In a significant move that has caught the attention of cryptocurrency enthusiasts, the Shiba Inu (SHIB) development team is gearing up for a substantial burn of its meme coin. This move follows a series of smaller burns in recent months and comes ahead of a major upgrade to the network.

Shiba Inu team plans to record token burn

The Shiba Inu team, known for its proactive approach to managing the SHIB ecosystem, has incinerated over 36 billion SHIB tokens in the past two months. These burns were funded by the transaction fees generated within the Shibarium ecosystem. The upcoming burn, however, is set to eclipse these figures dramatically.

An estimated 9.25 trillion Shiba Inu tokens are on the line for destruction, derived from $1 million worth of BONE tokens reported by the team in November. This amount translates to approximately 101.5 trillion SHIB, of which a small portion has already been burned in four separate transactions.

The Shiba Inu team is also significantly shifting their burning strategy. Until now, the process has been manual, with the developers directly initiating each burn. Starting in January, this is set to change with the introduction of automated SHIB burns. This automation is expected to streamline the process and increase the frequency and volume of burns.

A recent blog post from the Shiba Inu team has shed light on the future of these burns, indicating a promising outlook. The move is part of a broader strategy to effectively manage the coin’s supply and value.

Implications of the Shibarium network upgrade

The Shiba Inu ecosystem is not just stopping at coin burns. The network is undergoing a major upgrade, with the Puppynet testnet transitioning from Ethereum’s Goerli network to Sepolia. This upgrade is part of the team’s commitment to improving the network’s performance and scalability.

The Shibarium network upgrade is poised to enhance user experience and bring new functionalities to the SHIB ecosystem. It represents a significant milestone in the project’s roadmap and is closely watched by investors and enthusiasts alike.

The cryptocurrency community is keenly observing as the Shiba Inu team embarks on these ambitious initiatives. The planned coin burn and network upgrade mark a new chapter in the development of the SHIB ecosystem. With these strategic moves, the team aims to bolster the coin’s value and utility, potentially impacting its position in the competitive world of cryptocurrencies.

Following the successful launch of its $AI token, Sleepless AI has announced a significant financial strategy, the $AI Together Plan. The initiative involves channeling an estimated $2.5 million, accrued from the company’s NFT auction revenues, into securing the long-term price performance of the $AI token. Amidst the market’s mixed reactions, ranging from congratulations to skepticism, Sleepless AI is taking a firm stand to bolster the value of its digital asset.

The $AI Together Plan is a clear response to the current market valuation of the $AI token, which Sleepless AI believes is undervalued. By dedicating a substantial portion of its NFT auction revenue to the token, the company aims to demonstrate its confidence in the token’s potential and address any market uncertainties. The move is indicative of Sleepless AI’s commitment to its investors and its belief in the token’s long-term growth prospects.

The $AI together plan – Sleepless AI’s strategy for long-term growth

The $AI Together Plan is a strategic initiative by Sleepless AI to ensure the stability and growth of the $AI token in the long run. The plan is not just about injecting funds into the token; it’s a comprehensive strategy to enhance its market value and investor appeal. The allocation of $2.5 million from NFT auction revenues is a testament to the company’s belief in the token’s inherent value and its potential for significant growth over time.

The strategic investment is expected to positively impact the token’s market performance, instilling confidence among current and potential investors. Sleepless AI’s proactive approach to managing the token’s value demonstrates a deep understanding of market dynamics and a commitment to navigating the complex landscape of cryptocurrency investment. The $AI Together Plan is poised to play a crucial role in shaping the future trajectory of the $AI token, making it a more attractive and stable investment option.

Addressing market perceptions and building investor confidence

The launch of the $AI token has been met with a spectrum of reactions, highlighting the challenges and opportunities in the cryptocurrency market. Sleepless AI’s decision to invest heavily in the token is a bold move to address market skepticism and reinforce investor confidence. The initiative is not only about enhancing the token’s value but also about sending a strong message to the market about the company’s dedication to its digital assets.

By openly communicating its strategy and intentions with the $AI Together Plan, Sleepless AI is setting a new standard in transparency and investor relations in the crypto space. The approach is likely to resonate well with investors, especially those who may have reservations about the token’s future. The company’s commitment to its investors and the token’s long-term success is a reassuring signal to the market, potentially leading to increased interest and investment in the $AI token.

Conclusion

Sleepless AI’s $AI Together Plan represents a forward-looking approach to securing the long-term success of the $AI token. The company’s substantial investment and strategic focus on enhancing the token’s market value reflect its commitment to growth and investor confidence. As Sleepless AI navigates the evolving landscape of cryptocurrency, the $AI Together Plan stands as a significant move towards ensuring the stability and prosperity of its digital assets. The initiative not only bolsters the $AI token’s position in the market but also reinforces Sleepless AI’s reputation as a visionary and investor-centric company in the crypto industry.

