We have already understood game theory and its usage in cryptoeconomics, in this blog we will look at the problems that might come with using game theory in a decentralised, distributed system. Lets quickly look at the problems that it might cause:
Despite the incentive structures and game theory
mechanics driving honest behavior in the Bitcoin network, there are some
important issues that are widely recognized. Centralization of mining as a result
of mining pools has led to concerns that the reinforcing Nash Equilibrium of
the system can be compromised through a 51% attack.
This is where malicious miners control enough of
the network hashing power to fork the blockchain, overriding the coordination
game played out by a decentralized network of miners. Due to this, some view
incentive mechanisms as not particularly necessary or only necessary as a last
resort of cryptocurrency platforms due to the
complications in system logic that they create.
The empirical problem laid out by critics is that
the success of game theory models in these platforms cannot be determined
academically, only through practice. Some of the assumptions made by game
theory models in cryptocurrency platforms revolve around a specific threshold
of people acting honestly or dishonestly.
Predicating platform security on implied
assumptions of human behavior can be risky, especially when there is no
precedent for the technology or models being implemented.
Bitcoin as a decentralized network is built on the uncoordinated choice concept
where coordination between parties is limited by the size of parties
interacting with each other. Centralized mining pools do not follow this
concept and therefore create a viable security concern.
This blog explores the possibility of Cryptocurrencies as a solution to hyperinflation, if you haven’t read the previous blog on the Introduction to Hyperinflation, please do so.
The invention of cryptocurrency has added a whole new
dimension to the digitization of the global economy. It offers an alternative
to conventional forms of central bank money or ‘fiat’ currency. It also offers
new approaches to setting monetary policy, free from political interference and
the damaging consequences of hyperinflation.
Fiat currency is money that is not
backed by an underlying asset or commodity but is given the status of legal
tender by law. Legal tender is something that a business is obligated to accept
as a means of payment. But the fiat itself is inherently worthless. Its value
is based on users’ faith that a given nominal amount of currency – the face
value – will entitle them to a certain amount of goods or services in exchange.
Put differently, money enables
individuals to supply their labor now in exchange for goods and services later.
It serves as a form of deferred payment. It is this fundamental use of money –
that it permits payment to be deferred – that really makes money, money.
Without a means to defer payment, all transactions would have to be conducted
via barter.
It’s easy to see how it might be
difficult for say, a physician to provide their services as a medical
professional, in exchange for payment in groceries, gas, utilities, clothing,
and so on, from their patients. The healthcare industry would be brought to a
halt pretty quickly under a barter system. Fortunately, we have money to smooth
the process.
It is this aspect of money – that
it enables deferral of payment – which is key to understanding why monetary
stability, or stability of the value of a currency, is crucial for maintaining
the integrity of money and the economic systems it underpins.
Without
monetary stability the purchasing power of a given nominal amount of money
becomes uncertain. And that, in the extreme, might inhibit individuals and
businesses from engaging in supplying goods and services altogether.
In regimes with runaway inflation,
money ceases to function effectively as a form of deferred payment. A given
amount of cash paid in return for work done today may not be worth anything
like the same amount of it is not spent until tomorrow. It is no surprise to
observe that in recent years in countries that have recent episodes of hyperinflation,
citizens have increasingly turned to other currencies, including
cryptocurrency, in order to store wealth.
That’s because, in contrast to fiat
currency, which a government can print more and more of every day, thereby
undermining its value, cryptocurrencies like Bitcoin
have a fixed total possible supply. In the case of Bitcoin, there can never be
any more than 21 million Bitcoins. This means that the value of a Bitcoin
cannot be debased by increasing the number of them in circulation.
It is surely no coincidence that
in Venezuela, where the IMF anticipates that price inflation could reach
1,000,000% (that’s not a typo, it really is one million percent) in 2018,
cryptocurrency use has been on a dramatic rise.
In Venezuela, Dash, which offers
low-cost, near instantaneous, transactions, has now surpassed Bitcoin in terms
of adoption. Speaking to Bitcoin Magazine, Jorge Farias, CEO of Cryptobuyer,
the first platform to list cryptocurrency against the national currency, the
bolivar, Dash now accounts for more transactions on the platform than Bitcoin.
