Fireblocks 101

Question 1

Fireblocks

Answer 1

Mission: Enable every business to easily and securely support digital assets and cryptocurrencies.

Fireblocks allows you and your team to securely scale your business by enabling you to store, transfer and issue digital assets across your entire ecosystem

Question 2

The Fireblocks Network

Answer 2

Interconnected group of 1300+ Fireblocks customers (and 25+ integrated exchanges) that can discover and connect with each other, as well as securely transfer between each other with greater speed and less risk of errors. One analogy we’ve used is we’re SWIFT in crypto.

Question 3

Multi Layer Security

Answer 3

We deploy multiple defensive mechanisms to protect data and information. A methodology of this sort, in which one layer of security being compromised doesn’t break the entire system and is able to address a variety of attack vectors at once and decrease the likelihood of successful breach.

Question 4

DeFi

Answer 4

Fireblocks DeFi allows customers to securely, quickly and compliantly access and utilize any DeFi protocol and strategies decentralized exchange trading/ lending/borrowing, staking, tokenization, and yield farming- backed by Fireblocks’ key protection and automated policies and governance.

Question 5

AML/Compliance

Answer 5

With Fireblocks API, you can automate deposit and withdrawal screening, freeze funds, and generate audit logs for regulators. Reports include info on whether the transaction was accepted or rejected.

Question 6

Tokenization

Answer 6

Tokenization is the process of using distributed ledger technology to issue tokens which represent rights or ownership on a physical or digital asset.

Fireblocks offers an out -of box- tokenization solution that helps customers with issuance, distribution, management and access to secondary markets. We can help institutions tokenize any asset class- ex debt, equity, and real estate and manage token life cycles end to end.

Question 7

Fb’s Policy and Workflow Engine

Answer 7

Don’t rely on manual, in-person, and hard to enforce user permissions. Define policies directly on the Fireblocks’ policy engine to protect funds against internal collusion, simplify operations and enjoy automated governance 24/7.

Question 8

Payments Engine

Answer 8

Make money move faster for businesses and consumers. We provide infrastructure and give banking entities the ability to integrate and build new infrastructure, an easier financial system that is more convenient and safer.

Question 9

Web3 Engine

Answer 9

Peer to peer networks of computers that interact with one another without middlemen. Fireblocks is the only enterprise grade platform for developers building the next generation of NFTs, GameFi and DeFi products.

Question 10

Blockchain

Answer 10

Blockchain is a decentralized digital ledger that securely stores records across a network of computers in a way that is transparent, immutable, and resistant to tampering.

A shared ledger that multiple parties are using, allows them to collaborate without having to trust each other.

It makes intermediaries obsolete when verifying data, since all the information is stored and verified in the blockchain.

Question 11

Wallets

Answer 11

Custodial: With custodial crypto wallets your assets are held in custody for you by a third party that manages your private keys on your behalf. This means that users don’t have full control over their funds or the ability to sign transactions.

Non -Custodial: A non-custodial wallet is a wallet where only the user holds the private keys. This gives users full control of their funds without any intermediaries.

Question 12

Cryptocurrencies

Answer 12

A digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
This is what a majority of people think of when it comes to digital assets, the two most popular ones are Bitcoin and Ethereum.

Question 13

Stablecoins

Answer 13

These are tokens that are pegged directly to a fiat currency (ex the US dollar)

Question 14

NFTs

Answer 14

These are tokens that cannot be exchanged for a like token any bitcoin can be exchanged for any other bitcoin but NFTs cannot be exchanged for one another as a 1 to 1). These are tokens that represent digital ownership of an asset. Including real world assets such as a Picasso painting or real estate, Graphics tweets etc.

ex 2. *non fungible, not exchangeable on a 1 to 1 basis- $1 in wallet can be exchanged for another $, if 1 bitcoin, can be exchanged for another bitcoin

Question 15

Securities Tokens

Answer 15

Tokenized versions of financial market instruments (stocks/bonds) and live on the blockchain.

Question 16

Protocols

Answer 16

Protocols are the underlying code that allows all Internet applications to run. Facebook, Google, Netflix, nearly every website runs on an internet protocol. A protocol is the foundation layer of code that is responsible for how something is functioning. Think of a protocol as a set of rules that allows communication and exchange of information.

Cryptocurrencies have protocols as well. Each cryptocurrency has its own distinct protocol that provides security of information and communication of the data.

Question 17

Transactions

Answer 17

The path from “send” to “receive” has 3 parts:

Signing: You sign the transaction with your private key to prove it’s you.

Broadcasting: Your transaction is sent out to the network for everyone to see.

Confirming: The network verifies and records the transaction on the blockchain, making it official

Question 18

Hashing

Answer 18

In blockchain, hashes are used to represent the current state of a blockchain to ensure its immutability. Every transaction includes information about it (the time, the amount the address), this information is combined into a hash called transaction ID (TXID), which identifies and verifies a transaction has happened.

