How Cryptocurrency Works

What Is A Cryptocurrency?

New virtual currency

Bitcoins –  BTC the new virtual money

The world is moving at an incredibly fast pace these days. I don’t mean that time is speeding up although sometimes it feels that way with all the changes that new technology is bringing into our lives. Enter the terms Bitcoin, Cryptocurrency & Blockchain into our vocabulary. If you mentioned these words in a discussion 9 years ago (circa 2007) 99.9% of people would wonder what you were talking about.

However right now in 2018, unless you have been hiding under a rock these terms have become mainstream. The price of BITCOIN has rocketed exponentially over the past 12 months to be currently valued at over $8,000 per. Bitcoin and has been as high as $20,000 (click here for live pricing) at the time of writing. These words are now heard on daily basis and believe me this is a trend that is going to continue for years to come now. Yet the majority of us are still not really sure what the above words all mean and how it all works.

So Please Explain How Cryptocurrency Works:

 A great way to get your head around what & how Cryptocurrency functions is to view Bettina Warburg’s explanation who manages to break it down into 5 levels of difficulty –  watch this.    

We now know that people are talking about it on a daily basis and that that Bitcoins are extremely valuable. There are some shady hackers who have made some serious money out of it and that it is proving a very convenient way for criminal organisations to launder their ill gained fortunes. Governments are scratching their collective heads on how to deal with this new currency. But you are not reading this to hear about government legislation issues – so we will move on to the meaning of cryptocurrencies, and how they work in a way that everyone can gather a basic 101 understanding.

The Beginning Of Cryptocurrency

Cryptocurrency as a theory has existed much longer than most of us are aware of. Attempts at creating a sustainable cryptocurrency were made back in the early 80’s – all of which failed miserably due to the limited technology at that point in time.  However, cryptocurrency as we know it today started with the creation of Bitcoin. In November 2008 a phantom man going by the name of Satoshi Nakatomo posted a research paper where he described his design for a new digital currency called Bitcoin. I have called him a phantom because nobody knew his real name, and until recently no one could prove his existence. However, it is now thought that Satoshi Nakatomo is a pseudonym for a group of people.

Later on, in January 2009 the mysterious Nakatomo “mines” the first blockchain which is called the genesis block (I will explain that in a later article) and puts in motion the whole Bitcoin craze. The initial exchange rate of bitcoin was 1,309.03 BTC to one U.S. Dollar. In other words, one bitcoin was worth about eight-hundredths of a 1 cent. This rate is derived from the cost of electricity used by a computer to generate, or “mine” the currency. For a year or so, this creation remained operated within a tiny group of early adopters. But slowly, word of Bitcoin started to spread beyond this closed circle of cryptography enthusiasts. In 2012 WordPress became the first major company to accept payment in Bitcoin. Others, like Dell, Expedia and Microsoft followed and initiated the expansion of Bitcoin as a certified payment method. Satoshi (the man or group of people) are now reputed to be worth in excess of USD$17B as at November 2017 based on the current market value of Bitcoin.

Although bitcoin is the first and the most significant cryptocurrency, it is important to know that there are now over 1500 other cryptocurrencies like Ethereum, Litecoin, Zcash which are also active and have attained a certain value.

How Does The Blockchain Work In Cryptocurrency?

The main problem that prevented cryptocurrencies from functioning was a little thing called the double-spending problem. That means that if a digital currency is just information, free from a conventional physical structure like paper or metal, nothing can prevent a person to copy and paste it as he wishes. Well, the blockchain is just that, a decentralised database serving as a kind of digital ledger that keeps track of every cryptocurrency transaction. It makes sure that when a digital currency is spent once, it cannot be spent again. It keeps a record of every transaction ever made and allows access to information. On the other hand, it protects any data from being copied or deleted.

Blockchain technology exists as a shared database that is duplicated thousand times on a network of computers. That means that it does not exist in a specific location, which makes its records public and easily verifiable. This computer network is formed by users willing to devote their hardware and CPU power and run a special software that maintains that network. Those people are called “miners”. In that process, Miners will generate cryptocurrency and that way are rewarded for their efforts. The drawback of mining is that cryptocurrencies are designed to have a finite supply, which makes them similar to gold, or other precious metals. It means that miners will receive fewer units as the blockchain is mined deeper towards its final algorithm. (It is currently estimated that Bitcoin has a finite supply of 21 million “coins” – with approximately 16 million now in circulation) That is the main difference between cryptocurrencies and fiat currencies (paper money produced by governments of each country) which supply is, theoretically, unlimited.

How Secure Is Cryptocurrency?

Since blockchain technology serves as a kind of open database, you are probably wondering about security issues. Well, that is one of the best properties of this technology, it is virtually un-hackable. If a hacker wants to hack into a certain block of the blockchain he needs to hack, not only the desired block but all of the preceding blocks. That way he would need to go back to the entire history of the blockchain. He would also need to do this on every ledger on the network. And if that is not enough, he would need to do all that simultaneously. All in all, this makes blockchain technology truly hack-proof.

Advantages

  • Their scarcity and similarity to precious metals make them inflation protected which cannot be said to fiat currencies.
  • Cryptocurrencies offer a reliable way of exchange outside the direct control of national banks. Although it is expected that world governments will need to co-opt cryptocurrencies in the long run.
  • Mining is designed to be a kind of built-in quality control and monitoring instrument for cryptocurrencies. Since miners are paid for their efforts, they have a financial motivation for keeping accurate and up-to-date transaction records. That way they are securing the integrity of the system. It also stabilizes the value of the currency.
  • Privacy protection and anonymity are one of the main advantages of cryptocurrencies. All cryptocurrency users are using pseudonyms that cannot be connected to any information, accounts, or stored data that could identify them.
  • It is impossible for governments to seize or freeze accounts as is the case with fiat currencies. The decentralized nature of cryptocurrencies with all of its funds, transactions, and records stored all around the world makes it immune to these kinds of actions.
  • Transactions re cheaper than with traditional currencies. Their security features eliminate the need for a third-party payment processor needed to authenticate every electronic financial transaction. It is also cheaper to make international transactions since cryptocurrencies treat all transactions as domestic.

Shortcomings

  • Probably the main drawback comes from a feature that makes one of the advantages. The lack of regulation makes them perfect for implementation of illegal transactions on the dark
  • The lack of regulation also attracts tax evaders. Many small employers pay their employees in bitcoin. That way both parties evade paying taxes.
  • Since cryptocurrencies do not exist in any kind of physical form, they have a potential for financial damage due to data loss.
  • Many cryptocurrencies cannot be exchanged directly for fiat currencies. Just those with highest market capitalizations.
  • Although miners are in some way intermediaries for cryptocurrency transactions, they are not responsible for resolving disputes between transacting parties. In one word you have no one to appeal to if you are cheated or not satisfied with a specific cryptocurrency transaction.