Its use is so widespread, in fact,
that there is even now an organization called Dash Venezuela which provides
Spanish-speaking support to users. Arguably, this emergent institutionalization
of Dash makes it a sort of de facto ‘national’ cryptocurrency for the people of
Venezuela.
In Zimbabwe, which suffered a
similarly extreme episode of hyperinflation around a decade ago, the
Dash-powered money transfer system Kuvacash, has been growing in popularity as
a means of making peer-to-peer payments via the cell phone network.
Fiat currency may be the legal
tender in countries like Venezuela and Zimbabwe, but that does not mean it is
fulfilling the essential function of money. People in these countries cannot
rely on their respective governments to provide the monetary stability they
need, they have looked to cryptocurrency,
which offers them a real choice, and real hope.
Fortunately, in some other
developing economies where there is a lack of financial inclusion, the
technology underpinning cryptocurrency is being looked at seriously. The United
Nations Economic Commission for Latin America and the Caribbean (ECLAC) has
produced several thoughtful reports on the opportunities and risks presented by
cryptocurrency in the Caribbean.
The government of Montserrat has
even gone so far as to enter into a Memorandum of Understanding with
Barbados-based fintech firm Bitt to create a digital payments platform for the
country. Montserrat Premier Donaldson Romeo said, “The people of Montserrat
will benefit from increased financial inclusion, and a reduction in their need
for cash to make payments for goods and services, or as a means of saving.” The
platform will be based on Digital Eastern Caribbean Dollars. Naturally, the
currency symbol has an ‘X’ in it (DXCD)!
In the previous blog we went through all the markers that you need to remember while you are technically analysing the market. In this blog we will be going look at two types of Technical Analysis. Read on to find out more.
Elliott Wave Analysis
The Elliott Wave
principle is a form of technical analysis that cryptocurrency
traders use to analyse market cycles and forecast market trends by identifying
extremes in investor psychology, highs and low in prices and other collective
factors.
Elliott Wave traders believe that markets are
affected by collective investor psychology, or crowd psychology, and that it
moves between optimism and pessimism in natural sequences.
It seems to be a discipline suited for
cryptocurrency traders because, at this time, they are being solely driven by
investor psychology since there are no true underlying fundamentals backing its
price rise other than aggressive buying due to limited supply.
The key to success when using Elliott Wave analysis
is to get the wave count right. Traders who use this technique believe the
market moves in waves and that price action is primarily driven by groups of
five waves. It takes years to master Elliott
Wave analysis, but some cryptocurrency traders feel they have a good enough
grasp of the basics to apply it to markets such as Bitcoin.
Stochastics
and Relative Strength Index (RSI)
Stochastics
and the Relative Strength Index (RSI) are known in the technical analysis field
as oscillators because they move between a low of 0 and a high of 100. Some
cryptocurrency traders use them to determine the strength of a trend or to
predict tops and bottoms because of overbought and oversold conditions.
As Bitcoin prices often
trade in an overbought or oversold condition due to its high volatility, RSI
indicator signals traders to enter or exit a certain position.
They
both work under the premise that prices should be closing near the highs of
trading range during upswings and toward the lower end of a trading range
during downswings.
During a prolonged move down, the oscillators will near 0,
indicating that a bottom may be near. During a prolonged move up, the
oscillators will near 100, indicating that a top may be near. In the attached
graph, Bitcoin
is currently at 81.92 (RSI), meaning that Bitcoin is overbought and a
correction is expected.
Margin trading with cryptocurrency allows users to borrow money against their current funds to trade cryptocurrency “on margin” on an exchange. In other words, users can leverage their existing cryptocurrency or dollars by borrowing funds to increase their buying power (generally paying interest on the amount borrowed, but not always).
For
example, you put down $25 and leverage 4:1 to borrow $75 to buy $100 worth
of Bitcoin. The only stipulation is
that no matter what happens, you’ll have to pay back to $75 plus fees. In order
to ensure they get the loaned amount back, an exchange will generally “call in”
your margin trade once you hit a price where you would start losing the
borrowed money (as they will let you borrow money to trade, but they don’t want
you losing that money). A margin call can be avoided by putting more money into
the position.
A
given exchange will have a range of different leveraging options (2:1, 3.33:1,
4:1, 100:1, etc.). Margin trading can be done short (where you bet on the price
going down) or long (where you bet on the price going up). Further, it can be
used to speculate, to hedge, or to avoid having to keep your full balance on an
exchange.
