Explore how cryptocurrency is redefining value, from gold and paper to digital trust, decentralisation, and financial inclusion in the digital age.
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For millennia, humans have defined value through the tangible: gold you could hold, land you could stand on, and later, paper notes backed by government promises. But in just over a decade, cryptocurrency has fundamentally challenged these ancient conventions, introducing a radical new proposition: what if value could exist purely as information, secured not by central authorities but by mathematics and collective consensus?
Consider this: cryptocurrency isn't merely a financial innovation; it represents a philosophical, cultural, and psychological revolution in how we conceptualise value itself. While traditional economists and crypto bros might view crypto assets as speculative instruments, they miss the broader transformation occurring beneath the price charts - a complete reconstruction of our relationship with money, trust, and economic participation.
As we'll explore, this shift extends far beyond trading and investing. It's reshaping how entire generations think about wealth preservation, questioning long-held assumptions about institutional authority, and expanding financial access to previously excluded populations. From Bitcoin's deflationary model to the complex ecosystems of decentralised finance, crypto is rewriting the very language of value in the digital age. Let’s explore it.
From tangible to digital: the evolution of wealth perception
"Where exactly is your Bitcoin?" This seemingly simple question reveals the profound shift occurring in our collective understanding of wealth. For centuries, value storage meant physical possession (again, gold bars in vaults, cash in wallets, or property deeds in filing cabinets). The materiality of these assets provided psychological comfort; you could literally touch your wealth.
Cryptocurrency challenges this fundamental association between physicality and value. When someone owns Bitcoin, they don't possess a digital coin in the conventional sense. Instead, they control access to a position on an immutable ledger - a concept so abstract that it requires significant cognitive adjustment for many traditional investors.
From a behavioural aspect, the difficulty many people have with accepting cryptocurrency stems from our evolutionary programming: our brains developed to value tangible resources (food, shelter, tools). Abstract representations of value require more cognitive processing, which is why many people struggle with the concept of crypto despite understanding it intellectually.
This transition mirrors other historical shifts in value perception. When paper money first replaced gold coins, many resisted the change, insisting that value couldn't exist in mere paper promises. Today's movement from government-issued currency to algorithmic scarcity follows a similar pattern of initial resistance followed by gradual normalisation.
What makes the current transition unique is its complete divorce from the physical realm. Bitcoin, Ethereum, and thousands of other digital assets exist exclusively as information, secured through cryptography, distributed across thousands of computers worldwide, and accessible only through digital keys. This represents not an incremental change but a quantum leap in how we conceptualise ownership and store value.
Decentralisation: redefining trust and authority
Perhaps crypto's most revolutionary aspect isn't its digital nature but its decentralised structure. For centuries, we've outsourced trust to centralised institutions, for example, banks to protect our deposits, governments to manage currency supplies, and credit agencies to verify our financial identities.
Cryptocurrency proposes an alternative: what if trust could be encoded into protocol rules, distributed across networks, and verified by mathematics rather than human authorities?
When Satoshi Nakamoto created Bitcoin, it wasn't just a new asset class - it was a fundamental challenge to the monopoly on money creation. By solving the double-spend problem without requiring a central authority, blockchain technology essentially digitised trust itself.
This decentralisation has profound implications across the financial landscape:
- Banking without banks: Cryptocurrency enables people to become their own financial institutions: storing, transferring, and managing wealth without intermediaries who charge fees and impose conditions.
- Censorship resistance: When value exists on distributed networks, it becomes extraordinarily difficult for any single entity to freeze assets or block transactions, creating new forms of financial freedom.
- Global accessibility: Traditional financial systems reflect geographic and political boundaries. Decentralised networks operate independently of these constraints, allowing anyone with internet access to participate in the global economy.
In emerging markets particularly, this shift from institutional to algorithmic trust has accelerated rapidly. When Venezuela experienced hyperinflation exceeding 1,000,000% in 2018, many citizens turned to Bitcoin not as a speculative investment but as a practical necessity, literally a more stable store of value than their national currency. Similar adoption patterns have emerged across countries with unstable monetary policies or restrictive capital controls.
Some may view decentralisation as more than just a technological preference and more of a direct response to institutional failure. For example, when central banks and governments repeatedly mismanage monetary policy, people naturally tend to seek alternatives that can't be arbitrarily inflated or confiscated.
