仮想通貨に関する用語集(CRYPTO GLOSSARY) A行

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Account Abstraction

Account abstraction (AA) is a concept in blockchain that enhances security by separating the control of a user’s funds from the execution of smart contracts.

What is Account Abstraction (AA)?

Account abstraction refers to managing cryptocurrency using smart contracts without transferring control to those contracts. This improves security by reducing the risk of malicious activity, as users retain control over their funds. Additionally, AA enhances the user experience by enabling more customizable and secure interactions with decentralized applications (dApps).

Why Account Abstraction?

Externally Owned Accounts (EOAs) are the traditional cryptocurrency wallets controlled by private keys. However, EOAs have significant limitations. When interacting with smart contracts, users often have to relinquish control of their accounts, making them vulnerable to security breaches. Moreover, EOAs lack features such as autopay and spending policies, which could provide more granular control over transactions.

Account abstraction addresses these issues by allowing smart contracts to manage funds without taking control away from the user. This separation ensures that users’ funds are more secure and that they can customize their wallet interactions according to their needs. For instance, AA can enable automated payments and limit daily transaction amounts, features that are not possible with traditional EOAs.

Examples and Benefits

Account abstraction offers several key benefits:

• Flexible Recovery: Users can set rules for fund transfer if a wallet remains inactive for a certain period, ensuring that assets are not lost if the user can no longer access their account.
• Signature Abstraction: This feature allows for more flexible authentication methods, such as biometrics or two-factor authentication, enhancing security and ease of use.
• Gas Abstraction: Instead of requiring users to pay transaction fees in ETH, AA enables payments in any ERC-20 token, making the process more user-friendly and reducing the need to maintain an ETH balance.
• Customizable Policies: Users can implement spending limits and automated payments, providing greater control over their financial activities.

Implementing account abstraction on Ethereum is still in progress, but some ecosystems already incorporate these features into their blockchains. Wallets like Argent and Ambire leverage AA to offer advanced functionalities such as social recovery and multi-signature transactions.

In conclusion, account abstraction is a significant advancement in the blockchain space. It addresses the limitations of EOAs and enhances security and user experience. By allowing users to maintain control over their funds while utilizing the benefits of smart contracts, AA makes cryptocurrency management more secure and accessible, paving the way for the broader adoption of blockchain technology.

 

Address (Wallet Address)

A wallet address is a group of letters and numbers used for sending and receiving cryptocurrencies and other digital assets. It can be shared to facilitate digital transactions.

Introduction

In the dynamic and ever-evolving world of cryptocurrency, understanding the concept of a Wallet Address is crucial. This comprehensive guide delves into the intricacies of wallet addresses, answering all possible questions and providing a thorough understanding of their role in the crypto ecosystem.

What is a Wallet Address?

A wallet address in the cryptocurrency world is akin to a bank account number. It’s a unique string of characters that enables users to receive cryptocurrencies. 

Wallet Address Format

Each blockchain has its own style of digital wallet address. On the Ethereum blockchain, an Ethereum wallet address starts with the characters “0x” and typically has 40 hexadecimal characters in it. A wallet address, therefore, could look something like: 0xb794f5ea0ba39494ce839613fffba74279579268.

Bitcoin wallet addresses, meanwhile, always start with 1, 3 or bc1. They are also typically made up of 27 to 34 alphanumeric characters.

That means a BTC wallet address could appear, for example, as 3FZbgi29cpjq2GjdwV8eyHuJJnkLtktZc5.

On the Avalanche blockchain, crypto wallet addresses are slightly easier to distinguish. They use a Bech32 addressing format where each virtual machine has its own unique identifier.

For example, the Avalanche C-Chain has addresses that begin with “C”, the Avalanche P-Chain has addresses that begin with “P”, and lastly, the Avalanche X-Chain has addresses that begin with “X”. The wallet address is then immediately followed by “avax1”, making it obvious to users that they are making transactions on the Avalanche blockchain.

How Do Wallet Addresses Work?

