What Is The Ethereum Dencun Upgrade, And Why Is It Important?

What Is The Ethereum Dencun Upgrade, And Why Is It Important?

The Ethereum Dencun upgrade, combining Deneb and Cancun updates, introduces significant changes to enhance scalability and reduce fees. This upgrade, crucial for Ethereum’s future growth, facilitates cheaper transaction storage off-chain. 

What is Ethereum Cancun-Deneb (Dencun) upgrade?

Dencun combines two updates called Deneb and Cancun into one big change for Ethereum, touching both the part of Ethereum that reaches agreements (consensus layer) and the part that handles transactions (execution layer). 

The Dencun upgrade also brings a feature called Proto-Danksharding through EIP-4844, aiming to lower the costs for layer 2 (L2) storage solutions. It introduces a new kind of temporary data storage called “blobs,” which helps in making storage cheaper for rollup providers. 

Proto-danksharding is an early step towards full danksharding. It allows layer-2 solutions on Ethereum to keep large transaction data off the main network, similar to using a temporary storage space. This helps reduce costs for users of layer-2 solutions by keeping the main Ethereum network less cluttered and reserved for crucial transactions.

These blobs stay available on the network for about 18 days, or 4096 epochs, after which they are removed. However, even after removal, the validity of the data can still be checked with certain proofs.

This is a major system update in blockchain, and it started at a specific time in Ethereum’s history, rolling out completely in 15 minutes. This update aims to cut down fees for certain transactions and enable Ethereum to handle more activity.

Deneb focuses on improving the agreement part of Ethereum, making sure everyone on the network agrees on what’s happening. 

Cancun upgrades how transactions are done, making them smoother and more efficient. 

This addition is expected to significantly lower rollup costs, control the size of the blockchain, and accommodate more users while keeping the network secure and decentralized.

This big change comes after another important update last year, which let people take their Ethereum out if they had put it into the network before.

What will happen after the Ethereum Dencun upgrade?

Lower fees from rollups

This feature started on March 13, 2024, at 1:55 PM UTC, from epoch 269568. 

Major rollup providers like Arbitrum and Optimism have announced they will start using the new blob feature right after the upgrade. 

However, the exact time when each rollup will start showing lower fees might differ because each provider needs to update their systems to use the new blob space.

Off-chain transactions to keep the network costs low

The Dencun upgrade makes Ethereum better by allowing it to handle more users and transactions without raising costs too much. It also keeps the network spread out and not controlled by just a few.

Ethereum is focusing on improving “layer 2 rollups.” These are systems that help handle more users safely.

Rollups work by doing transactions separately and then sending a summary or proof back to the main network. This process costs money, which was high before because every network user had to keep the information forever.

The Dencun upgrade introduces Proto-Danksharding, making it cheaper to store these summaries. Now, they only need to be kept for about 18 days, reducing costs. Since rollups need about 7 days to handle withdrawals, the new 18-day limit is more than enough, keeping everything secure without needing more computer storage.

Impact all Ethereum consensus and validator clients

The Proto-Danksharding update (EIP-4844) requires changes to both the systems that carry out transactions and the ones that help agree on the network’s state. 

All the main programs used by Ethereum have been updated to reflect this change. 

People running these programs need to make sure they’re using the latest version to stay connected with Ethereum after the update. 

Remember, this info can get outdated, so always look for the latest updates. Also, the software used by validators, who help keep Ethereum secure, has been updated for this new change.

Layer 2 (L2) transactions can be stored in 2 ways

Transactions on Ethereum’s Layer 2 can now be stored in two ways

  1. in new, cheaper temporary blob space or 
  2. in the older, more costly permanent smart contract calldata. 

Blob space saves money by offering short-term storage, enough for all needed security checks. The permanent calldata, though more secure for long-term, costs more.

The choice between using blob space or calldata is usually up to the rollup providers, who decide based on how much blob space is available. 

If lots of people want to use blob space, they might have to use calldata to make sure transactions go through quickly.

Even though users might technically pick which storage they prefer, rollup providers typically make this decision to keep things simpler and costs lower. For more details on how this works, you should look at the information given by the rollup providers.

Enhanced security with EIP-4788 and EIP-6780

The Dencun upgrade wasn’t mainly about security, but it did bring in some improvements to make Ethereum safer.

Part of the update, EIP-4788, helps the parts of Ethereum that check transactions and the parts that carry out transactions talk to each other better. This could make it harder for attackers to find and exploit weak spots.

