There are several thousands of cryptocurrencies out there, known also as altcoins. These coins and tokens all have their own unique features and uses, for example, some are used to help decide the direction the creator company should take, others give you discounts or access to special features. The Coin Guide is a concise summary of the aims and technology behind a certain cryptocurrencies. Insight is crucial in this field. Many projects disguise their progress through complicated jargon, making it hard to distinguish those who are building something meaningful from those who are not.
Bitcoin Halving is expected to happen at 12 May 2020 07:07:39 UTC
What is the Bitcoin Halving Event?
The Bitcoin Halving event which marks the point where Bitcoin mining rewards will be cut precisely in half. Many view this as a turning point for the price of Bitcoin because it will drastically reduce the new supply of Bitcoin, creating scarcity. Currently the Bitcoin Halving is expected to happen at 12 May 2020 11:04:30 UTC – the exact time and date may vary due to fluctuations in Bitcoin block creation time. Once the halving takes place, the amount of Bitcoin mined per day will decrease from 1,800 BTC to 900 BTC. It is important to remember this event is permanent and will affect all the Bitcoin mined in the future as well (until the next halving event). From an economics standpoint, the less Bitcoin there is being produced the more scare and less accessible Bitcoin will become.
Check out my video on what the Bitcoin halving is, and what opportunities it can mean for Bitcoin.
Reduced Sell Pressure on Bitcoin
There will be substantially less sell pressure from Bitcoin miners as they’re income of Bitcoin will half. Currently, miners will mint $13 million USD worth of Bitcoin per day. This is no small figure – and one of the reasons why mining is such a trillion dollar industry (Check out our Bitcoin mining guide for how to be part of it).
Will Miners shut down / got bankrupt?
After the Halving, miners will receive half of their regular income. This will drastically alter the dynamics and profitability of Bitcoin Mining. For miners who are using older machines (ASICs), the drop in income might spell certain doom. Some miners will yield negative profits and be forced to retire the older less efficient units. This is a common practice in mining – renewing hardware is part of the profitability cycle for miners. This is similar to other tech hardware businesses like server farms which require annual upgrades to hardware.
There is no risk that Bitcoin be without miners – till is still 900 BTC to be mined each day (~$7.5 Million USD). Miners will be looking to be more competitive and source cheaper and cheaper electricity. In addition, Bitcoin difficulty can drop if there is less hashrate on the network, meaning it will be easier to mine Bitcoin.
Hype and Expectations
Bitcoin Halving Memes and Hype
The Bitcoin Halving comes with a lot of hype and optimism for the future of Bitcoin. Several memes have emerged with charts pointing to “pump” in the price of Bitcoin. The chart above shows the LOG price of Bitcoin over time, with a ascending trend indicating potential prices of $250,000 and even $2,000,000 for the price of Bitcoin. It is important to remember that with cryptocurrencies prices are high volatile and past trends don’t always indicate future trends.
Stats
Total Bitcoins in circulation:
18,367,900
Total Bitcoins to ever be produced:
21,000,000
Percentage of total Bitcoins mined:
87.47%
Total Bitcoins left to mine:
2,632,100
Total Bitcoins left to mine until next blockhalf:
7,100
Bitcoin price (USD):
$9,987.70
Market capitalization (USD):
$183,453,074,830.00
Bitcoins generated per day:
1,800
Bitcoin inflation rate per annum:
3.64%
Bitcoin inflation rate per annum at next block halving event:
1.80%
Bitcoin inflation per day (USD):
$17,977,860
Bitcoin inflation until next blockhalf event based on current price (USD):
What are Central Bank Digital Currencies (CBDC) – will they mark the start of a revolution to change the financial system forever? CBDCs are digital currencies issued by central banks that function as National Currencies (fiat). They are a direct replacement of paper money, with the exact same value and issuance policies. CBDCs are state-sanctioned and governed by the monetary authority and regulatory law.
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Banks around the world are racing to issue out Central Bank Digital Currencies (CBDC). China has already deployed the test trial for Digital Currency Electronic Payment (DCEP), a digital version of the RenMinBi based on cryptographic technology. Japan immediately countered this announcement by plans to release a Digital Yen in “2 to 3” years. One of the key motivations behind CBDC is to drastically improve the way money is transferred around the world. Instead of relying on decade-old technologies like SWIFT, Digital Currencies can be transferred directly without friction. This will drastic impacts on all levels of banking, from the m0 reserve system to the unbanked.
Major newspaper outlets like The Guardian and the Economist began writing opinion pieces, calling the advancement from China a big step and one that could pose a threat to US economic hegemony. On the other side, commentators in China heralded their country’s fast work and implementation. Although the US and its state banks have been slow to announce any research plans and have seemingly stopped Facebook’s Libra (a privatized answer to a CBDC) in its tracks, other western nations have quickly begun research.
Global effort to deploy Central Bank Digital Currencies
Earlier this year, banks from the UK, EU, Japan Canada, Switzerland, and Sweden all began joint research on a CBDC. France has announced intentions to test a pilot CBDC in 2020.
In Asia, the Japanese immediately announced their intentions to create a CBDC to match China’s as soon as the news began to break. The Bank of Korea is also looking at its own digital currency. Smaller national banks like Thailand, the Philippines, and Singapore are also looking into creating their own. Projects such as Singapore’s Ubin work with the Monetary Authority of Singapore are already in Phase 5 of development.
The world is moving towards CBDC and is in agreement that this will be the currency of the future. But, what makes them so special and alluring to banks and governments?
Digital Currencies as a weapon to combat economic change
The main reason is its cost-effectiveness and control. CBDCs are not subject to long processing times and costly fees. As you can see from the stable coin market, sending and receiving cryptocurrencies can be done quickly and easily, with just a phone and internet connection required. Not only that, but digital currencies are far easier to track making money laundering tracking much easier.
Another factor is CBDC’s resilience to political or economic changes. Often citizens from emerging economies are subject to a large disparity in their currency’s health in the market when compared to exchange rates, however, stable coins rarely have major shifts. Not only that, but big banking shutdowns, like seen in Greece and Iceland might well have had a solution if they held a financial alternative to store their money. This benefit of digital currencies could well be important as the world stares recession in the face following the economic stresses of the Coronavirus effort.
However, there is one major detail that is propelling some nations’ research. The threat which CBDC’s pose to the US dollar domination. ChinaDaily called the People’s Bank of China’s DCEP a “functional alternative to the dollar settlement system.” This is something politicians in Beijing want as US sanctions are made effective namely due to the dollar being the reserve currency. This means often international transfers to sanctioned states are prohibited and banks shut down, as they are using the US dollar in the exchange.
Challenging US sanctions
The theoretical ability of CBDC’s to circumvent US dominance is something numerous embattled nations have looked to pounce on. Other countries who hold national digital currencies include Iran- a country ravaged by US sanctions and Venezuala- a similarly hit nation. Other US adversaries that have begun research into their own CBDC include Cuba, North Korea, and Palestine.
