Categories
Cryptocurrencies

How Can Blockchain Help End Poverty? 

Blockchain has been lauded as an absolute game-changer that could improve society in so many ways. 

But there’s one area that could greatly benefit from the technology that has not received as much attention, and that is global poverty. 

According to the World Bank, about 750 million people somewhere in the world are living under the poverty line. Some of the factors contributing to this figure are the lack of access to banking facilities, lack of proper property documentation systems, and corruption.

Blockchain can help tackle poverty across the globe by doing what it does best: providing tamper-proof record-keeping models, promoting radical transparency, and being a decentralized platform that’s inclusive for all. 

Let’s explore the ways in which this could be a reality. 

Economic Identity

According to the World Bank, about 1.7 billion or the world’s population is unbanked or underbanked. This is due to these people lacking proper identification or not having a credit history. This renders them unqualified for opening a bank account. In turn, they can’t access loans to start a business or save up money to build wealth. This causes them to remain trapped in poverty. 

Blockchain can help solve this by providing a decentralized and immutable platform where people can properly document their identity. Blockchain-powered platforms in organizations and governments would help more people access financial services that would start them on the journey towards economic empowerment.

Property Rights

In many places around the world, especially in developing countries, there are no proper systems of tracking property rights, and where they exist, they’re either fractured or incomplete. Land registry systems are either unreliable or marred by corruption.

Yet owning property is one way to combat poverty. People can sell land and pay school fees or start a business. They can cultivate crops and participate in the economy. The lack of proper property registry keeps people stuck in poverty, as well as causing conflict. 

Blockchain can help solve this. Blockchain-based property documentation can help grant many of the world’s poor their first undeniable asset. Since blockchain records are immutable, documented property would be immune from fraud or manipulation. Several countries are already experimenting with blockchain-based land registries: including Bermuda, Ghana, India, Russia, Rwanda, and so on. 

Access to Money

One of the biggest hurdles to providing financial aid to the poor quickly and efficiently is the numerous steps involved in the banking process. This is even more so when borders and international regulations are in play. Add to this the administrative costs and banking fees, and a lot of the money ends up swallowed in the process. 

Blockchain can help solve this by providing a peer-to-peer framework where people can receive money as soon as it’s disbursed. No need for footing administrative labor costs, paying extra banking fees, or waiting for days for funds to reach individuals. This can prove even more useful in times of acute needs when money could practically help save lives. 

We’re already seeing this functionality in play. The United Nations tested a  cryptocurrency-based model of voucher-giving to Syrian refugees who could then redeem them for food items. About 10,000 people utilized the vouchers and got faster access to food relief, as opposed to if multiple international banking channels and procedures had had to be followed. 

Financial Inclusion

Exclusion from the world’s financial system is why millions remain impoverished. And this is partly because they’re unbanked. Banks themselves require a lot of money to set up. As such, building banks with the requisite infrastructure, especially in poor regions, is an expensive and often difficult endeavor. 

Blockchain eliminates the need for banks. All people need is a mobile phone with internet connectivity for them to access financial services and manage their finances. There is no need for complex infrastructures, bureaucratic procedures, hidden costs, or the corrupt interference of local authorities. 

Blockchain treats people the same way; it doesn’t recognize whether you’re a high-flying career banker in Manhattan or a poor farmer in Kazakhstan. It’s this indiscriminate and inclusive nature of the technology that could help lift many out of poverty. 

Creating Transparency and Reducing Corruption

Corruption is a disease that keeps people trapped in a vicious cycle of poverty. When public funds are stolen, people are denied basic services like healthcare, water, decent sanitary conditions, and so on. 

Blockchain is immutable, transparent, and secure, and it can help minimize the avenues for corruption. On a public blockchain, anyone can see the history of records and where the money is going. 

The immutability, i.e., the unalterable nature of blockchain records, means no one can manipulate records. As such, it would be impossible for corrupt officials to embezzle or redirect funds. Even if they attempted, the blockchain would show who did it, and when. 

Monetizing Microtransactions

Blockchain-based currencies can help assign value to items at smaller prices, making transactions cost-effective. People can purchase value with very tiny amounts of money, e.g., a small amount of data at 0.000001 of crypto. 

This level of micro transactions opens avenues for more people to participate in global commerce. In this way, individuals can also prove their credit-worthiness and gain access to credit. A poor grocery keeper on the other side of the world can easily show the cryptocurrency in their wallet and prove that they’re a good candidate for a loan. This means banks can take more risk than they would have and service more people. In return, this opens up the economy for the betterment of everyone. 

Supporting Micro-lending and Micro-trading

Once again, blockchain’s ability to support microtransactions can foster micro-lending and help people pull themselves out of poverty. 

In the past and even now, micro-lending has gotten a bad rap thanks to exorbitantly high-interest rates and unscrupulous loan sharks.

Blockchain could help solve this. First, it would massively help reduce the administrative costs for processing loans, allowing microlenders to administer more loans and extend their services to more borrowers. 

Blockchain tech would also enable farmers in poor regions to engage in micro-trading by giving them direct access to the market and sell their products at fair prices – without the need for expensive markups. Blockchain would help them sell small sizes of products since with the technology, even the smallest sizes will be profitable and economically viable. 

Insurance

This is one of the most interesting ways in which blockchain can help reduce poverty. Traditionally, insurance is usually too expensive for the average person and the poor. This is due to the byzantine administrative channels involved, or simply the service costs being beyond the reach of many. There’s also the issue of corruption in which contributors to insurance schemes are denied payments in the time of need, often under flimsy justifications. 

Blockchain can greatly help to change this by providing a system where people can verify payment records and help deter fraud. Blockchain-based accounting procedures can also reduce admin costs by a ton. 

Blockchain can also allow people to make payments in small amounts so that even the economically disadvantaged can receive insurance services. Insurance claims can also be verified in the immutable and transparent blockchain. And lastly, insurance payments can be processed faster to reduce waiting times and help facilitate a better economy for everyone. 

Blockchain can help surmount the many hurdles that have always hampered efforts towards the reduction of poverty. It doesn’t discriminate on origin, race, class, or gender. It eliminates convoluted procedures that increase costs or delay services. It helps stamp out fraud by showing records to everyone involved. Let’s hope more countries will recognize the power of blockchain and employ it to better their people’s lives. 

Categories
Cryptocurrencies

Marijuana Cryptocurrencies: Definitive guide

The marijuana and cryptocurrency industries are two industries that each, in its own way, has been battling for recognition since its very inception. Marijuana is still largely seen as a harmful substance that ought to be criminalized, only seeing a bit of legal light recently when states began to recognize it as medically beneficial. Cryptocurrency, on its part, is still very much under the water in terms of mainstream acceptance. 

These two also face the same major issues; their legal status is shaky at best, and they have a regulatory crackdown nightmare constantly hanging over them.

It’s no surprise, therefore, that the two industries are using each other to gain legitimacy and shatter barriers. 

Why Marijuana Cryptocurrencies? 

It certainly would be fun if we had marijuana cryptocurrencies just for the sake. The truth is that this class of cryptocurrencies emerged to fill a real need. In the US, marijuana is still considered illegal at the federal level. For this reason, banks and other financial institutions have given the marijuana industry a wide berth. 

What this means for marijuana businesses is that they can’t get business loans, conduct transactions, and so on. Marijuana customers also cannot purchase products in a completely free environment. 

Cryptocurrencies, known for their privacy of transactions, are the perfect solution for this scenario. Instead of risking prosecution or being shut down, marijuana sellers can exchange money with less hassle as well as faster and in a more secure fashion. 

Match Made in Heaven

There perhaps isn’t a better-suited relationship between two industries than the marijuana and cryptocurrency industry, and a big reason for that is that they’re still outliers, or at least considered so by the government and media. 

Like we’ve mentioned before, their legal status is still largely grey. They’re both encumbered by legal, political, and regulatory challenges. Their user base is also a lot alike, with each having a bigger share of the younger demographic than, the older one. 

Let’s look at the challenges facing each.

A decade later, cryptocurrencies may be the investment of choice for thousands, but they’re still very much seen as belonging in the fringes of the financial world. Part of this is due to their decentralized and peer-to-peer nature that makes them immune from state interference. Naturally, governments and regulators will handle them with a huge dose of skepticism. 

The other is their reputation as the currency for crime. Bitcoin’s Silk Road saga, where the currency was used for all manner of cringe-worthy transactions, did nothing for the overall reputation of the industry.

Another reason is cryptocurrencies are yet to make a dent when it comes to day to day transactions. This is due to their novel nature, as well as their wild volatility, which renders them unsuitable for daily purchases. As such, very few merchants or businesses are willing to accept them. Also, banks are not exactly itching to start accepting them as a valid currency. 

On its part, cannabis is far from receiving full legal recognition. Despite years of agitation for its legalization by fans, it’s still not legal at the federal level, it’s still viewed skeptically and its use is still stigmatized. Banks are also hesitant to handle anything cannabis due to sticky legal issues.

Coming Together

This state of, uh, limbo for both industries and their similarities gives them the perfect template to work together. 

Cannabis operators and users can rely on cryptocurrency to conduct transactions outside regulatory clampdown and censorship. And crypto gets a ready-made group of user base and adopters, demonstrating that indeed, the currency is as viable as any other. After all, if it can power the marijuana industry and facilitate secure transactions, why wouldn’t it do the same for other industries?  

What are the Impacts of Cryptocurrencies on the Marijuana Industry?

Cryptocurrencies have heralded a new age for the marijuana industry, from small business owners to farmers. 

Aspiring marijuana businesses now have a chance to get off the ground more easily, and marijuana customers can purchase the product more discreetly. 

Marijuana farmers are also using crypto to facilitate purchases and the sale of products, from oils to flowers, in a secure and safe environment.

What are Some of the Popular Marijuana Cryptocurrencies? 

Below are some crypto projects proudly waving the marijuana flag: 

PotCoin

Launched in 2014, PotCoin was one of the earliest cannabis cryptocurrencies to enter the scene. Its debut was pushed by Colorado’s legalization of marijuana, with the creators seeking to capitalize on the opportunities that would open as a result. It first started out as a solution for the trouble cannabis users faced when transacting in the product, even installing a PotCoin ATM in a marijuana dispensary in the state. 

However, the coin didn’t pick enough traction, remaining in the back water until 2017. Its involving of former basketball star Dennis Rodman in marketing efforts might be what finally got it some worthwhile attention. Keen watchers of the crypto space remember when the project released a video and photo of Rodman in North Korea wearing a potcoin.com T-shirt. This little stunt wasn’t so little, going by the fact that the coin gained by 76% in just one day. 

As of April 21, 2020, the crypto is trading at $0.005123, with a market cap of $1, 146, 336. PotCoin uses a proof-of-stake consensus mechanism and can process transactions in 40 seconds, which is remarkable compared to Bitcoin’s 10 minutes. 

DopeCoin (DOPE)

DOPE is a 2014 creation of Adam Howell, and is a “digital currency for marijuana enthusiasts,” according to its website. Also, users can transact in a pseudonymous environment in under a minute, without incurring costs. 

At the time of writing, Dopecoin has a circulating and total supply of 117 million, with a market cap of $127, 891 while trading at $0.001095, according to Coinmarketcap.com. 

The coin seems to be branching out beyond marijuana, however, stating: link “Instead of focusing solely on the marijuana industry, we have expanded our reach to include all blacklisted industries, including marijuana, crypto, vape/e-cig, gambling/betting, big pharma, alcohol and more.” 

HempCoin (THC)

HempCoin, also launched in 2014, is a project that aims to help the agriculture industry adhere to compliance and regulatory rules and avoid losses. It helps track products through the “entire seed to scale” process through a “grow diary app, audit trail programs, and asset tracking tools. 

On the THC platform, farmers of whether “Hemp, Bananas, Corn or Tomatoes can track every aspect of the farming process including location, yields, and a list of everyone who interacted with a particular plant or product. 

THC is currently trading at $0.000961, with a market cap of $245, 949, and a circulating supply of 256 million and a total supply of roughly the same value. The coin has a maximum supply of 300 million. 

CannaCoin (CCN)

CannaCoin is a “group of Cannabis enthusiasts working towards the future development of cryptocurrency applications related to cannabis production, seed production, extract production, glass blowing facilities, vape and dab station manufacturing, crypto development and more.” The coin uses proof of stake velocity consensus mechanism (PosV), an alternative to Bitcoin’s proof of work protocol. 

The coin runs on a decentralized and peer-to-peer platform and is currently trading at 0.015528, with a market cap of $73, 019, and a circulating supply of 4.7 million CCN. 

CannabisCoin 

Developed in 2014, this is a marijuana proof-of-work, peer-to-peer cryptocurrency that aims to streamline payment processing for marijuana dispensaries. 

According to Coinmarketcap, the coin is trading at $0. 008021 currently, with a market cap of $619,475, a circulating and total supply of 77 million CANN, and a total 92 million CANN, respectively.

KushCoin (KUSH)

KUSH is a cryptocurrency that aims to facilitate a smooth supply chain for the marijuana industry, from land acquisition to farming, harvest, transport, delivery, and just the overall growth and sale process of the product. 

Like much of the cryptos involved with cannabis, KUSH was developed in 2014 to streamline processes in the industry and provide a safe and private channel for cannabis consumers. 

Per Coinmarketcap, KUSH’s current value is $0.026729, with a total supply of 5.6 million.  

ParagonCoin (PRG) 

ParagonCoin traces its beginnings to PargonSpace, a co-working space for entrepreneurs in Los Angeles. The company then came up with ParagonCoin as a currency for payment of rent and other services and products in the Paragon premises. 

As you’ve already guessed, the project has now set its sights on the cannabis industry and plans to facilitate seed-to-sale tracking of Cannabis products so as to help farmers with regulatory compliance. 

The coin is now trading at $0.003420, with a market cap of $76, 152.89, a circulating and total supply of 22.3, and 165 million, respectively. 

By their existence alone, these coins are making a statement that both cryptocurrency and marijuana industries are forces to be reckoned with.  Considering the contention with which they have both been treated, the pair can bring out the best in each other and prove their legitimacy to the world. 

Categories
Crypto Guides

What Are Bitcoin Faucets, & What Do They Offer?

Introduction

Bitcoin, launched in 2009, did not really break the news. As people started to understand the blockchain technology and the unique features in it, Bitcoin gained some recognition. But, when the Bitcoin prices began to skyrocket, everyone, including small kids, knew about it. Many started to find ways to enter the Bitcoin space. And this when they also came across Bitcoin Faucets.

As a beginner in the field of Bitcoin, several would not know what Bitcoin Facets are. This article will walk you through the complete understanding of Bitcoin Faucets.

Introduction to Bitcoin Faucets

Bitcoin Faucets are online websites and applications, which is basically a reward platform system for the users who get paid for completing some tasks given by the platform. In exchange for completing these tasks, users are rewarded with Satoshi. And the Satoshi earned are directly deposited in the user’s Bitcoin wallet or micro wallet.

Satoshi – It is the smallest unit of Bitcoin, which is worth one-hundredth million of a Bitcoin.

Why Bitcoin Faucets?

Bitcoin is still a relatively new term for people to understand completely. Many are in the process of learning about investing in Bitcoin. In the learning population, there are people who are conservative when it comes to investing. This is the reason Bitcoin Faucets was created. It acts as a medium to introduce people to the concept of Bitcoin investment by actually risking their own money. With this platform, Bitcoin enthusiasts can get insights about Bitcoin and also an earning opportunity.

Where does the earned Satoshi go?

When you register with a Bitcoin Faucet platform, you will have to provide your Bitcoin wallet address. All the Satoshi that is earned will directly be transferred to that wallet address. This wallet is a secure digital account, having a unique bitcoin key. For those who are new to bitcoin wallets, you may relate to the Bitcoin wallet as a traditional wallet, and the Bitcoin key can be associated with your bank account.

How do Bitcoin Faucets generate revenue?

Bitcoin is a cryptocurrency that saw exponential growth a few years ago and has made some people a lot of money. So, the very next question that pops up is, why would Bitcoin Faucets give away coins for free? As a matter of fact, these platforms generate revenue by rewarding users with coins. The simple answer is, they earn money through advertisements.

Bitcoin Faucets are very popular among the beginners in Bitcoin. So, most of the websites host ads on their portal. Be it a pay-per-click or pay-per-impression, Bitcoin Faucets have a steady source of income through affiliate marketing. So more the users they get on board, more is going to be their revenue.

You can visit this link to find the best Bitcoin faucets of 2020.

Conclusion

If you have an interest in investing in Bitcoin but have no clue how to go about it, then Bitcoin Faucets can surely be a great option. This does not risk your money in the market but instead rewards you for learning something of your interest. Having said that, there are platforms that kill a clear user interface with a countless number of ads on the screen. So, you might have to switch from platform to platform to find the right one. Cheers!

Categories
Cryptocurrencies

What is a Bitcoin Mixer? Here is a Detailed Guide

As you transact on the Bitcoin blockchain, sooner or later, you’ll come to realize that while your transactions are not entirely linked to your identity, your Bitcoin address, which is public, and your history of transactions can be used to piece together your real identity. 

Obviously, this is not a very heartening fact since everyone would ideally conduct their transactions confidentially. While this may be so, many Bitcoin users are not aware that they can add an extra layer of privacy for their Bitcoin transactions. 

One excellent way to do this is to use a Bitcoin mixer, which is a service that ‘mixes’ your coins with other users’ coins in a manner that the origin of each of the coins is completely obfuscated, securing your privacy. 

What Exactly are Bitcoin Mixers?

Also known as tumblers, blenders, or shufflers, Bitcoin mixers are solutions that allow users to mix their coins with other users’ coins in order to protect their privacy. 

As you already know by now, Bitcoin addresses are pseudonymous, meaning while they don’t tie your Identifying information to transactions, a determined person can piece together a transaction trail to the owner of a particular address. Every time you move funds, you risk revealing a great deal of your personal information, from how many coins you own, how you spent them, and so on. 

This is where Bitcoin mixers come in. The idea behind mixing coins is to throw off, or so to speak, anyone who might be trying to follow your transactions. By mixing your coins with other users, you can blur the ties between your Bitcoin address and your real-life identity. 

How do Bitcoin Mixers Work?

To illustrate how a Bitcoin mixer works, imagine blending a fruit drink. Every fruit that goes in there is like a Bitcoin address. When the drink is done, you can’t really tell which fruit is responsible for which flavor. Just as much, when you mix your coins with other users’, no one can tell which coins originate from which address.

Types of Bitcoin Mixers

Today we have a range of Bitcoin mixers: from centralized to decentralized solutions to others that use privacy coins as part of the process. Below, we’ll take a look at two of the most popular solutions available, mainly centralized mixers and Chaumian CoinJoin mixers.

i) Centralized Mixers

These are mixers that accept Bitcoin in return for sending back different coins. The more the users use this service, the more difficult it is to tie the “incoming” coins to the “outgoing” coins. 

Centralized mixers, however, have certain shortcomings. When you deposit your coins in such a mixer, you surrender control of your coins. It’s very conceivable that such a mixer can refuse to return them. 

Another problem is since the mixer knows who sent and received which coins, they can easily re-establish the actual identity of coin holders. If they share this information e.g., when compelled to by law enforcement, users stand to lose their privacy. 

Then there’s the issue of data. Centralized coin mixers usually get access to information such as user activity, IP and Bitcoin addresses, and so on. Ideally, mixers should delete information logs like these in the spirit of privacy. However, you can never know if a mixer follows through with this. 

And finally, centralized mixers can be easily located by law enforcement and forced to shut down. BestMixer is one such mixer that was shut down by Dutch authorities. 

ii) Chaumian CoinJoin Mixers

These are mixers that allow a large group of users to pool together their coins as one large payment to themselves. For instance, 100 users will send 0.1 BTC to a new address, and then merge them to become one big transaction. Everyone will get 0.1 BTC back, but this time, no one can tell where each BTC originated from. 

Mixers that use the CoinJoin implementation can be designed in a manner that not even they can figure out where each transaction went where. Also, it’s impossible for these mixers to refuse to release the coins since users will not sign the merged transaction if they didn’t get their BTC back. 

What Are Some Popular Mixers?

There are reliable wallets that have made a name for themselves in this space, and we’ll take a look at some below. 

  • Wasabi Wallet is an implementation of the Chaumian CoinJoin wallet. Wasabi is designed in such a way that the operator cannot deanonymize user identity or steal coins. The service is trustless by nature, meaning the service only oversees the “merging” of the different coins and does not know which inputs belong to which output. Moreover, Wasabi uses the Tor anonymity network so no one can track your activity.
  • Samourai Wallet also offers a CoinJoin mixing service called Whirlpool that supports both desktop and mobile. With Samourai, all you need to do is to install the wallet – no ID checks, email address, and so on. 
  • JoinMarket: This is a tool that allows users to merge their transactions to create one huge transaction, obscuring the origin of each in the process. JoinMarket has an interesting model: there are market takers and market makers. The market makers are ‘time-rich’ and collect fees when other users coinjoin with them. The market takers are time-stressed and want to coinjoin as fast as possible. Therefore they pay a fee to coinjoin with their time-rich peers.

What’s the Legal Standing of Bitcoin Mixers? 

Much like Bitcoin itself, Bitcoin mixers operate in a legally uncertain area. As such, the legal standing of any Bitcoin mixer differs from jurisdiction to jurisdiction. 

There are legal mixers that have been shut down by authorities as they were perceived to promote illegal activity like money laundering. 

Centralized mixers, which make up the majority of mixers, are particularly prone to being banned, since they have a single point of attack. 

However, as a service, Bitcoin mixing remains largely unencumbered. And even if there was a crack down on centralized mixing services, decentralized mixing services, which are harder to shut down thanks to a distributed platform, would quickly fill in the gap. 

What Are Some Use Cases for a Coin Mixer?

The case for a Bitcoin mixer might be compelling, but you may still wonder when at all to use one. Of course, a Bitcoin mixer is useful whenever you’re transacting in Bitcoin for the sake of safety and an extra layer of security. These scenarios should give you an idea of when a Bitcoin mixer would be useful: 

  • Across the globe, Bitcoin is now accepted for payments by some businesses. If you use the same wallet for every transaction, you’re leaving a trail that makes it easy for illicit players to single out the address as belonging to you. A Bitcoin mixer obscures your transactions, so you’re not leaving a traceable trail that could be followed back to you.  
  • Suppose your wallet has a variety of cryptos. Now let’s say your wallet’s ID is inadvertently exposed online, one way or another. This would render it susceptible to fraud. With a Bitcoin mixer, there’s zero chance of this happening. 
  • Imagine you’re an investor/trader holding a substantial amount of crypto in your wallet. Since  Bitcoin transactions are public, it’s easy to see how much money a particular address moved, and when. If particularly large sums are involved, you may become the target of unscrupulous parties. A Bitcoin mixer removes the possibility of this happening by mixing your transactions with other users’ so no one can know which transaction belongs to who.
  • In the case of hot wallets, which are connected to the internet, your funds are exposed to all manner of online vulnerabilities, from hacking to phishing attacks, to malware. When you use a Bitcoin mixer, transactions to and from your wallet are kept anonymous. 

Why Should You Use a Bitcoin Mixer? 

  • It severs the connection between your sending and receiving addresses, obscuring your transactions.
  • It’s impossible for your funds to be traced to any wallet.
  • It grants you the anonymity that Bitcoin alone can’t
  • It grants you full control over your transactions, as it should be
  • Your personal data is kept away in such a manner that third parties have nothing on you. 
  • A mixing service deletes your transaction history so that they can never be traced back to you. 

Final Thoughts

A Bitcoin mixer gives you greater control over your funds by ensuring no one can follow your transactions’ trail. Any potential hacker is thwarted off, and so is any other third-party who is interested in your transactions’ history. If you need to anonymize your transactions even better, a Bitcoin mixer is worth looking at. 

Categories
Crypto Guides

Bitcoin & The Possible Black Swan Events!

Introduction

The cryptocurrency is a domain where there are several varieties of critics. And most of them have a negative sentiment on it. There are financial bears who do not have a positive outlook on cryptocurrencies in the long term. Then there are techies who believe that blockchain, not a technology that is going to give a breakthrough to the current technology. There are also government mongers who are fearful and anxious about investors grabbing their interest in cryptocurrencies, which would drop their tax money.

Then we have a black swan event, which is a different case altogether. A black swan event for Bitcoin or any other cryptocurrency, for that matter, is the absolute worst-case scenario that could take place.

Why is it necessary to consider the possibility of Black Swan scenarios? If the FUDsters give a healthy level of condensing for the market as a whole, the black swan forecasts are like a rototiller. Their job is to assume that the market is going to collapse anytime soon and is required to stay away or look for other options. If such a thing is inevitable, it is useful to know what to expect.

Here are a few worst-case scenarios that cryptocurrencies could affect. Before getting right into it, first, let’s start off by understanding what a black swan event actually is.

A Black Swan Event

This was described by a financier and author, Nassim Nicholas Taleb, while he was writing about the 2008 financial crises. Taleb referred to the Black Swan event as a completely unpredictable beforehand consequence, which is devastating.

Taleb also pointed out that the black swan event is a relative concept. This event may not be a terrible scenario for everything equally. It can be localized as well, where one market’s black swan could be another’s market’s bull booster. For instance, the failure of cryptocurrency and blockchain could give more room space to other technologies and financial sectors.

We have listed out some examples which would be torn apart the cryptocurrency space – and not necessarily shake the other related sectors.

The Regulatory

Bitcoin and other cryptocurrencies currently operate in a very legal state at the moment. In the U.S. and many other countries, there have been tentative steps regarding the management of cryptocurrencies. The U.S. Securities and Exchange Commission has not confirmed whether cryptos are securities on a case-to-case basis.

However, the bomb hasn’t been dropped yet. There could be a moment where the countries like the U.S. and South Korea simultaneously decide that the cryptocurrencies would be banned outright. This would hit the entire crypto market really bad.

Catastrophic Code Failure

Cryptocurrencies are virtual currencies that are hardcoded. So, there is a possibility of a bug being found and exploited in the code. As a matter of fact, recently, a malicious attack happened to Verge, which allowed hackers to mine extremely easy blocks and extract off millions of dollars of the coin. Also, 51% of attacks can be carried out easily out of smaller coins that were discovered.

However, such a thing is unlikely to happen to the cryptocurrency giant, Bitcoin. But the Quantum Computing has something dissimilar to say: “The massive calculating power of quantum computers will be able to break Bitcoin security within ten years, say security experts.” Still, Bitcoin has proven itself countless times that it is resistant to attacks. Either way, a solution of the same would reach before it becomes possible.

Final words

Going by the definition, Black Swans are harder to identify ahead of time. They are also an event that could be devastating to the market. As the author Taleb says, it is like a variation of the “prepare for the worst” mindset. Though there is still enthusiasm and forecasted potential in the cryptocurrency space, it is also vital for such optimists to have their end on the negative side of it. After all, the cryptocurrency always proves to be a perfect example of “expect the unexpected.” All The Best.

Categories
Crypto Videos

Legitimate Passive Income Streams In Crypto – The Pitfalls & Successes Part 4

 

Earn Passive Income in Cryptocurrency – part 4

This part of the Cryptocurrency Passive Income guide will talk about one of the most known ways of creating passive income with cryptos, mining. This is also one of the first, if not the first, method of earning a passive income with cryptocurrencies, as this was the only way you could passively earn money when there was only one cryptocurrency, Bitcoin.

Mining – history

In the early days of Bitcoin, anyone could mind from almost any device. Mining Bitcoin on an everyday PC Central Processing Unit (CPU for short) was a completely viable solution. However, as Bitcoin gained traction, mining on regular CPU’s became harder. As the competition increased, so did the mining difficulty, and most miners swapped to mining with their Graphics Processing Units (GPU s for short). However, the competition kept increasing, and certain companies started developing specialized miners that were used exclusively for mining. These miners were called Application-Specific Integrated Circuits (ASICs). They are tailor-made for one specific purpose – mining – and are extremely effective at it.

Mining – overview

As miners mine cryptocurrencies almost exclusively on specific mining hardware, the entry fee for this way of earning a passive income has increased. Besides the initial hardware costs, which often go above $1000 per unit, a miner would have to pay for the electricity that the hardware uses. This is why it is extremely important to check the electricity prices in your country before starting to mine.
Bitcoin mining has mostly become a business ran by corporations rather than a way of earning passive income for regular individuals.

However, Bitcoin is not the only minable cryptocurrency. Mining lower hash rate coins that use the Proof of Work algorithm can still be a great source of passive income. On these smaller networks, using GPUs is still somewhat viable. Mining lesser-known coins are quite risky and speculative, but also potentially highly rewarding in the long run. These coins might be worth something one day, and completely worthless the other. However, they can also get adopted by the community and exponentially rise in price and value.

Conclusion

Mining is certainly one of the ways to earn passive income with cryptocurrencies, but it is far from the safest, easiest, or the most profitable one. It requires some technical knowledge, initial investment, profitability calculations as well as picking the proper coin. Though it can be highly profitable, it is not something crypto beginners should do.

Categories
Cryptocurrencies

18 Cryptocurrency Scams You Need to Know About 

Ten years into their existence, cryptocurrencies are still confusing to users. Combine this with the fact that some smart investors who got in early made a lot of money during the 2017 crypto boom. This has earned the asset class some allure, making them highly lucrative to investors. Also, cryptocurrencies are still largely unregulated. This combination makes them a ripe target for opportunists and fraudsters who have perfected the art of certain scams.

In this article, we describe the most common cryptocurrency scams, so you always know what to watch out for and hence protect yourself and your funds.  

1. Hardware Wallet 

A hardware wallet is one of the safest places you can store your private key. These wallets constitute a device that resembles a flash drive and offer a safe and secure way for crypto holders to avoid online transactions which are susceptible to hacking, malware, and other vulnerabilities. 

Scammers know that hardware wallets are the go-to safest option for the majority of crypto holders, and are exploiting that by creating hardware wallets that have inbuilt vulnerabilities that make it easy for your crypto to be targeted. Some scams include making hardware wallets with a ‘pre-configured’ seed phrase hidden under a scratch card. The user will be instructed to scratch the card and set up the compromised seed phrase. Once you set up the seed phrase, it’s easy for hackers to siphon your funds. 

While this scam is really efficient, it’s also easy to avoid. Always purchase wallets from trusted sources. A quick search through the internet should show such wallets. For example, wallets that are written about by legitimate websites are good examples. 

2. Exchange Scams

Crypto exchanges are sites where crypto traders can purchase and sell cryptocurrency. However, most crypto exchanges have no regulatory authority overseeing their operations. This has led to the emergence of fake exchanges that are solely out to scam unsuspecting crypto investors. Many traders have been left in the dust after putting their funds in exchanges that turned out to be traps. 

One way to avoid such scams is to only sign up with trusted exchanges. Also, watch out for exchanges touting unrealistically high prices or big discounts. Also, look at the exchange’s URL. A legit website address should begin with HTTPS, signaling that the website is encrypted and thus safe. If an exchange website seems to have a shady-looking address, or there are some grammar errors, chances are it’s a scam.

3. Fake ICOs

ICOs are like IPOs, only this time for crypto. ICOs are a way for new cryptocurrency projects to raise capital. Through ICOs, users can back and participate in crypto projects they’re interested in. However, with a new ICO happening every other week, fraudsters are now using them as conduits for scamming unsuspecting investors.

One way fraudsters do this is by creating fake websites that are purportedly for ICOs and instructing the public to send coins to a fake wallet. Other times, the ICO itself is a gimmick. Unlike some other scams, this kind of scam might be a little harder to detect. However, it’s not entirely possible to avoid one. If you’re interested in a particular ICO, start by picking apart its white paper. Also, do a search on the team behind it. Are they open and with an online presence, or are they shadowy? Do they have relevant experience in the cryptocurrency, finance, or tech industry?

4. Cloud Mining Schemes

What’s the other way to acquire cryptocurrencies if you don’t want to buy or exchange them? Mining. 

However, mining isn’t cheap. It’s very resource-intensive in terms of mining technology, electricity, and time. Some companies have seen a business opportunity out of this, and are now offering users server space to mine coins at a certain rate, for a fee. 

But just like anywhere that money is involved, scammers have now set their eyes on this venture. Some companies are offering what they call “lifetime contracts” that purportedly keep mining costs the same, with lucrative returns. But you’ll notice as the mining difficulty increases, the returns will decrease. Other companies will promise outstanding returns without really disclosing the true costs going into the process, and the diminishing returns occasioned by the increase in mining difficulty. 

5. Multi-Level Marketing (MLMs) 

Multi-level schemes are not just limited to the ‘real-world.’ They’re also well and alive in the digital world. MLMs are schemes that look legit on the surface; they offer huge returns while also taking more money from naïve investors with the promise of even higher profits.

OneCoin is one company that played this game very well. People all over the world were encouraged to sign up and get their friends and family to sign up with the promise of perks and massive earnings. However, it all turned out to be a scam when the leader of the whole set up disappeared, and several members of the scheme were implicated for shadowy operations. 

Always look for information about a company before committing in any way, especially where money is concerned. Read the fine print and establish, if at all, their claims hold any water and are indeed feasible. 

6. Blackmail

This is a scam in which strangers will threaten to release information that you don’t want others to know about, or claim that they’ve hacked your computer and can access it using a remote desktop protocol (RDP). They might claim to have used your webcam to record you doing something that you wouldn’t want others to know about.

They will then demand that you send Bitcoin or another cryptocurrency in return for them to suppress or discard the material or send nothing and see the information sent to colleagues, friends, and family and your social networks. Scammers like these usually steal email lists and other information and attempt to dupe thousands of people using that info.

7. Ponzi Schemes

These are offerings of handsome returns when you deposit a particular amount of money. When you see an offering such as this, know it’s likely to be a Ponzi scheme. A Ponzi scheme is a one where money from the latest rung of investors is used to pay off earlier investors. In the end, a lot of people will lose a lot of money in the process.

8. Free Giveaways

This is a scam in which scammers will take advantage of the viral way in which information spreads online. They will claim to offer free giveaways of cryptocurrency to people who send a small amount of crypto if they register or provide personally-identifying information. In truth, they will use that information in some other sort of exploitation.

9. Phishing Emails

Be wary of emails from services that you apparently use requesting you take a particular action, such as resetting your password or requiring you to interact with your account in any way. Usually, these scams intend for you to reveal or compromise your personal information.

When you get a request like this one, try to establish its legitimacy by calling your company or reaching out to them via their social media accounts.

10. Phishing websites

These scams usually go hand in hand with phishing emails. Usually, you’ll receive a phishing email that links to a replica website. This website will then prompt you to enter your information through a login or prompt you to install malware. These websites may also sometimes appear as sponsored results on search engines or in-app download sites.

You can avoid that scam by not installing any suspicious software or logging to a website unless you’re absolutely certain it’s not a fake one. Also, don’t download any app whose authenticity you’re not sure about. 

11. Impersonation

Some con artists have also mastered the art of impersonation. One way they will pull an impersonation plot is by taking the content of the person they’re impersonating and then publishing it in an account that looks exactly like the original poster. They will then add a follow-up message or some call to action, which is a ploy to acquire people’s information and use it for some swindling scheme.

Also, impersonators will sometimes use these fake accounts to trick followers into taking action, which is also intended to get them to reveal some sort of information.

You can avoid this kind of scam by never responding to any request emanating from a questionable social media account, or one that’s not straightforward with its intentions. Always seek to establish the authenticity of such a request by cross-checking such an account across multiple social platforms.

12. Malware

Use of Malware is another tactic that scammers use to fleece cryptocurrency out of unsuspecting people. This calls for you to be ultra-vigilant whenever you’re sending cryptocurrency. Confirm more than once that you’re sending to the right address.

Some malware can cause you to send funds to the hacker’s address instead of the right one. When you paste the address from your PC’s click board, the malware changes the address, so the funds are unknowingly sent to the hacker’s address. When you realize this, it’s too late, since cryptocurrency transactions are irreversible. Thus, be extremely cautious about what kind of software you install on your PC. A quality security scanner might also help, but it’s not 100% foolproof.

