Bitcoin is evolving at breakneck speed. The world's oldest blockchain is undergoing a renaissance. NFTs, token standards, and staking are now part of its ecosystem. Dozens of new scaling solutions and "Layer 2s" have emerged. While price volatility grabs headlines, and millions of struggling investors are on the edge of their seats waiting for the next bull run to come true, developers say the real action is happening behind the scenes. Who said that Bitcoin is supposed to stay the way Satoshi Nakamoto invented it forever? Layer 2 decisions in the world of Bitcoin are paving the way to new uncharted territories. The implications are simply unbelievable. These technologies can alter the very idea of Bitcoin. And all that can happen sooner than anyone expected. The most exciting developments? They're just around the corner. Here's the leading five. BitcoinOS: Pushing Boundaries BitcoinOS made waves in July. They were the first to verify a zero-knowledge proof on Bitcoin. But last week, they dropped a real bombshell. Their manifesto claims they've unlocked "the ultimate upgrade to Bitcoin" without changing Bitcoin Core. How's that even possible? "BitcoinOS aims to be the last platform you'll ever need in the blockchain space," their website boasts. Their goal? Make Bitcoin the foundation for all decentralized innovation. The team's BitSNARK technology is the secret sauce. It tackles Bitcoin's trilemma of scale, security, and expressivity. BitcoinOS isn't a typical Layer 2 or rollup. It's an infrastructure layer. Multiple rollups with diverse functions can be built on it. They instantly inherit Bitcoin's security and decentralization. BitcoinOS unifies liquidity and users across its ecosystem. The result? A seamless, single-chain experience. It's Bitcoin, unleashed. "Our goal is to unite the fragmented blockchain world and drive the next wave of adoption and development," the team declares. Brollups: A Native Approach Mid-June saw a new contender emerge. Bitcoin developer Burak Kecli proposed "Brollups". Unlike BitcoinOS, Brollups shun zero-knowledge tech. Kecli claims his design is truly "trustless". "Brollup allows for unilateral exits," Kecli told Decrypt. "You can settle your coins without permission, unlike BitVM-based rollups where you have to ask." Brollups use pre-signed transactions. Users swap Bitcoin UTXOs for virtual transaction outputs (VTXOs). These VTXOs enable smart contracts on Bitcoin. Yes, the smart contracts that are driving the innovation in the world of Ethereum. The system can handle "over 90% of DeFi use-cases", according to docs. Selling NFTs for Bitcoin? Check. Placing token orders on a DEX? No problem. Brollups build on the Ark protocol. Ark aimed to fix UX issues in Bitcoin's lightning network, but it had limitations. So now Brollups address these head-on. Kecli isn't pulling punches. "It does not mean anything to verify [zero-knowledge proofs] on Bitcoin unless users are able to exit," he argued in July. "It is not a layer 2 if [a] unilateral exit path is not available." Fractal Bitcoin: Familiar Territory Fractal takes a different tack. This Bitcoin sidechain focuses solely on scaling transactions. Its unique selling point? Familiarity. The code mimics Bitcoin's base layer closely. For native Bitcoin devs, it's like coming home. And that might be the killer feature that can help Fractal thrive to success. "Fractal enables plug-and-play continuity," states their website. It's a recursive scaling of Bitcoin Core code. No foreign constructs means native support for existing infrastructure, including wallets. Fractal's transactions and hashes are traceable. They lead back to the Bitcoin blockchain itself. Fractals can stack, each layer boosting Bitcoin's scale by 20X. All transactions eventually resolve on Bitcoin L1. Security is robust. Fractal uses a mix of Bitcoin L1 merged mining and native Fractal mining. It supports Ordinals and BRC-20 tokens, just like Bitcoin. UniSat, a BRC-20 marketplace, is a core contributor here. Fractal's got a trick up its sleeve. It reintroduced OP_CAT, enabling smart contracts. "This is our initial step in providing enhanced Bitcoin scripting programmability on Fractal," said UniSat founder Lorenzo last month. So, Fractal is something new done in an old-fashioned Bitcoin way. Satoshi would have liked it, wouldn't he? Babylon: Staking Comes to Bitcoin Babylon is bringing staking to Bitcoin. It's a big deal. Staking is the most popular DeFi application on altcoin chains. Millions of users are staking their assets, some to make profits, others to influence the blockchain development. Now, it's Bitcoin's turn. Babylon Labs has launched phase one of its staking mainnet. BTC holders can lock up coins on the base layer, prepping for staking. Soon, these coins will secure multiple proof-of-stake networks simultaneously. Stakers will earn yield from each network. While staking on Bitcoin might sound a bit weird, that's a pretty neat move. "There is no wrapping or bridging involved," Babylon says. Staking BTC requires no trust in intermediaries, IOUs, or specific layer-2 chains. "Through its modular design and slashing functionality, Babylon Bitcoin Staking Protocol will enable [proof of stake] systems to introduce bitcoin as a staking asset and enjoy higher crypto-economic security than what native tokens can provide." Babylon co-founder David Tse sees big potential. Just hear this out. Altcoins could use Bitcoin for economic security without inflating their native assets. You could have best of both worlds simultaneously. But, wait, there is more. Bitcoin Layer 2 solutions are the real prize. "Bitcoin staking becomes a mechanism where the L2s can get security from Bitcoin," Tse explained. "They want to get liquidity from Bitcoin, [and] they want to get security from the most secure chain in the world." With Bitcoin staking on the horizon, projects are already moving. Stacks-based Zest Protocol is enabling liquid staking on Bitcoin. Savers can earn yield while retaining the freedom to trade BTC. Nubit: The Backbone of Bitcoin L2s Nubit is aiming to be the unsung hero of Bitcoin's evolution. It's a background service, acting as the spine securing multiple Bitcoin L2s. This blockchain will be a "data-availability" (DA) layer. It's secured through Bitcoin staking and powered by the Babylon Protocol. Regular security checkpoints are posted to Bitcoin L1. Nubit is optimized for storing massive amounts of data from Web2 and Web3. It inherits security almost on par with Bitcoin itself. Sounds way too complicated? Wait until you hear this. "Nubit DA leverages Bitcoin to deliver trustless, scalable data availability across all chains in the ecosystem," wrote Nubit co-founder Yu Feng earlier this month. Data availability is crucial. It ensures all blockchain transactions are faithfully stored and proposed. It guarantees the chain's state can be recovered at any time. For the plethora of Bitcoin rollup projects, using Bitcoin L1 for DA is cost-prohibitive. Researchers have confirmed this. See? That's why most are eyeing optimized DA layers that inherit Bitcoin's security. Feng's vision is ambitious. "We offer an ecosystem solution that not only simplifies the transition from Web2 to Web3 but also empowers an open, collaborative environment where everyone can participate and be rewarded through the Nubit network," he wrote.

