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Financial Cryptography

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CRYPTOCURRENCY BITCOIN

CRYPTOCURRENCY BITCOIN
Bitcoin Table of contents expand: 1. What is Bitcoin? 2. Understanding Bitcoin 3. How Bitcoin Works 4. What's a Bitcoin Worth? 5. How Bitcoin Began 6. Who Invented Bitcoin? 7. Before Satoshi 8. Why Is Satoshi Anonymous? 9. The Suspects 10. Can Satoshi's Identity Be Proven? 11. Receiving Bitcoins As Payment 12. Working For Bitcoins 13. Bitcoin From Interest Payments 14. Bitcoins From Gambling 15. Investing in Bitcoins 16. Risks of Bitcoin Investing 17. Bitcoin Regulatory Risk 18. Security Risk of Bitcoins 19. Insurance Risk 20. Risk of Bitcoin Fraud 21. Market Risk 22. Bitcoin's Tax Risk What is Bitcoin?
Bitcoin is a digital currency created in January 2009. It follows the ideas set out in a white paper by the mysterious Satoshi Nakamoto, whose true identity is yet to be verified. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
There are no physical bitcoins, only balances kept on a public ledger in the cloud, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of other virtual currencies collectively referred to as Altcoins.
Understanding Bitcoin Bitcoin is a type of cryptocurrency: Balances are kept using public and private "keys," which are long strings of numbers and letters linked through the mathematical encryption algorithm that was used to create them. The public key (comparable to a bank account number) serves as the address which is published to the world and to which others may send bitcoins. The private key (comparable to an ATM PIN) is meant to be a guarded secret and only used to authorize Bitcoin transmissions. Style notes: According to the official Bitcoin Foundation, the word "Bitcoin" is capitalized in the context of referring to the entity or concept, whereas "bitcoin" is written in the lower case when referring to a quantity of the currency (e.g. "I traded 20 bitcoin") or the units themselves. The plural form can be either "bitcoin" or "bitcoins."
How Bitcoin Works Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, also known as "miners," are motivated by rewards (the release of new bitcoin) and transaction fees paid in bitcoin. These miners can be thought of as the decentralized authority enforcing the credibility of the Bitcoin network. New bitcoin is being released to the miners at a fixed, but periodically declining rate, such that the total supply of bitcoins approaches 21 million. One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin), and this smallest unit is referred to as a Satoshi. If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places. Bitcoin mining is the process through which bitcoins are released to come into circulation. Basically, it involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain and receiving a reward in the form of a few bitcoins. The block reward was 50 new bitcoins in 2009; it decreases every four years. As more and more bitcoins are created, the difficulty of the mining process – that is, the amount of computing power involved – increases. The mining difficulty began at 1.0 with Bitcoin's debut back in 2009; at the end of the year, it was only 1.18. As of February 2019, the mining difficulty is over 6.06 billion. Once, an ordinary desktop computer sufficed for the mining process; now, to combat the difficulty level, miners must use faster hardware like Application-Specific Integrated Circuits (ASIC), more advanced processing units like Graphic Processing Units (GPUs), etc.
What's a Bitcoin Worth? In 2017 alone, the price of Bitcoin rose from a little under $1,000 at the beginning of the year to close to $19,000, ending the year more than 1,400% higher. Bitcoin's price is also quite dependent on the size of its mining network since the larger the network is, the more difficult – and thus more costly – it is to produce new bitcoins. As a result, the price of bitcoin has to increase as its cost of production also rises. The Bitcoin mining network's aggregate power has more than tripled over the past twelve months.
How Bitcoin Began
Aug. 18, 2008: The domain name bitcoin.org is registered. Today, at least, this domain is "WhoisGuard Protected," meaning the identity of the person who registered it is not public information.
Oct. 31, 2008: Someone using the name Satoshi Nakamoto makes an announcement on The Cryptography Mailing list at metzdowd.com: "I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party. The paper is available at http://www.bitcoin.org/bitcoin.pdf." This link leads to the now-famous white paper published on bitcoin.org entitled "Bitcoin: A Peer-to-Peer Electronic Cash System." This paper would become the Magna Carta for how Bitcoin operates today.
Jan. 3, 2009: The first Bitcoin block is mined, Block 0. This is also known as the "genesis block" and contains the text: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks," perhaps as proof that the block was mined on or after that date, and perhaps also as relevant political commentary.
Jan. 8, 2009: The first version of the Bitcoin software is announced on The Cryptography Mailing list.
Jan. 9, 2009: Block 1 is mined, and Bitcoin mining commences in earnest.
Who Invented Bitcoin?
No one knows. Not conclusively, at any rate. Satoshi Nakamoto is the name associated with the person or group of people who released the original Bitcoin white paper in 2008 and worked on the original Bitcoin software that was released in 2009. The Bitcoin protocol requires users to enter a birthday upon signup, and we know that an individual named Satoshi Nakamoto registered and put down April 5 as a birth date. And that's about it.
Before Satoshi
Though it is tempting to believe the media's spin that Satoshi Nakamoto is a solitary, quixotic genius who created Bitcoin out of thin air, such innovations do not happen in a vacuum. All major scientific discoveries, no matter how original-seeming, were built on previously existing research. There are precursors to Bitcoin: Adam Back’s Hashcash, invented in 1997, and subsequently Wei Dai’s b-money, Nick Szabo’s bit gold and Hal Finney’s Reusable Proof of Work. The Bitcoin white paper itself cites Hashcash and b-money, as well as various other works spanning several research fields.
Why Is Satoshi Anonymous?
There are two primary motivations for keeping Bitcoin's inventor keeping his or her or their identity secret. One is privacy. As Bitcoin has gained in popularity – becoming something of a worldwide phenomenon – Satoshi Nakamoto would likely garner a lot of attention from the media and from governments.
The other reason is safety. Looking at 2009 alone, 32,489 blocks were mined; at the then-reward rate of 50 BTC per block, the total payout in 2009 was 1,624,500 BTC, which at today’s prices is over $900 million. One may conclude that only Satoshi and perhaps a few other people were mining through 2009 and that they possess a majority of that $900 million worth of BTC. Someone in possession of that much BTC could become a target of criminals, especially since bitcoins are less like stocks and more like cash, where the private keys needed to authorize spending could be printed out and literally kept under a mattress. While it's likely the inventor of Bitcoin would take precautions to make any extortion-induced transfers traceable, remaining anonymous is a good way for Satoshi to limit exposure.
The Suspects
Numerous people have been suggested as possible Satoshi Nakamoto by major media outlets. Oct. 10, 2011, The New Yorker published an article speculating that Nakamoto might be Irish cryptography student Michael Clear or economic sociologist Vili Lehdonvirta. A day later, Fast Company suggested that Nakamoto could be a group of three people – Neal King, Vladimir Oksman and Charles Bry – who together appear on a patent related to secure communications that were filed two months before bitcoin.org was registered. A Vice article published in May 2013 added more suspects to the list, including Gavin Andresen, the Bitcoin project’s lead developer; Jed McCaleb, co-founder of now-defunct Bitcoin exchange Mt. Gox; and famed Japanese mathematician Shinichi Mochizuki.
In December 2013, Techcrunch published an interview with researcher Skye Grey who claimed textual analysis of published writings shows a link between Satoshi and bit-gold creator Nick Szabo. And perhaps most famously, in March 2014, Newsweek ran a cover article claiming that Satoshi is actually an individual named Satoshi Nakamoto – a 64-year-old Japanese-American engineer living in California. The list of suspects is long, and all the individuals deny being Satoshi.
Can Satoshi's Identity Be Proven?
It would seem even early collaborators on the project don’t have verifiable proof of Satoshi’s identity. To reveal conclusively who Satoshi Nakamoto is, a definitive link would need to be made between his/her activity with Bitcoin and his/her identity. That could come in the form of linking the party behind the domain registration of bitcoin.org, email and forum accounts used by Satoshi Nakamoto, or ownership of some portion of the earliest mined bitcoins. Even though the bitcoins Satoshi likely possesses are traceable on the blockchain, it seems he/she has yet to cash them out in a way that reveals his/her identity. If Satoshi were to move his/her bitcoins to an exchange today, this might attract attention, but it seems unlikely that a well-funded and successful exchange would betray a customer's privacy.
Receiving Bitcoins As Payment
Bitcoins can be accepted as a means of payment for products sold or services provided. If you have a brick and mortar store, just display a sign saying “Bitcoin Accepted Here” and many of your customers may well take you up on it; the transactions can be handled with the requisite hardware terminal or wallet address through QR codes and touch screen apps. An online business can easily accept bitcoins by just adding this payment option to the others it offers, like credit cards, PayPal, etc. Online payments will require a Bitcoin merchant tool (an external processor like Coinbase or BitPay).
Working For Bitcoins
Those who are self-employed can get paid for a job in bitcoins. There are several websites/job boards which are dedicated to the digital currency:
Work For Bitcoin brings together work seekers and prospective employers through its websiteCoinality features jobs – freelance, part-time and full-time – that offer payment in bitcoins, as well as Dogecoin and LitecoinJobs4Bitcoins, part of reddit.comBitGigs
Bitcoin From Interest Payments
Another interesting way (literally) to earn bitcoins is by lending them out and being repaid in the currency. Lending can take three forms – direct lending to someone you know; through a website which facilitates peer-to-peer transactions, pairing borrowers and lenders; or depositing bitcoins in a virtual bank that offers a certain interest rate for Bitcoin accounts. Some such sites are Bitbond, BitLendingClub, and BTCjam. Obviously, you should do due diligence on any third-party site.
Bitcoins From Gambling
It’s possible to play at casinos that cater to Bitcoin aficionados, with options like online lotteries, jackpots, spread betting, and other games. Of course, the pros and cons and risks that apply to any sort of gambling and betting endeavors are in force here too.
Investing in Bitcoins
There are many Bitcoin supporters who believe that digital currency is the future. Those who endorse it are of the view that it facilitates a much faster, no-fee payment system for transactions across the globe. Although it is not itself any backed by any government or central bank, bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders interested in currency plays. Indeed, one of the primary reasons for the growth of digital currencies like Bitcoin is that they can act as an alternative to national fiat money and traditional commodities like gold.
In March 2014, the IRS stated that all virtual currencies, including bitcoins, would be taxed as property rather than currency. Gains or losses from bitcoins held as capital will be realized as capital gains or losses, while bitcoins held as inventory will incur ordinary gains or losses.
Like any other asset, the principle of buying low and selling high applies to bitcoins. The most popular way of amassing the currency is through buying on a Bitcoin exchange, but there are many other ways to earn and own bitcoins. Here are a few options which Bitcoin enthusiasts can explore.
Risks of Bitcoin Investing
Though Bitcoin was not designed as a normal equity investment (no shares have been issued), some speculative investors were drawn to the digital money after it appreciated rapidly in May 2011 and again in November 2013. Thus, many people purchase bitcoin for its investment value rather than as a medium of exchange.
However, their lack of guaranteed value and digital nature means the purchase and use of bitcoins carries several inherent risks. Many investor alerts have been issued by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Consumer Financial Protection Bureau (CFPB), and other agencies.
The concept of a virtual currency is still novel and, compared to traditional investments, Bitcoin doesn't have much of a long-term track record or history of credibility to back it. With their increasing use, bitcoins are becoming less experimental every day, of course; still, after eight years, they (like all digital currencies) remain in a development phase, still evolving. "It is pretty much the highest-risk, highest-return investment that you can possibly make,” says Barry Silbert, CEO of Digital Currency Group, which builds and invests in Bitcoin and blockchain companies.
Bitcoin Regulatory Risk
Investing money into Bitcoin in any of its many guises is not for the risk-averse. Bitcoins are a rival to government currency and may be used for black market transactions, money laundering, illegal activities or tax evasion. As a result, governments may seek to regulate, restrict or ban the use and sale of bitcoins, and some already have. Others are coming up with various rules. For example, in 2015, the New York State Department of Financial Services finalized regulations that would require companies dealing with the buy, sell, transfer or storage of bitcoins to record the identity of customers, have a compliance officer and maintain capital reserves. The transactions worth $10,000 or more will have to be recorded and reported.
Although more agencies will follow suit, issuing rules and guidelines, the lack of uniform regulations about bitcoins (and other virtual currency) raises questions over their longevity, liquidity, and universality.
Security Risk of Bitcoins
Bitcoin exchanges are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. If a thief gains access to a Bitcoin owner's computer hard drive and steals his private encryption key, he could transfer the stolen Bitcoins to another account. (Users can prevent this only if bitcoins are stored on a computer which is not connected to the internet, or else by choosing to use a paper wallet – printing out the Bitcoin private keys and addresses, and not keeping them on a computer at all.) Hackers can also target Bitcoin exchanges, gaining access to thousands of accounts and digital wallets where bitcoins are stored. One especially notorious hacking incident took place in 2014, when Mt. Gox, a Bitcoin exchange in Japan, was forced to close down after millions of dollars worth of bitcoins were stolen.
This is particularly problematic once you remember that all Bitcoin transactions are permanent and irreversible. It's like dealing with cash: Any transaction carried out with bitcoins can only be reversed if the person who has received them refunds them. There is no third party or a payment processor, as in the case of a debit or credit card – hence, no source of protection or appeal if there is a problem.
Insurance Risk
Some investments are insured through the Securities Investor Protection Corporation. Normal bank accounts are insured through the Federal Deposit Insurance Corporation (FDIC) up to a certain amount depending on the jurisdiction. Bitcoin exchanges and Bitcoin accounts are not insured by any type of federal or government program.
Risk of Bitcoin Fraud
While Bitcoin uses private key encryption to verify owners and register transactions, fraudsters and scammers may attempt to sell false bitcoins. For instance, in July 2013, the SEC brought legal action against an operator of a Bitcoin-related Ponzi scheme.
Market Risk
Like with any investment, Bitcoin values can fluctuate. Indeed, the value of the currency has seen wild swings in price over its short existence. Subject to high volume buying and selling on exchanges, it has a high sensitivity to “news." According to the CFPB, the price of bitcoins fell by 61% in a single day in 2013, while the one-day price drop in 2014 has been as big as 80%.
If fewer people begin to accept Bitcoin as a currency, these digital units may lose value and could become worthless. There is already plenty of competition, and though Bitcoin has a huge lead over the other 100-odd digital currencies that have sprung up, thanks to its brand recognition and venture capital money, a technological break-through in the form of a better virtual coin is always a threat.
Bitcoin's Tax Risk
As bitcoin is ineligible to be included in any tax-advantaged retirement accounts, there are no good, legal options to shield investments from taxation.
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Related Terms
Satoshi
The satoshi is the smallest unit of the bitcoin cryptocurrency. It is named after Satoshi Nakamoto, the creator of the protocol used in block chains and the bitcoin cryptocurrency.
Chartalism Chartalism is a non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Satoshi Nakamoto The name used by the unknown creator of the protocol used in the bitcoin cryptocurrency. Satoshi Nakamoto is closely-associated with blockchain technology.
Bitcoin Mining, Explained Breaking down everything you need to know about Bitcoin Mining, from Blockchain and Block Rewards to Proof-of-Work and Mining Pools.
Understanding Bitcoin Unlimited Bitcoin Unlimited is a proposed upgrade to Bitcoin Core that allows larger block sizes. The upgrade is designed to improve transaction speed through scale.
Blockchain Explained
A guide to help you understand what blockchain is and how it can be used by industries. You've probably encountered a definition like this: “blockchain is a distributed, decentralized, public ledger." But blockchain is easier to understand than it sounds.
Top 6 Books to Learn About Bitcoin About UsAdvertiseContactPrivacy PolicyTerms of UseCareers Investopedia is part of the Dotdash publishing family.The Balance Lifewire TripSavvy The Spruceand more
By Satoshi Nakamoto
Read it once, go read other crypto stuff, read it again… keep doing this until the whole document makes sense. It’ll take a while, but you’ll get there. This is the original whitepaper introducing and explaining Bitcoin, and there’s really nothing better out there to understand on the subject.
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party

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Weekly news review (October 26-1)

Weekly news review (October 26-1)
Hello, Community. We hope you had a great weekend. Without further ado, let's jump into last week's news highlights!
https://preview.redd.it/66ibndgf8nw31.png?width=1200&format=png&auto=webp&s=ba33fbcf1d3a16dd283e06a36b4317e6601dac74

Microsoft has issued a short notice, warning about a new wave of highly targeted cyberattacks by a group of Russian state-sponsored hackers attempting to hack over a dozen anti-doping authorities and sporting organizations around the world.
The attacks are originating from the 'Strontium' Russian hacking group, widely known as Fancy Bear or APT28, and are believed to be linked to the upcoming 2020 Summer Olympics in Tokyo. The Fancy Bear hacking group, also known as APT28, Sofacy, X-agent, Sednit, Sandworm, and Pawn Storm, is believed to be linked to Russian military intelligence agency GRU and has been in operation since at least 2007.
The latest cyberattacks began on September 16, apparently after the World Anti-Doping Agency (WADA) found irregularities in a database from Russia's national anti-doping laboratory, warning that Russian athletes could face a ban from competing at Tokyo 2020 Summer Olympics. Microsoft's Threat Intelligence Center said that some of these "significant cyberattacks" were successful, but the majority were not, and that the company notified affected organisations and worked with some of them to "secure compromised accounts or systems."