13. Meet in Person

You might come across someone offering to sell or buy crypto from you, and they will ask that you meet in person to conduct the exchange. If it’s not a trusted person that you already know, it’s a good idea to not entertain the proposition. You could end up being robbed or harmed.

Also, cons are known to exchange fake Fiat money for crypto in such meetups. If you must conduct a one-on-one exchange that way, consider asking them to put the money in a peer-to-peer escrow account. But, remember crypto exchanges exist for this purpose. Better to pay the extra transaction fees and stay safe than get in a potentially dangerous situation.

14. Money Transfer Fraud

These are scams in which fraudsters and con artists will send you an email telling you they need help moving money in exchange for a portion of the funds. These are scams geared toward getting you to reveal your identifying information one way or another.

15. Pumps and Dumps

In a pump and dump scheme, an individual (or individuals) usually goes on a hype campaign -on social media platforms -about a cryptocurrency in order to artificially drive up (pump) it’s the price, and when it reaches a certain price, they’ll sell (dump) their holdings for a profit. Usually, it’s inexperienced investors who fall for this ploy, thinking the coin in question is the next big thing. Most of the time, it will be a valueless coin that might never see the light of day, and you’re stuck with it since you’re unlikely to find a willing buyer anytime soon.

When making any crypto buying decision, always rely on your own research and bear in mind that no one knows what value any coin is going to be in the future, so don’t believe anyone who says otherwise.

16. Pyramid scheme

This is a scam where-in a fraudster will promise handsome returns to participants when they recruit a certain number of other participants. This enables the scheme to grow virally and quickly, but the whole thing crumbles soon when there are no more people to recruit. Also, members, or the ones they’ve recruited, will not realize any meaningful returns during the whole debacle.

Never be duped to recruit your network into a scheme with the promise that you (and them) will accumulate some sort of returns. Also, never contribute your money into such a scheme at the behest of any person.

17. Ransomware

This is malicious software that partially or completely blocks your access to your PC or another device. The malware will only grant you access to the device once you have paid a cryptocurrency in ransom. In such a situation, consult a professional to help you remove the malware rather than pay the ransom. Also, be careful about the kind of programs you install in your device. Always make sure that a program is not a fake one impersonating one that you’ve used in the past.

18. Scam Coins

Be careful what cryptocurrency you invest in. Some altcoins (cryptocurrencies other than Bitcoin) are scam coins. Scam coins usually entice investors to put money into a project via a private sale with the promise of high returns to those who get in early.

Scam coins may have a very flashy website and create a climate of fear-of-missing-out (FOMO) to trick people into investing. Other scam coins will offer airdrops (giving away free coins) to potential investors in exchange for investing in the project or joining their community. Also, watch out for cryptocurrency projects that invoke Bitcoin a lot. This is a ploy to trick people into thinking that it is a legitimate project.

Cryptocurrency scams are not going anywhere, and fraudsters are always looking for new ways to perpetrate them. But one scam is usually a variation of another, and knowing what to look out for can help protect you. This comprehensive list should help you avoid being duped and losing your funds.

Categories
Crypto Daily Topic

Here are The Weirdest Cryptocurrencies

Nothing is more democratic than cryptocurrencies. Being decentralized, peer-to-peer and having almost no barrier for entry, it means that anyone can come up with their idea of what they consider as a unique addition to the crypto space, which is why we have 2000+ cryptocurrencies in existence today. 

Of course, in such a laissez-faire environment, we’re bound to see cryptocurrencies of all sorts popping up – from uber-useful ones with real solutions to downright wacky and silly ones. 

This piece is a homage to cryptocurrencies falling in the latter category. Because even if some already went the way of the dodo, what harm does it do to celebrate their wacky ingenuity? 

So here’s a list of the most ridiculous cryptocurrencies that we unearthed:

1. Useless Ethereum Token (UET)

The weirdness of this cryptocurrency lies in how irreverent it is. From the name itself to its offensive hand gesture. 

Useless Ethereum Token is one of the many, many riffs of Ethereum, and in the democratic crypto space, anyone can take the name of a cryptocurrency and make whatever they want – including a mockery, out of it. 

UET seems to poke fun at ICOs, declaring itself “The world’s first 100% honest ICO.

A quick look through UET’s website reveals the cryptocurrency exists mainly to rail against ICOs, saying “everyone is tired of ICOs” because they start with a lot of hype, only for the token to needlessly “clog the Ethereum network” and lose their “value” shortly after. Thus, UET is fashioning itself as the first cryptocurrency that “transparently offers investors no value…” 

The creator of UET is so honest he offers potential investors this warning: “You’re going to give some random person in the internet money, and they’re going take it and go buy stuff with it. Probably electronics to be honest. Maybe even a big-screen television. Seriously, don’t buy these tokens…”

And the most insane thing? Despite the parody-heavy warnings, investors pumped $43, 713 into the ICO, “enough to buy 36 televisions” as the website describes it.

2. Cthulhu Offerings

“The time draws near, the return of The Great Old One is upon us. Join us in our ritual.” Those are the words that greet visitors to the Cthulhu Offerings cryptocurrency website, which currently appears to be defunct. 

Depending on you, Cthulhu Offerings (OFF) is either strange or really interesting. The cryptocurrency is inspired by American writer H.P Lovecraft’s short mythical story “The Call of Cthulhu.” 

Cthulhu is a sea monster that habits the Pacific and is a combination of a dragon, an octopus and a human being. Cthulhu will one day rise and unleash terror on the world.

The cryptocurrency gets weirder when you notice, though, as developer Adam McKinney divulges to Verge: “It was not released to make money or even to be profitable – it was released because Cthulhu deserves away for people to waste electricity in his name.” 

The waste of electricity here refers to the energy used in generating new Offerings (OFF) through mining. The OFF model is designed to automatically adjust the mining difficulty when half of the coins are mined, so as to prevent inflation of the currency.

3. Unobtanium

This cryptocurrency is inspired by Avatar, the very successful 2009 science fiction movie. In the movie, humans invade a foreign planet called Pandora to obtain a valuable but rare mineral, ‘Unobtanium.’ Pandora happens to have large reserves of this mineral, and the humans are determined to mine it, even if they will kill nearly everyone in the process. 

Naturally, the developer thought it cool to fashion the cryptocurrency to be as rare as the fictional mineral. Only a maximum of 250,000 coins in total will exist of the currency in the next 300 years. 

On the website, you’re played through an anecdote about how gold was “the most valuable resource known to mankind,” the “treasure of kings,” but “that is the past.” “This is the digital age,” it says, and “Bitcoin is the new gold,” which is “rare to find and hard to obtain.” But what’s even rarer? Unobtanium, “the platinum to Bitcoin’s gold.” It’s called “Uno,” and it’s “rare and fair.” 

Of course, it remains to be seen how sustainable the self-declared platinum to Bitcoin’s gold is with that ultra-limited supply.

4. Dogecoin

This is one ‘joke’ cryptocurrency that has gone on to achieve massive success. Dogecoin is inspired by Doge, a popular internet meme. The crypto features a Shiba Inu on its logo, departing from the traditionally more serious logo designs. Dogecoin is so successful that as of 4th April 2020, it’s ranking at #33, with an impressive market cap of $229, 719, 465. 

Dogecoin is mostly used as a tipping system to reward the creation of inspiring content on social platforms Reddit and Twitter. 

The crypto is the idea of Billy Markus of the US, and Jackson Palmer of Australia. The duo had envisioned the currency as a light-hearted take on crypto and blockchain, with absolutely no idea that it would become a ‘legit’ currency.

5. WhopperCoin

One of the great things about cryptocurrency technology is if you’re creative enough, you can create anything. Burger King Russia seems to know this, creating a cryptocurrency that allows users to get a free burger at the chain once they earn a certain amount of the coin. 

So how does Whoppercoin work? Well, by earning a Whoppercoin for every ruble they spend. Once you reach 1700 coins, you can redeem it for a free burger. Sounds like a plan, no?

Whoppercoin runs on the Waves blockchain, and it can also be transferred and traded, meaning users can either redeem their rewards or sell them if they like. 

In the release statement (link), Waves touted Whoppercoin as an investment tool as well: “Now Whopper is not only a burger that people in 90 different countries love, it’s an investment tool as well…According to forecasts, cryptocurrency will increase exponentially in value. Eating Whoppers is now a strategy for financial prosperity tomorrow.”

6. F.U.C.K Token

Going by the name alone, this cryptocurrency might be the weirdest of them all. F.U.C.K here stands for ‘Finally Useful Crypto Karma.’ According to the website, this bizarre coin is “a social cryptocurrency that aims to help everyone around the world give a FUCK.” 

According to a bizarre video on the website, millions of people are plagued by the lack of ability to give a fuck”, and through this token, you can finally give a fuck. For instance, if you love a post on Reddit, you can give a fuck. But if the post or comment is not “fuckworthy, simply give no fucks.” 

Even more bizarrely, the F.U.C.K ICO raised $30,000 in 30 minutes.

Vice, the publication, sought to establish the thinking behind the coin. According to the developer, the ICO market is just people who are “pissing away” a ton of money on companies that are merely selling ideas without the product to back it up. Of course, they see no irony at all in that statement, given the F.U.C.K token doesn’t offer a whole lot.

7. Coinye

Even though Coinye coin is officially dead, this list wouldn’t be without it as it’s one of the truly outlandish ones to ever exist. 

The coin first featured a logo with American rapper Kanye West’s image, despite him not being affiliated in any way with the developers. Predictably, Kanye was not too pleased with the idea, and, through his lawyers, sent a cease and desist letter to the developers on the basis that the use of image constituted trademark infringement. 

The team responded by removing all references to the rapper from the project, and instead replaced the logo with a likeness of West as a sun-glassed fish. This time, West’s legal team sued the creators, forcing them to completely abandon the project. 

If you’re like us, you’re probably wondering what was in the developers’ minds with this whole shenanigan. Apparently, it’s nothing more than “because they were huge fans of West. In an interview with Noisey, they revealed that they “chose to represent Kanye because he is and has always been a trendsetter, and he’s always keeping things unique.” Well…

8. Trump Coin

Donald Trump shocked the whole world by clinching the American presidency in 2016, despite being not being the projected candidate to do so. So it’s no surprise there’s a cryptocurrency in his name.

The TrumpCoin website states that the coin is a “digital currency supporting Patriots around the world.” These patriots are people who “…want the truth told and written, they dislike corruption and evil politicians. They want criminals brought to justice and abhor corrupt governments and tyrannical dictators.” 

There’s a video that allegedly describes the vision of the project but is, in fact, a politically-charged video complete with snippets of Trump campaign speeches. 

Final Thoughts

Cryptocurrencies are supposed to be serious business that democratizes finance. But a little creativity once in a while that pushes the limits and breaks the mold is also welcome. These cryptocurrencies do an excellent job of that. 

Categories
Cryptocurrencies

Everything You Need to Know About Gemini Dollar Stablecoin

Cryptocurrencies have all these dazzling features like decentralization, peer-to-peer transactions, and cryptographic security that have made them the darling of investors. The asset class has bucked the trend in these ways, as well as another not so good one, depending on who you’re asking: they’re prone to dramatic price swings. If you’re asking investors, this unpredictability in price is a good thing since it allows them to speculate. 

For the rest of the people who wish to utilize the secure and anonymous currency for everyday activities, the usual cryptocurrencies are not an option. Stablecoins, cryptocurrencies that are backed by an external asset, is an innovation to solve this problem. 

What is Gemini Dollar? 

Gemini dollar is “purpose-built” stablecoin “to bring the value of the U.S. dollar into the modern digital era,” according to its website. 

What this means is it’s a cryptocurrency that borrows the stability and credibility of the U.S. dollar and combines it with the fastness, security, and allure of digital money. New Gemini tokens are printed in a highly controlled environment that ensures the amount of Gemini dollars issued and in supply do not exceed the underlying U.S. dollar reserve.

What are Stablecoins? 

Stablecoins are cryptocurrencies that are pegged to a “real-world” asset. The real-world asset could be anything from Fiat currency to a commodity such as gold and so on. Still, some stablecoins are pegged against another cryptocurrency whose supply is controlled by an external market mechanism. 

The idea behind stablecoins is to provide some stability and predictability to a cryptocurrency. Cryptocurrencies are known for their wild and unpredictable price swings, which renders them unsuitable for regular and everyday use. With stablecoins, users get the privacy and security of cryptocurrencies together with the stability and reliability of crypto. 

Stablecoins usually have the same value as their underlying asset. For instance, if a coin is pegged at the ratio of 1:1 to the U.S. dollar, its value will revolve around the value of the dollar. Stablecoins can usually be redeemed for their underlying assets.

Who is Behind Gemini Dollar? 

Gemini Dollar is a project of Cameron and Tyler Winklevoss, who are venture capitalists, Bitcoin investors, and owners of the Gemini Dollar exchange. The Gemini Dollar website states that the currency was created by “top technologists and security engineers.”

Gemini is regulated by the New York State Department of Financial Services. The currency takes a departure from a stablecoin norm but is backed by only one bank – State Street. The company is periodically regulated by accounting firm BPM so as to stay in compliance with auditing laws. 

How Gemini Dollar Works

Gemini Dollar runs on the Ethereum blockchain. The coins are generated when you deposit Fiat money into Gemini’s custodian account. The Ethereum blockchain confirms the supply of coins, while the auditing firm sees to it that the supply is equivalent to the amount of USD holdings. Each Gemini dollar is equivalent to one U.S. dollar held in the backup reserves. 

The Gemini dollar ecosystem comprises three critical layers: 

i) The Proxy Layer: this is the governance layer which identifies and allows eligible on-chain processes, and can stop any process if need be. It also creates and transfers GUSD coins. 

ii) The Impl Layer. This layer is where data and logic for the execution of smart contracts reside. Here, creation, transfer, and token ‘burning’ are carried out. This layer also ensures that a GUSD is printed for every USD held in reserve. 

iii) The Store Layer. This ledger oversees transactions and makes them public so the public can view Gemini dollar transactions. It also serves as the “external and eternal Gemini dollar ledger.”

Security Features of Gemini Dollar

The Gemini Dollar system utilizes the following security features to ensure the safety of funds and client privacy. 

  • Offline Keys. These are keys that approve high-risk actions and are stored in Gemini’s cold storage system. 
  • Key Generation. This is the process by which Gemini generates, stores and manages keys by use of hardware security modules (HSMs)
  • Multi-signature. Multi-signature keys are used to approve risky transactions. This process involves two or more people signing off a transaction. 
  • Time lock. This mechanism stops transactions deemed as risky or suspicious for a certain period before execution. During the time lock, the system can detect and respond appropriately to any security or privacy breach.
  • Revocation. This mechanism revokes any malicious or erroneous transactions before execution. 

How Does Gemini Dollar Differ From Other Stablecoins? 

Gemini Dollar belongs to a class of stablecoins that rely on a centralized entity to issue coins and manage a real-world asset reserve. Some of the stablecoins in this category include USD coin (USDC), TrueUSD (TUSD), Paxos Standard Token (PAX), and Tether (USDT).

These coins differ from each other in their function only slightly but otherwise operate on the same centralized model of issuing coins, freezing suspicious transactions, and so on. The key takeaway is that they are not censorship-resistant like, say, Bitcoin or Ethereum.

Gemini Dollar: Tokenomics

Unlike other stablecoins such as Tether and USDC, the Gemini dollar is not enjoying much dominance in the crypto market. As of April 7, 2020, the stablecoin is ranking at #405 amongst all cryptocurrencies. It has a market cap of $5,637,192 and a 24-hour trading volume of $26, 693, 402. It’s a circulating supply of 5,592,534, and its total supply is of the same value. 

Where to Buy and Store GUSD 

You can purchase Gemini Dollar at any of these exchanges: BitFinex, CoinMex, BitMart, OKEx, YoBit, Bitrue, and so on. In some of the exchanges, you can buy the currency with U.S. dollars, while in others, you need to purchase a cryptocurrency such as BTC, ETH, XRP, USDT, and so on. 

Being an ERC token, the Gemini dollar can be stored in any Ethereum wallet. Some popular options include MyEtherWallet and MetaMask. Alternatively, you could store them in safer hardware wallets such as Trezor and Ledger Nano. 

Final Thoughts

Gemini dollar’s proposition doesn’t differ much from that of other stablecoins, but it’s mysteriously not performing as well as them. Whether it’s because of branding or market factors beyond its control, it’s hard to figure why. Interested investors can only wait and see if there’s an upturn for the stablecoin in the near future. 

Categories
Crypto Daily Topic

Everything You Need To Know About the Upcoming Bitcoin Halving

Bitcoin fans across the world look forward to a special event every four years. This event is the Bitcoin halving, christened ‘halvening’ by the community to give it a more apocalyptic tone.

On May 12th, 2020, the cryptocurrency is set to undergo its third halving, and the community is riled up as ever in anticipation of the event.

In case you’re new to the whole brouhaha or wish to get a clearer understanding of what it’s all about, read on as we break everything down.

The Upcoming Halving is Generating Interest like Never Before

Data from Google Trends shows that search for the event was at an all-time high between April 5th and the 11th, as more people Googled about “bitcoin halving” in anticipation of the event.

Google Trends ranks interest on terms on a scale of zero to 100, with 100 being the highest amount of interest an event/term can generate, based on region and period.

What is Bitcoin Halving?

Miners are network participants who validate transactions and add new blocks on the blockchain. By doing this, they make the sending of bitcoins throughout the network possible. Miners get rewarded with ‘block rewards’ – in the form of bitcoins, for doing so.

Mining is a pretty resource-intensive activity, and it’s known for consuming a lot of electricity. A lot of people describe mining as involving the solving of complex computational puzzles. A more apt description is that miners will rapidly enter a string of random numbers until they finally enter the right one – which constitutes the next block.

Mining is very crucial to Bitcoin’s security. Since every new block is linked to the previous one using cryptography, it renders it almost impossible to interfere with the blockchain and hence transactions.

The block reward, in a sense, is the driving factor behind the running of Bitcoin since it incentivizes miners to continue producing blocks and, as a result, keep the blockchain secure – and honest, and hence something that millions of users around the world can trust. If Bitcoin had a history of manipulation and tampering, it wouldn’t be the trusted blockchain and cryptocurrency it is today.

The cycle of block rewards halving is embedded into Bitcoin’s code, and it enables the deflationary supply of Bitcoin.  

What is a Block Halving Event?

Block halving is the slashing of block rewards into two. Block rewards are bitcoins that Bitcoin miners are rewarded for verifying blocks and adding new transactions on the blockchain (more on that below).

In the early days of Bitcoin, miners received 50 bitcoins for every mined block. On the 29th of November 2012, at the 210,000th block, this reward was slashed into half into 25. On July 10th of 2016 (approx. after four years), this rate was halved again into 12.5. In next month’s halving, which will take place presumably on May 12th, it will be halved into 6.25 bitcoins per block. The 2016 halving took place at block height 420, 000, and the upcoming one will take place at the height of block 630, 000.

To date, roughly 18.3 million blocks have been mined out of the 21 million that will ever exist.

Who Controls the Issuance of Bitcoin?

The short answer is, no one. Rather, Satoshi Nakamoto, Bitcoin’s creator, programmed the network itself to control how new coins are ‘minted’. In turn, new coins are issued after consensus among network participants.

The issuance of new bitcoins follows these rules:

21, 000, 000 million is the number of coins that will ever be produced

A 10-minute interval between the production of new blocks

The halving of block rewards after every 210,000 blocks

An initial bock reward of 50 bitcoins and the halving of the reward at each halving event until a zero value is reached (approx. in the year 2140).

What’s the Idea behind Halving?

Bitcoin’s supply is programmed to decrease, becoming scarcer over time. The premise is if the supply decreases, demand will increase, cushioning its users against inflation of the currency.

This is in stark contrast to the inflation-prone traditional currencies whose value decreases over time. For example, anywhere in the world right now, the purchasing value for a US dollar has decreased over time. Bitcoin is built to be the opposite of this. As its supply diminishes over time, and its demand and value increases, so do its purchasing power.

Will the Price of Bitcoin Go Up After the Halving?

The Bitcoin halving event is a huge deal: it signals a decrease in the supply of the world’s first and most successful cryptocurrency. As you would expect, it’s not one that comes and goes quietly. Naturally, the pomp and fervor that surrounds it has to influence Bitcoin’s price, right?

This is always a debate every Bitcoin halving season. Some people believe that the price will change little, if all, since the halving has already been factored in by the market. Others believe that the halving in supply should prompt an increase in the demand for Bitcoin. Either of these scenarios can play out. One, no significant change at all, or there can be a significant bump in price. What’s for certain, though, is that the event will bring with it new entrants, and the reduction in block rewards will cause an increase in demand.

Perhaps even, history will repeat itself. Bitcoin saw a major price bump a year later, both after the past two halving events. We may not see a massive rise right now, but we might see one a year from now.

Who Will Be Affected by This Event?

Of course, the halvening, uh, bringeth a few ripples that will be felt by certain players in the Bitcoin ecosystem – one way or another.

As we’ve already noted, miners will see their block rewards cut in half. For miners that are still using the older and less efficient mining models, this is not good news. Also, miners who have recently invested in mining hardware will have to wait a bit longer before they can start realizing significant ROI.

Exchanges will also be affected since they are at the center stage of any market shift. If prices take a bullish nature, they (exchanges) will be best positioned to reap from this trend.

Where Can I Witness the Halving?

You can follow the halving via a block explorer, where you can see new block updates.

In the past, Bitcoin fans across the world have held halving parties, but due to the social distancing courtesy of the Covid-19 pandemic, it looks like this time, people will follow the event from their homes. Of course, you can always join fellow Bitcoiners on Twitter, Telegram, and internet relay chats as everyone counts down to the halvening.

Categories
Cryptocurrencies

Electrum Bitcoin Wallet Review 2020: Features, cost, pros and cons

Electrum Bitcoin wallet is arguably one of the most popular and oldest software wallet currently available. It launched in November 2011, and it is estimated that more than 10% of all bitcoins transactions conducted today involve Electrum bitcoin wallets. Created by Thomas Voegtlin, a German computer scientist, the wallet technology is open-sourced, allowing for consistent developments that make it the most secure software wallet around. The bitcoin-only wallet is feature-rich but can, at times, be said to have prioritized system features over user-friendliness. 

In this review, we look at some of the factors making Electrum one of the most trusted software wallets, its key features, and compare it with other hot and cold wallets.

Electrum Key features:

Mobile and desktop: While it started off as a pure software wallet, Electrum has evolved over the years and is currently available as desktop and android apps. Both are regularly updated and patched to address different vulnerabilities and enhance their ease of use.

Fast: You don’t need to download the entire electrum blockchain to store your coins. You only need the software wallet that is stored within your phone or desktop, and this contributes to the expedient electrum transactions.

Hardware wallet integration: Electrum can integrate with all the popular hardware wallets out there, including Ledger Nano S, Keepkey, and Trezor. The integration makes it possible to access all electrum features, including the transfer of bitcoins in and out of the electrum wallet via the hardware wallet interface.

Tor support: In a crypto industry first, Electrum wallets are now compatible with the Tor browser. Tor is popular for its IP masking capabilities, and the integration is in line with its commitment to upholding user anonymity.

No Downtime: The electrum server network is highly decentralized, a move that eliminates the possibility of a central point of failure. This decentralization and the fact that it is highly vetted by industry professional has also eliminated the possibility of downtime.

OS compatibility: Electrum is highly versatile and is compatible with all popular operating systems, including Linux, Windows, and macOS desktops, as well as Android smartphones.

Export coins to another wallet: Electrum wallet doesn’t lock in your funds, implying that even though it doesn’t allow for integration with other software wallets, you are free to transfer your digital assets held in an electrum wallet to any other software or hardware wallet seamlessly.

Security features:

Password protected: The Electrum bitcoin wallet is password-protected, and you get to set the password for your wallet during installation.

Cold storages: The electrum desktop, to a certain extent, can be considered cold storage. While it stores your bitcoins in desktop wallets, your private keys are safely tucked away from any internet connections.

Multi-signature: You can use the recovery phrase to open and maintain several electrum wallets on different devices, after which you can assign them the multi-sig capabilities to ensure that even if one was compromised, the bitcoins therein cannot be transferred without the permission of the other traders.

Offline key phrase generation: Like hardware wallets that generate sensitive wallet information like pin codes and recovery phrases on the internet detached devices, Electrum supports the offline generation of the recovery phrase. It allows you to generate the password and recovery words offline, away from malware and keyloggers.

Anonymous users: Electrum is one of the few wallets that support anonymous account creation. Virtually anyone can, therefore, download the Ethereum software wallet and create an anonymous user account. 

Currencies supported

Interestingly, the electrum desktop and smartphone wallets will only support hold bitcoins. The open-source nature of the technology used to develop the electrum wallet has encouraged the offshoot of electrum wallet forks that specialize in holding Bitcoin cryptocurrency fork currencies like Bitcoin Gold, Litecoin, and Bitcoin Cash.

Electrum wallet cost and other fees

Electrum wallet company is a service provider. While they don’t charge you for downloading the wallet, you will incur a transaction fee every time you send bitcoins from your account. Currently, the wallet imposes a default flat fee of about 0.2 mBTC per transaction.

The rate is, however, not fixed and will often fall to around 0.1 mBTC depending on such factors as the amount you wish to send.

Note: 1 mBTC refers to a millibitcoin (one-thousandth of a bitcoin).

Setting up the Electrum wallet:

How to install the Electrum wallet:

Step 1: Start by downloading the Electrum wallet from the official Electrum website (www.electrum.org) based on your desktop’s operating system.

Step 2: Proceed to the installation page where you will be asked to chose between standard wallet, Multi-signature wallet, wallet with two-factor authentication, or import bitcoin wallet or private keys. Chose accordingly, but for simplicity purposes, we will highlight how to create a standard wallet.

Step 3: If you choose the standard wallet, the question will be whether you wish to create a new seed or recover a wallet using an existing seed. If you had lost access to a smartphone or desktop holding your private keys, you would go for restoring a wallet using the word seed you have. But since we are creating a new account, we click on “Create a new seed.”

Step 4: The installer will display a 12-word recovery seed that you are required to write down.

Step 5: The next window displays a confirmation window that requires you to key in the recovery seed words to verify that you captured them accurately.

Step 6: Proceed to create your unique electrum password and store the recovery seed in a safe place. Your wallet is now ready for use.

Sending and receiving coins:

To receive bitcoins from your other wallets or third parties, you need to first access your online electrum wallet:

Step 1: Click on the receive icon.

Step 2: The wallet will display the bitcoin receiving address

Step 3: Copy the address and send it to whoever you wish to receive your bitcoins from

To send payments from your Electrum wallet, you still need to first access your electrum wallet on your browser:

Step 1: Click on the send payment icon.

Step 2: Key in/paste the wallet address you wish to send bitcoins to and the amounts you want to send (inclusive of the electrum wallet transaction fees)

Step 3: Confirm the details before authorizing the payout

Electrum hardware wallet pros and cons:

Pros:

  • It is one of the most accepted and widely used bitcoin wallets primarily because it is inexpensive.
  • Embraces several high-quality security features like the multi-signature and two-factor authentication
  • Can easily integrate with the more secure hardware wallets
  • Electrum wallet is feature-rich
  • Maintains an easy setup process for new accounts and recovery of lost private keys

Cons:

  • Can be easily compromised by powerful key logger malware that records all your account sign in details
  • You must maintain a highly powerful antivirus software to keep malware out, which might be costly over time.
  • Electrum software wallet prioritizes the feature richness of the wallet over its user-friendliness.
  • Despite there being 1000+ cryptocurrencies and tokens, the Electrum wallet will only support bitcoins.

Electrum wallet compared to competitors:

Electrum wallet’s biggest strengths and advantages emanate from its wide range of security features. In the face of online hot wallets that like the eToro and Coinbase, Electrum may seem complicated to use as you are required to first move your funds to the crypto exchange before trading them. The move is tedious and costly. Not to mention that they support a wider range of cryptocurrencies and tokens Electrum, on the other hand, can be considered secure than either of these given its cold storage, multi-signature, and recovery seed features.

Customer support:

The fact that the Electrum is an open-sourced project with no central authority can be attributed to its near-nonexistent customer support service. On their website, for instance, you will only find the social media links and no phone number or live chat feature.

Verdict: Is the Electrum wallet worth buying?

Bad as Electrum bitcoin wallet’s customer support service maybe, it still remains the most formidable bitcoin wallet. Nearly 10% of all bitcoin transactions today can be traced back to an electrum wallet. Anyone looking for an inexpensive wallet that only maintains relatively low transactions should look for an electrum wallet. It also appeals to experienced crypto traders who are looking for a balance between fast transaction processing and the safety of their digital assets.  The low transaction fees also tend to favor low-volume traders and investors. Our verdict: Electrum bitcoin wallet provides value for money.

Categories
Cryptocurrencies

Trezor One Wallet Review 2020: Features, cost, pros and cons

TREZOR has two claims to its massive popularity and influence in the crypto industry. First, it is the pioneer crypto hardware wallet – created in 2014, and secondly, it is developed and distributed by one of the most reputable crypto industry security systems providers – Satoshi Labs. Its influence in the offline crypto storage space is so significant that most of the hardware wallet brands available today have at one time borrowed a leaf from its sleek design or its source code.

In this review, we explore whether the key-holder sized multicurrency hardware wallet lives up to its reputation. We look at its costs, features, and the level of security it offers. We also look at its costs and other fees in comparison with some of its hot and cold wallet competitors.

Trezor Key features

Small size: TREZOR One is smaller in size when compared to some of its competitors like the wide screened keep-key wallet. The biggest advantage of this is that it makes it highly portable. On the flip side, though, it means that the wallet has a relatively small screen size.

Satoshi Labs: It’s no secret that Satoshi Labs redefined the way crypto users handle and store their coins with the creation of Trezor One hardware wallet. The company further is also regularly providing patches and firmware updates for the wallet.

Compatible with all OS types: TREZOR hardware wallet is compatible with virtually all the most popular operating systems, including Windows, macOS, Linux, Android, and iOS.

Multiple types of Trezor wallets available: There are two primary types of TREZOR hardware wallets – Trezor One (also known as the standard wallet) and Trezor Model T (referred to as the premium wallet). They have their differences in the number of currencies supported and security features. Trezor One is also smaller in size, with two buttons, and features a small screen while Trezor Model T is comparatively larger and features a wider touchscreen with no buttons.

Compatible with software wallets: Both Trezor wallets are compatible with popular desktop software wallets like GreenAddress, MultiBit HD, and Electrum as well as Mycelium and GreenBits Android wallets. The wallet can be set up and managed via the myTREZOR.com site or via the TREZOR Chrome extension.

Security features

TREZOR hardware wallet’s first line of defense when it comes to protecting their client’s digital assets lies in the offline storage of private keys. Others include:

Pin code protection: Both TREZOR hardware wallets use a pin code system that is set during setup. You will need the pin to access your crypto balance and authorize in and outbound crypto transactions. The wait time is raised by the power of two every time you input a wrong pin code, further compounding the security level.

24-word recovery seed: Should you forget the pin, you can recover your private keys using the 24-word recovery words given during set up. In case the device is damaged, lost, or stolen, you can use the recovery seed words to recover your digital assets.

Passphrase: You can also add a passphrase, the 25-word to your recovery seed, to further boost the security of the device and its contents. You will, however, want to tread carefully when dealing with a passphrase as it doesn’t have a backup, and forgetting it, makes your crypto assets inaccessible even to you.

Device buttons and touchscreen: TREZOR One has two navigation buttons while TREZOR Model T has a touchscreen, and both serve the same purpose of authorizing transactions. This makes it impossible for a hacker to transfer your crypto assets even if they gained access to your myTREZOR account.

Currencies supported

TREZOR One supports all the most popular cryptocurrencies like Bitcoin, Litecoin, Dash, Dogecoin, Bitcoin Cash, and 1000+ tokens and stable coins like USDC and USDT.

TREZOR Model T, on the other hand, supports all the cryptocurrencies, tokens, and stable coins supported by its Trezor One and a few more not supported by its counterparts like Ripple, EOS, Cardano, Monero, Ontology, Horizen, and ValorToken.

Trezor wallet cost and other fees

TREZOR one currently goes for $55

TREZOR Model T is currently priced at $251

There are no other fees associated with the use of either TREZOR hardware wallets. Firmware updates and patches are free for all Trezor wallet users.

Setting up the Trezor wallet:

How to install Trezor one wallet:

Step 1: Open the Trezor.io website, select the install Trezor one option and proceed to download and install the Trezor Chrome/Firefox extension.

Step 2: Connect the device to the computer using its USB cable

Step 3: Select the install firmware option, unplug and reconnect the device to refresh once the installation is complete.

Step 4: Click on the Create New icon and “create a backup in three minutes” to generate the 24 recovery seed words.

Step 5″ The recovery words will appear on your device screen, and you can write them down by using the buttons to scroll up and down. Pay key attention to spelling and the order in which they appear.

Step 6: Finish by assigning your device a name and creating the pin code.

Sending and receiving coins:

To receive funds into your Trezor wallet, connect the device, and open your Trezor account:

Step 1: Click the receive icon.

Step 2: Select “show address.”

Step 3: Ensure the address on the screen display matches the on-device screen, copy and send it to whoever is sending you the digital assets.

To send payments from your Trezor wallet, you still need to connect the computer and open your Trezor account:

Step 1: Decide on the currency you want to send

Step 2: Key in the receiver’s address and the amounts you wish to send

Step 3: Confirm the details and authorize the payment.

Trezor hardware wallet pros and cons:

Pros:

  • You have the option of choosing between the standard Trezor One and Premium Trezor Model T wallets.
  • Trezor hardware wallets support more than 1000 cryptocurrencies and tokens.
  • The wallet has a relatively straightforward setup process.
  • The Trezor wallet technology is open-sourced and has thus been scrutinized and enhanced by a legion of developers to come up with the most secure wallet.
  • Digital assets on the device are kept offline under a multi-layered security system.

Cons:

  • In 2017, hackers were able to comprise the security of Trezor wallets, enabling them to steal and identify the private keys stored in the devices, and this haunts Satoshi Labs to date.
  • One may consider their $59 price tag exorbitant given the number of free alternatives available.
  • The wallet isn’t hierarchically deterministic.
  • Trezor One doesn’t support popular coins like Ripple and Monero.

Trezor wallet compared to competitors:

When compared to such online hot wallets as Coinbase and eToro, Trezor has the advantage of reduced risk exposure of coins given that they are stored offline. Satoshi Labs also imposes multi-layered security features. Note, however, that the online wallets maintained by these exchanges are free to use for their account holders. Additionally, the integration of these online wallets with reputable crypto exchanges makes their wallets easier to use by simplifying the send/receive crypto processes between the exchange and the wallet.

When compared to equally reputable hardware wallets like Ledger Nano and Keepkey, Trezor has a more solid reputation. The two can even be considered forks of the Trezor wallet as they have borrowed heavily from its open-source network. The 2017 security breach, however, gave the crypto community a reason to doubt the effectiveness of Trezor. 

Customer support:

Trezor has a highly attractive customer support system. On the support page of their website, is an elaborate FAQ section detailing some of the most common challenges faced by their hardware wallet users. There also is the technical issues and system status sections that you can use to check the health of your wallet and determine if it is functioning optimally. The customer support team is only accessible via TREZOR social media pages as they do not have a phone number on display.

Verdict: Is the Trezor wallet worth buying?

Trezor hardware wallets have numerous strengths, from the pioneer hardware wallets to supporting one of the widest range of cryptocurrencies and tokens. The open-source nature of their technology further ensures that programmers are constantly probing its effectiveness. The company is nonetheless still dogged by the 2017 security breach. Overall, we feel that it is moderately priced and worth buying for individuals looking to properly secure their crypto assets.

Categories
Cryptocurrencies

Ledger Nano S Wallet Review 2020: Features, cost, pros and cons

Ledger Nano hardware wallets entered the crypto space in 2014. Six years down the line, it has emerged as one of the most reputable crypto hardware developers. And in its line of flagship products are two highly advanced crypto hardware wallets, namely Ledger Nano S and Ledger Nano X. In these reviews, we will be looking at what is arguably their best selling hardware wallet, Ledger Nano S. After the record sale of over 1.4 million units, we want to understand what gives it an edge over the rest of the crypto wallets currently in circulation.

