genesis block</strong></strong></a>. It’s offered up to miners to give out their rewards.</p>\n<p>Coinbase transactions have a special requirement. There must be a number of 100 blocks that have confirmed the transaction. Furthermore, the coinbase acts as their one and only input while the reward and transaction fees of the block are the output. This output can be transferred through multiple addresses. </p>\n<p>Coinbase Transaction Features</p>\n<p>Coinbase transactions hold a variety of characteristics that differentiate them from regular transactions on the blockchain.</p>\n<p>First of all, miners don’t just create the blocks of a blockchain, they’re also responsible for creating the coinbase transactions. This raised some concerns in regards to the miners influencing these transactions for their own gain. Therefore, the developers took the necessary actions to eliminate this possibility. They did this by creating a system to guarantee that all of the criteria of a valid block have been met. Once the transaction has been confirmed by 100 blocks, the reward can be accessed. It also acts as a second layer of security in the case of blockchain <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-fork-blockchain/">forks. /nWhen a miner creates a new block, a list of blockchain users’ transactions that have been validated can be found. However, only the first transaction is considered to be the coinbase transaction. The value of this transaction links to the current reward of a block since the base amount is the same as the current active mining reward.</p>\n<p>The <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-halving/">halving event which happens every 210,000 mined blocks, or every 4 years, influences the value of the block reward. This halved value is what the miners receive for successfully mining a block. For instance, Bitcoin’s rewards started at 50 BTC per block, after the first halving, they dropped to 25 BTC, then to 12.5 BTC. Currently, the block reward stands at 6.25 BTC.</p>\n<p>What is a Genesis Block?</p>\n<p>The term Genesis <strong>Block</strong> defines the very first block of a specific cryptocurrency. Although, it’s often used in regards to the first-ever block built for the cryptocurrency that originated them all - Bitcoin. </p>\n<p>It’s no secret to anyone that Bitcoin was the company that introduced cryptocurrencies. Their first block was built in 2009. It’s known as the genesis block or block zero. </p>\n<p>The very first coinbase transaction happened within the genesis block. Since it did not reach the transaction database, the transaction has a unique feature. This feature makes sure that the transaction will never be spent. </p>\n<p><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/who-is-satoshi-nakamoto/">Satoshi Nakamoto</strong></a> took pride in the fact that Bitcoin, the first cryptocurrency, had completely eliminated the necessity for banks or other financial institutions. Therefore, he left a special message within the code of the BTC genesis block - “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”.</p>\n<p>This is a headline taken from the daily British national newspaper “The Times”. The article was published on the 3rd of January, 2009 which is the exact same date that Bitcoin was launched. This article discussed how the British government is taking action to financially help banks. </p>\n<p>The founder of Bitcoin never explicitly stated what exactly this message is supposed to symbolize. However, many crypto enthusiasts believe that it’s <strong>a testament to the removal of a middleman such as a bank within transactions</strong>.</p>\n<p>Moreover, the physical copy of this specific newspaper is now considered to be a collector’s item.</p>","level":"hard","meta_title":"What is Coinbase Transaction? Definition & Meaning | Crypto Wiki","meta_description":"Coinbase Transaction meaning: Coinbase Transaction - is the initial transaction in a single block within the blockchain.","meta_keywords":null,"language":"en","created_at":"2022-04-06T08:01:20.000000Z","updated_at":"2022-05-13T14:32:24.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-coinbase-transaction"},"prevSection":{"id":230,"original_id":null,"author_id":40,"translator_id":null,"title":"What is Custody?","slug":"what-is-custody","section":"C","keyword":"Custody","status":"published","definition":"is the process through which financial institutions hold and safeguard the financial assets of their clients in order to prevent asset fraud or loss.","content":"<p><strong>Custody is the procedure through which financial organizations keep and preserve their clients' financial assets in order to prevent asset fraud or loss.</strong> It might be seen as a protection service offered by a financial institution.</p>\n<p>The primary goal is to safeguard the cryptocurrency assets that use <strong>private keys.</strong> The private keys allow users to perform transactions and access their crypto assets. Besides, the keys are complicated to remember and have the potential to be stolen or hacked.</p>\n<p>Custody had changed from being a personal relationship to engaging with a managed institution. This evolved into a new level of financial complexity, further dividing daily life and <strong>decentralized banking. </strong>Besides, the institution that offers custody is designated as a custodian, and it gathers earnings, interest, and gains from asset sales in exchange for a fee and redistributes money according to the client's orders.</p>\n<p>Custodians are fairly essential in the financial environment, they provide advanced trading tools to advanced users.</p>\n<p>Crypto custody providers are those who hold crypto assets such as <strong>Bitcoin, Ethereum, Terra, and Cardano</strong>. They serve customers who want to maintain and protect their virtual assets in a user-friendly, protected, and regulated custodial system.