The U.S. multinational computer software company Adobe has suffered a serious security breach earlier this month that exposed user records' database belonging to the company's popular Creative Cloud service. With an estimated 15 million subscribers, Adobe Creative Cloud or Adobe CC is a subscription service that gives users access to the company's full suite of popular creative software for desktop and mobile, including Photoshop, Illustrator, Premiere Pro, InDesign, Lightroom, and many more.
Since the misconfigured cloud database did not include any password or financial information such as credit card numbers, the exposed data is severe enough to expose Adobe CC users to highly targeted and convincing phishing attacks.

Earlier in the week, BTC swiftly dropped by 10% after failing to hold above the $8,000 support.
By Thursday, BTC/USD was sitting on the bottom trendline of the descending channel and many investors and analysts were calling for a drop to $7,000.
A few even predicted that a revisit to the long-term support at $6,500 was on the cards. Despite the bearish bias, traders like Scott Melker and Michaël van de Poppe spotted a series of bullish divergences on the 4-hour and daily timeframe and by Friday morning (Oct. 25) the chart and various indicators on the hourly and 4-hour timeframe were flashing bullish.
Investors believed that a quick upside move to $7,700-$7,800 would occur and many expected that bears would open their short positions at the top of this range and eventually push Bitcoin price back down to the mid $7,000s or high $6,000s at worst.
Obviously, this is exactly what did not happen and the short squeeze that accompanied the first part of Bitcoin’s 16% rally from $7,450 to $8,600 resulted in the liquidation of $150 million shorts at BitMEX.
After such a strong move, consolidation around the $8,300 to $8,500 region was the next expectation that traders had in mind. Tackling the $8,800 resistance would have been the next step and it seemed likely that this would play out depending on the state of the weekly candle at closing.
Surprisingly, Bitcoin bulls gathered up enough steam for a final hurrah, and towards the evening of the U.S. trading session bulls pressed Bitcoin price far above the $8,800 resistance to set a higher high at $10,540.
Analysts and traders will probably spend the weekend searching for the exact reasons that catalyzed today’s strong 36% surge — the biggest daily gain since 2011.

The Standing Committee of the 13th National People's Congress in China has passed a new law regulating cryptography on Oct. 26 that will take effect on Jan. 1, 2020, reports local news outlet CCTV.
Per the report, the new regulatory framework aims to set standards for the application of cryptography and the management of passwords. The new regulatory framework establishes the role of a central cryptographic agency meant to lead public cryptographic work, creating guidelines and policies for the industry.
The draft of the law was published on May 7 by a Chinese news outlet. The text is largely focused on government centralized password management and does not explicitly mention cryptocurrency, though it does focus on cryptography, a key component underpinning cryptocurrencies such as Bitcoin.

Five European Union member countries have reportedly teamed up to prevent the issuance of Facebook’s stablecoin Libra.
Following a series of private meetings in October, France is reportedly leading the anti-Libra effort with Germany, Italy, Spain and the Netherlands, political news publication Politico Europe reports on Oct. 30.
Citing sources familiar with the matter, Politico states that the countries’ deputy finance ministers have presented their unified position against Libra to other EU ministers at a private meeting on Oct. 28 in Brussels.
According to the report, the group intends to prevent Libra from launching in Europe as well as increase pressure on Facebook and other members of the Libra Foundation to give up on the project. Eurozone diplomats and European Commission (EC) officials reportedly confirmed to Politico that the coalition is encouraging EU governments to consider banning Libra altogether.

Let us know in the comments section down below!
submitted by rokkex to Rokkex [link] [comments]

The Great Bitcoin Bull Market Of 2017 by Trace Mayer

By: Trace Mayer, host of The Bitcoin Knowledge Podcast.
Originally posted here with images and Youtube videos.
I just got back from a two week vacation without Internet as I was scouring some archeological ruins. I hardly thought about Bitcoin at all because there were so many other interesting things and it would be there when I got back.
Jimmy Song suggested I do an article on the current state of Bitcoin. A great suggestion but he is really smart (he worked on Armory after all!) so I better be thorough and accurate!
Therefore, this article will be pretty lengthy and meticulous.
BACKGROUND
As I completely expected, the 2X movement from the New York Agreement that was supposed to happen during the middle of my vacation flopped on its face because Jeff Garzik was driving the clown car with passengers willfully inside like Coinbase, Blockchain.info, Bitgo and Xapo and there were here massive bugS and in the code and miners like Bitmain did not want to allocate $150-350m to get it over the difficulty adjustments.
I am very disappointed in their lack of integrity with putting their money where their mouths are; myself and many others wanted to sell a lot of B2X for BTC!
On 7 December 2015, with Bitcoin trading at US$388.40, I wrote The Rise of the Fourth Great Bitcoin Bubble. On 4 December 2016, with Bitcoin trading at US$762.97, I did this interview:

As of 26 November 2017, Bitcoin is trading around US$9,250.00. That is an increase of about 2,400% since I wrote the article prognosticating this fourth great Bitcoin bull market. I sure like being right, like usual (19 Dec 2011, 1 Jul 2013), especially when there are financial and economic consequences.
With such massive gains in such a short period of time the speculative question becomes: Buy, Hold or Sell?
FUNDAMENTALS
Bitcoin is the decentralized censorship-resistant Internet Protocol for transferring value over a communications channel.
The Bitcoin network can use traditional Internet infrastructure. However, it is even more resilient because it has custom infrastructure including, thanks to Bitcoin Core developer Matt Corrallo, the FIBRE network and, thanks to Blockstream, satellites which reduce the cost of running a full-node anywhere in the world to essentially nothing in terms of money or privacy. Transactions can be cheaply broadcast via SMS messages.
SECURITY
The Bitcoin network has a difficulty of 1,347,001,430,559 which suggests about 9,642,211 TH/s of custom ASIC hardware deployed.
At a retail price of approximately US$105/THs that implies about $650m of custom ASIC hardware deployed (35% discount applied).
This custom hardware consumes approximately 30 TWh per year. That could power about 2.8m US households or the entire country of Morocco which has a population of 33.85m.
This Bitcoin mining generates approximately 12.5 bitcoins every 10 minutes or approximately 1,800 per day worth approximately US$16,650,000.
Bitcoin currently has a market capitalization greater than $150B which puts it solidly in the top-30 of M1 money stock countries and a 200 day moving average of about $65B which is increasing about $500m per day.
Average daily volumes for Bitcoin is around US$5B. That means multi-million dollar positions can be moved into and out of very easily with minimal slippage.
When my friend Andreas Antonopolous was unable to give his talk at a CRYPSA event I was invited to fill in and delivered this presentation, impromptu, on the Seven Network Effects of Bitcoin.
These seven network effects of Bitcoin are (1) Speculation, (2) Merchants, (3) Consumers, (4) Security [miners], (5) Developers, (6) Financialization and (7) Settlement Currency are all taking root at the same time and in an incredibly intertwined way.
With only the first network effect starting to take significant root; Bitcoin is no longer a little experiment of magic Internet money anymore. Bitcoin is monster growing at a tremendous rate!!

SPECULATION
For the Bitcoin price to remain at $9,250 it requires approximately US$16,650,000 per day of capital inflow from new hodlers.
Bitcoin is both a Giffen good and a Veblen good.
A Giffen good is a product that people consume more of as the price rises and vice versa — seemingly in violation of basic laws of demand in microeconomics such as with substitute goods and the income effect.
Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases in an apparent contradiction of the law of demand.
There are approximately 16.5m bitcoins of which ~4m are lost, ~4-6m are in deep cold storage, ~4m are in cold storage and ~2-4m are salable.
(http://www.runtogold.com/images/lost-bitcoins-1.jpg)
(http://www.runtogold.com/images/lost-bitcoins-2.jpg)
And forks like BCash (BCH) should not be scary but instead be looked upon as an opportunity to take more territory on the Bitcoin blockchain by trading the forks for real bitcoins which dries up more salable supply by moving it, likely, into deep cold storage.
According to Wikipedia, there are approximately 15.4m millionaires in the United States and about 12m HNWIs ($30m+ net worth) in the world. In other words, if every HNWI in the world wanted to own an entire bitcoin as a 'risk-free asset' that cannot be confiscated, seized or have the balance other wise altered then they could not.
For wise portfolio management, these HNWIs should have at least about 2-5% in gold and 0.5-1% in bitcoin.
Why? Perhaps some of the 60+ Saudis with 1,700 frozen bank accounts and about $800B of assets being targetted might be able to explain it to you.
In other words, everyone loves to chase the rabbit and once they catch it then know that it will not get away.
RETAIL
There are approximately 150+ significant Bitcoin exchanges worldwide. Kraken, according to the CEO, was adding about 6,000 new funded accounts per day in July 2017.
Supposedly, Coinbase is currently adding about 75,000 new accounts per day. Based on some trade secret analytics I have access to; I would estimate Coinbase is adding approximately 17,500 new accounts per day that purchase at least US$100 of Bitcoin.
If we assume Coinbase accounts for 8% of new global Bitcoin users who purchase at least $100 of bitcoins (just pulled out of thin error and likely very conservative as the actual number is perhaps around 2%) then that is approximately $21,875,000 of new capital coming into Bitcoin every single day just from retail demand from 218,750 total new accounts.
What I have found is that most new users start off buying US$100-500 and then after 3-4 months months they ramp up their capital allocation to $5,000+ if they have the funds available.
After all, it takes some time and practical experience to learn how to safely secure one's private keys.
To do so, I highly recommend Bitcoin Core (network consensus and full validation of the blockchain), Armory (private key management), Glacier Protocol (operational procedures) and a Puri.sm laptop (secure non-specialized hardware).
WALL STREET
There has been no solution for large financial fiduciaries to invest in Bitcoin. This changed November 2017.
LedgerX, whose CEO I interviewed 23 March 2013, began trading as a CFTC regulated Swap Execution Facility and Derivatives Clearing Organization.
The CME Group announced they will begin trading in Q4 2017 Bitcoin futures.
The CBOE announced they will begin trading Bitcoin futures soon.
By analogy, these institutional products are like connecting a major metropolis's water system (US$90.4T and US$2 quadrillion) via a nanoscopic shunt to a tiny blueberry ($150B) that is infinitely expandable.
This price discovery could be the most wild thing anyone has ever experienced in financial markets.
THE GREAT CREDIT CONTRACTION
The same week Bitcoin was released I published my book The Great Credit Contraction and asserted it had now begun and capital would burrow down the liquidity pyramid into safer and more liquid assets.
(http://www.runtogold.com/images/Great-Credit-Contraction-Liquidity-Pyramid.jpg)
Thus, the critical question becomes: Is Bitcoin a possible solution to the Great Credit Contraction by becoming the safest and most liquid asset?
BITCOIN'S RISK PROFILE
At all times and in all circumstances gold remains money but, of course, there is always exchange rate risk due to price ratios constantly fluctuating. If the metal is held with a third-party in allocated-allocated storage (safest possible) then there is performance risk (Morgan Stanley gold storage lawsuit).
But, if properly held then, there should be no counter-party risk which requires the financial ability of a third-party to perform like with a bank account deposit. And, since gold exists at a single point in space and time therefore it is subject to confiscation or seizure risk.
Bitcoin is a completely new asset type. As such, the storage container is nearly empty with only $150B.
And every Bitcoin transaction effectively melts down every BTC and recasts it; thus ensuring with 100% accuracy the quantity and quality of the bitcoins. If the transaction is not on the blockchain then it did not happen. This is the strictest regulation possible; by math and cryptography!
This new immutable asset, if properly secured, is subject only to exchange rate risk. There does exist the possibility that a software bug may exist that could shut down the network, like what has happened with Ethereum, but the probability is almost nil and getting lower everyday it does not happen.
Thus, Bitcoin arguably has a lower risk profile than even gold and is the only blockchain to achieve security, scalability and liquidity.
To remain decentralized, censorship-resistant and immutable requires scalability so as many users as possible can run full-nodes.
(http://www.runtogold.com/images/ethereum-bitcoin-scability-nov-2017.png)
TRANSACTIONS
Some people, probably mostly those shilling alt-coins, think Bitcoin has a scalability problem that is so serious it requires a crude hard fork to solve.
On the other side of the debate, the Internet protocol and blockchain geniuses assert the scalability issues can, like other Internet Protocols have done, be solved in different layers which are now possible because of Segregated Witness which was activated in August 2017.
Whose code do you want to run: the JV benchwarmers or the championship Chicago Bulls?
As transaction fees rise, certain use cases of the Bitcoin blockchain are priced out of the market. And as the fees fall then they are economical again.
Additionally, as transaction fees rise, certain UTXOs are no longer economically usable thus destroying part of the money supply until fees decline and UTXOs become economical to move.
There are approximately 275,000-350,000 transactions per day with transaction fees currently about $2m/day and the 200 DMA is around $1.08m/day.
(http://www.runtogold.com/images/bitcoin-transaction-fees-nov-2017.png)
What I like about transaction fees is that they somewhat reveal the financial health of the network.
The security of the Bitcoin network results from the miners creating solutions to proof of work problems in the Bitcoin protocol and being rewarded from the (1) coinbase reward which is a form of inflation and (2) transaction fees which is a form of usage fee.
The higher the transaction fees then the greater implied value the Bitcoin network provides because users are willing to pay more for it.
I am highly skeptical of blockchains which have very low transaction fees. By Internet bubble analogy, Pets.com may have millions of page views but I am more interested in EBITDA.
DEVELOPERS
Bitcoin and blockchain programming is not an easy skill to acquire and master. Most developers who have the skill are also financially independent now and can work on whatever they want.
The best of the best work through the Bitcoin Core process. After all, if you are a world class mountain climber then you do not hang out in the MacDonalds play pen but instead climb Mount Everest because that is where the challenge is.
However, there are many talented developers who work in other areas besides the protocol. Wallet maintainers, exchange operators, payment processors, etc. all need competent developers to help build their businesses.
Consequently, there is a huge shortage of competent developers. This is probably the largest single scalability constraint for the ecosystem.
Nevertheless, the Bitcoin ecosystem is healthier than ever before.
(http://www.runtogold.com/images/bitcoin-ecosystem.jpg)(/images/bitcoin-ecosystem-small.jpg)
SETTLEMENT CURRENCY
There are no significant global reserve settlement currency use cases for Bitcoin yet.
Perhaps the closest is Blockstream's Strong Federations via Liquid.
PRICE
There is a tremendous amount of disagreement in the marketplace about the value proposition of Bitcoin. Price discovery for this asset will be intense and likely take many cycles of which this is the fourth.
Since the supply is known the exchange rate of Bitcoins is composed of (1) transactional demand and (2) speculative demand.
Interestingly, the price elasticity of demand for the transactional demand component is irrelevant to the price. This makes for very interesting dynamics!
(http://www.runtogold.com/images/bitcoin-speculation.jpg)
On 4 May 2017, Lightspeed Venture Partners partner Jeremy Liew who was among the early Facebook investors and the first Snapchat investor laid out their case for bitcoin exploding to $500,000 by 2030.
On 2 November 2017, Goldman Sachs CEO Lloyd Blankfein (https://www.bloomberg.com/news/articles/2017-11-02/blankfein-says-don-t-dismiss-bitcoin-while-still-pondering-value)said, "Now we have paper that is just backed by fiat...Maybe in the new world, something gets backed by consensus."
On 12 Sep 2017, JP Morgan CEO called Bitcoin a 'fraud' but conceded that "(http://fortune.com/2017/09/12/jamie-dimon-bitcoin-cryptocurrency-fraud-buy/)Bitcoin could reach $100,000".
Thus, it is no surprise that the Bitcoin chart looks like a ferret on meth when there are such widely varying opinions on its value proposition.
I have been around this space for a long time. In my opinion, those who scoffed at the thought of $1 BTC, $10 BTC (Professor Bitcorn!), $100 BTC, $1,000 BTC are scoffing at $10,000 BTC and will scoff at $100,000 BTC, $1,000,000 BTC and even $10,000,000 BTC.
Interestingly, the people who understand it the best seem to think its financial dominance is destiny.
Meanwhile, those who understand it the least make emotionally charged, intellectually incoherent bearish arguments. A tremendous example of worldwide cognitive dissonance with regards to sound money, technology and the role or power of the State.
Consequently, I like looking at the 200 day moving average to filter out the daily noise and see the long-term trend.
(http://www.runtogold.com/images/bitcoin-price-200dma-nov-2017.png)
Well, that chart of the long-term trend is pretty obvious and hard to dispute. Bitcoin is in a massive secular bull market.
The 200 day moving average is around $4,001 and rising about $30 per day.
So, what do some proforma situations look like where Bitcoin may be undervalued, average valued and overvalued? No, these are not prognostications.
(http://www.runtogold.com/images/bitcoin-price-pro-forma.png)
Maybe Jamie Dimon is not so off his rocker after all with a $100,000 price prediction.
We are in a very unique period of human history where the collective globe is rethinking what money is and Bitcoin is in the ring battling for complete domination. Is or will it be fit for purpose?
As I have said many times before, if Bitcoin is fit for this purpose then this is the largest wealth transfer in the history of the world.
CONCLUSION
Well, this has been a brief analysis of where I think Bitcoin is at the end of November 2017.
The seven network effects are taking root extremely fast and exponentially reinforcing each other. The technological dominance of Bitcoin is unrivaled.
The world is rethinking what money is. Even CEOs of the largest banks and partners of the largest VC funds are honing in on Bitcoin's beacon.
While no one has a crystal ball; when I look in mine I see Bitcoin's future being very bright.
Currently, almost everyone who has bought Bitcoin and hodled is sitting on unrealized gains as measured in fiat currency. That is, after all, what uncharted territory with daily all-time highs do!
But perhaps there is a larger lesson to be learned here.
Riches are getting increasingly slippery because no one has a reliable defined tool to measure them with. Times like these require incredible amounts of humility and intelligence guided by macro instincts.
Perhaps everyone should start keeping books in three numéraires: USD, gold and Bitcoin.
Both gold and Bitcoin have never been worth nothing. But USD is a fiat currency and there are thousands of those in the fiat currency graveyard. How low can the world reserve currency go?
After all, what is the risk-free asset? And, whatever it is, in The Great Credit Contraction you want it!
What do you think? Disagree with some of my arguments or assertions? Please, eviscerate them on Twitter or in the comments!
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A Beginners Guide to Bitcoin, Blockchain & Cryptocurrency

