Tag: Bitcoin trading

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Crypto Cryptocurrencies

Questions You Might Be Afraid to Ask About Bitcoin

There are a lot of questions you may want to ask about cryptocurrencies and Bitcoin in particular. Interest in the world’s first mainstream cryptocurrency is coming fast and they are relentless now that the price has really started to take off and more and more people are taking notice of it. However, with so many […]

There are a lot of questions you may want to ask about cryptocurrencies and Bitcoin in particular. Interest in the world’s first mainstream cryptocurrency is coming fast and they are relentless now that the price has really started to take off and more and more people are taking notice of it. However, with so many […]

There are a lot of questions you may want to ask about cryptocurrencies and Bitcoin in particular. Interest in the world’s first mainstream cryptocurrency is coming fast and they are relentless now that the price has really started to take off and more and more people are taking notice of it. However, with so many eyes on cryptocurrency, some people may have some pretty basic questions that they feel are a little silly and they simply do not wish to ask them. Yet we are here to tell you that no question is a silly one, we all have different knowledge of Bitcoin and so asking a question is simply our way of gathering more information. So here are some of the questions that you may be afraid to ask about Bitcoin.

Is it a scam?

Let’s get this one out the way right away, the simple answer to this question is no and there are a  few reasons why. Firstly it is a completely independent currency, it is not owned or controlled by a single entity, this means that if someone was to suddenly remove their bitcoin from the markets, or to simply state that the price is much higher or lower, then this would make no difference to the ecosystem. Not a single person can control it and so it cannot be a scam. The second point is that the price is controlled by supply and demand, it is an open market that anyone can trade on, anyone can buy or sell, so you are able to sell your bitcoin at any time, you are not forced to hold and you are not stuck with them, a scam would not allow you to sell at any time in order to get your money back. To put it simply again, Bitcoin is certainly not a scam.

Is it a bubble?

This is a slightly harder question to answer, there is evidence that it may be a bubble, but there is also evidence that it is not, but what you really need to ask yourself is whether or not it is actually a bad thing even if it was a bubble. Of course, if it is not then that is great, the price continues to rise and rise. If however it is a bubble and at some point, it bursts, there is nothing to say that the price won’t recover and then continue to rise afterward. Look at the dot-com bubble, that burst, but now the internet and internet-based businesses are bigger than they ever were within that bubble. Yes, bubbles bursting can be pretty bad short term, but they don’t mean that things won’t be successful in the long run.

What is it?

A lot of people may be hearing about Bitcoin for the first time, so while it may seem silly to not know what it is, many people won’t and so this is not a bad question at all. Bitcoin is a cryptocurrency, this means that it is a currency that exists only on the internet and is based on a form of an algorithm, or a blockchain in this case. Bitcoin can be used as a currency, traded and exchanged for goods or other currencies. The way it works is that each person has a wallet with their coins in, you can then send the information, computer algorithms and processing power is used to confirm each transaction and not one person has any control over the network. All transactions can be seen within the blockchain. There is of course more to it, but we would be here for hours trying to explain everything.

How do I store Bitcoin?

Actually, another good question, when we think about storing our money we think about banks or our wallets, the latter is exactly how we store Bitcoin too, in a wallet, only that it is a digital wallet rather than a physical one. This wallet acts as our safety deposit box for our Bitcoin, any bitcoin that is sent to us will go to that wallet and anything that we wish to send will come out of it. No other person will have access to it apart from you and as long as you keep the credentials, the wallet will be around forever, as it is recoverable on other devices with those credentials.

Can you trade it?

Yes, you certainly can and there are a few different ways that you can do it. You can simply buy or sell it, there are many exchanges that allow you to buy bitcoin with your local currency or to sell it in order to get your currency. You can also trade it like you do in the foreign exchange markets, many brokers that offer Forex services are now enabling you to trade cryptocurrencies like Bitcoin too. This makes it extremely accessible and easy to trade on the global markets, there are even Bitcoin or cryptocurrency-specific brokers popping up that have very good trading conditions available on them.

What can you spend it on?

