As bitcoin passes $10,000 for the first time in months, the conversation around crypto is heating up again. The biggest crypto haters are now getting in on the action, most famously JPMorgan CEO Jamie Dimon. Ether, the Pepsi to bitcoins Coca-Cola, came into its own as a separate, distinct and viable long term investment. Many investors are beginning to view cryptocurrency as more than a short term speculation play or a portfolio hedge. There is evidence that the major cryptocurrencies are being used as a play against the falling U.S. dollar. News of Bitcoins new highs came at around the same time as headlines of dollar debasement

During the first mania in December 2017, bitcoin peaked at almost $20,000. Total market capitalization tripled from approximately $250 billion to $750 billion and barged into the mainstream public consciousness. Unfortunately for some traders, the market sold off just as quickly as it had pumped itself up.

The total market cap for the crypto market

Professional analysts dont believe that crypto will give back its gains so quickly this time. I tend to agree. The major difference between 2017 and 2020 is cryptos ease of access. When I first bought crypto circa 2015, it was a real David Hasselhoff. The exchange I used, Coinbase, was clunky, slow and illiquid. I was so frustrated with my experience there that I immediately moved my crypto into a private wallet and didnt buy again for a time.

Moving my coins into an off exchange wallet was an experience as well. I remember downloading the entire blockchain to my computer because there were few trustworthy light wallets, and even less information actually explaining what that meant. I bought a separate computer just for my bitcoin. I tried my best to learn hashes and forks. I remember thinking I was a financial genius for being able to capture and claim my Bitcoin Cash. It was a challenge for me!

Today, Coinbase is a much better experience than I remember, and so are many other exchanges. I now have three wallets that are not only easy to use, but are actually fun to use. Fees have been reduced. Trading coins against each other is more like a video game. It is easy to switch coins. You can move in real time, fast enough to catch short term moves. I can basically trade my crypto just like I trade my securities.

Whats more, the establishment has bought in. The Chicago Mercantile Exchange (CME) now offers futures contracts on bitcoin. Banks fought for and received the right to hold crypto quite recently. Pop singer Akon is building an entire city in Senegal based around his own coin, the Akoin. Megacompanies like Facebook and countries like Russia are now trying to create crypto rather than kill it. Regardless of which coins pass the test of time, digital currency has legs. It is here to stay. All the market has to do is attract people in.

When it comes to easy access in the crypto market, few platforms give you an easier time than eToro. eToro deals in contracts for differences (CFDs) that serve as proxies for top cryptocurrencies. Whats the difference? When you buy or sell a CFD, you actually never own the crypto. But since the price of the contract is tagged to the price of the coin, you do benefit from good trades and suffer losses for bad ones.

So what are the benefits of trading CFDs rather than real crypto?

First, you are trading on a highly liquid platform with easy entries and exits. Many crypto exchanges suffer from illiquidity and volatile price shifts. You also gain the safety of trading within the auspices of a regulated broker. eToro is regulated through many well known financial authorities including the Cyprus Securities and Exchange Commission (CySEC), the UKs Financial Conduct Authority and holds as Australian Financial Services License.

Second, you dont have to worry about actually buying crypto, which can still be a hassle. Governments are doing their best to regulate crypto, and they are clamping down on the exchanges the onboard ramps. As a result, you have to go through a bureaucracy of sorts to legitimately enter the market. You lose your anonymity, which was the first major advantage of using crypto in the first place.

Third, you can easily trade crypto using leverage. Your limit on eToro is 2X when you trade cryptocurrencies.

As it was in 2017, bitcoin is the number one performing asset class in 2020. This time, society may actually be ready to embrace it. If you are looking for a quick way to get in the market without learning all of the nuances of crypto, eToro CFDs can help.

2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Is Cryptocurrency Here to Stay This Time? - Benzinga

The cryptocurrency market is once again experiencing volatility after a period with minimal price movements, especially for Bitcoin and Ethereum. Along with the spiking prices, various parameters are also seeing incredible actions such as the Bakkt Bitcoin futures contracts volume which hit a new record high as reported in Cryptocurrency Market News earlier.

Grayscale, a leading fund manager in the United States has also recorded a massive growth in less than two weeks. The assets under management (AUM) surged by over $1 billion to hit $5.1 billion as reported by Grayscale on July 28.

According to the AUM table, Grayscale Bitcoin Trust leads with $4.3 billion. Grayscale Ethereum Trust comes second with $581 million following a $127 million increase. On the other hand, Grayscale Bitcoin Cash Trust more than doubled in value from $6 million to $12.8 million. The fund manager also added $12.7 million to the Ethereum Classic Fund while the Litecoin Trust saw a $6.7 million increase. On the flip side, the Stellar Lumens Trust experienced a $100,000 drop to stand at $0.5 million.

Bitcoin is back to trading above $11,000 after confirming support at $10,800. All indicators are back to sending bullish signals starting with the RSIs as it continues to hold in the overbought region. The MACD is also moving higher within the positive region in addition to the positive divergence. In other words, Bitcoin is not only going to contain gains above $11,000 but also trend higher towards $10,400 resistance.

Ethereum has already started working on the triangle breakout discussed during the Asian hours on Wednesday. After dropping to confirm support at $312, ETH has made a comeback above $320. It is trading at $324 following a triangle breakout that if supported by the right volume could pave the way for gains past $340.

Ripple is among the biggest gainers of the day following a breakout that topped $0.24. The cryptoassets rally seems to have delayed but it finally materialized as XRP overcame key hurdles at $0.22, $0.23 and the most recent $0.24.