Another change, EIP-6780, is about altering the way smart contracts can end themselves through the “SELFDESTRUCT” function. By tweaking how this works, it’s harder for bad actors to misuse this function, which could lead to better overall security for Ethereum smart contracts.

Lower costs on Layer-2 solutions

The Dencun update has introduced a new method for Ethereum’s Layer-2 scaling solutions that lowers the cost of transactions. 

These Layer-2 networks group many transactions together to save money before sending them to the main Ethereum network. 

The key feature of Dencun, called proto-danksharding and introduced in EIP-4844, reduces Layer-2 costs by allowing these networks to store certain transaction information outside the main blockchain.

Will the 4844 update lower the cost of gas on Layer 1 (L1)?

Not really. 

The update brings in a new way to charge for something called blob space, used mainly by rollup providers. Moving rollup data to blobs might lower fees on L1 a bit, but the main goal is to cut costs on Layer 2 (L2). Any decrease in L1 fees would be a small, indirect result.

The lessening of L1 gas costs depends on how much the rollup providers use the new blob data. But since L1 is used for lots of other things too, its costs might stay competitive. 

If rollups start using blob space, they will use less L1 gas, which could help reduce L1 gas prices for a while. 

However, blob space has its limits; if it gets too full, rollups will need to use the old, more expensive storage, which could make gas prices go up again for both L1 and L2.

How do you get old blob data?

Regular Ethereum nodes keep the latest network information, but they can throw away old blob data after about 18 days. Before getting rid of it, Ethereum makes sure everyone who might need it has a chance to:

  • Grab and save the data if they want.
  • Finish any dispute periods for rollups.
  • Complete the transactions for rollups.

People might want old blob data for different reasons, and there are a few ways to get it:

  • The Graph uses a network of node operators paid in cryptocurrency to keep this data.
  • BitTorrent lets volunteers store and share the data.
  • Ethereum’s portal network is working to let people access all Ethereum data through a network similar to BitTorrent.
  • Individuals can also keep their own copies of any data they find important.
  • Rollup services might keep the data to make their services better.
  • Block explorers use special nodes to collect and keep all this information, making it easy to look up past data on the web.

When getting old data back, you just need one reliable source to check it against the current network state.

How does this upgrade fit into the larger plan for Ethereum?

Proto-Danksharding is a preparatory step towards fully adopting Danksharding. 

Danksharding aims to spread out the storage of transaction data among different network participants, so no single one has to store everything. 

This method will allow more data to be included in each block, helping Ethereum grow to support more users and transactions.

Such growth is key for Ethereum to serve billions of people affordably and run more complex applications while keeping the network spread out and not controlled by just a few. 

Without these updates, the equipment needed to run the network would become too costly, possibly leaving only a few large players in charge, which would conflict with Ethereum’s goal of being decentralized.

DeFi Scams: How Pump-and-Dump Schemes Undermine Crypto Trust

DeFi Scams: How Pump-and-Dump Schemes Undermine Crypto Trust

Pump-and-dump schemes, prevalent in over 90,000 Ethereum projects, are eroding confidence in the DeFi sector by exploiting liquidity and inflating profits, casting a shadow on the cryptocurrency industry’s integrity.

The world of cryptocurrency is like the Wild West, but it’s slowly becoming more like traditional finance. But in decentralized finance, or DeFi, it’s still pretty wild. People often trade in risky ways, leading to scams and unfair trading.

In a scam called a pump-and-dump, someone or a group lies to make people excited about buying a token. They say things that aren’t true to make people afraid of missing out. Then, while others start buying, they sell their own shares for a higher price.

So far, people have created over two million different cryptocurrencies. But many of these are no longer used. 

According to a Chainalysis report, in 2023, more than 370,000 new tokens were created just on the Ethereum network. Out of these, 168,600 were listed on decentralized exchanges, where people can trade them.

The report found that many Ethereum tokens show signs of being messed with in the market. 

Usually, less than 1.4% of new tokens get more than $300 in trading activity right after they launch. Only 5.7% of the tokens started in 2023 on Ethereum have done better than this.

Also, the research points out that about 90,408 tokens didn’t get more than $300 in trades. And there was at least one case where someone took out more than 70% of a token’s trading money in one go, after buying it five times before.

While this doesn’t prove these tokens were all used in scams, it does show how experts can use the data from the blockchain to find fishy patterns.