Summary:

There is a vast amount of information about cryptocurrencies on the internet. By investing in Bitcoin or other Cryptocurrencies you may be able to make a fortune if you are careful and buy wisely. However the market in cryptocurrencies is extremely volatile and can fluctuate wildly. So be smart and don’t invest more than you can afford to possibly lose.

Follow us for more upcoming articles on cryptocurrency information.

Is Coinbase Safe?

Is Coinbase Safe?

Store Bitcoins Safely

Bitcoins if not stored securely are a target for online hackers to steal

As most of you already know, Coinbase is one of the oldest and the largest cryptocurrency exchanges in the world. It is available in more than 30 countries and has more than 4 million customers all over the globe. The users of Coinbase can buy and sell three of the most popular cryptocurrencies out there: Bitcoin, Ethereum, and Litecoin by using different payment methods like a bank account, SEPA transfer, PayPal etc.

By being the most popular intermediary in the volatile and yet unexplored market that is cryptocurrency, it is only logical that the following question arises: “Is Coinbase Safe?” Add to that an online modus operandi with handling money and it makes it perfect for questioning its safety. Here we will review the security of Coinbase and try to answer the “Is Coinbase Safe?” question.

  • Coinbase Legitimacy

Since it is a company that is doing its business in the U.S., they are obligated to follow U.S. laws and regulations. And they need to do that at a federal and state levels. Some of the regulations that Coinbase conform with are:

  • The company is registered as a Money Services Business with FinCEN.
  • Bank Secrecy Act.
  • USA Patriot Act.
  • State money transmission laws and regulations.

 

These laws and regulations are what separates Coinbase from other offshore competitor exchanges located in countries that offer less strict laws and regulations and provide an initial answer to the question “Is Coinbase Safe?”.

Note: Apart from the US, other countries Coinbase operates in, do not require certificates to conduct a cryptocurrency oriented business.

 

  • Is Coinbase Safe for storing your funds?

 

With Coinbase, customer funds are separated from company funds and are stored in protected bank accounts. The company assures their customers that in the unlikely scenairio Coinbase goes bankrupt the customer funds stored in those accounts are not accessible by Coinbase creditors and would be deposited back to the customers.

98% of customer funds are held in an offline storage in the shape of multiple physical wallets, which are further kept in safety deposit boxes and vaults located all over the globe. That way Coinbase protects its customer funds from hackers.

The remaining 2% are stored online and completely insured by an insurance syndicate Lloyd’s of London.

Another nifty feature for United State resident users is the Coinbase Wallet FDIC insurance coverage, up to a maximum of $250,000.

Note: Despite all of these security measures, customers are always liable in the case of their private accounts being compromised.

 

  • Is Coinbase safe for your personal information?

Coinbase uses Multiple 2-factor authentication (2FA) to secure its user’s accounts. The most basic 2FA method is using the SMS texts, but there is also an option of setting up a third party 2FA app like Google Authenticator and Authy, which is highly recommended.

Coinbase customers can also receive a notification if a new device from a different IP address attempts to log into their account.

 

  • Is Coinbase Safe for transactions?

Since your email, phone number and many other personal information are required you might say that Coinbase is safe for conducting transactions. They can even connect your personal information with your IP address as an extra layer of safety.

Another security measure is that each transaction request uses a new address, which prevents other users from connecting cryptocurrency addresses together.

On the other hand, Coinbase has been familiar with using the personal information to track their users and monitor their spending habits. They are also known for banning users based on their transactions. Users that were sending cryptocurrency to gambling sites or darknet had their accounts shut down. Even though those users are always paid back to their bank accounts, a cryptocurrency exchange should not decide where its users are spending their money.

 

  • Is Coinbase Safe with its Wallets?

 

Online Wallets are one of the main worries when asking is Coinbase Safe? There are three types of cryptocurrency wallets that can be created with Coinbase and each has its security measures:

 

  • Coinbase Bitcoin Wallet

With this wallet, your cryptocurrency is controlled by the Coinbase. That means that you have to trust the company to keep your coins secure, and of course take good care of your login credentials. Even though Coinbase is an international company with over $100 million in funding, the point of cryptocurrency, much like any other currency, is that customer has total control over its funds.

 

  • Coinbase Vault

The newly added Vault feature allows the user to share his account with 2 or more users. That means that all of the users that are sharing that account need to approve any transaction before it processes. All transactions have 48-hour delay that allows users to prevent a potential unauthorized transaction being processed.

 

Although this is a more secure option than the first one, it is still controlled by Coinbase and not by the user.

 

  • Multisig Vault

For total control over your funds on Coinbase, you must use this wallet. It uses a multi-sig method where there are 3 keys. One is held by the account owner, the second one is held by Coinbase and the third one is held by another user who shares your account. The shared key is encrypted with your password for security.

 

So, in case the Coinbase goes down you will still have your own key and the shared one. That way you will be able to transfer funds from your account without the control of the company.

 

 

  • Conclusion

We believe we have provided you with enough information to answer the popular question related to this cryptocurrency exchange. Is Coinbase Safe? Well, we think that as far as cryptocurrency exchanges go, this one is probably the safest and the most trustworthy of them all. The fact that they follow the US laws and regulations and offer insurance really separates them from the competition. On the other hand, the monitoring of user transactions and control of their funds is something Coinbase needs to work on in the future.

What Is Ripple

Ripple Crypto Coin Explained

Ripple Cryptocurrency Coins

When Bitcoin emerged in 2009 with the introduction of blockchain technology it was the dawn of the cryptocurrency era. Bitcoin was considered the king of the cryptocurrency and rightly dominated a small but slowly flourishing market. In recent years there has been an explosion of ICO (Initial Coin Offerings – similar to a share prospectus), and along with that came several challengers to Bitcoin’s market dominance. There have been a number of contenders to that prestigious crown, with many different and innovative platforms. Ethereum is probably the one to get the closest to the crown, then Litecoin who also experienced a steady growth, but there is one that is the most interesting of them all. Ripple is probably one the unique coins on the market today. It offers a much more centralized feel in a largely decentralized space.

  • What is Ripple?

