APEX WHALE LIBRARY

2023-02-22 19:39:09 Educational Post:

Rising Wedge

A rising wedge is represented by a trend line caught between two upwardly slanted lines of support and resistance. In this case the line of support is steeper than the resistance line. This pattern generally signals that an asset’s price will eventually decline more permanently – which is demonstrated when it breaks through the support level. Open / Comment

2023-02-22 19:39:09 Educational Post:

Descending triangle

A descending triangle signifies a bearish continuation of a downtrend. Typically, a trader will enter a short position during a descending triangle – possibly with CFDs – in an attempt to profit from a falling market.

Descending triangles generally shift lower and break through the support because they are indicative of a market dominated by sellers, meaning that successively lower peaks are likely to be prevalent and unlikely to reverse.

Descending triangles can be identified from a horizontal line of support and a downward-sloping line of resistance. Eventually, the trend will break through the support and the downtrend will continue. Open / Comment

2023-02-22 19:39:08 Educational Post:

What is risk management?

Risk management entails predicting and identifying financial risks involved with your investments to minimize them. Investors then employ risk management strategies to help them manage their portfolio's risk exposure. A critical first step is assessing your current exposure to risks and then building your strategies and plans around them.

Risk management strategies are plans and strategic actions traders and investors implement after identifying investment risks. These strategies reduce risk and can involve a wide range of financial activities, such as taking out loss insurance and diversifying your portfolio across asset classes.

Risk Management Strategies

1. The 1% rule is a simple risk management strategy that entails not risking more than 1% of your total capital on an investment or trade.

2. A stop-loss order sets a predetermined price for an asset at which the position will close. The stop price is set below the current price and, when triggered, helps protect against further losses. A take-profit order works the opposite way, setting a price at which you want to close your position and lock in a certain profit.

3. Diversifying your portfolio is one of the most popular and fundamental tools to reduce your overall investment risk. A diversified portfolio won't be too heavily invested in any asset or asset class, minimizing the risk of heavy losses from one particular asset or asset class. For instance, you may hold a variety of different coins and tokens, as well as provide liquidity and loans. Open / Comment

2023-02-22 19:39:08 Educational Post:

What is a blockchain oracle?

Blockchain oracles are services that function as bridges between blockchains and the real world, enabling smart contracts to access data sources outside their native networks. In other words, they act as a link between on-chain applications and off-chain data.

As such, off-chain events can be conveyed into on-chain ones recognized by smart contracts. This information can be anything, from token or stock prices to the results of a football game, or a weather forecast.

Blockchain oracles can also verify if data is accurate, though they are not the data source itself. Instead, they are akin to an additional layer that collects and authenticates information and transmits it to the correct destination.

Blockchain oracles also allow people to use blockchains in contractual agreements. For example, you and your friend could bet on a football game in this way: firstly, both of you agree on terms and lock your funds in a smart contract. Secondly, the blockchain oracle will inform the smart contract of the game's result. Finally, after the game ends, the smart contract will release the funds to the winner of the bet.

There are different types of blockchain oracles, and one oracle can fall into multiple categories: software, centralized, decentralized, inbound, and outbound oracles. Essentially, how a blockchain oracle operates depends on the purpose for which it was built.

Blockchains would have less potential and fewer possibilities for mass adoption without oracles, as their information would be limited to their internal data. While blockchain oracles don't solve the problem of data availability, they can make available off-chain data on-chain using external sources. Open / Comment

2023-02-22 19:39:08 Educational Post:

What Is an API Key? 

An API key is used to control and track who is using an API and how they’re using it. The term “API key” can mean different things for different systems. Some systems have a single code but others can have multiple codes for a single “API key”.   

As such, an “API key” is a unique code or a set of unique codes used by an API to authenticate and authorize the calling user or application. Some codes are used for authentication and some are used for creating cryptographic signatures to prove the legitimacy of a request. 

These authentication codes are commonly referred to collectively as an “API key”, while the codes used for cryptographic signatures go by various names, such as “secret key”, “public key”, or “private key”. Authentication entails identifying the entities involved and confirming they are who they say they are.

Are API Keys Secure? 

The responsibility of an API key rests with the user. API keys are similar to passwords and need to be treated with the same care. Sharing an API key is similar to sharing a password and as such, should not be done as doing so would put the user’s account at risk. 

API keys are commonly targeted in cyberattacks because they can be used to perform powerful operations on systems, such as requesting personal information or executing financial transactions. In fact, there have been cases of crawlers successfully attacking online code databases to steal  API keys.
The consequences of API key theft can be drastic and lead to significant financial loss.

Furthermore, as some API keys don’t expire, they can be used indefinitely by attackers once stolen, until the keys themselves are revoked. Open / Comment

2023-02-22 19:39:08 Educational Post:

What Are Options Contracts?

