Atomic Swap. What It Is and Its Importance for the World of Cryptocurrencies

atomic swap

Is the ability to transfer coins that are based on different blockchains without third parties real? In general, yes, it is, but as elsewhere, there are pitfalls and nuances in this issue. Today we will talk about such a development as an atomic swap, we will learn how it works and what prospects it has.

Contents:
(please click the topic to scroll down to it)

  1. What is an atomic swap?
  2. How does it work?
  3. Prospects for the future
  4. Conclusion

1. What is an atomic swap?

Recently, the cryptocurrency community has been discussing a new and truly revolutionary idea that can transform the industry beyond recognition. Atomic swaps make it possible to conduct trading operations between different cryptocurrencies without using the help of third parties.

In order for the parties to not deceive each other, both transactions are synchronized. If one of the participants suddenly decides to refuse to conduct an exchange operation, the funds will return to their holders.

Test atomic swaps are already functioning; if they prove their reliability, then this will have colossal consequences for the entire cryptocurrency industry. This technology can arrange a total restructuring of orders in the market, up to the complete replacement of the familiar cryptocurrency exchanges. With the help of atomic swaps investors can get full access and control over their own assets.

2. How does it work?

To understand this rather difficult process it is necessary to simplify and have a visual picture in the head. So, let’s take two users A and B. User A is the initiator of this imaginary transaction. To begin with, he creates a place where funds will be stored at the time of the swap, we’ll call it the deposit box or the address of the contract. To open it you need several components:

  • secret phrase (generated by user A);
  • electronic signature of user B.

In order for user B not to be able to collect money ahead of time, user A should never transfer a secret phrase-number to him, but hash it in advance. Hash is the encryption of any data; blockchain, in principle, works on its basis.

After that, the user B has the opportunity to view the cell and make sure that there is the required number of coins; then B creates its contract address based on the hash of the A user’s cell. Both of these cells can be opened using the same key. Then there is the final stage of the transaction, when A signs cell of B and redeems the funds bound to the wallet. Secret phrase-number is transferred to B and that one can open the cell in which reserved funds of user A are kept. This completes the transaction.

3. Prospects for the future

As we already mentioned above, based on the technology of atomic swaps, it is possible to create absolutely decentralized exchanges, which will be impossible to crack or compromise. If Charlie Lee and the team are able to solve a number of problems and bottlenecks in this technology, then this will be a real revolution in the cryptocurrency industry. At this point in time, the technology works only with such coins:

  • Litecoin;
  • Decred;
  • Bitcoin;
  • Viacoin;
  • Vertcoin.

It should be noted that the source code of this technology is in the public domain, for this reason, any developer, if desires, can introduce it into his offspring.

4. Conclusion

Atomic swap is a truly revolutionary idea, which excites the minds of many participants in the cryptocurrency market. A successful scenario of this direction will change the industry forever: new services will appear, coins will become more flexible type of assets, and users will have full control over their own funds.

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How To Read Trading Charts

Cryptocurrency exchanges work on the same principle as traditional exchanges. Potentially, it is possible to earn very good money on these platforms, but for this, it is needed to be able to correctly read the cryptocurrency coin chart. Of course, in order to become a professional trader, it needs to learn and practice a lot, but if your goal is to understand the basics, this article will be an excellent starting point in the exciting world of trading for you.

There are a huge variety of different charts, but the most common is the “Candlestick chart”. The chart is a much more informative tool than digital or text analysis. Using graphics, it is possible to quickly navigate and understand the current mood of the crowd, as well as the balance of power between sellers and buyers of a particular asset. Based on the obtained data, it is possible to calculate the potential profitability or unprofitability of a particular deal.

1. The main types of stock charts

As it was mentioned above, there are a huge number of different types of charts, but the main ones are lines, bars, and candlesticks. All of these tools (with the exception of the line charts) can tell about:

  • price at the beginning of the selected period (1 minute, 5 minutes, 15 minutes, 1 hour, 1 day, 1 week, etc.);
  • price at the end of the selected period;
  • the minimum and maximum rate of the selected period.

By and large, the crypto chart clearly shows the history of the struggle between bulls and bears. In the process of this confrontation, a large number of deals are made. It should be understood that even a slight fluctuation of the price means that some have already earned on it, while others, on the contrary, have suffered losses.

