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The crypto markets are in the midst of a serious slump. While bear markets are a natural process within the economic cycles and should not be feared, many look to these times as an opportunity to accumulate cryptocurrencies in what has become known as "buying the dip".

Bitcoin currently undervalued

According to the United States investment company, JPMorgan Chase, who valued Bitcoin at $38,000, the biggest cryptocurrency is currently undervalued. With Bitcoin essentially selling at a "discount", now is a great time to establish whether you should buy the dip. 

It is believed that the crypto markets have taken a knock following the war instigated by Russia on Ukraine, the global rising inflation rates, a looming recession and the potential energy crisis that could plague Europe. Despite the global market turmoil, cryptocurrencies have proven to be incredibly resilient over the years.

There are of course a few things to consider, mainly your appetite for risk and your currency income bracket. As the golden rule goes: never invest more than you're willing to lose. Another important component to consider when deciding whether to buy the crypto dip is where you see the cryptocurrency going in the future. Do you believe in the project's fundamentals, and that its user base will continue to grow?

Despite the cryptocurrency being 70% down from its all-time high price achieved in November 2021, industry insiders remain bullish. Chris Brendler, managing director at D.A. Davidson, believes Bitcoin will be trading at $38,000 by the end of the year, and $50,000 by the end of 2023. Jurrien Timmer, director of global macro at Fidelity Investments, on the other hand, believes that it will be worth up to $100,000 in 2024. 

Is it the right time to invest in cryptocurrencies?

Since its inception over a decade ago, Bitcoin has amassed a devoted following. However, it's impossible to say now whether Bitcoin will become the world's reserve currency or a universally acknowledged store of value, like gold. Some investors are frightened by the rush of riches or downfall, while others are enthusiastic about the potential for large gains. in the crypto market.

In 2022, Bitcoin is considerably less hazardous than it was in 2012 and is widely regarded as being a revolutionary technology. In today's geopolitical climate, Bitcoin has risen to the forefront. El Salvador's decision to legalize Bitcoin as legal money in 2021 is expected to encourage other nations to do the same, however, others may choose against it out of fear of losing their fiat currency. 

Buying Bitcoin, also known as making a Bitcoin investment, like any speculative investment, involves a degree of risk. Bitcoin was the first digital asset to give rise to the contemporary crypto economy. For many years, it had a hidden following of crypto investors who believed it may eventually replace the physical monetary system. As institutions and governments seek to satisfy their customers' growing demand for exposure, Bitcoin has grown.

In order to get the most out of a Bitcoin investment, one must know when to buy. The Bitcoin market is unpredictable and may switch rapidly, with fluctuations ranging from minutes to weeks and even months. As a result, determining the right time to buy one's digital currency is crucial.

There is no such thing as a perfect time to make a crypto investment, however, buying when in a dip or a bear market allows for lower price points. 

While Bitcoin remains the biggest cryptocurrency, there are alternative investment options to consider such as Ethereum, the second biggest cryptocurrency. Ethereum was designed as a blockchain platform on which developers could create their own blockchain-based apps, known as decentralized applications (apps). When buying the dip, investors tend to stick to the top-ranked cryptocurrencies.

Buying crypto during a bear market

In the world of cryptocurrencies, a dip is when you buy something after its value has dropped. Buying a dip indicates that you have an opportunity to invest in a digital currency or token whose price has fallen, whether it be short or long-term. A bull market is typically a good time for you to sell Bitcoin, while a bear market is a good time to buy Bitcoin.

A bear market is any decline in the market price of at least 20% over a set period of time. The December 2017 Bitcoin price crash is one such example, in which the price of Bitcoin fell from $20,000 to $3,200 in just a few days. According to folklore, the term "bear" is said to derive from a bear's fighting style, which involves using its claws in a downward motion. Others speculate that it has to do with bears going into hibernation in the winter. 

Traders prefer to acquire assets during a bear market, particularly when they are at low prices. However, determining when a bear market has come to an end makes it difficult for investors to take the risk of buying a low-value cryptocurrency that may or may not recover.

When investors learn about unfavorable circumstances involving a specific cryptocurrency or asset, the market price commonly drops. As a result of the negative spiral, more people delay investing because they believe that more terrible news is on the way and that they should prepare for the worst.