Each new block in the chain contains a new hash that combines the new transaction with the previous block’s hash. This process is repeated in each new block added to the chain, so each new hash is generated from previous hashes, creating an unbreakable dependency. Since each block links back to its previous block, If one block is tampered with, it changes its hash and breaks the chain. To prevent the entire chain from changing, blockchain uses the proof of work mechanism.

Question 19

Proof of Work (POW)

Answer 19

a consensus mechanism; It’s a method of confirming a transaction and producing new blocks to the chain.

The Computers that present new blocks to the chain are called Miners. Miners compete with one another to solve complex mathematical puzzles, the first one to solve a puzzle is the one who gets to update the blockchain, verifying the most recent transaction. In return, the miner gets a predefined quantity of cryptocurrency.

POW= massive amount of $, encourages use of mining pool which makes centralized so to solve those issues Proof of stake came into play…

Question 20

Proof of Stake

Answer 20

Proof of stake consensus mechanism then randomly determines the identity of the miner. This mechanism eliminates the energy wasting competition between miners and avoids the mining pools that centralizes the process.

Question 21

Ethereum (Ether)

Answer 21

native crypto currency= ether (ETH)

a decentralized blockchain platform that establishes a peer-to-peer network that securely executes and verifies application code, called smart contracts. Smart contracts allow participants to transact with each other without a trusted central authority & incentivizes network participants through proof-of-stake (PoS) validation.

Question 22

Smart Contracts

Answer 22

Smart contracts are lines of code written in to the blockchain, carry out functions once conditions are met (pay rent to landlord, without any time delays like an agent delaying transaction)

Question 23

Gas fees

Answer 23

for Ethereum- a metaphor for transaction fee a user has to pay for sending funds or interacting with smart contract

Question 24

Banks as customers

Answer 24

A key focus of the institution is to be a deposit taking institution (take and safeguard client funds). This can also include activities such as lending and broader deposit yield generating activities

Use: Future- proof wallet technology for digital asset custody

Question 25

Neobanks as customers

Answer 25

A neobank is a financial institution that operates entirely digitally with no physical bank branches. Typically, they run through an online platform such as a website, a smartphone application, or even both and can offer banking or other financial services to customers. Can also include Crypto Banks

Use: Monetize digital assets and grow your crypto customer base

Question 26

Exchanges as customers

Answer 26

A cryptocurrency exchange is an online marketplace that allows users to buy, sell, and trade cryptocurrencies.

Use: Drive trading volume without sacrificing security or operational efficiency

Question 27

Lending desks as customers

Answer 27

A crypto lending desk is a platform that connects lenders and borrowers of cryptocurrency.

How it works
Lenders deposit their cryptocurrency into the lending desk, and borrowers can then use the platform to secure loans. The lending desk uses the deposited cryptocurrency to fund the loans, and sets the interest rates for both parties.

Use: Securely scale retail flow and boost capital efficiency

Question 27

OTC/Brokerage

Answer 27

Over-the-counter (OTC) trading is a decentralized way of buying and selling financial instruments, such as stocks, bonds, currencies, and derivatives, through a broker-dealer network. These third parties facilitate the exchange process between a buyer and seller. They have access to platforms that offer tradable securities.

Use: Transform settlement operations and strengthen security

Question 28

Market Makers/ Prop traders

Answer 28

Market makers give liquidity and ease trade by providing prices for financial assets, while prop trading businesses concentrate on making money through active trading and speculation.

Use: Boost operational efficiency and drive balance sheet optimization.

Question 28

Hedge funds

Answer 28

The term “hedge fund” refers to an investment instrument with pooled funds that is managed to outperform average market returns. The fund manager often hedges the fund’s positions to protect them from market risk.

Use: Meet fiduciary duty without jeopardizing operational efficiency.

Question 28

Digital asset wallets

Answer 28

hot wallet: a browser based extension (ex metamask)

warm wallet: SaaS or desktop app that also requires authentication

cold wallet: non internet connected devices like an unplugged usb stick

Question 29

Fireblock stats

Answer 29

1,500+ customers
Over $4T assets secured
170M+ wallets created
50+ blockchains supported
Four main office locations
Tel-Aviv (Product, R&D, HR)
New York (GTM HQ)
London (GTM)
Singapore (GTM)

Question 30

CeFi vs DeFi

Answer 30

Asset custody…if you want to keep the control of the blockchain system in your hands without giving it to any regulatory body, go for a DeFi model. However, if you want to make a system where your users would get an assurance that a centralized authority is looking over their crypto and data, go with CeFi

Question 31

Staking

Answer 31

Staking is the practice of locking your digital tokens to a blockchain network in order to earn rewards—usually a percentage of the tokens staked. Staking cryptocurrency is also how token holders earn the right to participate in proof-of-stake blockchains.

Question 32

Blue chip tokens

Answer 32

Bitcoin (BTC), Ethereum (ETH, Solana (SOL), Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Tron (TRX), Ripple (XRP)