This week, meme coins have shown some mild optimism, with mostly positive price movements. Here’s a quick breakdown of the top 10 meme coins and their recent news. Dogecoin (DOGE) Dogecoin, the original meme coin inspired by the Shiba Inu "Doge" meme, has become a cultural phenomenon and gained a massive following. It's a joke that turned out to be a business worth billions. Its lighthearted approach and celebrity endorsements have made it a favorite among crypto enthusiasts and newcomers alike. Dogecoin saw an increase of around 10% this week, climbing to $0.1057. While not a massive surge compared to some other coins, it remains a key player in the meme coin space, bolstered by its persistent social media presence and renewed interest from long-term holders. Shiba Inu (SHIB) Shiba Inu, often dubbed the "Dogecoin killer," has evolved from a mere meme coin into a diverse ecosystem with its own decentralized exchange and NFT marketplace. Its passionate community, known as the "SHIB Army," has been a driving force behind its growth and development. These two canine-themed tokens define the overall meme coin market to a great extent. How abut this week? Well, Shiba Inu had a decent uptick, gaining 7%, with its price now sitting at $0.00001385. Shiba's community-driven initiatives, including its upcoming "Shibarium" upgrade, continue to fuel investor enthusiasm, helping the coin stay resilient despite the market volatility. Jokes aside, SHIB is a significant and influential player shaping the crypto market in many ways. Pepe (PEPE) Pepe, based on the iconic green frog meme, quickly rose to prominence in the crypto world, capturing the essence of internet culture. Its rapid growth and widespread adoption have made it a standout in the meme coin category. Many users love Pepe because it has a different feel, they call it a breeze of fresh air in the meme coin market mostly populated by similarly forged tokens. Anyway, Pepe has been one of the best performers this week, boasting a 12% rise, reaching $0.057758. It is also one of the most traded meme tokens of the week. Much of this rally was attributed to increased retail interest and speculative trading. Which is, in a sense, a sign of how much faith traders actually have in Pepe. Dogwifhat (WIF) Dogwifhat, featuring a Shiba Inu wearing a hat, combines the popularity of dog-themed coins with a quirky twist. Its unique branding and Solana-based technology have helped it carve out a niche in the crowded meme coin market. In general, Dogwifhat outshined many other meme coins this week, but failed to show significant growth (+5%). The Solana-based meme token has been a favorite among traders. Floki (FLOKI) Yet, again a canine-themed token. Named after Elon Musk's Shiba Inu puppy, Floki aims to combine meme coin appeal with utility through various projects and partnerships. Its marketing efforts and community engagement have helped it gain significant traction in the crypto space. Floki Inu stayed relatively calm this week (+2%), even despite its aggressive marketing and increasing visibility in the meme coin sector. Floki's recent jump to $0.0001261 is largely attributed to its recent partnerships and ecosystem developments, which have given it a fresh wave of interest. Bonk (BONK) Bonk, a Solana-based meme coin, emerged as a community-driven project aiming to bring renewed enthusiasm to the Solana ecosystem. Its rapid adoption and integration into various Solana projects have contributed to its growing popularity. Bonk posted a solid 6% gain this week, trading at $0.00001726. Despite being relatively new, BONK continues to gain traction in the meme coin world, fueled by community-driven hype. Many believe Bonk has a potential of Brett (Based) Based Brett (BRETT) is a meme coin that plays on internet culture and crypto slang, with "based" often used to describe admirable or agreeable content. Its unique branding aims to appeal to a niche audience within the crypto community. It's one of the few coins that took a risk of being absolutely unique. BRETT remained somewhat quiet this week in terms of news, but the price action was pleasing, to say the least. BRETT gained 16%. It's still gaining a steady following in the meme coin ecosystem, thanks to its niche appeal and growing social media buzz. Analysts are watching closely to see how its community evolves. Popcat (SOL) Popcat, inspired by a viral internet meme featuring a cat with an open mouth, brings a fun and lighthearted element to the Solana ecosystem. Its playful nature resonates with meme enthusiasts and crypto traders alike. And playful it was this week, no doubt. Popcat suddenly skyrocketed (+44%) becoming the unofficial leader of the meme coin pack. With its fun and casual branding, it continues to attract attention, though no significant news came out about its developments in the past few days. Dogs (DOGS) And some more dogs here. Dogs token aims to capitalize on the broader appeal of canine-themed cryptocurrencies, offering a more generalized approach compared to specific breed-based coins. Its success relies heavily on community engagement and meme culture. Dogs stayed relatively calm this week, gaining 6%, which according to some analysts reflects a cooling off in speculative interest. While still a popular meme token, it faced competition from the likes of Dogwifhat and Pepe, which drew attention away from this project. Yet, not everyone shares this sentiment. And the future of the Dogs is still unclear. Book of Meme Now, last but not least, let's take a look at The Book of Meme token. It seeks to encapsulate the entire meme culture within a single cryptocurrency. It aims to create a decentralized platform for meme creation and sharing, blending humor with blockchain technology. Nice approach, beyond any doubt. Not always does it work in the perfect way, though. The Book of Meme token remained under the radar this week, gaining modest 7%, which isn't bad, but trailing behind Popcat, for example is staggering. Its community has been building slowly, but without any major announcements or partnerships, it didn't see much movement in terms of price or volume.