Ripple was originally released in 2012 as a follow up to Ripplepay. It is designed to be a real-time gross settlement system (RTGS) and serve as a currency exchange. As opposed to Bitcoin, Ripple is not about energy consumption as a proof of work. It uses a network of independently validating servers that pose as a ledger where these servers continuously monitor transaction records. These servers can be anyone’s property, from banks to individual users. Ripple’s integrity is based on an agreement process between those validating servers that operate on a shared public database.

XRP, a Ripple protocol token, is planned to allow direct and prompt money transfer between two consenting parties. With the help of Ripple, you can exchange any type of currency from regular fiat currency to even airline miles. The best thing about Ripple is that they claim that the mentioned exchange is executed without fees and a lag time in the transfer process that are common features of traditional banking. They even say that it is possible to avoid cryptocurrency transactions via exchanges.

  • Who Is Behind Ripple?

Jed McCaleb, formerly employed at Mt. Gox, a cryptocurrency giant that handles the majority of global Bitcoin exchanges, and Chris Larsen who was a co-founder and CEO of the E-LOAN, an online financial company, joined forces and created “OpenCoin” (Should not be confused with OpenCoin.org, which is developing an open-source version of an electronic cash system), a company responsible for introducing Ripple protocol to the cryptocurrency community. With the team of developers that also have Bitcoin background, they hit the ground running and managed to gather funding from Andreessen Horowitz, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and the Bitcoin Opportunity Fund.

  • What Is Ripple Used For?

    Ripple Coin Is A Popular Coin

    Ripple Coins In A Physical Form

As we already said, Ripple protocol is used to execute rapid and direct transactions of any currency. Put that together with the fact that opposing to other cryptocurrencies that use blockchain technology and are entirely decentralized and lack any control, Ripple’s transactions are handled by and controlled by the regulatory financial institutions and Ripple Labs. Those financial institutions are regular banks like Santander like American Express that back this cryptocurrency and have a hand in its operations and growth.

The XRP token itself, however, seems to have a very small influence. Ripple even planned to discontinue XRP until the whole crypto-craze took off in 2016. The token is used entirely independent of the Ripple protocol. This actually means that banks do not need XRP to transfer any currency which is a fact that small investors need to keep in mind when planning to buy the token.

  • Can You Mine Ripple?

Unlike other, well-known tokens, XRP is not possible to mine. The company that created it issued a number of 100 billion XRP at the beginning and remained the only entity that is able to generate further XRP. Being that every XRP used in a transaction is being eliminated and unable to be used ever again, it is a fair assumption that as the XRP community grows, the token will decrease in numbers and therefore become more valuable. On the other hand, no one can forbid the company to issue another 100 billion.

  • Is Ripple a good investment?

The rise of the XRP value should be attributed to the enlargement of the worldwide Ripple network. As more financial institutions follow the lead of the likes of Santander and American Express, the bigger is the demand for the coin. Some predictions are that 2017 was the trial year for Ripple and that in the coming year the cryptocurrency will experience some important implementations by major Financial Institutions. This will certainly result in a short-term growth in value. Though, no one can predict what will happen in the long run since Ripple has practically only just commenced its crypto-career.

 

Conclusion

As you can see, Ripple really poses a unique presence in the ever-growing cryptocurrency world. As we said, it provides a centralized feel in a largely decentralized space and shows a great potential to change the traditional currency transaction process as we know it. On the other hand, like any other newly discovered cryptocurrency, Ripple’s future cannot be predicted with any dose of certainty. Especially when you take in mind the unpredictability of the XRP. At the end, time will tell what is the final reach of this interesting crypto.

 

The authors currently do not hold any Ripple coin and make no recommendation whether or not you should invest in Ripple or any other Altcoins. Information provided is designed to give you some insight into the Ripple cryptocurrency that may assist you in formulating your own opinions.

Will CryptoCurrencies Survive The Current Market Crash?

Will CryptoCurrencies Survive The Current Market Crash?

“The sky is falling” cry the masses who quickly adopt the actions of the herd mentality which is a natural human behaviour.

The Big Market Crashes:

Anyone who knows a little bit of financial history will understand with what happened in the following market crashes:

  • The Great 1929 Stock Market Crash – which led into the great depression
  • 1987 Stock Market Crash
  • The DOTCOM Bubble of 2001
  • US Housing Market Crash – which led many governments into bailing out financial institutions who were carrying losses of hundreds of billions of dollars and facing oblivion.

 

In each of these circumstances the markets rose almost uncontrollably in the famous exponential curve. Ultimately the growth in each of the circumstances was unsustainable and was made worse by the availability of “free” or cheap money for investors.

The Fall Of Bitcoin And The Market Capitalization:

The current correction or carnage in the Cryptocurrency market has seen the pioneer of  Cryptocurrencies  (BITCOIN) fall from a high of nearly $20,000 just prior to Christmas 2017 back to to around $6,500 (February 6, 2018). The capitalization of the Cryptocurrency Market has fallen from $830 billion (January 7, 2018) back to $300 billion (February 6, 2018). Overall that’s close to a 64% fall in 1 month.

Panicked by the “bad news” the herd mentality kicked into gear and dumped their crypto investments which in turn caused further selling by those basing their investments on margin lending.

Similarities Between Dotcom Bubble And Cryptocurrency Crash

The current state of the Crypto Currency Market has so many similarities to the DOTCOM Bubble that can be outlined in the following points:

 

  • When the internet was embraced by companies in the early to mid 1990s with a view to offering their products and services online. The market initially was slow to adopt this new way of doing business but it did not stop the believers or early adopters from investing.
  • The NASDAQ was where the tech companies like APPLE, DELL, CISCO, IBM etc were listed. The DOTCOMS also began listing on the NASDAQ to raise funds for their “business models” with ISO (Initial Share Offering) – (sound like ICO?)
  • The DOTCOMs were a mix of companies rapidly thrown together with a ‘business model’ and not a functioning business generating income to sustain it. They are dependent on the investors buying their shares which they did in droves which rapidly drove the share prices up exponentially. (I can even remember a mining company transforming almost overnight into a Dotcom). There were plenty of ‘shonky’ operators cashing in on this investment windfall. (starting to sound familiar yet?)
  • By the mid to late 1990s with cheap money, easy capital and over speculation & way too much confidence venture capitalists not wanting to miss out on a ‘big score’ invested billions of dollars recklessly into many of these Dotcom shams.
  • With the investments of the venture capitalists driving prices ‘to the moon’ money from the general public began to pour into the share market in the belief and hope of a big score in this exploding market.
  • Between 1995 and 2000 the NASDAQ increased five-fold from 1000 to over 5000 points. In the 12 months prior to March 2000 the NASDAQ valuations nearly doubled. (Again does this have a familiar ring except the growth in the Cryptocurrency Market capitalization went from approximately $19 billion dollars (February 2017) to over $825 billion dollars (January 7, 2018) – this was a growth of around 43X.
  • So the DOTCOM Bubble occurred when some of the major tech companies issued massive sell orders on their stock at the top of the market in March. This in turn fuelled further selling which had a snowballing effect in driving the market rapidly down. With this change of market sentiment the capital investment for the DOTCOMs dried up which set off a chain reaction collapse of these ‘business models’. With no further investment and no actual functioning business to generate income their cash streams rapidly dried up causing their ultimate demise. Trillions of dollars of investor’s money was lost in this collapse.

