What is Blockchain Technology? A Beginners Guide to Blockchain Technology: How it Works and Its Application

The world of blockchain technology is daunting for many of us, full of terminology and ideas that boggle our minds, creating an immediate flight response that ultimately makes us believe it’s a scam. Like most people, when you first read or heard about blockchain, you immediately felt fire alarms going off in your head, accompanied by this voice blaring, “Do not risk a single dime on this sham!”

If only you had pushed past the fear and dove in, boy, you would be ecstatic now. But let’s not settle on what could have been and instead shed some light on how lucrative and real this “sham” has become.

As blockchain technology grows and becomes more user-friendly, it’s essential to learn about it and stay prepared for its future. If you are new to blockchain, this is the platform for understanding the basic concepts.

What is Blockchain Technology?

Blockchain technology is a decentralized system that allows for secure, transparent and tamper-proof transactions. Transactions get verified by a network of computers rather than a centralized authority and recorded in an immutable public ledger.

It keeps track of a growing list of ordered records known as blocks. Each block contains a timestamp and a link to the previous block, forming a chain of data called a blockchain.

The distributed timestamping server and peer-to-peer network build security in the blockchain system, resulting in a database that is managed autonomously and decentralized.

This makes blockchain ideal for applications such as digital recording assets, contracts and other essential documents.

Users can only modify the parts of the blockchain that they “own,” which requires them to have the private keys necessary to read or write to the file. Cryptography keeps everyone’s copy of the distributed blockchain in sync.

Blockchain technology was initially proposed in 2008 by an anonymous person or group under the pseudonym Satoshi Nakamoto. The developers implemented the technology was in 2009 as the core component of Bitcoin, the first digital currency.

Bitcoin was the first digital currency to use a blockchain system to solve the double-spending issue(unlike tangible coins or tokens, electronic files can be duplicated and spent twice) without using an authoritative body or central server.

Blockchain essentially offers the possibility of widespread disintermediation of trade and transaction processing.

How Does Blockchain Work?

A blockchain enables any user to send value anywhere in the world where the receiver can access the blockchain file. However, to edit only the blocks you “own,” you must have a private, cryptographically generated key.

However, three technologies must collaborate on the blockchain for a secure transaction.

  • A distributed network using a shared ledger
  • Private cryptographic keys
  • A system of records

Cryptographic Keys

Blockchain technology thrives on cryptography, encrypting addresses and other data using sophisticated computer operational processes.

Cryptography is a critical component in making crypto transactions secure so that these digital assets can get the name cryptocurrency—users login into the blockchain with the help of a system known as key cryptography.

This system begins with your public key, a long string of numbers and letters that serve as your account number when interacting with the blockchain that underpins a cryptocurrency. Before your data gets posted to the blockchain, it gets encrypted with your public key.

The private key is like a password giving you access to your account. The key decodes information intended for you and posted on the blockchain, granting you access to data and cryptocurrency funds.

So, when two people want to transact, they must both have the public and private keys for identity. These keys’ integration can be considered as a skillful form of consent, resulting in an instrumental digital signature. The digital signature provides solid ownership control.

While the platform solves the authentication, it must integrate it with a method of authorizing transactions and permissions (authorization)- a distributed network.

Distributed Network

A distributed network is one where the blockchain file gets stored on multiple computers instead of just one. This way, the blockchain cannot be controlled by a single user or entity.

To ensure that everyone has an accurate copy of the blockchain, users in a distributed network must agree to download and share the file. When a new block gets created, it is added to all blockchain copies across the network.

This way, everyone has access to the same information, and no one can tamper with the blockchain without detection. A shared ledger is a database maintained by a group of users rather than a single entity.

This way, all users have access to the same information, and no one can control the data or make changes without the group’s consensus. One of the most appealing aspects of the bitcoin blockchain is that it is so large and has amassed much computing power.

System of Records

A system of records is a database that stores information about transactions or other activities.

The records system allows users to verify that a transaction has taken place and that the data is accurate. A block is then broadcast to all nodes in the network, containing a digital signature, timestamp, and relevant information.

Mining is essential for open-public blockchains. Mining is based on a novel approach to an age-old economic problem: the tragedy of the commons. For instance, Bitcoin mining eliminates the possibility of the same bitcoin being used in multiple transactions simultaneously in a way that is hard to detect.

Each blockchain may have a different type, amount, and verification process. It is a matter of the blockchain protocol – or the rules that govern what is and is not a valid trade or a valid block creation. The verification process gets tailored to each blockchain. When enough nodes agree on verifying transactions, they can now create any necessary rules and incentives.

Blockchain Applications

Now that we understand blockchain technology, it’s essential to look at some practical applications for this emerging technology. The leading blockchain applications include;

Financial Services

Traditional systems are inefficient, error-prone, and excruciatingly slow. Intermediaries are frequently required to mediate the process and resolve disputes. Naturally, this comes at a cost in stress, time, and money. On the other hand, users find blockchain to be less expensive, more transparent, and more effective. Examples of financial services include;

  • Cross-border payments– blockchain provides solutions with transparency and low cost.
  • Banking– blockchain can provide customers with a faster, more transparent, and more secure banking experience.
  • International remittances– blockchain can help reduce the cost and time of international money transfers.
  • Insurance– blockchain has the potential to make the insurance industry more efficient, reduce costs, and increase transparency.
  • Clearing and settlement– the current clearing and settlement process is slow, expensive, and error-prone. Blockchain has the potential to streamline this process and make it more efficient.
  • Asset management– blockchain can help asset managers to reduce costs, increase transparency, and improve performance.

Smart Contracts

Smart contracts are digital contracts embedded with an if-this-then-that (IFTTT) code that allows them to self-execute. In real life, an intermediary ensures that all parties adhere to the terms of the agreement.

The blockchain eliminates the need for third parties. Still, it also ensures that all ledger participants are aware of the contract details and that contractual terms are automatically implemented once conditions are met.

You can use smart contracts in various situations, including financial derivatives, insurance premiums, property law, and crowdfunding agreements.

Smart Property

Smart technology can get embedded in tangible or intangible property such as houses or cars. On the one hand, property titles, patents or company shares. This registration gets saved on the ledger, and the contractual details of others permitted to own this property. You can use smart keys to grant access to the authorized party– once the contract is verified, the ledger stores and allows the exchange of these smart keys.

The decentralized ledger also serves as a system for recording and managing property rights and allowing smart contracts to be duplicated if records or the smart key are lost.

Making property smart reduces your chances of encountering fraud, mediation fees, and other issues.

Internet of Things (IoT)

In the coming years, most people will use blockchain technology to manage and secure the internet of things (IoT). IoT is a network of tangible items or devices embedded with electronics, sensors, software, and network connectivity that permits these items to collect and exchange data. IoT can revolutionize many industries, including transportation, health care, manufacturing, and energy.

Blockchain technology can help secure IoT devices by verifying their identities and providing a tamper-proof record of transactions. In addition, it can help to ensure that data is not manipulated or stolen. This could significantly impact the security of IoT devices and the data they collect.


Blockchain technology is increasingly befitting in life, work, and interacting with digital information. There is no single set of standards, as there is with any new, revolutionary technology, and the overall impact is still in discovery. But there’s no denying that it’s here to stay.


Initial NFT Offering: The New Fundraising Technique Used By Decentralized Platforms

Cryptocurrency has taken a front seat in innovation and efficiency in the ever-growing digital world. Crypto developers have designed various fundraising models and crowdfunding initiatives to help businesses and young systems increase cash and nurture their ventures to yield extra awareness and appeal to early investors.

These fundraising systems help a variety of business enterprise entities to increase the yielding of profit. Notably, the most popular fundraising model in the crypto space is the Initial Coin Offering (ICO).

Users of this model reward their traders with a cryptocurrency token to fund the platform. Aside from the Initial Coin Offering (ICO), other brilliant fundraising initiatives include the Initial Exchange Offering (IEO) and the Initial Dex Offering (IDO).

However, with the increasing popularity of blockchain technology, a new fundraising model has emerged and is quickly gaining traction in the crypto space. This new model is called an Initial NFT Offering (INO). This article will explore what an INO is, how it works, and its advantages, but before that, let’s explain the concept of crowdfunding.

Understanding Crowdfunding

The concept of crowdfunding revolves around raising funds for various business purposes. In general, a cryptocurrency project will be available on the interest, and anyone willing to contribute to the project can actively engage and invest in it. This trend is being used by many crypto entrepreneurs and aspiring startups to generate early-stage funding for their business ideas.

Crowdfunding can be done in various ways, but the most common is through an Initial Coin Offering (ICO). ICOs have been widely popular in recent years and have helped many businesses raise the necessary funds to get their work off the ground.

An ICO usually works by businesses offering investors a new cryptocurrency token in exchange for funding the platform. These tokens can now be used to access the services or products provided by the business.

The Initial Non-Fungible Token Offering, or INO, is the most recent addition to the fundraising approach. Created specifically for decentralized platforms, many crypto experts with prior experience in the field view it as a better strategy.

What is Initial NFT Offering (INO)

An Initial NFT Offering (INO) is a fundraising model that allows businesses to issue digital assets for funding. This new model has emerged due to the increasing popularity of blockchain technology and non-fungible tokens (NFTs).

Unlike ICOs, IEOs, and IDOs, which raise funds in fiat or cryptocurrency, INOs raise funds in the form of non-fungible tokens (NFTs).

Non-fungible tokens (NFTs) are blockchain-based cryptographic assets with unique identification codes and metadata that differentiate them from one another. They cannot be traded or exchanged at equivalency, unlike cryptocurrencies.

NFTs, include ownership information for easy identification and transfer between token holders. Owners can also include metadata or asset attributes in NFTs.

One advantage of Initial NFT Offerings is that they make it simple to launch an NFT project. INOs are responsible for the rapid expansion of the NFT space and the number of NFT projects now offering NFT collections.

How Does Initial NFT Offering (INO) Work?

The process of an INO is relatively simple. Businesses issue digital assets, in the form of non-fungible tokens (NFTs), to investors in exchange for funding.

