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Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 2: Death of Bitcoin or Birth of a New World?

Digital currencies will change the world we live in so profoundly that everyone will be taken by surprise. Yes, it is true and it is already happening. Some are convinced that precisely this year, 2021, is going to force these changes that we have been hearing about lately.  Bitcoin is already believed to be a thing of the past, technologically. With bitcoin skyrocketing these days, it is almost impossible to believe the things you are reading, but just bear with us and maybe discover a different perspective you have never seen elsewhere before. It is just the fundamental analysis we need for long-term investing.

As the ground-breaking precursor to many new coins, Bitcoin served to show the path, to pave the way for innovative tokens, opening our eyes to a whole new world of possibilities. It was a breakthrough invention that changed the world, like the first cell phone or the first TV. Still, it is important to distinguish between a predecessor and emerging inventions because we all long replaced our brick cell phones with devices that can meet our present needs.

When Bitcoin first appeared, it was a true revolution in many different ways. We finally had a new technology and decentralized digital currencies, and such an information technology breakthrough mustn’t be understated. The invention we now know under the name of decentralized distributed ledger eliminated the need for a centralized body or intermediary, like banks, to process or validate transactions. Blockchain technology is thus as important to the world as the first car, having changed the options available and the way different processes are managed.

When we think of the software industry, we know how new generations upgrade their original versions. We can painfully recall the first version of Microsoft Windows 1.0, acknowledging and appreciating all the ways computing has changed since its debut. The thing with each new invention is that its purpose is to see if this item is going to work at all. Only after this point, engineers and concept designers can actually make changes to fix any bugs and enhance performance, launching newer and improved versions each time. 

Bitcoin inventors faced a much greater hurdle than building a graphical user interface, but the accompanying first version quality challenges remained more or less the same. Their first product, blockchain, immediately drew the attention of people and institutions all across the world, but the product’s quality is still questionable. 

To understand these matters properly, it is crucial to differentiate between the bitcoin cryptocurrency and blockchain technology. Blockchain, the first version of a decentralized distributed ledger, is a historically significant invention that has brought about unprecedented changes to all of us. However, and this is the main point, blockchain, as we know it is still version one, just like Microsoft Windows 1.0, was. Unfortunately, blockchain technology resides on a highly inefficient algorithm – proof of work (PoW), which we mentioned in the previous article when we talked about the way to secure extra income with crypto. Due to its imperfections and lacks, blockchain’s performance is far less than what it should be now, 12 years after its creation. 

What these concerns aim to point out is that we need a more sophisticated version of a decentralized distributed ledger that compensates for blockchain’s limitations. We still want to keep the essential functions of blockchain, yet we need faster and more efficient performance. To do so, the current PoW design that serves to keep the network safe needs to be replaced.

Staking, or mining, that we discussed in the first series of these articles on cryptocurrencies, may be an excellent way for traders to earn a few extra coins, but the system’s need for it to work only demonstrates a serious downside. The problem we are presented with here is why we need this feature in the first place to grant security to the system. Thankfully, we have seen some successful attempts to break this barrier in the recent past. 

A new distributed ledger – permissioned distributed ledger, which is used by XRP cryptocurrency, is able to process 10 times more transactions per second than any blockchain-based cryptocurrency. What it lacks however is the means to bypass the need for a central authority because the crypto community essentially needs a mechanism that will bypass the involvement of banks. That is why even this improved version of this technology is insufficient to meet the needs of crypto traders. 

The only reason why blockchain is still used lies in the fact that no one has managed to come up with a better, more efficient solution that will satisfy the basic requirements and speed up the process at the same time. However, in the past few years, we have been seeing different companies advertise their products that have supposedly managed to meet these requirements and overcome challenges inherent to the blockchain. A fully decentralized permissionless distributed ledger finally leaves room for engineering scalable digital currency systems that have the real potential to become, or even replace, major currencies in the global financial system one day.  

Blockchain-based cryptocurrency systems could never be apt at achieving this, but we finally have the stage ready for digital currencies to compete with conventional currencies on the global level. While this indicates global progression towards new systems and ways of operating and existing, it also poses a serious threat to blockchain technology and currencies such as bitcoin.

Are cryptocurrencies as we know them going to disappear? Well – not anytime soon. However, it is reasonable to assume that their importance is going to diminish slowly with time. In the next article of this series, we are going right into the lion’s den to see where digital currencies stand in comparison to the global financial system and what will happen with fiat currencies in the near future. Stay tuned. 

P.S. If you want to learn what you can do now to still make money in the crypto market, check out the previous article where we discussed how to make smart money trading crypto now. 

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Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 1: Making Smart Money Trading Crypto

Bitcoin will do to the banks what email did to the postal industry, said Rick Falkvinge. Yes, we are certainly seeing gigantic moves in the cryptocurrency market these days. As we are waiting for Facebook to launch its long-awaited Libra (now Diem) digital currency, Bitcoin is skyrocketing like never before. Currency revolution is heavily speculated and we all want to see what’s behind the facade. Where is the crypto market headed in the long run and what impact is it going to have on the world? What’s the big picture and how can we ride this massive wave that is happening as you read these words? Stay tuned as we start a series of articles on crypto trading, providing objective facts and key advice that you can immediately apply in trading.

They say it is not important when you enter the market as long as you forever maintain the buy-and-hold mindset. What we don’t want is instant gratification compulsion, especially now when the market is moving erratically. Money management and trading psychology will prevent you from interfering with your trades, collecting profit prematurely, and taking major losses. If you are new to crypto trading, following these essential tips will make a significant difference in the short and long term. In this market, the upside is extraordinary, while the downside is limited. Therefore, let’s see what steps you can take to make the most of it.

Luckily, we can now go both long and short and crypto already has an inherent upside that we can benefit from immediately. We need to see if we are in a buyer’s or seller’s market and determine where we can make the most profit. Still – and this is imperative now more than ever before – we can always make a mistake in our estimations. That is why we absolutely never go all in. And, equally importantly, we never give in to the market’s community hype, fortifying our sense of independence and self-reliance. The key is to make smart money and, to do so, the best strategy is to spread out. Diversify your coins and that way, even if something falls through, you will always be safe. This also means that you will not overleveraged and, thus, take a smaller (5-15%) fraction of the entire portfolio to hold crypto. 

Always come up with a plan and make sure you stick to it. Keep your anxiety and other emotions aside and set key points ahead. Determine your stop-loss and take-profit, and then move your stop-loss to break-even when it gets there if you want to scale out. Scaling in and cost averaging can be something you can apply but then you would need more attention and research. Rely solely on your system to tell you when the right time to make a move comes and do not deviate from the initial plan. Additionally, besides the daily chart, you can also use the weekly and the monthly ones for long-term trading. Just remember not to let the fear of missing out get the best of you, especially in the midst of this crypto craze.

Holding is used by the richest traders on the globe, who know how to allot their investments to reap benefits continuously. Allocate 70% of your finances to long-term buy and hold and 30% to your short, more aggressive trading strategy. Then, decide how you are going to spread out to ensure risk is reduced. For example, you can have the majority of investment in commodity stablecoins as a protection in case everything else falls apart. The second in line could be bitcoin or ETH or, preferably, both. Next, 5—20% could be distributed across different altcoins. Your final layer should be your longshots or the coins you use for your long-term strategy.

With crypto, we may not know exactly when the best time to start trading is. However, if you do feel that something is to go up, crypto’s upside and downside ratio allow you to invest your money more freely than in other markets. You can also use Trailing Buy, which helps us determine entry signals. To enter a new trade, move the trailing line down only if the price goes lower than it is right now (i.e. if it breaks down upon the candle close). When the price finally hits the trailing stop, you are getting the green light to buy.

Whether a trade renders great results or not, you need to set a defined exit strategy. Like in any other market, you need to align your exit point with your overall strategy; hence, your exit strategy is going to vary depending on the type of trade. You must maintain consistency and refrain from making any changes in the middle of a trade. As cryptocurrencies are great for holding, your exit will then be contingent upon your idea of how long that trade should last. As long as you have a projection of how far you want to go, you will know exactly where you want to take your money off.

Staking is an excellent way to make passive income in the crypto market while holding them at the same time. This strategy implies that you hold some coins (keep them in a crypto wallet) and, therefore, strengthen the network for which you get a reward in the form of extra tokens. While not all cryptocurrencies permit this, the Proof-of-Stake mechanism requires that certain coins’ new blocks be verified by staking after production. What is important is that you can earn additional income when the coin you hold increases in value. Some blockchains have predefined minimum and maximum staking periods that basically determine the span during which you can retrieve your coins. To avoid dealing with all these requirements, traders prefer to delegate their coins to a validator (traders who stake their coins) running a staking pool. It is, however, important to mention that validators lose a portion of their stake if they double-sign or attempt to attack the network.

Since crypto is known to multiply in value up and down in only one year, what we are witnessing right now should not come as a surprise. What you can, and must, do is ensure all possible protection to minimize losses and ride the big waves. Money management, trading psychology, and the right mindset are your strongest tools to combat any unpredictability and volatility, regardless of the positive aspects this market bears. Announcements and predictions generated in the crypto community often come with an excess of falsehood and unnecessary drama, so to avoid this, just try to the best of your abilities to keep a cool head and be smart about each move you make. As they say – haste makes waste. Don’t be another failed promise of success but rather invest intelligently – both your time and money.

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Crypto Cryptocurrencies

Qualities the Best Bitcoin Traders Tend to Have

From the outside crypto trading looks very similar to forex trading. Technically it is, the same mechanics are used for both, however, the type of people that can trade crypto rather than forex vary quite a bit. There are certain elements to trading crypto that are very different and so require a very different mindset in order to do it successfully. We are going to be looking at some of the qualities that the best crypto and bitcoin traders have and which ones are required if you want to successfully trade bitcoin.

Must Have Patience

When we look at the crypto and bitcoin markets, there can be times here pretty much nothing happens. There have been times where the price of bitcoin has gone months without really moving up and down. Now with bitcoin, you can still make money with a ranging market, scalping little bits here and there, but the real money that makes a bitcoin trader successful aren’t the large moves that it takes both up and down. The problems that these do not come up very often, one or two every year or so. Due to this, a bitcoin trader will need to have a lot of patience, they need to be able to sit back and wait before putting on any trades. In forex it can be painful waiting a week, imagine having to wait for a month or even 6 months before putting on a trade, this is why successful bitcoin traders need to have a lot of patience and self-control.

Have to Always Be Aware

When it comes to bitcoin or any sort of crypto, you need to stay aware when you are trading it or even thinking of taking it. We say this because the news that comes out about it is not as mainstream as it may be for things like the USD or GBP. You need to be aware of what is happening, the latest scandal, the latest news release, and the latest uptake from a major company. Being on top of all of this can help you to choose the right tries to take and to also avoid placing trades at a time where things may potentially go downhill, especially when a scandal or scam comes to light. Be aware, keep on top of the news and be sure that you are always checking rumours before placing trades, as even rumours can affect the bitcoin markets a lot more than they can things in the forex markets.

Need to Always Be Prepared

The markets can shift at any time, this is similar to the forex markets, but you often have a lot more of a warning on the forex markets than you do with the bitcoin markets. Bitcoin can change within minutes of news coming out and due to this, you need to be ready to go as soon as that news comes out in order to help protect your trades or to quickly put a trade on before the new movement has finished. So if you work a full-time job then you can miss a lot of opportunities. Of course, it is best to have a stable job, but the most successful traders often have jobs that allow them to jump on their phone at any time or they simply stay at home, waiting and being ready to make a trade.

Need to Accept Risks

There are a lot of risks when it comes to trading bitcoin, far more than there is with forex, and let’s be honest, there are a lot of risks when trading forex too. The reason why it is considered riskier than normal forex trading is the fact that it has an extreme amount of volatility, the markets can jump up and down thousands in just seconds. If you are not careful, then your account can go from being in profit to blowing in a matter of seconds. A good bitcoin trader will understand this, they will either have the money there and already consider it lost (which is a good rule of thumb anyway) or they have very strict risk management tools in place to protect the account. The risks are there and the risks are far higher than they are with regular forex traders, so if you do not like risk, you most likely won’t like trading bitcoin either.

Ability to Withstand Drops

Bitcoin can be an emotional rollercoaster, for both those trading and those holding onto it, it can have incredible rises, but on the other side of the coin are the incredible drops that it can also have. For many, seeing the value of bitcoin plummet while trading or holding can cause real emotional strain and can cause a lot of stress for the holder or trader. If You are planning on trading bitcoin then emotionally, you need to be prepared for these huge drops, you need to be aware that they will happen and you need to be able to withstand it, both financially and emotionally. So if you get stressed by losses or drops, then bitcoin trading may not be the best asset for you to trade.

An Eye for Details

We know that bitcoin has huge movements both up and down, but the markets often go sideways. When the price is going sideways you need to have an eye for details if you wish to be profitable. You need to start scalping the tiny movements up and down, in reality, those tiny movements could be hundreds or even thousands dollars when put into perspective with the overall price and movements. You need to be ready to place trades for these little movements, it can be very risky, as a breakout could happen at any time, but keeping an eye on the details like news, rumours, companies using bitcoin, and so forth will enable you to trade these sideways markets and still profit in the perceived slow times for bitcoin.

You Need Money

You need a lot more money to trade bitcoin than you do forex. This is basically because of the size of the assets that you are trading and the amount of volatility in the markets. So those really successful bitcoin traders will have a healthy account balance to begin with. Yes, you can trade with $100, but that entire balance will be at risk with each trade, not something that would be recommended at all. You Are looking to trade bitcoin successfully then you will most likely need a slightly larger balance than you do with forex.

Those are just some of the traits that successful bitcoin and crypto traders will need, it is a very different thing to trade bitcoin than it is the normal forex markets. The movements are far more volatile, accounts can blow very easily and so it is far more stressful. News events can have instant and huge effects on the market and you certainly need a lot more money to trade it successfully. If you are planning on trading bitcoin then you need to be aware of these things, you need to accept the risks and you need to be ready to trade at pretty much any time.

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Crypto Cryptocurrencies

The Do’s and Don’ts of Successful Bitcoin Trading

When it comes to crypto trading, especially Bitcoin, there are a  number of things that you should be doing as well as things that you probably know you shouldn’t. We are looking at some of the do’s and the don’ts when it comes to bitcoin trading. Take a look and see how many of them you are doing, if you are doing some of the things you probably shouldn’t, it is not the end of the world, simply use this to help understand what you can do a  little differently to ultimately improve your bitcoin trading.

Do: Trade With A Strategy

It can be tempting to simply follow what other people are doing when it comes to trading bitcoin. There are a lot of people out there making a lot of money of fit, so there is no harm in just following them right? Well no, first they will certainly be trading with a strategy, secondly, you do not know what that strategy is and so blindly following trades is never a good idea in that situation. Also, you will not be getting the trades at the exact same time, so by the time you take the trade the optimum time may have already passed. So this is why you need a strategy, a strategy that outlines what you will be trading, when you will be trading and how you will be protecting your account. You should always trade with one and you should only put on trades that are properly in line with the strategy that you are using.

Don’t: Blindly Follow the Trades of Others

As mentioned above, you should not be blindly following other people’s trades, as tempting as it may seem. You need to remember that they have been doing this a long time, they have a strategy that they are following, they may even have information from sources that you do not know about, so blindly following their trade will basically mean that you are allowing them to trade for you, but with a delay. Even 10 minutes can mean a lot when you are placing a trade that long after they have put out the signal or that you have seen that they have traded. You also may not have the risk management in place that they do in case things go wrong, so their account may be safe from a drop, but yours is not. So only trade trades that you have found, not that you have funded posts somewhere on the internet.

Do: Use Risk Management

Risk Management is key when it comes to any form of trading and it is certainly the case for bitcoin too. You need to use it, things like a proper risk to reward ratio will enable you to remain profitable, things like stop losses need to be used with every single trade, no matter how sure you are that the trade that you are putting on will be successful, you need to use stop losses. They are there to protect your account and to enable you to remain profitable. If you do not use them, then a single trade could cause you to lose your entire account, something that you certainly do not want to do. So use stop losses, with every single trade, every single one of them.

Don’t: Trade Too Much

It can be very tempting to trade more when things are going well, especially when it is bitcoin due to the massive profit potential that it offers, but you need to be wary of this, you do not know what to overtrade. Overtrading is basically when you place more trades than you should. Overtrading can decrease your account’s margin, and when the margin gets too low, it will only take a small movement the wrong way for your account to blow and for your broker to close all of your trades in the negative. Only trade what you need to, do not get greedy, if you are being profitable, accept that, do not try to push too hard for more.

Do: Keep An Eye On the News

When you are trading bitcoin, it is very important that you keep an eye on the news that is going on around you. Bitcoin can be heavily influenced by the news, if a country decides to ban its use it can have a very strong and very quick drop, if a major company decides to start accepting it, it can have a huge spike upwards. You do not want to miss out on the opportunities that the news can present, but maybe more importantly, you do not want to get caught out by a huge drop, which even with stop losses in place, can cause an account to blow if the price jumps passed the stop loss. If you are going to trade bitcoin or any other form of cryptocurrency, then it is very important that you keep an eye on the news and know what is going on in the crypto world.

Don’t: Let Emotions Overtake You

It is very easy to let emotion take over, especially when there is money involved. This is no different for crypto and bitcoin trading. There is a lot of money to be made, the markets can move up and down a lot which can play havoc with your emotions, in fact, it can cause a lot of stress and anxiety. Things like anxiety can make you not want to trade at all, maybe this has come from a loss or consecutive losses. Then there are things like greed and overconfidence, these can make you start to place more trades, or larger trades, each of which will be putting your account under more and more pressure. If you feel that any form of emotion is starting to build up and that it has the potential to affect the trades that you are making, then you need to take a step back. Take a break, go out for a bit, clear your mind and then come back with a fresh view of the markets. Whatever you do, do not place a trade based on an emotion, it won’t end well.,

Those are some of the do’ and don’ts when it comes to bitcoin trading. There are of course many other things that you should or shouldn’t be doing, but we can’t go over all of them. As we mentioned at the start, if you are doing some of the don’ts, do not worry, we have all done some of them at one point in our trading career, simply learn from them and try and turn that don’t into a do.

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Crypto Cryptocurrencies

The Best Cryptocurrency Advice You’ll Ever Receive

There is a lot of advice being thrown around about things like Bitcoin and other cryptocurrencies, some of it is fantastic advice, other bits are not quite so good and could potentially put you into trouble. Wherever you go, there will be people giving advice on what you should be doing when it comes to the cryptocurrency world. Today we are going to be looking at some of the best advice that you may hear about cryptocurrencies and what you should do with that advice.

Don’t Buy Just Because the Price Is Low

The cryptocurrency markets are a crazy thing, they have hundreds of ups and hundreds of downs throughout the year. The age-old idea of buying low and selling high is used with pretty much everything in the world when it comes to sales and retail, the exact same applies to cryptocurrencies. You should be buying when the price is low and then selling when the price is high. There are some problems with this, how exactly do you know when the price is at its lowest? The truth is that you cannot and you don’t, you need to guess which is why things can be a little risky, of course, once it has been purchased, holding on until the price comes back up is certainly a good strategy and one that has served people very well in the past.

You Can Trade It Too

A lot of people know things like bitcoin and other cryptocurrencies as something that you purchase and then hold on to, that is a good way to make money and it is what a lot of people are getting very rich doing, however, that works best when you can buy a large amount of it, in the thousands. If you do not have that much then there are other fantastic ways to make money with cryptocurrency, one of those ways is to trade it, much in the same way that we do the forex markets. Many brokers are now offering it and you do not need much, just $10 to get started. You can trade it 24/7 with low spreads and low commissions, allowing even those with fewer funds to trade and earn more bitcoin as they go. Trading is a great opportunity and one that more and more people are starting to take up.

Avoid FOMO

FOMO stands for the Fear Of Missing Out, you suffer from this when you see others doing things that you are not, making you want to do it. This is very prevalent in the cryptocurrency world. When you see someone buying up things like bitcoin, only for the price to rise and they make a lot of money, you of course want to be a part of that and so decide to buy simply because they did, but the problem is that you are buying into something that you do not know about or due to your emotions. The markets may well turn at this point, the other guy will withdraw his funds and you are then stuck with a currency that is losing value, it is under your purchase price so you have no choice but to hold on or to sell at a loss. Do not buy into things just because someone else is doing well and you do not wish to lose out on any possible profits, do your own research and buy what you feel is right.

Diversify

Good advice for any sort of investment or anything that you are putting your money into is the fact that you should diversify, you should not stick everything in one basket or in this case one cryptocurrency. One thing to bear in mind though is that you also do not want to spread yourself too thin, you will want to get on 5 or 6 coins, not 20 or 30, the more you do the harder it will be to keep track of the coins you have and where all your money is. So ensure that you diversify out of just one coin but not too much.

Avoid Rumors

There are a lot of rumors when it comes to cryptocurrencies and we mean a lot. More than there are with pretty much anything else in the world right now. Some rumors end up being true, but the majority of them are not, the majority of them are made up and come from people’s minds, often what they want to happen with no real evidence behind them. So the last thing that you want to do is to listen to them or even worse to act on them. We have seen a lot of people place trades or buy coins based on rumor, and you can probably guess that the results ended up with a loss. So some of the best advice that you can be given is to simply not follow the rumors and do not buy things based on what a random person on the internet has said.

Only Spend What You Can Afford to Lose

Do not use money that you cannot afford to lose, that is one of the golden rules of anything to do with money, simply do not do it. Before you buy any coins, before you place any trades, think about the money that you are putting in and consider it as a loss as soon as it leaves your bank account. Consider whether you need that money, what would you use it for? If it would be used for food or things like rent then you should not be using it at all, you should only use money that would not negatively affect your life. Whatever you do, do not do what some others do, do not borrow money, do not take a loan to trade with or to buy cryptocurrencies with, this will only lead to you being in debt potentially for many years to come.

Those are some of the things that we consider some of the best advice that you can get about cryptocurrencies. There are of course many other things that could help you out, in fact, you probably have a few tips for others too. Keep your wits about you, but with money, you can afford and do research rather than blindly listening to others. That is the best advice that you can use.

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Cryptocurrencies

Why We Love Trading Bitcoin (And You Should, Too!)

Bitcoin has been a bit of a revelation, it has grown beyond what many imagined would be possible, it has changed the face of the world in some regards and is still considered and a potential currency of the future, but when it comes to trading it, there are still quite a few people who are skeptical, and that’s fine. We are going to be looking at some of the reasons why we love to trade Bitcoin and the reasons why you probably should too. Of course, it won’t be for everyone, that is fine, we still love it and we know that a lot of you will too.

Amazing Profit Potential

Let’s get this one out the way straight away, there is the potential to make a lot of money. As with any form of trading, one of the motivations for us to do it is the fact that we can make money from it, it will be the same for the majority of traders. When it comes to trading Bitcoin, that potential is huge, as is the overall potential of Bitcoin to be huge. Just look at the recent growths, the coin is now sitting near to $40,000, up from $6,000 less than a year ago, which is over a $30,000 increase in less than a year. If that isn’t profit potential then we do not know what is. That is why we love trading it, the great thing about trading is that unlike holding,m when the price retraces, which it does and always will, you can profit on the drops too, granted that is a little riskier. The profits are there to be had and that is why we love trading bitcoin so much.

It’s Trader Directed

Unlike forex trading, the crypt markets are trader-led, what this means is that the markets will basically move the way that traders want them to move. So if one single very large trader comes in, they have the ability to shift the markets up or down with a single large trade, or when the sentiment is an extreme buy like we have seen recently, more and more little traders are coming in with their buys, this will continuously push the markets up to even higher prices. Of course, the news does have an effect on the markets, when there is good or bad news surrounding bitcoin, the price will often shift up or down, but again, this is solely based on the traders making that decision, hence why more often than not, some bad news or even good news will have pretty much no effect on the markets right away, it may take a few days, weeks or even months for traders to fully understand it and for it to take effect.

It’s Super Exciting!

The Bitcoin markets are exciting, they are a constant battle between the bulls and bears, and even without trading it, simply watching it can be exciting. In fact, we do that quite a lot, just sit by the charts and various other indicators watching things change and watching the battle between the buys and sells. Of course, it is a little more exciting when your money is on the line. Trading often brings adrenaline and it is no different from crypto trading. When our trade is going the right way, it feels fantastic, when it is going the wrong way it is a panic, but both of those emotions bring our adrenaline levels up. There is nothing better than a big trade dropping to near the stop loss only for it to reverse and end up in profit. You do not get that feeling in many other places in life, so that is one of the major reasons that we love to trade it.

It’s Growing Liquidity

The cryptocoryne world is still in its infancy, it is still a baby, sounds crazy to say that but bitcoin has only been around for around 11 years, that is not much at all. When it was first made available to trade, there was not much liquidity at all, you could only place a 0.01 lot, and you were lucky if that matched the price you put in, these days though it is far easier, the liquidity within the markets has been growing rapidly and it is not pretty easy to put on a trade as big as 10 lots. The liquidity will only continue to grow as more and more people start picking up Bitcoin and more people start to trade it. It is growing in popularity which is only good for our trading. Higher liquidity also means that the markets are a little safer, the movements will still be there and they will be just as big, but they may not be quite as sharp, allowing us to implement slightly better risk management, which of course is vital for the survival of our trading accounts.

It’s Widely Accessible

It used to be hard to get into any form of trading, but that is very accessible with the rise of the retail forex brokers, the same thing has happened with Bitcoin trading. Back when the coin first launched you could not trade it on a broker, you could buy it, or you could sell it at very limited places, that was it. Then brokers began to bring it in, but it was very exclusive, only a few brooks had it and those that did, had horrendous spreads, making it not trading at all. Now though, more and more brokers are picking it up, crypto-specific brokers are out there too. These brokers are now offering much better spreads, ones that make it profitable again, and many broilers are now offering leverage on their crypto markets including bitcoin. These developments have made it far easier to get into the world of bitcoin trading, and this added accessibility has helped to improve things like liquidity in the markets. We can only imagine that it will become even more accessible in the future, how we do not know, just that it most likely will.

Those are just some of the reasons that we love trading bitcoin and why you probably should too. There are of course many more reasons, but we would be here all day if we went over all of them. Have you tried trading bitcoin? If you have, you most likely would recognise a number of the things that we put, the markets are always developing and changing, something that is exciting for us and as long as bitcoin and other coins are around, we will pretty much always love to trade them.

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Cryptocurrencies

Detailed Breakdown of Bitcoin’s Four Year’s Cycles

Up to 30 companies in Japan have announced plans to issue digital yen, and Rick Rieder, the CIO of BlackRock, is taking crypto seriously if his comments on CNBC are anything to go by. According to the world’s largest asset manager, the functionality and durable mechanism of crypto assets makes them more functional than gold, a fact that is up for debate.

It seems that the financial sector around the world is gradually embracing cryptocurrency, and it’s only a matter of time before it transitions to the mainstream. As a crypto investor, the current trend is satisfying. 

But is it time to make a move and laugh all the way to the bank?

Well, the most recent bitcoin highs had some investors rolling in a sense of accomplishment and success when they cashed out at the right time. Others waited for the prices to continue the upward trajectory above $41,000, but it is now on a free fall. 

Well, understanding the price movement of bitcoins is critical to make wise decisions. 

The popular theory that attempts to explain bitcoin’s price movement is bitcoins four-year cycles.

The price of bitcoin moves in cycles of booms and busts. If we were to learn anything from history, investors’ best financial decision has been to own bitcoin in a bull market.

Let’s examine the historical price behavior to have a better understanding of the bitcoin price volatility.

Price History of Bitcoin

Satoshi Nakamoto invented the cryptocurrency in 2008, and in the following year, the first transaction took place between him and an early adopter. The first real-world transaction took place when a bitcoin miner used bitcoins to buy pizzas in 2010 in Florida.

Bitcoin’s trading history is characterized by volatility since its creation in 2009. It has a reasonably short life, but it has seen a lot of action. One upon a time, the cryptocurrency traded for next to nothing, and the real price increase was from $0.0008 to $0.08 for a single coin. 

All along, bitcoin has been through significant rallies and crashes. Regardless, interest in bitcoin has surged in 2020 and is expected to continue in 2021. By 2020, the crypto-currency had recouped all its losses to record an all-time high. 

The Stages 

Stage 1: Exponential Highs

At this phase, the fear of missing out (FOMO) and euphoria among bitcoin investors is at its highest. The emotions compel many people to purchase at abnormally high prices leading to a prolonged bull trend that pushes the prices through the roof.

The high exponential stage is also called “topping out,” where the bitcoin prices reach their peak. 

Stage 2: Correction

The correction stage comes immediately after the euphoria that characterized the previous 12 months. The stage corrects for over-optimism by shedding considerable valuation.

Profit-taking investors create a sell-side pressure, which causes the bitcoin to drop a bit after an abnormal growth.

Stage 3: Accumulation and Recovery

Following the price correction, the sell-side momentum starts to slow down and bottom out. It is at this stage that bargain buyers take advantage of the discounted prices to accumulate bitcoins. 

Eventually, new demand starts to form, and the phase becomes a point of maximum financial opportunity where the prospect of reward overtakes that of the associated risk. The new growing demand is driven by the desire to make enormous profits. 

Stage 4: Continuation

After bottoming out, bitcoin starts to go up. Historically, the continuation stage has been all about exceeding the sell-side pressure characterized by sellers resisting the growing prices.

The continuation stage is an essential technical step that indicates a shift in market psychology. The stage tends to encourage strong emotions to result in buy-side momentum. Following a successful 12-month close, the market psychology then transitions to buying from selling.

The Effect of Bitcoin Halving 

Bitcoin halving occurs when the value of new bitcoin created every 10 minutes is halved. The latest bitcoin halving reduced the block reward of 12.5 to 6.25 every 10 minutes. 

Typically, bitcoin halving marks a fundamental variation in the protocol of the cryptocurrency. The event also has a significant impact on the prices of the bitcoin as well. It acts as a catalyst to propel the prices to new heights. 

Given that 21 million is the maximum supply cap, the halving event means that it will take much longer for all the bitcoin to go into circulation. It also means that all the bitcoins created will be less and less, limiting the supply. The scarcity of bitcoins increases value, which is why bitcoin halving acts as a catalyst in the new bull market. 

In the past, the bitcoin price has grown exponentially following the halving events. This observation can be used to explain the current situation.

The bitcoin’s next phase one was expected to be in 2021 to manage a 12-month candle close above the price level of ~$14,300. It has clearly exceeded this.

The belief was that the $20,000 mark will spur the buy-side momentum driven by investors’ intense emotions.

The 12-month price chart indicated that ~$14,300 may actually be the inflexion point in market psychology. Based on the 4 Year Cycle historical trends, a candle close above ~$14,300 provides the necessary confirmation that the prices may go above $20,000 in 2021. That is just what happened based on the current prices. 

Current Bitcoin Situation and Interpretation

A few days ago, on 8th January 2021, the world’s largest and most popular cryptocurrency was posting highs of $41,962. It is now just above $30,000, recording losses of up to 20%. Bitcoin is in free fall, which has already wiped $130 billion off the market.

The fall in prices comes after the UK Financial Conduct Authority warned investors that they could lose everything based on difficulties in valuing crypto assets and price volatility. 

However, the problem is that the price volatility will pique the interest of individual investors whose ability to take on significant losses is a far cry compared to institutional investors.

Since bitcoin was created, the debate has raged about whether the abnormal rises in prices constitute market bubbles or are objective indicators of its future role in the financial ecosystem. A market bubble is when the asset value becomes over-inflated.

Some investors will see the latest bitcoin rise and fall as a bubble that has burst. On the other side of the spectrum, some experts believe the bitcoin fluctuations are nothing out of the ordinary and will continue to occur towards its eventual valuation.

The considerable upside swings followed by corrections are normal behaviour and confirm the bitcoins four year cycles is more than just a theory. 

Bitcoin prices were in the first stage of exponential growth to reach an all-time high of $41,962. Apparently, the cryptocurrency is now in the correction stage before it enters the accumulation and recovery phase, and eventually, continuation.

Final Word

As with any other new technology, bitcoin prices are highly volatile, but it’s normal behavior. Based on the four-year cycles, bitcoin was experiencing exponential growth towards the start of January 2021, but it is now in the correction stage. The slashing of up to 20% of its value is just a normal phase of correction and nothing to cause panic.

Bitcoin investment is not for the faint-hearted. It is only for those with higher risk tolerance levels, sufficient exposure to the asset class, and a long term view of the technology. It would be best if you never lost sight of the big picture. Focus on the forest as opposed to a single tree. Happy trading, folks! 

Categories
Blockchain and DLT Crypto

Security in Blockchain: Myths and Truths

Around security in blockchain some interesting myths have been created that make this technology look like a total panacea and something almost surreal, for that reason, we dedicate this article to break these myths and make see the truth about this technology.

Safety is certainly one of the main, or perhaps the main, requirement for blockchain technology. In fact, in a way, security has become the first bastion of defense of this technology that now conquers more and more spaces. And it is not for less, the security in the blockchain is excellent, but reaching it takes a lot of work. In addition, it is not a magic solution, because as in any computer system always reigns the premise of cybersecurity:

“There is no 100% secure computer system.”

That is the harsh reality of the computer world, and blockchain, being a computer technology, is not exempt from this rule. So why our confidence in your safety? Why have so many myths been created around this technology? What is the truth? Let’s try to show that several of the myths that have been created around blockchain technology.

Myth 1: Blockchain is unhackable.

One of the first myths we see in the blockchain world is about the inability of blockchain technology. The truth is that this is not 100% true. Certainly, blockchain technology presents a high level of security, and more if we compare it with any type of sector that is based on centralized technologies.

Bitcoin, the world’s first cryptocurrency, has shown us several times that it has errors that can be dangerous for everyone. So what protects us from the blockchain catastrophe? Simple, the assurance that the community will detect and correct those errors, as it has always done. And in the worst-case scenario, in the event of an error that has not been detected early, the network can always agree to return to a block where that has not happened.

This is in addition to the continuous work to develop security measures that avoid serious problems, and the always reliable decentralization, which will allow us to rebuild everything in case the worst comes to pass. But we can also be sure of something, that a project like Bitcoin has accumulated 46 serious errors, is an incredible achievement, because in contrast Windows 10 (developed by one of the corporations that dominate the world) in just a period of 4 years accumulates more than 8100 errors.

Myth 2: Blockchain is absolutely immutable.

Another common myth in the blockchain world is the “absolute immutability” of the blockchain. Something that is not true. The truth is that the blockchain can be rectified or modified under very specific conditions, and we know that from those who have read about the 51% Attack. This attack has the ability to modify the blockchain significantly despite the attempts we make to avoid it, and all within the parameters allowed by the protocol because after all, most of the nodes (51%) have decided to do so.

The attack we have already seen in action, Ethereum Classic (ETC) recently suffered another attack of this type. Bitcoin Gold was another recent victim of such attacks, and other cryptocurrencies are constantly suffering it today. But isn’t Blockchain supposed to be immutable? The answer to this is: It is under certain circumstances. If a blockchain network has its power distributed among its nodes so that none of them has the most power in their hands, then that network will be secure. Otherwise, it’s a recipe for disaster.

Myth 3: All blockchain is highly decentralized.

Decentralization may be the worst myth of all, and it is because decentralization in blockchain projects is misunderstood (or misused). And many projects, and companies, use the word “Blockchain” to confuse, trying to convey that they are a decentralized network when they are not.

For example, Bitcoin is a fairly decentralized network, but there’s still a long way to reach a “safe zone of decentralization”, that area where Bitcoin users turn to their own nodes instead of third parties to perform their operations. The latter may sound utopian, but it would be the perfect example of absolute decentralization. Still, Bitcoin is a good example of decentralization.

However, if we choose other projects such as Ripple, Stellar, Tether, Bitcoin SV, Tron, UNUS, IOTA, Compound, BAT, Theta,… that decentralization is lost. Yes, these projects are blockchain, some with great renown and great economic level, but each and every one of them have of decentralized what of decentralized has a Bank.

In short, they are projects that use the words “blockchain” and “decentralization” to disguise an almost absolute centralization existing over their systems. And we are not talking about centralization at the level of development, but also at the level of nodes, miners, and other structures that make it possible to function. In this sense, this myth falls for the clear evidence that a “blockchain project” is not automatically decentralized because it is blockchain.

Myth 4: Cryptography makes Blockchain secure.

This myth, surely, is one of the most difficult of all to understand. The reason for this is because it is a half-truth. Cryptography is certainly the basis of blockchain security, but cryptography is constantly broken.

An example that breaks this myth can be seen in IOTA. This cryptocurrency is based on DAG (Directed Acyclic Graphs) technology and uses a cryptographic function that was considered secure. However, a hacker managed to break that algorithm and as a result, thousands of users were affected, with theft of funds and access to the seeds of their purses. A serious problem where cryptography was not enough to maintain security. As a negative result, the IOTA network was out of service for 14 days until the problem was fixed.

However, the operating model of Bitcoin, the management of its development, and its active community is a successful formula to combat the problems that could come along this line.

Myth 5: Smart contracts are the ultimate programming tool.