2. “Candlestick chart”

Let’s take a closer look at the most common version of charts, namely “Candlestick chart”. It was invented almost 400 years ago by a rice seller from the country of the Rising Sun. The process of observing a line chart is not entirely convenient; for this reason, the construction of “Candlestick chart” is based on the principle of dividing the total time into specific periods. This principle helps to quickly navigate what is happening on the market and, accordingly, to give the Bitcoin trend prediction or any other financial asset forecast.

3. How to read the chart “Candlestick chart”?

One candle represents the range of prices for an asset for a certain period of time. The boundaries of the candle are the lowest and highest asset price in this period of time. If the candle`s color is green, this means that the asset has increased in value over a given period of time; if it is red, then, on the contrary, it has fallen.

Source: https://www.tradingview.com/

If you look closely at the above chart, you will notice:

  • the candle corresponds to the time interval – 60 minutes;
  • the minimum asset price was $3485,24;
  • the maximum asset price was $3733.58;
  • This hour began with a price of $3506,42 and ended with the price of $3687 (for this reason, the candle is green).

The main parameters that should be paid attention to when reading cryptocurrency charts are:

  • asset price;
  • time;
  • trading volume.

By and large, the entire analysis of charts is an ordinary calculation of the balance between supply and demand. It is possible to estimate the level of the strength of bulls or bears through the asset price (vertical axis) and the volume of transactions (horizontal axis). These skills allow experienced traders to take the right position in advance and earn money on any price movement.

4. Conclusion

In this article, we talked about how to read cryptocurrency charts. As it was mentioned above, there are a huge number of different types of charts, but the most popular and often used is the option “Candlestick chart”. The basic principle of this type of charts is to divide the time into certain periods. It is quite informative and easy to read. If you want to start trading, then you definitely need to get a deeper understanding of this topic.

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Soft Fork and Hard Fork in Simple Words

Many people do not want to understand the subject of cryptocurrency, because they think it is very difficult, and to understand how everything works, it is necessary to spend a lot of time. Indeed, for an unprepared person, some terms may seem very complicated: blockchain, hard fork, soft fork, etc. Of course, if you want to learn how to code, create algorithms or new cryptocurrencies, then you need to get a profile education, which will take more than one year. But if your goal is a trivial desire to understand the basics, then you will need to read just a couple dozen guides, which, by the way, you can find on our website.

In this material, we will tell you in simple words how hard fork differs from soft fork, and also recall the main Bitcoin hard forks.

1. What is soft fork?

Soft fork is the process of software updating or changing the code of a particular cryptocurrency. When conducting softfork, there is no need for a total replacement of computer software that ensures the operability of the coin network. All innovations that are made during the soft fork have full compatibility with older versions of the network. This means that if the coin creators want to cancel this update, they can do it without any problems.

To make it clear for an ordinary person who does not understand the nuances of the blockchain’s work, let us draw an analogy with the denomination of the ruble of the Russian Federation. In 1998, the Central Bank of the Russian Federation artificially raised the rate of the national currency in 1000 times. But after that, old-style banknotes were still in use for some time. If the Central Bank specialists considered this experiment unsuccessful, they could have easily canceled it and returned the previous exchange rate of the ruble.

Basically, soft fork is conducted because of the need to improve the network, as well as the liquidation of detected errors. During these updates, there is no change in the basic principles of the network.

2. What is hard fork?

Cryptocurrency hard fork is a cardinal change of the blockchain network code, which implies the lack of compatibility with older software. Roughly speaking, in the process of carrying out hard fork, a completely new cryptocurrency is being created, which cannot work with the old version within the same network. After hard fork, an alternative blockchain is created and it works on a completely different principle.

To simplify the process of understanding the above information, let’s also give an analogy from real life. Most people know that the euro currency has now been entered as legal tender in the European Union. Its introduction began in 1999. In the process of development, the euro has stopped to depend on the franc or dychmark and has become an absolutely independent currency.

The main reasons why developers spend cryptocurrency hard fork:

  • implementation of improvements that require major changes;
  • elimination of major bugs;
  • a desire to create a new cryptocurrency based on an already working product.

The main hard fork meaning is to create a separate blockchain, which will have its own miners.

3. The main hard forks of the first cryptocurrency Bitcoin

Hard forks in Bitcoin happen much more often than in any other cryptocurrency. Now let’s talk about the main forks what happened in Bitcoin network lately.

