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What is blockchain and how it works? (Simplified)
We’re sitting on a park bench. It’s a great day. I have one apple with me. I give it to you. You now have one apple and I have zero.
That was simple, right?

Let’s look closely at what happened

My apple was physically put into your hand. You know it happened. I was there and you were there. You touched it.
We didn’t need a third person there to help us make the transfer and confirm that the apple went from me to you.
The apple is yours! I can’t give you another apple because I don’t have any left so I can’t control it anymore.
The apple left my possession completely. You have full control over that apple now. You can give it to your friend if you want, and then that friend can give it to his friend.
And so on.
So that’s what an in-person exchange looks like. I guess it’s really the same, whether I’m giving you a banana, a book or a dollar bill….
Now say, I have one digital apple. Here, I’ll give you my digital apple. 

Ah! Now it gets interesting.

Firstly, how do you know that that digital apple that used to be mine, is now yours, and only yours?
Think about it for a second.
It’s more complicated, right? How do you know that I didn’t send that apple to my friend Alex as an email attachment first? Or your friend Joe? Or my friend Lisa too?
Maybe I made a a couple of copies of that digital apple on my computer. Maybe I put it up on the internet and one million people downloaded it.

As you see, this digital exchange is a bit of a problem. As you can see, sending digital apples doesn’t look like sending physical apples.

Some brainy computer scientists actually have a name for this problem: it’s called the double-spending problem.
But don’t worry about it.
All you need to know is that, it’s confused them for quite some time and they’ve never solved it.
Until now.

Can we find a solution on our own?

Maybe these digital apples need to be tracked in a ledger. It’s basically a book where you track all transactions — an accounting book.
This ledger, since it’s digital, needs to live in its own world and have someone in charge of it.
We could find someone to take care of it. To update all new transactions and it would be a great solution, wouldn’t it?

However, there’s a bit of a problem though: 

1) What if someone created more? He could just add a couple of digital apples to his balance whenever he wants!
2) It’s not exactly like when we were on the bench that one day. It was just you and me then. We are not alone and we are again making our exchange through the third party. It is not kinda like our exchange from the bench…
Is there any way to closely replicate our park bench, just you-and-me, transaction digitally? Seems kinda tough…
What if we gave this ledger — to everybody? Instead of the ledger living on someone’s computer, it’ll live in everybody’s computers. All the transactions that have ever happened, from all time, in digital apples will be recorded in it.
You can’t cheat it. I can’t send you digital apples I don’t have, because then it wouldn’t sync up with everybody in the system. It’d be a tough system to beat. Especially if it got really big.
Plus it’s not controlled by one person, so I know no one can just decide to give himself more digital apples.
The rules of the system were already defined at the beginning. And the code and rules are open-source.
It’s therefor the smart people to contribute to, maintain, secure, improve on, and check on.
You could participate in this network too and update the ledger and make sure it all checks out.
For the trouble the solution, you could get some digital apples as a reward. In fact, that’s the only way to create more digital apples in the system.

I simplified quite a bit

…but that system I explained exists. It’s called the Blockchain.
And those digital apples are the “coins” within the system. 


Introduction to Blockchain

Apart from being the hottest investment opportunity in the second decade of the 21st century, what really gives the power is the underlying technology, called Blockchain.



“Blockchain Technology” is a term you have probably heard before.
However, most of the people don’t know the difference between Bitcoin and blockchain.
Bitcoin is a cryptocurrency that goes up and down.
On the other side, Blockchain is the underlying technology of cryptocurrencies. 
For the first time now in human history, people everywhere can trust each other and transact peer to the peer.
The trust is established not by some big institution but by collaboration, cryptography and some clever code!

What does the public ledger enable?

We hope the story from the park bench was clear and easy to understand. So, did you see what happened? 
1) It’s open-source to remember? In the beginning, we defined the total number of digital apples in our public ledger. I know the exact amount that exists. Within the system, I know they are limited.
2) When I make an exchange I now know that digital apple certifiably left my possession and is now wholly yours. I used to not be able to say that about digital things. It will be updated and verified by the public ledger. 
3) Because it’s a public ledger, I didn’t need third-party to make sure I didn’t cheat, or make extra copies for me, or send apples twice, or thrice…
Within the the system, the exchange of a digital apple is now just like the exchange of a physical one.
It’s now as good as seeing a physical apple leave my hand and drop into your pocket.
Moreover, just like on the park bench, the exchange involved two people only. You and me — we didn’t need the third party there to make it valid.
In other words, it behaves like a physical object.