At the moment, bulls are struggling with containing gains above $0.24 while XRP dances at $0.2403. The RSI and MACD clearly show that upward movement has lost traction. Therefore, holding defending $0.24 is key to averting losses that could even retest $0.23.

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Cryptocurrency Market Update: Grayscale crypto fund hits $5.1 billion, Bitcoin, Ethereum and Ripple in the green again - FXStreet

Cryptocurrency facts takes a simplified look at digital currencies like Bitcoin to help explain what cryptocurrency is, how it works, and its implications. On this site, we cover everything you need to know about:

TIP: If you are new to cryptocurrency, check out ourguide to cryptocurrency for beginnersfor a crash course on the basics. Or, check out ourcryptocurrency investing starter kit.

As of 2020, cryptocurrency has been used as a decentralized alternative to traditional fiat currencies (which are usually backed by some central government) such as the US dollar (USD). Meanwhile, cryptocurrency technology, including smart contracts and blockchain technology, have been used for a number of other purposes such as apps, cloud computing, and more.

For theaverage person using cryptocurrency is as easy as:

For advanced users, the possibilities are vast.

How do I get cryptocurrency? If you want to get cryptocurrency you can mine it, trade goods and services for it, or buy it via brokers and exchanges using dollars and other cryptocurrencies. Check out Coinbase for a broker/exchange/wallet solution.

What is a cryptocurrency address?: A public address is a unique string of charactersused to receive cryptocurrency. Each public address has a matching private address that can be used to prove ownership of thepublic address. WithBitcoin the addressis called a Bitcoin address. Think of it like a unique email address that people can send currency to as opposed to emails.

The first decentralized digital cryptocurrency can arguably be traced back to bit gold(not to be confused withBitgold), which was worked on by Nick Szabo between 1998 and 2005 but was never implemented.

Although bit gold is widely considered the first precursor to bitcoin, cryptocurrency pioneer David Chaums company DigiCash (a company founded in1989 which attempted to innovate digital currency),Wei Daisb-money(a conceptual system published in1998 which Satoshi cites it in the Bitcoin white paper), ande-gold (a centralized digital currency that started in 1996) are all notable early mentions.

With that history noted, modern digital currency starts in 2008 whenSatoshi Nakamoto (an anonymousperson and/or group) released theirpaper detailing what would become Bitcoin.

Bitcoin became the first decentralized digital coin when it was created in 2008. Itthen went public in2009.

As of 2020, Bitcoin is the most commonly known and used cryptocurrency. Meanwhile, other coins including Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and more are all notable mentions.

Given thepopularity of Bitcoin as well asits history, the term altcoin is sometimes used to describe alternative cryptocurrenciesto bitcoin (especially coins with small market caps).

As of January 2015, there wereover 500different types of cryptocurrencies or altcoins for trade in online markets. However,only 10 of them had market capitalizations over $10 million.

As of September 2017, there were over 1,100 cryptocurrencies and thetotal market capitalization of all cryptocurrencies reached an all-time high surpassing $60 billion! Then, by December 2017, the total market cap reached $600 billion (a multiple of 10 in only two months).

Since that time the total amount of coins has grown while the market cap has ebbed and flowed.

Although the future is uncertain, cryptocurrency is proving itself to be more than just a fad. Today cryptocurrency is shaping up to be a growing market that (despite the pros and cons) is likely here for the long haul.

On this site, we explore every aspect of cryptocurrency. Simply choose a page from the menu,visitour what is cryptocurrency page for a more detailed explanation of cryptocurrency, or jump right in to the how cryptocurrency works section to start learning about transactions, mining, and public ledgers.

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Introduction to Cryptocurrency - CryptoCurrency Facts

Cryptocurrency has been a popular topic of discussion for several years. However, at the end of 2017, with bitcoin futures trading beginning on the Chicago Board Options Exchange and Chicago Mercantile Exchange, the conversation has seemed to reach a fever pitch. But what is cryptocurrency? And whats behind its meteoric rise?

Like money, a cryptocurrency is a medium of exchange. However, the cryptocurrency is virtual or digital, meaning that there is no physical coin or bill that owners of the currency possess. The crypto- part of its name comes from the fact that it uses cryptography to secure and verify transactions. Additionally, a common characteristic of many cryptocurrencies is their decentralized nature: Whereas typical currencies are issued from a central bank, cryptocurrencies cut out the middlemen as a peer-to-peer system. This decentralization is touted as one its principal benefits, as it might increase transaction speed and let users avoid fees charged by banks and other more traditional financial institutions.

There are multiple cryptocurrencies that are widely used. Among the biggest are Ripple, LiteCoin, and Ethererum. However, its Bitcoin that remains the largest and most talked about cryptocurrency.

Bitcoin, which was created in 2009, is credited as the first decentralized cryptocurrency. Its also the first cryptocurrency to have its futures traded on a major exchange. Holders of Bitcoin are able to use it just like any other currency at thousands of vendors, including Overstock and Subway.

Bitcoin, though, has garnered widespread attention not only for its increase in popularity as a digital currency, but also for what is perhaps its biggest innovation: blockchain.

In the most basic terms, blockchain is a type of digitized and public ledger. Bicoin uses blockchain technology to maintain information on how much Bitcoin is owned and who owns it. Rather than possessing physical currency, or even a digital file thats representative of the currency, individuals have a claim to a piece of information contained in the blockchain ledger.

So when a Bitcoin transaction is made, the currency is transferred between parties as a block of information that gets added to the historical chain of transaction data. This ledger is a public fileanyone can download a copy of it. Individuals identities are encrypted, however, and this feature of the technology is among the many reasons it is so highly touted.