Bitcoin TX. This project is noticeable by only the fact it was the first hard fork in the Bitcoins network. The development team led by Mike Hearn held this hard fork in August 2015. The principal difference between the new project and the original Bitcoin was an increased block size (up to 8Mb). This solution would increase the capacity of the blockchain to 24 transactions per second. For the further development of Bitcoin XT, it had to be supported by ¾ of all the miners of the original Bitcoin network. But in fact, the first hardfork got support of only 12% miners. For this reason, the project was forgotten over time, and its network became incapable.

Bitcoin Classic. The developers of this project took into account the Bitcoin XT errors and decided to smoothly increase the block size: initially increase it to 2 MB, and only after 24 months – double it to 4 MB. It occurred in January 2016. But, unfortunately, this hard fork also failed. The reason was all the same low support from the miners. Officially, the project was closed in November 2017.

Bitcoin Cash. As of today, it is the most successful and popular Bitcoin hard fork. It is the only BTC fork, which not only got, but also stayed for a long time in the list of TOP-10 cryptocurrency projects. It was initiated in August 2017. The main advantages of this project over the original BTC are: increased capacity, low commissions. Subsequently, Bitcoin Cash had its own hard fork (November 15, 2018), which slightly weakened its position, but the project is not forgotten and continues to develop.

4. Conclusion

Briefly and in simple words, hard fork definition is a large-scale update of an existing cryptocurrency, in the process of which a new coin appears. Soft fork can be compared with a planned software update, which does not imply the emergence of a new cryptocurrency.

If to look at the history of Bitcoin hard forks, it appears, that no project has even managed to come close to BTC, so far. At the moment, the only more or less successful project is Bitcoin Cash, but developers need to put much efforts to help their brainchild to compete to its older brother.

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What is Fintech?

Fintech is the new financial industry that improves the current financial system and our everyday life with innovative technologies.

New technologies in the financial sphere

The field of financial technology is developing rapidly. Every year, there are more sites and applications that simplify the payment for goods and services, the receipt and repayment of loans, as well as the usual process of money transfer.

Payment services are the most popular in fintech today, which significantly save the time for making payments. With their help instant transfers within a country and fast international ones are made. Payments using a QR code also relate to financial technologies.

What financial technology allows to increase

Financial technology is designed to speed up the process of carrying out any banking procedures.

Conceptual approach to the development of the fintech ecosystem

Forming the financial ecosystem will help financial and credit organizations in the competition for customers and increase business income. However, a conceptual approach to the development of such ecosystem requires the development of IT systems in order to collect, store and process huge amounts of data both online and offline.

Innovative financial technology

The development of financial technology began in 2009 after the crisis. Banks used robots to reduce costs, began offering credit to their customers online, and moved financial payments to the Internet. Much greater impact to the development of financial technology made the mobile Internet. As a result, several major financial technologies and capabilities emerged:

  • delivery of services via the smartphone;
  • delivery of services via social networks;
  • alternative payments;
  • marketplaces;
  • innovative business models;
  • artificial intelligence;
  • digital identification and biometrics;
  • open API.

Investing in fintech

For the period from 2010 to 2015 only, the volume of investments in fintech increased to almost 20 billion, which is 10 times more in terms of investments before 2009.

According to KPMG auditing company, the volume of investments in the first half of 2018 amounted to $ 57.9 billion, which outweighed the volume for 2017.

The Fintech boom

Today, many startups do not meet the expectations of investors, although in 2014 the situation was completely reversed. The revolutionary Boom of financial technology fell exactly on that year, in which no name players at that time stood out, and today they are world famous giants of the financial industry such as Square and Stripe payment services, which had raised $ 150 million, Renrenda startup, that had collected $ 130 million, and p2p lending platform.

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What is Artificial Intelligence?

You may not even realize it, but you daily encounter or interact closely with Artificial Intelligence (AI), or at least take part in its training. All modern technologies of the latest generation use AI: smartphones, smart watches, social networks and even messengers, not to mention more serious developments, such as high-intelligence machines.

Artificial Intelligence is a science and technology of creating intelligent machines, programs, and systems capable of solving creative tasks that, as is commonly believed, only a human can handle.

This definition hardly made it clear, so in this article The Coin Shark will answer the most frequently asked questions and tell you everything you need to know about Artificial Intelligence.

What can be related to Artificial Intelligence technologies?