DeFi scams Ethereum 2023
Source: Chainalysis

The entities that launched these tokens made around $241.6 million in profit in 2023. 

This doesn’t include the costs to set up and start their projects. Some of these people launched many tokens. For example, one person started 81 different tokens and made about $830,000.

How can unfair trading stop?

  • Make cryptocurrency rules clearer to prevent unfair trading.
  • Understand that crypto trading happens across many platforms, not just one, requiring a broad view for effective regulation.
  • Regulators should learn how the crypto market is evolving to better combat insider trading.
  • Increase oversight in the crypto space, similar to the stock market, to deter unethical practices.
  • Crypto exchanges should provide clearer warnings to their users about the risks of insider trading.
  • Develop and implement stricter regulatory measures for both centralized and decentralized exchanges.
  • Encourage transparency and ethical practices among those launching new tokens, especially with memecoins.
  • Consider the long-term impact of allowing pump-and-dump schemes on the credibility and stability of the crypto market.

Crypto integrity and oversight

Many can see how all these events, such as DeFi scams and unregulated trading, can hurt the crypto world’s reputation.

A solution would be to have an independent or clear third-party check for bad practices. 

It’s hard to catch wrongdoers in crypto because the laws are not clear. 

People choose crypto to avoid traditional banks, which they might not trust. But if crypto faces the same problems as banks, people might go back to banking. To gain more users, the crypto community must stop these bad practices.

Depending on your geographical location, you might have laws that have your back. 

Laws like the European Union’s Markets in Crypto-Assets Regulation (MiCA) can help. They set rules and punishments to prevent wrongdoing, which could reduce fraud in the industry.

The rise of the influencer-led crypto projects

Unlike startups that need time to grow before offering shares, memecoin projects can explode overnight, often inspired by online jokes or trends. 

Insiders might use secret tips to make fast, large profits by buying before big news breaks, pushing up the price of their holdings.

Services like Lookonchain can spot these activities, such as a case where someone turned a small investment in Solana’s token into $2 million by trading just five minutes after market launch.

Some crypto influencers push hasty decisions that can lead to losses, as they may profit from hyping certain projects. Regulators try to control this by targeting promoters, but often, the main culprits remain untouched.

The U.S. Securities and Exchange Commission has taken legal action against celebrities, like Kim Kardashian, for unauthorized crypto promotions, with the SEC’s Chair warning against such activities in 2023.

How to avoid pump-and-dump schemes in crypto

Despite efforts, regulators struggle to control crypto pump-and-dump and insider trading. 

Chainalysis’s study shows gaps in enforcement. This might mean that the regulators could try to apply traditional finance protections to crypto. However, unclear laws and guidelines hinder this.

Authorities usually track back from victims, but social media complicates matters. Catching and prosecuting wrongdoers is necessary to stop them from exploiting the system. 

The good news is that a simple blockchain analysis can trace stolen funds. However, setting up a capable regulatory team remains a challenge.

On-chain analysis can reveal who owns most of a token, which might indicate a scheme. Overall, transparency, which is unique to blockchain, can assist in monitoring.

Preventing scams requires investor education and skepticism. Self-research and cautious investing are essential. The sector’s growth relies not just on big firms entering but on protecting individual investors in DeFi. Always exert caution, especially with new, quickly rising tokens. 

The 2024 Bitcoin Halving And Its Widespread Effects

The 2024 Bitcoin Halving And Its Widespread Effects

How will the upcoming Bitcoin halving impact miners and the cryptocurrency market? It’s all about energy efficiency strategies, global mining shifts, market reactions, and the potential long-term effects on Bitcoin’s value and mining landscape.

Bitcoin 20224 halving and its impact

The Bitcoin community is on the brink of a major event – the upcoming Bitcoin 2024 halving.

This anticipated event, occurring every four years, is expected to have significant implications for the market and miners, particularly those based in the United States. 

As we approach this pivotal moment, set for April, the mining landscape is bracing for change, with the reward for mining Bitcoin transactions set to decrease from 6.25 BTC to 3.125 BTC.

This reduction in mining rewards will challenge operations globally, but the impact will vary significantly based on regional factors and operational efficiencies. 

In the United States, where recent data from Hashlabs Mining indicates that 40% of Bitcoin mining takes place, the focus has turned towards energy-efficient mining operations. These operations are believed to be less susceptible to the adverse effects of the halving due to their lower operational costs.

The halving is not just a technical adjustment; it serves as a crucial test for the sustainability and profitability of mining activities. 