Key Takeaways

The collaboration between blockchain and artificial intelligence is transforming industries, offering improved security, better data analysis, streamlined efficiency, and personalized user experiences.

While promising, the combination of blockchain and AI has many challenges, including biases in AI algorithms, integration complexities, and regulatory concerns. Addressing these risks requires diverse datasets, careful planning, and a proactive approach to evolving regulations.

Introduction

In the fast-paced world of technology, two buzzwords that often steal the spotlight are blockchain and artificial intelligence (AI). While these terms might sound complex to newcomers, their collaboration is reshaping industries and promising a future of innovation. In this article, we'll discuss the relationship between blockchain and AI, exploring use cases, potential benefits, and some of the possible risks.

Blockchain: Distributed Database

Imagine a notebook that everyone shares, and once something is written in it, it can never be erased or altered. That's the essence of blockchain – a transparent, secure digital ledger distributed across multiple computers. Unlike traditional databases, blockchain operates without a central authority, ensuring data integrity and trust through decentralized consensus mechanisms.

AI: The Brainpower Behind Machines

Artificial intelligence, in simple terms, is the capability of machines to learn and make decisions. It encompasses the science and engineering of creating intelligent computer programs that mimic human cognition. AI leverages advanced algorithms to analyze data, learn from patterns, and perform tasks autonomously. An example of AI in action is ChatGPT, which uses language models to generate human-like text based on input.

Blockchain and AI Use Cases

The convergence of blockchain and AI is revolutionizing various sectors by enhancing security, transparency, data analysis, and automation. Let’s explore some compelling scenarios where the integration of these technologies is making a significant impact.

Enhanced security and fraud prevention

Blockchains are designed to be highly resistant to data tampering and fraudulent activity. The infrastructure of distributed networks combined with cryptographic techniques can bring an extra layer of security to AI systems. 

For example, an AI model could be programmed to access certain systems or a specific set of data only if certain conditions are met. Such conditions could then be enforced by a distributed network of users through the use of smart contracts.

In practice, blockchain technology can be used to secure all sorts of databases (e.g., financial, healthcare, etc.). In this context, AI can be used to improve efficiency when analyzing and managing blockchain data.

Decentralized data storage

Blockchain-based decentralized storage solutions ensure data accuracy and integrity, which is crucial for AI systems reliant on vast datasets. Integrating AI with blockchain enhances data privacy and provides tamper-proof storage, facilitating secure data management for various applications.

Supply chain management

Blockchain offers transparency and traceability in supply chains, while AI analyzes the generated data to optimize processes. This combination helps in predicting inventory issues, identifying patterns, and streamlining operations, leading to more efficient supply chain management.

Smart contracts and automation

Smart contracts are self-executing contracts with rules encoded on the blockchain. AI can enhance these contracts by automating tasks based on real-time data analysis. This integration reduces the need for intermediaries, increases efficiency, and enables more intelligent and dynamic contract execution.

Blockchain and AI: Potential Benefits

Improved security

Combining blockchain's tamper-resistant nature with AI's anomaly detection capabilities creates a robust security framework. This reduces the risk of data breaches and unauthorized access, fostering trust in digital transactions.

Enhanced efficiency

The transparent ledger of blockchain coupled with AI's data processing prowess streamlines business processes, leading to increased efficiency, reduced operational costs, and faster decision-making.

Personalized experiences

AI thrives on data, and blockchain ensures the authenticity and security of this data. This synergy enables businesses to deliver personalized experiences, from tailored product recommendations to customized services, enhancing user satisfaction.

Blockchain and AI: Potential Risks

Bias in AI algorithms

AI algorithms are only as unbiased as the data they are trained on. If the training data contains biases, these will be reflected in AI-driven decisions. Mitigating this risk involves using diverse and representative datasets and implementing robust testing and monitoring procedures.

Integration challenges

Integrating blockchain and AI technologies poses significant challenges. Organizations may face difficulties adapting their existing systems to accommodate this collaboration. Overcoming these hurdles requires careful planning, technical expertise, and a strategic approach.

Regulatory concerns

As blockchain and AI technologies advance, they may outpace current regulatory frameworks, raising concerns about data privacy and legal compliance. Addressing these issues requires proactive engagement with regulatory bodies and the development of compliant solutions.