We will be looking at the unique operational and security features that endear Ledger Nano S to the crypto community. Additionally, we will vet its cost and fees, level of customer support offered by its developers, and compare its effectiveness against its competitors before telling you if it lives up to its reputation. Let’s start by looking at its key features:

Ledger Nano S Key Features:

Software wallet integration: The Ledger Nano S can be easily integrated with different other type software and smartphone-based wallet apps like the android based Mycelium or software-based wallets like electrum.

Buttons and a built-in display: The Ledger Nano S is a hardware wallet with two buttons and an inbuilt display screen. The two buttons come in handy when installing and configuring the disk as well as during transaction confirmation.

OS compatibility: Ledger Nano S hardware wallet is compatible with virtually all the most popular operating systems like Windows, Linux, and macOS.

Stores between 3-5 wallets: The ledger Nano S can support between 3 to 5 different crypto wallets at a go. This ideally implies that one can only create three different types of cryptocurrency accounts at a go. In a rather complicated workaround, however, Ledger Nano S users have claimed to be able to add more cryptocurrency accounts to their wallet by integrating wallet apps into the hardware wallet and later deleting the app from the wallet. By deleting the app, you leave the private coins in the wallet, but you will have to add the app every time you wish to transact.

Security features:

Encryption: Ledger Nano S doesn’t just store your private keys; it also employs the highest grade of encryption to keep them as safe as possible.

Dual chips: The Ledger Nano S hardware wallet embraces the dual-chip technology and is currently fitted with the ST31H320 and STM32F042 chips. Once you store your private keys here, these chips sign the transactions separately as they are two different pieces of hardware, effectively adding another security layer around your coins.

Pin code: Like any other hardware or software wallet, you will have to set up the wallet access pin code. This is, in most cases, the first line of defense against illegal access to your private keys.

Offline configuration: Ledger Nano S features an inbuilt display that makes it possible to configure and setup the most sensitive aspects of your wallet’s security like the pin code and the generation of the recovery seed words offline.

Cold storage: The USB like device stores your crypto assets in a highly secure offline environment under a multilayered security system.

24-word recovery seed: when installing the device, the Ledger Nano S provides you with an offline auto-generated list of 24 words that you can use to reset your device if you forgot your pin code. You could use the recovery seed to access your private keys on another ledger Nano S wallet if the one you already have was stolen or compromised.

Currencies supported on Ledger Nano S

Ledger Nano S supports all the popular coins like BTC, Eth, BitcoinCash, Ripple, Litecoin, Dash, Dogecoin, Komodo, and ZCash. The hardware wallet company is also constantly increasing the number of supported devices and currently lists 700+ that you can hold in a Ledger Nano S wallet.

Ledger Nano S wallet cost and other fees

The Ledger Nano S hardware wallet costs $59 (exclusive of VAT and shipping). There are no additional deposit or withdrawal fees.

Setting up the Ledger Nano S wallet

How to install Ledger Nano S wallet:

Step 1: Ledger Nano S does not have an inbuilt battery; therefore, plug it into a computer using a USB cable to power it on.

Step 2: The device display will present you with an option of configuring new device or private keys recovery, use the buttons to choose the configuration. Proceed to set a 4-7 digit pin code, using the buttons to scroll up and down and confirming a number by pressing both buttons simultaneously.

Step 3: The device then presents you with the recovery seed, a string of 24 words. Write them down on a piece of paper and keep it safe as you will need it to access your private keys should you forget the pin or lose the device.

Step 4: Confirm you captured the recovery seeds correctly by verifying two random seed words. The device will ask you to confirm two random seed phrases.

Step 5: Download and install the Ledger Live desktop app from Ledger’s website. It serves as the app companion for ledger wallets and can work well on your phone too.

Step 6: Use Ledger Live app to install different crypto wallets to your hardware keeping in mind that Ledger Nano S limited memory only allows for the installation of between 3 to 5 crypto wallets at a time.

Sending and receiving coins:

To receive bitcoins from your other wallets or third parties, you need to first access your Ledger Live app:

Step 1: Say you want to receive bitcoins and already have a bitcoin account in your wallet. Start by scrolling through the device and find the B icon representing the Bitcoin account.

Step 2: Press both buttons to confirm the bitcoin account, and a wallet address will appear on the Ledger live app.

Step 3:  Send the wallet to the parties from whom you wish to receive bitcoins from

To send payments from your Ledger Nano S wallet, you still need to first access your Ledger Live app:

Step 1: Say you want to send Ethereum tokens. Scroll through the device and find the E icon symbolizing the Ethereum account.

Step 2: From the app, key in/copy-paste your receiver’s wallet address and the correct amount of Eth you wish to send

Step 3: Authorize the payout by long-pressing both buttons on your device simultaneously.

Ledger Nano S hardware wallet pros and cons:

Pros:

  • The wallet is highly secure, and there haven’t been any reported cases of a security breach.
  • Its straightforward setup process and ease of use makes it ideal for beginners.
  • Ledger Nano S is competitively priced at $59
  • The device’s small size makes it highly portable.
  • The Wallet supports a wide range of coins and tokens.

Cons:

  • Doesn’t support the highly secure passphrases
  • Has a relatively small device display that can’t fit the entire crypto address

Ledger Nano S Wallet compared to competitors:

The fact that Ledger Nano S hosts a wide range of security features and has never recorded a single security breach incidence makes it superior to most software and hardware wallets. It, for instance, is more secure than most web-based and software wallets in the sense that all its coins are held offline. And hackers can’t compromise or steal the crypto assets held therein. Even if they gained access to the Ledger Live app login details, payouts could only be initiated by pressing the device buttons.

Compared to two of its fiercest competitors in the hardware wallet niche, KeepKey, and Trezor, Ledger Nano S leads the path when it comes to affordability, reputation, and security. KeepKey may have never experienced a security breach, but it will only support about 40 crypto coins and tokens against Ledger Nano’s 700+. Trezor, On the other hand, has been around for close to a decade and claims to support 1000+ coins and tokens. It, however, recently suffered a massive security breach that tainted its reputation and deflated the crypto community’s confidence in its products.

Customer support:

Ledger hardware wallet providers can also be said to be doing a better job in customer support than most other hardware wallet companies. On their customer support page, for instance, you get to check and download free hardware updates and check the status of different crypto apps. And while they don’t maintain phone support, you get to interact with their responsive teams on different social media platforms.

Verdict: Is the Ledger Nano S Wallet worth buying?

There is a reason why Ledger Nano S remains the most popular crypto hardware wallet while maintaining the highest sales records. It is feature-rich, relatively inexpensive, and beginner and friendly. More importantly, it uses a proprietary OS to secure its wallets and has never recorded a security breach. We hold the opinion that Ledger Nano is worth buying and one of the must-haves for every crypto trader.

 

Categories
Crypto Videos

The Bitcoin Halving Is Coming! Why Should You Be Buying Alts?

 

Making an insane profit from the Bitcoin Halving

Cryptocurrencies have made many people millionaires, and they will yet again. One of the biggest and fastest wealth distribution events in modern history is exactly the creation of cryptocurrencies. Events that severely impact the supply or demand of an asset are rarely known in advance, which is not the case with Bitcoin. Bitcoin’s halving event is widely known, and that makes Bitcoin extremely unique.

Bitcoin Halving

The event called the halving makes the supply of new Bitcoin coming onto the market cut in half. This is by design and happens approximately every four years. Shrinking supply, when combined with growing demand, is a proven recipe for a price increase. The halving presents an opportunity for regular people to invest a small amount of money and walk away with hundreds or thousands of dollars.

We know the Bitcoin halving will happen in May, and that the supply of Bitcoin will shrink as miners will be rewarded 50% less than up until then. Each time the halving happened, the prices soared. The first halving in 2012 brought Bitcoin’s price up 2,135%. The second halving in 2016 managed to propel Bitcoin’s price 3,122% over the next 18 months.

While most investors know about the halving, they don’t look into its track record when it comes to massive gains. On top of that, even fewer people know that altcoins might be the assets they should be looking for as the Bitcoin halving approaches. After Bitcoin’s first halving, Litecoin (which is called “Silver to Bitcoin’s Gold” soared more than 7,000%. The second Bitcoin’s halving happened, and an altcoin called verge shot up an astonishing 1,362,400%.

Conclusion

While it is true that altcoins are separate projects and that each one of them has something unique, it is undeniable that they are connected and correlated to Bitcoin. Investing in altcoins with the most promising technology might be the way to go before the halving happens.

Categories
Cryptocurrencies

Mycelium Wallet Review 2020: Features, Fees & Ease Of Use

On the Mycelium website, the Mycelium wallet is referred to as the ‘Default Bitcoin Wallet.’ Probably because Mycelium is by far the oldest and one of the most reputable smartphone-based bitcoin wallets. Introduced to the market in 2008, Mycelium has undergone a raft of improvements and integrations to make it the safest Bitcoin storage hubs. Over time, the wallet has also gained the title of the most versatile wallet given the numerous third-party services it has safely integrated onto its network. But what sets it apart from the rest of the smart app wallets?

We answer this by looking at some of Mycelium wallet’s security features, ease of use, and proposed updates to the wallet’s functionality. We will also tell you if the mobile wallet truly lives up to its reputation.

Mycelium Key features

Smartphone-based: Mycelium is an app-based crypto wallet implying that it is compatible with both Android and iOS operating systems. It is hosted on a smartphone, effectively making it one of the most portable and easily accessible bitcoin wallets.

Integrates with hardware wallet: Mycelium wallet’s versatility makes it possible to integrate the mobile phone wallet with popular hardware wallets. These include KeepKey, Ledger Nano S, and Trezor.

Hierarchical Deterministic: The fact that Mycelium is an HD wallet implies that one can derive future bitcoin addresses from the master seed, easing the wallet recovery process.

Mycelium local trader: Unlike exchange backed wallets like eToro, Coinbase or BitMex, Mycelium is a stand-alone wallet. It nonetheless features a decentralized exchange-like marketplace that facilitates the exchange of bitcoins for fiat currencies between users. Dubbed the “Mycelium Local Trader,” the marketplace also features an end-to-end encrypted chat service.

Integration with third-party service providers: Mycelium bitcoin wallet partners with three main third party service providers Cashila, Glidera, and Coinpult. Cashila makes it possible for Mycelium users within the Euro SEPA zone to settle their bills. Glidera allows US and Canadian users to buy bitcoins with their bank balances. Coinpult, on the other hand, makes it possible for Mycelium users to hedge bitcoins against popular currencies like USD.

Security features

Pin code protection: After downloading the mycelium wallet app and installing it in your device, you will be asked to set a unique pin code. It prevents illegal access to your wallet and private keys and will be required every time you wish to log in, check balances, and confirm transactions.

12-word recovery seed: During the installation, Mycelium provides you with a 12-word recovery seed that you can use to reclaim your wallet. You will need to recover your bitcoin private keys should you lose the phone or forget the Mycelium bitcoin wallet password.

Watch-Only accounts: A watch only account allows for the storage of just the bitcoin address and not its corresponding private keys. You can then track the receivables into your wallet and monitor the coin balance while making it impossible to send out coins from the wallet even if hackers accessed your login details.

Military-grade encryption: The Mycelium bitcoin wallet encrypts your bitcoin address and private keys therein with the military-grade AES-256 bit encryption technology. The two are also never stored on the Mycelium servers.

It does not collect private data: Mycelium further commits to not collect sensitive personal information from its product consumers. It will only obtain your bitcoin address, location, nickname, and trade history while promising not to share it with any third parties.

Currencies supported

Mycelium is a bitcoin wallet and will, therefore, only support the legacy cryptocurrency. 

Integration with different third party services and the introduction of the Mycelium Local Trader have nevertheless made it possible for Mycelium users to exchange Bitcoins for fiat currencies like USD and Euro. If you want access to a huge number of currencies without losing access to your Mycelium wallet, consider integrating it with such hardware wallets as Ledger Nano and Trezor that support 1000+ crypto coins and tokens.

Mycelium wallet cost and other fees

You won’t be charged to download, install, and interact with the Mycelium bitcoin wallet. A transaction fee of between $2 and $7, however, applies every time you send bitcoins or seek to exchange your coins with fiat currency. The fee varies depending on the size of the transaction.

Setting up the Mycelium wallet:

How to install Mycelium one wallet:

Step 1: Download the Mycelium bitcoin wallet from the Google playstore for android users or the App Store for iOS smartphones and proceed to install the App.

Step 2: After the installation, open the wallet and select the “Create New Wallet.”

Step 3: The first step in creating a wallet is setting your PIN. This will be required for all future logins, memorize it.

Step 4: After confirming the PIN code, the wallet will provide you with the recovery seed made of 12 random words. Write them down on a piece of paper and keep it safe.

Step 5: You are now set and can start sending and receiving bitcoins or transacting in the Mycelium local trader.

Sending and receiving coins:

To receive funds into your Mycelium bitcoin wallet:

Step 1: Log in to your Mycelium bitcoin wallet and select receive bitcoins

Step 2: The page will display a QR code and your bitcoin address.

Step 3: Have the sender scan the code or send them the address.

To send payments from your Mycelium bitcoin wallet:

Step 1: Log in to your Mycelium bitcoin account and select the SEND option under the BALANCE tab of the wallet

Step 2: Paste the receiver’s bitcoin address you had copied to the clipboard or type it manually.

Step 3: Choose the currency – Bitcoin, USD, EUR – you wish to send and enter the amount

Step 4: Confirm the details authorize the payout using the PIN code.

Mycelium hardware wallet pros and cons:

Pros:

  • Mycelium presents its users with a wide range of features that ease its use.
  • Its open-sourced code has been vetted vigorously to seal all security loopholes.
  • One of the few wallets with an independent fiat-to-crypto exchange
  • Integrates with several third-party service providers
  • Compatible with popular hardware wallets

Cons:

  • The mobile wallet isn’t as secure as hardware wallets that store private keys offline.
  • Will only support bitcoin cryptocurrency.
  • Bitcoin investigators can use the information the wallet collects to reverse-trace a transaction.
  • Mycelium is a hot wallet and not immune to hacking, phishing, and malware corruption threats.

Mycelium wallet compared to competitors:

Mycelium may be referred to as the default bitcoin wallet, but recent years have seen the offshoot of several smartphone crypto wallets like Jazz and Cryptonator. Unlike the two, Mycelium is open source, which gives an upper edge when it comes to the security and integrity of the mobile wallet. The two, however, take advantage of Mycelium’s rigid approach to the crypto market by supporting multiple digital currencies as Mycelium sticks to Bitcoin. One may also consider the Jazz wallet’s user interface quite friendlier. 

Upcoming ‘massive upgrades’

On their website, Mycelium argues that while their wallet has, for the longest time, been a great tool for Bitcoin users, its time to share this goodness with everyone else. To make this possible they have come up with a raft of proposed upgrades to the bitcoin wallet including:

  • Integrating inexpensive remitters
  • Introducing wallet-linked and in-wallet-issued debit cards
  • Escrow protected bets and transactions.
  • More efficient hedging and investment portfolios

Customer support:

Mycelium’s customer support starts with a relatively expanded FAQ page on their website. Wallet users can also ask for assistance by opening a support ticket or contacting them on the different Mycelium social media pages. Mycelium, however, doesn’t offer phone support.

Verdict: Does Mycelium live to its reputation?

Despite the entry of numerous smartphone-based crypto wallets into the play, Mycelium remains one of the most popular. Some of the factors giving it a competitive advantage include its ease of use, inexpensive transaction fees, and a proven track record of keeping client private keys secure. While we fault its decision to stick to bitcoin transactions despite there being over 1000 cryptocurrencies today, we still believe that it is worth having.

Categories
Cryptocurrencies

MyEther Wallet Review 2020: Features, Fees & Ease Of Use

On their website, MyEther refers to their web-based wallet as ‘Ethereum’s Original Wallet,’ specially designed to help individuals keep their private keys safe and interact with the Ethereum blockchain. Commonly referred to as the MEW Wallet, the open-sourced platform was designed to help crypto investors and traders manage their Ethereum and ERC-20 tokens. And despite the fact that it is a hot web-based wallet, it continues to enjoy massive popularity within the crypto community.

In this MyEther Wallet review, we will be seeking answers to what draws crypto users to the wallet. We will vet the crypto wallet’s features, security, cost, and ease of use before telling you if it is fit for use.

MyEther Wallet Key features

Web-based: MyEther Wallet is a hot, online-based crypto wallet that stores your private keys in your PC, mobile app, or offline in a USB Drive.

Launched a mobile app: MyEther wallet recently launched a mobile application for both Android and iOS users, dubbed MEWconnect. It has all the features and benefits of the MyEther app, with the added advantage of being available on the move.

Access to Ethereum blockchain: Unlike most crypto wallets that will only give you access to a storage unit for your digital assets, MyEther gives you access to the Ethereum blockchain network. You can also use the app to exchange Ethereum based coins and interact with all the network features like smart contracts, Decentralized apps, and ENS as well as sign and verify messages.

Compatible with hardware wallet: MyEther crypto wallet will also integrate with all popular hardware wallets like Ledger Nano, Trezor, and KeepKey. This not only adds an extra layer of security to the company but also makes it possible for you to hold more than just the Ethereum based coins and tokens.

Offline transactions: The MyEther crypto wallet is unique in the sense that it is available for offline transactions. You do not need to be online to send or receive different coins and wallets to the wallet.

Save private keys offline: Since its establishment, MyEther crypto wallet has undergone several operational and security adjustments. One of these is the ability to store private keys offline. Instead of maintaining your private keys over the cloud, you can now save them offline in a flash disk or written in a piece of paper.

Compatible with popular browsers: MyEther wallet is also compatible with all the popular browsers, including Firefox, Chrome, and Brave. You can access your ether wallet via MyEther wallet website or the different browser extensions.

Compatible with exchanges: You can also integrate the MyEther wallet with different crypto exchanges, including Changelly, that allow you to buy and sell your digital assets for other crypto or fiat currencies.

Security features

Password protection: Like most other online and offline crypto wallet, MyEther has a password as the foremost form deterrence against authorized access to the private keys stored therein. You will need to set this password during the wallet installation and activation stage.

Recovery Keystore: In addition to the password is yet another security layer that – the Keystore recovery seed. It’s a set of words generated by the wallet during setup, and it comes in handy should you forget your password.

Open-sourced technology: MyEther has open-sourced the technology used to develop this crypto wallet. This has encouraged cryptocurrency and bitcoin enthusiasts to vet it exhaustively and come up with security improvement recommendations that have helped make it one of the most secure web-based wallets.

Highly encrypted: MyEther wallet further encrypts the private keys and addresses stored in your crypto wallet as well as its associated passwords. This keeps the private keys stored therein safe from malware.

Does not collect private data: In yet another privacy approach, MyEther crypto wallet collects no more of your personal information than is necessary. The crypto wallet company further provides its clients with the assurance of not sharing this data with third parties.

Currencies supported

MyEther is an Ethereum wallet that will only support Ethereum, Ethereum Classic, and ERC 20 coins and tokens. Its compatibility with numerous hardware wallets like Ledger Nano and Trezor that support 1000s of coins has, however, expanded the wallet’s currency support exponentially.

MyEtherWallet wallet cost and other fees

You will not be charged a fee for downloading, installing, and interacting with MyEther wallet or the MEWconnect smartphone app.

MyEther is also one of the few crypto wallets that won’t impose fees for cryptocurrency transactions conducted within its platform. You will only have to pay negligible fees that go straight to Eth miners and not the platform itself.

The minimum fee for a transaction is usually 0.000441 Ether, but you can always choose custom fees if you wish to have your transaction processed in the shortest time possible. For acceptance into the next block, you pay 40 GWEI, acceptance into the next few blocks costs 20 GWEI, while acceptance within the next few minutes costs 2 GWEI.

*Note: 1,000,000 GWEI = 0.001 ETH

Setting up the MyEther Wallet :

How to install MyEther Wallet:

Step 1: Start by accessing the MyEther crypto wallet website and selecting the create new wallet option.

Step 2: On the next page, you will find a small tutorial on how to engage with the MyEther wallet. You can view the tutorial or simply skip.

Step 3: Next is the create a new wallet page that gives you the option of creating the wallet online or via the smartphone app.

Step 4: If you choose to create an account online, you first need to create and verify your wallet password before generating the recovery seed. If you chose the MEWconnect smartphone app, you have to start by downloading the app from the MyEther website, proceed to create a password, after which the app will provide you with the recovery seed.

Step 5: Save your recovery seed to your PC or USB

Sending and receiving coins:

To Send tokens from your MyEther Wallet:

Step 1: Open the web-based wallet account and click “Send Ether &Tokens.”

Step 2: Choose the payment account i.e., your private keys or connected hardware wallets

Step 3: Paste the wallet address, number of tokens you wish to send, and GAS.

Step 4: Click ‘Generate Transaction,” confirm recipient details and verify the transaction.

To receive payments into your MyEther Wallet:

Step 1: Log into your MyEther wallet.

Step 2: Click on the “Receive Ether & Tokens” tab to get your receiving address.

Step 3: Send the address to whoever is sending you the coins

Step 4: Receive Ether and supported ERC 20 tokens from

MyEther Wallet pros and cons

Pros:

  • Its open-source protocol keeps it highly secure and ahead of the competition.
  • The wallet is compatible with most hardware wallets, including Trezor and Ledger Nano.
  • The wallet supports both online and offline transactions.
  • New privacy settings make it possible to store your wallet’s recovery phrase heavily encrypted offline on PC or USB disk.
  • MyEther wallet is also compatible with such exchanges as Changelly making the transfer of funds and currency conversions relatively easy.

Cons:

  • MyEther is a hot wallet, and this exposes it to possible hacking and phishing attacks.
  • One may consider the MyEther app relatively complicated to set up and use
  • Will only support Ethereum and ER20 tokens, leaving behind popular currencies like Bitcoin.
  • The web-based wallet isn’t as secure and hard to breach as the hardware wallets.

MyEther Wallet compared to competitors:

MyEther ranks fairly when compared to such other online wallets as Coinbase and eToro. These two are exchange linked and have two key advantages over MyEther. First, they are exchange linked and therefore expose the trader to more trade and investment opportunities. Secondly, they support all the popular coins and currencies and even host initial coin offerings. Unlike the two, however, MyEther wallet’s protocol is open source, making it safer and more secure, plus it also has both online and offline transaction processing features.

Customer support:

MyEther has an elaborate and detailed FAQ page, as well as tutorial videos that explain how the site works in detail. Their website is also available in both English and Russian languages. They also have a live chat tool on the website and are easily accessible the different social media platforms.

Verdict: Does MyEtherWallet live to its reputation?

MyEther Wallet is one of the safest and most versatile web-based Ethereum blockchain wallets available today. Some of its key strengths lie in its compatibility with several hardware wallets that complement its security and the number of cryptos and tokens it can support. It also is one of the few crypto wallets with a companion smartphone app, both of which give you access to not just the wallet but the Ethereum blockchain. It, therefore, is our opinion that while its online nature puts it at a higher risk of hacking and phishing attacks than hardware wallets, it still is a reputable wallet and fit for beginners and active traders looking for a wallet that allows for fast transaction processing.

Categories
Crypto Daily Topic

Coronacoin: the Crypto that Lets You Bet on Death

As if Coronavirus was not enough for the world to grapple with, some crypto developers have now created a cryptocurrency that will allow investors to reap from infections and fatalities from the pandemic. On its website, the token brazenly declares itself “the world’s first crypto-backed by proof of death.”

The strange cryptocurrency lets people bet on the pandemic by earning profits, the more the virus spreads, and the more people die from it. The more this happens, the more valuable the coin becomes, increasing its demand.

The cryptocurrency calls itself NCOV, and it’s an ERC20 token. Its total supply is 7,604,953,650 – a figure that chillingly represents the world’s total population. According to the website, the coins will be burnt every 48 hours according to how many new infections and deaths have occurred since the last burn. The coin hopes to be deflationary using this strategy. As per the website, 298, 308 tokens have been burned as of March 23, 2020.

According to Reuters, the coin is created by seven developers – a majority based in Europe, and still, more are to come on board.

Saving Grace

Perhaps in a bid to redeem its image, the team is marketing the coin as “2019-nCoV relief effort.” On the website they claim that 20% of the supply will be donated monthly to the Red Cross. “We plan to gradually trade the 20% total supply for ETH over time and donate it. We also plan to increase the amount donated at once over time as trading starts to increase.” As proof that they are actually donating, the team provides the public address of the donation wallet on Etherscan.

Trading Coronacoin

With new Corona infections rising rapidly, the tokens are burning fast. “Some people speculate a large portion of the supply will be burned due to the spread of the virus, so they invest,” Sunny Kemp, a user who also identified himself as one of the developers, told Reuters. Responding to criticism that the project is a macabre gimmick, Kemp said, “There are currently active pandemic bonds issued by the World Health Organization. How is that different?”

The coin is being traded on the Saturn Network – an equally dubious platform, where it makes up nearly 60% of the exchange’s paltry volume. Decrypt, a crypto news and analysis website investigated the exchange and found that it falls short of common crypto exchange standards. Some of the grievances are that the exchange’s website is “stupidly slow,” with an “absolutely putrid user interface” and a “lamentable” user experience.  Decrypt also casts doubt on how decentralized the exchange truly is.

For interested investors, you need to get a MetaMask wallet and sign up at Saturn Exchange.

Raising Awareness?

According to Decrypt, Kemp claims that the project intends to create awareness of the pandemic. “We intend to launch tip bots so people can spread Coronavirus on social media. This will help build public awareness.” He also claimed that Coronatoken was “in talks with a biochemist who is working to develop drugs to fight the virus. These are the kinds of partnerships we want to build.”

Asked why build a cryptocurrency instead of regular fundraising, the team said they thought, “this would be a good way to raise awareness in a unique and interesting way.” About the probability of people falsely reporting new Corona incidences or encourage its spread, the team responded that they “recognize that aspect of the project. We would never advocate for anyone to do such a thing, obviously. It would be morally and probably legally wrong. We believe Corona token holders are responsible.”

Criticism

On Reddit, where the coin was first announced, many users were not thrilled with the idea. Only one user was impressed, commenting, “Thanks for the airdrops. I hope you can bring awareness to the spread of the virus, so people are prepared. The media is covering up what is really going on.”

Other Redditors criticized the project.

“Frankly, this is amoral,” said one.

“Tasteless,” offered another.

“Disgusting,” commented one more.

“This is why we can’t have nice things,” submitted another.

“You should be ashamed. I feel sorry for you and the rest of the team who play on people’s lives,” rebuked another.

Rising Pandemic

Coronavirus, now called COVID-19, is a novel type of virus that causes respiratory illness. As of March 23, 2020, at least 339, 000 people have contracted the infection, and more than 14,700 have died, according to a tally by Johns Hopkins University.

The virus was first identified in Wuhan, a city in China, in December 2019. The exact origin of the disease has not been identified, though it is suspected that it originated from a seafood market in the city.

The virus has spread to at least 177 countries and territories, prompting states to implement lockdowns to stem its spread.

Finance markets have taken a beating as a result of the virus, prompting fears of a global coronavirus recession.

What do you think of Coronacoin? Is it a creative way to raise awareness, or is it a brazen joke taken too far?

Categories
Cryptocurrencies

What Determines The Price Of One Bitcoin?

Bitcoin is the most dominant cryptocurrency out of the thousands that exist today. It is the largest in market cap, and it pretty much influences investor sentiment about the rest of the cryptocurrencies. Bitcoin was created by a mysterious developer with the pseudonym Satoshi Nakamoto. 

Bitcoin transactions i.e., buying, transferring, spending of bitcoins, are recorded on a public blockchain. Its transactions are pseudonymous, that is, a user’s personal credentials are not publicly displayed, but their public address/key is. This public address can be used to trace the owner of a transaction if need be.

Unlike conventional currency, Bitcoin is not issued by a central bank or rallied by the state. As such, monetary policies, interest rates, inflation, and so on do not apply to Bitcoin. 

Curious Bitcoin investors may thus be gnawed by this question:

What is it that determines the price of Bitcoin?

Several factors determine its valuation, and we’ll look at each below: 

Supply and Demand

Before we look at the supply and demand of Bitcoin, we need to look at what partially determines the supply and demand of fiat currency. Actions like adjusting the discount rate, Lowering or raising the reserve ratio, and so on can impact a country’s currency exchange rate.

Now the supply of Bitcoin is determined by other factors. To begin with, new bitcoins are generated at a fixed rate through a process known as mining. Mining involves verifying and confirming blocks of transactions and adding those transactions on the blockchain. The Bitcoin protocol is designed in a manner that the coins released into circulation will reduce over time. For instance, coins were generated at a rate of 6.9% in 2016, and this reduced to 4.4% in 2017 and to 4.0% in 2018. As fewer coins are released, demand increases. Demand being higher than supply will result in the price going up. 

Secondly, the supply of Bitcoin may be determined by the number of coins the system is programmed to allow. Bitcoin’s supply is capped at 21 million. When this number of coins has been generated, mining will no longer create new coins. Already, Bitcoin’s supply has reached 18.1 million – this represents 86.2% of the crypto’s supply at that particular time. 

Once we reach 21 million coins, the price of Bitcoin will depend on several factors. For instance, will it be a practical currency, i.e., usable in day-to-day transactions? Will it be legally recognized? Will it be in demand – which will be determined by the demand for cryptocurrencies in general? The controlled generation of bitcoins will no longer have an impact on its price.

Competition

Bitcoin may be the most important and recognized cryptocurrency, but there are thousands more vying for the world’s attention. As of March 2020, Bitcoin is still leading the pack in terms of market capitalization – but other cryptocurrencies are giving it a run for its money. Some of them aim to outdo Bitcoin in one functionality or another – either by solving a problem that bitcoin cannot solve, or improving a certain functionality, or being more innovative. 

Cryptocurrencies such as Ethereum, EOS, Litecoin, Ripple, Tether, and Binance coin are some of its closest competitors. Besides, there are few barriers to entry into the crypto space, and new cryptocurrencies are constantly making the news. However, Bitcoin still maintains the highest visibility for any cryptocurrency. This gives it a certain clout and an edge over the competition. 

Cost of Production

Bitcoin is a virtual currency, but its production is not very different from other products that incur a real-life cost. Bitcoin is famous for consuming electricity, the equivalent of entire countries. Generation of new coins – or ‘mining’ involves miners solving complicated math problems – with the first miner to solve the puzzle being rewarded with bitcoins and a fraction of transaction fees. 

But Bitcoin, unlike other produced products, has an algorithm that allows only one block to be found every ten minutes. This means that the more miners in the network, the more difficult it is to find the answer to the puzzle. This means more energy is consumed in the process. 

It also means the more producers (miners) that join in the competition, the more the problem is difficult – and thus more expensive – to solve. Research has demonstrated that Bitcoin’s price is indeed tied to its cost of production.

Availability on Crypto Exchanges

Very much like how equity investors trade stocks and bonds over stock exchanges, crypto investors also trade crypto-currencies over cryptocurrency exchanges like Coinbase Bitfinex, Binance, Poloniex, Coinmama, Bitpanda, and so on. Also, just like the traditional exchanges, Crypto exchanges allow investors to trade crypto in pairs, e.g., Bitcoin/Ether (BTC/ETH). 

The more popular an exchange is, the more traders and investors it draws. This increases market liquidity for currencies listed on the exchange, increasing their demand. Also, since these exchanges operate in jurisdictions where they are regulated, the presence of, let’s say, Bitcoin, implies regulatory compliance, rendering Bitcoin a legitimate currency in the eyes of the public and potential investors. This matters because the legal standing of cryptocurrencies is currently sort of in a gray area.

Regulation and Legal Matters

Bitcoin and other cryptocurrencies have become so popular that regulators are not sure how to classify them. For example, the Securities and Exchange Commission (SEC) classifies the digital assets as Securities, while the US Commodity Futures Trading Commission (CFTC) classifies them as commodities. This confusion over what kind of assets cryptocurrencies are, as well as the tumble over which regulator gets to set the rules, creates uncertainty that impacts the value of cryptocurrencies. 

Also, the finance market is now witnessing the introduction of new financial products – such as exchange-traded funds futures and other derivatives that use Bitcoin as the underlying asset. 

This impacts the price of Bitcoin. First, it expands bitcoin’s access to investors who could not afford to buy it. This increases Bitcoin’s demand. Secondly, it can mitigate the volatility of Bitcoin, since institutional Bitcoin derivatives’ investors can use their massive resources and market influence to bet on which direction Bitcoin’s price will move.

Governance Stability (or lack of) and Forking 

Bitcoin is a decentralized and autonomous network – meaning it’s not governed by any single entity. As such, it relies on network participants to process transactions and protect the network. Any updates to the Bitcoin protocol are done only after consensus is reached, meaning issues take longer to resolve as opposed to a centralized system where decisions are made by those at the top and implemented as quickly as possible. This is frustrating for the community and might cause many people to invest in other cryptocurrencies.  

Bitcoin’s scalability issue is another problem. Any blockchain’s volume of transactions depends on the size of the block, and Bitcoin’s current 1MB block size severely limits the number of transactions that can be processed in one second. This wasn’t an issue before cryptocurrencies became hugely popular, but the slow transactions on Bitcoin might push people towards cryptocurrencies with a faster transaction time. 

Bitcoin enthusiasts have been at loggerheads over how to best increase the speed of transactions. This can be achieved via one of two types of software updates – which are called forks. Soft forks constitute rules or updates that do not permanently split the blockchain and result in a new cryptocurrency. Hard forks constitute a permanent split of the blockchain and, with it, the birth of a new cryptocurrency. The Bitcoin blockchain has previously undergone hard forks that resulted in Bitcoin Cash and Bitcoin Gold cryptocurrencies. 

Hard forks do not just split the blockchain; they also split the community. The Bitcoin Cash fork was particularly acrimonious. When events like these happen, they splinter a cryptocurrency’s user base, which is also the investor base. This can reduce demand for that cryptocurrency, lowering its price. It can also negatively affect investor sentiment, which has the same effect. 

Conclusion

Now that you know how the Bitcoin price comes to be, you’re better placed to know how certain events, either internal or external, to Bitcoin, affects its price. And while no one can accurately predict the exact price of the currency, at least you can foresee potential movements in its price long before it happens. This can help you know better decide if to buy or sell. 

Categories
Crypto Daily Topic

Myths about Blockchain and Cryptocurrencies

If there’s one space that’s rife with confusion, myths, untruths, and rumors, it’s the blockchain and crypto space. That’s because both technologies are still relatively young, and cryptocurrencies, in particular, confounds many with their explosive success and tenacity when many thought they were passing smoke.

Blockchain, on its part, has been touted as the panacea of many ills faced by the finance industry and businesses. Also, you’ll rarely hear its weaknesses mentioned, just the pros.

What are the facts, and what is fiction? Whether you’re an investor, an aspiring investor, or just watching from the sidelines, it’s important that you have a clear and realistic view of these technologies.

This piece debunks the most common myths about blockchain and cryptocurrencies.

1. Bitcoin Is Blockchain

Bitcoin is the first and most popular blockchain application. As such, many people confuse it with Bitcoin. Bitcoin is a cryptocurrency – the first-ever, introduced in 2009. It facilitates transactions in a peer-to-peer and decentralized environment. Transactions on the Bitcoin network do not need approval or supervision by a third party. Blockchain, on the other hand, is a distributed ledger that is stored in a cluster of computers. Blockchain records are secured by the use of cryptography.

2. Blockchain’s Only Application Is Cryptocurrency

It’s true that cryptocurrencies are the widest application of blockchain technology.  It’s also true that the two go together very well. But cryptocurrency is not the only use case for blockchain. Lots more industries can use blockchain and take advantage of its security, transparency, immutability, and so on. 