Many NFT platforms allow their users to create Initial NFT Offerings for their community. The NFT platforms enable their communities to vote for good and promising projects published on the platform, and the winners get rewarded with the NFTs.

Developers and upcoming projects provide technical documents and future roadmaps to their community at the start of this race, giving the devs more openness and publicizing their work.

In order to list a project on a platform, creators must implement a First-Come-First-Served or lottery model to allocate their work fairly while increasing community engagement.

Typically, platforms grant access to digital work based on their users’ number of crypto tokens. Users are encouraged to stake crypto tokens to obtain allocations from upcoming projects. Members in the higher tiers of the INO receive rare non-fungible tokens for each project.

Artwork, games, videos, fashion accessories, music, photographs, and metaverses are among the digital assets sold during the fundraising process.

Furthermore, some platforms offer an Initial Staking NFT Offering, or ISNO, a modified version of INO. ISNO involves the sale of limited edition stake-able non-fungible tokens. The concept behind ISNO is to offer a more exclusive and valuable NFT to users who are willing to stake crypto tokens for the development of the project.

Developers design specific staking pools and launch digital assets directly on the platform with varying rarity and burning periods. The ISNO then enables each holder to burn their assets and release the crypto tokens. The owners and creators receive a portion of the staked reward on some platforms.

These NFTs can be bought and sold on decentralized exchanges (DEXs) and can also be used to access the services or products offered by the business. For example, an NFT could be used to access a virtual world or to purchase a digital asset.

Advantages of Initial NFT Offering (INO)

New supporters are diving into the NFT market, resulting in the massive adoption of NFTs. As a result, the number of NFTs is increasing, coincident with a push in INOs, providing plenty of advantages for the market of NFTs. The advantages include;

  • Transparency– NFTs are immutable and transparent, thanks to decentralized ledger technology (DLT). The characteristics of NFTs make them ideal for use cases such as digital art, gaming, and collectibles.
  • NFTs are easy to trade and transfer. Initial NFT Offerings enable people to earn a living without difficulty by utilizing various digital assets. Users with little understanding of the NFT space can reach out to a wide range of audiences with the help of INOs and crowdfunding. Artists who intend to put together these initiatives can financially fund them by increasing desired tokens through INOs before starting the projects.
  • Reduced transaction costs– They have reduced transaction costs while increasing funding returns. INOs with distinct features encourage customers to pay less for transactions. Reduced transaction fees are a boon to innovators and developers, as NFT offerings help to limit transaction fees. The more significant budget returns get linked to the restrained transaction expenses. Initial NFT Offerings provide traders with an advantage due to the inherent scarcity of NFTs.
  • High investment returns– They have high investment returns. Regarding ROI, INOs offer better results than traditional fundraising methods. In the case of successful projects, the return on investment for early backers is significantly higher.
  • Enhanced liquidity– They offer enhanced liquidity to the project. By releasing a limited number of NFTs, the project can control the price while providing liquidity to early backers.
  • Improved engagement with the community– They offer improved engagement with the community. Backers can show their support for a project by participating in the NFT sale. In addition, they can also stay updated on the project’s progress and receive exclusive benefits.
  • NFT lending– NFTs can be used as collateral for lending. This is because NFTs are digital assets stored on a blockchain. Lenders can use NFTs to secure loans and earn interest on their investments.

Features of the Initial NFT Offering (INO)

Below are some features that make the Initial NFT Offering platform the best of all fundraising platforms.

Security features– The security of the Initial NFT Offering platform is ensured by the use of,

  • 2FA, Authenticator– Allow advanced security features such as 2 Factor Authentication, Google Authenticator, Re-Captcha, and others to help users secure their accounts on the platform.
  • Encryption– The platform uses AES 256 encryption to encrypt data in transit and at rest. To ensure data integrity, PII data is also encrypted. Depending on demand, more encryption standards can be customized and integrated.

Application features– The Initial NFT Offering platform can be used for a wide range of applications, such as

  • Milestone Contract– The platform’s milestone feature is an exceptional yet optional feature that enables legitimate INOs to differentiate themselves from frauds and thus attract the right investors. Furthermore, this will assist investors in regaining trust in the INO.
  • Investor Management– The platform allows for simple management of prospective investors acquired through multi-channel INO marketing campaigns delivered across various crypto ad networks and the crypto community.

Platform Features– The platform has a wide range of features that make it the best fundraising platform.

  • Custom Smart Contract– With just a few clicks, you can facilitate flawless airdrops, bonus transfers, refunds, and more by designing custom smart contracts to govern everything on your INO sale.
  • Airdrop Campaign Management– Controlling user incentivization allows you to connect with your target audience, build communities, and raise awareness while also efficiently managing your airdrop campaign.
  • Detailed Reports and Analytics– You can easily track your INO performance using a single reporting dashboard that provides access to automated reports, basic and advanced report insights, real-time alerts, etc.


Initial NFT Offering (INFO) is a fairly young crowdfunding offering in which tokenized assets in the form of NFTs are sold on the INO platform during the early stages of a project or business. INOs make it easier for firms and artists to sell their NFTs while incentivizing and rewarding investors and communities.

INO is a current solution for getting to the bottom of people’s problems. It enables NFT liquidity, simplifies the recording process, eliminates adherence risks, and provides a safe passage for users.


Crypto Adventure: All You Need to Know About Crypto Tourism

On November 24, 2021, Russell Crowe fired off a tweet lauding the “amazing restaurants” on the streets of Bangkok. About four days later, Bloomberg reported that Thailand’s state tourism agency was laying the groundwork to attract the people who have become wealthy and famous by holding digital currencies. The plan also includes attracting celebrity crypto aficionados like Russell Crowe.

To some, the Tourism Authority of Thailand’s (TAT) plans could come across as radical attempts by a desperate and revenue-craving entity at resuscitating an industry badly hit by the Covid-19 pandemic. After all, the Bloomberg report states that the agency lost over $80 billion in potential revenue when Thailand went into lock-down in early 2020.

Nevertheless, TAT’s initiative is an example of an emerging aspect of global tourism called crypto tourism. This article aims to help you understand crypto tourism, its advantages and disadvantages, and the role of blockchain technology in the sector’s success.

What is crypto tourism?

Crypto tourism refers to a form of tourism or tour service targeted at cryptocurrency enthusiasts. It often involves tour companies organizing travel tours paid for with crypto or tour packages, including crypto-focused classes or lectures by the tourists.

Suppose you wish to travel to your favorite destination. You notice that you can use cryptocurrency to pay for essential amenities, including your stay at the hotel, food, and transportation. If you hold crypto, this could be an opportunity one can hardly pass.

The destinations that encourage crypto tourism often have proper mechanisms in place to facilitate smooth transactions. For instance, they could have crypto ATMs and other facilities that create an enabling environment. Some destinations go as far as issuing their own crypto coins and wallets, and on top of which, they build a new tourism ecosystem.

But to say that crypto tourism is all about targeting crypto enthusiasts would be too simplistic. Instead, countries like Thailand hope to build a new tourism ecosystem centered around blockchain – the technology that underlies cryptocurrencies.

Blockchain in crypto tourism

The term ‘blockchain’ suddenly became a buzzword overnight after Bitcoin emerged into mainstream awareness in 2009. Blockchain technology refers to a database system distributed among different nodes within a computer network. In simpler words, it refers to a shared registry that records and tracks transactions in a business network.

Blockchain is big news because it ensures that shared information is immutable. The technology enforces transparency when sharing information and only allows permissioned parties access to the network. Thus, blockchain’s potential applications in many industries are vast, so the tourism industry embracing the technology is not radical.

According to Statista, the tourism industry does not have one clear product; hence tricky to define. The industry has many subsectors, and some of the best known include travel companies, attractions, hospitality, transport, and lodging.

Nevertheless, a common thread cuts through the various subsectors: they all rely heavily on tracking and identification services. For example, a travel company might need the capacity to track customer luggage or adequately identify the customers for security reasons.

While attracting the crypto wealthy seems like the tourism industry’s quick fix to revenue shortfall post-Covid, the ultimate goal could be grander than understood today. For instance, most crypto tourism packages entail experts offering lectures on cryptocurrency and blockchain. Therefore, the ultimate goal could be to build the destination’s blockchain capacity. They could then use the capacity to build a more robust tourism industry.

What services does crypto tourism offer?s

Like any other tourism package, crypto tourism offers an array of treats to clients. Some of them include:


Cruises are an integral part of the global travel industry. Thousands of passengers book tickets for voyages to various regions worldwide every year. According to Cruise Market Watch, a cruise market watcher, the global cruise market generated revenue close to $30 billion yearly before the pandemic hit.

Seeing that the cruise market has immense potential for huge returns, CoinsBank organized a crypto-themed voyage in 2017 dubbed The Blockchain Cruise. The voyage would be one colossal blockchain technology event attracting thousands of participants from all over the world.

Buoyed by the success of the initial attempt, CoinsBank transformed the voyage into an annual excursion, with the last voyage taking place in 2019. The Blockchain Cruise is now a global conference with stops in major cities along the Mediterranean coastline.

NFT gallery visitations

NFT galleries are coming in various locations worldwide as museums, and other attractions businesses cast their nets wide to capture as many crypto tourists as possible.

A non-fungible token or NFT is a unit of data stored on the blockchain. The data can represent anything from a physical asset to digital art, and the best part is that NFT is uninterchangeable.

Over the past few years, interest in NFTs has shot up, mainly after Beeple sold an NFT for $69 million in March 2021. Because of their popularity, some enthusiasts have set up physical NFT galleries and opened the doors to crypto tourists.

In the UK, Quantus launched in March 2022 to showcase digital art in the physical world. Located in Shoreditch, London, the NFT gallery will host strictly NFT work and includes interactive elements for a wholesome experience.

A similar brick-and-mortar art gallery opened in Chicago in November 2021. The trailblazing NFT gallery displays different works of art on screens mounted on walls. Most importantly, visitors can place bids by scanning blockchain-linked QR codes.

Crypto payments

Although less apparent, utilizing cryptocurrency on vacation is an integral part of crypto tourism. Tour companies that support payments in crypto indirectly encourage crypto millionaires to utilize their services.