This situation sets the stage for a broader discussion on the future of Bitcoin mining in the U.S. and globally as miners scramble to adapt to the impending reduction in rewards.

What is the Bitcoin halving?

The Bitcoin halving is a major event. It happens every four years. 

In April 2024, the reward for mining Bitcoin will be cut in half. This means Bitcoin miners will get less Bitcoin for their work.

Why does this matter? 

It affects how much money miners make. 

When rewards drop, some miners might stop mining because it’s too expensive. This is especially true for those who use a lot of energy.

But it’s not all bad. The halving can make Bitcoin more rare. This can increase its value. People are watching to see how this changes Bitcoin’s price.

In the U.S., many miners are preparing. They are using less energy to stay profitable. This is important because the U.S. has a lot of Bitcoin miners.

The halving tests miners. It shows who can adapt and who can’t. This event is big for Bitcoin’s future. It could change how people see and use Bitcoin.

U.S. miners’ strategies for becoming more energy efficient

As the U.S. miners are getting ready for the halving, they focus on using less energy. This can help them stay profitable even when mining rewards are cut.

Energy costs matter a lot. Cheap energy means lower costs and greater profits. This is key for making money after the Bitcoin halving.

Some miners plan ahead. They look for ways to cut energy costs. They have mining sites all over the world. They share their energy costs to stay open about their spending.

The price of Bitcoin is also important. If it stays the same, some U.S. miners might reduce their mining. This is because they will earn less Bitcoin for the same work.

But, if Bitcoin’s price goes up, miners could still do well. Higher prices mean more money for the same amount of Bitcoin.

Navigating post-halving challenges

As the halving approaches, the future of Bitcoin mining hangs in the balance. Miners around the world are bracing for change, with energy efficiency becoming the mantra for survival. Those who have prepared by reducing costs and enhancing efficiency stand the best chance of weathering the storm.

The halving could lead to a shakeout, where only the most efficient miners remain. This is not necessarily bad; it could lead to a more sustainable and robust mining ecosystem. Efficiency gains could offset the reduction in rewards, maintaining the health of the Bitcoin network.

The global hash rate, despite potential short-term dips, is expected to continue its upward trajectory. This reflects confidence in Bitcoin’s long-term value and the mining industry’s resilience. New technologies and mining strategies will likely emerge, driving further innovation in the sector.

The price of Bitcoin remains a wildcard. A significant increase could rejuvenate the mining landscape, compensating for the halved rewards. Conversely, if prices remain stagnant or fall, the industry could face further consolidation.

Anticipating the Bitcoin market post-halving

The Bitcoin halving event sparks widespread speculation about future price movements. 

Historically, halvings have been followed by significant price increases, fueling optimism among investors. As the supply of new Bitcoins decreases, if demand remains the same or increases, the price could rise.

Currently, Bitcoin’s price is experiencing a notable upsurge, partly driven by the anticipation of the halving. 

Investors are keenly observing market trends, with many expecting the price to reach new heights post-halving. This optimism is bolstered by recent rallies and the introduction of Bitcoin ETFs (exchange-traded funds), which have attracted new investors.

However, the market is complex and not immune to downturns. High leverage and speculative trading could lead to volatility and corrections. Analysts advise caution, suggesting that while the outlook is promising, the market may still experience swings.

The post-halving period is a time of uncertainty and opportunity. Market dynamics post-halving will be influenced by a mix of investor sentiment, market liquidity, and broader economic factors. 

As always, investors should conduct thorough research and consider multiple perspectives before making decisions. The halving could be a catalyst for growth, but the path is unlikely to be smooth.

In conclusion, the upcoming Bitcoin halving presents both challenges and opportunities. Miners must adapt to survive, while investors watch closely as this event could herald a new era for Bitcoin’s value and its underlying technology. 

The next few months will be critical in shaping the future of Bitcoin mining and the cryptocurrency market at large.

ECB Starts Preparation Phase For Revolutionary Digital Euro Launch

ECB Starts Preparation Phase For Revolutionary Digital Euro Launch

The European Central Bank announces a decisive move towards introducing a digital euro. This initiative will enhance privacy, increase competition in the payment sector, and ensure financial stability.

Piero Cipollone, a top official at the European Central Bank (ECB), recently talked to a group of European lawmakers about getting ready to create a digital version of the euro. He mentioned four main challenges they need to tackle and assured that the ECB is working to ensure that everyone can use this new digital currency without having to pay for it.

