Crypto Academy

What is fiat currency?

fiat currency

7 min reading

Let’s discover together what is fiat money, its origin and what it is used for.

What is fiat money

What is fiat currency?

Fiat or fiduciary money is a currency, in other words, ordinary paper bills and money on our bank cards (US dollar, euro, ruble, yuan, etc.), the value of which is set and issued by the government. Fiat money almost always acts as a means of payment, which is based on state laws. From Latin, the word fiat translates as: “Let it be!”, and it also means “instruction” or “decree”. Most countries use this currency to buy goods and services, invest and save. The fiat currency can be either in cash or in electronic form. Before the abolition of the “gold standard” in 1973, fiat funds were provided with gold, that is, behind each banknote, there was a certain amount of precious metal from the state’s gold reserve.

History of fiat currency

It is said that in the ancient world many types of commodity money were used for exchange, loans, or gifts, such as shells and pearls; animal skins; live cattle and other long-term food, honey; pebbles, etc. Some of these types of money had practical value, for example, it was possible to sew clothes from the skin, and slaughter cattle, and feed the family. And for example, pearls were primarily a means of exchanging goods. It is worth noting that it was not science, religion, or poetry that led to the emergence of human writing, but accounting. It was necessary to count the money, and there were more and more calculations. 

It was too difficult to remember so much information, and people started taking notes. Beginning with, the first monuments of writing were discovered in China, which date back to the IV millennium BC. Starting from the second millennium BC, money was made from iron, silver, gold, and other metals. First, there were arrowheads, sword fragments, and so on. Then, the oldest coins in Europe consisted of an alloy of silver and gold and were issued in Lydia, by King Ardis, around 685 BC. 

At the end of the XIX century, all developed countries had already used coins. Paper money appeared in the first century AD. Due to the fact that the mining of precious metals was expensive, the coins themselves could be easily forged, so it was necessary to control the purity of the alloy, as well as since that it was necessary to carry a large number of coins, and this is very inconvenient. The first paper money appeared in China, in 812.

Differences between fiat money and cryptocurrency

The main difference between cryptocurrency and fiat money is that digital currency is not physically expressed in any way, and at the information level, the coins are carefully encrypted, preventing the possibility of forgery. The balance calculation is based on the sent and received transactions. Fiat currency is accepted on the legislative level in many countries around the world.

This currency has no independent value, and the exchange rate is set depending on government policies and guarantees. At the same time, crypto-currency is quite unpredictable and its rates depend on various factors such as news, legislative regulations, government policies, and even statements of celebrities.

Advantages and disadvantages of fiat money

The first advantage of fiat money is that it has more noticeable stability so that there is no strong volatility. Despite the growing popularity of cryptocurrencies, fiat money is still in demand. They are traded by a huge number of people, which makes the exchange rate fluctuations more predictable. Moreover, the advantage of these payment methods is that if you lose your plastic card or forget your PIN code, it does not mean that you have lost money. Your funds are still in the bank, so you can dispose of them without limits after a new card will be received. Another advantage is that banking operations are fast and reversible. In case of an error, it is possible to cancel the transaction if the fact of fraud is proved, and the bank considers the reasons weighty. Also, paying with fiat money differs with a much faster transaction speed compared with crypto-currency. The users should wait 20-60 minutes for the transaction to be verified and validated. However, fiat money is accepted everywhere: in shops, restaurants, taxis, airports. 

It is said that centralization is a weak point of fiat currency. Most projects that work with fiat are based on a central server. By hacking the servers, the hacker gains access to the user accounts and steals money. Moreover, inflation is also considered to be a big disadvantage. Since the state is forced to regularly issue money, it leads to their gradual depreciation. The fiat currency does not have anonymity. Thus you have to provide the bank with all your personal data such as your last name, passport data, your place of work in order to create a new bank card or account.

How and where to exchange cryptocurrency for fiat money

If you are wondering how and where you can exchange cryptocurrency for fiat money, here are some popular ways to do so. For someone trying to sell or buy cryptocurrency for the first time, this method may seem the most obvious – private cryptocurrency exchanges. This is supposed to be a service of buying cryptocurrency or fiat money directly at the offices. It is also possible to exchange cryptocurrency through an acquaintance, but you need to be extremely careful and cautious here. Another way to exchange currency from another person is through P2P exchanges like LocalBitcoins. These platforms advertise to buy or sell. Buyers can negotiate a deal and set their own terms. One of the most legitimate and popular ways to exchange cryptocurrencies for fiat currency and conversely is through professional crypto-exchanges. You only deal with the platform – not other users. Fiat money can also be withdrawn to a bank account. OTC providers are over-the-counter agents who match the buyer with the seller for a commission. Traders usually negotiate large sums of money to buy and sell. This method of OTC trading is now rising. 