How
Margin Trading Cryptocurrency Works – Call Prices and Liquidation
This
brings us to the next point. As noted above, you have to have enough funds to
cover the bet you are taking. If you don’t have the funds, your position will
automatically be closed, “liquidated” or “called in.” As, although the lender
will let you use their money for a fee to margin trade, any money lost and any
fees paid will come out of your funds. This is like the friend who let you
borrow $50 in the Investopedia quote above; the lender is letting you borrow
money, not have it to lose.
Specifically,
if your balance falls below the “Maintenance Margin Requirement (MMR)” due to
the price going the opposite way that you bet on, the exchange will either
start liquidating your assets to get its money back or will simply request the
funds from you. This is called a “margin call.” TIP: A margin call
can be offset by contributing more funds to the order book you have the margin
in (ex. BTC/USD). When you deposit more funds, you increase your margin ratio
and improve your call price.
In other
words, technical jargon aside, the concept here is: margin trading allows you
to make bigger bets than you otherwise would at the cost of extra fees and
extra risks. When you take a bet, you can use the lender’s money, but if the
bet goes the wrong way, the funds come out of your pocket. You take all the
risk.
That is
the gist of margin trading; with that information, you know just enough to be
dangerous.
Should
You Use This Strategy?
We
strongly suggest staying away from margin trading unless you have done
research, are experienced, and are margin trading with a very specific purpose
such as hedging. Losing money trading cryptocurrency
is stressful enough without borrowing funds plus interest to create leveraged
positions. That magnifies your stress level.
Of
course, if you are less conservative than we are and want to trade on margin
anyway, your next step should be reading all the documentation on margin
trading for a given exchange before getting started. Understanding how to open
and close margin positions, and making sure you understand margin ratios and
calls, as well as brushing up on some margin trading strategy, is part of the
next step. We’ll assume you are already well versed in technical
indicators.
WARNING
ON RISKS, RATIOS, AND BET SIZE: Margin trading cryptocurrency is one of the riskiest
bets you can take. Cryptocurrency
is risky, and margin trading is risky. Put them together on a highly leveraged
moonshot, and you could find yourself owing a great deal of money rather
quickly (especially with low volume high volatility altcoins). Unlike with
regular trading, you can lose your entire initial investment margin trading.
Further, the more you leverage, the quicker you can lose it.
For
example, if you go long on a 4:1 margin and the position goes down about 25%
from where you opened the position (or a little less since you’ll likely owe
fees), the margin will be called in, and you’ll be left with nothing. Think of
it this way; you put down $25, you borrowed $75, and thus with fees you only
have a little under $25 to lose of the total $100 you are betting. If it goes
up, then you can keep the position open as long as you like (as you aren’t
risking the lender’s $75), but if it goes down your position will be liquidated
based on the rate at which you are leveraged unless you put more funds in. Do
an 8:1 leveraged position and it will be called in twice as fast at around
12.5%, do a 2:1 position and it will be called in at around 50%. Yes, you can
always add to your position to prevent it from closing, but this is the exact
sort of rabbit hole that loses people money. For an obligatory horror story and
fair warning of the perks and perils of margin trading, see the Reddit post “How
I Lost Nearly 200 BTC trading this past month.”
The
main aim of Blockchain
is to create an immutable public ledger to ensure integrity of transactions. In
the past few years of its existence multiple different types of blockchain have
evolved from the original blockchain. The concepts of public and private
blockchains have come into being, these two are often confused together as they
both have very similar features. This article ensures to bring out the
difference between the two.
Public vs. Private blockchain
Public and private
blockchains are equally decentralized, peer-to-peer
networks where each member maintains a copy of a shared ledger that
stores digitally signed transactions. This ledger can only be affixed to,
but not edited. Participants in a blockchain
retain this ledger in sync through a consensus protocol. This produces a
assurance on the immutability of the ledger which cannot be tainted
even if there are some malicious members on the blockchain.
The difference between public
and private blockchain is related to the type of members allowed within the
network that preserve the ledger and execute the consensus protocol.
Public
blockchains
Public blockchains are open networks that allow anyone
to participate in the network, hence the name ‘public’. Such a network depends
upon the number of participants for its success, and hence encourages more and
more public participation through an incentivization mechanism. The best
example of a public blockchain is Bitcoin
where participants in the network (miners) are rewarded with BTC tokens.