An options contract is an agreement that gives a trader the right to buy or sell an asset at a predetermined price, either before or at a certain date. Although it may sound similar to futures contracts, traders that buy options contracts are not obligated to settle their positions.

Options contracts are derivatives that can be based on a wide range of underlying assets, including stocks, and cryptocurrencies. These contracts may also be derived from financial indexes. Typically, options contracts are used for hedging risks on existing positions and for speculative trading.

How do options contracts work?

There are two basic types of options, known as puts and calls. Call options give contract owners the right to buy the underlying asset, while put options confer the right to sell. As such, traders usually enter into calls when they expect the price of the underlying asset to increase, and puts when they expect the price to decrease. They may also use calls and puts hoping for prices to remain stable - or even a combination of the two types - to bet in favor or against market volatility.

An options contract consists of at least four components: size, expiration date, strike price, and premium. First, the size of the order refers to the number of contracts to be traded. Second, the expiration date is the date after which a trader can no longer exercise the option. Third, the strike price is the price at which the asset will be bought or sold (in case the contract buyer decides to exercise the option). Finally, the premium is the trading price of the options contract. It indicates the amount an investor must pay to obtain the power of choice. So buyers acquire contracts from writers (sellers) according to the value of the premium, which is constantly changing, as the expiration date gets closer.

As the name suggests, options give an investor the choice to buy or sell an asset in the future, regardless of the market price. These type of contracts are very versatile and can be used in various scenarios - not only for speculative trading but also for performing hedging strategies. Open / Comment

2023-02-22 19:39:08 Educational Post:

What is trading volume?

Crypto trading volume measures how many times a coin changes hands over a given time frame.

Volume is an extremely important indicator for traders to determine the future profitability of cryptocurrencies. Volume can show the direction and movement of the cryptocurrency as well as a prediction of future price and its demand.

A greater volume of cryptocurrency transactions leads to fair cryptocurrency prices and removes the chance of distorted pricing.

A low cryptocurrency exchange volume signals inefficient or low trades, as the asking prices of sellers fail to meet the bids of potential buyers.

Higher volume tends to translate to higher price stability and less volatility. Of course, times of extreme fear or greed might bring surges in volume and large price movements. But, in general, coins or assets that consistently have higher volume tend to have less volatility. Open / Comment

2023-02-22 19:39:08 Educational Post:

What Is Tokenomics and Why Does It Matter?

Tokenomics is a term that captures a token’s economics. It describes the factors that impact a token’s use and value, including but not limited to the token’s creation and distribution, supply and demand, incentive mechanisms, and token burn schedules. For crypto projects, well-designed tokenomics is critical to success. Assessing a project’s tokenomics before deciding to participate is essential for investors and stakeholders.

Let’s look at bitcoin as an example. The total supply of bitcoin is pre-programmed to be 21 million coins. The way bitcoins are created and entered into circulation is by mining. Miners are given some bitcoins as a reward when a block is mined every 10 minutes or so. 

The reward, also called block subsidy, is halved every 210,000 blocks. By this schedule, a halving takes place every four years. Since January 3, 2009, when the first block, or the genesis block, was created on the Bitcoin network, the block subsidy has been halved three times from 50 BTC to 25 BTC, 12.5 BTC, and 6.25 BTC currently.

Based on these rules, it’s easy to calculate that around 328,500 bitcoins will be mined in 2022 by dividing the total number of minutes of the year by 10 (because a block is mined every 10 minutes) and then multiplying by 6.25 (because each block gives out 6.25 BTC as rewards). Therefore, the number of bitcoins mined each year can be predicted, and the last bitcoin is expected to be mined around the year 2140.

Key elements of Tokenomics

As a catch-all term for a wide range of factors influencing a cryptocurrency’s value, “tokenomics” refers first and foremost to the structure of a cryptocurrency’s economy as designed by its creators. Here are some of the most important factors to consider when looking at a cryptocurrency’s tokenomics. 

Token supply

Supply and demand are the primary factors impacting the price of any good or service. The same goes for crypto. There are several critical metrics measuring a token’s supply. 

Token Utility

Token utility refers to the use cases designed for a token. For example, BNB’s utility includes powering the BNB Chain, paying transaction fees and enjoying trading fee discounts on the BNB Chain, and serving as community utility token on the BNB Chain ecosystem. Users can also stake BNB with various products within the ecosystem to earn additional income.

Analysing token distribution 

Aside from supply and demand, it’s essential to look at how tokens are distributed. Large institutions and individual investors behave differently. Knowing what types of entities hold a token will give you insight into how they are likely to trade their tokens, which will in turn impact the token’s value. 