Smart contracts are often seen as the biggest breakthrough achieved thanks to blockchain, and that vision is correct. However, smart contracts are not inherently secure by running on a blockchain, as many show, on the contrary, a public smart contract is subject to public scrutiny, and if there are malicious actors in that audience who can see a vulnerability, they’ll exploit it for a profit.

Yes, smart contracts are very powerful, but their security is far from perfect, in fact, we could say that it is still a work in progress, as we can see to platforms like Ethereum, where they seek to constantly improve their language to enable the most secure development of such tools.

Computer security has always been a space where the impossible always ends up being possible. There are many systems that claim to be “ineligible” and always end up giving in to some error in their systems sooner or later. It is something that reaches even the big ones, such as OpenBSD, the most secure operating system in the world, and that in all its history (23 years) has only had two errors in its installation by default.

That being said, blockchain although it is a very secure system, perhaps one of the safest to handle our money, is not an all-powerful and perfect solution. We are certainly far from that, and that, however illogical, is a good thing. 

In this sense, the future of blockchain security will always be positive, it will always go in the interest of being able to improve what we currently have, to face the challenges of the future. That way we can stay calm, blockchain security will improve, and with it, our impression of a technology that is changing the world.

Categories
Crypto Daily Topic Cryptocurrencies

5 Crypto Trading Strategies To Bank on in 2021

Cryptocurrencies are rapidly transforming the financial sector. At the moment, they’re finding greater acceptance in payments besides offering an alternative investment vehicle. The reasons for their increased popularity are varied. Chief, though, is their decentralized nature and potential for high returns. From these reasons, it is easy to see why they’d be an attractive investment. 

Crypto trading is as lucrative as it’s risky. It is, therefore, imperative to adopt a solid investment strategy. Again, investing in digital assets needn’t be a complex engagement. The market is rich in strategies that ease potential investors’ foray into the space. 

This article examines five proven strategies that one may bank their crypto trading on in 2021.

Which are the Best five Trading Strategies to Adopt in 2021?

As already indicated, there is a myriad of trading strategies at any investor’s disposal. Individual preferences determine the choice of the means to employ. Here are five concrete plans that you can depend on this year. 

1. Scalping

Scalping is a trading strategy defined by short durations between a trade’s opening and closing. The underlying thinking is that little profits snowball into huge ones in time. Scalpers are traders employing this technique. It utilizes market volatility and is handy in slow market days.

Types of Crypto Scalping Strategies

A scalper may pick from any of the following five strategies:

  • Crypto Range Trading- the range is the difference between the price support and resistance. Scalpers buy at support and sell at resistance.
  • Bid-Ask Spread- The scalper opens a position at either the bid or ask price. To get a profit, they then quickly close the position a few points lower or higher.
  • Arbitrage- here, the investor profits from trading the same asset in different markets. Arbitrage is either spatial or paring.
  • Price Action– the trader uses price movements to make trading decisions. 
  • Margin Trading- It entails transacting with borrowed funds.

The Pros and Cons of Crypto Scalping

Like any other trading strategy, scalping has its pros and cons. One advantage is that the small position sizes make it low risk. Additionally, regular small price changes enhance profits, and one can automate their transactions. 

Finally, affordable entry positions expand trading opportunities.

On the other hand, scalping is demanding; Any slight delay may lead to losses. Further, it has low returns per trade, and traders incur higher transaction costs.

2. Buy the Dips and Hold

Downswings offer excellent buying opportunities. If the affected asset is strong, the price will appreciate once it gains its market confidence.

An examination of cryptos reveals periods of over and undervaluation. Additionally, the crypto market reacts to media coverage. Positive reportage triggers increased acquisition at overvalued rates. The reverse causes traders to panic, therefore, sell their coins below their real value.

Undervalued cryptocurrencies are ideal investment opportunities. Traders using this strategy study the market to determine peak undervaluation. They also predict the earliest recovery. After this, they do their trades holding out for profit when the market corrects itself.

Pros and Cons of Buying the Dips and Holding

A significant plus for this strategy is that one needn’t have special high-frequency trading software to trade. It is convenient as a single trade suffices. Moreover, one profits from both the cryptos upside and the undervalued amount. 

The downside is that it is a long term approach. There aren’t quick profits here. Additionally, it requires a proper grasp of the market. Finally, the strategy calls for calmness amidst market turbulence.

3. Fading Trading

A high-risk trading strategy, fading involves betting against the market’s momentum. The trader sells when there’s an upswing in the market and buys when the market experiences a downswing.

Owing to its high-risk nature, it’s a suitable method for experienced traders. Also, it’s ideal for risk-inclined individuals. However, it could yield dividends when correctly applied and is best suited for a highly volatile market.

Pros and Cons Of Fading Trading

When adequately executed, Fading can be a lucrative trading strategy. Traders can realize profits from any market reversals, a situation that always follows an upsurge or a markdown. That said, it is a risky strategy. One risks incurring massive losses if they misread the market.

4. High-frequency Trading 

High-frequency trading is the most profitable yet complex trading strategy to use. It involves the full automation of trading strategies. HFTs are algorithmic and entail volume trading in milliseconds.

Pros and Cons of High-Frequency Trading

HFT trading is beneficial in several ways. Firstly, it reduces the bid-ask spreads, enhances market efficiency, and creates high liquidity to mitigate the effects of market fragmentation. Further, HFT removes emotions out of trading hence improving better decision making.

On the other hand, HFTs could be disadvantageous. For example, algorithms are susceptible to spoofing, thus price anomalies. Secondly, the hardware and software required for trading are costly. Also, the risk of glitches isn’t far away.

5. Golden Cross and Death Cross Trading

The golden cross denotes a situation where a cryptocurrency’s short term average crosses its long term average. Whereas the short term average comprises the currency’s 50 days average, the long term is its 200-day average.

The death cross, on the flip side, is the opposite of the golden cross. It is the point when the short term average goes under the long term average. The gist of this strategy is buying at the golden cross and selling at the death cross.

Analyzing the changes in trading volumes confirms the occurrence of these trends. Although some use technical indicators such as RSI and the MACD, many consider volume one of the best indicators. 

Pros and Cons of Golden Cross and Death Cross Trading Strategy

A major boon for the strategy’s users is that it helps to determine the market trend. Using both indicators is essential in pointing out attractive entry and exit points. 

Conversely, other schools of thought consider the two to be lagging indicators. Thus, they indicate momentum after price movements have occurred, not before. Additionally, some of the momenta they show could be temporary hence unreliable.

Final Thoughts

The growth of cryptos has ushered in an exciting period in global finance. Besides expanding the payments sector, it has created alternative investment avenues. This growth is fuelled by, among others, the higher ROIs recorded in the space. 

To the first time investor, navigating crypto investments could be exacting. For profitability, they need concrete strategies. Luckily today, there are many sound ones that help ease their entry into the sector. These vary in their utility, and ultimately the choice of one over the other is individual. That said, they serve the same end; taking the guesswork out of investments. 

So, let us know which of the five strategies you’ll be adopting this year!

 

Categories
Cryptocurrencies

25 Terms that Every Cryptocurrency Trader Should Know

Need to brush up on your cryptocurrency terminology? Even if you’re already caught up on regular trading terms, there are still some new concepts you’ll need to understand if you don’t want to get lost while navigating crypto trading, so stay with us to learn all the new terms that you need to know.

  1. Bitcoin – This is the number one contender in the cryptocurrency field. It was created to eliminate the government and central banks from being involved in transactions and was described as a “peer to peer payment system”. Bitcoin has risen and fallen in value since it was first introduced in 2008, but savvy investors should know that the price has risen to all-time highs in just the past few years. 
  2. ICO/ITC – The abbreviation stands for Initial Coin Offering (ICO) or Initial Token Offer (ITO). It refers to the first shares of a new company being listed on the stock exchange, typically before the currency has been fully released. The goal is for a certain amount of the stock to be purchased before release in order to help fund further development efforts. 
  3. Fiat Currencies – A fiat currency is issued by the government and helps banks gain greater control of the economy because they can decide how much to print and release to the public. The US Dollar is an example of a fiat currency. 
  4. Fear, Uncertainty, and Doubt (FUD) – Negative opinions about cryptocurrency contribute to FUD because it can lead investors to fear crashing prices when they read about it online. Typically, these posts are misleading and are sometimes used by competition to sabotage prices. 
  5. Fear of Missing Out (FOMO) – This term refers to fears that make investors think they are missing out on a good opportunity, often causing anxiety and other psychological issues.
  6. Blockchain – The blockchain is the network where cryptocurrency transactions are maintained and linked through a peer to peer system. Each record of a transaction is stored on a block and are then linked together into a list, called a chain, before being confirmed by several computers on the internet.  
  7. Mining – The process of verifying transactions and adding them to the public record on the blockchain. 
  8. Wallet – Following the concept of a traditional wallet, this common term refers to the online digital wallet that holds each user’s cryptocurrency. 
  9. Address – An address is made up of a series of letters and/or numbers and specifies where cryptocurrency is going to be sent. 
  10.  Altcoin – Stands for “alternative coin” and is used to refer to any cryptocurrency that isn’t Bitcoin. (i.e., Litecoin, Ethereum, Ripple, and so on.)
  11.  Exchange – Where people buy, sell, and trade cryptocurrency. Coinbase is an example of an online exchange. 
  12.  Market Capitalization – The complete value of all of all cryptocurrencies, including the overall supply and the supply that has actually been released. 
  13.  Hashing – An algorithm used on the blockchain that must be solved for blockchain transactions. 
  14.  Pump & Dump – Investors or creators of a cryptocurrency set up a time when people should buy and sell their currency in order to pump up the price. Then, the investors usually sell once they are happy with the price, leaving the other investors with a currency that has deflated in value.  
  15.  Whale – A person or institution that owns a large percentage of Bitcoin or another cryptocurrency, enough so that they could attempt to manipulate the currency’s value by selling. 
  16.  ATH – An abbreviation that stands for “all-time highs”. This refers to the maximum value a cryptocurrency has ever reached before. Many cryptocurrencies will exceed their previous ATH multiple times throughout their lifespan.
  17.  Cryptography – Cryptocurrencies rely on this process of encoding and decoding information that helps to keep others from viewing any information about their transactions. 
  18.  Fork – A fork can be soft or hard and involves changes in rules or formality for a specific currency.  In some cases, miners may not agree on which blockchain to use, which can lead to the creation of two versions of the blockchain. 
  19.  HODL – This abbreviation stands for “hold on for dear life” and refers to holding onto cryptocurrency until market volatility passes. The acronym was originally a misspelling of the word hold but became the more common term that refers to holding onto an asset. 
  20.  Moon – A sharp rise in value for a cryptocurrency, also called mooning. 
  21.  Public Key – This refers to the address where a user can receive money and should be shared with others if you need to receive it, unlike the private key, which is only for the individual. 
  22.  Satoshi Nakamoto – The alias used by the creator of Bitcoin. To this day, the true identity of the creator has never been revealed. Several people have claimed to be Satoshi, but it has never been proven. 
  23. Token – One unit of digital currency, for example, one Bitcoin. 
  24.  Private Key – A string of letters and/or numbers that can be used to access one’s digital currency. This is meant to be kept private, as others can steal your currency if it is shared.
  25. Consensus – occurs when the network’s nodes can agree and verify that a transaction has taken place.
Categories
Cryptocurrencies

The History of Bitcoin

If you’ve never heard of Bitcoin before, you’ve either been living under a rock for the past few years, or you don’t keep up with the news. This cryptocurrency didn’t attract much attention in its early days, but it has become more recognized as a real currency and boasted upon as the price of Bitcoin has reached maximum highs in just the past few months. But what exactly is Bitcoin…and where did it come from? If you’re thinking of investing in this asset, you’ll need to know the history of the up and coming currency that might even become as accepted as the US Dollar someday. 

The Beginning 

Bitcoin was first introduced under the alias Satoshi Nakamoto back in October of 2008 as a “peer-to-peer cash system”. The idea was that Bitcoin would allow users to send and receive money online without dealing with a middleman (i.e., the central banks). This would save investors from paying high banking fees, relying on major payment systems, and trusting banks in general. It was also meant to provide the people with more privacy, as the government would not be able to trace the transactions or to know how much money someone had or withdrew through Bitcoin. 

A console developer named Hal Finley read about this interesting concept for a decentralized currency and offered to mine the first coins as a test. Many people accused Finley of actually being Satoshi Nakamoto, the original developer, but he swore that it was not him up until his death from ALS in 2014. To this day, the true identity of Satoshi remains a mystery. Finley even claimed that he never found out who the original Bitcoin creator was, despite working with him from the early days of Bitcoin’s launch. 

 Although Bitcoin was first mentioned in 2008, the first lines of code weren’t written until the following year. There was also an issue with the currency being worthless in the beginning, as it was literally worth $0. The coin was finally recognized as a form of currency by a small number of online merchants as early as 2010. Surprisingly, pizza was one of the first material assets that were purchased using Bitcoin. Today, the pizza would be worth around $100 million in value! 

Rising Popularity 

Cameron and Tyler Winklevoss purchased $10 million worth of Bitcoin in 2012. Their purchase paid off big time, as their investment’s value more than tripled within one year’s time. In addition to finding these influential investors, Bitcoin also received another big push towards popularity in 2011 once it was introduced as the main form of currency accepted on Silk Road.

For those that don’t know, Silk Road is an online marketplace that allows users to buy and sell illegal items. The list of black market items include drugs, medical supplies, illegal fireworks, stolen goods, and more. Since Bitcoin was traceless and eliminated the government and banks from transactions, it made sense for the site to want to use it in order to keep the identities of their consumers anonymous. 

Things continued to fall into place in 2011 as other cryptocurrencies like Litecoin and Ethereum were created. Even more, attention was drawn to cryptocurrencies and the option to trade them on exchanges was introduced, which made many of the formerly skeptical traders see Bitcoin as a real currency. It became easier to buy and sell Bitcoin and the price grew to be above $1 that year before reaching its first all-time high of $31. Although the price did die back down, this would be the first of many price bubbles that Bitcoin would experience. 

The Following Years

Bitcoin reached even more price peaks a couple of years later, rising from $200 to $1,000+ in 2013. A few years later in 2017, the price continued to rise to $10,000 before reaching a maximum peak of more than $19,000 that same year. Everyone was talking about Bitcoin.

Sadly, Bitcoin’s luck did not continue and prices crashed in 2018. This could be blamed on the fact that many investors still did not trust the currency and saw it as worthless. Some investors simply trusted the central bank more than they trusted the newer currency; others saw Bitcoin as fraudulent because it was being used to make illegal purchases. 

In 2019, prices began to rise and fall once more. The currency reached a $10,000 value by June of that year but fell to $7,000 before the year was over. These highs and lows in value could be considered a normal factor for Bitcoin prices by this point, but investors still saw a lot of investment opportunities.

Then, in 2020, the COVID-19 pandemic helped Bitcoin to reach its highest price peak so far at $24,000 USD. This was due in part to the government’s efforts to reopen the economy and support spending by passing a stimulus aid package that caused inflation with the US dollar. This caused many investors and financial institutions to turn towards Bitcoin. 

Where is Bitcoin Today? 

Today, one Bitcoin is worth exactly $36,853 USD – a far cry from the $0 starting price back in 2009. The outlook for the next decade could go either way. Some investors expect to see a price of more than $500,000 per Bitcoin by the year 2030, while others think the price will crash to less than $1,000. Only time will tell where the true price is going. 

As time goes on, Bitcoin is expected by many to draw in even more investors and to potentially break its all-time high several times over. With so many perks, especially anonymity, Bitcoin will continue to offer something that draws in investors that are looking for privacy. Others will continue to discredit cryptocurrency as a whole and might never be convinced that Bitcoin is more trustworthy than using a traditional bank. Bitcoin’s critics still believe the bleaker predictions that state the value will drop dramatically. In the end, each investor will need to decide for themselves whether they think Bitcoin is the way of the future or just a fad that will be forgotten about over the next few years.

Categories
Cryptocurrencies

3 Assets that Will Keep Your Investment Inflation Resistant

Inarguably, the value of the dollar today is not the same as it was a decade or two ago. You use more currency to buy less, and that is what inflation is all about.

Inflation can be defined as the measure of the average price level, in an economy, of a unit of goods and services. It is the increase in the price over a particular period, where you cannot use the same amount of currency to purchase a specific item. 

No doubt, the pandemic and the rushed measures to control it were devastating to the world economy. Governments worldwide scrambled to shut down their economies and started printing money to control the spread while also trying to keep the local market functional.

The main issue with printing excess money is that it eventually decimates the host government’s currency and pushes the economy into an inflationary spiral. 

Nonetheless, inflation is a natural event, and only the most disciplined investor benefits from it or reduces its effect on their investments. 

How to Safeguard Against Inflation

In response to the COVID-19-inspired economic fallout, the Fed was forced to pull out all the stops in a bid to control it. These measures have pushed the Federal Reserve balance sheet to over the $7 trillion mark from $4 trillion, and further contractions are expected.

But what should you do as an investor? 

Ideally, there are two factors to look out for when searching for an inflation-resistant asset; real yield and store of value.

An asset with a large store of value such as gold does not lose its purchasing power over a particular period. If the asset can also create income, the better, as it fulfills the two requirements.

There are a couple of other benchmarks that measure potential hedges against inflation, and they include how the asset holds its value over time. Other essential factors include how people perceive the assets as a store of value across borders and how quickly it can be monetized.

Lastly, the ideal inflation-resistant asset should be easily movable across geographical borders in case of unforeseen hurdles.

The perspective of bitcoin as a viable store of value that can be monetized quickly is gaining traction, at least in recent months. Bitcoin is also beyond the control of any government and is, therefore, borderless.

Understanding the Top Three Assets That Will Keep Your Investment Inflation-free

While changes in the inflation level depend on various factors, such as the rapid increases in raw materials prices and rising wages, the coronavirus pandemic is the most significant.

In the last century, the US dollar buying power has been on a free fall, mostly because of the monetary, fiscal policy adopted. The Federal Reserve’s primary response has been to print money and purchase securities on the open market to plug an economic crisis like it is happening now. Although it adds more liquidity to the market, this policy diminishes the value of the dollar, which sometimes aggravates an already dire situation. 

Consumer Price Index (CPI) is the primary method of tracking US Dollar inflation. As far back as 1948, the inflation rate has been at an average of around 2%. This translates to a loss in value of up to 2% every year. That means the money in your savings account is losing its value.

Although inflation is a significant characteristic of market economies, it is possible to plan for it by focusing your investment in asset classes that outperform the market during such challenging times.

Gold 

Traditionally, gold has been the perfect inflation hedge based on its stability. Not long ago, gold went above the $2,000 an ounce ceiling to record a 27% raise last year, 2020, which is quite enormous. 

In fact, many people have previously viewed gold as a possible alternative currency, especially in countries whose money is losing value fast. This precious metal is tangible and real and tends to hold its value in the long term, like no other asset.

Typically, it is common practice for gold or other strong currency to replace a weakened local currency to keep the economy sane. Central banks around the world hoard gold as they start to print money. They spend more of the bad money, which loses value and hold on to the good money, which is gold.

Unfortunately, gold is not always the perfect hedge in tough economic times. When inflation is in an upward trajectory, central banks move in to enforce a monetary policy that includes increasing interest rates. Assets such as gold, with no yields or any other accumulating rewards, are not always the best investment vehicle.

Other better assets will protect your wealth from inflation and still give you good yields. However, diversification is vital for a strong portfolio.

Bitcoin

Last year, bitcoin was up by 66%, and the rise continued into the new year to post a high of $40,519.45, an all-time high. With its exceptional value, bitcoin is hedging against inflation and chaos.

 

The borderless and decentralized cryptocurrency is beyond any government control, and they cannot print more of it like they do with the standard currency. The maximum bitcoin supply is 21 million, which serves to limit the supply and prevent eventual dilution.

Bitcoin supply remains constant, regardless of what the local governments do.

Interestingly, the current government shutdowns are playing in the hands of digital assets such as cryptocurrency, thereby increasing its value as an inflation hedge asset. But how is that so?

Clearly, the current shutdowns have directed the focus to digital currencies. This may be one of the reasons that propelled bitcoin to an all-time high. It is one of the few assets posting excellent results, which is good for crypto investors. 

Stocks

Thanks to coronavirus, the S&P 500 index surged 55% from the lows observed in March last year despite all the groom. Similar to bitcoin and gold, the lockdowns and the resulting money printing has caused a rally to the stocks. But how can this happen? 

According to economists, the stocks’ value is not appreciating, but rather the dollar is depreciating against the stocks. The surge in equities is a significant indication of diminishing trust in the local currencies, which forces the wise investor to add more stocks to their portfolio to safeguard against losses.

Apparently, investors have lined up to take up stocks at the expense of fiat currencies.

Final Word

Ostensibly, most investors do not give a hoot about inflation and its effect on day-to-day trading and investment. Well, indeed, what you can’t see can’t hurt you, but inflation is the exception. It will hit where it hurts the most; your financial well-being.

The common practice is to hoard local currency in the form of savings to safeguard against tough times. Putting away something for the rainy day is alright, but the strategy has a significant flaw. You lose a bit of the savings to inflation. Saving in a bank is not a viable option, especially when the global central banks do everything to devalue the local currency.

The looming economic crisis, driven by the continued printing of money, calls for wise investment decisions. Ideally, invest in inflation hedge assets such as gold, bitcoin, and stocks to weather the current storm. Don’t be on the losing side by putting so much faith in the dollar and other global currency.

Categories
Cryptocurrencies

5 Exchanges that Don’t Need KYC Verifications

The KYC (Know Your Customer) regulations are standard with financial institutions around the world. These laws were enacted to prevent money laundering activities in the financial industry, and every one of us has been subject to them, in one way or another. 

The regulations require institutions or platforms to verify individuals’ identities before using their money transmission services, and most recently, virtual currencies. 

Cryptocurrency and blockchain technology is the new kid in the financial block, and already disrupting the market with lower transaction fees, confidentiality of transactions, and improved security against fraud.

Surprisingly, the KYC verifications are gradually creeping to cryptocurrency exchange platforms. This means that getting your money from the cryptocurrency exchange is a bit more complicated than sending money. But you don’t need to use “surveillance exchanges,” as critics call them, to trade.

If you prefer to withhold personal information with your cryptocurrency investment, you can use anonymous cryptocurrency exchanges. We list five of the best exchanges that don’t require KYC verifications.

Are KYC Exchanges Safer than non-KYC Exchanges?

No doubt, the exchanges that mandate KYC verifications may sometimes offer better security. The platforms are fully regulated and may provide better redress in case of a hack or when something goes wrong. 

On the other hand, regulators may not be able to track culprits in a fully anonymous platform. It can also sometimes be difficult to access important information such as inflation rate, currency generation, and other blockchain transactions. Regardless, the benefits of anonymity in cryptocurrency outweigh its downsides. 

BitMEX is a cryptocurrency derivatives exchange that is the latest to join the club of cryptocurrency platforms aligning themselves with the traditional financial institutions’ regulations. Since August 28 of 2020, the exchange has been rolling out KYC. All traders are required to submit photographic ID and other identifying information by February 12, 2021.

But this does not imply non-KYC Exchanges are not safe. In contrast, many cryptocurrency investors prefer non-KYC platforms. This is because they believe KYC is a powerful magnet for hackers, making everyone unsafe. Every time you make a transaction, you give out your crypto address that can be used in blackmail, social engineering, hacking, or by law enforcement.

At the Web3 Summit, Edward Snowden was given a headline spot, and this goes to show that privacy hardliners are not going to relent anytime soon. The action by BitMEX could see migrations to non-KYC exchanges such as ByBit, but still, that is a wait-and-see situation. 

The main goal of high-value crypto traders is to be in cryptocurrency exchanges that blend anonymity and security to a satisfying level. If any one of the two fails, the investors move to better alternatives, and there will always be crypto exchanges such as ByBit ready to receive them with open arms.

As a crypto trader, you can choose to keep your personal information and protect your identity from the reach of criminals by choosing secure, anonymous crypto exchanges.

Binance

The Hong Kong-based cryptocurrency exchange is currently the most popular and the world’s largest, with up to 10 million active users, ahead of Bittrex. With Changpeng Zhao as its head, Binance has been one of the most innovative with creating the Binance Coin (BNB) token. Binance supports over 150 cryptocurrencies.

Users can access a 2 BTC worth of cryptocurrency trading limit without KYC verifications, with additional benefits of up to 50% reduction in fees. You do not need verification for spot trading.

However, transactions involving large amounts of BTC will involve completing KYC procedures to use the Binance platform. Binance US, which the US traders must use, requires KYC verification during registration.

You can deposit funds on Binance through credit cards, bank transfers, and crypto deposits. Holders of its native token, BNB, enjoy a discounted rate. The exchange has a referral program for BNB tokens, among other rewards.

There are some signs that Binance could go the way of BitMEX and transition to full KYC sometime in the future. This is mainly because it is compelled to align with numerous jurisdictions’ requirements where the platform operates. They choose to avoid the push and shove involved with the regulators of different countries and regions. 

Block DX

The exchange operates on blockchain interoperability protocol or the Blocknet, allowing communication between private and public blockchains. Blocknet also makes it easier to interact and exchange crypto among the platform users. 

The Blocknet Protocol-powered decentralized exchange allows users to transact without an intermediary. It has no withdrawal and trade limits, thus allowing greater flexibility. The exchange provides trading pair freedom, where all you need is a small amount of its native coin, BLOCK, to take an existing order. You do not need BLOCK tokens to create an order.

According to the non-custodial exchange developers, Block DX does not have any pause button, kill switch or email notifications. There are no interruptions in scheduled or unscheduled maintenance, and it does not have any offshore company. It claims to be the best definition of a decentralized and anonymous cryptocurrency exchange.

What separates Block DX from its other decentralized peers is that it decentralizes all its platform components. You enjoy more flexibility and freedom.

Changelly

The anonymous cryptocurrency exchange has been around since 2013 and has considerable experience in the crypto space. 

The platform allows instant transfers across various cryptocurrencies to cryptocurrency wallets. The exchange has a reasonable fee of 0.5% and is very committed to protecting your privacy. Changelly only requires an email address.

Changelly is integrated into the Stratis app, and you can conveniently trade the $STRAT tokens right on your mobile device. But still, the exchange supports up to 150 cryptocurrencies. $STRAT is among the leading cryptographic tokens that you can freely trade in open exchanges. 

However, you need supporting cryptos such as dash and Ethereum to exchange for BTC. Changelly is a centralized exchange, but it does not require id verification to access the swapping services. The only instance where KYC verification is necessary is when Changelly detects suspicious activities.

The platform has a vast array of acceptable payment services apart from the crypto deposits. You can deposit through credit card payments, bank transfers, and even ApplePay. Besides, its trading algo is one of the most impressive yet, which scans other platforms to find the best trading prices.

ByBit

This platform matches the ability to leverage trades by up to 100 times by BitMEX without requests for any personally identifying information. This strategy helped ByBit accrue more than a million users worldwide since its launch in 2018.

ByBit may seem too lax with security for a casual observer, but nothing could be further from the truth. ByBit is only part of a handful of cryptocurrency exchanges that can genuinely be said to have never been breached since its establishment.

ByBit leverages two-factor authentication sign-ins compatible with authenticator apps, SMS, and email. Funds are usually in multi-signature wallets stored in offline cold storage.

The Singaporean crypto exchange has a wide variety of features for margins trading. The perpetual swap product, BTC-USD, is the most popular with ByBit, and you can trade ETH, EOS, and XRP. 

ByBit’s crypto margin trading guides have a wealth of tips and tricks on swapping derivatives. Anyone around the globe can use ByBit without the need for KYC verification. The platform has both Android and iOS compatibility and is available in different languages. 

Unfortunately, ByBit bars users from the US. 

IDEX

The hybrid cryptocurrency exchange, which has centralized and decentralized features, is a favorite for Ethereum holders. In an operating environment where owners can be liable for illegal activity in their exchanges, IDEX has pursued pragmatic decentralization to influence legal treatment by the regulators.

IDEX is mainly designed for Ethereum and Ethereum-based tokens (ERC-20) trading. 

The platform employs blockchain technology security and privacy to allow anonymous trading by using only the wallet addresses. You only need to deposit tokens to unlock the wallets and start trading. The IDEX native token holders receive a percentage of the transaction fees generated on the platform.

As of August 23, 2020, all users in the IDEX platform require partial verification to trade. You will also need passport scans and selfies for withdrawals of $5,000 or more. US customers are restricted from trading particular assets on the platform.

Final Word

The world of digital currency was propelled by, among other factors, anonymity. The increasing need for KYC verification to improve security also acts as a barrier. In some way, KYC is a potential threat, as well, in case of a data breach on public ledgers. 

Well, bitcoin mixers are an excellent option for anonymity and security. Nonetheless, a well-established crypto exchange platform that doesn’t require KYC verification is usually sufficient in most cases. Do a little digging before signing up for a cryptocurrency exchange. Check its policies, read the reviews, and weigh the quality of its customer support.

The above exchanges are only a few of the well-established and reliable crypto platforms you can start with. There are many others, as well. Happy trading!

Categories
Crypto Daily Topic Cryptocurrencies

Impact of DeFi in the Banking Sector

Blockchain is revolutionary fintech, and DeFi applications are taking success in financial services to a whole new level. Over 1.7 billion people remain unbanked, and DeFi is empowering internet users with permissionless financial services that cut out third parties.

Investors locked more than $15 billion within DeFi protocols in 2020. While decentralization has only captured billions, traditional, centralized finance controls the vast trillions of dollars transacting globally. Therefore, more innovations and marketing will suffice for further adoption.

However, with the industry admitting roughly $500 million from investors monthly, the prospects are changing. DeFi offers irresistible convenience and cost-effectiveness. The potential is also vast.

DeFi encompasses digital lending, borrowing, staking for capital gains, and regular income. DeFi services are permissionless, and they execute most transactions through tokenization and smart contracts. Eliminating all the third-parties and profit-seeking intermediaries make DeFi cost-effective.

Laws, rules, and regulations are programmed into blockchain protocols, and DeFi impacts every aspect of traditional financial services via automation. The impact is so great that it could change human interactions on an international scale.

In this article, we are peering into DeFi and its impact on the finance industry. A chronological outlook of blockchain developments suggests a pattern of innovation and adaptability. Understanding this pattern is crucial for your future investment projects.

The Ethereum Blockchain: How Are dApps Taking over the Banking Sector?       

To start with, let’s appreciate that the Ethereum community has revolutionized and accentuated DeFi as no other blockchain has. The ecosystem is advanced enough to evaluate systemic risks, and it reports DeFi Scores for platform security.

The ecosystem supports open-source composability, and the Ethereum blockchain harnesses the collaboration of independent developers worldwide. Borderless, open-source development has encouraged software designers and coding experts to focus on their strengths.

Ethereum’s infrastructure allows users to integrate various DeFi applications covering vast, diverse industries such as gaming, credit, supply-chain management, and capital markets. Laying and building applications on each other creates a vast network effect.

The Ethereum community is significant in DeFi because its network has over 7,083 live, global, main-net nodes, over 88 million unique users, over 42 million smart contracts executed.

You can utilize over 2,773 decentralized applications along with over 23K daily users. DApps are popular and post daily transactions exceeding 78K because of their:

  • Open-source codes.
  • Decentralized consensus and governance.
  • Noncustodial, permissionless services.
  • Tokenization and the use of smart contracts.

The diversity of dApps supports digital currency banking services, alternative services, DEXs, and P2P lending. Users embrace digital transactions because they are fast, secure, borderless, pseudo-anonymous, and irreversible.

Cross-chain interoperability came into DeFi markets in 2020, and you can now lend, borrow, and trade tokens across different blockchain networks.

How DeFi Saved Global Finance from Total Atrophy

When the Coronavirus became a global pandemic, states imposed mandatory lockdowns. Globally, the banking sector came to a standstill, and the international exchange services and other intermediaries such as asset managers, insurers, and bankers.

People were required to stay at home, and only essential services were allowed to proceed. If we didn’t have alternative financial services, most global supply chains would have suffered complete atrophy.

Governments created concerns about the value of money when they printed cash to bail out people and agencies. People and investors got more concerned that they pay taxes, yet governments dilute their savings by printing more money.

The threat to traditional finance was runaway inflation and the concern that credit is limited for those needing it the most. The international investment landscape went through shocks as investors turned to DeFi, seeking to mitigate the effects of a global pandemic.

Fintech Verticals Most Impacted by DeFi

Open Banking and Financial Data

Data is one of the most valuable commodities in the Mega Big Data era. Banking institutions traditionally hoarded all the financial data of users. In the US, financial data is worth over $15 billion. However, bankers won’t let you access it.

DeFi frees up your financial data for your benefit, allowing you to make intuitive, cost-effective investments. DeFi applications and services are providing open-source, immutable, financial market data.

Moreover, pseudo-anonymity and permissionless transactions prevent a handful of corporations from accessing your private transaction history.

Decentralized Exchanges

DEXs empower users to control their funds, giving them exclusive access to their private keys. These permissionless exchanges reduce the risk of custodian third-parties and diminish the risk of custodian third-parties losing your funds through major hacking events.

Cross-chain money markets are completely cutting off permission-based, custodian exchanges where you need expensive, third-party intermediation to swap bitcoins for other tokens like ETH, BCH, and XRP. Therefore, you can take just seconds to execute fast, borderless, almost-free transactions.

Borrowing and Lending

DeFi allows people to earn high interest on their savings. As crypto-assets stabilize volatility issues, DeFi is empowering crypto users to save profitably. You don’t need banks to store or transfer value. You can just use your smartphone and an internet connection to upload your finances to online savings software with blockchain transparency, security, and profitability.

DeFi platforms offer flexible interest payments, with some paying out interests every second. The best part is that you don’t need credit checks to take out DeFi loans. You only need to collateralize with your long-term investments. DeFi borrowing costs for commercial use are tax-deductible.

Tokenization and Asset Management

The tokenization of assets is at the core of decentralized finance. It’s revolutionizing assets-trading across the globe, offering traders new markets and opportunities. DeFi offers reliable asset and supply-chain management via smart contracts.

You can make international deals and trust total strangers to hold their side of the deal. Smart contracts don’t release payments unless all predetermined conditions are fulfilled. Tokenization is crucial in executing group contracts such as the ones utilized in:

  • Liquidity pools.
  • DeFi insurance protocols.

Parting Shot

The impact of DeFi on the banking sector threatens its existence, but bankers can adopt dApps to survive the storm and thrive. The banking sector won’t disappear, but it will evolve drastically as DeFi revolutionizes how we interact and do business.

Understanding the role of DeFi in 21st commerce is important for your financial future. Remember that these technologies offer cutting-edge convenience, and the market is growing exponentially. Therefore, you need to join in on the benefits or risk falling behind.

What do you think about DeFi, and what are your predictions on 2021 banking? Share your views in the comments section.

 

Categories
Crypto Daily Topic Cryptocurrencies

DeFi vs CeFi Investments: What’s the Difference?

The advent of the blockchain and Bitcoin ushered a new era of transformation in the financial sector. The latter’s successes catalyzed further innovations in this space. One of its earliest adaptations was Centralized Finance( CeFi). Further developments have seen the introduction of Decentralized Finance(DeFi). 

Though the two are diametric opposites of each other, they serve one end: the expansion of financial services. But what do these concepts mean? What are their pros and cons? Can we find commonalities between the two? Finally, is there a way of bridging the divide between them?

This article will use the questions above to differentiate CeFi and DeFi investments. In this way, it aims at deepening your understanding of these crucial financial developments.

Understanding CeFi

CeFi is centralized finance and comprises closed financial markets. It entails a central authority controlling all aspects of transactions between peers. The said authority could be a bank, government, or any other uninvolved third party. 

Salient Features of CeFi

A keen look at CeFi investments reveals several important features. First, there’s a strong emphasis on KYC and AML requirements. In keeping with their jurisdictions’ laws, CeFi service providers require their users to provide personal information, including identity and residence details.

Secondly, CeFi investments are custodial in that they hold their users’ private keys. They are centralized and offer cross-chain services. CeFi investment services also allow for the exchange of different cryptos issued on different blockchains.

Advantages of CeFi

The popularity of CeFi investments speaks of their usefulness. For instance, they guarantee the protection of depositors’ funds. As they’re custodial, CeFi service providers assure their users of the safety and returns on their users’ funds.

Additionally, they undertake to secure one’s private keys. Since the service provider holds the private keys, there’s no danger of ever  losing them. Moreover, they have dedicated customer support systems. 

Disadvantages of CeFi

There are several deficiencies linked to CeFi. Among these are higher transaction fees. Because they use intermediaries in transactions, they charge higher fees. Another shortfall is that they lack transparency as they don’t provide for a public audit of transactions.

The centralized nature denies users control over their funds and makes them invasive in nature. Their  KYC requirements demand full disclosure of personal information. Users can quite easily lose their funds on these since CeFi investments are an easy target for hacking owing to their custodial nature.

Decentralized Finance (DeFi)

DeFi is an acronym for decentralized finance- a movement that champions the provision of P2P financial services. DeFi solutions give parties greater control over their transactions. They achieve this by eliminating centralizing authorities – banks and governments – from the exchanges.

Last year saw a proliferation of DeFi platforms. Currently, the major players in the space include Compound, Yearn Finance, Uniswap, and Marker DAO.