Just as Bitcoin and cryptocurrencies are gaining in stature, blockchain is expected emerge as an important technology with a wide array of potential applications, too. Blockchain could be used in everything from expedited transfer of title in real estate sales to international transactionsnot to mention those that havent even been thought of yet.

So while the outlook for both cryptocurrencies and blockchain arent entirely well defined and the concepts may initially be difficult to grasp, one thing is likely: consumers of all stripes can be sure that these technologies will likely impact the financial futures of consumers of all stripes in the years to come.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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What Is Cryptocurrency? | Discover

Cryptocurrency Investing on eToro a League of Its Own

Cryptocurrencies represent a distinct asset class in a league of their own. While they have often been associated with extreme volatility since their inception a decade ago, volatility is a double-edged sword. While you can earn a significant amount of money quickly, you can also lose it just as fast. The average annual return of the US stock market since the 1950s is estimated at 7%[1], however, in the cryptocurrency market, prices can move by many percent in a single day (for example, Bitcoin circa 2017).

The fast-paced nature of the cryptocurrency market also manifests itself in a far shorter market cycle than in traditional financial markets. Here are some tips to help you survive a market downturn.

Knowing your investment objectives and your time horizon are two important elements that will dictate your investment decisions. Individuals can be characterised as either short-term traders or long-term investors. Short-term traders thrive in a volatile environment where they tend to make frequent investment decisions in the form of buying and selling in very short time intervals. They can hold on to their investments for days, hours, minutes and even seconds! Short-term trading is highly risky, and is usually reserved for sophisticated and experienced individuals. For normal retail investors, a long-term investing approach is a safer strategy, where investments are held for the long haul. Given the potential and gradual adoption of blockchain technology, cryptocurrencies may skyrocket in value over the long term. With a longer-term horizon, you do not need to be exposed to short-term price variations that can take their toll mentally and emotionally.

You should only acquire cryptocurrencies through reputable and licensed cryptocurrency exchange such as eToro, which offers many popular cryptocurrency and tokens to choose from, and several features to help you get started on your crypto journey, for example, eToros extensive articles that cover basic trading strategies as well as guides to help you navigate the complexities of the market.

Obscure tokens are tokens with low market capitalisation or even coins which have gone through an Initial Coin Offering (ICO), but are not yet listed on any exchange. Usually, these tokens are thinly traded across a small pool of exchanges, probably due to little trading demand or because they are relatively new coins. Obscure tokens are highly risky, because they do not have an established track record and prices could be extremely volatile due to their paltry liquidity. Prices can swing rigorously if a large order is executed on an exchange. Although these tokens could be significantly profitable if prices go on an upward trajectory, you could also stand to lose a big chunk of value if prices move adversely. A market downturn, as witnessed at the start of 2018, could obliterate the value of obscure tokens significantly, and they could possibly lose as much as 70% to 90% of their value. Only when you have considerable experience and knowledge dealing with obscure tokens should you seek to include them in your portfolio. You should always store your coins in a secure digital wallet. eToro offers a secure digital assets Wallet solution that supports over 120 coins and lets you safely store your cryptocurrencies.

In this complex and fast-moving space, research is your best friend. Engage in thorough due diligence before carrying out any investment decisions. If you are thinking about investing in a new coin or token, first evaluate the website, team and most importantly, the projects white paper. Ensure that the project has clearly defined the problems which it is addressing and that the solution has been thoroughly explained. Only when you are clear about the projects direction, its potential and the absence of red flags, should you commit to executing the investment. One easy way to understand sentiments related to any coin is to utilise a crypto social feed, such as eToro, which allows interaction with a vibrant community of like-minded crypto enthusiasts.

When new to the cryptocurrency market and trading in general, it is best to avoid highly leveraged products and strategies in the fast-evolving cryptocurrency space. Products such as cryptocurrency derivatives, options and CFDs should be avoided if you do not fully understand their mechanics. Strategies such as margin trading are also highly risky and should be avoided to reduce your risks. Investing in cryptocurrencies is already risky; trading using leverage could significantly increase your risk exposure, especially in a market downturn where the possibility of margin calls increase exponentially. Acquiring real coins from regulated cryptocurrency platforms such as eToro is a good first step.

Financial wisdom dictates that diversifying is key to managing your investment portfolio. Put simply, a basket of crypto is wiser than investing solely in one coin. Without diversification, your losses will be directly tied to one investment. In a diversified pool of coins, your losses can be mitigated across all coins and could reflect a lower overall loss in a market downturn. The availability of different coins and trading pairs in many cryptocurrency platforms with eToro being one of the most prominent allows you to effectively diversify your portfolio safely and conveniently.

In a market downturn, the focus should be more on accumulating cryptocurrencies due to lower market prices, especially if you are a long-term believer in digital currencies. There are numerous ways to earn free cryptocurrency on the side, including utilizing your computing resources to collectively mine cryptocurrency transactions and earn mining rewards, subscribing to services that provide free coins in exchange for work being done (such as BAT browsers) and exploiting cashback rewards services that provide you cryptocurrency rewards if you shop online.

Fear of missing out (FOMO) is a widely used term in the cryptocurrency space to describe a situation that entails extreme hype which generates investment decisions on a particular coin. Investing in a cryptocurrency purely based on hype and speculation is an irrational move and could result in significant losses for investors. You must do thorough due diligence for every investment decision to ensure that you truly understand the coins proposition and utility, using leading resources such as eToros free market research on prominent coins.

Volatility in the cryptocurrency market can be extreme. It is always a good idea to try not to be overly zealous when looking at price movement, since market volatility can induce a heightened degree of anxiousness and FOMO, both of which could be detrimental to your investment decisions.

