FAQ - Crypto Basics

  • 1. What is cryptocurrency?

    Cryptocurrencies are a digital currency. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.

  • 2. What is blockchain?

    Blockchain is essentially a global database of transactions and interactions which is resistant to modification of its data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.

  • 3. Why Use Blockchain?

    Tipbot Ltd decided it was best to use blockchain to record transactions of its Troy Gold tokens and gold products as it provides a secure and transparent ledger which cannot be modified or manipulated in any way, not even by Tipbot Ltd.

    As Troy’s Gold products carry substantial value, it is important from a security perspective that its records are perfectly accurate and visible to everyone. Blockchain provides this facility without concern.

  • 4. What are Smart Contracts?

    Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network.

    Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism. They render transactions traceable, transparent, and irreversible.

  • 5. What is a cryptocurrency exchange?

    Cryptocurrency exchanges allow customers to trade cryptocurrencies for other assets, such as conventional FIAT (Dollars, pounds etc) money, or to trade between different digital currencies.

  • 6. What is FIAT?

    FIAT is a currency without intrinsic value that has been established as money, usually by government regulation. The US Dollar, British Pound and any other typical global currency is considered FIAT.

  • 7. What is a cryptocurrency wallet and how does it work?

    A cryptocurrency wallet stores the public and private "keys" or "addresses" which can be used to receive or spend cryptocurrencies.

    With the private key, it is possible to write in the public ledger (blockchain), effectively spending the associated cryptocurrency. With the public key, it is possible for others to send currency to the wallet.

  • 8. What are GAS fees and who pays them??

    Gas refers to the cost of processing a transaction on the blockchain. Gas on the Ethereum blockchain is measured in GWEI. When you conduct a transfer, you must pay the GAS fee, current fees and costs can be visible at www.ethgasstation.info

  • 9. What is an ITO?

    An ITO stands for “Initial Token Offering”. The Tokens are a virtual form of investment, which have been created using blockchain technology. Troy is "issuing" tokens as a means of raising capital by using an existing blockchain platform (in this case Ethereum) to create and record the distribution of tokens as a form of investment in our start-up. We further plan to supplement this with the Troy Vault the world’s most secure cryptocurrency wallet.

  • 10. So how does all this work?

    The investment terms of the tokens are pre-programmed into the blockchain to form a “smart contract” that can be automatically performed by software. For instance, smart contracts can autonomously transfer tokens to investors once the smart contract has recognised that all the conditions for investment have been met (such as transferring the purchase price for the tokens, usually in a cryptocurrency, to the issuer). A blockchain platform can securely verify and record transfers of tokens, and should be a transparent means for investors to monitor their investments (Bitcoin’s open blockchain ledger is publically visible online, although other blockchain platforms can be private). Since the administration of the token issue is automated by software, it is very efficient, and typically only the token issuer and investors need to participate. This has the potential to disintermediate (cut out) many of the parties that are typically involved in traditional forms of issuing investments.

    source: Authored by senior associate Stephen Ozanne, this article first appeared in EnVoyage Magazine.

  • 11. Is Troy the same as Bitcoin or Ethereum?

    No, Troy does not have its own blockchain. TROY Gold tokens exist on the Ethereum blockchain.

  • 12. Is an ITO legal?

    ITO’s are legal in most jurisdictions. However, very few are regulated. This is why Troy has incorporated in Malta and is regulated under the newly founded Virtual Financial Assets Act 2018.

    Reports suggest that the ITO market grew over 800 percent in the past two years and a further 540 percent during the past six months.

    source: Stephen Ozanne, Senior Associate, Walkers Guernsey LLP