Cryptocurrency Investing Tips and Guide

Cryptocurrency investment as the name implies are all areas of Blockchain ecosystem where one can invest your money or resources in other to receive returns after a particular period of time. It is as any other kind of investment plan in the financial system, but unlike other platforms e.g banks and stock exchange, cryptocurrency has more to offer due to its decentralized nature.

It is a free market without rules and regulations where international bodies can team up in other to create an open platform. Investing on the Blockchain is a new trend all over the world in which every one who hears about it always likes to be part of it, therefore a trusted source of content is always needed in other for one not to operate blindly especially when choosing a strategy for crypto investing.

There have been encounters of people leaving the sphere being that they chose the wrong platform to invest which lead into a great lost, ranging from the exchange, trading, ICO etc. Day by day, there are reports about lost funds and a platform is needed where the right knowledge on how to play safe can be acquired.

Do You Have to Pay Taxes on Cryptocurrency?

So you made a nice return on your investment. Congratulations, but don’t forget to pay your taxes! Due to the newness of cryptocurrency, many of its investors are still quite young, and many of them are not fully prepared to deal with the tax consequences of trading.

As an investor, it’s vital to know how certain actions will affect you in the long run. So, in this article, we’re about to go over a small portion of what to expect when it comes to paying the tax man after you’ve cashed out your cryptocurrencies.

Investors should be aware that these rules will vary greatly depending on what country you live in. This includes not only the rules on what is taxable but also the percentage that you will be required to pay.

This piece is written based on rules in the United States. You should however not assume that this is an extensive list of your particular requirements, and if you reside in another country, then you might need to consult your local government’s documentation on what is expected of individuals in your country when it comes to taxes.

Be wary, because if you fail to pay your taxes or you mess up certain entries on your documentation that there could be heavy penalties involved. It may be better for you to consult an accountant or other tax professionals for your particular financial needs, but it’s possible to use this article to get an idea of the situation.

When will you owe money on crypto gains?

Cryptocurrencies are something that most governments have never really seen before. They are both money and an investment, and for that reason, they have trouble figuring out exactly how to tax them.

However, most countries seem to agree that they are something akin to securities or possessions. There are also different ways to acquire cryptocurrencies, but in most cases, taxable events will likely follow these rules.

  • You sold a coin or token for more than you paid for it.
  • You mined or earned a coin or token.

Investors should be aware that “sold” does not only refer to cashing out a coin or token to your government currency. Many countries such as the United States see crypto to crypto trades as taxable instances as well, and they will expect you to pay a percentage of any gains to them.

For example, if you trade Ethereum for an ERC20 token, then you owe tax on any gains you made on that Ethereum when the swap occurred. If you didn’t make any money on your Ethereum, then you won’t owe any further taxes on that transaction.

Taxes on selling cryptocurrencies

In many cases, this will be referred to as a capital gain, and you have to pay the proper capital gains tax amount. The exact amount that you will have to give up will likely vary by your country, your current income status and the number of months that you held the investment.

In the United States there exists both short term and long term percentages on gains. If you hold an investment for under 12 months, then you actually owe the standard income tax rate in your bracket on that investment. Had you held your coins or your tokens for a year or more, then you’ll be privileged to a much lower tax rate.

If you are planning on selling some of your investments, then it’s in your best interest to see exactly how long you’ve had them. You should also know that you might need to prove that you’ve held them for exactly a year, and records from your exchange accounts may be needed for this.

Remember that as an investor you only have to pay for assets that you sell. If you are still holding your cryptocurrencies, then, in this case, you don’t incur taxes on them even if you have made a gain. This is not a taxable event, and it does not need to be reported when you file your taxes with your local government.

Taxes on earning cryptocurrencies

What if you earned this crypto rather than purchased it? What then are the rules? In most cases, this is to be calculated as income, and you will be asked to pay the standard income tax rate on the date when you received these coins or tokens were acquired. What types of things could be considered as reportable under this example?

Money you earned from mining coins

Do you mine cryptocurrencies using your computer? The government considers this income, and they are certain to want their standard share. Make sure to keep records of your expenses so that you only send them what you made a profit on and not what you made before expenses.

Airdrops from ICOs or giveaways

Free coins are great, but the government doesn’t think they’re free. These crypto gifts are still subject to taxes. Fortunately though, these taxes are calculated for you at the time of the event, and it’s like that they are worth very little at this moment. (You will still owe capital gains fees as well when you sell them at a later date.)

Staking coins from POS or masternodes

Do you love POS coins? Well, you owe money on those too. You have generated new coins that you did not have before, and that counts as income. At the time you receive your stakes you’ll need to take note of the value of the coin at that time and pay taxes on it.