According to a Markets Insider analysis, most businesses in the travel services industry are adopting a crypto-friendly posture. It said that the travel industry tops the list of the top 10 crypto-friendly industries, where 11.5% of businesses in the sector accept crypto payments.

Crypto adoption may be nascent, but the intention is clear: businesses will go to great lengths to tap into a rolling wave with the potential for vast returns.

Pros and cons of crypto tourism


·      It offers learning opportunities in crypto investments and the latest trends

While defining crypto tourism, we stated that the packages include opportunities for visitors to offer crypto-focused lectures. This is an ingenious initiative because it opens learning opportunities for the local population.

According to 2021’s Blockchain Employment Report, blockchain’s highly technical and abstract nature is the most significant obstacle to the technology’s optimum trajectory. In other words, there is a shortage of experts who can distil the knowledge and disseminate it to the majority who lack technical skills.

This is why facilitating quality crypto tourists appears to be an ingenious initiative. If, for instance, the Tourism Authority of Thailand (TAT) succeeds in establishing an active crypto tourism niche in the country, the local population is highly likely to benefit from the knowledge the experts will share.

Additionally, most of the wealthy and famous in the crypto ecosystem are open-minded people who could strike investment deals wherever they go. This means that the destination countries might experience increased capital inflow. Also, local crypto investors who want links with the outside world could benefit from interacting with crypto tourists.

·      It widens the range of payment options

Every country has a national currency that foreigners ought to use when visiting. It means converting currency from one denomination to another, which could shortchange the visitors because of forex slippage.

With cryptocurrency as an alternative payment method, many tourists can avoid forex slippage because currency conversion won’t be needed. For example, most destinations that support crypto tourism accept Bitcoin, the first and widely recognized cryptocurrency. This makes it easy to transfer the coins.

·      It offers networking opportunities

In an upcoming sector such as crypto, beginners face enormous challenges navigating the ecosystem. Also, most of the crypto talent is concentrated in developed countries; hence finding mentors is challenging.

However, more people can meet leading developers and visionaries through crypto tourism services like cruises. Thankfully, all of the crypto-focused cruises taken so far have been designed to be global blockchain conferences. They are a critical avenue to meet and interact with experts and investors.


Crypto tourism is a grand vision, but it faces complex challenges. For example, except for El Salvador and a few other outliers, many countries do not recognize cryptocurrency as legal tender. Until most nations adopt meaningful crypto policies that facilitate the use of digital coins as money, it may take a while before travelers can comfortably switch to crypto.

Additionally, a small population globally understands or even has access to crypto. It means crypto tourism will remain limited to a small market for the foreseeable future.


If cryptocurrency is the future of finance, crypto tourism is the first indication of the radical shift in global tourism. Once the digital currency takes hold in global tourism, the chances of redundant fiat currency will increase. In the meantime, initiatives like crypto tourism remain mere attempts by businesses and countries to cast the net wide to stave off the effects of the Covid-19 pandemic on the industry.


Top 13 Crypto Podcasts

It can be challenging to keep up with the rapidly-changing world of bitcoin, blockchain, and cryptocurrency. Most books and magazines are outdated as soon as they hit the shelves in this space, and traditional education is decades behind.

On the other hand, if you try to read every article or watch several videos, you realize that there’s a lot of information to digest and stay on top of the space. That’s why podcasts are so valuable in this space – they condense all the essential news and updates into a short, easy-to-digest format that you can listen to while you’re on your way to work or doing chores around the house.

But with so much content out there, how do you know which podcast to invest your time into? We’ve gathered our collective listening experience in this blog post and selected a few of the most worthwhile crypto podcasts.

The Best Crypto Podcasts

In no particular order, here are a few podcasts that attempt to make sense of this rapidly evolving field.

1.   Unchained Podcasts

 Laura Shin, a sovereign journalist covering all things crypto, talks with industry pioneers in this podcast about how blockchain technology and crypto-assets can positively impact how we earn, spend and invest money.

Shin chronicles the early tensions and power struggles that characterize Bitcoin and Ethereum’s founding and offers a glimpse into the DAO, which caused Ethereum’s first existential crisis. She also describes the massive ICO bubble that saw prices soar – and the fortunes of just a few.

However, Shin’s podcasts consist primarily of interviews with industry insiders and leaders, allowing her followers to eavesdrop on the latest industry insights. Since she was a senior editor at Forbes and one of the first mainstream journalists to write extensively about crypto, Shin has been involved in the crypto landscape for quite some time. Her experience and connections make her podcast one of the best sources for in-depth information about the industry.

2.   The Bitcoin Podcast Network

Bitcoin Podcast Network offers a wide range of long-form podcast episodes about bitcoin, blockchain, Ethereum, etc. It is one of the steadiest crypto podcasts out there.

The podcast features interviews with top people in the space, such as Roger Ver and Nick Szabo. The podcast doesn’t shy away from controversial topics, like forks, airdrops, and scams. The hosts, Dr. Corey Petty and Lucian Beebe, have over 20 years of experience in the financial sector, and they’re not afraid to tackle the hard questions.

3.   The Bad Crypto Podcast

Do you get depressed when the crypto markets fall? Do you have a tear in your eye because you don’t want to look at the block folio? Do you worry that your coins will turn to dust? Brush away your tears and fears because The Bad Crypto Podcast will turn that frown upside down. That’s correct. The Bad Crypto Podcast slices, dices, purees, boils, and fries your sadness into crypto joy! The Bad Crypto Podcast is perfect for those new to the space and looking for an entertaining introduction. The hosts, Joel Comm and Travis Wright are self-proclaimed “blockchain, bitcoin, and cryptocurrency evangelists” who love to have fun while educating their listeners. The podcast covers various topics, from ICOs and airdrops to the latest news and developments.

4.   CoinDesk Podcasts

CoinDesk is one of the leading news sources for all things crypto, and its podcast offerings are just as comprehensive. CoinDesk has gathered several podcasts under their umbrella podcast network, including the Breakdown and SOB (short for “Speaking of Bitcoin”).

The Breakdown, presented by Nathaniel Whittemore, examines macroeconomics, bitcoin, geopolitics, and the big picture of power shifts. Each week, Nathaniel is joined by a different guest to discuss the latest news and developments. SOB- Speaking of Bitcoin features Stephanie Murphy, Andreas M. Antonopoulos, and Jonathan Mohan.

CoinDesk podcast covers the latest Bitcoin news, focusing on Liberty, Justice, and Peace. They also interview leading figures in the space, such as Naval Ravikant and Elizabeth Stark. CoinDesk podcasts is an integrated platform for crypto news, data, events & indices for the next generation of investing and the future of money.

5.   What Bitcoin Did

What Bitcoin Did features host Peter McCormack interviewing some of the biggest names in the crypto industry, such as Adam Back, President Nayib Bukele, and Nick Szabo. The podcast includes a wide range of topics, from the early days of bitcoin to the latest news and developments. Peter is a bitcoin maximalist, and his passion for the space shines through in his interviews.

McCormack’s podcasts are extremely valuable for newcomers because he was new to Bitcoin when he started the podcast. So there’s an evolution to his podcasts, with the old ones addressing most of the core issues of crypto. In contrast, subsequent podcasts become increasingly sophisticated as McCormack’s knowledge of the subject grows.

Listeners also appreciate that McCormack gives Bitcoin critics airtime, giving his podcasts a balanced perspective that is somewhat unusual in the partisan world of cryptocurrencies.

6.   Crypto 101

 Are you new to cryptocurrencies and blockchain technology? Do you find the space confusing and overwhelming? If so, Crypto 101 is the podcast for you. The duo Bryce Paul, business development professional in the crypto space, and Aaron Malone, a crypto advisor and researcher, host the podcast.

 The podcast covers a wide range of topics, from the basics of blockchain technology to the latest news, developments, and analysis for a “community of Crypto Crusaders on a mission to takecontrol of their future. Crypto 101 is perfect for those new to the space and looking for a comprehensive introduction.

7.   Unconfirmed

Unconfirmed is a weekly podcast hosted by Laura Shin, a senior editor at Forbes magazine. The podcast features in-depth interviews with some of the most famous people in the crypto space, such as Naval Ravikant, Olaf Carlson-Wee, and Fred Ehrsam. Unconfirmed addresses different crypto topics, from the latest news and developments to the intersection of crypto and traditional finance.

In the cryptosphere, fintech developments often occur within seconds, and the podcast strives to respond to those changes in just the same way. So new episodes of Unconfirmed are released every week in digestible bursts of twenty minutes.

8.   Uncommon Core

The Uncommon Core podcast is a weekly show that’s hosted by Hasu, a cryptocurrency writer and researcher, and Su Zhu. The podcast explores big-picture questions in the crypto space, such as “Is Bitcoin a digital gold?” and “What is the difference between blockchains and virtual currencies?”

 Although the podcast covers topics within the crypto-verse that, at first glance, appear somewhat dense, their unique approach yields insights that set them apart from other podcasts. The podcast aims to reach those looking to understand better the cryptocurrency space and how it works.

  • Pomp Podcast

Anthony “Pomp” Pompliano is a bitcoin maximalist and the founder of Morgan Creek Digital, a digital asset management firm. In his podcast, Pomp interviews some of the biggest names in the crypto space, such as Naval Ravikant, Fred Wilson, and Wences Casares.

Pompliano’s passion for the space shines through in his interviews. His content is engaging and encompasses everything from how to build a fintech company to what you need to know about investing and avoiding scams.

While the podcast is geared toward those already familiar with the space, beginners will also find value in Pomp’s insights.

10.     Bankless Podcasts

The Bankless podcast is a production of the software company Ethereum. Hosted by Ryan Sean Adams, the podcast features conversations with some of the most influential individuals in the space, such as Vitalik Buterin, Gavin Wood, and Alex Tapscott.

The podcast covers a wide range of topics related to Ethereum, decentralized finance, and the future of the internet. Ryan Adams does an excellent job of breaking down complex issues for listeners and providing valuable insights into the world of cryptocurrencies.

11.     Epicenter Podcasts

The Epicentre podcast is a production of the Bitcoin Foundation. Hosted by Brian Fabian Crain and Sébastien Couture, the podcast features in-depth interviews with some of the most famous names, like Gavin Andresen, Jeff Garzik, and Peter Todd.

