Educational Material

Whether you are just looking for a place to get started, or you’re looking for more information on Blockchain, Cardano, or other Cryptocurrencies, you will be able to find concise information in the lessons/videos below!
This is currently a WIP! Check out the social media links in the top right and make sure to check back in for updates!
What are Cryptocurrencies?

Cryptocurrencies, often referred to as crypto, are digital or virtual currencies or assets. Cryptocurrencies are secured by cryptography, hence the term cryptocurrency.

Cryptocurrencies typically function on decentralized networks and use blockchain technologies to keep track of movements of ‘tokens’ or transactions of the cryptocurrency.

What is the Blockchain?

Cryptocurrencies, often referred to as crypto, are digital or virtual currencies or assets. Cryptocurrencies are secured by cryptography, hence the term cryptocurrency.

Cryptocurrencies typically function on decentralized networks and use blockchain technologies to keep track of movements of ‘tokens’ or transactions of the cryptocurrency.

The blockchain is a public, immutable ledger of transactions that can be viewed similarly to a database for the cryptocurrency.

The method of adding data to the blockchain depends on whether the cryptocurrency’s consensus for adding data is Proof-of-Work, Proof-of-Stake, or some other variant, but the data is always added in chunks called “blocks.” These blocks of data (often of transactions of the cryptocurrency) are added onto the chain of previous blocks. Hence the name “blockchain.”

What is Proof-of-Work (PoW)?

Proof-of-Work (PoW) is a decentralized consensus model for adding blocks onto the blockchain. This method requires multiple computers, ASIC miners, or other hardware (called miners) throughout the peer-to-peer network to “work” to solve cryptographic puzzles via computing power to validate transactions.

Thus miners compete against each other in order to be the first to solve the cryptographic puzzle. Though, often the computational power of miners may be pooled together to increase the likelihood of the pool to develop a block.

Once a miner or miner within a pool succeeds in validating the transactions, it is added onto the blockchain and the miner or pool is paid a reward. There are many variations of the consensus for PoW, as PoW is the first consensus model, but those will be covered in more advanced lessons.

What is Proof-of-Stake (PoS)?

Proof-of-Stake (PoS) is a decentralized consensus model for adding blocks onto the blockchain. PoS was developed to solve the inherent problems of Proof-of-Work (PoW). These differences are covered below in “Difference and Pros & Cons of PoW & PoS.”

Instead of miners developing blocks through using computational power, as with PoW, PoS uses the amount of the cryptocurrency that a miner or pool has and is staking to determine the mining power or likelihood of mining a block. This is to say, that if a miner or pool operator own 5% of all of the cryptocurrency or cryptocurrency that is being staked and are staking it, then that miner or pool operator would develop ~5% of the blocks.

PoS uses an algorithm to determine which miner or pools get to develop a block on the blockchain, and in turn, be rewarded (typically with the transaction fees) for developing a block.

Differences and Pros & Cons of PoW & PoS
PoW PoS
Function (How to develop block) Miners or Pool Operators use computational power to solve cryptographic puzzles to develop blocks on the blockchain. The more computational power they have, the more likely they are to mine a block. Miners or Pool Operators use their stake of the cryptocurrency to develop blocks on the blockchain. The larger the stake of cryptocurrency is the more likely the are to develop a block.
Advantages – Oldest consensus model for cryptocurrencies.

– Used by some of the biggest cryptocurrencies such as Bitcoin and Ethereum.

– More common consensus model for newer cryptocurrencies.

– Requires much less energy to run as miners/pool operators are not competing to develop blocks.

– Typically requires little to no hardware to participate and receive a payout within the system.

Disadvantages – As the system scales or become more widely used, the cost of mining the cryptocurrency goes up.

– Typically starts out decentralized, but leads to more centralized structure due to large costs in computational infrastructure and electricity.

– Due to the increasing costs of the system with scaling, there are often higher fees as the cryptocurrencies becomes more valuable.

– Can be viewed as a system where the “rich get richer” due to their ability to buy more of the cryptocurrency to stake to earn rewards.

– Have not been around as long as PoW.

Different Types of Wallets for Your Crypto?

There are two main types of wallets to store your cryptocurrencies. There are cold wallets and hot wallets.

Hot Wallets or hot storage wallets are wallets that can be accessed via a website or other site or application of the wallet provider. The most common examples of hot wallets are exchanges where you can deposit, withdraw, sell and trade your cryptocurrencies.

