Everything you need to know about Smart Contracts

Smart contracts are the new transaction protocols in the cryptocurrency market. The term was coined by the cryptologist, Nick Szabo in 1994. Smart contracts are computerized protocols which execute the terms and conditions of a contract. The main objective of building smart contracts is to satisfy the common conditions of any contract.

What are Smart Contracts?

All the “if-then-this-that” conditions in a contract are self-executed in a smart contract coded into it. The new rage in the market for such an old term is that the new smart contracts are based upon the Ethereum technology.

The new smart contracts along with the Ethereum blockchain technology removes all the intermediaries which reduce the time and cost considerably.

The main advantage of executing the smart contracts on the Ethereum blockchain is to make them decentralized and incontrovertible.

How do smart contracts work?

The process starts with writing the code of the smart contract in Solidity, a language of Ethereum. This code can be used for the exchange of goods or for an exchange of money when certain terms and conditions are met.

The next step is to upload the code on ETHEREUM VIRTUAL MACHINE (EVM) where the smart contract will be executed. Once the code is uploaded in EMV, it becomes same across each and every Ethereum node.

An Ethereum contract will involve at least 2 parties, powered by Ether, a digital asset. Then the smart contract will be executed and distributed according to the logic in the code.

Ethereum smart contracts can be trusted completely because each and every executed code or contract is stored on the Ethereum blockchain so the user can verify everything they need.

Advantages of using Smart Contracts

The smart contracts have the following advantages:

  1. Self- verifying
  2. Indisputable
  3. Self- Executing
  4. Reduces cost
  5. Removes intermediates
  6. Reduces the risk of fraud
  7. Auto-enforcing

So in short, a smart contract is a software which has pre-coded terms and conditions for negotiating a contract and it self-verifies the contract and executes the terms and conditions and its central code is decentralized for the Ethereum blockchain.

 

Everything you need to know about HD Wallets

 

Wallets are very essential to keep your cryptocurrencies safe and secure. In the case of cryptocurrencies, a wallet is a digital file which contains an address where you can receive your cryptocurrency coins and have the private key to spend them is called a cryptocurrency wallet.

A wallet stores your cryptocurrencies and allows you to spend them as you wish. They are the primary user interface through which you interact with the cryptocurrency world. Your cryptocurrency address is equivalent to your mail address and your private key is your password.

 

How are HD wallets different from other wallets?

There are many types of wallets present but the most advanced and easy wallets are HD wallets.

In most wallets, a random address is generated every time you do a transaction and every time, you have to back up your data. As the number of your tractions will increase, this simple task becomes complicated and you need a lot of backups. On the other hand, if the same address is reused, it can compromise with your financial privacy.

So, to remove the deficiencies of both these wallets, HD wallets were developed under the BIP 32.

 

What makes HD Wallets unique?

HD stands for Hierarchical Deterministic. 12-word master seed keys are used in this wallet which derives new addresses for the wallet sequentially and hierarchically every time a transaction is done.

These are sequential so the user does not require to back it up and the financial secrecy is maintained as every address is new.

How does HD wallets work?

Based upon the BIP 2, a tree-like hierarchical structure is generated from the seed master key in the HD wallet. When the user restores the wallet, all the private keys generated by the seed key are recovered using the BIP 32 structure.

The backing up of the seed file is mandatory in the HD wallets so that all the addresses can be retrieved.

 

Some Popular HD wallets

Some popular HD wallets which you can buy are LedgerNano S, KeepKey, Trezor, Jaxx, Mycelium and Electrum.

We hope that all your doubts regarding the HD wallets for cryptocurrencies are cleared. HD wallets solve the problem of backing up every time and protects your financial privacy.

4 Tips to Pick Up the Right ICO

Cryptocurrency is a high risk, high reward investment. There are tons of options out there in the market. But before getting carried away by the prospect of huge returns, it is important to keep it in mind that not all of them would taste success in the longer run.

So what should a newbie investor consider before deciding to invest in an upcoming ICO? Let’s find out 4 useful tips which would ensure that your hard-earned money is invested in the right ICO.

  1. Know the People Behind the Scene

It is critical to find out the people behind an initial coin offering. Are there real people working on the project or is it just a scam to be unfolded in the near future? Is there any notable crypto advisor behind the scene? Is there any prominent private venture investor involved in the project? When was the company floated and how good is the track record? It is always better to invest in a company that has been around in the market for a while and has known faces in its payroll.