Market cycles are a natural part of the free market. The volatile nature of the cryptocurrency market could shorten the market cycles of booms and busts relative to more traditional and mature markets, such as the stock markets. It is important to enter the market with a focused and long-term investment horizon.

[1] Data derived from Investopedia

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8 Ways To Survive A Cryptocurrency Market Downturn ...

On 15 July 2020, Twitter accounts belonging to Bill Gates, Barack Obama, Joe Biden and other public figures were subject to coordinated social engineering attacks. According to Twitter, the attackers successfully targeted some of [the companys] employees with access to internal systems and tools. The compromised accounts swiftly set in motion a large-scale cryptocurrency fraud scheme, inviting Twitter users to send Bitcoins to an unverified wallet, with the promise of a 2:1 return on every transaction. The tweets were prefaced by the message I am giving back to the community, in an apparent attempt to capitalize on the current political momentum in the US.

This was the second large-scale cryptocurrency scam executed on Twitter this year. In January, verified Twitter accounts were taken over by scammers and transformed into identical copies of Elon Musks official account, inviting Twitter users to a crypto party.

While the above incidents may be attributed to security flaws, internal protocol breaches or carelessness in the administration and storage of credentials by individual Twitter account holders, they are largely enabled, inspired, and ultimately prompted by the characteristics of pseudonymity, immutability and decentralization, which lie at the core of blockchain technology. Indeed, these very characteristics have rendered cryptocurrencies increasingly attractive and accessible, thereby broadening the pool of potential targets for online scammers, while enabling the latter to conceal their identities behind cryptocurrency keys.

Systemic and consumer-related risks associated with cryptocurrencies

As cryptocurrencies are seen by an increasing number of international financial actors as the perfect hedge against the recessionary effects of the COVID-19 pandemic, and as their circulation continues to transcend national jurisdictions, there is growing international concern about their systemic and consumer-related risks. In this light, must cryptocurrencies be subject to some form of international regulation, harmonization or coordination? Seeing as their risks are inherently transboundary, the answer should be in the affirmative.

In particular, as regards systemic risks, blockchain pseudonymity has facilitated the use of cryptocurrencies for cross-border money-laundering, tax avoidance and illicit financing. Further, so-called stablecoins, i.e. cryptocurrencies pegged to baskets of safe assets (such as government bonds), are capable of affecting exchange rates and cross-border financial stability.

The transboundary element is also heavy on the consumer risk side. Besides scams, a significant risk of this type pertains to the loss or theft of private wallet keys, resulting in the irretrievability of stored coins due to the immutable nature of blockchain technology. Another consumer risk pertains to the fact that the platforms on which cryptocurrency transactions take place, i.e. exchange websites or apps, may fall prey to hackers, who may be able to extract cryptocurrencies kept therein (and not safely stored in a wallet). Relatedly, users may incur significant capital losses due to limited information about the volatility of their investments. These risks are indeed inherently transboundary, as they revolve around cross-border payments or data transfers and engage the liability of corporations with multinational presence or activities (such as cryptocurrency exchange platforms).

The shortcomings of domestically-oriented regulatory models

Could such risks, notwithstanding their cross-border nature, be mitigated through actions undertaken at the national level alone? Insofar as systemic risks are concerned, national attempts would run into a collective action problem. The spill-over effects of fluctuations in exchange rates and financial instability are, by definition, externally induced, primarily arising as a result of incomplete regulation in foreign jurisdictions. The latter may indeed have a high tolerance for cryptocurrency-related systemic risks, thus being unwilling to impose meaningful regulatory constraints on cryptocurrencies, unless motivated by a certain sense of international consensus. Similar considerations may apply to illicit money flows and tax avoidance, activities which are largely propelled by regulatory mismatches between different jurisdictions.

As it pertains to consumer risks, in an increasingly cashless and fintech-driven global economy, a robust regulatory framework for cryptocurrencies, imposing know-your-customer rules and mandatory permits, inter alia, might discourage inbound investment by (or in) fintech companies. Able to benefit from light regulation in alternative financial markets, such companies may simply find it too inconvenient or unprofitable to pursue activities in risk-averse jurisdictions. The latter may therefore find themselves in a catch-22 scenario, forced to select between a solid regulatory framework that might discourage fintech, or a cryptocurrency-friendly framework providing limited consumer protection. As past experiences from international banking and taxation indicate, in such a scenario, many countries are in fact likely to succumb to a race to the bottom as opposed to improving their regulatory standards.

Regulatory divergence and lack of international consensus

Considering the transboundary nature of the aforesaid risks, international regulation, harmonization or cooperation would appear desirable. Yet, since the launch of Bitcoin in 2008/2009, there have been few significant developments in that direction. There appears to be no critical mass of like-minded countries, capable of instilling some sense of international consensus that would trigger a harmonization or cooperation (let alone regulation) process. By way of illustration, China has introduced an umbrella ban on private cryptocurrencies, aiming to develop its own, state-backed coin. South Korea recently adopted a comprehensive, cryptocurrency-specific law linking wallets to real-world bank accounts and requiring the registration of wallets under their users actual names. The European Banking Authority and the European Securities and Markets Authority have highlighted the need for a cryptocurrency-specific approach that would evaluate the use of each cryptocurrency individually, whereas in the US no cryptocurrency-specific laws have been formally contemplated, with most types of transactions being currently subject to the supervision of the Securities and Exchange Commission and the Commodity Futures Trading Commission. These variations reflect fundamental differences in understanding as regards the legal nature, risks and benefits of cryptocurrencies.

