Topic
This topic gives the site its name, and it is the one where caution matters most: tokens, blockchains, bitcoin, stablecoins and their risks.
This topic gives the site its name, and it is the one where caution matters most. These notes explain what a token is and how it differs from a coin, how a blockchain records transactions, how bitcoin works according to its original design paper, what stablecoins try to do and how they can fail, what a spot bitcoin exchange-traded product is, and the risks regulators highlight — price swings, fraud, hacks and the loss of private keys. Nothing here is a recommendation to buy any crypto asset. The notes below are listed in reading order: start at the top, or jump straight to the question you have. Every note ends with its numbered sources.
Start with
A token is an entry on a shared digital ledger, controlled by a secret key. Here is what the main types are, what holding one really means, and why prices swing so hard.
Read the noteA blockchain is a shared ledger kept by many computers, where each block is chained to the last by a digital fingerprint. Here is the mechanism, with hashes computed in code.
Read the noteBitcoin is a digital currency with no central issuer, a public ledger and a fixed supply schedule. Here is how it works, where new coins come from and what can go wrong.
Read the noteStablecoins are tokens built to stay at $1. Whether they do depends on the reserves behind them and on everyone trusting those reserves at the same time.
Read the noteCrypto prices can fall by most of their value, the companies that hold it can fail, and fraud losses run into billions a year. Here is each risk, sourced and explained.
Read the noteSpot bitcoin ETFs let you get bitcoin price exposure through a brokerage account. They remove some wallet risks, add a yearly fee and keep all of bitcoin's volatility.
Read the notePress / or Ctrl K anywhere to search.