 

From my own perspective the parallels between the DOTCOM Bubble and the Cryptocurrency Crash are uncanny.

Which Cryptocurrencies Will Survive:

Currently there are some 1541 Crypto Currencies listed in this market area. (Check Coinmarket Cap here https://coinmarketcap.com/all/views/all/ for an update on the number of currencies listed and the live individual prices for each coin.

Among the 1541 listings are literally hundreds of crypto currencies that will probably not bring their business idea to an actual working model – let alone begin to turn a profit.

However I wouldn’t be too despondent as out of the ashes of the Dotcom Bubble rose some truly remarkable business giants that now dominate the online world – here a few examples:

 

  • AMAZON
  • Google
  • Face Book
  • Alibaba

 

So my advice is to do some serious research and identify those Cryptocurrencies that have a sound business model and sufficient financial means to bring their model to market successfully. It is my firm belief that there are opportunities to invest in some future financial giants that will net you an enormous financial windfall – if you choose carefully!

You may like this post on the top 10 current cryptocurrencies.

How To Buy Bitcoins & Other Crypto Currencies

 

If you are new to Cryptocurrency and are thinking of buying Bitcoins (or part of a Bitcoin) or another Crypto Currency then we would recommend that you read the information in this article.

Bitcoin A New Payment System

Safe Ways To Store Bitcoins

As a potential investor in Bitcoin or another Crypto Currency, whether you have $1000, $10,000 or $100,000 to invest, the principles will be the same. If you read and apply the following rules then you should not have any problems.

 

Open An Account With A Reputable Exchange

To purchase a Bitcoin or other Crypto Coins you will need to open an account with a reputable Crypto Currency exchange. A reputable exchange will request for you to provide suitable identification (ie. Passport, Drivers License, Proof of Residency etc) to gain account approval. All these exchanges will have fees for purchasing & selling the currency on your behalf. The fees vary from exchange to exchange but it is worth checking them out in advance so that you are fully informed. Once your account is approved you can then commence transferring funds into your account via:

  • Bank transfer of Fiat currency (ie. USD$, Euro etc)
  • Pay Pal
  • Credit Card (be wary of the fees associated with doing it this way)
  • Other means

 

For a list of reputable Crypto Currency Exchanges you will find them in this article.

 

Understand What You Are Buying

Do you understand what Bitcoin does and how it functions? If the same applies to another Crypto Coin you are thinking of investing in then I strongly suggest that you do some research into the product. So many people are taking a “tip” from a friend or relative who tell them “it’s a sure thing….it’s going to the moon!” On this recommendation people are literally throwing their hard earned cash at something they have no idea about. The prices are fluctuating wildly in this market mainly because of a lot of “spin doctors” making predictions without any facts. I have seen forums with over 1500 people on “live” all talking up or down “coins” without any facts to verify their stance. There is so much “chatter” moving so quickly it is difficult to keep pace.

 

So be warned – DO SOME RESEARCH!

 

Be Aware Of Scams

As this article is being penned there are some 1493 currencies (sorry….. by the time this paragraph was completed there are 2 less – 1491 listings) listed on Coin Market Cap (click here for the current live numbers). On the recent fall in the market this number dipped to 1440. There are new ICO’s being released weekly and just as quickly some of them are falling off the radar with their investor’s funds. As this market is still in its infancy there are ICO’s being released with nothing more than an idea and a good social media marketer. They are able to raise millions of dollars of your money with no real obligation to follow through with the project.

 

How To Store Your Bitcoin Safely

When you purchase your chosen currency (let’s use Bitcoin in this example) you are issued with 2 important KEYS. One is a PUBLIC key and PRIVATE key.

Store Bitcoins Safely

Bitcoins if not stored securely are a target for online hackers to steal

What is the difference between a PUBLIC and PRIVATE Key?

To put it simply when you purchase Bitcoin(s) or part of a Bitcoin you are issued with a Public and a Private Key.

 

The Public Key allows you to encrypt your Bitcoin transaction. However the Private Key is the only way to decrypt your transaction to allow you to gain access to it for sale or a transaction for other means.

 

Storing Your Private Key:

If your computer is hacked and your private key is stolen or you are careless and leave it in public view your Bitcoin(s) can be transferred into another persons account and it will be lost forever with no trail to follow. Should you lose your private key your Bitcoin(s) will also be lost forever in cyber space.

 

What you can do to prevent this happening is:

  • Store your keys in an online wallet and then take it offline
  • Make several copies of your KEYS (possible ways: in writing, on a USB, on a card reader, engraved on a piece of metal) Store these in a safe place and try to think of every possible contingency. ie. Fire, water damage, forget where they are). I know of some people who have engraved them onto a metal plate & buried the plate.
  • You could also write it on paper & store it in a watertight container & bury it in your backyard.
  • Lock it up in a bank safety deposit box (but do you trust your banks)

 

If you choose to keep your Bitcoins on the exchange’s site there are risks associated with that (referring to the Mt Gox Exchange)

 

The safest practice is to store it in a wallet and take it offline then securing your keys in a safe place. If you do write your keys on paper do not make the reference for the keys too clear in case someone happened to stumble upon your storage crypt.

Ethereum V Bitcoin

Ethereum V Bitcoin: Which One Do You Buy?

Ethereum Vs Bitcoin

Bitcoin and Etherum are both cryptocurrencies but are totally different

With the extreme rise of the crypto-community in the past couple of years, accompanied by the continuous emergence of new coins, arose the need for endless comparison of those cryptocurrencies. Whether in the terms of sheer value or the functionality of their blockchain technology, their comparison is a constant topic on every site or forum even remotely related to the topic of cryptocurrency. Logically the most common is the comparison between the two with the largest market cap, Bitcoin ($ 236 B) and Ethereum ($ 132 B). (For an instant update on market capitalization click here) So in this article we are going to explain the main differences between these two juggernauts.

The Technology Behind Bitcoin and Ethereum

First and foremost, we will explain and compare the main purposes of these cryptocurrencies as well as the way they use the blockchain technology since there lie the crucial differences between them.