The podcast addresses various topics, from the latest news and developments to the technical aspects of Bitcoin. Crain and Couture are highly knowledgeable about the space and offer excellent insights to crypto-newcomers.

12.     The Flippening Podcast

The Flippening podcast is hosted by Clay Collins, the co-founder, and CEO of Nomics, a cryptocurrency data website. The podcast delivers in spades, covering various topics related to the cryptocurrency space, such as investing, trading, and the latest news and developments. Collins is an excellent host, and his knowledge of the crypto-space is vast– his high-energy delivery makes for captivating listening.

13.     The Money Movement

Brought to you by the circle, The Money Movement podcast is a great listen for those who want to learn about the cryptocurrency space and how it works. Hosted by Jeremy Allaire, the podcast explores and chronicles the ideas and opportunities that drive the new world of digital money.

Covering topics in the future of work, the rise of stablecoins, and the new world of central bank digital currencies, The Money Movement is a must-listen for those who want to stay ahead of the curve.


Top 10 Crypto Lending Platforms

Since its unveiling, Bitcoin has shown immense potential to upend the structures of legacy global finance, but a killer app is yet to emerge. However, the search for the killer app could be over if crypto lending takes off.

If figures from the niche are anything to go by, crypto lending is set to be the most significant thing out of the crypto industry. For example, data from Credmark, a crypto data company, indicates the crypto lending market rose sharply between 2019 and 2020. Specifically, from Q3 2019 to Q4 2020, the market recorded an 1170% rise in the total active collateral.

What is a crypto lending platform?

Crypto lending refers to a niche of the cryptocurrency industry where crypto-asset holders lend out their coins or borrow against the assets as collateral. Therefore, a crypto lending platform is a marketplace where borrowers take loans and lenders earn passive income from their crypto-asset holding.

Some crypto firms like BlockFi and Celsius Network have created lending platforms with transactions worth millions of dollars. According to DeFi Pulse, a site that offers the latest rankings and analytics of the decentralized finance (DeFi) sector, MakerDAO has $14.52 billion in total value locked.

Crypto lending works similar to the traditional banking industry but with digital assets instead of fiat. An investor opens an account with a lending platform, deposits crypto, and earns interest.

Furthermore, the crypto lending sector falls into the two main categories of the crypto industry: centralized finance (CeFi) and decentralized finance (DeFi). In CeFi, transactions go through third-party service providers, while in DeFi, transactions are peer-to-peer, with no third-party gatekeepers.

Some of the leading lending platforms include:


BlockFi is an excellent platform to onboard into the crypto lending ecosystem because it follows a centralized structure. As with all the crypto-focused businesses in centralized finance (CeFi), BlockFi operates like traditional banks. That means users get the best of both worlds: the security of traditional banking and the income potential of cryptocurrencies.

Like banks, BlockFi lets users open savings accounts, deposit coins, and begin earning interest. Users can fund their accounts with 13 coins, including Ethereum (ETH), Bitcoin (BTC), and Litecoin (LTC), and earn interest rates ranging from 3% to 9.3%.

However, it is worth noting that the interest rate regime is floating. A floating interest rate regime fluctuates periodically. The rate moves up or down as a floating boat would on water, meaning the current rate depends on the conditions in the market. With a floating interest rate, lenders can exploit the full income potential of a volatile market, although it raises the risk profile in case of a downturn.

BlockFi boasts over $10 billion in assets and a global clientele numbering over a million. Users can withdraw funds without charge once per month, and any extra withdrawal requests will attract a small surcharge.


Cryptocurrency burst onto the global scene primarily because supporters argued it could define a new global financial system that cuts out gatekeepers. While significant steps have been made to this end, there is still a long way ahead. Interestingly, CoinRabbit is among the vanguard crypto-focused businesses intent on materializing crypto’s original objective.

CoinRabbit is a crypto lending platform that matches lenders and buyers without requiring KYC procedures. The absence of KYC means users can transact anonymously, which some could find most appropriate.

Besides non-KYC, users can also withdraw funds without charge, leaving them with maximum possible returns. Additionally, all stablecoin deposits attract an annual percentage rate (APR) between 12% and 16%. What’s more, CoinRabbit implements one of the fastest deposit processes in the market, taking you less than 15 minutes to run through.

Furthermore, CoinRabbit does not restrict the savings and withdrawal amounts. Users can also open multiple savings accounts, each with a different coin.


Celsius is a crypto lending platform like no other, especially when speaking interest rates and coin variety. On the one hand, lenders can generate about 17% return on their assets, while on the other hand, borrowers do not face punitive rates. The balance between the competing sides of the market has made Celsius a popular crypto lending platform globally.

Established in 2017, Celsius has processed more than $922 million in rewards and yields and holds assets worth over $20.9 billion. The figures are a testament that Celsius’s over 1.7 million users trust the platform.

Speaking of trust, Celsius has gone to great lengths to demonstrate to users that it can keep their funds safe. The business obtained a FinCEN certification early on to acquire legitimacy in the United States.

What’s more, Celsius claims to provide fair and transparent services, including low rates for loans, quick transactions, and zero fees.


MakerDAO is one of the most utilized crypto lending platforms in the DeFi niche. The decentralized credit platform is built on the Ethereum blockchain, and Dai (DAI) is the native token. Dai is a stablecoin whose value corresponds to the US dollar (USD).

Users get credit in the form of Dai with collateral, including Ethereum (ETH) and other Ethereum-based cryptocurrencies. The debt incurs interest (also called stability fee) that accrues monthly. Maker users can ask for Dai debt up to 66% of the collateral’s value.

According to DeFi Pulse, MakerDAO is the biggest DeFi project in the lending sector, with more than $14 billion in total value locked (TVL).


Aave is similar to Maker concerning the decentralization of transactions. When it went live in 2020, the decentralized liquidity protocol promised an open-source platform built on the Ethereum blockchain. It means third-party developers can build decentralized applications (dApps) and other services on top of the Aave Protocol.

To use Aave, investors only need to deposit any amount of a preferred cryptocurrency. The assets will start earning interest immediately – the interest rate is calculated based on market demand. Additionally, users can secure loans on the platform by collateralizing the deposited assets. The beauty of Aave is that borrowers can offset the interest incurred with interest earned on the deposited funds.


Binance is primarily a cryptocurrency exchange, but the platform has spread itself as far as crypto lending. Given its reputation as a likable exchange, the platform could leverage the trust and the vast ecosystem it has created to revolutionize the crypto lending sector.

One of Binance’s strengths is Binance Coin (BNB), an altcoin geared at streamlining operations. Specifically, the coin is spearheading Binance’s foray into DeFi. With BNB, users can buy and sell crypto assets, as well as stake the coin for passive income.


The Compound Protocol was launched in September 2018 on the Ethereum blockchain to decentralize finance. To this end, the developers open-sourced the entire codebase.

The protocol leverages complex algorithms to enable users to earn interest on assets or access credit against their assets. Compound is entirely decentralized and open to anyone with assets and willing to supply them to its liquidity pool. Furthermore, the platform calculates interest rates based on supply and demand forces.

Because of easy access and democratized governance, Compound is a popular platform in the DeFi ecosystem. In fact, DeFi Pulse ranks it the third-best crypto lending platform based on total value locked (TVL) – Compound’s TVL was $6.23 billion at writing.

Additionally, Compound has a native token COMP for faster and smoother transactions. Users can also stake the token, which has attractive yields.


Crypto lending is booming in the DeFi ecosystem, with more than 50 projects under DeFi Pulse’s radar. Alchemix is one of these projects, besides Aave, Maker, Compound, etc.

Alchemix is one of the youngest crypto lending protocols in the market, having launched in March 2021. Like many others, Alchemix is Ethereum-based, but it takes the concept of crypto lending a notch higher. The platform’s protocol has a unique feature that automatically makes the loans pay themselves back.

Alchemix accepts stablecoin deposits, which users can collateralize and earn yields. To pay debt automatically, the protocol sends the yield generated on user assets to pay the interest accrued on borrowed funds. The automation makes Alchemix a unique platform and its most vital selling point.


YouHodler is one of the best crypto lending platforms based on the loan-to-value ratio. The loan to value (LTV) ratio is a composite index used to adjust the lending and borrowing of crypto on various platforms. YouHodler’s LTV is approximately 90%.

What’s more, YouHodler offers instant cash loans with either Bitcoin (BTC) or Tether (USDT) as collateral. The platform also supports fiat as collateral, including US dollars (USD), euros (EUR), Swiss franc (CHF), and British pound (GBP).


Most crypto lending platforms already discussed are overwhelmingly web-based. This means they lock out potential users who access the internet via smartphones. Thankfully, CoinLoan aims to disrupt the status quo by offering mobile-first services.

CoinLoan has aesthetically designed iOS and Android apps that enable users to manage their assets seamlessly, as well as participate in the credit market. On top of that, users can deposit and withdraw funds without charges.


If blockchain is the future of finance, then crypto lending platforms will be essential to the technology’s success. As already apparent, crypto lending projects have billions of dollars in locked value and have sufficient momentum to break even.

Nevertheless, there is always that nagging question: is the crypto lending ecosystem safe? As with any upcoming niche, crypto lending has many challenges, but users can remain safe if they know better. For example, one must ascertain that the preferred platform is reputable and has proper measures to secure user assets.


What Is Web 3? All You Need to Know About the Third-Generation Internet

Google Trends data indicates Web 3.0 is a hot topic, whose popularity peaked in late 2021. Although the number of searches on Google has plateaued since then, the trend line indicates there still exists substantial interest in the newest phenomenon in the internet age.

While the term ‘Web 3.0’ (or ‘web3’) appears all over the place, much of the world is still wrapping its head around it. This article explains Web 3 with a particular focus on the fundamental architecture, how it defers from the existing infrastructure, and why it matters.

Web 3 defined

Web 3 is the newest internet iteration built on decentralized ledger technology (DLT). Blockchain is the more commonplace term for DLT. The technology enables user data storage across a distributed network of devices. This architecture prevents monopolistic tendencies in internet management, meaning big corporations like Meta or Alphabet cannot thrive. In other words, Web 3 is an online ecosystem built on the blockchain.