Closing Thoughts

The collaboration between blockchain and AI is still in its early stages, but the potential is immense. This article highlighted several scenarios where these technologies can enhance security, efficiency, and user experiences. However, it’s crucial to remain aware of potential challenges, such as biases in AI algorithms and the complexities of their integration.

As blockchain and AI continue to evolve, we can anticipate groundbreaking developments across various industries. From transforming financial transactions to optimizing supply chains, the future likely holds exciting innovations driven by the convergence of these powerful technologies.

Further Reading

What Are Smart Contracts and How Do They Work?

A Beginner's Guide to Decentralized Finance (DeFi)

What Is the Ethereum Cancun Upgrade?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

TL;DR

Sidechains are independent blockchains connected to the main blockchain via a two-way bridge, allowing the transfer of assets between them.

They can operate autonomously with unique consensus mechanisms and block parameters, enabling efficient processing of transactions and customization for specific purposes.

Sidechains offer scalability, flexibility, and EVM compatibility but come with trade-offs, including potential decentralization challenges and the need for robust security measures.

Introduction

In the world of blockchain technology, the increasing demand for scalability and efficiency has led to the emergence of innovative solutions, and one such concept is sidechains. 

The initial idea of a sidechain emerged in October 2014 in a paper titled “Enabling Blockchain Innovations with Pegged Sidechains”. The paper was published by Adam Back in collaboration with other cryptographers and Bitcoin developers, including Matt Corallo, Luke Dashjr, Andrew Poelstra, and Pieter Wuille.

But what exactly are sidechains, and how do they contribute to the evolution of blockchain ecosystems?

Defining Sidechains

At its core, a sidechain is a parallel blockchain that operates independently from the main blockchain (also referred to as the main chain). Typically, this connection is established through a two-way bridge, enabling the seamless transfer of digital assets or tokens between the main chain and the sidechain.

How Do Sidechains Work?

The distinctiveness of sidechains lies in their autonomy. Unlike the main chain, sidechains have the flexibility to adopt unique consensus algorithms and block parameters tailored to their specific purposes. This freedom allows them to process transactions efficiently, offering advantages such as faster confirmation times and lower fees.

Consensus algorithms on sidechains can vary, ranging from Proof-of-Authority to Delegated Proof-of-Stake. Validators within the sidechain network play a crucial role in verifying transactions, producing blocks, and ensuring the overall security of the chain.

Additionally, sidechains often differ from the main chain in terms of block parameters. While the main blockchain imposes limits on block times and sizes, sidechains can adjust these parameters to achieve higher throughput. However, this comes with trade-offs, as more permissive block parameters may compromise decentralization by relying on a smaller number of powerful nodes.

EVM Compatibility

A noteworthy feature of some sidechains is compatibility with the Ethereum Virtual Machine (EVM). This compatibility allows sidechains to execute smart contracts written in languages like Solidity, providing a familiar environment for developers. Essentially, if a sidechain is EVM-compatible, it can seamlessly run decentralized applications (DApps) and execute smart contracts designed for the Ethereum blockchain.

Pros and Cons of Sidechains

As with any technological innovation, sidechains come with a set of advantages and limitations. Let's explore some of the pros and cons of sidechains.

Pros

Scalability: Sidechains provide a scalable solution by offloading some transaction processing from the main chain, reducing congestion and enhancing performance.

Flexibility: The autonomy of sidechains allows for experimentation with different consensus mechanisms and parameters, fostering innovation and customization.

EVM compatibility: EVM-compatible sidechains offer a seamless transition for developers, enabling them to deploy existing Ethereum smart contracts on the sidechain.

Cons

Decentralization trade-offs: Achieving high throughput on sidechains often involves sacrificing a degree of decentralization. This can lead to a concentration of power among a few validating nodes, potentially impacting the security of the chain.

Security Concerns: Sidechains are responsible for their own security. Although a compromise in the security of a sidechain does not directly affect the main chain, this independence may introduce more security risks.

Complexity: Implementing and maintaining sidechains requires significant effort and resources. The initial setup complexity and ongoing maintenance might pose challenges for adoption.

Examples of Sidechain Projects

Several projects have embraced the concept of sidechains, each offering unique features and addressing specific needs within the blockchain ecosystem. Some notable examples include:

1. Polygon: Polygon employs a mix of sidechains to enhance Ethereum scalability using the Plasma framework. It aims to provide fast and low-cost transactions for decentralized applications (DApps).

2. SKALE: SKALE leverages elastic sidechains to offer developers a platform for building decentralized applications with high performance and scalability. It focuses on providing a developer-friendly environment.

3. Gnosis: Gnosis Chain utilizes the xDai sidechain to facilitate fast and stable transactions. It emphasizes usability and is often chosen for applications requiring quick and affordable transactions.