Key DeFi Features

A number of features define DeFi investment projects. To begin with, they are permissionless, which means that anyone can use them, regardless of their geographical location.

On top of that, they depend on Smart contracts, a set of code defining the relationship of the transacting parties. The smart contracts work together with Decentralized apps (Dapps) to automate transactions.

Again, DeFi investments are Blockchain-based. They run on the Ethereum blockchain and have wide applications across the payments, lending, and trading sectors.

Advantages of DeFi

The ballooning of DeFi projects points to them being beneficial. Here’s a rundown of their key advantages. A key feature is that DeFi investments give users autonomy over their funds. The user is the sole custodian of their investment.

Equally, it is expedient as it eliminates third parties, which helps to make it more affordable. Furthermore, DeFi investments are tradeable, thanks to tokenization, which allows for trading in micro-units.

Another key feature is that they’re accessible. DeFi investments are open to everyone, notwithstanding their location. They are also transparent since their deployment on the blockchain opens transactions to public scrutiny.

Disadvantages of DeFi

Although advantageous in many ways, DeFi platforms have their shortcomings. The threat of losing assets ranks highly among those. DeFi users may permanently lose their crypto assets by losing their private keys or mistyping their wallet addresses.

In close tow is the possible exposure to scams. Many cons have infiltrated the DeFi Sector. These take advantage of the absence of centralized control; victims have very little recourse, if any, in such cases. 

Significant Differences Between DeFi and CeFi

The differences between CeFi and DeFi are more than in the terminology. As the following points will indicate, the two platforms are stark contrasts of each other.

Governance

Centralized authorities run all aspects of CeFi platforms. The users have to subscribe to a set code of regulations. On the contrary, DeFi platforms look to their user communities for governance. Some of them issue governance tokens that enable holders to participate in the decision-making processes. An example is Compound (COMP).

Features 

Both CeFi and DeFi have unique features defining them. For example, CeFi projects are custodial while DeFi projects are non-custodial. Again CeFis offer dedicated customer services, which DeFis don’t.

Further CeFi investments adopt the use of Centralised Exchanges (CEX). On the flip side, DeFi investments use Decentralized Exchanges (DEXs).

Whereas CeFi projects are permissioned, DeFis aren’t. CeFis use third parties to create trust, while DeFis are trustless networks.

Regulation

CeFi platforms conform to strict regulations of the jurisdictions they operate. In compliance, they undertake thorough KYC and AML reviews of their users. On the other hand, DeFi is nascent and unregulated. They, therefore, dispense with KYC requirements. 

That said, many jurisdictions are instituting regulatory measures in crypto operations. The Securities and Exchange Commission of the US oversees cryptocurrency trade.  At the same time, the European Commission is pushing for a comprehensive legal framework targeting cryptos.

Fees 

As CeFi runs centralized exchanges, they charge higher fees. The higher fees arise from the need to maintain the platform, pay their staff, improve their offering, among others.

In contrast, DeFi platforms are affordable. They employ decentralized exchanges that don’t provide custody services and don’t have teams engaging in their day to day running.

Liquidity 

CeFi and DeFi investment platforms have different approaches to raising liquidity. CeFi projects raise liquidity by matching buyers’ and sellers’ orders akin to forex or stock markets. DeFi projects in reverse employ automated market makers that  pre-fund both sides of the trade.

Security 

The custodial nature of  CEXs increases their susceptibility to cyberattacks. Although CeFi platforms invest in robust security systems, it isn’t unusual to hear of major platforms getting hacked.  

 

DEXs, however, are noncustodial. Thus are less susceptible to such attacks. However, vulnerabilities in their smart contracts could expose them to the theft of funds.

Similarities Between DeFi and CeFi Investments

Although different, the two platforms find convergence in certain areas. For example, they offer similar financial services. These include trading (spot, derivatives, and margin), borrowing and lending, payments, and the development of stablecoins. 

Also, both systems bank on innovation. They use transformative blockchain technology. Further, both serve the digital assets ecosystem.

Parting Shot

CeFi and DeFi platforms are polar opposite. That said, they serve similar functions in payments, lending, and trades. Moreover, both are at different stages of their development, with CeFi having a headstart over DeFi. This gap in development calls for urgent redress. 

To that end, several projects and platforms are working on appropriate solutions. Binance is one of them. Apart from reducing the risks inherent in DeFi, there’s a need to mainstream it. Moreover, there must be a simplification of the DeFi adoption process besides building robust DeFi communities.

 

Categories
Cryptocurrencies

What is Ethereum (ETH)?

Ethereum is a very important blockchain in the cryptocurrency world and is responsible for many of the revolutionary technologies that seek to transform the world as we know it.

What is Ethereum?

The cryptocurrency Ethereum is one of the largest cryptocurrency projects in the cryptocurrency industry. Ethereum itself is a digital platform that is based on blockchain or blockchain technology. Its goal is to become a blockchain capable of running decentralized applications.

To achieve this, this project has a blockchain and cryptocurrency with unique features. These include the ability to use and create smart contracts and new tokens. Both are powerful functionalities, which allows it to stand as one of the most complete and powerful blockchains in cryptocurrency.

The currency of the network is called Ether (ETH), and like Bitcoin (BTC), the Ether is characterized by being a cryptocurrency that can be used as a peer-to-peer payment method. An important point is that it uses the Proof-of-Work (PoW) consensus protocol, using the Ethash algorithm. The development of this blockchain began thanks to the work of Vitalik Buterin in 2013.

Technical Characteristics of Ethereum

Mining

Ethereum is a cryptocurrency that works by PoW consensus protocol using the Ethash algorithm. This algorithm is designed to be highly demanding and targeted at GPU mining. For this reason, mining was in principle highly decentralized and diverse.

Ethash uses the Keccak hash function, also known as SHA-3. In this way, the algorithm seeks to use highly secure cryptographic elements. At the same time, Ethash is thinking of having an intensive memory and cache usage. Both characteristics are aimed at offering resistance to mining by ASIC and avoiding centralization of it.

Issuance of Cryptocurrencies

This cryptocurrency at the moment has an annual issue limited to 18 million Ethers per year. That is, every year mining activity can generate up to 18 million new currencies. However, the total issue is endless. To achieve the broadcast, the network has a rather peculiar coinbase transaction system. First, if a miner finds the solution of a block it receives as a reward 2 ETH. 

However, Ethereum is a blockchain in constant evolution. One of the important changes that will be seen in Ethereum in the coming years will be the abandonment of PoW to a PoS mining system. With this change, Ethereum will go on to create cryptocurrencies for its blockchain in a completely different way from the current one, avoiding using miners and encouraging greater economic participation in the blockchain.

Gas, the Basis of Everything

Gas is a very typical concept of the Ethereum network. It is used to measure the work done within the blockchain. Each action will count as a single operation or set of operations has a specific cost that is given in Gas units.

Among the functions of the Gas inside the blockchain we can mention:

-Assigns a cost to the execution of tasks. Gas is used to measure the cost of performing a specific action within the blockchain. Each action has a cost in Gas and a set of actions carried out adds the total cost of said operation. In this way, we can see Gas as the price to pay for carrying out actions within the blockchain.

-Helps to improve the security of the system. Since every action has a price, this helps prevent the blockchain from stopping its operation and undermining its security. This is possible because the Gas helps protect the network from spam attacks. 

-Reward the miners. The actions in the blockchain depend on their execution in the hardware that is in the hands of the miners. To pay for this use there is the Gas.

Block Size and Generation Time

Ethereum is characterized by calculating the size of its blocks in a somewhat particular way. Unlike Bitcoin, where its size is limited to 1 MB, in Ethereum its size is limited to a specific amount of Gas. To be more precise, the size limit of the Ethereum blocks is 1.500.000 Gas. 

“A block can contain about 70 payment transactions between accounts, the simplest of the possible transactions.”

Another difference with Bitcoin is block generation time. In Bitcoin, each block is generated every 10 minutes, while in Ethereum this value is variable. Each block was generated approximately every 16 seconds. This means that it is generally quicker to provide confirmations than Bitcoin, which positively impacts its possibilities as a payment system.

Smart Contracts

A smart contract or smart contract is a computer program that performs certain actions preset in your code under certain conditions. Actions that have been reviewed and accepted by the various parties that have “signed” the contract. In this way, the smart contract enforces its programmed conditions by submitting a response according to its clauses in a completely autonomous way.

The technology of smart contracts is one of the fundamental bases of Ethereum and the operation of many of its features. A situation that can be seen especially in the tokens and DApps of this blockchain.

Ethereum Virtual Machine

The Ethereum Virtual Machine (EVM) is a software whose objective is to serve as an abstraction layer in the execution of code that is stored in the blockchain. With this, the aim is to prevent a malicious programmer of a DApp or smart contract from attacking the security of the network nodes and with the network itself.

EVM enables the operation of smart contracts and DApps thanks to the use of the Solidity programming language. This language allows you to program all the logic behind the DApps and smart contracts while allowing the decentralized execution of your code using the EVM.

Smarts contracts and DApps

Smart contracts and DApps are one of the largest uses for Ethereum. The capabilities of these two tools are virtually endless. Since the creation of smart contracts to buy or trade goods or services, their usefulness is only limited by the imagination. On the other hand, DApps are a revolution. They are capable of creating completely decentralized, non-corrodible, safe, and economically self-sustainable applications. We can also mention the platforms of oracles that are built on this network, as in the case of Augur.

Companies Using Ethereum

Ethereum’s capabilities to use smart contracts, build tokens easily and deploy DApps have captured the attention of many companies worldwide. This has meant that the development of Ethereum has had the direct or indirect support of a large business group interested in developing its technology. All these companies have created the so-called Ethereum Enterprise Alliance (EEA) which has more than 100 members. 

Among them are:

Accenture, a company dedicated to technology services and consulting.

AMD, a leader in the development of chipset, CPU, and graphics cards.

BBVA, a Spanish bank with a worldwide presence.

BP Ventures, the investment arm of oil company BP.

Cisco, the world’s largest network company.

Delloite, one of the world’s largest audit, financial, and legal consulting firms.

GoChain, probably the most important company in the development of DApps.

Hyperledger, the world’s largest enterprise blockchain and open source development project.

JP Morgan, one of the world’s largest financial firms.

Microsoft, the world’s largest software development and technology company responsible for Windows development.

Advantages of Ethereum

-It is a multipurpose blockchain thanks to its ability to integrate and use smart contacts.

-The use and development of EVM confer a high level of security to run smart contracts and DApps in a completely decentralized and secure way.

-It has a fast block production which allows you to have a much faster transaction confirmation speed than Bitcoin and other cryptocurrencies.

– Development is not under the control of any authority, its development core is completely decentralized and decisions are made by consensus. In addition, the community has a high impact on decisions about blockchain development.

Categories
Crypto Daily Topic Cryptocurrencies

A Complete Guide to DeFi Taxes: Everything You Should Know

2020 was revolutionary for DeFi markets, and investors flooded the young industry with over $7billion from a mere $1.2 billion. As the market cap and number of transactions surged, regulators came up with responsive ways to tax cryptocurrency income. 

Initially, taxes were a foreign concept in crypto realms, but the IRS made definitive tax rules for blockchain transactions. Most digital currency taxation policies are based on cryptocurrencies, but regulation is spilling over to the DeFi markets.

Most crypto users are ignorant of digital currency tax laws, but the IRS will not let you plead ignorance. The federal tax agency is decisively cracking down on crypto tax compliance, and this article will help you gain some valuable insights.

Reading on will help you keep compliant with DeFi taxation requirements. Even more importantly, it will help you navigate DeFi, so you trigger as much tax deductibility as allowed in novel legal confines. 

Crypto Taxes 101

The IRS categorizes digital tokens as properties and not currencies. Bitcoins, for example, are capital assets that can attract profits and losses from transactions.

Reporting your crypto taxes gets harder with the increasing number of blockchain transactions per financial year. The IRS adopted and has never changed its use of first-in, first-out accounting, which means you should determine your net gains/losses on crypto assets.

Profits are categorized as long-term or short-term capital gains. Losses on cryptocurrencies are considered deductible capital losses.

To prevent crypto holders from absconding cumbersome tax computing and filing, the IRS imposes the form 1099-K for all crypto exchange users posting over 200 transactions per year. This file is similar to form 1099-B that stockbrokers use for filing capital losses/gains, but it has some unique provisions.

Introduction to DeFi Taxes

DeFi exists within cryptocurrency realms, enabling digital token users to trade, lend, and borrow via low-cost automation that rules out third-party financial services. In DeFi markets, crypto owners earn interest on lending platforms, and the interest is paid in the same digital currencies.

Therefore, crypto interests increase the number of digital currencies. When you earn interests through your crypto tokens, a different taxable event occurs from profits/losses. Taxable events in DeFi markets transpire when:

  • You trade one cryptocurrency for another via cross-chain money markets, realizing either profits or losses.
  • You trade crypto tokens for fiat currencies, either realizing either profits or losses.
  • You spend digital tokens on goods and services, realizing either profits or losses.
  • You earn in cryptocurrencies, and DeFi services create numerous earning opportunities where you trade your time and skills by executing network protocols. Moreover, some CEOs and athletes prefer getting their salaries in digital tokens.

These taxable events in cryptocurrency transactions are either:

  • Capital gains.
  • Ordinary income.

Ordinary Income vs. Capital Gains Income               

Ordinary income taxes apply for normal jobs, and the IRS doesn’t classify cryptocurrency miners any differently. You must pay according to your marginal tax bracket.

Bitcoin miners and validators on Proof of Stake protocols earn digital tokens for authenticating transactions. These earnings are categorized as ordinary income, and they offer minimal tax savings.

Capital gains income manifests when you swap your digital assets for a higher monetary value than you acquired them. These income streams present significant tax benefits and holidays. For starters, long-term capital gains tax rates are diminished compared to short-term capital gains.

Moreover, you can completely offset capital gains with capital losses. However, capital gains can only offset ordinary income up to $3,000.

DeFi Taxes in Lending and Borrowing

The DeFi ecosystem offers lending opportunities like no other. Your digital currencies can earn interest on Compound, Blanancer, and Uniswap by contributing to liquidity pools or lending directly.

Some DeFi protocols take crypto loans and issue out Liquidity Pool Tokens in return. The currencies you loan out determine the number of tokens from the liquidity pool and ultimately how much interest you make.

Interests that you make on crypto lending platforms qualify as ordinary income for tax purposes. The DeFi ecosystem allows you to boost your revenues, with some platforms paying out interests every second.

The same applies to crypto borrowing platforms. You can borrow bitcoins and other digital tokens to use for business or personal use. Commercial cryptocurrency loans qualify for tax-deductible expenses. Therefore, you can claim relief on costs you incur when borrowing cryptocurrencies for commercial use. 

DeFi Taxes for Unexpected Income from Hard Forks and Token Distribution

Sometimes, blockchain networks award existing users or asset holders with free digital tokens. Such tokens are newly acquired assets with monetary value. Such a transaction is taxable, and the IRS categorizes it as regular income.

Therefore, you must report it within your appropriate tax brackets, and you won’t qualify for many deductions on these earnings. If you use such tokens profitably, file the revenue made on top separately.

Networks like Compound sometimes distribute their native tokens for free to users during initial offerings. For example, the DeFi platform distributed $100 worth of COMP. The users who enjoyed free $100-worth assets owed the IRS whatever your income rate is for that $100.

You won’t pay any more taxes if you hold the COMP, no matter how much they appreciate it. However, you will owe the day you redeem that appreciated monetary value, and you should report the net revenue as capital gains.

If the $100-worth of COMP appreciates to $300 within a year, you will owe short-term capital gains tax for $200 if you sell the COMP or redeem it for products and services. Your capital losses for the COMP are not deductible on the income tax you owe for unexpected digital income.

Cryptocurrency forks are other sources of unexpected digital income. Forks result when validators or miners in a network disagree on blockchain governance. A great example is that of Bitcoin and Bitcoin Cash. They disagreed, and the Fork was quite controversial because it created BTC tokens from scratch.

Investors of parent cryptocurrencies end up with an equal number of forked-off tokens. For example, if you had 4 BTC during the fork, you automatically got 4 BCH, and you became a member of two independent blockchains.

These unexpected incomes are also part of your taxable income, and you pay per your tax bracket. Any gains on them are taxable, and any losses on them are not tax-deductible.

DeFi Taxes in DEXs

Basic taxation rules for cryptocurrencies apply to DEXs. You do not incur taxation for transferring funds from one platform to another, so long as the accounts and funds are yours.

However, when DEXs allow cross-chain asset swaps, an element of profitability occurs. You either gain profits or losses on your initial capital assets.

Reporting DeFi Income on Your Taxes

It is your responsibility to report DEX revenue streams for tax purposes. The advantages of DeFi taxation are abundant. Report all DeFi buys and sells on the IRS Form 8949 for your capital gains filing.

Tax Advantages of DeFi

For starters, DeFi lending converts your currencies to Liquidity Pool Tokens. Your liquidity tokens remain the same, but their value increases over time. You make a capital gain when redeeming your LPTs for the original cryptocurrencies.

DeFi converts what should be your regular income into capital gains income. Consequently, you qualify for deductions if you make losses later selling the tokens.

DeFi allows you to borrow tokens with different cryptocurrencies acting as collateral in Ripple’s XRP for the long-run, but ETC is more profitable in the short-term.

Long-term capital gains offer more deductibles than short-term ones, and you shouldn’t keep selling your XRP to leverage ETH’s profitability. You can borrow ETH with XRP as the collateral if the prospective earnings are more than interest costs.

Tax Disadvantages of DeFi

Whenever you exchange a crypto asset for another, you are most likely triggering a taxable event. This makes it cumbersome to track all profits and losses made every time such DeFi transactions occur.

Tax Treatment Overview on Different Platforms

  • Uniswap

Uniswap executes the Liquidity Pool protocol for its crypto lenders. It empowers you to swap income tax liability for capital gains liability, which is deductible. UNI tokens basically cushion you from future losses on the native coin you want to lend.

  • Maker/Oasis

This DeFi service allows you to harness long-term tax deductions on capital gains. The platform allows you to trade between assets and even earn interest on other assets. They allow you to lock your ETH as collateral, and as it gathers capital gains, you can seize the short-term profitability of other blockchain networks.

  • Compound

Compound is also a Liquidity Pool platform, which converts your ETH to cETH. When the liquidity pool earns interest, the value on your cETH will move from income tax liability to capital gains revenue, deductible for losses.

  • Balancer

Balancer is another Liquidity Pool DeFi service. It’s sort of a tax-lien insurance package against future losses on crypto assets. 

Parting Shot

Ignorance cannot be your defense when you are found to be non-compliant. The DeFi markets are enormous and have the potential to overtake centralized finance in years to come. The IRS knows this fact, as do most sovereign central banks. 

Fortunately, DeFi taxes are friendly, and they offer numerous tax-saving opportunities. You stand to make tremendous capital gains and high, compounding interest rates investing in DeFi. The gains are way bigger than the tax costs. 

Enforcement over DeFi taxes will only get more aggressive, intuitive, and efficient. That’s why you need to read this article and share it with your friends. Take charge of your tax compliance, and share some of your most effective tax filing tips for DeFi transactions. 

Categories
Crypto Daily Topic Cryptocurrencies

How to Come Up With a Good Bitcoin Investment Strategy

Surprisingly, many people just buy Bitcoin and fumble with the investment until they make some profit. Investing in Bitcoin is actually a serious venture, and contrary to widespread practice, it needs a strategy! But what is an investment strategy anyway? What constitutes a good strategy? And, does it apply to all forms of Bitcoin investment?

These are the hard questions we seek to answer in this article. 

Is There a Right Way to Invest?

When investing in crypto or any other asset, you can gain or lose. The most successful investors are those who combine tactic, experience, and of course, luck. Since we cannot do anything about experience and luck, we are usually left with the tactic in the playground, and that’s where planning comes in. We’re not saying that there is a right or wrong way to invest. But, if you are really keen on maximizing your profits and keeping risks at bay, then planning for that journey is indispensable.

What is an Investment Strategy?

An investment strategy is a calculated approach that helps an investor make decisions to achieve specific goals. The investor could be seeking to multiply wealth. They could be seeking to protect whatever they already have. Regardless of the circumstances, an investment strategy must consider the investor’s goals, risk tolerance, and future capital needs. 

What Constitutes a Good Strategy?

Keeping in mind the above picture of what an investment strategy is, it is easy to figure out what a good one should be made of. Generally, you can consult the following checklist if you want to come up with a sound Bitcoin investment strategy.

  1. It contains your definition of risk tolerance – Risk is a central component of any investment strategy. Defining your risk tolerance helps you apply brakes when the train is accelerating in the wrong direction. It might sound trivial, but desperate decisions are never far from the mind when things get thick. 
  2. It identifies your goals – An investment strategy is nothing without goals. It should be clear from the start what you want to achieve from such an engagement. 
  3. It should be realistic – If it were that easy to make money, everyone would be rich. The excitement one gets when approaching an investment may mislead them to overshoot.
  4. It should aim at maximizing profits and minimizing risks – well, that’s the whole point of investing. 

This is by no means an exhaustive definition of a good investment. However, it is a fair guide on how to approach planning for your Bitcoin investment. With this background in mind, let us look at how you can develop an award-winning Bitcoin investment strategy.

Step #1 Identify the opportunity and the risk

If there is no opportunity, abort the mission. Diving straight into an investment without identifying whether there is a suitable opportunity sounds like gambling. After all, the whole purpose of venturing into investment is taking advantage of some opportunity. 

Spotting opportunities is not always easy, but sometimes it is. An example of opportunity in Bitcoin investment is the crypto’s rising value. This could be a short term opportunity or something that will outlive this generation (no one knows how long Bitcoin will sustain the uptrend). However you look at it, we must agree that identifying the opportunity is the basis of everything.

With opportunity comes risks. As mentioned earlier, risk is a core part of any investment strategy. The opportunity might be huge, but so could be the risk. If there is reason to believe that the current Bitcoin boom is a fad, the risk associated with investing all your savings would be catastrophic. The bottom line is, you should identify how much risk the opportunity presents and how much of it are you willing to tolerate.

Step #2 Decide how much and for how long

The amount of money you should invest and for how long are crucial parameters. Of course, you’re not planning to hold Bitcoin until you die. But if that is your intention, it should be clear from the onset. Holding assets indefinitely and without a plan defies the purpose of accumulating wealth.

However, this is not a rule cast in stone. For instance, if you plan to protect your wealth, you might want to convert a huge chunk of your dollar savings to Bitcoin, and short time fluctuations will not be a bother because profits will average out over time. 

Step #3 Invest – a plan without action is pointless.

Now that you have a clear goal and an understanding of the opportunities and risks, it is time to invest. Depending on your goals, you may find one investment approach more suitable than others. Typical options for investing in Bitcoin include:

  • Trading – With trading, you can either go for spot trading or derivatives trading. With spot trading, you simply buy Bitcoin when you think it is trading at a low price and sell when you believe the price has gone high enough. Without concrete investment goals, it is difficult to remain disciplined when spot trading as periods of explosive uptrends and epic falls might send you into euphoric buying/ panic selling episodes, respectively.
  • HODLing – This is where you buy Bitcoin and keep it with no intention of using the asset in the short run. This approach may be more suitable if you plan to protect your wealth or diversify your investment portfolio. Wealth stored in Bitcoin can be readily liquidated and converted to fiat money. You can also use such investments to acquire crypto loans. 

Step #4 Monitor your investment

An investment is like a seed – once sowed, the growth journey has only begun. Keeping an eye on your investment helps you to determine whether your strategy needs editing. If you believe you made mistakes in your original plan, there is no shame in revising it until you feel you have gotten it right. It is important to practice emotional control while observing how events unfold during the course of the growth of your wealth. You should also stay updated and keep learning, as that’s the only way to align your strategy with the reality of the market. 

Final Thoughts

Investing in Bitcoin is not complicated, but without planning for it, the chances of going nowhere with your investment are high. A good investment strategy, we have seen, needs to define your goals, your risk tolerance, be realistic, and focus on maximizing profits while keeping risks under control. There is no right or wrong way to invest, but that does not mean a planless investment is also acceptable. Similarly, the four-step approach described above is not the only sound methodology. However, it captures most of the crucial elements that will help your Bitcoin strategy stand out. Feel free to play around with it!

Categories
Crypto Daily Topic Cryptocurrencies

Now You can Earn Interest on Your Idle Crypto Assets with Nexo

Apart from HODLing and spending, many crypto users have no idea what to do with their crypto assets. Nexo, a leading financial institution for digital assets, provides crypto users with the opportunity to earn interest on their idle crypto assets. Overall, the concept is simple – you entrust your assets with Nexo, they invest them primarily through lending, and you share the returns. It works almost like a traditional investment bank; only that crypto is the main asset here.

Naturally, many questions will emerge regarding the profitability of Nexo’s offerings, its security, usability, and much more – investors are an inquisitive lot. This article will answer some of the most pertinent ones if only that will give you the confidence to join the league of passive investors. 

What Is Nexo?

Before we rush into how to invest with Nexo, let us first understand what it is. Simply put, Nexo is (arguably) the world’s leader in the provision of digital banking services. The company has strived to bring traditional banking to the world of crypto by merging fintech with blockchain. Nexo specializes in providing lending facilities in the DeFi space. According to the company, $5 billion worth of digital loans have been processed on the platform since its establishment in 2018. The company enjoys a user base of over 1 million and is available in nearly every corner of the planet. 

How Do You Earn?

Nexo offers a variety of crypto financial services, with lending at the top of the list. To earn, you need to deposit supported digital assets (both fiat and crypto) to your Nexo account. The following steps should help with the process:

  1. Register for an account on platform.nexo.io 
  2. Enable 2-factor authentication (this is mandatory)
  3. Scroll down until you find a list of supported crypto assets and select ‘Top Up’ on the one you wish to invest in. Besides the token, you will see how much interest you can earn from each one and what options there are for maximizing your interest.
  4. Nexo will generate a deposit address and a QR code. You can either copy the address or scan the code. It is extremely important to double-check this address before depositing since Nexo puts a disclaimer for funds sent to the wrong address. You can also top up your Nexo account directly from an exchange. If you are depositing BTC, your transaction will appear after 6 nodes have confirmed the transfer. For ETH and other ERC-20 tokens, 50 is the required number of confirmations. 
  5. You can follow the progress of your deposits on the transactions page/ tab.
  6. Interest is earned when you withdraw from your available credit line. The withdraw button is conveniently placed next to the deposit button. 

The steps may look numerous, but really, the entire process can be summarized as ‘top up supported assets and start earning automatically.’ In other words, once you deposit, no other effort is required from you – that’s the true spirit of passive earning. 

Which Digital Assets Can You Invest?

Nexo supports the following digital assets:

  • Bitcoin
  • Ether
  • Litecoin
  • Bitcoin Cash
  • Nexo Token
  • XRP (Ripple)
  • Tether
  • USD Coin
  • Dai
  • Euro
  • GBP
  • Several others

Is Nexo a Good Investment?

As an investor, you have the choice to bid your assets in a portfolio of your choice. So, what would make you choose Nexo first? The following factors might:

  • You can earn up to 12% interest on stablecoins. Interest earned depends on the asset you have deposited and the method you choose for payout. Earning in Nexo for selected stablecoins attracts the full 12% interest.
  • While interest is calculated on an annual percentage rate (APR), payouts are made daily. So you don’t have to wait for end-year dividends like most investments.
  • You can deposit or withdraw funds at any time of your liking.
  • Your deposited assets are backed by a $100 million insurance secured with BitGo.
  • There are no minimum contribution thresholds and no fees charged for funding or withdrawing from your wallet.

Are There Any Risks?

Any keen investor would be worried about the safety of their investment, especially if their assets will be used to extend credit to others. With Nexo, this is not a matter of great concern as your assets and those of others are backed by a $100 million insurance at BitGo. Deposits are also stored in multisig cold storage wallets so you can rest easy as your money works for you. 

Additionally, borrowers have a limit based on their deposited crypto assets. Nexo uses a complex formula to dynamically calculate credit limits based on the dynamic value of digital assets. So, Nexo is unlikely to run out of cash due to overborrowing. 

Lastly, while this is not a risk per se, it is worth noting that first time users may find the platform a little cumbersome to use. The website has only scanty information about what you need to do to get started, and you are likely to fumble around looking for where to click next. Clearly, the platform has not been customised for the crypto investor who’s just starting out. 

Reputation and Regulation 

Nexo boasts of a good reputation among users of crypto financial services. On TrustPilot, a leading consumer review website, 90% of users have ranked it ‘excellent,’ with a score of 4.8/5. The company is also licenced and regulated by the European Central Bank, besides being certified as ISO/IEC 27001:2013 compliant. With such credentials, you can be assured that you will be dealing with a legitimate and tried, and trusted platform. 

But What’s The Catch?

For those who are still not convinced about the viability of Nexo’s business model, questions on where’s the catch will linger. The way this financial institution operates is quite similar to traditional banks – users deposit their assets (usually dollars, euro, etc.), which gives the banks the capital to finance credit and other investments. The only difference is that Nexo cannot rely on traditional loan recovery techniques in case a borrower defaults. Therefore, the company depends on a user’s deposited assets as collateral. You can deposit multiple assets to maintain a positive loan-to-value ratio. This ratio is an indicator of your ability to settle the debt. If you default, Nexo will automatically initiate a sale of your deposited assets until the desired balance is achieved. 

Final Thoughts

‘Earn passively from your idle crypto assets’ sounds just as cool as it is, especially when using Nexo. The platform allows you to deposit a variety of crypto assets and earn up to 12% interest. Interestingly, all you need to do is deposit funds to your Nexo wallet, just as you would do with a crypto exchange. Nexo’s investment terms are quite friendly. For instance, there are no minimum deposits, you can deposit or withdraw at any time, payouts are done daily, and so on. Additionally, the platform ensures the security of your funds is guaranteed by implementing 2-factor authentication for deposits and withdrawals, insuring depositors’ funds, and storing them in multisig cold storage wallets. The only downside with Nexo is the limited information on the website, which might leave new investors struggling to get started. 

Categories
Crypto Daily Topic Cryptocurrencies

Earn Passively with VeriBlock’s Latest Tech: Proof of Proof

Innovations in the cryptosphere are fast and wild. Recently, VeriBlock released the novel proof-of-proof protocol, which allows blockchains to inherit Bitcoin’s security. The organization’s unique technology solves two problems simultaneously. First, a diverse ecosystem of blockchains – each focused on addressing a unique need – is secured. Secondly, gains made from the increased adoption of these alternate blockchains will drive more transactions out of the Bitcoin network, thereby increasing Bitcoin’s scalability, and by extension, solving the pioneer blockchain’s major headache.

While this technology is expected to transform Bitcoin and the entire crypto universe, the best part is that you can take part in the revolution and earn passively. 

In this article, we will look closely at this interesting concept and discuss the opportunity in it.

What Is Proof-of-Proof (PoP)?

At the core of it, PoP is a form of mining. VeriBlock envisioned an ecosystem of blockchains – each addressing diverse problems – but with the full security of Bitcoin. But why Bitcoin? You may ask. 

Currently, Bitcoin is the largest cryptocurrency network and is rightfully considered the golden standard of security. Attacking the network would require massive investment in specialized computational infrastructure, all thanks to the high number of nodes in the network paired with its consensus algorithm. It is argued that to stage a 51% attack against Bitcoin, even the world’s fastest supercomputer would be of no use. Smaller blockchains have had to endure this vulnerability for years, but not anymore.

Simply put, VeriBlock’s PoP scheme will allow participating blockchains to use Bitcoin for a second-layer of consensus. So, first, they do their own proof-of-work consensus then push the transactions to Bitcoin through VeriBlock’s blockchain. 

The VeriBlock ecosystem acts as an aggregation layer between alternative blockchains and Bitcoin. Whenever a new blockchain joins this ecosystem, VeriBlock becomes even more decentralized and more secure due to the increased network effect. 

What’s The Deal?

For VeriBlock’s technology to work, PoP miners are needed, and that’s where you come in. As discussed above, the technology works by having transactions mined in their original blockchains then published to Bitcoin in a decentralized, trustless, transparent, and permissionless (DTTP) manner. Hence, your work as a PoP miner will be pushing blockchains, which already have intermediate consensus, to Bitcoin to receive the final security seal. The backend mechanics are complex, but the user’s role is suitable for a layperson.

With VeriBlock’s PoP, everyone stands to benefit. We have seen that PoP miners get their commissions by pushing transactions to the second layer of verification. On the other hand, innovators working on alternative blockchains will see their projects boosted as users become more confident in adopting these blockchains. The thing is, it is easier for developers to build applications on alternative blockchains where speed and scalability are non-issues. But security remains a challenge for such networks. Therefore, it is easy to understand why the whole crypto community should rejoice at the release of this invention.

How Do You Earn?

Unquestionably, VeriBlock’s PoP technology is too complex to be discussed here, but luckily, you do not need to understand the intricacies to participate and earn.

Send Bitcoin, get paid! Earning with VeriBlock’s PoP is that simple. The company has partnered with ZelCore to make this dream a reality. From December 2020, ZelCore users can earn $VBK by sending Bitcoin from their wallets. On the updated wallets, users will find $VBK alongside BTC, BCH, LTC, and other major cryptos. 

For the earning part, all you really need to do is update your ZelCore wallet to get the new feature. Any time you send Bitcoin from your ZelCore wallet, you will be taking part in VeriBlock’s second layer of consensus and getting paid for the hard work. Again, for emphasis, you do not need to do any manual validations – sending BTC is sufficient to earn you rewards.

In the bag of goodies, we also had some 1.5 million $VBK, which was to be shared among the first 15,000 users to upgrade their wallets by December 21. If you did upgrade before then, kudos! If not, your second chance is to earn by sending BTC from your ZelCore wallet.

Rewards are earned in VeriBlock coins ($VBK), which can be converted to other major cryptocurrencies. The conversion is expected to be smooth as $VBK is already listed as an asset in the updated wallet. Paying out earnings through $VBK was necessary because that’s the network that performs the final consensus, which is understandably confusing as Bitcoin would be expected to be doing this task. 

Which Wallets Are Supported?

At the moment, you can only participate in this passive earning scheme if you are using the ZelCore wallet. Some consider this a disadvantage given that the wallet is not open-source, and for being a commercial wallet, users are charged monthly maintenance fees to use some features. Nonetheless, the developers have tried to compensate for this by offering highly reliable customer support and unmatched user experience. 

About the ZelCore Wallet

ZelCore is a multi-asset crypto commercial wallet that supports over 170 digital assets. It integrates the services of a number of major exchanges, including Changelly, InstaSwap, Coinswitch, and Kyber, so you have it all under one roof. The application, which is available for both mobile and desktop devices, offers beautiful interfaces, best-in-class security, including two-factor authentication, great usability, and seamless integration of new features, which the company promises to roll out continuously. 

Why Should You Participate in VeriBlock’s PoP?

First, to earn passively. VeriBlock’s PoP gives ordinary Bitcoin users – those without any special mining equipment – the opportunity to earn from mining. This idea is not only novel but exciting too. It is not often that you can make money by almost investing nothing. Also, mining has, hitherto, been a reserve of those with the financial muscle to invest what it takes to set up the specialized infrastructure.

Secondly, your participation in VeriBlock’s PoP scheme will be for the greater good of the cryptoverse. The growth of alternate blockchains has been hampered significantly by security issues related to the 51% attack. It has been difficult for merchants and exchanges to list tokens from alternate blockchains when the risk of double-spend stares at them. Thus, when you take part in proof-of-proof validations, you are helping alternate blockchains to grow.

Final Thoughts

Earning passively is one of the easiest and effortless ways to earn from crypto. With VeriBlock’s proof-of-proof invention, ordinary Bitcoin users can make extra money by validating transactions. Participating is easy – one only needs to download a ZelCore wallet (or update it for existing users) and start sending BTC from the wallet. There is a slight limitation in the use of the ZelCore wallet as it is a commercial product. Nonetheless, its usability, security, customer support, and its wide variety of features make it worth the trouble. VeriBlock may extend the technology to other wallets, but as to which ones and when, that remains a matter of conjecture. Overall, we may point out a few areas of improvement for VeriBlock’s PoP earning scheme. Still, we must also agree that this is a noteworthy opportunity for Bitcoin users to earn effortlessly.

Categories
Crypto Daily Topic Cryptocurrencies

What Is It Like Investing in Tezos (XTZ)?

Smart contract safety, long-term upgradability, and open participation: these are the problems Tezos promised to solve when it was created in 2018. So, the developers built the network to facilitate peer-to-peer transactions and launch smart contracts. Behind the network sits the Tez (also called Tezzie) digital token, which is the focus of this article. 

If you are familiar with Ethereum smart contracts, you might already understand Tezos’ offering. However, the slight difference between smart contracts on these two networks is that Tezos allows participants to directly control the network’s rules. This makes Tezos not just a re-invention of the Ethereum wheel but a rather more flexible and scalable platform for implementing smart contracts. 

Tez can be considered a major crypto. By market capitalization, it ranked #19 at the time of writing. It’s availability in multiple exchange pairs and listing on major exchanges indicates that it is a popular asset among investors. 

This article will look at what it is like investing in Tez and answer questions such as is it a good investment.

What is Unique about Tezos?