Cold Wallets or cold storage wallets are wallets that have another layer of protection as they are not connected to the internet and are often physically disconnected. The most common cold wallets are paper wallets (piece of paper with the wallet’s private and public keys documented on it) and hardware wallets such as USB drives, Ledgers, and Trezor devices that must be physically plugged into a computer to access the cryptocurrency.

Many advocate for using cold wallets using the phrase, “Not your keys, not your crypto.” This phrase comes from the concept that if you do not own the private and public keys to your wallet, then you do not actually own the crypto. This would mean that, as an example, if you deposit Bitcoin into an exchange, they can decide to freeze your funds as they are holding your Bitcoin.

Positives and Negatives of Cryptocurrencies?
Positives Negatives
– 24 hour access to your cryptocurrency.

– Many see cryptocurrencies such as Bitcoin or others with limited supplies as a hedge against inflation due to countries debasing their currencies by continuously print more of it.

– Fast transaction speeds. Debit/Credit card payments often take multiple days to clear. Whereas, depending on the cryptocurrency it may take between 1 hour to a couple of seconds.

– Not heavily regulated*

-Anonymity*

– A relatively new/young asset class.

– Potentially higher volatility than other asset classes. While this does increase the chances of making large profits, it also goes hand-in-hand with the possibility of large losses.

-Due to it being a new asset class, it is not well understood by the population and has not see strong mainstream adoption… yet.

– Not heavily regulated*

-Anonymity*

Common Terms

WIP

What is an NFT?

Non-fungible token or NFT is a crypto asset on the blockchain that has a unique identification code and metadata, but in lay terms, it is a unique crypto asset that can range from artwork, personal identification, or even representations of real-world items.

The easiest way to differentiate between fungible and non-fungible tokens are through three specific qualities. Non-fungible tokens are non-interchangeable, non-divisible, and unique. While fungible tokens are interchangeable, divisible, and uniform.

The most common examples of a fungible asset or token would be fiat currencies such as the US dollar or Bitcoin. The US $1 bill is interchangeable with any other $1 bill. Just as Bitcoin is also interchangeable with any other Bitcoin. Both the US dollar and Bitcoin are divisible as well as uniform.

The most common examples of a non-fungible tokens would be artwork or deeds to a house. Deeds to different houses are not interchangeable as they represent unique properties. Houses or their deeds are not divisible (or at least not functionally so.)

What is Decentralized Finance?

Decentralized finance (DeFi) is a system of financial functions that are built on technology, typically blockchain technologies, to remove intermediates of the legacy financial system. By doing this, individuals regardless of geographical location, cultural identity, age, or currency used can have access to financial functions and utilities.

In the legacy financial system, there are hubs or central locations where many of these processes occur. These systems are centralized in specific parts of the world, and these systems often require identification and other functions that rely on being born in a specific location or having access to these centralized functions (ex: DMVs, Banks, Brokers, etc.)

Decentralized finance’s purpose is to remove these intermediates and allow individuals more financial freedom by providing these functions outside of the centralized systems.

What is a Decentralized Exchange?

Decentralized exchanges (DEX) are cryptocurrency exchanges that allow direct transactions, trades, or swaps between peers without the need for an intermediate entity. Decentralized exchanges are a part of decentralized finance (DeFi).

How decentralized exchanges are able to avoid the need for intermediates such as banks or other financial institutions is through the use of smart contracts on the blockchain to mediate the execution of trades.

The benefit of a decentralized exchange is that there is no need to send your cryptocurrency to a custodial wallet of the exchange. This means that a DEX is not as likely to be targeted by hackers to steal funds as there is no central authority to target.

The negative of decentralized exchanges are that there is no central authority to help you out if something goes wrong.

What are Liquidity Pools and How Do They Work?

Liquidity pools are foundational part of decentralized finance (DeFi) as a whole and to the automated market maker (AMM) model of decentralized exchanges (DEX).

Liquidity pools are pools or groupings of of funds that are locked in a smart contract. These pools are used to facilitate trading on a decentralized exchange.

For most pools, any individual can provide liquidity to a pool. When liquidity is provided, the liquidity provider (LP) will receive a percentage of all the fees that accumulate, through trades, in the pool that they are providing liquidity for.

The pooled resources, in many liquidity pools, keep a 50/50 balance. This means if one resource grows in value, the pool will adjust to keep the 50/50 balance automatically or through market forces. This ensures that there is enough liquidity to facilitate trading and that the pricing remains accurate.