The Web3 landscape continues to evolve rapidly, offering a variety of investment opportunities for those willing to make money in the decentralized future. But the investment landscape in Web3 is so different from what you might be used to in the world of traditional layer 1 crypto that it can be really confusing. This transformation is underpinned by blockchain technology, decentralized protocols, and a new ethos of user empowerment and data ownership. It is fairly easy to get lost here, especially if you are a novice investor. The year 2024 has witnessed significant maturation in the Web3 space, with increased institutional adoption, regulatory clarity, and technological advancements. Basic things you need to know: the total value locked (TVL) in decentralized finance (DeFi) protocols has surged past previous records, while non-fungible tokens (NFTs) have found practical applications beyond digital art. But that's just a beginning. The intersection of artificial intelligence and blockchain technology has opened up new frontiers, promising to revolutionize industries from finance to healthcare. And even if you are a small investor it gives you opportunities to make immense profits here. You can do it in many ways, starting from straightforward direct cryptocurrency investments and moving to a rather geeky and tech-savvy methods. Which one to choose is up to you, but here we are with a detailed layout of the most promising options you have. Buy Web3 Cryptocurrencies Let's start with easiest and the most obvious way to begin making money on web3 in 2024, shall we? You can directly invest in Web3 cryptocurrencies. Simply put, you can buy and hold these tokens until the proper moment comes to sell them. It remains one of the easiest ways to gain exposure to the decentralized internet revolution. These digital assets serve as the native currencies of various blockchain networks and decentralized applications (dApps), playing crucial roles in governance, utility, and value transfer within their respective ecosystems. For instance, Solana (SOL) has gained traction for its high throughput and low transaction costs, making it attractive for decentralized finance (DeFi) and NFT applications. Similarly, Polkadot (DOT) has carved out a niche with its interoperability focus, allowing different blockchains to communicate and share data seamlessly. Another category to consider is a bit more tech-savvy and requires more specific knowledge of the nature of the blockchain. We are talking about governance tokens of major DeFi protocols. These tokens, such as Uniswap's UNI or Aave's AAVE, not only provide voting rights in the protocol's decision-making process but also often accrue value based on the protocol's performance. For example, holders of UNI can vote on proposals that affect Uniswap's development and may receive a portion of the protocol's fees in the future. Investing in Web3 cryptocurrencies requires a deep understanding of tokenomics – the economic models underpinning these digital assets. Factors to consider include token supply (fixed vs inflationary), distribution mechanisms, utility within the ecosystem, and vesting schedules for team and investor allocations. For instance, a deflationary token model, where tokens are regularly burned or removed from circulation, can potentially lead to price appreciation if demand remains constant or increases. Yes, all this seems much more difficult than simply buying Bitcoin in an anticipation of its next bull run. But the margins here can be absolutely different, and to your profit of course. Invest in Quality DePIN Projects Decentralized Physical Infrastructure Networks, or DePIN, represent a fascinating convergence of blockchain technology and real-world infrastructure. And while you may at first think this is a bit of a science fiction, the technology is absolutely real. And it is here already. Believe it or not, but these projects aim to create decentralized alternatives to traditional centralized services in areas such as telecommunications, energy, and data storage. In 2024, DePIN has emerged as one of the most promising sectors within the Web3 ecosystem. Widespread adoption is on the horizon already, and you don't have to wait for it. Simply put, it will be way too late to invest when an average tiktoker will be there. One of the pioneering projects in this space is Helium (HNT), which has built a decentralized wireless network for Internet of Things (IoT) devices. Participants can set up hotspots using low-cost hardware, earning HNT tokens for providing coverage. The network's success lies in its ability to incentivize the creation of a global, community-driven wireless infrastructure. As of 2024, Helium has expanded beyond IoT to include 5G coverage, significantly increasing its potential market. Another notable DePIN project is Filecoin (FIL), which aims to create a decentralized storage network. Users can rent out their spare hard drive space, earning FIL tokens in return. This model not only provides a more resilient and censorship-resistant alternative to centralized cloud storage but also allows for a more efficient use of global storage resources. The project has gained traction with enterprises and developers looking for decentralized storage solutions. In the energy sector, projects like Power Ledger (POWR) are revolutionizing how we think about electricity distribution. By creating a peer-to-peer energy trading platform, Power Ledger allows prosumers (those who both produce and consume energy) to sell their excess solar power directly to neighbors. This not only promotes the adoption of renewable energy but also creates a more efficient and resilient energy grid. When evaluating DePIN projects for investment, it's crucial to consider the real-world adoption and utility of the network. Look for projects that solve genuine problems and have a clear path to scaling. The tokenomics of DePIN projects often involve complex incentive structures designed to encourage network growth and maintenance. For example, many projects use a dual-token model: a utility token for network operations and a governance token for protocol decision-making. Understanding these models is crucial for assessing the long-term value proposition of the investment. Invest in AI Crypto Projects There is no way you are not familiar with ChatGPT or Midjourney, unless you live in a distant undiscovered island in the Pacific Ocean. But Artificial Intelligence hysteria goes far beyond asking chatbot to make your homework for you. The convergence of AI and blockchain technology has given rise to a new category of crypto projects that leverage the strengths of both fields. These AI crypto projects aim to create decentralized AI systems that are more transparent, accountable, and accessible than their centralized counterparts. As of 2024, this sector has seen explosive growth, driven by advancements in both AI and blockchain technologies. One of the leading projects in this space is Ocean Protocol (OCEAN), which aims to create a decentralized data exchange to train AI models. By allowing data owners to monetize their data while maintaining control over its usage, Ocean Protocol addresses one of the key challenges in AI development – access to high-quality, diverse datasets. The OCEAN token is used for governance and as a means of exchange within the ecosystem. Another notable project is SingularityNET (AGIX), which aims to create a decentralized marketplace for AI services. By allowing AI developers to sell their services directly to users, SingularityNET promotes innovation and competition in the AI space. The project has gained attention for its collaboration with Sophia, the humanoid robot developed by Hanson Robotics. Fetch.ai (FET) is another promising project that combines AI, blockchain, and Internet of Things (IoT) technologies. Fetch.ai's network allows devices to autonomously trade resources and services, creating a decentralized digital economy. When evaluating AI crypto projects, it's crucial to assess the team's expertise in both AI and blockchain technologies. Look for projects with strong academic backgrounds and industry experience in AI, as well as a track record in blockchain