One of the things that make Tezos unique is its proof-of-stake consensus. Unlike Bitcoin, consensus on the Tezos network is achieved by stakers, whose mining power depends on how much Tez they hold. Relying on this consensus mechanism might have given the crypto some resilience against the cryptocurrency bear market of 2019. Between October 2019 and February 2020, the crypto recorded triple growth. This is a remarkable movement – at the time of writing this, even Bitcoin, in its current biggest bull run yet, has not attained triple growth.

Performance in 2020

Tezos is known for euphoric investment. During its ICO launch, it raised $232 million, one of the biggest ICOs at the time. Well, in 2020, the crypto has shown similar tendencies – fluctuating between less than a dollar and $4. Such volatility has only been shown by a few cryptocurrencies. Again, we must acknowledge how large these fluctuations are. Despite the relatively low price, the percentage changes are tremendous. 

Tez was trading at roughly $1.3 at the beginning of 2020. By mid-February, it had rallied to trade at $3.7. Prices soon crashed to lows of $1.3 a month later. Between April and July, Tez demonstrated rare stability exchanging at about $2 and only fluctuating slightly. In August, the crypto experienced its largest spike of the year, and at some point, fetched a whopping $4.2 at exchanges. The prices have since dropped to $2, which so far seems like its point of equilibrium.

24-hour trading volumes for the crypto indicate drastic changes in investor activity. There was only 30 million worth of trade per day as the year opened, but by mid-February, this number had increased 10-fold. By mid-August, the volume was 20 times. Even when the prices dropped to the $1.3 figure witnessed at the start of the year, 24-hour trading volumes never declined below $70 million. 

The volume of trading exhibited by Tez shows how enthusiastic investors have been with this crypto. Coupled with its relatively high volatility, we can conclude that Tez has been the perfect asset for short-term trading, at least according to investors’ 2020 trading patterns. 

The Future of Tezos

We have seen that, due to its volatility and high trading volume, Tez performs impressively in the short term. For investors who seek to grow their investment in the long term, questions on Tez’s suitability still persist. 

Tezos had a promising start right from its introduction to the initial coin offering. As earlier mentioned, the crypto raised one of the highest amounts ever raised in a cryptocurrency ICO. The faith investors have placed on the crypto from the start indicates its potential and guarantees some level of support for its growth.

Tez has also shown tremendous resilience in the past. After the successful ICO, legal disputes delayed its launch for almost a year. Even so, when it finally launched in 2018, investors had not lost faith in the project – which can be proven by how fast it rallied to reach triple gains. Tezos’ market rank is another indicator of its resilience and aggressive growth. For a crypto that is only 2 years in the market, claiming a position among the top 20 cryptocurrencies is no mean feat.

These past indicators describe a crypto with a solid foundation, good reputation, and the community support needed for future growth.

Adoption in The Banking Sector

The network’s flexibility and scalability also imply that we will see new use cases regularly. In 2019, barely a year after Tezos was launched, BTG Pactual and Dalma Capital (both are reputable investment banks) announced that they will be using the Tezos blockchain for security token offerings (STO).

Tezos adoption in the banking sector is also likely to increase, particularly due to its security. Least Authority, an esteemed security auditing company, released a report affirming that ‘Tezos protects against chain reorganizations and selfish baking.’ Such approvals will go a long way in promoting the crypto’s adoption in the financial sector. 

Stability and Reliability

Tezos’ designers spent a lot of thought on the network’s stability. Unlike most crypto, Tezos has an advanced infrastructure that is not prone to hard forks. Users can vote on proposals to upgrade the protocol on the main blockchain. Through a process known as baking, users stake an amount of XTZ to participate in the voting process. Changes to the protocol become effective only after they have been backed by a super majority. This form of governance ensures the network is ‘built to last.’ As an investor, you will be protected from the uncertainty that comes with hard forks and the subsequent possibility of making a loss on your investment.

Is it Risky Investing in Tezos?

Cryptocurrencies are inherently risky investments. Tezos appears as a stable, secure, and well-governed blockchain. However, the currency faces the same volatility and speculation that all other cryptos face. No matter how lucrative Tezos might appear, the golden rule remains, never risk more than you can afford to lose.

Final Thoughts

Investing in Tezos can be an exciting experience – you can quickly gain or lose, and by high margins. The currency’s relatively high volatility makes it a particularly suitable asset for short term investment. In the long term, Tezos looks equally promising. It is secure, stable, and reliable. These characteristics position the crypto strategically for widespread adoption in the mainstream financial sector. The network’s immunity against hard forking is a guarantee of stability against hard fork uncertainties. While Tezos is a good investment, it is still risky due to the virtue of being a cryptocurrency. Therefore, it is best to exercise caution and avoid hype when making the decision to invest in Tezzie. 

Categories
Crypto Daily Topic Cryptocurrencies

How to Take Advantage of Ethereum 2.0

Ethereum, the decentralized blockchain that features smart contracts, will be getting a series of upgrades that will see improved scalability, security, and sustainability. This massive upgrade will create new opportunities for investors. Apart from allowing Ethereum users to earn passively from staking, smart investors can take advantage of price changes during the launch of Ethereum 2.0 and multiply their investments. 

In this article, we will look at what is Ethereum 2.0, what investment opportunities it creates, and how you can be part of this development.

What is Etherum 2.0 All About?

Also known as Eth2, Ethereum 2.0 is fundamentally a shift from the current proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) model. In the PoW model, the generation of new blocks relies on the computing power of each node on the network that is taking part in transaction validation. On the other hand, PoS relies on virtual miners (also called validators) and Ether deposits to achieve consensus. 

Besides changing the consensus mechanism, Eth2 also introduces shard chains – a mechanism that ‘splits’ the Ethereum blockchain and shares the processing task among different nodes. This approach increases the network’s processing capability by allowing concurrent processing of transactions – a shift from the traditional sequential processing. 

While the upgrade is squarely technical, its economic and financial implications will be far-reaching. 

How Will Eth 2.0 Affect Prices?

Whenever a major event happens on certain crypto, its prices are bound to change due to increased speculation. In the wake of the anticipated Eth2 launch, upward price movements were observed. The launch was set to happen on 1st December, and a week to this launch, ETH prices had gone as high as $600. While this rally might have been due to other factors, such as the general positive sentiment on cryptocurrencies, the surge observed just a week before the event can’t be coincidental. 

Speculation aside, Eth2 is bringing improved transaction speeds and lower costs – factors likely to increase demand for the crypto. Already, exchanges are reporting declined sell pressure, which indicates that investors are not eager to sell ETH at the moment. The speed and transaction cost improvements will also automatically cascade to tokens that run on the Ethereum blockchain. This will trigger even more demand for the crypto and, thus, better prices. 

Staking in Eth 2.0

The introduction of staking in Eth2 creates a new opportunity for investors to earn by validating transactions, and this is the latest investment opportunity we would like to discuss. 

Simply put, staking in Eth2 implies depositing 32 ETH to activate validator software – the tool you will be using to process transactions. As a validator, you will have the power (and duty) to process transactions and add new blocks to the blockchain, and earn rewards while at it.

Rewards are given to validators for pushing transaction batches into new blocks and validating other validators’ work. While there are bountiful rewards in staking, you might lose ETH if you are unavailable to perform validations or if you use your stake against Eth2 validation specifications. 

How to Stake in Eth 2.0

Staking involves sending 32 ETH to the following address: 

0x00000000219ab540356cbb839cbe05303d7705fa

However, you will need to use the launchpad dedicated for this purpose. The address above is for verification purposes only. The process involves several distinct steps, summarized as follows:

  1. Review Eth2 staking agreement/ terms and conditions
    1. Sign up on the launchpad. This will involve depositing the 32 ETH.
    2. Agree that it is your responsibility to keep your validator online.
    3. Agree that you are liable to slashing (incurring a large penalty) if you act against validation specifications.
    4. Agree that you understand that your mnemonic (or seed) is the only way to access your funds and that you will keep it safe.
    5. Agree to safeguard your key stores, which will hold your keys, and provide the public keys to the launchpad site to activate your validator.
    6. Agree that you cannot transfer your staked ETH until Phase 1 and that you cannot withdraw until Phase 2.
    7. Agree that once you exit, you cannot rejoin as staking is a long-term commitment. (The completion of each phase depends on reaching a certain amount of staked ETH. Thus, withdrawals will keep extending timelines for this smart contract).
    8. Accept early adoption risks, i.e., software and design flaws that may result in the loss of your ETH.
    9. Agree that you are technically capable of configuring a validator.
  2. Select an Eth1 client that will run parallel to your Eth2 client. This is necessary to process deposit transactions coming from the Eth1 chain.
  3. Select an Eth2 client and set up a node. You can choose between Prysm, Nimbus, Lighthouse, and Teku. Nimbus is one of the most versatile as it can run even on older smartphones.
  4. Select the number of validators you would like to run and the operating system you will use. Remember, to operate each validator, you will need 64 ETH.
  5. Upload the validator which you downloaded/ built from the previous step.
  6. Finally, connect your wallet.

While staking in Eth2 is quite technical, especially for the average user, a comprehensive step-by-step guide is provided on the Ethereum launchpad website. It is also worth acknowledging the thoroughness with which the documentation was put together by the Eth2 team to guide potential validators. If you use this guide, you are unlikely to get stuck simply due to technical difficulty. 

Is Eth 2.0 Staking a Good Idea?

Staking in Eth2 is a double-edged sword – it comes with both benefits and risks. When you commit your ETH to the staking contract, you are almost guaranteed returns just from staking. However, returns are highly variable. In fact, it is impossible to tell how much you can earn by staking a fixed amount of ETH until you actually receive the reward. Even so, if you stake and consistently participate in validation, you will get rewarded. 

Secondly, staking means locking your ETH to the network for some time, without the possibility of withdrawing it at least until Phase 1.5. This is akin to depositing with a fixed account, whose interest can be compared to the growth of ETH in the near future. 

While staking is a good way to earn from Eth2, you might want to consider the following risks:

  • Staking is a one-way deposit. ETH you send to the contract address cannot be withdrawn until an unknown future date (this is until Phase 1.5 of the upgrade is reached).
  • Profits you earn from staking also remain staked until this unknown future date.
  • Validation is a responsibility that all stakers must undertake. By being offline, you will lose as much as you would have earned if you were available for validation.

Final Thoughts

The coming of Eth2 brings with it exciting investment opportunities. Other than the traditional trading and HODLing, Eth2 allows you to commit some funds to the network and join other validators and earn exclusive rewards from it. Risks, including early-adoption software bugs and slashing due to being offline, exist. However, all considered, staking is a worthy venture that ETH investors should consider. 

Categories
Cryptocurrencies

9 Signs Your Crypto Investment Is About To Go Down

Crypto investments are inherently risky. At some point in the course of your journey, you will undoubtedly lose (part) of your investment. You could be contemplating investing, or you might actually be deep into the game. Whichever the case, losing your investment can be traumatic to the extent that you might want to avoid crypto altogether. 

You could lose your investment out of a lack of understanding the trade, or someone just fleeced you. After all, crypto is not for everyone. But wait! Even seasoned investors once in a while incur losses. The question is, are there warning signs you can watch out for and jump out before it’s too late or wait until the time is ripe?

This article looks at signs that tell you to avoid that crypto investment or abandon it if you had already taken the journey. 

#1 You’re not really enthusiastic about crypto

Many a time, people rush into crypto because they hear it is lucrative. There is no doubt that investors have made big cash out of crypto investments. But, if you are only interested in multiplying your money, you might find yourself making very unwise decisions. Additionally, if you are not enthusiastic about crypto, chances are you will struggle to understand market dynamics and how to take advantage of the seasons. 

#2 You don’t understand the technology

Almost anyone can buy and sell cryptocurrency. In essence, you do not need to be a geek to invest in cryptocurrency. But there is one little rule in investment: you should invest in a sector you understand – this is controversial, but think of it this way: Would you rather bid your money on a project you have no idea of or one in which you’re a professional? 

A cryptocurrency is a form of technology, and if you are not good at tech, don’t be surprised if you find yourself struggling to catch up with technological changes that directly affect your investment. You should consider this your cue to take a break from crypto investment until you are familiar with the technology. 

#3 You are not updated with news and events

Events in the cryptocurrency space unravel so fast that, as an investor, you cannot afford to be outdated. Due to the speculative nature of these markets, news and events have a major influence on prices. Thus, if you hardly follow the news, you are likely to miss out on your cues to exit a market. Of course, you also need to be able to interpret the news – they sure won’t announce that it is time to exit. 

#4 You are not patient

This is not just for crypto. For any sort of investment, you need to be patient, especially to give you time to think twice. Hype, FOMO, and peer pressure can rush you into investing even when you have not thoroughly analyzed an investment.

There is no substitute for due diligence. As such, if you are not patient enough to double-check that enticing crypto investment proposal, you are already a potential victim of loss. Regardless of the kind of crypto investment in question – an ICO, DAICO, trading, staking…you name it – time and patience are absolutely necessary inputs for the avoidance of unnecessary losses. And if you lack these elements, it is a sign that you are unlikely to succeed in crypto investment. 

#5 You easily buy into the buzz

Arguably, the hype is the biggest commodity traded in the money markets. It’s even bigger in crypto trading, which has been branded as revolutionary, more advanced, and cut out for the discerning investor.

The hype has misled many into thinking that certain investments are paying off handsomely, only to realize later that it’s not all true. A good investment must be well thought out – the timelines, the bid, the risks, and all. Some people just can’t resist the hype. Should you be one of them, your crypto investments are at a greater risk of going down.

#6 You are a panic seller

Crypto is, by nature, highly volatile. Sometimes, a cryptocurrency can gain/lose 20% but then correct the trend within hours. Such temporary spikes are a norm in the markets. If you have a tendency to panic-sell, the chances are that you will sell your assets when the prices have temporarily crashed, and you will have lost the difference. It is best to differentiate normal fluctuations from sustained trends. 

#7 You’re only investing in high-risk portfolios

In the money markets, high risks are associated with high returns, and the converse is true. There are people who appear to specialize in taking high-risk investments only. You could say one’s investment strategy is their choice, but to be honest, these are the kind of investments that, when they go down, fall hard. 

If you find yourself choosing high-risk portfolios all the time, it is best to re-evaluate your strategy. With due respect to diverse investment styles, a good portfolio should balance both high and low-risk investments. 

#8 You don’t like the idea of losing money

Not that anyone does, but investing in crypto is a two-way traffic – you can gain, you can lose. When investing in crypto, you should come to terms with the possibility of losing money. It is generally important to be open-minded to avoid panic-selling or making some other rash decision. If you find yourself struggling to accept the loss of your investment, check again that you are not vulnerable to making hasty decisions to ‘avoid further loss’ as this could be counterproductive and lead to even further losses.

#9 You have no idea what is going on

This sounds related to being updated and understanding tech, but it goes even further. Crypto investment is diverse. You will hear of ICOs, staking, crypto loans, and other jargon not found in regular conversations. You can imagine what it would be like investing in an ICO and receiving a bunch of useless tokens just because there was an offer for ‘early-bird investors.’ The thing is, you should familiarize yourself with what is what, so you know exactly what you are engaging in. 

Final Thoughts

Investing in crypto is a risky journey. Despite the fact that you can reap big profits from the venture, the possibility of loss always exists. As some of these losses are avoidable, you should watch out for the signs above to help you know when and if to take the risk. Anyway, there is no right or wrong investment approach – take this only as a guideline to avoid unnecessary losses to your crypto investments. 

Categories
Cryptocurrencies

Overview of PoW and PoS Consensus Algorithms

One of Ethereum’s most anticipated updates in 2018-2019 is the final part called Serenity, which will lead to the shift of the consensus algorithm with Proof-of-Work to Proof-of-Stake. For the miners, this will mean the end of classical mining (proof of labor) and the step towards obtaining an interest in the self-possession of the currency (proof of participation). Good or bad, there’s no definitive answer. Although the PoS algorithm is considered of greatest interest, always viewed from a technical point of view, this consideration may lead to the problem of centralization and pricing. What is PoW and PoS: essence, differences, advantages, and disadvantages, read this article.

PoW or PoS: About Consensus Algorithms

In the spring of 2017, Ethereum developers released some details of Casper’s future protocol. One of the main changes that have been proposed to the protocol, whose publication of the first part was already held in November 2017, will be the transition from the Proof-of-Work consensus algorithm to Proof-of-Stake. This point should first be of interest to those involved in mining. And let the second part of the protocol be postponed, you need to understand the difference between this type of algorithms and what is changed to miners are waiting for. But before that, let’s understand what the consensus algorithm is, in principle, and what they are.

What Is A Consensus Algorithm?

In any network built under blockchain, two types of messages are transmitted: transactions (conventionally, money transfer) and blocks that are made up of these transactions. To make a transaction, it is not necessary the consent of participants outside the system, just know the key (password, identification of the holder of the wallet). Another issue is the blocks, whose order in the transaction log is confirmed by consensus. The biggest problem we’re dealing with on the net is that it’s possible to forward a transaction at the same time between nodes.

Example of the so-called “double expense”. Oleg has 1 bitcoin, which he wants to send, but does it at the same time Alexander and Yana. And if Alexander and Yana do not agree with each other on these transactions (that is, they do not know that a simultaneous shipment was made), then a network problem arises. Therefore, all network participants agree on a transaction log, so that one of Oleg’s operations will be successful, and the second one will be recognised as incorrect. The reason for this problem is obvious, but how to solve it technically is a difficult question.

Byzantine Consensus

The Byzantine consensus is a common definition of the task of the interaction of several participants of the network with each other, located remotely and receiving a task from a single center. And some network participants, including the same center, may be intruders (hackers). In other words, the Byzantine protocol algorithm should provide communication between remote network participants, eliminating fraudulent operations, i.e., transaction security.

The idea of Byzantine consensus appeared in the 1980s. Its essence lies in the following (including fantasy). Byzantium on the eve of the battle. The Byzantine army consists, for example, of four legions that are located at a distance from each other. At a certain point, each of the legion generals receives an order from the executive center to attack or retreat. The development of events is as follows:

If all the legions attack, they win.

If all the legions withdraw, they save the people (also a successful outcome).

If a party attacks, a party retreats, the army suffers defeat.

The work to be done is obvious, but where do we find the guarantee that there will be no traitors who carry out contrary orders? And where do we find the guarantee that the boss will not also be a traitor who sends different orders to his subordinates? Conclusion: Subordinates must comment on the information between themselves, and thus the false data will be deleted. To be precise, they should comment on the information about the number of legions who have been loyal to Byzantium, and draw conclusions about the number of legions of traitors. The task assumes that with N number of generals the traitors can be N-1.

The principle of the agreement is that all loyal subordinates, as a result of the exchange of information, will have to make the same decision, ignoring the information of the general traitor. Let us return to the example. The main feature of the exchange of information is as follows:

Each general sends information on the number of his legion to three other generals. And the disinformation traitor sends the other generals different numbers on the number. In cryptocurrencies, it is an analogue of spam, DDoS attacks, fictitious transactions.

Each general forms a block in which it indicates all four digits received, indicating from whom it was received, and this ready block sends it to other generals.

As a result, each general has in his hands 4 blocks with figures on the number of each legion. And it is logical that for three general figures are the same in the three blocks and only one will have discrepancies.

Thus, the loyal generals reach an agreement, excluding the opinion of the traitor. The example is short, but it clearly shows how network members come up with a single solution, eliminating the fake ones.

Proof-of-Work Consensus

The Byzantine consensus has a serious problem: the generals know from whom the information comes. That is, there is no anonymity, which is inherent in cryptocurrencies. In the 1990s, a certain version of the consensus algorithm that we’re discussing, maintaining anonymity. In essence, it does not make sense to go deeper, but it comes down to the fact that all the calculations (analyses transmitted to each other in the information network) are made by the PC. To join the network, applicants must complete a certain task (perform a calculation it is not possible for a person, but it is not impossible for a computer), this comes to prove that it is a real user.

The Proof-of-Work algorithm itself (proof of work) is the calculation that the computer performs at the time of mining, while blocking the fake strings and finding the correct transactions.

Distinctive Features of Proof-of-Work

Consensus eliminates the problem of anonymous networks: Sybilla attacks. This situation is what we find when an attacker wants to surround the node of a victim, that is, access all nearby nodes. By seizing the channels of entry and exit of information, you can send false data to the victim. In a BTC built on the PoW algorithm, this possibility is leveled off, as the victim’s node chooses other nodes at random, excluding the victim’s entire environment.

The test does not move to other blocks, that is, it excludes the possibility of stealing from each other (the test is the result of calculations in which energy is spent).

The test cannot be obtained in advance. Each new block will always have a reference to the previous one block, so it is possible to calculate each new test only with the arrival of a new block.

PoW guarantees the integrity of the distribution of the unit’s rewards according to the computer’s capacity. If the power (hash) is 5% of the network, the miner’s computation process creates a certain percentage of the block and receives the same percentage of the reward.

Actual resources, for example, electricity, are spent for the purpose of obtaining evidence, because miners lose the incentive to somehow influence nodes and transmit false information, there is a risk of losing the money invested.

Proof-of-Stake Consensus

If there are many miners in the network and there are also more cryptocurrencies extracted, more power is required for computational operations. Only there are no benefits of these calculations, except for the security and anonymity of the network. Attempts to steer energy in the right direction were in the early stages of Ripple, where miners performed calculations, necessary for different scientific industries (medicine, robotics, etc.), and thus received a reward from developers. But he had to retire.

The second problem in mining is unlimited emission. If bitcoin has this limitation (and BTC extraction is becoming less profitable as the reward for the block decreases), some currencies (for example, Ethereum) have no restrictions. And any unrestricted issuance is charged with depreciation.

The Proof-of-Stake (proof of participation) algorithm deviates from the concept of emission. If in the above-mentioned algorithm, the miner had to prove his presence in the system by calculations, here it is enough that the miner has cryptocurrencies, that is, a participation in the common system on which interests are accrued. In other words, mining as such disappears is replaced by interest.

Other Test Algorithms

The PoW and PoS consensus algorithms use most existing cryptocurrencies. And technically more perfect coins are considered based on PoS. But there are many other mechanisms to protect data, and although these mechanisms are similar to PoS and PoW, they have, of course, their own peculiarities:

Proof-of-Activity is a model that represents the original symbiosis of PoW and PoS.

Delegated Proof-of-Stake is an analogue of PoS, but with elements of vote delegation. Each system member votes for a witness to protect their computer network. The impact on the vote is determined by how many tokens the person has (the more, the greater the impact on the network). The algorithm uses EOS, Lisk, BitShares.

Proof-of-Burn is a model in which the miner sends coins to an address from which they cannot be reliably removed (coin burning). Thus, the miner obtains the possibility of eternal mining, the right to which is played in the form of a lottery among the owners of burnt coins. /li>

Proof-of-Capacity is a model based on the popular idea of “memory as resources”. To participate in the mining process, you need to provide a part of your computer’s memory.

Proof-of-Storage is a similar version of the previous algorithm, with a small difference: the allocated memory is part of the shared cloud storage.

The logic of these algorithms is hard to explain. Since the objective of the algorithm is to ensure maximum network security with minimum power consumption, with which PoS handles very well. Other types of algorithms seem to try to create something of their own, original, but not as effective. And by the maturity of the idea, these algorithms lag behind PoW and PoS.

Consequences of the Ethereum Transitions

And then, again, we return to the same question with which the article began: What can miners expect from future changes? There is still no precise transition plan and the transition is postponed. The road map envisages the start of the transition in Metropolis (Serenity) stage 4. The transition will be smooth: First, according to the PoS algorithm you will check 1 transaction out of 100, then your amount will increase.

Miners do not yet fully understand how the transition from Ether to the PoS algorithm will affect. Criticism of the algorithm sounds relative to the price of a cryptocurrency. If in the Proof-of-Work algorithm the minimum cost of a coin is the amount of energy spent for its extraction, then in Proof-of-Stake the price of the coin is determined by speculators. If the project is not interesting, then the price of the coin will drop to zero. On the other hand, more and more coins go to ICO directly with the PoS algorithm.

The question remains as to the amount of the commission for the possession of coins and their comparability with the profitability of other instruments. There is an opinion that will not be high, and therefore the popularity of Ethereum may be affected due to high risks. In this sense, there are perspectives in Ethereum Classic.

Possible changes may include:

Cost reduction. As the practice of such changes shows, price growth does not occur. On the contrary, miners lose interest in the currency, after which a reduction happens.

Change of mining target. Ethereum mining disappears. And in order to continue using your power, you will have to choose another currency. Or try to join the cryptocurrency project, which offers a fee for computing capacity rental (e.g., Golem).

Change in the correlation of forces. The ownership test can lead to large investors being able to concentrate on most cryptocurrencies, which really destroys the advantage of decentralization.

So far, the feasibility of moving to PoS raises more questions than answers. Analysts agree that the transition to a new algorithm like Ethereum will positively affect, but no one can predict the exact consequences. Cryptocurrency is a new instrument, only to gain experience to fill the potholes.

Categories
Cryptocurrencies

The Lightning Network and Its Functions

Solving the Bitcoin scalability problem is no easy task. This problem has taken a long time of research and development, but the solution could already be among us. Its name is Lightning Network and could lead Bitcoin to the apex of scalability to deal with the massification of cryptocurrencies.

The Lightning Network protocol is a protocol designed to improve the scalability of Bitcoin. This is possible because Lightning Network works as a second layer on Bitcoin. One that allows this cryptocurrency to perform things that it normally could not and more specifically; instant transactions with very low commissions. The development and creation of this protocol began with the work of Joseph Poon and Thaddeus Dryja. But at present, it is companies such as Blockstream, Lightning Labs, and ACINQ that drive the development of it. The whitepaper of this development can be found at that link on their main website.

To understand a little of the potential of this technology, we need to keep two things in mind. The first is that Bitcoin was created as a digital money solution. Second, that goal is impossible to achieve in the current state of the Bitcoin network and software. The reason for this is very simple: Bitcoin has trouble scaling.

Currently, Bitcoin can only process 7 to 8 transactions per second. This is a very small capacity and it cannot cope with the massive use of cryptocurrency. As a result, the Bitcoin network becomes slow and very expensive when it comes to paying commissions. For this reason, a new way of performing transactions quickly was needed, which was simple to use and compatible with Bitcoin without making major modifications. The answer to these needs and more is Lightning Network, a protocol from which we will learn a little more below.

Why is needed to improve the scalability of Bitcoin?

Surely you are asking yourself this very question and it is your right. You will think that if Bitcoin has such a powerful and extensive network then why it should improve its scalability. The short answer is; because by improving scalability, transactions are done faster and less expensive.

To explain the answer at length let’s do this little exercise. Imagine you do a transaction in Bitcoin. At that time the Bitcoin network has very little use and the commission cost of each transaction is very small.

However, the cost of fees may increase as network usage increases. This is because a queue or excess of transactions is generated in the mempool. It is there that miners tend to prioritize transactions with higher commission payments for more profits. That way, if you want a transaction to be processed quickly, then you will have to pay more in commissions.

But the latter case also tells us that commission costs will increase to the point where we will not be able to make micro-payments. For example, sending 1 dollar may result in more than 1 dollar for the cost of the commission. This is a meaningless situation and one that scalability improvement can solve, hence the need to improve this feature.

How Lightning Network works

The operation of the Lightning Network depends on several technical factors and a process to make it safe to use. First, Lightning Network depends on the non-malleability of the cryptocurrency being secured. In this way, it would be impossible for a third party to change the information about the transactions or cryptocurrencies during the verification or generation process.

In Bitcoin and Litecoin the non-malleability property of the transactions was introduced thanks to the arrival of SegWit (Segregated Witness). With this soft fork, Bitcoin solved this problem and put the first building blocks for a new way to scale its capabilities.

That’s how the development of Lightning Network and its so-called pay channels began. These payment channels are the cornerstone of Lightning Network operation and the key to enabling unprecedented scalability in Bitcoin.

What are paid channels?

Payment channels are the basis of the Lightning Network. A payment channel is actually a multi-signature transaction in the blockchain with at least one of them sending funds. In this channel, each person has a private key and each future transaction can be made only if the keys of the two parties sign. This is a means of consensus that the compromise has been approved to be executed by both parties.

In addition, payment channels may be open for a certain period of time. Normally this is about 10 minutes or what it takes to mine the next block on the blockchain. But once the channel is opened, channel participants can instantly exchange assets between themselves using the funds stored in that channel. In a nutshell, this means that parties that are part of a Lightning Network payment channel can make payments to each other instantly.

Despite this behavior, the transactions made in said payment channel are completely valid in the blockchain. This is because once the channel is closed, the transactions made are transmitted to the network, verified, and included in a Bitcoin block.

Explaining how Lightning Network works

To understand how Lightning Network works, it’s best to break down your entire operating process step by step. For that reason, we will explain to you a simple exercise on how to perform this process along with other points of interest to clear all your doubts.

First, within Lightning, we will have two participants who will create an initial transaction in the $20 blockchain. Of that $20, $10 will be from Carmen and $10 from Aitor. This deal could be different and can vary within the channel we mentioned earlier, so Carmen could have $15 and Aitor $5 at the end of all exchanges.

What Lightning does is take the technology behind the paid channels and create a network that shapes them using smart contracts to make sure the network can run on a decentralized basis.

In this regard, we would have the following breakdown of the process:

  • Carmen opens a pay channel with Aitor that in turn has a channel with Laura, which in turn has an open channel with David.
  • Right now we have 4 parties participating in different payment channels or payment channels.
  • Carmen wants to exchange assets with David, so she can send funds through Aitor and Laura to ultimately reach David, the recipient.

Due to the nature of the Lightning Network, Carmen would not have to rely on Aitor and Laura within the process as cryptography is used to ensure that the funds David will receive will be exactly the same as Carmen has sent. Otherwise, they’ll be automatically returned to Carmen.

Categories
Cryptocurrencies

Everything You Need to Know About Litecoin

In this article, we will try to develop the essence of the project and the main differences with Bitcoin. Where to buy, save, and how to mine Litecoin, and prospects for cryptocurrency quotes.

The Litecoin cryptocurrency is called silver, compared to Bitcoin, which is rightfully gold. Initially, the currency was created as a reserve variant of BTC, which did not have analogues for a long time. Subsequently, the payment system became a stand-alone project, which created Bitcoin a real competition. However, maintaining the “silver” Litecoin could not, giving way to BCH, Ripple, and decentralized networks EТН and EOS. Although the startup is gradually losing positions, it remains an attractive option for diversification of the investment portfolio. What is Litecoin, what are its characteristics, how to mine the cryptocurrency, where to buy it, and what are the projections of its course.

Litecoin To Replace BTC?

In 2018, relative stability began in the cryptocurrency market and some clear trends were emerging. The success of ICOs is still present and continues to have some growth, but it has begun to follow a pattern: developers are moving further and further away from non-traditional startup ideas, creating analogues (fork, clones) from the most popular cryptocurrencies. Firstly, we are talking about payment systems and decentralised networks such as BTC and ETH. It is logical that when there is a market correction the vast majority will cease to exist, giving way to the oldest, but not less popular cryptocurrencies. And although these older cryptocurrencies have been repeatedly criticized, they remain solid in the top capitalization rating of CoinMarketCap and are unlikely to be eliminated.

One of these coins is the cryptocurrency Litecoin, which is among the most flexible, progressive, and promising. This cryptocurrency is traded on almost every stock exchange in the world, except for “pocket” exchanges (“adapted” for a particular project). Your code is constantly improving, and it is possible that someday this payment system will be able to become equal with BTCs in terms of capitalization. What is Litecoin, what are its differences with Bitcoin, where to buy and save, how to mine and what are the prospects of cryptocurrency, read it in the article.

Charlie Lee was the founder of this project, and I was the one to date is one of the main developers. Initially, cryptocurrency was conceived as an analogue to Bitcoin, a kind of reserve currency. In 2011, its code was developed, copying almost literally the BTC code, only with more bandwidth, and in 2013 the project gained worldwide recognition, occupying second place in terms of capitalization. Subsequently, some changes were made to Litecoin with respect to the mining algorithm, transaction speed, and the number of coins. The order of blockchain construction on both currencies is the same, the differences are only in the function of finding a hash. Both currencies have a Proof-of-Work consensus algorithm.

Differences Between Litecoin and Bitcoin

The number of Litecoin coins is 84 million, of which more than 56 million have been extracted (the BTC issue is limited to 21 million coins, of which 17 million have already been extracted).

Hash search algorithm: Litecoin is Scrypt, Bitcoin is SHA-256.

The speed of computation generation is 4 times higher. The generation of 6 blocks takes place in 15 minutes.

There are many possibilities that in the future an adaptation of Atomic Swap technology, this technology will allow for paying for goods and services with Litecoin and Bitcoin. For example, if the seller accepts only BTC, it will be possible to pay for the goods with LTC (automatic conversion) without commissions. The technology, at present, has not been implemented, but in the future, it may become a significant competitive advantage compared to BTC.

There is protection against “double costs”. The peer-to-peer network excludes third-party intervention. Litecoin and Bitcoin are very similar. LTC developers had one goal: to increase the speed of transactions. And in part, they succeeded, but they failed to break the glory of the BTC. There are two reasons for this:

  1. Investors are used to Bitcoin and have legislative support in some countries. And while the idea of Litecoin looks promising, investors preferred the already proven asset.
  2. Bitcoin doesn’t have a founder, the development team is working on it, and the network itself is completely decentralized. Litecoin was created by Charlie Lee, who had substantial participation until the end of 2017. This dependence partly deterred investors who feared an artificial influence on quotations.

The official startup website is somewhat confusing. It is a single page, where the main information is only data on purses, shoes, and bags. There is neither a White Paper, nor a clear description of the essence of the project and its advantages, nor information about the developers. Why such a serious startup was left without any information support is a mystery. And that’s one of the reasons why Litecoin is inferior to its competitors. Some of the information can be found on the litecoin-foundation.org site, but it is uncomfortable.

Where to Buy and Save Litecoin

It could be thought that the popularity of cryptocurrency should ensure a uniform distribution of turnover, which would mean reducing the risks and equal interest of investors worldwide. However, the largest volume of sales falls to OKEx (okex.com), approximately 27-30%. You have the possibility to purchase a chip here, but only for BTC or USDT, unfortunately, ЕТН or fiat are not provided. Although this exchange is one of the largest, it is surprising why in Huobi or Bitfinex the volume is much smaller. Here it is appropriate to recall the accusations against Charlie Lee, whose essence was the artificial manipulation of LTC’s price when he was one of the developers in the Coinbase exchange.

Litecoin is present in more than 350 exchanges of cryptocurrencies its instruments, but currency trading takes place in just a few tens of them, literally. The second place after OKEx is in the Binance exchange (binance.com) with a turnover of 10-12%, but here the currency is also traded only by USDT or BTC. Between 5% and 9% of turnover corresponds to GDAX (gdax.com), Binance, Huobi (huobi.pro/ru-ru/), Bitfinex (bitfinex.com), Bit-Z (bit-z.com). Few exchanges can have the possibility of purchase cryptocurrencies for a South Korean won, EUR, or ETH.

In terms of the proportion of turnover for each specific exchange, Litecoin is lower than its main competitors: BTC, ETH, XRP, EOS, ВСН. In front of Binance is LTC also TRON and Loom Network, in front of Huobi is Cortex, in front of Bit-Z is TRON, in front of OKEx is True Chain. Due to frequent cryptocurrency exchange attacks, it is not desirable to keep coins in your accounts. An alternative could be the purses, whose list is provided on the site. These include online, cold wallets, and coin purse devices for different types of carriers. To avoid problems and loss of cryptocurrencies, it is recommended to use only these.

Another alternative for intraday trading is Forex. Advantages of this option:

  • The ability to open not only a long position but also a short position. The implementation of any strategy that cannot be implemented in exchanges due to technical details, the possibility of using trading advisors.
  • Account security (protection against piracy and unauthorized withdrawal of money). The ability to recover a password if you have lost it (the wallet password is not restored).
  • Instantaneous transaction speed.

For those who were interested in this possibility, LiteForex prepared a nice surprise: recently, cryptocurrency pairs have been added to the list of instruments, allowing you to win at rates not only relative to the US dollar, but also among themselves. Learn more about the terms and conditions here.

Litecoin Mining

Litecoin is often referred to as “silver after gold,” meaning it is the second most significant cryptocurrency after Bitcoin. It is true that in times past it was in the TOP 3, even the cryptocurrency came out of the TOP 5, occupying a sixth-place rather unstable. By the level of capitalization only a little Cardan is missing to lower Litecoin another line down. And there, she will be reached by Stellar, who is rapidly gaining momentum. We will try to explain this by the following factors:

The emergence of new payment systems, in part “drag on itself”. First, there are numerous Bitcoin forks and a new address in cryptocurrencies: blockchain symbiosis (e.g., Bitcoin and ZClassic). If Bitcoin is backed by great trust and recognition from countries, then other payment systems to reach the CIMA is more difficult.

Competence of decentralized networks. Any startup has the obligation to be a useful project if we look at it from a practical point of view. And if most payment systems are only in a model state, then, based on decentralized networks, application development is already underway. Because Litecoin lost positions to Ethereum and EOS.