Cipollone explained that the ECB is already looking for companies that can help build and support this new digital euro. He said it’s important to start looking for these companies now, before they officially decide to introduce the digital euro. 

This way, they won’t be behind schedule. He also mentioned that any agreements they make with these companies will be flexible, taking into account future laws and technology changes.

Moreover, he mentioned that only companies based in the EU, or those controlled by EU citizens, will be allowed to be part of this project.

Partners for the digital Euro

This could be a big moment for Amazon because it was picked to help design a sample online shopping feature for the digital euro, but now they are looking for more applicants for the project.

Piero Cipollone also talked about the rules for using the digital euro. He described it as a single set of guidelines and standards that will make sure the digital euro works smoothly everywhere. According to Cipollone, the digital euro should be as straightforward to use as cash. 

This would mean people wouldn’t have to rely on big international companies to make payments and everyone in the euro area would get the same level of service.

Cipollone likened the system supporting the digital euro to railway tracks. 

Just like tracks can be used by many different train companies but are owned by the government, the digital euro system would be open for various businesses to use while being controlled by the state.

There is no need to make the digital Euro a legal tender

On February 15, a group called the European Money and Financial Forum, which is independent and not-for-profit, released a study. This study pointed out some tricky legal problems that could come up if the digital euro is made a required form of payment. 

It was especially concerned about how this decision could affect companies that handle payments and are part of the euro payment system. The study also criticized the idea of making something a required form of payment, calling it an outdated concept.

To make sure the digital euro doesn’t upset the financial system, Piero Cipollone said they’re adding some safety measures to its design. For instance, the digital euro won’t earn interest, so it won’t compete with banks where people save their money. 

There will also be limits on how much digital euro individuals can hold, and businesses and financial institutions won’t be allowed to keep it. 

However, people will be able to connect their digital euro wallets to their bank accounts. This means they can make transactions directly without needing to move money into their wallets first.

Cipollone also mentioned privacy with the digital euro, promising that it would allow for very private online payments, more private than what’s currently available through commercial services.

Will cash still be in use after the release of the digital Euro?

Cash will still be available, and when you pay with the digital euro without using the internet, it will be just as private as using cash. 

Only the person giving the money and the person receiving it will know the details of the transaction. 

When paying online, the European Central Bank (ECB) will only get a very small amount of data that’s been disguised to protect identities. 

This data is only for necessary actions like completing the payment. 

Plus, users will have more control over their personal information than they do with private payment services. The digital euro will also have the best protection against online threats.

ECB’s timeline for the digital Euro

The European Central Bank (ECB) is taking careful steps towards introducing the digital euro, with the project currently in the research and development phase. 

In November 2023, the preparation phase was approved to start after the investigation phase was concluded. 

While specific dates for the full rollout are yet to be announced, the ECB has indicated a phased approach. 

Initial experiments and prototypes are being tested to ensure the digital euro meets high standards of security, efficiency, and accessibility. 

Following this, a pilot phase could be launched to test real-life applications, expected to take several years to complete. 

The final introduction of the digital euro to the public would only occur after successful trials and adjustments based on feedback.

 This cautious approach ensures that once launched, the digital euro will be ready for widespread use across the eurozone, providing a seamless and secure digital payment option for all citizens.

Ultimately, the final decision to introduce the digital Euro can only be taken after the entire EU adopts a legislative framework. 

Best Ethereum Wallet: Top Non-Custodial Wallets For You

Best Ethereum Wallet: Top Non-Custodial Wallets For You

What’s the best Ethereum wallet? Well, it depends on several factors, such as your specific needs, security preferences, and how you plan to use your Ethereum.

Whether you’re looking for the best Ethereum miner software to earn tokens, a simple way to manage your assets with an Ethereum paper wallet, or a robust online service for easy access and transactions, there’s an Ethereum wallet out there that fits your needs. 

Before choosing a wallet, let’s have a look at some of the most popular Ethereum wallets worldwide. 

What is an Ethereum wallet?

An Ethereum wallet is a digital tool that lets you interact with your Ethereum blockchain network. 

Think of it as an internet banking app, but for Ethereum. You can use it to check your balance, send and receive funds, and connect to applications. It’s essential for managing your Ethereum tokens and engaging with the vast world of decentralized applications (dApps) on the Ethereum blockchain.

To create an Ethereum wallet, you can download software from trusted sources or use an online platform that lets you generate a new wallet. The best Ethereum wallets offer a mix of security, user-friendliness, and features, such as offline capabilities for added security or integration with hardware wallets like Ledger for even more protection.