Each wallet address, generated by your crypto wallet, is unique and functions as your public identifier on the blockchain.

Understanding What is Blockchain? provides deeper insights into how wallet addresses operate within this technology.

Types of Wallet Addresses

Single-Use vs. Multi-Use Addresses

Single-Use Addresses: These are used for one transaction only, enhancing privacy and security. Multi-Use Addresses: These can receive multiple transactions, common in exchanges and online wallets.

Bitcoin and Ethereum Addresses

Bitcoin Addresses: Often start with ‘1’ or ‘3’, and are derived from users’ public keys. 

Ethereum Addresses: They start with ‘0x’, indicating that they’re part of the Ethereum network. 

Creating and Managing Wallet Addresses

How to Create a Wallet Address

Creating a wallet address is simple with a cryptocurrency wallet.

Best Practices for Managing Wallet Addresses Security: Always keep your private keys secure. Multiple Wallets: Use different wallets for different purposes. The Role of Wallet Addresses in Transactions

Sending and Receiving Cryptocurrencies

Wallet addresses are essential for sending and receiving cryptocurrencies. Understanding the mechanics of crypto transactions is crucial, as explored in Crypto Trading Risk Management.

The Importance of Accurate Wallet Addresses

One wrong character in a wallet address can result in loss of funds, making accuracy paramount. Advanced Topics in Wallet Addresses

QR Codes and Wallet Addresses

QR codes simplify the process of sharing wallet addresses. They are widely used in mobile wallet applications.

Wallet Address and Blockchain

Explorers You can view transactions associated with a wallet address through blockchain explorers. 

Conclusion

Wallet addresses are the backbone of cryptocurrency transactions. Understanding their functionality and proper management is key to navigating the crypto world safely and efficiently.

FAQs

① Can I change my wallet address?

Wallet addresses are fixed; however, you can create new ones.

② Are wallet addresses case-sensitive?

Yes, they are case-sensitive and must be used exactly as they appear.

③ How many cryptocurrencies can a single wallet address hold?

It depends on the wallet type. Some support multiple cryptocurrencies, while others are specific to one.

Airdrop

A crypto airdrop is a marketing campaign where a project will deliver free crypto tokens or coins to participating users’ wallets.

What is a Crypto Airdrop?

A crypto airdrop is a promotional event used by blockchain start-ups to increase hype or awareness of a new blockchain project by distributing a specific token or coin to its users for free. It is a marketing initiative that incentivizes token holders to engage more with the project, increase the overall token supply, and become active participants in the community. While crypto airdrops are mostly given out for free, some airdrops ask their participants to perform specific tasks before they can claim their tokens.

Types of Crypto Airdrops

Crypto airdrops can be classified into three broad categories:

Exclusive Airdrop

Exclusive airdrops select specific individuals based on their association with the project, such as active community forum posters. The purpose is to reward participants based on their loyalty and past connection with the project.

Bounty Airdrop

Bounty airdrops are not free. For bounty airdrops, participants have to complete some tasks related to the project, such as creating and sharing posts on the project’s social media handles, participating in forums, tagging friends on Instagram, etc. After completion of the task, participants fill out a form along with their wallet address to claim the “bounty” and receive the airdrop.

Holder Airdrop

It is a type of cryptocurrency airdrop that is based on a snapshot of the blockchain ledger at a specific block height or date. In a holder airdrop, cryptocurrency holders who have a certain minimum balance of a particular token in their wallets at the time of the snapshot are eligible to receive a distribution of a new token, usually for free.

How Can I Tell if an Airdrop is Fake?

Crypto airdrops seem appealing, but unfortunately, there are ways to scam unsuspecting crypto enthusiasts with fake airdrops.

Here are some useful tips you can use to avoid airdrop scams:

• Before providing your crypto wallet address for the airdrop, double-check whether the project or start-up is using its official website.
• Never share your private keys, seed phrases, or passwords online.
• Legit start-ups usually do not ask for any registration fees to qualify for airdrops.
• Beware of the rug-pull scam. Many scammers will artificially pump up their project tokens to increase their value temporarily.
• Remember that it’s a scam if the project promises an exorbitantly high number of airdrops.