The prospects for the Litecoin cryptocurrency are more than optimistic, but the chances of even reaching the TOP 5 (not to mention the TOP 3) are slim. The payment system is improved and developed, actively promoted in forums and media. But competitors don’t stay in place either, and the closest of them, Bitcoin Cash, is out of reach.

One of the decisive factors determining the interest of investors in cryptocurrency is the news fund. In early February 20, 2018, developers announced the release of LitePay, a technology that would allow retailers to make and record payments instantly anywhere in the world. According to the information on the project’s website, this technology would protect against volatility through the instantaneous exchange of LTCs by traditional currency units, thus competing with exchanges.

With a rate close to 3% for payment cards, LitePay technology would reduce costs by up to 1% (which is even lower than BTC’s). The planned launch of the technology did not take place and so far its future is unknown. After the failed release of LitePay (allegedly due to hostile actions by card issuers in relation to cryptocurrency companies), the rate dropped and so far has not returned to the same level.

In the near future, lots of news determine Litecoin’s exchange rate. By the way, startup founder Charlie Lee in December 2017 completely got rid of his share, selling coins at the time of the spike in quotes. After the LTC price on 19 December reached a record high of USD 359, it sold its entire share, motivating that it will now not be accused of influencing the quotations for its own benefit. For several weeks afterward, the coin was halved.

And yet, Litecoin’s exchange rate forecast is positive. Little by little, startups support different platforms, and now the success of the project will depend exclusively on the developers. With cryptocurrency, you can pay for goods in some online stores, but so far their number is limited.

Conclusion

The Litecoin cryptocurrency is a good second-tier currency, lower due to development errors only in the BTC and BCH payment systems (Ripple and decentralised networks are not taken into account, as they have a different essence). It is not strictly necessary that we talk about the stable growth of the exchange rate, but on the other hand, this is a possibility for Forex to gain in the fluctuations of the quotes in both directions. To project the exchange rate, we follow the news and do not forget the diversification of the portfolio.

Categories
Crypto Daily Topic

What is coin burning all about?

The crypto adoption juggernaut rolls full steam ahead. You need only look at the increasing number of outlets accepting crypto payments to prove this. Even governments that once approached them with cynicism have caught on to the act. The big migration to CBDCs is now a matter of time.

Whereas the growing acceptance is positive, it comes with its misgivings. Although the proliferation of coins and tokens expands choices, it raises concern about sustaining cryptos’ value within the cryptosphere.

Cryptos are good at mitigating inflation, but they’re not immune to it. Crypto projects have had to devise the means of controlling this. As such, coin burns have been the tool of choice. But what are coin burns? How does one execute them? Importantly what is their value? Stick around as we go deep into the subject. 

What Is Coin Burning?

Coin burning is the process of removing a set volume of cryptos from circulation.  In doing so, developers and miners reduce their total supply. 

Eater Addresses/ Blackholes

Coin burning entails sending cryptos to public addresses with unobtainable private keys. Also known as eater addresses or blackholes, these addresses render the coins useless. Nevertheless, they allow for their public viewing and peer verification on the blockchain.

Coin Burning Varies With The Project

Depending on the frequency of the coin burning process, we can classify it into two broad categories:

  • One time burns – are one-off coin burns popularly embraced by  ICO projects to clean the market of unsold coins.
  • Periodic Burns- these are undertaken repeatedly at either fixed or varying intervals; Binance holds quarterly coin burns while Tether does so per withdrawal or collection

What are The Approaches to Coin Burning?

There are two major approaches to coin burning. These are:

  • Mechanisms relating to the token’s blockchain protocol
  • Mechanisms driven by economic sense

Protocol Related Mechanisms

In this category, we have coin burning mechanisms embedded in the project’s core protocol layer. We may divide these into two main groups.

  • Proof of Burn Mechanisms
  • Anti Spam mechanisms
i) Proof of Burn Mechanisms

These use the  Proof of Burn (PoB) consensus that requires miners to prove that they’ve burnt some of their coins. PoB has several variants:

  • Burning Native Coins for Mining Rights- miners must burn some of their coins to acquire block mining rights;  an example is Slimcoin.
  • Burning Bitcoins to Create New Native Coins- projects like  Counterparty (XCP) use PoB that burns BTC in exchange for a similar value of coins in the native currency, XCP
  • Burn-And-Mint Equilibrium: an advanced version of PoB used by  Factom (FCT) that burns native tokens in return for Entry Credits for storing data on its blockchain
ii) Anti Spamming Mechanisms

Introducing a cost to transactions prevents spamming and DDOS attacks that compromise the network. Projects like  Ripple (XRP) and Request Network (REQ) integrate a burning mechanism for every transaction on their network. Though indirectly, their Users ‘incur’ the cost of trading on them. The ecosystem gains in value resulting from a reduced supply of native coins. 

Mechanisms Driven By Economic Sense

These are mechanisms informed by a project’s economic considerations. They may be one-offs or periodic.

i) Mopping up of The Unsold ICO Tokens

At times ICOs fail to meet their hardcaps. Consequently, remain with unsold tokens. The projects may decide to destroy these to maintain their credibility.

ii) Paying out Dividends to the Coin Holders

Profitable projects may use their profits in buying back their native coins from the public. They then destroy the repurchased coins, thus paying them some dividend, which increases the value to coin holders.

What are the Steps Followed in a Coin Burning Event?

The coin burning event follows a sequence of four steps. Here’s its breakdown:

  • Institution of the burn function- the coin holder starts by calling the burn function, indicating the number of coins they intend to burn.
  • Verification of the coins  for burning- The contract proceeds to determine the ownership and validity of the selected coins, considers positive numbers only
  • Abortion of the burn function- The process aborts if the instigator has fewer coins or uses a negative value or zero.
  • Execution of the Burn function- the smart contract withdraws  the sums from the instigator’s wallet, permanently cutting them from circulation 

Why do Crypto Project’s Institute Coin Burns?

You’d think that coin burning is beneficial. Wouldn’t you? After all, you have Key players like Binance and Tether performing them. What then are its benefits

i) Appreciation in the Crypto’s Value

Cryptos are decentralized. In essence, market forces determine their prices. Coin burning depletes the sum of coins serving the market. As a result, their value rises to attain equilibrium. The attainment of market equilibrium is essential in stabilizing the price(value) of the crypto.

ii) Ensuring Network Stability

As stated elsewhere in this article, coin burning is key to eliminating Spam and DDOS. Accordingly, the network becomes stable.

iii) To Mop Up The Unsold Tokens From an ICO or Token sale

Crypto projects initiate ICOs to get public buy-in. Towards these, they set aside a certain percentage of the coins hoping that the investors will acquire the whole lot. However, things don’t always go that way, resulting in a remnant of those coins.

iv) Winning Investors’ Trust

The token insurer burns the coins remaining unsold from the ICO. They do this to ensure a level playing field for all investors. Were the issuer to keep the unsold coins, they’d have a massive advantage over other investors. Coin burning helps win the trust of other investors and incentivizes their stay within the project. 

A case in point is the Neblio cryptocurrency. Its team burned 122 million tokens that remained from their ICO. It sent them to an unspendable NEBL address.

v) Correcting Errors in Coin Issuance

At times projects realize errors in the creation of their tokens or coins. As such, they turn to coin burns to remedy this situation. A case in mind is Tether. The company realized that it had erroneously produced $ 5 Billion USDT. It resorted to a coin burn to maintain its 1:1 peg to the USD. Allowing the extra coins to stand would have destabilized the ratio.

vi) Guaranteeing The Developers’ Commitment to the Project

Coin burning signals the Developers’ commitment to the project. Look at it this way: the coin burn reduces their supply. At the same time, it increases the value of the coin or token in question. Burning is indicative of the developers’ desire to see the project grow in value and network function.

vii) Reduction of The Competition Between Miners

The Proof of Burn (PoW)  consensus is a popular offshoot of coin burning. Through it, a user destroys their coins to gain mining rights.

Managing Mining

PoB matches the number of blocks a miner can verify to the volume of coins they burn. This way, one’s mining ability increases with increased burning. Thus it reduces the number of miners and competition for resources between them.

Leveling the Playing Field Through Decay Rates

Since PoB favors the large-scale miner, they employ decay rates. This feature reduces one’s mining capacity with every verification. For them to remain profitable, it compels them to invest in more tokens to burn.

Final Thoughts

Although touted as the fix against inflation, cryptos aren’t immune to the same. Consequently, projects have had to find ways of guarding against it. Their default method has been the institution of coin burning: the deliberate removal of a given amount of coins from the market. It may be a one-off event or a periodic undertaking. Additionally, it could be a procedure hardwired into the project’s core protocol layer or driven by economic consideration. Whatever the cause, coin burning is an essential undertaking that, among other positives, infuses stability and confidence in any crypto project.

Categories
Cryptocurrencies

Bitcoin: 10 Things I Wish I’d Known Earlier

Bitcoin is a crazy beast! It’s had some huge ups and downs over the past few years for those that are trading it as well as those that are simply holding it. Much like many things in life, we know a lot more now than we did a few years back, and there are things that we know now that we absolutely wished that we knew back then. That is what we are going to be looking at today, 10 things that we wish we had known about Bitcoin all those years ago.

It Will Hit $30,000+

Many people said it, yet a lot of the people that stated that Bitcoin would hit those prices did not put their money where their mouth is. Unfortunately, I was one of those people. I told others that it would go that high, others bought in because of what I said, yet I did not. I simply said it but did not do it. That was a huge mistake, especially as I had some bitcoin from back when they were worth about $10, I also had some when they were worth $6,000. Now that they are worth over $30,000, I have none. So I wish I had taken my own advice and bought in. A really tough lesson, but a good one.

There Are No Bull or Bear Markets (Technically)

This may sound strange, but if you look at bitcoin as a whole, there is only a bullish market with pretty much no bears. The problem is that most people look at the short term, what is happening now, and I have done the same thing. I have seen drops and I have sold, rather than looking at the big picture. When we look at long term trading, then the markets have only moved up, meaning that if we buy at any point in bitcoins history, we would now be making money. Even if we bought at the previous all-time highs, which people said was a stupid thing to do, at the time yes, but overall no. the markets are bullish, and probably will be for years to come.

Don’t Believe Everything You Hear

People say a lot of things. Some may turn out to be true, while others can be completely made up. The crypto and Bitcoin world is full of people saying things. If you believe it all you will be buying and selling every minute. Instead, you need to find sources that give good and accurate information. Easier said than done, but it is possible, do not listen to social media, which is simply full of people shouting about anything they want without any real evidence behind it.

Idiots Make Money Too

We often see things about people selling their homes to buy bitcoin. We all called them an idiot, but now, they are pretty darn rich…but they are still idiots. People risk all sorts of things on hopes and dreams, some work out others don’t. Just because someone made a lot of money with bitcoin does not mean that they aren’t idiots.

Volatility Is Great

A lot of people are scared of volatility and there is a lot of it when it comes to Bitcoin, but it is also the volatility that makes it so profitable. I was a little scared of the volatility, the fact that I could very easily lose my money, but instead I should have been looking at the opportunities that it was presenting me. I should have used that volatility to help increase my accounts and to look at it as a good thing rather than the bad that I did.

Learn From the Mistakes

Mistakes are there as a brilliant learning tool, one that should always be used. Unfortunately, it is not something that I used. Instead, I committed the same mistake multiple times, to the horror of my account balance. Of course, eventually, I did learn from them and no longer make them, but I should have known that I needed to learn straight away. If you make a mistake, be sure that you learn from it and don’t commit the same mistakes over and over.

You Can’t Trade It Like Forex

While it looks very similar and uses the same brokers and charts, the way that you trade bitcoin varies a lot when you compare it to forex trading. Again, this is something that I did not realise straight away. When I began trading it, I traded it with the same strategies and this led to a lot of losses. Bitcoin simply does not follow the same fundamentals or systems that forex trading does, so you need to adapt, and need to create your own strategy that better suits the way that bitcoin moves.

People Control the Markets

Something that I learned a little down the line was that the Bitcoin markets are not entirely their own thing. They can be massively influenced by a number of large traders, they can freeze the price or help to push it up, so when you see huge movements from different wallets. This can give you an idea of what may be about to happen. I never took any notice back then of huge sell-offs or huge buys, but if I had I would have made a lot more and prevented some of the losses that I had.

It’s Easy to Access Bitcoin

A few years back it was not quite as easy to get access to bitcoin, to buy it, or to trade it. However, it wasn’t anywhere near as hard to get than I thought it was. There were many more brokers offering it. I was simply sticking to the major brokers, ones that offered it with pretty high spreads. Instead, I should have been looking for more specialist brokers, the ones that are focusing on cryptocurrencies. There were quite a few of them around and they offered much better trading conditions.

There Is A Lot of Dead Hype

Hype is all around when it comes to cryptocurrencies, especially Bitcoin. Everywhere you look you will see people hyping up the price or what will happen. The problem is that a lot of this hype has come from nothing. There is nothing fueling it. The next big bull run is tomorrow, next week, the month after, there will be hype and rumours about it pretty much all the time. You need to be careful what you listen to and which bits of hype you listen to. Certainly don’t believe everything that you hear.

Those are 10 things that I wish I knew earlier about Bitcoin, some when I look back are pretty obvious and I should have known, but we often get caught up in the moment and I certainly did. There are probably other things that I should have known or done, but that is the past, it is now time to look to the future and what can be achieved from here, using what I have learned.

 

Categories
Crypto Daily Topic Crypto Videos

Pension Funds Are Investing In Bitcoin!


“Pension Funds are Investing in Bitcoin” – Grayscale

 

Grayscale’s newly-appointed CEO, Michael Sonnenshein, told Bloomberg that pension funds and endowments are actively investing in the Grayscale family of funds. Sonnenshein’s interview with Bloomberg came on Jan 7.

He further explained the statement: “We have started to see participation not just from the hedge funds, which we’ve seen participation from for a long time now, but now it’s recently coming from other institutions, pensions, and endowments. The sizes of allocations that they are making are also growing rapidly.”

Grayscale has been at the forefront of the recent Bitcoin buying spree, and its holdings now account for roughly 3% of the circulating Bitcoin. The fund manager continues to increase its position by buying even more cryptocurrencies as more institutional investors seek exposure to Bitcoin and other digital assets. 

Grayscale’s total assets under management, or AUM for short, have eclipsed $27 billion across ten different investment products. The Grayscale Bitcoin Trust remains its most popular product by far, with over $23 billion in AUM. Its Ethereum trust is the second most popular product, and it is currently valued at around $3.7 billion, while its Digital Large Cap Fund holds somewhere in the ballpark of $340 million.

Pension funds are starting to follow a hoard of institutional buyers that started to enter the Bitcoin and crypto market in 2020. A survey conducted by Fidelity Investments in late 2020 found that 36% of financial institutions across both the United States and Europe said they own cryptocurrencies or derivatives. Over 25% of the respondents reported holding Bitcoin, while 11% said they own Ether.

According to Grayscale Investments, the institutional interest for cryptocurrency and Bitcoin is intensifying at an alarming rate, with pension funds and endowments being the most recent entrants into the space.

The company’s aggressive Bitcoin buying is likely contributing to the digital currency’s rapid price increase. With more Bitcoin taken out of circulation and miners not being able to produce as much Bitcoin as it is requested, the already scarce asset is becoming even more difficult to get at current prices. Sonnenshein stated:

“This is a verifiable scarce asset, so when there are mechanisms that are removing Bitcoin from circulation, that’s inherently making it an even more scarce asset.”

Categories
Crypto Daily Topic Cryptocurrencies

How Does Ripple (XRP) Fare against the Rising Stablecoins?

Ripple Labs was poised to overtake the bitcoin network because of its fast speeds and cost-effective transaction framework. Ripple’s XRP promised to convert crypto assets from mere investment options to viable, widespread means of digitized, global payments.

Another form of cryptocurrencies emerged as designers grew wary of regulatory gaps and volatility in crypto markets. Stablecoins are digital currencies whose value is pegged on national fiat currencies. They are designed to diminish the volatility of crypto assets.

Some stablecoins have their value pegged on other cryptocurrencies. Other coins are backed by asset-buying algorithms. Therefore, stablecoins can be backed by gold, a basket of fiat currencies, other crypto assets, and stable investment commodities.

The Ripple payment protocol has been in the markets since 2012, and we’ve had enough time to observe the rise and fall of the XRP currency. Ripple Labs enjoyed phenomenal, initial success in the markets because of its low-cost, global transactions that don’t allow chargebacks.

So, what is Ripple’s market position in contrast to stablecoins? Empower yourself by understanding the differences between traditional cryptocurrencies and stablecoins. How else will you make insightful investment decisions with long-term benefits?

Understanding the Rise of Stablecoins

The year 2020 saw a tremendous rise in the overall market cap of stablecoins, from $5.3 billion to $13 billion. The Coronavirus pandemic caused widespread volatility of assets, and investors moved to stablecoins in search of stability.

Investors prefer stablecoins because these currencies exist in environments that are free from speculation. Stablecoins maintain a value close to real-world assets, and you can predict your financial future with these assets.

With volatility out of the picture, stablecoins present the best investment options for folks pursuing decentralized finance. These digital currencies apply smart contracts, making them viable, more convenient replacements for banks and other third parties. You can save time and money by cutting out intermediaries.

Stablecoin providers are innovative, and they use algorithms to buy and sell assets for stability. The process is known as collateralization.

Bitcoin is an excellent example of cryptocurrency value fluctuations. In 2017, one coin was worth $5,950 in November, and the value skyrocketed to $19,700 just a month later. Bitcoins can fluctuate in over 10% of value daily.

The volatility of traditional crypto assets made them more viable for speculative investment and less suitable for daily transactions. Who wants to buy a bike with bitcoins today, only for the same amount of bitcoins worth a truck tomorrow?

Stablecoins are better suited for daily transactions than traditional crypto assets purely because of reduced volatility. These hybrid crypto assets did well in 2020 after addressing value fluctuations because of their transactional convenience.

Advantages of Stablecoins over Traditional Cryptocurrencies

  • Stablecoins utilize liquidity pools, diminishing volatility, and offering predictable purchasing power.
  • These currencies offer exceptional convenience in remitting secure, fast, global payments. The payment protocols integrate seamlessly with blockchain networks.
  • Stablecoins offer redemption guarantees at face value. You can recover the exact amount of fiat money you spent acquiring individual stablecoins.

Why Was XRP Overtaking the Crypto Markets?

The creators of Ripple wanted to develop a payment protocol that:

  • Processes transactions fast
  • Offers a global reach
  • Levies negligible transaction fees
  • Is secure and irreversible

This protocol applies a digitally distributed ledger, and the network reconciles the ledger via independent validating servers. Since the network of randomized validators is vast, the Ripple protocol can validate numerous transactions in real-time.

You can receive payment notifications a few seconds after approving transactions.

Just a year after launching, Ripple’s payment protocol attracted banks, and the company has so far integrated the protocol with the networks of over 100 banks. The blockchain tech was impressive enough to get Ripple in MIT’s list of the smartest companies.

Ripple’s success was continually growing, and XRP became the most competitive currency after Bitcoin. It had amassed a market cap of $73 billion by the end of 2017.

SEC’s All-Out War on Ripple and Other Traditional Cryptocurrency Firms

Coinbase announced it would suspend the trading of Ripple’s XRP, and other major blockchain exchanges followed suit. This was a significant development that caused XRP’s value to drop drastically.

Major cryptocurrency exchanges are dropping XRP because of the legal conflict Ripple has with the SEC. Most of the exchanges are trying to go public, and Ripple’s issues with the SEC could cause rising expenses for firms like Coinbase.

The SEC charged Ripple for offering securities for over seven years without due registration. This financial regulator categorized XRP as security. The lawsuit caused the price of XRP to fall by over 50%.

Ripple’s leadership is also facing charges for failing to disclose crucial information that XRP buyers needed to assess their risks. The current and former Ripple CEOs are accused of distributing XRPs for non-cash consideration without duly registering XRP as a security.

Ripple is determined to fight the lawsuit, and it does not consider the SEC to have any regulatory jurisdiction over XRP. According to the network’s leadership, XRP is a currency and not a security. Still, the SEC insists Ripple must comply with federal laws meant to protect investors and consumers.

Exchanges risk court charges and law enforcement raids if they continue trading XRPs without registering as securities exchanges. Since the registration process is costly and time-consuming, crypto-asset exchanges would instead let the Sec and Ripple Labs face off in court.

But Ripple Labs is not the only subject of the SEC’s all-out war on cryptocurrencies. This federal agency also fined EtherDelta $400,000 for operating unregistered securities exchanges. The circumstances would have been worse, and EtherDelta settled with the SEC to avoid harsh penalties.

Airfox and Paragon Coin were not so lucky; they were charged for selling digital tokens in ICOs. The Sec found grounds to penalize them for violating registration requirements for ICO securities.

Airfox had to return $15 million to investors and register its tokens as securities. Paragon Coin had to return $12 million to investors, register its tokens as securities, and report to the SEC periodically.

Parting Shot

Did you think the regulatory force would be so impactful? Do you remember how effectively legislative committees were in silencing Facebook’s Libra? The legal environment is hostile for non-compliant blockchains. 

Only Bitcoin seems resistant to government censorship, but it’s also the only one with an anonymous founding creator. We can’t say the same about Ripple’s XRP, and stablecoins will also be subject to government scrutiny. It’s only a matter of time.

However, blockchain technologies are secure, transparent, convenient, and cost-effective. Digital currencies offer irresistible benefits for users and investors. These fintech technologies will evolve to find legal compliance and global acceptance.

In the meanwhile, share your predictions on the reality of XRP’s quagmire in the comments section. Share this article with your friends who fancy cutting-edge technologies that make life easier.

Categories
Cryptocurrencies

The Major Risks of Investing in DeFi and How to Mitigate Them

For a crypto enthusiast, there could never be a better time to be alive. First, there’s their growing acceptance as a store of value. Additionally, developers keep churning out exciting products promising to revolutionize our financial lives. One such product is Defi, and 2020 has seen its popularity grow in leaps and bounds.

To the Defi proponents, it is the magic pill that will cure the shortfalls of conventional finance. Often Defi Investments are portrayed as a sure way to wealth. Though, a keen look at the sector reveals the presence of pitfalls amidst the opportunities always touted. Making headway in this space, therefore, demands prudence.

What then are the risks accompanying Defi Investments? What are the ways of mitigating them? Stay with me as we unearth the risks to expect when you invest in the sector and the measures to protect your investments from them.                

Which are the Major Risks in Defi Investments?

We can categorize the risks in the Defi sector into three, namely, technical risk, financial risks, and procedural risks. We shall now embark on explaining each of these briefly.

Technical Risks

Technical risks arise from malfunctions in the protocols, hardware, and software of a Defi platform. They are critical since they compromise the platform’s functions. They include:

Smart Contract Risks

Smart contracts are the lifeline of Defi. They are central to the execution of most functions. Therefore any error in their operation will impact the Defi they run on and imperil users’ funds.

Smart contracts are human-made and, therefore, prone to bugs and other vulnerabilities. Unscrupulous individuals will exploit these to gain unauthorized control over the protocol’s functions. Recently, there have been reports of incidences of smart contract exploits that led to the loss of funds.

Hardware risks 

Hardware is the foundation on which Defi services run. Compromised hardware impacts the proper functioning of a Defi platform. Common hardware risks affecting DeFi systems include:

  • The power issues may cause unreliability of the service or application, diminished service life and performance.
  • Sensitivity risks result from degradation, humidity, dust, or other similar issues.
  •  Incompatibility risks can limit the speed of the system and other issues.

Software Risks

The entire Defi ecosystem runs on software. A corrupted software impedes the proper functioning of the Defi platform. These risks present in different ways:

  • Distributed Denial of Service (DDoS) attacks disrupt the normal functioning of an app or service.
  • Injection risks introduce malicious code into the DeFi software, for instance, SQL injection into web apps.
  • Uncontrolled format strings execute malicious code in a web app.
  • Overflow risks cause the software to skip certain functions or implement them in error.

Financial Risks Related to DeFi

Most information on Defi only speaks of the profit-making part. Whereas it is true that with wise investments, one can make a ton, there’s also the possibility of incurring losses. Financial risks are those that put you in danger of losing your funds. These include:

Impermanent loss

Impermanent loss occurs when you fund a liquidity pool, and the price of your deposited assets falls compared to when you deposited them. In an ironic twist, you discover that you’d have been better off hodling them.

Currency Fluctuations

The whole crypto space is very volatile. Cryptocurrencies experience upturns and downturns spectacularly. If you invest funds in a particular crypto asset, then its price falls, you experience a loss. The same obtains for staked assets. Should the supporting asset decline in value, it will take the supported down with it.  

Scams

The Defi Sector is crawling with persons and entities of dubious intentions. These fashion different kinds of scams to the detriment of unsuspecting investors. Some of the means they employ include:

Exit Scams

Unscrupulous promoters dupe investors by setting up a project with a seemingly attractive concept. They collect funds through an ICO and melt away with the loot. A case in point is YFDEX. Finance’s heist.

Pump and Dump Schemes

Whales create an artificial demand for a coin/token, thereby drawing in investors. Later they withdraw their funds at a profit. Consequently, the market plummets, leaving the rest counting losses.

Fake Airdrops and Rewards

Scammers create fake Airdrops and giveaways to access private keys and personal info. They then use these to defraud you of your funds.

Defi Rug Pulls

Defi rug-pulls scams involve minting new tokens, marketing, and listing them on Uniswap. The masterminds inject liquidity, convincing trusting investors to swap their ETH for the token. After that, the cons withdraw the funds leaving holders high and dry.

Procedural Risks in DeFi

These are the risks arising from one’s usage of the Defi platforms and attendant infrastructure. They include:

Phishing Attacks 

Here a malicious player duplicates a website or service, duping the unsuspecting into sharing sensitive information. Alternatively, they could send emails that install malicious code on their devices. Then they use the victim’s sensitive information siphoning their funds.

Pretexting 

A hacker poses as a representative of a DeFi service and convinces users to share sensitive information.

Exposure of Login Credentials

At times a user may knowingly or unknowingly expose their login details. Anyone with ill motives will use these to access their accounts.

Loss Of Login Details

Users may forget their login credentials. They, therefore, cannot access their accounts, leading to a loss of investments.

How Do You Mitigate Risks Associated With Defi Investments?

The Defi space can be unforgiving to anyone who navigates it without caution. One needs to guard their investments jealously. Here’re a few pointers on how to protect yourself from the risks outlined above:

Deal with Authentic Products and Services Only

Use products and services whose authenticity you’re sure about. Before settling on a product/service, DYOR! Look at reviews and recommendations about them. From there, you’ll get a good feel of what you’re getting into. Negative reviews are your cue to take off.

Use Multi-Factor Authentication

Secure your logins with several verification instruments. Examples include email confirmations, two-factor authentication, and multi-sig authentication.

Keep it Private

Treat your Defi investments like any other sensitive and personal information: private! Doing so helps ward off hackers’ attention.

Secure Your Digital Assets

The security of your investment is a wallet away. Hot wallets are ideal for actively accessing DeFi services. Cold wallets, on the other hand, are suitable for offline storage. Invest in a dependable wallet

Make Updates and Backups Your Friends

You must keep a backup of your sensitive information, including login credentials. Besides improving user experiences, upgrades, and patches of Defi solutions resolve vulnerabilities.

Takeaways

Don’t be fooled! Defi is not always about sunshine and rainbows. Behind the much-publicized good lurks danger. The Defi space is full of risks that can wipe out our investments if we don’t exercise caution. These risks present themselves in three broad categories: that is technical, financial, and procedural. Each of these broad categories has its specific shape of risks as has been elucidated. That said, any investor should take comfort that there are mitigation measures that they can take to protect themselves. Their judicious utilization will shield them from funds loss.

Categories
Crypto Daily Topic Cryptocurrencies

The Best  Crypto Trading Bots Going into 2021

The increased acceptance of Cryptocurrencies is a boon for the financial sector. It promises to improve the inefficiencies of the mainstream financial systems. Again, their adoption expands access to services. Furthermore, it creates a unique investment opportunity. 

Their proliferation, however, is a nightmare to any would-be investor. According to CoinMarketCap, the total number of cryptos stood at 6,955 as of September 2020. Coupled with the fact that the crypto market never sleeps, this makes investments in the space daunting. We need solutions to deal with these challenges better. Here’s where trading bots come in.

Crypto trading bots are software apps that automate trade in cryptos. They scour the market for the optimal buy and sell values aiming to earn the user a profit. The volatility characterizing the cryptos market makes them all the more important. In this article, we look at them, factors to consider when selecting one, and finally, the outstanding bots going into 2021.

The case for Crypto Trading Bots

Crypto bots are essential in organizing one’s trades. Currently, the market is experiencing increased usage. Several factors explain this shift, and here we present the key ones.

i) Bots Eliminate the Human Element in Transactions

Left unchecked, emotions cloud the trader’s judgment. High-risk investments like cryptos require objectivity. Bots make transaction decisions based on rational analysis and interpretation of the market. This way, they eliminate impulsive and speculative trading that could imperil one’s investments

ii) Theirs is A Round The Clock Operation

The cryptocurrency space never sleeps. Again it is volatile. A momentary lapse and one could miss out on opportunities. Alternatively, they could incur losses. Here’s where trading bots come in handy. Their actions are automated. As such, they capture every shift in the market as it happens. This way, they save the trader the need to stay awake to track the market physically. Once configured, they automate transactions even when the trade is unavailable.

iii) They are Better at Multitasking

The crypto market is a maze. There are millions of transactions taking place in any instance. Physically tracking these is demanding even to the seasoned trader. Not so for the bots. They simultaneously track changes across multiple cryptos and exchanges. Thus they’re better at picking the best trades than us humans.

iv) Bots Streamline Transactions

For one to trade profitably, speed is essential. The market could quickly gain as it could fall. Unlike us, Bots execute transactions in a flash. Thus they enable timely settlements. Their use could make the difference between profit and loss.

Which Factors do You Consider When Selecting a Trading Bot?

Bots flood the crypto market. Each of these claims to be the real deal. Separating the quality product from the rest could be challenging. The following pointers will help you ease that decision:

  • Reliability- quality bots guarantee round the clock function.
  • Security- a good bot is robust and able to withstand attacks.
  • User experience- it should be easy to understand and use.
  • Affordability- a good bot offers efficiency at a fair rate.
  • Profitability- Quality bots enable users to achieve consistent profits.

Which are The Best Crypto Trading Bots Going into 2021?

Each crypto trading bot is unique. Moreover, no single bot is perfect. Selecting one boils down to individual preferences and how they fit into one’s trading strategy. Here are our best five picks moving forward. It is a random list, not an indicator of some particular ranking.

1. CryptoHopper

It is easy to use a semi-automated bot seeking to simplify crypto trading. It fashions itself as a tool that makes crypto traders maximize profits while reducing losses. Its key features include:

Social Trading

Through telegram trading, experienced analysts ( signalers) share insight on rising coins with other traders. Users may subscribe directly to these signalers. Moreover, they may automatically respond with a buy or sell order when it comes in.

It’s Cloud-Based

The service is entirely cloud-based. Therefore one can trade 24/7. One can log in anytime from any device.

Enables Exchange and Market Arbitrage

The arbitrage tool enables the user to benefit from the price differences between exchanges or crypto pairs. On enabling the bot, it searches for arbitrage opportunities. Besides, you don’t need to withdraw your funds from one exchange for another.

Market-Making

Through the market making bot, one can easily make markets and trade on the spread.

Strategy Designer

The strategy designer helps a user to develop a strategy enabling them to get the best trading signals. One can harness many indicators and candle patterns, including RSI, EMA, Parabolic Sar, CCI, Hammer, Hanged Man, and many more. Your Hopper will scan the markets 24/7 searching for opportunities for you. 

  • Backtesting/Paper Trading
  • Mirror Trading
  • Trailing Stop Tool

2. 3Commas

Incepted in 2017, 3commas is a popular crypto trading platform offering bot development functions. Its easy usage makes it ideal for users of all levels of technical ability. Its key features include:

SmartTrade

This feature allows trading across several exchanges from a single window. Smart trade allows you the following functionalities:

  • Trailing order- enables you to adjust Take Profit and Stop Loss parameters automatically
  • Smart Cover- allows one to sell and buy back their coins
  • Short orders

Wide Exchange Integration

3commas supports up to 13 different exchanges. This makes it convenient to trade over multiple platforms.

Portfolio Management

Through this feature, one tracks their investment. The user may:

  • Create their coin portfolio(s)
  • View portfolios of other 3commas users
  • Adopt other users’ portfolios to their needs
  • Balance their coin ratios

TradingView Signals

The TradingView signal finder allows instant tracking of the market. The signal finder issues four order types, namely:

  • Buy
  • Strong buy
  • Sell
  • Strong sell

Backtest

Users can simulate trading before executing actual trades. This way, they get to test their trading strategies and get a feel of the platform’s features.

3. Shrimpy

Shrimpy describes itself as the social trading platform for cryptocurrencies. It takes pride in simplifying portfolio management. Among its key features are:

Portfolio Management

Shrimpy enables you to connect all of your crypto exchanges and automate transactions. It helps you build a portfolio strategy. Also, through it, one can monitor the market. Its management tools automate portfolio allocations and rebalancing.

Social Trading

The platform has bet big on its community. Users have a forum for exchanging ideas and strategies. Again they get to educate each other on matters crypto. As a result, they increase their mastery of the sector.

Copy Trading

Shrimpy allows one to follow other investors on the platform. This way, they can model their investments on the leaders’. Copying the strategies of successful traders helps improve one’s profitability.

Robust Security

The platform boasts of robust security features. Each uses FIPS 140-2 security modules to encrypt all the API keys. Additionally, the platform only reads data for trading purposes. Therefore it’s unable to withdraw one’s funds. It also supports two-factor authentication.

Social Leader Reward

Through the social trading platform, Shrimpy creates leaderboards. Users earn $4 for every new follower they gain every month.

Shrimpy Universal Exchange API

Shrimpy offers its users an industry-leading API that facilitates crypto transactions, the instantaneous collection of data, and the management of exchanges.

4. Gunbot

Gunbot is an advanced bot allowing easy transaction of cryptos. After the user identifies a trading strategy, the bot automates it. Its popularity draws from the following features:

Multi-Platform Support

The software is compatible with different platforms. It runs on Windows, macOS, Linux, and ARM devices.

Multi Exchange Support

Gunbot supports the most popular exchanges. Additionally, the platform continues to support new exchanges. Further, it supports lesser-known spot exchanges through the CCXT library.

Strategy Presets for Beginners

For the uninitiated, trading can prove arduous. Gunbot eases things for the newbies. Its strategy presets allow them to trade easily as they learn the ropes. 

Wide Variety Of Trading Options

Gunbot users can buy and sell in 14 different ways. You can use all these methods within a customized strategy. Also, one may employ a set of confirming indicators to specify the trading conditions they want to allow. Including a stop-limit reduces one’s risk exposure.

Dollar-Cost Averaging(DCA)

Gunbot uses the double up method to average down assets automatically. The morbid allows one to reach a lower average price per unit as prices decline. Thus it enables exit at the lowest profitable price. Through DCA, one can set up the following options:

  • Trigger for DCA orders
  • The minimum price difference between buy orders while in DCA
  • Frequency of placing DCA orders
  • The ratio of volume purchased via DCA orders to the amount of quote units already owned.

Reversal Trading

Gunbot can automatically accumulate quote currency when prices go down. It does so without investing more than the initial buy order. This way, it helps bring down the break-even point.

Telegram Integration

Through telegram, one gets to interact with their bot. This feature enables:

  • Profit tracking- get profit/loss statistics for every trading pair.
  • Modify settings- change settings on the go, such as enabling or disabling pairs.
  • Get notifications on trades.
  • Monitor trades.

Final Thoughts

The crypto space is disruptive. Our continuing acceptance of cryptos is reshaping the financial landscape. Thanks to them, there’s the possibility of increasing financial access. Additionally, we can look forward to enhanced efficiencies and the opening up of investment opportunities. 

 As crypto markets are volatile and complex to navigate, we require better analyzing and strategizing tools. Crypto trading bots make this possible. They take the chore out of transactions while seeking profit for the investor. 

 In a market bursting with them, one should exercise caution in their choice. This article outlines the key factors to consider when picking one over the other(s). It goes on to identify the best bots going into 2021. Though not exhaustive, this guide is a good starting point in your crypto bot choosing journey.

Categories
Blockchain and DLT Crypto Daily Topic

5 Portals That Rate And Rank DeFi 

There’s never a dull moment in the Defi sector. Continuous innovation in the space affords us products and solutions that ease our transactions. Additionally, the thriving Defi sector provides alternative investment avenues. Further, the investments attract better returns compared to those from conventional finance. It isn’t a wonder that investors in their droves keep boarding the Defi juggernaut.

In a sense, the ballooning of Defi is both a blessing and curse, A blessing in that it expands our choices and gives us greater say over our funds. On the other hand, many competing products could cause us headaches in product choices. The fact that genuine and fake projects dot Defi’s landscape further exacerbates this dilemma.

Luckily though, we’ve portals whose mission is to take the difficulty out of Defi investments. These scour the Defi sector, analyzing projects and trends for our consumption. In them, we have crucial allies for navigating the Defi maze. This article examines five portals that rate and rank Defi to our gain. We shall proceed to explore the features that make them a must-have tool in our investment journey.