Pretty much anything. Bitcoin is becoming more and more accepted. In fact, no matter which country you live in, there will be services and shops available for you to spend your Bitcoin on. Even places like PayPal, the world’s most popular payment processor, are now accepting Bitcoin and allowing you to purchase through them and to pay through their portal with Bitcoin. There are a lot of shops that now accept it too, if you are looking for pretty much anything on the internet you should be able to find it available for Bitcoin. So while you might not be able to use it in your local shops, you can online, but there is nothing to say that your local shops won’t start accepting it any day now, more and more companies are each and every day.

Those are some of the questions that you may be afraid to ask, but you should’;t be, we all have different knowledge and different understandings of what Bitcoin is, the whale cryptocurrency world is a brand new one, and not one knows everything about it as it is constantly developing. If you have questions you should ask them, no matter how silly it may seem to you, just ask away, you will gain a lot more knowledge doing that than sitting on your question and never finding out the answers.

Categories
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.

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.

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.

Categories
Crypto

The Worst Advice You Could Ever Get About Bitcoin Trading

Advice can be a fantastic thing, it can help us improve in pretty much everything that we do. However, on the other side of that coin, it can also be devastating. Advice is often given with good intentions, yet some of the advice given, no matter how good the intentions are can be bad advice, […]

Advice can be a fantastic thing, it can help us improve in pretty much everything that we do. However, on the other side of that coin, it can also be devastating. Advice is often given with good intentions, yet some of the advice given, no matter how good the intentions are can be bad advice, […]

Advice can be a fantastic thing, it can help us improve in pretty much everything that we do. However, on the other side of that coin, it can also be devastating. Advice is often given with good intentions, yet some of the advice given, no matter how good the intentions are can be bad advice, advice that can end up hurting you or your accounts should you decide to follow it. So let’s look at some of the worst advice that you could ever be given about cryptocurrencies, don’t get us wrong, the advice probably worked for someone, but it is a risk to follow it and we would recommend that if you hear any of the following that you avoid that advice like the plague.

Buy, Buy, Buy

Buy, buy, buy, advice that is given out a lot, in the past, at any time throughout the life of coins like Bitcoin, if you had bought and helped you would now be in profit, it is as simple as that so the advice would have done pretty well. For other cryptocurrencies though, that advice may not be quite as good,  a lot of them have had their all-time highs long ago and have not recovered back to that value. If you simply buy without any real plan or idea of where you will get out, including the historical process of the asset then you could be in for a disaster. Only buying can lead to a lack of funds, it can lead to losses should the markets turn and while it can make you money, it is a risky strategy to simply continue to buy at every opportunity that you can. There have been people doing very silly things, selling their house to put all of the money into Bitcoin, yes it paid off but the risk was far too high, do not put everything into it and do not put money in that you do not have.

It’s A Scam

Bitcoin is a cam, cryptocurrencies are a scam, you will hear that a lot, and there is absolutely no evidence behind those claims. The majority of people that state this do not have an understanding of what it is that they are calling scams. We have to admit, that yes, there are some scams within the cryptocurrency world, but then again there are within any industry you look at, this does not, however, mean that the entire cryptocurrency scene is a scam, much the same way that not all banks are scams. Those that are telling you it is a scam will also be advising you to avoid buying it and to avoid trading it. That is terrible advice. There is no harm in trading these coins and tokens, as there are a lot that are very safe to trade. Try and avoid the smaller ones but the majority of brokers that offer any sort of trading and purchasing will be monitoring the coins they have listed and will filter out the undesirable or less than legit ones.

Sell On Drops to Avoid Losses

There are a lot of panic buyers out there, and for every panic buyer, there is also a panic seller, these are people who will see the price falling and instantly panic and sell their coins. This is the worst thing that you can do, well in most cases anyway. Instead, when it comes to cryptocurrencies there is a good example of why you should hold, only sell when you are planning to, when you buy them you should have a target amount in place, that is where you sell and withdraw. Do not sell just because the price is dropping, odds are that it will reverse and go even higher, causing you to miss out, and certainly don’t panic if the price drops after you have just made a purchase, that is an instant loss. So do not listen to those that tell you that you should be selling on the drop, there is no guarantee that it is the bottom and no guarantee that the price won’t instantly reverse.