Interest or other assets given to you for holding investments

Some tokens pay their investors interest for loyally holding on to their tokens. This is also the money you have earned, and it needs to be accounted for.


All of these items will be considered income where your country’s government is concerned, and they will expect you to report this income to them. The percentage you will pay will depend on how much money you have made that year.

Make sure when you’re doing your calculations that you use your complete income amount from all sources because there’s no distinction here. It will all be lumped together, and if you do not calculate it properly, then you could find that you actually belong in a top tier tax bracket, and you may not have enough saved up to cover this fee!

How can you lower your cryptocurrency taxes?

There are several ways that will allow you to lower your liabilities if you’re feeling sad about the amount of your winnings that you will be forced to pay out to your government.

Wait to sell your investments

Can you hold off on selling your investment? If that’s a possibility then you can immediately reduce your future debt by dropping into the long-term capital gains territory. This is almost always a significant savings, even 0% depending on what you make at your day job.

In order to pay $0 on your crypto assets you can only claim a small amount per year, and your eligibility will be dependent upon how much your regular income rate is, but even if you are a higher earner, this will definitely be the easiest way to pay less money.

Take advantage of your losses

Did you pick a real stinker this year? Since these are counted as securities, you’re allowed to take a write off for a capital loss to make your debt sting a little bit less. Unfortunately, this amount is capped at $3,000. If you took a bigger hit than that, then it won’t help you out as much, but every little bit helps.

Reduce your other income

If you’re teetering on the brink of being dropped down into a tax bracket with a more favorable tax rate, then you could try to find some other ways to lower your income, at least as far as governments are concerned. In most cases, your capital gains tax rate is based on this, and if you can reduce this, then you’ll be able to take more crypto gains with less taxes.

Some ways to do this are making pre-tax payments to your retirement savings for your job, taking business deductions, making charitable donations or even deferring your earnings until January.

File your paperwork jointly

If you are married, and both you and your partner are still filing singly, then could possibly get a better discount if you file together depending on how much money you both make. The allowances for couples are much more generous than they would be for single people, and it is sometimes worth it to consider the possibilities to save some money on your bill if you plan to make a large cash out this year.

Conclusion

In closing, it’s a good idea to keep an eye on your financial events to make certain that you are not cheating yourself out of income. Nobody likes to give the government more money then they have to. By making a thorough plan before you sell your investments, you can make sure that you are putting yourself in the best possible situation.

Unfortunately for cryptocurrency users, the 12 month waiting period for long-term capital gains may as well be an eternity. That means you will need to weigh your choices to see whether you need to sell out of your positions immediately or if it’s best to hold off for a while for a more favorable tax climate.

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The Most Crypto Friendly Countries for Investors

As an investor, it’s important to be able to see your investments from all angles. I’m sure you’ve spent a good deal of time researching your picks. You’ve probably read the whitepaper all the way through and you’ve thoroughly researched the team. Have you stopped to consider the country your investment is situated in though? If you haven’t then you may want to start doing so right now.

Cryptocurrency is still pretty new as far as the financial world is concerned, and countries across the globe are running to catch up. You didn’t think that these markets would go on unregulated forever, did you? The time for that is coming to a close, and it would be in your best interest to figure out exactly where your investments stand when it comes to the local authorities.

In this article, we’re going to go over what exactly a nation’s regulations could mean for your investment, and we’re also going to talk about some of the most cryptocurrency friendly countries in the world! (Want to see the worst? Check out the countries section and sort by the worst safety ranking option.)

Why does it matter what country a blockchain project is in?

In the case of community coins, in most cases, it will not matter. However, more and more cryptocurrency projects are actually being launched using crowdsale methods. That means that most countries will consider these as something akin to securities, and they will want to treat them as such.

While once this was a legal grey area, it’s becoming quite clear that world governments are no longer content to allow these projects to operate without any guidelines any longer. Several key markets are getting ready to announce their specific guidelines very soon, and what they have to say could greatly influence the price of your investments.

The most obvious example of this is when China announced that all ICOs within the country would need to cease collecting investor’s funds. This news sent the market into a panic, and investors quickly dumped their Chinese holdings. This can obviously be a complete disaster that you would want to avoid in the future.

For this reason, it’s usually a good idea to know where an ICO has been established and what that country’s stance on cryptocurrencies as a whole is. Even if they have previously expressed no interest in placing restrictions on trading, owning or using cryptocurrencies, that could change if they have not yet taken a position.

What are the most friendly countries for cryptocurrencies?

The good news is that there are many countries that are very welcoming to digital currencies. These governments appreciate the fact that their citizens should be free to transact in any means that they please. Some of these entries are on the list because they don’t place any restrictions on these assets at all.