Scarcity, security & the psychology of hodling
Unlike fiat currencies that can be created indefinitely by central banks, Bitcoin introduced the concept of absolute digital scarcity: only 21 million will ever exist. Again, this fixed supply fundamentally changed how people think about money's relationship to inflation and time.
The term "HODL" (originally a typo for "hold") has evolved from crypto-community slang into a philosophy reflecting a significant psychological shift. Hodlers view cryptocurrency not as a short-term trading vehicle but as a long-term store of value, for some: digital assets worth preserving across generations.
Economist Saifedean Ammous, author of The Bitcoin Standard, argues that Bitcoin marks a return to "hard money" principles. He suggests that for most of human history, money was tied to inherently scarce resources like gold, which couldn't be artificially increased. In contrast, the widespread use of elastic fiat currencies in the 20th century is, in his view, a historical outlier. Bitcoin, with its fixed supply, reintroduces the idea of money that resists debasement.
This scarcity-based mindset has also impacted saving behaviours, particularly among younger generations. While traditional financial advisors typically recommend diversified portfolios with 3-6 months of emergency savings, many crypto adopters maintain much larger reserves, viewing fiat currency as an inherently depreciating asset and cryptocurrency as a hedge against monetary expansion.
The psychological security derived from mathematically guaranteed scarcity creates powerful emotional attachments. For many hodlers, their relationship with cryptocurrency transcends normal investment dynamics - it becomes a vote of confidence in a different economic model. This faith often persists through extreme market volatility, confounding traditional economic rationality models.
From a psychological perspective, consider this: the willingness to endure 70-80% drawdowns without selling suggests something deeper than profit motivation. For committed crypto holders, their assets represent not just potential financial gain but ideological alignment and identity. They're invested emotionally as well as financially.
Financial sovereignty and the global unbanked
For approximately 1.7 billion adults worldwide without access to banking services, cryptocurrency offers something revolutionary: financial inclusion without institutional permission. This aspect of the crypto revolution rarely makes headlines but represents one of its most profound impacts.
In regions where banking infrastructure is limited, cryptocurrency enables financial activities previously impossible:
- Cross-border remittances: Migrant workers can send money home without exorbitant fees or lengthy delays
- Savings protection: Citisens in economically unstable regions can store value beyond the reach of local currency depreciation
- Microfinance access: Blockchain-based lending platforms enable credit access without traditional banking relationships
The concept of "being your own bank" carries different significance for someone in rural Kenya than for someone in Manhattan. For the latter, it might represent philosophical alignment; for the former, it could mean the first real opportunity to participate in the global financial system.
Even in developed economies, cryptocurrency offers financial sovereignty to those facing exclusion. Sex workers, political dissidents, and others vulnerable to financial censorship have found in crypto a way to operate beyond institutional control, though, of course, this same quality raises legitimate concerns about illicit usage.
Risk, reward, and a new investment ethos
Cryptocurrency has also introduced an entirely different relationship with financial risk. Traditional investment wisdom emphasises diversification, steady appreciation, and risk mitigation. The crypto ecosystem, by contrast, has “normalised” extreme volatility, concentrated positions, and experimental financial protocols.
DeFi (decentralised finance) platforms exemplify this new investment psychology. These permissionless protocols enable users to lend, borrow, and trade directly through smart contracts, often offering yields far exceeding traditional finance but with correspondingly higher risks. The willingness to lock millions of dollars, or just hundreds, into experimental code represents a profound shift in risk tolerance.
What traditional investors might see as reckless, many crypto participants view as rational, given their time horizon and beliefs about technological adoption. If someone genuinely believes blockchain technology will transform finance, accepting short-term volatility for potential long-term exponential growth aligns with that conviction.
The future of value: identity, data, and the Metaverse
As crypto continues evolving, its impact on value perception extends into emerging domains like digital identity, data ownership, and virtual economies. Blockchain technology enables new forms of value representation far beyond simple currency.
The next frontier isn't just about money - it's about tokenising aspects of human activity that were previously outside economic systems. From attention to data to reputation, blockchain enables us to capture, measure, and exchange forms of value that were previously intangible. Enter Web3.