Just HODL

Something that came up at the start of the whole Bitcoin and cryptocurrency boom was the term HODL, this is basically the idea of holding onto your bitcoin no matter what, with no real aim or goal as to when you will sell or withdraw back into local currencies. While there is certainly some credit to the idea of holding Bitcoin and other cryptocurrencies long term, as there is certainly profit to be had in doing that, the idea of not having any sort of end goal is not. Yes by cashing out you may lose some potential profit, but you are cashing out at a level that is right for you and so you should be happy with that, just aimlessly holding things and hoping that they continue to go up is not a good thing to do as everything that goes up will eventually come back down.

Don’t Buy It, Don’t Trade It

We put these ones in one as they are very similar, a lot of people are telling others to simply not buy into it or to not trade it, why they have decided that this is the advice that they are going to be giving we have no idea. There is absolutely no reason why you should not be buying and no reason why you should not be trading it. Many of the people giving this advice either do not fully understand how cryptocurrencies work or they simply do not like the risks that are involved. That is fine for them, but it is not a reason to advise other people away due to their own preferences. If you want to trade it, trade it, if you want to buy, then buy, do not listen to this sort of advice.

Those are a few of the things that we consider as the worst advice that you can get, there will of course be other silly things that you may hear or you may have even heard something even worse, either way, it is important that you do not take all advice on board, some of it can be ignored. After All the decisions on what you do are yours and yours alone.

Categories
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 […]

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 […]

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.

Categories
Crypto

Why Are Bitcoin Scams So Incredibly Profitable?

The popularity of Bitcoin, alternative currencies and blockchain is increasing daily. Just look at Google’s trends for the three terms to see how often people search for them in the world’s most used search engine. In general, the term “bitcoin” is the most sought after among others such as “cryptocurrency”, “altcoin” or “blockchain.” The level […]

The popularity of Bitcoin, alternative currencies and blockchain is increasing daily. Just look at Google’s trends for the three terms to see how often people search for them in the world’s most used search engine. In general, the term “bitcoin” is the most sought after among others such as “cryptocurrency”, “altcoin” or “blockchain.” The level […]

The popularity of Bitcoin, alternative currencies and blockchain is increasing daily. Just look at Google’s trends for the three terms to see how often people search for them in the world’s most used search engine.

In general, the term “bitcoin” is the most sought after among others such as “cryptocurrency”, “altcoin” or “blockchain.” The level of bitcoin search in Google goes in an amazing agreement with respect to the quotation of the cryptocurrency itself. Whatever the term you are looking for, as long as it matches any word related to digital coins it is suffering an inordinate increase in searches over the past few years.

“Unfortunately not all people or groups have the best intentions and usually take advantage of the little experience of new people who discover the Bitcoin ecosystem and all its advantages”. 

In this article, we explain how to stay away from them and prevent more than one scare.

What should I do first to avoid losing my cryptocurrencies?

Using an updated and secured operating system with an antivirus that is the order of the day when it comes to updates is one of the most recommended aspects.

It’s one of the first things to consider. The number of users using Windows is higher than that of other operating systems such as Linux, so their chances of success are much higher and devices with Windows installed on it are the main target of these attackers.

Sometimes people use Linux to avoid precisely this problem, but we should not get confused… Using Linux without due protections on the file system is also an open door to theft.

It is very important to be clear that the securitisation of the working environment is very important both for prevention and for the detection of scams. Below we will separate the incidents that can happen in 3 large groups such as software, web, and investment.

Why in these three categories? Very simple, not all bitcoin-related scams happen from computer programs. Many of them can be intimately linked to participation in investments or projects related to the ecosystem of cryptocurrencies without having to go through software or website.

Payments to the Ransomware

Although it is software (that is to say it should be in the previous section of software) we believe that it is worth highlighting because of its impact and the high number of victims.

It’s a Trojan virus. It has hundreds of versions (one of the most famous is criptolocker) and they all do the same: they encrypt your computer files and ask you to pay a certain amount in bitcoins to decrypt them (recover access to them).

Most commonly, your computer will be infected by opening a file (usually a “.pdf” or “.exe”) that is sent to you in an email. But, in addition to the big problem that this already entails, it has a second part: the scam.

Many of these virus versions will never return access to encrypted files even if the reward is paid. What’s more, even if you decrypt the files you have to keep in mind that the computer is still infected (which is dangerous if you later store important new data, for example, the private keys of the Bitcoin wallet that you can use to save the bitcoins that you have left over after the payment of the ransom).