However, we studied the detailed information about fiat currencies, and how they differ from cryptocurrencies. Although states and people all around the world trust fiat currencies, all their disadvantages make us believe that digital currencies have to come a long way to replace fiat on the financial market. Therefore, we should follow the situation on the crypto-currency market, read the news, and make conclusions about the possible perspectives of the fiat money and crypto-currency market.


What information is shared by the nodes?

information shared by the nodes

4 min reading

It’s that time to know what’s nodes and what information they share.

what info is shared by the nodes

What information is shared by the nodes?

Users working in the cryptocurrency industry find it difficult to understand the concept of nodes. Noda, translated from Latin, means node. A node is a computer that operates in the Bitcoin network using the p2p protocol and allowing nodes to communicate with each other on the network and distribute information about transactions and blocks. All transactions are managed and coordinated according to the canons of a decentralized distributed network, which requires constant interaction between nodes. If a node goes down, it will fall off the network for some time and re-synchronization will be required to restore functionality. The more nodes operate in the system, the higher the scalability of the network is. It also increases the speed of transaction validation.

What is a node needed for? 

Since a network node is the basic element of the blockchain ecosystem, it cannot exist without it. Once a miner intends to add a new transaction block to the blockchain, he transfers the block to other nodes. They, in turn, can either accept or reject it. If the verification is successful, then the block is accepted. In other words, blockchain nodes are the backbone of the blockchain and it cannot function properly without them. Also, nodes that misuse or attempt to distribute incorrect information are quickly recognized by honest nodes and disconnected from the network.

The network node is the key factor that creates, receives, and transmits messages. The node monitors the consensus of the network, collects, records transaction data, and stores validated transactions. Each participant voluntarily provides his own hardware to support the blockchain and is not paid for these services. To become a node, the user needs to install special software designed for a particular cryptocurrency. A full node performs routing, base populating, and global blockchain support functions.

Further, the definition of a node can vary greatly depending on the context used. When it comes to computer or telecommunications networks, nodes can offer different services, acting either as a redistribution point or as a communication endpoint. After all, they perform functions such as keeping full copies of the ledger and updating the data to the current version synchronized with other nodes. Usually, a node is a real unit of computing equipment, that is, a personal computer connected to the Internet network with a local wallet installed and synchronized with the blockchain. All network participants have absolutely identical copies of the distributed ledger. Besides, a node can also be virtual. There are also lightweight network nodes that do not have their own copy of the blockchain, as well as special nodes of other types. But all of them must be connected to the same peer-to-peer network to exchange information. 

There are several types of nodes: full node, light node, master node, supernode. First of all, full nodes are communication nodes that are completely independent of each other and store all the data in the blockchain. The peculiarity of such nodes can be referred to as they operate completely autonomously from each other and do not trust the decisions of other communication nodes. 

Light nodes are communication nodes that have less autonomy, compared to full ones. They store only transaction block headers in the network and are dependent on full nodes. Masternode is specially adapted full nodes, which act as a trusted communication node and represents a connection to the network cryptocurrency wallet with placed deposit. Then, supernodes are masternode functioning without a wallet and acting as an endpoint of cryptocurrency API.

However, nodes make the rules, not miners. Miners receive transactions validated by the nodes and create blocks that will also be checked by the node. Important to note, that the consensus rules are not determined by the miners; their job is to put the transaction into a block that the node considers correct. The stability of the blockchain depends on how the node works, and users must be especially careful to secure the network so that attackers cannot exploit the vulnerability of nodes.


What is NFT? And why is it different from other tokens?

What is NFT?

5 min reading

What is a non-fungible token or NFT? Is it different from other tokens? Let’s find out together.

what is the non-fungible tocken_(NFT)

What is NFT? And why is it different from other tokens?

Blockchain and cryptocurrencies have been around for years, but NFT is relatively new. What is it? Technically, any cryptocurrency is a token, but not every token is a cryptocurrency. It depends on what functions it performs.  A blockchain is a database that is simultaneously stored on a huge number of computers. In the traditional model of the Internet, all devices are connected to centralized nodes. In a blockchain system, all the devices simultaneously store all the information published on the blockchain. Tokens are a register entry within the blockchain. The distinctive feature of most tokens is the principle of interchangeability.

What is NFT?

NFT, a non-fungible token, is a type of cryptographic token, each instance of which is unique and cannot be exchanged or replaced by another similar token. An NFT functions like a cryptographic token, but unlike cryptocurrencies such as Bitcoin, are not mutually interchangeable, in other words, not fungible. There are things you can’t replace, like the Mona Lisa. The original is one, the others are just copies.  That is why the format of non-interchangeable tokens was created in order to transfer unique items to the blockchain. 

Each NFT is unique and exists in a single copy, it cannot be separated, and all information about its author, buyer, and all transactions with it is securely stored in a blockchain. 