1. DeFi Pulse

DeFi Pulse site enables you to find analysis and rankings of Defi protocols. Its salient features include:

Total Value Locked

This metric shows the amount of funds locked up in various DeFi contracts. A high TVL is indicative of a thriving economy. Defi Pulse uses a graph to capture the daily TVL progression.

Market dominance

This standard ranks projects according to their liquidity levels. Projects with higher liquidity are a stable and attractive investment option.

The Market Leader Share Metric

The Market leader share metric gives you a glimpse of the Defi categories available on Defi Pulse’s site. Major types include Lending, DEX’s, Derivatives, Payments, and Assets.

DeFi Pulse Farmer

The DeFi Pulse Farmer is the site’s newsletter. It covers the latest news and opportunities in the Defi space.

DeFi Lending

The Defi lending feature shows the interest that these protocols generate per year. Through this ranking, you can determine the most profitable investments. The platform also has a calculator that shows you how much interest you’d draw per month by locking a given amount of an asset.

DeFi Pulse Token List

The Token list is a directory of the legitimate tokens trading on Ethereum.  It serves to reassure users that they are dealing with a genuine project.

2. CoinMarketCap DeFi page

CoinMarketCap (CMC) has distinguished itself to be a trustworthy platform. Its Defi page lists tokens simply and conveniently, allowing for faster searches. Its other standout features are:

Cryptoasset Ranking

Here you find all the assets that CMC lists. You get to see the asset’s market cap, price changes within a day or week, its volume, and circulating supply.

Coin Details Pages

These provide in-depth information regarding a coin. The “market pairs” tab features prominently on these pages. Market pairs have unique confidence indicators that aid you in picking an exchange to trade. This confidence score mirrors the exchange’s liquidity.

Exchanges

Here you get to compare how the different exchanges fare. The exchanges fall into different categories, including spot exchanges, derivatives exchanges, and decentralized exchanges.

CMC’s Watchlist

The watchlist feature allows you to mark your favorite cryptos. In this way, you can easily track their performance.

Headlines

Keep abreast of the happenings in the crypto and blockchain space with this tool. The embedded Signals feature sends you news directly from a project or a given crypto protocol.

3. Etherscan

Etherscan is an Ethereum based platform providing analyses of the Defi sector. It debuted in 2015 and one of the longest-running independent projects built on the network. Its mission is to provide fair access to blockchain data. Some of its key features are:

DeFi Leaderboard

Through Etherscan’s leaderboard feature, you get to find up to date analytics and rankings of DeFi protocols. The rankings take into account the total value locked into the smart contracts. From the leaderboard, one can skim the following information:

  • The project’s rank
  • The project’s name
  • Its category
  • TVL in USD
  • Price changes in a day
  • Price changes over a week
  • The project’s market capitalization
  • The market cap to TVL ratio

Token Tracker

Etherscan tracks and ranks two kinds of tokens. First is the ERC 20 token, and secondly, the ERC 721 token, also known as the Non-Fungible Token.

ERC 20 token Tracker

In ranking the ERC 20 token, Etherscan identifies the project by name, states its trading price, and changes in 24 hours. Additionally, it indicates the token volume within a day, the token’s market cap, and its total number of holders.

Non-fungible Tokens Tracker

This tracker ranks the top ERC 721 tokens. It identifies the project and its volume first within a day and finally in a week.

Yield Farms Tracker

Yield farming is an essential component of Defi. Accordingly, Etherscan has provided a rank for the top yield farming ventures. You’ll find the project’s name, its start date, addresses, trading prices, and market cap in this ranking.

4. Loanscan

Loanscan is your go-to platform in matters of Defi lending. It gives you access to financial information and analysis for credit issued on the Ethereum blockchain. The platform supports loans from Compound, dYdX, Dharma, and Maker DAO protocols. However, it plans to introduce additional protocols and blockchains in the future. Minimalist in nature, it has two significant features:

Earn Yield

Here you get to know the amount of interest you’ll earn investing in a given platform. Besides showing the earning in terms of USD, Loanscan also compares the yield across cryptos. 

Borrow

This feature enables you to determine the cheapest platforms to seek credit. Again it lists the platforms and their lending rates for different cryptos. 

5. DeFiprime

DefiPrime is a feature-rich portal offering comprehensive information on different Defi projects. On this site, you’ll find news and blog articles relating to Defi. Additionally, you can conveniently search for projects under several categories. Some of the main categories include  Alternative savings, Daos, Payments, and Staking. The site eases the process of finding projects as it arranges them in niches. Thus, it saves you time.

Final Thoughts

The growth of Defi has placed us in a quandary. On the one hand, we celebrate the convenience of transactions, expansion of financial options, and notably, the financial freedom Defi affords us. That said, their proliferation introduces challenges in determining which products to choose. As the sector has its fair share of legit and fraudulent projects, this difficulty gains in significance. All is not lost, though. Some portals undertake analysis of the Defi market to keep us in the know. Using these portals takes the guesswork out of investing, guaranteeing us fruitful experiences in the space. 

Categories
Crypto Daily Topic Forex Daily Topic Forex Videos

Forex Trading Algorithms Part 7 Elements Of Computer Languages For EA Design!


Trading Algorithms VII – Liberal sequences and exact sequences

Translating ideas into a trading algorithm is not always easy. When examining a particular trade idea, we could find two cases: 

  • the signal can be described precisely in a consecutive sequence of trading facts, or 
  • Several conditions with variable steps among each condition need to be spotted.

The first class is easier to program. To this class belong any kind of crossovers: 

  • price to MA: 

  • MA to MA :

Similar conditions can be created with indicator crossovers and level breakouts.

 

Trading Signals Using Pivots

But what if the idea is more complex?. Let’s consider we want to catch pivot points in the direction of the trend. Let’s say we want to open a buy trade in the second pivot reversal. Let’s follow Pruitt’s example:

Buy on the second pivot pullback if

1.- The second pivot high is higher than the first pivot

2.- The pullback is larger than 2%

3.- The sequence takes less than 30 bars

 

The Flag Model

Since these conditions happen with variable price-action sequences programming, this kind of entry is much more difficult if we employ just If-then-else statements. The employment of flags to signal that a specific condition was met helps in the logic but is not the best solution.


As we see, the flag model is awkward and not too flexible. Also, this method is prone to errors.

 

The Finite State Machine

The second method to this kind of problem is the Finite State Machine (FSM). Basically, we want to detect certain states following others, defining a state when the needed condition is met. An FSM is a machine with finite states. The machine moves from state zero or START through several states until a final one, which defines the ACCEPT state. 

We can imagine a state machine as a combination lock. We need to supply the lock with a combination of numbers until its final digit, which triggers its opening.

The first step is to create the states needed. Next, we create the conditions for the change from one state to other states. Once satisfied with the diagram, we can easily write the pseudo-code, or, even, the actual code directly.

As we can see here, the code is precisely subdivided into states, each state with the precise instructions to move to the next state or back to the start state. We can see also that this algorithm is executed from top to bottom on each new bar. We hope that this example will help you better understand how an entry algorithm can be created.

Stay tuned for more interesting videos on trading algos!

Categories
Cryptocurrencies

5 Ways Investors Lost Cryptos in 2020

Without a doubt, 2020 is the year that the crypto community experienced significant growth. Cryptocurrencies regained much of their lost value and reached new heights, thanks to their growing adoption. 

The crypto industry continues to grow, and investors are laughing all the way to the bank. Along with all this good, there were a host of crypto scams that left investors with a bad taste in their mouths. But how did these crypto scams occur? 

Cryptocurrency losses due to hacks on the DeFi platforms, theft, and fraud amounted to $1.8 billion within the first ten months of 2020, up from $4.52 billion in the entire previous year. The 2019 DeFi volume figure was negligible, but it now appears the DeFi platforms are lucrative for bitcoin thieves. With up to $98 million in losses, DeFi hacks made up 21% of the total crypto fraud in 2020, which is quite significant. But why so many crypto scams?

The USD value in DeFi cryptos and other cryptocurrencies has grown exponentially, attracting the attention of scammers, money launderers, and DeFi protocol hackers. Everyone, including those that don’t want to put in the hard work, wants a piece of the Bitcoin profits.

Scammers use different methods to get a piece of the crypto cake, but according to a report by CipherTrace, Ponzi schemes and investment scams are two of the main ways that investors lost cryptos in 2020. 

Let’s have a detailed look at how crypto investors made losses in 2020, shall we?

1. Ponzi Schemes 

Ponzi schemes have emerged as one of the favorite vehicles for crypto frauds, and it seems they are not going anywhere. Usually, the schemes promise investors quick significant returns with little or no risk. 

The first few returns are made from recruits’ funds, serving as bait for more investment into the scheme. Most of the time, there is little or no business development in the background to support the pyramid of promised returns. Eventually, the schemes come tumbling down, and founders vanish into thin air with the investors’ money. 

The classic crypto giveaway scam moved to YouTube from Twitter in 2020. In one instance, a hacker hijacked tens of YouTube accounts to broadcast a crypto giveaway falsely promising to double your earnings within a short period. The Ponzi scheme was broadcast live on YouTube, posing as a message from Bill Gates, the Microsoft CEO. 

2. Exchange Hacks 

Centralized exchanges provide a platform for the buying and selling of cryptocurrency. They act as middlemen, with various currencies for trading in a partially regulated environment, and are a favorite of newcomers in the bitcoin industry.

Unfortunately, centralized bitcoin exchanges come with a variety of risks. For starters, the funds deposited are entirely on the platform owners’ hands, which is somewhat risky.

In September 2020, hackers made away with a large haul of cryptocurrency worth $275 million from KuCoin, a popular platform, becoming one of the largest hacks. The cybercriminals used various methods such as diversifying into multiple currencies and mixers to avoid leaving a trail. 

But the decentralized exchanges were not spared either.

Another high-profile bitcoin theft in 2020 involved the Cryptocurrency exchange Bisq where virtual currency worth $250,000 was lost. The hackers used a vulnerability introduced after a recent update to the network, allowing them to manipulate fallback addresses and send the funds to the wallets they controlled. 

Earlier in the year, IOTA Foundation had to temporarily suspend operations following a cyberattack targeting the IOTA wallet app. The organization took steps to freeze the entire system within 25 minutes of reports that cryptos were being stolen from users’ wallets. 

3. Social Media Crypto Scams

The #cryptocurrency tag on Twitter hosts who-is-who in the crypto industry, including tech engineers, investors, and programmers. But the social media platform is one of the several ways that crypto thieves used to scam people out of their hard-earned cash. 

Hackers took control of the social media giant back-end referred to as the “God Mode” by hacking Twitter employees to access high-value accounts. 

On July 15th, the verified accounts of famous personalities such as former President Barack Obama, Elon Musk, Bill Gates, and Kanye West were hacked and used in a fake crypto giveaway. The hackers promised $2000 worth of cryptocurrency for just $1000, hauling over $121k of stolen bitcoins in the process. 

4. Sim Swapping 

SIM swapping is a relatively new crypto scamming method which is also gaining a foothold. Scammers convince the mobile service provider to move a number to a new SIM card in a device they control to perpetrate crypto scams. 

The method has become too familiar, especially in the cryptocurrency and Bitcoin industry. Usually, the hackers hope to access the victims’ cryptocurrency wallet through SMS sent to their phone for two-factor authentication. 

If successful, scammers access your phone, cryptocurrency exchanges, bank accounts, and other sensitive personal information to wipe your crypto wallet dry. Recently, Harvard University Ph.D. students and professors highlighted the increased risk of SIM swaps in 2020 in a research paper. Incidentally, one of the authors fell victim to a SIM swap.

In one unfortunate incident, a man lost $24 million through SIM swapping as a part of the coordinated attack. It has emerged that the 2020 twitter hacker was part of the SIM swap syndicate. 

5. Trickery by the Phishing Websites and ICOs

2020 has had more than its fair share of phishing scams, and especially in the crypto industry. The main route is often through email, where the scammers guide people to particular websites to steal their credentials, which they use to access their wallets.

Just recently, scammers successfully tricked an astounding number of people into visiting a replicated version of the popular cryptocurrency Ripple (XRP) ledger to steal more than $280k

Meanwhile, fake ICOs or the initial coin offering occur frequently and are a significant risk for bitcoin investors. Like an initial public offering, the initial coin offering’s main objective is to raise funds for the startup. But how do fake ICOs work?

Usually, fraudsters hype the project with fake ICO details to convince the investors. They use their website to promise heaven and earth to the users and then instruct them to make deposits in provided wallets. Sometime after the deposit, it becomes more apparent to the Investor that they were scammed. 

One good example is Big Coin, which used a variety of masked campaigns. They hyped their fake cryptocurrency’s capabilities and technical progression to convince investors and steal $6 million. 

Conclusion 

With cryptocurrency, due diligence is of utmost importance before dipping headfirst into the industry. Bitcoin tends to attract attention, especially when transitioning into the bull market. Everybody wants a piece of it, and less experienced investors fail to spot the red flags, losing money in the process.

It is still a crypto jungle out there, with scammers and thieves using old tricks in the book such as Ponzi schemes, hacking, and phishing, as well as inventing new ways to shake you off of your hard-earned money. But if there’s anything that 2020 has taught us is that the internet space can be very profitable, but at the same time, very risky. Analysts are in consensus that only education can help reduce the risks of crypto scams. Take extra care when investing and accessing your cryptocurrency wallets, and the whole experience will be worth it. 

Categories
Cryptocurrencies

Libra: The Official Cryptocurrency of Facebook

In this article, we will examine Facebook’s Libra Cryptocurrency, its essence, its special features, the advantages and disadvantages, and the problems and prospects of this cryptocurrency. Is Libra the cryptocurrency of the future or a black mark for Facebook?

In 2018, Facebook announced that it would create a cryptocurrency platform, called Libra. In June 2019, the project was presented for the first time to the audience. Despite its relative transparency and interesting implementation of the idea, the project was not approved by regulators who saw in the first type of new cryptocurrency and blockchain a serious competition with the world bank and the financial system in general. Now, the issue is which of the members of the Libra Association will sign the statutes of the Association on 14 October, going against the regulators, and what the consequences will be.

By 2017, the cryptocurrency market was developing so fast that the world’s largest corporations were eager not to fall behind new technologies. In 2018, everything changed a lot, but those who had already begun to invest millions of dollars in the development of their own platforms simply could not go back. Firstly, blockchain data transfer technology was interesting for investment banks, which faced two paths: joining existing systems (for example, Ripple, be able to become an alternative to SWIFT) or develop your own cryptocurrency startup.

Citibank and JPMorgan chose the second form. It is true that the instability of the cryptocurrency market and the ambiguous attitude of the regulators forced them to slow down the pace of development a little and change to an attitude of waiting and seeing. However, Citibank eventually decided to abandon all of its cryptocurrency experiments, preferring SWIFT. The stable currency JPM Coin was ready to test in June 2019, but JPMorgan has yet to make any public announcement.

In the spring of 2018, Mark Zuckerberg, the founder of Facebook, made the world aware of the creation of a new cryptocurrency. Actually, it is an electronic payment system that has as a benefit instant messaging transactions from WhatsApp and Facebook Messenger in all countries where the social network is used. In theory, through this cryptocurrency, Facebook users will pay for various types of virtual purchases, which are now paid for with real money.

As the creators of the project say, the need to have created their own means of payment is due to the excessive volatility of cryptocurrencies in general, as well as that of fiduciary currencies. To ensure that the currency is not as volatile as traditional cryptos, Libra will be a stable currency backed by several currencies (including the US dollar and the euro).

Features of the Libra Cryptocurrency

-The Libra consensus algorithm suggests 100 validators in the initial stage, 66% of the votes are enough to make any changes in the network (similar to DpoS). It is suggested that validators be the largest participants in the network, and the number of validators may increase further in the future.

-Pound will be of less interest to speculators, as developers aim to maintain a stable exchange rate within social networks.

-It has been studied that the use of Libra within the network could increase the speed of transactions, much faster than the banking service and, in addition, would reduce the fees. We think that in the future different applications can be combined into one, in short, the public covered by this system will be more than 4 billion people in the world.

-The only wallet compatible with WhatsApp and Facebook Messenger is Calibrate. To open an account we only need a smartphone, and it will not be necessary to open a bank account.

-The share of USD in the support of Libra exceeds 50%. The intention is that Libra is also backed by the euro, the pound sterling, the yen, and government values.

-Facebook publicly unveiled its Libra project in June 2019 and presented its technical documentation. The coin is ready for final release in 2020. Although the platform’s codebase was developed by Facebook programmers, the company is not willing to reserve the right to exclusive control. In addition, developers have assured that they will not run the project until regulators (especially Americans) are completely satisfied.

-According to the developers, Libra is basically not a common cryptocurrency. This is a means of payment within a social media network, which may fall into the category of goods.

Contentious Points Associated with the Platform

-Libra is not ready to compete with the banks, although this statement may be questioned.

-It is not clear whether people blocked on the Facebook network can use the Calibrate wallet for any or other reason (political opinions, incitement to conflict, etc.). Even if it is temporarily locked, a user cannot use the wallet.

-Companies from countries where Libra is prohibited will not be able to participate in the association or receive validation votes. Doesn’t seem like a good idea, but this problem has not yet been decided.

-It is not clear how votes will be allocated if one validation company buys from another. Theoretically, a company receives a vote. The new company will have 2 votes in the event of a merger (this is the potential danger of centralisation).

-The platform has not established any mechanism to combat changes that have not been authorized in the Libra protocol.

-And, obviously, the biggest problem is that it is not defined how Libra will be able to avoid transfers out of purses and exchanges that fall under the category of illegal operations (money laundering, terrorist financing, etc.).

Opposition to Libra

Members of the Libra Association will meet on October 14 in Geneva, Switzerland, to sign the statute. Originally, 28 companies were announced to participate in the partnership. Before the project is already official, they must integrate their own system into the platform and perform test transactions. The “entry fee” is unclear: Facebook asked each member to commit an initial $10 million to join the group, but the reality is that no company has transferred the money today. Moreover, it was currently not clear which member would sign the document.

On 4 October 2019, PayPal, a well-known digital payment platform, officially refused to participate in the Libra cryptocurrency project. Therefore, the company became the first of 28 previously announced Libra Association members, who refused to support the platform. Reasons for the decision were not made public. The company representatives just pointed out that PayPal intends to focus on its own trading priorities.

It is not well defined if other electronic payment systems such as Stripe, Visa, or Mastercard can participate in this association, as they also plan to withdraw from the agreement. One of the unidentified sources explained this position simply: payment systems do not need excessive control by regulators over their businesses, which will inevitably follow after public support for Libra fell out of favor. In short, payment systems chose not to go against the regulator.

After Facebook launched Libra in mid-June, regulators and central banks responded immediately:

  1. French Finance Minister Bruno Le Maire said the central bank refuses to support the development of the Facebook Pound cryptocurrency in Europe because it endangers the monetary sovereignty of states. In his opinion, the danger is that Facebook has 2 billion users worldwide. Any failure in the network threatens financial problems.

Commentary: We have not defined the reason why other cryptocurrencies have never been accused of endangering the monetary sovereignty of states, and why BTC, being a stronger competitor, is not so much criticized.

  1. Germany went even further and adopted a blockchain strategy that prevents parallel coins from being issued in the country.

Commentary: It doesn’t seem easy to figure out how to implement this prohibition in reality, and how to ban cryptocurrency in general in the European legal framework.

  1. The European Commission began to investigate possible anti-competitive behaviour related to Libra. According to their representatives, the launch of Libra can lead to the creation of a completely separate economy, which will place those who do not use cryptocurrencies in a difficult position.

Commentary: It is surprising why this rhetoric has not been seen in relation to BTCs. Nor is it common for the European Commission to give its support to technically backward segments of the population, rather than promoting new technologies among people.

  1. The US Fed Advisory Council opposed Libra because Facebook would create a shadow banking system. US banks fear that Libra will reduce payment volumes in the banking system.

Commentary: The Council is made up of 12 presidents of the largest banks in the United States. It stands to reason that they are concerned about a slowdown in their business. But this is what is called competition, where the most technologically advanced systems displace the least developed. I wonder what exactly Libra provoked to have such strong criticism. This gives the reason for those who think that Facebook is a very strong competitor and others fear it.

  1. Most US congressmen think that Libra should apply for a banking license and be regulated by the US Financial Sector Advisory Council (FSAC). Their argument: the payment systems involved in the Libra project a close connection. And when no one expects it, the digital portfolio could start to present systemic risks along with large banks (alluding to the Libra Association audience).

Commentary: These concerns have some reasons. If a third of the world’s population starts using Libra, the attitude towards banks and fiduciary money can change. And the problem of managing risks becomes one of the key issues here. On the other hand, we have the information that the congressmen themselves claim to admit that cryptocurrencies and the blockchain have been completely integrated into everyday life during the 10 years of their operation. And breaking the future of technology makes no sense.

FINMA, the Swiss regulator, decided to support the platform. The country’s financial market supervision service believes that the project is being developed in a transparent manner and does not see any particular risk in digital currency, provided that it is developed in accordance with the relevant established rules. It is therefore reasonable that the Libra Association consortium should be registered in Switzerland.

There is a very clear algorithm in the actions of the SEC and all European regulators. Cryptocurrencies and regulators are like two opponents, and each is trying to cross a line in the defense of the enemy. Attempts to take control of token issuance, ban mining and ICOs, and restrict crypto-swap operation have ultimately had no effect. It is very difficult to have control of something that does not have a single focal point and has an intangible electronic form.

The cryptocurrency community actively promotes the idea of future bitcoin and ETF funds, which goes against the policy of the SEC. In turn, the SEC, trying to gain control of the situation, can do nothing against developers “private” and, therefore, confrontation with Libra is an ideal opportunity to show their power and avoid such attempts by global corporations in the future.

Imagine a community where people pose a potential danger. Civilians are easily controlled, while potentially dangerous people create their own clandestine organizations that cannot be controlled. However, these organizations do not yet present any particular danger, because the authorities sometimes establish an exemplary punishment so that the other cannot do the same, As long as the authorities catch one of those illegal organizations in the act. And this is not easy.

And on a certain occasion, a dissident leader, who is quite popular, tries to create a product that is unfavorable to the authorities. The authorities understand that if they do nothing, the rest can go their way, and then it will be even more difficult to maintain authority. So it is not important whether the product may appear to be a threat or, on the contrary, a benefit. It’s important to show who’s boss here, what happened in the confrontation between regulators and Facebook.

In other words, regulators have simply seized the opportunity to demonstrate their power by attempting to dismantle a great project that has been created by one of the world’s most powerful technology companies. And the score is one to zero for the regulators so far.

Why Libra and Similar Startups Have No Real Prospects

They have no proper place in the global financial system. The unstable position of cryptocurrencies is due to the fact that there is no legal framework or a clear system of regulation/control. If “private” developers can still market their product in a narrow circle of cryptocurrency enthusiasts, then large corporations interested in cryptocurrency are immediately put at risk. So far, according to the SEC, cryptocurrency is an asset to the shadow business, and there are still no prospects.

They do not provide sufficient return or return on investment. It is impossible to estimate the performance of the platform if there is more than a year before its launch. While 90% of new companies in the cryptocurrency market are currently in development, it is impossible to assess the effectiveness of investments. “Private” developers at their risk perform ICO and expect to cover costs and earn money at the pre-sale and pump. Corporations cannot take that step, as their reputation would be at stake in this case.

Some economies are closed and lagging behind economically. First of all, it’s serious for China, which has its own messengers, so it’s unclear how Facebook could promote its product in China. Secondly, these are economically backward countries where there is no developed banking system or general knowledge of cryptocurrencies and electronic purses. In those countries, even smartphones are not common.

In attempting to capture exaggerations, Facebook, on the contrary, now has to follow the slow path of global cryptocurrency development, led by the SEC and European regulators. The corporation has not benefited from the early release of the product into the market. Many investors remember the 2018 scandals about leaked information, according to which Facebook, according to the policies of the FTC (the United States Federal Trade Commission) issued on July 24, 2019, must pay a record fine for social media of $5 billion. The refusal of payment systems to cooperate with the Libra platform could give a new blow to Facebook’s reputation.

Conclusion

It’s hard to blame Facebook for anything, but the situation is definitely not on the corporate side. One of Zuckerberg’s mistakes was that, with the aim of beating competitors, he offered the market a flawed and unfinished product without a clear development strategy and aligning all questions with regulators. And now, any of the big corporations will hardly want to follow their example and stand up to regulators. US and European regulators, on the other hand, took the opportunity to demonstrate their power and ruin the new project.

Another Facebook flaw was the focus on advertising and positioning itself as a leader. JPM Coin developers preferred to remain in the shadows. JPM Coin is only a tokenization trust, so the project will hardly be of interest to a wide range of financial institutions. In this way, developers avoided unnecessary advertising. Facebook, on the other hand, carried out its aggressive marketing policy, trying to get the support of major corporate investors. But he got opposition from the regulators instead.

Unfortunately, Libra is one of many examples of how remotely distant cryptocurrencies can be a complete financial instrument that investors and venture capital trust. Especially when political intrigue is in the foreground.

Categories
Crypto Daily Topic Cryptocurrencies

What is IDO? Is it the End of ICO and IEOs?

Cryptocurrency and blockchain aim to reduce dependence on regulated financial models and centralized platforms. Unfortunately, the majority of the exchanges are still running as centralized and in fully controlled models. 

IDO or the Initial DEX Offering has emerged as a solution to ensure independence and autonomy. The interest in the decentralized token listing is growing, indicating a desire to move towards a no-restriction and higher efficiency model, and that is where IDO comes in.

Initial DEX Offering is only a few months old, and it has already become a preferred method to raise capital in DeFi and distribute tokens. Admittedly, the IDO community is inexperienced, but still, it is making great strides.

Shortcomings of the Initial Coin Offering

2017 was nothing short of a fantastic year for ICO, and anyone with some white paper on digital currency could raise funds. But as it turned out, most of them were scams, and billions of dollars were lost, highlighting ICOs as scammy. 

ICO has its place in the history books as it represents the first method that investors raised funds in the crypto realm, but its weaknesses are quite glaring, and therefore the need to move past it. 

Essentially, investors in crypto startups did not have the necessary knowledge background to assess the project’s viability. Some of them invested in rumblings on white papers, and others in ICOs with staggering high valuations. But that is not all.

Initial coin offering had a loophole, and most scammers exploited it gleefully. After ICO fundraising, the project teams were free to collect the funds in one lump sum. Even if the project teams were truly committed to the project, receiving such a sum in one fell swoop was distracting, and the motivation to continue with the project would diminish significantly. 

The other shortcoming was the absence of a decent governance mechanism to safeguard the investors’ funds. People who put up their money were left stressing about their investments’ fate, continually sifting through everywhere for news, and there was also the issue of gas wars.

The most common way to contribute or participate in ICOs was through sending money from personal wallets. This created a “gas limit,” which is the maximum amount of funds you are willing to part with as transaction fees to move up the transaction validation system’s queue. 

Gas wars occurred when particular investors put up transaction fees too high to push rivals down the queue. Over time, the initially overjoyed investors for winning the gas war would then begin to sulk as regulators and other bodies started to examine some of the fundraisings’ legitimacy. For example, the SEC is beginning the process of filing cases against some of the concluded ICOs. 

Considering all these factors, legitimate projects can fail to get sufficient funding through ICOs. This is mostly because of the diminishing reputation and the need for a better alternative. 

What is IDO?

The IDO fundraising method has striking similarities to ICO and IEO. However, it is decentralized and based on DeFi, a robust, innovative, and scalable open finance technology.

An excellent example of Initial DEX Offerings is the Raven Protocol-built IDO, the first of its kind, hosted on Binance DEX. The others in operation include UMA (a Synthetic asset) and BZX, a margin trading and lending protocol. Many other platforms already have IDO dashboards and are looking to throw their hat into the ring.

Not too long ago, UMA, BZRX, and COMP used Uniswap, popular for its fair and smooth way to deliver tokens to the market. This method of distribution has become standard and is open to public access. IDO empowers users from different countries to participate in the trade. That means people from all over the globe can purchase tokens from Raven Protocol and other token vendors. 

The Difference between IDO, IEO, and ICO

The main difference between IDO and IEO is the fundraising platform hosting them. On the part of the ICO, the operations and transactions are managed on an inner platform. 

On the other hand, the centralized exchange IEO (initial exchange offerings) hosts “ICO” in-house and is, therefore, the ICO’s mutated version. Unlike ICO, IEOs offer an additional layer of intermediation, only allowing legitimate projects. Unfortunately, a large number of IEO’s are selling similar tokens to ICO, which may complicate the whole issue.

No doubt, the regulatory landscape governing crypto exchanges such as EIO is complicated, but that does not shield it in any way. The U.S. regulator has made it clear that ICO token sales are the same as securities issuances, posing a significant risk to IEO issuers and contributors. It is not an exciting prospect to invest in a promising project only to enter the SEC’s bad books. 

Typically, IDO (Initial Dex Offering) is IEO and ICO rolled into one decentralized platform. IDOs emerged with the DeFi rally as a new form of raising capital on a decentralized platform. In the case of IDOs, it is the active community members that vet and approve projects and tokens. This mechanism is somewhat favorable as it incorporates diverse opinions. 

Also, DEXes and IDOs are part of the push to decentralization as regulators begin to shift their attention to cryptos. Furthermore, the synergy between DeFi and DEXes reinforces their value in the crypto world.

The exchange fee for IEO is spiraling out of control as the market develops, and together with increased scrutiny by the regulators put it at a disadvantage. The advantage of IDO over IEO is in its decentralized nature and scalability. You don’t need permission from any authority to trade in the exchanges.

Is IDO Replacing IEO and ICO?

The birth of new technology is most often similar to a human child that goes through various stages before it matures. IDO is still in its infancy and is quickly moving to puberty, with various noticeable characteristics such as instability. The concept of IDO is no doubt exciting and may replace IEO and ICO sometime in the future. However, it has to mature first before it can take over from IEO and ICO. 

UMA, the synthetic assets platform which placed $500k into a liquidity pool, best illustrates the above point. The total supply put up was 2% under a starting price of $0.26, similar to what the seed investors paid a couple of years ago. Investors scrambled to purchase the tokens, and the bonding curve effect occurred, raising the price in the process.

Competing traders set up higher gas costs, resulting in a higher $2 price of UMA within minutes. Some buyers were dissatisfied as they purchased the tokens at a higher price than the initial investors. 

This is the same problem that BZX’s buyers face on Uniswap, with BZRX token prices rising to 12 times within a minute. There is still no IDO model that balances fairness and the need to maximize the capital. In the future, this goal may become a reality, but there’s some distance to cover. 

Conclusion 

No doubt IDO is the next big thing in DeFi and blockchain finance. However, it is still in the development stage, with instability and slight uncertainties, and it may be some time before it becomes mainstream and replaces IEO and ICO. In the meantime, IDO is in a wait-and-see situation.

But that does not mean you should stay away from IDO, at least for the time being. It means that you should be prepared to deal with the price instability until the platform matures and stabilizes in a not so distant future.

Categories
Cryptocurrencies

Dash Is Known for Privacy, But Should You Invest In It?

Dash was developed with privacy in mind and to overcome the shortfalls that Bitcoin was facing. Originally introduced as Xcoin in 2014, the crypto has rebranded twice – first as Darkcoin then as Dash. Speculation that Xcoin was a pump-and-dump scheme were rife and likely contributed to the name change. As the altcoin was being renamed to Darkcoin, it received press, which pushed its adoption among darknet markets. Ever since, Dash has had a somewhat controversial reputation to the effect that even some governments pushed for their delisting. 

Arguably, Dash offers the best privacy guarantee in the entire cryptoverse – and this can be proven by how authorities get all fidgety at the mention of the crypto. Just recently, the US Internal Revenue Service announced a mega reward for anyone who can help them break Dash’s privacy and find the origin of transactions.

Despite Dash appearing like privacy is all it offers, it’s hard to deny that the altcoin is a worthy competitor to the likes of Bitcoin, Ethereum, and Litecoin, which are darlings to many investors. The crypto features prominently among the top 30 cryptocurrencies by market cap. It has significant daily trading volumes and can be exchanged with most major currencies – both fiat and crypto.

But wait, considering the reputational and potential availability challenges the cryptocurrency is facing, should you invest in it? Well, read on to find out what makes Dash a worthy investment.

Performance in 2020 

When choosing a good crypto investment, financial performance is among the key metrics to look out for. Throughout 2020, dash has shown rather erratic performance – call it volatility. Opening the year at around $20, Dash quickly rallied to peak $140 within weeks. Those who took advantage of this bull run undoubtedly tripled their investment. 

But it wasn’t long before the bears came calling and sent the crypto back to $40 at the beginning of April. In the subsequent months until June, Dash traded at between $60 and $80. This was the least volatile period for the crypto in the year. Still, these fluctuations were significantly high by crypto market standards.

After a brief rally in August followed by a correction in October, Dash seemed to stabilize in December, trading at roughly between $90 and $100. 

As to whether the crypto has enough volatility to challenge investors, the answer is an unwavering yes.

24-hour trading volumes have consistently declined over the year, which could imply two things: either, investors are HODLing their coins or just not buying as much. Usually, declining trading volumes are associated with falling prices. As for Dash, this has not been the case, not at least in 2020. One conclusion we can draw from this observation is that Dash has a rare element of resilience, and we can expect it to remain afloat in both good and bad times. 

Does Dash Have a Future?

Dash’s performance in 2020 leaves little doubt about its potential for short-term profitability, particularly with reference to its volatility. Volatility in crypto trading, just like in forex, allows investors to take advantage of price changes to make their cuts. In 2020, Dash showed price changes of up to 500%, which implies massive trading potential.

Trading Dash seems lucrative in the short run, but if you choose to invest in it for the long-term, are returns promised? Well, the indicators below give more insights on the direction the crypto is likely to take in the future.

#1 Dash development is funded 

Worth noting is that Dash is a next-generation crypto and a decentralized autonomous organization (DAO). The DAO is a collection of privileged nodes (masternodes) that invest back 10% of gains earned from mining. Well, this is not their primary function, but the dedication of a tithe to the network’s development promises sustainability, for instance, by building integrations fast and reliably. Unlike other cryptos, the continuous development of Dash does not entirely rely on a vibrant user community.

#2 The crypto responds to bull runs

In 2017 when a majority of crypto joined the historic bull run, Dash gained over 8,000%. Launched only 3 years before and trading at $0.12, the crypto had rallied to trade at $1,494 by the end of 2017. Dash entered 2018 with pride, flying as high as $1,000 – at a time when other cryptocurrencies were also flourishing. The entry into 2019 was not as flamboyant given the bubble had long burst, and most cryptos were heading for a correction. Even so, Dash maintained an impressive $100-$170 exchange rate. During past bull runs, the crypto’s behavior gives hopes that it will keep rising as other cryptocurrencies gain adoption.

#3 Crypto users are demanding more privacy

The demand for privacy across the globe is just increasing, and if there were a merchant trading this commodity, this would be the best time for them to cash in. From anonymous donations to buying what the government doesn’t want you to, privacy is increasingly becoming a selling point, and Dash takes care of this demand. To no one’s surprise, Alternative 36, Inc., an American e-commerce company, started accepting Dash payments for legal cannabis trade in the US.

#4 Dash offers superior performance 

Compared to Bitcoin and Ethereum, Dash payments are fast. As cryptocurrencies continue to gain adoption in the retail industry, Dash might become a more favorable option for payments than its mightier siblings.

#6 Dash’s ‘InstantSend’ and ‘PrivateSend’ 

Dash offers some transaction versatility. You can choose to send money instantly or wait for miners to work at their pace. Similarly, you can decide to send money anonymously or leave traces. This versatility makes Dash suitable for use in a wider range of applications, and hence, increases its utility. To guarantee the future of a cryptocurrency, the utility is everything. 

Regulators Have Their Eyes Fixed on Dash. Will That Affect You?

Regulators are clearly unhappy with the level of anonymity that Dash provides. In Japan, they pushed exchanges such as Coincheck to delist Dash and other anonymity-focused cryptocurrencies. The US Department of Internal Revenue also made clear its intention to crack Dash’s privacy and other anonymity cryptos. You probably have fears that you may become a victim of such heightened surveillance. While such an event is possible, it is worth noting that the crypto is used for many legitimate trades, and there’s no earthly reason why you would be victimized solely for investing in Dash. 

Final Thoughts

Dash is one of the best-known anonymity altcoins, and this reputation might have blinded investors from seeing the crypto’s investment potential. For short-term ventures, we have seen that Dash offers unmatched volatility, where investors can walk in and walk out with huge profits within months. In the long term, Dash is equally promising – based on past performance, support for network development, increasing demand for privacy, and its utility, which is likely to increase. While there might be concerns about the surveillance authorities have on Dash, overall, its prospects for profitability overshadow these concerns. 

Categories
Crypto Daily Topic Cryptocurrencies

5 Best Websites to Buy Bitcoins Directly from Your Device, Anonymously

Blockchains are secure and imitable, but these publicly-circulated ledgers aren’t anonymous. In contrast, crypto assets are designed for transparency. If you make crypto investments, analysts can dedicate sufficient resources to track down your identity.