development. For example, SingularityNET's founder, Ben Goertzel, is a well-known figure in the AI community, which lends credibility to the project. The scalability and interoperability of these projects are also key considerations. AI models often require significant computational resources, so the underlying blockchain needs to be capable of handling high throughput. Projects that leverage Layer 2 solutions or have clear scaling roadmaps are often better positioned for long-term success. Privacy and ethical considerations play a crucial role in AI crypto projects. Look for projects that prioritize data privacy and have clear guidelines for ethical AI development. For instance, Ocean Protocol's use of compute-to-data technology allows AI models to be trained on sensitive data without exposing the raw data itself, addressing crucial privacy concerns. The tokenomics of AI crypto projects often involve complex mechanisms to incentivize both AI development and network participation. For example, some projects use token staking to secure the network and govern AI model deployments. Understanding these mechanisms is crucial for assessing the long-term value proposition of the investment. Lastly, consider the potential real-world applications and adoption of the project. AI crypto projects that solve tangible problems or improve existing processes in industries like healthcare, finance, or logistics are more likely to gain traction. For instance, Fetch.ai's applications in supply chain optimization have attracted attention from major logistics companies. Invest in NFTs and Real-World Asset Tokens It might seem that NFTs are dead in 2024, but that it not true. Non-fungible tokens and real-world asset tokens represent a significant evolution in the concept of digital ownership and asset tokenization. By 2024, these technologies have moved beyond their initial hype cycle, finding practical applications across various industries and offering new investment opportunities in the Web3 ecosystem. NFTs, which represent unique digital assets on a blockchain, have expanded far beyond digital art. In the gaming industry, NFTs are being used to represent in-game assets, allowing players to truly own and trade their virtual items across different games and platforms. Projects like Axie Infinity have pioneered the "play-to-earn" model, where players can earn cryptocurrency by participating in the game ecosystem. The music industry has also embraced NFTs, with artists using them to offer unique experiences and revenue streams. For example, some musicians are selling limited edition album releases as NFTs, which include exclusive content and even royalty rights. This model allows artists to connect directly with their fans and potentially earn more from their work than traditional streaming models allow. In the realm of real estate, NFTs are being used to fractionalize property ownership, making high-value real estate investments more accessible to a broader range of investors. Platforms like RealT allow users to purchase tokens representing a share in a physical property, earning rental income proportional to their ownership stake. Real-world asset tokens, or security tokens, represent a bridge between traditional finance and the crypto world. These tokens can represent ownership in assets such as stocks, bonds, commodities, or real estate. By tokenizing these assets, they become more liquid and can be traded 24/7 on global markets. For example, companies like Polymath are creating platforms for businesses to issue security tokens compliant with regulatory requirements. When investing in NFTs, it's crucial to understand the underlying value proposition. For collectibles or art NFTs, factors like the artist's reputation, the scarcity of the piece, and the NFT's provenance play significant roles in determining value. For NFTs representing virtual land or in-game assets, consider the popularity and growth potential of the associated metaverse or game. For real-world asset tokens, due diligence should include assessing the legal framework surrounding the tokenization process. Ensure that the tokens comply with relevant securities laws and that there's a clear mechanism for redeeming the token for the underlying asset if necessary. Also, consider the liquidity of the token markets, as this can significantly impact your ability to exit the investment. The technology underpinning NFTs and asset tokens is also an important consideration. Most NFTs currently exist on the Ethereum blockchain, but other chains like Solana and Flow are gaining traction due to their lower transaction costs and higher throughput. The choice of blockchain can impact factors like transaction speed, gas fees, and interoperability with other platforms. Diversify into VR, AR, and Metaverse Ecosystems Now this is the most sophisticated and tech-savvy way to invest in web3. Virtual Reality (VR), Augmented Reality (AR), and the concept of the metaverse have emerged as key components of the Web3 ecosystem. They offer immersive digital experiences and new paradigms for social interaction, commerce, and entertainment. By 2024, these technologies have matured significantly. No, Mark Zuckerberg failed us again, with no promises of his having come alive. What was the point then to rename Facebook into Meta? Anyway, Metaverse, yet non-existing at the moment, presents diverse investment opportunities for those looking to capitalize on the future of digital interaction. Just look at these most promising opportunities. Decentraland (MANA) is one of the pioneering blockchain-based metaverse projects. Users can buy, develop, and monetize virtual land represented by LAND tokens. The platform has hosted virtual concerts, art galleries, and even casinos, demonstrating the diverse potential of metaverse economies. How can you participate? The easiest way would be to purchase MANA tokens, which are used for transactions within Decentraland, or by directly investing in virtual real estate. Another significant player is The Sandbox (SAND), which combines elements of decentralized finance (DeFi) with a voxel-based gaming metaverse. Users can create, share, and monetize their gaming experiences. The platform has attracted partnerships with major brands and celebrities, indicating growing mainstream interest in metaverse projects. Once again, you can buy SAND and hold it or use it to invest directly into the gaming. In the AR space, projects like Augmented Reality Metaverse (ARM) are working to create decentralized AR experiences overlaid on the real world. These projects often involve tokenized real-world locations, similar to how Pokémon GO created virtual points of interest. When evaluating metaverse and VR/AR projects for investment, consider the project's user base and growth metrics. Active user numbers, time spent in the platform, and transaction volumes can provide insights into the health of the metaverse economy. The technology stack is another crucial factor. Look for projects that prioritize interoperability, allowing assets and identities to move seamlessly between different metaverse platforms. Projects building on open standards or those actively working on cross-chain solutions may have a competitive advantage in the long run. Content creation tools and ease of development are also important considerations, if you you want to invest here. Metaverses that provide robust, user-friendly tools for creating content and experiences are more likely to attract a vibrant community of developers and creators, which is crucial for the long-term success of any metaverse project. The economic model of the metaverse is a key differentiator. Some projects, like Decentraland, have a fixed supply of virtual land, creating scarcity that can drive value. Others may have more dynamic economic models. Understanding these tokenomics is crucial for assessing the investment potential. Hardware adoption is a significant factor, particularly for VR-focused projects. As VR headsets become more affordable and user-friendly, projects that are well-positioned to capitalize on this growing user base may see accelerated growth. Keep an eye on partnerships between metaverse projects and hardware manufacturers.

