BLACKACADEMY will guide you through everything related to cryptocurrencies; from altcoins to exchanges, how to buy and sell, and many other topics that will assist you as a beginner in the crypto market. Even if it may seem somewhat complicated at first, you will definitely get the idea over time. Black Academy will present the topics which you are curious about to you in an organized manner. Therefore you can adapt to the sustainable and renewable way of the future. You should never invest based on hearsay and third party guidance. Never invest your money which you would use to pay for your needs. Always get education in the area and continue learning. Let us show you the ropes with BlackRose.
What’s Crypto? Cryptography (encryption) is a set of mathematical methods that provides security and privacy to not only information but also to the sender and the receiver of the information. In short, cryptography is the transformation of some information into a state that prevents others from accessing it. In this internet age that we live in, security of information sent and received has gained huge importance and cryptocurrencies are exchange tools that came to life in order to provide this important security. We can also call them digital or artificial forex. The term crypto currency stems from the combination of cryptography and currency. Bitcoin is the first currency to be created in this manner. A lot of future cryptocurrencies appeared since the emergence of Bitcoin. We, BlackRose, will talk about those currencies under other topics. Cryptocurrencies operate on a decentralized system. They are not affiliated with any government, bank, or private organization and do not require permission or approval from anyone. Therefore you are free to use cryptocurrencies for all transactions you require without the necessity for intermediaries. You can make quick transfers from anywhere in the world for free or in return of diminutive fees.What is Bitcoin? Bitcoin is the first decentralized crypto or digital currency that can be transferred from user to user using open-source software. It was created by an anonymous person or group called by the nickname Satoshi Nakamoto in 2008 and was made available as an open-source software in 2009. Transactions with Bitcoin are recorded in a public ledger called the blockchain. El Salvador officially announced Bitcoin as a legal currency with the draft approved by the senate on June 6, 2021, and it was adopted as a legal currency on September 7, 2021. Central African Republic has become the second country to officially recognize Bitcoin as a legal currency after El Salvador. Although there are particular countries where its use is legal, there are many countries where it is not.Here is the list of the countries where bitcoin is recognised as a legal currency
● United States of America: In 2015, it was recognized as a commodity and subsequently it was considered as a fund.
● England: Bitcoin is used legally and commonly. Moreover, taxes are applied to the transactions made.
● Australia: It has been recognized legally but no legal regulations have been put in place. Despite this, the country has supported the use of cryptocurrencies by removing the double taxation applied to Bitcoin.
● Sweden: Has been recognised as a payment method by the FSA, and is used as a payment method.
● Belgium: Bitcoin use is very popular despite there being no regulations in place.
● Canada: A lot of companies choose Bitcoin although there are no legal regulations in place.
What is Altcoin?
Bitcoin production cost and difficulty increased with the growing interest in Bitcoin. Therefore, equipment for this special purpose has been manufactured and energy consumption has increased much further. Alongside these challenges and the growing interest, alternative cryptocurrencies similar to Bitcoin have emerged with different algorithms. All coins other than Bitcoin are referred as altcoin. It’s easier to mine altocoins. Therefore you may ask if we should prefer altcoins? Yes, they should definitely be preferred but first of all, it is significant to conduct serious research to get to know them and make a risk analysis. For the record the crypto world is a market with a high risk level. As an example of altcoins; ethereum, litecoin, monero, neo, ripple are some of them. Actually, a new one enters the crypto market almost every day and each coin has its own blockchain. It is very costly to create these blockchains and it is necessary that miners from all over the world support them with expensive hardware. Plus, the amount of energy used by the hardware is incredibly high.
What is Token?
What differs tokens from coins is that they do not have their own blockchain and they work on already existing blockchains. Therefore, they are easier to produce. Many of tokens operate on Ethereum. Tokens are assets released to finance a project; they can represent a value, service or even a product. Tokens cannot be used for trading outside their own domain.
How and where to Buy Cryptocurrencies?