The term ‘Web 3’ and other variations, such as Web3 or Web 3.0, originated with Gavin Wood in 2014, the co-developer of the Ethereum blockchain. It was coined to refer to the third generation of the internet. He later left the project to dedicate his time to Web3 Foundation, supporting blockchain-based decentralized projects.

So far, we know that Web 3 is the third generation of the internet, but one can barely wrap one’s head around the new phenomenon. To understand Web 3 better, one must review its precursors.

Precursors to Web 3

The worldwide web history harks back to 1990 when Tim Berners-Lee pioneered the hypertext document management system accessible via the internet. Browsers, such as Netscape, took the technology a notch higher by creating the means for less technical-minded users to wander the internet. This era when users could only read material on the internet refers to Web 1.0.

Web 1.0 was a game-changer, and users marveled at it, especially when they felt the power of computers in their hands. However, users could do nothing beyond reading static web pages and interacting on message boards.

The web evolved into the early 2000s, and web pages became dynamic. However, the highlight of the new internet era, also called Web 2.0, was content creation. Users were no longer passive spectators but active content creators. For instance, platforms like YouTube allowed users to record pieces of their daily lives and share them with strangers online.

Beyond user-generated content, there was a paradigm shift towards online interactivity. Social media platforms like Facebook and Twitter introduced social connectivity and interactivity that surpassed those seen in the previous era. The explosion of content transformed barely known companies into tech giants, incentivizing them to control their data pipelines tightly.

According to a World Economic Forum (WEF) analysis, the architecture of Web 2.0 enabled big corporations to build an insanely profitable business model. The current internet runs on centralized serves stored in vast data centers under the tech giants’ control. In the end, users have superficial control over their online identities.

How Web 3 differs from the current internet (Web 2)

The most defining characteristic of the current internet is the ad-based revenue model. Most tech giants offer services for next to nothing but then harvest user data for sale to advertisers. But according to knowledgeable observers, the newest internet generation shifts the web from the attention economy to the ownership economy.

However, Web 2 and Web 3 have many more fundamental differences. Let’s discuss a few:

Decentralization vs. centralization

The primary objective of the internet is to share information and social interactions – both Web 2 and Web 3 agree on this. However, the current internet is platform-centric, meaning the gatekeepers exert disproportionate control over user data. It means Meta or Twitter can use collected user data as they like.

The current internet relies on servers in specific locations to respond to requests for information. Contrariwise, Web 3 follows a decentralized architecture when storing content. The internet stores information on blockchains, which are more like decentralized databases. This technology enables information to be accessible in multiple locations simultaneously.

We can explain the difference better with an illustration. Twitter is a popular microblogging website where people worldwide air their takes on various topics. However, Twitter has policies to regulate the environment, and it actively censors accounts and tweets if they break community rules. But if Twitter were built on the blockchain, it would be impossible to carry out the punitive actions because no one has absolute control of the platform.

Peer-to-peer interactions

The rise of tech giants like Facebook accelerated the growth of the current internet. These sites enabled users to interact in ways they could not imagine before, which was painless. For example, Facebook’s monthly active users (MAUs) increased exponentially since its founding in 2004. In just four years, the company reported 100 million MAUs, and more than 2.3 billion in 2019.

One might argue that the centralized nature of Facebook enabled ideas to flow easily and decisions to be made quickly, hence contributing to the platform’s meteoric rise. However, one can also postulate that Facebook’s – and similar tech giants’ – chokehold on Web 2.0 has provided the fuel for the attractiveness of Web 3.0.

Specifically, Web 3 leverages the blockchain and other open-source software to implement a permissionless and trustless ecosystem. In other words, a platform like Facebook built on the blockchain would allow users to interact without relying on the benevolence of the platform’s parent company, in this case, Meta.

Ubiquity and connectivity

Each player stores information behind a firewall in a secure server on the current internet. Thus, users must open an account with specific platforms to enjoy their services. To a large extent, the fragmentation of databases in Web 2.0 is a primary reason for its declining attractiveness.

On the contrary, the fact that Web 3 applications are built on the distributed ledger technology (DLT implies more connectedness of content. Also, most developers create applications using open-source technology, which encourages openness.

Unlike the current web, the third-generation internet will not commoditize the personal computer. No company will have the power to create and control a data center. Instead, blockchain spreads the data center out to the edge and into the users’ hands.

AI integration

The open nature of Web 3 architecture enables technologies such as artificial intelligence (AI) and machine learning (ML) to flourish. However, there is overwhelming evidence that AI and ML are already in extensive use on the current internet. What, then, makes AI integration in Web 3 more significant?

In Web 2, companies tightly control the information on their servers. For example, the Google search engine collects user data to train the AI system that underlies its crawlers. However, no one outside of Google’s authorized staff can ascertain the integrity of the collected data, which makes the insights gleaned from it questionable.

The case of reviews on Trustpilot is an apt illustration of the challenge AI faces in Web 2. Trustpilot provides a platform for users to give their perspectives regarding particular products or services. Other users can then use the information to make better purchasing decisions. But Trustpilot can obtain cooked reviews to support the sales of given products/services.

Web 3 approaches AI integration differently. The new internet leverages openness and easy accessibility of objective data to train AI and ML models. The models’ accuracy is higher because there is no room for humans to rig the data.

For example, if Google were to operate in Web 3, the search engine would produce more relevant results instead of the current system where the results are used as an advertising platform. The search engine has to rig the search results in a certain way to ensure the ads are targeted enough.

Factors powering Web 3

The third-generation internet must outperform the current system in critical aspects if it wants to supplant Web 2. With its flaws, Web 2 is pervasive and has given rise to behemoths that the thought of their collapse appears to be a far-fetched fantasy. However, certain factors can empower Web 3 enough to surpass the current internet. They include:

Digital scarcity

The current web is built on the abundance of content, such that content creators cannot leverage the revenue potential. Contrarily, Web 3 leverages non-fungible tokens (NFTs) to give creators control over their content.

If the concept catches on, it will transform the next generation internet from an attention economy to an ownership economy. Given that NFTs have already taken off, the probability of more creators making the switch is high. If and when this happens, it would be a matter of time before a complete transition to Web 3 happens.

Patronage on steroids

Currently, users can support content creators by watching personalized ads. The creators will then rely on the platform’s benevolence and trust that they will be compensated fairly.

Web 3 takes the concept a notch higher by enabling creators to interact directly with their fans. In other words, the new internet proposes to transition from the donation model of the current internet to a value model – users are willing to pay for something not because they have to but because it benefits them. For example, users could buy tokens that give them a stake in an artist’s music album. The users can then partake in the album’s sales in proportion to the number of tokens purchased.

Community ownership

We know that the popular business model for businesses on the current internet gives outsized power to platform owners. For example, YouTube can delete a video from its server as long it violates community guidelines, however trivial.

Web 3 prevents such flagrant abuse of power by placing a platform’s governance under decentralized autonomous organizations or DAOs. Such an organization is represented by mutually accepted rules and is under the control of its members. Thus, the ecosystem lacks hierarchy hurdles and bureaucracy.

It means users will join DAOs based on how their objectives align with personal beliefs. Also, they’ll be able to effect changes, which is a pipe dream on the current internet.

Criticisms of Web 3

Web 3 has hurdles it must brave to fulfill its potential. Some of the limitations include:

Web 3 falls short of its ideals

Most Web 3 proponents posit that decentralization is the panacea for all of the current internet’s ills. But the reality is that ownership of blockchain networks and other critical infrastructure belongs to a few big players. 

A case in point is former Twitter Chief Executive Jack Dorsey’s rant on Twitter in late 2021, where he decried the trickery of those pushing the Web 3 agenda. He alleged that wealthy VCs like Andreessen Horowitz were hyping Web 3 because of vested interest. In the end, it is the few whales with outsized control of critical infrastructure that will harvest the bulk of Web 3’s potential, much like it is happening today with tech giants like Twitter, Google, Facebook, and more.


Much of the blockchain ecosystem is in the development stage, and many projects are coming up in closeted environments. For example, most of the current Web 3 applications are built on the Ethereum blockchain, but similar platforms, such as Polygon, have similar projects. The problem arises when users cannot seamlessly move from one platform to another.

Additionally, most current web browsers lack support for Web 3 technologies, without which regular internet users cannot access the ecosystem.

User experience

Still, the lack of integration in modern web browsers means users have to install additional software on their computers to access Web 3. The extra steps and complexity make for a poor user experience.


Most blockchain networks cannot match the transaction speeds we are used to on the current internet. The decentralized nature of the platforms implies that transactions jump through more hoops than usual before completion. The result is a slower network that might dissuade some from onboarding.


The new internet generation promises premium experiences for users, such as a customized browsing experience, speedy and more relevant search results, and an immersive social media experience. All this will happen with the individual being empowered to control their digital footprint and perhaps benefit from it financially. However, Web 3 has critical hurdles it must negotiate successfully to convince the skeptics because they are many.


The 8 Biggest Crypto Hackings

The birth of cryptocurrency in January 2009 marked a momentous shift in the way the ordinary man thinks about money. For the first time, people had the freedom to exchange value without banks as intermediaries. Essentially, cryptocurrency placed complete control of one’s finances into one’s hands.

While blockchain – the technology that underlies cryptocurrencies – brings peers in a transaction closer than ever, compared to the traditional financial system, there is still a need for specific third parties to facilitate transactions. For example, third-party crypto wallet providers offer users the chance to store coins safely and conveniently. Other third parties enable cross-chain transactions and so on.

Over the years, bad actors have exploited susceptibilities within the third-party platforms and made away with large sums of cryptocurrencies. Hackers have stolen an equivalent of $5.9 billion in crypto to date. But the most critical question is: who got hacked and how much value did they lose? Read on to find out the ten biggest crypto hacks in the industry’s history.

Ronin Network

Ronin Network is a sidechain built on the Ethereum blockchain to support Axie Infinity, an online video game. Vietnam-based Sky Mavis developed Ronin in 2020 to increase transaction speeds and player satisfaction in Axie Infinity by circumventing the inadequacies of Ethereum.