This causes the market to lose more ground as a result of panic selling and contributes to the downward trend in crypto prices. Bear markets eventually subside when investors gradually regain their confidence and buy Bitcoin, ushering in a new bull cycle.

Bear markets are a great time for Bitcoin investors to take advantage of the price swings. When Bitcoin funds are low, this typically equates to lower fees on Bitcoin transactions as well, which can help to propel Bitcoin adoption.

Is now the right time for a Bitcoin investment?

We must first assess the market's overall attitude to determine whether now is a good time to invest in Bitcoin. 

According to the crypto Fear and Greed Index, it is currently positioned on "extreme fear" indicating that it is trading well below its intrinsic values.

The "Bitcoin Monthly" report issued by Ark Invest reported that 'Hodlers,' are more powerful than ever before, with 66% of Bitcoin's supply remaining unchanged for almost a year. This illustrates the market's long-term dedication.

According to Glassnode data, short-term investments dropped -35% below the breakeven price in the third quarter. These statistics were last seen in January 2022, July 2020, and March 2020. The aggregate long- and short-term holdings are still above the breakeven price, implying that widespread capitulation has not occurred.

Trading Bitcoin in the current crypto market conditions

Finally, it all boils down to whether or not you feel comfortable putting your money into the current market conditions. There is no easy solution to when is the best time to invest in Bitcoin. We are still early in the game, and Bitcoin, as well as the entire sector, has a lot of room for development. This implies that the investment opportunities for investors will likely continue. 

Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions or other material as financial advice. This information is specific to that of the Bitcoin market and should not be translated to the traditional stock markets. The crypto market is an entirely different asset class and crypto holdings should be treated as such.

The information herein does not constitute an offer to sell or the solicitation to purchase/invest in any crypto assets and is not to be taken as a recommendation that any particular investment or trading approach is appropriate for any specific person.

There is a possibility of risk in investing in crypto assets and investors are exposed to fluctuations in the crypto asset market. This communication should be read in conjunction with Tap's Terms and Conditions.
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_{Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions or other material as financial advice. This communication should be read in conjunction with Tap’s Terms and Conditions.}

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You might have come across the term crypto rug pull in the news over the years, but what does it mean? Different to a pump and dump scheme, we explore the rug pull crypto meaning to help you gain a greater understanding of the industry.

What is a Rug Pull Crypto?

A rug pull is a malicious cryptocurrency industry technique where developers abandon a crypto project and flee with investors' funds.

In the decentralized finance (DeFi) ecosystem, particularly on decentralized exchanges (DEXs), bad actors create a token and list it on a DEX, then link it to a major digital currency like Ethereum.

Developers will often also create hype around the token on Telegram, Twitter, and other social media platforms by abruptly pumping loads of money into their liquidity pool in an attempt to reassure investors. Once a large number of unsuspicious investors swap their ETH for the offered token, the creators drain everything from the liquidity pool, bringing the coin's price to zero.

This is typically seen in a new project, and not in established projects such as Bitcoin, Ethereum, etc.

Rugs Pools and DEXs

Rug pulls thrive on decentralized exchange platforms like DEXs since they allow users to list tokens without undergoing an audit, unlike centralized cryptocurrency exchanges. Furthermore, creating ERC-20 tokens on open-source blockchain technologies such as Ethereum is simple and free. These two features create the ideal climate for a rug pull, and are being used against the unsuspecting public.

What To Look Out For

While this is unlikely to happen to established cryptocurrency projects, there are many crypto projects out there, especially new ones, that might signal a red flag.

It's important to note that the prices of tokens in a pool are determined by the current balances of each. To prevent being caught off guard, ensure there is liquidity in a pool. However, this is only the beginning; you must also look for any lock-in requirements on the pooling system. Most reputable firms lock pooled liquidity for a certain length of time.

A coin that has risen in price within hours is another common feature of a rug pull. A rug pull coin, for example, might jump from 0 to 50X in just 24 hours. This scheme is intended to generate FOMO among investors and encourage them to add even more money into the project.

An "unruggable" project is one that doesn't have a significant number of tokens held by the development team. A project may be classed as "unruggable" if it does not include the signature big number of team-held tokens that could be stolen through a rug pull or exit scam.

An unruggable project is one in which the team gives up any ownership of tokens, such as those they would have received during a presale.

Are Crypto Rug Pulls Illegal?