 

Akash Network

Akash Network is an open-source and decentralized platform that facilitates the buying and selling of cloud computing resources.

What Is Akash Network?

Akash Network is an on-chain decentralized and open-source cloud computing platform that connects compute buyers and compute sellers via its own marketplace.  In other words, it links server owners in need of computing power to host their applications with other network users willing to rent out or lease compute capacity.

Greg Osuri and Adam Bozanich co-founded Akash in March 2018. The network aims to provide users with a more secure, flexible, and cost-effective cloud computing resources alternative to traditional cloud services. Akash is built using the Cosmos software development kit (Cosmos SDK). It operates on the Cosmos network as an app-chain or application-specific blockchain.

How Does Akash Network (AKT) Work?

Akash uses a delegated proof of stake (DPoS) consensus algorithm, which means that it is secured by a group of validators and delegators. The validators are responsible for forging new blocks and confirming transactions within the network through a voting process. Delegators, on the other hand, stake the network’s native token, the Akash token (AKT), to vote for their preferred validator based on their reputation. Besides staking, the network’s native token is also used for governance and conducting transactions within the ecosystem.

Here’s how the network works:

• Decentralized marketplace – Its marketplace, the Akash Marketplace, allows users to offer or bid for computing resources. The buyers or users in need of computing power are known as the “Tenants” while the sellers, the ones offering their idle computing power, are known as “Providers.”
• Resource allocation – The purchasers request computing resources and the Providers place their bids on the requests. The lowest bidder wins the lease. The network uses smart contracts to automatically match the bids with the offers.

In summary, the network offers users financial incentives to participate in the network. For instance, the Providers benefit from monetizing their unused computing resources while the Tenants acquire additional computing power at lower costs.

Algorithm

An algorithm is a set of well-defined instructions used to perform calculations, accomplish a task, or solve a problem(s). The instructions must be executed in a specific order to produce the desired outcome.

What is An Algorithm in Crypto?

In the context of crypto, an algorithm is a finite set of commands defining the flow of actions that will solve complex mathematical problems or achieve a certain goal. Cryptocurrencies typically rely on algorithms to secure and validate transactions in a decentralized manner. The encryption algorithms are unique to every cryptocurrency network.

Imagine you and your friends are hosting a geek hackathon. You send out a special invitation letter in the form of a computer game. The invitation letter contains a series of instructions that one must follow to find out the location, time and other details about the hackathon. The invitation letter in this case represents the algorithm and the instructions in it are the steps or operations one must carry out to find out the event details.

In the blockchain context, algorithms, dubbed “consensus algorithms”, are used to verify and validate transactions and add them to the blockchain. For instance, Bitcoin uses a consensus algorithm called proof-of-work (PoW) consensus.  In PoW, network miners/validators compute complex mathematical puzzles to prove their work and earn the right to add new transactions to the blockchain.

Types of Crypto Algorithms

Algorithms in cryptography and data security are used to encrypt and decrypt data. Cryptography refers to the process of keeping communication and information secure from third parties. This makes it useful in securing data in crypto’s ledger systems. The most common types of algorithms in cryptography include hash function, symmetric, and asymmetric algorithms.

Symmetric algorithm

A symmetric algorithm is also known as a secret key or shared key algorithm. This is because it uses the same cryptographic key to encrypt and decrypt data. In most cases, the secret key is only known by the authorized parties.

Asymmetric algorithm

Asymmetric encryption (public-key cryptography) uses two different types of cryptographic keys to encrypt and decrypt data – the public and private keys. While the public key can be shared with anyone, the private key is kept a secret. In essence, the public key allows users to send and receive cryptocurrencies, but only the user with the private key can access funds in the account.

Hash function

Unlike symmetric and asymmetric algorithms, hash functions are keyless. Instead, they generate a hash value, which is a condensed representation of a large dataset. Hash values are nearly impossible to reverse. This makes it useful for key management, authentication, digital signatures, deriving encryption keys, and generating deterministic random numbers.