An Ethereum wallet is a crypto wallet that supports the Ethereum blockchain. It’s also a necessary step if you want to interact with the increasing number of dApps in the DeFi world. Having an Ethereum wallet will enable you to connect to decentralized exchanges, such as UniSwap, and trade crypto without having to interact with centralized exchanges. Most crypto investors prefer to hold their funds in a non-custodial wallet, which helps them preserve their anonymity. 

While there is no way to determine the actual number of Ethereum users, it is possible to verify the number of unique addresses on the Ethereum blockchain. 

These addresses stand as unique wallets, as each crypto wallet is associated with an address. Of course, one user could set up an infinite number of wallets. But an increasing number of wallets can also be associated with an increased number of users. 

As of February 2024, there are 258.08 million unique Ethereum addresses, and each is associated with a distinct Ethereum wallet. According to YCharts, this represents a 15.99% increase since last year. 

Source: Ethereum Cumulative Unique Addresses (I:ECUA)

Types of Ethereum wallets

Ethereum wallets can be categorized into several types, each offering different features and levels of security. Here’s a list of the types of Ethereum wallets available:

  1. Hardware wallets. Secure physical devices designed to store your cryptocurrency’s private keys offline. They are highly recommended for storing large amounts of Ethereum securely. Examples include Ledger and Trezor.
  2. Software wallets. These wallets are digital and can be further divided into three main types based on their platform:
    1. Desktop wallets. Applications you download and install on your computer. They offer a good balance between security and convenience, allowing full control over your assets.
    2. Mobile wallets. Apps for your smartphone, providing easy access and the ability to manage your Ethereum on the go. Ideal for everyday transactions.
    3. Web wallets. Accessible through internet browsers and can be hosted or non-hosted. While they offer convenience for transactions and trading, they may be less secure than other options due to the risk of online attacks.
  3. Paper wallets. Essentially a physical printout of your public and private keys. It’s a form of cold storage (offline) and is very secure against online hacking, but it requires careful handling to avoid loss or damage.

All these types of Ethereum wallets are commonly referred to as non-custodial wallets, as you’re the only one who has access to them. 

In contrast, custodial wallets are actually crypto accounts on centralized platforms, such as Binance or Coinbase. These present more risks, as the platform also has access to your funds and are more prone to hacking and potential losses. Since we are talking about Ethereum wallets, and not accounts, all the wallets presented in our selection are non-custodial wallets. 

Best Ethereum wallet

MetaMask

Type: Software Wallet (Browser and Mobile App)

MetaMask is a versatile digital wallet offering a user-friendly platform for managing digital assets, interacting with decentralized applications, and supporting a wide range of Ethereum and EVM-compatible blockchains. Ideal for both beginners and developers.

Coinbase Wallet

Type: Software Wallet (Web and Mobile App)

A self-custody wallet from the leading cryptocurrency exchange, Coinbase Wallet allows users to store a wide variety of cryptocurrencies and access Ethereum-based DeFi apps, emphasizing ease of use and security.

ZenGo

Type: Software Wallet (Mobile App)

ZenGo is a next-gen crypto wallet using MPC technology for enhanced security, eliminating traditional vulnerabilities like seed phrases. It’s user-friendly and supports a broad range of cryptocurrencies.

Trezor

Type: Hardware Wallet

Trezor provides top-notch security by storing cryptocurrency offline. It supports a vast array of cryptocurrencies and offers a user-friendly interface for managing assets securely.

Ledger

Type: Hardware Wallet

Ledger wallets are known for their robust security, supporting over 5,500 cryptocurrencies. They provide offline storage and a range of services through the Ledger Live software, suitable for a wide range of users.

How to choose the best Ethereum wallet for you?

Choosing the best Ethereum wallet depends on your priorities: security, convenience, or a balance of both. 

Here’s how to make the right choice:

  • Security. If safeguarding your assets is top priority, consider hardware wallets like Ledger or Trezor. They store your keys offline, away from online threats.
  • Convenience. If you frequently trade or use Ethereum for transactions, software wallets (web, mobile, or desktop) like MetaMask or Coinbase Wallet offer easy access and are user-friendly.
  • Functionality. Look for wallets that support the features you need, such as DeFi access, NFT storage, or integrated exchanges for easy trading.
  • Compatibility. Ensure the wallet supports Ethereum and any other cryptocurrencies you’re interested in.
  • Reputation and reliability. Choose wallets with a proven track record and positive user reviews. Research their security history and updates.
  • Ownership. Decide if you want full control over your keys (non-custodial) or if you’re comfortable entrusting them to a third party (custodial). The list provided above offers the best options for non-custodial wallets. 