Clearly, the race is on between the various competing nations to launch their own digital currencies and make a new economic framework. Who will lead the charge remains to be seen, but the answer could have major consequences for the future.
Private keys are made of numbers and letters, they are used to uniquely identify users which will allow them to perform secure transactions.
A cryptocurrency private key uniquely identifies, authenticates, and grants you access to your account, enabling you to spend or send the cryptocurrencies in your wallet. This means that you will lose your assets if you lose your private key. Fortunately, there are methods to help store your private keys as will be seen later.
Private Key vs Public Key- What’s the difference?
Private keys are NOT public keys. A public key or address allows other users to identify you and your account during a transaction.
By way of analogy, a public key is like a bank account number which others can know and they require it to transact with you. On the other hand, the private key is your PIN code which you need to access your bank account at the ATM. Only you should know that secret PIN code as anyone who knows it can withdraw funds from your account.
To learn more about how this technology came about, check out my interview with one of the pioneers of public-key cryptography-Whitfield Diffie.
Father of cryptography: Whitfield Diffie
How are private keys generated?
The platform first generates a private key using random mathematical sequences. From there, the public key is generated.
How do you access your cryptocurrency using a private key?
There are 2 ways to access your cryptocurrency once you have a cryptocurrency account and a private key:
Vsit a reliable Digital Ledger Technology (DLT) website using your internet browser and log onto your account using your private key. The site will confirm that the account matches the private key and allow you to view and perform transactions online. However this method of directly logging in through a browser is inconvenient as you must input all the alphanumeric characters of your private key every time you wish to transact; or
Use a cryptocurrency wallet. With this wallet, all your private keys will be stored and accessed with a simpler to master authentication phrase. The wallet will provide the private key when you make a transaction. There are several kinds of wallets which store your private and public keys, e.g.
Speaking of wallets, you’ll also hear people mentioning “hot wallets” and “cold wallets”. It may sound confusing at first, but it simply refers to whether they are connected to the internet or not. Hot wallets are connected to the internet, whilst cold wallets are not.
What is a seed phrase / recovery phrase? What does it have to do with your private key?
In our wallet setup tutorial videos you there will be a step where you need to write down and keep in safe custody a string of words. This is known as your seed phrase. The seed phrase is generally 12 or more English words which is used to encrypt your private key into an easier to understand format (i.e. instead of a string of letters and numbers). Therefore, anyone who has access to your seed phrase has access to your private key.
How can I keep my seed phrase safe?
Your seed phrase (or recovery phrase) is essentially your private key, but encrypted in an easier to understand format. Therefore it is crucial to keep it safe from hackers and thieves. Here’s some tips and tricks which you could consider to keep them safe.
Recording your seed phrase:
Write down your private keys using pens with permanent ink and paper that would not smudge or cause ink to fade over time (e.g. paper which receipts are usually printed on).
Laminating the paper which your seed phrase is recorded on to avoid water damage.
Avoid the cards provided to you by the wallet manufacturers to write down your seed phrase i.e. do not use the recovery cards provided by say Ledger to record your Ledger seed phrase. This is to try and make it that much more difficult for thieves to piece the puzzle together.
There may be debate on this, but some have suggested to have more than 1 copy of the seed phrase in case it gets lost.
For those who are worried about using pen and paper. Some companies such as Cryptosteel which sells devices with metal tiles for you to record your recovery seed on.
Some have even come up with the idea of memorising the entire phrase themselves, or having their trusted friends and family to memorise several words each.
Confirming your seed phrase: As a best practice, once you’ve copied down your seed phrase you should confirm the phrase with the following steps. Firstly to send a small amount of cryptocurrency to the public key that is generated, then to delete the account from your device. Finally to import your account to your device again. If you see the same amount of cryptocurrency in your device, then the seed phrase correctly corresponds to your account.
Storing your seed phrase: if you have several copies of your seed phrase, you can store it in several discrete locations which are ideally safe from the elements and not obvious to find. Another best practice is also to keep your seed phrase in a separate location from your hardware wallet.
Your seed/ recovery phrase gives you access to your private keys
What happens if you lose your private key?
If you lose your private key, you will not be able to access any funds in your account. Because of the secure nature and random mathematical sequences used to generate the private key, nobody will be able to recover your private key and consequently the cryptocurrencies.
It is therefore advisable that you keep your private key very safely.
Using a cryptocurrency hardware wallet can prevent loss of your private key.
When setting up the wallet and syncing with the accounts, users must set an 18 to 24-word recovery phrase. This recovery phrase is then used to restore your device and consequently your private key.
Cryptocurrency private keys and cybersecurity
Anyone that has access to your private key can access your funds. This is the same for the recovery phrase.
Therefore, be careful not to reveal your private key to anyone. You should also be careful not to inadvertently give thieves access to your funds by saving your recovery phrase online or taking photos of it.
To prevent theft, one option that some people use is to save the private key offline on a paper wallet.
Some people print out their private keys on a piece of paper and keep it safe. This is known as a “paper wallet”
Conclusion
A cryptocurrency private key is a unique identifier that distinguishes your cryptocurrency account from others. It generates the public key that your trading partners will use to transact with you, and allows you to log in and transact with them.
Therefore you should ensure your seed phrase/ recovery phrase and thus your private keys remain safe.
Updated 30th March 2020: Added 2 new sections “What is a seed phrase / recovery phrase? What does it have to do with your private key?” and “How can I keep my seed phrase safe?”
Why does Bitcoin always “pump” in short periods of time? Can we benefit on this type of price action. Are OTC Bitcoin trading volume flows responsible for this type of price action and how do we learn about Over-the-Counter trading.
In this article, we’ll tackle one of the greatest mysteries in the Bitcoin and cryptocurrency investing space – namely why does Bitcoin prices have drastic price movements in short bursts of time. This type of movement is almost commonplace in Cryptocurrency investing, for example just today Bitcoin prices moved from $8150 to $8450, then to $8800 in the space of 4 hours, with two big green candles leading the charge. What’s also surprising is that there is no fundamental reason to cause these movements – they are not triggered by a single world or political event. In this article we’ll look at the must possible reason behind what’s happening.
Let’s get one thing out of the way – sudden Bitcoin pumps are not executed by a large group of people with small amounts of money. If this was the case, this group of people would have to be well organised, and information about such pumps are bound to leak out. We would know well in advance of the event happening. It would be common knowledge – especially considering how fast information spreads.
This leads to the next conclusion – Bitcoin pumps are executed by small groups of people with access to the OTC market. We already know the world has high wealth concentration – 1% of the world has 99% of the wealth. The 1% can easily transact enough fiat to cause these sudden shifts in the price intentionally or otherwise.
This theory is validated by reports of strong OTC volume flow in the past few weeks. This is across all trading desks around the world, especially with strong volume coming out of China and Southeast Asia. Recently reports have surfaced that OTC desks such as Genesis Block are expanding and opening new offices in Thailand to deal with the extra volume.