While crypto rug pulls should be illegal, unfortunately, due to the youth of the crypto industry the laws surrounding rug pulls are not the legal system. Unfortunately, many criminals have and continue to get away with rug pulls and related crimes.

Biggest Rug Pulls

One of the biggest rug pulls to take place in the crypto industry is the Squid game crypto rug pull, which took place in late 2021.

The token, which was named after the popular Netflix series Squid Game was created by an unknown group, and grew dramatically in value with each coin rising from next-to-nothing to an astounding $2,861.

At the peak of its performance, the website was taken down and the promoters were unable to be reached. The liquidity suddenly vanished, sending the value of the token plummeting to near zero while the developers took home more than $3.3 million. Over 43,000 investors had the rug pulled out from under their feet as they suddenly become holders of a worthless token.

It was subsequently discovered that the project's creators had included an anti-dumping mechanism preventing individuals from selling their tokens, indicating that it was designed to be a rug pull from the beginning. By using the name of a well-known TV program and gaining a lot of media exposure, the creators were able to boost public awareness and lend the fraudulent coin a sense of legitimacy.

In Conclusion

While not terribly common, rug pulls happen from time to time and it's in investors' best interests to know about them. Consider these tips mentioned above when navigating the crypto space, and be sure to fully vet a project's quality before parting ways with any money. Choosing established cryptocurrency projects is always advisable, particularly over a new project that has garnered a lot of hype. Unfortunately, crypto rug pulls are here to stay, but that doesn't mean that you need to be involved.

Spot trading is a simple way to invest and trade a financial instrument, commodity, or foreign currency or a cryptocurrencies on a specific date. Your first experience with forex or crypto investing will most likely be a spot transaction in the spot market, for example, buying Bitcoin at the market price and holding it in a secure wallet. Below we explore what spot trading is exactly. 

Spot exchanges exist for a variety of assets, including cryptocurrencies, equities, commodities, forex, and bonds. You're probably more familiar with spot markets and spot trading than you think. NASDAQ or the New York Stock Exchange are both examples of spot markets. 

What is spot trading?

Spot traders attempt to make money in the market by purchasing assets and waiting for them to appreciate in value. When the price of a commodity rises, spot traders will sell their assets for a profit. Spot traders can also short markets. This method involves selling financial assets and repurchasing them when the price drops.

The spot price of an asset is the current market value. You can purchase or sell your assets immediately at the best available spot price using a market order on an exchange. However, should there not be enough liquidity in that market at the time your order might not be executed. There also may not be sufficient volume to meet your demand at that price.

For example, if your order is for 5 BTC at the spot price, but only 2 are on offer, you will have to fill the rest of your order with BTC at a different price. Spot prices change in real-time, and are updated and changed in real-time as orders are matched. Over-the-counter spot trading is different than this (more on this below).

Delivery times vary depending on the asset, with cryptocurrencies typically executed instantly while stocks and equities might take a few days. This might be displayed as T+2 which illustrates the trade date plus two business days. With modern-day digitized systems, delivery is almost immediate, particularly with the crypto markets operating 24/7, while OTC and peer-to-peer trading might take a little longer.

Spot trading vs margin trading

In some spot markets, margin trading is available, but it isn't the same as spot trading. Spot trading necessitates that you immediately fully acquire the asset and take delivery of it. 

In contrast, margin trading allows you to borrow money from a third party with interest, allowing you to enter larger bets/trades. As a result, borrowing provides a margin.

However, just like any other investment, trading cryptocurrency carries the risk of massive losses if you don't know what you're doing. Margin trading is advised for seasoned traders only. 

Spot markets vs futures markets

Spot markets allow you to make fast exchanges with a guaranteed delivery time. On the other hand, futures trading is based on contracts that must be paid for in the future. A buyer and seller agree to exchange a specific quantity of items at a specified price in the future. When the settlement date arrives, most buyers and sellers will typically choose to make a cash settlement instead of delivering the asset. 

How OTC exchanges differ from other exchanges

While most people will do spot trading on exchanges, you may also trade directly with others without the assistance of a third party. Over-the-counter trades are the prime example of this. Here we explore how OTC exchanges differ from centralized and decentralized exchanges. 

Centralized Exchanges

Exchanges are divided into two types: centralized and decentralized. A centralized exchange manages the trading of assets like cryptocurrencies, foreign exchange, and commodities. The exchange serves as a go-between for market participants and protects the traded assets as a custodian. 