Today, technologies include the latest models of smartphones and other mobile devices, as well as Siri and Alice voice assistants, Google and Yandex search engines, even GPS navigation devices. AI is actively used in the sphere of defense and military affairs, medicine, education, business, and other areas.

What does AI do?

Studies and develops. Let’s have a look at the example of the latest flagships, in which artificial intelligence is integrated into Alice or Siri voice assistants, depending on the operating system of the smartphone. The helpers adapt to the needs and even the character of the user to help with everyday tasks. It is assumed that the assistants can not only find information, but also independently call a taxi, book hotel rooms, etc.

In other words, AI will adapt to a person’s way of thinking in order to solve logical and creative tasks.

What does Artificial Intelligence include?

If we do not go into detail of a complex process of building and learning AI, then artificial intelligence includes neural networks with a huge number of large databases that are replenished every second.

Application of AI in economic

In the economic sphere, artificial intelligence is applicable in banks, logistics, trade, markets and even brewing. Based on AI technologies, which are used in economic, completely replaced a human at some positions as a work unit.

Benefits 

AI greatly facilitates everyday life, not to mention the global challenges. It can solve issues that require a logical approach with such speed that is beyond the power of man. Its another peculiarity is that it can make decisions accurately and precisely with the slightest error. For example, in the field of medicine, AI will soon be able to make diagnoses and even execute complex operations that the medical workers are not able to carry out today.

AI and Robotics

AI and robotics used to be two completely different areas,  but now they are in close contact. They quickly found use in many practical implementations that showed a good result. The symbiosis of AI and robotics is actively used not only in research centers, but also in small and medium-sized businesses. The speed of development is amazing: while humanity have become used to mobile devices, the developers have already begun releasing the first AI robots. At the moment, the international community is demanding smart robotics regulation.

Tasks

AI is designed to solve and perform tasks that are beyond the power of man. For example, in diagnostics it will be able to determine a pathology in the early stages, which will make an insane step in medicine and prolong people’s lives. Also, AI can effectively use resources, for example, in production. In transport logistics, smart cars will work out the most optimal route to save fuel and reduce vehicle wear. There is a huge amount of tasks that AI can solve, but they all should be led to simplification, economy and accuracy.

Development 

It is difficult to predict the development of AI since the direction is developing rapidly. For just a few years humanity has witnessed how machines can reproduce human speech and logically answer questions. So far it is known that the potential of artificial intelligence is not even half used.

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What is STO and Why Is It Going to Replace ICO in a Near Future

During the last couple years the crowdfunding market began to develop rapidly. ICO or initial coin offering – is not only a very convenient way of raising capital for further project’s development, but also a very profitable investment tool. But there are many troubles on this market, which need a solution. In this article we will talk about a new type of crowdfunding on the cryptocurrency market (STO), find out how it differs from the ICO and what is its future.

1. The main problems of ICO

So as it was mentioned before, the ICO reputation suffered during 2017 – 2018 years. The sad statistics indicates that the vast majority of cryptocurrency startups that conducted public ICO, failed. There are many scammers on this market, whose activities are aimed only at personal enrichment. In 2018 general investments in ICO amounted to more than 18 billion dollars, and by the end of the year all projects brought only losses and frustration to their investors. Because of this, the regulators began to actively monitor start-ups that raise their capital through crowdfunding.

Users can purchase two types of digital assets in a process of participation during initial coin offering:

  • Payment Tokens. They can be used to pay for different goods and services, offered by a company- issuer.
  • Utility Tokens (or useful tokens). They allow using some specific services, offered by an issuing company.

It is very important to understand, that possession of the above mentioned types of assets does not provide an investor neither with influence on the destiny of the company (for example to participate in the voting of shareholders), nor with protection of his rights. The fact is that payment and utility tokens are not equal to securities or stocks.

2. What is STO?

It worth noting, that there is one more type of tokens – Security Token. This variant of assets is very similar to traditional stocks, to which everyone has already managed to get used on stock markets. The main feature of this type is that their owners, in fact, have the right of ownership of a certain share of a company. Such kind of investment is fully protected by regulators. It means that company’s failure to fulfill financial obligations to its investors will entail legal proceedings.

Many experts note, that STO will replace ICO on the crowdfunding market. The matter is the best features of ICO and IPO were united in this investment tool. STO got that level of security, which IPO has, and also the relative simplicity and accessibility that is inherent to ICO.