However, some of them are there because they place the correct restrictions. Ones that would punish exchanges and crowdsales looking to steal from their investors, but not ones which would put investor’s liberties at risk.

Australia

Australia has been a surprisingly friendly country to cryptocurrencies. They’ve even gone so far as to declare Bitcoin and other cryptos as legal tender, and they’ve eliminated the double taxation which Australian citizens would incur for spending their cryptocurrency on goods and services.

Since these individuals would already be paying the GST, the government found this unfair and changed it. Businesses and individuals are free to exchange goods and services for alternate currencies as they see fit, and there are no restrictions on them for doing so.

However, Australia is not without regulation entirely. They have issued guidelines for ICOs that wish to take up residence in the country and exchanges must be licensed if they want to operate there. For the most part, these are welcome guidelines.

ICOs will be relieved to have clear rules to follow and investors will be safer from scammers and unsavory projects out to steal their money. This country legitimized Bitcoin as early as 2013, much sooner than others, and it looks as if they will continue this positive trend in the future.

Estonia

This country has become increasingly important in the cryptocurrency space. While other countries have become fearful of digital coins and tokens, Estonia has embraced those assets. They were even the first country to launch their own ICO.

Their openness to technology has allowed them to embrace many technologies that larger countries would never dream of attempting, such as their innovative e-residency initiative.

As far as cryptos go, they are largely unregulated in Estonia, and that makes this a very attractive European location for coin offerings. More and more exchanges are popping up here so as to allow their customers the financial privacy that they desire, and to operate without the headaches of other countries overreaching regulations.

Lithuania

It will be interesting to see what happens for Lithuania as far as cryptocurrencies are concerned in the future. Previously, this country was almost entirely unregulated for cryptos. They have recently launched their own guidelines for ICOs and exchanges thanks to the influx of blockchain businesses looking to set up shop in a place that will allow them to operate unmolested. The government of this nation has since had to come up with a plan, as it’s clear that many of these operations can not continue to go unchecked for the safety of their citizens.

Fortunately, the regulations are not overbearing and most ICOs want to comply with governments because they are a business. Businesses with a public face have a very hard time operating and servicing their customers if they don’t know what the laws are in regards to their operations. The Lithuanian government has made clear what will be expected, and as long as these demands remain fair, these companies will likely continue to operate here.

Cyprus

Cyprus has already recognized cryptocurrencies as legal tender as far back as 2014. Presently, cryptocurrencies are not subject to any regulations in the country, and that means its citizens can transact with them freely. If you’re an investor, then you’ll also be happy to know that this little country also imposes no taxes on cryptocurrencies gains. They actually do not tax securities at all, and since they have classified cryptos as securities, that means no taxes. That’s reason enough to love Cyprus, but there’s more.

ICOs are also largely unrestricted here, and that makes this a popular destination for new blockchain entities looking for more freedom. This is actually the highest rated entry on the list, and if you’re interested in seeing the details, then check out the ‘Countries’ section up top for a breakdown to see what makes Cyprus the top destination for blockchain!

France

This European nation is taking an interesting approach to attract blockchain companies. For a long time now, setting up a legal company in this sector has been a nightmare. France actually plans to attract ICOs by making that easy.

They will be setting up easy to follow guidelines that will make establishing a coin offering funded company easy to do, and they hope that will lure these companies in. It might just work. Being able to avoid any legal complications with a government in a major country that is willing to work with you is a good step towards making a stable launching ground for your business.

While there are other countries with more free business operations, they do pose one problem. Many unsavory companies will also be using these countries as a home base, and that puts anyone who uses them in the same group as far as investors are concerned.

This could soon turn into a red flag that turns off investors and these ICOs will want to avoid that at any cost. France has the potential to capitalize on this if they’re smart and are willing to embrace blockchain.

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What Is an ETF? Holding Cryptocurrency VS Bitcoin ETFs

Cryptocurrency has become increasingly more popular in the past year or so. After Bitcoin jumped to an all-time high price, new investors came out of the woodwork looking to get their piece. While things have cooled off, for now, it seems that the market is bubbling again, and this time around investors may be interested in taking a route less traveled thanks to new financial instruments that have come about.

One of these investment vehicles is called an ETF, otherwise known as an exchange traded fund, and it’s currently stirring the waters even with traditional cryptocurrency holders. Many of them are convinced that this will be what makes mainstream investors jump in, as it gives them a safety net that was previously unavailable.

By using one of these funds, investors who are not very tech savvy can have exposure to Bitcoin and other promising crypto assets without the need to learn how to manage them for themselves. First, let’s talk about what an ETF is.