An NFT is a digital certificate attached to a unique object. Most NFT tokens work on the Ethereum blockchain and use the ERC-721 standard to create them. Functionally, they are almost identical to the most common tokens of the ERC-20 standard. But there is a very important exception – the very non-interchangeability, which allows ERC-721 tokens to confirm the uniqueness of an asset. Anyone who owns the intellectual rights to the artwork or a product that exists in digital form can create their NFT token. Releasing your NFT is called minting.  To mint your drawing or work it is possible to do it on Rarible or OpenSea and others.

NFT is not only a tool for tokenization of digital art objects and various collectibles. But this technology has also reached financial services, especially decentralized ones. In the last few months, projects that operate on the DeFi market and use NFT have started to appear.

The owner of an NFT can dispose of the token at will, including reselling it. So far, this rarely happens – the market for non-interchangeable tokens is at a very early stage of its development, so the number of resales of NFTs remains insignificant.

How do I create my NFT token?

It turns out that creating an NFT token is not hard at all. In total, to create your NFT token, you need an Ethereum wallet, the website and the particular content you want to put into the token. Go to: OpenSea, choose to Create/My collections. And in case you are not registered, you’ll get a window that you need to login through the ethereum wallet. To add a token, you must create a collection for this press “Create”. Add the logo of the collection, the name of the collection, and description, here is a collection created! You can add items (tokens) by clicking on “Add items” and in the next window “Add new item”. 

Add the media file you want to put in the token. This can be a picture, video, 3D model, sound. Allowed formats are JPG, PNG, GIF, SVG, MP4, WEBM, MP3, WAV, OGG, GLB, GLTF, up to 100 MB. Also, add the name of the token. You can add a link and description below, and you can also add various characteristics to the token. You can also add locked content, which can only be seen by the buyer (the owner of this token). Next, specify the number of copies in which the token is being issued. Click “Create” and the token is created! It takes a couple of days to verify it. Afterward, you can sell it if you want. To do this press “Sell”. Usually, on Opensea, the sales are done in an auction format. You don’t have to pay money to create digital art and store it. It will be necessary to verify the token and put it up for auction for sale and the commission for this will be 0.03 Etherium.

What can you sell in an NFT form?

Anything can be sold in the form of NFT: images, text, music, videos, event tickets, artifacts from video games and virtual reality, or even the rights to use cryptocurrency wallet names – that is, any digital product that claims to be unique. Collectors, gamers, major publications, singers, as well as artists and art lovers pay special attention to NFT.

The market for non-interchangeable tokens is developing extremely fast and blockchain technology and infrastructure has changed dramatically in the past few years. One potential future application of NFT is the blockchain recording of unique documents. Due to the reliability of the blockchain, diplomas, certificates, and various documents could be issued in NFT format, potentially helping to eliminate the risk of forgery.


What is Stablecoin?

What is Stablecoin?

5 min reading

Let’s get acquainted with a stablecoin while reading this article. You’ll find out about its types and role in the cryptographic world.

what's stablecoin

What is Stablecoin?

Stablecoin is a type of digital money that is stable and linked to real assets, such as Fiat (for example, USD, EUR, CNY, or JPY) and sometimes even with gold or oil. They have a fixed rate, which can vary within 1% in each of the parties. Cryptocurrency is not linked to any central bank or institution, instead, such assets rely on their cryptography and strict auditing. With their help, investors and other market participants are able to cope with a number of disadvantages of classic cryptocurrencies, as well as provide the cheap and fast exchange of a stable currency anywhere in the world without limits. This class of digital assets also has low exchange rate volatility. 

Stablecoin offers a steady price, facilitating it for certain functions, such as exchange medium, account unit, and value accumulation. The goal of creating Stablecoin was to integrate new economic innovations into existing businesses without the risk of losing funds. Therefore, Stablecoins can be used for various settlements between two counterparties behind the banking system, providing high security and privacy.

Types of Stablecoins

All currently available Stablecoins can be divided into three types:

    • Stablecoins backed by traditional currencies and other assets. Let’s say you have a certain amount of, for example, dollars, and digital tokens are issued for this amount in a ratio of 1 to 1. The algorithm is simple, reliable, and accessible for everyone. As we have already mentioned, gold, oil, etc. can act as an asset. 
    • Stablecoins backed by other cryptocurrencies. Everything is the same, but instead of fiat currencies and other financial assets, such stablecoins are “pegged” to top cryptocurrencies such as Bitcoin or Ethereum. As you can imagine, the scheme is not secure. Unexpected impact of value, backed by stablecoin, could almost completely devalue cryptocurrency.
    • Stablecoins without collateral. It’s even easier. Such tokens have any price, since they have no connection to anything tangible. 

When it comes to fiat-based stablecoins, a prime example would be Tether (USDT), TrueUSD (TUSD). Also, let’s give an example of the largest commodity-backed stablecoin is DGX, an Erc-20 token backed by physical gold, fully vetted and stored at Safe House vault in Singapore. The most prominent example of a crypto-backed token is MakerDao (DAI). And when it comes to senorrage-style stablecoins, Basis and Havven are good examples.