There are various ways to buy cryptocurrencies. The best way to buy cryptocurrencies is to have an account on a crypto exchange market if you are a beginner. The most significant point is the correct choice of the cryptocurrency market. You should also pay attention to which market the crypto currency you buy is listed on since not every cryptocurrency may be listed on every market. The features you should pay attention to in the exchange markets where you will buy crypto are as the following:
● Being reliable and well-known
● Having investments and security measures
● Having password and two-step verification measures
● It should store your data such as identity and address
● High trading volume (total of daily trading transactions)
● It should have a high number of users and even global stock markets
● It should have a trading pair (example: euro/dollar) and a number of cryptocurrencies
● commission (fee) charges
● It is important to have a good user experience,
● recognised payment methods
● Technical support,
● Minimum investment limit
● Powerful and organizational framework.
What Factors to Consider When Buying Cryptocurrencies?
● First of all, the white paper or black paper of the project should be read. White paper is a document that includes the working principles of the project; the problems it aims to solve, its way to provide solutions, the financial information and the technical information. The more successfully the white paper is written, the more it attracts future investors.
● The team behind the project should be observed: Who is in the team, who are the managers, what are the managers' areas of expertise are the questions to be asked. In addition, previous initiative and work are also among the issues that you should pay attention to.
● The supply of the coin you will buy: the total supply and circulation supply of the cryptocurrency you will buy should be considered. The total supply represents the maximum amount of cryptocurrency that will be produced. Yet, not all the total supply may be in circulation. This part does not affect the value of the partial coin since it is not in circulation. The circulating supply indicates how much of the generated cryptocurrency is in circulation in the market. The lower total supply amounts will always be more valuable. Some cryptocurrencies burn and further reduce the supply while others continue to produce and increase the supply.
● Consider future planning (road map): It gives information about when and how the plans will be made, the steps to be taken, any updates, listings, and the progress of the project as stated in the white paper. It is a point that must be examined.
Privacy & Security in Cryptocurrencies
Cryptocurrency investors always prioritize privacy and security. Some steps they take to increase security are the following:
● Private key protection,
● The 2fa verification,
● Cold wallet and hot wallet usage (you will find detailed information in the following topics)
…are the main things that provide privacy and security in cryptocurrencies. In particular, the security of cryptocurrencies is increased thanks to the use of cold and hot wallets.
The Trading Strategy
The plan you implement for trading is called a trading strategy. Since this strategy is completely personal, it is not quite right to fit its rules between certain criterion. Creating a plan for yourself sets goals, determines the risk and time you want to take, helps you reach those goals and decide what to buy and when to sell. It prevents you from being affected by different factors and making mistakes. Hence it is significant to create a sustainable strategy for yourself. Still, there are some common methods although the trading strategy is unique to the investor…
Daily trading refers to the trading transactions you perform during a day. As with any other strategy, you need to do technical analysis in daily trading. Technical analysis gives you the information about the level to buy and sell. Since the profit in a single transaction may be low, many assets can be traded within the day. Hence daily trading is more convenient for experienced investors. Huge revenues can be obtained in this manner, but you require a lot of time and technical knowledge to be a successful day-to-day investor. Therefore, all investors must know how to conduct a technical analysis.
Instant Trading (Scalping)
It is a type of trade which is suitable to take the advantage of market inefficiency to make tiny profits. It is complex high-intensity strategy. It is among the fastest and most challenging strategies as it requires very fast moves within minutes or even seconds. It is a method that only experienced investors should use.
Wave Trading (Swing)
It is an investment form between Day Trading and Long Term Trading that may last from a few days up to a few months. In this method, the investor opens a transaction by making use of technical and fundamental analysis. It is an ideal strategy for beginners since it does not require constant attention and follow-up like day and instant trading. It is among the methods with the highest profit potential.
Position Trading (Trend)
Trend trading -also known as position trading- is a sort of strategy which aims to understand whether the price is going up or down by analyzing medium and long-term trends. It is a long-term strategy that allows you to predict using fundamental analysis whether the price of a cryptocurrency will go up or down within at least a few months. In this strategy, not only fundamental analysis but also technical indicators are used. Instead of short-term price movements, medium and long-term indicators are followed. The time frame is wide and allows more accurate and careful decisions.