In a blockchain, each block contains a record of
numerous transactions on the network. Creating new blocks gives out a reward,
also known as the “miner’s fee”. In a public blockchain, where there can be a
lot of participants on the network, it becomes necessary to maintain scarcity
of the reward tokens, and regulate who gets the right to create the next block.
To achieve this, each participant in the network must solve a complex
cryptographic problem (also known as “proof of work”). Whoever solves the
problem earn the right to create the next block (and gets the reward). The
disadvantage to this is, these problems are very resource intensive and take a
substantial amount of computational power to solve.
Another disadvantage is the public nature of the
blockchain itself. There is little to no privacy for transactions, nor any
regulation or criteria for participants to join. Public blockchains might be
suitable for projects in the public domain (such as Blockchain), but not ideal
for enterprise-level use cases.
Private
blockchains
Enterprises can set up private blockchains to protect
the privacy and security of their data. Participation in a private blockchain
requires an invitation, which itself is also validated by the network starter
or a set of rules that can put into place. Such a network is known as a permissioned
network, and puts a restriction on who is allowed to join. Private
blockchains can also restrict participant activity such that certain
transactions can only be carried out by certain participants and not others,
despite the fact that they’re on the network. This creates an added layer of
privacy.
Participation rules can either be set up by existing
participants, a regulatory authority or a consortium. All participants in a
network play a role in maintaining the blockchain in a decentralized manner.
An example of a private blockchain is Linux Foundation’s
Hyperledger Fabric,
designed to cater to enterprise requirements. Only entities participating in a
particular transaction have knowledge about it — other entities will have no
access to it. Because such a blockchain is lighter, it provides transactional
throughput that is orders of magnitude higher than in public blockchains.
Charitable giving is on the rise, mostly due to resilient economic conditions in North America and Europe over current years. According to Giving USA, 2017 was the first year that contributions from the US crossed the $400 billion mark, a rise of five percent over the preceding year.
While
contributing to charity may deliver us with a warm glow, few people stop to
consider exactly where their donations end up. Charity fraud is a global issue,
creating a risk that donated funds end up being siphoned off through scams or
corruption.
What can Blockchain do for Charity?
Blockchain technology is creating waves in many sectors such
as supply chain due to its functionality in providing a secure, unalterable
record of value transfers. This makes blockchain the ideal technology to bring
transparency to the distribution of charitable donations.
Using an open public ledger, a charity or NGO could
collect donations in a digital currency. Each unit collected is traceable from
the moment it’s contributed to the point that it’s spent on goods or services. Cryptocurrency
transfers are peer-to-peer, meaning that charities could also decrease fees
incurred by intermediaries like banks or foreign currency exchange services. 2017
and 2018 saw a proliferation of tech start-ups generating blockchain-based
digital tokens to crowdfund their new business venture. While the regulators
have now started to clamp down, in 2019 blockchain innovators are now turning
to regulated token generation events, known as security token offerings (STO.)
Charities and NGOs could similarly use such a mechanism to crowdsource
donations for their endeavours.
Furthermore, blockchain-based smart contracts
could even automate the distribution of funds for particular projects. For
example, if a charity collects funds to build a school, the funding could be
released by smart contracts in stages once specific milestones of the
construction project are completed. Some projects are already working on
these kinds of solutions for charities. Alice is one example.
The tech firm is collaborating with the Charities Aid Foundation and Imperial
College London to develop a blockchain-based
platform aimed at transparency in charitable fundraising.
How the Blockchain Community is Giving
Back
The Bitcoin boom of late 2017 and early 2018 saw
massive growth in the market size for cryptocurrencies and blockchain. Now,
some blockchain firms are demonstrating their commitment to social
responsibility by setting up charitable initiatives. In many cases, these are
also leveraging the benefits of blockchain in managing charity funding.
#VoiceYourLove
For example, Tronis a decentralized application protocol, launched in 2018. The
project is managed by the Tron Foundation, a non-profit based in Singapore with
tech wunderkind Justin Sun at the helm.
Tron recently
announced its
collaboration with the ALS Association on an awareness campaign timed to
coincide with Valentine’s Day, called #VoiceYourLove. The ALS Association had
enormous success back in 2014 with the Ice Bucket Challenge, which went viral
on social media. The new campaign invites people to create videos where they
talk about their loved ones. Contributions to the #VoiceYourLove campaign
will be tracked through to distribution using blockchain, with the results
published at the end of the campaign. Sun himself has personally donated
$250,000 and is “urging others in the blockchain industry to voice their love
by donating to help find a cure.”