Several emerging trends suggest how our concept of value might further evolve:
- Digital identity as asset: Self-sovereign identity systems enable individuals to control and potentially monetise their verified credentials and reputation
- Data ownership: Blockchain-based systems allow users to control, track, and be compensated for their data rather than surrendering it to platforms
- Virtual property: As metaverse platforms develop, ownership of digital land, items, and experiences increasingly resembles traditional property rights
The integration of AI with blockchain technology particularly suggests radical possibilities. Autonomous economic agents (software that can hold assets, make transactions, and provide services) may create entirely new economic relationships not predicated on human participation at all.
Looking toward 2035-2045, we might see value systems where:
- Human attention becomes explicitly priced and compensated through micropayment systems
- Algorithmic reputation scores function as forms of capital across platforms
- Digital and physical assets become increasingly interchangeable through tokenisation
The distinction between 'real' and 'virtual' value is already dissolving. For digital natives, ownership of a rare game item or social token can feel as significant as physical possessions. As virtual experiences consume more of our time and attention, this trend will likely only accelerate.
Conclusion: the value revolution has already begun
Cryptocurrency's true revolution isn't financial - it's conceptual, transforming how we understand value itself. Beyond creating wealth or challenging institutions, crypto expands money's definition through mathematical scarcity, programmable assets, and community governance.
This philosophical shift fundamentally redefines our relationship with ownership, trust, and economic participation.
As digital and physical value boundaries blur, both opportunities and challenges emerge. Whether you participate or not, understanding these paradigm shifts will be crucial for navigating our economic future where value is increasingly defined by consensus rather than decree.
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You've likely come across the term "token" in your crypto ventures, or heard Bitcoin and Ethereum described as a token, but what does this all mean? In this article, we're breaking down what a token is, and how to distinguish a coin from a token and how it can be used as a tool to store value.
Token Definition
A token, in the cryptocurrency sense of the world, represents a particular asset or utility. It's worth noting in this item that tokens and cryptocurrencies are terms often used interchangeably however they technically differ. Tokens typically fall into one of the following three categories:
Payment tokens
These tokens allow users to purchase goods and services outside of the blockchain, offering an alternative currency.
Security tokens
Similar to initial public offerings (IPOs) on the stock market, security tokens offer users an ownership stake or entitle the holder to dividends in a blockchain project.
Utility tokens
Utility tokens offer users access to a service within a particular ecosystem, similar to loyalty points on a Starbucks card. These points hold value within their own ecosystem but cannot be used outside of that.
Coins vs Tokens
Getting more technical, when exploring coins vs tokens, tokens are categorised as crypto assets that have been built on top of another blockchain while coins are built on their own blockchain.
Ether, for example, is the native token to the Ethereum blockchain, however, the platform allows developers to create a range of token standards on top of it. Based on this information, all ERC-20 tokens are therefore categorised as tokens as opposed to coins.
USD Coin (USDC) and Tether (USDT) are therefore tokens as they are built on top of the Ethereum blockchain. While each network is operated by its own leadership, both use Ethereum's blockchain to facilitate all transactions.
How Are Tokens Traded?
Much like coins, tokens can be bought, sold and traded on exchanges, or sent directly from one wallet to another. This is facilitated by blockchain technology, in the same way that coins are transferred from one location to another. Unlike coins, which are all fungible in nature, tokens can sometimes be non-fungible, meaning that they are not identical in value and function.
Tokens are sent using the wallet address of a recipient's blockchain-compatible wallet. The address is often represented by a barcode in the form of a QR code, or through a lengthy alphanumeric code. All transactions take place from the wallet holding the tokens and are sent directly to the wallet of the recipient without the need for a centralized authority like a bank. Tokens can typically be bought on exchanges, often with Visa or Mastercard, or exchanged between users.
How is an NFT Different from Cryptocurrency?
Non-fungible tokens (NFTs) are all different from each other as they each represent a real-world object, whether a digital piece of artwork or a bottle of fine wine. Bitcoin can be traded for anything around the world, whereas NFTs are unique in nature and while they hold value they cannot be used interchangeably.
What Are NFTs Used For?
NFTs are used to represent a particular asset, whether it be physical or digital. When minted, these tokens will permanently represent that asset and cannot be changed. For example, one NFT could represent an apartment in London while another could represent a song by Kings of Leon. The possibilities are endless, and the marketplaces are huge.