International authorities such as Europol, FBI, European Commission, National Police, and a dozen other authorities and security companies have jointly developed the website No More Ransom, which helps prevent and disinfect the most typical versions of this type of virus (unfortunately still only in English and with solutions to few versions of the virus).

“If you’ve been infected, don’t pay and report the case.”

Bitcoin scams at the investment fund level.

We have reserved this point for the end since it is one of those that can get to transmit more security to investors but sometimes it is the opposite… Haven’t you ever met someone who promises crazy trading returns? No one’s asked you to join a high-yielding weekly fund? If they haven’t, it’s because you’re very new to Bitcoin, but it will get to you, so we want you to be prepared.

Obviously, not all mutual funds are part of the scam categorization. But there are many occasions when certain private investments disappear by magic, leaving thousands of people affected by a project whose flag was the technology of digital coins.

Unetenet, the precursor scam.

You’ve probably heard some information about the Unetenet project. To understand this clearly, its creators sold share packages or affiliates in exchange for WINNINGS YES OR YES when the reality is that by the time you attracted more people to Unetenet, you were getting more chances to collect your monthly percentage.

Unfortunately, these scams often end up losing a lot of money to those who don’t know where they’re getting into or who rely on secure profits. In this article, we will not mention projects with a high chance of becoming a scam like Unetenet, But we only have to go around the web pages of all those services that guarantee and promise returns on the investment totally astronomical and with a base clearly pyramidal.

Another of the most talked-about, and well-known cases in the Bitcoin community, OneCoin, which involved thousands of users in a global Ponzi pyramid scam that used Bitcoin as a constant claim alongside a multilevel structure to sell investment packages in its non-existent currency.

“As always our best advice is this: never trust anyone but yourself.”

Common sense and analysis

In short, don’t believe anyone who promises you astronomical returns. And when we talk about “astronomical” returns we don’t necessarily talk about cases like those mentioned above that promise you to double the amount, but, for example, cases where they offer you a 0.5% daily or weekly, or where you receive a reward in other cryptocurrencies (cryptocurrencies without any backup). Be careful with all this and analyze it very well, because in many cases it is a simple scam.

We have to bear in mind that possibly (and especially during the first phase in which you are involved in the scam), you will receive commissions, which will make you not suspect because this depends on you spreading the word and bringing to the scam more people, but when the time comes to your money and the rest of it will disappear.

These scams not only take advantage of ignorance but also of people’s greed. No one can assure you of fixed benefits over anything, for we live in a dynamic and unpredictable universe.

In investments of any kind, but especially in those related to Bitcoin, follow a golden rule: never play with the money you’re going to eat, only with what you really don’t care about losing, and above all analyze very well where you put it. The worst thing about these situations is that those who end up most affected are the ones who most need the money that has been stolen from them.

¡And remember! The problem is not Bitcoin, the main cause of all this is humans. These kinds of scams are present daily with Euros, Dollars, or any other currency you can imagine. The sole purpose of this article is to warn you of the different types of scams that you can find and always investigate before acquiring any software, active or participating in a project.

As a final resource, we leave below a website where all the Bitcoin scams (and cryptocurrencies in general) that are detected are added. It is a list that already has hundreds of websites and it is always good to have at hand as a resource to contrast and to alert others of your discoveries: BadBitcoin.

Categories
Crypto Daily Topic

How to Invest in Bitcoin

Everyone has heard of folks that became millionaires from Bitcoin trading. Of course, trading Bitcoin is no guarantee that you’re going to wake up super rich. It takes smart calculation and healthy doses of patience to realize a tangible ROI. 

Everyone has heard of folks that became millionaires from Bitcoin trading. Of course, trading Bitcoin is no guarantee that you’re going to wake up super rich. It takes smart calculation and healthy doses of patience to realize a tangible ROI. 

Everyone has heard of folks that became millionaires from Bitcoin trading. Of course, trading Bitcoin is no guarantee that you’re going to wake up super rich. It takes smart calculation and healthy doses of patience to realize a tangible ROI. 

Now, despite Bitcoin investing being a potentially lucrative venture, many people either still don’t have the faintest idea of what it is and how to go about it, or they think it’s something beyond their reach. 

We hope to change that in this article. You’ll realize that getting started in Bitcoin is easier than you think. 

So, we’ll break down the steps towards owning Bitcoin, right after we understand what Bitcoin is and some important caveats that you need to be aware of before hopping on the train. 