By considering these factors and identifying what matters most to you—whether it’s impenetrable security, the convenience of quick transactions, or a specific set of features—you can select the Ethereum wallet that best fits your needs.

Scalping Crypto: Best Strategies, Indicators And Trading Tips

Scalping Crypto: Best Strategies, Indicators And Trading Tips

Dive into the thrilling world of crypto scalping and learn the top strategies and trading tips for mastering the art of quick profits. 

Are you a beginner ready to tackle the fast-paced world of crypto trading? Or an experienced trader aiming to polish your scalping skills? This guide has all you need to successfully navigate the volatile cryptocurrency markets.

What is scalping?

Scalping is a trading strategy used in the financial markets, especially popular among day traders. Imagine you’re at a marketplace, but instead of buying fruits to eat over the week, you’re buying and selling stocks, currencies, or even cryptocurrencies, all within a very short time—sometimes in minutes or even seconds! 

The goal here is to make small profits quickly by taking advantage of tiny price changes throughout the day. Now, to do this effectively, traders use special tools.

Scalping tools

These scalping tools are like the gadgets and apps that help you snag the best deals online but are designed for trading. 

They include:

  • Charting software

This is like a high-tech map that helps traders see where the prices of stocks or currencies have been and predict where they might go next. It’s filled with graphs and indicators that give clues on the right moment to buy or sell.

  • Trading platforms

These are the apps or websites where the actual buying and selling happen. They need to be fast because, in scalping, even a few seconds of delays can make a difference between profit and loss.

  • Market news feeds

Just like checking the weather before heading out, traders use news feeds to stay updated on financial news that might affect the prices of what they’re trading.

  • Order execution tools

These tools help execute trades (buy or sell orders) quickly. Imagine telling a robot to buy or sell the moment conditions are just right; that’s what these tools do, making sure traders can jump on opportunities instantly.

In simple terms, the most basic definition of scalping is all about making quick, small profits in a fast-moving market. This trading technique also involves using a set of specialized tools to help make smart, speedy decisions.

Scalping strategies

Scalping trading strategies are favoured by many traders for their potential to secure quick profits with minimal exposure to market risk. While the concept might remind some of scalping tickets, where individuals buy tickets to sell at a higher price, scalping in financial markets is legal and widely practiced. 

These strategies are particularly prevalent in forex scalping, where traders capitalize on minor currency fluctuations. The essence of scalping meaning lies in the rapid buying and selling of securities, aiming for small gains in short periods.

A successful scalping trader employs a variety of tactics to navigate the markets efficiently. When it comes to scalping stocks or scalping options, the approach involves meticulous analysis and swift execution to benefit from the brief periods when prices align favourably. 

The strategy demands an in-depth understanding of market movements and the ability to act quickly to exploit small price changes.

The best scalping indicator can vary depending on personal preference and the specific market. 

However, the following tools are commonly regarded as the most effective for identifying potential entry and exit points: 

  • Relative Strength Index (RSI), 
  • Moving Average Convergence Divergence (MACD)
  • Bollinger Bands 

These indicators help traders discern short-term price movements, guiding them to make swift, informed decisions.

Trading and especially scalping requires a keen sense of market trends and the ability to remain focused under pressure, as the success of scalping strategies hinges on executing a large volume of trades to accumulate significant profits over time.

Scalping crypto

Scalping in the context of cryptocurrency trading is a fast-paced strategy that involves making multiple trades over the course of a day to profit from small price movements. This approach is similar to scalping in traditional financial markets but is applied to the highly volatile crypto markets. 

What is scalping crypto?

Scalping crypto involves buying and selling cryptocurrencies within a very short time frame, often minutes or even seconds, aiming to capture small, quick profits from slight price changes. 

Given the cryptocurrency market’s volatility, it presents numerous opportunities for scalpers to profit from these small fluctuations.