To make this concept less abstract, we will use an example with a pool that is an Ethereum and DAI (both cryptocurrencies; ETH/DAI) pool. DAI is a stable coin that is $1, and ETH will be equal to $500.

In this pool, a liquidity provider must equal amounts of both DAI and ETH. Chris who is to be the liquidity provider owns 2 ETH, so he must convert 1 ETH into 500 DAI. The total amount dollar amount his is depositing is $1,000 of which half is ETH and half is DAI. In this pool, we will say that once Chris supplies his crypto to the liquidity pool, he is providing half of the entire liquidity.

Sometime later, Chris withdraws his liquidity (cryptocurrencies) from the liquidity pool and has received half of all the transaction fees from the trades facilitated by the ETH/DAI pool. What Chris has done is called, “liquidity mining“, and his assets helped to facilitate trade through use of the liquidity pool.

What is Staking?

Staking is another facet of decentralized finance (DeFi). In a previous lesson, we covered “What is Proof-of-Stake” (found under “Cryptocurrency Basics”), but staking is the act of taking cryptocurrencies that can be staked and delegating them to a pool in order to receive more of that cryptocurrency.

An example of a cryptocurrency with staking functionality is Cardano. With Cardano, an individual that owns Cardano (ADA) could delegate or stake their ADA with a pool, in this case LOOPS pool, in order to receive a portion of the block reward when that pool develops a block.

To receive step-by-step instructions on how to delegate Cardano (ADA) to Crypto Loops’s Pool. Either follow this link and go to the FAQ, or scroll down to “Cardano (ADA) Basics” then click “How to Stake Cardano?”

What is Bitcoin?

Currently, Bitcoin is the the largest cryptocurrency by market capitalization. Bitcoin was developed in January 2009 (post-2008 housing market crisis) by an individual or group under the pseudonymous name Satoshi Nakamoto. Nakamoto developed the whitepaper that explains and outlines Bitcoin and posted it on bitcoin.org on October 31, 2008.

Bitcoin functions through a proof-of-work (PoW) consensus where “miners” use computational power or pooled computational power to try and “mine” bitcoin (see 1.2). Bitcoin is a deflationary cryptocurrency. This means that, there are only ever going to be 21 million Bitcoins in existence. This is done by decreasing the reward from mining by half (the halving) every 210,000 blocks.

One Bitcoin is divisible down to eight decimal places (0.00000001 or 100 millionths). This unit is called a Satoshi, named after Bitcoin’s creator. This ultimately means that 1 Bitcoin = 100,000,000 Satoshi(s). Satoshi(s) are often referred to as Sats (ie: Stacking sats or I have 1 million sats).

What is Bitcoin Mining?

The term “mining Bitcoin” is a reference to Bitcoin’s proof-of-work (PoW) consensus model for logging transactions on the blockchain (see Cryptocurrency Basics 1.2).

Bitcoin uses a specific PoW model called SHA-256 (See Bitcoin Advanced). New Bitcoins are mined (a block is produced) approximately every 10 minutes, and as we discussed in section 2.0, the rewards are halved every 210,000 blocks. Originally, in 2009, the block reward was 50 Bitcoin. Then on November 28, 2012, the block reward was decreased to 25 Bitcoin. The next two halvings would occur on July 9, 2016 and May 11, 2020 with block rewards decreasing to 12.5 and 6.25 Bitcoin respectively.

Once all 21 million Bitcoin are mined, the system will be maintained by mining rewards being paid through the transaction fees of the system.

As more miners join the ecosystem, it becomes more difficult to mine a block. This is due to the system adjusting the difficulty to make sure that new blocks are developed at a steady rate. This increase in difficulty also helps to increase the network’s security.

What is a Bitcoin Hard Fork?

Bitcoin has had several hard forks (or hard fork events throughout it’s history. Hard forks typically develop when members of Bitcoin or its developers cannot come to a consensus or become dissatisfied with the current blockchain. This can lead to changes in the blockchain protocol that diverges or branches off the main chain to create a side chain that runs parallel to the main chain. Thusly, hard forks can be seen as a fork in the road for the blockchain.

The best way to understand this is to use the visualization, down below. One of the most popular hard forks of Bitcoin is Bitcoin Cash (BCH). Bitcoin Cash was developed when some Bitcoin miners and developers grew concerned about Bitcoin’s lack of scalability (ability to handle growing numbers of transactions, users, and the speed of processing transactions). Due to the disagreement of how to solve this problem, Bitcoin Cash was created from the hard fork

Source: Monnos.com

There have been many hard forks with Bitcoin. Just to name a few, there are Bitcoin Gold (BTG), Bitcoin Diamond (BCD), and Bitcoin Cash (BCH).