As cryptocurrency, and blockchain technology become more abundant throughout our society, it’s important to understand the inner workings of this technology, especially if you plan to use cryptocurrency as an investment vehicle. If you’re new to the crypto-sphere, learning about Bitcoin makes it much easier to understand other cryptocurrencies as many other altcoins' technologies are borrowed directly from Bitcoin.
Bitcoin is one of those things that you look into only to discover you have more questions than answers, and right as you’re starting to wrap your head around the technology; you discover the fact that Bitcoin has six other variants (forks), the amount of politics at hand, or that there are over a thousand different cryptocurrencies just as complex if not even more complex than Bitcoin.
We are currently in the infancy of blockchain technology and the effects of this technology will be as profound as the internet. This isn’t something that’s just going to fade away into history as you may have been led to believe. I believe this is something that will become an integral part of our society, eventually embedded within our technology. If you’re a crypto-newbie, be glad that you're relatively early to the industry. I hope this post will put you on the fast-track to understanding Bitcoin, blockchain, and how a large percentage of cryptocurrencies work.

Community Terminology

Altcoin: Short for alternative coin. There are over 1,000 different cryptocurrencies. You’re probably most familiar with Bitcoin. Anything that isn’t Bitcoin is generally referred to as an altcoin.
HODL: Misspelling of hold. Dank meme accidentally started by this dude. Hodlers are much more interested in long term gains rather than playing the risky game of trying to time the market.
TO THE MOON: When a cryptocurrency’s price rapidly increases. A major price spike of over 1,000% can look like it’s blasting off to the moon. Just be sure you’re wearing your seatbelt when it comes crashing down.
FUD: Fear. Uncertainty. Doubt.
FOMO: Fear of missing out.
Bull Run: Financial term used to describe a rising market.
Bear Run: Financial term used to describe a falling market.

What Is Bitcoin?

Bitcoin (BTC) is a decentralized digital currency that uses cryptography to secure and ensure validity of transactions within the network. Hence the term crypto-currency. Decentralization is a key aspect of Bitcoin. There is no CEO of Bitcoin or central authoritative government in control of the currency. The currency is ran and operated by the people, for the people. One of the main development teams behind Bitcoin is blockstream.
Bitcoin is a product of blockchain technology. Blockchain is what allows for the security and decentralization of Bitcoin. To understand Bitcoin and other cryptocurrencies, you must understand to some degree, blockchain. This can get extremely technical the further down the rabbit hole you go, and because this is technically a beginners guide, I’m going to try and simplify to the best of my ability and provide resources for further technical reading.

A Brief History

Bitcoin was created by Satoshi Nakamoto. The identity of Nakamoto is unknown. The idea of Bitcoin was first introduced in 2008 when Nakamoto released the Bitcoin white paper - Bitcoin: A Peer-to-Peer Electronic Cash System. Later, in January 2009, Nakamoto announced the Bitcoin software and the Bitcoin network officially began.
I should also mention that the smallest unit of a Bitcoin is called a Satoshi. 1 BTC = 100,000,000 Satoshis. When purchasing Bitcoin, you don’t actually need to purchase an entire coin. Bitcoin is divisible, so you can purchase any amount greater than 1 Satoshi (0.00000001 BTC).

What Is Blockchain?

Blockchain is a distributed ledger, a distributed collection of accounts. What is being accounted for depends on the use-case of the blockchain itself. In the case of Bitcoin, what is being accounted for is financial transactions.
The first block in a blockchain is referred to as the genesis block. A block is an aggregate of data. Blocks are also discovered through a process known as mining (more on this later). Each block is cryptographically signed by the previous block in the chain and visualizing this would look something akin to a chain of blocks, hence the term, blockchain.
For more information regarding blockchain I’ve provided more resouces below:

What is Bitcoin Mining

Bitcoin mining is one solution to the double spend problem. Bitcoin mining is how transactions are placed into blocks and added onto the blockchain. This is done to ensure proof of work, where computational power is staked in order to solve what is essentially a puzzle. If you solve the puzzle correctly, you are rewarded Bitcoin in the form of transaction fees, and the predetermined block reward. The Bitcoin given during a block reward is also the only way new Bitcoin can be introduced into the economy. With a halving event occurring roughly every 4 years, it is estimated that the last Bitcoin block will be mined in the year 2,140. (See What is Block Reward below for more info).
Mining is one of those aspects of Bitcoin that can get extremely technical and more complicated the further down the rabbit hole you go. An entire website could be created (and many have) dedicated solely to information regarding Bitcoin mining. The small paragraph above is meant to briefly expose you to the function of mining and the role it plays within the ecosystem. It doesn’t even scratch the surface regarding the topic.

How do you Purchase Bitcoin?

The most popular way to purchase Bitcoin through is through an online exchange where you trade fiat (your national currency) for Bitcoin.
Popular exchanges include:
  • Coinbase
  • Kraken
  • Cex
  • Gemini
There’s tons of different exchanges. Just make sure you find one that supports your national currency.

Volatility

Bitcoin and cryptocurrencies are EXTREMELY volatile. Swings of 30% or more within a few days is not unheard of. Understand that there is always inherent risks with any investment. Cryptocurrencies especially. Only invest what you’re willing to lose.

Transaction & Network Fees

Transacting on the Bitcoin network is not free. Every purchase or transfer of Bitcoin will cost X amount of BTC depending on how congested the network is. These fees are given to miners as apart of the block reward.
Late 2017 when Bitcoin got up to $20,000USD, the average network fee was ~$50. Currently, at the time of writing this, the average network fee is $1.46. This data is available in real-time on BitInfoCharts.

Security

In this new era of money, there is no central bank or government you can go to in need of assistance. This means the responsibility of your money falls 100% into your hands. That being said, the security regarding your cryptocurrency should be impeccable. The anonymity provided by cryptocurrencies alone makes you a valuable target to hackers and scammers. Below I’ve detailed out best practices regarding securing your cryptocurrency.

Two-Factor Authentication (2FA)

Two-factor authentication is a second way of authenticating your identity upon signing in to an account. Most cryptocurrency related software/websites will offer or require some form of 2FA. Upon creation of any crypto-related account find the Security section and enable 2FA.

SMS Authentication

The most basic form of 2FA which you are probably most familiar with. This form of authentication sends a text message to your smartphone with a special code that will allow access to your account upon entry. Note that this is not the safest form of 2FA as you may still be vulnerable to what is known as a SIM swap attack. SIM swapping is a social engineering method in which an attacker will call up your phone carrier, impersonating you, in attempt to re-activate your SIM card on his/her device. Once the attacker has access to your SIM card he/she now has access to your text messages which can then be used to access your online accounts. You can prevent this by using an authenticator such as Google Authenticator.

Authenticator

The use of an authenticator is the safest form of 2FA. An authenticator is installed on a seperate device and enabling it requires you input an ever changing six digit code in order to access your account. I recommend using Google Authenticator.
If a website has the option to enable an authenticator, it will give you a QR code and secret key. Use Google Authenticator to scan the QR code. The secret key consists of a random string of numbers and letters. Write this down on a seperate sheet of paper and do not store it on a digital device.
Once Google Authenticator has been enabled, every time you sign into your account, you will have to input a six-digit code that looks similar to this. If you happen to lose or damage the device you have Google Authenticator installed on, you will be locked out of your account UNLESS you have access to the secret key (which you should have written down).

Hardware Wallets

A wallet is what you store Bitcoin and cryptocurrency on. I’ll provide resources on the different type of wallets later but I want to emphasize the use of a hardware wallet (aka cold storage).
Hardware wallets are the safest way of storing cryptocurrency because it allows for your crypto to be kept offline in a physical device. After purchasing crypto via an exchange, I recommend transferring it to cold storage. The most popular hardware wallets include the Ledger Nano S, and Trezor.
Hardware wallets come with a special key so that if it gets lost or damaged, you can recover your crypto. I recommend keeping your recovery key as well as any other sensitive information in a safety deposit box.
I know this all may seem a bit manic, but it is important you take the necessary security precautions in order to ensure the safety & longevity of your cryptocurrency.

Technical Aspects of Bitcoin

TL;DR
  • Address: What you send Bitcoin to.
  • Wallet: Where you store your Bitcoin
  • Max Supply: 21 million
  • Block Time: ~10 minutes
  • Block Size: 1-2 MB
  • Block Reward: BTC reward received from mining.

What is a Bitcoin Address?

A Bitcoin address is what you send Bitcoin to. If you want to receive Bitcoin you’d give someone your Bitcoin address. Think of a Bitcoin address as an email address for money.

What is a Bitcoin Wallet?

As the title implies, a Bitcoin wallet is anything that can store Bitcoin. There are many different types of wallets including paper wallets, software wallets and hardware wallets. It is generally advised NOT to keep cryptocurrency on an exchange, as exchanges are prone to hacks (see Mt. Gox hack).
My preferred method of storing cryptocurrency is using a hardware wallet such as the Ledger Nano S or Trezor. These allow you to keep your crypto offline in physical form and as a result, much more safe from hacks. Paper wallets also allow for this but have less functionality in my opinion.
After I make crypto purchases, I transfer it to my Ledger Nano S and keep that in a safe at home. Hardware wallets also come with a special key so that if it gets lost or damaged, you can recover your crypto. I recommend keeping your recovery key in a safety deposit box.

What is Bitcoins Max Supply?

The max supply of Bitcoin is 21 million. The only way new Bitcoins can be introduced into the economy are through block rewards which are given after successfully mining a block (more on this later).

What is Bitcoins Block Time?

The average time in which blocks are created is called block time. For Bitcoin, the block time is ~10 minutes, meaning, 10 minutes is the minimum amount of time it will take for a Bitcoin transaction to be processed. Note that transactions on the Bitcoin network can take much longer depending on how congested the network is. Having to wait a few hours or even a few days in some instances for a transaction to clear is not unheard of.
Other cryptocurrencies will have different block times. For example, Ethereum has a block time of ~15 seconds.
For more information on how block time works, Prabath Siriwardena has a good block post on this subject which can be found here.

What is Bitcoins Block Size?

There is a limit to how large blocks can be. In the early days of Bitcoin, the block size was 36MB, but in 2010 this was reduced to 1 MB in order to prevent distributed denial of service attacks (DDoS), spam, and other malicious use on the blockchain. Nowadays, blocks are routinely in excess of 1MB, with the largest to date being somewhere around 2.1 MB.
There is much debate amongst the community on whether or not to increase Bitcoin’s block size limit to account for ever-increasing network demand. A larger block size would allow for more transactions to be processed. The con argument to this is that decentralization would be at risk as mining would become more centralized. As a result of this debate, on August 1, 2017, Bitcoin underwent a hard-fork and Bitcoin Cash was created which has a block size limit of 8 MB. Note that these are two completely different blockchains and sending Bitcoin to a Bitcoin Cash wallet (or vice versa) will result in a failed transaction.
Update: As of May 15th, 2018 Bitcoin Cash underwent another hard fork and the block size has increased to 32 MB.
On the topic of Bitcoin vs Bitcoin Cash and which cryptocurrency is better, I’ll let you do your own research and make that decision for yourself. It is good to know that this is a debated topic within the community and example of the politics that manifest within the space. Now if you see community members arguing about this topic, you’ll at least have a bit of background to the issue.

What is Block Reward?

Block reward is the BTC you receive after discovering a block. Blocks are discovered through a process called mining. The only way new BTC can be added to the economy is through block rewards and the block reward is halved every 210,000 blocks (approximately every 4 years). Halving events are done to limit the supply of Bitcoin. At the inception of Bitcoin, the block reward was 50BTC. At the time of writing this, the block reward is 12.5BTC. Halving events will continue to occur until the amount of new Bitcoin introduced into the economy becomes less than 1 Satoshi. This is expected to happen around the year 2,140. All 21 million Bitcoins will have been mined. Once all Bitcoins have been mined, the block reward will only consist of transaction fees.