But you know what’s cool?

It’s still digital.
We can now deal with 1,000 apples, or 1 million apples, or even .0000001 apples.
I can send it with a click of a button, and I can still drop it in your digital pocket if I was in Nicaragua and you were all the way in New York.
How cool is that?
Most of you are not going to send digital apples to your friends. It was an example to understand the point of blockchain technology.
It allows everyone to send to everyone digital cash all around the world without a third party. Excluding the third party will enable us to do it much faster, decrease the risk of losing money and decrease fees. 

What are the advantages of Blockchain technology?

Transparency 

One of the prime reasons blockchain is intriguing to businesses is that this technology is almost always open source.
That means other users or developers have the opportunity to modify it as they see it.
But what’s most important about it being open source is that it makes altering logged data within a blockchain incredibly difficult.
After all, if there are countless eyes on the network, someone is probably going to see that logged data has been altered.
This makes blockchain a particularly secure technology.

Reduced transaction costs

As noted, blockchain allows peer-to-peer and business-to-business transactions to be completed without the need for a third party, which is often a bank.
Since there’s no middleman involvement tied to blockchain transactions, it means they can actually, reduce costs to the user or businesses over time.

Increased efficiency and speed

When you use the traditional system, trading anything is a time-consuming process that is prone to human error and often requires third-party mediation.
By streamlining and automating these processes with blockchain, transactions can be completed faster and more efficiently.
When everyone has access to the same information, it becomes easier to trust each other without the need for numerous intermediaries.

Immutability

Once the data has been written into the blockchain, it is tough to change it back.
It is not genuinely immutable but, since changing data is extremely difficult and almost impossible, this is seen as a benefit to maintaining an immutable ledger of transactions.

High availability

As the system is based on thousands of nodes in a peer-to-peer network and the data is replicated and updated on each and every node, the system becomes highly available.
Even if nodes leave the network or become inaccessible, the network as a whole continues to work, thus making it highly accessible.
All you need to access the blockchain is a mobile device and wifi connection.


What are the main characteristics of blockchain technology?

We are going to use Bitcoin’s blockchain as an example. 

Bitcoin’s blockchain can process up to 7 transactions per second. All these transactions are tied up and added to the blocks.
If we consider that new blocks are created every 10 minutes, it means that a single block can contain up to 4000 transactions.
If there are more transactions, they will be added to the next block. 
The Bitcoin blockchain stores the data details about transactions, such as the sender, the receiver and the number of coins.
The block has the Hash and to understand what the hash is, the best would be to compare the hash to a fingerprint.
It is unique for every block, and it identifies the block and all of its contents. 

The third part of the block is the hash of the previous block. It creates the chain of the blocks because every block has the hash of the previous block and this is the technique that makes the blockchain so secure. 
Adding new blocks to previous ones create a chain of blocks, blockchain.

What could be stored on the blockchain?

Digital assets like money to music to art can be stored on a blockchain. They won’t be stored in a central place but will be distributed across a global ledger using the highest level of cryptography.
When a the transaction is conducted, it’s posted globally across millions and millions of computers.
Out therein the world, there is a group of people called miners, and they have massive computer power in their fingertips, 10 to 100 times bigger than the whole of Google worldwide.
They are letting the entire system run and allow us to benefit from this new technology.

What is mining and how does it work? (Simplified)


By solving mathematician problems, miners are verifying transactions and adding them into the blocks. Miners are getting two types of rewards for their work after the creation of every block.

What type of reward miners get?

firstly, miners get the block reward. For every block that was created, there is a certain amount of Bitcoins that goes to the miners.
If the miner a verified transaction that was added to the block, he is going to receive his part of the share.
The second reward is the fee that is paid by users for verifying their transactions.
Miners require a lot of computational power.
The more the the power you have, the more the chances you have that you are going to find first the solution to the mathematical problem because only the first who solve the problem is going to receive the reward. 
The increase of miners will cause an increase in the difficulty of solving the mathematical problem.
It means that miner reward will decrease.
That’s why mining is currently considered as not so profitable because it requires a lot of computation power and what is an even bigger problem is that you are competing with mining conglomerates with enormous mining power and your chances to be the one that is going first to find the solution is not so big.
Mining is deflationary which means that the number of mined coins is dropping.
As it is declared by bitcoin white paper, every four years mining reward is halved.
Currently, miners are getting 12.5 Bitcoins per block.
As it was defined in the white paper, the last Bitcoins will be mined around 2140.