For example, Ronin implements cheap and fast micro-transactions, unlike Ethereum’s slow and gas-intensive transactions. As a sidechain, Ronin Network runs parallel to Ethereum and performs critical functions, such as authenticating transactions.

But problems arise when the sidechain’s architecture is not robust enough to withstand intrusion by bad actors. On 29 March 2022, Ronin Network revealed to its users that the platform had “been exploited for 173,600 Ethereum and 25.5M USDC.” At the time of the heist, the total value of the stolen cryptocurrencies was $615 million.

According to the statement, the attacker compromised the Ronin bridge (Ronin validator), which facilitates the cross-platform transfer of crypto assets, and stole the private keys.

Following investigations by the US Federal Bureau of Investigations (FBI) and the Treasury Department, the hack was attributed to the Lazarus Group, a group of hackers based in North Korea. Also, the US Treasury has sanctioned the wallet address that received the loot, meaning the hackers cannot move the coins.

Poly Network

When Satoshi Nakamoto described the Bitcoin blockchain architecture, they defined interactions within the network. The same happened with the Ethereum network and all the layer one blockchains. Thus, the initial networks are isolated ecosystems where users cannot transfer assets across the chains.

Like Ronin Network, the Poly Network developers envisioned a bridge to facilitate information transfer between chains. Specifically, Poly Network provides cross-chain technology for interactions in the decentralized finance (DeFi) ecosystem.

As the DeFi ecosystem expanded exponentially and the total value locked in projects skyrocketed, Poly Network began to experience elevated demand. It also means the network was handling many transactions per day. Meanwhile, bad actors were also hard at work looking for susceptibilities.

In August 2021, Poly Network noticed that hackers had exploited a vulnerability in a smart contract that maintains the bulk of the network’s liquidity. The hackers overrode the smart contract’s instructions and commandeered about $610 million worth of crypto.

Thankfully, the hackers later claimed the attack was in jest, after which they returned all the coins.


Before demand for cross-chain technology platforms became mainstream, cryptocurrency exchanges were the most popular crypto platforms. Coincheck, a cryptocurrency exchange based in Japan, faced its date with hackers during this period.

The cryptocurrency market was near the peak of the first massive rally in early January 2018. This means the number of transactions taking place in a day was huge. Coincheck chose to store funds in a hot wallet to keep up with the market’s tempo. A hot wallet is a crypto wallet that is always online. The connectivity enables users to make transactions quickly.

The problem with a hot wallet is that third parties can easily hijack and take control of the private keys. This is what befell Coincheck on 26 January 2018, when hackers compromised the hot wallet and funneled out 523 million NEM coins, worth around $530 million at the time.

An analysis of the hack established that Coincheck suffered a severe staff shortage, which might have created security lapses. However, Coincheck reimbursed all of its 260,000 customers affected.

Mt. Gox

The Mt. Gox hack is the earliest known incidence that captured global attention. In February 2014, a series of events happened quickly, spooking the entire cryptocurrency ecosystem. First, Mt. Gox, a Tokyo, Japan-based and largest cryptocurrency exchange at the time since Bitcoin launched, suddenly ceased operations. Next, users could not access the exchange’s website, and even more mysterious, its entire Twitter feed vanished.

On 28 February 2014, Mt. Gox sought protection under Japan’s Civil Rehabilitation Law, citing consequential events that hampered the exchange’s operations. According to a statement, a bug in the Bitcoin system gave bad access to the exchange, after which they disappeared 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to the exchange.

Interestingly, this wasn’t Mt. Gox’s first encounter with hackers. The exchange had, on various occasions, lost a substantial amount of crypto to intruders before the fateful day. For example, the exchange admitted that it had been hacked on 19 June 2011, after which it lost $500,000 worth of bitcoin.

Before February 2014, Mt. Gox handled close to 80% of the entire bitcoins in circulation. But all that changed when the 2014 hack came to light. From 2011 to 2014, the exchange had lost close to $500 million worth of cryptocurrency, affecting about 24,000 customers.


The Wormhole network is a messaging protocol that enables interoperability between blockchain networks. The platform connected Ethereum, Solana, Binance Smart Chain (BSC), and Terra at launch. However, the technology has matured into a communication bridge between Solana and other significant decentralized finance (DeFi) projects.

On 3 February 2022, the Wormhole team sent out a tweet announcing that the network had been compromised and 120,000 wrapped ETH or wETH stolen. The coins were worth over $320 million at the time of the incident.

As a bridge between major chains like Ethereum and Solana, Wormhole acts like an escrow that links cross-chain transactions. It locks transactions until all the instructions contained in smart contracts are fulfilled.

However, a hacker infiltrated the network’s liquidity by exploiting a critical vulnerability within the bridge. The attacker then exploited the breach to mint new wETH tokens.


Besides Coincheck and Mt. Gox, KuCoin is another cryptocurrency exchange with an unsavory experience with attackers. In a statement to users on 26 September 2020, the KuCoin leadership shared the results of an “internal security audit report” that established the loss of thousands of bitcoins and other altcoins worth over $275 million.

Further investigations established that the attackers had obtained the private keys to the Singapore-based crypto exchange’s hot wallets. They then withdrew 1,008 BTC, 11,543 ETH, and millions of ERC-20 and other digital assets.

An analysis by Chainalysis attributed the intrusion to the North Korea-based Lazarus Group, the same culprit in the Ronin Network hack. However, the exchange later assured users that it had recovered coins worth about $204 million.


PancakeBunny adds to the growing list of DeFi projects attacked in the recent past. According to a CipherTrace report released in May 2021, DeFi hacks made up over 60% of all crypto hacks by the end of April 2021. Incredibly, the theft volume in the ecosystem was virtually non-existent just two years ago. What gives?

The case of the PancakeBunny theft offers an apt illustration of why DeFi is a prime target for hackers. PancakeBunny is decentralized finance (DeFi) lending platform that provides flash loans and other packages. A flash loan is an unsecured debt lent to a borrower, and the borrower is supposed to pay it back soonest possible. In a sense, the DeFi ecosystem is a fertile space where new products are sprouting relentlessly.

Unfortunately, the flash loan service can hurt a platform severely if attackers find and exploit susceptibilities.

On 20 May 2021, the PancakeBunny team revealed, in a series of tweets, that the unthinkable had happened. Attackers had orchestrated a flash loan attack that enabled them to make off with BUNNY and Binance Coin (BNB), amounting to $200 million. BUNNY is the PancakeBunny network native coin.

Apparently, the attacker utilized the platform’s proprietary protocol called PancakeSwap, which facilitates the borrowing process.


On 5 December 2021, BitMart CEO Sheldon Xia tweeted information that roiled the crypto exchange’s users. He said his team had identified “a large-scale security breach related to one of our ETH hot wallets and one of our BSC hot wallets.” Essentially, attackers accessed the exchange’s hot wallets and withdrew crypto assets worth approximately $196 million.

We explained earlier that a hot wallet is always online and, thus, highly susceptible to unauthorized access. Specifically, the hackers siphoned off $100 million worth of tokens from the Ethereum blockchain and $96 million off the Binance Smart Chain. Over 20 tokens were targeted.


The cryptocurrency ecosystem has been a frequent target for hacks since bitcoin revolutionized global finance. However, the rate of attacks is rising, especially with the increased popularity of DeFi. Unfortunately, there is no telling with certainty if the trend will halt soon because blockchain technology is nascent, and the world is only learning the first principles.


GameFi: The Intersection Between Gaming DeFi

The blockchain appears to have captured the public’s imagination, creating significant interest from investors and offering endless use cases for industries such as healthcare and finance. Nonetheless, the promise has frequently overshadowed its potential.

Despite this, the digital ledger may have found its savior in online gaming, which is poised to become its first actual use case as the benefits of DeFi propel the gaming industry forward a generation. This multibillion-dollar industry is undergoing rapid transformation. Traditional gaming seeks a more immersive experience for players – a new era of online gaming that has opened up avenues of opportunity to a growing crypto community.

GameFi is at the forefront of this transformation, with a mission to create an ecosystem that combines entertainment, crypto-powered economic incentives, and novel social interaction – where gamers want to stay, play, live, and grow.

In this article, we will explore how GameFi uses DeFi to power the future of online gaming. We will also touch on some of this intersection’s advantages. Stay tuned!

What is GameFi?

The idea for GameFi (GAFI) arose from the convergence of two fast-paced industries: decentralized finance (DeFi) and gaming. GameFi is a DeFi platform used to create new types of blockchain-based games.

GameFi is a platform that allows developers to publish their games while gamers can buy GameCredits (GAME) using fiat money and then utilize them to acquire gamers.

Additionally, gamers can use their in-game assets as collateral for borrowing and lending. The GameFi protocol enables developers to create in-game economies powered by DeFi, allowing players to trade, lend or rent out their game assets and winnings. This not only creates a more engaging experience for gamers but also provides them with new ways to generate income from their hobby

Without a doubt, GameFi, is the meeting point of decentralized financial instruments (DeFis) and blockchain-based gaming.

On the one hand, GameFi solutions include software programs that integrate gamification tools into DeFis. In this case, the gaming is merely a cover for the underlying DeFi protocol, which is a key component of the project’s business model.

GameFi also develops actual video games powered by DeFi protocols. The end goal is to build a system where players can use their game assets as collateral for borrowing, lending, and trading.

The other GameFi solution involves introducing DeFi-specific concepts into the volatile world of decentralized gaming. Such systems list digital collectibles or non-fungible tokens (NFTs) as game assets. These can be used to power in-game economies and drive player interactions.

The MOBOX ‘play-to-earn’ platform best exemplifies the concept of GameFi as ‘gamified DeFi.’ MOBOX, like other modern DeFi ecosystems, includes modules for a wide range of applications, including staking schemes, liquidity pools, yield farming tools, NFT environments, etc.

The History of GameFi

Amazon Game Studios launched GameFi in 2013 to create a new line of digital entertainment products. A year later, GAFI released several experimental games developed by Amazon Game Studios, such as Cat Fling, Tales from Deep Space, and Toontown Rewritten. GameFi also contributed to the design of Crossy Road, which went on to become one of the best-selling iOS apps of the year.