Carry Protocol is a blockchain project that integrates directly interacts with millions of customers who shop and dine in South Korea. Carry creates an ecosystem that directly rewards shoppers, advertisers and retail stores, creating a win-win situation using blockchain technology. The key value behind Carry (CRE) is the integration into the biggest Korean rewards program – Dodo point (with more than 20 Million registered users).
Despite the rise of online retailers such as E-bay and Amazon, a great deal of commerce still occurs offline in brick and mortar stores. This traditional offline market is worth about US$25 trillion and comprises of 90% of all retail spending. This creates a lot of transactional data which includes valuable information on how and what we spend our money on.
Carry CEO Richard CEO demonstrates the Carry App
Carry Protocol uses blockchain technology to harness the utility of this transactional data. The network will give merchants better advertising tools and also enable consumers to control their data.
How does Carry create a win-win situation?
How Carry works from a consumers’ perspective
Merchants
Consumers can choose to pay in cash, credit or cryptocurrency
Merchants will be able to also accept digital currencies such as Bitcoin, Ethereum or Carry in their brick and mortar stores.
Carry will also enable merchants to reward their customers with digital tokens and custom Branded Tokens (BT). These BT will act as loyalty points.
Consumers
Consumers will be rewarded for sharing their transactional data
Carry will finally allow consumers to own and monetise their transactional data.
Most importantly, Carry will allow consumers to do this anonymously. Carry ensures consumers’ data remains anonymous by associating it with one or more wallet addresses rather than consumers’ names. Consumers can also choose to withhold selling their data to advertisers.
And of course, consumers will enjoy the benefits of the CRE tokens and BT.
Advertisers
Advertisers can utilise the data which consumers choose to share
They will be able to make use of the transactional data provided anonymously by consumers.
Advertisements will be sent to consumers’ phones about various merchants and their offers, which can attract consumers to them.
How does the Carry token (CRE) work?
CRE (pronounced “carry”) is the main token in the Carry system and features a huge part in the ecosystem.
Merchants use CRE to access Carry’s host of services. For example creating custom BT or programmable smart contracts. The merchants stake a certain number of CRE tokens on the Carry Protocol which will determine how many BT transactions they can have.
Consumers use CRE as payment for goods and services. The CRE spent will also be converted to loyalty points in the form of BT, which consumers can use in subsequent visits.
Advertisers will distribute CRE to consumers as compensation for accessing their transactional data.
What’s the status of Carry?
Carry will be operated by the co-founders of Spoqa. Spoqa is South Korea’s largest brick and mortar rewards platform with customer-facing tablets in 10,000 stores across Korea. Customers use this platform with their Dodo Point loyalty service.
Carry will utilise the system of consoles by Spoga.
Carry will utilise this existing infrastructure by launching its service on Spoga’s tablets. A simple update on the tablet is all that’s required.
In terms of partnerships, Spoqa itself already has $10 million in funding and has expanded into Japan. Meanwhile, Carry already has support from Hashed (the early angel investors in ICON).
Carry hopes to eventually expand out of their base in Asia to the rest of the world.
The Company has also recently announced its partnership with Genesis Block, an Asia-wide Over The Counter (OTC) trading desk and cryptocurrency ATM machine provider.
Carry x Genesis Block
CRE will be tradable at Genesis Block’s OTC desks.
Click here to learn more about OTC desks. You can also check out our video with Genesis Block’s Head Trader- Charles where we make him spill all his trading secrets.
Binance Competition
Carry Protocol has been selected to be in a voting competition on Binance – if successful CRE will be listed on Binance Exchange.
Conclusion
As much as we increasingly spend our times online, we cannot escape the offline world. We still want to travel to different places, visit shops and go out for meals with our friends.
Carry will be a welcome change to the increasingly relentless and intrusive world of online targeted advertising. Consumers will be able to choose to share their data to advertisers. Most importantly, we will receive actual incentives for doing so.
The low cost associated with Carry will also help a lot of small businesses gain exposure. This will enable them to survive in this aggressive market dominated by corporations who may simply only have better resources but not necessarily a better product.
ThunderCore (TT) is a high-performance smart contract platform which allows for the running of decentralized applications (Dapps) and Decentralized Finance (DeFi). Thundercore promises low fees and compatibility with any app written for the popular Ethereum Platform. The underlying currency on Thundercore Network is TT, which is used as a transfer of value and for related gas fees on the platform.
Thundercore attempts to Solve Scalability, allowing For Under One Second Confirmations. In the last couple of years, many blockchain projects have been working on scaling and improving network speeds. Until recently, it seemed nearly impossible to scale blockchains with big projects like Ethereum failing to do so. ThunderCore seems to have cracked it and may be on track to beating giants like Ethereum in scaling their platform.
What is the aim of ThunderCore?
ThunderCore aims to be a high-performance blockchain that enables mass adoption of dApps. It promises comparatively lesser transaction fees (low gas cost), compatibility, security and speed.
Currently, transactions on the blockchain are very slow. This is because of the “Blockchain Trilemma” a term coined by Vitalik Buterin, the founder of Ethereum.
Solving the Blockchain Trilemma
Vitalik Buterin proposed that a Blockchain can only have a maximum of 2 of these properties
According to the “Blockchain Trilemma“, a blockchain has three major features: decentralization, scalability and security.
However, the blockchain trilemma proposes that it is very hard for a project to have all three features to a satisfactory condition. A network that is decentralized and has a tough security would not be scalable. Similarly, a blockchain that is decentralized and scalable will have little security etc.
Buterin believes at a fundamental level, a blockchain network can only achieve two of the three features at any time. The blockchain trilemma could be the source of scalability issues on most cryptocurrency blockchains. Most crypto projects cannot handle high numbers of transactions while ensuring network decentralization and security.
However, ThunderCore has found a solution for this problem.
How does ThunderCore solve the Blockchain Trilemma?
Many projects have tried and failed to continue their emphasis on decentralization and security while incorporating scalability. ThunderCore, however attempts to do this in a unique way. They do this by creating a Fast Path and a Slow Path. The Fast Path is for optimistic conditions. Whilst the Slow Path is for worst-case situations.
What is the Fast Path and the Slow Path?
The Fast Path is like a highway, allowing for instant confirmations on the network. However, if anything goes wrong on the Fast Path, ThunderCore users can resort to a Slow Path. The Slow Path is similar to a network of smaller roads. It isn’t very fast, but it will be reliable.
For the Fast Path, ThunderCore facilitates fast and easy confirmation by 2 ways. The “Committee”, which is executed by a committee of stakeholders. And the “Accelerator” to linearize transactions and data.
ThunderCore uses Ethereum as the Slow Path as it is one of the most stable networks in the industry. The slow path will take over when the network condition is bad and /or if there is an attack. It also acts as a check to see if the Accelerator is working.
How to Stake Thundercore?