Technical Aspects Continued

Understanding Nodes

Straight from the Bitcoin.it wiki
Any computer that connects to the Bitcoin network is called a node. Nodes that fully verify all of the rules of Bitcoin are called full nodes.
In other words, full nodes are what verify the Bitcoin blockchain and they play a crucial role in maintaining the decentralized network. Full nodes store the entirety of the blockchain and validate transactions. Anyone can participate in the Bitcoin network and run a full node. Bitcoin.org has information on how to set up a full node. Running a full node also gives you wallet capabilities and the ability to query the blockchain.
For more information on Bitcoin nodes, see Andreas Antonopoulos’s Q&A on the role of nodes.

What is a Fork?

A fork is a divergence in a blockchain. Since Bitcoin is a peer-to-peer network, there’s an overall set of rules (protocol) in which participants within the network must abide by. These rules are put in place to form network consensus. Forks occur when implementations must be made to the blockchain or if there is disagreement amongst the network on how consensus should be achieved.

Soft Fork vs Hard Fork

The difference between soft and hard forks lies in compatibility. Soft forks are backwards compatible, hard forks are not. Think of soft forks as software upgrades to the blockchain, whereas hard forks are a software upgrade that warrant a completely new blockchain.
During a soft fork, miners and nodes upgrade their software to support new consensus rules. Nodes that do not upgrade will still accept the new blockchain.
Examples of Bitcoin soft forks include:
A hard fork can be thought of as the creation of a new blockchain that X percentage of the community decides to migrate too. During a hard fork, miners and nodes upgrade their software to support new consensus rules, Nodes that do not upgrade are invalid and cannot accept the new blockchain.
Examples of Bitcoin hard forks include:
  • Bitcoin Cash
  • Bitcoin Gold
Note that these are completely different blockchains and independent from the Bitcoin blockchain. If you try to send Bitcoin to one of these blockchains, the transaction will fail.

A Case For Bitcoin in a World of Centralization

Our current financial system is centralized, which means the ledger(s) that operate within this centralized system are subjugated to control, manipulation, fraud, and many other negative aspects that come with this system. There are also pros that come with a centralized system, such as the ability to swiftly make decisions. However, at some point, the cons outweigh the pros, and change is needed. What makes Bitcoin so special as opposed to our current financial system is that Bitcoin allows for the decentralized transfer of money. Not one person owns the Bitcoin network, everybody does. Not one person controls Bitcoin, everybody does. A decentralized system in theory removes much of the baggage that comes with a centralized system. Not to say the Bitcoin network doesn’t have its problems (wink wink it does), and there’s much debate amongst the community as to how to go about solving these issues. But even tiny steps are significant steps in the world of blockchain, and I believe Bitcoin will ultimately help to democratize our financial system, whether or not you believe it is here to stay for good.

Final Conclusions

Well that was a lot of words… Anyways I hope this guide was beneficial, especially to you crypto newbies out there. You may have come into this realm not expecting there to be an abundance of information to learn about. I know I didn’t. Bitcoin is only the tip of the iceberg, but now that you have a fundamental understanding of Bitcoin, learning about other cryptocurrencies such as Litecoin, and Ethereum will come more naturally.
Feel free to ask questions below! I’m sure either the community or myself would be happy to answer your questions.
Thanks for reading!

Related Links

Guides

Exchanges

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Coin Trade Base Exchange; The Leading Global Blockchain and Multi sided Crypto Exchange

Increase in the acceptability of cryptocurrency around the world has resulted to an increase in the number of cryptocurrency exchange platforms. A cryptocurrency or digital currency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrency exchanges or digital currency exchanges (DCE) are businesses that allow customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money , or different digital currencies.
On many present cryptocurrency exchanges, different digital currencies are used to trade against one other and the challenges faced by traders is high transaction charges; which greatly reduce their profits, security, bad users’ interface, and several payment options. To the best of our knowledge, there is no cryptocurrency exchange with zero or low transaction charges and no or less number of cryptocurrency exchange platforms accepting both crypto currency, fiat currency, paypal, perfect Money or gift cards as means of exchange for bitcoins and altcoins. To solve these major challenges facing the Traders and Investors, Coin Trade Base (CTB) Cryptocurrency Exchange is founded by an international team of cryptocurrency, finance, and technology Experts. Coin Trade Base (CTB) exchange is a cryptocurrency exchange platform with advanced security, simplified users’ interface and zero or low transaction charges. CTB exchange is safe, efficient, and users’ friendly.
On CTB Exchange, you can trade CTB token and other different digital currencies against one another with zero or low transaction charges. On CTB Digital-to-Fiat Escrow Exchange, you can trade all local fiat currencies and gift cards against CTB token and some standard cryptocurrencies anywhere in the world. This will provides more opportunity for traders and investors in the cryptocurrency world. Coin Trade Base will revolutionize the cryptocurrency exchange. We want to change the game and significantly increase the rate of cryptocurrency trading and adoption rate of cryptocurrencies. Our products and servicees make it safe and easy for people and corporates to store, sell, buy, use and learn about cryptocurrencies.
https://preview.redd.it/jqwfb5wwyd611.jpg?width=1956&format=pjpg&auto=webp&s=3be0508180d15e585d4c0768e1b57b9df2fc51e0
Our Team
Our team has been deeply involved in the cryptocurrency community for years and we understand that the interest of the users should be first and must be protected.
Existing Problems
1. Security
As the cryptocurrencies industry is getting more matured day-by-day, it is paramount the traders, ordinary persons and investors are able to safeguard and exchange their coins and tokens without any hiccup. It’s no doubt exchanges (for this kind of a purpose) are sprouting at a rate which is proportional to the crypto-industry growth. However, security, active support system, fiat gateway, among others still remain very big issues.
2. Digital to fiat exchange
Digital-to-fiat exchange difficulty is a serious issue plaguing the industry as users often need to use two or more exchanges (controlled by two or more different parties) if they want to redeem their digital assets for fiats and fiats for their digital assets. This comes with stress, dissatisfaction and usurious charges.
3. Complex users interface
Most cryptocurrency exchanges have complex user’s interface, and this makes it difficult for beginners to access and understand. This has made the active participation in the cryptocurrency trading difficult for them.
4. Speed
Speed and accuracy are important factors in the exchange of digital assets. Most current cryptocurrency exchanges are slow due to the influx of more users into their platforms, and it is so unfortunate that some are not designed to scale to meet such demand. This, in turn, frustrates the users and has negative effects on their orders which, eventually, affect their profits and outputs.
5. High transaction and withdrawal charges
Almost all exchanges charge the traders for transaction fees. Most charges a usurious fee, which greatly affects the traders’ profits and saddens ordinary persons(who just want to exchange their digital assets); and these outrageous fees are significantly different from the actual miners’ fees.
6. Hedges
Most traders face challenges on hedging on most cryptocurrecny exchanges with our Cryptocurrency Escrow Trading Platform you can convert your coin to your local currency.
Solutions
Why you should choose CoinTradeBase (CTB) Exchange
1. Advanced Security
Cryptocurrency exchanges handling users’ funds and data have to be secured. In the past, many security breaches leading to the loss of funds and data have been recorded in most exchanges. To make Coin Trade Base secure and ensure an absolute safety of the users’ funds, a multi-factor, dynamic, and authentication mechanism — to sensitive operations like withdrawal, etc — is adopted, and funds are held in a secure cold storage. This provides maximum security for our users. To boot, wallets in the platform have adopted multiple security levels of storage solution in line with their storage scale, and utilized cold storage and encrypted databases. We have stored the micro-withdrawal wallets in the private network architecture which has multi-layer firewall on the basis of security isolation. Thus, financial safety on this platform is taken diligently with utmost professionalism.
2. Low or no transaction fees
Most exchange platforms charge exorbitant fees on every transaction, and this is seriously affecting the users’ profit. However, on Coin Trade Base, there are low or no transaction charges. As a result, our users gain more outputs.
3. Simplified user’s interface
One of our aims is to make cryptocurrency trading and exchange easier for both the beginners, ordinary persons, and the professional traders. Coin Trade Base’s interface is simply designed, easy to access and understand, and facilitate cryptocurrency trading more than other older and clunky exchanges.
4. Unlimited high performance and worldwide presence
Coin Trade Base is a powerful and reliable platform built to withstand the present and future cryptocurrency market. Our exchanges’ servers will be powerful and dynamic to handle millions of transaction per second (according to the future market demand). Therefore, we can guarantee that there will be no delay or lag throughout the whole core order process when the market booms. CTB servers are located in global regions: Asia, America, Europe, Australia, Africa and more, and there will be fast server responses wherever the users are.
5. Active 24/7 customer support services
At CTB, we value our users and have put in place 24/7, professional and friendly customer support team members, who are ready to attend to our users’ needs at any time of the day, without any delay. CTB will offer customer services through different means including webpage, hotline, e-mail and social media. As the number of users grows, so does the customer support team grow simultaneously.
Features of CoinTradeBase Exchange
1. Push Notification
As we know that cryptocurrency market is very volatile and most traders always want to keep an eye on the market, we have implemented different push notifications to make trading easier for the traders by keeping them abreast of changes in the market. The push notifications allow:
To set price alerts for different coins.
To receive alerts when order is executed or partially filled.
To receive price-change alerts.
To create alerts for prices below or above your choice prices e.t.c.
2. Indicators
Market indicators are the mostly used statistical quantities that best traders use to predict the best behavior of the cryptocurrency markets at critical moments, and take timely actions to make profits from their prediction. CTB will cover the best evolutionary indicators for the trader to make informed decisions at various times.
3. Charts
This allows traders to study market pyschologies at various times, and give an insight on the history of different markets.
4. API Solutions
CTB exchange offers best and easy to use API solutions for market data on major cryptocurrencies. There is an availability of API that aggregates data from many exchanges. This will afford users opportunity to make informed decisions.
5. Conversion of CTB to all local currencies
CTB will support a lot of fiat currencies. On our Cryptocurrency Escrow Trading Platform, users will be able to convert their cryptocurrencies to their local currency (fiat currencies) anywhere in the world. In addition, on the Cryptocurrency Escrow Trading Platform, people will be able to trade all local fiat currencies against CTB token and some standard cryptocurrencies and tokens anywhere in the world. This will provide ample equal opportunity for traders and investors in the cryptocurrency world, most especially on the CTB exchange platform.
Products
i. Digital-to-fiat Escrow Exchange
ii. Digital-to-digital Exchange
Other Product fromCoin Trade Base
i. Decentralized Exchange
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Cryptocurrency: lives or dies? Part 1. Bubbles as a scarecrow for newcomers

Cryptocurrency: lives or dies? Part 1. Bubbles as a scarecrow for newcomers
Cryptocurrency: lives or dies? Part 1. Bubbles as a scarecrow for newcomers
The cryptomania 2017 was colossal. Although cryptocurrencies have existed since 2009, many people found out about them just in 2017, against the backdrop of the outstanding growth in rates and a clear sense of revolution. Many newcomers thought that the rates would grow forever. They were ready to buy digital currencies at any price considering any declines to be local, and growth to be global.
But 2018 brought an unpleasant surprise: the market suddenly began to break down. In the first quarter, many people hoped that this was only a “correction,” but the collapse continued. If early in 2018, Bitcoin (BTC) carried a record price of $20,000, then by September it had fallen in price to $6,300, that is, threefold. And the “heroic” ethereum (ETH), which almost surpassed BTC in terms of capitalization in Summer 2017, had fallen fivefold: from $1,300 to $250.

https://preview.redd.it/4gxrjt5imw031.jpg?width=1280&format=pjpg&auto=webp&s=caae30b6e06f61a8d7dd33e86344f58d22c30162
In autumn, the market froze. It seemed that the bottom was reached and the restoration would begin soon. However, November brought another surprise: the rates dropped again. For example, BTC fell in price from $6,000 to $ 4,000. This happened so suddenly that it looked like an evident conspiracy of the major players, so-called “whales”. Autumn investors, following the earlier ones, suffered losses. Many of them completely become disillusioned with the crypto-market, having decided that it is entirely in the grasp to manipulators: such a “market” resembles MMM where quotes are randomly set by puppeteers.
In Winter, the market froze again, while in Spring a long-promised growth began. In March it continued to ascend carefully, and in April it continued to ascend unexpectedly sharply and symmetrically to the drop in November. In both cases, the BTC rate changed by $800 just for an hour, but in November it was a drop, while in April it was a rise. In both cases, there was no kickback: on the contrary, the movement went on. Optimists rushed to buy cryptocurrencies, but the most population smelt a rat. If not only drops but also rises occur "in a snap", is this not the best proof of pulling the strings?

https://preview.redd.it/4dvc478jmw031.jpg?width=1280&format=pjpg&auto=webp&s=0ff55dff60910cef6a0d5dda8a2057151f4f2cbb
So do we believe in true market recovery now? Perhaps this is another trick? Is it worth investing in cryptocurrencies or is it better to forget them like a nightmare? Is the market entirely in the hands of puppeteers or does it have objective laws? We will try to understand this in more detail.
How did it get started: bitcoin and its bubble 2013
The first world’s cryptocurrency was Bitcoin (BTC). It appeared in 2009 and firstly it was known only to specialists in cryptography, as well as to particularly advanced free market activists. But soon it attracted the close attention of investors demonstrating in 2010-2013 a tremendous growth of 4 orders: from $ 0.1 to $ 1000. In other words, the average exchange rate grew by a factor of 10 per year (!!!)

https://preview.redd.it/2be0puujmw031.jpg?width=1280&format=pjpg&auto=webp&s=14420f8e457edee778f560c976f3369c805a286d
In 2013, this BTC’s success gained worldwide fame. However, as often happens, the shock popularization was no in favor of the asset rate: reaching a record mark of $1,200 in December 2013, BTC began to fall in price. Towards the end of 2014, its rate rolled back to $250, following which it remained relatively stable in 2015. A significant part of the growth in 2013 turned out to be a bubble. However, after blowing off the bubble, the BTC rate still remained significantly higher than it was early in 2013 (especially, in all previous years).

https://preview.redd.it/uowotkqkmw031.jpg?width=1280&format=pjpg&auto=webp&s=0b6b95fdb832ba59acf2746aa2e37af96df1a231
How it continued: altcoins and general market bubble 2017
The new growth of the BTC rate began in 2016, and became especially explosive in 2017. At the same time, altcoins, new cryptocurrencies, “alternative” BTC - ethereum (ETH), lightcoin (LTC), emercoin (EMC), and many others asserted themselves in a massive way. If until 2016 they stayed in the deep background of the market flagship, then in 2017 their total capitalization for some time exceeded the capitalization of BTC. In Summer 2017 there was a moment when the ETH acting alone nearly advanced the BTC.

https://preview.redd.it/e55s3hilmw031.jpg?width=1280&format=pjpg&auto=webp&s=b838ef697269c7746949eb2012882455ee8fe305
By the end of 2017, BTC had risen in price to $20,000, while the total capitalization of the cryptocurrency market reached a huge amount of $800 bln (higher than capitalization of any global corporation). But this turned out to be yet another bubble: throughout 2018, just as in 2014, the rate of BTC and other currencies was falling). By the end of the year, the market capitalization decreased to $130 billion.
What can be shown by the comparison of two bubbles
Financial bubbles constitute an unpleasant phenomenon, and yet a logical one. By studying their dynamics it is possible to reveal a lot of interesting things about the nature of the new assets. If we look attentively at the figures, it is possible to note: the bubbles of 2013-2014 and 2017-2018 have much in common.
⦁ In both cases, the rate of bitcoin has dropped approximately five-fold. Market capitalization in the second case has dropped approximately 6-fold.
⦁ In both cases, a general decline lasted about a year, followed by a quiet period.
⦁ In both cases, "after bubbles" the rates have been fixed at the levels that are considerably higher than the levels "before bubbles". For example, at the end of 2014, BTC was much more expensive than at the end of 2012, while in late 2018 it was much more expensive than in late 2016.
DECLINE IN 5.3
DECLINE IN 4.8

https://preview.redd.it/kvcy8nxmmw031.jpg?width=1280&format=pjpg&auto=webp&s=23dfa2bba06896babfba777d4ef16f9667c6f099
This simple comparison shows: the scale of the 2018 cryptocurrency crash is exaggerated. The bubble has developed according to the same scenario, as it happened last time, and seriously frightened only the novices.
Judging by the charts, the cryptocurrency market is more alive than dead. Moreover, it quite well follows the standard laws of financial bubbles’ development, and its multi-year trend is clearly positive. For the credibility one can recall, for example, the chart of the oil prices in the 2000s. As we can see here there is also a bubble and decline, but after that – recovery to the values, which are much higher than before the bubble. That’s what happens when the assets are really valuable (not just a short-lived hype), and this is exactly what we have been observing in case of cryptocurrency market.

https://preview.redd.it/2todpslnmw031.jpg?width=1280&format=pjpg&auto=webp&s=9da51f9b71f36dffb5b1af8152bb949286fb10c5
With a high degree of probability, right now cryptocurrency investments are of particular interest. The upward movement looks quite reasonable, and why it has happened so abruptly, is there some catch behind it, and what are the fundamental reasons that contributed to the upward trend – we will discuss all these questions next time
Analytical department, Trident company, Victor Argonov, Candidate of Physical and Mathematical Sciences.
Source:
http://trident-germes.com/category/article/
submitted by TridentGermes to Bitcoin [link] [comments]

Cryptocurrency: lives or dies? Part 1

Cryptocurrency: lives or dies? Part 1
Part 1. Bubbles as a scarecrow for newcomers

The cryptomania 2017 was colossal. Although cryptocurrencies have existed since 2009, many people found out about them just in 2017, against the backdrop of the outstanding growth in rates and a clear sense of revolution. Many newcomers thought that the rates would grow forever. They were ready to buy digital currencies at any price considering any declines to be local, and growth to be global.