How Does Bitcoin Work:

How Does Bitcoin Have Value

How Does Bitcoin Work

As most of you already know, Bitcoin is the first virtual currency released in 2009 by a phantom Satoshi Nakatomo introducing the blockchain technology to the world. With its main purpose being just that, as well as to serve as an alternative payment method and store of value which is not operated by any centralized authority, unlike fiat currencies. These features got the whole thing going and started the entire cryptocurrency craze. Over the years the acceptance of cryptocurrency concept increased, and Bitcoin became accepted as a formal way of payment by global companies such as Microsoft or Dell.

For an interesting You Tube overview of  how Bitcoin works click here.

Ethereum was introduced in 2015 by Vitalik Buterin. As Bitcoin, it also operates using blockchain technology but uses it for a different purpose.

How Does Ethereum Work:

Ethereum explanation

Ethereum Vs Bitcoin

Unlike Bitcoin, the way that Ethereum works is to use it’s blockchain to enable the creation of Distributed Applications that are not used only for maintaining the Ethereum blockchain. These apps are created without any control, downtime or a need for a third-party interference. In a sense, we might say that Ethereum is not only a platform but a programming language that is running on blockchain technology.

Other Ways Ethereum Works: Ethereum also uses a SmartContract system to facilitate transactions of money, property or anything of value between people while providing the security of using a third party as a control without the need of actually using it. Ethereum can even be used as a platform for other cryptocurrencies. Actually, many other cryptocurrencies are built on or even relying on its technology.

For a brief explanatory video by Ethereum’s founder Vitalik Buterin click here.

As you can see the two cryptocurrencies differ in their main purpose. While Bitcoin is mainly created as an alternative for regular money and used as a payment method and store of value, Ethereum’s main purpose is to serve as a platform that facilitates peer-to-peer transactions and creation of Distributed Applications and monetize the work of developers.

Value and Mining of Ethereum & Bitcoins:

After we went through the technical differences, now we are going to move to a topic that is probably more interesting for the cryptocurrency enthusiasts. Here we will compare their current value and mining potential.

  • By being the most valuable coin on the market Bitcoin is, logically, the better choice as a store of value. Not only it is more expensive ($ 14,068.20 comparing to ETH $1,366.26 – at the time of writing this article), but it is the most recognizable and acceptable one in the world. That makes it easier to obtain, store, sell or use as a direct way of payment. This can be attributed to Bitcoin’s built-in shortage. Namely, Bitcoin is a finite resource and has a predefined final number of 21 million, after which no more Bitcoins will be created. In theory that means that their value will grow the closer, it is to the end.
  • On the other hand, Ethereum will continue to release the same amount of coins forever which makes it supply constant and expanding. Bear in mind that cryptocurrency market is young, highly volatile and still not completely explored, therefore no one can really make any exact predictions on what will happen with any of these coins in the future.
  • When it comes to mining the embedded scarcity of Bitcoin will become ever harder to mine as approaching to that 21 million mark. To explain, it works like this: the reward for mining Bitcoin blockchain block is cut in half after every 211.000 blocks mined. Current block prize is 12.5 Bitcoins per mined block which is a large difference in comparison to starting 50 Bitcoins per block.
  • On the other hand, Ethereum miners are rewarded by its proof-of-work algorithm called Ethash. The reward is 5 ETH for each block mined. Ethash also encourages decentralized and individual mining, unlike Bitcoin where miners need to use more expensive ASICs in order to make a profit.

 

  • Another difference related to this topic is the block confirmation time.
  • Bitcoins average block confirmation time is 10 minutes
  • Ethereum takes it down to 12 seconds. This is enabled by Ethereum’s GHOST protocol which makes confirmations quicker but, at the same time produces more orphaned blocks.
  • As you can see as Bitcoin’s popularity makes it better as a store value, while its finite number and the fact that almost 80% of its resources are already mined makes it harder for new miners to make a profit.
  • Ethereum is currently one of the most profitable coins in terms of mining.

Summary
All in all, although both Bitcoin and Ethereum are called cryptocurrencies and both use blockchain technology, you can see from this article that they are essentially two completely different concepts.

  • While Bitcoin is used as a payment method
  • Ethereum’s main purpose is to serve as a platform that facilitates transactions and enables the creation of Distributed Applications.                                                              To determine which one is “better” you will have to ask yourself “what do I need it for?”. If you want to use it as store value then Bitcoin’s popularity and recognition take the advantage, while its finite supply, built-in scarcity and the fact that almost 80% of its resources make it less profitable for mining. If you are wondering in which one to invest, then your guess is as good as ours. Both have shown an increase in value since their introduction but the volatility and the young age of cryptocurrency market make it practically impossible to provide accurate predictions.
    We strongly suggest that you do your own research and don’t invest more than you can afford to lose!

Where Cryptocurrencies Are Heading In The Future

After a thorough explanation of the cryptocurrency concept, the manner in which they are traded and the process of mining, it is time to analyze the tendencies of cryptocurrencies and try to predict where are they heading in the future. The main focus will be set on the anonymity and lack of regulation which is the main problem that keeps cryptocurrencies from becoming mainstream, and on the other hand, the benefit of the lack of mediator, as well as some other perks that come with cryptocurrencies.

The currency of the Dark Web

It is likely that the majority of us have heard of the Dark Web, but most of you are not sure what it actually is. The Dark Web is a huge set of web sites that you cannot access using a mainstream service like Google. They even require a specific browser to access and offer the ability to participate in a number of illegal and immoral transactions like drugs, prostitution, terrorism, money laundering, and so on. Since cryptocurrencies do not answer to any of the official regulators, it makes them a favorite currency for these illegal transactions.

Another feature that makes them a favorite for illegal transactions is that they provide a high level of anonymity for their users. Although al cryptocurrency transactions are kept on a public ledger known as blockchain, the cryptographic keys and digital wallets that are used to store and keep the funds cannot be linked to any real person. This feature makes it almost impossible for law enforcement to use their main method in determining the identity of those who take part in illegal activities, and “follow the money”.

Bear in mind that, even though these features make cryptocurrencies favorable for illegal activities, they are certainly not used only for this kind of purchases. It is safe to say that global companies like Microsoft, Dell, and Expedia, who accept payments in Bitcoin, are not trading in illegal goods and services.

The elimination of  mediator

After you saw what makes cryptocurrency favorable for bad guys it is time to speak about the features that make them attractive for everyone. Especially when you compare them to fiat currencies. In short, cryptocurrencies provide the convenience of cash without the need of a mediator to check your accounts and identity, no clearing delays, no commission, no extra charges, no different exchange rates. Those features make cryptocurrencies more efficient when it comes to time-saving and more profitable for obvious reasons.