Algorithmic Stablecoin

An algorithmic stablecoin is a type of cryptocurrency that uses algorithms and smart contracts to maintain a stable value.

What Are Algorithmic Stablecoins?

Stablecoins are a type of digital asset designed to maintain a stable price regardless of market conditions. The majority of well-known stablecoins are collateralized, meaning that they are backed by an asset or commodity with a more consistent value, typically a fiat currency or a precious metal like gold, at a 1:1 ratio. 

However, there are also non-collateralized stablecoins, known as algorithmic stablecoins, that employ alternative methods to ensure their price stability.

Also called non-collateralized stablecoins or algostables, algorithmic stablecoins stabilize their value using computer algorithms and smart contracts. These stablecoins remove the need for collateral or reserves and instead use contract codes to manage the token’s circulating supply. They typically adjust the token supply in response to market demand.

Popular examples of non-collateralized stablecoins include DAI and decentralized USD (USDD).

How Do Algorithmic Stablecoins Work?

As opposed to collateralized stablecoins that tie their value to external assets, algorithmic stablecoins leverage a dynamic mechanism to adjust their token supply based on market forces. Essentially, the algorithm triggers mechanisms that either reduce or increase the token’s circulating supply if the stablecoin’s price deviates from the target value (the value of the fiat money it is pegged to).

For instance, if the stablecoin’s value drops below the target value, the algorithm reduces its supply via a process called burning. The mechanism can also reduce the circulating supply through token buybacks and locked staking, thereby increasing scarcity and driving up the price. If the price exceeds the target value, it increases its supply by minting more tokens to reduce its value. 

At a more technical level, there are different types of non-collateralized stablecoins, such as rebasing, seigniorage, and fractional algorithmic stablecoins.

• Rebase mechanisms – Employ an oracle contract to retrieve the stablecoin’s pricing information from other exchanges, and a rebasing contract to determine whether to mint or burn tokens to adjust the supply based on the obtained information.
• Seigniorage  – The seigniorage model involves issuing and redeeming two or more types of tokens: the stablecoin and a second token representing a share or seigniorage ownership. If the value of the stablecoin deviates from the intended peg, shares are used to increase or decrease the token supply.
• Fractional – These stablecoins are partially backed by collateral and partially stabilized by algorithms. Combining the features of both can help to prevent over-collateralization while alleviating custodial risks.

 

All Time High (ATH)

All-Time High (ATH) refers to the highest price that a financial asset has ever reached. The term is used to analyze traditional financial assets like stocks and bonds, as well as digital assets like Bitcoin.

What is Crypto All Time High?

The All-Time High or ATH of a cryptocurrency refers to the highest price of an asset over the course of its time on the market. In theory, an ATH shows the ‘maximum sale price’ at which the asset can be sold or the ‘maximum purchase price’ a trader will offer to purchase the asset.

Inversely, the All-Time Low (ATL)  represents the lowest price at which the asset has been traded or listed in a market exchange.

What is Bitcoin’s ATH?

In December 2018, Bitcoin’s ATH value was close to USD20,000. Three years later, in 2021, Bitcoin started the year with an ATH of a little under USD30,000 but on November 10, it peaked and made its way to make a new record ATH of USD68,000.

What is Ether’s ATH?

After Bitcoin, Ethereum holds the second-largest position in crypto market capitalization. 

All-Time Low (ATL)

All-time low (ATL) refers to the lowest price a digital asset has ever reached in its entire trading history.

What is All-Time Low in Crypto?

All-time low, is the lowest price a digital asset has ever traded in. To determine the ATL of a digital asset, one would need to look at the asset’s entire trading history and identify the point at which its price was at its lowest.

It is the complete opposite of an all-time high (ATH), when the digital asset has peaked or hit the highest price in its entire trading history.

What Does It Indicate?