  1. Understand the Target Market

The target market is another important aspect to consider. Not every market is crypto friendly. Knowing the market that the company is targeting would give you an idea of what challenges are to be expected and what opportunities might arise in the future.

  1. Nitpick the Whitepapers

Whitepapers are meant to serve as the promotional pitch to prospective investors. Ideally it should be well-written and thorough enough to provide the investors compelling reasons to get hooked. A quality whitepaper indicates that the company has done its homework right. Going through the minute details could prove useful in revealing the company’s intentions, as well as the project’s viability.

  1. Keep a Close Watch on Crypto Communities

Before investing, spend your time researching well-known crypto communities like BitcoinTalk or CryptoMinded to find out the general consensus about the ICO among seasoned investors. An ICO that has vibrant community discussions is highly likely to survive on the longer run. Look out for relevant press releases, advisor interviews and podcasts to gain insightful information. Presence on social platforms and sustained communication with potential investors can also be a pretty good indication of the company’s intentions.

The Bottom Line:

The key to pick the right ICO is to perform due diligence. Knowing the people behind the scene, identifying the future roadmap and understanding the target market can help you figure out the true potential of the ICO you are looking to invest in.

Identifying the Warning Signs of a Fake ICO

 

Undoubtedly, ICOs are forming an attractive part of the cryptocurrency and blockchain sectors for any potential investors.  Many have been lured by the promise of fast cash or exponential growth in relatively short periods of time.

Whilst the blockchain and crypto definitely represent the future of transactions and ICOs can be a hugely positive element of that future, there are many ICOs in the market which are nothing short of scams to watch out for. What should you look out for though? Here are some of the key signs which may let you know the ICO is a potential fake:

Below Quality Website/Whitepaper

This is a highly logical point. If you have a project which is attempting to raise tens of millions of dollars, as most ICOs do, then it stands to reason you will have invested in a top quality site design and been meticulous in the preparation of your whitepaper. These are the core elements of your project after all.

It is astonishing though, how many projects just pitch up with a truly awful website and error ridden concepts throughout. This is one sure fire sign to stay far far away from any potential investment.

Generally Poor Ratings

Nowadays, there is big business to be had in rating ICOs. There are many major players in this area with some of the best being among ICOBench. It is forgivable not to be listed on-time with this one since they usually have a large backlog, however if you notice a project with general abysmal ratings across a range of these rating sites, or no listings at all, then this is usually reflective of the projects overall value.

No Team Information

This is a final dead giveaway, if there is no team information listed or the information listed is not connected to a valid LinkedIn account. With every project worth its salt, those associated with it should be proud and more than happy to be listed. If this is not the case, then you would certainly have to question the integrity of the project.

When Will Crypto Become Part of Our Daily Lives?

 

This is a question on the lips of many who have watched the last 18 months complete with surging prices and so many new entrants to the sector. So, when can we expect to see crypto taking over from fiat currency and being used for our daily transactions?

The fact of the matter is that this is already happening, depending on who you speak to. There are already many providers such as these who will provide us with many required services through cryptocurrency. They are certainly not limited to some dark underbelly either. Even Expedia offers Bitcoin payments on vacation bookings.

Speed of Payment

Whilst the options above are fantastic, cryptocurrency has far from become a dominant force in our daily lives…yet. One of the issues behind this is certainly the transaction speed. As wonderful and pioneering as Bitcoin has been, many will agree that the transaction speed is much too slow to suffice in daily life. Luckily, there are currencies such as ripple and others which offer wastly improved transaction speeds.

Cost of Payment

Another issue which afflicts this question is the cost of transactions. This has become more and more of a problem with both Bitcoin and Ethereum as network traffic spikes. The cost of these payments at certain times, and combined with the speeds, simply mean they are not viable. There are many options though, and more arriving every day. Again in this category, Ripple and Tron emerge as relatively low cost in comparison.

Convenience

The fact is that there are still only a very small number of businesses or locations which will accept crypto payments. This is changing though, slowly but surely. We are starting to see the continued emergence of currencies who supply their users with crypto-linked debit cards. This is one of the key elements in encouraging and achieving daily use. If the current trends continue, it’s inevitable, we will eventually reach a point where cryptocurrency is out most widely used payment method.