How to perform crypto scalping

  1. Choose the right platform. Select a trading platform that offers low transaction fees and fast execution times, as the cost and speed of trades can significantly impact the profitability of scalping strategies.
  2. Utilise technical analysis. Scalpers rely heavily on technical analysis and indicators to make informed decisions. Tools like the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Bollinger Bands can help identify potential entry and exit points.
  3. Set up a trading plan. Before starting, establish strict entry, exit, and risk management rules. Decide on the profit targets and stop-loss orders to minimize potential losses.
  4. Monitor the market. Scalping requires constant monitoring of the market as conditions can change rapidly. Be prepared to make quick decisions based on real-time data.

Who is crypto scalping for?

Scalping crypto is best suited for traders who can dedicate the time and attention required to monitor the markets closely and make quick decisions. 

It requires a good understanding of the cryptocurrency market, patience, discipline, and the ability to remain calm under pressure. 

It’s not recommended for those who prefer a more laid-back approach to investing or cannot commit to the intense focus and time-scaling demands.

Is crypto scalping profitable?

Scalping can be a profitable endeavour in the crypto markets due to their inherent volatility and the frequent opportunities for making small, quick profits. 

However, it’s also risky, and the high volume of trades can lead to significant transaction fees, which can eat into profits. 

The profitability of scalping crypto also depends on the trader’s skill, strategy, and ability to react quickly to market movements.

If you’re interested in earning crypto, you should also check out some of the easiest ways to earn free crypto (still available today).

What is the best crypto for scalping?

The best cryptocurrencies for scalping are those that combine high liquidity, volatility, and strong market activity. 

These characteristics ensure that there are enough price movements throughout the day to make small, quick profits, and enough trading volume to enter and exit positions easily without significantly affecting the price. 

Bitcoin (BTC) and Ethereum (ETH) are often cited as some of the best options for scalping. That’s due to their high liquidity, volatility, and active trading communities. However, other cryptocurrencies like Ripple (XRP), Binance Coin (BNB), and Litecoin (LTC) can also be suitable for scalping. However, traders should always check if they meet the criteria of high liquidity and volatility.

Most crypto trading platforms have a page dedicated to the top trading digital assets on the platform. Look on that page to choose the crypto with the highest liquidity and market activity. 

Factors to consider when choosing the best crypto for scalping

Here are a few factors to consider when choosing the best crypto for scalping:

  • High liquidity. Liquidity refers to how easily an asset can be bought or sold in the market without affecting its price. High liquidity is crucial for scalpers, as it allows for quick trades at predictable prices. Cryptocurrencies with high trading volumes, like BTC and ETH, are often preferred for scalping because they can be traded easily at any time of the day.
  • Volatility. Volatility is a measure of how much the price of an asset varies over a short period. While high volatility increases risk, it also creates more opportunities for scalpers to profit from price fluctuations. Cryptocurrencies that show consistent volatility can be good candidates for scalping.
  • Market activity. Cryptos that have strong and active trading communities and are frequently included in news or market updates can provide scalpers with more opportunities to capitalize on price movements driven by news or events.
  • Technical analysis support. Cryptocurrencies that respond well to technical analysis and show clear trends or patterns can be easier to scalp. This is because scalpers rely heavily on technical indicators and charts to make quick trading decisions.

Should you engage in scalping crypto?

Scalping in the crypto markets is a dynamic and intensive trading strategy that targets minor price movements for profit. While it can be profitable, it requires a significant time commitment, a thorough understanding of the market, and a disciplined approach to risk management. 

It’s most suitable for experienced traders who thrive in fast-paced environments and are comfortable with high-risk, high-reward trading activities.

Whether one is engaged in scalping forex, scalping stocks, or scalping options, the key to success lies in a deep understanding of the market, a well-crafted strategy, and the use of reliable indicators. 

Scalping trading demands discipline, quick reflexes, and the ability to make decisions based on real-time information, making it an exciting, though challenging, trading style.

FAQ:

Is scalping illegal?

Scalping, in the context of trading (stocks, forex, or crypto), is a legal and legitimate strategy used by many traders. However, ticket scalping (buying and reselling event tickets for a profit) can be illegal or restricted in some jurisdictions.

What are the best scalping forex indicators?

The best scalping forex indicators include the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Bollinger Bands. They help identify entry and exit points by highlighting market trends and volatility.

What is scalping in crypto? 

Scalping in crypto involves making numerous small trades on minor price fluctuations. These trades happen within a day to accumulate profit from short-term market movements. Scaping is leveraging the high volatility of the cryptocurrency market.

Is scalping profitable?

Scalping can be profitable for traders who are disciplined, quick to make decisions, and able to closely monitor the markets. However, scalping carries a high risk and requires a significant time commitment to manage effectively.