The Bitcoin blockchain and other crypto networks qualify as financial services, and the law requires them to know the customers they serve. The Anti-Money Laundering legislation requires them to collect your ID at some point while serving you.

Most folks took an interest in these digital assets because they thought transactions would be untraceable. While cryptocurrency networks don’t offer anonymity by default, there are ways through which you can buy bitcoins anonymously.

The convenience of buying cryptos directly from your device is unbeatable, and if you can remain anonymous while at it, even better! 

In this article, we highlight some of the websites that make it easier for you to achieve this. These websites charge a bit extra than what bitcoins usually cost, but the kind of privacy you’re after does not come for free.

So, let’s dive into five of the best websites that are absolutely worth your time. 

1. LocalBitcoins

LocalBitcoins facilitates peer-to-peer crypto exchanges. It works pretty much like eBay, and it’s fueled by willing-buyer, willing-seller consensus. You can find numerous sellers offering their bitcoins for cash. P2P Bitcoin exchanges enable sellers to bypass costly taxation, and LocalBitcoins will empower you to buy bitcoins without any ID.

Through LocalBitcoins, you can directly communicate and make deals with potential sellers. The platform makes money from these exchanges by levying escrow services. These services are powered by Smart Contracts, making it hard for scammers to dupe diligent bitcoin buyers.

This website is reliable because it rates sellers by keeping reviews of their transaction history. Therefore, you can tell apart genuine sellers from scammers by just scrolling.

You’d be surprised by just how many sellers are out there. The great thing is that LocalBitcoins is available anywhere there are sellers, and you could buy bitcoins anonymously at your local coffee shop.

2. BitQuick

This website lets buyers purchase bitcoins via cash deposits. It empowers you to buy bitcoins fast and anonymously, but the cryptocurrencies cost a bit more.

BitQuick was launched in 2013 and is registered in Ohio, United States. This website only serves Americans, and it only accepts cash deposits. You can buy bitcoins anonymously from sellers by depositing cash to their bank accounts.

You can head over to the website and find suitable sellers. After agreeing on the pricing, the seller locks currencies into the BitQuick escrow, and the bitcoins are transferred to your crypto wallet when you deposit the agreed cash amount.

For verification, you must meet up with the seller, who should take a picture of the deposit receipt and upload it to the system. This service only charges 2% for buying bitcoins.

BitQuick only sells bitcoins. You can buy as little as bitcoins worth $10 and as much as $10,000 worth of bitcoins at a go.

3. Wall of Coins

Wall of Coins is yet another peer-to-peer marketplace for trading cryptocurrencies. This service is registered under Genitrust Inc., and it generates daily traffic of 25,000 unique visits.

Wall of Coins is famous because users can buy bitcoins anonymously via cash. It helps buyers and sellers to come together, serving the United States, the United Kingdom, and Germany.

Enjoy anonymity, buying bitcoins without an ID because Wall of Coins is unregulated. You can buy and sell various cryptocurrencies on this website, which accepts three methods of payment, including:

  • Bank of America’s Teller Assist.
  • MoneyGram Deposit.
  • Cash deposits at banks.

This website does not impose transaction limits. It is also a great option because it offers a live chat, allowing you to communicate with sellers directly. You can also access customer support via phone calls.

Wall of Coins holds sellers’ bitcoins in escrow, and it releases them to you when you complete the payment instructions.

4. Bisq (Formerly Bitsquare)

Bisq offers fully decentralized exchanges, and it does not require any personal information or ID verification. Therefore, this service does not hold users’ funds.

It is a peer-to-peer network, and users exploit it for anonymity. They visit it via secure browsers such as Tor. Users trust the platform because of its open-source structure.

Bitsquare launched in 2016, and it allows bitcoin sellers to create offers by locking agreed amounts in escrow. Both sellers and buyers make holding fees of 0.001BTC, and they also pay transaction fees for the service.

Since Bisq does not hold any money, crypto or fiat, it uses arbitrators as escrows. Bisq arbitrators are frequent users of the platform who perform escrow services on third-party terms.

Arbitrators deposit huge security fees to Bisq to finance trust. If arbitrators make away with seller’s bitcoins or buyer’s fiat money, their deposits can make up for the losses. They perform this role in the pursuit of earnings from the transaction fees.

5. LocalCryptos

This website serves over 100,000 users in over 100 nations. It is a non-custodial platform offering peer-to-peer, decentralized crypto trade.

LocalCryptos empowers you to buy bitcoins anonymously, most transactions only taking ten minutes. No third parties are involved, and your messages with the seller are encrypted. This website is secure and trustworthy thanks to its blockchain integrity. It offers escrow services for you to buy bitcoins online without the fear of loss.

This Australian crypto exchange lets you track ads of people selling various cryptocurrencies. It does not impose national restrictions, and it is welcoming to foreign investors. 

The ease of use is phenomenal. You have over 40 payment options available, and you can use non-custodial wallets to enhance control over your financial assets.

LocalCryptos will charge you 0.75% in trading fees when you buy on its platform.

Parting Shot

Bitcoins are pseudo-anonymous, but most supporting services such as emails, banks, and custodial wallets require ID verification. Analysts just need to pick up your number or email address to reveal your identity.

Your best shot of buying bitcoins anonymously is through peer-to-peer exchanges. Sellers on these platforms are probably just as motivated as you are in seeking anonymity. 

No matter how anonymous websites selling bitcoins get, it beats the point if you use custodial wallets. Non-custodial bitcoin wallets don’t require your ID verification, but custodial wallets report to financial regulators.

Don’t get anonymous money and take it straight to the scrutiny of third-parties. Use non-custodial digital wallets with the best websites to buy bitcoins directly from your device, anonymously.

Do you know of other ways to buy bitcoins anonymously? Be kind enough to share your proven tricks with us in the comments section. Also, feel free to share this piece with loved ones who want to buy bitcoins anonymously.

Categories
Cryptocurrencies

Harvest.io: The World’s First Cross-Chain Money Market

As cryptocurrency use gains more popularity, so do the innovations around this space. Crypto enthusiasts are set to enjoy increased convenience and ease of use after Kava unveiled Harvest.io. This cross-chain money market has a global reach, which makes it quite convenient for investors. 

Harvest.io is a fintech application built on top of Kava’s infrastructure, enabling users to borrow or lend cryptocurrencies across blockchains. It’s the first of its kind and is a premium feature of Kava 4 Gateway. 

It supports cross-chain transactions of BTC, BUSD, XRP, and Kava tokens. 

In this article, we shall explore the technologies behind Harvest.io, its history coming up, and some Harvest.io alternatives. It is worth noting that Harvest.io already rebranded to HARD, and its benefits accrue as fintech gains more users. 

Harvest.io Consolidating Markets for the First Time 

DeFi markets are fragmented, and crypto blockchains lacked interoperability until late 2020. Harvest.io came into the markets to resolve this problem.

The launch of Kava 4 Gateway in Oct 2020 ushered in a paradigm shift in the ease of use for crypto enthusiasts. It expanded Kava technologies into interoperability with BTC, XRP, and BUSD infrastructure. 

It also empowered users to expand assets without having to upgrade networks. 

Harvest.io was Kava 4 Gateway’s highlight, and it expanded the gains of DEXs. It’s making user-success more prevalent, and the masses are warming up to the ease of buying, selling, lending, and borrowing. 

It’s even sweeter considering that no third-party gets involved in any of the transactions, and the financial records are secure and irreversible. 

How Kava 4 Supports Cross-Chain Transactions

It’s simple how Harvest.io offers cross-chain interoperability, but the technology is proprietary. It builds cross-chain bridges and supports them with Chainlink Oracles. 

This fintech utilizes Kava’s:

  • Blockchain security. 
  • Price feed module.
  • Cross-chain functionality. 

The Harvest.io infrastructure is fast enough to attract new users. Unlike Bitcoin’s blockchain, the Kava networks build consensus through democratic validators. 

Harvest.io validators also vote on internal governance changes and implement system updates.

With Proof of Work, miners have to solve complex math problems, which makes them slower than Kava validators in authenticating and completing transactions. 

Interoperability: It’s Now A Crypto Reality

Interoperability refers to the ability of different computers, software, networks, and computing servers to exchange and apply data. 

Just five months after Kava launched Harvest.io, Kava accounts more than doubled, investors locked more than $25.65 million in value, and users borrowed $10.8 worth of USDX. Kava’s liquidity is rising exponentially. 

What Harvest.io Means for Investors

For starters, the fact it transitioned to HARD should motivate business minds that need to adapt and adopt investments in digital currencies. HARD makes it possible to trade and loan Stablecoins, KAVA tokens, BTC, XRP, ATOM, and BNB without involving third-parties.

HARD is the fintech that investors need to exploit the potential of cryptocurrencies. It empowers users to trade in a decentralized, convenient manner, and its interoperability makes it easier to access the most in-demand digital currencies. 

Blockchain Fintech Interoperability and Institutionalization

Crypto asset institutionalization will propel cryptocurrencies into the next step of global acceptance. However, institutionalization is still a long shot until certain factors are addressed. 

One of the biggest hurdles facing crypto-asset institutionalization is the lack of supporting services such as brokerages, exchanges, and asset management. 

Harvest.io takes care of the need for brokerages and third-party exchanges. Moreover, smart contracts are excellent upgrades for third-party asset management services. 

Institutionalization Takes More than Just Cross-Chain Money Markets

According to Binance CEO, Mr. Zhao, institutionalization and widespread use of Kava technologies need numerous synergies. He appreciates the milestone of developing cross-chain money markets. 

However, he asserts that the ecosystem needs other critical elements to be conducive for mass acceptance. For instance, he is wary about the ease of use in digital currency transactions. The major source of resistance springs from slow processing and the prevailing ignorance. 

In Nov 2020, Kava confirmed that HARD Protocol, previously Harvest.io, would be hosted on Binance’s Launchpool. The platform is designed to roll out DeFi to end-users. 

HARD allows users to stake BNB, KAVA tokens, and BUSD on separate slates. Kava Labs had to rename Harvest.io to HARD after Harvest.finance launched. It was the best way to resolve the hard trademark conflict of interest. 

Other Blockchains Featuring Cross-Chain Interoperability

Equilibrium is a digital money market that powers cross-chain currency exchanges. It also allows users to use, earn, lend, borrow, stake, and fundraise crypto assets across various popular blockchains. 

This cross-chain money market platform is integrated on the Polkadot network. Its designers focused on enhancing scalability and reducing high transaction costs.

Why Is HARD Better?

HARD tokens empower users to determine how things go. Users build consensus in the management of key parameters and protocols i.e.: 

  1. Platform fees. 
  2. How assets are offered. 
  3. Reward systems.

Earlier blockchain users have lots of say and establish grassroots culture. Consensuses are irreversible, and HARD tokens are most lucrative now that they are still novel crypto assets. 

Remember, cross-chain money markets are picking up traction. Folks are finding it easier to use blockchain fintech because of innovations such as Harvest.io, which is built on Kava 4 Gateway. 

Parting Shot

Harvest.io is a lucrative fintech for digital entrepreneurs. HARD technologies deliver reliability to users on a global scale, transcending above regulatory scrutiny. This DeFi fintech empowers users to determine the direction of the blockchain in a purely democratic fashion. 

Users can exchange and make use of information with other blockchain networks. It gives DeFi users access to borrowing and lending options for different cryptocurrencies, creating cross-chain money markets. Moreover, the tech is fast and secure. 

Take advantage of these innovations while they are new, and gain some control by making decisions while the platform is new. Check out HARD, and feel free to share your experience with cross-chain money markets in the comments section. 

Categories
Cryptocurrencies

 9 Best Blockchain Project Ideas for 2021

The blockchain market is estimated to exceed $39.7 billion by 2025, thanks to a growing need for smooth supplier management and simplified business operations. Blockchain promises secure data and easier recording of the transaction value. 

Since its introduction in 2009, blockchain has been a revelation for businesses looking to use technology to transform their current business model for more reliability, security, and transparency. Similar to 2020, blockchain technology is transitioning from the experimental stage to real business-ready solutions.

The adoption rate across different markets is expected to rise, and this presents a business opportunity. If you are looking to make your mark through blockchain technologies, then the following ideas will come in handy. 

Blockchain Digital Identity

Contemporary businesses often collect a lot of personal information, creating new business risks. Investments in powerful data vaults are not viable in the long run, as the tight-lipped systems can affect the drive for true customer understanding and product development. 

By 2025, the number of interconnected devices is estimated to rise to 22 billion. The majority of IoT technologies do not incorporate critical access and identity controls. There are already some major IT vendors providing IoT management systems to bridge the gap, but they often fall short.

The mismatching standards and hundreds of traditional servers make it complicated to implement management capabilities across devices. Blockchain promises practical solutions for interconnected devices.

The Distributed Ledger technology based on blockchain will ensure secure data storage in a tamper-proof, unified, and interoperable infrastructure. The benefit is a smooth and straightforward identification for employees and clients in some of the most sensitive industries. 

Blockchain digital identity is expected to improve manageability and control of personally identifiable information. So far, IBM and Accenture are some of the companies throwing their hat into the ring and already making significant progress with the blockchain digital identity project. 

Healthcare Medical Records Management

There are claims that blockchain technology can save billions in support function costs, staff costs, data breach, and IT-related costs in the healthcare industry.

A decentralized and secure blockchain-powered platform can support the storage and exchange of personal medical data. Hospital staff can then easily use the technology to update medical records.

One of the industry pioneers is Medicalchain, and they are already making significant progress, having signed a cooperation agreement with Mayo clinic. But still, the healthcare industry is largely uncharted territory, especially in the management of medical records, and therefore a great blockchain project idea for 2021. 

Stock Market Application 

The stock market has transformed many people’s lives and is an essential foundation for a country’s economy. It has its shortcomings, and the application of blockchain technology can significantly enhance its efficiency.

One area that blockchain can transform tremendously is the settlement process that every trade has to go through, which takes several days. The delays come from exchanges, clearinghouses, and regulatory processes. 

A blockchain system can potentially reduce the settlement process time to only a few minutes. The system is more efficient, and stock market trading will become more efficient with the advantage of decreasing errors.

A blockchain-based stock market application has the following advantages:

  • Easy to use
  • Enhanced transparency and fairness
  • Improved interoperability to increase trust
  • The clearing and settlement process becomes quick and easy
  • Risk containment mechanism

Logistics and Transport

Most of the logistics and supply chain systems are ineffective and outdated. Getting rid of intermediaries and improving transparency and efficiency in logistics can save companies millions of dollars.

Typically, a decentralized supply chain system that leverages blockchain technology and the Internet of Things (IoT) can improve transactions’ reliability and automate product traceability. Authentication for the transactions can be through blockchain to minimize errors and replace ineffective manual practices. The blockchain-enabled controls will reduce the chances of introducing counterfeit products into the supply chain, thereby ensuring integrity.

In transport, the blockchain technologies are scalable, immediate, easy to authenticate and track. With the blockchain’s help, businesses can easily track their truck components on a digital ledger for efficiency and reduced costs. The decentralized public ledger will record all adjustments in real-time and reduce clerical errors. 

The following factors are some of the things that make this an exciting blockchain project idea for 2021: 

  • Reduced transport costs
  • Easy documentation and coordination
  • Improved security and authentication
  • Quick and easy approval and clearance

Although companies such as Chronicled have already started the project in 2020, there is still much to do in logistics and supply chain management for 2021.

Decentralized Apps

Basing a business on Bitcoin (BTC) is not the wisest decision, as the system is vulnerable to high fees and instability. Currently, the BTC developers do not have a clear roadmap, which can sometimes affect the business model in the future. 

Decentralized applications (dApps) are based on blockchain and outside the control of a single entity. A standard web application such as Facebook runs on a computer system, where a single organization controls its backend. 

Building Dapps on Tezos and other smart contract platforms is a sensible thing to do to ensure business continuity. Beyond the control of a single entity, the decentralized environment is more transparent, secure, stable, and easier to use. The built-in medium of exchange in Dapps will potentially boost the adoption of cryptocurrencies.

As a result, many observers predict that Dapps will have an extensive global impact. 

Dapps are a viable project idea that you can sell to the numerous organizations and startups using bitcoin core and who seek stability for the future. 

Blockchain Consultancy

No doubt, the blockchain market is growing exponentially, and the need for a consultant increases by the day. In the following few years, more and more businesses will be lining up to leverage blockchain technology to stay relevant in the market. 

What makes it an excellent project idea for 2021 is the increasing number of businesses and individuals willing to listen to your blockchain project proposals. Unlike in the past, decision-makers in the business sector already know the benefits of blockchain and will be ready to hear how to make blockchain work for them.

There are various areas to specialize in as a blockchain consultant. For example, you can help strategize and develop a cryptocurrency community, airdrops, and logistics. Even though the industry is in its infancy, many businesses and people need help to leverage technology and ensure sustainability on-the-market. 

Voting Apps

The voting process, especially in developing countries, is usually a source of conflict that mostly erodes some of the gains made between the voting periods. The problem is generally tampering with the voting process and privacy.

Blockchain-based voting applications can streamline the voting process, protect critical data, reduce fraud, and enhance accountability. It can eliminate weaknesses that some proponents bank on to delegitimize the entire process while also maintaining the security of government and citizen’s data. 

Some of the benefits of a voting app blockchain project include:

  • Improved security and safety
  • Streamlined processes
  • Reduced redundancies
  • Improved integrity of the data
  • Cost reduction
  • Efficient process

Cryptocurrency Oracle

First conceived in the 1990s by researcher Nick Szabo, smart contracts have taken off with the advent of blockchain technology. The use of software and protocols to enforce an agreement’s performance or negotiation eliminates the need for laws or third parties. However, smart contracts are not sufficient on their own. Smart contracts need translator software to understand the terms, and that is where a cryptocurrency oracle comes in.

An oracle is a translator that provides critical data to trigger smart contracts after the original terms are met. The demand for the middleware software models is growing as businesses and governments implement blockchain platforms.

Apart from smart contracts, the other blockchain areas where oracle can prove useful include financial derivatives and betting. However, this is a very demanding project where you need to be a blockchain programming guru. 

Personal Finance Management

More than ever, people are focused on their finances and are taking action to ensure financial stability. A personal finance application has the potential to give businesses a fair amount of traction in an increasingly competitive market.

A blockchain-based app can easily categorize income and expenses in real-time and help manage finances. Such a system can easily connect with financial institutions to automatically update data and activate notifications.

What makes it a viable project idea for 2021 is its potential to help individuals take charge of their finances. Transparency, decreased error, traceability, and reconciliation are always welcome features in such a finance app. The added advantage of security and safety will significantly improve its standing. 

Final Thoughts

Like any other nascent technology, the early years of blockchain were characterized by growth spurts and evolving personality, much like a child that entered puberty. Blockchain , which just turned 11 a few weeks ago, is already exceeding expectations, which is more than you can expect from a technology still in its youth. The technology is now mature, and enterprise-ready solutions are hitting the market.

For the technically savvy, blockchain presents a golden opportunity for such projects as blockchain consultancy, stock market application, and decentralized apps. You can be part of the blockchain pioneers that create solutions with the capability to disrupt entire industries in 2021.

Categories
Crypto Daily Topic Cryptocurrencies

Bye Bye Libra, Hello Diem!

If you think Bitcoin had a controversial entry into the cryptocurrency scene, think Libra. Diem, previously Libra, hasn’t even entered the market, and it is already getting unpopular nicknames like Global coin and Facebook Coin. 

Names stick, and Diem is already in a sticky mess. This permission-based blockchain deservedly suffers an identity crisis because it packages centralized financial services as decentralized exchanges.

Initially, Libra was a blockchain-based payment system conceptualized for anonymity and decentralization. However, lawmakers in various developed nations like the UK, France, and the United States spoke against it. Some did so immediately after Facebook unveiled the Libra whitepaper.

Libra’s release was meant for 2020, but an aggressive push back from regulators in 2019 obscured the plans. Different entities fielded varying concerns addressing the Libra whitepaper, and the pressure pushed Facebook and its partners into drastic actions. Some partners left, leaving Libra with a looming identity crisis.

In this article, we discuss the rise and fall of the Libra Association. We are also looking into what Diem has to offer and how it’s evolved since conception. Stick around to learn the original Libra concept and why it rebranded to Diem to reduce Facebook stigma.

The Original Libra Concept

Facebook initiated and championed the formation of the Libra Association, and it always had a crypto tech in the works. The plan was to launch a stablecoin, which would be backed by a basket of national fiat currencies and securities.

The Libra stablecoin was designed to be more stable than any national currency, and Facebook would integrate it within its extensive social media coverage. Therefore, the cryptocurrency would be stabler than Bitcoin and enjoy undisputed, global utility. However, the grand scheme fell under siege the same day it was unveiled.

The Libra Association was to create new currency units on demand and retire units redeemed for fiat currency. It was also planning to reserve transactional data on the ledger for Libra Association members only.

Therefore, the blockchain technology wouldn’t be pure but a hybrid, centralized blockchain. The Libra Association reserved the distributed ledger’s reconciliation only to its service partners to prevent random data analysts from scrutinizing transactions.

Basically, Libra proposed a system where traditional blockchain transparency was obscured and reserved for its partners only. The pretext for shrouding the transparency was protecting customers’ privacy, but Mark Zuckerberg unsuccessfully tried convincing the Senate that Libra would honor users’ privacy.

Libra Couldn’t Address Trust and Privacy Issues

The Libra Association failed because of trying to appease both legislators and crypto purists. Revolutionary bitcoin users prefer permissionless cryptocurrencies, which transfer value in a decentralized fashion. Decentralized currencies can bypass regulatory enforcement.

Since Libra was not decentralized, it was to rely on trust, qualifying it as a ‘de facto central bank.’ The Libra Association and its network would be run by powerful corporations working in collaboration, and sovereign governments were concerned the Libra currency would cause widespread economic instability.  

Unlike Libra, Bitcoin is apolitical, and it doesn’t need the backing of fiat currency. Bitcoin is designed to withstand the regulatory scrutiny that seems to be putting down Libra, and the pure blockchain network is trusted worldwide for its anonymity.

Remember, nobody really knows who created Bitcoin.

Libra is not censorship-resistant, and Facebook is infamous for infringing on users’ privacy. This social media platform was subject to Senate and Judiciary inquiries, and it was scandalized for abusing the privacy rights of billions of users.

International Regulatory Resistance: Why Are Governments Fighting Libra?

The French Finance Minister was the first to raise concerns over Libra, just minutes after the whitepaper became public. France strongly opposed Libra becoming a sovereign currency, and the ministry cited privacy issues and consumer protectionism.

The English central Bank was a bit more accommodating, but it called for regulation of the proposed permission-based cryptocurrency. German lawmakers took a more cautious approach, distrusting the motives of the currency.

The European Union didn’t want Libra outcompeting European currencies, mainly because Facebook has a firm marketing grip globally.

American politicians were also quick to thwart efforts of rolling out the proposed Libra Network. The United States House Committee on Financial Services directed Facebook and its partners to stop developing Libra.

The Federal Reserve, the President, Congress, and the Senate had severe concerns regarding money laundering, economic stability, national security, and privacy & consumer protection. 

In response to the sharp criticisms and widespread distrust, Facebook promised to halt Libra until regulators felt comfortable. C.E.O Zuckerberg also promised Libra wouldn’t bypass US regulators by launching in other nations.

Facebook’s lousy rapport with regulators over privacy and consumer protection took a toll on Libra. US regulators petitioned Libra partners to explain how the currency would safeguard national security, and the following partners consequently abandoned Libra:

  • PayPal
  • Visa
  • MasterCard
  • Mercado Pago
  • Booking Holdings
  • eBay
  • Stripe

Libra received overwhelming lousy press, and it acquired negative connotations such as:

  • Facebook coin: Libra partners were afraid they’d be considered complacent in privacy violations.
  • Global coin: Governments were afraid Libra would overtake national currencies with FB’s robust marketing capacity, undermining national security.

Libra Rebranding to Diem: the Fundamental Changes

Facebook had to address structural and branding issues with Libra. The designers of this digital currency made critical changes to attract regulatory approval. The most fundamental of all changes was liberating the cryptocurrency from Facebook.

Facebook and the Libra Association announced Libra would rebrand to Diem, and the currency would not compete with fiat currencies. Instead, Diem would only complement the dollar, and it would also abandon the strategy of stabilizing behind a basket of various national currencies.

Facebook first renamed its blockchain subsidiary to Novi from Calibra. Novi is Greek for ‘new way.’

Diem was also meant to give this digital currency the connotation of transparency. Diem is Greek for the word ‘day,’ and the network promises the transparency of daylight. If only it can earn the trust of governments and safeguard the privacy of users.

Apart from repairing brand image, the Libra Association had to rebrand because of trademark disputes with other international firms. Finco sued the Libra Association in a New York court for using its registered logo trademark, and the company claimed monetary damages from the Libra Association.

Four European companies also petitioned against the Libra trademark, arguing Libra was a current form of their verbal brands.

Parting Shot

This hybrid cryptocurrency is controversial because of its hybrid nature, but mainly due to Facebook’s robust marketing reach. Diem will likely revolutionize crypto assets significantly because of its permission-based blockchain. That’s why you should understand this proposed fintech.

Diem will only be backed by the dollar. It will offer widespread adoption of cryptocurrencies. This currency will combine the transparency and security of blockchains, and users can make secure global transactions.

This proposed digital has significant potential, and you should share your thoughts in the comments section. Do you have any concerns that the Diem Association needs to address? Let’s discuss.

Categories
Cryptocurrencies

5 Best Staking Coins in 2020: Checking Out Number 4

Investors stake their cryptocurrencies by locking their assets for the reward incentives. Staking is similar to saving in banks because users lock their money in preferred financial services, but crypto staking earns higher ROI than fiat savings in banks. 

Staking is an innovation that allows users to reap maximum gains from their digital investments. Users can earn passively when their nodes validate and add blocks to blockchain networks.

Staking coins utilize a special, more user-friendly blockchain consensus for mining cryptocurrencies called Proof of Stake. In this article, we take a look at five of the best staking coins in 2020 you need to check out. But first, let’s get into the nitty-gritty details of the mining consensus. 

Proof of Stake vs. Proof of Work

Traditional Proof of Work (PoW) validates blocks of transaction information via complex cryptographic computing that generates consensus. In contrast, Proof of Stake (PoS) relies on democratic, open-source electioneering to select validating nodes for every block.

PoW rewards miners for solving mathematical problems with newly created crypto tokens, while PoS rewards validators with transaction fees. PoS systems select random users in the blockchains, making the networks impressively secure.

Proof of Stake systems start by selling a stock of pre-mined coins, and others switch from PoW systems. The switching process is called forging, and it includes locking coins in stakes. The size of each stake determines if it’s viable for validating the next block. Robust stakes have a more competitive advantage.

Nodes forge blocks by first authenticating transactions to match details on previous information blocks. Designers had to address the concern that wealthier nodes could get all the staking bids. Therefore, crypto startups implement:

  • Coinage selection: this strategy considers how long users lock their coins in stake. Coinage is determined by the number of coins multiplied by the period of stake. Coinage is reset to zero after forging, and networks stipulate minimum coinages for staking. This way, nodes with large stakes don’t get dominant control over the network.
  • Randomized block selection: this strategy is predictable, but it provides sufficient protection from corruption. The system selects validating nodes transparently via stake sizes and hash values.

Now, without further ado, let’s review the best staking coins in 2020 worth your time and fiscal investment. 

Best Five Staking Coins in 2020

NOW Token

This digital asset is native to ChangeNOW, a robust crypto exchange platform. The staking coin empowers users to buy numerous products within the NOW infrastructure.

The staking rewards are annual, and staking longer rewards more. You can lock as little as 10 NOW tokens and manage these digital assets via:

  • Token Freezer.
  • Guarda Wallets staking tools.
  • BEPTools.

The tool you use to freeze your tokens will automatically predict your rewards every week. Users stand to gain significantly by staking NOW tokens, yielding high interests, weekly rewards, and demanding little principal investments.

Decred (DCR)

This staking coin was announced in 2016, and it forked from Bitcoin. The designers, miners, and validators disagreed with internal Bitcoin governance. Therefore, they created this hybrid coin, which is powered by both PoW and PoS mechanisms.

The Decred platform makes DCR tokens attractive via:

  • Smart contracts.
  • Public proposal platform.
  • Cross-platform wallets.
  • Cross-chain atomic swaps.

Decred PoW/PoS mechanisms require miners to build new blocks by validating transactions. The miners earn 60 percent of block rewards, and DCR holders can obtain voting tickets for all open network proposals.

You can stake DCR in two ways:

  • As a solo voter.
  • Through voting service providers.

When voting solo, you need to use the native command line and connect your wallet to Decred’s blockchain. Voting service providers charge about five percent of rewards for staking on behalf of users.

It supports user democracy, empowering network members to vote for consensus. However, much like Bitcoin, Decred can’t scale easily, and it falls behind in transaction speeds.

Tezos (XTZ)

This cryptocurrency is novel compared to others since it was launched in June 2020. It serves multi-purposes and is reliable for executing smart contracts. It is the native coin of a self-correchttps://tezos.com/ting platform.

The Tezos blockchain utilizes a unique codebase, using the OCaml computer language. Its PoS consensus implements delegated Liquid Proof of Stake.

XTZ is popular because it offers high staking to third-parties, who claim up to 25 percent of staking rewards. The 2020 ROI for staking Tezos is 5-6%. It is stabilized by its codebase, which allows self-correcting and built-in governance. Thus, it minimizes the risk of hard forks like the case of Bitcoin’s blockchain.

Tezos are created via ‘baking,’ which is just another name for staking. Validators allowing fraudulent transactions are to lose all their staked Tezos immediately the incorruptible blockchain flags incorrect validating. This is significant because bakers must have 8,000 Tezos to stake.

Algorand (ALGO)

ALGO is permissionless and decentralized. It transcends bordered economies and bypasses the need for financial regulators and other third-parties. ALGOs are great staking coins because of the low transaction costs involved.

This coin is native to the Algorand network, which utilizes Pure Proof of Stake to validate transactions. It does not facilitate users to delegate staking responsibilities to other nodes.

This blockchain reduces the risk of dominant users taking over. It decentralizes the network and disallows staking delegations. Thus, it reserves the voting power for the majority’s interests. Staking ALHGOs is relatively easy, and you only need a non-custodial wallet to hold ALGO tokens.

Just one ALGO is enough for staking. Users can earn ten percent annual interest, 5.46% staking on StakingRewards.com, or eight percent on Binance. Algorand facilitates 1,000 transactions per second, attracting them because of easy user experiences. Staking rewards are paid out every 20 minutes.

Loom Network (LOOM)

The Loom Network is a Platform as a Service meant for dApp developers. It supports Solidarity dApps running on side chains of the crypto network. This platform allows different application developers to personalize their consensus-building mechanisms.

Validating Loom transactions is easy, and users can rely on Delegated Proof of Stake. Scaling becomes easier, but users still enjoy Ethereum’s blockchain security.

These staking coins come into the market in 2018, but users started staking LOOM tokens a year later. By 2020, the Loom Basechain bridged different chains via impeccably high performance.

Cross-chain functionality makes LOOMs attractive stake coins. Developers use this Platform as a Service network to pay for hosting, and staking users can enjoy the rewards of creating new blocks.

All you need is one of the following wallets that are compatible with Loom’s blockchain:

  • Trezor.
  • Metamask.
  • Ledger.

Users must meet gas costs on the Ethereum network by depositing some ETH. Afterward, they need to connect their wallets to the LOOM Basechain Wallet for staking.

This network is popular because you can delegate staking to validators, who will claim 25% of your stake rewards. You can expect an annual ROI of 17% from LOOM stakes.

Parting Shot

Let’s agree that these coins are all pretty attractive investment options. Their main benefits include:

  1. Fast delivery.
  2. Lucrative ROI.
  3. Transparent, immutable accounting.
  4. Daily and annual payouts.

Validators are much quicker than bitcoin miners, which makes staking coins appealing to novice users. 

Staking crypto coins is a great investment option for crypto users. It makes it easier to earn high-interest rates on your savings, and you can conveniently, securely convert fiat currency into digital currencies. 

Embrace staking coins as crypto asset institutionalization edges closer to reality. The next time your friends ask for a great investment idea, share this article with them. 

You can also check out these coins for yourself and start earning passively. Please share your best staking coins in the comments section. 

Categories
Crypto Daily Topic

Platforms You Should Join to Avoid Falling for Defi Scams

Scammers couldn’t have found a better place to thrive. What with decentralization, the anonymity of transactions, and a lack of regulation characterizing the space? 

Despite its positives, the Defi sector is a jungle that readily swallows the unknowing. Navigating it requires heart, but more than that, tact. Identifying the snares and how to avoid them is the key to profitable investments in the sector.

2020 has witnessed a burgeoning of Defi projects offering their services and products. A good number of these are dubious, itching for an opportunity to rob you of your funds. 

How then are these fraudulent schemes perpetrated? Is there a way of identifying them? What measures can one take to protect themselves from falling victim to them? Are there platforms to guide investors in determining the genuine from fake projects? 

This article hopes to build your capacity to make informed decisions within the space by answering these questions.

How Do Scammers Carry out their Activities on Defi platforms?

Scams are as varied as there are scammers. Here are a few of their favored methods of execution.

  • Exit Scams

An exit scam is a scheme hatched by unscrupulous crypto promoters to defraud the public of their funds. They dupe investors by setting up a project with an attractive concept. After collecting funds from the ICO, the perpetrators evaporate with the funds leaving the investors in limbo. In 2020, for instance, YFDEX.Finance conned investors of $20 million in just two days of operating.

  • Pump and Dump

Pump and dump schemes involve artificially pushing the demand for a given token. A small group of whales identifies and purchases a token with low value. Their action causes the token’s prices to appreciate. This price hike draws other investors to acquire the token hoping for gain. On the price reaching a certain level, the whales dispose of their holdings at a profit. Thus, the prices plunge, leaving investors with hefty losses.

  • Admin Imitator

Using a social media platform, for instance, Twitter, Telegram, or Discord, a scammer impersonates a Defi Platform’s support team member. The scammer used credentials similar to the platform’s admin. They then ask either for private keys to resolve specific issues. Alternatively, they may require members to send ETH to a given address to complete their scam.

  • Fake Airdrops and Rewards

Airdrops and giveaways help. Defi platforms raise awareness about their platforms. Also, they increase community participation. At times scammers may provide fake Airdrops and reward to access private keys and personal info. They then use these to defraud you of your funds.

  • Defi Rug Pulls

Defi rug-pulls are con games that involve minting new tokens and publicizing them, primarily via social media. After that, the project lists on Uniswap, and owners inject liquidity. The unsuspecting investors will swap their ETH for the new token. The instigators then drain the liquidity pool. This way, they make away with the funds leaving holders with worthless coins.

  • Hardware Wallet Theft

Another scam involves selling users compromised hardware wallets. Their setup creates backdoors allowing hackers to drain one’s funds.  

How do you Identify Scam on Defi?

As the Defi sector is replete with scams, knowing how to identify them becomes an essential skill. Here are a few pointers:

  • Their Offering- Genuine projects have unique products tailored towards specific pain points, doubtful projects, on the contrary, piggyback on successful projects’ products.
  • Development- Are the developers continuously updating the code? If not, it could be a scam.
  • The founders- Are they known? What’s their reputation within the crypto space? Shady projects will have shady frontmen too.
  • Tokenomics- How is the token distributed? Scams typically inflate the token price while holding a majority of the token.
  • Language Use- If they use complex Defi jargon, it’s possibly a scam; legit projects use simple language.
  • Promised Returns- If the deal is too good to be true, think twice before committing.

5 Best Platforms to Sign Up For to Avoid DeFi Scams

The security of your funds could be a sign up away. The rise of Defi Scams has resulted in the emergence of platforms to protect users in the ecosystem. These platforms take it upon themselves to detect scams so that you don’t have to. Here’s your must sign up to platforms to avoid Defi scams

LID Protocol’s LIFTOFF

LIFTOFF is a platform that uses LID Protocol’s Certified Presales service to protect investors and projects. The service facilitates projects to raise funds. When they meet their targets, a smart contract locks the raised funds and tokens on Uniswap or other lending protocols. 

Once the presale concludes, it mints the liquidity pool tokens and burns them. Thus, it permanently locks the liquidity on the lending protocol preventing the occurrence of rug-pull scams. 

SlowMist

This China-based company is a market leader in blockchain security. Besides serving over 70 DEXs, 110 wallet providers, and 40 blockchain firms, it supports more than 800 tokens. It audits these projects’ security systems and smart contracts. 

SlowMist made headlines when it raised the alarm over an impending $2.5 million DeFi exit scam by Emerald Mine (EMD). The platform had transferred to a private account a vast chunk of tokens that users had staked.

PeckShield

PeckShield is another Chinese blockchain security company that strives to enhance blockchain security and usability. It produces cutting edge products targeting large scale systems. It reports on hidden vulnerabilities within networks. 

Additionally, it creates products and services to counter these vulnerabilities. PeckShield also flagged the Emerald Mine exit scam.

Blockchain Audit

This New York-based firm does more than build secure decentralized systems. It also audits Blockchains and reports on different projects’ states of security. Blockchain helps identify counterfeits, bullwhip effects, and fake reviews, among others. 

Again, it is a good source of information on upcoming projects and their security.