4. Loom Network: Loom Network specializes in creating scalable games and social applications on the blockchain. It uses DPoS (Delegated Proof-of-Stake) as its consensus mechanism to achieve high throughput.

Closing Thoughts

In the ever-evolving landscape of blockchain technology, sidechains stand out as a promising solution to the scalability challenge. Their ability to operate independently, coupled with features like EVM compatibility and bridges, opens avenues for diverse applications and use cases.

However, users and developers must navigate the trade-offs carefully, considering factors like decentralization, security, and implementation complexity. As the blockchain space continues to mature, the role of sidechains in shaping a more scalable and versatile ecosystem is likely to become increasingly significant.

Further Reading

Bitcoin Halving Date: What Happens to Your Bitcoin After the Halving?

What Is Cryptocurrency Mining and How Does It Work?

What Is Sharding and How Does It Work?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Despite the growing adoption, Bitcoin remains relatively unfamiliar worldwide. Although many have probably heard about cryptocurrencies and blockchain technology, there are still numerous myths and misconceptions.

This article aims to debunk some of the most common myths associated with Bitcoin. We will highlight the transparency of Bitcoin transactions, discuss the use of blockchain analytics by law enforcement, address concerns about Bitcoin’s environmental impact, and much more.

Introduction

Since its creation in 2009, Bitcoin has continued to grow and captured the attention of people around the globe. However, with its rise to prominence, several myths and misconceptions have emerged. In this article, we'll debunk the top 15 myths surrounding Bitcoin, shedding light on the reality behind each one.

Myth 1: Bitcoin Is Anonymous and Perfect for Criminals

Contrary to popular belief, Bitcoin transactions are pseudonymous but not entirely anonymous. Most Bitcoin wallet addresses don’t have a name attached to them, but all transactions are recorded on the blockchain, which works as a transparent, public ledger. This transparency makes it challenging for criminals to operate without leaving a trace. Law enforcement agencies actively use blockchain analytics to track illicit activities, resulting in numerous successful prosecutions.

Myth 2: Bitcoin Is a Ponzi Scheme

Bitcoin is often labeled as a Ponzi scheme, but this assertion is misleading. A Ponzi scheme involves using funds from new investors to pay existing ones, with the operator pocketing the bulk of the collected funds. Bitcoin, on the other hand, is a decentralized digital currency with genuine utility. While occasional fraudulent projects exist in every financial sector, applying the Ponzi label to the entire cryptocurrency industry is a mistake that oversimplifies a complex reality.

Myth 3: Bitcoin Is Bad for the Environment

The misconception that Bitcoin is inherently bad for the environment stems from its energy-intensive mining process. However, the comparison of Bitcoin's energy consumption to traditional financial systems or household appliances is often distorted. Blockchain networks consume less energy than most traditional financial systems, and the use of renewable energy sources for mining is on the rise.

In a research report by Galaxy Digital in 2021, it was revealed that the energy consumption of the data centers of the leading 100 global banks exceeds more than double that of the Bitcoin network. Moreover, estimations from the World Bank and the International Energy Agency indicate that the annual electricity loss in transmission and distribution is 19.4 times higher than the energy utilized by the Bitcoin blockchain over the same period.

For a more detailed discussion, check out The Myth That Crypto Is Bad For The Environment.

Myth 4: Bitcoin Is Only for Tech-Savvy Individuals

Bitcoin is often perceived as a complex technology accessible only to tech enthusiasts. In reality, the user interface of most Bitcoin wallets and exchanges improved significantly throughout the years. There is an increasing number of user-friendly products and guides, making crypto accessible to individuals with varying levels of experience.

Myth 5: Bitcoin Has No Intrinsic Value

Critics argue that Bitcoin lacks intrinsic value, considering it a speculative asset with no tangible backing. However, the intrinsic value of Bitcoin lies in its ability to function as a decentralized and borderless form of money. Its limited supply, censorship resistance, and potential as a store of value contribute to its intrinsic worth. As more individuals and institutions recognize these qualities, Bitcoin's value proposition becomes increasingly evident.

Myth 6: Bitcoin Is Too Volatile for Practical Use

Bitcoin's price volatility has been a point of concern, discouraging some from considering it as a viable currency. However, volatility is gradually decreasing as the market matures and institutional adoption grows. Additionally, stablecoins pegged to traditional currencies offer a less volatile option for those seeking stability while still utilizing blockchain technology.