3. Crypto Transactions Are Anonymous

Lots of crypto users are under the impression that crypto transactions are anonymous.  In actual sense, transactions on public blockchains such as Bitcoin are recorded on the blockchain and can be traced to the owner. While your personally identifying credentials will not be published on the blockchain, your public address will.  Also, crypto exchanges are mandated by governments to identify users on their platform.

4. Blockchain Will Overhaul How Business Transactions Are Done

Blockchain is often touted as the technology that will change how businesses conduct, record, and manage transactions. But in some instances, blockchain might be more process-intensive, difficult to scale, and take more confirmation time than current methods. Blockchain is only necessary if there is a need for ultra-secure verification and immutability of records.

5. Cryptocurrencies are Volatile, So Blockchain Cannot Be Reliable

Since many people still get cryptocurrency and blockchain mixed up, there is a misconception that with cryptocurrencies being so volatile, blockchain must not be credible. But the behavior of cryptocurrencies has nothing to do with blockchain, their underlying technology.

6. Cryptocurrencies Are Best For Illegal Activity

Cryptocurrencies have two special features, decentralization and privacy. These are very attractive features for criminals.  But they are also attractive features for law-abiding people who wish to invest in them, and citizens of politically or economically unstable countries. If your country’s economy has the possibility of destabilizing or your assets are at the risk of being frozen by a tyrannical government, cryptocurrencies might come as a very handy choice.

7. Blockchain Technology Can Be the Backbone of a Global Economy

No entity, either private or public, owns or regulates the blockchain. For this reason, Bitcoin proponents hope private blockchains can support cryptocurrencies for varied use across sectors. The reality is that current blockchains are still too small to support a global scale of financial operations.

8. Digital Tokens Are Digital Coins

Many people still use these terms interchangeably.  But the two are fundamentally different concepts. Digital coins have only one utility. They also act as a store of value, much like fiat, and are also used to access the services of a blockchain. Examples are Bitcoin and Ether for the Bitcoin and Ethereum blockchains, respectively. 

Tokens, for their part, store complex kinds of value such as property, stock, art, utility, and so on. In other words, they represent ownership of real-life assets. Tokens are hosted by a blockchain such as Ethereum and are issued via an Initial Coin Offering (ICO).

9. There Is Only One Type of Blockchain 

Many non-blockchain insiders think that there is only one type of blockchain.  In truth, there are three types of blockchain: 

Public blockchains: these are open-source blockchains on which anyone anywhere can participate.  Anyone can read, write, audit, or review anything on the blockchain. 

Private blockchains:  these blockchains are only accessible to participants who have been authorized to do so. Also, only authorized people can record transactions.

Consortium blockchains: These are blockchains that are governed by a group of companies – usually in the same industry – who come together to share insights and make decisions that benefit them and industry.

10. Blockchain Records Are Immune to Hacking or Alteration

One of blockchain’s main selling points is its immutability of records and its unimpeachable security. Many people often think this means blockchains are utterly insecure from attacks. But no system can be 100% tamper-proof or secure. In the case of blockchain, the more distributed it is, the most secure it is considered to be. This is because its distribution eliminates a single point of failure in the sense that even if one node fails, other nodes will continue running the network.

Also, blockchains are vulnerable to bugs in the code, loopholes in smart contracts, and other ways through which bad actors can exploit them.

11. Blockchain Technology Is Only Applicable In Finance

This misconception arises from the fact that blockchain was first applied to cryptocurrencies – which are in the finance sphere and which have impacted it directly. However, blockchain has numerous other applications.  It can be used in real estate, supply chain, healthcare, identity, music, and many other areas.

12. Blockchain Is Trustless

One of the most bandied-about words in the blockchain space is ‘trustless.’  The truth is that even blockchain requires a degree of trust. Blockchain does not completely eliminate the need for trust; it only reduces it. A certain degree of trust is placed on the underlying cryptography of public blockchains, as it is placed in the validators of permissioned ones. Blockchain, at best, is ‘trust-minimizing.’

13. Blockchain Is a ‘Truth Machine’ 

Blockchain is very good for transferring data that is native to the respective blockchain.  However, for non-native data, “garbage in garbage out” still applies to blockchain. This is because blockchain cannot determine whether data from external sources is accurate or not. If such data is inaccurate, blockchain will just treat it as it would any other input, after certain conditions are met.

14. Cryptocurrencies Are A Quick Route to Riches

There is a persistent idea that cryptocurrencies can make you rich overnight. Indeed, early crypto investors made huge gains in the most the bullish year 2017. But we’re yet to see another bullish year such as 2017, and with the hard-to-predict nature of cryptocurrencies, it’s hard to know when another crypto boom will occur. 

Cryptocurrencies are certainly thrilling to invest in, but they are not a one-way ticket to riches and glory. As with any investment, it’s prudent you do your research before investing, as well as diversify your investment portfolio across different assets to spread risk.

15. Cryptocurrencies Do Not Have Value

Several factors have contributed to the notion that cryptocurrencies do not have any intrinsic value or that they are a fad that will go away.  For one, the asset class has proven difficult to classify. Many countries are still at a loss on how to classify them for tax purposes. On their part, investors are not sure how to treat them in regard to taxation or even for everyday use. 

In actuality, cryptocurrencies only become bigger, and their very own infrastructure, e.g., worldwide distribution, sets them up for the long haul. And just like any other currencies, cryptocurrencies can be used as a medium of exchange, and they also possess the value that is attributed to them by users.

16. Cryptocurrencies Are Not Secure

As cryptocurrencies have become more popular, they have become targets of scammers, hackers, and thieves. The majority of insecurity incidents happened at cryptocurrency exchanges, while in other cases, malicious actors exploited vulnerabilities in wallets and other aspects. For these reasons, potential investors might worry about investing in this type of asset. 

But they should also know that yes, cryptocurrencies are possible targets for theft and fraud, but they can also safeguard their crypto holdings by exercising caution. Some cautious behavior includes storing large amounts of crypto holdings in cold wallets, not accessing their online wallets via public Wi-Fi, enabling two-factor authentication, and always storing their crypto funds in safe exchanges.

17. Cryptocurrencies Are a Scam

There is the notion in some quarters that cryptocurrencies are a scam. Of course, some greedy elements have set out to take advantage of people’s interest in cryptocurrency by offering fake ICOs, creating Ponzi schemes, creating fake exchanges and wallets, and so on. 

Very much like how fraud exists in the traditional finance landscape, it also does in the digital currency world. Wise investors, however, do not rush in to every investment opportunity blindly. Instead, they take their time to research every potential investment opportunity, carry out due diligence on any crypto exchange or wallet, and so on.

Final Thoughts

Either people have a starry-eyed view of blockchain and cryptocurrencies, or they think very lowly of them based on rumors. The truth is more in between. There is no perfect technology, and while blockchain and crypto are certainly revolutionary, they have their limitations. In the same measure, they are not overhyped technologies that are only good for criminals, and they are not going to make you rich overnight. Always DYOR (do your own research) with regards to everything blockchain and crypto.

Categories
Cryptocurrencies

What Is The Impact Of Cryptocurrencies On The Environment?

Cryptocurrencies came, saw, and disrupted the financial space – despite many predictions about their impending doom. They were labeled as a fad and as tools for enabling criminal activities.  But in a rally led by Bitcoin, cryptocurrencies have established themselves as legitimate and a force to be reckoned with in the finance space. 

However, digital assets still face criticism. One withering take was by Agustin Carstens, General Manager of the Bank of International Settlements, who called Bitcoin a combination of a bubble, a Ponzi scheme, and an environmental disaster.  

While the first two indictments are flat-out untrue, the third one deserves a closer inspection. Serious questions have been raised about the impact cryptocurrencies wield on the environment. 

Are cryptocurrencies power-hogging monsters, or is it a hollow indictment?

Cryptomining and More

The vast majority of cryptocurrencies have taken the model of Bitcoin, the first and the most successful cryptocurrency.  Bitcoin is a decentralized token, meaning it is not controlled or regulated by any bank or government. Instead, new coins are generated via ‘mining,’ a process in which computers across the globe solve complicated mathematical puzzles and earn some coins or a fraction of the transaction fees as a reward. 

The Bitcoin network is supported by blockchain technology – which includes a publicly distributed ledger that maintains a record of all transactions.  Transactions are in the form of blocks, which in turn are linked together and secured using cryptography. All records on the blockchain are shared across all users on the network – no matter where they are.

Cryptocurrency proponents content that the asset provides a unique alternative to the current financial system due to its cryptographically secured and anonymized infrastructure.  However, alarm bells have been ringing over the massive amounts of energy that goes into maintaining and generating new crypto coins.  

In a research by Digiconomists – a cryptocurrencies analysis site, titled “Bitcoin Energy Consumption Index,” Bitcoin used 32 terawatts of energy annually.  This energy could support nearly 3 million US households. Bitcoin also consumed more energy than Visa uses to process billions of transactions in a year. According to the site, the energy that Visa uses can power just 50, 000 US households.

Another concern has been that as cryptocurrencies gain more popularity, and their value increases, they require even more energy. For example, as Bitcoin increases in value, the computational puzzles become more difficult to solve, hence requiring more energy.

Cryptocurrencies and Fossil Fuels

The conversation about cryptocurrencies and the environment has taken another turn.  Environmentalists are concerned that cryptocurrencies are slowing down the effort to extract ourselves from the fossil fuels rabbit hole.

The vast amount of Bitcoin mining happens in China, where mining companies have set up huge mining operations in rural areas that have low-cost land and electricity.  Researchers from the University of Cambridge have called attention to the fact that much of the electricity being consumed in the mining rigs comes from abandoned coal-based power plants. 

Digiconomist also noted that the energy used by one Bitcoin mine in Inner Mongolia is equivalent to the energy required to fly a Boeing 747.

If you have been paying attention to the news, you must have noticed that burning coal and other fossil fuels massively contributes to the global carbon dioxide footprint, intensifying climate change.

What Do Miners Say?

Crypto miners have taken a defensive stance in the whole debate. They argue that crypto mining’s impact on the environment is nothing compared to that of physically extracting oil and other natural resources. 

Other miners have taken up more environmental-friendly strategies for their mining operations. An example is Vienna-based Hydrominer, a mining company that uses renewable hydroelectric power. The company’s co-founder, Nadine Damblon, however, thinks that the conversation is overblown. “Basically, we see an old argument here. People used to say that the streets would no longer be usable because they would be covered in horse manure -not long ago they said Google search engine would use up all the world’s energy.” 

She opines that as cryptocurrency evolves and develops, so will more energy-efficient technology be discovered. For her part, she’s already taken a step to employ a more eco-friendly mining process.

What Is Our Current Environmental Impact?

It’s fair to say that the impact of cryptocurrencies on the environment have been grossly exaggerated, especially when you compare it to how the current banking system consumes energy. 

In a 2014 study, Hass McCook, a bitcoin enthusiast, argued strongly for Bitcoin, stating: “Widely available public information strongly refutes claims that bitcoin is unsustainable, and shows that the social, environmental and economic impacts are a minuscule fraction of the impact that the legacy wealth and monetary system have on our society and environment.”

Right now, these are some of the biggest energy consumers in the current banking system: 

  •         24/7 server operations
  •         24/7 office towers 
  •         Cost of running ATM machines 
  •         Card readers 
  •         Data centers 
  •         Cost of running banks such as computer costs, air conditioning, and so on 

It’s worth noting that this list is by no means exhaustive. The use of a much more efficient system, cryptocurrency, would eliminate most of these and other hidden costs.

Who is Right?

Between overly conscious environmentalists and defensive miners, who is right in this debate? First of all, it’s important to note that although crypto mining gobbles up massive energy, analysts have not really arrived at a conclusion on the exact figures. 

Also, some people argue that the benefits of cryptocurrencies, including operational efficiency and their deflationary nature, outweighs the environmental toll.

A thorny issue in this debate has been the difficulty involved in trying to measure the exact environmental impact. This is partly because most currencies are either anonymous or have a degree of anonymity – making it difficult to generate a reasonable estimate of the energy they actually use.

But one analyst believes that the figures bode ill. Alex de Fries, a Bitcoin analyst, suggested in January 2018 that even the most energy-efficient mining Rings would still consume about 13 terawatts in total.  He said that that is the amount of energy that Slovenia uses. He painted a possible scenario where the machines in use are not as efficient as possible – in which case the energy used would be much higher – and even multiply as more miners jump into the bandwagon. 

De Vries’ view on the issue is largely uncompromising, suggesting that we don’t even need Bitcoin in the first place. “We are basically consuming thousands of times more energy for something we can already do at the moment. We can already do transactions, we don’t have to use Bitcoin if we trust our current system. I don’t see how Bitcoin justifies its energy use at the moment, given that most people do have a certain level of confidence in the current system.”

Closing Thoughts

Do cryptocurrencies pose a threat to the environment, or is the issue greatly exaggerated? As we have seen, the legacy banking system is not exactly as pure as snow. Cryptocurrencies present a safer, more trusted, and a faster way to conduct transactions.  They are disruptive, no doubt, but that does not mean that they are evil. And as the technology continues to evolve, more energy-efficient means will most certainly be adopted.

As for now, it can be said that the whole fuss about how cryptocurrencies are harming the environment is a lot of ado about little. This doesn’t mean that the crypto industry is exempt from environmental responsibility; it will have to come up with more environmentally conscious mining processes.

Categories
Crypto Daily Topic

How to Build a Long-term Cryptocurrency Portfolio

Historical data shows that the crypto market has returned over 900% since 2017. Of course, the journey hasn’t been all smooth, as evident from the often unprecedented dip and high trends of the market. But in the long haul, its valuation has been increasing as more investors join the trade. 

With this in mind, the idea of targeting long-term gains is more appealing than chasing short-term profits, which are often not as much as the former. 

While investing in the long-term promises greater returns, it should be noted that the method requires patience and keeping your emotions under check in all market tides. To achieve this, you should only invest an amount that you can live without; so no matter what happens, you won’t have the urge to sell your cryptos to sustain yourself. Also, having a cushion to fall back on will prevent you from panic-selling. 

Why Should you Consider long-term Crypto Investment? 

Foregoing the short-term profits in favor of long-term gains is not only highly rewarding but also less risky. As such, you don’t have to worry about missing out on leveraging into a position or timing the market.  

Day trading/short-term investment is characterized by numerous transactions whose fees can quickly accumulate and eat into your profits. But when investing in the long-term, all you have to do is pick a few cryptocurrencies and then wait. This helps reduce the number of transactions, saving you the fees that come with active trading. 

Indicators of Long-term Value

Building a long-term portfolio boils down to the type of digital currencies you invest in. With over a thousand cryptocurrencies in the market, it can be overwhelming to choose one that pays off in the long run. Here are a few factors to consider when choosing cryptocurrencies for your long-term life portfolio: 

1) Market Cap

Generally, the market cap of a digital coin is its trading price multiplied by its circulating supply. Usually, cryptos with a higher market price are less volatile compared to those with a lower market cap. 

Large market cap coins like Bitcoin and Ethereum dominate the crypto market, which is an indication of their long-term viability. Even in bear markets, these coins tend to weather the storm and keep their value relatively higher. 

At the same time, it doesn’t mean that you shouldn’t invest in cryptos with a lower market capitalization. In fact, such coins may eventually outdo the dominant coins in terms of returns since they are still in the budding stage.

However, the lower-cap cryptos tend to be risky since not all of them grow exponentially as anticipated, with some even being fraud projects. As such, it makes sense to scrutinize the viability of lower-market cap coins before investing in one. 

Besides their potential to offer great returns, coins with a lower market cap are an ideal diversification tool. Rather than allocating all your funds to the dominant coins, you may consider allocating a certain percentage to the lower-market cap coins. But first, you need to assess your risk tolerance. In this case, if you are a conservative investor, allocate a higher percentage of your funds to coins with a higher market cap, and the vice versa is true. 

2) Utility Value

The true measure of a coin’s ability to survive for long in the market is whether it has a real-world user base or a concrete project backing it up. 

A coin’s utility value can be determined by its user base. For instance, Bitcoin has the largest number of users in the crypto market, thus holds more utility value compared to a less used digital coin. In the case of ETH, the coin derives its value from the Ethereum blockchain, which allows developers to build decentralized apps. Other cryptocurrencies with real-world use include Stellar, Ripple, and WanChain.

Other worthy considerations to help you determine a coin’s value include its governance and market opportunity. In this case, a coin’s governance means a solid framework regulating its supply, for instance, the mining process of the coin. Market opportunity, on the other hand, refers to a coin’s ability to provide a solution to the problem it intends to solve. 

3) Industry

The industry in which a coin is tied to not only predicts its long-term growth but also offers an opportunity to spread your risk. Apart from Bitcoin, most of the cryptocurrencies are designed to offer solutions to a particular industry. For instance, Vechain and Waltonchain intend to improve the supply chain industry. If, from your analysis, you believe that the two coins will steadily increase in value, you may consider investing additional capital in them. 

You can also spread your investment across other coins linked to the computing, networking, and financial industries to achieve a diversified portfolio. 

Don’t Be Too Rigid 

Now that you understand the essential steps in building a long-term portfolio don’t confine your earning potential to the structure of your portfolio. This means that you don’t have to completely stay away from short-term profits. When you spot a rising trend early enough, be sure to sell part of holdings to make a profit. 

It’s easy to be carried away by the quick profit to the point of disrupting your long-term portfolio. For this reason, you may consider adding a few low priced coins in your portfolio. These coins tend to offer better short-term gains, especially in a bullish market. Most importantly, adding them into your portfolio means that you won’t have to sell your long-term holdings in pursuit of the quick rewards. As such, you won’t compromise your long-term goal. 

Conclusion 

While the above tips will help you build a long-term portfolio, you should note that the crypto-market is highly volatile. To keep up with the trends, it demands that you regularly track and rebalance your portfolio in line with your objectives. Also, it’s a good idea to keep tabs on market events such as government laws in your jurisdiction regarding cryptocurrencies. These events usually have an impact on price movements. 

Categories
Cryptocurrencies

Why you Should Consider Staking Cryptocurrencies

The most popular way to make money in the crypto industry is trading or mining. But recently, the two methods are proving difficult due to unprecedented market trends and the high electric power consumption associated with mining. 

Unknown to many, you can earn passive income from owning and holding a digital currency in a wallet for a fixed period of time. It’s pretty much like saving money in a fixed deposit account. The longer the money stays in the account, the more interest you earn. What makes coin staking even more lucrative is the fact that you can reinvest your earned coin tokens to reap more returns. So, you don’t have to study complex price charts or try to time the market. You earn guaranteed income regardless of market highs and lows. 

How the Coin Staking Process Works

Cryptocurrency staking is derived from the “Proof-of-Stake” (POS) algorithm. See, in the case of Proof-of-Work, the creation of new blocks, as well as validation of transactions, relies on solving complex mathematical calculations. This process relies heavily on the mining power of a GPU/CPU, which is why it’s an expensive method. The higher the mining power, the more coins rewards a miner earns. 

Rather than using expensive mining hardware, POS validates transactions and generates new blocks using coins stored in a wallet (network nodes). It’s important to note that not every coin holder is chosen to validate a transaction. Usually, users who have staked significant amounts of coins stand a better chance of being chosen as the next validators. 

Alternatively, you may consider joining a staking pool to increase your chances of validating new blocks and earning coin rewards. Basically, a staking pool works by merging resources of several coin holders to form a stronger staking power. The block rewards are then shared proportionally to an individual’s contribution. 

Advantages and Disadvantages of Coin Staking

In addition to being a more energy-efficient way of earning more coins, crypto staking also offers a wide range of benefits, including: 

☑️Protected Value

The coins mined using computational power risk losing their value over time due to the use of the mining hardware and ASIC. On the other hand, coins earned through staking do not increase or appreciate in value with time. Their value can only fluctuate with the market trends. 

☑️Reduces Centralization Risk

Coin staking eliminates the need for owning expensive mining equipment and other entry barriers such as the technical know-how and knowledge of the market patterns. This is especially the case with staking pools where the entry requirements are relatively low. As such, it offers an opportunity for more investors to join the network, thereby decentralizing its control. 

☑️Enhanced Security

Besides staking cryptos on an online wallet, there are a couple of blockchain networks that allow investors to stake coins in their cold wallets. This method is commonly known as cold staking, and it goes a long way into securing your earnings. Cold staking is particularly useful to stakeholders with large amounts of coins that would otherwise be susceptible to theft if stored in an online wallet.

☑️Reduces the Chance of a 51% Attack

The 51% attack is a common problem in the Proof-of-Work algorithm, where coin rewards are earned through mining. The attack refers to a case whereby a user or group of users controlling the majority of the mining power end up monopolizing the creation of new blocks. As such, they prevent the small-scale miners from completing blocks, which in turn denies them coin rewards. Besides reversing transactions, such attacks also lead to the outflow of small-scale miners as well as a decline of the coin’s value. 

Thanks to the Proof-of-Stake improved architecture, it’s almost impossible for one party to earn extra profits and become the majority holder. Even in the event where a perpetrator succeeds in controlling the largest share, the community can coordinate a hard-fork and delete the offending validator’s holdings. As a result, the price of the coin may increase due to the supply crunch. 

The only drawback of staking cryptocurrencies is that you’ll need to lock them for a fixed period without using them. In a bullish market, locking your coins for long may not be a huge problem. The problem occurs in bearish market conditions, especially when the amount earned through staking is not enough to cover the price depreciation. As such, it makes sense to stake a specific amount of coins depending on your risk tolerance. 

How to Get Started Staking Cryptocurrencies

Staking cryptocurrencies may sound easy and straightforward in theory, but it actually demands a considerable degree of input if you’re to make any reasonable returns. 

i) Choose a Coin to Stake

Finding a good Proof-of-Stake coin requires extensive research of the crypto market. At first, you may easily be lured by POS coins offering the highest percentage of returns. Usually, such coins end up being saturated in the market, making it hard for your stakes to maintain their value. Also, due to their high supply in the market, these coins tend to require a huge financial investment for one to begin staking. 

An ideal POS coin strikes a good balance between returns and the initial investment required. This way, it’s able to maintain a steady value making it suitable for generating passive income rather than being a speculative investment. 

ii) Determine the Minimum Requirements

All POS coins have a minimum number of tokens required in order to begin staking. Dash, for instance, requires about 1000 DASH coins while ETH requires not less than 32 coins. This amount can be brought down to attainable limits by joining a staking pool. But you should be prepared to pay a certain percentage of your rewards to the pool provider as payment for the service. 

Alternatively, you can also invest in coins such as PIVX, NEO, and PART that don’t require a minimum investment amount. However, they don’t pay as well as their counterparts. 

iii) Hot or Cold Staking

For those coins that require staking in an online wallet, you’ll need around-the-clock connection to the internet. A standard computer might serve you just right, preferably one that consumes less power. Small single-board computers such as Raspberry pi and PocketBeagle can also get the job done and even save much more on power bills. 

Cold staking is the best alternative if you want to eliminate the power and internet bills entirely. Coins staked in a hardware wallet are also safer than those in a hot wallet. 

Conclusion

As market volatility and the high cost of mining continues to turn away investors, coin staking is finding its place as an alternative method of earning income from the crypto market. Most importantly, through its long-term approach, coin staking puts the crypto-space on the road to maturation as more investors welcome the idea of earning returns from staking. 

Categories
Crypto Daily Topic

The Future of Cryptocurrencies 

About 10 or 11 years ago, the world couldn’t have foreseen a new class of digital currencies that would threaten to upset the global financial order. As of now, cryptocurrencies are firmly the leading tradable asset – overtaking others that were since the beginning of trading. And a cryptocurrency that’s not even out yet – Libra, sent economic experts into a panic mode as they decried the influence it would have on the world’s finance system. 

While those are positive highlights, the cryptocurrency industry is encumbered by challenges that might curtail its mainstream success, at least in the short run. Also, crypto, as we know it now, is primarily driven by investor speculation and trading. We’re still far from the day when we can use it to pay for coffee in the drive-thru. 

So what is the future of cryptocurrencies? What developments are we likely to see in the space in the coming years? And the seemingly outdated but still relevant question: should you invest in cryptocurrencies? 

What is Cryptocurrency?

Cryptocurrency is an internet-based currency that uses cryptography to secure and facilitate transactions. Cryptocurrencies utilize blockchain technology to achieve decentralization, transparency, and immutability. Cryptocurrency came into life with the creation of Bitcoin in 2009. The crypto was a slow burner up until April 2013 when it peaked at $266 after surging ten times in February and March of that year. From then on, the media and the Investment community started taking notice. 

Bitcoin has gone on to achieve the record high of $20, 089, but like any other cryptocurrency, it is subject to wild price swings, and as such, a stable price for the crypto is very rare. Bitcoin’s success has inspired thousands of more cryptocurrencies – some falling by the wayside, others achieving remarkable success. Currently, there are more than 3000 cryptocurrencies in existence. And cryptocurrency has proven to be a formidable force in the trading and investment world, leading other asset classes last year to be the best performing asset class in 2019.  

Will cryptocurrencies dethrone traditional currency and go mainstream? Will it become ubiquitous one day? Or is it just a fad?

Let’s look at developments that are likely to unfold: 

i) From Investment to Utility

In the last decade, cryptocurrencies were used mainly for speculation and investment. Trading was the main activity driving the use and existence of cryptocurrency. This will not change at least in foreseeable years, but it’s highly likely that we will start to see the use of crypto for non-trading activities such as staking, borrowing, lending, payments, commerce, and so on.

ii) Increased scrutiny

The cryptocurrency features of decentralization and anonymity have made it the go-to currency for illegal activities such as money laundering, weapons procurement, drug dealing, trafficking, smuggling, and so on. This has put it in the spotlight of regulatory and government agencies.

Cryptocurrency is already regulated in regions such as the European Union, while other countries like China have banned it outright. However, even with jurisdictions that have taken steps to regulate it, there isn’t a consensus on how to do so. Some regulations target crypto exchanges, while others intend to control trading. 

There is a split in opinion on the ramifications of regulating cryptocurrencies. Some countries believe that clamping down too hard on cryptocurrency will stifle innovation – prompting them to take the more cautious approach of watching from the distance but also stepping up to curb illegalities such as phony ICOs and crypto Ponzi schemes.

iii) More Stablecoins

Stablecoins are a new class of cryptocurrencies that are backed by real-life assets such as fiat currency. Stablecoins are meant to offer some price stability and mitigate the volatility of cryptocurrencies. Since they are backed by real-world currency, it means they are cushioned against the price swings of normal currencies. These price swings render cryptocurrencies unsuitable for day-to-day use as a medium of exchange. Stablecoins aim to offer the best of both worlds – the security, privacy, and fast transactions of crypto, as well as the volatility-free use as a means of payment.  

Some stablecoins have already entered the crypto fold, including Maker coin, Gemini dollar, and Tether. Libra is yet another stable coin that’s slated for release this year. Libra, for one, is notable since it’s a project spearheaded by Facebook, which has over 2 billion users across the globe. Due to the massive user base, the release of Libra would shake up not just the crypto world, but the world economy as we know it. This explains why its announcement was met with ire by financial bodies and regulators – with the argument that it would threaten and undermine the global financial system.

iv) Scalability

Lack of scalability has been the bane of cryptocurrencies’ existence. Scalability here means the speed at which cryptocurrencies can process transactions. So far, legacy blockchains such as Bitcoin and Ethereum have proven incapable of handling transactions at a level that would allow them to compete with, let alone overtake traditional payment models such as Visa. For instance, Bitcoin can only process 7 transactions per second while Visa can handle up to 1700 transactions per second. As you can see, cryptocurrencies have a lot to do if at all they’re to become viable mainstream currencies. 

Already, we’re seeing scaling solutions such as SegWit, the Lightning Network, Rootstock, and so on. These technologies differ greatly in the way they function, but they’re all geared towards the common goal of improving scalability on the blockchain. We’re likely to see more cryptocurrencies adopting these technologies, possibly putting them toe to toe with the traditional payment models. 

Challenges, and the Future

While cryptocurrencies have their revolutionary qualities, they also have their own limitations. For example, a crypto holder can lose their fortune through a computer crash, loss or damage of their physical crypto wallet, or their virtual wallet being hacked. This is a problem that can be solved through technological advances in the future.

What may be harder to solve is the curse of stricter regulation and intensified scrutiny that hangs over cryptocurrencies, the more they proliferate. This threat may slow down the advancement of this space, and undermine the very premise of their continued advancement or even existence. 

Also, businesses across the world now accept cryptocurrencies for transactions, but that number is still very much in the minority. If cryptocurrencies are to achieve mainstream recognition, they first have to find widespread use among populations. But remember that they have a complexity to them that may deter their widespread adoption. 

For a cryptocurrency to become part of the global financial club, it has to satisfy certain criteria. First, it will have to be just mathematically complex enough to deter fraud, but be easy to understand at the same time. It would also need to be decentralized to enable peer-to-peer transactions without third-party interference, but also be secure enough. Again, it would need to safeguard the privacy and anonymity of users without being a conduit for financial crime and nefarious activity.

Should You Invest In Cryptocurrencies? 

Cryptocurrencies, as anyone in the crypto community knows, can be a lucrative venture. Stories are told of crypto millionaires who struck luck by investing in the asset. That doesn’t mean you should dip both your feet in the water. Cryptocurrencies are a remarkably speculative asset class – with unpredictable price swings, and your money can be wiped away overnight if you are not careful. 

For instance, Bitcoin famously once plunged from $260 to about $130 in 6 hours. If you’re more of a conservative investor who doesn’t find thrill in that nature of volatility, you probably should look for more stable or predictable kinds of investments. 

Final Thoughts 

It’s hard to picture what the future of cryptocurrencies looks like. The technology itself is self-limiting in certain ways – like being too complex for much of the hoi polloi. Regulation is another threat that hangs over it all the time.

But going by the explosive success the industry has achieved in ten years since Bitcoin, including trouncing other asset classes, we simply can’t know what to expect. The crypto scene is highly dynamic, and things are constantly changing. What’s certain is that the future of cryptocurrencies holds a few more surprises.

Categories
Cryptocurrencies

How to Identify a Phony ICO

Every new week we hear of yet another new cryptocurrency being launched. Launching of cryptocurrencies and Initial Coin Offerings (ICOs) go hand in hand – as new crypto projects seek financing for the project. Due to their novel nature – in terms of technology and market behavior, cryptocurrencies are a very attractive investment for investors. 

Thus, any new and flashy crypto project is likely to attract a horde of both experienced and novice traders. Scammers know this, which is why phony projects have been able to successfully con millions of dollars from oblivious investors.

How do you stay alert? How do you avoid sinking your precious savings in a fraudulent ICO? The crypto space is incredibly dynamic, and even the savviest investor can find themselves sideswiped pretty fast. That doesn’t mean you can’t have some antennae out to help you detect crypto ICO fraud. 

This piece arms you with what you need to know so you won’t fall victim to the ICO scam clothed in grand promises and irresistible investment returns.

i) Find Out About the Team

Nothing will familiarize you with an ICO better than the team behind it. To determine whether an ICO is fake or not, check who the developer and the administrative team are. If it’s a legit project, these people will not only be out in the open but also have some history in a relevant field such as cryptocurrency, finance, or technology. If the team has a somewhat questionable history with these fields, you might want to get out.

Other scammers will name drop trusted names within the industry, claiming to have their backing for the project. To determine the veracity of this, a quick Google search is all you need. Also, check whether the people behind the project have mentioned it in their verified social media pages. If the search turns up nothing, you should take that as a red flag. And even if they mention the project and their social media activity generally looks dubious – like no interaction with followers that should also be a big, flashing, red sign.

ii) Study the Whitepaper

The foundation of any ICO is its whitepaper. A white paper should contain the background, motivation, goals, strategy, potential challenges, and a roadmap for the implementation of any blockchain or crypto project. A white paper can tell you so much. Read it thoroughly. Check to see the sources referenced in the paper. Does it have financial models that have been explored by other experts before? Does it address legal concerns? Does it talk about tools like SWOT analysis? Does it have a timeline for implementation?

These guidelines are for when a potential blockchain-based project has a white paper, to begin with. If it doesn’t have one, then you shouldn’t even think twice about it. Note, though, that it’s still possible for a fake ICO to produce a very convincing white paper. In that case, you need to check if it answers all your questions. What sets it apart? How does it aim to thrive in the already competitive blockchain space? How does it intend to achieve its goals? Finally, even if the white paper ticks all your boxes, always rely on your gut instinct. If too much as the littlest thing sets you off the wrong way, perhaps something is wrong.

iii) Look at the Token Sale

ICOs usually depend on crowd sales to fund projects. Know this: the crowdfunding process should be completely transparent. A legitimate ICO will make public sales figures so that potential investors can see and track them easily over time.

If a company is making it difficult for the public to track the progress of its crowd sale, this signifies a lack of honesty and perhaps underhanded dealings. Watch out for excuses, such as protecting the privacy of individual contributors. This is just a ploy to hide the progress of the ICO and prevent people from seeing how much money has been raised and how much time is remaining. Sometimes, scam ICOs will use this trick to generate a sense of urgency and fear of missing out (FOMO) in potential investors – so that they can collect more money.

iv) Is The Project Feasible?

This may sound obvious, but blockchain projects poised for success are those that have a solid and feasible set of goals. Crypto and blockchain are already wildly competitive spaces. A new project should be able to demonstrate what difference it brings and how it plans to outdo competitors. Many projects started out with pomp and circumstance, only to sputter away after the center couldn’t hold any longer. A project should sell a compelling concept that sustains interest in the long haul. 

The issue of transparency also arises. Projects that have an outstanding proposal are more likely to put themselves in the open as much as possible. If a project regularly updates the community with achieved milestones, that means it is legitimate and feasible.

v) Caution Is Your Friend

The crypto space offers opportunities galore for those who have done their research and can read the fine print before jumping into any investment. People have made millions out of this industry. Due to this promise, it is very tempting to want to jump into the next hot new project. And scammers know this, which is why they will not hesitate to flash seemingly irresistible projects in the eyes of naive investors.

Be wary of projects that sound too good to be true. Scrutinize new projects up to the last detail. Watch out for any single piece of important information that seems to be missing. Also, check for outside sources to establish the credential of any projects. 

Check if it has supporting communities on social media and other online forums. Remember, a project doesn’t need to be fake, so you can lose money; it can also be just poorly designed or too weak to succeed.

vi) Beware of Improbable Promises

Investing was never a surefire endeavor – not in stocks, not in commodities, and certainly not in blockchain projects. If a project comes out promising nothing but sky-high results, then it’s probably a scam.

 If someone is promising you a massive ROI before anything even kicks off, or guaranteeing you impressive profits, you need to be very suspicious.

Also, watch out for a project creator who tells you they already raised millions of dollars and that you need to join in now. It is an attempt to convince you to shell out your money, so you don’t miss out on the “golden opportunity.”

vii) Check Under The Hood

Some phony projects are just peddling vaporware. Which is why you need to confirm the software of any new crypto project that you want to invest in.

Check GitHub. Is the product listed on there? Also, is there a community where you can ask questions about the functionality and features of the crypto? You can even ask the developers to show you a prototype.

viii) How Are They Handling Your Money?

The way a project is handling your contributions can reveal a lot. For example, your funds should not be sent directly to an exchange site like, say, Binance. This would mean the creators can automatically cash out the money – without any accountability at all.

Also, how are they vetting contribution sources? Are they following anti-money laundering (AML) procedures? Are they adhering to know your customer (KYC) regulations? 

If the project team is not complying with best practices, it means they are operating outside of the law. And if they’re operating outside of the law, then you’re not supposed to be giving them your money.

Final Thoughts

The cryptocurrency market is fast-paced and exciting. It can make you pretty handsome returns, but you can also lose your savings in a heartbeat. This isn’t to deter you from trying your hand in the market. It’s a call to caution – more measured steps and due diligence before you fork out your cash for any investment. By following these guidelines, you should be able to gauge if that flashy ICO is worth your time and money.

Categories
Crypto Daily Topic

Cryptocurrencies and Ponzi schemes

According to a report by Chainalysis, crypto Ponzi schemes are now the biggest crypto crime. In 2019, Ponzi schemes accounted for 92% of proceedings from crypto crimes.