Users can easily trade NFTs on marketplaces (through a website or mobile app) such as OpenSea or Rarible. Once you own an NFT you are credited with the ownership rights of the asset the NFT represents. Due to the nature of blockchain technology, this is permanently displayed on the network's public ledger for anyone to review. This process ensures that the ownership of an NFT cannot the changed and the information is available for anyone to credit.
Note that several blockchain networks currently support the minting of NFTs, and the holder will need a wallet specific to that blockchain in order to hold the NFT.
Are Tokens Regulated?
When it comes to regulation, countries around the world are currently drawing up legal frameworks to better implement cryptocurrencies into our current financial system. This includes the likes of tokens.
Once cryptocurrencies are regulated by government authorities, they could provide the world with unrealized use cases like being used to manage a prescription at a pharmacy or clinical services or to provide feedback to IT support. While there are plenty of tokens available on the market today, it's likely that this is only the tip of the iceberg in terms of their potential to improve issues faced around the world.
Investing centers around making gains off of your initial capital. When determining the potential gains one could make there are a number of variables one needs to consider, such as how much capital one has put into the investment and what returns are associated with that asset class.
This led to the creation of ROI (return on investment), a measure that allows anyone to calculate the net profit or loss of an investment in percentage form.
What is return on investment?
All investments, including stocks, bonds, real estate, and small businesses, come with the goal of making more money than you put in. The money you earn over and above your initial investment is called profit. When discussing investment profitability, people often use the term ROI, meaning return on investment. This metric expresses the amount of net profit one can earn/earned as a percentage of what the initial investment was.
ROI can help you assess if buying property or investing in a business is worth it. It's also helped companies determine the value of adding new products, building more facilities, acquiring other businesses, advertising campaigns, etc.
ROI (return on investment) is the percentage of gain or loss on an investment relative to the total cost of the investment. In other terms, it's a way to compare different investments in order to figure out which ones are worth pursuing. For example, you could calculate ROI to decide whether selling one stock and buying another would be a good idea.
While there is no limit to a return on investment theoretically, in practice, no investment is guaranteed to have any return. If your ROI is negative, it means you not only failed to make a profit but also lost some of your original investment. The worst possible outcome would be -100% ROI, meaning you completely lost your initial investment. An ROI of 0% signifies that you at least recovered the money you put in, but gained nothing beyond that.
While ROI is often used as a marker of profitability, it isn't foolproof. There are several limitations to calculating ROI as your only measure which include the time frame in which you will earn back your investment, inflation rates, how risky a venture is, and additional maintenance costs that may be incurred.
Calculating ROI terminology
Before we dive in, let's first cover some basic terminology.
Net profit or net income
Net profit is the amount of money left over after all operating costs, such as the cost of transaction costs or maintenance costs, and other expenses have been accounted for and subtracted from the total revenue. It is used to measure profitability. Net profit can also be called net income, net earnings, or the bottom line.
Total cost of investment
This figure will look at the amount of money invested in a particular investment.
How to calculate ROI: the ROI formula
The ROI formula is a simple equation that looks at the price change of the asset and the net profits (the initial cost of the investment minus its value when you sell it). When calculating ROI you would use this formula:
ROI = (Net Profit / Total Cost of Investment) x 100
To factor trading costs into your ROI figure, you'll use:
ROI = ((Value of Investment - Cost of Investment – Associated Costs) / Cost of Investment) x 100
As an example, let's say you buy 5 shares of $100 each in Twitter, equating to $500. You sell them a year later for $150 each, equating to $750. Let's say you paid $5 commission on each trade, costing you $25 in trading fees.
ROI = (($750 - $500 - $25) / $500) x 100 = 45%
This means that you made a 45% return on investment on that particular investment.
How to determine a strong ROI
A "good" return on investment is any number above 0, as this means you made some profit. However, the ideal ROI should be higher than what you could've earned had you chosen another investment (the next best thing).
To compare this, investors often compare their earnings to what they could've made on the broader stock market or in a high-yield savings account. Using the S&P 500 as a control, over the past four decades it has made gains of around 7% (after inflation). An ROI is generally considered to be a strong one if it beats the stock market in the long term.
It's always important to note that past performance does not equate to future results. Another pearl of wisdom to remember is that high rewards generally come alongside high risks. If an investment promises very high ROIs, consider this also means that it comes with high risks.