What will happen once all Bitcoins are mined?

Once the last Bitcoin is mined in 2140, miners will still be rewarded for processing transactions in fees.
By then, blocks will also be larger so more transactions will be in each block giving miners a the larger aggregate of fees.
Considering that by 2140 the increase in price will happen and also increase in the number of transactions in each block, it leads to the conclusion that mining will still attract interest.

What is staking and how it works?


Mining is not the only consensus algorithm that helps blockchain work and keeps the tracking of all data that goes through a blockchain.
There are lots of them, and most popular of the rest is staking. 

How does staking work?

In a regular crypto network like Bitcoin, transactions are randomly processed by the mining node that is the first to solve a complex the algorithm at the end of a timeframe.
In Proof of Staking protocol, miners are chosen randomly from a pool by holders of the digital coin.
You can become a part of the pool by staking a certain amount of coins that are prescribed by their terms and conditions.

What does actually staking mean?

Staking means holding a certain amount of coins on a unique a wallet that used for staking.
The coins you deposit are locked for a certain period.
By depositing these coins to that wallet, you guarantee that you will not approve fraudulent transactions.
If you try to debase the system, you risk losing your coins.
For approving transactions, you will get a staking reward, similar to mining reward. 
What is the difference between mining and staking? In general, staking is similar to mining, but you do not need mining equipment.
You just need a a certain amount of coins that are proposed by the rules, and you can start staking.
It is better for the environment since it doesn’t consume electricity as mining does. 
The primary the benefit of staking coins is that it removes the need for purchasing expensive hardware.
However, on the another side, there is a risk involved in staking as well.
Staking coins in a bound wallet has one drawback.
The coins are locked up for some time, and you are not able to manage them until they are at stake.
This may not be a problem while the value of the currency is rising, but it can lead to significant losses when the price is falling.
The amount earned through staking might not be enough to cover the price depreciation during a market decline.

 

What is Hard fork? (Simplified)
We will use Bitcoin as a primary example, but all these concepts apply for all other cryptocurrencies as well.
Bitcoin is implemented with a lot of software. The software is called the Bitcoin protocol, and it establishes the rules that everyone should agree if they want to use Bitcoin.
This includes how large the block is, what rewards miners get, how fees are calculated.
However, just as any other software project, development will never be fully finished.
There is always room for improvement.
The Bitcoin developers regularly push out the updates to fix the issues or to increase performance.
Some of those improvements are small, but some of them fundamentally change the way bitcoin works. 

What happens in there is disagreement in a community?

Sometimes it happens that a group of developers disagrees with the direction, bitcoin is taking.
Miners can also disagree because of the updates to the bitcoin protocol reduce their profits.
The group of people can create their version of the protocol and fork the blockchain
Bitcoin consists of its protocol and Blockchain.
First, they have to do is to copy Bitcoin’s s protocol.
They can do this because Bitcoin’s s protocol is completely open-sourced.
After they’ve implemented their desired changes, they define a point of time in which their fork is going to become active. 

How do they launch their own version?

This is done by specifying the block number.
For example, you can say that your fork will go live on block 480 000.
When that block number is reached, the community is splitting in two.
Some people are going to support the current protocol while others are going to support the new one.
Each group is now going to add the new blocks to their blockchains.
At this point, both the blockchains are incompatible with each other.
Because the fork is based on the original blockchain, all transactions that happened on original blockchain also occurred on the fork.
That means if you had a certain amount of the coins before the fork, you would also get the the same amount of the new, forked currency.
Some call it free money, but it depends if the forked coin attracts the value.
An example is Bitcoin cash that happened on August 1st, 2017.
The miners couldn’t agree on the block size.
Some of them wanted to stay at the same size of 1MB while others wanted an increase.
If you had 5 BTC on your wallet before the hard fork, you would receive 5 Bitcoin Cash coins after the fork. 
Because of its open-sourced nature, everyone can see and get its code, make the changes and launch its coin.
This is not going to be Bitcoin fork but rather a new cryptocurrency that is created from Bitcoin’s protocol as the basis.
An example is Litecoin that was made from Bitcoins code with few changes.
The bigger coin supply and faster block confirmation time are one of the differences between Litecoin and Bitcoin protocol.
Also, the mining algorithms they are using for mining are different.