Ponzi schemes are financial fraud schemes that trick unwitting people into investing money in a non-existent enterprise. Ponzi schemers sustain the fraud but paying out profits to initial investors using the money that new investors have pumped into the project. Ponzi schemes are able to sustain this lie for a while – but the facade starts cracking when they can no longer attract new investors, and old investors start getting concerned.

Ponzi schemers are now moving into the cryptocurrency space to try their luck. This is because many people are still unfamiliar with cryptocurrency or how the technology really works, rendering them vulnerable to any investment lie mixed with some truths. There is also the sentiment about cryptocurrency being a “get-rich-quick” investment. The crypto space also has few checks and balances – thanks to its decentralized and deregulated nature – making it easy to defraud unsuspecting investors and evade the law – even if just for a while.  

OneCoin: the Greatest Crypto Ponzi scheme of All Time

OneCoin is perhaps the cryptocurrency Ponzi scheme that takes the crown. US prosecutors have concluded that the scheme raked in approximately $4 billion from investors around the globe. From Palestine to the UK to Uganda to India to the US, people from all over the world were duped into sinking money into “the next Bitcoin.” 

In China alone, authorities recovered $267.5 million and prosecuted over 90 people in connection with the scheme. 

Dr. Ruja Ignatova, the mastermind behind the scheme, has been missing since 2017. The last that was heard of her is that she boarded a plane from Sofia to Athens never to be seen or heard from again. 

OneCoin was launched by Ignatova, a Bulgarian, who according to her LinkedIn profile, is an Oxford graduate and a former McKinsey employee. 

On the surface, you couldn’t have suspected anything was amiss. After all, OneCoin supposedly worked like any other cryptocurrency that generated new coins via mining and could be used to facilitate global payments. Also, it came with a safe and secure wallet, and it had a “total supply of 120 billion” coins. 

Network participants were required to buy educational materials that included cryptocurrencies, trading, and trading analysis, investments, and so on. 

Participants could also receive discounted packages and referral rewards if they got more users to join the network. 

Ostensibly, OneCoin was a “centralized network” where the team “took care of all technical aspects.” In truth, however, OneCoins were engineered by the scammers who programmed it from $0.56 to around $ 33.68. 

Also, it was later debunked that OneCoin never really had a blockchain, with police saying that it lacked “a true blockchain that is public and verifiable.”

The Launch of Onecoin

In June of 2016, Dr. Ruja appeared on stage at a flashy event on the Wembley Stadium in London, dressed resplendently in a ball gown complete with long earrings. With superlative after superlative, she described OneCoin as the next big thing, including that OneCoin would be “the biggest out there,” and it would “write history.” She told hundreds (or perhaps thousands) of screaming fans that OneCoin was the “most transparent, most powerful, and most legal” cryptocurrency. She concluded with this classic: “In two years, nobody will speak about bitcoin anymore!”

Despite OneCoin allegedly growing rapidly and stories of success, investors were starting to get concerned. A long-touted crypto exchange that would let users exchange one coin into Fiat was being constantly postponed. At an event in Lisbon where organizers would allay investor concerns, Dr. Ruja was a no-show. 

FBI records indicate that she flew on a Ryanair flight from Sofia to Athens on October 25, 2016, and that is the last that investigators know for now. A BBC article surmises that she might be living in Frankfurt under a fake identity. 

She has been charged in absentia with securities and wire fraud and money laundering. Her brother, Konstantin Ignatov, has been convicted for money laundering and fraud. A US lawyer Mark Scott has also been convicted for money laundering in connection with the OneCoin scam.

How to Smell a Cryptocurrency Ponzi scheme From Miles Away

The OneCoin story is a juicy one, but in there lies very important lessons for every aspiring cryptocurrency investor. Investors who put money into the project will likely never be able to recover it. Even though authorities might successfully recoup some of the money, the probability that individual investors around the world will be fully compensated is very low. Their money’s gone, just like that. 

So how can you protect yourself from these kinds of scams? After all, such fraudsters are not going anywhere; in fact, they are constantly reinventing the game. 

Always look out for these red lights: 

i) Massive and Consistent Returns

This is perhaps the most obvious tell-tale sign of a Ponzi scheme. No investment can consistently return massive profits almost without risk. So when you see a project bragging about an impossibly high rate of returns, think twice. The general rule is: if it is too good to be true, it probably is.

ii) Returns Dependent on Referrals

If an investment project relies too much on referrals, then that is a red alert. Referral and commissions are the main routes through which participants will earn in most Ponzi schemes. If you see this kind of a model in any enterprise, it means the business itself is unprofitable, and sooner or later, it will cave in. 

iii) Unclear Ownership

Who owns the company? Are the founders in the shadows, or is information about the company inconsistent? If you know what to look for, a simple Google search should be able to reveal any shadiness. 

iv) Need To Join For More Information

To escape the law, many websites of crypto schemes will put up the facade of a legitimate business such as a wallet service, a cloud mining platform, etc. Then they will tell you that to access the investment portion, you need to sign up first. This should set off your alarm bells.

v) Closed-source or Non-Public Blockchain

The tradition of cryptocurrencies is to exist in the open. But scam coins will usually hide their source code such that others in the development space cannot review it. Also, their blockchain is not up for public participation.

Final Thoughts 

As you can see, crypto Ponzi schemes are well and alive. Fraudsters are rushing in to cash in on the allure that cryptocurrencies hold, and if you’re not careful, it’s easy to get roiled in a Ponzi scheme and lose your savings in a flash. These nuggets should help protect you from falling victim to a crypto Ponzi scheme.

Categories
Cryptocurrencies

What are CryptoKitties?

-When Satoshi Nakamoto created the blockchain, he had far more far-reaching goals in mind: a secure technology that would power the world’s first cryptocurrency. And indeed, cryptocurrencies are the biggest adoption of blockchain today.

But then came Ethereum, the blockchain that showed us that blockchain was capable of more. On the platform, users can create smart contracts and build decentralized applications (DApps) – which are applications that cannot be censored or controlled by anyone.

Then one team came and utilized DApps in a way that was completely unprecedented – by creating a game that allows people to buy, breed, and trade cats. The game has taken the world, not just the blockchain world, by storm. Enthusiastic players have poured millions of dollars into the game. Several articles have been published about “kitty phenomena.” Even Ethereum’s Vitalik Buterin himself has given it a shout out – and that is saying something.

So what’s CryptoKitties? This article sets to exploring the intriguing blockchain-powered “kitty verse.”

The Team behind CryptoKitties

Crypto Kitties is the brainchild of a company called Axiom Zen. This company creates many sorts of projects using novel technologies like virtual reality and blockchain.  

Based in both San Francisco and Vancouver, the “award-winning venture studio” CryptoKitties wants you to “Collect and trade CryptoKitties in one of the world’s first blockchain games. Breed your rarest cats to create the purrfect furry friend. The future is meow!”

What is a Genetic Algorithm? 

A genetic algorithm is a computer science optimization technique that’s inspired by the natural selection process. It works by generating ‘kids’ from a pool of parent solutions that uses bio-inspired operators such as selection, crossover, and mutation. The genetic algorithm represents the genes in the form of numbers. The numbers represent the proteins and other elements that we humans have in our bodies.   

  • Selection: Selection means retaining the best parents with the best genes from one generation to the other. 
  • Crossover: This means taking the two common variables of the two parents and retaining them in the child, just like how real-life people retain features from both parents. 
  • Mutation: This involves taking a parent and randomly mutating some of their ‘genes’ to create a child. 

Why are we talking about the Genetic Algorithm? Because it’s the technology that CryptoKitties uses to create new kitties. By using a crossover mechanism, a child genome is “sired” from the gene pool of two-parent kitties. This child genome is what grows up to be a new kitty. 

The CryptoKitty Smart Contract 

The entire cryptokitty smart contract is broken down into smaller and more manageable contracts. The ‘inheritance tree’ of the contracts is like this: 

  • contract KittyAccessControl 
  • contract KittyBase is KittyAccessControl 
  • contract KityyOwnership is KittyBase  
  • contract KittyBreeding is KityyOwnership  
  • contract KittyAuction is KittyBreeding
  • contract KittyMinting is KittyAuction
  • contract KittyCore is KittyMinting

The KittyCore here is the contract that tracks ownership and transfer of kitties. It’s The one that greenlights the siring of new kitties 

Where Do New Kitties Come From? 

The first cat was adopted on December 2, 2017. Since then, a new cat was born every 15 minutes until November 2018 when the first generation kitties no longer existed. 

The white pa-purr (what the developers really, truly call the white paper) states that only 50, 000 generation-0 kitties will ever exist. 

Of course, CryptoKitties can breed with each other to birth newborn kitties. Any kitty can be a ‘sire’ or a ‘dame’ for a breeding pair. After breeding takes place, the owner of the dame will be given the baby kitty – who will have ‘cattributes’ of their parents, as well as random cattributes. In rare cases, a ‘fancy cat’ with custom cattributes will be born. 

There’s no limit to how many CryptoKitties can exist. On the CryptoKitties market, you can also pay to breed your kitty with another person’s kitty – if you like that kitty’s cattributes. 

How to Buy and Store CryptoKitties?

Before you get started with anything, there are three things that you need:

Before you can begin to buy CryptoKitties, you need to have the following: 

  • Chrome or Firefox Browser 
  • The Metamask Wallet 
  • Ether in the Metamask Wallet. You can exchange fiat currency for Ether from any of several exchanges, including Coinbase, Kraken, Bitfinex, GDAX, Gemini, and so on. 

Once you have those, it’s pretty straightforward. Go to the CryptoKitties website and choose the kitty of your preference. Don’t you like any? No problem. Simply search for a ‘Gen 0’ kitty under the ‘Gen 0’ tab. 

To sire new kitties, go to the ‘Siring’ tab. On there, you’ll see all the kitties that have been put up for siring. Go ahead and choose the kitty that you’d like to have mated with yours. 

Now, how do you store your kitties? You can keep them in the MetasMask wallet if you’d like to be viewing and also trading them. But if you’d like to HODL your kitties, you can store them in a cold storage wallet that supports ERC-721 tokens e.g., Ledger Nano S.

Gas Consumption of CryptoKitties

CryptoKitties are one of the reasons scalability of the Ethereum blockchain has come into sharp focus. This is because the game became so popular that it clogged up the Ethereum network such that transactions would take days before confirmation. Due to this, the creators of the game had to increase ‘birthing’ fees.

Axiom, the company behind the game, said this in a Medium article:

“The excitement and adoption we’ve seen this week has been overwhelming, and we couldn’t be happier! However, the Ethereum network is completely full. The only way to keep CryptoKitties from lagging is to increase the gas prices so that all transactions can complete quickly. We know that increased gas prices will mean that some of you will need to slow down your breeding regimen, and we are incredibly disappointed by that. But who knows? Maybe this slowdown will just mean that you’ll love the Kitties you already have that much more.”

From this episode, it was clearer than ever that the Ethereum blockchain and, indeed, the current entire blockchain setup is not really capable of handling mainstream demands. That means that they have to work on the scalability issue before they can play the role of a decentralized, peer-to-peer future.

Built on Ethereum 

As of early 2020, CryptoKitties runs on the Ethereum network. Smart contracts oversee every aspect of the buying and selling of kitties. As such, no one can change, remove, or change a kitty once it has been birthed. The person that holds a CryptoKitty can hold it, let it mate with another kitty, or trade it if they feel like. 

The game also uses Ether as the medium for transactions. It’s still not possible to buy CryptoKitties with fiat currency as of now. However, the developing team hopes to make this option available in the future.

Final Musings (Meowsings!)

Whether you’re a cat lover or not, CryptoKitties allows you to immerse yourself in a unique gaming experience of Kitty verse and make lucrative profits while at it. The game is an illustration of what blockchain is capable of. 

Who would have thought that Satoshi’s technology would one day be used for purely recreational purposes? CryptoKitties’ wild popularity just shows that blockchain games can be a hit, as long as they provide some form of value to the masses. More than industry applications, this could be the very pathway to taking blockchain mainstream.

Categories
Crypto Videos

CNBC Is Always Wrong About Crypto – The Laughing Stock That Became A Indicator For Winning Trades!

Is CNBC always wrong about crypto? The CNBC reverse indicator!

Media has been covering cryptocurrencies in-depth for a couple of years now, with many crypto analysts, enthusiasts, and non-believers appearing on air. However, one channel stands out if we talk about cryptocurrency analysis and reports, and that is CNBC.

Bears, bulls, and CNBC

Jacob Canfield, a cryptocurrency analyst, and trader, noted how various tweets that CNBC posted and that is about Bitcoin going up or down coincided with exactly the opposite price movement. He posted his research in a submission on a popular website TradingView.

Canfield said that “Almost every single CNBC bullish tweet we’ve seen has been at the top of almost every single rally, giving traders a very strong sell signal. On the other hand, with every bearish tweet CBNC posts, it has been a clear tell of a short reversal as well as the end of a rally”.
As previously mentioned, CNBC is one of the most vocal mainstream outlets regarding Bitcoin and cryptocurrency in general, featuring daily price movement coverage as well as events regarding crypto. It has dedicated hosts that include the investment manager Brian Kelly.

CNBC reverse indicator

Based on the history of the posts, Canfield says, CNBC can be used as a reverse indicator. When used in such a manner, it had around 95 percent accuracy at the time the research was posted.
Canfield continued his analysis by saying: “With every bearish tweet CNBC posts, we typically see a 30% return on average.” If we pair this indicator with a few more indicators, we can create a pretty good strategy that covers price action, volume as well as market sentiment.
Based on this 30% average return expectation, the CNBC reverse indicator is an amazing indicator to use when gauging market sentiment and when to think about long or short positions. This indicator held up well over time as the CNBC news is showing almost the same levels of inaccuracy as they showed at the time of posting this analysis.

Following the post, the CNBC television reportedly contacted Jacob Canfield and invited him to be a guest at one of its crypto-related news segments.

Categories
Cryptocurrencies

Enterprise Ethereum Alliance: A comprehensive guide

A lot can happen in a decade. And in the blockchain and cryptocurrency space, a lot has happened – and that’s remarkable, seeing we started using those terms just about ten years ago. From thousands of cryptocurrencies launched to entire organizations coming together to further the blockchain agenda – the industry is growing stronger. 

The Enterprise Ethereum Alliance (EEA) is one of these organizations – and it exists to make it easier for individuals and businesses all over the world to collaborate and build private versions of the Ethereum blockchain for their business needs.  

The alliance has over 150 members – which is impressive, seeing as it only started with 30. 

What is EEA’s Vision? 

EEA is motivated by four goals:

i) Build a standard open-source specification 

EEA will define open-source standards for the operation of Ethereum blockchain across member organizations. 

ii) Address enterprise requirements

The EEA will help member organizations deploy blockchain technology wherever applicable.   

iii) Evolve in tandem with the Ethereum blockchain 

EEA members will get blockchain experts and best practices from the Ethereum blockchain. Hence, both public and private versions of the Ethereum blockchain will grow alongside each other.

iv)Strive for global interoperability 

The EEA will strive to realize the interoperability of the blockchains.

How Does EEA Help the Ethereum Blockchain?

The EEA hopes to help the Ethereum blockchain in these ways: 

  • Governance for Ethereum’s Enterprise Applications

The alliance will design a framework through which smart contracts can be optimized and implemented for companies and businesses. Thanks to this, companies will have an easier task of transferring real-world applications onto the blockchain. 

  • Enhance Compatibility and the Public Ethereum

The EEA will plug in new features based on real-life uses cases and contribute to Ethereum’s smart contracts business potential – and the way businesses conduct business.   

  • Ensure Rapid Technical Innovations

Developers interested in creating smart contracts and decentralized applications on the Ethereum blockchain will have an easier time doing so, thanks to more familiar frameworks and more standardized technical procedures and tools.

Ethereum Enterprise Alliance and Hyperledger 

In October 2018, the EEA and Hyperledger – an umbrella project for open-source blockchain frameworks announced they would be working together for the benefit of blockchain. This was good news for the crypto space since both bodies have a wealth of blockchain expertise between them. The two organizations were being seen as competitors before – but coming together means they can tap the synergies in each other and do great things for blockchain. 

“This is a time of great opportunity. Collaborating through mutual associate membership, provides more opportunities for both organizations to work more closely together,” said Ron Resnick, an executive director of the Ethereum Enterprise Alliance. 

The two organizations will help drive the adoption of blockchain by businesses and companies all over the world and, in the process, bring blockchain benefits to the world. 

The new arrangement will also allow for greater sharing between the two organizations. For example, Hyperledger developers can benefit from EEA’s certification programs, and EEA members working to achieve certain standards can get help from the Hyperledger platform to implement them. 

Members of the EEA

EEA is a collaboration of an eclectic mix of companies. 

Some heavyweights in the alliance are Intel, Microsoft, Santander, ING, Ethereum Foundation, Scotiabank, PricewaterhouseCoopers, and Standard Chartered Bank. 

The most interesting member might be JP Morgan Chase & Co. This is because the company’s CEO, Jamie Dimon, has been on record declaring his lack of faith in Bitcoin, Ethereum’s main competitor. His dislike for Bitcoin is so strong that he said he would fire any JP Morgan employee who traded Bitcoin. So, it’s puzzling that he would disparage Bitcoin and throw his support behind Ethereum. 

How to Become a Member of EEA

Anyone can become an EEA member, provided they meet the criteria. Members can be individuals, groups, or organizations. The criteria for joining is as below: 

  • Applicant must be promoting Ethereum-based enterprise applications one way or another. 
  • Applicant must agree to the EEA policies, guidelines – which include Intellectual Property, Non-Disclosure, and Antitrust.
  • Applicant must comply with their country’s laws and regulations 
  • Once a member, applicants must pay an annual membership fee. The fee is as follows: $3,000 for individuals, groups, and companies with less than 50 employees, $10,000 for companies with 51 to 500 employees, $15,000 for companies with 501 to 5,000 employees, and $25,000 for companies with more than $5,000 employees. 

Benefits of the EEA

One of the benefits of the Enterprise Ethereum Alliance is events. The EEA organizes several events each year that create great opportunities for members to meet, network, and share and discuss ideas. Anyone that wishes to connect with the Ethereum agenda in a more meaningful way can benefit from those events. The events take place in many places across the world; some events have been held in London, New York, Denver, Hangzhou, and many others. This opens up the opportunity for businesses from diverse areas of the world to attend. 

Another benefit is members can create strong relationships within the Ethereum community. Apart from discussing serious topics like regulations, creating decentralized applications, and so on, there are also sometimes cocktail receptions that bring people together to have fun, bond, and let loose a bit. 

EEA members can also have detailed bios on the website – where they can talk about their company as well as their Ethereum agenda. This makes for increased international visibility for their company – which comes with increased presence and authority in their industry. As well, members can view each other’s information and create mutually beneficial connections.  

Why Organizations Are Joining the EEA

There are several reasons why the EEA has been a hit. 

Ethereum is the most popular cryptocurrency next to Bitcoin. It is the second-largest in market cap and has maintained that position for a very long time. Also, a lot of the most popular cryptocurrencies today started as Ethereum-based projects – think Tron, EOS, Binance Coin, and so on.  

Ethereum is also home to the ingenious smart contract technology that makes getting into a contract simpler and cheaper than ever before. Smart contracts are self-verifying and self-executing, which removes the need for intermediaries like lawyers, banks, and so on. Many people are interested in technology to see how they can benefit from it.  

Then there are Ethereum’s decentralized applications (DApps), which hold massive potential. DApps are applications that are uncensorable and give users complete control over their personal information – unlike centralized applications like Google, Facebook, etc. For many developers, Ethereum is the go-to blockchain for creating DApps. The reason for this is Ethereum’s solid reputation as the blockchain that made the technology possible. Another reason is the Ethereum Virtual Machine that gives developers access to friendly tools. 

Closing Thoughts

The Enterprise Ethereum Alliance has become a formidable organization in the blockchain space thanks to the value proposition of the Ethereum blockchain and powerful companies that are backing it up. EEA also helped Ethereum’s token – Ether to gain a solid footing in the crypto market. This should be good news for Ethereum investors – they’re assured that Ethereum is not a fad cryptocurrency that’s going to disappear with the wind. And, blockchain enthusiasts should also rest at ease knowing that there are organizations out there that are working daily to advance the cause of technology.  

Categories
Crypto Daily Topic

Blockchain and Finance

Since Satoshi Nakamoto introduced blockchain to the world ten years ago, the technology has found utility in all sorts of interesting places – from supply chains to healthcare to media to finance. Blockchain, a technology whose idea was floated in the computing world but only brought to life in 2009, possesses certain features that have made it a highly sought after technology. And now, dozens of industries are scrambling to get a piece of it.

Finance, being one of the industries that literally keep the world moving, is at the forefront in the exploration of blockchain.

But before we see how that is, let’s get a closer look at blockchain and see why it’s so special.

What Is Blockchain?

A blockchain is a distributed ledger that stores time-stamped transactions in the form of blocks and is open to everyone on the network. Blockchain’s records are immutable – meaning once information is entered, it’s unalterable – or extremely difficult to change. Each block of transactions is linked to each other using cryptography.

Cryptography itself is the coding of information so that unauthorized third parties cannot interpret it. The technique goes back to 44 BC when Julius Caesar used cryptography to communicate to his generals in a manner that his enemies would not crack the meaning.

Ten years after the first application of blockchain by Bitcoin, the technology has become such a hit due to the following reasons:

  • It is decentralized – meaning it’s not controlled by any one single authority
  • Information is secured using the highest levels of cryptography
  • It is immutable – hence tamper-proof – which reduces chances of fraud
  • It is transparent – meaning it’s open for all network participants

Blockchain has three identifying features that have made it so popular. These are:

Decentralization: In a decentralized system, information is distributed across the network such that everyone in the system has access to the information. Transacting parties can do so directly with each other without the intervention of a third party. Also, you and only you have control over your money. You don’t have to go through the bank to spend or send money to anyone.  

Transparency: When it comes to transparency in blockchain, it means that an individual’s transaction history is in the public domain through their public address. The world has simply never had this level of transparency before. This means the global financial system can finally be held to more accountability.

Immutability: Immutability in blockchain means that information that has been entered on the blockchain cannot be altered or tampered with. This is a very welcome feature in finance because it would ensure the integrity of financial records and eliminate fraud.

Blockchain and Banking

One of the sectors that blockchain would help is finance, which is somewhat ironic since blockchain was first introduced to bypass the existing system. The Harvard Review puts it this way: “The blockchain will do to the financial system what the internet did to the media.” 

The internet came and democratized information. Today, all anyone needs to access certain information is to enter a keyword on a search engine. If blockchain adoption goes mainstream, getting access to financial services – no matter where you are in the world – would be as easy as tapping a button.

So, where can blockchain be applied in finance?

Blockchain tech can be applied to an endless list of finance areas– from insurance to payments, to record-keeping, and so on. In this article, we’ll focus on three areas: faster cross-border payments, cheaper Know Your Customer procedures, and trade finance. 

Faster Cross-Border Payments

If you’ve ever sent or received money from overseas, then you know how tedious and expensive the process can be. On average, a recipient receives their money after about 2-5 working days. And if the money is sent on a Friday, you will receive it on Tuesday since financial institutions are closed on weekends. 

Why does it take so long? Because there are numerous intermediaries involved. And every intermediary has thousands, if not millions, of similar transactions that they are processing. 

But with blockchain, transactions take place in a peer-to-peer, decentralized environment – which saves time and money. Transactions are settled instantly, removing the need for third-party intermediaries. 

Cheaper Know Your Customer (KYC) Procedures 

Banks lose an astonishing amount of money through KYC procedures. The average bank spends an average of £40m a year on KYC compliance, and some banks can even spend up to £300m. These jaw-dropping expenses are to be blamed on ever-changing regulation policies, and some banks still following outdated compliance methods, like paper-based processes. 

Blockchain will solve this problem by empowering people to have control over their personally-identifying information. Customers can upload their identities on the blockchain, and banks can request access to it. 

Also, banks can be granted KYC access to a common repository on a blockchain that they are a part of. Since the information is not controlled by anyone, anyone who is part of the network can access it and share it with anyone. 

According to a Santander-Innoventures report, banks can save up to $15 to 20 billion a year in infrastructure costs by 2022. 

Trade Finance

Just like with cross-border payments, the current trade finance is encumbered with a bunch of parties who make the process slow and tedious. And these parties don’t even trust each other – so they have to involve even more intermediaries like banks and clearinghouses. Blockchain can help solve this problem through the use of smart contracts.  

Smart contracts are self-verifying and self-executing contracts. These contracts are loaded agreements in the form of code. Once all parties involved meet their end of the bargain, the contract self-executes.

How would smart contracts help with trade finance? Since they are self-executing, they can transfer values such as money, title deeds, and so on – removing the need for intermediaries such as banks clearinghouses and with it, the would-be fees. This process is not just cheaper, but also time-saving. An ecosystem is created in which trust is not a prerequisite for doing business.

These three examples highlight how various capabilities of blockchain can be harnessed to transform finance.

Below, let’s take a look at the broader benefits of the technology for the finance sector.

Benefits of Blockchain

Security: Blockchain’s distributed architecture eliminates single points of failure since data is spread all over multiple nodes. Also, its immutable nature is tamper-proof, which removes the possibility of manipulation and fraud.

Transparency: Blockchain utilizes mutualized processes – acting as a single source of truth for all authorized participants

Trust: Blockchain’s immutability and transparency provides a climate of confidence and trust

Streamlined processes: Blockchain processes are faster have reduced downtimes, and have reduced potential for error and delay. It also removes a lot of procedures that would waste time in a traditional setting.

Challenges Blocking Blockchain’s Adoption

While blockchain technology promises a new dawn for finance, it faces obstacles that make it unsuitable for mainstream financial adoption. These obstacles are as follows: 

  1. Lack of scalability: the current blockchain architecture is currently simply unable to cope with high large volumes of demand – i.e., customers in their millions – in one second.
  2. The use of key cryptography: One can only access their assets with their private key. If those keys are lost, misplaced or damaged, you lose your funds – and there’s no recourse
  3. Lack of interoperability: Currently, it’s impossible for blockchains to know what’s going on on other blockchains. This impedes their widespread adoption.

Final Thoughts 

Even though blockchain was introduced to outpace traditional finance, the latter could actually use the former and be better suited to cope with the ever-changing dynamics of customer preferences and needs. When blockchain wizards come up with ways to beat the current obstacles faced by blockchain, it will be an exciting time for finance. 

 

 

Categories
Cryptocurrencies

Is Neo an Ethereum Killer? 

If you’re active in the crypto space, then you’ve definitely heard of Neo, a.k.a Ethereum Killer, a.k.a Ethereum of China. Ethereum seems the common denominator in both tags – probably because the two platforms have so much in common so much that China sees it as the challenger and the Asian equivalent of Ethereum. 

However, the platform has taken a different path from Ethereum in some ways, and it’s those ways that merit it some closer examination. 

The name Neo is Greek, and it means new, young, fresh, recent.

Is Neo really fresh? And is it worth the unofficial crown of Ethereum Killer? There is a lot of hype surrounding Neo, but when you lift the lid, you find there are actually some interesting things to discover.

What is Neo?

History of the Neo Blockchain

Neo is the brainchild of Da Hongfei and Erik Zhang. The two have extensive experience in blockchain, having previously formed Onchain, a successful blockchain research, and development company. The Neo project was funded by two ICOs, the first one which happened in a 10-days span in October 2015 and raised $555,000, while the second ICO raised $4. 5 million. 

Components of the NEO System

Neo has a few interesting technical features that make up the Neo ecosystem. These are:  

A Delegated Byzantine Fault Tolerance (DBFT) algorithm – Neo uses a DBFT consensus mechanism that enables the network to resist malicious attempts 

Neo Contract – A mechanism through which developers can create smart contracts in a safe, scalable and high-performance environment using a variety of programming languages 

NeoFS – A decentralized storage that utilizes distributed hash table technology  

NeoQ – a cryptographic mechanism that creates problems that are unsolvable by quantum computers, ensuring the Neo blockchain is quantum-proof. Quantum computing poses a real threat to the blockchain. Many experts agree that it could unravel the blockchain as we know it. NeoQ aims to prevent quantum computing from destroying the Neo ecosystem.   

The Neo Smart Contract System

Neo’s smart contract system comprises three parts: NeoVM (Neo Virtual Machine), IntereopService, and DevPack. Let’s take a closer look at each: 

  • NeoVM

NeoVM is a lightweight virtual machine that’s similar to a virtual CPU and executes smart contracts on the Neo platform. 

  • InteropService 

This is a function that helps smart contracts on the platform have more utility. It enables smart contracts to interact with data from outside the Neo blockchain without putting the system at security risks. This data couple be either transaction, asset, or contract information, and so on. InteropService also hosts smart contracts as storage.

  • DevPack 

This a language compiler that enables developers to create contracts in various languages. 

Neo: Tokenomics

As of March 6, 2020, Neo was trading at $12.28 and ranking at#19 with a market cap of $858, 998, 683. It had a 24-hour volume of $800, 365, 774, a circulating supply of 70, 538, 831, a total supply of 100m, and a maximum supply of the same value. Its all-time high was Jan 15, 2018 (Jan 2015), while its all-time low was $0. 072287 (Oct 21, 2016)

Neo’s Smart Economy

Neo wants to facilitate what it refers to as the “smart economy.” The smart economy comprises these components: 

  • Digital assets
  • Digital identity 
  • Smart contracts 

Digital Assets

A digital asset is anything that’s formatted in a binary form and comes with the right to use it. A digital asset must include the right to use, so it is considered as one. 

Blockchain has enabled a safer environment where individuals own digital assets. With technology, digital assets can be stored in a decentralized, secure, trusted, and third-party-free environment. 

There exists two forms of digital assets that an individual can utilize: 

  1. Global assets 
  2. Contract assets 

Global assets are recognizable by other smart contracts and clients in the system, while a contract asset is recognized only by the smart contract owner. 

Neo Blockchain and Digital Identity

IGI Global defines digital identity as “the data that uniquely describes a person or thing and contains information about the subject’s relationships.”

Digital identities are essential for the digitization of assets to work. 

The Neo platform utilizes the X.509 digital identity standard as well as the Web of Trust point-to-point certificate issuance models. 

Neo verifies identity-based on these features: 

  • Facial features
  • Fingerprints 
  • Voice activation 
  • SMS and others 

Smart Contracts 

Smart contacts that are contracts that take place on a blockchain – making them digital, trustless, and borderless. These contracts are coded so that they will self-execute when specific conditions are met. 

A smart contract must be immutable (unalterable) and be able to run on multiple computers without compromising the integrity of the network. As such, a smart contract needs to have the following qualities: 

  1. Deterministic
  2. Terminable
  3. Isolated  

What does each of these mean? Let’s get a closer look: 

Deterministic: This means that a program will always produce the same output to a given input. E.g., if 4+2=6, then 4+2 will be six every single time. Deterministic systems are designed to eliminate randomness out of a system.  

Terminable: This means that a contract should be able to come to completion after a set period so that it doesn’t go into an endless loop that will waste time and drain resources.    

Isolated: This means that individual contracts will be kept isolated in case of any bugs and malware that they may contain, knowingly or unknowingly. This is so to save the system from being affected by such bugs. 

Is Neo Similar to Ethereum?

Both Neo and Ethereum inevitably have several things in common, but they also differ in some key ways. 

Similarities 

  • Both blockchains provide a platform for developers all over the world to create smart contracts and decentralized applications
  • Both have native coins that power transactions: Ethereum has Ether, and Neo has GAS. 
  • Both have Turing complete, meaning any problem can be solved as long as the machine has enough memory space 

But what makes Neo interesting is not its similarities with Ethereum, but the differences. Neo is one of those projects that get branded “Ethereum Killer” since they do way better than Ethereum in regard to certain functionalities. 

For example, developers can use any codebase out of so many in the Neo platform, including C#, VB.Net, F#, Java, Kotlin, and more. Ethereum, on the other hand, only supports Solidity, its proprietary programming code that requires developers to master it before they can create applications on the platform. This is sort of a barrier to entry that could lock out many developers from the Ethereum ecosystem. 

The Two Tokens: Neo and Gas

The Neo ecosystem has two native tokens: Neo and GAS. These tokens serve different but complementary roles. 

Neo tokens are used to transfer value in the network. Having Neo tokens gives you a stake in the Neo blockchain. Users need to hold Neo tokens to be rewarded with GAS.

GAS tokens are used to enable seamless transactions in the Neo network. You pay GAS for using the Neo blockchain, e.g., subscription fees.  

Is Neo the Ethereum of China? 

Neo is often called the Ethereum of China due to its similarities with Ethereum. It is known in the crypto space that the Chinese government – which is well-known for its chilly attitude towards cryptocurrency – has warmed up to Neo and seeks to position it as the smart contract and DApps industry leader. Of course, this attitude could be a double-edged sword: it could legitimize the platform, but it could also alienate it from the rest of the world.  

How to Buy and Store Neo

You can buy or trade other cryptocurrencies such as Bitcoin and Ethereum in popular exchanges such as eToro, Coinswitch, Huobi, Changelly, Kucoin, Binance, Bitfinex, and so on. 

Some platforms allow you to purchase Neo with fiat money, while others only allow crypto.

Once you’ve bought Neo, it is recommended that you don’t let it sit on the exchange since exchanges are prone to hacking and other attacks. And since crypto transactions are irreversible, once your crypto is gone, it’s gone. 

We recommend storing your funds in tried-and-true wallets such as Guarda, Atomic wallet, NEON Gui – the official Neo wallet for desktop, and so on. Hardware wallets are always the safest option, though, and we recommend Ledger Nano X and Ledger Nano S. 

Neo: Final Thoughts

Neo is certainly ahead of other blockchain and cryptocurrency projects even if just by virtue of its unique Delegated Byzantine Fault Tolerance Mechanism or its getting ahead of the potentially harmful quantum computing. It excels yet again by allowing individuals to digitize assets and developers to build decentralized apps on its network using super-versatile tools. Perhaps Neo is ‘fresh’ after all. The question is, will it keep fresh? Its cheerleaders are banking on that. 

 

 

Categories
Crypto Daily Topic Cryptocurrencies

Ethereum Vs Ethereum Classic

Crypto newcomers will immediately notice two types of Ethereum in the space: Ethereum and Ethereum and Ethereum Classic. What they won’t know is the unfortunate story, turned intrigue, that spawned the existence of these two cryptocurrencies. Ethereum, the most popular blockchain after Bitcoin, was forced to split into Ethereum (ETH) and Ethereum Classic (ETC) in one of the most pivotal events in blockchain and cryptocurrency history. 

What is Ethereum? 

In broad strokes, Ethereum is an open software blockchain platform on which developers can build and deploy smart contracts and decentralized applications. 

Smart contracts are digital contracts that are self-verifying, self-executing, and do not require intermediaries to represent the contracting parties. Smart contracts are run and are deployed on the blockchain, and they automatically self-enforce when conditions of the agreement are met. Since they run on a blockchain, smart contracts are immune from censorship, fraud, and any sort of outside interference.

Decentralized applications (DApps) on their part are applications that run on a decentralized, peer-to-peer, and deregulated platform. DApps allow the user to retain their personal data, as opposed to centralized applications where user data is in the hands of the organization. Smart contract is the technology that connects DApps to the blockchain.

Enter DAO 

The formation of Ethereum and Ethereum Classic can be traced back to an organization called DAO, or the Decentralized Autonomous Organization. 

DAO was an automated and decentralized organization. It was a sort of venture capital fund that ran without the organizational hierarchy that’s typical with normal organizations. DAO was going to fund DApps built on the Ethereum blockchain. 

DAO was set up to give investors decision-making power over which potential DApp projects would receive funding. Investors would need to purchase DAO tokens – which gave them a stake in the DAO system. DAO tokens were purchased using Ether. 

For a DApp to be green-lit for funding, it had to be whitelisted by ‘curators’ who were basically reputable figureheads in the Ethereum space. Next, the approved DApps would be voted on DAO investors – or the token holders. If the proposal received a 20% approval, it would receive funding, so it gets started. 