But 2018 brought an unpleasant surprise: the market suddenly began to break down. In the first quarter, many people hoped that this was only a “correction,” but the collapse continued. If early in 2018, Bitcoin (BTC) carried a record price of $20,000, then by September it had fallen in price to $6,300, that is, threefold. And the “heroic” ethereum (ETH), which almost surpassed BTC in terms of capitalization in Summer 2017, had fallen fivefold: from $1,300 to $250.

https://preview.redd.it/ly1to0boz9y21.jpg?width=1280&format=pjpg&auto=webp&s=10a6f59dc9509c5bd571fb6145ac91158028e849
In autumn, the market froze. It seemed that the bottom was reached and the restoration would begin soon. However, November brought another surprise: the rates dropped again. For example, BTC fell in price from $6,000 to $ 4,000. This happened so suddenly that it looked like an evident conspiracy of the major players, so-called “whales”. Autumn investors, following the earlier ones, suffered losses. Many of them completely become disillusioned with the crypto-market, having decided that it is entirely in the grasp to manipulators: such a “market” resembles MMM where quotes are randomly set by puppeteers.

In Winter, the market froze again, while in Spring a long-promised growth began. In March it continued to ascend carefully, and in April it continued to ascend unexpectedly sharply and symmetrically to the drop in November. In both cases, the BTC rate changed by $800 just for an hour, but in November it was a drop, while in April it was a rise. In both cases, there was no kickback: on the contrary, the movement went on. Optimists rushed to buy cryptocurrencies, but the most population smelt a rat. If not only drops but also rises occur "in a snap", is this not the best proof of pulling the strings?

https://preview.redd.it/x14yabypz9y21.jpg?width=1280&format=pjpg&auto=webp&s=34f2b146d58ad4a406450bb2961709ba281c2dec
So do we believe in true market recovery now? Perhaps this is another trick? Is it worth investing in cryptocurrencies or is it better to forget them like a nightmare? Is the market entirely in the hands of puppeteers or does it have objective laws? We will try to understand this in more detail.

How did it get started: bitcoin and its bubble 2013

The first world’s cryptocurrency was Bitcoin (BTC). It appeared in 2009 and firstly it was known only to specialists in cryptography, as well as to particularly advanced free market activists. But soon it attracted the close attention of investors demonstrating in 2010-2013 a tremendous growth of 4 orders: from $ 0.1 to $ 1000. In other words, the average exchange rate grew by a factor of 10 per year (!!!)

https://preview.redd.it/m35lylysz9y21.jpg?width=1280&format=pjpg&auto=webp&s=7a30a6c591c049d0b5e076fb922a980127c531b1
In 2013, this BTC’s success gained worldwide fame. However, as often happens, the shock popularization was no in favor of the asset rate: reaching a record mark of $1,200 in December 2013, BTC began to fall in price. Towards the end of 2014, its rate rolled back to $250, following which it remained relatively stable in 2015. A significant part of the growth in 2013 turned out to be a bubble. However, after blowing off the bubble, the BTC rate still remained significantly higher than it was early in 2013 (especially, in all previous years).

https://preview.redd.it/4va61pjuz9y21.jpg?width=1280&format=pjpg&auto=webp&s=0f4a3800254ad0d70af8556467283ec87376e0cd

How it continued: altcoins and general market bubble 2017

The new growth of the BTC rate began in 2016, and became especially explosive in 2017. At the same time, altcoins, new cryptocurrencies, “alternative” BTC - ethereum (ETH), lightcoin (LTC), emercoin (EMC), and many others asserted themselves in a massive way. If until 2016 they stayed in the deep background of the market flagship, then in 2017 their total capitalization for some time exceeded the capitalization of BTC. In Summer 2017 there was a moment when the ETH acting alone nearly advanced the BTC.

https://preview.redd.it/dqyjr0yvz9y21.jpg?width=1280&format=pjpg&auto=webp&s=2daf6704930f105b301db95f7370027795911ede
By the end of 2017, BTC had risen in price to $20,000, while the total capitalization of the cryptocurrency market reached a huge amount of $800 bln (higher than capitalization of any global corporation). But this turned out to be yet another bubble: throughout 2018, just as in 2014, the rate of BTC and other currencies was falling). By the end of the year, the market capitalization decreased to $130 billion.

What can be shown by the comparison of two bubbles

Financial bubbles constitute an unpleasant phenomenon, and yet a logical one. By studying their dynamics it is possible to reveal a lot of interesting things about the nature of the new assets. If we look attentively at the figures, it is possible to note: the bubbles of 2013-2014 and 2017-2018 have much in common.

⦁ In both cases, the rate of bitcoin has dropped approximately five-fold. Market capitalization in the second case has dropped approximately 6-fold.
⦁ In both cases, a general decline lasted about a year, followed by a quiet period.
⦁ In both cases, "after bubbles" the rates have been fixed at the levels that are considerably higher than the levels "before bubbles". For example, at the end of 2014, BTC was much more expensive than at the end of 2012, while in late 2018 it was much more expensive than in late 2016.
DECLINE IN 5.3
DECLINE IN 4.8
https://preview.redd.it/p9nzmxuyz9y21.jpg?width=1280&format=pjpg&auto=webp&s=d11cea8a0e6802eb740df678a306e43cf882edd6
This simple comparison shows: the scale of the 2018 cryptocurrency crash is exaggerated. The bubble has developed according to the same scenario, as it happened last time, and seriously frightened only the novices.

Judging by the charts, the cryptocurrency market is more alive than dead. Moreover, it quite well follows the standard laws of financial bubbles’ development, and its multi-year trend is clearly positive. For the credibility one can recall, for example, the chart of the oil prices in the 2000s. As we can see here there is also a bubble and decline, but after that – recovery to the values, which are much higher than before the bubble. That’s what happens when the assets are really valuable (not just a short-lived hype), and this is exactly what we have been observing in case of cryptocurrency market.

https://preview.redd.it/z5p0rs130ay21.jpg?width=1280&format=pjpg&auto=webp&s=a7ea7e1d50b8e81baace77c7a17957ab0c364604

With a high degree of probability, right now cryptocurrency investments are of particular interest. The upward movement looks quite reasonable, and why it has happened so abruptly, is there some catch behind it, and what are the fundamental reasons that contributed to the upward trend – we will discuss all these questions next time
Analytical department, Trident company, Victor Argonov, Candidate of Physical and Mathematical Sciences.
Source: http://trident-germes.com/
submitted by TridentGermes to ENG [link] [comments]

BetOnYourself - the best platform for Gamebet

BetOnYourself - the best platform for Gamebet
Introduction
About some years ago, one of my friends hailed his belief in Bitcoin and explained how he moved his whole life savings onto a hardware wallet and erudite his private alphanumeric key. He looked like a personality from a Neal businessman novel-gritty, daring and irreverent of the world’s established banking systems. While Bitcoin has soared since then and created him a wealthy person repeatedly over, the question now's if it'll still rise in price or if it’s already reached its height.
A digital currency “cryptocurrency” that has no tangible paper or physical coin illustration. Instead, cryptography techniques victimization computers and open supply package generate the currency supported proof, or blockchains. Cryptocurrencies like Bitcoin square measure decentralized: There’s no place sort of a bank wherever the currency is control, and a private security key tied to an open source ledger proves who holds the value. As AN electronic payment system, cryptocurrencies are instantaneous and have low transaction fees compared to traditional banking systems, which are comparatively slow and have high fees associated.
That’s why I’ve been onerous at work making an attempt to share this innovative project with my like crypto lover
https://preview.redd.it/hptvc3x1bgn21.png?width=200&format=png&auto=webp&s=49707636a634385d61c770b84b913802f042ce26
About BetOnYourself
The development of the BetOnYourself platform will be funded by selling vouchers (iBET) for our future escrow service fees to ICO backers. Vouchers (iBET) represent a complicated payment offers for the written agreement service and can be usable right once the launch of the BetOnYourself platform. As an iBET owner, you have the right to have your iBET tokens withdrawn at the time of a trade, but you can also decide to sell your rights on the market as iBET will be a tradable token. The iBET token will have a great advantage over other payment options. By victimization the iBET tokens, there will be a 50% discount on the service fees for every single bet placed. The amount of enjoying “bets on yourself” with one token are going to be supported the market value of iBET tokens at the instant of the trade. A transaction for an iBET holder will be charged at the best asking price which favours buying iBET tokens in advance. Any user are going to be charged a fee within the currency they're enjoying in; so, owning iBET tokens beforehand won't be necessary. The fee cost will be executed automatically. iBET owners will have their iBET tokens subtracted from the balance, based on the iBET’s market value.
BetOnYourself is, therefore, the perfect answer for all players out there who want to start earning from their hobby of playing games. Our main goal is to lead to a new way of professional gaming. How? BetOnYourself will serve as a peer-to-peer eSports wagering platform for members to compete against other similar skilled opponents and bet on themselves. The games square measure skill-based, and there will be no chance involved in a set challenge. The user-friendly platform will allow members to choose their own opponents, challenges and bet amount in a quick and efficient way.
As gamers, we have a tendency to noticed a void in services wherever players will vie {in a|during a|in AN exceedingly|in a very} challenge for an actual prize. Becoming knowledgeable gamer is also a dream for several, but only a small percent of them actually achieve that. In a competitive world of eSports, not everyone gets the chance to earn money from their skills, even if they truly possess them. BetOnYourself is here to change that.
BetOnYourself is a platform created by gamers who saw the potential in giving players the power of creating bets on their own gaming skills — a great idea coming to life with a strong team of professionals. Every player can bet as much money as he wants.
Every player can choose his opponent. Everything is in the player’s hands. BetOnYourself serves as a tool for players who want to bet on their own gaming skills against anyone, anytime, anywhere!
ESPORTS
eSports may well be the quickest growing sport within the world with nice benefits. It doesn’t got to be vie in-person; it will be vie anytime, and anyone can play. There are no limitations. It is a world of freedom that adapts to a private would like.eSports, by definition, is competitive gaming at a professional level in an organized format with a specific goal and a transparent distinction between players that square measure competitor against one another. Esports may be a true digital-first multi-platform recreation format, which implies it will be obtainable at the same time on mobile devices, tablets, desktop computers, streaming TVs, social media, stadiums, arenas and more — live or as play per demand.
VISION
As gamers, we tend to noticed a void in services wherever players will contend associate exceedingly|in a very} challenge for an actual prize. There are numerous revenue streams in eSports, the biggest being game publisher fees, media rights, advertising, sponsorship, merchandise and tickets, which combined bring in more than $906 million a year. But there's no revenue for associate degree everyday gamer. BetOnYourself is here to change that.
What makes eSports so appealing?
It is the actual fact that the success of a player is totally freelance of his physical attributes and skills. Two completely different players can excel in the game field, regardless of gender, culture or location. It is an area that connects everybody World Health Organization loves vice in any manner. MARKET OPPORTUNITY
The number of gamers worldwide in two017 was up to 2.2 billion worldwide across all platforms, and in the year before there were only around 13K professional gamers in the world. The percentage of skilled gamers is thus as tiny as zero,0006%. This means there is a massive number of amateur gamers who do not get the chance to make money from their gaming skills. That void will be filled with the BetOnYourself platform.N on-professional eSports players will get a chance to make a financial profit from their gaming skills. Their time may well be well spent, not simply during a sense of getting fun. The goal of BetOnYourself iBET
BUSINESS PROFITABILITY
Based on current player count data, our potential target goal in the first year of business is 1% of the market. The calculable earnings can, therefore, be calculated supported this p.c. On the average, we estimate that one player will bet 2.5$ and one game session between 2 players will have a joint bet amount of 5$. On average, a player plays three games per vice session. Our provision in each game session is 10% or 5% if the players are using our token iBET.Based on these figures we estimate: An annual market volume of 280 million challenges average platform transaction fee of 0.25$ per single challenge
TOTAL annual fee income of $105 million based on the average between both fee amounts, 5%, and 10%.
BUSINESS PROFITABILITY
Based on current player count information, we have predicted our potential earnings in the first year of operations. Since info regarding player count for each game isn't clear and visual to the general public, the actual results can be higher or lower. The model may be a sample calculation that's supported public info on that the supply is often listed. Since the numbers don't seem to be official, the calculations should not be considered as information for an investment in tokens or a solicitation to buy tokens.
The vice corporations don't enable insights of their player base by default, but some of the numbers can be found on sources like Steam Charts and Steam Spy, which apply to PC games only. That means that the numbers across all platforms area unit abundant higher.
The Statistics Portal has published a number of player bases for different games in August of 2017, listed below.LOL 100 million Hearthstone 23.9 million Fortnite 45 million (Source: Epic Games, 2018) FIFA 18 12.3 million PUBG 6.8 million data 2 12.6 million Starcraft 2 2.4 million