What is the Lightning Network?

The lightning network is a second layer technology built on bitcoin to help overcome many of the downsides to the bitcoin network.

Downsides of the bitcoin network that the lightning network fixes:

  • Slow Transaction Speed: Bitcoin’s transaction are aggregated into blocks, so this can lead to payment speeds of almost 1 hour. The lightning network provides almost instant payments due to it functioning on a different layer than bitcoin’s blockchain.
  • Micropayments: Bitcoin payments have a minimum balance you can send and a transaction fee that depends on the network conditions, but the lightning network can send as little as 0.00000001 bitcoin or 1 satoshi.
  • Scalability: Due to a block on the bitcoin blockchain containing a max of 1 MB, there is a limited number of transactions that can fit within a block. This can lead to increased congestion on the blockchain, but the lightning network is able to avoid these limits due to it using a separate layer.
What is Ethereum?

Ethereum is currently the second-largest cryptocurrency by market capitalization, as well as the most actively used blockchain. Ether (ETH) is the native cryptocurrency of the platform. Ethereum is both a platform and a programming language (Turing complete) that runs on a decentralized, open-source blockchain with smart contract functionality.

This means that developers can build decentralized applications (dApps) on the Ethereum platform. These decentralized finance (DeFi) applications aim at offering financial services without a financial middleman such as brokers, exchanges, or banks, and, in turn, allow cryptocurrency users to borrow against their holdings or lend them out to earn interest.

Moreover, Ethereum allows for the creation and trading of non-fungible tokens (NFTs). Sold as non-interchangeable, unique digital property, NFTs are connected to digital artworks or other real-world items. In addition, many other cryptocurrencies operate as ERC-20 tokens on top of the Ethereum blockchain and/or have used the Ethereum platform for their initial coin offerings.

Lastly, Ethereum is working on a transition from proof-of-work (PoW) to proof-of-stake (PoS) through a series of upgrades to Ethereum 2.0. Ethereum 2.0 is meant to amplify the transaction throughput or scalability through sharding.

What are Smart Contracts?

A smart contract, as its name suggests, is a contract that is automated by smart functionalities. Based on the terms of a contract or an agreement, a computerized transaction protocol is able to automatically execute, control, as well as document legally relevant events and actions. Smart contracts aim to reduce the need for trusted intermediators, arbitrations, and enforcement costs. Furthermore, this lowers the risks of malicious and accidental exceptions as well as fraud losses.

As an analogy, a vending machine can be viewed as a rudimentary piece of smart contract technology. In Ethereum’s 2014 white paper, the Bitcoin protocol is described as a weak version of the smart contract concept outlined by computer scientist, lawyer, and cryptographer Nick Szabo. Since then, more cryptocurrencies, besides Ethereum, have emerged with advanced smart contract support between untrusted parties.

What is an ERC-20 or 223 Token?

Ethereum supports many types of tokens, which are digital assets built on top of its blockchain. These tokens can range from a digital representations of a physical object like Gold to a native currency like Golem, which is used to pay transaction fees. They may also be used to represent financial instruments such as bonds and stocks later on. Developers need not create an entirely new blockchain from scratch, as they can leverage the existing Ethereum infrastructure. In this process, the increasing demand for Ether to power the smart contracts would fuel the expansion of the Ethereum ecosystem.

ERC-20

In November 2015, Fabian Vogelsteller proposed the Ethereum Request for Comments 20 (ERC-20) Token Standard. Through this standard, an API for tokens within smart contracts can provide functions including the transfer of tokens from one account to another, getting the current token balance of an account and getting the total supply of the token available on the network.

Smart contracts that correctly implement ERC-20 processes are called ERC-20 Token Contracts, and help keep track of the created tokens on Ethereum. Numerous cryptocurrencies have launched as ERC-20 tokens and have been distributed through initial coin offerings. Fees to send ERC-20 tokens must be paid with Ether.

ERC-223

Despite being well-implemented and well-documented, the ERC-20 Token Standard has a logical bug that has led to permanent losses of tokens worth millions of dollars. ERC-20 assumes two ways of performing a token transaction. First of all, the “transfer” function lets you send tokens to someone’s address, or an externally owned account (EOAs). If you want to deposit tokens to a smart contract instead, you should use the combination “approve + transferFrom”, authorizing this contract to withdraw your tokens via the “approve” function, and then call the “transferFrom” function to handle your deposit and withdraw your tokens.