</p>\n<p>Custodians can maintain assets in two forms - <strong>digital and physical</strong>. Custodial enterprises are often large banks or other reputable institutions in charge of safeguarding the assets of a large number of clients. In most situations, this refers to billions of dollars.</p>\n<p>There are different types of crypto custody alternatives though, such as self-custody, meaning having control over your crypto assets with software, hardware, or paper wallets. Exchange wallets are another option, as well as a third-party custodian.</p>\n<p>From a blockchain perspective, the services are usually offered by <strong>a third-party crypto exchange provider</strong>. The exchange keeps the secret keys of its cryptocurrency users as well as the crypto assets.</p>\n<p>The custody of cryptocurrencies is completely maintained by crypto exchanges, which deploy security technologies to protect their users' digital assets against fraud or unexpected losses. In the event of a breach or robbery, the custodian is entirely liable for repaying their customers.</p>\n<p>Important to note though that users should be cautious when utilizing cryptocurrency custodians as a way to keep virtual currencies. There is no guarantee that a major <strong>hack</strong> won’t happen to take their holdings away for good.</p>\n<p>Skilled crypto investors advise users to put virtual currencies in <strong>cold storage</strong> if they are not regularly using them or do not intend to use them in the nearish term. This is necessary to protect the funds against fraud and other harmful activities.</p>\n<p>Overall, blockchain and cryptocurrency are actively revolutionizing the financial world, and custody is essential for the growing ecosystem.</p>","level":"medium","meta_title":"What is Custody? Definition & Meaning | Crypto Wiki","meta_description":"Custody meaning: Custody - is the process through which financial institutions hold and safeguard the financial assets of their clients in order to prevent asset fraud or loss.","meta_keywords":null,"language":"en","created_at":"2022-03-01T13:27:38.000000Z","updated_at":"2022-05-13T14:32:23.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-custody"},"currentChapter":"C","currentSection":"what-is-casper-ethereum","chapterTitle":"C","readingLevel":"medium"},"url":"/crypto/learn/crypto-terms/what-is-casper-ethereum","version":"cdd198d50cbe5c9c21c9329d7c096ffc"}" class="container-fluid d-flex crypto-book p-0"> Crypto Terms: Letter C
What is Casper (Ethereum)?
Casper (Ethereum) MEANING:
Casper (Ethereum) -
Casper – a protocol aimed at converting the Ethereum network into a Proof of Stake (PoS) blockchain.
Let's find out Casper (Ethereum) meaning, definition in crypto,
what is Casper (Ethereum),
and all other detailed facts.
At the moment, the existing Proof of Work (PoW) consensus mechanism of Ethereum is being replaced with a better version – the Proof of Stake (PoS) mechanism.
Ethereum Casper is a protocol that combines PoS and PoW consensus mechanisms. The PoW part, which uses the Ethash algorithm, is the same as what we have now. However, Casper the Friendly Finality Gadget (FFG) is a new consensus technique that is used in the PoS part.
Casper FFG's ultimate goal is to replace PoW mining with PoS mining. This means that those who mine Ethereum using hardware at the moment will be able to help validate and secure the network without having to invest in additional expensive hardware.
The Difference Between PoW and PoS
PoW relies on computational processing power while PoS relies on token-holder deposits to achieve consensus.
Besides, PoW is based on the premise that miners have to compete to solve a complicated cryptographic puzzle. The first person to solve the riddle receives a reward as well as the ability to create a new block on the blockchain.
On the other hand, PoS requires miners to lock up some of their money as stakes, instead of competing against one another. A block validator is chosen randomly based on his/her personal stake weight (the number of coins staked).
The Benefits of the Casper Protocol for Ethereum
- Energy Efficiency. One of the main benefits of switching to PoS is that it will save electricity. In the long run, this will result in a regulated and sustainable increase in the amount of Ether in circulation.
- Reduced Environmental Impact. PoS systems demand less effort to validate transactions, which means miners don't need as much high-powered hardware or money for electricity. This results in reduced costs and a smaller environmental footprint, which is especially crucial given that Bitcoin mining consumes more energy than many countries.
- Increased Scalability. Every transaction in a PoW network must be validated by every node before it can be completed. PoS employs a different validation approach, allowing Casper to execute more transactions per second, resulting in quicker and less expensive transactions.
The Implementation Phases of the Casper Protocol
- Phase 0: Beacon Chain. The PoS concept is introduced to the Ethereum blockchain in this phase. Beacon Chain is a new blockchain that is meant to run in parallel to the current Ethereum blockchain version. Beacon Chain is intended to be used to coordinate validators without having accounts or executing smart contracts.
- Phase 1: Sharding. This phase is meant to provide massive scalability by separating the Ethereum network into numerous shards, each capable of processing transactions in parallel. The Ethereum network can currently process roughly 15 transactions per second (TPS). Sharding would allow it to process thousands, if not millions, of TPS.
The Casper protocol's ultimate goal is to upgrade Ethereum to version 2.0, which is also known as Serenity. Ethereum 2.0 aspires to be quicker, more efficient, and more scalable than its predecessor.