Myth 7: Bitcoin Is a Bubble That Will Burst Soon

The notion that Bitcoin is a bubble waiting to burst is a common narrative. While Bitcoin's price experiences fluctuations, labeling it as a bubble oversimplifies its role in the financial landscape. Bitcoin has shown resilience over the years, surviving numerous market corrections. Its growing acceptance and integration into mainstream financial systems indicate that Bitcoin is more than just a fleeting speculative bubble.

Myth 8: Bitcoin Is Controlled by a Single Entity

Some believe that a single entity or group controls Bitcoin, manipulating its price and operations. In reality, Bitcoin operates on a decentralized network of nodes and miners, preventing any single entity from exerting control. Decisions regarding the network's development are made through a consensus mechanism, ensuring a democratic and transparent governance structure.

Myth 9: Bitcoin Is Only for Criminal Activities

Bitcoin's early association with the Silk Road marketplace fueled the myth that it is primarily used for illegal activities. However, blockchain technology's transparent nature makes it an ineffective tool for criminals attempting to remain anonymous. Law enforcement agencies worldwide actively trace and prosecute individuals involved in illicit activities, dispelling the myth that Bitcoin is a haven for criminals.

Myth 10: Bitcoin Will Be Rendered Obsolete by Altcoins

While numerous altcoins aim to challenge Bitcoin's dominance, none have succeeded in replacing it as the leading cryptocurrency. Bitcoin's first-mover advantage and established network effect contribute to its resilience. Altcoins may offer different features or use cases, but Bitcoin's decentralization and unique value proposition ensure its continued relevance in the crypto space.

Myth 11: Bitcoin Is Too Expensive for Average Investors

Many believe that investing in Bitcoin requires substantial financial resources, deterring average investors. However, Bitcoin is divisible, and investors can buy fractions of a BTC, making it accessible to individuals with varying budgets. The rise of cryptocurrency exchanges offering user-friendly interfaces further simplifies the investment process, encouraging broader participation.

Myth 12: Bitcoin Transactions Are Slow and Expensive

Critics often argue that Bitcoin transactions are slow and expensive, especially during periods of high network activity. However, advancements like the Lightning Network enable faster and more cost-effective transactions by allowing off-chain settlement. Ongoing development efforts aim to enhance Bitcoin's scalability, ensuring it remains a viable option for efficient and affordable transactions.

Myth 13: Bitcoin Is Just a Speculative Asset

While Bitcoin has garnered attention as a speculative asset, its utility extends beyond investment. Bitcoin's decentralized nature, security features, and resistance to censorship position it as a valuable tool for financial inclusion and sovereignty. As global economic uncertainties persist, Bitcoin's role as a hedge against inflation and government overreach becomes increasingly relevant.

Myth 14: Bitcoin Is a Passing Trend

Some dismiss Bitcoin as a passing trend, attributing its popularity to temporary hype. However, Bitcoin's endurance over more than a decade, coupled with growing institutional adoption, challenges this perception. The continued development of blockchain technology and the integration of cryptocurrencies into traditional financial systems signal that Bitcoin is here to stay.

Myth 15: Bitcoin Has No Real-World Use Cases

Contrary to the belief that Bitcoin lacks real-world use cases, its applications are expanding across various industries. Bitcoin serves as a store of value, a medium of exchange, and a hedge against inflation. Additionally, blockchain technology can facilitate transparent supply chain management, secure cross-border transactions, and innovative solutions for financial inclusion.

Closing Thoughts

Dispelling Bitcoin myths is crucial for understanding the true nature of Bitcoin and other cryptocurrencies. Bitcoin's decentralized, secure, and transparent features make it a groundbreaking financial tool. As the crypto space evolves, separating fact from fiction is essential for informed participation in the Bitcoin ecosystem.

Further Reading

Bitcoin Halving Date: What Happens to Your Bitcoin After the Halving?

A Beginner's Guide to Bitcoin's Lightning Network

5 Ways to Improve Your Binance Account Security

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

TL;DR

A cryptocurrency whitepaper enables projects to explain their products and goals to their audiences. Projects can freely choose what kind of information they want to provide, but whitepapers usually include an overview of the project’s goals, tokenomics, products, features, and information about the team. As such, whitepapers can be a good place to start when doing research on a specific project.

Introduction

A whitepaper summarizes, in a single document, the important information related to a blockchain or cryptocurrency project. It’s a popular way of explaining how a certain project works and what problems it’s aiming to solve.

What is a whitepaper?

Generally, a whitepaper is a report or guide that informs its readers about a specific topic or issue. For example, developers can create a whitepaper about their software to educate users on what they are building and why.

In the blockchain space, a whitepaper is a document that helps outline the main features and technical specifications of a specific cryptocurrency or blockchain project. Although many whitepapers are focused on a coin or token, they can also be based on different types of projects, such as a decentralized finance (DeFi) platform or a play-to-earn game.

