Author: coinex24
Introduction It’s often considered critical to the functioning of a blockchain that the system is transparent. This means that every node on the network can store a copy and verify that no rules are being broken. For many distributed ledgers, anyone can load up an online block explorer that allows them to search through blocks, transactions, and addresses. On the privacy front, this isn’t ideal. In a system like Bitcoin, every transaction can be linked back to a previous one. Coins are not technically fungible, meaning that each can be tied to specific transactions. No one can prevent you from…
Introduction Scalability broadly refers to a system’s ability to grow to accommodate increasing demand. In computing, you might boost your machine’s performance by upgrading its hardware so it is faster to perform certain tasks. When we speak of scalability in blockchains, we refer to growing their capacity to handle more transactions. Protocols like Bitcoin have many strengths, but scalability is not one of them. If Bitcoin were run in a centrally-owned database, it would be relatively easy for an administrator to increase speed and throughput. But Bitcoin’s value propositions (i.e., censorship-resistance) requires that many participants sync a copy of the…
Introduction Technical indicators are an essential part of analyzing the financial markets. Some of them aim to illustrate momentum like the Relative Strength Index (RSI), the StochRSI, or the MACD. Others may be used to find potential points of interest on a chart, such as the Fibonacci Retracement tool, Parabolic SAR, or Bollinger Bands. But what is the most fundamental indicator out there? Arguably, it’s volume. Volume can be used as a tool for confirming a trend, identifying potential points of reversal, and many other strategies. The VWAP combines the power of volume with price action to create a practical…
Introduction Bitcoin is sometimes referred to as programmable money. Because of its digital nature, it allows users a great degree of flexibility when it comes to setting conditions for how funds can be spent. We speak of wallets and coins when discussing Bitcoin. But we could also think of wallets as keys, coins as cheques, and the blockchain as row after row of locked safes. Each safe has a thin slot in it, such that anyone can deposit cheques or look in to see how much value the safe holds. However, only the key holder will be able to access the inside. When a key holder wants to…
Introduction Chart patterns are abundant when it comes to technical analysis. We have already talked about them in A Beginner’s Guide to Classical Chart Patterns, and 12 Popular Candlestick Patterns in Technical Analysis. However, there are many other patterns out there that can be useful for day traders, swing traders, and long-term investors. The golden cross and the death cross are two good examples. Before we get into what a golden cross and a death cross are, we need to understand what a moving average (MA) is. In short, it’s a line plotted over a price chart that measures the…
Introduction There are countless ways to generate profits in the financial markets. Some traders will use technical analysis, while others will invest in companies and projects using fundamental analysis. As such, you, as a trader or investor, also have many different options to create a profitable trading strategy. However, what if the market is going through a prolonged bear market, where prices are continually declining? What can traders do then to maintain a source of income from trading? Shorting the market allows traders to profit off price declines. Entering a short position can also be an excellent way to manage…
Introduction Ethereum was founded by Vitalik Buterin in 2014, positioning itself as an open-source platform for launching decentralized applications (DApps). Many of Buterin’s motivations for creating a new blockchain stemmed from the Bitcoin protocol’s lack of flexibility. Since its launch, the Ethereum blockchain has attracted developers, businesses, and entrepreneurs, spawning a growing industry of users launching smart contracts and distributed applications. In this article, we’ll look at the ERC-20 standard, an important framework for creating tokens. While it’s specific to the Ethereum network, the framework also inspired other blockchain standards, such as Binance Chain’s BEP-2. What is the ERC-20 standard?…
Introduction Bitcoin is often referred to as digital cash, but this is a questionable comparison. If Alice pays Bob ten dollars in cash, Bob has no idea where the money came from. If he later goes on to give it to Carol, she will be unable to deduce that Alice was once in possession of it. Bitcoin is different because of its inherent public nature. The history of a given coin (more precisely, an unspent transaction output or UTXO) can be trivially observed by anyone. It’s a bit like writing the transaction amount and names of participants on a bill…
Introduction Short selling allows traders to profit off an asset’s price decline. It’s a very common way to manage downside risk, hedge existing holdings, or simply express a bearish outlook on the market. However, shorting can be an exceptionally high-risk trading strategy at times. Not only because there is no upper limit for the price of an asset, but also due to short squeezes. A short squeeze can be described as a sudden price increase. When it occurs, many short sellers get “trapped” and quickly rush to the exit to try and cover their positions. Naturally, if you’d like to…
Introduction Financial markets move in trends. It’s important to understand the differences between these trends to be able to make better investment decisions. How come? Well, different market trends can lead to wildly different market conditions. If you don’t know what the underlying trend is, how are you going to adapt to changing conditions? A market trend is the overall direction that the market is going. In a bear market, prices are generally declining. Bear markets can be a challenging time to trade or invest in, especially for beginners. Most crypto traders and technical analysts agree that Bitcoin has been in a macro bull…