What are Stablecoins?​

As explained in the previous lesson, stablecoins are tokens pegged to the value of government currencies (most often the US dollar).
They can also be pegged to real-world assets like gold or silver.

The most popular stablecoins are:

• USDT
• USDC
• BUSD

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How Do They Stay at $1?​

Let’s take USDT (Tether) as an example:

• Issued by Tether Limited
• Backed by reserves of dollars and cash equivalents
• For every 1 USDT issued → 1 USD is held in reserve

📌 Peg mechanism:

• If USDT drops to $0.98, traders can buy it at a discount, redeem it for $1, and profit.
• This arbitrage quickly pushes the price back to $1.

The same logic applies to USDC (issued by Circle) and BUSD (issued by Binance).

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Centralized Stablecoins​

All three — USDT, USDC, BUSD — are centralized stablecoins.
This means:

• They are issued by companies.
• Companies comply with regulations.
• They include a freeze function in their contracts.

👉 Yes, centralized issuers can freeze tokens directly in your wallet.

Why?

• To comply with regulators.
• Usually applied in cases of stolen funds or hacks.
• Ordinary users are almost never affected.

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Decentralized Stablecoins​

To avoid the risk of freezing, decentralized stablecoins exist.

Example: DAI (issued by Oasis/MakerDAO).

• Pegged to the US dollar.
• Backed by crypto collateral.
• To mint 1 DAI → lock $1.50 worth of ETH.
• Overcollateralization keeps DAI stable around $1.

Other examples: Frax, LUSD.
Their mechanisms are more complex (covered in PRO modules).

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Where Are Stablecoins Used?​

Stablecoins are used everywhere in crypto:

• Buying BTC, ETH, and other crypto on exchanges
• In DeFi for lending, borrowing, yield farming
• Across centralized and decentralized instruments

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Which Stablecoin to Use?​

• Short-term / everyday use: USDT or USDC are fine (buying, trading, DeFi yield).
• Long-term holding: Avoid large balances in centralized stablecoins → risk of freeze (low, but real).
• Consider decentralized options like DAI for higher safety.

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Disclaimer: These materials are created for educational purposes only and do not constitute financial advice.

As you’ve already learned, cryptocurrency is a massive industry, and everyone can use it in their own way and for their own needs.
The main advantage of cryptocurrency is full and independent control over your own funds.

When you use cryptocurrency correctly, only you have access to your money.

• Neither banks nor regulators can take away your funds.
• Transactions cannot be frozen.
• Accounts cannot be blocked.

You are the sole owner of your funds, independent of government influence.

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Banks vs. Cryptocurrency​

Ask yourself: where is it safer to store money?

• In a bank, where transactions can be blocked, accounts frozen, or funds withdrawn without consent?
• Or in cryptocurrency, where only you hold the keys and access?

📌 History shows that neither banks nor governments can be fully trusted.

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Financial Inclusion​

Cryptocurrency opens countless opportunities, especially in developing countries:

• 🌍 More than 2 billion people don’t have a bank account.
• With crypto, all they need is a wallet app on a phone.
• No ID verification. No bank permission.

➡️ Download a wallet → Create it → Send your first transaction.

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Decentralized Finance (DeFi)​

DeFi expands these opportunities further:

• Borrowing and lending
• Trading on decentralized exchanges
• Buying insurance

…all without intermediaries and without central authorities.

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Cross-Border Payments​

• Sending money anywhere in the world takes ~10 minutes.
• Fees are just a few cents (or at worst a few dollars).
• Commonly done with Bitcoin or stablecoins.

Recipients can easily swap crypto for local currency through exchangers.

📈 Today, crypto payments are widely used by:

• Developers and freelancers (fast, reliable, low-fee payments).
• People in sanctioned countries (often the only way to interact with the global economy).

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The Myth of Easy Money​

Many newcomers see crypto only as a way to make money.
⚠️ But there is no such thing as easy money in crypto.

• Quick, effortless profits do not exist.
• Most newcomers lose money chasing hype or “magic money buttons.”

I’ve been watching the market since 2016, and the pattern is always the same:
📌 Following media, YouTube, or Telegram “signals” without analysis leads to losses.

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The Right Approach​

Yes, there are many ways to earn in crypto, but each requires:

• Time
• Knowledge
• Strategy
• A minimum budget for entry

It’s crucial to:

• Choose a personal strategy
• Study methods gradually
• Avoid blind trust in influencers or media hype

👉 Following others without doing your own research is the fastest way to lose money.

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What’s Next​

In the next post, I’ll explain the two main approaches to earning with cryptocurrency — and which one might be right for you.

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Disclaimer: These materials are created for educational purposes only and do not constitute financial advice.