A centralized cryptocurrency exchange is a marketplace where buyers and sellers of cryptocurrencies trade one for another with one authority overseeing all operations. It is responsible for ensuring that operations like regulation, KYC (Know Your Customer), fair pricing, security, and customer protection are in order and running optimally at all times. 

In return, the exchange takes a cut on transactions, listings, and other trading activities. As long as an exchange has enough users, these exchanges can make money through bull and bear markets. 

To use a centralized exchange, you must first load your account with the fiat or cryptocurrency you want to trade. A reputable centralized exchange must ensure that transactions run smoothly.

Decentralized exchanges

A decentralized exchange (DEX) is another trading platform popular in the cryptocurrency industry. A DEX provides many of the same basic services as a centralized exchange, although instead of matching orders through the use of traditional technology, it does so via blockchain technology. In most cases, DEX users do not need to create an account and can trade peer-to-peer without having to load funds onto the platform. 

DEXs operate using smart contracts which execute trades directly from the traders' wallets, bypassing exchanges entirely. Many individuals appreciate the freedom and privacy that comes with a DEX because it provides greater anonymity than a typical exchange. This, however, has its drawback, such as security concerns. 

Over-the-counter

Lastly, there is over-the-counter trading (OTC), also known as off-exchange trading. OTC exchanges allow brokers, traders, and dealers to trade financial assets, currencies and securities through direct transactions. Spot trading on the OTC market uses a variety of communication channels to arrange trades, including phones and instant messaging.

OTC trades avoid the use of an order book providing certain benefits. If you're trading a low-volume liquid asset like a small-cap coin, a big order on a centralized or decentralized exchange may cause slippage. Because the exchange is unable to completely fill your order at the desired price, you must accept greater prices in order to complete it. With large OTC trades, the trader will get better prices.

Even liquid assets like Bitcoin can suffer from slippage when orders are too big. So, large BTC purchases may also profit from OTC transactions.

Final thoughts

Spot trading is a widely used method of trading, particularly for beginner traders. Although it's relatively straightforward, it’s always best to be well informed and well-educated. 

In the honest words of Benjamin Franklin: “By failing to plan, you are preparing to fail." Don't let your finances go to ruin over Christmas - take the time now to build a budget and arm yourself with a plan to take into the holiday season.

Christmas is a time for giving, but it's also a time when many people overspend and end up using their credit card to buy gifts during Christmas time. To avoid this and stay within your budget, it's important to plan ahead and set a total budget for your holiday spending. This will give you plenty of time to save up for gifts, travel, and other expenses, and it will help you avoid overspending.
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Build a budget in 4 simple steps

Much like a monthly budget, your Christmas budget is going to focus on the month ahead, balancing your income with expenses, with a little extra gift-giving thrown in. This is the toughest step - and best believe the most important one.

One way to save money and stay within your budget is to set aside a portion of each paycheck in a dedicated Christmas savings account. This will make it easier to save up for the holiday season and avoid using your credit card to buy gifts. You can also use gift guides and other resources to find affordable gift ideas, and start shopping early to take advantage of sales and discounts.

1. Determine your income

When creating a Christmas budget, it's important to include all sources of income you expect to receive this month. This includes your regular home pay, as well as any additional income from a side hustle, bonus, tax rebate, or other sources. By including the amount of each income stream in your budget, you'll have a clear picture of how much money you have available to spend on Christmas gifts, travel, and other holiday expenses.

If you're expecting any extra money this month, such as a bonus at work or extra income from a side hustle, be sure to include this in your budget as well. This can help you save more money for Christmas and avoid overspending. Consider buying only one gift for each person on your list, rather than buying multiple gifts. And remember, you should only be spending money that you own on Christmas gifts and expenses, rather than using credit or going into debt.

2. Write down all your expenses

From household expenses to utilities to car expenses to debt payoffs and money allocated to your savings funds. Also, be sure to include entertainment and transport, and don't forget the important things like insurance, child care and medical aid.

3. Create a special Christmas column

Added to your regular expenses, map out a budget for gifts, decor, and any food and drink-related expenses you will encounter. To make the task less daunting, start with which friends and family members you need to buy presents for and a rough estimate of what these might cost.

Also, consider things like stocking stuffers, the Christmas tree, sdecorations, and wrapping paper. Don't put too much pressure on yourself here, go for affordable over perfect and on credit, or better yet shop for a deal in the months before. The point of this budget is to reduce credit card debt, so use the time to come up with some great ideas before you go shopping. 