For more info

BOUNTYOX Username: @cryptounique
submitted by 1loveone to ICOAnalysis [link] [comments]

zcash thesis

Zcash launched in 2016 and is a private digital asset which leverages Zero-Knowledge proofs, known as ZK-Snarks, to shroud transaction details such as transaction amount, sender and receiver. The team comprises of individuals with deep domain knowledge in both research in the field of cryptography together with growing and scaling companies.
Zcash was initially funded through the Zero Coin Electric company by a range of prominent angel investors. It has been reported that the company raised $1M; they have not disclosed the type of the round as is common with venture investing. The investors should at a minimum, benefit from the direct exposure to ZEC as an asset and other products that the company commercialise. This is a long term project (10+ years) and through research one can infer that private transactions is not the sole goal of the company. Like Bitcoin, Zcash has a fixed supply of 21 million.
Zcash leverages proof-of-work with 2MB block sizes with 150 second block times. Up until 2020, 20% of the mining reward is sent the the founder address and is known as the “Founder’s Reward”. The reward will cease after the first halving where 100% of the mining reward shall be received by the successful miner. The first halving is due in H2 2020 and occurs every four years. Zcash experiences a high inital inflation rate (similar to BTC) which the market has to absorb.
The founders reward will comprise 10% of the total supply of Zcash. The Founders Reward can be associated with a few distinct elements such as, investors, employees & advisors, and Zcash strategic reward. Zcash is an American company and might be adopted by the west. On the other hand, the chinese have a foundness towards chinese companies and Zcash may not be widely adopted in the East
The business seems introverted to the general crypto audience, they are prominent in the more technical conferences. This for me is not a concern, learn to walk before you can run.
Team and Investors
The team comprises of highly technical individuals from top tier research institutions. Given I am not an erudite in crypography it is reckless to provide an analysis of the research from the company and individuals. Faith is in the bio of the team and the knowledge around the table, particularly from the investors. I believe this to currently be the strongest team for the “privacy wars” as compared to the teams from other privacy focused assets such as, Monero.
Strategy
The company seeks to make private programmable money. Through my readings, the word programmable has appeared in a number of places and has caught my attention. To me, this reads smart contracts or virtual machine type capabilities. Additionally given the huge increase and adoption of the lighting network, I see layer two solutions being developed on the zcash chain (BOLT).
The company was funded through an equity round. This seems very much a seed round to me and revenue or additional capital for the company to be able to send of software development is to come from the founders reward.
Zooko has stated that they will investigated alternative consensus mechanisms such as PoS. They are not a leader in consensus mechanism algorithms and thus take little risk in amending such segments of the technology. I can see an instance where there is a hard fork for those wanting to remain on a PoW chain and those that want to migrate to a PoW chain (free coins). I believe there is a risk of capital management. Given the significant levels of research to be undertaken, if the founders reward is not sufficient enough there could be some issues. I will come onto this in financials.
There is no clear strategy, or one that is publicly available although, I am certain Zcash is going to be a groundbreaking development in the digital asset scene.
The market / users
There are an abundant variety of private digital money. Monero and Dash come to mind and there are many other projects. Monero given their mandatory privacy functions and long standing in the scene provide zcash with a genuine competitor. Additionally, a ecosystem may emerge where zcash is for the wealthy and large institutions and monero and other private cryptocurrencies are used for day to day spending and by a large retail audience.
There are huge changes in the private wealth ecosystem with a large wealth transfer in the order of trillions of dollars will be handed down a generation who are digital natives / millennials and open to digital currencies. They are more inclined to allocate risk capital to cryptocurrencies.
I dont not anticipate a paradigm shift with the users of zcash given the early stages of technical development of the entire ecosystem. Around H2 in 2020, I imagine some activity, other than that, I imagine it being uneventful. Zcash have already announced the upgrades in Blossom.
Z are private addresses and t addresses are transparent. Round trip transactions, most transactions are transparent given the complex and expensive data requirements for z transactions. This will reduce and private transactions will only increase
Financials
The company was centrally funded and is an American entity. The seed funding is utilised to get Zcash of the ground and fund initial development with the Founders Reward contributing to the development. There are approximately over five million in circulation with 20 million to be in circulation by 2050. The current inflation rate is therefore, 45% and will reduce with the block halving times. The market has to absorb a high degree of Zcash on a daily basis, supply will adjust but it may explain why zcash doesn't “pump” like other alt coins. Simply, given a $50 ZEC, 12.5 ZEC mined at very block and that there are 1440 minutes a day, the market has to absorb 7200 ZEC on a daily basis. On a fucking daily basis. Let that sink in. that is $360,000 in new issuance. At the all time high that is $7.2 million. Miners need to cover their costs.
The first halving will significantly impact the market as will the second, the 3rd halving will start to have a smaller effect and zcash by then could have migrated to a different consensus mechanism
What is worrying is the cost to launch a 51% attack on the network. It costs between $300,000 - $500,000 a day to launch a 51% attack on the network.
If this is a prolonged bear market, i.e. up until 2021, crypto development could potentially slow and there might be calls for zcash to extend the founders reward. I do not expect this to happen. At the moment I anticipate BTC to be above the 20-week MA by Q4 2020.
Price.
All assets are against BTC. I have marked out areas of significant resistance and I believe they will be tested around 2020. If the founders reward is extended, this will be a bearish impact on price along with delays or software issues.These areas will not be tested if there is bearish news regarding the founders reward. The chart is in a continually bear market. This is a direct result of the inflation rate, the market has to absorb a high number of Zcash on a daily basis, the founders reward and the overall nascent stage the company is in.

In terms of the bottom, it is very difficult to infer that given the historical price chart. I believe 0.014-0.011 is a good range for the bottom. Given current market conditions, we are close to the “bottom”. To be clear, given the lack of historical price it is difficult to provide a tighter range.

I have spent ~15 hours to research and write this.
submitted by Cryptocobbler to DigitalAssetResearch [link] [comments]

Report I by Stablecoin Research Institute - The Difficulties and Future of Stablecoin

Report I by Stablecoin Research Institute - The Difficulties and Future of Stablecoin
https://preview.redd.it/pnnmh4gt6ng21.jpg?width=1080&format=pjpg&auto=webp&s=3a94528a71b7c6e2db9ea746116afeec8d7b1c51

Bitcoin was originally conceived to be outside the fiat money system as an electronic cash system for a new world. However, at present, the currency standard is still the fiat money standard. The envisaged bitcoin-based settlement system still has no foundation or a wide consensus on the value of the currency standard.
As a compromise, many stablecoins provide a temporary solution for the ecology through a 1:1 anchorage of U.S. dollar, with third-party bank custody becoming mainstream. The rapid growth of Tether and the loss of market share in the face of competition have added more uncertainty to the current market. The decentralization scheme provided by MakerDAO was slightly weak in the initial competition but the reputation gradually accumulated. As the market deepens, cryptocurrencies based on more regional legal currencies are gradually coming online, and people are beginning to try different chain payment attempts.
This article refers to the article Stable Digital Currency Manual by co-founder of Zhibao Mikko, trying to explore the difficulties and future of stablecoin from a currency perspective.

The Difficulties of Bitcoin Settlement System
When it comes to stablecoins, the original idea of Bitcoin has to be mentioned ---- a peer-to-peer electronic cash system. Over the past decade, a series of expansions have been made in the blockchain technology and Bitcoin. In people's minds, Bitcoin will be a new generation of the world's monetary system, independent of the fiat money (US dollar) system, to de-intermediate transaction transfers and asset storage, to eliminate asset losses caused by the bank's centralized risk, and put an end to the harvest of wealth brought about by hyperinflation.
In reality, Bitcoin does have somehow established its own trading system - such as black market transactions in the dark network. Dark network commodity trading uses Bitcoin as a medium, and buyers and sellers are also happy to configure a portion of Bitcoin as a value reserve. On the other hand, Bitcoin is the most common trading medium among cryptocurrency exchanges for a long time before the popularity of USDT. Some people said, “Bitcoin is the real stablecoin.” In addition to observing the fluctuations in the value of the fiat money, the traders of various cryptocurrencies will also pay attention to the relationship between cryptocurrency and the bitcoin trading pair. But in this case, this so-called bitcoin-based trading system still has several problems.

https://preview.redd.it/679bncm37ng21.jpg?width=788&format=pjpg&auto=webp&s=dbbb630b286a87eb3b1a38ac48cabac4b653bf83

The first is the currency standard: even if some people regard Bitcoin as a gift, they have long believed that Bitcoin will eventually level the volatility and increase the index, but even the so-called beliefs are usually denominated in fiat money (US dollar, Euro, RMB). That is to say, the first problem with Bitcoin is that there is no pricing power. In other words, Bitcoin cannot perform the settlement function extensively in the holder's daily life. The daily benchmarking consensus based on Bitcoin in a wide range is that it doesn't exist at all.
In China, a Coke is 3 RMB, and in the US it is 1 US dollar. The two are under their respective independent settlement systems. If the person in one of the systems happens to come to another system, such as a Chinese who first bought a Coke in the United States, the first reaction is likely to be a cup of 6.71 yuan. Bitcoin or any other cryptocurrency does not have a similar settlement system under the independent monetary framework.
In the case that it is not possible to participate extensively in daily pricing, the currency standard is the fiat money standard. For members of the cryptocurrency community, the actual fiat money-based thinking does not directly affect the willingness of buyers and sellers to use Bitcoin or other cryptocurrencies for physical purchases, but when Bitcoin’s price against fiat money falls into huge downward fluctuations, it rejects the situation of receiving cryptocurrencies is inevitable.
So the second question directly promotes the strong demand for stablecoins: currency price fluctuations. On the other hand, it should be realized that Bitcoin does not have a complete settlement system and a broad and stable price consensus based on the system; on the other hand, since the initial definition of Bitcoin was an innovation independent of the traditional financial system, even if it is far from the original concept, the community consensus based on the decentralization and token incentives is different from the traditional financial system.
So for a long time, the market could not price bitcoin with the traditional asset framework. The triumph of 2017 has made the society more aware and acknowledged about Bitcoin and other cryptocurrency systems. The Chicago Mercantile Exchange CME has put on bitcoin futures at the end of the year. At the same time as government regulation gradually intervenes, the OTC exchange network outside the market is also getting better and better, and the pricing of bitcoin is starting to break away from fanaticism. At the end of 2017, the isolationism of various countries has become stronger, the pace of interest rate hikes of the FED has sped up, and global asset preferences have also undergone subtle changes towards safe-haven assets. China’s domestic capital has advocated “cash is the king” and Bitcoin has entered a down cycle.
As noted above, upside volatility can also encourage traditional merchants to participate in speculation, but downside volatility has caused most merchants to lose their willingness to treat Bitcoin as a currency. In 2018, with the increasingly strong bear market in the cryptocurrency world, the demand for safe-haven and stable-price trading media in the encryption community has skyrocketed, and countless stablecoin projects have been launched. At the same time, Tether, which occupied the absolute market share of stablecoins in 2017, continued to expand against the trend of black box operations.

Third Party Intermediary - Compromise of Fiat Money Stablecoins
The hot currency-backed stablecoin is undoubtedly a compromise of the cryptocurrency market against traditional currencies.
As Nakamoto said in the Bitcoin White Paper, “trade on the Internet almost requires financial institutions to act as trusted third parties to process electronic payment information. Although such systems work well in most cases, such systems are still endogenously constrained by the weakness of the 'trust based model'... We really need an electronic payment system that is based on cryptography rather than credit, making any parties that have reached an agreement can make payments directly, eliminating the need for third-party intermediaries."
Although the article refers to the payment process in the transaction, it is the same in terms of collateral custody. The trust of third-party financial institutions in this mode is inevitable. Trust means that when the custodian bank secretly misappropriates collateral or bankrupts for any reason, the user's assets will be difficult to guarantee, abbreviated as SPOF single point of failure.
But the good news is that when the market competition is fully carried out, the user as a whole is divided into several different groups, and different fiat money stablecoin products with different audit processes under different banks are used. A single point of failure of an individual project does not affect the continued operation of other stablecoin products; and the community response to a single company's evil or potential evil is greatly magnified as the number of competing products increases.
Taking Tether as an example, the giants who once occupied more than 95% of the market share of the stablecoin market finally ignited the trust crisis in the long-term refusal of transparent auditing, and the market share plummeted. In the foreseeable future, Tether will gradually liberalize its transparency and optimize its relationship with users to maintain its current market share. The stablecoin competing products that continue to enter the market will form a continuous multi-disciplinary force on existing projects in the market to promote market improvement and relief centralized risk.

The Rise and Blockage of Tether
The real rise of stablecoin is actually symbolized by Tether's exponential growth in 2017. From the eve of the dawn of 2017 to the day after 20 months, Tether's market value has skyrocketed from less than $7 million to more than $2.8 billion, a 400-fold increase.

USDT Year Chart (green - currency price; blue - market value)

In 2018, the hot stablecoin market, USDT's exclusive access to the stablecoin, and stablecoin’s widespread dissatisfaction with the rejection of third-party audits attracted many competitors. In March, True USD (TUSD) was transparently managed. The name entered the competition. Around October, stablecoins such as USDCoin (USDC), Gemini Dollar (GUSD) and Paxos Standard (PAX), which had strong background, compliance audit and good asset transparency, went online. At about the same time, perhaps the pressure from friends and merchants has soared. It is a coincidence that Tether has successively experienced a series of scandals and then the price collapsed in mid-October, and evaporated 40% of the market value in the following month. After a series of cycles, the situation gradually eased.
The four consecutive stablecoins mentioned above seized the market share and expanded rapidly in the next few months. In the month before the deadline, Tether's stablecoin market share was stable at around 70%, and the remaining market share was occupied by the top four newcomers. In the process of grabbing the market, there were fluctuations, including the only US compliance encryption. The progress of the USDC issued by the currency exchange COINBASE is the most eye-catching, and its market value accounts for about 10% of the overall stablecoin market at the time of writing.

https://preview.redd.it/wk591kvn7ng21.jpg?width=731&format=pjpg&auto=webp&s=39a89384cf7b848f50fee6884e109038ac0dc6c6

A simple conclusion is that Tether can still be stable even after the crisis, thanks to Tether's first-mover advantage in its existing position on global exchanges and the high liquidity it represents. The three basic functions of money are pricing units, value storage, and trading media, while liquidity is their common subtext.
The unit price provided by a currency lacking liquidity cannot obtain broad consensus of money users. The lack of consensus leads to price disorder, and the currency thus loses the valuation value. As a value storage and trading medium, it will miss trading object and depth due to low liquidity and cannot complete the basic function as a currency. Although the new four-dollar collateral stabilized currency occupies its place in the start of the competition with Tether, Tether sits on a whole bull market with a trading history that has a relatively complete trading pair coverage in the world's major exchanges; In addition to the full coverage of the exchange, USDT also has a sound OTC network construction, providing the most direct portal for stocks and potential incremental users. Under the superposition, Tether's endogenous and exogenous liquidity advantages are particularly evident, and even in the case of black box scandals, it can still occupy a fairly strong market share. But with the gradual gradual competition, peer supervision and the gradual enrichment of user-selectable products, Tether's fault-tolerant space for future strategies is not as optimistic as imagined.

HUSD - Self-contained Stablecoins
In response to the October crisis in Tether, the Fire Currency Exchange launched a HUSD Stabilization Coin program.
In this scheme, the Firecoin users will automatically convert to HUSD when they recharge the PAX, TUSD, USDC, and GUSD. HUSD has no actual issuance process, but simply a unit of pricing corresponding to four types of stablecoin recharge. After the user converts one of the stablecoins into HUSD, he or she can freely choose any one to redeem.
The program not only helps users to spread the centralization risk of a single fiat money stablecoin, but also helps the four stable coins to complete the group on the fire currency exchange to cope with the existing liquidity competitive advantage of the USDT. But on the other hand, the user's use of HUSD is based on trust in the fire currency exchange, in other words another single point of failure risk. Therefore, in order to dilute the risk of centralization, it is still necessary to transparently deal with the specific schemes of the fire currency exchange, and the supervision of the fire coins by the community, especially other exchanges.