Recent developments and future prospects for international governance

Notwithstanding the above, there appears to be an end in sight for the current governance standstill. Recently, the Financial Action Task Force (FATF) issued Guidance for a Risk-based Approach to Virtual Assets and Virtual Asset Service Providers, clarifying how its International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation apply to virtual assets, virtual asset activities and virtual asset providers. Moreover, the Financial Stability Board (FSB) issued a list of high-level recommendations for stablecoins; notably, according to recommendation 5, [a]uthorities should ensure that GSC [global stablecoin] arrangements have effective risk management frameworks in place especially with regard to reserve management, operational resiliency, cyber security safeguards and AML/CFT measures, as well as fit and proper requirements. Lastly, the International Organization of Securities Commissions (IOSCO) published a report setting out a range of key considerations for regulating cryptocurrency exchange platforms. Among else, the report urges domestic authorities to review the arrangements in place to compensate participants in the event of a loss of assets, including, for example, insurance policies, compensation funds or other contingency measures. In view of the institutional backing of the FATF, FSB and IOSCO, these initiatives are likely to bring about some degree of concerted regulatory activity.

Critically, in past cases marked by limited appetite for international dialogue, the solution has been prompted by compelling political developments. Indeed, in both international taxation and finance, it took the shock of the Global Financial Crisis for governments to converge on the need to limit transfer pricing and base erosion (see the OECDs BEPS project), decrease banking leverage and strengthen capital requirements (see the Basel III Accord). This time around, the negative publicity generated by recent scams and Facebooks Libra project, coupled with the COVID-induced recession, will likely serve to facilitate global consensus, hopefully toward a balance between fintech innovation and risk mitigation.

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Cryptocurrency theft, scam and other misadventures: what ...

BTC whales have been moving large stacks of Bitcoins lately, triggered by the recent bullish momentum in the BTC market.

According to data obtained from BTCBlockbot, a crypto analytic tracker, an unknown whale moved 15,022 BTC in block 641,074, estimated to be roughly worth about $162 million, about 10 hours ago.

READ MORE: Over 900,000active Bitcoinwallets pushtransactions to3-yearhigh

It should be noted that Bitcoin is not really anonymous, because all BTC transactions are kept permanently and publicly on the blockchain or ledger system. This makes it very easy for anyone to see the transactions and balances of any BTC address.

According to data obtained from Coinmarketcap, Bitcoin traded at $11,000 with a market capitalization of $202 billion, at the time this report was drafted.

READ ALSO: Tether whales move USDT 110,000,000 in 1 hour

Quick fact: At the BTC market, investors or traders who own large amounts of cryptocurrency are typically called BTC whales. This means that a BTC whale would be an individual or business entity (with a single Bitcoin address) owning around 1000 BTCs or more.

As BTC whales accumulate BTCs, the circulating supply reduces, and this can weaken any bearish trend Bitcoin finds itself in. What this means in essence is that over time, as BTC approaches its fixed supply of 21 million, its possible that the price of BTC will go up, with BTCs present demand factored in.

READ ALSO: Bitcoin thieves move 3,897 BTC worth $42 million in 1 hour

Although it is difficult to predict market movements, Bitcoin whales have shown historically that they often determine Bitcoinstrend.

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There are now 18000 Bitcoin millionaires - Nairametrics

By Peter Kent, Tyler Bain

Cryptocurrency mining involves the addition of transactions to a blockchain by a crypto miner. But, its a bit more complicated than that. Take a look at decentralization and discover the role of the crypto miner.

Cryptocurrencies are decentralized that is, no central bank, no central database, and no single, central authority manages the currency network. The United States, for example, has the Federal Reserve in Washington, the organization that manages the U.S. dollar, and European Central Bank in Frankfurt manages the euro, and all other fiat currencies also have centralized oversight bodies.

However, cryptocurrencies dont have a central authority; rather, the cryptocurrency community and, in particular, cryptocurrency miners and network nodes manage them. For this reason, cryptocurrencies are often referred to as trustless. Because no single party or entity controls how a cryptocurrency is issued, spent, or balanced; you dont have to put your trust in a single authority.

Trustless is a bit of a misnomer. Trust is baked into the system. You dont have to trust a single authority, but your trust in the system and fully auditable codebase is still essential. In fact no form of currency can work without some form of trust or belief. (If nobody trusts the currency, then nobody will accept it or work to maintain it!)

In the trustless cryptocurrency world, you can still trust the cryptocurrency community and its mechanisms to ensure that the blockchain contains an accurate and immutable unchangeable record of cryptocurrency transactions. Cryptocurrencies are established using a set of software rules that ensure that the system can be trusted, and the mining process is part of this system that allows everyone to trust the blockchain.

Cryptocurrencies have no central bank printing new money. Instead, miners dig up new currency according to a preset coin-issue schedule and release it into circulation in a process called mining.

When you compare cryptocurrency mining to gold mining, why the process is referred to as mining becomes clear. In both forms of mining, the miners put in work and are rewarded with an uncirculated asset. In gold mining, naturally occurring gold that was outside the economy is dug up and becomes part of the gold circulating within the economy.

In cryptocurrency mining, work is performed, and the process ends with new cryptocurrency being created and added to the blockchain ledger. In both cases, miners, after receiving their reward the mined gold or the newly created cryptocurrency usually sell it to the public to recoup their operating costs and get their profit, placing the new currency into circulation.

The cryptocurrency miners work is different from that of a gold miner, of course, but the result is much the same: Both make money. For cryptocurrency mining, all of the work happens on a mining computer or rig connected to the cryptocurrency network no burro riding or gap-toothed gold panners required!