Pros and cons of Stablecoins

Stablecoin has a number of advantages. The Stablecoin volatility is said to be lower than other cryptocurrencies. Their price directly depends on the exchange rate of the real asset. It turns their tokens into a payment means that can be used for payments in everyday life. In addition, inflation is also possible for such cryptocurrencies. This is an additional incentive to spend them, rather than keep them in the piggy bank. 

The development of the cryptocurrency industry and digital assets can grow in several directions. For example, Stablecoins  enable credit and insurance services to appear on the blockchain due to the small price. It prevents sharp jumps in the conventional cryptocurrencies rate. Furthermore, Stablecoin cannot be affected by the government actions or the Central Bank. Important to note that stablecoins could be useful for countries with a high level of inflation. The phenomenon of stablecoins is characterized by a total stability and security, eliminating the vulnerabilities or brittleness of the system.

The picture would be incomplete if we did not mention the disadvantages inherent in Stablecoin. The first drawback lies in the binding to fiat currencies. For example, if the Stablecoin price depends on the dollar exchange rate, then such tokens become its derivative. Also, the main disadvantage is that intermediaries are required for functioning, which increases the risks of uncontrolled emissions. As a result, decentralization is impossible. 

Stablecoin issuance requires the creation of special companies, responsible for coins provision and guarantee of free exchange. It should be mentioned that stablecoins have a slow withdrawal to fiat and a high degree of regulation. However, this type of digital currency is a powerful tool that can help to improve the cryptocurrency ecosystem as a whole, as well as being an alternative means of saving in cases of high market volatility.


Soft/Hard Fork

Soft/Hard Fork

6 min reading

Discover what forks mean, its types, when and why they usually happen.

what's hard vs soft fork

Soft/Hard Fork

The terms soft fork and hard fork are frequent occurrences in the crypto-sphere. In this article, we will try to explain what are the hard fork and soft fork, and what is the difference between these two concepts. 

What is a fork?                  

Altcoins emerged in 2011, disrupting the primacy of the first cryptocurrency – Bitcoin. The roots of most Altcoins grow precisely from Bitcoin, and fork is the cause of this process. Put differently, any fork is a rules change in which a block in the Blockchain is taken in genuine (valid). Therefore, users vote for a fork by downloading new software.

Types of forks

There are two main types of Forks: soft forks and hard forks (“soft” modification and “hard” modification.) A soft fork is a modification of a software protocol that is combined with a previous version. Namely, it’s a soft form of the rule change where corner pieces of the old Blockchain version can fully interact with corner pieces of the new version. Bitcoin soft fork is a hot topic in the cryptocurrency industry. Unlike hard fork, which requires (almost) all nodes to update and agree on a new version, this kind of fork only requires the fraction support of miners updating their software. 

Hard fork is a radical switch to a new protocol that is incompatible with the previous version or a complete Blockchain separation into two independent branches. The blocks that are genuine in the new version are completely unsupported by the old one. The most popular hard fork in the cryptocurrency sphere was the hard fork of ether. This cryptocurrency split into two camps: Ethereum and Ethereum Classic. In a hard fork, all nodes and miners switch to the latest protocol software version, in case they want to move to a new bifurcated chain. It creates the fork in Blockchain. Consequently, there are two ways: the way leading to a new improved Blockchain and the way following the old rules. Hard fork usually happens only when there is sufficient support from the miners’ community. When a miners majority agrees to upgrade or fork, the blockchain’s developers start working on code updating. As a rule, the number of agreements should not be less than 95 percent.

Why Hard Fork is held

A hard fork can be initiated by members of the development team or miners. The main thing is to assemble a large group of people who are capable of modifying the source protocol. Unbundling is impossible without qualified Blockchain engineers. The purpose of major update conducting is to fix flaws that hinder the Blockchain Network operation. Individual groups within the community may propose different solutions to the problem, and if they fail to reach a consensus, a split or fork occurs.

Famous hard forks

When asked what a bitcoin fork is, many people remember Bitcoin Cash (BCH). The asset emerged in 2017 as a result of a hard fork on the bitcoin blockchain. The cryptocurrency still exists successfully to this day. Bitcoin and Bitcoin Cash share a common history up to blockchain 478,558. Bitcoin Cash came about as a result of a disagreement in the community over the true concept of the cryptocurrency laid out by bitcoin creator Satoshi Nakamoto. The main bone of contention was block size and the implementation of Segregated Witness. 

Another famous example involves Ethereum (ETH), a successful branch of the cryptocurrency now known as Ethereum Classic (ETC). It was created after the hacking of the Decentralised Autonomous Organisation (DAO) and the theft of $50 million in ETH. The Ethereum community mulled over how to deal with the aftermath, and most decided to hold a hard fork on a block of 1,920,000. This is how the Ethereum fork came about.