What is Soft fork?


One type of fork, known as the soft fork, results in creating two versions of software, the old and the new, in this case, the old version is usually abandoned.
Those who still run the old version can still participate on the network although they will be missing the new features added in the current version.

What is the difference between a hard fork and soft fork?

Whenever a chain needs to be updated there are two ways of doing that: a soft fork or a hard fork.
Think of soft as an update in the software which is backward compatible.
What does that mean?
Suppose you are running MS Excel 2005 in your laptop and you want to open a spreadsheet built-in MS Excel 2015, you can still open it because MS Excel 2015 is backward compatible. 
However, having said that there is a difference.
All the updates that you can enjoy in the newer version won’t be visible to you in the older version.
Going back to our MS excel analogy again, suppose there is a a feature which allows to put in GIFs in the spreadsheet in the 2015 version, you won’t see those GIFs in the 2005 version.
So basically, you will see all text but won’t see the GIF.
It is important to mention that there will be no split in the community.
There will be split in the chain, but this split won’t give you new coins.
Simply, both chains will keep running.
However, how time goes, more and more people and miners will be using the new one because of it will offer more features and that’s the reason why the old chain will slowly die.
This is similar to updates on your phone.
You can still be using the old version, but some features may not be available. 
Sooner or later, you will decide to upgrade your phone to get new features.
Once you upgrade to the latest version, you won’t be able to go back to the previous one.
That’s the way the old chain dies as slowly more, and more people upgrade to the new version, and they can’t go back to the old one.

How to trade cryptocurrencies on Binance? (Complete guide)
Now, once you opened an account and learned how to secure it and deposit coins to the exchange, it is time to learn how to buy and sell on Binance. 
One of the essential parts of the exchange has to be the trading platform.
Trading means buying and selling.
So, from now, instead of using two words, to express buying and selling, we will use trading. 
Not only in the currency world but in the real world.
To buy an apple, you trade money for an apple. You trade one good for another.
When it comes to Binance, it is well known for having one of the most efficient trade matching engines on the market.
Their matching engine can sustain a rate of 1.4m orders per second.
This means that even in periods of market strain, orders will still be executed.
The platform is technically powerful and highly functional, but it is also easy to use for those new to trading who merely want to buy or sell coins.
Binance has developed two different user platforms, basic and advanced platform.
The main difference between these two, apart from design, is the fact that the advanced platform gives you more space for charting and allows you using more indicators.
Later on, in the trading course, you will see why this is totally unnecessary and why using basic one is more than enough, not only for beginners but for everyone.
Long story short, an exchange should be used as a platform to buy or sell your coins, not to do charting there.
Charting is done on special platforms that are used only for that and because of that they are made to be user-friendly so charting on them is very easy even for beginners. 

How does a basic platform look like?

On the left, you have order books where you can see orders from other traders.
Red orders are the price they want to sell at while buy orders are the price they want to buy at.
There are two ways to buy coins. 
Below the chart, you have the buy and sell options.
As we said, there are two ways to buy and sell coins.
First one is by using the limit order and the second one is by using the market order.

How to buy using limit and market orders?

If you want to buy using the limit order, you place an order below the current price so if the price drops to your order and fills, you will buy the particular coin.
On the other side, someone won’t wait for the market to drop a little bit and he will want to buy automatically.
To do that, you place the market order.
The order will be filled automatically at the current price. 

How to sell using limit and market orders?

You also have two option.
One way is by placing a limit order at a higher price than the current one.
If the price reaches your order price, it will be filled and your coins will be sold.
The second the option is by using market order that will automatically sell your coins at the current price. 
Binance is no doubt quite an impressive exchange.
Not only do they have one of the largest selections of coins to buy, but they are also the the largest exchange by reported volume.
Moreover, they are well regarded in the cryptocurrency community for professionalism and security.
While hackers have tried on countless occasions to breach their systems, they have remained one step ahead.
The fact that they went from a startup in early 2017 to becoming biggest exchange in late 2018 by outperforming exchanges that were in the market for years before Binance is big enough to believe in the team and project behind this crypto exchange.
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