Christine Lagard, the Managing Director of the IMF (International Monetary Fund), touched on this topic in her speech at a London conference that was held recently.  She said that “It’s time for the world’s central banks and regulators to get serious about digital currencies”. According to her words, global financial institutions are taking a risk by not monitoring and trying to understand the ever growing world of cryptocurrencies that are, for some time now, making a huge impact on global payments system.

Ms. Lagarde dismisses the speculation of cryptocurrencies being a fraud or identifying them with Ponzi schemes, saying that there is a lot more in cryptocurrencies than that.

She also points out that it is not impossible for IMF to develop its own cryptocurrency at one point. Where the main focus will be to use the technology to make payment transactions more efficient and reduce the cost of those transactions at the same time.

According to Lagarde’s words at the London conference, development of cryptocurrencies could be the answer for countries with “weak institutions and unstable national currencies”. These economies may experience a growing use of cryptocurrencies since it can prove to be a more efficient and profitable method than adopting a currency of another country like U.S. dollar. She wittily named this process “dollarization 2.0”.

Even though Ms. Lagarde embraces the existence and potential of cryptocurrency, she points out that the official implementation of cryptocurrencies in the global economy is a distant prospect. This is mainly because they are at the time too volatile, risky and energy intensive.

J-Coin

Christine Lagarde is not the only one with the idea of developing a cryptocurrency that is legally regulated. Various banks from different countries are investigating the possibilities of creating their own, personalized cryptocurrencies.

One of them is Mizuho Bank from Japan. Mizuho is hoping to develop a cryptocurrency that is pegged to the Yen, which will be called “J-Coin”. The main goal of this cryptocurrency will be to make payments and transactions via the smartphone app.

This project is still in early stages. There were just study meetings held with the necessary institutions, and they are yet to receive any approval from official regulators. However, people who are leading this project, are hoping that J-Coin would become available in time for the Tokyo Olympics in 2020.

While exploring the cryptocurrency market, Mizuho had shown a particular interest in blockchain technology that serves as a decentralized ledger with a potential to revolutionize the payment and transfer processes in global financial institutions.

This year Mizhuo even attempted and succeeded to complete a trade finance transaction using the blockchain technology. In this process information was sent from Japan to Australia while everything was done on a digital platform based on the mentioned blockchain technology.

Summary

At the end, you can not help but notice the raw potential of cryptocurrency. Even though their properties like anonymity make them a favorite for illegal activities, however in my opinion they can potentially offer more good than bad to the global economy. Especially in the terms of effectiveness and cost-reducing. In other words, if a solution is found for the problems of volatility and lack of regulation, cryptocurrencies can really revolutionize the global economy.

How To Mine For Bitcoins

Mining for Bitcoins

Bitcoin mining requires powerful computers

Bitcoin mining can still be profitable with the right equipment

The next topic in our journey towards a complete explanation of cryptocurrencies is Mining. You probably heard of this expression many times in terms of cryptocurrencies. This is because it presents a vital part of blockchain maintenance and cryptocurrency sustainability. Here we will concentrate on Bitcoin mining since it is the first and the best-known cryptocurrency.

How Does Bitcoin Mining Work?

Bitcoin mining is a process where cryptocurrency transactions are verified and stored in blockchain that serves as a kind of a public ledger. It is also the procedure through which new Bitcoins are released in circulation. This process includes compiling blockchain blocks out of recent transactions and trying to solve a computationally difficult problem. The “miner” who is first to solve the  problem is the one that gets to place the next block on the blockchain. With that, they will collect a reward in the form of transaction fees related to the transactions compiled in the blockchain block, as well as the Bitcoin released during that process.

That amount of newly released Bitcoin with each block is called the block reward. The most important thing you should know about block reward is that it is cut in half after every 210,000 blocks are mined. Bear in mind that the block reward started at 50 Bitcoins in 2009. In 2014 it is halved to 25. In 2016. It is further diminished to 12.5. Current state, at the time of writing this article, is that there are 499,082 total blocks. Therefore, there are 130,918 blocks left until the block reward is halved again. Estimated time for that to happen is 09 Jun 2020, as you can see on this countdown. Here you can also see that the final number of Bitcoins to ever be mined is 21,000,000.

Now you can start to understand why mining for bitcoins gets harder and, what is more important, less profitable over time. This can also be seen on the example of the mentioned problems miners need to solve in order to get the block reward. The difficulty of those problems, hence mining is adjusted every 2016 blocks relative to the computational power employed in mining. The more power employed the more difficult problems are, and opposite. This happens with the aim of maintaining a constant rate of block discovery. In layman terms, this means that the more miners there are, the harder it is to mine.

Is It Profitable To Mine Bitcoins Today?

The good thing about Bitcoin mining is that it can be done by anyone. All you need is a stable internet connection and appropriate hardware and you are ready to go. This hardware needs to be a custom-made PC with multiple powerful GPU’s or a piece of ASIC hardware specially designed Bitcoin mining. But the main challenge is to determine the profitability of Bitcoin mining. To do that you need to take next factors in your calculation:

  • Value of Bitcoin – current value of Bitcoin expressed in USD or other currency
  • Hash Rate – the speed your hardware will resolve those mathematical problems in order to get the reward. The Hash Rate is measured in hashes per second and can be expressed in MH/s (Mega hash per second), GH/s (Giga hash per second), TH/s (Terra hash per second) and PH/s (Peta hash per second).
  • Block reward – number of Bitcoins you will be rewarded for each block. As we said, Bitcoin mining becomes less profitable with time.
  • Electricity Rate – since the mining hardware consumes a lot of power, the cost of electricity in your area is one of the important factors you need to take in the count.
  • Pool fees – if you want to get into Bitcoin mining, you will need to join a mining pool. It is simply a group of miners joined together with a goal to mine more effectively. These mining pools will charge you a certain fee for maintaining their operations.

Since calculating these values manually turns out to be time-consuming, here you can find a handy Bitcoin Mining Calculator where you can put in the mentioned values while some of them, like Bitcoin value and block reward, are already entered and updated live. You can also enter the price of your hardware and recurring costs as a part of Break-Even Analysis.

As an example, we took the ASIC hardware AntMiner S9 with a hash rate of 14 TH/s, and a power consumption of 1375W. As power cost, we took a US average of 12 cents per kWh, and as a pool, we chose Nanopool that charges a 1% fee. When we entered these values at the current value of Bitcoin of around $16400 in the calculator it gave up the monthly profit of $950. It also said that at the approximate price of $5500 for the hardware it will break even in 9 months.