KryptoGO

KryptoGO develops advanced blockchain solutions and offers consultancy services through linking projects with experts on various issues. It also undertakes audits besides reporting on different projects. 

Hence, it’s a valuable source of information for anyone researching a project of interest.

What to do to Protect Yourself from Scams?

To protect yourself against being scammed:

  • Do your research on the project before investing
  • Seek expert opinion on the project
  • Avoid sharing your private keys and personal information
  • Only get your hard wallets from legit outlets
  • Sign up to a platform that analyses Defi projects and trends

Final Thoughts

The Defi sector crawls with nefarious schemes. Consequently, it behooves every investor to be awake to this reality. Scammers have devised different ways of actualizing their goals. As such, knowing how to identify scam projects from the rest is critical. 

Simple actions like digging into the founder’s background, examining the project’s development history and its token structure can avert huge losses. Additionally, signing up to platforms like the ones identified here will guarantee you a safe investing experience.

Categories
Crypto Daily Topic Cryptocurrencies

DeFi Investing 101: A Complete Beginners Guide 

The crypto space is decorated with exciting projects. In the year 2020, however, none has caught the eye as much as DeFi has. DeFi is an acronym for decentralized finance, several protocols geared towards providing financial services while eliminating a central governing authority from transactions.

In the last year alone, the total value locked in DeFi funds has grown from $850 million to stand at $14.9 billion as of 15th December. This growth is indicative of the rising appetite for investments in the sector. The excitement that DeFi has created is pulsating; it almost sucks you in. Doesn’t it?

But as a newbie, should you take the plunge? What are the investment options available to you? Are there any pitfalls you should be wary of? If you’ve asked any or all of these questions and are reading this, then you’re in the right place. Today we journey through DeFi, providing a few pointers to help you along your investment journey.

Is DeFi Worth the Hype?

The kind of interest generated by DeFi speaks volumes about the sector’s potential. But what benefits does one derive from investing in the industry? The following are a few reasons why DeFi is attractive: 

  • Accessibility – DeFi products are available to anyone whenever they may be; with an internet connection, one is good to go.
  • Autonomy – through the elimination of central authorities, DeFi gives the users control over their financial activity.
  • Transparency – all transactions take place over the Ethereum blockchain enabling their public scrutiny before verification.
  • Higher returns- because of the attendant risk, the DeFi sector offers higher ROIs than legacy financial institutions.
  • Increased liquidity of illiquid assets- tokenization enables the representation of previously illiquid assets on the Blockchain enabling their easy transference.
  • Faster transactions – DeFi platforms allow for real-time P2P transactions saving time.
  • Affordable – DeFi platforms eliminate intermediaries from fees cutting transaction costs significantly
  • Borderless- DeFi allows seamless Cross-border transactions anytime, any day

What are The DeFi Investment Options Available to a Beginner?

The DeFi Sector replicates the functions of the traditional financial systems in a decentralized manner. Scanning through the sector reveals rich products for the interested investor. To the newbie, investing within the space need not be a chore. Here are a few easy pickings to set you off on your investment journey:

Decentralized Lending and Borrowing

Open lending protocols dot the DeFi landscape. These allow users with extra liquidity to loan it out to others in need of it. It works in similar ways to conventional lending. The only point of departure is that DeFi lending eliminates central authorities and intermediaries from the transactions.

Providing Credit through Smart Contracts and DApps

Smart contracts and DApps enable P2P interactions between lenders and borrowers. These tools spell out the terms of credit and repayment. Once the borrower complies with them, the platform automatically disburses the funds to their wallets. 

Collateralization is Key

They, however, have to provide collateral in the form of tokens. If they default on their obligations, they cede ownership of the tokenized asset to the lender.

Yield Farming

Yield farming is also liquidity mining. It is the provision of liquidity to a Decentralized Exchange (DEX) for a reward. At the center of yield, farming are liquidity pools, which are pools of tokens governed by a smart contract. They facilitate transactions over a DEX by providing the required capital. These rewards create extra income streams for the investor.

Rewarding Contribution

Investors who contribute to liquidity pools are known as liquidity providers (LPs). They can draw profit in two ways. First, they get token rewards for funding the pool. The rewards are an incentive to keep their funds within it. These rewards help to build up one’s total holding within an ecosystem.

Decentralizing Governance

Additionally, protocols may reward their investors with governance tokens. These tokens are essential in ensuring that the platform decentralizes fully. Developers may issue the tokens in several ways:

  • Through listing 
  • Distributing a share of the tokens to their founding community members before listing
  • Rewarding LPs with governance tokens besides the yield rates

Distribution of Fees

Secondly, the liquidity providers share fees that their pool attracts. DEXs mostly use the Automatic Market Maker(AMM) approach. AMMs allow P2P token trades within the liquidity pool Users pay fees- for instance, it is 0.3% of the transaction value on Uniswap– to complete their transactions. The AMM collects all the fees and distributes them to the LPs as a reward. 

Trading Over a DEX

The Decentralized Exchange (DEX) is an essential cog for the running of the DeFi protocols. They enable P2P transactions occurring in the space. There are different trading and, therefore, investment strategies one may adopt. Here we focus on a couple:

Margin Trading

Margin trading involves trading a financial asset using credit obtained from an AMM. The financial assets provide the collateral for the loan taken. After trading, they pay back the loan plus fees and keep the difference as profit. In case of a loss, the protocol will deduct the loan and expenses first. One should therefore exercise caution trading this way as they could lose the collateral.

Synthetic Assets

Synthetic assets are token representations of derivatives. These assets allow the tokenization of real-life assets, for example, property hence their trading on the Blockchain. Without them(synthetic assets), they would remain illiquid. 

No-Loss Games and Lotteries

Among DeFi s wide gamut of attractive services are games and lotteries. A good example is the PoolTogether game. It’s some risk-free lottery. Here investors put their funds in a shared pot. One participant wins the profit accruing, while the rest get their funds back.

Should I be Concerned About My Investing in DeFi?

Despite its attractiveness, the DeFi sector is still in its infancy. As such, it is essential to approach investments within it cautiously. Let us now shift our attention to a few concerns besetting the sector.

  • Price fluctuations – the cryptosphere as a whole is very volatile; the value of tokens and coins can spectacularly appreciate and depreciate in equal measure resulting in untold losses.
  • Scalability issues – Even with the implementation of Ethereum 2.0, there’s lingering skepticism that the sector can handle bulk transactions at a go.
  • Smart contract vulnerabilities – hackers have on occasions exploited vulnerabilities in some smart contracts to steal from DEXs.
  • Lower liquidity compared to the traditional financial systems – even though the sector shows so much promise, its TVL pales compared to the liquidity held by mainstream finance globally.
  • Over- collateralization of credit – borrowers have to stake an asset of higher value than the loans they qualify for

Stick To The Following, and You’ll Be Fine

By now, you’re getting the hang of DeFi investments. Now let’s look at some of the best practices to guarantee you a fulfilling investment journey:

i) Be Thorough in Your Research

Don’t take anyone’s word blindly. It’s good to listen to others but folks that up with your research about the market. This way, you can determine if any token is worth the time and money. It’s critical to examine:

  • The token distribution,
  • The team behind the project, 
  • The word on the street concerning the project
  • Partnerships the project has drawn
  • Its roadmap to implementation

The above scrutiny enables you to understand how trustworthy the project is.

ii) Spot the Opportunities

After verifying the project’s authenticity, the next step is to determine the most profitable tokens. Participating in the initial funding rounds enables you to acquire tokens affordably, enhancing your chance to turn positive returns.

Again it is essential to look at projects launching under unique funding models. Traditionally, such projects have generated a handsome profit for investors.

iii) Manage Your Risk 

After identifying the ideal project, now comes the actual investing. You then proceed to find an exchange that supports the trading pair that interests you.

Proceed to place your order and set your desired stop loss value. Consider initiating a trailing stop order. You can use it to maintain the stop loss as the asset appreciates.

Final Thoughts

The DeFi sector continues to grow, buoyed by the rising demand for its products. This growth comes with many different opportunities for any crypto enthusiasts. Compared to traditional financial systems, DeFi offers convenience, practicality, and affordable transactions. 

Additionally, it provides better ROIs than conventional financial systems. It’s easy to see why they could take any beginner’s fancy. That said, you should exercise prudence in your investment choices as they impact your venture’s profitability.

This article has traversed investments in the DeFi sector. It arms any newbie with the fundamentals that, if adhered to, will make their foray into DeFi a fulfilling one.

Categories
Cryptocurrencies

How Defi will Help To Bank The Unbanked

The statics couldn’t paint a grimmer picture. According to the World Bank’s findex report of 2017, up to 1.7 Billion people are either unbanked or underbanked. They, for the most part, cannot access financial services. Where they do, it is inadequate for their needs. As access to financial services impacts poverty reduction, this statistic makes for sad reading. We need urgent interventions to remedy the situation.

So how then do we increase this access? The financial space continues to pursue interventions that’ll expand the reach of its services. One such intervention is Decentralized finance (Defi), a  product that promises to disrupt the financial landscape. In this article, we discuss the role of Defi in enhancing financial inclusion. First off, though, a look at the global state of the unbanked.

Banking the Unbanked is more than a third world issue

Banking the unbanked is a problem for the LDCs, right? Well, not exactly. It is easy to assume that underdevelopment confines it to developing nations. Statistics do, however, tell a different story. Ironical as it sounds, a significant population in the developed world suffers the same problem. In the US, for instance, up to 25% of its households do not have access to banking fàcilities. To effectively tackle the issue, there’s a need for a broader perspective.

How is Defi a Solution to the Challenges of Realising Financial Inclusion?

Defi exploits gaps in the traditional financial system. Chiefly it seems to expand access to financial services. It does so in the following ways.

i) Eliminates the Need for Brick and Mortar Facilities

Despite the adoption of tech, legacy financial institutions still depend on brick and mortar premises. Setting up a physical branch network is expensive. Banks may, therefore, not feel compelled to establish these everywhere.

Furthermore, some regions are far-flung. Banks might, therefore, deem it unprofitable to invest in them. These reasons and others prevent many from enjoying financial services. Defi could be the remedy for such.

Digitalization of Transactions Expands Access

As stated earlier, Defi dispenses off with the need for physical premises. It runs on the Blockchain. Consequently, it digitalizes every financial function. 

This way, it expands financial services to the remotest of places. Hence it allows the hitherto unserved segments the enjoyment of these services.

A good Internet Connection is all One Needs

A reliable internet connection is all one requires to get set. Using devices such as phones, customers can:

  • Open accounts
  • Deposit and withdraw funds from their accounts
  • Make payments for goods and services
  • Make P2P funds transfers

Cross-segment Solutions

There are solutions for every income segment. High-end customers may use in-phone apps, offline codes, and QR codes to transact. The lower segments can use SMS.

ii) Lowers the transaction Costs

High transaction costs discourage entry into the financial sector. The decentralization of finance allows P2P trading. Deploying dApps and smart contracts eliminate intermediaries. These attract transaction fees per transaction. Their removal significantly lowers or eliminates costs. As such, it spurs demand and use of financial services.

iii) Enhances Access to Credit Through P2P lending and Non-collateralized loans

Many of the Unbanked find it difficult to attract credit. Normally, banks consider them a high-risk refusing to lend them. They require them to put up collateral that is often not available. Their perceived high-risk profile means that the banks price their loans higher than their peers.

Defi programs provide ways out for them. They incorporate crowdfunding and P2P lending.  Anyone can easily get credit in these ways. 

Additionally, repayment rates are affordable. Again, lending proceeds regardless of one’s credit score

iv) Allows the Entry of Undocumented Person’s

Banks require documentation for one to open an account. These may not be readily available for one reason or another. Inability to produce them leads to denial of service.

Defi, on the other hand, insists on the autonomy and privacy of users. As such, they have relaxed KYC requirements. This is in keeping with the true nature of distributed ledger technologies. Less stringent KYC requirements enable a higher uptake of financial services.

v) Round The Clock Transactions

Using the Blockchain, one can transact at any time from anywhere. You needn’t worry that the bank is closed for the day, weekend, or holiday. Even with the incorporation of tech, legacy financial institutions run by the workweek and hours. Certain transactions cannot go on past the work hours or days. This feature is a drawback, especially in emergency cases. Defi provides customers with the convenience to transact at the times of their choice.

vi) Interoperability of Functions

Defi allows cross-platform convergence. Through Cross-chain composability, two or more Blockchains can communicate with each other. The convergence enables seamless transfer of digital assets between them. 

Significance of Cross-chain Composability

Cross-chain composability is significant in that:

  • Users needn’t migrate from their networks to other compatible one’s to execute transactions
  • It cuts down on transaction costs
  • Enables near-instant transfers

On the flip side, banks tend to have differentiated products. Often this differentiation prevents convergence. It is, at times, impossible to carry out certain transactions across networks. Even when this is possible, the process is lengthy and costly.

Final Thoughts

The financial sector evolves rapidly. Players within the space continue to innovate to improve customer experiences. Some of these inventions aim at easing the accessibility of services offered. That said, the current financial systems are inadequate. To date, a significant portion of the global population remains unserved. Considering the correlation between poverty reduction and financial access, this reality is telling. We need solutions to expanding financial inclusion, and on this score, Decentralized finance offers much promise. Increased adoption will radically alter the financial landscape bringing financial services to more people.

Categories
Cryptocurrencies

Who Is the True Creator of Bitcoin?

Satoshi Nakamoto is the known and recognized creator of Bitcoin. And even if we don’t know who Satoshi Nakamoto is or was, we do know what he has done. He or she (or they) invented the bitcoin protocol and published it in a scientific paper through the Cryptography Mailing List in October 2008.

No one knows his or her identity, which makes this all the more mysterious. We will refer to Satoshi as “he” going forward in this article. Satoshi’s identity is a topic that always arouses curiosity. It is for this reason that we publish this article echoing the information that exists to date. In 2009 he published the first version of the bitcoin client and participated with others in the project until his presence began to dilute towards the end of 2010.

He worked with others at first although he took great care not to make personal information visible and the last one he knew of him/her was in the spring of 2011 when he said that “he was to other things”.

But it’s Japanese, isn’t it?

“Satoshi” means “clear, witty, wise thinking”.

“Naka” can mean “mean, relationship”.

“Moto” can mean “origin or creation”.

We can’t know for sure if he was Japanese or not, not even his gender, age, or any other data. We might even be talking about a group of people, instead of a single individual.

Does anyone know who Nakamoto is?

No, but the conclusions people draw when they start to investigate can lead to even more intriguing information. Joshua Davis of the New Yorker believes that Satoshi Nakamoto is Michael Clear, a cryptography student at Trinity College in Dublin.

He drew this conclusion after analyzing 80,000 words from Nakamoto’s writings and looking for grammatical coincidences. He also suspected Finnish sociologist, economist, and video game developer Vili Lehdonvirta. Both have denied being the creators of bitcoin, making it public to Michael Clear at the 2013 Web Summit.

Fast Company’s Adam Penenberg contradicted that information by claiming that Nakamoto was three people:

“Neal King, Vladimir Oksman and Charles Bry”.

He came to this conclusion by writing loose phrases from Nakamoto’s scientific article on Google to see if they were used anywhere else. One of them, “computationally impractical to reverse”, turned out to be part of a patent application filed by these three people, regarding a system to update and distribute encryption keys.

“… the outputs of which are fixed-size strings that are computationally 

impractical to reverse-map. In this manner, the shared secret …”

The bitcoin.org domain originally used to publish the scientific paper created by Satoshi had been registered three days before the patent request.

It was registered in Finland and one of the patent authors had traveled there six months before the domain was registered.

All of those “involved” deny it.

In any case, when the bitcoin.org domain was registered on August 18, 2008, he/she who registered it used a Japanese anonymous registration service and the hosting used a Japanese ISP. The registration of the site was then transferred to Finland on 18 May 2011.

It is curious that the domain with extension “.com” (usually the most desired, bitcoin.com) was registered on January 4, 2008… Maybe it’s just chance. Currently, Bitcoin.com is owned by Roger Ver.

Others think it was Martii Malmi, a developer from Finland who has been involved in bitcoin development from the start, creating its user interface.

In May 2013, internet pioneer Ted Nelson added more fuel to the fire by stating that Satoshi could be Japanese mathematician Shinichi Mochizuki, although he admits that the evidence is circumstantial at best.

In February 2014, Leah McGrath Goodman of Newsweek claimed to have found the real Satoshi Nakamoto. Dorian S Nakamoto has since denied knowing anything about Bitcoin, coming to hire a lawyer and making an official statement.

Hal Finney, Michael Weber, Wei Dai, and other developers are among the names that occasionally come to light in media reports and discussions in online forums as potential “Satoshis”.

A group of forensic linguists from Aston University believes that the real creator is retired law professor Nick Szabo, based on the analysis of the scientific article on bitcoin.

Dominic Frisby, a comedian, and writer also suggests that Szabo is the strongest candidate to be Satoshi in his book “Bitcoin: The Future of Money”.

His detailed analysis takes into account the linguistic factors of what Satoshi wrote as well as his knowledge of C++ and his likely birthday date.

To a large extent, all of these potential Satoshi candidates have insisted that they are not the creators of bitcoin.

Michael Weber hasn’t answered yet.

Some even think that Bitcoin has been the creation of 4 leading technology companies. This is because the name of Satoshi Nakamoto carries within it clues to them: SAmsung, TOSHIba, NAKAmichi, and MOTOrola.

Jed McCaleb, a lover of Japanese culture living there who created Mt. Gox and co-founded Ripple and later Stellar, has also been targeted.

Another theory suggests that scientists Donal O’Mahony and Michael Peirce are Satoshi Nakamoto, based on a scientific paper of which they are authors and which deals with virtual payments together with Hitesh Tewari, based on a book they published together. O’Mahony and Tewari also worked at Trinity College, that is, at the same site as Michael Clear.

Israelis Dorit Ron and Adi Shamir of the Weizmann Institute recanted allegations made in an article suggesting a link between Satoshi and Silk Road, the black market dismantled by the FBI in October 2013. They suggested a link between an address that supposedly belonged to Satoshi and the site.

Security investigator Dustin D. Trammel owned the address and was said to be Satoshi. Either way, others think he wasn’t even Japanese. His English, in the texts he wrote, shows typical idiomatic nuances of a native English.

What do we know about him?

One thing we know, based on interviews with people who have worked with him/her in the early stages of bitcoin development is that their system is very well thought out. His coding skills were unconventional, according to developer Jeff Garzik, as he did not apply the same tests on the code you would expect from a classic computer engineer.

How many bitcoins could he have?

In an analysis made by Sergio Lerner, an authority in the world of Bitcoin and cryptography, it was suggested that Satoshi mined most of the first blocks of the network and that he could have a fortune of about a million bitcoins.

What is he doing now?

No one knows what Satoshi is currently involved in. But in one of the last emails he sent to a developer, dated April 23, 2011, he said, “I’ve moved on to other things. He’s in good hands with Gavin and the rest.”

Does he work for the government?

Although there are rumors that Satoshi may work for one of the “three-letter” intelligence agencies (CIA, FBI, etc.), or maybe even some shadow organization looking for a common currency to dominate the planet, developer Jeff Garzik makes it clear:

“Satoshi published an open-source system so that no one needed to know who he was or what knowledge he had. Open-source software makes it impossible to hide secrets. Source code speaks for itself.”

In fact, he was smart to use a pseudonym. This, then, forces people to focus on the technology itself rather than the person behind it.

Today, Bitcoin is much bigger than the figure of Satoshi Nakamoto. It doesn’t matter who it is for many anymore. Its initial code has been improved thanks to the effort of some of the best brains on the planet working collaboratively. The work has been done in a totally altruistic way daily making this technology better and better.

Categories
Cryptocurrencies

Top 5 Best DeFi Tokens for Smart Investors

2020 is undoubtedly one year that will go down in history books. Far from the global health and economic crisis resulting from the pandemic, this year has seen an explosive growth of decentralized finance. In fact, we can only compare it to the 2017 ICO boom. 

It goes without saying that the booming industry has seen developers come up with various DeFi tokens that provide different solutions. So, how do you, as a smart investor, choose the best tokens for your portfolio. 

Well, you really are spoilt for choice when it comes to DeFi tokens. However, if you’d like to make a sound investment decision, you’d better be on the lookout for the best and most promising DeFi tokens. 

It doesn’t sound like an easy decision, which is why we are here to the rescue. Have a look at the five best DeFi tokens that are totally worth your time and money. 

Chainlink (LINK)

Smart contracts are an essential feature of decentralized finance, and the Chainlink Network aims to create a world connected through smart contracts. The decentralized oracle network allows for the creation of smart contracts that are securely attached to real-time data. This functionality makes Chainlink ideal for sending payments anywhere and connecting to any external API. 

The platform’s native token, LINK, has been rising steadily over the last year. At the time of writing, LINK had a $5.299 billion market capital and was trading at $13.633. The proven track record of completed milestones, plus the token’s growth potential, make LINK one of the best DeFi tokens to invest in. 

Wrapped Bitcoin (WBTC)

The introduction of Bitcoin to the world opened up an entire world of possibilities. However, despite all the fantastic features it presented, the Bitcoin network lacked in several ways, which initiated the search for better blockchains that would be more flexible than the rigid parent technology. This search eventually led to the development of the Ether network, which is the core of most DeFi projects. 

Now, suppose you could combine the best features of Ether and Bitcoin? Wouldn’t that be amazing?

Wrapped Bitcoin does precisely that. The token enjoys a 1:1 ratio backing with bitcoin. It comes with the strength of the pioneer cryptocurrency, coupled with the flexibility of ERC-20 tokens. This feature makes it easier for the token to standardize bitcoin to ERC-20, allowing for the creation of Bitcoin smart contracts. 

WBTC is currently trading at $22,703, a 6.07 % increase over the last 24 hours. 

Compound (COMP)

Borrowing and lending are some of the critical features of the DeFi industry. If you’re looking to invest in a token offering lucrative options for these functionalities, you should consider looking at COMP

The ERC-20 token asset gained the massive attention of the DeFi world after its value skyrocketed immediately after its launch, before correcting to normal levels. It is currently trading at $169.984 and has increased by 10% over the last 24 hours at the time of writing. 

Many will argue that COMP isn’t worth investing in since it is only a governance token. However, Compound Protocol, the network behind the token, was one of the first to leverage decentralization in borrowing and lending, a concept that has been around for ages. As more investors realize this protocol’s potential, its value will increase, getting more people on board. 

Polkadot

Investing in different DeFi and crypto projects will have you working with various blockchains. Therefore, you’re going to need one or two projects that allow for true interoperability, which is precisely what Polkadot offers. The network developed by Ethereum’s co-founder, Gavin Wood, has its native token as DOT, which is currently trading at $4.902

The DOT token powers the Polkadot network and fulfills three purposes; staking, bonding, and governance. Staking helps to keep the network secure by incentivizing DOT token holders. The game theory requires that holders behave honestly and those who don’t lose their stake in the network. 

Holders also have complete control over the protocol. They have a say in managing protocol upgrades and fixes and other exclusive privileges that would typically be given to miners on other platforms. 

One of the DOT token’s best features is its bonding, which is a form of proof of stake. The mechanism makes it easier to add new parachains to the networks by bonding tokens. If there are any outdated or non-useful parachains, removing the bonded tokens gets rid of the chains. 

The rigidity of blockchains and the inability to transfer and receive data is a significant setback in the crypto world. Therefore, Polkadot’s ability to transmit arbitrary data between chains and tokens makes this project a worthy investment venture. 

DeFiChain (DFI)

Everyone in the crypto space knows that most DeFi projects are built on Ethereum, the world’s second-largest blockchain network. However, if you’re after a DeFi project built on the King coin, you should undoubtedly check out DeFiChain. This network brings together the security and immutability of Bitcoin and the best of Proof of Stake mechanisms. 

One of the features that make DeFiChain stand out is that it’s a non-Turing complete protocol. Ethereum is a Turing blockchain, which compromises its security. Therefore, anything can happen on the protocol, which is not the case for DeFiChain. Having the network’s core built on Bitcoin also helps to increase the levels of security. 

The DFI token serves several functions on the network. Besides using the token as collateral, for staking, and paying network fees, users can also use DFI to create custom DCT tokens. This unique functionality makes DeFiChain the ideal investment option for crypto enthusiasts looking to make their cryptos work for them. Over the last 24 hours, DFI has increased in value by 16.32% to trade at $0.76593.

Parting Shot

The DeFi scene has exploded in 2020, with new tokens being released by the day. As a smart investor, you’ll undoubtedly be on the lookout for the ideal tokens that will make you more money from your investment. 

When choosing the ideal DeFi token, be sure to check out the solution it provides in the crypto world, its growth potential, and whether it has a proven track of accomplished milestones. It would also be best if you had a look at the team behind the project to have a clear picture of what to expect.

Choosing smart tokens for your DeFi portfolio is only the first step, but many investors will agree that it’s a crucial one. Therefore, if you have no idea where to start, the five tokens in this article should give you a pretty good head start. So, head on over to the official sites, read through their documents, and decide which ones to choose. All the best in your investment ventures!

Categories
Crypto Daily Topic Cryptocurrencies

The Best Use Cases For Decentralized Finance Projects

There’s hardly a facet of our lives left untouched by blockchain technology. From the most ubiquitous to the complex of our engagements, its effects are discernible. But perhaps the one sector where its effects are most discernible is in finance. The shortfalls of the legacy financial systems provide the right environment for innovation to sprout. Fintech firms are outdoing themselves in the production of products and technologies aimed at bettering users’ experiences.

This year has seen the emergence of many disruptive technologies. However, non features as prominently as decentralized finance(DeFi). DeFi is technology’s response to an inadequate financial system. 

In this article, we tackle two significant aspects of Defi. First, the significance of Defi projects. We also present the best use cases to give you insight into this revolutionary technology. 

Let’s get into it!

What is the Significance of Decentralized Finance Projects?

Defi projects are universally beneficial. The buzz they continue to generate emphasizes this truth. Here’re a few of the benefits associated with them:

  • They streamline transactions- smart contracts execute exchanges increasing efficiencies.
  • Increase the security of transactions- they draw on the Ethereum blockchain’s Immutability to secure trades.
  • They are scalable- Ethereum’s composable software ensures that DeFi protocols and applications are interoperable, giving the developers and product the flexibility to build on top of existing ones. 
  • Increase transparency of transactions- distributed ledger technology enables one’s peers to access and verify their transactions, curbing fraud.
  • It is permissionless- DeFi facilitates anyone with a crypto wallet and the Internet to access its applications regardless of their location.
  • Gives the user control over their data- Web3 wallets like MetaMask interact with permissionless dAapps and protocols to provide users custody of their assets data. 

What are the Best Use Cases for Decentralized Finance?

From the preceding, it is clear that DeFi projects are beneficial. The question then arises, where can we best use this technology? DeFi technology has wide usage. The following are some of the prominent use cases.  

i) Management Of Assets

DeFi protocols give users full custody of their funds. Additionally, Crypto wallets help one easily and securely interact with decentralized applications (dApps) for different transactions. These transactions range from trading and transferring crypto to earning interest on their crypto holdings. Tracking one’s assets becomes easy this way.

ii) Gaming

Defi platforms are interoperable. This feature has opened up opportunities for developers to build cross-platform protocols across a variety of verticals. 

Ethereum-based games have gained popularity due to their inbuilt economies and rewards. Take the case of the PoolTogether game. Its users acquire digital tickets using the DAI stable coin. They then pool their tokens for lending on the Compound money market.

iii) Provision of Credit

DeFi allows the creation of P2P lending pools and borrowing contracts. For instance, Compound -an autonomous interest rate protocol- integrates with most DeFi platforms, enabling users to earn interest in crypto that they’ve lent.

Compound’s smart contract automatically matches creditors to borrowers. Additionally, it determines interest rates by comparing the volume of the borrowed to supplied funds.

iv) Decentralized Exchanges

Decentralized exchanges (DEXs) are crypto trading platforms allowing P2P transactions. They achieve this by eliminating central authorities. As they’re non-custodial, they mitigate price manipulation, hacking, and theft.

DEXs are the mainstay of token projects. They enhance their access to affordable liquidity as they allow projects to list without fees. This way, they differ significantly from centralized exchanges that charge higher prices per listing.

The degree of decentralization varies with the exchange. Whereas exchanges may centrally host order books and other aspects of a users’ account, they don’t hold their private keys. Examples of popular DEXs in the DeFi space currently include AirSwap, Liquality, Mesa, Oasis, and Uniswap.

v) Decentralized Insurance

Investing in cryptos (DeFi included) comes with its fair share of risks. As such, different products that hedge against risks in this space are available. They help protect against market crashes, hackings, failure of smart contacts, among others. Nexus Mutual is one such example.

The players within the Defi space underwrite the risk. That is to say, they pool resources to acquire the premium providing the cover. Utilizing smart contracts makes the products transparent. Anyone can access the payout terms via the Blockchain.

vi) Issuance of Synthetic Assets

Synthetic assets are tokenized representations of derivatives. An Ethereum based smart contract locks them to the Blockchain. These derivatives may represent real-world assets, including fiat currencies, bonds, commodities, or even cryptos.

Synthetic assets are tradeable. Consequently, they allow the disposal and acquisition of assets that are illiquid or difficult to obtain. The Synthetix protocol is essential to their issuance. It employs a 750% collateralization ratio that guards against price shocks.

vii) Liquidity Mining

Liquidity Mining, also known as yield farming, is holding digital assets for rewards. Through smart contracts, owners of crypto assets get incentives for keeping rather than trading them.

Participation in these projects requires stacking liquidity provider (LP) tokens. One obtains these through providing liquidity to a DEX, such as UNISWAP. Users then stake their tokens to mind new ones for exchange.

viii) Identity Management

Traditional financial systems rely on KYC guidelines to comply with AML and CFT regulations. Defi, on the other hand, uses Know- your-transactions (KYT) protocols to deter fraud and other financial crimes. KYT uses the behavior of participating addresses rather than individual IDs to assess and stem the risk for financial crime. The assessment is in real-time. 

ix) Enhancing Financial Inclusion

In tandem with Blockchain-based identity systems, DeFi opens up financial opportunities to those previously excluded. It eases collateralization requirements for those seeking credit. Again it delinks creditworthiness from such aspects as income and ownership of property. Instead, it shifts it to attributes like financial reputation and activity. 

x) Development of Stablecoins

A stablecoin is a cryptocurrency whose value depends on a stable asset or group of assets. The supporting assets could be fiat commodities or other cryptocurrencies.

Intended to mitigate the volatility of cryptos, they have found a home in the DeFi space. They are essential in remittances, borrowing, and lending. Another area they’re gaining prominence in is the Central Banks Digital Currencies.

xi) Provision of Marketplaces

Many marketplaces have arisen to exploit DeFi functions. These allow P2P exchanges globally. From them, traders and consumers enjoy a wide variety of products and services.

Final Thoughts

The year 2020 could be defined as the year of Defi. During this period, interest in this disruptive technology peaked. The heightened interest attests to its significance. Not only will it increase access to financial services, but also ease transactions besides securing them. The technology has wide useability. For instance, it is essential in credit provision, creating market places, and even combating financial crimes. Even though it is still developing, it has shown the potential to alter our economic landscape for the better. As we expand research and development in the area, we can only look forward to exciting products and solutions in the space.

Categories
Crypto Daily Topic Cryptocurrencies

Top 5 DeFi Projects to Look Out for in 2021

The DeFi industry is still in its infancy stage but has already registered some impressive growth over the years. The industry’s total value is currently locked at $14.92 billion and is expected to grow in the coming year. 

There’s no doubt that DeFi brings about some unique solutions that are quite lucrative for investors of all kinds. If you’ve had your eye on the crypto industry for a while, there are chances that you’ve thought of putting your money in this exciting venture. But if you don’t know how to get started, you may feel stuck when choosing the best projects.

If you’re in this position, this article is just what you need. Buckle up, and let’s dive into the five best DeFi projects you should consider investing in the coming year. 

Uniswap

Anyone who has been in the crypto industry for quite a while will agree that decentralized exchanges were primarily associated with thin order books and poor UX. These issues, coupled with exorbitant fees, centralized gateways, and too many transactions was the reason dex enthusiasts demanded a simple yet effective decentralized exchange. 

Uniswap was launched in 2018 as an automated liquidity protocol for ETH and ERC-20 tokens. The platform has its own token, UNI, which is instrumental in governing protocol changes. 

One of the things that make Uniswap unique is that it doesn’t use order books but instead has an automated market maker. Users only need to select the assets they want to trade, and the platform automatically completes the transaction. 

Uniswap presents several advantages, which is why you should hop onto it already. It has no listing fees for new tokens, and users don’t have to complete the KYC checks. Besides, you get full custody of your funds and an excellent way to earn some extra tokens through the platform’s liquidity pools. 

If you choose to invest in the platform, you could either be a casual user, an arbitrageur, or a liquidity provider, all of whom play essential roles in the ecosystem. 

Yearn Finance

Yearn.Finance should be your go-to project if you’re looking to maximize the annual percentage yields on the cryptocurrencies you’ve deposited in DeFi. The unique project is an array of DeFi protocols built on Ethereum and designed for high-yield returns through liquidity pools and community governed lending protocols. Like Uniswap, Yearn Finance uses an automated market marker to allow users to convert tokens and earn from both lending and trading fees.

Yearn Finance is still relatively new in the industry, having been launched in February 2020. The platform had a rapid ascent in August, which saw its value rise to $650 million, accounting for a significant percentage of the entire industry’s value.

According to Jesse Walden, CEO of Variant Fund, “The unifying goal of all Yearn products is to create a simple, intuitive interface to all of DeFi.”

Yearn’s intuitive interface makes trading easier for all users. The platform is a portal for other DeFi products and has the YFI as its governance token. Yearn is considered entirely decentralized because the YFI tokens cannot be pre-mined, and the platform didn’t hold an ICO.

Although YFI was initially designed to be entirely community-governed, it can now be traded on other platforms such as Uniswap.

Curve Finance

You’ve probably heard of stablecoins, and if you know a thing or two about cryptocurrencies, they must have piqued your interest as an investor. Well, Curve Finance is an excellent DeFi platform if you’d like to trade-in stablecoins efficiently. It provides a solution to one of the most considerable problems in the DeFi sector; price slippage.

Like any other ideal marketplace, demand and supply forces determine the lending rates in DeFi. Now, suppose you want to trade between USDC and DAI. If the lending yield for USDC becomes higher than that of DAI, lenders will want to migrate to USDC. Curve Finance allows you to effectively do this and still earn better than you would with a regular DEX.

Switching between stablecoins effectively helps correct any anomalies in the interest rates that may result from mismatches in the demand and supply. Users can keep their profits once the interest rates are back to normal. 

Curve Finance provides one of the best ways to earn as a liquidity provider with returns of over 300% per year for BUSD. This is made possible by providing liquidity to other DeFi protocols using the deposited funds. This move generates interest for the other protocols, and Yearn, in turn, assigns the interest to liquidity providers. Additionally, they receive some CRV tokens and a cut of the trading fees from the platform.

DAI 

Speaking of stablecoins, DAI is one you should definitely watch out for in the coming year. The coin has its price pegged to the US dollar, which helps maintain its value. Whenever users on MakerDAO, the protocol behind DAI, take out a loan, the stablecoin is created. The decentralized nature of the protocol, together with the lack of volatility, ensures that DAI remains stable and transparent. 

Initially, you’d only be able to use ETH as collateral for DAI. However, the stablecoin now supports different cryptocurrencies as collateral for a DAI loan. You can place your cryptos and get them back for the same price, despite changes in the coins’ values. 

There are plenty of stablecoins available, so what makes DAI any different? Well, if you are really against censorship by governments and other regulatory bodies, you’re going to love using DAI. It is backed by smart contracts, which makes it resistant to censorship. It also provides privacy when transacting since users don’t need to complete KYC checks or create any accounts. 

Kava

Kava developers used various technologies to create a system that would allow users of significant crypto assets to access collateralized loans and stablecoins. The network uses USDX as its stablecoin, and users get to collateralize their crypto assets in exchange for the stablecoin. 

To help you gain a leveraged position in the market, you could take out several collateralized loans. For each of these loans, you’ll receive an equivalent amount of USDX to create synthetic leverage. You can then earn a passive income from the platform by staking and bonding your USDX coins. 

Kava uses a dual token system that ensures usability and flexibility. The native token for the blockchain is Kava tokens, which double up as the governance and voting tokens. Kava tokens help to ensure the platform’s security through staking, which also earns users block rewards. 

Kava has already made a name for itself in the business world by gaining some major entities’ attention. For example, Arrington Capital, Ripple, and Cosmos are behind this DeFi project, which provides some assurance in its profitability and sustainability. 

Parting Shot

There’s no denying that the DeFi industry has taken giant leaps over recent months and will continue to do so in 2021. Like most investors, you’ll undoubtedly want to add long-term value projects to your portfolio, and DeFi is an excellent way to go about it. 

Sure, it’s totally okay to be skeptical about new ventures such as this. However, the DeFi industry has proven to provide solutions to problems poised in centralized finance. 

Just as you would with any other investment, it’s best to do your due diligence and learn as much as possible before placing your money in a DeFi project. These five projects should give you an excellent head start for your 2021 investments.