Cryptocurrency miners add transactions to the blockchain, but different cryptocurrencies use different mining methods, if the cryptocurrency uses mining at all. (Most cryptocurrencies dont use mining.) Different mining and consensus methods are used to determine who creates new blocks of data and how exactly the blocks are added to the blockchain.

How you mine a particular cryptocurrency varies slightly depending on the type of cryptocurrency being mined, but the basics are still the same: Mining creates a system to build trust between parties without needing a single authority and ensures that everyones cryptocurrency balances are up-to-date and correct in the blockchain ledger.

The work performed by miners consists of a few main actions:

The preceding cryptocurrency mining process is essential work, needed for the continued propagation of the blockchain and its associated transactions. Without it, the blockchain wont function. But why would someone do this work? What are the incentives for the miner?

The bitcoin miner actually has a couple of incentives (other cryptocurrencies may work in a different manner):

Combined, the fees and subsidy are known as the block reward. In Bitcoin, the block subsidy began at 50 BTC. (BTC is the ticker symbol for bitcoin.) The block subsidy at the time of writing is currently 12.5 BTC. The block subsidy is halved every 210,000 blocks, or roughly every four years; sometime around May 2020 it will halve again to 6.25 BTC per block.

The image below, from the BlockChain.com blockchain explorer, shows a block subsidy being paid to an address that is owned by the miner who added the block to the blockchain. Near the top you can see that 12.5 BTC is being paid as the subsidy; the actual sum received by the miner (the full reward, 13.24251028 BTC) is larger, because it also includes the transaction fees for all the transactions in the block.

For a cryptocurrency to function, several conditions must be met by the protocol. Jan Lanksys 6-factor list is particularly helpful. (Jan is a cryptocurrency academic teaching at a university in the Czech Republic). As can be seen, below, mining (in the mineable cryptocurrencies, non-mineable currencies have different mechanisms) is an integral part of making sure these conditions are met.

If even one of these six conditions arent met, a cryptocurrency will fail because it cant build enough trust for people to reliably use it. The process of mining solidifies and satisfies every single one of these conditions.

Theres a mind exercise known as the Byzantine Generals Problem (or the Byzantine Fault, the error avalanche, and various other things) that illustrates the problem that cryptocurrency consensus algorithms seek to solve.

The overall problem? Youre trying to reach consensus; in cryptocurrency, youre trying to reach agreement over the history of currency transactions. But in a cryptocurrency network, a distributed computer system of equals, you have thousands, maybe tens of thousands of computers (nodes); in the Bitcoin network you currently have 80,000 to 100,000 nodes.

But out of those tens of thousands of systems, some are going to have technical problems; hardware faults, misconfiguration, out-of-date software, misfunctioning routers, and so on. Others are going to be untrustworthy; theyre going to be seeking to exploit weaknesses for the financial gain of the people running the node (they are run by traitors). The problem is that for various reasons, some nodes may send conflicting and faulty information.

So someone came up with a sort of parable or metaphor, the Byzantine Generals Problem. (A guy named Leslie Lamport Shostak first told this story back in 1980, in a paper related to general issues of reliability in distributed computer systems.)

Originally named the Albanian Generals Problem, it was renamed after a long-defunct empire so not to offend any Albanians! (Though in this interconnected world of constant social media offense, there must be at least some offended residents of Istanbul.)

Apparently distributed-computing academics like to sit around and devise these little metaphors; theres the dining philosophers problem, the readers/writers problem, and so on. In fact the Byzantine Generals Problem was derived from the Chinese Generals Problem.

Anyway, the idea is this, as described in the original paper:

We imagine that several divisions of the Byzantine army are camped outside an enemy city, each division commanded by its own general. The generals can communicate with one another only by messenger. After observing the enemy, they must decide upon a common plan of action. However, some of the generals may be traitors, trying to prevent the loyal generals from reaching agreement. The generals must have an algorithm to guarantee that A. All loyal generals decide upon the same plan of action.[and] B. A small number of traitors cannot cause the loyal generals to adopt a bad plan.

(Search online for byzantine generals problem leslie lamport robert shostak marshall pease if youre interested in seeing the original paper.)

Thats the problem that cryptocurrency consensus algorithms, as theyre known, are trying to solve. How do the generals (the computer nodes) come up with consensus (all agree on the same plan of actionor transaction ledger), and avoid being led astray by a small number of traitors (faulty equipment and hackers)?

To have a chance at the mining reward, crypto miners must set up their mining rigs (the computer equipment) and run that cryptocurrencys associated mining software.

Depending on how many resources the crypto miner is committing, he or she will have a proportional chance to be the lucky miner who gets to create and chain the latest block; the more resources employed, the higher the chance of winning the reward. Each block has a predetermined amount of payment, which is rewarded to the victorious miner for their hard work to spend as they wish.

So how is the winning miner chosen? That depends. In most cases, one of two basic two methods are used:

When Bitcoin first started, anyone with a simple desktop computer was able to mine. The would-be miner simply downloaded the Bitcoin mining software, installed it, and let the BTC roll in! As time went on, though, competition increased.

Faster and more powerful computers were built and used for mining. Eventually, specialized processing chips called Application Specific Integrated Circuits (ASICs) were developed. An ASIC, as the name implies, is a computer chip designed for a specific purpose, such displaying high-resolution graphics quickly, running a smartphone, or carrying out a particular form of computation.

Specific ASICs have been designed to be highly efficient at the forms of computation required for cryptocurrency mining for example, for Bitcoin mining. Such a chip can be 1,000 times more efficient at Bitcoin mining than the chip in your PC, so in todays Bitcoin mining environment, its go ASIC or go home!