This flexible process, together with the transparency and the overall potential of the DAO, was unprecedented, and scores of investors jumped in, hoping to get a piece of the action. In a record 28 days, the project had raised over $150 million of ether. 

Of course, that was all fine and dandy, but what if an investor wanted to get out? What if an approved DApp did not exactly tickle your fancy, was there a way to opt out? As with anything blockchain, the DAO was a democratic process, so yes, there was a way out – called the “split function.”  

Using this function, you could not only get back your ether, but you could also create your version of DAO known as “Child DAO.” If enough DAO token holders joined you, you could even start accepting your own proposals. The only condition was you had to hold out on spending your ether for the next 28 days.  

But it was this same Split Function that brought DAO to its knees. It exposed a huge loophole in the system that could be manipulated by a bad actor. Many people pointed this out, but DAO creators brushed it aside as not a big issue. Except it was, and it was exploited, and the aftermath was the undesirable split of Ethereum into Ethereum and Ethereum and Ethereum Classic. 

The Big and Bad DAO Attack 

The reckoning came on June 17, 2016. A person, or persons, exploited the Split Function and managed to siphon $50m dollars. And because hindsight is 20/20, it’s very clear to see how straightforward the attack was, and how it could have easily been avoided. 

Now, if one wanted to opt-out Of DAO, all they had to do was to submit a request. The Split Function would then do the following: 

  • Refund the user their ether in exchange for their DAO tokens 
  • Update the transaction in the blockchain, as well as the internal token balance 

What the attacker did was they made a recursive function of the request – meaning they made the request repeatedly for the same amount of DAO tokens 

  • The split function happened this way: 
  • DAO receives DAO tokens and gives the user the requested ether 
  • Before DAO can update the transaction, the user makes other requests for the same amount of Ether, making the code repeat the process over and over. 

By the end of it all, $50 million worth of ether was transferred to a child DAO. As you can imagine, the entire Ethereum and DAO community was sent into a panicking frenzy after it was discovered what was going on.   

Now’ it’s very important to point out that the attack took place courtesy to loopholes in the DAO and not Ethereum. 

DAO ran on Ethereum, and DAO had issues. Ethereum was merely the host of the DAO. 

Dao Attack: The Aftermath

Now after the attack happened, people naturally had questions about whether Ethereum and cryptocurrencies, in general, could be trusted. Even though Ethereum was not to blame, a lot of people couldn’t pick apart between it and DAO. Ether nosedived from $20 to $13. 

Now despite the hacker executing the attack, they couldn’t get access to the funds since the DAO smart contract had enforced the 28-day rule – that you couldn’t spend the ether after exiting DAO. This gave the community three options moving forward: 

  • No step would be taken: Some people were against making any changes since that would mean contravening the immutability tenet of blockchain. These people took the “code is law approach.”
  • Execute a soft fork: The majority of the community voted to implement a soft fork. The idea was to segregate the blocks that were involved in the hacker’s transactions so they wouldn’t be able to move the funds. However, this posed another problem: a soft fork opened way for a denial-of-service (DoS) attack, which meant an attacker could manipulate miners to perform malicious transactions. 
  • Implement a hard fork: A hard fork was now the only way to go. Hard forking meant a section of the Ethereum blockchain would branch out at a particular point – which was the point just before the DAO attack. 

After the fork, two completely different chains were born. The new chain went with the name Ethereum, or ETH. A section of the Ethereum community that was against the fork remained ‘loyal’ to the old chain, which in turn took up the name Ethereum Classic (ETC).  

The fork enabled DAO to refund investors the money that had been taken away. For every 100 of DAO, DAO token holders would be given 1 ETH. This caused a sharp disagreement, which added more fuel to the Anti-Hard Fork drive and contributed to the formation of Ethereum Classic.

You need to understand the magnitude of this hard fork. Remember, Ethereum was the most important cryptocurrency after Bitcoin. A hard fork shook not just the Ethereum community but the entire blockchain and crypto space. Gavin Wood, Ethereum’s co-founder, called this moment “the single most important moment in cryptocurrency history since the birth of Bitcoin.”

ETC vs. ETH – An Ideological Split 

The Ethereum split came down to a difference in ideology. The people that stuck with the old chain believed that cryptocurrency is supposed to be resilient against the whimsical decisions of people. According to them, a hard fork was a sellout, a betrayal of what cryptocurrency stood for. If you were splitting the Ethereum blockchain, you were defeating the very purpose of its existence – to represent a non-corrupt finance system. 

ETH Vs. ETC

Because these two are a split of the same chain and given the contentious history between them, it’s only natural that comparisons will be drawn. 

The biggest problem with ETC is that it is not backward compatible with the ETH hard fork. Also, the movers and shakers of the Ethereum community went with the new chain. This means users of the old chain will not have access to any updates on the new chain, like the upcoming move from Proof of Work to Proof of Stake. 

For ETH, the issue is the new chain violated the “code is law” principle. There is also the glaring question of: how can we know the chain will not be capriciously hard forked again in the future? Are there already hard forks forming different versions of ETH? Even though the latter is conspiracy theories, it creates a climate of distrust in the public, which could lead to a devaluation of the coin.    

Having said that, let’s look at the pros and cons of each cryptocurrency: 

ETC

Pros

  • Adheres to the immutability tenet of blockchain 
  • Has the support of some big-time loyalists 

Cons

  • Users cannot enjoy any updates on ETH
  • The support of the vast majority of heavyweights in the community moved to ETH

ETH 

Pros

  • Has the support of the majority of the earliest big-time developers including Ethereum’s founder Vitalik Buterin 
  • It is possible to update the software with new changes 
  • Enjoys a higher hash rate
  • Has the backing of the Enterprise Ethereum Alliance (EEA)  

Cons

  • Betrayed the philosophy of immutability 

How Do ETH and ETC Stack Up in the Market? 

As of February 06, 2020, ETH is the more successful cryptocurrency of the two coins – at a market rank position #2 next only to Bitcoin. The crypto is trading at $236.42, while ETC is trading at $8.17 while ranking at #18. ETH has a market cap of 26 billion, while ETC stands at $950 million. 

ETH has enjoyed an all-time high of $1.432.88 (Jan 13, 2018), while ETC’S all-time was only $47.77 (Dec 21, 2017). 

ETC Vs. ETH – Final Words

In the never-ending ETC vs. ETH competition, ETH always comes out the winner as the vast majority of Ethereum developers, users and supporters have stuck by its side. ETH may have violated some blockchain principles, but the community bundled together and made something great out of the absolute disaster that was the DAO hack. That is a victory it will always have up in its notch. 

ETC, on the other hand, remains stained by the DAO attack, and the argument that it’s held together by sympathizers, blockchain loyalists, and pure market speculation. 

What’s for certain is that both chains have their loyal bases, and each of them has clout that’s unique to them. As for the battle between them, the common phrase, “it’s not over yet,” applies.

 

 

Categories
Cryptocurrencies

Breaking down ZCash

The first-ever blockchain, Bitcoin, is pretty much an open ledger where all and sundry can see your transactions, and those transactions can be traced back to you, if need be. While this level of transparency is partly what endeared many to Bitcoin, it is not amenable to the notions of privacy that are increasingly prevalent in today’s world.

Is there a way we can take advantage of blockchain technology without sacrificing privacy? Several cryptocurrencies intending to answer that very question have sprung up in recent years. Zcash, a crypto-based on the Bitcoin code base, is one of them.

This article scratches beneath the surface of this privacy coin to look at how it works, who created it, and how it stacks up against other cryptocurrencies in terms of performance.

What is Zcash?

Zcash is a decentralized, peer-to-peer, and privacy-focused cryptocurrency. It is based on the Bitcoin code and was launched in October 2016. It was first called the Zerocoin protocol, then the Zerocash system before finally going by the name Zcash.

Zooko Wilcox, the founder of Zcash, describes it as “another blockchain and cryptographic money which permits private exchanges (and by and large private information) in an open blockchain. This permits organizations, buyers, and new applications to control who gets the chance to see the points of interest of their exchanges, even while utilizing a worldwide, authorization-less blockchain.”

The Team behind Zcash

Zcash is the product of a mix of engineers, scientists, and designers around the world. In the team are graduates from some of the leading universities from around the world, including MIT, Johns Hopkins, and Tel Aviv University. The team’s leader and also founder OF Zcash is Zooko Wilcox, who has 20+ years of experience in open and decentralized systems as well as cryptography.

There’s also the Zcash Foundation, a non-profit whose mandate is maintaining and constantly improving the Zcash protocol to accurately represent the interests of current and future users as well as the community. The foundation was launched in 2017.

How Zcash Works and Its Privacy Model

Zcash works by encrypting transaction details via zk-SNARK – a zero-knowledge proof protocol. Before we talk about zk-SNARK, let’s first get an idea of what zero-knowledge proof is.

What is Zero-Knowledge Proof (ZKP)

 The concept of zero-knowledge proof harks back to the 1980s when 3 MIT researchers – Shafi Goldwasser, Silvio Micali, and Charles Rackoff were working on interactive proof systems, and they stumbled on the idea of having knowledge of proof without revealing that knowledge.

The zero-knowledge proof concept has two parties: the prover and the verifier. A prover can prove to the verifier that they possess certain information without revealing what that information is. A ZKP must possess the following parameters:

  • Completeness: The statement must be true so that a verifier can be convinced of it without proof
  • Soundness: The statement must be true in a way that a lie in its stead would not convince the verifier
  • Zero-knowledge: The verifier has no idea what the information is

What is Zk-Snarks?

Zk-Snark stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.” Zk-Snarks are mathematical proof constructs that see to it that a transaction takes place without its details being divulged. These details include sender, recipient, and amount. Zk-Snarks also plays the role of preventing double-spending.

The Problem with Bitcoin’s Transparency

Bitcoin is the first cryptocurrency and one that a lot of cryptocurrencies are modeled after. On the Bitcoin blockchain, the world can see the details of transactions that took place, such as the public key. This transparency is a welcome idea, especially when preventing criminal activity from being conducted using the currency. But it’s also the crypto’s pitfall, especially in modern times when privacy is highly valued and protected.

Businesses also have the need to keep their most sensitive information away from the eyes of competitors and other interested parties. Companies also want to keep employee information, including salaries, from other employees and the public in general. Both these scenarios are not possible on the public Bitcoin blockchain.

Zcash’s Selective Disclosure

On the Zcash platform, transactions can either be “transparent” or “shielded.” Transparent transactions happen through the t-addr, or ‘transparent addresses while shielded addresses happen through the z-addr, or the zero-proof address. This is what’s referred to as “selective disclosure” of Zcash transactions. Users can choose whether to send funds using transparent or shielded addresses. Usually, a user can send funds publicly to a private address and vice versa.

This selective disclosure affords users the choice to comply with industry, tax, and legal obligations when and if required. For example, a user can prove that they own at least a thousand dollars without revealing the exact amount. As well, you can use this feature to comply with auditing requirements by providing payments.

Tokenomics of Zcash

Zcash is a fork of Bitcoin and has the same maximum supply of 21 million as Bitcoin. Zcash’s coins will all be mined by 2032, and block rewards get halved every four years as a deflationary measure. As of March 3, 2020, Zcash is trading at $51.85 with a market cap of $478, 526, 912, and #27 ranking. Its 24-hour volume is $370, 092, 058, and it has a circulating supply of 9, 228, 331, and a total supply of the same value. Zcash has an all-time high of $5, 942.80 on October 29, 2016, and an all-time low of $25.45 on November 25, 2019.

Where to Buy and Store Zcash (ZEC)

You can purchase ZEC from these exchanges, among other popular ones: Coinbase, Cointree, Gemini, Bithumb, Kraken, Huobi, YoBit.Net, Changelly, and etoro. Some exchanges will allow you to buy directly with fiat currency, while others will require you to first purchase Bitcoin or another crypto such as Ethereum to trade it for Zcash.

You can store your ZEC on the Linux command line client wallet known as zcashd. This option is good for you only if you know your way around computers or are sufficiently tech-savvy. There’s also a desktop wallet by the Cash foundation that supports Linux, Windows, and Mac. Other desktop options include Jaxx and Exodus.

If you’re more into hardware wallets – and you should – since they’re the safest option, you’re in luck because user favorites such as Ledger and Trezor both support the coin.

The Bottom Line

Zcash is a cryptocurrency that provides the decentralized, peer-to-peer model of transactions while keeping them private. Users, businesses, and organizations looking to combine the benefits of blockchain technology with privacy are right at home with Z-cash. They also get to comply with regulations without giving everything away. Zcash offers the world the benefits of blockchain without sacrificing their privacy. And with the world valuing privacy more than ever, Zcash is set to move only forward.

Categories
Cryptocurrencies

Weaknesses of Blockchain

Blockchain, the technology that underlies cryptocurrencies, constitutes distributed ledgers shared across nodes (computers) participating in the network. These ledgers record data in a sequential fashion after cryptographically securing it. Once data is recorded on the blockchain, it can’t be deleted. This, among many other features of blockchain, like transparency and being deregulated, has given blockchain tech a revolutionary reputation.

But some of these features have also proven to be the Achilles heel for blockchain. This article dives into some of the weaknesses of blockchain as it stands today.

i) 51% Attack

Consensus algorithms that help protect blockchains, like the bitcoin blockchain, have proven resilient over the years.

However, there’s the 51% attack threat that’s always hanging over these blockchains like the sword of Damocles. A 51% attack would occur if an entity managed to gain control over 50%+ of the network. This would disrupt the network by allowing such things as double-spending, excluding valid transactions, or altering the correct order of transactions.

ii) Data Modification, Or Lack of It

Once data is recorded on the blockchain, it’s immutable. Immutable means it’s unalterable. While this promotes accountability and reduces chances of fraud, it’s not always favorable for blockchain. Humans are prone to making mistakes, and once inaccurate information is stored on the blockchain, it can never be changed.

iii) No Customer Protection

Blockchain technology operates on the basis of the individual holding power over the asset they are verifying on the blockchain – whether it’s a title deed, a cryptocurrency, etc. Naturally, transactions go sour sometimes. In a scenario where this happens, the only way to overturn the transaction is if both parties agree, which might prove a tall order. This is unlike a centralized system where an arbiter mediates between two conflicting sides.

iv) Slow Settlements

Before any transaction is verified on the blockchain, all nodes must come to a consensus about the validity of the transaction. This is way slower than say, a bank verifying your transaction at the counter. And in the time between when a transaction is lodged and when it’s verified, a malicious actor can enter and execute malicious transactions.

v) Miners Can Be Selfish

On blockchains such as Bitcoin’s, mining is a process that incentivizes network participants to commit computer processing power and then gets rewards in the form of coins or a fraction of transaction keys. However, this has a downside. Miners may not be very concerned about settling the optimal number of transactions. All they care about might be finding the next block as quickly as possible in order to verify it and get rewarded.

There’s also the case of Selfish Mining, a.k.a block withholding attack, in which a miner finds and validates a block but does not broadcast it to the rest of the network. This results in the miner having more ‘proof-of-work’ than other miners in the pool and increasing their odds of unfairly getting more block rewards.

vi) Private Keys

Blockchain uses what are known as private keys to give crypto owners full control over their funds and data. Users need their private keys to access their funds and conduct transactions. This means if you own cryptocurrency, the security of funds is solely on you. In other words, you’re your own bank.  Once a user loses their private key (either by forgetting the seed phrase or misplacing their hardware wallet), their crypto holdings are effectively lost, and there is no recourse.

vii) Inefficiency

Blockchains that, for instance, use proof-of-work consensus mechanisms, are incredibly inefficient. This is because they store the entire history of transactions that ever occurred on the blockchain. This takes up massive storage capacities across devices. To make a transaction, the entire downloading and verification process needs to be completed. This could take several days – spelling crippling inefficiency about the network.

Viii) Storage Issues

As blockchains get more popular, it means more and more users are interacting with the network. This increases the size of the blockchain. We’re talking about hundreds of gigabytes of storage. This puts the network at the risk of losing nodes when people find the ledger too huge to download and store in their devices. And this puts the health of the blockchain in jeopardy since the health of a blockchain partly depends on how many nodes are supporting the network.

ix) Scalability Issues

To demonstrate the scalability issue of blockchain, let’s look at the most widely applied blockchain – the Bitcoin blockchain. It takes around 10 minutes for a transaction to be verified, translating into an average of 7 transactions per second. Compare this with Visa, which processes an average of 2,000 transactions per second. What this means is blockchains are still a long way off from achieving the level of scalability that they would need to be able to serve millions of customers around the world.

Final Thoughts

The idea here is not to discredit blockchain but point out how the technology could improve. Blockchain is not referred to as revolutionary for no reason. Developers are coming up with new solutions for blockchain’s weak spots every other day. Some of these are the Lightning Network, a technology that promises to improve Bitcoin’s scalability by offloading some transaction data off the blockchain so as to facilitate faster transactions. Industries of all types are also exploring technology so as to achieve more efficiency in processes. Despite its weaknesses, blockchain remains a technology to reckon with.

Categories
Crypto Videos

Crypto Lending The Superior Way Of HODLing Part 2 OF 5

Crypto Lending – Where to lend your crypto? (part 2/5)

 

This part of the Crypto Lending guide will cover Nexo and BlockFi, two of the three platforms that we will show as good examples of how a lending platform should operate.

Nexo is a company founded in 2017 and is backed by Michael Arrington, the founder of TechCrunch. It has nearly 200,000 customers and even got covered by Forbes. The platform has back payments in 45 Fiat currencies.
Nexo Wallets are provided by BitGo. Therefore, users who borrow or lend Bitcoin or any other cryptocurrency are insured for up to $100,000,000.00. The insurance is backed by Lloyd’s bank. This amount is, however, for the total company in case it gets hacked or goes bankrupt. NEX allows its lenders to have their earnings deposited every single day, rather than having to wait for a week, month or more. They have an interest rate of 8%, with the option to withdraw anytime.

When it comes to user experience, they are top-notch. On top of that, this company constantly strives to get better and makes new beneficial partnerships quite often. When it comes to cons, there aren’t many. However, one comes to mind. Even though borrowers can withdraw in any of the supported 45+ fiat currencies, lenders are allowed to deposit only stablecoins and fiat currencies. Nexo is currently working on supporting BTC and ETH deposits, but they didn’t make any projection regarding the time of realization of this project.

BlockFi is a company founded by Zac Prince and Flori Marquez. It has raised over $20 million of capital from various firms. The company is young and growing at a fast pace. The company offers a 6.2% interest rate on BTC lending and 3.3% on ETH lending, compounded. Granted, this rate is only for deposits under 10 BTC and 100 ETH. The rates for larger amounts of crypto drop severely. When it comes to borrowers, they get a 4.5% interest rate by using the platform.

There is no minimum deposit, and all your crypto holdings are stored with Gemini. Gemini acts as a 3rd party depository trust that is a licensed custodian with insurance. It has a perfect track record when it comes to preventing hacks and fund losses.

When it comes to cons, there are a couple we can think of. The first one only applies to people that want to lend larger amounts of crypto. BlockFi offers digressive interest rates, meaning that the rates decrease to 2.2% and 0.2% for deposits larger than 10 BTC and 100 ETH. BlockFi also offers fewer choices of cryptocurrencies people can earn interest on as it supports only BTC, ETH, and GUSD. The last con would be that the platform is not FDIC insured (though Gemini – which protects BlockFi user’s assets – has a strong track record for security).

Check out part 3 of our Cryptocurrency Lending series, where we will cover Celsius Network as the third good option for crypto lending.

 

Categories
Crypto Videos

Crypto Lending The Superior Way Of HODLing Part 1 OF 5

Crypto Lending – the superior way of HODLing cryptocurrency (part 1/5)

 


Bitcoin (and cryptocurrency in general) loans are quickly becoming a hot topic. Crypto lending sites and crypto-backed loans are becoming a new way for the investors, hedge funds, miners, and even the unbanked to utilize and leverage their finances as well as to support their business ideas. The HODLers with their crypto bags can also earn interest on their holdings and gain more financial freedom through earning passive income.

The concept is actually quite simple:

For borrowers: If you need a loan to support your business idea or some other endeavor, you will have to put up a small amount of crypto as collateral. After that, you can get a fiat or a stablecoin to use. You will have to pay back the loan according to the agreement.
For lenders: If you want to lend cryptocurrency, you will put up a certain amount of crypto and earn a predetermined amount of interest from it.
From what we have established, we can see that lending crypto is a great way of utilizing funds when you want to hold rather than trade or sell. However, lending cryptocurrencies doesn’t come without risks. If a bank fails, a chunk of their customer’s funds is insured by the government. If it happens that they go down, their customers are at least partially safe. However, what happens with crypto lending platforms and their insurance? You need to consider things such as safety and insurance policy alongside the things you would usually look for in a lending platform (more talk on that later on in the series).

Crypto lending – introduction

Certain studies have shown that when you have passive income, your stress and anxiety levels are greatly reduced. You also spend more time with friends and family, and you are freer to pursue hobbies and interests.

This 5 part series will cover:
What is Bitcoin lending, and why you should take advantage of the best Bitcoin lending sites to earn passive income

What to look for in a lending platform (We will be covering Nexo, BlockFi and Celsius Network)
What NOT to look for in a lending platform (We will be covering XCOINS and SALT)
Security and insurance policy and the importance of these factors.

Check out part 2 of the Crypto Lending series, where we will talk about Nexo and BlockFI, their advantages and disadvantages, and why they are good lending platforms in general.

Categories
Crypto Daily Topic

The Recent Bitcoin Surge: Is it a Mirror of the 2017 Bull Run? 

Towards the tail end of 2019, Bitcoin stagnated in the ranges of $7,000 to $8,000. However, at the beginning of this year, 2020, its price increased steadily to the highs of $9,443.96 and continued to show signs of strength. As the anticipation for even higher prices continues to grow, its quite clear that Bitcoin market was in a bull run, and perhaps will continue to be bullish for the better part of this year. 

The projected bull run can be linked to the fact that the digital coin’s daily entities are close to those leading up to the 2017 bull run. In this case, the daily entities suggest that an increasing number of people are using Bitcoin – a relevant milestone in launching a bull market. On top of it all, the bull may continue to reign for longer if the highly anticipated Bitcoin halving goes as expected.

But before we can ascertain that this year’s bull run is similar or different from that of 2017, we need to go back and look at the factors that led up to bull market in the first place. By doing so, it will enable us to point out the differences/ similarities between the year 2020 bull run and that of 2017

Factors that Stirred the Bitcoin Market in 2017 

Rising from the lows of less than $1,000 to as high as $20,000 all within a year, proved that Bitcoin could defy the traditional laws of asset valuation. However, the surge in price can be explained by several factors:

FOMO is Real

The 2017 bull run was mainly fueled by the Fear of Missing Out (FOMO). Only a sizable number of retailers knew what bitcoin is or understood how it works. The majority of them were trading the digital currency since they saw it rise in value and made other traders rich overnight.

Consequently, there was spiked adoption of Bitcoin by the public leading to the high demand for the coin. The higher the demand, the higher the price. Yet, the coin itself wasn’t quite ready for the wide adoption, which explains the drastic reduction in price in the early beginning of 2018. 

Price Manipulation

According to a recent research, it is likely that a “whale” manipulated Bitcoin’s price in 2017, resulting in the bull run. In this context, a whale is an individual or institution that holds a significant amount of Bitcoin, which is higher than that of the average investor. 

The research reports that the “whale’s” transactions on the blockchain revealed that Tether was used to back up the price and manipulate the Bitcoin market. This report doesn’t seem far-fetched since large transactions of Bitcoin can be loosely interpreted as massive adoption of the coin, resulting in a bull market. 

Less Government Regulation

Looking behind the 2017 bull market, there were three other bitcoin bull cycles, though they weren’t as significant. However, the idea here is that in each of these bull cycles, including that of 2017, the government institutions hadn’t enforced strict measures against cryptocurrencies as they currently have. This provided an ideal atmosphere for increased bitcoin activities between miners and traders, resulting in increased trading volume. 

Nonetheless, since the 2017 bull cycle, Bitcoin and the crypto-market as a whole has evolved and is on its way to a more mature phase.

What has improved since 2017

i) Lower Fees

The most significant change since 2017 is the reduction in Bitcoin transaction fees. The adoption of Segwit, as well as the increase in the number of exchanges, have made the transaction faster and affordable for Bitcoin users. 

Of course, if Bitcoin goes into a full-blown bull run, the transaction fees will increase in equal measure. However, the fees will still remain lower compared to other years, incentivizing more investors to join the market. 

ii) Big Money Interests

In 2017, and years before that, blue-chip companies dissociated themselves from bitcoin and blockchain technology altogether. 

Years after, there have been a lot of big brand companies showing interest in the cryptocurrencies, with an aim for leveraging the underlying protocol – blockchain. A good example is Facebook Inc, whose CEO announced the launch of the company’s digital coin, Libra. Microsoft is also actively building on the Bitcoin blockchain, as other institutions such as JP Morgan continue to show interest in cryptocurrencies. This gives the whole crypto-market the validation it deserves, prompting mass adoption. Increased mass adoption will likely trigger an increase in Bitcoin prices since it’s the most held coin by crypto investors. 

iii) Better Liquidity

It is estimated that there are about 206 exchanges currently in operation. To investors, this means it is a whole lot easier to liquidate your investment than it was a few years ago when only a few exchanges were operational. 

What’s even better is that most of the exchanges accept fiat currency directly, in exchange for cryptocurrencies. Investors can buy cryptos using their debit cards at a lower cost and more efficiently than it was the case in 2017. With better liquidity, especially for BTC, the trading volume is bound to increase, which is an essential feature to complement this year’s bull run. 

iv) More Options

It was not until the near-end of the 2017 bull run that Cboe and CME launched bitcoin futures. Despite being launched a bit late, the derivatives are meant to offer a more stable trading alternative to BTC, making the futures attractive to institutional investors. 

Also, if bitcoin price continues to increase and even reach an all-time high, the derivatives provide an efficient way for investors looking to make returns, by shorting Bitcoin. 

This time it’s Different 

It is evident that the Bitcoin landscape has matured since the phenomenal 2017 bull run. More corporations are entering the market, bringing new infrastructure and technologies to improve not just Bitcoin trading, but also the entire cryptocurrency market. If these changes in the market fundamentals are anything to go with, it is safe to say that the 2020 bull run might surpass that of 2017. But even if it fails to do so, 2020 still remains the best year for Bitcoin in terms of the average price. Compared to 2017, when Bitcoin’s average price was $6,125, this year’s average price is, so far, at $9,120, an indication of better days ahead. 

 

Categories
Crypto Daily Topic

Is There a Looming Race for Digital Currency Supremacy?

Being the first of its kind, Bitcoin can be termed as the king of cryptocurrency – a position that can also be attributed to its large user base. 

Ever since its inception, this digital currency has inspired the launch of similar, or rather improved iterations, of new cryptos. As a result, the market is quite flooded with cryptocurrencies, each offering a unique utility point, in a bid to establish undisputed authority in the crypto-market. 

The race to dominating the crypto-space has grown exponentially to a point that it has attracted the attention of government institutions, who are seeking to regulate blockchain and all crypto assets. 

While most government institutions are playing catch-up, giant tech companies such as Facebook are laying plans on launching their own digital currency. So, the real question is, who is likely to win the digital currency race? Will it be a state or a private entity? 

The Case for Facebook’s Libra coin

Less than a year ago, Facebook announced that it would launch a digital coin called Libra. The coin is aimed at connecting thousands of people who don’t have immediate access to traditional banking systems. From the surface, Libra could indeed be a financial game-changer, as the giant tech company is banking on its massive international user base. This also translates to more profits for the company on top of its record high revenue generated from the advertisement.  

But the road to launching Libra, so far, has been nothing short of challenging. Lawmakers, especially in the U.S., were quick to grill Facebook’s plan on the basis of privacy concerns.

Unfortunately, the company hasn’t been in the good books as far as users’ privacy is concerned. As such, the U.S. Congress viewed its extension into the financial realm will likely result in more cases of consumers’ privacy violation. 

However, looking at what Libra can help users achieve, a good number of businesses will likely buy into it; despite Facebook’s disregard for privacy. For starters, the social media platform connects businesses to millions of potential customers. Put Libra into the picture, and Facebook transforms from just a social media platform to an e-commerce and financial marketplace, where customers can shop online using the built-in digital currency. This will be by far a great opportunity that many small businesses can’t resist. Also, Libra’s white paper outlines big brand partners such as MasterCard Inc, Visa Inc, and Uber Technologies, who’ve signed up to invest in the coin’s growth. 

But, for those who are unwilling to cede their personal details to a company that has always shown it can’t be trusted, the big-name partners can be seen as pathways for mitigating the regulatory measures and privacy criticism that Facebook faces. 

Central Banks Race

Sure, cryptocurrencies, in general, have been met with a lot of skepticism credit to their potential to disrupt global finance. Blockchain – the underlying cryptocurrency technology- is still in its infancy stage, which also attracts more speculation on digital currencies. 

Despite the backlash from finance regulators, a handful of countries are warming up to cryptocurrencies and its potential to revolutionize global finance. 

A good example is China, where the country’s central bank – People’s Bank of China (PBOC) – is closer than ever to digitizing the Yuan, China’s official currency. This move has been endorsed by President Xi Jinping, who believes blockchain is an integral part of China’s plan to become a high-tech superpower. 

Following closely behind is Japan, where the legislators are exploring the idea of issuing Central Bank Digital Currency (CBDC) in the form of a digital Yen. Apparently, the process of digitizing the national currency will be a joint venture between the Japanese Government and several private companies. Nonetheless, the goal is to give Japan an upper-hand in the cryptocurrency industry. 

Many believe that Japan’s plan to issue a CBDC is in response to the fear of competition from China, who are also digitizing the Yuan. Facebook’s Libra coin is also part of the reason why Japan is joining the race for digital currency supremacy. This is due to the fact that Libra is backed by different fiat currencies, making it hard to manage since it can’t be pegged to a single county’s politics. 

Western Countries Response

Western economic powers haven’t been as fast as expected, in adopting or promoting the use of digital currencies. In fact, since the birth of blockchain, some Western Countries have been actively inhibiting the growth of cryptocurrencies through strict regulatory laws. Case in point, the U.K. is determined to ban crypto derivatives in addition to planning on taxing crypto users. Things aren’t any better for crypto users in the U.S., where the IRS has managed to stub out several crypto start-ups. 

Recently, however, the western countries have realized the futility of blocking digital currencies. The European Central Bank (ECB), in particular, is working on a digital currency that could be an alternative to private providers. There have been notable moves by central banks in Canada, Switzerland, and Singapore, where they are looking at adopting a digital currency, as the use of fiat currencies decline. 

As countries and private entities try to establish their dominance in the crypto-market, the world’s largest central bank, Bank of International Settlements, aims at keeping the race co-ordinated and less chaotic. For this reason, the institution has appointed one of the ECB board members, to oversee the development of a digital currency model that other central banks can easily adopt. 

In the U.S., several Congress members expressed in writing to the Fed chairman – Jerome Powell – their interest in pushing for the digitization of the dollar. According to these Congress members, the current skepticism surrounding cryptos will jeopardize the widespread acceptance of digital currencies in the long haul. 

Conclusion

Clearly, the race to establishing a sovereign digital currency has taken root. China is expected to emerge victorious in this race, owing to the political back up blockchain has received in the country. 

Facebook and Japan could be the closest rivals to China as the two already have an established framework to support their digital currency. The former is only held back by legal setbacks, while the later is yet to materialize its plan in comparison to China’s concrete effort to digitize the Yuan. 

Western countries, however slow they might be, will soon catch-up at their own pace. But for now, only time will tell who will win the race. 

 

Categories
Cryptocurrencies

A Beginner’s Guide to Tezos

Tezos is one of the most controversial cryptocurrencies to grace the scene. After a wildly successful July 2017 ICO that collected $232 million, its launch was postponed with controversy after another. However, the crypto finally launched in September 2018, rising above the cacophony to become the tenth most successful cryptocurrency as of February 26, 2020.

And this crypto-only seems to be growing stronger – it’s one of the cryptos to witness a bullish first quarter of the year.

So, what is Tezos? Let’s do a deep dive into Tezos, its unique selling point, and the controversy that once threatened to derail it.

Who is Behind Tezos?

The team behind Tezos is Arthur Breitman and his wife, Kathleen Breitman. Between them, they have a wealth of computer science, Mathematics, and finance experience. Arthur has previously worked for Goldman Sachs and Morgan Stanley, while Kathleen has work experience from Bridgewater Associates and R3.

Tezo’s On-Chain Governance and Self-Amending Protocol

Before we dive into Tezos, we need to understand the meaning of a ‘fork’ in the context of blockchain.

Blockchain, like software, needs to be updated from time to time to improve its functionality in one way or another. A software upgrade is known as a fork – which can either a soft fork or hard fork. A soft fork is backward compatible, but a hard fork is not.

Backward compatibility means the ability of the new version to interact with the older version. Once a hard fork is implemented, there’s no going back whatsoever. If you don’t upgrade to the new version, you can’t access the latest update or interact with participants in the latest version in any way.

Now you need to understand that forks are not a bad thing: if anything, updates are what makes a blockchain amenable to changing times and user demands.  The only problem is when hard forks cause rancor within a blockchain community.

We are all aware of the most contentious hard forks of all time – the ones that split both Bitcoin and Bitcoin Cash. Bitcoin was split into Bitcoin and Bitcoin Cash, and shortly after, Bitcoin Cash itself split into Bitcoin Cash and Bitcoin Satoshi Vision (SV). The Bitcoin Cash split was especially marked by extreme animosity between the two camps complete with name-calling and threats and the so-called hash wars.

The hash wars were pretty much the two camps using their mining resources to outdo the other chain. Ultimately, it was unnecessary theatrics that actually plunged the whole crypto market and promoted a bad rap against the blockchain and crypto industry.

This is the kind of contention Tezos is trying to avoid. Kathleen Breitman, the Tezos co-founder, said this in an interview with BreakerMag: “The great irony of Bitcoin is that it’s ultimately a tool for community consensus, but it’s [marred by] a tremendous amount of animosity. Tezos allows for innovation to happen in a systemized way as opposed to one born of politics. You’ll not find two people who loathe politicking more than Arthur and me. That’s the idea behind Tezos: let’s formalize this extraordinarily informal process.”

The Tezos’ Way

Tezos hopes to avoid divisive hard forks via what they call ‘self-amendments and on-chain governance.’ The self-amendment concept is meant to prevent the chain from undergoing a hard fork when it needs to upgrade. On-chain governance, at its simplest, means that users will vote over any proposed amendment. Combining the two means that voting can be modified, or the chain can be amended when necessary. The result is a frictionless process that allows the evolution of the blockchain without a hard fork. 

This is how it works:

  • Developers independently submit proposals for protocol upgrades together with an invoice for compensation of their idea
  • The compensation is meant to incentivize developers to contribute to the network  
  • The community puts the proposal into a trial and points out areas that can be improved or removed
  • After rigorous testing, Tezos stakeholders vote on whether the protocol should be implemented or not
  • If the vote favors an upgrade, a ‘hot-swap’ is carried out, and the new protocol is set in motion

This process ensures a decentralized and democratic approach to protocol upgrades by ensuring approval from the bigger section of the community. It’s a peaceful and yet effective approach for improving the Tezos platform.

The Baking process

Amusingly, Tezos calls its staking process “baking.” The baking process is as follows:

  • Bakers are granted block validation rights according to the amount of stake they own in Tezos
  • A block is baked (produced) by a random stakeholder and endorsed by 32 stakeholders (bakers) who are also randomly chosen 
  • Upon verification, the block is recorded on the blockchain
  • If a block is successfully validated and added on the blockchain, the baker is given a block reward and a percentage of the fees from that transaction

Token holders can delegate their baking rights to other token holders without relinquishing their ownership of the tokens. When the baking process is completed, the baker shares its rewards with the other delegates. A baker will be punished for acting dishonestly e.g., not sharing rewards, charging high fees, or attempting a double spend or propagating blocks on different branches. 

Token holders can easily switch delegates and, as such, can threaten to delegate elsewhere – this fosters coordination instead.