When a cryptocurrency is trading at an ATL, it is generally seen as being on a bearish trajectory. It can be caused by various factors, such as negative media coverage, macroeconomic conditions, or industry instability, amongst other factors.

The ATL level of an asset is commonly used to assess its potential for future growth. Despite its frequent use as a benchmark, it cannot be guaranteed that an asset will never reach its ATL level again in the future.

 

Altcoin

Altcoins refers to any other cryptocurrency apart from Bitcoin. They are called altcoins because they are considered alternative currencies to Bitcoin.

What is an Altcoin?

The term “Altcoin” is used to refer to any cryptocurrency that isn’t Bitcoin. Because Bitcoin was the first cryptocurrency, it completely dominated the market to the point that it was considered the original cryptocurrency. As a result, any other cryptocurrencies that entered the market were deemed “alternative coins,” which was then shortened to “altcoin” This trend continues today, despite the vast number of different cryptocurrencies on the market – if it’s not Bitcoin, it’s an altcoin. 

The first altcoin,  Namecoin (NMC), was released in April 2011, three years after Bitcoin; it was designed to be an alternative currency to Bitcoin. Litecoin became the second altcoin in October 2011,  though it was created from the Bitcoin source code. 

Today there are thousands of altcoins that work differently from the Bitcoin blockchain. Unlike Bitcoin, many altcoins also have other use cases, apart from serving as a medium of exchange. For example, Ether (ETH) is used to pay transaction fees (gas) on the Ethereum Blockchain, and Maker (MKR) allows its holders to vote on the community decisions for the token. 

Types of Altcoins 

There are over 10,000 altcoins currently available, with several categories of use or function Here are the different types of altcoins you should know:

Stablecoins 

Stablecoins are digital assets pegged to another financial instrument, usually a fiat currency or stable asset like Gold, to create and enforce a stable price. 

They maintain this price stability through algorithmic formulas and holding reserves of the financial instruments they are pegged to. For example, the USDT stablecoin is pegged to the US Dollar at 1:1, which means that 1 USDT equals 1USD.

Utility Token

Utility tokens are developed for a specific purpose, usually for financing crypto projects. They are typically issued early in a project during what’s called the “ Initial Coin Offering” to gather funds and offer investors (their holders) unique benefits, like exclusive access to some services or products. However, utility tokens don’t give you an ownership stake in the project.

ERC-20 tokens on the Ethereum Network are utility tokens: their main function is to be used within their respective environment – Metaverse tokens are one example of this dynamic.

Meme Coin 

Meme coins don’t exactly have a use case; instead, they are inspired by memes or jokes from social media and the internet. Their performance is driven mainly by their community or social media influence. Therefore, meme coins are usually highly volatile.

They gain popularity but then slump overnight with massive price movements. Examples of meme coins are Dogecoin (DOGE) and Shiba Inu (SHIB). 

Governance Tokens 

Governance tokens give you the right to vote on certain decisions on a project within a particular DAO, dApp, or DeFi protocol. Governance tokens are a way for decentralized projects to distribute the decision-making power within their community. An example of a governance token is the MAKER Token (MKR)

Security Tokens 

A security token is a digital asset representing your ownership right or stake in a project issued on an existing blockchain. Generally, security tokens are usually created as investments; you can think of them as tokenized securities or stocks on blockchains.

 

Apeing

Apeing is crypto slang describing the practice of investing in a new project without doing due diligence.

What Is Apeing?

Whether it is to express their emotions and opinions or define a phenomenon in the industry, the crypto community never fails to come up with some distinctive jargon and slang. . One such quirky term is apeing (ape),  which defines the act of buying newly launched crypto tokens, without having done prior research. Such impulsive decisions are often driven by the fear of missing out (FOMO) on potential gains. 

The term gained popularity during the 2020 DeFi Summer craze when DeFi projects launched one after another. A percentage of investors quickly realized substantial gains from investing in these projects shortly after they launched. Their success spread to social media platforms, where other investors aped their approach.