If the user tries to send tokens to a smart contract by directly calling the “transfer” function, they will see a successful transaction, but the contract will never receive the tokens!

As a solution to this costly bug, the ERC-223 Token Standard was developed by Reddit user u/Dexaran. His solution is to modify the “transfer” method to check whether the receiving address is a contract (i.e. contains data) or not. If it is a contract, then it assumes that there is a “tokenFallback” function to call it back. However, the main weakness is that if the “tokenFallback” does not exist, then the receiving contract’s fallback function will be called and the sent tokens may still be lost.

What is Cardano?

Cardano is a third-generation cryptocurrency that was developed with an academic and research-driven approach in 2015 and launched in 2017 by Charles Hoskinson (a co-founder of Ethereum). Cardano plans and is working towards having smart contracts, multi-asset functionality, and even governance on chain.

Cardano uses a proof-of-stake (PoS) protocol called “Ouroboros” to verify blocks on the blockchain.

Cardano’s cryptocurrency unit/ticker is ADA (₳) and is divisible into one-millionths (1/1,000,000). This division of ADA is called a Lovelace, and is named so in honor of Ada Lovelace. This means that 1 ADA = 1,000,000 Lovelaces.

How to make a Cardano (ADA) Wallet on Yoroi?

To make a Yoroi wallet you can either follow the instructions in the video below, or you can follow the written instructions below that.

Video tutorial on how to make a Yoroi wallet

First you will need to download Yoroi on your smartphone. The application can be found in the Google Play store and Apple app store.

Yoroi wallet in Google Play store

Once you have Yoroi downloaded and installed, open up Yoroi. You will be required to pick your language, accept the terms of service agreement, and create a PIN code for your wallet.

1) Language selection
2) Terms of service agreement
3) PIN code creation

Once you have all of that completed, you will select, “ADD WALLET (SHELLEY-ERA).” Then select”CREATE WALLET.”

Click (ADD WALLET SHELLEY-ERA)
Click (CREATE WALLET)

 

You should now see a screen where you can give your wallet a name and create a spending password. Here you will want to name your wallet whatever you wish. It can be anything as this is not a username. The name of your wallet will just help you to differentiate it other wallets if you decide to create more than one. A spending password will be a password you will have to use anytime you want to send ADA out of your wallet or delegate (stake) your ADA. Once done, select “CONTINUE.”

Wallet name and spending password creation

There will be a pop-up that informs you that you will be given your wallet recovery phrase on the next screen. Read this pop-up thoroughly and then, when ready, select “I UNDERSTAND.”

Wallet recovery phrase pop-up

This next screen will show your recovery phrase. Make sure to write it down and make sure you secure it. This is the only way to recover your wallet in the case that you delete your wallet or uninstall or remove Yoroi.

Once you have written it down. Select “YES, I HAVE WRITTEN IT DOWN.”

Note: The order is important and should be ordered starting with the top row going from left to right, and doing the same with each row that follows.

Recovery phrase: KEEP SECURE AND SECRET

You will then see another pop-up. Read this pop-up as well and check off the boxes after you have read and understand them. Then select “I UNDERSTAND.”

Recovery phrase pop-up

You will then be asked to verify your recovery phrase by putting the words of your recovery phrase in order. Once you have done this, then select “CONFIRM.”

Recovery phrase verification screen
Recovery phrase verification screen completed

Congratulations! You now have a wallet you can send, receive, and delegate your Cardano (ADA) with!

How to make a Cardano (ADA) Wallet on Daedalus?

To make a Cardano wallet on Daedalus you can either follow the instructions in the video below, or you can follow the written instructions below that.

Complete guide to building a Cardano (ADA) wallet and delegating on Daedalus

When you open up Daedalus, you see four squares in the middle of the screen. There will be one to create a wallet, pair a hardware wallet, restore a previous wallet, and import earlier wallets. You will want to click on the box with “Create a new wallet.”

Create a new wallet highlighted

You will now see a pop-up where you can give your wallet a name and create a spending password. Here you will want to name your wallet whatever you wish. It can be anything as this is not a username. The name of your wallet will just help you to differentiate it other wallets if you decide to create more than one. A spending password will be a password you will have to use anytime you want to send ADA out of your wallet or delegate (stake) your ADA. Once done, click “Create Shelley wallet.”