By 2015, Game Fi had evolved into an internal service that powers Amazon Game Studios apps and games and games from other companies. Game Closure, which uses GameFi to power its popular social platform for game development, GameHouse Social, was its first external customer. According to Lior Tal, CEO of GameClosure, GameFi “performs better than anything else out there.”

In 2016, GameFi was made available to all Amazon Game Studios partners. The same year, the company launched Amazon Lumberyard, a free game engine with GameFi built-in. Amazon Lumberyard was designed to make it easy for developers to create high-quality games.

The following year, Amazon Game Studios released several successful games powered by GameFi, including The Grand Tour Game, Breakaway, and New World. By the end of 2017, Amazon had begun selling GameFi to developers via its Amazon Web Services Marketplace.

GameFi is now available as a GPU instance, with support for various programming languages such as Java, C#, and Python. GameFi gives you unrestricted access to aggregate functionality (tracking users across games) and per-game user behavior. It also provides APIs for game data, social features, and in-app purchases.

GameFi Protocols

On the GameFi platform, several protocols are currently live and in use. However, only a few of them are frequently used by the majority of the players. The most popular protocols on the GameFi platform are:

  • Advanced Encryption Standard (AES)-128 is used to encrypt some protocols. However, all of this is rendered obsolete when both parties employ the same protocol. As a result, it does not affect your chances or ability to predict your opponent’s behavior.
  • GameFi Protocol (GFP) is the first GameFi mining pool protocol to create the first global GameFi aggregation platform. Its governance token is GFI. GFP-DAO is formed spontaneously by token holders. Carry out community governance for the GameFi Protocol.
  • GFI is the native token of the GameFi Protocol and is used to power all platform aspects. It is currently on several exchanges, including Binance, Huobi, and OKEx.
  • Notably, User Datagram Protocol (UDP) is used for all communication between players and the GameFi server. It is a connectionless code that does not require a dedicated connection between two parties. It makes it well-suited for games, where players come and go as they please.

Raw UDP is the default protocol that everyone uses when they first start playing on GameFi. The protocol provides no packet protection. As a result, you should only use it against other users who use the protocol.

UDP-R extends the UDP protocol that uses a slightly different packet format. Its developers designed it to be more resistant to packet loss and corruption. However, it is not as widely used as UDP due to the slightly higher overhead required.

Advantages of GameFi

GameFi is transforming the video games industry by bringing together the best of two worlds: the gaming industry and blockchain technology.

The main advantages of GameFi are:

  • Incentives

GameFi provides an incentive for players to play to earn, which is a massive intervention for the gaming industry. The revolutionary concepts rejected traditional game business models, which rely heavily on in-app purchases and advertising.

On the contrary, blockchain-based play-to-earn games allow for exchanging in-game tokens and items for cryptocurrencies. As a result, players’ in-game assets can now be used outside of the game environment, unlike in traditional games. Trading their in-game tokens on the marketplace, for example, can help players earn financial incentives.

  • Decentralized Gaming Experience

The assurance of complete control over your assets is the best value advantage in the world of GameFi NFT. Gaming Finance projects permanently store all data about your in-game assets and NFTs on blockchain networks.

You don’t have to fear losing all of your assets if the game crashes. Players have full control over all assets they own in the game, and they can use them however they see fit.

  • Friendly Learning Curve

Many people are skeptical of playing GameFi games because they are unsure of the new play-to-earn model. However, there are no complicated steps or instructions to follow when playing such games. On the contrary, simple gameplay mechanisms are one of the most notable features of play-to-earn games. As a result, there are almost no barriers to entering the world of play-to-earn games.

  • Transparency

The use of blockchain technology in GameFi provides an entirely transparent ecosystem. All the transactions and game data are stored on the blockchain, which is publicly available for anyone to view.

The Most Popular GameFi Projects

The following are some of the most popular GameFi projects:

Axie Infinity

Axie Infinity became popular in the Philippines during a global pandemic in 2020. The majority of the country’s unemployed used Axie Infinity as a source of income.

The game primarily employs the play-to-earn model and includes fundamental mechanics such as asset trading and task completion.

In this GameFi project, players can collect, breed, and train Axies in the form of NFTs. AXS, the native token of Axie Infinity, has a staggering market capitalization of over $8 billion, making it one of the frontrunners in Gaming Finance.


Decentraland is a famous virtual world that runs on the Ethereum blockchain. It is one of the first projects to implement the play-to-earn model in a gaming environment successfully.

The game allows players to buy, sell, or trade virtual land and experiences. It also includes a virtual world builder, allowing players to create their own experiences.

With various in-game items, players can customize their parcels of land with new experiences targeted at a specific audience. The latest auction of virtual real estate on Decentraland for nearly $4 million is undoubtedly an indicator of its future role in the GameFi revolution.


GameFi (GAFI) is a decentralized platform that allows players to join the thriving blockchain game economy. As a player, you can obtain GameFi tokens to store your in-game assets on the blockchain and provide feedback to developers and publishers via surveys. Every transaction gets carried out using GFI tokens, allowing players and developers to spend the currencies they have earned within the GameFi network.


Hot Vs. Cold Wallets: A Detailed Overview of Cryptocurrency Storage Methods

The number of people holding cryptocurrencies today is higher than ever before. For instance,’s wallet usage reached 81 million in 2022. Similar service providers are recording equally impressive numbers.

Cryptocurrencies, especially bitcoin, increased in popularity during the coronavirus pandemic as people sought alternative means to beat inflation. Accordingly, demand for crypto wallets grew – because people have to keep the coins somewhere safe.

While knowledge of crypto is improving worldwide, few people understand related aspects, such as crypto wallets. If you’re reading this, count yourself a part of the growing population whose crypto-sophistication level is improving. This article goes under the hood to explain and describe crypto wallets with a particular focus on the difference between hot and cold wallets.

What is a cryptocurrency wallet?

In the traditional sense, a wallet is a bag or case for holding money. Note that, in this case, the wallet is a ‘thing’ because it holds physical money – banknotes, coins, or bank cards. But what does it become when the money ceases to be a thing?

Cryptocurrency is a digital asset domiciled on a blockchain platform. Accordingly, a crypto wallet is a software that allows you to store and transfer cryptocurrency. The wallet could be a device, such as a flash drive or a mobile or desktop platform program. But the differences with physical wallets do not end there.

For example, crypto wallets do not carry the actual coins, even in their digital form. Instead, the device or program merely holds the keys to your coins. Let’s explain further:

Cryptocurrency is digital money used in a centralized or peer-to-peer system to transfer value, such as Bitcoin. Technically, crypto is encrypted data hosted on a blockchain network. To move or alter the data, one must have the proper credentials and permissions; otherwise, the process will not succeed.

This is where the concept of keys comes in. In cryptography, a key is a technology that validates the authenticity of data through encryption and decryption. When transacting in the cryptocurrency ecosystem, you’ll come across two keys – public and private keys.

  • Public key – this works similarly to an address that identifies you when transacting with crypto. Think of it as a bank account number or an email address that enables you to send and receive messages. As such, the key is sharable.
  • A private key is a string of numbers and letters that should be kept secret. If the public key is the bank account/email address, the private key is the password that gives you access to the account. When sending or receiving crypto coins, the private key identifies you as the rightful owner of the crypto wallet, and the transaction should proceed.

What about hot and cold wallets?

We know that crypto wallets do not store actual coins, but instead, they hold the keys to the assets. The wallets merely facilitate your interaction with the blockchain that hosts the cryptocurrency. Specifically, they let you move coins elsewhere and allow others to see the balance in your wallet, and vice versa.

As you interact with crypto wallets further, you’ll notice variations. For example, we already mentioned that the wallet could be software installed on a desktop computer or smartphone or a device such as a flash drive. Consequently, one can place crypto wallets into two broad categories: hardware and software wallets.

  • Hardware wallets include wallets that are physical devices that users can plug into a computer to complete transactions.
  • Software wallets are pieces of software installed on a smartphone or desktop.

But what about hot and cold wallets? A hot wallet is one that users can access if only there is internet access. The holder’s keys are held in a secure web server accessible online. Also, the hot wallet can fall into either of the two broad categories of crypto wallets.

On the other hand, a cold wallet is what you might have already guessed, a crypto wallet accessible offline. The holder’s keys are stored locally, on the desktop, smartphone, a flash drive, or even a piece of paper. A typical cold wallet falls under the hardware crypto wallet category.

Hot vs. cold wallets

Besides accessibility online or offline, hot and cold wallets differ in many other ways that we will explore here.

Hot crypto wallets

Hot wallets are sometimes called web-based wallets, and they are also the most common. To understand why they are familiar, let’s consider an illustration.

Suppose you sign up for an account on a crypto exchange, such as Coinbase. Usually, most crypto exchanges offer to store the coins for you in custodial wallets. But let’s say you download a desktop wallet on your computer or an app on your smartphone because it is fast and straightforward to set up – you’ll be setting up a hot wallet.

Pros of hot wallets

  • Hot wallets are always connected to the internet, thus easy to use. For example, some hot wallet service providers offer them as browser extensions, making access a tap or click away.
  • Also, hot wallets are easily accessible and convenient. Think of the smartphone application. You always carry your mobile phone around, and there is no chance you’ll need to access your wallet only to realize that you left the phone at home.

Cons of hot wallets

  • Hot wallets are not ideal for holding large amounts of crypto because of an elevated risk of hacking. The fact that hot wallets are always online means hackers have the time to fiddle around for unauthorized access.
  • To some extent, users do not have complete control over their coins. We know that hot wallets store users’ private keys on a secure web server operated by a hot wallet service provider. If bad actors hijack the service provider’s equipment, users are likely to lose their keys.

Cold crypto wallets

A cold wallet is anything where you can access your keys without internet access. It includes a piece of paper with your public and private keys written on it.

Suppose you buy Bitcoins from your favorite exchange and, instead of downloading a browser extension for storing the coins, you order a USB stick, such as Ledger, from Amazon. You’ll then hook the device to your computer and complete the transfer of the coins. While at it, you’ll notice that the device will ask for a passcode before giving you access. Thus, you must have the physical device in hand and the passcode to use the cold wallet.