A whitepaper may provide an overview of essential data in the form of statistics and diagrams. Also, a whitepaper could explain the governing structure of the project, who’s working on it, and the current and future development plans (i.e., their roadmap).

However, there's no official way to make a whitepaper. Each project creates a whitepaper that fits its conditions best. Optimally, the whitepaper should be neutral and informative to clearly depict the project and its goals. Users should always be cautious with whitepapers that present persuasive language and projects that promise too much without giving enough information.

Cryptocurrency whitepapers are often thought of as business plans for crypto projects. It's because they provide investors with a comprehensive project overview. But, unlike business plans, whitepapers are usually released before the cryptocurrency launch. So, a whitepaper is often a starting point in which a crypto project lays out the direction and intention of its idea.

What information can you find in a whitepaper?

Founders make whitepapers to provide an understanding of the goal of their project. For example, Bitcoin's whitepaper says: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution." While Ethereum's whitepaper describes its goal in the following way: "The intent of Ethereum is to create an alternative protocol for building decentralized applications."

Whitepapers often give an idea about the real-world utility of the crypto project. For example, it could describe how it solves a specific problem or how it can improve certain aspects of our lives.

Nevertheless, it's important to stay cautious about the promises. It's not a hard task to create a whitepaper. For example, the Initial Coin Offering (ICO) boom of 2017 gave rise to thousands of tokens with "innovative" ideas, but most projects failed to deliver. As a rule of thumb, remember that just attaching a cryptocurrency to a use case doesn't signify that it will be adopted and used.

So, in addition to goals and promises, whitepapers can also show how the cryptocurrency will really work. For example, one of the things it could explain is what kind of consensus mechanism it uses to allow network participants to coordinate in a distributed way.

A whitepaper could also give an in-depth look into tokenomics components, such as token burns, token allocations, and incentive mechanisms. Finally, a whitepaper could contain a roadmap informing users about the project timetable so that they would know when to expect the product releases.

Whitepapers are often designed to be straightforward so that anyone can read them and get at least the basic idea about the cryptocurrency or blockchain project. However, a good whitepaper will also give technical explanations to confirm the project’s competence.

Why are whitepapers important?

Whitepapers are important for the crypto ecosystem. Even though there are no standards for creating them, whitepapers have become a framework for researching crypto projects.

It's a general recommendation to start crypto research by reading the project's whitepaper. Users can use whitepapers to identify potential red flags or promising projects. In addition, they enable users to monitor if a project is sticking to its original plans and goals.

Whitepapers can provide transparency and equality by making the project's key information public. Various parties can benefit from whitepapers. For example, while investors can make better investment decisions using them, developers can decide on their possible participation in the protocol. Similarly, a person interested in the idea can decide more confidently if he wants to join a particular community after reading it.

Examples of whitepapers

Bitcoin whitepaper

The bitcoin whitepaper was published in 2008 by an anonymous individual or group known as Satoshi Nakamoto. The Bitcoin whitepaper is called "Bitcoin: A Peer-to-Peer Electronic Cash System."

The whitepaper outlines how people could use Bitcoin as a more efficient form of money outside the traditional banking model. It gives technical explanations of how the Bitcoin network allows users to send digital currency on the peer-to-peer network without intermediaries. The whitepaper also explains how the Bitcoin network is protected against censorship and double-spending attacks.

Ethereum whitepaper

A young programmer called Vitalik Buterin published the Ethereum whitepaper in 2014. But, even before it, Vitalik proposed the idea of the whitepaper in 2013 in a blog post, "Ethereum: The Ultimate Smart Contract and Decentralized Application Platform." The post presented the idea of a Turing-complete blockchain, which is a type of decentralized computer that can run any application if given enough time and resources.

The Ethereum whitepaper explains how its purpose differs from that of Bitcoin. Whereas Bitcoin has a specific function to provide digital peer-to-peer payments, the Ethereum whitepaper presented a platform that would enable developers to build and deploy all kinds of decentralized applications (DApps). This could be, for example, another cryptocurrency or a decentralized lending platform. The whitepaper also explains the technological solutions that made Ethereum possible, such as smart contracts and the Ethereum Virtual Machine.

Closing thoughts

Optimally, a whitepaper should provide you with a necessary understanding of what the cryptocurrency project plans to do and how. However, whitepapers are not regulated, and practically anyone can write one. So, if you are interested in a certain project, it’s important to analyze their whitepaper carefully, considering the potential red flags and risks.

Further reading

The Psychology of Market Cycles

What Is an NFT?

What Is GameFi and How Does It Work?