Liquid Proof of Stake

To understand Tezo’s liquid proof of stake, we need to understand the proof of stake mechanism (PoS) and then the delegated proof of stake mechanism. PoS was invented to improve on Bitcoin’s proof of work mechanism, which is too slow and consumes too much energy.

The proof of stake mechanism works as follows: 

  • Validators commit some coins as stake
  • They initiate the block validation process i.e., they identify blocks that can be added onto the blockchain, then initiate the verification process by placing a bet on it.
  • When a block is successfully validated and recorded on the chain, the validators receive a reward proportionate to their bets

However, the PoS mechanism includes the entire community and may prove to be problematic for scalability in the long run. For this reason, newer blockchains are designed with a delegated proof of stake (DPoS) protocol. DPoS means delegates are selected beforehand.

The Tezos consensus mechanism is a lot like this but slightly different. Instead of a hard and fast rule about the choosing of delegates, it’s completely up to a network participant to decide if they want to be involved in the validation process or not. In short, delegation is optional, or ‘liquid.’

Tezos’ Architecture

Any blockchain utilizes the following three layers:

  1. Network protocol – responsible for discovering blocks and broadcasting transactions between nodes
  2. Transaction protocol – a transaction layer that defines what a valid transaction is
  3. Consensus protocol – determines how an agreement on the validity of transactions is achieved

Tezos combines the last two protocols to form a ‘Blockchain Protocol.’

Tezos breaks from this using a generic ‘Network Shell’ that’s compatible with the different transaction and consensus protocol mechanisms. The Network Shell facilitates interaction between the network protocol and the blockchain protocol and is agnostic (amenable) to both the transaction and consensus protocols.

Controversy Surrounding Tezos

The Tezos we know today almost never was – thanks to a cloud of controversy, it was mired in from the very beginning. Let’s look at the issues one by one below:

Intellectual Property Row

First off, the company behind Tezos is called Dynamic Ledger Solutions (DLS), while the one that was put in charge of the ICO contributions is the Tezos Foundation.

DLS retained intellectual property rights over the Tezos source code. As per the ICO agreement, the Breitmans would set up a foundation (the Tezos Foundation), which would then buy out DLS (including the property rights) for the sake of the community.

However, the agreement had been that the Breitmans and Tim Draper, a venture capitalist, would receive 8.5% of the funds raised from the ICO as well as 10% of the circulating Tezzos. A document outlining the relationship between DLS and Tezos foundation and for the “interest of privacy” was pulled from the companies’ websites with no explanation. 

Internal Power Wrangles

The next controversy was the Breitmans getting into a public dispute with a member of the board and the President of the Tezos Foundation, Johann Gevers. The story is that Gevers, being in control of the funds from the ICO, would not release the funds.

The squabble caused unrest within the community and caused the coin to plummet in value. The Breitmans put out a censuring statement on Gevers peppered with terms such as “self-dealing, self-promotion, and conflicts of interest.” The prolonged and adverse media attention eventually pushed Gevers, and the Tezos Foundation board members to step down. They were replaced by two community members Michel Mauny and Ryan Jesperson.

KYC/AML

For the next few months, updates from the Tezos foundation were scarce as the community waited for any sign. Then the Tezos foundation unexpectedly announced that Know Your Customer/Anti-Money Laundering checks would be required from the contributors to the ICO from the year prior. This caught investors off-guard since the ICO was already a year old by then. This announcement was met with disapproving reactions from the community. 

Tokenomics of Tezo

Tezos was trading at $2.59 as of February 26, 2020. It was ranking at #10 in market cap with the value of $1, 816, 801, 431, and a 24-hour volume of $237, 062, 869. Its circulating supply was 701, 996, 666, with an all-time of $4.46 on July 01, 2018, and an all-time low of 0.314631 on December 07, 2018.

Where to Buy and Store Tezos

You can buy Tezos directly from or trade another crypto such as Bitcoin or Ethereum and then exchange it for Tezos (XTZ) on crypto exchanges such as Binance, Coinbase, Kraken, Cointree, Huobi, Bittrex and so on.

There’s currently no official wallet for Tezos. Like for any other cryptocurrency, it’s highly recommended you store your XTZ on a hardware wallet. Some great options include Trezor and Ledger Nano.

Concluding Thoughts

Tezos brings an interesting perspective into the blockchain space – the idea of the autonomous amendment and on-chain governance. And its success after another may be an indication that the crypto was cut for the future despite what many believed. Its success will depend on how it continues to innovate in an ultra-competitive crypto space.

 

 

Categories
Cryptocurrencies

Is Celer Network the Most Advanced Layer-2 Scaling Platform?

While the first generation of blockchains inspired us with dazzling qualities such as decentralization, immutability, and radical transparency, it has also proven to have scaling issues as interest in cryptocurrency surges. For this reason, many cryptos have sprung up to address the scaling issue and even do even more. 

The Celer Network is one such crypto project, and it promises to provide a new blockchain experience for users through interactivity, topnotch security, and low or zero fees to create and interact with decentralized applications and smart contracts.  

The Celer Network is the brainchild of a team with PhDs from some of the most prestigious universities in the world, including MIT, UC Berkeley, Princeton, and experience from tech giants like Google, Amazon, Cisco, HP, and more.

In this article, we go deeper into the Celer Network and discover what makes it stand out from other crypto projects.

Crypto’s Scalability Problem

As cryptocurrency has become more popular in recent years, it has become clear that the traditional architecture of blockchain cannot really support millions of users. Nothing has made this clearer than Cryptokitties, a game atop Ethereum’s blockchain that allows users to buy, breed, and sell virtual cats. 

This game became so popular, with a massive surge in users, that the Ethereum blockchain couldn’t support it optimally anymore. As such, transactions took days to be completed. The developing team had to increase transaction fees to reduce the traffic on the blockchain. 

The Celer Network

Breaking down Celer

At its very core, the Celer Network comprises two components: 

  • cStack – Celer’s off-chain architecture that can be integrated on different blockchains
  • cEconomy – the network’s cryptoeconomics (combination of cryptography and economics) model. 

cStack

cStack features these layers: 

  1. cChannel: A generalized state channel and a side chain suite that maximizes utilization of liquidity
  2. cRoute: An optimal transfer route with high throughput 
  3. cOS: A developed framework that supports off-chain enabled applications
What is cChannel? 

As an off-chain solution, cChannel utilizes the two underlying components of off-chain platforms: state channel and sidechains. 

A state channel is one that allows two-way communication between participants, allowing them to conduct transactions outside of the blockchain. A state channel has these characteristics: 

  • A segment of the blockchain is locked up via a smart contract arrangement
  • Participants in a transaction sign off transactions among each other without involving miners at all 
  • After the channel closes, the final state is added on the main chain  

Some state channels deal with payments only. Celer’s state channel tracks all the programs that may occur between the parties, including payments. 

Why Are State Channels Important? 

To understand why state channels are useful, think of the blockchain. As an example, on the Bitcoin and Ethereum blockchains, users have to wait until a supermajority of nodes in the network vote for transactions to go through. Also, as more users interact with the network, this voting process takes longer. As you can see, this process is slow and unideal.

This is where state channels come in. Since transactions are taking place between two parties instead of passing through the mining verification process, they are simple, direct, and quick.

State channels also provide strong privacy. Blockchain transactions are available on a public ledger, and thus, anyone can see them. But state channel transactions are only known between the two transacting parties.

Celer network hopes to create a ‘state channel network,’ which is a network of individual state channels designed such that they can route state changes through each other. Via such a network, users may not have open channels with each other, but they can open a virtual channel between themselves.  

What is cRoute?

To understand the Celer network’s cRoute, let’s do a quick run-through of the problems with existing state channels, mainly the Lightning Network and the Raiden network. 

State channels depend on state routing, which determines the speed and volume of transactions on a state channel, which is why it needs to be designed efficiently.

The Lightning Network uses “Flare,” a type of Landmark Protocol, while the Raiden Network utilizes the A* tree search, a mechanism designed to look for the shortest routing path. 

Both these mechanisms are scrambling to find the “shortest route between two points.” While this mechanism helps put out a good throughput, it changes network topology (arrangement of the elements in a communication network) and, as such, interferes with the overall balance of the network. 

Distributed Balanced Routing 

Celer hopes to remedy this using the Distributed Balanced Routing (DBR). DBR provides for transparency and network balancing in the routing process. DBR is akin to a river flowing downhill. It doesn’t know its final destination. It just follows gravity. Here are the benefits of the DBR algorithm:

  • Provably optimal: It tracks the most optimal route for transfer requests
  • Channel balancing: Each state channel is built to maintain balanced transfers for the network’s topology
  • Complete decentralization: Its decentralized algorithm provides for each node to only need to communicate with its neighbors.
  • Failure-resistant: the DBR algorithm can detect and adapt to unresponsive nodes ultra-fast. If some nodes fail, the remaining nodes will pick the slack and still deliver the maximum possible throughput.
  • Privacy: Thanks to DBR’s multi-channels, transactions are accorded a high level of privacy without the need for additional privacy settings or tools. It can also integrate Tor-like routing to ensure anonymity.

cOS

coS is a framework that aims to help developers build decentralized applications (DApps) of a high level of abstraction. (Abstraction means creating a system such that the average person can use without the need to know the complex technology behind the scenes.)

Via cOS, developers will be able to create two categories of DApps:

  • Simple pay-per-use applications: These applications will allow users to receive small payments from the real world and stream them through the payment network.
  • Complex multi-party applications: These applications will improve the current smart contract models with new techniques such as metaprogramming and annotation processing.

cEconomy

cEconomy is the second most important value proposition of Celer. This cryptoeconomic model aims to ensure that the network’s ecosystem remains stable and functional at all times. It plans to achieve these trade-offs via these mechanisms:

Proof of Liquidity Commitment (PoLC), which is a virtual mining process tasked with acquiring liquidity for the off-chain ecosystem. The Celer Network has members known as “Network Liquidity Backers” who commit their liquidity (like ETH) to the Collateral Commitment for a certain time, after which are rewarded with CELR tokens as a reward. This is what maintains liquidity in the network.

Liquidity Backing Auction (LiBA), which helps off-chain service providers obtain liquidity through a crowdlending model. A lender’s priority status is determined based on the amount of solicited liquidity and the size of the stake in CELR.

State Guardian Network, a special side-chain that protects off-chain states when users are offline to ensure the availability of the network. To become state guardians, CELR token holders need to stake their CELR with the SGN, upon which they become eligible guardians.

What is CelerX? 

CelerX is a Celer app and the only layer-2 application available on Android and iOS. Through the app, users can: 

  1. Use Celer Pay to instantly money with zero costs
  2. Play a variety of games with zero or ‘millisecond’ latency and stand a chance to win prizes

Since its launch, CelerX has reached $1.4m+ in total prizes awarded, 11,000 players, and 300,000 matches from 88 countries. 

Funds deposited on Celer Pay are in your complete control at all times. CelerX uses the ERC-20 Game Token (GT) through which users can practice games like Solitaire Win, Fishjump, Diamond Break, Frog Jump, Fruit Punch, etc. in the app. 

The app provides competitions for approximately 80% of the world and 38 US states. As of February 25, 2020, users from these US states are not eligible for the games due to gaming restrictions in the states: Arizona, Arkansas, Connecticut, Delaware, Florida, Lousiana, Maryland, Montana, South Carolina, South Dakota, and Tennessee. Users from Maine and Indiana are prohibited from card games.  

Crypto-based games have proved to be a hit with the masses (cue Cryptokitties), and CelerX hopes to capitalize on this by providing a platform for skill-based gaming mobile-based e-sports. Through the app, users can buy cryptocurrencies through credit cards, Paypal, and ApplePay – a first not only in blockchain-based gaming but the mobile gaming industry itself.  

Tokenomics of Celer

The Celer token helps keep the network’s liquidity stable while also acting as a medium for payments and transaction fees.

These are the Celer token values as of February 25, 2020. The token is trading at $0.003660 at a market rank of #289. Its market cap is $13, 262, 362, and its 24-hour volume is 4, 825, 975, with a circulating supply of 3, 624, 044, 542. It has a total supply of 10 billion and a maximum supply of the same value. Its all-time high is $0.0302469 on March 25, 2019, while its all-time low was $0.003150 on January 24, 2020.

Closing Thoughts

Celer Network is not another run-of-the-mill crypto scalability project. It utilizes clever layer-2 solutions that put security and privacy at the forefront, always. Its CelerX app model is peerless, as is its cStack and cEconomy components. The project shows a lot of promise, and it will be interesting to see how it pans out in the future. 

Categories
Cryptocurrencies

Private, Public and Consortium Blockchains

Bitcoin brought with it blockchain technology – the technology that allows digital information to be distributed but not edited or copied. After it became a hit with Bitcoin, eager innovators from all over the world have made it their mission to replicate it in nearly every conceivable industry. From finance to healthcare to supply chains, industries are experimenting with blockchain to improve efficiency, transparency, and accountability in their systems.

What is Blockchain? 

A blockchain is a database whose entries cannot be deleted or edited but only distributed. It’s a time-stamped series of transactions that are immutable and whose data is managed by a network of computers.

Cryptocurrency, a form of digital money that prevents double-spending, is so far the dominant application of blockchain. Blockchain as a concept had been floated around the computer science space from as early as 1991, but only materialized 18 years later when Satoshi Nakamoto, the anonymous creator of Bitcoin, employed it as the underlying technology of Bitcoin. 

Now, as its appeal has increased in recent years, it has been borrowed for use in all kinds of digital information.

Today, there are three kinds of blockchains: private, public, and consortium chains. This article sets to exploring each of these. Before that, let’s point out three characteristics all three share. 

☑️ An append-only ledger – this means that on a blockchain, you can’t modify or alter what’s already recorded – you can only add to the last block. This procedure greatly reduces the chances of fraud.

☑️ A network of peers – all network participants (called nodes) hold a copy of the database. This setup promotes fairness and autonomy. 

☑️ A consensus mechanism – a blockchain network must have a mechanism through which nodes can agree upon the authenticity of a transaction. This feature promotes a democratic – everyone-has-a-say – process.

What is a Public Blockchain?

A public blockchain is an open-source blockchain. That means it’s open to the public. Anyone and everyone of every age, nationality, or social status is welcome to join the network, have a say, and take part in core activities. Public blockchains are also called ‘permissionless’ since you don’t need permission from anyone to interact with the protocol.

The idea behind public blockchains is self-governance and autonomy. No one dictates the rules, and anyone can join and leave as they wish. As well, all transactions that take place on a public blockchain are entirely open for anyone to see.

Public blockchains are ‘censorship-resistant’ in that they are run by users all over the world, making it hard for any authority or government to control or shut them down.

Also, public blockchains have a token that incentivizes various participants of the network to keep the network active.

The Good

Public blockchains are highly secure, courtesy of being run by computers from all over the world.

They ensure privacy for users in that you don’t leave your personally-identifying details on the chain, but rather transaction information like wallet number, time, and amount.

Transactions are peer-to-peer, meaning users are in complete control of their money with no one capable of freezing their funds

The Bad

Public blockchains like Bitcoin consume a lot of energy, which is expensive and bad for the environment

The majority of public blockchains are pseudonymous, meaning users do not have absolute and inviolable privacy or anonymity.

Some users of the network might have malicious intent, including hacking, stealing of tokens, or network clogging.

Public Blockchain Use Case

Bitcoin is the first-ever and the most well-known application of a public blockchain. 

Bitcoin transactions can be examined by anyone on the Blockchain Explorer. Other public blockchains are Ethereum, Litecoin, ZCash, Monero, Dash, and so on.

What is a Private Blockchain?

A private blockchain is one in which you need authentic and verified credentials to gain access. A private blockchain differs from a public one in that you need permission, depending on your position in the system’s hierarchy, to contribute and maintain the network. People at the top of the hierarchy or those with express access can also override processes as they deem necessary.

A private blockchain makes sense in a business context where managers want to improve efficiency but don’t want to put company data on the public blockchain. As well, a business has the right to amp up privacy restrictions any time they deem fit.

In a private blockchain, there’s the question of who enters entries, who can see updated transactions, who can begin a process, and so on.

The Good

Since only specific users can control the network, there’s no waiting times or periods of high demand which would slow down the network.

Entities that use private blockchains can keep sensitive data from the public while also realizing improved levels of efficiency.

Private blockchains do not have to provide any incentives to participants; neither do they consume massive amounts of energy. 

There is no possibility of downtimes arising from a spike in demand.

The Bad

Without support from computer users all over the world, a private blockchain is prone to stunted growth. It can also be slow to scale up and meet changing customer needs. 

Since they are centralized, public blockchains are susceptible to human error, manipulation, abuse, and other unfair dealings.

Use Case of a Private Blockchain

The best use case of a private blockchain is Hyperledger Fabric, a permissioned blockchain that businesses can deploy on their platform. The blockchain is also available in a plug and play mode, allowing businesses to set it up anytime and plug off when they don’t need to use it.

Walmart is a well-known user of Hyperledger Fabric. The retail giant can now trace the origin of more than 25 food products, from farm to store, to ensure quality levels and food safety.

What is a Consortium Blockchain?

The consortium blockchain is a type of blockchain that combines elements of both public and private blockchains. This is the distinction between a consortium blockchain and either of the two other types:  in a public blockchain, anyone can contribute to the network by inputting entries, validating blocks, etc. In a private blockchain, only a few entities have access to the chain and have the authority to initiate processes, enter entries, and so on. On a consortium blockchain, it’s a handful of equally powerful participants that can access the chain.

After that distinction, the rules of the system are not cast in stone. Some selected individuals may be the only ones who can view the chain, or it can be everyone in the consortium. As long as decisions are arrived at by consensus, they can be rolled out to the satisfaction of all parties.

Consortium blockchains rely significantly on the integrity of the validators. Provided a certain threshold of the validators can act with integrity, the network will work without issue.

Consortium blockchains make sense in the context where multiple organizations operate in the same industry and see it fit to collaborate on certain aspects of their business. This way, they can save on costs and function better individually and collectively. An organization would be motivated to join such a consortium courtesy of information and insights into the industry that they’d gain from other industry players. Sometimes the organizations involved can be termed “frenemies” since they are working together but also competing against each other.

Use Cases of Consortium Blockchains

There are currently many consortium blockchains that exist all over the world. Let’s briefly look at a few below:

☑️BankChain, a platform for banks whose goal is to explore, build, and implement blockchain software. Members of the BankChain community include Deutsche Bank, Bank of Baroda, Lulu Exchange, Kotak Bank, etc. 

☑️B3i, a community of insurers and reinsurers that attempts to improve industry efficiency through blockchain. Members include Liberty Mutual, Swiss Re, SBI Group, Tokio Marine, Allianz, and so on.

☑️Enterprise Ethereum Alliance (EEA), a consortium that aims to promote Enterprise Ethereum, an organization that delivers both public and private Ethereum blockchain for businesses.

Final Words

Blockchain has evolved a lot from the days when it was associated with Bitcoin only. It’s definitely exciting to see it as the new and hot technology that industries of all types are scrambling to get a piece of. And understandably so, because it embodies features that are a first, and which have the potential to revolutionize not just how we do business but also society itself. 

Companies need to choose what type of blockchain they want to get involved with, depending on their end goal and overall objective. Meanwhile, blockchain enthusiasts will be watching for new developments in this thrilling space.

Categories
Crypto Guides

What Are IEOs & How Are They Better Than ICOs?

Introduction

In our previous guide, we learned about what an Initial Coin Offering (ICO) is all about. We also discussed that 2017-18 was the golden era of ICOs, where some of the biggest ever ICOs like EOS, Telegram, and Dragon Coin happened. But what happened after that? ICOs took a hard hit after the Chinese government banned them. Also, there was a lot of negativity in this space after many large ICOs turned out to be scams. So it has been challenging for the Crypto startups to raise funds for their companies ever since the downfall of ICOs. This necessity resulted in the invention of a fantastic solution – Initial Exchange Offering (IEO)

Understanding IEO

In an IEO, any crypto company willing to raise funds for their project will approach a credible cryptocurrency exchange. The crypto tokens sales of that particular company will happen on that exchange, and the companies will have to pay a certain amount of fee and a percentage of tokens that got sold during an IEO. The exchange here is acting as a platform for the companies to sell their tokens.

So basically, Initial Exchange Offering works just like how Initial Coin Offering works without the decentralization part. That means, there is Smart Contract functionality in this process. All the transactions are centralized as they are authorized by the exchange in which the tokens are being sold. This is a win-win situation where the crypto companies can have a smooth fundraising process, and the exchanges can make profits by listing new crypto tokens in their platform.

Working of an IEO

In an ICO, people who are interested in purchasing tokens must send their funds to a given smart contract. But since IEO is a centralized process, interested participants must create an account with the exchange that is undertaking an IEO and complete their respective KYC procedures. Then they must deposit their funds in the exchange wallet and purchase the newly issued tokens using those funds. Most of the deposits are accepted in cryptocurrency only.

Top IEOs Till Now

Unless you are absolutely new to the crypto world, you must have heard about the Binance exchange. This exchange is one of the first ones to start the IEO revolution by designing a platform known as Binance Launchpad. The first successful IEO was of BitTorrent, a popular torrent service provider, and it was launched on the Binance Launchpad. BTT (BitTorrent Token) sales created a record in the world of IEOs by raising more than seven million dollars in a mere fifteen minutes. This company was backed by TRON, so this success isn’t a surprise.

If not for IEOs, it would be impossible for a new crypto startup to raise this amount of funds in hours or minutes. One more notable success story of an IEO is also from the Binance Launchpad only. A crypto company known as Fetch has raised about six million dollars and met the target in less than half a minute. After seeing the massive success of Binance Launchpad, many other exchanges have shown keen interest in this space. Let’s see what those exchanges are in the below section.

Top Exchanges That Embrace IEOs

As discussed, it is a potential business for any exchange for conducting IEOs using their platform. So many exchanges have shown great interest in the recent past to conduct IEOs and increase their visibility as well. Some of the top exchanges include Binance (Binance Launchpad), BitMax (BitMax Launchpad), Bittrex (Bittrex Int. IEO), KuCoin (KuCoin Spotlight) and Huobi (Huobi Prime).

IEOs have many pros over ICOs in terms of legality, security, and ease of access. That’s about IEOs; in our upcoming article, let’s discuss another fundraising method known as STO.

Categories
Cryptocurrencies

Decred Review: Is It the Ideal Cryptocurrency?

Cryptocurrency represents freedom of finance. Decentralized, censorship-resistant, and peer-to-peer are some of the words that we ascribe to it. But whether the vast majority of cryptocurrencies meet these criteria is a grey area.

Decred is a cryptocurrency launched in February 2016 that attempts to live up to these ideals. Its team of founding developers comprises of former developers of the notable btcsuite, a version of Bitcoin programmed in the Go language.

In this article, we’ll cover the exciting highlights of the Decred project and leave you to decide whether it’s the optimal currency or not. 

The Principles of Decred

Decred endeavors to live by these principles:

☑️ Free and Open Software – All software developed as part of Decred shall be free and open software

☑️ Free Speech and Consideration – Every member has the right to communicate opinions and ideas without fear of censorship, as long as it’s based on fact and reason. 

☑️ Multi-Stakeholder Inclusivity – A diverse set of views and users shall be represented and encouraged.

☑️ Incremental Privacy and Security – Privacy and security are priorities, and they shall be treated as such, and shall be incrementally implemented and on a continuing basis, both proactively and in direct response to attacks.

☑️ Fixed Finite Supply – Issuance of coins is finite, and the total issuance shall not exceed 20, 999,999.99800912 DCR, with a block subsidy that adjusts every 21.33 days by a reducing factor of 100/101.

☑️ Universal Fungibility – Universal fungibility is central to Decred as a store of value, and any attacks against it shall be met with countermeasures.

Breaking down Decred

Decred has a maximum supply of 21 million. The project never held an ICO, but an airdrop of 282.64 DCR was awarded to 2972 selected participants during the launch. Its all-time high was $99.74 on April 25, 2018, and its all-time low at $0. 394796 on December 28, 2016.

As of February 21 21, 2020, the price of Decred is $20.53 at a market rank of #37. Its 24-hour volume is $28, 260, 170, with a circulating supply of 10, 786, 831.

Each time DCR is mined, 60% is awarded to the PoW miner, 30% to PoS voters, and 10% held by Decred for future development.

How to Get Involved With Decred

Decred designates three ways through which you can interact with the platform:

The Wallet – Through the wallet, you can send and receive funds as well as take part in PoS voting.

Proof-of-Work Mining – You can use your computing power to validate transactions on the network and generate new tokens.

Proof-of-Stake Mining – Through ownership OF Decred tokens, you can vote on network development issues and validate transactions. 

All you need to send or receive Decred tokens is an address that you can easily generate from any Decred wallet. Once you own Decred, you’re eligible to join a staking pool and participate in PoS voting and earn rewards while at it.

What Problems Does Decred Intend to Solve?

Decred developers are huge blockchain and Bitcoin fans. However, they identified problems with how Bitcoin operates. As Bitcoin’s popularity has surged, the decision-making process seems to get more centralized by the day. This is evidenced by, for instance, the concentrated power in the hands of powerful mining companies.

In addition, almost any major upgrades to the Bitcoin software have to take place via a hard fork. This is what happened in 2017 when one section of the community proposed the SegWit2x hard fork on the chain. The two opposing sides got involved in hostile debates, peppered with name-calling and threats. The hard fork was finally called off, but not before leaving sharp divides in the Bitcoin community.

According to Decred, such divisions and the power that a particular section of the community might have over the cryptocurrency is counterproductive to the ideals, spirit, and the world of blockchain and cryptocurrency.

We’ve all seen what happens when two opposing sides do not arrive at a consensus. Factions can decide at any time to create a hard fork off the open-source Bitcoin code. Cryptocurrencies like Bitcoin Cash, Bitcoin Gold, Bitcoin Satoshi’s Vision, and Bitcoin Diamond are all offshoots of the original Bitcoin blockchain.

The Problem with Hard Forks

Forking is never the ideal outcome for cryptocurrency. Let’s see below why:

Repeated hard forks are bad for investor sentiment. After the Bitcoin Cash hard fork, Bitcoin prices took a tumble.

Hard forks fracture the Bitcoin community. The flared up tensions, and hard-line stances do no good for the community and the cryptocurrency sphere as a whole.

New hard forks are susceptible to attacks. So far, the biggest public blockchain to succumb to a 51% attack is, you guessed it, a hard fork. This blockchain is Bitcoin gold, and the attack happened in May 2018. The attacker made away with roughly 388,000 BTG worth $17.8 million then.

Hard forking undercuts the economic aspect of cryptocurrencies. For instance, the Bitcoin hard forks are confusing to users and undermine Bitcoin’s principle of a capped supply.

Decred presents a vision and cryptocurrency that’s free of hard forks, especially ones that fracture the community. While a hard fork is possible on Decred, its voting protocol is designed so that users can democratically vote on changes before activation.

Let’s look at the various mechanisms that Decred employ that will help it realize fair, smooth, and efficient governance.

Decred’s Hybrid PoS and PoW System

Decred’s voting system utilizes a hybrid of the two best-known consensus mechanisms: proof of work and proof of stake. 

These are the basics of how these two interact:

  • Miners mine for a block using PoW
  • Five token holders are randomly chosen to verify the block
  • If three of these validators confirm the validity of the block, it is recorded on the blockchain
  • 60% of the block rewards go to the miners, 30% to the validators, and 10% to the Decred project for future development.

With PoS, anyone who holds Decred tokens can participate in the staking system in this way:

  • DCR holders can purchase tickets with their tokens. The tickets give them pass to be part of the system
  • Only 20 tickets can go to any one block at any time. You may have to wait to get mined, but if you wish to get mined faster, you’ll need to pay some fees.
  • Once mined, your ticket is “immature” and will be held outside the random draw pool until 256 blocks have been mined, which is in approximately 20 hours.
  • After your ticket enters the draw pool, you will have to hold out for your chance to be chosen as one of the five validators that are randomly picked to verify the block
  • Your ticket has a 50% chance of being selected within 28 days and a 99.5% chance of being selected before it expires (after around four months).
  • Once your ticket’s chosen, you’ll help validate a block and be rewarded with a price for the ticket and also a staking reward.

The Decred system is also fair in that validators can participate in staking pools. As such, if a validator can’t make it to be part of the validation process, they can simply have their pool validate a block on their behalf.  

So far, you can see that Decred gives the power of participation to both users and miners. Unlike the Bitcoin system, miners do not possess disproportionate power over the network. If, for instance, a miner decides to mine a malicious block i.e., a transaction unrelated to the chain, validators can simply decline to verify the block. As you know already, PoW takes a lot of computational power, and for that, miners have very little incentive to do something that won’t pass with the validators.

How Safe Is the PoW/PoS Hybrid?

Just HOW safe is the PoW/PoS hybrid mechanism? A crypto analyst named Zubair Zia made it his mission to test the security of Decred’s chain vs. Bitcoin’s or a PoW/PoS model vs. a pure PoW model. He wanted to see which chain would more easily succumb to a 51% attack.

He used BITMAIN’s Antminer s9i’s, which has a rate of 14 tera-hashes per second. His calculations demonstrated that it was 22 times as expensive to hit Decred as compared to Bitcoin as of June 2, 2018.

In short, the hybrid system is 22 times more secure than a purely PoW system.

Lightning Network for Transactions

Decred has also implemented the Lightning Network.  The Lightning Network (LN) is an off-chain technology that has been explored by multiple cryptocurrencies to improve scalability. LN helps to settle payments outside of the blockchain so as to reduce traffic and backlog on the main chain.

LN works by having two users set up a payment channel on the network and depositing an equal amount of funds. Any time one user wishes to transact, they simply send a promissory note to the other user indicating a change of the total sum in the shared channel.

Since transactions happen off the chain, users also pay fewer fees since there’s no queue. Transactions are also instant, and there’s even added privacy thanks to a Tor-like routing algorithm for transactions. 

Decred’s Politeia

Thanks to a decision-making system called Politeia, Decred has managed to achieve decentralization more than any other existing cryptocurrency project.

Politeia is an ancient Greek word employed in Greek political writings, especially that of Plato and Aristotle. The term has many senses, from meaning “rights of citizens” to “form of government.”

Decred’s Politeia is designed to be the ultimate form of self-governance and community autonomy over a cryptocurrency project. Users can vote to accept or reject proposals, including budgets, software upgrades, marketing plans, constitutional amendments, and so on. When launching the system, project lead Jake Yocom-Piatt noted: “The direction of Decred now lies with the collective intelligence and creativity of its stakeholders.

We look forward to the exciting projects our community will propose.”

Where to Buy and Store DCR

You can purchase DCR from several exchanges, including Binance, Bittrex, Coinswitch, Changelly, Kucoin, Huobi, and so on by trading Bitcoin for it.

As for storage, the best wallet so far is the Decrediton wallet that’s available for Mac, Linux, Windows, and so on.

Great third party options also include Exodus, Coinomi, Atomic, Ledger Nano, etc.

Final Words

Decred has undoubtedly broken the mold, especially with its first of the kind governance system. Even though not as well-known as of yet, it’s one that has modeled cryptocurrency ideals better than perhaps the whole cryptocurrency pool right now.

The team behind it is also very well-regarded in the blockchain and crypto space, which is just the icing on the cake. With such a sound philosophy and a fantastic team, Decred is poised for success. But this will depend on the community. One can only hope it will mobilize for better and more exciting features for the platform before newer projects arrive and overtake the platform. 

Categories
Crypto Guides

5 Things To Consider Before Investing In Cryptos

Introduction

Cryptocurrencies have been buzzing our lives continuously ever since the Bitcoin boom at the year-end of 2017. The people who didn’t give a serious thought about investing in cryptos before that period has started taking it seriously, at least after that boom. One thing is for sure. Cryptocurrencies are here to stay; there is no doubt about that.

Hence, it is common for a potential investor to think if they should be investing in cryptos or not. Our answer is ‘Yes,’ they should be. However, investors should be very careful before investing in this space. So, we are providing some tips and considerations one should ponder upon before venturing into the world of cryptocurrencies.

📋 Always invest the money which you are ready to lose

We all save money for a rainy day. We are always advised by our parents when we start our financial life to save at least 10% of your paycheck. We never know what unexpected expenses pop up, and we should be able to face them without any inconvenience; otherwise, it is easy to fall in a debt pit.

Hence don’t ever invest in cryptocurrencies from your savings. We never know how the highly volatile markets of Cryptos will treat us. Always invest the money which you are ready to lose so that you don’t sell off your investments at the wrong time only because you need money.

📋 Do your research

Don’t invest in anything just because your friends/colleagues/cousins are doing it. Do your research before you venture into something new. Only after getting enough knowledge and when you think you have a grip on it, (like – when to buy and when to sell) start investing in cryptocurrencies. It is always advisable to start with the prominent ones like Bitcoin and Ethereum.

Then gradually jump into the niche coins if you want to. When one would like to invest in niche coins, it is better to go through the white paper, the tech behind the new currency, people who are developing the coin, etc. so that you will be aware if it is a scam. As the crypto industry is full of scams and fraudsters, we should be very cautious.

📋 Diversifying your investments

When people start out investing in cryptocurrencies, most of them start with Bitcoin and stay with Bitcoin only. There are many other coins other than Bitcoin. Try to invest in at least ten coins that have huge potential. You can check the market capitalization or pick the currency based on the number of coins in circulation. So that you won’t lose all your money when the value of a single coin has fallen.

We are all familiar with the saying, ‘Don’t put all your eggs in a single basket.’ Hence don’t invest all your money in only Cryptocurrencies. It would be helpful if you diversified the investment portfolio. You may invest in potential markets like Stocks, Mutual funds, Real estate, Bonds, etc. Since the cryptocurrency market is extremely volatile, it is advised that you may consider investing 10% of your portfolio in this space.

📋 Securing your coins

Once you invest in cryptos, you better don’t leave them in your accounts in the exchange. All the hacks that ever happened on cryptos happened on only exchanges so far. We have a variety of wallets to choose for, say paper wallets, electronic wallets, hardware wallets, desktop wallets, mobile wallets, etc. In turn, you can choose different wallets to use as well. For a long term investment, you may choose hardware wallets while for the short-term traders, mobile wallets can be used as they are easily accessible.

📋 Track the investments

Once you invest in cryptos, you should start tracking the performance of the coins so that you would be informed all the time. We have apps to monitor the same where we must enter the coin name, the number of coins purchased date of purchase, and other minor details. Apps like Blockfolio and Bitmap can be considered for this purpose.

While these are the essential points to consider, alternatively, you can follow people on different platforms who are best in the said fields, which reaffirms your learnings. Don’t sell off all your crypto investments when you say huge profits, try to sell on a percentage basis so that you can cash in on when there is a spike. At the same time, one will have money to buy in dips. Finally, be proud that by investing, you are a part of the crypto revolution. Cheers!

Categories
Crypto Daily Topic Cryptocurrencies

What is Bumo Blockchain?

Before we say a single thing about Bumo blockchain, we need to talk about blockchain. Blockchain is a publicly distributed ledger that records transactions between parties permanently, transparently, and in a peer-to-peer manner.  

The concept of blockchain existed in the developer community for years. Still, it only came to life in 2008 when a person/people under the pseudonym Satoshi Nakamoto created a blockchain to serve as the underlying technology under the world’s first cryptocurrency – Bitcoin.

Since then, numerous cryptocurrencies have been created by developers all over the world – either running on their own blockchains or other cryptocurrencies’ blockchains.  The technology has also broken out of the cryptocurrency application and has been adopted in other industries – from finance to healthcare to supply chain and so on. These applications represent the private, enterprise side, of blockchain.

What is Bumo?

Bumo is a next-generation enterprise-grade public blockchain that hopes to host what it calls a ‘ubiquitous’ value transfer, smart contracts, and decentralized applications platform. The Bumo project is still in beta, i.e., still in development. 