People ape in the hopes of making substantial returns or gaining early access to a promising project before the project becomes popular. While the project may yield high returns, it is a high-risk high-reward move that can result in significant losses should the project fail. For instance, investors can lose funds in DeFi scams, such as rug pulls and pump-and-dump schemes, by investing in projects without doing extensive research.

Crypto Twitter may use the term to ask (and sometimes inform) others whether they are purchasing a new token or coin.  For instance, “What token are you apeing in 2024?” or “I think I’ll ape this token; the project looks quite promising.“

 

Application Layer

The application layer is the front-end layer of a blockchain, made up of programs that allow users to interact with a blockchain network.

What is an Application Layer in Blockchain?

How do users engage with a blockchain network? Usually, individuals don’t interact with a blockchain directly. Instead, the communication is facilitated by the application layer.

In the blockchain context, the application layer is the segment of blockchain architecture that hosts all the applications that interact with the protocol. Simply put, it is where all the applications on a network are built and deployed. That includes key components such as decentralized applications (dApps), smart contracts, application programming interfaces (APIs), user interfaces, and chain code.

The application layer extends a blockchain’s utility beyond a distributed ledger by providing end-users with blockchain-based programs.

The programs serve as the frontend that enables users to receive and send data to the blockchain stack, which acts as the backend. More importantly, it guarantees the blockchain’s deterministic nature – where the same transaction executed produces the same result – allowing the nodes to achieve a consensus. 

Blockchain architecture is composed of four other sub-layers besides the application layer: the data layer, hardware layer, network layer, and consensus layer.

• The data layer is the blockchain’s mechanism that stores, organizes, and maintains information on the network. 
• The hardware layer consists of the physical components, such as servers and computers, necessary for hosting the blockchain.
• The network layer, also called the peer-to-peer (P2P) or propagation layer, is responsible for all inter-node communication, block creation and propagation, and maintaining the blockchain infrastructure.
• The consensus (protocol) layer validates every blockchain transaction using the network’s consensus mechanism.

Why Is the Application Layer Significant?

• Expands blockchain utility: Smart contracts and dApps extend blockchain use cases beyond trading and storing cryptocurrencies, and introduce new and important applications of blockchain technology such as decentralized finance (DeFi).
• Enhances blockchain accessibility: This layer facilitates user-friendly interfaces that make blockchains accessible to the everyday user. This also encourages blockchain adoption. 

 

Arbitrage

Arbitrage is a trading tool used to make profits by simultaneously buying and selling the same asset (or securities) across (or within) marketplaces to make profits off of the margins of the particular asset (or securities). This concept also applies to crypto trading.

What Is Arbitrage?

Arbitrage is a trading mechanism that allows traders to take advantage of  small price differences between two or more marketplaces for particular assets (or financial securities).

What Is Crypto Arbitrage?

In crypto trading, arbitrage means taking advantage of market inefficiencies that exist in the crypto sector, such as differences in cryptocurrency prices across different exchanges. 

To clarify, prices for digital assets on different marketplaces can vary significantly given that these decentralized markets have different liquidity levels of cryptocurrencies.These price discrepancies across exchanges allow crypto traders to take advantage if they are able to realize their trades quickly enough. However, it is worth noting that this trading practice comes with risks like transaction costs (gas fees per blockchain) and volatility of the crypto markets that could affect potential income gains. 

For example, if 1 Ether (ETH) is priced at 3500USD on Exchange ‘A’, and priced at 3600USD on Exchange B, a trader could buy 1 ETH from Exchange A and sell to Exchange B for a profit of 100USD. 

The different types include:

• Cross-Exchange Arbitrage: This strategy takes advantage of price differences across multiple exchanges/platforms. 
• Intra-Exchange Arbitrage: This strategy occurs within a particular marketplace and exploits the price differences of a particular asset. For example, a trader may choose to exploit the spot and futures prices of an existing cryptocurrency on a particular platform.  

 

Artificial Intelligence (A.I.)

Artificial intelligence (AI) is the simulation of human-like intelligence by machines or computer systems to accomplish tasks.