Therefore, a strong ROI will vary depending on the investment's level of risk, your goals, and how much risk you're willing to take.
Where the ROI formula falls short
The main limitation of using this return on investment ROI formula as a marker of success is that it doesn't show how long it took to earn the money back. When comparing various investments, the time it takes to mature will have a significant impact on the profits you could earn.
For instance, a year loan versus a bond held for five years versus a property held for 10 years will all have varying ROIs once you've established how long it will take to earn the specified ROIs.
In this scenario, the ROI calculations mentioned above skimp on the full story. It also doesn't account for risk. For instance, the loan repayments could be delayed or the property market might be in a slump, all affecting the potential profits earnable.
With many variables, it becomes harder to predict what the exact ROI calculation on an investment will be, so be sure to factor this in when using the return on investment ROI formula to determine how attractive an investment opportunity or business venture is.
ROI alternatives
Although the return on investment doesn't consider how long you keep an asset, it's essential to compare the ROI of investments held for comparable lengths of time as a more clear performance measure. If that's not possible, there are a few other options.
Average Annual Return
Also known as annualized return on investment, this adjusts the ROI formula to factor in the timing. Here you would divide the ROI by the number of years you hold the asset.
Compound Annual Growth Rate (CAGR)
This option is more complicated but yields more accurate results as it factors in compound interest generated over time.
Internal Rate of Return (IRR)
This measure factors in the notion that profits earned earlier outway the same profits earned later, taking into account interest that could've been earned and factors like inflation. This equation is quite complicated but there are online calculators one can use.
Conclusion
A return on investment (ROI) is a formula used to calculate the net profit or loss of an investment in percentage form. The ROI calculation can present valuable information when investing capital or determining profitability ratios. The ROI equation looks at the initial value of one investment and determines the financial return. A negative ROI indicates that the investment returns were lower than the investment cost.
You've likely heard the term being thrown around in the cryptosphere. In this piece, we're breaking down what a fiat wallet is, why one might choose to use it, and how to create one should you wish to.
What Is a Fiat Wallet?
A fiat wallet is a digital account where you can store, send, and receive traditional (fiat) currencies like USD, EUR, or GBP. Think of it as an online version of a bank account, but often integrated within a crypto or fintech platform.
Many crypto exchanges offer fiat wallets alongside crypto wallets, allowing users to buy and sell digital assets more efficiently. Instead of waiting for bank transfers to clear, users can use their fiat wallet to make instant deposits or purchases.
Fiat wallets are also popular in fintech apps and are typically operated under an e-money license. Some platforms may even offer perks like interest or rewards for holding fiat funds in the wallet.
What Is Fiat Currency?
Before we go further, it's important to understand what "fiat" means. A fiat currency is a government-issued currency—like the US dollar, Euro, or British pound—not backed by a physical commodity like gold but by the trust in the government that issues it.
These currencies are regulated by central banks and are legal tender in their respective regions.
How Does a Fiat Wallet Work?
Much like a crypto wallet, a fiat wallet stores currency digitally. The key difference? It holds regular government-issued currency, not crypto assets.
Users often keep fiat in these wallets on exchanges or fintech platforms to allow quick transactions, avoid delays, or earn passive rewards. For instance, you can instantly buy Bitcoin using funds from your fiat wallet—no need to wait for your bank to process a transfer.
It’s worth noting that fiat wallets are not connected to a blockchain. They operate entirely outside the crypto ecosystem, serving as a bridge between traditional finance and digital assets.
Why Use a Fiat Wallet?
The short answer: speed and flexibility.
Here are some common reasons users opt for a fiat wallet:
- To buy or sell cryptocurrencies instantly, especially during periods of volatility
- To avoid delays from traditional bank transfers
- To keep cash on hand for seizing market opportunities
Imagine spotting a huge dip in a crypto asset overnight. If you rely on a standard bank transfer, it could take 2–3 days before your funds are available—by then, the opportunity may be gone. With a fiat wallet, you could act immediately.
For traders and investors, having funds ready to go can make a big difference. In crypto, speed often equals profit.
Is Your Money Safe in a Fiat Wallet?
The safety of your funds depends on the platform hosting your fiat wallet. A well-regulated provider with strong security practices should offer robust protection—just like a traditional bank.