Pop-up requiring you to name your wallet and create a spending password

There will be a pop-up that informs you that you will be given your wallet recovery phrase on the next screen. Read this pop-up thoroughly and then, when ready check off the box and click “Continue.”

Wallet recovery phrase pop-up

You will now be shown your 24-word recovery phrase. I will be showing mine recovery phrase as an example, but this wallet should not be recovered or used as the recovery phrase is now public.

Make sure to write down your recovery phrase starting from the top row from left to right, and repeat with each following row. The order of the recovery phrase is important. Once you have written down your recovery phrase, click “Yes, I have written down my wallet recovery phrase.”

Recovery phrase: KEEP SECURE AND SECRET

Next, you will be required to enter your 24-word recovery phrase. Once you have done so, two check boxes will appear with text next to them. Make sure to read through the pop-up before checking off the boxes. Then click “Confirm.”

Completed recovery phrase verification

Congratulations! You now have a wallet you can send, receive, and delegate your Cardano (ADA) with!

How to Stake Cardano?

How to stake Cardano (ADA) on Yoroi?

If you are using Yoroi wallet and wish to stake (or delegate) your ADA with LOOPS pool, then you can follow the video listed below or read the instructions below it!

Video explanation on how to delegate using Yoroi

This guide will use images from the Yoroi mobile app, but is quite similar and should be followable if you use the Yoroi browser extension. First, you will want to make sure that you have a minimum of 10 ADA in your wallet to delegate. Once you have that, open up the Yoroi mobile app or browser extension. You will have to input your pin code. Once you’ve competed that, you will need to select the wallet you want to delegate.

Yoroi wallet to be selected to delegate

Once you have selected your wallet, you should be able to see your available funds at the top, and at the bottom, you should see five options: transactions (the one you will be on by default), send, receive, dashboard, and delegate. Select “Delegate.”

Options within Yoroi wallet are located at the bottom of the screen

Here you will see a search bar where you can search for a pool directly, pick one of the pools that shows up, or sort the pools. We will be picking LOOPS pool as we would recommend you do as well. Though if you want to delegate with other pools, you can get more information on pools here. In the search bar, type LOOPS and click the magnifying glass icon. “[LOOPS] Crypto Loops” should show and click “delegate.”

Staking center where you can search for LOOPS pool

You will be taken to the last step which is to confirm the delegation. Here you can see the name of the pool you are going to be delegating your stake to “Crypto Loops” and amount of Cardano (ADA) that will be staked. Also you will see the fee of approximately 2.17 ADA. This is comprised of a refundable 2 ADA fee and the ~0.17 ADA transaction fee. Also under the spending password you will be able to see the approximate amount of ADA you will receive each epoch (5 days). To confirm the delegation, you will need to type in your spending password and click “delegate.”

Yoroi delegation/stake confirmation screen

Congratulations! You have successfully delegated your ADA with LOOPS pool. At the bottom, there is the dashboard. Click “dashboard” and you will be able to view how far into the current epoch we are, the summary of your wallet, and what pool you are delegating to. Within “your summary”, you can keep track of your rewards/passive income you have received.

Yoroi wallet dashboard

How to stake Cardano (ADA) on Daedalus?

Once you have set up a Daedalus Wallet and it has at minimum 10 ADA, you can begin to delegate your ADA to a stake pool or our stake pool LOOPS. Directly below, there is a video explanation, and below that, there is a written out complete step by step explanation.

Complete guide to delegating Cardano (ADA) on Daedalus

First, you will want to open Daedalus and make sure the wallet you want to delegate (stake) has at least 10 ADA. To do this you will have to make sure your wallet names are visible by clicking the wallet symbol that is in the top left corner of the application if it is not visible already.

This wallet does not have 10 ADA, but make sure yours does as will be explained

Once you have confirmed that you do have 10 ADA or more, click the constellation icon. This can be found below the wallet icon.

 

Constellation logo location in Daedalus

You should now see a countdown to the end of the current epoch (each epoch is 5 days). Below that, you should see your wallet(s). Here you can see what pool you are delegated to and more information.

 

Delegation center where all delegation (staking) information can be seen

If you hover your mouse over the last box with “undelegated” in it, it will show the option to delegate your wallet. Click “delegate.”

“Delegate” button appearance

Once you have clicked “delegate” a window will pop-up. This window will give you additional information on delegating as well as the steps. When you are ready, click “continue.”