4. Minus your expenses from your income

With the expenses (including the Christmas expenses) and income column side by side, review your expenditure and ensure that the total amount in your income column can cover this.

• if your expenditure is higher than your income make tweaks to bring it down. Consider buying a smaller gift for someone, or reducing your entertainment budget.
• if your income is higher than your expenditure, great job. Now consider allocating those funds somewhere to avoid frivolous spending. Perhaps put more money in one of your savings accounts, or consider gifting some to a charity. Bear in mind that allocating these funds now before you're tempted to spend them will be preferable.
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Manage your spending as you go

Check in every now and then to ensure that you're still in line with your spending and fund allocation. You don't need to become an accountant tracing every cent, just check in weekly for an overview of your expenditure and whether you need to make any adjustments.

Sticking to your christmas season budget will be the second hardest part - but not impossible! Print it out, put it on your fridge and be diligent about sticking to your budget. Your January wallet (and budget and bank repayments) will thank you.

Finding the perfect gift for your loved ones can be challenging, especially if you're on a tight budget. One way to save money on gifts is to shop sales and use coupons. Many stores offer special discounts and deals during the holiday season, so be sure to keep an eye out for these and take advantage of them. You can also use a sinking fund to save extra cash throughout the year for Christmas gifts, which can help you avoid going into debt when it comes time to do your holiday shopping.

Another way to save money during the gift-buying season is to give DIY gifts. These can be personal and heartfelt, and often cost less than store-bought items. Consider making yourself festive Christmas dinner, baked goods, hot cocoa, crafting a handmade gift, or giving an experience gift, such as tickets to a concert or a voucher for a spa day. These gifts can be thoughtful and unique, and they can help you save money on your holiday spending.
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Getting prepared for next year

While you're doing most of the groundwork, why not duplicate this information now and implement it into next year's christmas budget already (meaning more expendable income for you in December)?

Establish your Christmas expenses

When creating your Christmas expenditure list, take into account any changes or new additions to your family or holiday plans. Start by making a list of all the Christmas presents you plan to buy, as well as any expected extra Christmas spending in your budget.

Don't forget to include Christmas presents for your kids and other family members. Also, consider in your holiday budget expenses such as travel, holiday meal, decorations (everyone loves some shiny christmas lights) , and entertaining. Add up the total cost of all these items to determine your total Christmas budget amount.

If you're using last year's budget as a starting point, be sure to make any necessary adjustments. The whole point of creating a budget is to ensure that you have enough money to cover all your expenses and avoid overspending during the holiday season. This will make your Christmas shopping experience stress-free and enjoyable. 

Work out monthly savings

Divide your Christmas expenses by 12 months and establish what you'll need to put aside each month to meet this goal. Consider creating a separate savings account (better yet one that has interest rewards) so that you have a safe space to put these funds out of reach.

Imagine the feeling of knowing all your festive season expenses are already saved. That might just be sweeter than Aunt Ruth's cranberry jelly.

Get prepared and enjoy this most wonderful time of the year

The festive season doesn’t need to be stressful, with a plan in place and a budget you’re ready to take on by the horns, your Christmas could be a lot cheerier, freeing up more time to enjoy the moments spent with the people you love. 

By following these steps, you can create a budget for Christmas that will help you save money and avoid overspending. And remember, it's not just about buying gifts - the holiday season is about spending time with loved ones and creating memories, not about going into debt. So, make a plan and stick to it, you won't feel guilty and you'll be well on your way to a happy, debt-free Christmas!

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We’ve covered what Proof of Work and Proof of Stake is, but what is PaaS?

In this article, we’re making this rather complicated-sounding term easy to understand as we explore where it came from, what it means, and why it’s likely to keep popping up in the crypto realm. 

What Is PaaS?

PaaS stands for Platform as a Service and refers to a cloud delivery service that uses third-party cloud service providers. “As a service” indicates that the cloud computing service is provided by a third party, rather than the user having to manage their own hardware and software.

PaaS providers offer a range of services, including operating systems, databases, middleware, and other software development tools. PaaS offerings can be used for both cloud-native and hybrid cloud applications.

PaaS solutions are popular among software developers and businesses looking to migrate their applications to the cloud. They provide an application development platform that can be used to build and deploy applications quickly and easily, without the need for specialized hardware or software.