What’s Bitcoin? 

Bitcoin is the pioneer and the most successful of what’s known as cryptocurrencies. It has no physical presence – only digital, and it can be transferred electronically from one person to another, irrespective of their locations around the globe. 

One of the most defining factors of Bitcoin is decentralization, which means that it’s not controlled or run by any single individual or entity. Rather, it’s maintained and secured by thousands of computers (known as nodes) all over the world. These computers are run by regular people like you and me, just like anyone can contribute to Wikipedia. 

Bitcoin has a finite coin supply of 21 million, meaning once that supply is reached, normal coins will be released. The rate at which new coins are released is reduced by half at approximately every four years. The first halving was in 2012, the next in 2016, and the latest one happened in May 2020.

Despite having no physical proof of existence, Bitcoin has proven to be a very attractive financial instrument to investors. This is partly because unlike Fiat currency that is issued and controlled by governments, Bitcoin is self issuing, and its value as a currency is fully determined by people’s perception/acceptance. It’s the same thing when it comes to exchanging with other users. Users can transfer Bitcoin among themselves on a purely peer-to-peer (P2P) basis. 

When Bitcoin was only starting out, anyone with a regular computer could ‘mine‘ and own the currency. But after the currency gained traction, the mining difficulty increased, rendering regular computers ineffective and necessitating the invention of more powerful computers known as application-specific integrated circuits (ASICs).

The problem is, ASICs cost a neat penny. Not just that, Bitcoin mining is now mostly done by entire mining ‘farms’ who more or less control the whole Bitcoin mining endeavor. With these odds stacked against them, the average aspiring Bitcoin investor has no choice but to purchase the currency. 

What you Need to Know Before You Begin

Bitcoin is a purely internet-based currency. That, therefore, calls for entirely different approaches to security and storage. That means there are a few things that you need to know before you even dive into handling Bitcoin.

If you want to invest in Bitcoin, you’re going to need a crypto wallet, your ID credentials, a secure internet connection, and a method of payment. After assembling those things, you need to sign up at a cryptocurrency exchange of your choice. A method of payment can either be bank wire, debit card, or credit card. These are the requirements for purchasing Bitcoin from a cryptocurrency exchange, which is one of several ways of obtaining Bitcoin. Purchasing bitcoin from an exchange is one of the safest sources and because there’s virtually no chance of fraud. 

Something else you should look out for is privacy and security. Privacy here means that, let it be only you that knows how much Bitcoin you own. Bragging about the size of your holdings is a bad idea. That’s because when you let the world know that you own Bitcoin, you could very well be attacked – and that means both digitally and physically. 

How can you be attacked digitally? This could be a ransomware attack, a SIM swap attack, hacking, phishing attacks, and so on. As for physical attacks, there’s no shortage of stories of people that have been kidnapped and forced to give up their Bitcoin private key. A private key is like your bank account PIN. When you give up your private key, you’ve given up control and access to your funds. 

Your private key should be guarded at all costs. You need to know that anytime you make a transaction, the person at the other end can see your account balance because it’s publicly available in your public address. It’s not a good idea for someone to know your account balance. So, if possible, keep any large holdings in different public addresses from the ones that you use for regular transactions. 

And finally, be aware that all the history of transactions on the Bitcoin blockchain is transparent for everyone to see. What’s available, though, is public addresses. Your personal identifying information is not. Bitcoin transactions are private, but not anonymous. Indeed, Bitcoin transactions are best described as pseudonymous. Here’s the thing: anyone with enough resources and determination can, by using blockchain analysis, track down the real-life identity of the individual behind a transaction. 

To counter this, various technologies have been invented to achieve complete anonymity for Bitcoin transactions. These include Bitcoin mixers. 

Getting Started 

Now that you know what you need to know, let’s go through the steps of acquiring Bitcoin. 

#1. Get a Bitcoin Wallet

Unlike Fiat currency that’s stored in the bank, Bitcoin has to be stored in a cryptocurrency wallet. That will allow you to receive, send, and transfer Bitcoin. There are two main types of crypto wallets: software and hardware. Software wallets are based on the internet (including wallets provided by crypto exchanges), while hardware wallets are kept offline.