What is an exchange traded fund (ETF)?

Typically an ETF is a collection of other assets that are managed by a company. You can think of something like this as a more hands-off investment option. Schemes like this a typical in retirement accounts or other long-term investment plans where investors may have little knowledge of or desire to learn about financial markets.

Many times these are used by people who need a safe place to store their money without the worries of choosing their own investment assets. These funds can contain many different things such as stocks, bonds or commodities. An ETF trades just like a company stock does on major exchanges, and that’s good news for Bitcoin because it allows investors who aren’t interested in navigating the waters of holding cryptocurrency themselves to speculate on it.

While it’s true that they will not actually be buying this cryptocurrency themselves, the company holding the fund will, and it will take coins out of circulation when they purchase them. A fund is also capable of purchasing a much larger number of coins than an individual, so the volume of assets which they consume could be substantial.

It’s likely that fund managers will only use high profile coins such as Bitcoin and Ethereum which are deemed safest, but in the past, even lower valued altcoins have seen the trickle-down effect when the Bitcoin market begins booming.

Should you invest in Bitcoin directly or through an ETF?

This decision is one you’ll need to make for yourself, but there are some serious points to consider before making a decision. Both of these options have their pros and cons.

Pros to purchasing shares of an exchange traded fund

  • No need to purchase assets individually

There’s now an exhausting number of cryptocurrencies, and those who are not enthusiasts themselves may be interested in this emerging technology but just can’t learn everything that’s needed about them before investing. Investing in a fund allows you to take the guesswork out of it, and many people appreciate this approach.

  • Fully managed

ETFs are fully managed by a company and a financial manager. They learn all the ins and outs of the market and make important decisions. They take the actions they think are best to preserve the value of the fund including buying, selling or reducing exposure to certain assets. Their investors don’t need to worry about it.

  • Convenient and safe

If you have other traditional stock assets, then it’s convenient to manage your cryptocurrency assets right next to them using an insured company that operates in the traditional finance space. Many investors will value this safety, especially if they are using this ETF for their retirement savings.

  • No need to worry about private keys and storage

Cryptocurrency storage can be complicated for users that don’t understand the technology. It’s easy to make a mistake and lose a good deal of money or have it stolen from you. By investing in an ETF, you can still have exposure without worrying about private keys or how to store your coins or tokens safely.

Cons to invest in Exchange Traded Funds

  • No hedge against traditional financial assets

An ETF’s value is meant to trade cryptocurrencies, but the reality could be very different in the event of an economic downturn. If this happens you can expect investors to dump their shares in the ETF, and this could be very bad for their investors. You don’t actually own any Bitcoin here, you own shares in somebody else’s Bitcoin.

  • Funds and companies can declare bankruptcy

It’s entirely possible that the fund holding your cryptocurrencies could go bankrupt. If they do then you may not be able to recover your investment. By holding cryptocurrencies privately instead you can eliminate this risk. Once you own cryptocurrencies yourself nobody can take them from you for any reason.

  • Regulations for crypto ETFs are not yet certain

It’s not currently certain how these investment vehicles will be treated. It’s also not certain whether the people managing them actually know how to store these assets safely or not. By turning over control of your money to others you put yourself at a greater risk, one that cryptocurrencies like Bitcoin were meant to remove.

  • Limited access to coins and tokens

ETFs will only list the most successful cryptos. This means Bitcoin and Ethereum and likely no other options. As an investor, this is very limiting, and it’s possible that you could make substantially more profit for less money investing in lesser-known assets. While it is riskier, it’s something you will not be able to do in an ETF.

Conclusion

While there are a lot of reasons to pursue both methods, holding your own cryptocurrency is still likely the best route. It’s not very hard to learn how to properly manage your crypto portfolio and how to store your coins or tokens safely.

Cointobuy.io has numerous articles available which can help you with this. Check out the rest of the blog to find out how to store your cryptocurrencies safely, how to find good coins to invest in and how to better manage your portfolio’s risk profile.

Becoming a good investor is not easy. It takes a lot of work and dedication to make sound financial decisions that are not impacted by your emotions. It is something that anyone can learn to do with a little work, however, and if you’re willing to take on this task for yourself then you could be greatly rewarded for your efforts. More so than you would be letting somebody else take the wheel because in many cases fund returns are not the best.

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Most newbies come into the space only because of the testimony they heard of how Bitcoin and other alternative currencies (altcoins) have done wonders but fail to get the right knowledge before putting in their resources. Here you will find well-written tips and guides for newbies from pros on how to choose the right investment plan so as not to fall into being scammed or losing fund investing in shitcoin.