How does this work in cryptocurrencies?

In cryptocurrencies cases, a Fork refers to a change in the operating rules that involves introducing amendments to the protocol. In other words, it’s necessary to implement serious changes in operation to make bitcoin (or any other crypto) better and more secure. The system improving in the term of technical operation and eliminating some vulnerabilities is the main goal of hard and soft forks. For instance, such issues as transaction speed or network scalability problems can be handled by forks.

The crypto-currencies versions, created by forks, are believed to be more advanced in technical terms. These technical processes are called to facilitate and improve the system operating, as was said before. In some cases, there is a conflict between developers. Some think the system should remain unchanged, the others insist on a technical conversion. Such changes took place in the communities of Bitcoin and Ethereum (the world’s second most popular cryptocurrency).

However, as the Blockchain industry evolves, major code updates are essential. If updates are done well and meaningfully, the cryptocurrency will benefit and the risks are not as high as they seem. But, be careful and look at the situation objectively. Good luck!


Are there crypto payment cards?

crypto payment cards

6 min reading

Obtaining cryptocurrency as liquid cash.

are there crypto payment cards

Are there crypto payment cards?

Just as there are payment cards in centralized banking systems, there are also cryptographic payment cards for purchases and other needs. The Bitcoin debit card, for example, allows people to shop online. Individuals also have the opportunity to withdraw money from ATMs, even if the latter does not accept cryptocurrency. Instead of converting these bitcoins to local currency, cardholders simply fund their debit card with cryptocurrency, which is automatically converted at the time of purchase. In fact, cryptocurrencies use different existing debit cards. Well-known are such cards as Coinbase, BlockCard, Wirex, BitPay, Bitwala, Binance, and many others.

Please note that each cryptocurrency debit card is different depending on the cryptocurrency supported, the fees charged, and the incentives it offers to users.

What is Coinbase?

Coinbase is a cryptocurrency exchange that instantly converts cryptocurrencies stored in multiple wallets and accepts Visa cards. It was founded in 2012 and offers a range of security and convenience features such as a mobile wallet app, two-factor verification, instant card blocking, expense tracking, and more. With Coinbase debit cards, users convert cryptocurrency to a fiat point of sale which allows them to pay with crypto. 

Like every other debit card, it must be activated before use and this can be done within the coinbase card app, or get to the customer support agent who will then provide the user with an activation code. The downside is that a Coinbase account is required and the fees charged are excessive.

What is BlockCard ?

BlockCard is a US cryptocurrency debit card that offers the lowest prices. It also allows cardholders to make purchases using the cryptocurrency based on their choice wherever Visa cards are accepted. It does not charge any deposit, exchange, or withdrawal fees. On the other hand, you need to buy Ternio tokens and also know your verification (KYC). The main aim of BlockСard is to accelerate the use of blockchain and cryptocurrency in everyday life.

This enables its users to gain the utility of their cryptocurrency and also to trust the fact that cryptocurrency is not a scam. with BlockCard, after creating a BlockCard account, the user will then either buy or  make a deposit of any cryptocurrency of their choice. This is then converted to TERN which is the user’s purchasing power. 

What is Wirex?

Wirex is an EU-only digital payment platform that has been around since 2014. It offers bitcoin cashback and referral bonuses. It supports 19 cryptocurrencies. On the other hand, the Wirex cardholder must have a Wirex token (WXT) in order to receive rewards. In order to be able to use Wirex, you will have to create an account on the Wirex website, get verified, add some cryptos or fiat currency to the account, and then place an order for a card. Note that there is a maintenance card fee with all fees and limits broken down.

What is BitPay?

BitPay is an American cryptocurrency that is available in 50 states, can be located anywhere in the world, and does not require the US conversion fee. On the other hand, in order to have this debit card, people must have a social security number and a driver’s license. These cards also cannot be sent to a post office box. To obtain a BitPay card, the user will have to be above 18 years and will have successfully completed the identification stage. BitPay is a prepaid debit card that allows businesses to accept Bitcoin as payments as well as bank deposits in the currency they will prefer for a one percent payment fee. To use this service, you will have to transfer crypto into a BitPay wallet and once that is done, you can convert it to dollars. These are not the only cryptocurrency cards available, over time other cryptocurrencies tend to leave payment cards. Here are some examples: Trastra, Bitnovo, PolisPay.

In conclusion, essentially all of these payment cards aim to provide more options for online and in-store purchases, as well as for withdrawing money in places that do not accept cryptocurrency. The best payment card to date is Coinbase due to its automatic cryptocurrency conversion, ease of use, and security features.


Blockchains vs. banks

Blockchains vs. banks

5 min reading

Blockchains or Banks, that’s the question. Let’s discover the similarities and differences that exist between these.

blockchains vs banks

Blockchains vs. banks

Every day you keep hearing of the existence of decentralized finance which outsmarts the banking systems in so many aspects. Yet as a human being one will always want to remain with the system he has been used to just because the devil you know is better than the angel you do not know. This is quite understandable. 