Glossary of Crypto Terms
● Hodl: Means a somewhat passive investment strategy which you hold a investment tool for a long time. The term became common as a misspelling of the word “hold”.
● ATH: Abbreviation for "all-time high". It is the highest price ever reached by a cryptocurrency.
● FUD: Abbreviation for “Fear, Uncertainty and Doubt”.
● KYC: Abbreviation for “Know Your Customer”. It is the first and mandatory step that cryptocurrency exchanges and trading platforms must complete in order to authenticate their customers. If you do not authenticate, you may be restricted to only some applications.
● ATL: Abbreviation for "All-time low". It is the lowest price ever reached by a cryptocurrency.
● FA: Abbreviation for “fundamental analysis”, it is a method of predicting the value, as well as future performance of a particular asset. It is also used in the crypto money industry.
● Fiat: Refers to traditional, government-backed currencies such as the pound, euro and US dollar.
● Stablecoin: It is a type of cryptocurrency that aims to provide price stability in the cryptocurrency market. Most stablecoins are indexed to the US dollar.
● Pump: This is a term used to express an upward price movement, usually with a large inflow of money into a cryptocurrency.
● Dump: Indicates a downward movement when there is a large outflow of money from a cryptocurrency.
● Airdrop: An event where a blockchain project distributes free tokens or cryptocurrencies to the community.
● ICO: Initial coin offer. First public offering of tokens or digital assets for a new blockchain project.
● IDO: First decentralized offering that looks like an ICO but Allows users to interact with the project before the project is published.
● IEO: First exchange offer. This is the First time a cryptocurrency is sold via a digital currency exchange.
● Dumping: The process of dumping large amounts of cryptocurrencies into exchanges simultaneously when the supply overwhelms demand.
● Hard fork: A fork in the blockchain that validates transactions previously labeled as invalid and vice versa. For this fork to work, all nodes in the network must be upgraded to the latest protocol.
● Burn: The process of sending a cryptocurrency to a wallet address that will no longer be reachable.
What is Blockchain?
Blockchain is fundamentally a database. This type of database is called a block chain because it consists of blocks of data added one after the other. Cryptocurrencies work on this database; cryptocurrency transactions are verified and recorded on the blockchain. However, blockchains have some unique features different from other databases. First of all, blockchains are insert-only databases. Therefore data can only be added to the blockchain. Data added to the blockchain cannot be changed or deleted. Each block added to the block chain, each new data entry, is linked to the last block. Thus, each newly entered data carries the digital fingerprint of the previous data. This is a feature that contributes to the security of the blockchain network. Because if you try to change a block, its digital fingerprint will also change, so the fingerprint of the next block must also change. It is transparent – all data on the network is publicly available. Incorruptible – even the slightest change of data on the network requires the consent of the majority of millions of users, so it doesn’t become corrupted.
What are The Disadvantages of Blockchain?
The only disadvantage of blockchain is its high energy consumption. Since it doesn't have a central database, the network works non-stop to add new links to the unit chain in millions of different locations. This means high energy consumption as it requires powerful processors. According to the available data, the annual energy consumption of the Bitcoin network is the same as the annual electricity consumption of Turkmenistan. Considering that there are hundreds of types of cryptocurrencies, the annual energy consumption of all coins using blockchain technology corresponds to the annual energy consumption of tens of countries.
How Does Blockchain Work?
Bitcoin buying and selling is entered in the ledger. It is then transmitted to a network of powerful computers known as nodes. This network is made of thousands of nodes around the world compete to validate the transactions using computer algorithms. This is also known as Bitcoin mining. The first miner to successfully complete a new block is rewarded with bitcoin for their work. These rewards are paid with network fees passed on to the buyer and seller. Fees may increase or decrease depending on the volume of the transaction. After the purchase is cryptographically confirmed, the transaction is added to a block in the distributed ledger. The majority of the network must then approve the sale in a process known as "proof-of-work". Using a cryptographic fingerprint known as a hash, the block is permanently chained to all previous bitcoin transaction blocks and the sale is completed.