Delegate wallet pop-up

Once you have clicked “continue”, you should see that the pop-up is now asking for you to complete step 1. Step 1 is picking which wallet you want to select to delegate. Again, there is a minimum of 10 ADA required for delegation. If you don’t have 10 ADA, you will see that the box around the wallet is red.

Indication that you do not have enough ADA to delegate

Select a wallet that has the 10 ADA minimum or add the ADA required to your wallet. Once your wallet meets the requirements the continue button will be lit up. Then click “continue”.

Continue button is lit up, indicating you can proceed with delegating your wallet

Next, you will be taken to step 2 where you will be asked to choose a stake pool. You can search for a specific pool by typing in the name, or you can scroll down through the pools and find which one you want to delegate to. Of course, we recommend staking with LOOPS pool, but for resources on different pools, you can follow this link.

Choosing the stake pool you want to delegate (stake) to

Once you have chosen the pool you want to delegate with, in our case LOOPS, then you will click “continue.” Next you will see step 3 which is confirmation. You will be able to verify that you have chosen the correct pool and wallet for delegating or staking your ADA. There is a transaction fee required to initiate delegating, this is a one time fee, but if you switch pools, you will have to pay another transaction fee. Once you have verified everything is correct, put in your spending password and click “confirm.”

Delegation confirmation screen

Congratulations! You have successfully delegated your ADA to LOOPS pool or any pool of your choosing!

Congratulation image and verification that you have successfully delegated your ADA
What is Cardano Road Map?

The Cardano road map is the summary of the developmental plan for Cardano. The road map can be broken down into 5 different eras that are centered around a specific functionality or goal.

Byron Era – Foundation

The Byron Era saw the development of many baseline needs for Cardano such as:

  • Delivery of the Daedalus Wallet (Cardano desktop wallet)
  • Delivery of Yoroi Wallet (A light wallet for browser and smartphones)
  • Increasing accessibility to Cardano via 30+ exchange listings
  • builing a community around Cardano

Shelly Era – Decentralization

The Shelly Era saw the development and implementation of its proof-of-stake (PoS) protocol Ouroboros. It was during this period that the decentralization of the PoS system in the form of stake pools (like our LOOPS Stake Pool).

Goguen Era – Smart Contracts

We are currently in the Goguen Era. The Goguen era is where smart contract integration and capabilities on the Cardano network begin, and where developers will be able to develop decentralized applications (dApps) of all sorts including applications supporting decentralized finance (DeFi). Some important developments within this era are:

  • Development of Plutus, a purpose-built smart contract development language and execution platform using the functional programming language Haskell.
  • Development of Marlowe Playground, a useful tool for those without technical knowledge or programming knowledge to be able to build smart contracts or other financial contracts.
  • Development of Marlowe Run, a prototype app that, similar to Marlowe Playground, provided the ability to financial services to leverage blockchain-based financial services or smart contracts without prior knowledge of programming or the blockchain. One of the key products of Marlowe Run is the off-the-shelf smart contracts that will be available. All one will need to do is pick a basic financial contract (ex: loan, bond, etc.) and fill in the blanks.

In short, Goguen will bring smart contracts, token creation, NFTs, and many other functions to the Cardano blockchain.

Basho Era – Scaling

The Basho Era era will be optimizing and focusing on two problem areas of most cryptocurrency networks: scalability and interoperability.

The scalability focus is to improve the performance of the Cardano network and to support further growth and adoption of the blockchain for applications and higher transaction volumes.

The interoperability focus is to increase functionality with other cryptocurrency blockchains, and to allow functionality between Cardano’s main blockchain and future sidechains. These sidechains could be used to off-load work/decrease congestion on the main chain (Cardano’s blockchain).

Voltaire Era – Governance

The Voltaire Era is the last era in the Cardano road map and is the most ambitious. Voltaire will aim to create have a governance system that is used to govern developments and the direction that the community wishes to take Cardano.

Currently, we can already see parts of this era such as:

  • Project Catalyst- a system by which problems or needed developments within the Cardano ecosystem or community are put forward. The community then provides solutions and proposals to meet these needs.
  • Cardano Treasury- a system that is used to fund the solutions put forward in Project Catalyst, and is funded by taking a portion of all transaction fees on the Cardano network.
  • Voting- anyone who owns Cardano (ADA) can vote for which proposals should receive funding from the treasury, and by voting, community members are rewarded with ADA.