Many novice users sincerely believe that “coin” and “token” can used interchangeably in crypto. And that is a mistake, as they are not the same. More advanced users often think that coins function as a form of money, while tokens can be used for a variety of purposes. That is correct, but there is more to it. The gurus will say that a coin is native to its Layer 1 blockchain, whereas tokens are created on top of existing chains. That is true. But even these two definitions aren't enough to paint the whole picture. Understanding the distinction between coins and tokens is crucial for investors, developers, and enthusiasts alike. These two terms are often used interchangeably, but they represent fundamentally different concepts within the blockchain ecosystem. Let's take a look into the technical and functional differences between cryptocurrency coins and tokens, providing a comprehensive overview of their roles in the digital asset landscape. Cryptocurrency Coins: Native Assets of Blockchain Networks Let's start with the basics. Cryptocurrency coins, often referred to as "native coins" or simply "cryptocurrencies," are the primary assets of their respective blockchain networks. The easiest way to show how they work is to speak of Bitcoin (BTC). Yes, the first (and still the most influential) cryptocurrency is the most well-known example of a coin. It operates on its own purpose-built blockchain and serves as the network's native currency. Once again, Bitcoin exists inside the blockchain network that was created solely for the purpose of Bitcoin to function. It's that simple. Key characteristics of cryptocurrency coins include: Independent Blockchain: Coins have their own dedicated blockchain. Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Cardano (ADA) are other prominent examples of coins with native blockchains. Medium of Exchange: Coins are primarily designed to function as digital money. They can be used to transfer value within their network and, increasingly, in the broader digital economy. Store of Value: Many coins, particularly Bitcoin, are viewed as digital assets that can potentially preserve or increase in value over time. Mining or Staking Rewards: In most cases, new coins are created through mining (in PoW systems) or staking (in PoS systems) as rewards for network participants who help maintain the blockchain's integrity. Governance: Some coin-based systems, like Decred (DCR), incorporate governance mechanisms that allow coin holders to vote on protocol changes and network upgrades. Now, while coins have similar characteristics and purposes, there are some differences in the way they operate. In other words, the technical implementation of coins varies depending on the blockchain. Bitcoin, for example, uses the Unspent Transaction Output (UTXO) model, where each transaction consumes previous transaction outputs and creates new ones. Ethereum, on the other hand, uses an account-based model, which tracks the balance of each address directly. Tokens: Built on Existing Blockchains Tokens, in contrast to coins, are created and operate on pre-existing blockchain platforms. Feel the difference? Whole blockchains have been created to allow standalone coins to exist. Meanwhile, there are huge blockchain networks that allow for multiple tokens to co-exist there. The most common platform for token creation is Ethereum. Think of USDT, the most popular stablecoin now. Or Dogecoin - the most influential meme coin. Since the introduction of the concept of smart contracts - one of the most revolutionary innovations there ever was - thousands of tokens have been created on the Ethereum blockchain. Thanks to these self-executing agreements developers can easily create custom tokens with specific functionalities and use cases. Key characteristics of tokens include: Dependent on Host Blockchain: Tokens rely on another blockchain's infrastructure. For instance, many popular tokens like USDT, LINK, and UNI are built on Ethereum as ERC-20 tokens. Diverse Use Cases: Tokens can represent a wide range of assets or utilities beyond simple value transfer. This includes security tokens, utility tokens, governance tokens, and non-fungible tokens (NFTs). Smart Contract-Based: Most tokens are created and managed through smart contracts, which define their supply, distribution, and functionality. Easier to Create: Launching a token is generally simpler and less resource-intensive than creating a new blockchain for a coin. Interoperability: Tokens built on the same standard (e.g., ERC-20) can easily interact with each other and with decentralized applications (dApps) on their host blockchain. The technical implementation of tokens varies depending on the standard used. For instance, on Ethereum, the ERC-20 standard defines a set of functions that allow tokens to be transferred and managed consistently across different applications. But there are other different token standards, like ERC-721 for NFTs and ERC-1155 for multi-token contracts. And this field is constantly evolving and developing. Thus, new tokens with unique attributes and characteristics. Technical Deep Dive: Coins vs Tokens In short, we've figured the main difference between coins and tokens. Yet, some technical aspects remain to be unveiled. Consensus Mechanisms As we mentioned above, coins typically require their own consensus mechanism to validate transactions and maintain network security. Bitcoin's PoW system, for example, involves miners solving complex mathematical problems to add new blocks to the chain. Ethereum's PoS system requires validators to stake ETH to participate in block creation and validation. Tokens live in a different realm. They inherit the consensus mechanism of their host blockchain. Simply put, a token, regardless of the kind of blockchain it is based on, doesn't require its own consensus mechanism. It simply uses the one the main blockchain is using. An ERC-20 token on Ethereum (like, USDT) doesn't need its own consensus protocol; it relies on Ethereum's existing network of validators to process transactions. So when you send or receive USDT from your wallet the transaction is operated by the underlying Ethereum blockchain. And Ethereum consensus mechanism is used. Transaction Processing Now, there is another big difference between coins and tokens. For coins, transaction processing occurs directly on their native blockchain. When you send Bitcoin, the transaction is broadcast to the network, verified by nodes, and then added to a block by miners. Using BTC you never leave the world of Bitcoin. It might seem to end-user that token transaction work the same way, but that's nothing but illusion. Token transactions involve an additional layer of complexity. When you transfer an ERC-20 token (let's keep using USDT as an example), you're actually interacting with the token's smart contract (Tether's, in this case) on the Ethereum blockchain. The contract updates its internal state to reflect the new token balances, and this state change is then recorded on the Ethereum blockchain. Scalability and Network Congestion There is an area where tokens can have a clear advantage over coins. Let's talk about scalability. Coins face scalability challenges directly, as every transaction must be processed by the entire network. For instance, Bitcoin's limited block size and 10-minute block time have led to congestion and high fees during peak usage periods. Tokens - as you remember, they are built upon the existing blockchains - can potentially offer better scalability, as multiple token transactions can be bundled into a single transaction on the host blockchain. Of course, this is an advantage, but it might have a reverse effect. Ethereum has faced significant congestion issues due to the high volume of token transactions, particularly during the DeFi boom and NFT crazes. Many USDT users are gradually leaning towards TRON blockchain because it has much less congestions than Ethereum. Smart Contract Functionality While some coin-based blockchains like Ethereum and Cardano support smart contracts natively, many early cryptocurrencies like Bitcoin have limited programmability. Bitcoin's Script language, for instance, is intentionally restricted to prevent potential security vulnerabilities. Tokens, by their nature, are deeply integrated with smart contract functionality. This allows for complex behaviors and interactions, such as automatic distribution of dividends to token holders or conditional transfers based on predefined criteria. Use Cases: Coins vs Tokens in Action Now it's time to describe the differences in use cases. The distinct characteristics of coins and tokens lead to different applications in the cryptocurrency ecosystem. Cryptocurrency Coins