Thundercore cannot be mined as a way to generate new TT or gain passive income, hence there is no thundercore mining. Instead to passively generate Thundercore, TT is staked by locking up TT in a particular wallet. The amount of rewards depends on the lockup duration, which can be 7 days, 30 days, 3 months, 6 months or 1 year. Staking Thundercore is easy, you can do this using the mobile wallet and joining a staking pool.
Thundercore Staking Rewards over time
What is the ThunderCore (TT) used for?
The ThunderCore (also known was ThunderToken or TT) is the native cryptocurrency of the ThunderCore network. Analogous to ETH on the Ethereum network, ThunderToken is used for paying gas fees and value transfers.
The team comprises of engineers, scientists and entrepreneurs. They previously worked in publishing academic papers relating to Bitcoin and smart contracts. They are also the founding members of the Initiative for Cryptocurrency and Contracts (IC3).
The first Thunder release will be fully EVM (Ethereum Virtual Machine) compatible. Thus, allowing for direct migration of dApps.
ThunderCore has already deployed its pre-release main-net. Therefore, developers can already start building on ThunderCore. Users can also start deploying smart contracts.
How do I connect to the ThunderCore Mainnet?
You can directly connect to Thundercore by changing the RPC settings on Metamask or changing the server on MyEtherWallet.
Get ThunderToken (TT): You can get tokens from the Metamask browser extension. Click on the drop down menu and select “custom RPC”. Go to “new network section” and select “advanced option”.
The TT symbol will appear on your Metamask. You can get 50 free tokens on the ThunderCore website by copying and pasting your Metamask TT address onto the appropriate field. You can also use this process to purchase tokens;
ThunderCore is compatible with the Ethereum network;
The network has a faster transaction speed compared to Ethereum;
ERC20 smart contracts can be deployed on this network;
The team are working on new features that would allow dApp interaction without gas;
ThunderCore allows users and developers to utilize existing tools such as Metamask and Truffle etc.; and
Developers can use familiar programming languages (e.g. Solidity) while carrying out smart contracts on the network.
Cons
There is currently only one “Accelerator” on this network. This raises questions over how much power will be centralized. (Note the accelerator cannot freeze accounts or pause transactions indefinitely as this would lead to a re-election)
Huobi has released the Token metrics of ThunderToken (TT):
Total Raised: $50M USD Angel round: $0.01 USD/token (2 years lock- till March 2020) Seed round: $0.02 USD/token (1 year lock – till Apr-May 2019) Final round: $0.10 USD/token(20% released on Feb 28, 40% to be released on May 28, 40% on Aug 28) Huobi Lite round: $0.015 USD/token, only $500,000 USD worth of tokens sold
What we can deduce from this is that ThunderCore valuation dropped from the final Private sale time – from $0.1 to $0.15. Admittedly, the Huobi Lite tokens could also be considered to be sold at a discount to encourage more players to get in. There is controversy over the Huobi Lite sale of TT, as the token price was much lower than the Final Round – upsetting a lot of the initial investors and supporters (such as ThunderFans).
ThunderCore Hub (Games and Thundercore Giveaways)
ThunderCore Hub is a wallet and Dapp hub for mobile phones
Currently ThunderCore Hub is doing a 150 TT giveaway to test out their new Android app. To quality, visit the ThunderCore Hub website and install the beta APK, register for an account and play dApp games to get the free TT.
Conclusion
ThunderCore is different because it scales both transactions and smart contracts. This could mean that blockchains can have thousands of transactions per second without compromising on security and decentralization.
Update (May 1 2019): Mainnet RCP address and Team members & Linkedin Profiles Update (May 10 2019): Added listing information on Huobi Update (May 14 2019): Added ThunderCore Hub and TT Giveaway
Binance Token (BNB) is a cryptocurrency created by cryptocurrency exchange Binance. It’s main function is as a form of value transfer on Binance Chain, trading pair on Binance DEX and as a utility token on Binance exchange.
Learn more about BNB and Binance as well with our video- What is Binance (BNB) in a nutshell.
What is Binance Coin (BNB)?
History
BNB was launched through an Initial Coin Offering (ICO) on 14th July 2017 as an ERC-20 token before the Exchange was launched.
A total of 15 Million USD dollars were raised during the event.
Investors were compensated with BNB tokens during the ICO. At the time, each token was exchanging hands at US$0.10. The token’s price has since tremendously appreciated and is now one of the top 10 cryptocurrencies with the highest market capitalisation according to CoinMarketCap.
The token initially ran on the Ethereum network but was later swapped 1:1 with BEP2 BNB tokens. This is so the tokens can instead run on their own Binance Chain.
Uses for BNB on Binance Exchange
BNB has several functions on Binance
1. Exchange Fees: Binance tokens can be used to reduce trading fees. Currently, Binance has a 0.1% trade fee and 50% of this fee can be paid in BNB. You are eligible for a 25% discount when paying for trading fees using the token.
2. GAS: Binance will eventually feature advanced features that require GAS. The tokens can be used as GAS to power these advanced features.
3. Binance Launchpad: BNB is used to participating in the Binance Launchpad. This is an Initial Exchange Offering platform where cryptocurrency projects will publicly issue tokens on the exchange to participants.
4. Binance DEX: The Binance DEX (Decentralised Exchange) runs on the Exchange’s Binance Chain.
5. Staking: Binance eventually wants to develop a decentralised exchange. The tokens will be used on the Exchange to stake transactions.
1. Paying for goods and services: The token can also be used to pay for goods and services at different establishments. For instance, Binance invested in TravelbyBit to enable users to pay for services at entire Brisbane Airport. TravelbyBit is an Australian startup that enables establishments to accept cryptocurrencies for goods or services. (https://woodlees.com) Currently, the startup has over 150 establishments.
2. Accessing loans and cash: Holders of the Binance exchange token can withdraw cash from crypto ATMs. Additionally, they can access loans on the Nexo platform.
3. Accessing services on social media platforms: For example, it can act as a gift token on Uplive, a live streaming platform.
4. Trading and holding: The token can be traded just as a normal altcoin. Additionally, some people hold and speculate on the token in the hopes of profiting when the price appreciates.
Stellar is a platform that connects banks, payments systems, and people. Lauched in 2014, Stellar uses blockchain technology to allow for quick currency exchange and money transfer. Stellar was originally based on Ripple Lab’s protocol, but due to key philosophical differences Stellar eventually rewrote the code entirely. It is built on a semi-decentralized consensus platform and is designed to support any type of currency such as the US dollar, RMB or Yen. Stellar platform’s native currency is the Stellar Lumens (XLM).
Uses Stellar Consensus Protocol (SCP) rather than Proof of Work
Simple, clean API
Multisig and smart contracts
Decentralized distributed database
1% fixed annual inflation
How fast is Stellar?
Stellar XLM Logo
The Stellar network can confirm transactions within 3-5 seconds with a transaction cost of less than $0.00001. This makes the network ideal for mass consumer adoption and cross border transactions. The network itself can support more than 1000+ transactions per second.
How Does Stellar Lumens work?