But you will however agree with me that trying out new things may never be bad after all. However, if you are a newbie you may have heard of the existence of blockchains but you have not really known or understood the difference that exists between them. This article will talk about the difference between blockchains and banks.

The difference between blockchain and banks

Blockchain technology is considered one of the most revolutionary technologies in the new era. The banking system is characterized by central banks having some degree of control over commercial banks. The banking system has been around for many years. In order to establish the difference between blockchain and the banking system, it is important to learn the advantages of both systems. You might be interested to know that a blockchain is a type of database that collects information and groups it into blocks.

The blocks have a certain amount of memory, which, once filled, is added to previously filled blocks, forming a chain of data that we call “a blockchain”. Each new piece of information that follows the recently added block is collected into a new block to be also added to the chain. The advantage of this method is that it cannot be hacked. When a block is complete, it is put into the chain and it becomes a part of the chronological sequence. Each block once added to the chain, receives an exact timestamp. 

The nature of a centralized banking system makes it vulnerable to hacking. The centralization of the banking system also increases the likelihood of adverse economic conditions. Nevertheless, the established differences between banks and blockchains are laid out below.First and foremost, blockchain is a decentralized database that does not require a third party to conduct transactions. Whereas with banks, all transactions are performed by third parties that include governments as well as other financial institutions.

Blockchain is a transparent system. It maintains the trust of its users through its transparency. It is transparent in the sense that every transaction is visible to all participants, with no ability to conceal the information. Meanwhile, bank ledgers are closed, completely private, and isolated. The public only has access to a certain portion of the documents stored in the banks.

While blockchain is available 24/7/365, banks operate over a certain time and for a certain number of days. For example, bitcoin transactions can take anywhere from fifteen minutes to an hour depending on network congestion, unlike banks where the transaction can take about 24 hours and especially when the network is overloaded.

Since it is the participants who do all the blockchain work, there is no need for third parties to intervene. As a result, costs are reduced and the process of exchanging assets is much more cost-effective than trading with banks. In fact, users are able to determine how much they are willing to pay. This is interesting because it creates an open market or, if a user sets their fee at an unfavorable price, their transaction might not be processed.

Blockchain is error-resistant. It is a much more secure way to store information because of its resistance to data being changed, modified, or even deleted. Once information is stored, it cannot be lost or deleted, and the chain keeps track of everything that follows it. All records are irreversible. Whereas bank ledgers do not guarantee this and can be changed or tampered with, making them less reliable.

While blockchain allows participants from all over the world to join at any time and from anywhere, banks do not. It takes days for a bank to process transactions and reaches a settlement.

In conclusion, considering the comparison made, blockchains are safer and more secure. Blockchain stands to make business and government operations more accurate, efficient, secure, and cheap with fewer middlemen.


Anonymity or not?

Anonymity or not?

4 min reading

Is cryptocurrency anonymous or not? Let's consider this question together.

Anonimity or not

Anonymity or not?

Due to the active marketing work of many companies, bloggers, and others seeking to make money from the industry, many people still think all cryptocurrencies are anonymous. The main misconception now is that bitcoin and cryptocurrency, in general, are a departure from the banking system, and the inability to track money, but this is not entirely true. If people want anonymity, it is about other currencies. 

Basic principles of blockchain

Everyone knows that cryptocurrency runs on a blockchain system. The basic principle of blockchain is transparency and publicity of transactions. The chain of operations of any participant in the network can be traced and determined, for example, the frequency and volume of transfers. The system also gives any user the ability to write out the addresses from which amounts were transferred; each of them can be used for a new search. And if the owner has left his data somewhere – for example, when ordering in an online store or on a forum – you can identify him as well.

Bitcoin is neither completely anonymous nor completely transparent. The answer to the question about the privacy of Bitcoin is somewhere in a gray zone, where the privacy of user activity ultimately depends on the capabilities of one’s opponent, technical literacy of users, and the tools they use. There is no perfect solution to online privacy, and in many cases, privacy choices are inevitably associated with a number of trade-offs in both cost and ease of use. Moreover, privacy is never a static goal but is constantly changing in the race between those who create tools to protect the privacy and those who create tools to destroy it. 

Making changes to the underlying protocol rarely turns out to be a simple trade-off between privacy and transparency. More often than not, they are also accompanied by changes in security, scalability, and software compatibility.

Transactions in blockchain

Historically, the development trends and ethos of the Bitcoin community have always favored privacy more than full transparency, however, Bitcoin’s approach is more conservative compared to cryptocurrencies, in which privacy is the top priority.