Let’s look at some of Bumo’s unique selling points right off the park:

  • Two or more users can create an account together, thanks to what the platform calls “individual account weightage”
  • A Merkle-Patricia Tree to help store data efficiently
  • A “trailer” system that helps segregate on-chain and off-chain data
  • An ‘Orbit’ infrastructure helping support Bumo’s 2-layer multiform architecture
  • A 2-layer multi-chain consensus structure that’ll enable up to 10,000 transactions per second
  • A “Canal” system to facilitate interoperability
  • A robust and friendly toolkit for developers to create smart contracts
  • The ability for developers to build apps that aren’t necessarily backed by a smart contract

In this guide, we’ll look at these features in greater detail and see what Bumo hopes to do differently for the blockchain ecosystem. To do that, we first need to talk about the inherent problems with blockchain right now.  

Problems with the Blockchain

Scalability

The first and second-generation blockchain’s scalability issue refers to their inability to handle high-volume transactions within a short period of time – hence they can’t be used to serve millions of people all over the world.

One reason for this is the mining-based verification mechanism that requires miners to verify transactions and then record the verified transactions in the blockchain. This creates a backlog of transactions and a slow, overloaded network since a miner can only mine a certain number of transactions at any time.

The other reason is the 1MB sized blocks on the Bitcoin blockchain, which severely limits how much data any one block can hold. This means your transactions have to wait in a queue for roughly 10 minutes. On the Ethereum blockchain, there are no block size limits, but transactions may take an average of 15 seconds before verification. 

Lack of Interoperability

Interoperability, or lack of it, is another issue with existing blockchains. Existing blockchains e.g., Bitcoin and Ethereum, are not built to be able to interact with each other. This is why crypto exchanges have the power that they do since they provide a much-needed portal on which different cryptos can interact with each other.

But exchanges are centralized entities, which goes against the decentralization principle of cryptocurrencies. Besides, centralization makes cryptocurrencies vulnerable to hacking and blackouts, which can stall services.

The lack of interoperability also means mainstream adoption of the blockchain is impossible. This is because, for blockchain technology to be integrated into the mainstream, it needs to be able to interact with existing systems.

BUMO is a next-generation blockchain that’s going to be catering to businesses. It comprises of two-layer chains that will help streamline transactions on the blockchain. The Bumo system will also be interoperable with both heterogeneous and homogeneous blockchain.  

The Team behind Bumo

Bumo is a vision of four core people: Steven Li, Steven Guo, John Zhao, and Yuliang Zheng. This team has between them a wealth of experience in Physics, blockchain, cryptography, and hashing technology.

Core Features of Bumo

Let’s dive deeper into the core features the Bumo blockchain that makes it stand out: 

A Multisig account

A multisig (multi-signature) is an account owned and controlled by more than one party. The Bumo blockchain uses something known as ‘account weightage’ to give more power of access to some signature holders over others. For example, if three people own a business and they have an account on the Bumo blockchain, the CEO’s approval, for instance, will count more than the other two’s.  This is an approach that the Bumo team hopes will appeal to big companies.

The Merkle Patricia Trie (MPT)

The Merkle Patricia Trie is a tool that combines the technologies of Merkle Tree and Patricia (Practical Algorithm to Retrieve Information Coded in Alphanumeric) Tree. This combination makes it easier to find particular transactions by reducing the time that would be taken to ascertain if that transaction belongs to a particular block or not.

Trailer System for Off-Chain and On-Chain Data

Depending on the characteristics of the data, the Bumo blockchain will differentiate data into off-chain and on-chain data, providing a streamlined system for handling heavy and complex data. This differentiation will help reduce the burden on the blockchain and save on hardware costs because the node network will experience less strain.

Interoperability Feature of the Bumo Blockchain

The Bumo blockchain has the Canal system, which is two-layered – with main chains and cross chains. The main chains comprise collection and validation nodes. The validation nodes provide “high-level” consensus for transactions on the cross-chain.

Cross chains are akin to the routers in a traditional network system. They route data from various blockchains towards the target blockchain. 

BUMO and Smart Contracts

BUMO hopes to be the best destination for smart contracts. The platform will feature these properties which are specifically geared to help it achieve this purpose:

i) Turing complete, or ‘computationally universal,’ which means a contract can solve any problem with the right tools

ii) Fast deployment 

iii) Flexible calls

iv) Reliable execution of smart contracts

v) The Bumo platform features a virtual machine called the BuVM (Bumo Virtual Machine). BuVM has the following properties to enable what Bumo calls “Eco-Friendly Smart Contracts.”

  • More advanced smart contract performance
  • Increased security for smart contracts
  • Multi-language support for smart contracts
  • Developer-friendly tools and environment

Also, the Bumo platform will provide a unique space for app developers, thanks to the following features:

  • Native application programming interface tools
  • WebSocket-like features
  • Ability to create an app or tokenize assets without the need for a smart contract. This is what Bumo calls “Account-based Tokenization Protocol,” in which users will be able to issue tokens by the mere virtue of having an account on the Bumo blockchain.

Benefits of Bumo

☑️The ability to tokenize assets quickly, safely and reliably

☑️A friendly environment for developers to create decentralized applications

☑️The ability to handle up to 10,000 transactions per second

☑️Reduce the costs of operation, maintenance, and exchange of data in the blockchain

☑️It will allow the connection of Internet of Things devices that will create value for thousands of people

☑️It is user-friendly

☑️People can exchange smart contract values faster and safely

☑️It promotes the free flow of digital assets

Final Thoughts

The Bumo blockchain is poised to reinvent several aspects of blockchain and stir the crypto space for the better. If Bumo succeeds, it’s very likely the blockchain world will bid goodbye problems like scalability issues, lack of interoperability, and the need to be well-versed in programing language so as to create applications. Will the Bumo team deliver, or is it another overhyped blockchain project? As with many things in blockchain tech, only time will tell. 

Categories
Crypto Guides

Top 4 Ways To Earn Cryptocurrency For Free

Introduction

Cryptocurrencies have been one of the most spoken topics in the last decade. That too, in the last three years, the interest in investing or trading cryptos has been the maximum. We have also been discussing a lot about cryptocurrency lately in our detailed guides. We understood the various properties of cryptos and what makes this currency truly amazing. So, if you are a novice trader or investor or just a reader, we believe that you have at least a little interest in owning some of the top cryptos in the market.

One can buy cryptos easily in different ways, such as purchasing them in an exchange or using services like localbitcoin.com, etc. While these are some of the easiest ways to purchase cryptos, all of them involve investing your own money. But what if we say there are various ways in the market where you can earn cryptos for free? Yes. Many people are already grabbing these opportunities and earning a good amount of cryptos without having to invest their hard-earned money.

We have listed four of the most efficient ways to earn crypto for free. Please note that earning these cryptos does involve some amount of work from your side because nothing on this planet is truly free. However, you are not required to put any of your funds or take a full-time job for a crypto company. So let’s see the different possible ways to earn free cryptos.

💸 Through Airdrops

This is by far the most popular way of earning free cryptos. Airdrops work just like giveaways. Any crypto startup would prefer giving their coins for free in order to spread their name. It’s a marketing strategy where the participants of the airdrop get to avail free cryptos. There is a minimum amount of work involved in this process, like follow the company’s Twitter account, joining their telegram page, etc.

Anyone with an active ERC-20 compatible Ethereum Wallet can participate in these airdrops. Make sure to do your research to find the airdrops offered by some of the most potential crypto companies; because the free cryptos that you have earned in airdrops must increase in value later to make a profit out of them.

As we can see below, the last Stellar’s airdrop involved an offering of close to 375 million Stellar coins.

Picture Taken From – Blockchain.com

💸 Coinbase Earn Programme

Users of one of the very well-known crypto exchange – Coinbase, can earn free cryptocurrencies by completing some of the interesting courses provided by them. These courses include lessons about the basics of how certain cryptocurrencies work. The point here is that this exchange offers free coins of crypto to their users by educating them and creating exposure to that crypto.

Picture Taken From – Coinbase

We can currently earn cryptos worth $186 (as of Feb 2020) by just signing up with Coinbase and completing the courses offered by them. Dai, EOS, Stellar, and Zcash are some of the familiar cryptos that can be earned through this program. You can follow this link to start with the courses.

💸 Participating In the Bounty Programs

Free cryptocurrencies can be earned through participating in various bounty programs offered by the crypto/blockchain companies. There are different types of bounties, such as Bug bounties, Content bounties, Social bounties, and Signature bounties. In bug bounties, cryptos are offered to the people who help the companies in finding bugs in their code. The rest of the bounties involve creating content and exposure for both crypto start-ups and well-established companies in different forums. So these programs are not just for tech-savvy individuals but also for promotors.

Recently, Coinbase has offered about $30,000 worth of cryptos to an ethical hacker who founds potential bugs in their system.

Picture Taken From – Hackerone

💸 Through Affiliate Marketing

Many of the cryptocurrency companies have their own affiliate marketing programs for individuals or companies who are willing to promote and generate sales for them. For instance, companies like Trezor, Ledger, Binance, and LocalBitcoins offer 10% – 40% of commissions to their referrals. Details about each of these affiliate marketing programs can be found in their corresponding websites.

Bottom line

There are many other ways through which free cryptocurrency can be earned, but these seemed to the most effective ones. Not every company that offer free cryptos have the best interest for their customers. So please do thorough research about the authenticity of any program you are willing to take part in. All the best.

Categories
Crypto Daily Topic Cryptocurrencies

What Is Rootstock (RSK): Understanding The Most Popular Bitcoin Blockchain

Bitcoin technology has played a phenomenal role in revolutionizing the global finance industry. Finance industry players, retail companies, and individuals understand this, hence its massive adoption across all industries. But Rootstock (RSK) sidechain developers believe that Bitcoin blockchain could be doing more. And that limitations in scalability, transaction processing, and lack of support for smart contracts the dominant cryptocoin is facing today are its biggest hindrances.

RSK developers also believe that the pioneer blockchain is money-dominated, implying that people concentrate more on Bitcoin Value than the technological revolution it promises the finance sector. And to address these issues, RSK labs sought to create a Bitcoin sidechain – Rootstock, also known as the ‘SMARTER BITCOIN.’ According to the company, the Sidechain will help Bitcoin overcome these limitations and boost its functionality and interoperability.

But what is RSK, and what progress has it made in making these feasible?

What Is RSK?

RSK is a Bitcoin sidechain connected to the BTC blockchain by a two-way peg. It can also be said to be an innovative virtual machine (RVM), tethered to the root of bitcoin blockchain with the aim of introducing the smart contract concept to the pioneer blockchain while effectively boosting its scalability. Plus, its through RSK sidechain that the crypto community will be able to create and run Bitcoin blockchain-backed smart contracts.

How does RSK hope to achieve these?

Ideally, the RSK sidechain seeks to marry the functionalities of the Ethereum blockchain with the security and efficiency of the bitcoin blockchain. To make this possible, the smart contract sidechain is tethered to the main blockchain by a two-way peg. This ensures that the side chain runs parallel to the main blockchain and that there is interchangeability of assets between both parent and side chain. It also has the backing of a semi-trusted third party that oversees the reliability of all transactions between RSK sidechain and Bitcoin blockchain in the execution of these smart contracts.

Hybrid federation to actualize smart contracts:

The semi-trusted-third-party (STTP) comprises of 25 highly accredited crypto community members of proven crypto knowledge and unquestionable integrity. And they serve as an interlink between RSK sidechain and Bitcoin blockchain, where they determine when to lock or release smart contract funds.

Why does the execution of smart contracts need a third party, you might ask? Well, because Bitcoin blockchain does not support the creation of smart contracts on its platform, RSK platform users needed an assurance that the Sidechain was operating in their best interests. And who to better provide such oversight and regularly audit the transactions carried out on the platform than the crème del crème of the crypto industry.

The 25 STTPs effectively form the hybrid federation that, in turn, operates the multi-signature wallet used to authorize the locking and release of funds. Each multi-sig wallet member has one vote, and it takes a simple majority to authorize the execution of a smart contract.

Two-way peg to actualize scalability and transaction speeds

The RSK Labs has been involved in the audit and analysis of both Bitcoin and Ethereum blockchains. In RSK sidechain, they have come up with a highly scalable platform that seeks to boost on-chain transaction processing speeds to 2000 in the long-run from the 3 TPS recorded by bitcoin blockchain today. They also intend to increase block confirmation speeds from 10 minutes per block to less than 10 seconds per block. To achieve this, RSK Labs developers utilized the GHOST protocol used on the Ethereum blockchain to speed up transaction processing speeds, and the DÉCOR+ block reward sharing protocol.

Note that RSK is a sidechain and will not be modifying the bitcoin blockchain code. How then does its scalability and transaction speeds impact Bitcoin? Well, the 2-way peg ensures the two blockchains run parallel to each other, and share assets like the blockchain database. This implies that if a transaction is recorded on the sidechain block, it automatically records on the main bitcoin blockchain, effectively eliminating chances of duplication. The tokens are also interchangeable, where 1 BTC = 1 SBTC (the token used on the RSK sidechain network).

RSK key features and components

Virtual machine:

RSK is to bitcoin, what EVM is Ethereum. A virtual machine through which bitcoin smart contracts can be executed. RSK, however, goes a notch higher to provide a platform on which the crypto community can create Bitcoin-based decentralized apps. And this effectively earns it the title –SmartBitcoin.

No commercializing tokens:

The fact that RSK is a sidechain that complements the Bitcoin blockchain means that its tokens won’t be commercially available. They will be restricted within the RSK to boost network operations like DApps creation. And to allow for easier interchangeability, 1 SBTC will always hold the same value as 1BTC. Let’s say you had 5 BTC and that you wanted to transact but want to leverage the speed and efficiency of the RSK sidechain. You simply exchange them for an equivalent amount of SBTC, and once done, convert your SBTC balance back to BTC.

Transactions not fully trustless:

The fact that Bitcoin’s blockchain does not support the creation of smart contracts on its native network necessitates the use of the Hybrid Federation interlink. When you exchange your BTC for SBTC or vice versa, your coins are locked in a multi-signature wallet within the 2-way peg. The federation, consisting of 25 highly accredited crypto community members, holds the keys to the multi-sig wallet. And locking and releasing funds held in the wallet only requires the authorization of a simple majority.  It provides a semi-trustless oversight over the funds as opposed to the fully independent, trustless, and automated oversight needed in a smart contract.

Merge-mining security:

 Bitcoin miners don’t need special applications or hardware to mine SBTC tokens. The RSK token mining applications are completely compatible with the bitcoin mining infrastructure. And as Bitcoin mining halves and block confirmation become harder, SBTC mining is a well-timed incentive.

The bridge between bitcoin and Ethereum:

RSK also supports the Turing Complete Programming language used by Ethereum Virtual Machine (EVM) and Ethereum DAPPs. This makes it possible for Ethereum blockchain users to easily migrate their systems to the RSK network. It is a viable option for Ethereum users, uncertain about the efficiency and reliability of the upcoming shift by Ethreum from proof of work to proof of stake.

What is the future of RSK?

Federation transitions to a drivechain/sidechain model?

Currently, RSK transactions over the 2-way peg are audited by the semi-trustless federation. Moving forward, however, and as the Sidechain gains traction and usage, RSK hopes to shift the custody of the locked coins on the 2-way peg to the merge-miners. A significant move aimed at reducing the need for trust.

RSK Educate:

RSK also looks forward to educating the crypto community on the effectiveness of its innovative Sidechain. To this end, RSK has published all the whitepapers related to this project and even created a blog where they share tips and educate the masses on how to interact with the Sidechain.

Why hasn’t RSK picked?

When RSK made public their intention to create and actualize the implementation of smart contracts, every crypto community member expected a flawless process. In its stead, RSK Labs, the developers of RSK sidechain, decided to include the semi-trustless federation of signees to maintain custody of the coins exchanged between Bitcoin main net and Sidechain.

The inherent risk associated with such an arrangement, especially considering their small and compromisable size of just 25 participants,  have seen the crypto community shy off the platform. Most of these lie in wait of the proposed upgrade to the 2-way link that elbows out the federation in favor of BTC and SBTC merge miners. 

Bottom line

It is about time Bitcoin blockchain took advantage of its massive industry support and incorporated smart contract features. And the Rootstock sidechain is here to give the blockchain its much-needed push towards execution of smart contracts. By adopting RSK, users of the already dominant legacy coin stand to benefit from such features only available with the newer blockchain models as faster transaction processing speeds, a DApps building platform, and the ability to execute bitcoin blockchain-backed smart contracts. Looking at the Bitcoin community, however, one can’t help but notice the pockets of resistance and doubts forming around the effectiveness and reliability of the Sidechain. And these are majorly attributable to its reliance on the federation of signees as custodians of the locked coins. Only time will tell if this will change once RSK migrates to verification by merge-miners.

Categories
Crypto Videos

Surviving a Bear Market! – Crypto Trading Strategies Part 1

Cryptos in a bear market – what to do? part 1/2

Ever since Bitcoin got created (over ten years ago), investors have learned how volatile the cryptocurrency market can be. As the years passed, bull and bear trends have constantly replaced one another, with little to no way of predicting or preventing them. Even the smallest details were enough to change the situation of the market completely.


The biggest growth that cryptocurrencies have ever seen came in 2017 when the bulls took over the market and brought coins to entirely new heights. Those that have invested prior to the bull run, made quite a fortune. However, those that invested while the prices were up — lost a fortune. This was due to a massive market crash that happened in early 2018. The downtrend continued throughout the year, all the way until now.

These days, experts predict a new bull run, as they believe that cryptocurrencies follow an established market cycle. Considering the situation and the state the crypto market was in, investors needed to develop various strategies in order to survive the bear market. These strategies were not necessarily about making a profit but rather preserving money. We will present four strategies that might work in such a situation, and these are as follows:

Shooting
Holding
Buy low – sell high
Diversification
Shorting


Short-selling, or “shorting,” occurs when traders predict that a market is about to decline. If their prediction is correct, they earn a profit as they bet on the market going down. This method works in many different markets and is not limited to just crypto markets.

The most well-known example of shorting happened in 1992 when an investor called George Soros predicted the drop of the British pound and made nearly $1 billion in profit.
Shorting has proven itself to be quite an effective way of making a profit. This way of trading is possible through CFDs (Contracts For Difference) as well as cryptocurrency margin exchanges. By employing this strategy, traders can sell assets that they do not own. Instead, they borrow assets and sell them at current prices, and then rebuy them at (hopefully) lower prices.
If the market moves down, their position goes up, which then lets traders buy the asset at a much lower price, and make a profit. Exchanges such as Bitmex offer its users shorting options based on how much Bitcoin they own.
Shorting doesn’t have to be used for just making a profit. It can also be used for hedging purposes.


If a trader is holding large amounts of a certain asset, such as Bitcoin, they can open a short position to decrease the risk of losing money in case the asset moves in the opposite direction.

Check out part 2 of our How to trade in a bear market guide to learn more about the strategies that can be employed in a downtrend.

Categories
Cryptocurrencies

How to Choose and Accept Cryptocurrency for Your Business

As with any other technology, the digital currencies have revolutionized not just the tech world but also the health, finance, and manufacturing industries. 

Their disruptive aspect can be linked to the underlying protocol, blockchain, which most cryptos run on. 

This technology delivers faster and more secure transactions compared to using fiat currencies. Moreover, there are no central authorities such as banks or government, involved in the transaction. As a result, this lowers the transaction fees saving you money in the long haul.

But, ever since the Bitcoin craze back in 2017, there has been an influx of cryptos in the market. For any business owner, the overwhelming number of cryptocurrency choices can be daunting, especially with reports that some coins are a Ponzi scheme. 

Criteria used to choose the right crypto for your business

So, which criteria should business owners use to choose the right cryptocurrency for their enterprise?

☑️Value of the Coin

Choosing a coin that has high value shields your business from losses caused by the volatile nature of cryptocurrencies. This is especially true since highly valued coins tend to be more stable, meaning their prices don’t change radically. 

The value of a crypto is directly related to its demand. The higher the demand, the higher the value of the coin. 

☑️Usability

The usability of a coin can be viewed in different spectrums, but it all boils down to how users interact with a coin. 

The most basic usability aspect of a coin is in terms of the number of people using the coin. A popular digital coin certainly has a more significant number of users compared to a less popular coin. The idea here is to choose a digital coin that has a good number of users. This way, you can be assured that most of your customers have access to the coin of your choice. 

Also, usability entails the user-friendliness of a cryptocurrency. A coin with a complex interface can be intimidating to a particular demographic of your customer base, thus limiting your products or services to the tech-savvy clientele. 

A coin with an intuitive interface should be easy to perform simple functions such as opening and funding the wallet as well as sending and receiving funds. 

☑️Transfers

One of the primary reasons behind businesses accepting payments in cryptocurrencies is due to the fast transaction associated with the payment process. 

It’s common for business owners to wait for days or even weeks for payments made using a debit card, to reflect in their bank accounts. This can be frustrating, especially if you have urgent bills to pay or need to make a payroll.

While cryptocurrencies offer faster transactions than conventional currency, some aren’t as fast as you would wish. Take bitcoin, for instance. The network on which it operates has a scalability problem, which translates to slower transactions due to its limited blockchain size and frequency. 

Of course, there are altcoins such as Monero, and Litecoin that offer faster transactions and even charge less than bitcoin for sending and receiving funds. These coins take less time to confirm a block, amping up the transaction process. 

How to Accept Cryptocurrency for your Business

There are three main ways of accepting cryptocurrency as a form of tender for products and services. 

Direct Deposit

If you only have a small number of customers using cryptocurrency, direct deposit works best. All you need is to create a wallet and share its address with your customers. 

Ideally, you should partner with an exchange platform to help you create a wallet. This way, it will be easy for you to link your wallet to your bank account, so as to withdraw funds in fiat currency. 

Besides crypto exchanges, you may consider creating a versatile digital wallet with popular providers such as Exodus and Jaxx. With one of these wallets, you can accept any type of cryptocurrency for efficient conversion to conventional currency. 

To make the transactions easier for your customers, you should present your wallet in the form of a QR-code. Customers will just scan the code with their phones, and transfer the agreed amount directly to your wallet. You can request a wallet QR-code from the exchange site you’ve partnered with or use an independent app dedicated to creating one for streamlined cryptocurrency payments. 

Point of Sale (PoS) Equipment

A cryptocurrency PoS equipment is accompanied by a piece of software that automatically links your wallet to your bank account, for a seamless payment experience. The equipment also supports cryptocurrency-based debit cards and even offers withdrawal services in the form of fiat currency. 

Alternatively, instead of buying a cryptocurrency  PoS terminal, you can create a merchant digital wallet and link it to your existing PoS system. Unlike the traditional digital wallet, a merchant wallet comes with unique functionalities that make it compatible with your accounting systems for easy bookkeeping. 

Once you’ve created a merchant digital wallet with your preferred provider, you’ll then receive a public address, private key, and a QR-code. Now, using the instructional manual, integrate these details to your existing PoS system, invoices, and shopping cart. 

Plug-ins and Cash Out

Exchanges such as Binance and Coinbase offer plug-ins that are installed into your online store. It becomes easier to integrate these plug-ins if your store is on popular platforms such as Shopify, WordPress, or eBay. 

Customers can, therefore, shop from your store and check out using crypto, which is then deposited to your wallet address or bank account. 

Boost Your Business by Accepting Cryptocurrency Payments

Accepting cryptocurrency payments gives your business a competitive edge, as technology becomes more integrated into all business operations. Being an international currency, cryptos are also a gateway to broadening your market outreach. 

Of course, there are a few drawbacks with this payment method. Volatility remains the biggest downside to cryptocurrency payment for business services. With such unprecedented price swings, the most viable solution is to convert any cryptos to fiat currency, immediately upon receipt to protect yourself from loss of value. 

In addition to volatility, you should also maintain compliance with regulatory tax schemes that are subject to your jurisdiction. 

Nonetheless, business owners are advised to keep an eye out for cryptocurrency trends and consult experts in the field, to understand every aspect of digital currencies before integrating them into payment systems. 

Categories
Crypto Daily Topic

Bitcoin’s Path to $1 Million: A Mere Speculation or Inevitable Reality? 

nEver since Bitcoin hit an all-time high bull run in 2017, there has been speculation about its potential to hit the $1 million mark. 

John McAfee, with all his controversial personality and expertise in the tech world, has been at the front-seat, fuelling the $ 1 million BTC price speculation. In fact, he’s part of the reason why bitcoin reached $20,000 in December 2017, thanks to his bold prediction on Twitter in November of the same year.

Well, he didn’t exactly predict that it would be worth the $20,000 but instead claimed that the coin would be worth as much as $500,000 by the end of 2020. Although he didn’t get into the specifics of how he had arrived at that number, the prediction spiked a mass adoption of BTC in 2017, resulting in the bull run. 

A few months later, McAfee doubled up the prediction to a $1 million price target. Recently, other notable industry players such as PayPal director & CEO, Wences Caseres, threw in their weight on the prediction, saying it’s possible for BTC to hit $1 million in the next to seven to ten years. 

The Critics

Of course, there are a good number of respectable individuals opposed to the idea that bitcoin is a sound investment, leave alone the price prediction. Warren Buffet, the Oracle of Omaha, describes Bitcoin as a store of fear, not a store of value. Others who doubt bitcoins potential include JP Morgan and Chase Bank CEO Jamie Dimon and Paul Krugman, an esteemed economist and columnist for The New York Times. 

Despite the harsh skepticism facing Bitcoin’s future, it doesn’t mean it is entirely impossible for the cryptocurrency to grow in value, and even surpass the $1 million mark. 

But before that, there are several hurdles the digital currency must overcome to place itself on a path to the highly anticipated price target. 

Scaling Problem

For Bitcoin to experience any massive growth, its market capitalization has to grow first. Case in point, since the first real Bitcoin transaction back in 2010, the infamous Pizza purchase, the crypto’s market cap rose by a whopping 2,300%. This happened after a few weeks of increased adoption/transactions by the general public, who were eager to get a piece of this new digital currency. The increased market cap resulted in an increased BTC price from just $0.0025 to $0.06. 

Unfortunately, Bitcoin’s block size is insufficient to support the high number of transactions required to boost its market cap and eventually achieve the $1 million target. The actual block size is 1 MB, which often causes sluggish transactions even with the current of $178 billion. Keep in mind that the $1 million BTC argument dictates that the market cap must amount to approximately $16 trillion, an equivalent of 13% of global GDP! 

There have been attempts to solve this problem, but its success hasn’t materialized. Two Bitcoin developers created a two-layer solution dubbed the Lightning Network (LN). This off-chain payment tool makes the transfer of BTC funds faster, except that the payment information doesn’t touch the main blockchain unless the transaction link is closed. 

Besides, LN doesn’t completely solve the high bitcoin transaction fee problem, which could jeopardize the network’s adoption among the BTC community. 

Regulation from External Authorities

In line with the idea that there has to be a massive adoption of BTC to propel it to high price points, the current regulatory environment hasn’t been doing any good to the Bitcoin community. As such, more people are finding it hard to fully invest in Bitcoin, considering the negative reviews from government institutions. 

To put into perspective, consider the BitLicense law imposed by the New York State Department of Financial Services (NYSDFS). According to the law, any start-up centered around bitcoin will have to pay an exorbitant fee of about $5,000 to acquire a business permit/license. The worst bit is that it’s not guaranteed that the NYDFS will approve their license request. 

On top of that, there are states with varying bitcoin taxation laws, some of which are unfair. In such states, BTC is treated as an asset, thus subject to capital gain tax. The idea behind this is due to the unpredictable volatility of BTC, which. in an ideal case, would result in a bitcoin holder’s net worth increasing if the coins price were to increase in the first place. Consequently, this discourages business owners who would like to accept Bitcoin payments for their products or services. 

While the government’s interference is aimed at creating a sound atmosphere in the cryptocurrency space, it doesn’t come out well for people who loved Bitcoin’s decentralized nature. That said, there needs to be a bilateral trust between the Bitcoin community and the government, for the digital currency to reach $1 million in value. 

Banking Support

Probably, the major hurdle standing on the way to 1$ million BTC value is the lack of dependable liquidity. If the currency is to be accepted by the masses, they need a reliable option to change their fiat currency to BTC and vice versa. 

Unfortunately, in many countries, the central bank bars the subsidiary banks from offering liquidity options to BTC users. Some credit card companies even probit their users from purchasing cryptocurrencies. There have also been numerous cases of frozen accounts for those trading cryptocurrencies. 

Such strict laws not only discourage new investors but also causes panic selling among the existing Bitcoin holders, resulting in a bearish run in the crypto market. 

The Rationale Behind $ 1 Million BTC Price Prediction

Regardless of the seemingly impossible hurdles to overcome, Bitcoin still stands a chance to come close if not reach the ambitious price target. 

Let’s objectively look at some underlying factors that make the price target more of a reality than a speculation

Technological Growth

In the theoretical stages of technological growth and adoption, every new tech solution or tool starts out with an innovator as the pioneer and first user. Gradually, the tool/solution grows and becomes adopted by the first group of people known as early adopters. The early adopters aren’t big in numbers, but the subsequent mid and late adopters are often in large numbers, thus giving the tech solution in the mainstream attention and usage. 

Bitcoin by itself is a technological solution which in this case, the majority of the coins are held by the early adopters. These are a small group of people who invested in Bitcoin when it was worth pennies. As such, it’s quite safe to say that Bitcoin hasn’t yet achieved mainstream usage and adoption as spelled out in the developmental stages of technology solutions. 

More so, big corporations and the government have realized the importance of blockchain, the underlying cryptocurrency technology, as evident from the launch of Libra ( a digital currency expected to be launched by Facebook, soon). 

The cryptocurrency industry as a whole will, therefore, gain public acceptance placing BTC on its path to $1 million. 

Cushion Against Financial Crisis

Financial recession often results in loss of wealth among the citizens of the affected country. Bitcoin and another cryptocurrency, therefore, stands as a cushion against unpredicted financial crisis since it lacks a central authority controlling it. 

This idea is even more practical in countries such as Zimbabwe and the Philippines, where the local currency has lost much of its value. Bitcoin and other cryptos are an alternative store of value medium, to citizens in such countries. 

The higher the number of people safeguarding their wealth in cryptos, the more likely bitcoin will grow market cap and finally achieve a $1 million valuation. 

Conclusion

Judging from the past bull run, it’s easy to see why Bitcoin’s future cannot be accurately predicted. There are factors beyond the rational market principles that have and could influence Bitcoin prices, making the coin’s price growth subject to speculations. 

Nonetheless, for a stable growth towards high price points, Bitcoins must overcome the setbacks stated above. Only this way, and in combination with factors favoring its growth, will Bitcoin hit and surpass the $1 million price target with little volatility. 

Categories
Cryptocurrencies

What is Token Burning and How Does it Work?

Token burning, a concept unique to the cryptocurrency market, is gradually becoming an intrinsic feature of newer and future cryptocurrency projects. Even more recently, well-established altcoins such as Binance have adopted this concept making it worth the attention of any cryptocurrency investor. 

As the name suggests, coin/token burning is the process of ‘burning’ coins, or rather, the irreversible destruction of coins/tokens in an effort to eliminate them from circulation. 

To understand this concept better, let’s delve into how the whole ‘burning’ process works. 

How Does Token Burning Work?

Despite the extreme image the phrase paints, token burning doesn’t involve any kind of token disintegration. In fact, it’s impossible to disintegrate coins since blockchain – the underlying cryptocurrency protocol – is immutable, meaning the protocol’s history and data cannot be altered in any way. 

What actually happens is that the coins/tokens are algorithmically taken out of circulation by sending their signatures to a public address known as an ‘eater address.’ The keys to this public address are private and cannot be obtained by anyone. In essence, it means that once the tokens are sent to this address, they are unrecoverable and can never be used. Ever!

All burnt coins/tokens are then recorded on the blockchain transparent ledger system for all nodes to see and confirm that the coins have been indeed destroyed. 

While token burning serves the same purpose, which is the elimination of coins from distribution, it differs in the scope of execution. For instance, some projects will execute a one-time burn after their Initial Coin Offering (ICO), to help eliminate any unsold tokens. Other projects favor periodic burning of tokens based on the token’s utility and size, among other variables. Binance coin (BNB), for example, burns its tokens quarterly, with an aim to reach a threshold of 100 million BNB burned tokens. Alternatively, project developers can buy back their tokens from exchanges and take them out of circulation by sending them to the ‘eater address.’ 

A few other coins, such as Ripple, burn token progressively with each transaction. When parties transact using the coin, they must incur a transaction fee, pretty much like sending Bitcoin to another BTC wallet. However, in the case of Ripple, the transaction fees aren’t awarded to miners. Instead, these fees are automatically burned. 

Why do we need to burn tokens?

It’s quite startling to understand why crypto projects burn their precious tokens. But the process comes with its own benefits, favoring not only the developers but also the coin users. Here are the main motives behind token burning;

☑️Increase the Value of Coins 

The most common reason behind token burning is to boost and encourage the growth of a coin’s value. Going by the economic laws of demand and supply, reducing the supply of a commodity in the market fuels the demand for that particular project. As such, by burning a token, the supply of a coin reduces in equal measure, prompting a demand of the coin since there is a lesser amount of coins to satisfy the people’s demand. Consequently, the price of the coin appreciates, stabilizing its value. 

To the investors, the growth in value encourages them to hold the coins for longer in anticipation of even better prices as the demand increases. Also, holding the coins for longer helps maintain a sound network bandwidth, which is beneficial to the developers.

☑️Provision of Dividends

The provision of dividends is closely tied to the resultant increase in coin value after burning. However, this benefit works best in security tokens rather than in their utility counterparts. 

A security token is classed as an asset, and thus those holding it are regarded as investors. This is not the case with utility tokens. 

Nonetheless, with the increase in a coin’s price after burning some of them, the developers indirectly reward the coin holders, since the value of the asset has appreciated. This move plays out perfectly in countries such as the USA, where cryptos are discouraged from handing out dividends directly to their token holders. 

☑️Protection Against Spam

All cryptocurrencies are under the computing realm, which makes them vulnerable to cybersecurity threats. Having this in mind, it’s easy to understand why tokens can fall victim to Distributed Denial-of-service attack (DDOS), especially with the growing number of cryptocurrency users. 

Basically, DDOS is a cyber-attack in which the perpetrator seeks to flood a system with an influx of requests, so as to prevent the execution of some or all legitimate requests.

In the same vein, a DDOS attack on token targets at clogging the network, preventing the execution of transactions. By burning tokens, the developers end up reducing the overall transactions to a manageable number, thus safeguarding the network from DDOS attacks and spam transactions. 

Ripple is a perfect demonstration of how coin burning prevents spamming. By automatically burning a portion of the transacted amount, Ripple discourages the need to overload the network to gain a quick profit.

☑️Correct Errors

Although in rare cases, sometimes project developers make serious mistakes that can only be corrected by token burning. 

For instance, a project may issue an excess amount of coins or experience an increase in the number of tokens as a result of technical errors. In other cases, tokens unfit for trading. For example, those meant to support a transaction may end up into public circulation. Theoretically, an increased supply translates to lower demands, plummeting the coin prices. 

As a corrective measure, the excess tokens are burnt to avoid some of the consequences brought by the errors incurred. 

☑️Build Trust and Loyalty

Gaining trust from coin holders is the ultimate goal of any cryptocurrency, particularly one that is new in the market. 

After the Initial Coin Offering (ICO) of new crypto, its price is bound to increase. The project developers may decide to make more profits by selling excess coins to exchanges, at the prevailing spiked prices, which is unfair.  More so, by selling the excess coins, it would lead to allegations that the developers are only committed to gaining profits and that their coin has no real value. 

However, burning the excess coins shows that the developers are committed to the long-term growth of the coin. As such, the funds raised from the ICO will be used for business operations. But most importantly, burning excess coins help decentralize the project. 

Conclusion

As hardcore as it may sound, token/coin burning is proving to be an effective method of maintaining a balanced crypto-ecosystem. With time, future cryptocurrencies will certainly adopt this mechanism giving its numerous benefits, especially in a coin’s infancy stage. 

Also, with the hope that cryptocurrency space will stand the test of time, coin burning is arguably the best bet to maintaining the long-term value of a crypto.