Decentralized network
A decentralized network consists of peers that can run independently of each other. This means that the Stellar network does not depend on any single entity. The idea is to have as many independent servers participate in the Stellar network as possible, so that the network will still run successfully even if some servers fail.
Ledger
Like a traditional ledger, the Stellar ledger records a list of all the balances and transactions belonging to every single account on the network. A complete copy of the global Stellar ledger is hosted on each server that runs the Stellar software. Any entity can run a Stellar server.
These servers form a decentralized Stellar network, allowing the ledger to be distributed as widely as possible. The servers sync and validate the ledger by a mechanism known as consensus.
Consensus
Stellar uses the Stellar Consensus Protocol (SCP) rather than Proof of Work. The Stellar Consensus Protocol (SCP) is a protocol that achieves optimal safety against ill-behaved participants. Basically, it aims to be more secure and offer better protection against malicious parties.
The Stellar servers communicate and sync with each other to ensure that transactions are valid and get applied successfully to the global ledger.
For example, if you want to send $5 to a friend on the network, a list of trusted servers will begin a process to agree on the validity of your $5 payment to your friend. The majority of these servers will have to agree that you do in fact own $5 worth of credit on the network before they will mark the transaction as valid.
This entire process of coming to consensus on the Stellar network occurs approximately every 2-5 seconds.
Anchors, trust, and credit
Anchors are simply entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. They act as a bridge between different currencies and the Stellar network. All money transactions in the Stellar network (except the native digital currency of lumens) occur in the form of credit issued by anchors.
Anchors do two simple things:
They take your deposit and issue the corresponding credit to your account address on the Stellar ledger. You can make a withdrawal by bringing them credit they issued.
You have to trust the anchor to honor your deposits and withdrawals of credit it has issued.
Anchors exist in the pre-stellar world now. For example, to use Paypal, you deposit money in from your bank account. Paypal then gives you credit in your Paypal account. You can now send that Paypal credit to anyone that trusts Paypal (anyone with a Paypal account). Someone that received your Paypal credit can convert it to real money using Paypal by withdrawing it to the bank.
Anchors perform the same function in Stellar. The difference is, all the “Paypals” and other anchors are operating on the same network so they can all transact with each other now – this makes the system way more powerful. People can now easily send and exchange all these different anchor credits with each other.
Distributed Exchange
The Stellar ledger is able to store offers that people have made to buy or sell currencies. Offers are public commitments to exchange one type of credit for another at a pre-determined rate. The ledger becomes a global marketplace for offers.
All these offers form what is called an orderbook. There is an orderbook for each currency/issuer pair. So if you are wanting to exchange Virgin Bank/EUR for bitstamp/BTC you look at that particular order book in the ledger to see what people are buying and selling it for.
This allows people to not only buy and sell currencies in a foreign exchange like manner but also to convert currencies seamlessly during transactions.
Stellar Lumens Partnerships
Stellar key aim is to help to poor and the unbanked. In 2017, IBM announced a partnership with Stellar protocol to develop a cross-border blockchain-based payment system for large banks. This would greatly improve the efficiency of cross border transactions, especially for countries in Southeast Asia where remittance costs matter and many domestic helpers cannot afford to send money back home. Currently the program works with 47 currencies and in 72 countries.
Stellar Lumens (XLM) Currency
Lumens is the name given to the token of the Stellar network. They were originally called stellars back when the Stellar network launched in 2014, but with the launch of the upgraded network in 2015, the name of the token changed from stellar to lumen.
The Stellar network’s built-in currency, the lumen, serves two purposes:
Acts as a small anti-spam role
Each transaction has a minor fee—0.00001 lumens—associated with it. This fee prevents users with malicious intentions from flooding the network (otherwise known as a DoS attack). Lumens work as a security token, mitigating DoS attacks that attempt to generate large numbers of transactions or consume large amounts of space in the ledger.
Similarly, the Stellar network requires all accounts to hold a minimum balance of 20 lumens. This requirement ensures that accounts are authentic, which helps the network maintain a seamless flow of transactions.
May facilitate multi-currency transactions
XLM sometimes facilitate trades between pairs of currencies between which there is not a large direct market, acting as a bridge. This function is possible when there is a liquid market between the lumen and each currency involved.
Stellar Lumen token metrics
At the genesis of the Stellar Network, 100 billion lumens (XLM) were created as specified in the protocol. As part of its custodial mandate, the Stellar Development Foundation (SDF) is entrusted to oversee that the vast majority, 95 billion, of the lumens are distributed to the world.
50% to be given in small increments to as many people as possible.
25% to be given to other businesses and non-profits to reach people that stellar.org wouldn’t otherwise be able to reach through the Direct Signup program.
20% to be given to bitcoin and XRP holders
5% to be retained by Stellar.org for operations.
The Stellar network has a built-in, fixed inflation mechanism. New lumens are added to the network at the rate of 1% each year. The network also collects a base fee for each operation in a transaction. The funds from base fees are added to the inflation pool.
As a balancing measure for the ecosystem, anyone who holds lumens can vote on where the funds in this pool go. Each week, the protocol distributes these lumens to any account that gets over .05% of the votes from other accounts on the network.
How to mine Stellar (XLM)
One question that is frequently asked is how to mine Stellar (XLM). Stellar cannot be mined in a process similar to Bitcoin because it doesn’t use Proof-of-Work. Instead Stellar relies on re-established nodes that confirm transactions via a voting system. Block rewards are given to Stellar Nodes at a 1% inflation rate per year. You can buy or sell Stellar (XLM) on the Binance Exchange.
Ripple – Ripple Transaction Protocol is a real-time settlement system designed to be used by banks for currency exchange, remittance and gross settlement. The idea is to replace age old systems like SWIFT – which was developed in 1972 and used by most banks today. The Ripple protocol offers significant advantages in both speed of transfer and transfer tracking. Ripple uses distributed ledger technology, similar to Bitcoin. When compared with Bitcoin, it is faster and cheaper to send on the ripple network. However, there is one significant trade-off which is its lack of decentralization. The Ripple network is closed off and cannot be joined by any user – meaning there is a significant amount of centralization.
xCurrent Settlement between banks
XRP – The cryptocurrency XRP is commonly confused with the Ripple Protocol (also named Ripple) issued Ripple Labs. The XRP is an issued token that uses the Ripple network – it can be sent extremely quickly and with low fees. However, it should be noted that the XRP is not required for the network to work nor is it required for banks to use it if they choose to adopt Ripple. In fact, the xCurrent communication between banks do not use XRP.
Ripple Currency (XRP) vs the Ripple Protocol
So lets start off with one confusing factors. So I must make a distinction between Ripple the transaction protocol (which is used between banks and other businesses) and the ripple issued currency, XRP. When you see Ripple making gains its actually the XRP, the currency that is issued by Ripple. And this is actually quite different from the network protocol or Ripple protocol. Both share the same name and I’m sure this has definitely confused a lot of investors.
https://youtu.be/Y1GshH0F9Ic
Ripple Protocol
So lets start off with the transaction network known as Ripple. So the Ripple protocol is based on technology that’s similar to blockchain but not completely the same. It doesn’t require any mining and its based on a consensus network instead of being consumer-facing which is what Bitcoin is. Basically, it’s for the everyday person.