The Future of Blockchain Technology
While the Bitcoin system is the most well-known application of blockchain technology, there are thousands of cryptocurrencies built on this emerging technology. While it remains to be seen whether bitcoin will succeed in replacing other traditional payment methods in the future, applications of blockchain technology are growing rapidly. It is expected to lead to dramatic changes across industries.
Areas of Blockchain Technology Usage
In the field of;
● digital identities,
● copyright and user protection,
● voting area,
● real estate, land and automobile title transfers,
● data sharing,
● payment processing and money transfering,
● tax regulation and compliance,
● labor rights,
● food safety,
● stock trading,
● accelerating energy futures trading and compliance,
● gun tracking,
● medical record keeping,
● wills or inheritances.
Smart contracts are computer softwares designed as self-executing contracts. These softwares perform the predetermined action if the predetermined conditions are met. The most important feature is that it is a reliable structure that eliminates third parties. Thanks to smart contracts, deals can be made with confidence without the requirement for a central authority, a legal system or an external enforcement mechanism.
How Do Smart Contracts Work?
Just like traditional contracts, smart contracts are contracts between two or more parties where one party offers something of value to the other. The difference between a smart contract and a traditional contract is that a smart contract is a self-executing code that fulfills the terms of the contract. This code is sent as a transaction to an address on a blockchain, where it is verified by that blockchain's consensus mechanism. When this transaction is included in a block, the smart contract is initiated and is irreversible.
What Are Smart Contracts Used for?
Smart contracts, which are frequently used in the Ethereum network in particular, are quite popular in decentralized finance (Defi) in general, and thousands of dApp smart contracts are used in different ways in various blockchain networks, from finance to gaming, exchanges to media.
What is metaverse?
Metaverse is a sort of virtual reality in which people control and interact using their own avatars inspired by the 1992 science fiction novel "Snow Crash" by Neal Stephenson. Metaverse can be broadly divided into two different types of platforms. The first group focuses on creating a blockchain-based metaverse using NFTs and cryptocurrencies. The second group uses the metaverse for virtual worlds where people can meet for work or play. Metaverse technology according to a definition: Extensive, persistent, real-time rendered 3D worlds and networks that support the persistence of identity, objects, history, payments, and entitlements, each of which can be effectively experienced by an unlimited number of users simultaneously. In the future, interacting with the Metadatabase will feel much more real and faster than the web.
How Will Metaverse Technology Affect Our Daily Lives?
The spread of sustainable Metaverse projects, people are thought to be able to communicate with each other in a better way. Although the Internet has increased the speed and quality of communication, there may be points where it falls short. Metaverse is predicted to eliminate these inadequacies and provide a sense of togetherness in the future no matter how far the distance is.
How Will Metaverse Technology Affect the World of Art and Design?
The different possibilities that Metaverse is going to offer will of course also affect the art world and design. Although blockchain-based cryptocurrencies are seen as a medium of exchange, NFTs are on their way to becoming the official currency of the art world. Likewise, the metaverse will also break new ground in the art world and design, as well as offering a different perspective to our daily work on the internet or providing social gaming platforms.
What are NFTs?
NFT is a concept often associated with the field of digital art. However, an NFT is actually an immutable, indivisible and unique token. An NFT serves as a digital proof of ownership for any asset. Any asset can be an NFT. This can be a work of art, a trading card or an official document. It is not possible to change an NFT after creation. Each NFT is unique. Thanks to these features, NFTs also prove ownership of assets. So NFTs act as digital identity documents for assets. Thanks to NFTs providing proof of ownership, counterfeiting can be prevented in the field of digital art. NFT trades are made through NFT marketplaces. In an NFT marketplace, NFTs on the blockchain with which it is compatible are traded. The most popular and largest NFT marketplace is OpenSea.
What is Web 3.0?
Web 3.0 represents the most discussed revolution in the world of technology and cryptocurrencies and the third major revolution of the world wide internet network. We met the concept of web 1.0 with the introduction of the internet into our lives. In Web 1.0, users were not able to interact with networks and the pages they visited. Only the page contents could be read. The concept of Web 2.0 entered our lives with the emergence of social media applications and websites. Our data on the applications and sites we interacted with with Web 2.0 was only collected in a single database. These platforms mean that we own none of the content we create, the services we interact with. With Web 3.0, ownership, security and privacy issues on platforms are getting a decentralized, sustainable solution. The idea of decentralization takes a step forward. For Web 3.0, which can be defined as a “decentralized and transparent internet”, blockchain technology seems to be the most ideal solution.