Tokenomics is a fundamental concept to understand if you want to get into crypto. It’s a term capturing the major factors affecting the value of a token. It’s important to note that no single factor provides a magical key. Your assessment should be based on as many factors as possible and analyzed as a whole. Tokenomics can be combined with other fundamental analysis tools to make an informed judgment on a project’s future prospects and its token’s price. Open / Comment

2023-02-22 19:39:08 Educational Post:

What is cryptocurrency mining?

Blockchain networks use mining to create and validate new blocks of transactions and secure the network. In the process, the so-called miners use significant amounts of computational resources to create new units of cryptocurrencies, increasing their existing circulating supply.

Bitcoin, Litecoin (LTC), and many other blockchain networks use the Proof of Work (PoW) consensus algorithm for cryptocurrency mining. PoW determines how a blockchain network reaches consensus across all the distributed participants without third-party intermediaries. In addition, it solves the double-spend problem, preventing the network participants from using the same funds more than once.

PoW promotes good network participation by design. Miners compete by solving complex cryptographic puzzles with mining hardware to win the right to mine the next block. The first miner to find a valid solution and confirm their block of transactions receive rewards. Therefore, the process requires effort and is expensive, but it offers compensation for the work.

PoW mining also makes a blockchain network more decentralized. A blockchain can function as a decentralized ledger because countless distributed computers (nodes) worldwide maintain it. Therefore rather than having a single database, these interconnected computers maintain a copy of the blockchain data and communicate with each other to continuously ensure the correct state of the blockchain.

However, it's also possible to disrupt a blockchain with a so-called 51% attack. While very unlikely, especially for the larger blockchain networks, a single entity or organization could, in theory, take over 50% of the network's computing power. That amount of mining power would let the attacker intentionally exclude or alter the ordering of transactions, also enabling them to reverse their own transactions.

Another potential issue regarding cryptocurrency mining relates to its sustainability and expenses. Cryptocurrency mining requires significant investment, not only in hardware but also in energy. As a result, many miners, especially those that mine bitcoin (BTC), consume massive amounts of electricity. In addition, if a miner doesn't have access to several mining rigs and cheap electricity, the mining will unlikely ever turn into a profit.

Mining also requires a certain degree of technical knowledge, especially when acquiring and setting up your mining equipment. It’s important to do your own research and understand the specifics of the cryptocurrency you want to mine. You will also need to set up a crypto wallet to receive potential mining rewards. Open / Comment

2023-02-22 19:39:08 Educational Post:

What is the metaverse?

The metaverse is a concept of connected, virtual universes that are explorable via 3D avatars. You can think of it as the next evolution of the Internet, with more immersive and interactive online experiences.

The metaverse incorporates technologies such as augmented reality (AR), virtual reality (VR), and blockchain. While AR enables users to morph digital visual elements into the real world using a camera, VR produces computer-generated virtual environments that users explore through VR headsets. Meanwhile, blockchain technology enables properties of digital proof of ownership, digital collectability, and transfer of value.

What can be done in the metaverse?

The metaverse creates shared virtual spaces that combine the physical and digital. For example, businesses could start using the metaverse for hosting mixed reality meetings using VR headsets or signing contracts without being physically in the same place.

Similarly, you could do groceries by interacting with virtual aisles, showcase your NFT collections to virtual buddies, and visit art exhibitions without leaving the cozy of your home.

Play-to-earn games like Axie Infinity and work socialization tools like Gather town already prove working aspects of the virtual worlds possible. They invite users to have fun, meet people, transact using digital currencies, and even earn a living.

Decentraland, on the other hand, is an online, digital world that successfully mixes social elements with cryptocurrencies and NFTs, representing anything from cosmetic collectibles to virtual real estate. For example, a player can use Decentraland's native cryptocurrency, MANA, to purchase 16x16 meter land parcels that are issued as NFTs (non-fungible tokens) on the Ethereum blockchain.

Is there just one metaverse?

The metaverse concept suggests that there is one common and shared virtual ground that everybody shares. But, as we have seen, there can be various metaverses that are separate from each other.

Therefore each metaverse has a specific function in the collective of metaverses. In the same way, as each social media platform provides specific services to its users, metaverses offer distinct virtual possibilities. Likewise to earlier examples, one metaverse could concentrate on gaming while others on meetups or concerts.

Crypto metaverse projects like Axie Infinity, Decentraland, and SecondLive each have their unique approach to building metaverse. In addition to blockchain-based metaverses, big tech is moving forward with the metaverse narrative. For example, Facebook changed its name to Meta and invested billions of dollars in developing metaverse content, software, and AR and VR headsets. Likewise, big companies like Microsoft, Google, and Tencent are building metaverse and are entering the space by developing new technologies.

In the long run, we may see various metaverses with different purposes becoming part of a single metaverse. Creating a web of different metaverses could also encourage further adoption. Open / Comment