Think of money, but in digital form. That's what coins are typically used for. Digital Gold: Bitcoin, often called "digital gold," is primarily used as a store of value and hedge against inflation. Its fixed supply of 21 million coins and decentralized nature make it attractive as a long-term investment. Global Payments: Litecoin and Bitcoin Cash focus on fast, low-cost transactions, positioning themselves as alternatives to traditional payment systems. Smart Contract Platforms: Ethereum's native coin, Ether, fuels the entire Ethereum ecosystem, paying for computation and storage on the world's largest smart contract platform. Privacy-Focused Transactions: Coins like Monero (XMR) and Zcash (ZEC) use advanced cryptographic techniques to offer enhanced privacy for financial transactions. Tokens Here we see a different story. Tokens are not money (though, of course, they can represent digital assets, like stablecoins and meme coins). But they are mostly tools. Decentralized Finance (DeFi): Tokens are the lifeblood of the DeFi ecosystem. Examples include: Dai (DAI): A decentralized stablecoin maintained through smart contracts. Aave (AAVE): Governance token for the Aave lending protocol. Uniswap (UNI): Represents ownership in the Uniswap decentralized exchange. Utility Tokens: These provide access to specific products or services within a blockchain ecosystem. Filecoin (FIL), for instance, is used to pay for decentralized storage services. Security Tokens: Representing ownership in real-world assets, security tokens like tZERO aim to tokenize traditional securities. Non-Fungible Tokens (NFTs): Unique tokens representing ownership of digital or physical assets, popular in art, collectibles, and gaming. Governance Tokens: Allow holders to participate in decentralized decision-making. Compound's COMP token, for example, gives users voting rights on protocol changes. The Blurring Lines: Coins, Tokens, and Interoperability Finally, there is one more point to be made. And it can mess up things for you after all you've read everything above. But that's the world of crypto, you know, ever evolving and fickle. As the cryptocurrency space evolves, the distinction between coins and tokens is becoming less clear-cut. Wrapped Tokens: Bitcoin can be represented on the Ethereum blockchain as Wrapped Bitcoin (WBTC), an ERC-20 token. This allows Bitcoin to interact with Ethereum's DeFi ecosystem. Pretty slick innovation that attracts many users. Cross-Chain Bridges: Projects like Polkadot and Cosmos are creating interoperable networks where assets can move seamlessly between different blockchains. That kind of innovation has a potential to become the true blood of the crypto world, some experts think. Layer 2 Solutions: Scaling solutions like Bitcoin's Lightning Network or Ethereum's Optimistic Rollups create new paradigms for transaction processing that don't neatly fit the traditional coin/token dichotomy. And there is Layer 3 on the horizon already. Tokenization of Protocols: Some projects that started as tokens are launching their own blockchains. Binance Coin (BNB), for example, began as an ERC-20 token but now operates on its own Binance Chain. It's just an example of how tokens can evolve to become coins.

You've probably heard of smart contracts, but smart accounts is a less known innovation, that many crypto users are not familiar with. Yet, smart accounts have emerged as a game-changing solution with amazing implications. They're revolutionizing how we interact with digital assets and decentralized applications. But what exactly are smart accounts? And how can you leverage them to your advantage? What is a Smart Account? Let's start with basics. A smart account, also known as a smart contract wallet, is a blockchain-based account that can execute predefined actions automatically when certain conditions are met. Kind of reminds of smart contracts, right? Exactly! But it is a different animal all together. Unlike traditional cryptocurrency wallets, which are essentially just repositories for storing private keys, smart accounts are programmable. Think of a wallet that is tied to a smart contract - that's the easiest way to describe what it is. Smart accounts can hold, send, and receive digital assets under the specific circumstances. And they also interact with decentralized applications (dApps) and other smart contracts. Why can you possibly need smart accounts, what are their real world implications? Let's find out. Enhanced Security Features Smart accounts offer a significant upgrade in security compared to traditional cryptocurrency wallets. How's so? Well, they include a number of security features, that are simply on a different level. Let's start with multi-signature functionality, that allows users to set up multiple approvers for transactions. This feature adds an extra layer of protection against unauthorized access. One of the most notable security enhancements is the ability to implement time locks. Users can set a delay between initiating a transaction and its execution. During this period, the transaction can be cancelled if suspicious activity is detected. This feature is particularly useful for large transfers or in cases where a wallet may have been compromised. Smart accounts also support more sophisticated access control mechanisms. For instance, they can be programmed to require different levels of authorization for different types of transactions. A user might set up their account to allow small transfers with a single signature, while larger amounts require multiple approvals. Another key security feature is the ability to set spending limits. Users can define daily, weekly, or monthly transaction caps. What for? Well, it easily reduces the potential damage if an attacker gains access to the account. Some smart account implementations even allow for the creation of separate "vaults" within the account, each with its own set of rules and restrictions. This minimizes the scale of a damage the attacker can possibly inflict. Lastly, smart accounts often include built-in recovery mechanisms. If a user loses access to their account, they can initiate a recovery process that may involve trusted contacts, a waiting period, or other customizable conditions. This significantly reduces the risk of permanent loss of funds due to lost private keys. Gasless Transactions Gas fees have become an issue for some of the most popular blockchain networks. Well, here smart accounts shine again. One of the most user-friendly features of smart accounts is their ability to facilitate gasless transactions. In traditional blockchain networks, users must pay gas fees in the native cryptocurrency (like ETH for Ethereum) to process transactions. This can be a barrier for new users or those dealing with small amounts. Smart accounts can be set up to pay gas fees on behalf of the user, often in the token being transferred. This is achieved through a mechanism called meta-transactions. How it works? When a user initiates a transaction, they sign a message containing the transaction details. This signed message is then sent to a relay service, which pays the gas fee and submits the transaction to the network. It's that easy. But there is more. The concept of Account Abstraction (EIP-4337) has further enhanced this capability. It allows for the creation of "bundlers" that can batch multiple transactions together, potentially reducing overall gas costs. This opens up possibilities for more efficient and cost-effective blockchain interactions, something that may fasten mass crypto adoption. Some versions of smart accounts even allow for sponsored transactions, where dApp developers or other third parties can cover gas costs for specific actions. This can greatly improve user onboarding and engagement with decentralized applications. It's worth noting that while these transactions appear "gasless" to the end-user, the gas is still being paid somewhere in the system. The costs are often absorbed by the wallet provider or dApp as part of their business model, or recouped through other means like transaction fees or token swaps. Programmable Transaction Logic The true power of smart accounts lies in their programmability. Users can set up complex transaction logic that goes far beyond simple transfers. This opens up a world of possibilities for automating financial activities and interacting with decentralized applications. One common use case is setting up recurring payments. A user could program their smart account to automatically send a specific amount of tokens to a designated address on a regular schedule. This could be used for subscription services, regular savings deposits, or even payroll for decentralized autonomous organizations (DAOs). And that may also significantly help you save money on staff, as less financial managers are required to fulfill complicated tasks in the organization. Smart accounts can also be programmed to execute trades based on predefined conditions. And that is a kicker for crypto trading. For example, a user could set up their account to automatically swap tokens when certain price thresholds are met. This allows for more sophisticated trading strategies without constant manual intervention. Another powerful feature is the ability to interact with multiple DeFi protocols in a single transaction. That's a small revolution, to say the least. A smart account could be programmed to take out a loan from one protocol, use the borrowed funds to provide liquidity on another protocol, and then stake the resulting LP tokens - all in one atomic transaction. This level of composability allows for complex DeFi strategies that would be difficult or impossible to execute manually. Smart accounts can also implement more advanced financial instruments. For instance, they could be programmed to automatically hedge positions by interacting with options or futures contracts on decentralized exchanges. Or they could implement dollar-cost averaging strategies by making regular purchases of specific tokens. The programmability extends to implementing custom governance models as well. A smart account could be set up with complex voting mechanisms for multi-sig wallets, allowing for sophisticated decision-making processes in DAOs or other decentralized entities. Integration with DeFi Protocols Smart accounts are designed to seamlessly interact with the vast ecosystem of decentralized finance (DeFi) protocols. This integration allows users to access a wide range of financial services directly from their wallet interface, without needing to navigate multiple platforms or manage separate accounts. That is a kicker, especially for novice users. But traders who are active on multiple trading platforms also find this amazing. One of the key advantages is the ability to interact with lending and borrowing protocols. Users can supply assets as collateral, take out loans, or earn interest on their deposits directly through their smart account. Popular protocols like Aave, Compound, and MakerDAO can be accessed with just a few clicks. Decentralized exchanges (DEXs) are another critical component of the DeFi ecosystem that smart accounts can interact with. Users can execute token swaps, provide liquidity to trading pairs, and manage their positions in automated market makers (AMMs) like Uniswap or SushiSwap directly from their wallet. The easy access might sometimes mean more profits, as it saves significant amounts of time. Yield farming and liquidity mining strategies can also be implemented through smart accounts. Users can automatically stake tokens, claim rewards, and reinvest earnings across multiple protocols. And again, this level of automation can significantly enhance the efficiency of yield-seeking strategies. But enough of simplicity. Smart accounts can also integrate with more complex DeFi instruments like options, futures, and synthetic assets. Platforms like Synthetix, Opyn, or dYdX can be accessed directly, allowing users to engage in sophisticated trading and risk management strategies. A cool toy for sophisticated traders. Another important aspect is the integration with cross-chain bridges and layer 2 scaling solutions. Smart accounts can facilitate seamless transfers between different blockchain networks or layer 2 protocols, enhancing interoperability and scalability. Social Recovery and Account Abstraction And one more killer feature of smart accounts that you will definitely like. To begin with, just remember how much are you actually afraid of losing seed phrase to you non-custodial wallet. Now it's time to talk about social recovery. It is a groundbreaking feature of smart accounts that addresses one of the biggest pain points in cryptocurrency: the risk of permanently losing access to funds due to lost private keys. This system allows users to designate a set of trusted contacts or devices that can help recover account access. The social recovery process typically involves a time-locked mechanism. If a user loses access to their account, they can initiate a recovery request. The designated guardians then have a set period to approve or reject the request. This provides a balance between security and recoverability. Some versions of smart accounts allow for more complex recovery schemes. For example, a user might set up a system where any 3 out of 5 designated guardians can approve a recovery request. This adds an extra layer of security against potential collusion. But if you want even more secure solutions, there is something you will definitely like. Account Abstraction (AA) takes the concept of security even further. It's a proposed upgrade to Ethereum (EIP-4337) that would allow for more flexible account types. With AA, the distinction between externally owned accounts (EOAs) and contract accounts blurs, enabling a wide range of new possibilities. One key feature of AA is the ability to change the account's authentication mechanism. Users could switch from a standard private key to more advanced methods like multi-factor authentication, biometrics, or even quantum-resistant cryptography. AA also allows for more sophisticated fee payment mechanisms. Accounts could be set up to pay transaction fees in tokens other than the network's native currency, or even have fees sponsored by third parties. This could significantly lower the barrier to entry for new users. Another important aspect of AA is improved interoperability. Smart accounts could be designed to work across multiple blockchain networks, potentially simplifying cross-chain interactions and asset management. Batch Transactions and Atomic Operations Smart accounts excel at handling complex, multi-step transactions that would be cumbersome or impossible with traditional wallets. This capability is particularly useful in the world of DeFi, where users often need to interact with multiple protocols in a single operation. Batch transactions allow users to bundle multiple operations into a single transaction. This not only saves on gas fees but also ensures that all operations are executed atomically. What it means is that either all operations succeed, or all fail. This atomicity is crucial for maintaining consistency in complex financial operations. Why you might need it? For example, you might want to withdraw funds from a lending protocol, swap them for another token on a DEX, and then deposit the result into a yield farming contract. With a traditional wallet, you would have to carry three separate transactions, each incurring its own gas fee and requiring user confirmation. A smart account can execute all these steps in one atomic transaction. This batching capability is particularly powerful when combined with flash loans. Flash loans allow users to borrow large amounts of cryptocurrency without collateral, as long as the loan is repaid within the same transaction block. Smart accounts can leverage flash loans to execute complex arbitrage or liquidation strategies that would be impossible for individual users to perform manually. Another use case for atomic operations is in decentralized governance. A user could cast votes on multiple proposals across different DAOs in a single transaction, ensuring their voting power is consistently applied across all relevant decisions. A digital democracy of its kind, if you will. Batch transactions also open up possibilities for more efficient token management. Users could rebalance their portfolio, claim rewards from multiple protocols, and reinvest them all in one go. This level of automation can significantly reduce the time and cognitive load required to manage a diverse crypto portfolio. A dream for an advanced crypto trader. Advanced Authentication Methods Now back to security again. Smart accounts are pushing the boundaries of blockchain authentication. The idea is to move beyond the traditional private key model - which is, let's be sincere, clumsy and not welcoming to novice users - to offer more secure and user-friendly options. One of the most promising developments is the implementation of multi-factor authentication (MFA) for blockchain transactions. This could involve combining something the user knows (like a password), something they have (like a hardware device), and something they are (biometric data). For example, a smart account might require both a private key signature and a fingerprint scan to authorize high-value transactions. Hardware Security Modules (HSMs) are another advanced authentication method being