Decentralization Breakout of Stablecoin
At present, a number of currency-backed stablecoins, led by USDT, cover almost all of the market capitalization and liquidity of the stablecoin market.
In this case, MakerDAO's DAI is extraordinarily precious. The DAI Stabilized Currency System generates a stablecoin DAI through over-collateralization of cryptocurrency. Most of the functions within the system are implemented or planned through the deployment of smart contracts, such as chain generation and redemption of stable coins, management of collateral, and so on. In addition to the DAI as a stablecoin, as a dual currency system, there is another governance currency called MKR in MakerDAO. Governance currency holders support the system's decentralized governance functions while enjoying the overall benefits of the system, and provide additional funding buffers for the system in events such as abnormal currency fluctuations.
In MakerDAO's overall vision, the system first endorses the credit of the stablecoin through the chain of excess collateral, while the interest generated by the credit function (the essence of DAI generated by the mortgage cryptocurrency is a lending process), the collateral under abnormal fluctuations The profit from the flat penalty triggered by Ping and the more financial derivative function to support the system's self-operation.
One of the biggest conflicts between the community and the cryptocurrency collateral currency is the risk exposure of the collateral in the warehouse when the cryptocurrency generates a stablecoin. Although in theory the users of the stablecoin can be separated from the mortgagor, the mortgagor can be a more risk-tolerant group, such as an eager borrower, a professional user of financial instruments, etc., but since the stablecoin is issued The identity of the person itself is subject to a natural limitation based on the degree of risk aversion, and its supply has an additional limit.
On the other hand, there is a limited source of information about Ethereum as a single collateral: the mortgagor is limited to holders of Ethereum. In MakerDAO's plan, the multi-collateral version of the system will gradually improve with iteration, and the achievement of this program will effectively reduce the risk of the MakerDAO collateral asset portfolio and increase the potential DAI generation limit. Ample supply and liquidity of the DAI will help activate the system in more possibilities on the market.

https://preview.redd.it/kjbefyb18ng21.jpg?width=950&format=pjpg&auto=webp&s=c0fb8f3892c3d50f5549460acbb26c45773a2cc3

Compared to the competition between the four newcomers and the USDT, the position of MakerDAO is quite different. If the user's choice between the four newcomers and the USDT is a trade-off between liquidity (product usability) and security, then between USDT and DAI is liquidity (product usability) and decentralized belief. The trade-off. As far as the market is concerned, MakerDAO's dual currency system seems to explain better how the project side can continue the project through the circulation of profits. Many of the fiat money-backed stablecoin projects have always wondered whether they will realize their own coinage rights in the future and thus harm the user's property rights.
As a successful decentralized stablecoin project, MakerDAO is one of the most successful projects on Ethereum. This is both a tribute to the MakerDAO development path: the development of other projects (dApp) on the Ethereum and the overall robustness of the ecology. As the second generation of the public chain, Ethereum pioneered the concept of smart contract, which is a milestone in the development of application on the chain. However, in the course of many years of development, the performance of the main network and the fragmentation technology have been delayed. So although MakerDAO claims that DAI will have many chain advantages as ERC20 tokens, it seems that the eApp side of Ethereum has not seen a good development momentum.
It is worth mentioning that in the performance of the public chain and dApp development, the EOS public chain has developed rapidly since the launch of the main network in 2018. If EOS has a stablecoin project like MakerDAO, and can properly handle potential security issues in the operation process (such as the potential risks caused by the scalability of the contract, etc.), there is much to be done. After all, in addition to seeking cooperation under the chain, the pricing system of cryptocurrency is more important to find and create niches that belong only to the world of cryptocurrency. A robust dApp ecology with a constant need for stable coins or the only possible form of this niche.

Choice Outside the U.S. Dollar
The few stablecoins currently circulating the most are anchoring the US dollar. There is no doubt that the status of the dollar in the current world currency system is irreplaceable. The bitcoin and other cryptocurrencies described in the beginning of the article lack the independent settlement system, and the US dollar is the extreme of the other end – the currency with the most complete settlement framework in the world.
From the gold standard to the Bretton Woods system, to the current global commodity and foreign exchange trading system centered on the US dollar-oil trading system, the three functions of currency pricing, storage and circulation are reflected in the US dollar. As the currency with the most universal purchasing power and deep trading depth, the US dollar has naturally become the primary anchor for many stablecoins that pursue international influence. The dependence of the stablecoin on the US dollar is a last resort. While stabilizing the dollar, the stablecoin not only enjoys the liquidity advantage brought by the dollar, but also inherits the volatility risk of the dollar itself. Although the US dollar is still the most trustworthy currency on a macro level, if A's main payment scenario is in Country A, and Country A's currency has a large appreciation of the US dollar due to market factors, then the asset holding the anchored US dollar. Bringing a higher base point risk to A.
Among the many non-US dollar currencies, the yen is one of the most distinctive currencies. The Japanese government has a positive attitude towards blockchain technology. In April 2017, it recognized the legal payment status of Bitcoin and formulated a series of laws and regulations for the exchange. At the same time, Japan is also one of the most active participants in the cryptocurrency market. At the end of 2018, Japanese IT giant GMO Internet announced that it plans to introduce a yen-linked cryptocurrency in 2019 to prepare for the next phase of cross-border settlement. The emergence of a liquid currency-stable yen stablecoin will not only help Japanese crypto community members to better participate in daily market behavior, but also help cross-border currency settlement. In addition, due to Japan’s domestic economic structure, monetary policy has maintained ultra-low interest rates for a long time. Under this premise, investors are more willing to invest in sovereign countries with higher interest rates, especially the United States. When the United States is in turmoil, funds are largely returned to the yen, which has a very low risk attribute, which raises the yen and lowers the dollar. Therefore, the emergence of the yen stablecoin can also provide a better safe haven for holders of USD stabilized coins such as USDT in the potential dollar crisis.
In addition to the yen, the private sector or the government of Australia, the euro zone and other countries are also involved in the development and deployment of their domestic currency stablecoin. While the vast majority will still be a similarly centralized bank hosting model, it should still be seen as an improvement and rationally expecting a more equitable and efficient system.

The Future Direction of the Stablecoin
As mentioned at the beginning of the article, the original idea of the cryptocurrency community for Bitcoin was to create a decentralized financial system that would be independent of the traditional monetary system. However, due to the lack of an independent and complete settlement system, or the lack of a broad currency-based pricing consensus, the cryptocurrency world cannot be formed into a real monetary system, and it has to rely on the attachment to the US dollar or other currencies to achieve long-term scenarios. Valuation of prices in cryptocurrencies, etc. Although Bitcoin itself has the believer of the currency standard, the foundation of the belief is mostly based on the re-exponential rise of the price of the bitcoin, which is still the thinking of fiat money.
Given that there is a consensus that goods can only be denominated in currency A in the payment and settlement system of country A, if the cryptocurrency world wants to form an independent payment settlement system, the best pricing unit for the purchase should be cryptocurrency. The anchoring of the U.S. dollar and other fiat money is just to use the currency attribute (otherwise the currency credit cannot be established), and will destruct the consensus to regard cryptocurrency as the best pricing unit and establish an independent monetary system (the cost of convenience). The power of habit is hard to overcome, and the habit of paying the currency of a chain certainly needs to be achieved by the widespread purchase of assets on the chain. This process requires gradual improvement of the payment scenario between stablecoin systems and dApps.
The cryptocurrency eco-walls we mentioned above are based on the hope of this exclusive chain-based settlement system. The simple dApp on the chain is obviously not enough. We also have two topics to be studied in the chain payment scenario and asset chaining. Users must complete the process from chain to chain and back to chain to integrate cryptocurrency pricing into everyday habitual thinking.
Then, the stablecoin will gradually deepen into people's daily life after several decades, while the banknotes gradually withdraw from the trading scene, and the sub-generation gradually accepts the new cryptocurrency value settlement system.


Reference:
Stable Digital Currency Manual (http://wisburg.com/2018/07/03/稳定数字货币手册/)
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- BetOnYourself - the best platform for Gamebet

About some years ago, one of my friends hailed his belief in Bitcoin and explained how he moved his whole life savings onto a hardware wallet and erudite his private alphanumeric key. He looked like a personality from a Neal businessman novel-gritty, daring and irreverent of the world’s established banking systems. While Bitcoin has soared since then and created him a wealthy person repeatedly over, the question now's if it'll still rise in price or if it’s already reached its height.
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Trading Cryptocurrency Markets

