Use Cases

▪️Litecoin was forked from Bitcoin’s code to tackle issues of cost and scalability. These differences make Litecoin more favorable for merchants, since payments and transactions can be carried out quickly at a cheaper rate.

▪️Ethereum focuses on smart contracts, transfer of asset ownership and DApp production. Smart contracts are software programs that take action when specific predetermined criteria are met. This procedure makes sure that every Ethereum transaction is secure for the user.

▪️Additionally, asset exchanges like the transfer of property or money may be included in the contracts. Ethereum’s unique feature is that it allows programmers to directly interact with its underlying network, a capability that Bitcoin and Litecoin do not support.

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⏺ PREVIOUS LESSONS

#Glossary:

▪️Tokenomics:
Cryptocurrencies are governed by a set of rules called “tokenomics.” The term, a portmanteau of token and economics, refers to the monetary policies baked into each token or coin. A cryptocurrency's tokenomics govern its supply, outlining how and when more tokens are added into circulation.

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▪️WEEKLY REVIEW▪️

Recently you've learned about the differences between Litecoin and Ethereum:

▪️ The Main Difference
▪️ Introduction
▪️ Mining Rewards
▪️ Consensus Mechanisms
▪️ Use Cases

Our next topic will be covering the views about Bitcoin by some of the top-money managers.

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#Glossary:

▪️To the moon:
This expression is common in cryptocurrency chat groups and forums. It is used to communicate the desire for a huge price increase. For that purpose, they say "When Moon?" It is also used at times when the price of a coin is rising rapidly. In those cases the phrase "To the moon!" is common.

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#Glossary:

▪️The Sharpe Ratio:
This is a financial metric used to assess the risk-adjusted return of an investment or portfolio. It measures the excess return earned above a risk-free rate per unit of volatility or risk taken. A higher Sharpe ratio indicates a more favorable trade-off between return and risk, making it a valuable tool for evaluating investment performance.

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#Glossary:

▪️Unique Crypto Addresses:
These are alphanumeric strings that serve as identifiers for participants in a blockchain network. These addresses are used to send, receive, and store cryptocurrencies like Bitcoin, Ethereum, and others. Each address is unique and cryptographically generated, making it extremely improbable for two addresses to be the same. They are essential for ensuring the security and traceability of cryptocurrency transactions on the blockchain.

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#Glossary:

▪️Flatcoins:
Flatcoins are inflation-pegged stablecoins that negate the negative effect of price rises on the purchasing power of the currency they track.

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#Glossary:

▪️1% Market Depth:
The extent to which the order book displays the cumulative value of buy and sell orders within a 1% price range from the current market price in a financial market or cryptocurrency exchange.

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#Glossary:

▪️In-kind Creation vs Cash Creation:

In an in-kind creation, a participating firm or institution would deliver matching assets (ex. Bitcoin), and receive shares of the spot Bitcoin ETF in return.

In a cash creation, the participant would instead deliver cash to receive shares of the ETF.

▫️Though in-kind creations are common, cash creation might be preferred in the case of spot Bitcoin ETFs because broker-dealers cannot deal in Bitcoin.

▫️Cash creates would leave issuers responsible for transacting in Bitcoin, while brokers would be allowed to avoid relying on unregistered subsidiaries and third-party firms.

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#Glossary:

▪️The International Emergency Economic Powers Act (IEEPA):
A regulation pact which grants executive authority over emergencies during peace-time.

The IEEPA grants the president broad powers to investigate, regulate, or block economic activities involving foreign entities. The Act applies to nearly any transaction involving foreign nationals, governments, or businesses that falls under US jurisdiction.

Violating sanctions issued under the IEEPA carries steep civil and criminal implications.

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#Glossary:

▪️Personal Recognizance Bond
Also known as a PR bond, it is a type of bail bond that does not require the defendant to pay any money upfront. Instead, the court issues an order releasing the defendant from custody on the condition that they will appear for all scheduled court appearances.

If the defendant fails to uphold their end of the personal recognizance bond (by missing court dates), that person will have to pay the full bail amount and may be rearrested in the future.

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#Glossary:

▪️UTXO payment model

A cryptocurrency transaction model where each transaction creates unspent outputs that can be used as inputs for future transactions, enhancing privacy and security by avoiding the need for an account-based system.

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#Glossary:

▪️ERC-4337

A proposed Ethereum standard that introduces account abstraction, enabling more user-friendly and secure crypto wallets.

ERC-4337 transforms Ethereum's accounts into "smart wallets," enhancing functionality and security by allowing multiple signatures and simplifying recovery.

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#Glossary:

▪️ZK-EVMs

A class of Ethereum-compatible virtual machines that incorporate zero-knowledge proofs. These systems enhance privacy on the blockchain by allowing participants to validate transactions without revealing specific details, such as transaction amount or sender/receiver addresses.

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#Glossary:

▪️Liquid Staking

The process of converting staked tokens into fungible assets that can be traded or used in decentralized finance (DeFi) applications while still earning staking rewards. This provides liquidity to token holders who would otherwise have their assets locked in a staking contract.

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#Glossary:

▪️FATF "Travel Rule"

The FATF "Travel Rule," also known as Recommendation 16, is a set of international guidelines established by the Financial Action Task Force (FATF) to combat money laundering and terrorist financing (ML/TF) in the realm of virtual assets (VAs) like cryptocurrencies.

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#Glossary:

▪️401(k) plan

A 401(k) plan is a tax-advantaged retirement savings account offered by employers in the US, allowing employees to contribute a portion of their pre-tax income, often with employer matching, to facilitate long-term savings for retirement.

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▪️Mean Reversion

Mean reversion is a financial theory suggesting that asset prices and historical returns eventually return to their long-term mean or average level.

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▪️Exchange-Traded Product (ETP)

A type of financial instrument which allows investors to gain exposure to the price movements of an underlying asset without having to own the asset itself.

ETPs are physically backed, meaning settlement is in the underlying asset, rather than a cash equivalent.

ETPs can be traded on regulated exchanges in the same manner as company stocks and shares.

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▪️Decentralized Physical Infrastructure Networks (DePIN)

A DePIN is a decentralized application that uses tokens to incentivize people to crowdsource and build connected real-world physical infrastructure.

Example: NATIX Network is building a DePIN of smartphones working as AI-powered cameras collecting valuable mobility data, such as the amount of traffic and road conditions in specific areas.

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