We strongly advise you to make your contributions
to charities that accept bitcoin
and other cryptocurrencies that
work towards causes that resonate on a personal level.
With prices rocketing back from the lows. In fact, many cryptocurrencies have doubled from their recent low prices over the last several weeks. Here are a few reasons why you should get your hands on cryptos, and make them one of your investment options:
The Market Is Still In Its Infancy
Cryptocurrency is less than a decade old. Bitcoin was launched in 2009, and other major crypto names are far younger. By way of comparison, the New York Stock Exchange began in 1792 and commodities have traded for many centuries.
Volatility is the hallmark of a new market. As exchanges and investors adjust to the new products, massive price swings are inevitable. This is why, despite my bullish bias, I say to only risk what you can afford to lose when investing in the novel cryptocurrency markets.
As the market matures, volatility will decline to create smoother equity curves for investors in both directions. Make no mistake, the inevitable decline in volatility will take much of the enormous profit potential out of the nascent market. This is why now remains an ideal time to buy despite the high risk for extreme return-seeking investors.
Regulations Are Not A Bad Thing
There is a broad fear among cryptocurrency adherents that regulations will ruin the market. Many of the early adopters and creators of cryptocurrency have a strong anti-authoritarian, anarchist bias. In other words, these folks hate the government, regulations, and anything that interferes with the free market.
The early adopter’s utopian worldview — the dream to live in a world where everyone interacts fairly and peacefully — remains nothing but fantasy in the real world. As unfortunate as it may be, regulations are a must for a smooth and fair operating exchange.
The anarcho-capitalist movement that spawned cryptocurrency, and the underground commerce sites like Silk Road, is quickly becoming less of a factor in the growth of cryptocurrencies. A strong argument can be made that regulations are a must for the continued success of the crypto market. The fear-based selloffs triggered by regulation announcements and rumours make ideal buying prospects for savvy investors. An example of this was the steep sell-off that occurred when South Korea announced a slate of regulatory measures. The move was way overblown, and crypto quickly recovered from the selling. This happens again and again, creating an exploitable pattern.
Real World Applications
Crypto has moved away from the anarchist’s preferred means of exchange into the mainstream. However, it is not entirely mainstream enough to squash the upside potential. This means now is the time to buy before it’s too late!
Everyone knows bitcoin is being accepted at more and more locations around the globe. Since it was the first mover in the space, it is the leading cryptocurrency and has gained relatively widespread acceptance in the real world of commerce.
Other crypto projects like Ripple serve to transfer fiat currencies around the world. Crushing legacy systems like SWIFT regarding time and cost, Ripple and XcelToken Plus are the leading players in the conversion of money transfer systems into the digital age. Rumours abound that even Starbuckshas plans to accept Ripple and Litecoin as payment within the next five years. Should Starbucks come on board, expect a massive move by retailers in this direction. Ripple is just the tip of the iceberg coming to real-world applications of the blockchain and cryptocurrency.
Platforms like XcelTrip allow those holding cryptocurrencies, to travel anywhere with cryptocurrencies.
Bigger ICOs
Initial Coin Offering (ICO) has become a favorite way to raise capital over the past year. Often built on the Ethereum network, ICOs use vast numbers of tokens which, in turn, increase the demand for Ether, the cryptocurrency of the Ethereum network.
These types of offerings have reached the billion-dollar stage with Telegram, a messaging app, and the old school company Kodak both recently announcing plans to launch ICOs. We will only see ICOs grow more extensive and more legitimate over time, increasing demand for Ether and other backbone blockchain network cryptos.
The Banks And Institutions Are Coming
Primarily a retail investor phenomenon, cryptocurrency has attracted the interest of major institutions, banks and hedge funds. Multiple cryptocurrency hedge funds are springing up around the world, increasing the demand for the cryptocurrency. At the same time, considerable institutional money is starting to flow into the space. Attracted by the high return potential, institutions are in the early stages of accepting the asset class.
The amount of institutional money available for the new market is staggering. Should institutions, banks, and hedge funds embrace digital currency, the upside is truly unlimited.
