Crypto Education

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Crypto Education

What is a satoshi?


A Satoshi is the smallest unit of a bitcoin, sort of like a penny is the smallest
unit of the US dollar. It is .00000001 Bitcoin, or one hundred millionth of a Bitcoin.

What does it mean to HODL?

Hodl is a slang term and Internet meme that is used in the Bitcoin community when referring to holding the cryptocurrency rather than selling it. It originated in a December 2013 post on the Bitcoin Forum message board by an apparently inebriated user who posted with a typo in the subject, “I AM HODLING. In 2017, Quartz listed it as one of the essential slang terms in Bitcoin culture, and described it as a stance, “to stay invested in bitcoin and not to capitulate in the face of plunging prices.” referred to it as the “favorite mantra” of Bitcoin holders.

Since entering the Bitcoin vernacular, HODL has become a backronym for “hold on for dear life”.

Bitcoin vs Ethereum: Is one better?

That’s like choosing between peanut butter and jelly! They serve different purposes and we think both are pretty darn cool. Bitcoin is simpler, does one thing and does it extremely well – it has digitally transferred hundreds of billions of dollars without any interference or security problems since its inception in 2009. Ethereum is newer, shinier and has many revolutionary future use cases. Part of the fun of joining the blockchain revolution is watching these projects grow and mature. In 2000, during the internet boom, we never would have dreamed that we could order a pizza with a single click on a cell phone or call an Uber almost anywhere in the world. Who knows what kind of new behavior that decentralized blockchains will enable in 10 years.

What is Consensus?

Consensus is a group decision making process in which group members develop, and agree to support a decision in the best interest of the whole, ie general agreement. The key innovation is the ability to come to “consensus” on the state of data despite the absence of a central controlling party. The main approaches to achieving consensus with regard to blockchain include, proof of work (solving complex mathematical puzzle), proof of stake (risking your tokens), and proof of space time( verifying file storage. The consensus process ensures that every token is a scarce asset and that the distributed ledger is up to date and accurate.

What is a miner?

Miners discover new block entries to the blockchain, and race to solve a cryptographic puzzle that verifies bundles of transactions that will be joined together (along with some other data) into a new block. Every time a miner finds a block, he or she is rewarded with a block reward. This is exactly where you come in. By lending some of your unused computing power to Honeyminer, you are also racing to solve this puzzle and find the next block. We take care of the hard cryptography and mathematics, and leave you with the fun.

How many Cryptocurrencies are out there?

Currently there are over one thousand different crypto assets. Some are currencies like bitcoin that seek to disrupt money, while others are designed to represent resources like file storage, computation or identity verification. We see a future where blockchains disrupt hundreds of traditional industries like insurance and banking, and we can even tokenize personal assets like painting or houses, and put them on blockchains.

What is a smart contract?

A contract is simply an legally binding agreement between two or more people. A smart contract is a program that digitally enforces the execution of this agreement.

In a normal contract, like home insurance, a homeowner pays an insurance company a premium and then receives payments under certain damage scenarios. In a smart contract, these prespecified damage scenarios would be digitally written in Ethereum’s coding language. The homeowner would deposit money into this smart contract as well, and would be automatically paid off in the programmed stipulations.

The smart contract is decentralized and lives on the Ethereum blockchain, and is capable of automatically executing itself. Instead of waiting for an insurance inspector and then a claims adjuster, a smart contract could automatically pay out the smart contract based on a satellite photo.

Insurance is a complex use case, because notice in the example above, it would still rely on a satellite photo, which might not be able to see the extent of the homeowner’s damage. What if there was flooding inside the house? Right now, there are more use cases for simpler smart contracts. Prediction markets are an example of a smart contract that is ready for widespread use. I can make a bet with my friend Bob that the Eagles will win the next superbowl. Bob and I will each fund the bet with Ether, and the contract will automatically pay the winner. Note again, that there still needs to be someone or some way to inform the smart contract who actually won the game.

What is a blockchain?

A blockchain is an alternative to a private database. Public blockchains provide a distributed ledger that all can see. Each block contains data such as an account balance or a transaction, which then is verified and broadcast publicly. The Blockchain is a database that has a specific way of storing and managing information. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Bitcoin and other cryptocurrencies use blockchain technology but the blockchain can be used for any type of database. Blockchain is not the same as bitcoin.

Is Ether a cryptocurrency like Bitcoin?

Yes, Ether is a cryptocurrency because you can buy and sell it and it has value. However, it also also has utility because it can power Ethereum smart contracts or applications. Bitcoin does not have the same robust programming capabilities so we consider bitcoin to be a cryptocurrency, while we think that Ether is both a cryptocurrency and a utility token.

What is a Token?

Tokens (also known as cryptocurrencies or cryptoassets) are the internal currency of cryptonetworks, and are the incentive mechanism which enables them to function. Tokens can have properties of currencies, commodities, and securities. Tokens widely distributed among network users and participants works best. Tokens provide the incentive mechanism for these decentralized, independent actors to work together to provide the network service.

What is blockchain Governance?

Blockchain governance is the process through which stakeholders in a blockchain project interact and make decisions. Some blockchains are very centralized and only a few developers or miners can drive changes to the underlying rules. Others are quite de-centralized, where all token holders can vote. This is analogous to world governments that span from monarchies and autocratic regimes to democracies. In general, centralized systems can govern quicker because there are fewer parties, and they are more vulnerable to the abuse of this power.

What is Bitcoin?

Bitcoin is often referred to as “digital gold” because its a store of value. Some people like to call it a cryptocurrency. It is a scarce digital asset, cryptographically secured by the Bitcoin blockchain. Bitcoin is the name of a digital currency and the first major cryptocurrency created in 2009. Also, the name of the network and code managing the cryptocurrency.

What is a Distributed Ledger?

A Distributed Ledger is a database that is not stored on one computer. A copy of all records are instead stored on everyone’s computer that is on the network. An advantage over a single computer storage system is that you can continue updating records if one computer on the network fails.

What is Ether?

Ether is the currency of the Ethereum network. It is required to power the Ethereum Virtual Machine (the name that has been given to the decentralized world computer). The amount of Ether needed for a smart contract is dependant on the amount of processing power and complexity of the digital agreement. Simply transferring Ether is one of the simplest executions and would not cost a lot. Programming an entire homeowner’s insurance agreement into a smart contract might cost many Ether because there are so many possible events that need to be addressed.

How is the Ethereum network different than the Bitcoin network?

The Ethereum network runs smart contracts and applications. Its general programming language can do almost anything. Bitcoin is far simpler – it was designed to digitally store and transfer value via bitcoins.

What is Decentralization?

Decentralization is the process of distributing or dispersing functions, powers, people or things away from a central location or authority. Decentralization is a critical element of cryptonetworks because it is open to all innovators. Moreover decentralized cryptonetworks are a hedge against concentrated market power.

What is a Cryptocurrency?

Cryptocurrency is a digital or virtual currency that uses cryptography for its security features.

What is an open network?

An open network’s entire source code is available under open license, therefore anyone who wishes to can run competing copy. Moreover an open network is open to all participants, anyone who wants to join the network can operate a node that provides the network service. These networks are permission-less.

What is Currency?

Currency is a system of money in general use in a particular country or region (often coins and paper notes).

What is Ethereum?

Ethereum is a sophisticated blockchain capable of running smart contracts or applications.

What is a Crypto Network?

Crypto networks are decentralized networks build on top of the internet that provide a wide variety of digital services, such as data storage, computation, and interactive applications. Because users of the network are also holders of the tokens, crypto networks have the potential to distribute network value broadly to all stakeholders.