When you make transactions on the Bitcoin network, you leave two types of traces. They can be divided into those that are recorded in the blockchain and those that are not recorded in the blockchain. The information contained in the blockchain does not directly link transactions to your identity, but it allows you to link your transactions to each other. Traces from the second category allow you to link your transactions to your personality: those that are not recorded on the blockchain.

When you make transactions on the Bitcoin network, from time to time you receive (send) money from (to) an organization that knows who you are. Hence, this entity will have off-blockchain knowledge that links your identity to your bitcoin transactions. An easy way to understand what kind of information is stored in the clear text on the Bitcoin blockchain is to use a block explorer.

Blockchain security

The pseudonymous but transparent nature of the Bitcoin blockchain creates an environment in which the privacy of the system ultimately depends on the tools used by the user and the actions of the blockchain analysts. International regulations obligate all officially running exchanges to make a KYC of their customers. KYC is the name given to the process of verifying the real identity of a company’s customers. So the use of cryptocurrency for criminal purposes (money laundering, darknet, etc) may be tracked. A strong KYC policy is a way to make the crypto sphere very safe.


What is a cryptographic key?

What is a cryptographic key?

Would you like to know what is a cryptographic key? Discover what types there are and what they are used for.

Public and Private keys

What is a cryptographic key?

In this article we will  give you an answer to what is the cryptographic key. A cryptographic key is a special set of data that is used to encrypt and decrypt information sent over the network. Cryptographic keys are used for encrypting and decoding messages, for setting and verifying digital signatures or for verifying message authenticity, etc. The success of decryption largely depends on the key used. If for any reason access to it is lost, it will be impossible to decrypt the data.

Important to note that the key reliability is determined by the so-called key length, which is measured in bits. Length is an important parameter of cryptographic strength in modern encryption algorithms. The standard key length is 128 or 256 bits. Besides, cryptographic keys differ according to the algorithms of the system. There are 2 main types of keys: Open (public) and Closed (private). Let’s take a look at them.

Public key

The public key is available to everyone. It’s used for encrypting data when the browser accesses the server.

In public-key systems, each person has both public and private keys that are mutually complementary. The public key is available since it is the key to transmit information in the network. This key can be published in the public domain to verify the electronic digital signature and to prevent malicious actions on the part of the document certifier if he refuses to sign it.

Private (secret key)

First of all, the private key is known only to the site owner. It’s used for decrypting data sent by the browser. In order to guarantee the complete confidentiality and security of the data and protect it from intruders, the private key must be kept secret by its owner from third parties. As you know, the private key is always protected by a password, which prevents unauthorized use. Encryption with two keys of different types guarantees the safety of information. Even if the fraudster intercepts the traffic, he will not be able to decrypt it without the private key. The private key is generated by the system in a random sequence of numbers and letters. It is worth noting that only a certain version of the public key is suitable for one private key. 

How public and private keys work.

A public key can seem difficult for a newbie though very useful for communication especially when the sender will not want everyone to know the content of the message. In cryptography two individuals namely the sender and the receiver are involved and both have a public and a private key that contains large mathematical properties. If a message is encoded using someone’s public key, he in turn will be able to decode it using his private key. Simply put, within the public key infrastructure, the public key encrypts data and as soon as that has been done, only the person with the private key will be able to decode its content. The length of a public key depends on the algorithm it is made with and it varies from 128 bits to 4096 bits. 

A private key on the other hand which is a secret key is only known by its owner. It is a long randomly generated number that cannot be guessed. It can only be decoded by the person to whom the message is directed. For example, Peter sends an encrypted message to Nadia and somehow forgets to provide her with the secret key. Without it, Nadia will be unable to get the message and if eventually she is provided with the private key, then will she be able to get the message. Generally, a private key is kept safely so that no third party or fraudster will be able to access it. 

In addition, both keys are stored in a file known as a key ring, which also stores various key certificates. There is usually a ring for public keys and a ring for private keys. In general, public and private key encryption can be considered as a case for which two keys are used: one can only close, the other can open. But, although the private and public keys are mathematically related, it is not possible to calculate the private key from the public one.

However, we can be sure that the keys provide security for the system. They exclude the possibility of information leakage, as well as the possibility of redirecting it to another site.


What is an electronic signature?

What is an electronic signature?

7 min reading

In this article, we will tell you all about electronic signature and how safe it is.

What is the electronic signature

What is an electronic signature?

Whether you are a newbie or an expert in electronic signatures, an e-signature at first instance will cause someone to think of the security of his assets given that signatures grant access to very important documents of any human being or company. With the rapid evolution of the digital world, anything can be forged. This article will be talking about electronic signatures and their authenticity.

Gone are the days when you had to print out a document, sign it, scan it before sending it by email. With the introduction of the electronic signature, all the stress seems to have disappeared. An electronic signature, also known as an electronic signature, is a digital signature on a special digital platform. It is a cryptographic mechanism often used to implement electronic signatures. It is designed to provide the signer with a secure method of identification to ensure a transaction is not breached. This means that an electronic signature allows you to say goodbye to filing cabinets. By speeding up the time it takes to complete administrative tasks, electronic signatures save time on the things that matter in your business.