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I have written my conclusion for an international conference. We had a total of 70,800 listeners. I have now transcribed all the speeches so that everyone can read them. 👍👍👍👉Our job now is to spread information about GCV as soon as possible, especially my article and the exchange system in GCV. This is an educational effort to change the minds of the founders. 👉We don't need to research principles and technology because CT will manage it. the focus of our time should be on what the founders can do to help us make rapid progress to partner with CT. I've found that many founders want faster development, but they don't fully contribute to achieving it. 👉The barrier to KYC and mobility is a big risk in some areas when the level of policy is high, so, whether you have passed KYC or migrated, it is your job to complete the work of first by sharing this information with your community and on social media to prevent any black market buying and selling or low price exchanges. founders. This type of exchange can be easily accessed by many beginners. data collected from such exchanges can help CT in determining KYC, migration speed, mapping and for traders to determine exchange prices.👉For medium priced products, a small payment support of FIAT and Pi for GCV is recommended. this approach can encourage more traders to join and provide useful products to the founders without running out of cash for the support period before the OM. It will also benefit pioneers as they can save money to get what they want. 👉Luxury products that use GCV can now be advertised on OM, as long as they support GCV. We should announce this to the community to help unify the price soon.👉Some founders don't understand that the entire ecosystem is inseparable from financial systems, including FIAT and Pi. financial systems are a measure of the value of a product or service. ⚠️Some founders have said that CT never talks about price, so we founders should not have an agreement on price, which is completely wrong!!!! The technology of cT is as a husband, and the price of agreement from the founders is as a wife. Pi OM is a baby. Only when a husband and wife cooperate, they can have a child. if the wife does nothing but follow everything her husband does and praise him every day, saying she is great and believes that she can have a child, but forgets her role in the process of creating a child, can a child be born on earth?------ ------------- Congratulations! we have finished today's GCV international conference, and I would like to express my thanks to all the pioneers who attended and listened for almost four hours. on behalf of the Global GCV community, I want to thank the management of Arab Eagle A.E.C for sponsoring this meaningful meeting, which will now be recorded in our history of blockchain development. I would also like to express my gratitude to all the 19 leaders of the international community who represented the community of their countries and supported the GCV. We are indeed lucky to meet the Pi Network and walk together for almost five years. pi Network has brought us here from all over the world and has given us hope and light. We are very grateful to Dr. Nicolas and Dr. Fan for having a great vision and mission to change our world towards peace and prosperity. We have listened to speeches from 20 different speakers, and it is clear that GCV has been accepted internationally. Offline trading is booming based on GCV, and now is the time for our online ecosystem to recognize and respect GCV. this is important because the early maturing ecosystem will enable the initial launch of the Open Mainnet. Without a single pricing strategy, all ecosystems will remain static, even if there are hundreds of great ecosystems out there. Source: Kaiza This is not business advice, you should do your own research.

Community Submission - Author: Vallery Mou


What is a blockchain oracle?

Blockchain oracles are third-party services that provide smart contracts with external information. They serve as bridges between blockchains and the outside world.

Blockchains and smart contracts cannot access off-chain data (data that is outside of the network). However, for many contractual agreements, it is vital to have relevant information from the outside world to execute the agreement.

This is where blockchain oracles come into play, as they provide a link between off-chain and on-chain data. Oracles are vital within the blockchain ecosystem because they broaden the scope in which smart contracts can operate. Without blockchain oracles, smart contracts would have very limited use as they would only have access to data from within their networks. 

It’s important to note that a blockchain oracle is not the data source itself, but rather the layer that queries, verifies, and authenticates external data sources and then relays that information. The data transmitted by oracles comes in many forms – price information, the successful completion of a payment, or the temperature measured by a sensor. 

To call data from the outside world, the smart contract has to be invoked, and network resources have to be spent. Some oracles also have the ability to not only relay information to smart contracts but to send it back to external sources.

Many different types of oracles exist – how a blockchain oracle operates is entirely dependent on what it is designed for. This article will go through some of those designs.


Example of a blockchain oracle

Suppose that Alice and Bob place a bet on who the winner of the US presidential election will be. Alice believes that the Republican candidate will win, while Bob believes that the Democrat will be the winner. They agree on the terms of the bet and lock their funds in a smart contract, which will release all the funds to the winner based on the results of the election.

Since the smart contract cannot interact with external data, it has to depend on an oracle to feed it the necessary information – in this case, the results of the presidential election. After the election is over, the oracle queries a trusted API to find out which candidate has won and relays this information to the smart contract. The contract then sends the funds to Alice or Bob, depending on the outcome.

Without the oracle relaying the data, there would have been no way to settle this bet in a way that couldn’t be gamed by one of the participants. 