For more in-depth information check out: https://roadmap.cardano.org/en/

What is Alonzo or the Alonzo Hardfork?

WIP

What is Ergo?

Ergo (ERG) is the native token of the Ergo Platform, and is used to pay all transaction fees for transfers and smart contract executions. Ergo uses a proof-of-work (PoW) to develop the blockchain.

The team behind Ergo understands that networks should be able to change and adapt with the ever moving environment without the need of a centralized, trusted party. To this end, Ergo has an on-chain miner voting. What this means is that those who are helping to develop Ergo’s blockchain, through mining, can help gradually change different aspects or values of the blockchain itself.

An interesting quality that is similar to Cardano is that custom tokens that are on the Ergo Platform are treated as “first-class citizens.” This means that, unlike Ethereum, movement of custom tokens on Ergo’s blockchain are equal in priority to Ergo’s native token ERG.

Who is Behind Ergo?

Ergo is designed and implemented by a team of experienced developers and researchers, who hold publications and PhDs in cryptography, compiler theory, and blockchain technology. One such developer is Alexander Chepurnoy, who was a core developer at NXT, co-founder of smartcontract.com (now known as Chainlink), and an employee at Input Output HK (IOHK), where he was a research fellow and Team Scorex Manager.

What Happens if Ergo Wallets are Lost?

Many, if not most, cryptocurrencies have a limited supply. Bitcoin will only ever have 21 million Bitcoin, Cardano will only ever have 45 billion ADA, and Ergo will only ever have 97,739,924 ERG.

Along these lines, one may have heard about story of a man in San Francisco losing the password to unlock his Bitcoin wallet with $220 million worth of Bitcoin. These lost Bitcoins are lost forever unless the owner is able to remember the password, but what if this were to occur with one’s Ergo wallet?

With Ergo, they have remedied this problem by slowly recycling lost coins with a feature termed “storage rent.”

Storage rent is a process that slowly deducts fees from UTXOs that have not been moved for 4 years or more, and it provides multiple upsides for Ergo and its ecosystem. The first use is that the block reward, after 8 years, will be zero. This means that there will be no incentive to mine ERG and develop Ergo’s blockchain. Along with transaction fees, miners will be paid with the storage rent fees.

The second use is that lost ERG is recirculated back into the Ergo ecosystem. The original wallet holder would still lose their ERG, but the ERG is not also lost to the entire system.

To avoid storage rent, if you were to be a long term holder of ERG, all the holder would have to do is move their balance to another wallet every 4 years. This is a relatively low requirement.

How to Make an Ergo Wallet with Yoroi?

Down below is a step-by-step guide of how to make an Ergo (ERG) wallet on Yoroi.

If you are wanting to make an Ergo wallet using Yoroi, you will first need to go to Yoroi and select the device or service you are wanting to use, and install it.

You will then need to open up Yoroi and select your language.

You will then need to read and acknowledge the terms of use by clicking the box next to “I agree with the terms of use” and selecting continue.

Next, you will be presented with two options on the level of complexity of the wallet interface. For this tutorial, we will be choosing simple.

Now you will have three options: “Connect to hardware wallet”, “Create wallet”, and “Restore wallet.” Select “Create wallet.”

On the next screen, you will need to select Ergo for the cryptocurrency or platform you are wanting to store/use.

Then select “Create wallet” once again.

Next you will need to name your wallet and create a spending password. Your wallet name does not function like a username, so you can use any name for your wallet. This is only used to differentiate wallets if you decide to make more than one wallet.

The spending password will be needed anytime you are moving ERG out of the wallet.

Once you have entered the required information, click “CREATE PERSONAL WALLET.”

Next you will be informed about the recovery phrase you will be getting on the following screen. Read through the entire pop-up before checking the box off and selecting continue.

You will now see your recovery phrase. Make sure to write it down and keep it safe and secure as this is the only way to restore your wallet. The order does matter, so make sure you start with the top row from left to right.

I will be revealing my recovery phrase as I will be deleting this wallet afterwards. Do not try to recover my wallet as it will be compromised.

Once you have written it down, click “YES, I’VE WRITTEN IT DOWN.”

Now you will be required to input your recovery phrase in the correct order. This is to verify that you know your recovery phrase and/or have written it down correctly.

Once you have input your recovery phrase, you will see a new screen that you will need to read before checking off both boxes and selecting “CONFIRM.”

Congratulations! You now have an Ergo wallet!

What is XRP?

WIP

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