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Major Exchanges
In finance, an exchange is a forum or platform for trading commodities, derivatives, securities or other financial instruments. The principle concern of an exchange is to allow trading between parties to take place in a fair and legally compliant manner, as well as to ensure that pricing information for any instrument traded on the exchange is reliable and coherently delivered to exchange participants. In the cryptocurrency space exchanges are online platforms that allow users to trade cryptocurrencies or digital currencies for fiat money or other cryptocurrencies. They can be centralized exchanges such a Binance, or decentralized exchanges such as IDEX. Most cryptocurrency exchanges allow users to trade different crypto assets with BTC or ETH after having already exchanged fiat currency for one of those cryptocurrencies. Coinbase and Kraken are the main avenue for fiat money to enter into the cryptocurrency ecosystem.
Function and History
Crypto exchanges can be market-makers that take bid/ask spreads as a commission on the transaction for facilitating the trade, or more often charge a small percentage fee for operating the forum in which the trade was made. Most crypto exchanges operate outside of Western countries, enabling them to avoid stringent financial regulations and the potential for costly and lengthy legal proceedings. These entities will often maintain bank accounts in multiple jurisdictions, allowing the exchange to accept fiat currency and process transactions from customers all over the globe.
The concept of a digital asset exchange has been around since the late 2000s and the following initial attempts at running digital asset exchanges foreshadows the trouble involved in attempting to disrupt the operation of the fiat currency baking system. The trading of digital or electronic assets predate Bitcoin’s creation by several years, with the first electronic trading entities running afoul of the Australian Securities and Investments Commission (ASIC) in late 2004. Companies such as Goldex, SydneyGoldSales, and Ozzigold, shut down voluntarily after ASIC found that they were operating without an Australian Financial Services License. E-Gold, which exchanged fiat USD for grams of precious metals in digital form, was possibly the first digital currency exchange as we know it, allowing users to make instant transfers to the accounts of other E-Gold members. At its peak in 2006 E-Gold processed $2 billion worth of transactions and boasted a user base of over 5 million people.
Popular Exchanges
Here we will give a brief overview of the features and operational history of the more popular and higher volume exchanges because these are the platforms to which newer traders will be exposed. These exchanges are recommended to use because they are the industry standard and they inspire the most confidence.
Bitfinex
Owned and operated by iFinex Inc, the cryptocurrency trading platform Bitfinex was the largest Bitcoin exchange on the planet until late 2017. Headquartered in Hong Kong and based in the US Virgin Island, Bitfinex was one of the first exchanges to offer leveraged trading (“Margin trading allows a trader to open a position with leverage. For example — we opened a margin position with 2X leverage. Our base assets had increased by 10%. Our position yielded 20% because of the 2X leverage. Standard trades are traded with leverage of 1:1”) and also pioneered the use of the somewhat controversial, so-called “stable coin” Tether (USDT).
Binance
Binance is an international multi-language cryptocurrency exchange that rose from the mid-rank of cryptocurrency exchanges to become the market dominating behemoth we see today. At the height of the late 2017/early 2018 bull run, Binance was adding around 2 million new users per week! The exchange had to temporarily disallow new registrations because its servers simply could not keep up with that volume of business. After the temporary ban on new users was lifted the exchange added 240,000 new accounts within two hours.
Have you ever thought whats the role of the cypto exchanges? The answer is simple! There are several different types of exchanges that cater to different needs within the ecosystem, but their functions can be described by one or more of the following: To allow users to convert fiat currency into cryptocurrency. To trade BTC or ETH for alt coins. To facilitate the setting of prices for all crypto assets through an auction market mechanism. Simply put, you can either mine cryptocurrencies or purchase them, and seeing as the mining process requires the purchase of expensive mining equipment, Cryptocurrency exchanges can be loosely grouped into one of the 3 following exchange types, each with a slightly different role or combination of roles.
Have you ever thought about what are the types of Crypto exchanges?
  1. Traditional Cryptocurrency Exchange: These are the type that most closely mimic traditional stock exchanges where buyers and sellers trade at the current market price of whichever asset they want, with the exchange acting as the intermediary and charging a small fee for facilitating the trade. Kraken and GDAX are examples of this kind of cryptocurrency exchange. Fully peer-to-peer exchanges that operate without a middleman include EtherDelta, and IDEX, which are also examples of decentralized exchanges.
  2. Cryptocurrency Brokers: These are website or app based exchanges that act like a Travelex or other bureau-de-change. They allow customers to buy or sell crypto assets at a price set by the broker (usually market price plus a small premium). Coinbase is an example of this kind of exchange.
  3. Direct Trading Platform: These platforms offer direct peer-to-peer trading between buyers and sellers, but don’t use an exchange platform in doing so. These types of exchanges do not use a set market rate; rather, sellers set their own rates. This is a highly risky form of trading, from which new users should shy away.
To understand how an exchange functions we need only look as far as a traditional stock exchange. Most all the features of a cryptocurrency exchange are analogous to features of trading on a traditional stock exchange. In the simplest terms, the exchanges fulfil their role as the main marketplace for crypto assets of all kinds by catering to buyers or sellers. These are some definitions for the basic functions and features to know: Market Orders: Orders that are executed instantly at the current market price. Limit Order: This is an order that will only be executed if and when the price has risen to or dropped to that price specified by the trader and is also within the specified period of time. Transaction fees: Exchanges will charge transactions fees, usually levied on both the buyer and the seller, but sometimes only the seller is charged a fee. Fees vary on different exchanges though the norm is usually below 0.75%. Transfer charges: The exchange is in effect acting as a sort of escrow agent, to ensure there is no foul play, so it might also charge a small fee when you want to withdraw cryptocurrency to your own wallet.
Regulatory Environment and Evolution
Cryptocurrency has come a long way since the closing down of the Silk Road darknet market. The idea of crypto currency being primarily for criminals, has largely been seen as totally inaccurate and outdated. In this section we focus on the developing regulations surrounding the cryptocurrency asset class by region, and we also look at what the future may hold.
The United States of America
A coherent uniform approach at Federal or State level has yet to be implemented in the United States. The Financial Crimes Enforcement Network published guidelines as early as 2013 suggesting that BTC and other cryptos may fall under the label of “money transmitters” and thus would be required to take part in the same Anti-money Laundering (AML) and Know your Client (KYC) procedures as other money service businesses. At the state level, Texas applies its existing finance laws. And New York has instituted an entirely new licensing system.
The European Union
The EU’s approach to cryptocurrency has generally been far more accommodating overall than the United States, partly due to the adaptable nature of pre-existing laws governing electronic money that predated the creation of Bitcoin. As with the USA, the EU’s main fear is money laundering and criminality. The European Central Bank (ECB) categorized BTC as a “convertible decentralized currency” and advised all central banks in the EU to refrain from trading any cryptocurrencies until the proper regulatory framework was put in place. A task force was then set up by the European Parliament in order to prevent and investigate any potential money laundering that was making use of the new technology.
Likely future regulations for cryptocurrency traders within the European Union and North America will probably consist of the following proposals: The initiation of full KYC procedures so that users cannot remain fully anonymous, in order to prevent tax evasion and curtail money laundering. Caps on payments that can be made in cryptocurrency, similar to caps on traditional cash transactions. A set of rules governing tax obligations regarding cryptocurrencies Regulation by the ECB of any companies that offer exchanges between cryptocurrencies and fiat currencies It is less likely for other countries to follow the Chinese approach and completely ban certain aspects of cryptocurrency trading. It is widely considered more progressive and wiser to allow the technology to grow within a balanced accommodative regulatory framework that takes all interests and factors into consideration. It is probable that the most severe form of regulation will be the formation of new governmental bodies specifically to form laws and exercise regulatory control over the cryptocurrency space. But perhaps that is easier said than done. It may, in certain cases, be incredibly difficult to implement particular regulations due to the anonymous and decentralized nature of crypto.
Behavior of Cryptocurrency Investors by Demographic
Due to the fact that cryptocurrency has its roots firmly planted in the cryptography community, the vast majority of early adopters are representative of that group. In this section we cover the basic structure of the cryptocurrency market cycle and the makeup of the community at large, as well as the reasons behind different trading decisions.
The Cryptocurrency Market Cycle
Bitcoin leads the bull rally. FOMO (Fear of missing out) occurs, the price surge is a constant topic of mainstream news, business programs cover the story, and social media is abuzz with cryptocurrency chatter. Bitcoin reaches new All Timehigh (ATH) Market euphoria is fueled with even more hype and the cycle is in full force. There is a constant stream of news articles and commentary on the meteoric, seemingly unstoppable rise of Bitcoin. Bitcoin’s price “stabilizes”, In the 2017 bull run this was at or around $14,000. A number of solid, large market cap altcoins rise along with Bitcoin; ETH & LTC leading the altcoins at this time. FOMO comes into play, as the new ATH in market cap is reached by pumping of a huge number of alt coins.
Top altcoins “somewhat” stabilize, after reaching new all-time highs. The frenzy continues with crypto success stories, notable figures and famous people in the news. A majority of lesser known cryptocurrencies follow along on the upward momentum. Newcomers are drawn deeper into crypto and sign up for exchanges other than the main entry points like Coinbase and Kraken. In 2017 this saw Binance inundated with new registrations. Some of the cheapest coins are subject to massive pumping, such as Tron TRX which saw a rise in market cap from $150 million at the start of December 2017 to a peak of $16 billion! At this stage, even dead coins or known scams will get pumped. The price of the majority of cryptocurrencies stabilize, and some begin to retract. When the hype is subsiding after a huge crypto bull run, it is a massive sell signal. Traditional investors will begin to give interviews about how people need to be careful putting money into such a highly volatile asset class. Massive violent correction begins and the market starts to collapse. BTC begins to fall consistently on a daily basis, wiping out the insane gains of many medium to small cap cryptos with it. Panic selling sweeps through the market. Depression sets in, both in the markets, and in the minds of individual investors who failed to take profits, or heed the signs of imminent collapse. The price stagnation can last for months, or even years.
The Influence of Age upon Trading
Did you know? Cryptocurrencies have been called “stocks for millennials” According to a survey conducted by the Global Blockchain Business Council, only 5% of the American public own any bitcoin, but of those that do, an overwhelming majority of 71% are men, 58% of them are between the ages of 18 and 35, and over half of them are minorities. The same survey gauged public attitude toward the high risk/high return nature of cryptocurrency, in comparison to more secure guaranteed small percentage gains offered by government bonds or stocks, and found that 30% would rather invest $1,000 in crypto. Over 42% of millennials were aware of cryptocurrencies as opposed to only 15% of those ages 65 and over. In George M. Korniotis and Alok Kumar’s study into the effects of aging on portfolio management and the quality of decisions made by older investors, they found “that older and experienced investors are more likely to follow “rules of thumb” that reflect greater investment knowledge. However, older investors are less effective in applying their investment knowledge and exhibit worse investment skill, especially if they are less educated and earn lower income.”
Geographic Influence upon Trading
One of the main drivers of the apparent seasonal ebb and flow of cryptocurrency prices is the tax situation in the various territories that have the highest concentrations of cryptocurrency holders. Every year we see an overall market pull back beginning in mid to late January, with a recovery beginning usually after April. This is because “Tax Season” is roughly the same across Europe and the United States, with the deadline for Income tax returns being April 15th in the United States, and the tax year officially ending the UK on the 6th of April. All capital gains must be declared before the window closes or an American trader will face the powerful and long arm of the IRS with the consequent legal proceedings and possible jail time. Capital gains taxes around the world vary from jurisdiction to jurisdiction but there are often incentives for cryptocurrency holders to refrain from trading for over a year to qualify their profits as long term gain when they finally sell. In the US and Australia, for example, capital gains are reduced if you bought cryptocurrency for investment purposes and held it for over a year. In Germany if crypto assets are held for over a year then the gains derived from their sale are not taxed. Advantages like this apply to individual tax returns, on a case by case basis, and it is up to the investor to keep up to date with the tax codes of the territory in which they reside.
2013 Bull run vs 2017 Bull run price Analysis
In late 2016 cryptocurrency traders were faced with the task of distinguishing between the beginnings of a genuine bull run and what might colorfully be called a “dead cat bounce” (in traditional market terminology). Stagnation had gripped the market since the pull-back of early 2014. The meteoric rise of Bitcoin’s price in 2013 peaked with a price of $1,100 in November 2013, after a year of fantastic news on the adoption front with both Microsoft and PayPal offering BTC payment options. It is easy to look at a line going up on a chart and speak after the fact, but at the time, it is exceeding difficult to say whether the cat is actually climbing up the wall, or just bouncing off the ground. Here, we will discuss the factors that gave savvy investors clues as to why the 2017 bull run was going to outstrip the 2013 rally. Hopefully this will help give insight into how to differentiate between the signs of a small price increase and the start of a full scale bull run. Most importantly, Volume was far higher in 2017. As we can see in the graphic below, the 2017 volume far exceeds the volume of BTC trading during the 2013 price increase. The stranglehold MtGox held on trading made a huge bull run very difficult and unlikely.
Fraud & Immoral Activity in the Private Market
Ponzi Schemes Cryptocurrency Ponzi schemes will be covered in greater detail in Lesson 7, but we need to get a quick overview of the main features of Ponzi schemes and how to spot them at this point in our discussion. Here are some key indicators of a Ponzi scheme, both in cryptocurrencies and traditional investments: A guaranteed promise of high returns with little risk. Consistentflow of returns regardless of market conditions. Investments that have not been registered with the Securities and Exchange Commission (SEC). Investment strategies that are a secret, or described as too complex. Clients not allowed to view official paperwork for their investment. Clients have difficulties trying to get their money back. The initial members of the scheme, most likely unbeknownst to the later investors, are paid their “dividends” or “profits” with new investor cash. The most famous modern-day example of a Ponzi scheme in the traditional world, is Bernie Madoff’s $100 billion fraudulent enterprise, officially titled Bernard L. Madoff Investment Securities LLC. And in the crypto world, BitConnect is the most infamous case of an entirely fraudulent project which boasted a market cap of $2 billion at its peak.
What are the Exchange Hacks?
The history of cryptocurrency is littered with examples of hacked exchanges, some of them so severe that the operation had to be wound up forever. As we have already discussed, incredibly tech savvy and intelligent computer hackers led by Alexander Vinnik stole 850000 BTC from the MtGox exchange over a period from 2012–2014 resulting in the collapse of the exchange and a near-crippling hammer blow to the emerging asset class that is still being felt to this day. The BitGrail exchange suffered a similar style of attack in late 2017 and early 2018, in which Nano (XRB) was stolen that was at one point was worth almost $195 million. Even Bitfinex, one of the most famous and prestigious exchanges, has suffered a hack in 2016 where $72 million worth of BTC was stolen directly from customer accounts.
Hardware Wallet Scam Case Study
In late 2017, an unfortunate character on Reddit, going by the name of “moody rocket” relayed his story of an intricate scam in which his newly acquired hardware wallet was compromised, and his $34,000 life savings were stolen. He bought a second hand Nano ledger into which the scammers own recover seed had already been inserted. He began using the ledger without knowing that the default seed being used was not a randomly assigned seed. After a few weeks the scammer struck, and withdrew all the poor HODLer’s XRP, Dash and Litecoin into their own wallet (likely through a few intermediary wallets to lessen the very slim chances of being identified).
Hardware Wallet Scam Case Study Social Media Fraud
Many gullible and hapless twitter users have fallen victim to the recent phenomenon of scammers using a combination of convincing fake celebrity twitter profiles and numerous amounts of bots to swindle them of ETH or BTC. The scammers would set up a profile with a near identical handle to a famous figure in the tech sphere, such as Vitalik Buterin or Elon Musk. And then in the tweet, immediately following a genuine message, follow up with a variation of “Bonus give away for the next 100 lucky people, send me 0.1 ETH and I will send you 1 ETH back”, followed by the scammers ether wallet address. The next 20 or so responses will be so-called sockpuppet bots, thanking the fake account for their generosity. Thus, the pot is baited and the scammers can expect to receive potentially hundreds of donations of 0.1 Ether into their wallet. Many twitter users with a large follower base such as Vitalik Buterin have taken to adding “Not giving away ETH” to their username to save careless users from being scammed.
Market Manipulation
It also must be recognized that market manipulation is taking place in cryptocurrency. For those with the financial means i.e. whales, there are many ways in which to control the market in a totally immoral and underhanded way for your own profit. It is especially easy to manipulate cryptos that have a very low trading volume. The manipulator places large buy orders or sell walls to discourage price action in one way or the other. Insider trading is also a significant problem in cryptocurrency, as we saw with the example of blatant insider trading when Bitcoin Cash was listed on Coinbase.
Examples of ICO Fraudulent Company Behavior
In the past 2 years an astronomical amount of money has been lost in fraudulent Initial Coin Offerings. The utmost care and attention must be employed before you invest. We will cover this area in greater detail with a whole lesson devoted to the topic. However, at this point, it is useful to look at the main instances of ICO fraud. Among recent instances of fraudulent ICOs resulting in exit scams, 2 of the most infamous are the Benebit and PlexCoin ICOs which raised $4 million for the former and $15 million for the latter. Perhaps the most brazen and damaging ICO scam of all time was the Vietnamese Pincoin ICO operation, where $660million was raised from 32,000 investors before the scammer disappeared with the funds. In case of smaller ICO “exit scamming” there is usually zero chance of the scammers being found. Investors must just take the hit. We will cover these as well as others in Lesson 7 “Scam Projects”.
Signposts of Fraudulent Actors
The following factors are considered red flags when investigating a certain project or ICO, and all of them should be considered when deciding whether or not you want to invest. Whitepaper is a buzzword Salad: If the whitepaper is nothing more than a collection of buzzwords with little clarity of purpose and not much discussion of the tech involved, it is overwhelmingly likely you are reading a scam whitepaper.
Signposts of Fraudulent Actors §2
No Code Repository: With the vast majority of cryptocurrency projects employing open source code, your due diligence investigation should start at GitHub or Sourceforge. If the project has no entries, or nothing but cloned code, you should avoid it at all costs. Anonymous Team: If the team members are hard to find, or if you see they are exaggerating or lying about their experience, you should steer clear. And do not forget, in addition to taking proper precautions when investing in ICOs, you must always make sure that you are visiting authentic web pages, especially for web wallets. If, for example, you are on a spoof MyEtherWallet web page you could divulge your private key without realizing it and have your entire portfolio of Ether and ERC-20 tokens cleaned out.
Methods to Avoid falling Victim
Avoiding scammers and the traps they set for you is all about asking yourself the right questions, starting with: Is there a need for a Blockchain solution for the particular problem that a particular ICO is attempting to solve? The existing solution may be less costly, less time consuming, and more effective than the proposals of a team attempting to fill up their soft cap in an ICO. The following quote from Mihai Ivascu, the CEO of Modex, should be kept in mind every time you are grading an ICO’s chances of success: “I’m pretty sure that 95% of ICOswill not last, and many will go bankrupt. ….. not everything needs to be decentralized and put on an open source ledger.”
Methods to Avoid falling Victim §2 Do I Trust These People with My Money, or Not?
If you continue to feel uneasy about investing in the project, more due diligence is needed. The developers must be qualified and competent enough to complete the objectives that they have set out in the whitepaper.
Is this too good to be true?
All victims of the well-known social media scams using fake profiles of Vitalik Buterin, or Bitconnect investors for that matter, should have asked themselves this simple question, and their investment would have been saved. In the case of Bitconnect, huge guaranteed gains proportional to the amount of people you can get to sign up was a blatant pyramid scheme, obviously too good to be true. The same goes for Fake Vitalik’s offer of 1 ether in exchange for 0.1 ETH.
Selling Cryptocurrencies, Several reasons for selling with the appropriate actions to take:
If you are selling to buy into an ICO, or maybe believe Ether is a safer currency to hold for a certain period of time, it is likely you will want to make use of the Ether pair and receive Ether in return. Obviously if the ICO is on the NEO or WANchain blockchain for example, you will use the appropriate pair. -Trading to buy into another promising project that is listing on the exchange on which you are selling (or you think the exchange will experience a large amount of volume and become a larger exchange), you may want to trade your cryptocurrency for that exchange token. -If you believe that BTC stands a good chance of experiencing a bull run then using the BTC trading pair is the suitable choice. -If you believe that the market is about to experience a correction but you do not want to take your gains out of the market yet, selling for Tether or “tethering up” is the best play. This allows you to keep your locked-in profits on the exchange, unaffected by the price movements in the cryptocurrency markets,so that you can buy back in at the most profitable moment. -If you wish to “cash out” i.e. sell your cryptocurrency for fiat currency and have those funds in your bank account, the best pair to use is ETH or BTC because you will likely have to transfer to an exchange like Kraken or Coinbase to convert them into fiat. If the exchange offers Litecoin or Bitcoin Cash pairs it could be a good idea to use these for their fast transaction time and low fees.
Selling Cryptocurrencies
Knowing when and how to sell, as well as strategies to inflate the value of your trade before sale, are important skills as a trader of any product or financial instrument. If you are satisfied that the sale itself of the particular amount of a token or coin you are trading away is the right one, then you must decide at what price you are going to sell. Exchanges exercise their own discretion as to which trading “pairs” they will offer, but the most common ones are BTC, ETH, BNB for Binance, BIX for Bibox etc., and sometimes Tether (USDT) or NEO. As a trader, you decide which particular cryptocurrency to exchange depending on your reason for making that specific trade at that time.
Methods of Sale
Market sell/Limit sell on exchange: A limit sell is an order placed on an exchange to sell as soon as (also specifically only if and when) the price you specified has been hit within the time limit you select. A market order executes the sale immediately at the best possible price offered by the market at that exact time. OTC (or Over the Counter) selling refers to sale of securities or cryptocurrencies in any method without using an exchange to intermediate the trade and set the price. The most common way of conducting sales in this manner is through LocalBitcoins.com. This method of cryptocurrency selling is far riskier than using an exchange, for obvious reasons.
The influence and value of your Trade
There are a number of strategies you can use to appreciate the value of your trade and thus increase the Bitcoin or Ether value of your portfolio. It is important to disassociate yourself from the dollar value of your portfolio early on in your cryptocurrency trading career simply because the crypto market is so volatile you will end up pulling your hair out in frustration following the real dollar money value of your holdings. Once your funds have been converted into BTC and ETH they are completely in the crypto sphere. (Some crypto investors find it more appropriate to monitor the value of their portfolio in satoshi or gwei.) Certainly not limited to, but especially good for beginners, the most reliable way to increase your trading profits, and thus the overall value and health of your portfolio, is to buy into promising projects, hold them for 6 months to a year, and then reevaluate. This is called Long term holding and is the tactic that served Bitcoin HODLers quite well, from 2013 to the present day. Obviously, if something comes to light about the project that indicates a lengthy set back is likely, it is often better to cut your losses and sell. You are better off starting over and researching other projects. Also, you should set initial Price Points at which you first take out your original investment, and then later, at which you take out all your profits and exit the project. That should be after you believe the potential for growth has been exhausted for that particular project.
Another method of increasing the value of your trades is ICO flipping. This is the exact opposite of long term holding. This is a technique in which you aim for fast profits taking advantage of initial enthusiasm in the market that may double or triple the value of ICO projects when they first come to market. This method requires some experience using smaller exchanges like IDEX, on which project tokens can be bought and sold before listing on mainstream exchanges. “Tethering up” means to exchange tokens or coins for the USDT stable coin, the value of which is tethered to the US Dollar. If you learn, or know how to use, technical analysis, it is possible to predict when a market retreatment is likely by looking at the price movements of BTC. If you decide a market pull back is likely, you can tether up and maintain the dollar value of your portfolio in tether while other tokens and coins decrease in value. The you wait for an opportune moment to reenter the market.
Market Behavior in Different Time Periods
The main descriptors used for overall market sentiment are “Bull Market” and “Bear Market”. The former describes a market where people are buying on optimism. The latter describes a market where people are selling on pessimism. Fun (or maybe not) fact: The California grizzly bear was brought to extinction by the love of bear baiting as a sport in the mid 1800s. Bears were highly sought after for their intrinsic fighting qualities, and were forced into fighting bulls as Sunday morning entertainment for Californians. What has this got to do with trading and financial markets? The downward swipe of the bear’s paws gives a “Bear market” its name and the upward thrust of a Bull’s horns give the “Bull Market” its name. Most unfortunately for traders, the bear won over 80% of the bouts. During a Bull market, optimism can sometimes grow to be seemingly boundless, volume is rising, and prices are ascending. It can be a good idea to sell or rebalance your portfolio at such a time, especially if you have a particularly large position in one holding or another. This is especially applicable if you need to sell a large amount of a relatively low-volume holding, because you can then do so without dragging the price down by the large size of your own sell order.
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