Ripple is exclusively used by big institutions such as banks. The whole idea of Ripple is to allow banks to transfer any sort of asset, be it currency, USD, Euro, gold, or any other asset such as airmiles. You can transfer that between other institutions near instantaneously. This rivals systems such as swift. So if you ever bought Bitcoin with bank transfer you will know how painful that is. You have to contact your bank and send the transaction to a swift bank code account and this might take up to two to three days and theres a lot of transaction fees involved for both the sender and the receiver. Ripple is set to revolutionise this by providing near instantaneous, sub-second transactions for institutions such as banks. It’s already been adopted by quite a few big banks and
XRP – Currency of the Ripple Network (xRapid)
So now that I explained what is the Ripple transaction protocol, let’s move on to Ripple XRP. XRP is actually issued by Ripple Labs and is a form of cryptocurrency that can be traded and it’s not “mined”. So there is a finite number of ripples and that amount is actually issued by the company behind Ripple called Ripple Labs.
XRP by itself has no underlying related assets or values eg. Its not tied to USD or gold. Rather, it can be used to act as an intermediate currency in institutions. It has one huge advantage in that transaction costs are very, very low (unlike Bitcoin, which is now reaching 1.5 usd in transaction fees).
xCurrent doesn’t use XRP
Ripple Labs have developed two different technologies aimed at solving the transfer of value between nations. Xcurrent is an enterprise technology aimed at banks that allow instantaneous transfer of value. This technology does not use the XRP currency, rather it is ledger for value transfer in the currency of the bank’s choosing.
Is the XRP Centralized
XRP transactions can be confirmed very quickly because of the small number of validator nodes on the network. The XRP network is not open consensus, so only a small number of validators (~30 validators) need to communicate a transaction before it is considered “confirmed”. Proponents of XRP praise it for sub 1 second confirmation times whilst opponents point to the centralized architecture and lack of censorship-resistance. XRP transactions can be reversed and accounts can be frozen – similar to how traditional bank accounts my be frozen.
Concerns about Ripple
So moving on, XRP is currently only issued out at less than 40% of its total. The remaining amount (minus the 20% retained by the creators of Ripple) is held by Ripple Labs to distribute whenever and however they so wish. This is actually kind of interesting because unlike a lot of decentralized currencies, Ripple Labs plays a huge part in distributing XRP. Ripple Labs is actually a company and this is very different from Bitcoin, where Bitcoin is fully decentralized and doesn’t have a central controlling authority. Ripple Labs is registered in many countries and it could be sued and held under police custody. This is again very different from other technologies.
So that’s a little information regarding the Ripple protocol and XRP. I’m sure this may be a little bit confusing for some people and since the technology and the currency share the same name it could be misunderstood. I hope this clarifies a little for you about what Ripple protocol is and what XRP is.
In this article we give you the top 10 best ways to keep your cryptocurrencies safe.
Cryptocurrency and Bitcoin is an exciting emerging field bringing new ways of understanding technology and value. The rewards from investing in cryptocurrencies can also be huge. Therefore, hackers and thieves are constantly stepping up their game. And when theft from a remote location is possible and tracking hackers are almost impossible, it is very easy to lose everything. Therefore, you have to always take vigilance in your hands.
1. Understanding ownership of cryptocurrencies
Ownership of cryptocurrencies is via holding a Private Key. Anyone with this Private Key is able to withdraw your cryptocurrencies, similar to someone knowing your PIN code for your bank account.
With banks, if someone makes an unauthorised withdrawal from your bank account, you always can request your bank to reverse the transaction. This is not possible with cryptocurrency transactions which cannot cannot be cancelled or reversed.
This makes it all the more important to keep your Private Key to yourself.
Notably, many cryptocurrency holders store their cryptoassets on exchanges for trading. Some may also use online wallets for convenient storage and use. In these cases, the exchanges and wallets hold the Private Keys to your cryptocurrencies. Therefore, storing cryptocurrencies on exchanges and online wallets is essentially putting the security of your assets in the hands of third parties. Clearly, this is not something you would want to do.
2. Be wary of phishing scams
Phishing is malicious activity that involves deceptive emails or websites to solicit a user’s personal details. For example a phishing email disguised as a cryptocurrency exchange can direct you to a fake website and ask you to enter your login and password information.
One way to protect yourself is obviously be wary of any emails asking for your login information or requesting you to login onto their website. Especially if you have not done anything that may trigger this e.g. requested to reset your password.
As a good practice, you should also always check website security certificates on your email and any cryptocurrency exchanges you visit. But do note this is not 100% accurate.
3. Protect Your PC or phone against malware
Hackers can find ways to access your desktop wallet remotely using specialized malware. Therefore, always make sure your trading computer does not have any unknown programs.
Antivirus programs can add an extra layer of protection.
Some people may have phones or computers which they only use for trading or transacting with cryptocurrencies.
4. Avoid using public Wi-Fi networks
An additional measure to protect your computer is to avoid public Wi-Fi networks and especially accessing your cryptocurrency wallets or trading in public. These can be an avenue for foreign infiltration and theft of your cryptocurrencies.
5. Use a hardware wallet
Hardware wallets
Hardware wallets are external offline devices you can use to store your private keys and thus your cryptocurrencies. As they are offline, your cryptocurrencies will be protected against malware or viruses.
They do cost money but it is worthwhile for the sake of the security of your cryptoassets.
Examples of hardware wallets include the Ledger Nano X and the Trezor Model T. You can check out our Ledger Nano X review, or our Trezor Model T review for more information.
6. Use a paper wallet (for those who are extra careful)
Paper wallet example
Paper wallets are simply a piece of paper with your private and public keys printed on it. This paper wallet is kept in a safe location. For example, some people may store it in security deposit boxes or in a secure location at home.
This is the safest way of keeping your cryptocurrencies safe, despite being the most rudimentary.
7. Enable two-factor authentication (2FA)
Google authenticator
Two-factor authentication is when you enter 2 separate passwords to log in or to approve any withdrawals. The preferred methods are either by SMS or using Google Authenticator.
SMS authentication is where in addition to entering your username and password, you also request an SMS be sent to you with a unique code to log in.
However this method has been known to be vulnerable to SIM swap attacks. This is where hackers impersonate you to your telephone service provider and request a new SIM card. Therefore the requests for a SMS code will be sent directly to them.
The preferred method for two-factor authentication is using Google Authenticator. This is where a unique string of 6 numbers are generated every 30 seconds. When logging in, you go to the Google Authenticator app and log in with the generated numbers before they expire.
Most cryptocurrency traders enable two-factor authentication for any cryptocurrency exchanges they use, their online wallets (if any) and their email. The latter is because many cryptocurrency exchanges will send you a confirmation email to approve any withdrawals.