For high-difficulty cryptocurrencies, such as Bitcoin, the ideal mining environment is one with:

Fear not, though! With many different copies and mimicry of Bitcoin running rampant, Bitcoin is no longer the only game in town, and you can find lots of alternative mining choices, with varying levels of required computing power. Today, some of the most profitable cryptocurrencies to mine are lesser known and can be mined using off-the-shelf computer hardware due to less stringent difficulty levels that are associated with lower popularity and adoption.

Currently, a large portion of the global cryptocurrency mining takes place in China, at perhaps three times the rate of the next closest nation (the United States). A combination of cheap electricity and easy access to cheap computer components for building mining rigs gives China an edge that Chinese miners have leveraged and so far, maintained, even with their governments apparent disapproval of cryptocurrencies.

This is a testament to how resilient and difficult to shut down distributed cryptocurrency systems such as Bitcoin are.

A cryptocurrency has value because a large number of people collectively believe that it does. But why do they believe cryptocurrency has value? The answer is trust.

A holder of Bitcoin can trust that their Bitcoin will be in their wallet a day from now or 10 years from now. If they want to research how the system works, they can audit the code base to understand the system on a deeper level to see how trust is maintained.

However, if they do not have the skillset or the computer science knowledge to audit code, they can choose to trust that other people, more knowledgeable than them, understand and monitor the system; they can trust the overall blockchain community that is managing the particular cryptocurrency.

Without the mining functionality underpinning the distributed peer-to-peer cryptocurrency system, this collective trust (based on the proof of collective work towards the chain) would not exist.

Cryptocurrency mining makes sure that your balances wont change without your authorization. It incentivizes everyone to behave correctly and punishes those who dont. It creates a digital form of value transfer that can be trusted by each individual user as an equal peer in the network because every part of the system is aligned for one purpose: providing a secure way to create, verify, and transfer ownership of digitally scarce cryptographic units.

Peter Kent is a longtime technology author who also created the online course Crypto Clear: Bitcoin & Cryptocurrency Made Simple. Tyler Bain is a professional engineer who specializes on the electrical grid. He is also a Certified Bitcoin Professional who focuses on system resiliency and mining mechanics.

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What is Cryptocurrency Mining? - dummies

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Launching a new cryptocurrency-based startup or creating a new cryptocurrency altogether based on an original idea can be difficult without proper funding. However, getting global investors to fund your cryptocurrency can be tough without properly outlining your plans and benefits for backers.

According to Leftronic, 81% of people in the world have still never bought cryptocurrency, with only 10% claiming to fully understand how they operate. Thus, whitepapers have been introduced to the initial coin offering (ICO) projects which precede the development and subsequent launch of a new digital currency. Lets take a closer look at the role of whitepapers in cryptocurrency development in order to get your project on the right foot.

The role of whitepapers in cryptocurrency ICO projects

To start things off, lets talk whitepapers what are they and why do they matter for cryptocurrencies? According to Investopedia, whitepapers are informative documents issued by companies in order to present a product or service to public backers. They are used as an advertisement material for cryptocurrencies in the sense that they offer a detailed breakdown of how the currency will be created.

Writing a whitepaper for your upcoming cryptocurrency project is essential if you want to attract lucrative investors and secure funding for your startup efficiently. Once you publish the newly-written whitepaper and set up a trustworthy cryptocurrency wallet for it, your project will experience several important benefits going forward:

Cryptocurrency whitepaper writing guidelines

Introductory segment

Like other formal documents, your cryptocurrency whitepaper should start with legalities about your company and its CEO, date of publishing and other relevant information. The title page should be followed by an abstract of your whitepaper for future reference and repeat reading and lead into the introduction itself.

Use the introduction (treat it like an essay intro) to introduce yourself, your company and its history. Dont jump directly into the project itself give your readers time to know your company better before presenting them with a cryptocurrency value proposition.

Describe the pressing issue

Once the introduction is done, you will have an important task to complete what is the role of your cryptocurrency, and why should it exist? Whitepapers centered on ICO projects usually focus on very relevant public issues such as ecological problems, unemployment, healthcare, etc.

You need to make the reader empathize by introducing an issue they identify with this is one of the main roles of cryptocurrency whitepapers. If you aim to solve a problem in education, investors who focus on infrastructure wont have an interest in the project, for example. Outline the specifics of what your cryptocurrency will aim to resolve, its impact on the world and how it might affect the future if unresolved.

Describe your solution to the issue

Next, proceed to outline your solution to the issue youve previously presented. Do you aim to develop real-world products for international distribution or a cloud-based service? What infrastructural resources will you require to put the plans into motion?

Again, dont delve into the specifics of financing your ICO project just yet instead, focus on practical, step-by-step plans to solve the problem presented above. This will ensure that potential backers have a very clear image of how you intend to use the financial resources you raise through the whitepaper.

Present your project team

To showcase your proactivity and dedication to the project, its good practice to outline your project team in the whitepaper document. Who are your coworkers, team members and networking consultants? Which companies, startups or brands, in general, have showcased their interest in helping launch your cryptocurrency project?

Presenting such information through the whitepaper will further filter out the backers and investors who might be uninterested in your approach to ICO. Its better to do so early on instead of running into issues of misunderstanding or unspoken information down the line open up about your collaborators.

Set up a development roadmap

One of the most pivotal aspects of cryptocurrency whitepapers lies in the development roadmap. Mainly, what are the concrete steps, milestones and launch deadline of your cryptocurrency?