Pros of cold wallets

  • Security is cold crypto wallets’ strongest suit. We saw that they are accessible offline, hence unsusceptible to internet-based bad actors. Also, there is an extra layer of security, the passcode. Your coins are entirely safe if you can keep the passcode secret.
  • Cold wallets give you complete control over your keys and the coins because everything is stored locally.
  • Because of the solid security, cold wallets are ideal for storing a massive amount of crypto. In fact, this is the preferred storage method for many crypto-related businesses, such as exchanges.

Cons of cold wallets

  • Cold wallets are inconvenient and almost impractical for everyday usage. A typical crypto holder wants to take advantage of price swings in the market. However, the cumbersome nature of moving coins from a cold wallet impairs users’ ability to exploit the full potential of crypto price fluctuations.
  • Users have greater responsibility to guard the coins. If anything goes wrong, say you lose the passcode to the USB stick or recovery phrase, you assume 100% liability. On the contrary, hot wallet service providers might refund users if hackers compromise their webservers.

Which wallet should you choose?

Your choice of an ideal crypto wallet heavily depends on various factors. For example, what is the goal for buying crypto?

A cold wallet seems appropriate if you acquire the coins to ‘HODL.’ HODLing (short for Hold On Dear Life) is a cryptocurrency investment strategy where investors sit on their coins through various cycles – recession and appreciation – and would only sell at a price that generates sufficient returns. In such a case, there is no immediate need to transfer the coins, which makes sense to store them in a cold wallet.

However, a hot wallet would be ideal if you intend to play the market volatility. This investment strategy involves frequent buying and selling the given crypto to cash in on the fluctuating prices. Thus, you’ll need easy access to the coins because sometimes you might need to make several transactions in a day.


Is it possible to get the best of both worlds? So far, the market does not have wallets with both hot and cold characteristics, and perhaps it is because such a feat would be impossible. A wallet is either hot or cold; no two ways about it.

Nevertheless, people have developed ingenious tricks to achieve the impossible. A great example would be to use a dedicated mobile phone as a crypto wallet. You’d download a hot wallet onto the phone and only turn it on when it is time to make a transaction. So, the wallet is cold when the phone is off and becomes hot when you switch on the phone and connect it to the internet. Genius.


CBDCs and The Future of Money: All you Need to Know About Central Bank Digital Currencies

Aiming for global asset class status, crypto or digital tokens owe their development to Satoshi Nakamoto, who introduced the world to new peer-to-peer payment methods without a central authority to oversee them in 2009 during the creation of the Bitcoin blockchain.

In recent years, and mainly since the onset of COVID-19, these tokens have evolved into an investment tool, increasing the global appetite for cryptocurrency. This is due to the advanced security, transparency, and inflation protection cryptocurrencies provide.

However, because digital currencies like Bitcoin (BTC) threaten governments’ ability to manage their economies, various central banks are currently trialing their own sovereign-backed virtual currencies known as Central Bank Digital Currencies (CBDCs) using Blockchain technology.

In their latest report, the Bank for International Settlements said that 85% of all central banks worldwide are currently studying or piloting CBDCs. So, what are CBDCs, and how might they impact the future of money? Read on to discover everything you require to know about CBDCs.

What is CBDC?

Central bank digital currency (CBDC) is a blockchain-based digital currency controlled directly by the country’s central bank and supported by national credit and government authority. Few technocrats regard the CBDC as a digital form of sovereign money in which the central bank determines the monetary policies.

In the most simple terms, CBDC is an electronic form of central bank money that can store value and make digital payments quickly and easily.

CBDCs use new payment technologies, typically a blockchain, to increase payment efficiency and lower costs, making them distinct from established currencies like the US dollar.

A centralized database makes CBDCs more efficient than other digital payment systems, like Bitcoin or Ethereum, which use a decentralized ledger.

Each country considering a CBDC has its approach. The blockchain technology and general principles used by various CBDCs are similar to those used in Bitcoin, the original cryptocurrency.

Several countries are experimenting with CBDCs based on blockchain technology. Venezuela took the lead in this area, introducing its cryptocurrency, the petro, in 2018.

However, Petro is afflicted by numerous problems, and there are very few Venezuelans who use it. Besides Venezuela, the Chinese government is probably the most advanced in creating a CBDC.

The Federal Reserve Bank of Boston is in collaboration with the highly regarded Massachusetts Institute of Technology (MIT) on a digital dollar experiment.

The European Central Bank (ECB) has also been researching the possibility of introducing a digital euro.

The development of this new type of currency is still in its infancy, so it’s hard to predict how CBDCs will be used in the future.

However, some believe that CBDCs could eventually replace cash and become the primary form of currency in a country.

The Goal of Central Bank Digital Currencies

Numerous people living in the US and other countries lack access to financial services. In the United States, 5% of adults do not have a bank account. Another 13% of US adults have bank accounts but use more expensive alternatives like money orders, payday loans, and check cashing services.

As a result, CBDCs aim to provide businesses and consumers transferability, privacy, accessibility, convenience, and financial security. Additionally, CBDCs could decrease maintenance costs, reduce cross-border transaction costs, and provide lower-cost alternatives to those using alternative money transfer methods.

Moreover, the CBDC provides a country’s central bank with tools to implement monetary policies to keep the economy stable, control growth, and keep inflation under control.

Cryptocurrencies’ value constantly fluctuates, making them highly volatile assets. This volatility may cause severe financial stress in many households and negatively affect the economy.

CBDCs could help to reduce this volatility by providing a more stable alternative. For instance, government-backed and central bank-controlled CDCs would provide households, businesses, and consumers with stable methods for exchanging digital currency.

The Common CBDC Features

CBDCs are still in their early stages, so it’s unclear what more features they’ll eventually have – assuming they’re ever rolled out.

A CBDC is a cross between Bitcoin and a government-issued currency. The resulting CBDC creature incorporates characteristics from each, and specific features may include the following:

Distributed Ledger Technology

The world we live in is exceedingly digital, and our money is digital for the most part. Using our smartphones, we can peek at our balances or use our credit cards to make a payment. So, how is CBDC different?

The CBSC is digital, but its technological makeup is different. The idea is to reengineer money from scratch, with many borrowing from Bitcoin’s underlying technology with distributed ledger technology (DLT).

A bank’s ledger stores financial records to track records, such as how much money a person has and what transactions they’ve made. As opposed to a single database that holds all the financial records of an individual, the distributed ledger technology consists of multiple copies of these transactions, each managed and stored by a separate financial institution, usually by the country’s central bank.

We call this a permissioned blockchain because only a few select entities can access or alter it. Additionally, central entities control who has access to the blockchain and what they can do with it.

In contrast, a permissionless blockchain, such as Bitcoin, allows anyone to run the software and participate in sending transactions on the network.

Lower Costs

With a CBDC, there would theoretically be no or meager transaction costs. Advocates claim that they could reduce the cost of transferring money due to the structured hood of CBDC. The idea is that with a CBDC, all financial entities are more connected, ensuring a smoother flow of funds.

For context, the current system often involves an intermediary – think PayPal or a bank – to process transactions. With a CBDC in place, users would no longer require this middleman, as the CBDC would act as the intermediary. This could theoretically reduce or remove transaction fees.

Faster Transactions

Another potential benefit of a CBDC is that it would enable faster transactions. When you make a bank transfer in our current system, the receiving bank must wait for the funds to clear. With a CBDC, this wouldn’t be an issue because the settlement would happen in real-time.

This is because a CBDC is built on a blockchain, which would allow for the near-instantaneous processing of transactions.

Tracking Payments

DLTs provide a complete record of all transactions. Those governments known for their extensive surveillance apparatus may want to use this information to keep close tabs on their citizens.

It could have both positive and negative applications. How? It would allow the government to track down and prevent crime. On the other hand, the government could use it to infringe on the privacy of individuals.

Different governments have different policies in this regard. The Federal Reserve, for example, seems more interested in protecting the privacy of US citizens if it adopts a CBDC.

Centralized Control

Perhaps the most controversial aspect of a CBDC is under centralized control. But, there is a reason CBDCs use this permissioned blockchain. Many governments choose DLT technology because it allows them to maintain control over certain aspects, such as:

  • The Supply– Bitcoin has a built-in limit of 21 million bitcoins, which is extremely difficult, if not impossible, to change. On the other hand, governments each have a central bank in charge of the country’s money supply. These powerful banks decide when to remove or add money to the supply, such as stimulating the economy in difficult times, and setting national interest rates.
  • Who’s in Charge– It will be up to a central entity to decide which financial institutions participate in the distributed ledger. In other words, the government will be in charge of who can and cannot access the network.
  • What Transactions are Allowed– Governments maintain control by deciding which transactions are valid and invalid. For example, most governments banned cryptocurrency for certain activities, such as financing terrorist activities.

In short, a CBDC gives the government more power, not less. They can control the money supply and track financial activity more than with fiat currency.

This centralized control is one of the main reasons some people are against CBDCs. They argue that it takes away the freedom of decentralized cryptocurrencies, such as Bitcoin.

The Future of CBDCs

The finance world is in a new chapter of the history of money. And most countries seek to preserve key aspects of their old monetary and financial systems while experimenting with new digital forms of money.

For those experiments to succeed, policymakers must grapple with many open questions, technical obstacles, and tradeoffs.

Despite the challenges, over 100 countries are actively researching and testing CBDCs. For instance, more than a year has been since the Bahamas issued its currency, the Sand Dollar, known as the local CBDC.

China is leading the way among the biggest economies in trialing Central Bank Digital Currency (CBDC). There are more than a hundred million individual users and billions of transactions in China’s digital renminbi [called e-CNY].

The US is also looking into CBDC. In February, the Federal Reserve released a report stating that a CBDC could fundamentally alter the US financial system.

All eyes are now on Jamaica since it’s set to roll out its national digital currency in the coming months. This is after pilot-testing the project in 2021, issuing 230 million Jamaican dollars (US$1.5 million) of digital money.

The list goes on. It is clear that central banks are taking the idea of a CBDC seriously and are actively researching and testing them.