8. If it’s too good to be true, it probably is
The most common method for scammers to entice people is to feed upon people’s greed. Many scammers have websites or “exclusive” chat groups promising unreasonably high returns. These groups may require you to pay a membership fee to participate or to give them some of your cryptocurrencies so they can invest on your behalf.
As mentioned earlier, cryptocurrency transactions are irreversible. So you are left with no recourse if you later change your mind. These scammers may also operate in different jurisdictions so you have very little chance of tracking or taking any legal action against them if their promises do not materialise.
9. Keeping your information private
How NOT to maintain your privacy
Telling people how you store your cryptocurrencies or flaunting your wealth is the same as painting a target on your back. Whilst it is certainly wrong for hackers or scammers to steal from you, you do not want to expose yourself as a target.
As mentioned before hackers can operate remotely. Therefore, taking a photograph of your private keys, login information or hardware wallet recovery phrase is essentially the same as posting a photograph of your credit card details online.
Similarly, when setting up any cryptocurrency wallets or exchanges, or accessing or transacting with your cryptocurrencies, make sure you are in a safe location without any cameras around.
10. Test send is your friend
Cryptocurrency transactions are irreversible, so you need to be extra careful in making sure you are sending to the correct address. Here are 2 common pitfalls you will want to watch out for.
The first pitfall is sending your cryptocurrency to an incompatible wallet. For example, you cannot send Ethereum to a Bitcoin address. Another example is for some exchanges like Binance, they have recently switched from Omni to ERC-20 for their Tether (USDT) address. So even if you are sending the same currency i.e. USDT, you need to make sure the address type is the same.
The second pitfall is sending to the wrong address generally. Cryptocurrency addresses are long strings of digits which are case sensitive. So you should check every digit of the address before you press “send”.
For extra security, some people may also request the recipient to send a voice message dictating the first and last few digits of the wallet address. This is to avoid hackers who have taken over either party’s devices and sent out their own wallet address instead of the recipient’s.
Therefore to minimise losses, especially when sending large sums of cryptocurrencies, consider doing a test send with a small amount before sending the remainder of your coins.
Conclusion
Cryptocurrencies bring a shift in the way we hold and transact assets of substantial value. The power of being in full control of your digital assets undoubtedly comes with the duty to ensure their security. With cryptocurrencies, this duty falls squarely on the user. It may seem intimidating, but anyone can store, send and trade cryptocurrencies when armed with knowledge and exercise caution.
With our top 10 best ways to keep your cryptocurrencies safe, you can be sure to navigate this space with confidence.
Further reading
Now that we’ve looked at the top 10 ways to keep your cryptocurrencies safe, we move on to cryptocurrency exchangees. Cryptocurrency exchanges are an inevitable aspect of being involved in the cryptocurrency space when we want to exchange between different types of coins. So be sure to check out our ranking of the top best cryptocurrency exchanges of 2019 here.
The Harmony (ONE) protocol takes on the challenge of scaling blockchain without sacrificing decentralization. This has been the holy grail of challenges because solving scaling usually involves sacrificing decentralization – however Harmony maintains an open-consensus where anyone can join. This is achieved by:
Proof-of Stake – Harmony holders can participate in network consensus and improve network security
Deep Sharding – network is split into different teams or “shards” that work together and increase transaction efficiency
Network Optimized – Network communications are split into small fragments and shared (Kademlia routing)
Harmony protocol has a sharding-based, fully scalable, secure and efficient blockchain. This means that the consensus mechanism can provide the blockchain solution necessary for the future of DApps. Even though Proof of Work networks were initially highly decentralized this element can be diluted with high usage. As such, the consensus mechanism for Harmony ensures it is still decentralized and permission-less. These are critical parts of future relevance and sustainability.
Check out the Boxmining interview with the Co-Founder of Harmony Protocol, Nick White for an introduction to the project.
Interview with Co-Founder Nick White
The
Competitive Scalability Field
Providing scalability is a noble endeavor and unsurprisingly, Harmony will not be first to do it. This is because the field already features an array of running projects that also aim to provide the same solution. These rival projects include: EOS, Zilliqa, Algorand, and others. Harmony distinguishes itself by having a solid proof-of-stake system with state sharding. State sharding splits the network into teams that work together. This allows the network to grow faster as more nodes are added (rather than stay stagnant). Chains and transactions are co-ordinated by a beacon chain.
“Neither of the projects mentioned above has a blockchain which will be performant, scalable, and as low cost as the Harmony blockchain will be.”
Nick White, Co-founder of Harmony
Co-founder Nick White touts the fact that Harmony has advantages over and above typical scalability projects. These are in the form of improved user experience, reduction of costs and the ability to support larger user bases for the decentralized app community. This will in turn draw more developers and projects to be a part of the Harmony project community.
Harmony Protocol Consensus
Needless to say,
the target audience is not only limited to DApps developers but also
established companies with greater user bases who wish to integrate blockchain
technology into their products. White contends that such apps have had the
problem of slow and existing networks. Harmony, on the other hand, makes their
operations possible by efficient and affordable solutions.
The
Challenge of Attracting New Nodes
Attracting new nodes to the network is definitely an issue for the network. To this matter, their Co-Founder and CEO, Stephen Tse stated as follows:
“Harmony is building a robust ecosystem and we
are in talks with every major staking as a service company to bring them on
board and help grow Harmony’s validator ecosystem.”
As such, the project has a proposal to lower the barrier for those who wish to participate in the network. This is in the form of lower resource requirements (specfically, 4GB) for new entrants. In addition, Harmony will write scripts that will make the initial setup simple as well as block rewards for staking. The economic model that underlines that is yet to be clear but stakers have the assurance of rewards for participation.
Binance Partnership
Binance exchange has recently announced the upcoming Harmony Protocol Initial Exchange Offering (IEO). This IEO will take place on 28th May 2019 and aims to raise funds for a project whose operation is a lot like its name. This is because the idea of providing a pertinent demand for cryptosphere, scalability, is something that can draw on collective human collaboration in the innovative platform.
Harmony will be on Binance Launchpad
The Binance IEO has been known to be a boost for its featured projects. This is because of the marketing catalyst as well as investor attraction. As such, Harmony can reach millions more with the Binance partnership. The partnership will also be in line with Harmony’s vision to provide scalability to billions across the world.
White stated that the team has motivation from the global outlook that Binance provides. Blockchain technology has the potential to transform the lives of those both in developed and developing countries. This means that parts of Africa and Latin America, both within the scope of Harmony targets, can also achieve meaningful progress.
With that in mind, the Binance Launchpad will take place on 28th May 2019. Notably, the process will follow the lottery format that is typical of Binance now. The token price is $0.003175 for one Harmony (ONE) token with a hardcap of US$5 million.
Verdict
Harmony Roadmap 2019
In summary Harmony makes a solid stab at tackling blockchain scalablity whilst keeping an open consensus. The highlight of Harmony is the ability to do state sharding rather than simple transactional sharding, allowing more headroom for future scaling without congesting beacon chains.