What are the different types of blockchain oracles?

Blockchain oracles can be classified depending on a number of different qualities: 

Source – does the data originate from software or hardware?

Direction of information – is it inbound or outbound?

Trust – is it centralized or decentralized?

A single oracle can fall into multiple categories. For example, an oracle that sources information from a company website is a centralized inbound software oracle.


Software oracles

Software oracles interact with online sources of information and transmit it to the blockchain. This information can come from online databases, servers, websites – essentially, any data source on the Web.

The fact that software oracles are connected to the Internet not only allows them to supply information to smart contracts but also to transmit that information in real-time. This makes them one of the most common types of blockchain oracles. 

Information typically provided by software oracles can include exchange rates, digital asset prices, or real-time flight information.


Hardware oracles

Some smart contracts need to interface with the real world. Hardware oracles are designed to get information from the physical world and make it available to smart contracts. Such information could be relayed from electronic sensors, barcode scanners, and other information reading devices.

A hardware oracle essentially “translates” real-world events into digital values that can be understood by smart contracts.

An example of this could be a sensor that checks if a truck transporting goods has arrived at a loading bay. If it does, it relays the information to a smart contract that can then execute decisions based on it.

If you’d like to read more on a similar subject, check out Blockchain Use Cases: Supply Chain.


Inbound and outbound oracles

Inbound oracles transmit information from external sources to smart contracts, while outbound oracles send information from smart contracts to the external world. 

An example of an inbound oracle is one that tells a smart contract what the temperature is measured by a sensor. An example of an outbound oracle can be considered with a smart lock. If funds are deposited to an address, the smart contract sends this information through an outbound oracle to a mechanism that unlocks the smart lock.


Centralized and decentralized oracles

A centralized oracle is controlled by a single entity and is the sole provider of information for the smart contract. Using only one source of information can be risky – the effectiveness of the contract depends entirely on the entity controlling the oracle. Also, any malicious interference from a bad actor will have a direct impact on the smart contract. The main problem with centralized oracles is the existence of a single point of failure, which makes the contracts less resilient to vulnerabilities and attacks.

Decentralized oracles share some of the same objectives as public blockchains – avoiding counterparty risk. They increase the reliability of the information provided to smart contracts by not relying on a single source of truth. The smart contract queries multiple oracles to determine the validity and accuracy of the data – this is why decentralized oracles can also be referred to as consensus oracles.

Some blockchain projects provide decentralized oracle services to other blockchains. Decentralized oracles can also be useful in prediction markets, where the validity of a certain outcome can be verified by social consensus.

While decentralized oracles aim to achieve trustlessness, it is important to note that just like trustless blockchain networks, decentralized oracles do not completely eliminate trust, but rather distribute it between many participants.


Contract-specific oracles

A contract-specific oracle is one that is designed to be used by a single smart contract. This means that if one wants to deploy several smart contracts, a proportionate number of contract-specific oracles have to be developed.

This type of oracle is considered very time-consuming and expensive to maintain. Companies that want to extract data from a variety of sources may find this approach very impractical. On the other hand, since contract-specific oracles can be designed from scratch to serve a specific use case, developers have high flexibility to tailor them to specific requirements.


Human oracles

Sometimes individuals with specialized knowledge in a particular field can also serve as oracles. They can research and verify the authenticity of the information from various sources and translate that information to smart contracts. Since human oracles can verify their identity using cryptography, the possibility of a fraudster faking their identity and providing corrupted data is relatively low.


The Oracle Problem

Since smart contracts execute decisions based on data provided by oracles, they are key to a healthy blockchain ecosystem. The main challenge with designing oracles is that if the oracle is compromised, the smart contract relying on it is also compromised. This is often referred to as The Oracle Problem. 

Since oracles are not part of the main blockchain consensus, they are unfortunately not part of the security mechanisms that public blockchains can provide. The trust conflict between third-party oracles and the trustless execution of smart contracts remains a mostly unsolved issue.

Man-in-the-middle attacks can also be a threat, where a malicious actor gains access to the data flow between the oracles and the contract and modifies or falsifies the data.  


Closing thoughts

A reliable mechanism that facilitates communication between smart contracts and the external world is vital to the global adoption of blockchains. Without blockchain oracles, smart contracts would have to rely only on information already within their networks, which would considerably limit their capabilities.

Decentralized oracles have the potential to introduce safeguard mechanisms that could eliminate a lot of systemic risk from the blockchain ecosystem. Blockchain oracles remain one of the critical building blocks to be implemented in a secure, reliable, and trustless manner for the blockchain ecosystem to grow.