Potential backers want to have objective information about their investments and to know exactly how you intend to bridge the gap between theory and practice. You can rely on SMART goals methodology and create a rudimentary roadmap for your ICO project which can be included in the whitepaper for transparency.

List funding options and rewards

Finally, you will want to outline how potential investors can pitch in and fund your project, as well as what benefits they will receive. Cryptocurrency projects typically reward backers with special launch tokens or exclusive coins depending on the size of their financial backing.

Its a good idea to create different tiers for backers and offer different rewards for various amounts of investments. Make sure to be fair in rewarding public investors as they will effectively put money into your project based on a whitepaper alone. Use your best judgment based on the scale and requirements of your project in writing this section of the cryptocurrency whitepaper.

Provide up-to-date contact info

Once youve assembled the necessary info on your ICO project, you should also include updated information on how backers can reach you. Large B2B investors will surely want to chat about details concerning your whitepaper before they invest large sums of money in a cryptocurrency startup. Likewise, including such information upfront will signal that you are a trustworthy company with serious intentions in regard to the whitepaper.

Its good practice to launch a dedicated website for your ICO project or to publish it on a reliable global cryptocurrency network for increased credibility. Dont give backers any reason to doubt your intentions and showcase your proactivity through professional and informative communication throughout the fundraising process and beyond.

Following through

When all is said and done, a cryptocurrency whitepaper is your most powerful marketing tool. However, following up on your promises and delivering a functional product/service afterward matters just as much for your reputation. Make sure not to oversell your abilities or to shoot for the stars and under deliver. Its best to be realistic and allow backers to fund or not fund your ICO project based on tangible data and milestones. Consult your coworkers and start writing the cryptocurrency whitepaper today to reap its benefits as early as tomorrow.

Marques Coleman is a professional content creator and writer at Grab My Essay and Best Essay Education writing services. He also does some editing at TrustMyPaper. Marques has made it his mission to deliver practical digital content to worldwide audiences through articles, essays and case studies. In his spare time, Marques enjoys reading up on popular marketing trends and spending time outdoors.

Featured Image: Shutterstock/Ollyy

Originally posted here:
Cryptocurrency Whitepapers Why They Matter and How to ...

As you become involved in the new digital monetary mechanisms known as cryptocurrency, it doesn't take long to recognize there's risk involved in these transactions. And we're not talking about the volatility of the market. Scams are everywhere online, and cryptocurrency exchanges are no different. As you consider investing in different startups and exchange platforms, be aware of the possibilities of losing your cryptocurrency investments.

When you're looking into digital cryptocurrency companies and startups, experts recommend that you confirm that they're blockchain-powered, which means they track detailed transaction data. Also, check that they have solid business plans that solve real problems. Companies should specify their digital currency liquidity and ICO rules. There should be real people behind the company. If the startup you're investigating lacks some of these characteristics, think through your decision even more carefully.

Here's in a look at the more common scams and ways to avoid becoming a victim as you join the exciting future of cryptocurrency.

You may be following a solid tip from someone with a lot of expertise but still become a victim by accidently visiting a fake website. There's a surprising number of websites that have been set up to resemble original, valid startup companies. If there isn't a small lock icon indicating security near the URL bar and no "https" in the site address think twice.

Even if the site looks identical to the one you think you're visiting, you may find yourself directed to another platform for payment. For example, you click on a link that looks like a legitimate site, but attackers have created a fake URL with a zero in it instead of a letter o. That platform, of course, isn't taking you to the cryptocurrency investment that you've already researched. To avoid this, carefully type the exact URL into your browser. Double check it, too.

Another common way scammers trick cryptocurrency investors is through fake apps available for download through Google Play and the Apple App Store. Although stakeholders can often quickly find these fake apps and get them removed, that doesn't mean the apps aren't impacting many bottom lines. Thousands of people have already downloaded fake cryptocurrency apps, reports Bitcoin News.

While this is a greater risk for Android users, every investor should be aware of the possibility. Are there obvious misspellings in the copy or even the name of the app? Does the branding look inauthentic with strange coloring or an incorrect logo? Take note and reconsider downloading.

If you're following celebrities and executives on social media, you can't be sure that you're not following impostor accounts. The same applies to cryptocurrencies, where malicious, impersonating bots are rampant. Don't trust offers that come from Twitter or Facebook, especially if there seems to be an impossible result. Fake accounts are everywhere.

If someone on these platforms asks for even a small amount of your cryptocurrency, it's likely you can never get it back. Just because others are replying to the offer, don't assume they aren't bots, either. You have to be extra careful.

Even if it looks exactly like an email you received from a legitimate cryptocurrency company, take care before investing your digital currency. Is the email the exact same, and are the logo and branding identical? Can you verify that the email address is legitimately connected to the company? The ability to check on this is one reason why it's important to choose a company that has real people working for it. If you have doubts about an email, ask someone who works there. And never click on a link in a message to get to a site.

Scammers often announce fake ICOs, or initial coin offerings, as a way to steal substantial funds. Don't fall for these fake email and website offers. Take your time to look over all the details.

Unfortunately, there are many ways that some Internet users exploit unsecure computing systems to mine or steal cryptocurrency. Learn more about staying safe and protecting yourself in this emerging market before you start investing in cryptocurrency.

What is Cryptocurrency? Cryptocurrency Security: 4 Tips to Safely Invest in Cryptocurrency

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Scams are common online and cryptocurrency exchanges are no different. Read about four common cryptocurrency scams and how you can recognize and avoid them.

Read the rest here:
4 Common Cryptocurrency Scams | How to Avoid ...