Software wallets are not ideal because they are subject to online vulnerabilities. Hardware wallets, which are devices typically resembling a flash drive, provide much more protection since they can’t be hacked. Some of the best hardware wallets in the market include Ledger Nano S, Ledger Nano X, Trezor Model One, Trezor Model T, and KeepKey. 

#2. Connect a Bank Account

The next thing you need to do is connect your wallet to a bank account, debit, or credit card. Be aware that each of these methods has its own fees. If you use a bank account, expect to wait for at least four to five days for transactions to go through. With a bank account, you can buy and sell Bitcoin and get money deposited directly into your account. A bank account is better, security-wise, if you’re dealing with huge sums of money. 

With credit and debit cards, you can buy Bitcoin almost instantly. However, most exchanges only allow you to buy crypto, and even then, there’s a limit to how much you can buy. You cannot sell Bitcoin or deposit money into your bank account if you’re using a debit or credit card. 

#3. Sign up on a Bitcoin Exchange

A Bitcoin exchange is an online-based marketplace where you can buy, sell, or exchange Bitcoin. Just like there are many online markets for regular products – Amazon, eBay, and Alibaba, you’ll also find a variety of Bitcoin exchanges. 

Different exchanges have different reputation, reliability, user experience, pay structure, exchange rates, and the available cryptocurrencies for trading. Before you stick with one, look around. Here are some of our recommendations. 

Coinbase: This is US-based crypto and one of the ‘mainstream’ exchanges. It supports Bitcoin, Ethereum, Litecoin, Tezos, Ripple, EOS, cryptocurrencies. 

Binance: At the time of writing, Binance is the world’s largest crypto exchange by volume. It also supports the majority of the major cryptocurrencies. Unlike many exchanges, Binance charges a 0.1% fee for all trades.

Square Cash: This is an app exchange by online payments company Square. The app is mighty convenient for users of the Square platform. The app aims to enable users to buy and sell Bitcoin as quickly and as frictionlessly as possible.

#4. Place an order

After signing up at your preferred exchange, you’re now set to purchase Bitcoin. Congratulations. Even if you can’t afford one Bitcoin, which goes for several thousand dollars, thou shalt not fret. You can still purchase Bitcoin in its small, infinitesimal divisions called Satoshis. 

Other ways to Acquire or Invest in Bitcoin

We’d be remiss if we didn’t mention the other ways apart from exchanges through which you can acquire Bitcoin. Some of these include: 

Bitcoin ATMs: These are kiosks that allow you to buy or sell Bitcoin. As of July 25, 2020, Coin ATM radar indicates that there are currently 8805 Bitcoin ATMs in 73 countries.

Peer-to-peer Bitcoin sites: These are platforms that allow you to purchase Bitcoin directly from other owners. Examples include Bisq, Remitano, and LocalBitcoins.com. Always exercise extra caution when purchasing Bitcoin directly from individuals. 

Bitcoin Futures: For the more experienced investors, Bitcoin futures are another way to get involved in Bitcoin. 

Mining: If you can afford ASICs, then you can absolutely join a mining pool and start earning Bitcoin. 

Final Thought

Now that you have a grasp of how to own Bitcoin, you’re better prepared to start investing. Remember to do thorough research on any crypto exchange before you sign on. Read reviews, look at the supported currencies, and so on. Also, remember Bitcoin’s price is uber unpredictable, so only invest money that you can afford to lose. 

Categories
Crypto Guides

Perpetual Swaps for Bitcoin – Explained!

Introduction

Introduction

Introduction

Perpetual Swaps, also referred to as perpetual contracts, are essentially a very popular type of futures contract. These contracts are largely dominated by the BitMEX exchange. The XBT/USD has seen to be one of the most popular products offered by them. Bitcoin derivatives, particularly perpetual contracts on BitMEX, were surging of popularity in 2009, in every Bitcoin derivative platform where all of them had record high volumes.

According to sources, BitMEX has a volume of around $2 billion consistently for 24-hour for Bitcoin futures. One of the reasons for this overwhelming volume can be accounted for its high leverage that is provided. For example, BitMEX facilitates 100x leverage on perpetual contracts. So, traders can open positions worth 100 BTC in the futures market with just 1 BTC as margin.