As mentioned in the previous lesson, smart contracts are sets of functions and conditions executed in a specific order.
They are written by developers and are used to create decentralized applications (dApps) on platforms like Ethereum or BNB Chain.

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Example 1: Token Swap on a DEX​

Suppose I go to Uniswap and want to swap ETH for another token:

1. I send a transaction to the smart contract.
2. The smart contract reads the details and selects the best exchange rate.
3. It takes my ETH and sends the requested token back to my wallet.

💡 But what if the ETH price drops during the swap?

• If the price moves within the allowed range, the swap goes through.
• If the price deviates too much, the trade is canceled and my ETH is returned.

👉 This shows the power of smart contracts: they enforce predefined rules automatically.

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Example 2: Buying an NFT​

Imagine I want to buy an NFT on a decentralized marketplace:

1. I send a transaction to purchase the NFT.
2. The smart contract receives my funds.
3. It transfers the NFT to my wallet.
4. It sends payment to the seller.

✅ The deal is completed automatically — no third party needed.

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Why Smart Contracts Matter​

Transactions happen without relying on intermediaries.
This is the core advantage of smart contracts and cryptocurrency.

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Key Benefits​

1. Transparent – anyone can review the contract code.
2. Autonomous – no central governing authority required.
3. Immutable – once deployed on blockchain, the code cannot be altered.

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Risks to Consider​

⚠️ Smart contracts are only as safe as the code inside them.

• Anyone can deploy a contract.
• Malicious actors can create harmful functions.
• Users must be cautious and verify contracts before use.

I’ll cover the risks and security aspects in more detail in a future lesson.

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Disclaimer: These materials are created for educational purposes only and do not constitute financial advice.

Cryptocurrency is not just Bitcoin or Ethereum. It’s a vast global sphere that can be divided into three main components: blockchain, smart contracts, and mining. The entire cryptocurrency ecosystem is built on these three elements.

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1. Blockchain – the core element​

The core element of the cryptocurrency ecosystem is the blockchain.
Imagine a large global distributed database that runs on thousands of computers around the world. As soon as any information is added to this database, it is automatically copied to every computer in the network, creating global synchronization.

This approach ensures the immutability and security of the information stored in the blockchain. Any transaction recorded in the blockchain stays there forever and cannot be altered.
If someone wanted to change it, they would have to alter the data on every single computer in the network.

➡️ The main advantage of blockchain: immutability and data security.

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2. Smart contracts​

A smart contract is a set of conditions and actions executed in a specific order.
For example:

• If condition A is met → action X is executed
• If condition B is not met → action Y is triggered

Smart contracts are stored in the blockchain, which makes them immutable as well.

They are used almost everywhere:

• Issuing NFTs
• Creating new tokens
• Exchanging tokens

➡️ They are the backbone of most processes in the crypto space.

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3. Mining​

Mining provides security and decentralization for the blockchain.
Its main purpose is not the creation of new coins.

➡️ The real purpose of mining is securing the network.

For maintaining that security, miners receive rewards in the form of newly minted coins — for example, Bitcoin or Ethereum.

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Foundation of the crypto space​

These three elements form the foundation of everything that exists in the crypto space today:

• Decentralized finance (DeFi)
• Marketplaces
• Exchanges

All of it is built on blockchain and smart contracts, while security is ensured through mining.

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Key difference from the traditional financial system​

The main difference between cryptocurrency and traditional finance is full, independent control over your own funds.

• With crypto: you own your assets directly, without relying on third parties.
• With banks: your money can be frozen or your account blocked.

This is especially relevant now, in the era of regulations and restrictions based on nationality.
⚠️ But safe storage of cryptocurrency is a skill that needs to be learned.

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Beyond speculation​

Cryptocurrency is not just about price speculation or trading “monkey pictures.”
It is already a massive global financial ecosystem that offers:

• Access to traditional financial instruments
• Independence from regulators or central authorities
• Decentralized forms of the same financial tools available in the traditional system

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What’s next?​

In the next lesson, I’ll explain how blockchain works using a simple and clear example.
Understanding how blockchain functions is critically important to fully grasp how cryptocurrency as a whole operates.

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Disclaimer: These materials are created for educational purposes only and do not constitute financial advice.

Bitcoin is not just a cryptocurrency.
Bitcoin is a financial revolution that changed the world forever.

Its emergence gave people the opportunity to use digital money independent of the state.
It is a fully autonomous, decentralized, and transparent monetary system, where the rules are set from the beginning and remain unchanged.

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Why Bitcoin Matters​

To truly understand and appreciate the innovation of Bitcoin, you need to understand how the traditional financial system works — a system that has been failing for quite some time.

For this, it’s enough to read one book: The Bitcoin Standard.
It provides a clear understanding of why Bitcoin is so important today and why it is Bitcoin — and not any other cryptocurrency — that matters.