Most platforms apply:
- Data encryption
- Multi-factor authentication
- Biometric verification or one-time passwords (OTP)
Fiat wallets and crypto wallets typically share the same level of platform-based security, so always choose a provider that meets compliance standards and prioritizes user safety.
Store Your Fiat Currencies in Fiat Wallets on Tap
With Tap, you can securely store your fiat currencies in a regulated environment.
Here’s how to deposit into your fiat wallet:
- Open the Tap app
- Go to your Cash Wallet
- Select your desired fiat currency
- Choose between bank transfer or debit card
- Complete the transaction
Once the bank clears the funds, your wallet will be credited and ready to use. You can hold the funds as long as you like, or send them back to your bank at any time with just a few taps.
In market terminology, a bull market is a period of generally rising prices and investor optimism. The term "bull market" comes from the market that rises steadily and consistently like a healthy bull. A bear market is the opposite: It refers to a condition when prices are falling and investors are pessimistic about future market value. Historical market cycles are well defined and provide a good understanding of market trends.
It's all about cycles
The market cycle helps investors to know whether they should invest or hold back their crypto coins. To avoid making wrong market choices, investors should know market cycles so they can decide whether the crypto market is on the rise or not.
The market cycle helps people to know when the market is already booming and ready to take a plunge. This helps traders to decide which crypto coin to buy at its lowest value, hold it until market bull cycle and then sell it to make a very good profit.
The Bull Market:
A Bull market is a long run of increasing prices and investor optimism where buyers outnumber sellers. As the market bull cycle goes on, more investors will see the market as their opportunity to buy low and sell high. The result is a market cycle that is not as steep as it had previously been.
The Bear Market:
A Bear market is the opposite of a Bull market where prices are falling and investors have low expectations for future market values. The market cycles are frequently broken up into bull markets and bear markets. This market cycle happens when market prices fall and investors sell their coins, this causes market prices to drop even more until the trend reverses.
The case of the Dead/flat market
A Dead market is a term used to describe a period of time where there is not much movement in either direction but it is not a market downturn by any means. This market cycle can occur after prolonged market cycles such as bull (rising trend market) and bear (falling trend market).
The market is not a straight line, it goes up and down so even though the market has gone on for a considerable time without any market fluctuation, market volatility will eventually return.
The market can be dead for a long time but it could cause worry within investors so they should know where market cycles stand.
Since market cycles are consistent it is better to be ready for market volatility, this will help you make informed market decisions when market cycles return.
In conclusion: the market cycle is a repeating market trend that describes market fluctuations over time. When market prices increase, it is called a bull market; when prices fall, it's called a bear market. Knowledge of market cycles is an important asset for investors in the crypto market as the knowledge of swings, downturns and upturns can help make better-informed decisions with investing in cryptocurrencies.
As you navigate the waters of the cryptocurrency market you're likely to come across a term called "coin burning". In this article, we're exploring the process used to manage the token supply of projects, a means for companies to manually alter the supply (and thereby demand) of a token's circulating supply. While not adopted by every project, coin burning has proven over the years to be successful in increasing the price of a digital currency.
What Is A Coin Burn
Diving right in, a coin burn is the process of removing a certain number of tokens from circulation by sending them to an invalid address, a "black hole" of sorts. This process is written into the project's code and implemented at various increments as outlined in the whitepaper. While Bitcoin doesn't make use of coin burning, many projects on the Ethereum network, particularly ERC-20 tokens, have been known to implement it.
Through the use of a smart contract, also known as a burn function, the network would remove a specified number of tokens from circulation, decreasing the total supply and thereby (hopefully) increasing the demand. Coin burns have been known to lead to an increase in price, as the supply-demand ratio is altered.
An Example Of Coin Burning
A top 10 cryptocurrency project underwent a coin burn last year that is believed to be the biggest layer 1 token burn to date. 88.7 million LUNA, the native coin to the Terra project, were burned in November 2021 following a vote by the community. This was effectively worth $4.5 billion at the time. A few days following the coin burn the LUNA token hit a new record high.
The burn aimed to remove value from Terra’s community pool, but in reality, it simply moved the value from the pool to the individual holders of the cryptocurrency.