What Does Web 3.0 Promise?
It aims to provide a free, sustainable experience to users with the decentralization and transparent internet structure behind the Web 3.0 concept. When this libertarian idea is brought to life with the help of tools such as blockchain technologies and DAO, a structure in which no central institution or authority can control the flow of information in online networks will come to life. In other words, our data will be much safer and our thoughts will be expressed much more freely.
What is a Bear Market?
A bear market expresses a pessimistic market outlook where asset prices in the market are in a downward trend and risks are increasing. In a bear market, the supply-demand balance shifts against demand. In other words, there is low demand despite high supply. All the cyrpto currencies have a decline during the bear season in the crypto market. Not every downward movement in prices indicates a bear season. We can only understand that a bear market state has been entered when long-term downward movements occur. Prolonged and strong bear seasons and price drops of up to 85% can be seen in the crypto money markets.
What is a Bull Market?
Unlike the bear market, bull market refers to the period when the asset prices in the market are in a continuous upward trend. This period is a when confidence in the markets increases, the majority of investors make purchases, and demand outweighs supply. Demand for cryptocurrencies increases when investors who think prices will increase over time, i.e. bull investors, dominate the market. This is seen as an increase in the prices of all cryptocurrencies. A 20 percent increase in financial markets in a 60-day period is generally interpreted as a sign that a bull market state has started. In a bear market and a bull market, investors receive support from Instruments such as indicators.
What is IDO?
IDO is an initial coin offering model on decentralized exchanges. This model is a different version of ICO and so on. But it is especially considered more secure than ICO. Because ICOs are issued before a cryptocurrency is listed on an exchange. ICOs are much more prone to fraud or loss, as it is difficult to appreciate if the respective cryptocurrency is not listed on the exchange. However, cryptocurrencies whose IDO is regulated are immediately listed on the relevant decentralized exchange. Thanks to IDOs, developers do not require to collect assets for liquidity pools. In most IDOs, users lock their assets in the decentralized exchange to buy new tokens. Some of these assets are then given back to the project, while others are added to a liquidity pool together with the new token.
What is an ICO?
ICO defines the process of offering a newly produced token or crypto asset for sale in exchange for popular cryptocurrencies such as Bitcoin, Ethereum, to raise funds for projects. Purchased tokens or crypto assets can be used for different purposes such as to access advantageous use or profit sharing for the products and services offered by the project. The cryptocurrencies which were produced to raise funds for a project are put up for sale, but the people or institutions who will invest in the project will want to know all the details about the project. For this reason, perhaps one of the key documents of an ICO is the document called whitepaper, in which the project shares the problems it solves, the solutions it offers, the advantages it provides as well as the technical details. The document will be shared in a way which people will access it easily such as the project’s website, on the project's social media accounts and forums. How the collected crypto funds will be shared (project team's share, project development share, advertising marketing share, business partners' share, etc.) is explained in this technical document (Whitepaper) published by the project team before the fundraising process begins. The project team determines important information such as; how those who want to participate can be included in the ICO, which cryptocurrencies will be sold for which cryptocurrencies (usually Bitcoin or Ethereum), the lowest and highest amount of coins to be collected, the amount of coins to be paid, how sustainable the currency will be, when and how it will be delivered..
What is IEO?
IEO refers to the raising of funds for a new cryptocurrency project through centralized cryptocurrency trading platforms. Project owners who want to create a cryptocurrency project may sometimes require financial support for the development of the project. With IEO, project owners meet the financial support they require and provide a fund for the development of the project. Users can also own the projects they want to invest in with IEO, and after IEO, they can trade the related project.
What is The Difference Between IEO and ICO?
IEOs take place through centralized cryptocurrency trading platforms. ICO, on the other hand, is carried out by the project developers. The IEO project is listed on a centralized cryptocurrency trading platform. The project whose ICO is made does not have to be listed on a trading platform.