📖 You can find this book in our e-book library on the platform.

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Bitcoin as Digital Money​

As of now, Bitcoin is the only reliable, simple, fast, and cheap way to transfer value from point A to point B.
No other cryptocurrency can do it faster, safer, or more securely.

The Bitcoin blockchain is distributed across the world among all network participants.
Any transaction added to the blockchain is instantly recorded on every node.

➡️ Anyone can become a Bitcoin node:
Just install the software on your computer, and you store a complete copy of the Bitcoin blockchain — starting from its launch in 2009.

The more nodes in the network, the greater its decentralization and security.

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What Makes Bitcoin Different?​

Unlike other cryptocurrencies, Bitcoin has unique qualities:

1. No central point of control — its creator, Satoshi Nakamoto, disappeared and no longer has any control.
2. Full autonomy of the protocol — Bitcoin has no company or organization controlling it.
3. Direct connection to the real world — secured by energy-intensive mining.

By contrast:

• Ethereum is developed by the Ethereum Foundation, which can implement changes and upgrades.
• Solana, Avalanche, and others can be altered or even shut down by their developers.

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The Role of Mining​

Bitcoin mining requires a massive amount of energy — and contrary to myths, this is an advantage, not a drawback.

• Energy is what ties Bitcoin to the real world.
• Mining consumes real resources (electricity), just like extracting and refining gold.
• Most other cryptocurrencies use staking, where coins are created out of thin air, without resource costs — making them isolated from the real world.

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Inside the Bitcoin Module​

This lesson is only an introduction.
The Bitcoin module covers in detail:

• How Bitcoin works
• How transactions are structured
• What Bitcoin wallets are
• How to use Bitcoin properly while maintaining anonymity and privacy

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Bitcoin vs Other Cryptocurrencies​

Bitcoin is the only true digital form of money.
Everything else is not money.

• Ethereum is not a competitor to Bitcoin — its role is to serve as a platform for decentralized applications.
  • Decentralization is less critical for Ethereum than for Bitcoin.
• Solana, Avalanche, and many others belong to an entirely different category.

⚡ What Ethereum is, why it exists, and how it works — I’ll explain in the next lesson.

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Disclaimer: These materials are created for educational purposes only and do not constitute financial advice.

From the previous lessons, you’ve learned what Bitcoin and Ethereum are, how they differ, and what roles they perform.
But it’s very important to understand the difference between a network and the unit of account within that network. Let me explain.

• Bitcoin is a global distributed system of digital money, and the main unit of account in this network is bitcoin (BTC).
• Ethereum is a platform for decentralized applications, and the main unit of account in this network is ether (ETH).

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Coins​

Bitcoin and ether are coins — the primary accounting units within their own blockchains.

Examples:

• BNB in Binance Smart Chain
• AVAX in Avalanche

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Tokens​

A token is a cryptocurrency built on top of an existing blockchain (e.g., Ethereum or Avalanche).
Tokens can be divided into several major categories:

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1. Stablecoins​

• Used to digitize government currencies and other real-world assets.
• Example: USDT – a token built on Ethereum (and other blockchains), pegged to the US dollar.
• Key point: USDT is not the unit of account of Ethereum, it simply uses Ethereum’s blockchain as infrastructure.

👉 Despite the name, stablecoins are tokens, not coins.

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2. Utility Tokens​

• Used to access or purchase services, goods, or discounts.
• Examples:
  • Fee discounts on decentralized exchanges for token holders.
  • NFT project access restricted to specific token holders.
  • Tokens required to buy products or join launches.

👉 These are utility tokens because they unlock use-cases inside platforms.

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3. Security Tokens (Equity Tokens)​

• Work similar to dividends in traditional finance.
• Example: A DEX (decentralized exchange) earns fees and distributes part of its income to token holders.
• Such tokens represent profit-sharing rights and are often used in DeFi.

👉 These are called security tokens or equity tokens.

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4. NFTs (Non-Fungible Tokens)​

• Non-fungible tokens are unique and cannot be copied.
• NFTs are more than “monkey pictures.”
• They represent unique ownership and have many use cases (art, gaming, real estate, digital identity, etc.).

👉 I’ll cover NFTs in detail in a separate lesson.

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Summary​

• Coins are the primary units of account within their own blockchains.
• Tokens are cryptocurrencies built on top of existing blockchains (e.g., USDT on Ethereum).

Tokens fall into four main categories:​

1. Stablecoins
2. Utility tokens
3. Security tokens
4. NFTs

⚡ In reality, there are many more types of tokens. This lesson only covers the four main categories.

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What’s Next​

In the next lesson, we’ll explore how stablecoins work, why they are needed, and how they differ from one another.

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Disclaimer: These materials are created for educational purposes only and do not constitute financial advice.