3. Who can work with STO

SEC has developed rules for investors who wish to participate in STO.

  • An investor must have net worth of $1 million. It is worth noting that this amount does not include the market value of the investor`s real estate in which he lives.
  • The investor should have net income of 200 thousand dollars a year. If we are talking about a married couple, their total annual income must be at least 300 thousand dollars a year.
  • If we talk about an organization, its net assets must be at least $5 million in order to participate in STO. Also, all members of the company must be accredited investors.

It worth noticing, that an investor does not have to comply with all the above mentioned points, one is enough.

4. Forecast for the future

It is early to talk about the future that expects for STO yet. The main indicator of success, which is worth paying attention to is the number of companies that do not work on the blockchain technology market, who wants to conduct an STO in the near future. This type of attracting investment should interest middle class companies, for which to conduct a classic IPO is too expensive. If this scenario becomes a reality, then it will be possible to assert with confidence that STO has a great future. It worth noticing, that this is not a fast process. It will take at least 1-2 years to set all the mechanisms and launch STO for a wide audience. It is quite possible with the right approach of investors and regulators. Now there is another obstacle on the way to massive implementation of STO – the general decline of the cryptocurrency market. The matter is that people`s interest to investments in blockchain is decreased at the moment. But the fall cannot last forever, that is why many experts still have optimism and believe in better future of both STO and the cryptocurrency industry.

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How to Present Bitcoin for New Year: Unknown Methods

The New Year’s holidays is the time for surprising your family. If you have no idea how to do this, then The Coin Shark recommends you to present Bitcoin, the world most discussed cryptocurrency. Well, what else would you expect from us? 🙂

We bet that there is a question inside of your head: “How to do that, if it has no physical representation?”. So, here are 3 methods how to gift Bitcoin for New Year 2019, that no one knows about.

Preparing the gift

The preparation of Bitcoin presentation is identical in 3 methods.

Any gift becomes more attractive if it is wrapped in the festive package. We will also pack Bitcoin, the only thing is that a hard drive will be our colorful wrapper. Literally, we will gift Bitcoin on it or on some part of it.

If the person whom you are willing to present such an unusual gift has a digital wallet, then everything is simple, just transfer money on it. And if not, you have to create it. We will describe how to do that in the following methods.

Well, let’s start.

Method #1: Bitcoin on a sheet of paper

  1. Bitcoin Paper Wallet service will help you to achieve that. It was designed for creating a paper wallet. You can make a wallet model on this resource by yourself: choose style and language where the information will be written on. 
  2. You can decorate your wallet with holo-stickers, but not necessarily. The minimal value of 12 stickers is 0,0009 BTC.
  3. After the abovementioned steps you have to print an image. Keep in mind, that the image should be printed on both sides.
  4. “Run” to an exchange to buy BTC and immediately transfer them to the wallet, we recommend you to copy the address of it. For buying and exchanging Bitcoin or other cryptocurrencies, we advise you the following exchanges:

Binance
CEX.IO
EXMO
Coinmama
LiveCoin

5. Check the balance of the created wallet on Blockchain.info.

Method #2: Bitcoin on a flash drive

  1. Firstly, you have to buy a flash drive for storing Bitcoins. The market value of such devices starts from 58 EUR. Check out the Bitcoin-flash drives, such as: trezor.io, Ledger Nano S or Digital Bitbox.
  2. After the purchase, do the step #4 of the previous method.
  3. You can pack the flash drive as you want, for instance, in a small shiny box. Do not forget to put a note where the password will be.

Method #3: Bitcoin on a cellphone

Actually, any device with Android, iOS, BlackBerry or Windows operating system is suitable for storing Bitcoins and other cryptocurrencies.

  1. Buy a smartphone. It will be great if you know which model your relative wants.
  2. After the purchase, install a software: Coin.Space, ArcBit or Bither, it does not matter what operating system you have.
  3. You need to have an e-mail and a password for the registration of the wallet in these programs.
  4. Buy Bitcoin just like in the method #1.
  5. Write down the e-mail and the password on a sheet of paper and put it with the phone.

What risks may occur?

When you give Bitcoin as a present, warn the recipient about the features of the gift, for example, the paper wallet may tear, the flash drive and the smartphone are devices, which are easy to lose. Let your closest take care of the safety of a Bitcoin-carrier.    

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