Bitcoin Cash and Stellar are two other high profile cryptocurrencies that have made use of the coin burning initiative. Shiba Inu is another cryptocurrency to have undergone a coin burn, although this wasn't the initial intention of the project. The project's developers gifted half of the SHIB supply to Ethereum creator Vitalik Buterin, who went on to donate 10% and burn the remaining 90%.
How Does Coin Burning Work?
Should a project wish to implement a coin burn they will need to create a smart contract. Smart contracts are digital agreements that execute when certain criteria have been met. Say a project wants to implement a coin burn every 200,000 blocks, they will create the burn function to include this instruction.
When this milestone is achieved, the coins will automatically move from the designated wallet to a wallet address that does not have a private key. Without a private key, these coins can never be recovered. The coins will then be sent from the one wallet address to the other and effectively be removed from circulation. The transaction (burn) will be added to the network's blockchain records and be available to view through the blockchain explorer.
The Downside To Coin Burning
Before you invest in a project that undergoes coin burning it is important to note that coin burning does not guarantee an increase in the coin's price. The increase in price will depend on the network, the market climate and the current sentiment. During the Shiba Inu coin burn, while the price rose considerably, it soon returned to a more stable and substantially lower level.
Coin burning can also be used by ill acting developers to deceive the community. Say a project has a total supply of 100 million tokens and allocates 10 million to the platform's developers. They could then burn 40 million tokens, increasing their hold to 60% of the circulating supply on the network.
As with all transactions conducted on the blockchain, all payments are irreversible meaning that once you burn coins they can never be recovered.
What Is Proof Of Burn?
Not to be confused with coin burning, Proof of Burn (PoB) is a consensus mechanism similar to Proof of Work and Proof of Stake. The model utilizes an element of coin burning in its mining practice and is known to use considerably less energy than its PoW counterpart.
The process requires miners to burn tokens in order to participate in the mining process. The more coins burned the more blocks they can create, meaning the more rewards (in the form of transaction fees) they can earn. Miners are still required to use mining hardware. The benefit of this is to provide a less energy-intensive blockchain network that can run optimally through a network of decentralized mining participants.
You may have heard of bear and bull markets; both referring to economic conditions within a market. Think about how a bull attacks, lifting you up with its horns.
A bull market or bullish market describes a condition within a financial market where the prices are rising or are expected to rise. The term "bull market" is most often used to refer to a financial market but refers as well to any asset that is tradable such as bonds, real estate, commodities, and currencies. Bull markets indicate investor confidence, optimism, and expectations that strong results will continue for an extended period of time.
There are two ways to What is a Bull Market?
A bull market refers to a financial market condition in which the prices of securities or assets are rising or expected to rise over an extended period. In a bull market, investors are optimistic about the future prospects of the market and are willing to buy securities, pushing prices higher.
Bull markets are often associated with economic growth, strong corporate earnings, and low unemployment rates. In these conditions, investors are confident that businesses will continue to perform well and that the overall economy will continue to expand, leading to higher stock prices.
Recognizing a Bull Market
To recognize a bull market, investors need to look for a sustained period of rising prices across the market or a specific asset class. This period can last anywhere from a few months to several years.
Another way to recognize a bull market is through technical analysis. Technical analysts look at charts and other market indicators to identify patterns that signal a market trend. In a bull market, technical analysts may look for higher highs and higher lows in price movements over time.
Impact of a Bull Market
A bull market can have a significant impact on the economy, businesses, and investors. When the stock market is performing well, businesses may have easier access to capital and credit, which can lead to increased investment and growth.
A bull market can also lead to increased consumer confidence, as investors feel more optimistic about the economy and their financial futures. This can lead to higher consumer spending, which can, in turn, fuel economic growth.
On the other hand, a prolonged bull market can lead to a market bubble, where prices become overinflated and unsustainable. This can lead to a market correction, where prices drop significantly, and investors may suffer losses.
In conclusion
Bull markets can have a significant impact on the economy, businesses, and investors. Recognizing a bull market and understanding its impact can help investors make more informed investment decisions. However, it's essential to remain vigilant and avoid investing solely based on market trends, as market bubbles can lead to significant losses.
approach a bull market: selling stock for high profits or holding in hopes of rising prices in the future. Alternatively, you can also buy more assets, but most would not recommend buying on a high.