In Crypto, not all trade volumes are visible – in fact “Darkpools” account for a huge amount of crypto trading and has an enormous impact on cryptocurrency prices. Darkpools include peer-to-peer trading, such as on sites like localbitcoins.com and also Over the Counter (OTC) desks. The reason why it’s unreported is because deals are done privately, for example Peer-to-peer trading can be done in person and with cash, leaving virtually no trace of the transaction ever happening. Large volumes are also traded OTC – this is more organised as private buyers and sellers are matched, with some form of escrow to allow the transaction to take place. OTC desk sometimes even require minimum volumes, like $100,000+ USD to up to 1 Million.
First things first. What’s an Over the Counter (OTC) desk?
Traditionally, OTC desks facilitate trading of securities that are not listed on formal exchanges, e.g. the New York Stock Exchange.
The trading of cryptocurrencies on OTC desks is similar to those in traditional markets.
OTC desks have a network of buyers and sellers. The trades themselves are facilitated by OTC broker-dealer who will locate and negotiate directly with prospective buyers and sellers over computer networks or by phone.
This is contrasted from trading over exchanges where the prices and order books are publicly available. For OTC desks, their broker-dealers will negotiate the trade price for you. Trades are also not publicly listed giving the parties privacy.
Therefore, to fully understand what is going on in the cryptocurrency markets it is important to consider what is also happening at OTC desks. This is because large transactions happen on them on a daily basis.
What does a trader at an OTC desk do?
Traders at OTC desks are the broker-dealers mentioned above. Their role is to locate and match buyers and sellers, and negotiate the best deal for all the parties involved.
Part 1: Crypto trading/ Market Manipulation/ OTC Markets
Therefore, it is important for traders at OTC desks to have a keen eye on the cryptocurrency markets and be knowledgable of the market trends.
I had the opportunity to interview Charles Yang, Head Trader at Genesis Block Hong Kong, an OTC desk. In my interviews we discuss what’s really happening at OTC desks away from the public eye. We also discuss his thoughts on the market sentiment.
Is Tether Safe? Will Bitcoin & Ethereum Recover?
Secrets and Insights from an OTC Trader
Here’s a summary of the key points from the interviews with Charles.
There is still interest in cryptocurrencies
Charles observes there is revived interest in cryptocurrencies despite this bear market.
He notes that a lot of the customers from the OTC desk who were previously dormant have recently contacted them wanting to buy and sell cryptocurrencies.
The risk of Tether is exaggerated
Firstly, what is Tether? Refresh your memory with our Tether Explained guide below:
We’ve seen in recent news that USDT is not fully backed by cash. Instead, Tether is around 75% backed by cash, and the remaining 25% by other securities or loans.
Confused with what’s happening in this Tether scandal? Check out our video below which explains what is happening and the latest legal action surrounding Bitfinex.
Despite this, there is still demand for USDT in Asian countries such as China, where they are buying USDT at a premium.
This is because China bans cryptocurrency exchanges, so retail investors cannot buy cryptocurrencies such as BTC. What they do instead is they first buy USDT through peer to peer merchants, and then enter the cryptocurrency market at a later time when conditions are right.
Right now, Bitfinex who is being accused of “losing” customers funds is more at risk. Bitfinex will have to go bust first before people question USDT.
Charles believes that fundamentally short trading would have less losses because if USDT is at 97% and your prediction is wrong, then your loss would only be 3%. Whereas the opposite would be to bet that it goes to 0.
Mining is still profitable
The recent “official news” in China was that cryptocurrency mining has been banned.
Despite this ban, Bitmain is coming up with new models and generally summer is big for mining because electric costs falls.
There may be miners who start accumulating and building to maximize their margins
Charles notes there is news that big players are scrambling to get cheap damaged mining rigs. They are not the newest models but there are still returns from using them to mine cryptocurrencies.
So despite the official news about China banning mining the word on the street is that people are buying rigs and locking in contracts for the summer months.
Bitcoin mining Ban in China 1. Miners will "co-operate" and send in some old gear 2. Government will take photos claiming operation is successful 3. Mining with countinue in China as normal 4. Bitcoin demand will increase because Chinese people like to do opposite of Gov demands pic.twitter.com/d9GACAqd12
Simple guide to the aftermath of the Chinese Bitcoin mining ban
Initial Exchange Offerings (IEOs) are risky, but need not be avoided completely
If you participate and get allocation you would benefit. But ultimately it is the exchanges that benefit because you need to buy their token to participate.
For example Binance requires you to buy into IEOs with their BNB token. Of course it’ll be great for you in the short term if you get allocation and the coin pumps. However your risk is that you would be left with the exchange token if you don’t manage to get any allocation after the lottery.
IEOs are also highly volatile, especially immediately after listing
It may be better to trade with OTC desks than exchanges
Charles notices that there is quieter trade flow, so big players looking to buy or sell cryptocurrencies need to offer better prices. Therefore the margin between the buy and sell price is much less. Bigger players also can offer better quotes because of volume. Therefore it may be cheaper to trade with OTCs who deal exclusively with larger orders than exchanges.
And whilst exchanges require you to have the funds ready at the time of transaction, OTC desks allow you to lock in the prices and settle later. This gives people more flexibility .
However, depending on who you are, one upside or downside of OTCs is that they are not transparent. So while you can try to gauge whether there is a lot of trade flow through an OTC desk by reading their reports (if any), there is no way you can verify if they are being truthful. On the other hand you can conduct trades privately compared to on exchanges.
What coins to hold? Bitcoin Bitcoin Bitcoin (BTC)
Unlike other coins, Bitcoin (BTC) has a 10 year history. There is no founding team or leader. For this reason it is not affected by company politics and is the most decentralised.
We can see the prices for a lot of tokens crash during the Initial Coin Offering (ICO) crash. Some may be due to the project running out of funds, failing to deliver on its promises or in worse cases the founders and key personnel leaving the project altogether. Studies were shown that over 80% of ICOs in 2017 were scams.
I was standing in the same spot glued to my phone for 2 hours when this all went down.
We also see that the ICO game was not fair, some people were able to purchase tokens for a more favourable rate or terms even before the token was listed to the public. This however would never happen with BTC.
Is day trading profitable? No (sorry)
For retail investors, day trading is not profitable even for traditional markets.
This is because retail investors would be bogged down by trading fees, but not all trades are profitable.
Retail investors are also unprotected from market manipulation. This is especially true for cryptocurrency investing, which is generally an unregulated space.
Don’t do this
Conclusion
Ultimately, trading cryptocurrencies requires exercising caution and doing your own research. One can look at OTC desk reports to have a good grasp of what may be quietly happening with some big players, but at the end of the day, question everything. Also, whilst you may stand to gain several times your initial investment by going into highly volatile IEOs, bear in mind it is designed so that exchanges ultimately win. The most prudent thing to do is to never invest more than you can lose.