Keep all these points in mind and invest in a token that has
real world transaction usage and that also provides long term profits.
Cryptocurrency is “a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.” Cryptocurrencies in India are uncharted territory and seem to be one that is understood very little that people are vary of investing in them. Here is a list of myths revolving around cryptocurrencies that are busted:
Myth 1
Cryptocurrency Is Not Taxed
Yes, there is no central expert
involved and there are no banks involved. But this does not rule out that the
digital currency avoids being taxed. It is just any other transaction and you
are taxed whenever you sell it or whenever someone pays you in cryptocurrency.
In India, when you trade in
cryptocurrencies and make a profit, and if that profit exceeds 10 lakh rupees,
you have to pay 30% on the profit. This is for short-term gains where there is
no minimum time period for holding the investment. For a long-term gain, where your asset needs to hold for
at least two years, you will be taxed 20 percent on the profit.
Myth 2
Cryptocurrency Doesn’t Have Any Real Money Value to
Them
This is perhaps the biggest myth
about cryptocurrencies since there is no material asset that is backing them.
However, the people who trade in cryptocurrencies believe in the inherent value
of it, which has been supporting the system since 2008.
As long as there are people who
believe in and understand the value of cryptocurrencies, they are here to stay.
Myth 3
They Are Illegal Forms of Digital Money
Although the currency has been banned
in countries like Bolivia, Russia, Algeria, Ecuador and Trinidad; EU nations,
G7 nations, and the USA have made cryptocurrency a legal tender.
India’s previous Finance Minister,
Mr. Arun Jaitley pointed out in the Budget 2018-19 that the Blockchain
technology will be explored to promote digital and safe transactions. The
transactions in cryptocurrency are not banned in India and are thriving.
Myth 4
Cryptocurrencies Are Used for Criminal and Illicit
Purposes
While one event of the Silk Road Raid
in 2013 exposed the use of millions of dollars in Bitcoin for human and drug trafficking,
cryptocurrency is yet to be regulated. Yes, some criminal cases record the use
of cryptocurrency to get money, however, India has obligatory KYC (Know Your Customer) procedures in place for trading
in cryptocurrencies to reduce the chance of any unlawful use of the digital
money.
Myth 5
Cryptocurrencies Are Easy to Hack
Using a platform to trade in
cryptocurrencies is just like any other platform for trading. Upping the
security on wallets where trading in cryptocurrency is facilitated is the only
way to secure your wallet and enable safe transactions.
Myth 6
There Is Only One Huge Blockchain In Place
There absolutely is not. There are
many blockchains. Blockchain is just a technology that caters to different
problems- they may be public or private versions of blockchain, the source may
be open or closed, etc. While one type of blockchain might back Bitcoin, others
might support other cryptocurrencies like Ethereum, Ripple, XcelToken Plus etc.
Myth 7
Blockchain Is A Cloud-like Database
What is important to remember is that
blockchain is just like a ledger- it only keeps a record of the transactions.
In its entirety, this is the ledger that is backing cryptocurrencies and
ensures that transactions are safe, not repetitive and are transparent. Blockchain
cannot store any ‘files’. It only comprises a code for the transaction that
took place.
Myth 8
Cryptocurrencies Are Not Accepted as a Form of
Payment
Cryptocurrencies came in 2008. Slowly
and steadily, their virtue has been realized by people who are investing in
it. Big companies like Microsoft, Fiverr, Dell and Expedia have started to
accept Bitcoin. However, while buying cryptocurrencies is not illegal,
cryptocurrencies are not recognized as legal tender in India. Meaning, it is
not allowed as a payment option in India.
Myth 9
Cryptocurrencies and Its Transactions Are
Untraceable & Anonymous
The blockchain, a public ledger
maintains a record of everything. There exists anonymity, but in extreme cases,
identifying users and their details is not a difficult task.
Just like any other platform, there
is user anonymity, but it’s not absolute.
Myth 10
Blockchains Have No Business Use
The fact that ex-Finance Minister,
Mr. Arun Jaitley quoted the need to explore blockchain to promote digital
transactions says a lot about its sanctity.
In fact, they might be the next
big thing in the investment sector. Japan has already legitimized them and has
set a self-regulatory body as well.
Blockchains are the perfect database-
they store information, keep it secure, permanently store records and
transactions are traceable and cannot be easily hacked.