It is also a computer science field that focuses on creating intelligent systems.

What is Artificial Intelligence?

Artificial intelligence (AI) is the capacity of a computer program to learn or perform tasks often associated with human intelligence. AI systems are designed to analyze large datasets, interpret patterns, and solve problems with minimal human involvement. AI systems take user input, analyze the objective, and autonomously make decisions that achieve the desired outcome.

Artificial intelligence is categorized as either “narrow AI” or artificial general intelligence (strong AI). Narrow (weak) AI focuses on achieving a dedicated purpose, such as chatbot popups, trading bots, and facial recognition applications. Strong AI is not limited to performing a specific task. Instead, strong AI systems can perform a wide array of actions at human-level precision. 

Potential Impacts of Blockchain and AI Integration

Synergy between blockchain technology and artificial intelligence could have a significant effect on the future of technology. Such possibilities include:

• Enhancing the AI training process – AI heavily relies on data to learn and perform its intended functions, and blockchains are known for immutable and permanent data storage. A data economy built on blockchains can offer AI models access to large datasets, which could help train AI systems faster and more effectively. Blockchain users could also be incentivized to lend their computing power to train artificial intelligence systems. 
• Improving blockchain storage needs – Since blockchain systems permanently store transaction history, their size continually increases. AI could potentially introduce novel database sharding techniques, which would reduce the distributed ledger size and optimize data storage. 
• Optimizing consensus mechanisms – Proof-of-work algorithms are criticized for their intensive energy consumption processes. AI can help improve the mining algorithm by optimizing power and energy consumption. It could lead to mass adoption of the technology.
• Improving AI decision-making – Blockchains could be used to store every decision made by AI systems in an immutable and transparent manner. This would leave a clear audit trail that can be assessed, increasing the trust in the algorithm’s decision-making.

Cryptocurrency traders already leverage AI in algorithmic trading and trading bots to analyze market data, predict patterns, and automate the buying and selling of digital assets. The integration of AI and cryptocurrency is still in its infancy, with significant potential down the road.

 

Ask Price

An ask price is the lowest amount at which a seller is willing to sell an asset such as a stock, bond, or cryptocurrency.

What is Ask Price?

To complete a trade on a cryptocurrency exchange, there needs to be both a buyer and a seller. Every buyer looks to get the lowest possible price when buying a cryptocurrency, while every seller wants to sell for the highest price possible. The lowest price that is acceptable for the seller to sell is the ask price. When initiating an order, the buyer’s price needs to match the ask price of the seller for the transaction to be successful. 

In contrast to the ask price, the bid price is the highest amount that a buyer is willing to pay for an asset. In the crypto market, the bid and ask prices are displayed on exchanges. Together, they form the order book. Buyers and sellers can pick orders that match their prices from this trading order book. The bid price is usually lower than the ask price, and the disparity between both is known as the bid-ask spread.

 

Atomic Swap

An atomic swap is a peer-to-peer trading mechanism that facilitates the exchange of digital assets across separate chains without using intermediaries.

It enables users to transfer cryptocurrencies via smart contracts.

What Is Atomic Swap?

Also known as atomic cross-chain trading, the term atomic swap defines the transfer of digital assets between two parties without involving a third party, such as a centralized exchange (CEX) or market. This mechanism uses smart contract technology to execute transactions. 

A major risk with peer-to-peer (P2P) transactions is that one of the parties in the trade does not fulfill their side of the trade. This is what is known as counterparty risk. Atomic swaps eliminate this risk, as the smart contract only releases funds when all the involved parties deposit the predefined amount of crypto to the smart contract. This facilitates P2P transactions without the need for intermediaries to process the transaction. What’s more, atomic swapping also reduces the transaction costs associated with withdrawals, deposits, or trading.

The swaps are atomic due to their indivisibility, implying that the transactions are either executed in full or not – there are no in-betweens. The atomicity ensures token holders retain the integrity of their tokens until the transaction is complete. Technically, the swap is fraud-proof as no individual user can steal the other’s cryptocurrency.