integrated with smart accounts. These dedicated crypto processors securely manage digital keys for strong authentication. They provide a higher level of security than software-based key storage, as the private keys never leave the secure hardware environment. Some smart account implementations are exploring the use of zero-knowledge proofs for authentication. This cryptographic method allows a user to prove they have the right to access an account without revealing any specific information about their credentials. This could potentially enhance privacy and security in blockchain transactions. Time-based one-time passwords (TOTP), similar to those used in Google Authenticator, are also being implemented in some smart account systems. This adds an extra layer of security by requiring a time-sensitive code in addition to other authentication factors. Social logins are being explored as a more user-friendly authentication method. This would allow users to log in to their smart account using credentials from established platforms like Google or Facebook. While this may sacrifice some degree of decentralization, it could significantly lower the barrier to entry for new users. Once you become a more advanced user you can ditch those methods in favor of the more sophisticated ones. Customizable Access Control and Permissions Smart accounts offer a level of granularity in access control that far surpasses traditional cryptocurrency wallets. This feature allows users to set up sophisticated permission structures, enhancing both security and functionality. One of the key aspects of this customizable access control is the ability to set different permission levels for different actions. While that might sound a bit too geeky, please have a good look at this function. For instance, a user might set up their account so that small transactions require only a single signature, while larger transfers need multi-sig approval. This tiered approach allows for a balance between convenience for everyday use and enhanced security for high-value transactions. But there is more to it. Smart accounts can also implement role-based access control (RBAC). This is particularly useful for corporate or institutional users. Different members of an organization can be assigned different roles, each with its own set of permissions. For example, a CFO might have full access to all financial operations, while a junior accountant might only be able to view balances and initiate small transfers. And your freedom in managing access right is literally unlimited. Take time-based permissions - another powerful feature. Users can set up temporary access for specific addresses or for certain actions. This could be useful for delegating control during vacations, or for setting up time-limited access for contractors or service providers. Some smart account implementations allow for the creation of sub-accounts or vaults within the main account. Each of these can have its own set of rules and permissions. This feature is particularly useful for separating funds for different purposes or implementing more complex financial strategies. Another interesting application of customizable permissions is in implementing spending limits. Users can set daily, weekly, or monthly transaction caps for different types of operations or for specific addresses. This can serve as an additional safeguard against theft or unauthorized use. And back to traders. They can make use of more complex conditional permissions. For example, a smart account could be set up to allow certain actions only if the price of a specific token is within a certain range, or only during specific times of day. Interoperability and Cross-Chain Functionality As the blockchain ecosystem continues to expand, with multiple chains and layer 2 solutions gaining prominence, interoperability has become a crucial feature for smart accounts. The ability to seamlessly interact with different blockchain networks and protocols significantly enhances the utility and flexibility of these accounts. Especially if you are able to do these operations using the single interface. Smart accounts can integrate with various blockchain bridges, allowing users to transfer assets between different networks without needing to use separate wallets or exchanges. For example, a user might hold Ethereum-based tokens, Binance Smart Chain tokens, and assets on Polygon, all managed through the same smart account interface. This not only simplifies asset management but also opens up opportunities for cross-chain arbitrage and yield farming strategies. Some smart account versions are exploring the use of interoperable standards like the Inter-Blockchain Communication (IBC) protocol. This allows for more seamless communication between different blockchain networks, enabling complex cross-chain operations to be executed atomically. Another important aspect of interoperability is the ability to interact with different layer 2 scaling solutions. As networks like Ethereum face scaling challenges, many users and applications are moving to layer 2 networks for faster and cheaper transactions. Smart accounts are there to help. They can facilitate easy movement between the main chain and various layer 2 solutions, helping users to optimize for speed, cost, or security as needed. Cross-chain decentralized exchanges (DEXs) are also being integrated into smart account functionalities. You can swap tokens across different blockchain networks directly from their smart account interface, without needing to use centralized exchanges as intermediaries. And there is another concept, worth mentioning. Some advanced smart account implementations are exploring the idea of "chain-agnostic" accounts. This is a truly revolutionary idea of having one consistent address across multiple blockchain networks, simplifying the user experience and enhancing interoperability. It's too early to talk about this concept going live, but this could be a real game-changer. 10. Regulatory Compliance and Privacy Features Majority of users are concerned with privacy, but that doesn't imply they are willing to use illegal services. For many DeFi services and platforms regulatory compliance is a bit of a hurdle. And again. Enter smart accounts. They are at the forefront of implementing features that can help users navigate the complex landscape of financial regulations while still maintaining the benefits of decentralized finance. One key aspect of regulatory compliance is Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures. Some smart account implementations allow for the integration of on-chain identity verification. Users can attach verified credentials to their account, which can then be used to access services that require KYC without repeatedly going through the verification process. Travel rule compliance is another area where smart accounts can provide solutions. The Financial Action Task Force (FATF) requires that virtual asset service providers (VASPs) exchange certain information about the sender and recipient for transactions over a certain threshold. Smart accounts can be programmed to automatically include this required information in qualifying transactions, ensuring compliance without compromising user privacy for smaller transfers. Tax reporting is a significant challenge for many cryptocurrency users. Smart accounts can integrate with tax calculation services to automatically track transactions, calculate gains and losses, and even generate tax reports. This can significantly simplify the process of staying compliant with tax regulations across different jurisdictions. Nobody likes calculating their taxes, no doubt. What if you could delegate that to your smart account? Some smart account implementations are exploring the use of stealth addresses. These are one-time addresses generated for each transaction, making it much more difficult to track a user's transaction history. This enhances privacy while still allowing for the possibility of regulatory compliance when necessary. Another privacy feature being implemented in some smart accounts is the ability to integrate with privacy-focused cryptocurrencies or protocols. For example, a smart account might allow users to easily swap tokens for privacy coins like Monero or Zcash, or to use privacy-enhancing protocols like Tornado Cash, all while maintaining the ability to demonstrate regulatory compliance when required. Selective disclosure is another powerful feature being explored. This allows users to reveal only the minimum necessary information for each interaction. For instance, when making a purchase, a user might only need to prove they're over 18, rather than revealing their exact age or other personal details.