How are electronic signatures created?

It is however very easy to create an e-signature given that signature software is available online. You can either put your signature directly into a document with your mouse button, or you can enter your name, which will automatically be presented as an electronic signature. The first step will be to create your signature using a signature or stylus or if you are using a mobile device you could sign directly with your finger. Secondly, in case you used a piece of paper to create your signature, then take a picture of it using your phone or camera and upload it to the website you are using to create the e-signature and use the cursor to draw your signature. 

Benefits of electronic signatures

All documents are signed without a stamp, saving paper. Just as we mentioned earlier, before electronic signatures surfaced, every document which needed to be signed required that it be printed and signed by hand or a wet-signature even though electronic signatures saved one from printing papers here and there. Also, all documents are sent via email while saving postage. This means that you can sign a document without having to move or attend a meeting and can store these documents digitally, eliminating the need for paperwork. With digital encryption and audit trails associated with digital signatures, electronic signatures are sealed, stored, and protected from hackers and security breaches. 

Finally, before the advent of electronic signatures, forensic examination relied on establishing handwriting and the words of witnesses. Electronic signatures document the time, date, IP address, and unique user identification key used at the time of signing.

In terms of cryptography, we are talking more about digital signatures. Digital signatures are public-key primitives. A digital signature is a cryptographic value that is calculated from the data and a secret key is known only to the signer. How are you going to create a digital signature and how does it work?

First of all, anyone who accepts this key is a public-private owner. These keys are commonly used for encryption/decryption. Signing is done with a private key, also called a signing key, while the verification process is done with a public key. This private key then passes the data to a hash function and also generates a hash of the data. Once this is done, the signature key sends the information to the signature algorithm, which then creates a signature based on the specified hash.

For verification, the hash value and the result of the verification algorithm are compared. Because the digital signature is created with the signer’s private key, the signer cannot opt out of signing the data in the future. The importance of digital signatures relies on message authentication, data integrity, and reliability.

While many still use the traditional signature method, for most business proposals, electronic signatures are the preferred method for documenting signatures on the Internet. By adding public-key encryption to a digital signature scheme, you can create a cryptographic system that can provide four basic elements of security.

Digital signature

Many people often think that electronic signatures are the same as digital signatures. However, these concepts are quite different even in their modus operandi. It can be defined as a technique that binds a person or entity to digital data which could be independently verified by the receiver or any third party. Indeed, this scheme is based on public-key cryptography and anyone operating on this scheme will have to obtain a public and a private key. The private key is known as the signature key used for signing while the public key is used for verification and is known as the verification key.  Thus, these key pairs are used differently for encryption/decryption and signing/verifying. In other words, the private key which is the signature key is used for signing while the public key is used for verifying and is known as the verification key. However, note that many digital communications prefer using encrypted messages to plain texts just to enhance confidentiality. 

Let’s provide a simple illustration of how it works. The signer feeds data to the hash function and generates a hash of data. The Hash value and signature key are then fed to the signature algorithm which produces the digital signature on the given hash. Signature is conjoined to the data and then both are sent to the verifier. The verifier on his end feeds the digital signature and verification key into the verification algorithm, the hash value and output algorithm are compared, and based on the comparison result, the verifier decides whether the digital signature is valid. Given that the digital signature is created by the private key of the signer and he alone is in the custody of this key, he, therefore, cannot disavow the data in the future. 

Despite the fact that electronic signatures may seem identical when they are mentioned, they, however, differ a lot. Here are some of the differences that exist between them. 

Firstly, they differ in the domain of purpose. While an electronic signature is used to verify a document, the source of the document and the author, the purpose of digital identity on the other hand is to secure a document so that it does not get tampered with by unauthorized people. This is done with the implementation of private and public keys. 

Secondly, electronic signatures are not regulated and for this reason, they are less favorable to a lot of people and states since their authenticity is questionable. However, digital signatures are regulated and are authorized by certification authorities who are third parties that have been entrusted with the duty of performing these tasks. In addition, digital signatures comprise features that are meant to secure the document. 

Finally, with the electronic signature, it may be difficult to identify the real owner of the signature since it is not certified, that is the authenticity as well as the integrity of the document whereas with digital signature since the signer cannot repudiate any information attached to the data, it is very easy to identify the owner and also it is very easy to notice if the document has been tampered with since every unauthorized modification will lead to a failure in the digital signature verification.

Over and above, electronic signatures are very vital for some activities given that they work in compliance with applicable laws and regulations as well as industry standards. It however has some lapses which have been enumerated in the differences but that does not annul its importance. For everyone needing to more secure with documents and information, digital signatures are of better use since it is legally binding and authentic by signature even though even traceability to the owner of the document