Some of the key benefits of PaaS include reduced costs, faster deployment, and greater flexibility and scalability. PaaS providers offer a range of services, including operating systems, databases, middleware, and other software development tools. This allows users to develop, run, and manage applications without having to worry about the underlying infrastructure.

The History of PaaS

PaaS first appeared in 2005 as Zimki under the company Fontago. Zimki allowed users to build and deploy web services and applications through its code execution platform.

Billing was determined based on the number of JavaScript operations, the amount of web traffic and the total storage used, providing users with a much clearer cost structure than on other platforms. The platform was eventually shut down in 2008 by its parent company.

That same year the Google App Engine was launched allowing users to create web services and applications using languages like Go, PHP, Node.js, Java and Python.

Today, Google remains the biggest PaaS vendor in the world. 

How Does PaaS Work?

Instead of replacing its overall IT infrastructure and running these services in-house, PaaS streamlines access to its key services. This helps to reduce time in deployment as well as minimize startup costs. 

PaaS allows users to tap into resources and functions like capacity on demand, data storage, text editing, vision management and testing services despite being in geographically different locations. All while using a pay-per-use model. 

PaaS Offers Development Tools

PaaS, or Platform as a Service, is a cloud-based platform that provides users with access to the tools and resources needed to develop and run applications. Instead of replacing its overall IT infrastructure and running these services in-house, PaaS streamlines access to its key services, allowing users to easily tap into resources and functions like capacity on demand, data storage, text editing, vision management, and testing services. This pay-per-use model enables users to access the tools and resources they need without incurring the high costs of building and maintaining their own infrastructure.

PaaS technology offers a range of benefits for both developers and businesses, including the ability to easily integrate databases, manage infrastructure, and access data centers. This can provide a range of advantages, such as improved performance, enhanced security, and increased scalability.

PaaS technology providers also offer a range of services and support to their customers, including integration platforms and infrastructure management services. This can help businesses to quickly and easily integrate their applications with other systems and platforms, allowing them to take advantage of the benefits of PaaS without having to worry about the underlying infrastructure.

PaaS vs IaaS vs SaaS

PaaS, IaaS, and SaaS are all different models of cloud computing. PaaS, or Platform as a Service, provides access to the tools and resources needed to develop and run applications, while IaaS, or Infrastructure as a Service, offers access to the underlying infrastructure, including storage, networking, and computing power. SaaS, or Software as a Service, provides access to software applications over the internet.

These models differ in terms of what areas are handled on-site and which are handled by a third-party provider. For example, with PaaS, the infrastructure and operating system are managed by the provider, while the customer focuses on developing and deploying their own applications. With IaaS, the provider manages the infrastructure, while the customer is responsible for the operating system and applications. With SaaS, the provider manages everything, including the infrastructure, operating system, and applications.

Examples of companies that offer PaaS services include Amazon Web Services and the IBM Cloud, while IaaS providers include AWS, Microsoft Azure, and Google Cloud. Dropbox, Salesforce, and Google Apps are examples of SaaS providers.

These models offer advantages to businesses and developers looking to enter the cloud computing space. For example, PaaS offers the ability to focus on app development without worrying about the underlying infrastructure, while IaaS and SaaS provide access to cloud resources and the ability to quickly deploy and scale applications. These models can also be used to build communications platforms and other mobile applications, providing access to the necessary infrastructure and resources.

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PaaS Provider In Blockchain

The use of PaaS technology, or Platform as a Service, within the blockchain industry is becoming increasingly popular. While blockchain platforms themselves are not typically structured in a PaaS way, the concept of BPaaS, or Blockchain Platform as a Service, offers businesses and enterprises the opportunity to focus on the development of software and other services for customers.

BPaaS provides numerous advantages for companies looking to enter the blockchain space. It allows businesses to leverage the power of cloud-based infrastructure and resources to develop and deploy applications without the need to manage their own hardware and software.

PaaS providers like Amazon Managed Blockchain and the IBM Blockchain Platform are leading the way in offering BPaaS solutions to businesses. These platforms offer a range of tools and resources for application development, including integrated development environments (IDEs), code libraries, and APIs. This allows developers to focus on building and deploying their own blockchain-based applications without worrying about the underlying infrastructure.