 

Understanding Futures Contracts on Bitcoin

Perpetual swaps can be considered as a futures contract for Bitcoin where a futures contract is simply an agreement between two parties to buy/sell a security at a particular price and date in the future. The buyer of the futures contract is then required to buy the underlying asset once the contract comes to expiry, and the seller is obligated to deliver those assets to the buyer at the time of expiry.

Futures are said to be a type of derivatives because they are derived from the underlying value of the asset. But perpetual contracts are quite different though they are a form of futures contracts. They are also referred to as “inverse futures contracts.” It is nothing but a standard futures contract, where cash-settlement of the underlying asset can be done without physical delivery.

The reason they are referred to as inverse futures contracts for Bitcoin because the settlement for BTC/USD is accomplished in BTC instead of USD that happens in all other futures markets. As a result, the US dollar is interpreted as a commodity, while BTC is used for the settlement of the contract.

The Benefits of Trading Perpetual Swaps

Well, there got to be some reasons for the skyrocketing volume that is seen in the volume of Bitcoin futures contracts. So, let’s discuss them out.

1️⃣ The uniqueness of the inverse futures contract is that it enables us to trade cryptocurrencies against fiat currencies without really having any exposure to the fiat currency. This type of facility can cut through the regulatory complications involving deposits into the exchange using fiat currencies.

2️⃣ Practically hedging positions in USD by shorting positions is another great exclusive feature in an inverse futures contract for Bitcoin.

3️⃣ As mentioned, every future comes to an expiry. However, the inverse futures contract created by BitMEX does not expire and levy a funding rate at three predetermined times every single day using the negative funding mechanism. The funding payment (size of the position plus the funding rate) is provoked every 8 hours at these specific times: 4:00 UTC, 12:00 UTC, 20:00 UTC.

Conclusion

With the great features offered by the inverse futures contract for Bitcoin, the possibility of institutional money coming into the cryptocurrency market seems to be pretty high, which could hence expand and mature the existing futures market. Also, the no expiration of Bitcoin futures is another for this market to stay tight in the coming years as well.

Categories
Cryptocurrencies

What are Bitcoin Futures? 

Futures markets have, for long, been in existence in more established asset classes such as securities and bonds. However, it was not until late December of 2017 that Bitcoin futures were introduced on regulated trading avenues. Although it is the only one of their kind in the digital currency space, Bitcoin Futures is regarded as a significant milestone in bringing cryptocurrencies closer to mainstream investing. 

Futures markets have, for long, been in existence in more established asset classes such as securities and bonds. However, it was not until late December of 2017 that Bitcoin futures were introduced on regulated trading avenues. Although it is the only one of their kind in the digital currency space, Bitcoin Futures is regarded as a significant milestone in bringing cryptocurrencies closer to mainstream investing. 

Futures markets have, for long, been in existence in more established asset classes such as securities and bonds. However, it was not until late December of 2017 that Bitcoin futures were introduced on regulated trading avenues. Although it is the only one of their kind in the digital currency space, Bitcoin Futures is regarded as a significant milestone in bringing cryptocurrencies closer to mainstream investing. 

Similar to any commodity/asset futures, Bitcoin futures are not necessarily for maximizing profits but rather serve as a risk management tool to hedge against the risk of the volatile crypto market.  

To understand what exactly are Bitcoin futures, it demands we explore how typical futures contracts work in the first place. 

What are Futures Contracts?

Futures contracts are basically an agreement between two parties to buy or sell an underlying asset at a predetermined price on a precise future date. Once the contract expires, both parties are obligated to fulfill the terms of the contract at the agreed price, regardless of the actual price at the time of contract execution.

The parties involved usually take one of the two positions of a futures contract; long or short. If you take the long position, it means that you agree to buy the underlying asset/commodity at a specific price in the future, while the short position means the other party agrees to sell the asset at a specific price once the contract expires. 

The idea here is to hedge risks associated with adverse price movements of the commodity. If, for instance, you expect the price of a commodity to rise, you can take the long position in a futures contract at the current market price. Upon the expiration of the contract, if the price rose, you’ll have saved some money since the contract will be executed at the lower market price as agreed.   

In the same vein, futures can also be used to speculate price movements to realize profits. For instance, if the buying party anticipates that the price of the asset will rise leading up to the expiration date of the contract. They can profit off the price difference, if indeed the price rises, by selling the contract at a higher price to another party, before the expiration date. 