These numbers sound great, but you should always ask yourself what will happen with these numbers during the 9 months period? The volatility of Bitcoin presents the main risk for miners and prevents you from making any long-term profitability plan.

Can you mine for other cryptocurrencies?

Of course, you can. Not only that you can but it is probably more profitable in the long-term. Since bitcoin is the first one to start it is close to its end, while other cryptocurrencies like Ethereum, Litecoin, Monero, and ZCash are much easier to mine. There are also dozens of other altcoins that you can mine, but it is hard to tell which ones are worth investing in. On this site you can find all the information about any cryptocurrency there is and conduct your research on which cryptocurrency you want to mine.

Summary:

As you can see, mining for Bitcoins is currently profitable but the volatility of the market and the time of existence makes it hard to predict if you will make a positive return with your investment. On the other hand, other cryptocurrencies that are younger and less difficult to mine can turn out to be a smarter investment in the long-run.

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The Top 10 Cryptocurrencies

 

The Top 10 Cryptocurrencies

New virtual currency

Bitcoin stands head and shoulders above the other cryptocurrencies in terms of market capitalization

 

Now it is time to present you with the Top 10 Cryptocurrencies in terms of market capitalization as they stand at the time of writing. Be aware with the rapid price fluctuations in the cryptocurrency world that these  figures could vary greatly not just on a daily basis but on an hourly basis (particularly Bitcoin which hit a price of over $16,600 on December 12, 2017 )

 

Bitcoin (BTC) – Market Capitalization $ 264.50 Billion

As we already mentioned Bitcoin is the first cryptocurrency that actually worked. Created in 2008 by mysterious Satoshi Nakatomo it presented us the blockchain technology and started the global cryptocurrency craze. Since its creation and the initial value of about eight-hundredths of a cent, it recorded a constant growth and it is now worth a record $ 15,811. Bitcoin is also the first cryptocurrency that was accepted as a way of payment by international companies like Dell, Expedia, and Microsoft.

Ethereum (ETH) – Market Capitalization $ 45.56 Billion

The idea of Ethereum was presented in late 2013 by Vitalik Buterin. The main goal of ETH was to develop a new platform with a more general scripting language in order to create decentralized applications. Official development of the ETH project started in early 2014. through a Swiss company Ethereum Switzerland GmbH. The funding was organized by an online public crowdsale in the summer of 2014. where the participants were buying Ethereum value token with bitcoins. In 2016, with the collapse of the DAO project, Ethereum was forked into two separate blockchains. The original version became Ethereum Classic (ETC), while the new continued as Ethereum (ETC). The current value of ETH is around $ 442.76.

Bitcoin Cash (BCC/BCH) Market Capitalization $ 25.00 Billion

This cryptocurrency was presented on August 1. 2017. as a hard fork of Bitcoin blockchain. BCC inherited the complete transaction history of Bitcoin until that date, but all later transactions were separate. The main goal of BCC was to confront the bitcoin scalability problem and resolve a blockchain size limitation that was decreasing the Bitcoin transaction speed. Although some members of the community were convinced that it will favor the ones who wanted to treat Bitcoin as a digital investment instead of a mean of payment. The current value of BCC is around $ 1,405.89.

Exchange Union Coin (XUC) – Market Capitalization $ 22.20 Billion

Exchange Union Coin is developed within a partnership between the Exchange Union, Huiyin Blockchain Venture, the renowned blockchain-focused venture capital fund and the Jinsheng Capital, one of China’s largest private equity management institutions. It was presented in July 2017, and the crowdsale was held in August 2017. The main goal of XUC is to enable more efficient transfer of cryptocurrencies between exchanges. This coin is designed to be universal and widely accepted and circulated. Even if the exchanges do not use the same cryptocurrency, clients can effortlessly make transfers using the XUC. The current value of XUC is around $ 7.37.

Veritaseum (VERI) – Market Capitalization $ 13.56 Billion

Veritaseum was created by Reggie Middleton, an analyst, blogger and self-proclaimed genius. The purpose of VERI is to build blockchain-based, peer-to-peer capital markets on a global scale. This software will effortlessly connect parties where there will be no need for a third party. This concept where anyone with internet access can participate in these capital markets on a peer-to-peer and one-on-one basis is considered to be a scam by a large number of community members. Mainly because of the lack of any valid information about the whole stock exchange idea. Anyway, it has its market share and a current value of around $ 137.00.

IOTA (IOT) – Market Capitalization $ 13.43 Billion

IOTA was founded in 2015, with a focus on providing a secure way of communication and payment between machines on the Internet of Things. Instead of the traditional blockchain technology, IOTA uses direct acyclic graph (DAG) technology. The main properties of IOTA are that the transactions are free regardless of the size, a number of transactions that the system can handle simultaneously is unlimited, confirmation times are fast, and it is easily scalable. The current value of IOTA is around $ 4.68.

Ripple (XRP) – Market Capitalization $ 8.68 Billion

Introduced in 2012 XRP announced its main goal to be enabling of “secure, instant and nearly free global financial transactions of any size with no chargebacks. “Ripple is based on a shared, public database and apart from supporting fiat currency and cryptocurrency it supports any unit of value such as mobile minutes or frequent flier miles. The current value of XRP is around $ 0.2267.

DigitalCash (DASH) – Market Capitalization $ 5.58 Billion

This coin was initially released on January 18, 2014, as XCoin (XCO) and later, on March 25, 2015, renamed as DASH. It is an open source peer-to-peer cryptocurrency. The main goals of DASH are to become the most user-friendly and most scalable in the world. It operates as a self-funding model that enables them to compensate individuals for doing the work that adds value to the network. The current value of DASH is around $ 702.91.

Litecoin (LTC) – Market Capitalization $ 5.43 Billion

LTC was released on October 7, 2011, by Charlie Lee, a former Google employee. LTC is a fork of the Bitcoin blockchain. The main differences are that LTC has decreased block generation time and increased maximum number of coins. On the other hand, LTC is more complicated and expensive to produce. The current value of LTC is around $ 99.97.

Expanse (EXP) – Market Capitalization $ 5.07 Billion

EXP was developed as a first stable fork of Ethereum. It was created as a community-based project without the need for ICO. The main idea is to use blockchain technology to create anything community can imagine. EXP also operates as a Decentralized Autonomous Organization (DAO) and as a self-funding model. The current value of EXP is around $ 640.76.