In addition, transferring tokens in CEXs has a lot of inefficiencies attached to it, such as uneconomical fees, unnecessary steps, and potential security threats. DeFi services remove the reliance on intermediaries through atomic cross-chain trading to streamline the process, speed up transaction time, and lower potential security risks. 

Lastly, atomic swaps also enable different blockchains to communicate with each other, facilitating interoperability.

How Do Atomic Swaps Work?

Atomic cross-chain trading utilizes hash timelock contracts (HTLC) to automate the swaps. To clarify, HTLCs are time-bound smart contracts between the involved parties that generate a private key and hash functions. Each party must meet the predefined conditions within the specified timeframe for the transaction to be finalized. 

An HTLC has two key components – a timelock and a hashlock.

• Timelock – A timelock defines the deadline or time limit for the exchange. It ensures that the transaction takes place within the specified timeframe. Otherwise, the contract aborts the transaction and returns the tokens to their respective owners.
• Hashlock – This is the cryptographic key generated by the individual initiating the transaction. It ensures that the transfer is only executed if both parties acknowledge receipt of the desired tokens. Otherwise, the contract aborts the transaction and returns the tokens to the original owners.

Automated Market Maker

An automated market maker defines the underlying protocol that provides liquidity to decentralized exchanges and determines asset prices.

What is an Automated Market Maker (AMM)?

Liquidity in traditional or centralized exchanges (CEX) is provided by market participants – buyers and sellers. The buy orders are filled by matching them with the sell orders in the order book. Instead of relying on an intermediary to provide liquidity, decentralized exchanges (DEX) use automated market maker to facilitate trades through pricing algorithms and liquidity pools.

An automated market maker (AMM) is a mechanism that automates the buying and selling of digital assets on decentralized exchanges. This eliminates the need for a counterparty. They replace the traditional order books and market-making techniques by allowing users to lock their digital assets in pieces of self-executing code called smart contracts. The liquidity pool, which is the collection of the digital assets supplied by the users, provides the assets for the trade. 

How Do AMM Exchanges Work?

The main difference between order books and AMMs is that the pricing and order matching are automated in AMMs. A pricing algorithm in AMMs determines the prices at which assets are traded. On the other hand, order books facilitate price discovery by allowing buyers and sellers to set the prices at which they are willing to trade an asset.

For instance, imagine you intend to sell your BTC on a centralized exchange. The exchange looks for a buy order that matches your selling price and fulfills it. On the contrary, AMM exchanges do not need to have a counterparty on the other end to facilitate the trade. Instead, you interact directly with the smart contract in a peer-to-contract (P2C) manner.

To ensure sufficient liquidity, AMM DEX incentivizes the users, called liquidity providers (LPs), to contribute digital assets to the liquidity pool. Technically, anyone can deposit their crypto assets in liquidity pools in exchange for a percentage of the trading fees. More LPs locking their digital assets minimizes the chances of price slippage and improves the liquidity of the DEX.

Examples of AMM DEXs include Uniswap, Balancer, Pancakeswap, and Curve.

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仮想通貨取引をするとき、資産を増やすためには、仮想通貨だけでなく、FXCFD取引を行う必要性も出てきます。

仮想通貨に話題性がない時、いわゆる仮想通貨の冬の時代が続くときは、仮想通貨の時価総額が下がり、値動きがしない状態が続くからです。取引も合わせて、現物仮想通貨を保有し、しっかりと資産を増やしていきましょう。

将来、お金持ちになるには0.01BTC保有すればいいだけです。

現在10万ドル以上の資産を持つ残りの5億9000万人は、結果として大人1人あたり0.01BTCしか購入することができない。

将来はこの0.01BTCが持てるかどうかが富裕層の分かれ目となる。

0.01BTCを保有すれば、世界において13％の上位保有者に入る。法定通貨とビットコイン市場の相対的な富の集中度を比較すると、ビットコインのトップ13%の中にいることは、法定通貨での資産トップでいることと同じ価値を持つ。

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