How do bitcoin futures contracts work?

Bitcoin futures are similar to traditional financial futures, in that they allow you to speculate the Bitcoin’s price without having to own any Bitcoin. 

Investors can either take the long position on Bitcoin futures contract, if expecting prices to increase or short position if they own Bitcoins and want to mitigate potential losses from the anticipated drop in BTC prices. 

For instance, say, you own 10 Bitcoins at a market value of $5,000 for each coin, and you anticipate the price will drop to $4,000 in two months. You can take a short position, and agree to sell your Bitcoins at the prevailing market price. Close to the expiration date of the contract, you can decide to buy back (long position) the futures at the now low BTC price, thus earning you $10,000 while saving you the losses caused by the drop in price. 

Bitcoin futures unique advantages

I. Regulation

The crypto universe is torn between two major groups; those that want the coin to remain unregulated and those that believe regulation of BTC is an essential step towards mass adoption. 

Bitcoin futures are regulated by the Commodity Futures Trading Commission (CFTC). This places BTC on a path to mass adoption. It should be noted that CFTC is not as strict as its alternative, Security Exchange Commission (SEC). So, Bitcoin maintains a good deal of its liberal nature. 

II. Enhanced Liquidity

Thanks to the regulatory rules imposed by CFTC, Bitcoin futures are becoming more appealing to professional traders and big money Wall Street investors. With their more dollar volume input, BTC futures may become even more liquid than Bitcoin itself. 

III. Price Transparency

Bitcoin futures contracts are settled each trading day using a transparent reference price, which is written into all Bitcoin contracts in other markets. This will make it easy to use Bitcoin as a payment method since transparency creates a unified price that is essential in mitigating the volatility of spot prices. 

Getting started with Bitcoin futures trading

Now that you understand how to place and execute a Bitcoin futures contract, there are a few crucial things you need to know for profitable trading. 

Get Familiar with the Trading Rules

Trading Bitcoin futures is a bit different from trading typical equities and bond futures. This is due to the fact that they have a significantly higher margin requirement compared to a regular futures contract. 

Chicago Mercantile Exchange (CME) and Chicago Board of Exchange (Cboe), the main Bitcoin futures trading avenues, requires one to put up a 35% and 44% margin, respectively, of the futures contract value. Although this margin can be achieved by trading other financial products on the exchange, the products aren’t offered to new traders. 

Margin is basically the amount of money a trader must pay first as collateral when taking a futures position. Usually, for most traded assets, the margin is under 10%. 

So, this is to say that if a contract was trading at $10,000 on CME, a trader wishing to take a long or short position, will have to pay $3,500. The trader can also be subjected to additional margin calls if the account falls below a certain level. 

Understanding Price Limits

Price limits are the maximum price ranges allowed for a futures contract in a trading session. Bitcoin futures are subject to limits on how far the price can move before triggering a temporary or permanent halt. 

In the case of Cboe, a contract will be halted for two minutes if the best bid, leading to the contract expiration date, moves 10% up or down the previous day’s prices. 

Build a Trading Strategy

Developing a trading strategy is fundamental when trading any type of financing product, including Bitcoin futures. 

Your trading strategy should revolve around what you want to achieve – prevent loss or make a profit- while paying attention to your risk appetite. For this reason, consulting an experienced futures broker is recommended, so as to design a personalized strategy that is aligned to your objectives. 

Besides, trading directly on CME is almost out of reach due to the high cost a trader is required to pay before they can trade on the platform. As an individual investor, you, therefore, need to find a broker who trades on CME. 

Takeaways

One of the best things about Bitcoin futures is that you don’t need a wallet nor BTC coins to participate in the trade. Bitcoin futures, like most futures contracts, are settled in cash equivalents, so no tangible coins are exchanged between parties, saving you the hassle of owning or storing digital coins. Traders collect their gains once the other party honors their contract obligation. Also, you can conveniently place a short without necessarily borrowing the underlying asset ( Bitcoins), meaning you don’t have to own any coins. 

As lucrative as it may sound, it is important to keep in mind that Bitcoin futures are a highly risky investment instrument. As such, it is advised to only invest that amount you can afford to lose, should the contract go opposite of what you initially speculated. However, there is always the option to close out a position before the expiration date, in an effort to minimize or entirely avoid losses.