 

Summary:

This list is of top 10 cryptocurrencies in terms of Market Capitalization. As you can see Bitcoin expectedly dominates the list and will do so for a long time, followed by Ethereum who also seems to have its second place cemented for the time being. On the other hand, since the cryptocurrency market is very volatile, there will certainly be some changes in this list in the future. Especially on the bottom, with cryptocurrencies like Expanse (EXP), EOS and Monero (XMR) being close by.

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How To Trade In Cryptocurrencies

How to Trade in Cryptocurrencies.

Graph of cryptocurrencies

In our previous post we gave you a simple explanation of how Cryptocurrencies work and that Blockchain technology is the security in the background. Many of you will be now keen to start investing / trading in Cryptocurrencies, particularly since Bitcoin’s price rocketed through $11,000 earlier this week (November 2017).

NB. All currency comparisons to Bitcoin and other cryptocurrencies in this article are based in USD$.

 

Learn how massive money can be made using The Bitcoin Code

Investing In Cryptcurrency

Investing in Bitcoin

People investing wildly into Bitcoin

Investing and trading in cryptocurrencies is rapidly becoming a frenzy as the ‘herd’ mentality jump on board the trading wagon because they have “FOMO” – better known as fear of missing out.

  • As an example if you had invested $1000 into Bitcoin around 1 year ago it would be worth over $11,000 today. (since starting this article the price has fluctuated wildly so check here for live pricing updates)
  • If you were “crazy” or brave enough to have invested $1000 in Bitcoin in March 2010 when 1 Bitcoin was equal to $0.003, today it would be worth over $3 billion. Hard to imagine I know.

How The Cryptocurrency Exchanges Work

The most effective way to commence trading in this field is to gather an understanding of how the cryptocurrency exchange markets function. Mainly because of the certain level of technical knowledge required, lack of legal regulation and an overall shady atmosphere surrounding the cryptocurrency concept, viewed from the perspective of a beginner. Here we will show that trading in cryptocurrencies is not that complicated and can be very straightforward and secure if you follow a certain procedure.

A Cryptocurrency Exchange Is Totally Different To A Stock Exchange

And that is the first thing you need to understand! The world of trading cryptocurrencies is open 24/7 and therefore is extremely volatile. The value of a certain cryptocurrency can rise or fall by a huge % points in a matter of minutes. That way you can make a fortune or lose it in a very short period. However these losses or profits are “paper profits or losses” – they are neither until you sell out your position

Choose Your Cryptocurrency

Selecting a cryptocurrency you wish to trade with is the first step you need to make. You want to choose a cryptocurrency in which you believe in. That means finding out as much as you can about the currency, the operators, the uses of the currency. More details are outlined below. When you decide to perform your research, these are the aspects that you should consider prior to commencing trading:

  • Infrastructure and technology (App development, Quick transaction process, Cloud storage, funding, etc.)
  • The quantity, skill, and experience of its development team
  • Overall popularity, rising demand, and media coverage
  • Price (I suppose that you are familiar with the term “buy low sell high”)

Set Up A Secure Trading Environment

In order to actually start trading, you need to decide on where to store and trade your cryptocurrency. Thus, you will need to choose a wallet and a trading exchange that best suit your needs.

  1. A “Wallet” is an address on blockchain where you store your cryptocurrency. Each wallet has a public address that people use to send funds to, and a private address that you use to access and send your funds. It is of utmost importance that you do not expose your private key, otherwise, you will most definitely lose all your money. There are different types of wallets:
Mobile APPS used to track Cryptocurrencies

Keeping track of cryptocurrencies

  • Online wallets like MyEtherWallet or Blockchain Wallet are the easiest but the least secure way to store your cryptocurrency.
  • Mobile and desktop wallets like Exodus, Jaxx, or Mycelium are more secure than online wallets but if your phone or PC gets hacked or broken everything in your wallet will be gone.
  • Hardware device wallets like Ledger Wallet are safer than all the options above but still susceptible to damage or loss.
  • Paper Wallet are the most hacker-proof but the least convenient. If you choose to keep your private key on paper be sure to deposit them in a safe place and do not use regular paper but something more durable like TerraSlate.
  1. After you choose your wallet it is time to select the exchange and get to trading. Exchange is a place where you can exchange your cryptocurrency for fiat. (ie government currencies – eg. US$ or Euro) Each exchange has its own specificities, rules, and fees. Be sure you completely understand them before trading a substantial amount of money. Here are some of the most popular exchanges:

After measuring all the aspects that determine reliability and quality of an exchange, such as liquidity, spread, fees, purchase and withdrawal limits, trading volume, security, insurance, user-friendliness we found that Coinbase is the one of the safest exchanges to consider. Mainly due to its beginner-friendly user interface, and an unbeatable 100% crypto insurance.

  1. If you want to be a serious cryptocurrency trader and know your cryptocurrency value at any given moment, you need to have a cryptocurrency tracking app. Bear in mind that these apps are not made for storing cryptocurrency. They are used only to check their value. The apps we recommend are:
  • Blockfolio – The most prominent feature of this app is that it displays all currencies on your watchlist calculated in the value of the currency of your choice. Some apps are made to display the value in Bitcoin, which pointless if your mind is set on another cryptocurrency.
  • Coincap – This app allows you to display currencies by different ranking factors like volume or market capitalization. You also have access to a number of useful charts in order to track what is being actively traded. Coincap also displays prices calculated in the currency of your choice.

Beware Of Scams

Due to the lack of centralization and regulation on the cryptocurrency market it presents a suitable environment for scams. Here are some of the things you should be aware of:

  • There aren’t many trustworthy exchanges out there. Some exchanges are known to disappear overnight taking all the cryptocurrency with them. The most famous was the case of Mt Gox. This early cryptocurrency exchange at one point accounted for over 70 percent of all Bitcoin transactions worldwide. Until one morning the exchange suspended trading. It resulted in 850,000 Bitcoins stolen (valued at $450 million at the time)
  • Be careful when choosing your cryptocurrency because smaller altcoins are susceptible to a standard pump and dump.
  • In the process of initial coin offerings to raise a substantial amount of money, many cryptocurrency startups vastly overestimate their value.
  • There are cases of people being cold-called and persuaded to purchase non-existing cryptocurrency. Be sure that the real investor will never cold-call you to offer you an investment opportunity.

Summary:

As you can see, you can make a fortune overnight by trading in cryptocurrencies while on the other hand, you can lose everything at the same time, due to the extreme volatility of the cryptocurrency market. It is important to inform yourself thoroughly in order to set the perfect environment and to avoid any possible scams. And of course, do not be greedy especially if you are a beginner.

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