Overall, the use of PaaS in the blockchain industry offers numerous benefits, including reduced production costs, streamlined deployment, and the ability to easily integrate specific AI capabilities into applications. This makes it an attractive option for businesses looking to enter the blockchain space.

When learning about cryptocurrencies you're likely to come across the term "smart contracts". First popularised by Ethereum, smart contract functionality is now a regular feature among platforms that allow developers to build decentralized apps (dapps).

In this article, we're breaking down what smart contracts are, how smart contracts work, and where they came from.

What is a smart contract?

A smart contract is a digital agreement that executes based on the terms of the agreement. The terms are predetermined and written into the smart contract's code, ensuring that no edits can be made once the smart contract has been executed. As the smart contract is written using blockchain, the transactions are transparent and irreversible.

Due to the nature of these digital agreements, they can be carried out by two anonymous parties without the need for a third party/ central authority.

Smart contracts generally require payment for their creation, as the execution of the smart contract will require energy from the network. Ethereum smart contracts, for example, require gas fees in order to be created and executed, which are paid directly to the platform. The more complex the smart contract, the higher the gas fees. Other smart contracts will require payment in the digital assets utilized by the platform.

Smart contracts work because they are automated and utilize powerful decentralized technology.

Benefits of smart contracts

First and foremost, the biggest benefit of smart contracts is that they are trustworthy as they cannot be tampered with, nor can a third party intervene. So smart contracts cannot be hacked as they use blockchain technology to encrypt the information.

Smart contracts are cost-effective as they eradicate the middleman and save the users both time and fees that would otherwise come with them. Once certain criteria are met, smart contracts automatically execute, requiring no time delays, paperwork, or room for error. A smart contracts accuracy is determined by the accuracy of the coding used to create the smart contract.

many industries including insurance companies are using smart contracts to streamline and automate their business processes, including fulfilling legal obligations and managing financial transactions. By utilizing if-then statements, the insurance company can create smart contracts that automatically execute the insurance payment to policyholders when certain conditions are met. This can be used to process claims, pay out benefits, and manage other contracts in the same way.

How do smart contracts work?

Smart contracts are digital agreements built using blockchain. Developers looking to create a smart contract will need to utilize a blockchain platform that provides such functionality.

Determine agreement terms

Developers will first need to determine what the agreement terms are as well as the desired outcome. For example, one might create a smart contract that stipulates when 0.5 BTC is received by a certain digital assets wallet the code to a keypad on a property will be sent to the renter.

Determine conditions of agreement

Establish the conditions of the smart contract such as payment authorization or shipment receipt.

Write code

Using a smart contract writing platform, developers will write the code. This will then be sent to another team, such as an internal expert, for security testing.

Smart contracts deployed

Once approved, the code is then deployed on the blockchain platform. The smart contract will then be alerted to any event updates.

Smart contracts executed

Once the terms of the agreement are met and communicated to the blockchain through an oracle (a secure streaming data source), the smart contract will then automatically execute the desired outcome.

One might liken a smart contract to a digital vending machine. The terms of the agreement are understood by both parties involved prior to the transaction. Through an automated process, one party will input the initial criteria (the funds) and the predetermined outcome will be executed automatically (the selected goods will be released).

History of smart contracts

Smart contracts were first conceptualized by American computer scientist, Nick Szabo, the creator of the first digital money "Bit Gold", in 1998. He created them with the intention to digitize transaction methods to replace traditional contract and defined these smart contracts as "computerized transaction protocols that execute terms of a contract."

"These new securities are formed by combining securities (such as bonds) and derivatives (options and futures) in a wide variety of ways. Very complex term structures for payments can now be built into standardized contracts and traded with low transaction costs, due to computerized analysis of these complex term structures."

Szabo's concept remained purely theoretical until the invention of public blockchain technology, which provided the necessary infrastructure for storing and executing smart contracts. In recent years, smart contracts have been used in a variety of industries, including finance, real estate, and supply chain management. While there are still some security concerns with the technology, the use of smart contracts could further increase the efficiency and reliability of transactions.

Conclusion

Smart contracts are digital a contracts between two parties that are automatically executed once certain conditions are met without time delay. Built on the blockchain, smart contracts are immutable, irreversible, and transparent, and require no third parties. Smart contracts are written in varying programming languages dependant on the blockchain network on which they are created. This technology ensures that the smart contracts are implemented correctly.