Conclusion
To sum up, since cryptocurrencies is still an unmapped
avenue in the Indian market, a little more information around the topic can go
a long way in helping investors take a call whether they would want to venture
into the virtual currency space.
If you are someone gearing up to purchase
a Bitcoin or other cryptocurrencies, I suggest you weigh the
pros and cons of investing very carefully and be very clear about their use and
tax treatment in India before you make a decision.
The method of purchasing and selling cryptocurrency has been made a lot easier over the last few months. There are five significant aspects that you must think about before purchasing any cryptocurrencies or to buy some XcelToken Plus (XLAB):
Location
To find out how and where you can buy
cryptocurrency, it is important for you check your country’s regulations.
Payment Method
The most common and accepted payment methods to buy
cryptocurrency include: credit card, bank transfer or even cash. Different
websites accept different payment methods, so you’ll need to choose a website
that accepts the payment method you want to use.
Type of Cryptocurrency
Not
all cryptocurrencies are available for purchase on every website. You will have
to find a website that sells the cryptocurrency that you want to buy.
Cost of Fees
Each
website has different fees. Some are cheap, some are not so cheap. Make sure
you know how much the fees cost before setting up an account on any website.
You don’t want to waste your time verifying yourself and then find out the fees
are too high!
How much you can afford
As
with any investment, you should never invest more than you can
afford. I recommend speaking to a financial adviser first. With
those 5 factors in mind, we can move on. When you buy your cryptocurrency, you
will can’t obviously store them in your bank as you would regular fiat
currency.
Cryptocurrency Wallet
A cryptocurrency
wallet is where you store your cryptocurrencies after you have bought
them. You can compare a cryptocurrency wallet with your bank account. In the
same way that you store traditional currencies (USD, JPY, EUR etc.) in your
bank account, you will store your cryptocurrencies in your crypto wallet. There
are a lot of easy-to-use and safe options to choose from. It is important that
you choose a highly-secure wallet, because if your cryptocurrency gets stolen
from your wallet, you cannever get
it back.
There are three types of wallets:
Online wallets: The quickest to set up (but also the least
safe)
Software wallets: An app you download (safer than an online
wallet)
Hardware wallets: A portable device you plug into your computer via
USB (the safest option).
The wallet you need will depend on which cryptocurrency
you want to buy. If you buy Bitcoin,
for example, you’ll need a wallet that can store Bitcoin. If you buy Litecoin,
you’ll need a wallet that can store Litecoin.
There are multiple wallets that allow you to easily transact and safely store your
cryptocurrencies, coupled with features that allow you to use them for your
utility payment purposes.
With the information above you will now be able to
buy XcelToken Plus and trade with
them on one of the 14 trading platforms that it is listed on.
If you’re new to the crypto world you might have overheard people transferring their assets into cold storage or cold wallets but were unsure exactly what this involves. Simply put, it means securely transferring and storing your cryptocurrencies/ assets offline to decrease access to hackers. There are two ways in which you can store your cryptos offline, here’s how you can do it:
Hardware: Wallets
vary from software wallets in that they store a user’s private keys on a
hardware device like a USB. Although hardware wallets make transactions online,
they are stored offline which delivers improved security. Hardware
wallets can be compatible with several web interfaces and can support
different currencies; it just depends on which one you decide to use. What’s
more, making a transaction is easy. Users simply plug in their device to any internet-enabled
computer or device, enter a pin, send currency and confirm. Hardware wallets
make it conceivable to easily transact while also keeping your money offline
and away from danger.
Paper: Wallets are easy to use
and provide a very high level of security. While the term paper wallet can
simply refer to a physical copy or printout of your public and private keys, it
can also refer to a piece of software that is used to securely generate a pair
of keys which are then printed. Using a paper wallet is relatively
straightforward. Moving Bitcoin or
any other currency to your paper wallet is proficient by the transfer of assets
from your software wallet to the public address shown on your paper wallet.
Alternatively, if you want to withdraw or spend currency, all you need to do is
transfer funds from your paper wallet to your software wallet. This process,
often referred to as ‘sweeping,’ can either be done by hand by entering your
private keys or by scanning the QR code on the paper wallet.
If you are about to invest in XcelToken Plus (XLAB) it is suggested
that you store them in the above ways to make sure that your assets stay safe.
Future Of Cryptocurrency 