These guides include the best coin to buy, the best exchange to trade, the best way to make a purchase, the best way to secure your asset from hackers, the dos and don'ts of cryptocurrency investment and altcoins with great future potentials. Our guide/tips are mostly compiled for newbies who want to know more about crypto investment and the ecosystem as a whole.

Should You Use a Decentralized Cryptocurrency Exchange?

Choosing a good exchange is almost as important as choosing a cryptocurrency to invest in. The exchange facilitates your trade, and if a platform is inadequate or untrustworthy then your investments could suffer greatly.

If you choose an untrustworthy exchange then you might never even get your assets to start with! There are more or less two types of exchanges, and in this article, we’ll be discussing when you might consider using each kind. These are centralized and decentralized exchanges.

We’ll start off this article by defining what each of these options is and giving some examples of popular crypto exchanges in each category. Then we’ll talk about why you might choose one or the other to help you come to a decision about what type of platform you would be most comfortable trading on. Okay then, let’s get started.

What is a centralized exchange?

A centralized trading platform is a cryptocurrency service that is more or less controlled by one entity. Often this requires a central point of failure, and if the platform runs into legal complications they can be shut down or have certain regulations forced upon them. Most of these exchanges will require their users to submit to lengthy financial verification procedures due to their own responsibility to their local governing bodies.

This is most apparent for investors in the US due to the overwhelming regulation that is required by banks or any financial application. This doesn’t exactly jive with the original goal of cryptocurrency, which was to be free from these institutions, but it’s how things work for now.

There are however some benefits to using a centralized option. For starters, they tend to hold the highest level of trading volume. This is because they are typically companies with a large marketing budget to attract traders, and they also tend to be more trusted.

Many investors with a large bankroll don’t want to just put their money any old place, and a company that has real accountability for what they do with your money is generally their first stop.

By controlling much of the liquidity they actually attract even more traders to their service. This is because that’s where the money is and traders want to make money. Higher trading volume means more opportunities for trades with faster-moving markets and more profit.

Centralized exchanges also tend to be much faster than their DEX counterparts, and the ability to execute trades quickly is important to day traders. That is how they make their money after all, and if they spend all their time waiting around for confirmations then they will likely miss out on their very tiny profit window.

However, that does not mean that these investors are actually happy with centralized exchanges. In fact, many have voiced their disapproval of the way their funds are handled and the increase in fees that some players have been making. They just more or less put up with it for the benefits talked about above.

There have also been numerous instances where unsavory Website owners running these operations have taken off with trader’s funds. Whether this from direct theft or seizure from a governing body, the fact is that when a centralized platform has your money it is no longer yours, and they can do whatever they want with it.

Who might want to use a centralized exchange?

If you fit the below profiles then you may consider using this type of platform for your day to day trading activities.

  • Day traders
  • High volume traders
  • People who need trades executed quickly
  • People who are more comfortable with a company managing their money

What is a decentralized exchange?

When someone is talking about a cryptocurrency decentralized exchange they are typically talking about a trading platform which is distributed. This means that it does not have a central point of failure which can be shut down.

Not only does this protect the platform from attackers, but it also makes it extremely difficult for this option to be regulated, because there’s no company to shut down. Many of these operate in a peer to peer based environment that facilitates this functionality.

For privacy advocates and crypto enthusiasts, this presents a welcome change to the centralized platform ecosystem. A DEX typically comes with a real cryptocurrency wallet that you control, and that means no governing bodies or even the owners themselves can freeze your funds for any reason.

This also means that there is no verification procedure and no one is excluded from trading based on their location. This is extremely helpful to anyone who may have a difficult time registering a trading account based on their home country which may restrict or ban access to cryptocurrencies.

The fees for these types of setups also tend to be much more attractive, because the infrastructure to run them is cheaper. This means the exchange can pass these savings on to the traders.

There are however some downsides to using a DEX. The first being that despite the nature of cryptocurrencies, it has been very hard for a decentralized option to actually get off the ground. While there are several of them around, the trading volume remains painfully low, and it’s difficult to get people to actually use them. This is likely a chicken and egg type of scenario where you need traders to get transaction volume, but you also need transaction volume to get traders.

Due to this problem, it remains challenging to get people to make the switch. DEX’s also seem to suffer from a lack of speed, which is one of the biggest downsides to being decentralized. People making financial decisions where a second could cost them thousands of dollars do not want to use an exchange that can’t keep up.

This is, unfortunately, a big problem that DEX’s are still trying to solve. There are some solutions on the horizon which may clear this up, including liquidity pools which would allow them to easily share their trading volume and options which promise to be much faster. For now, however, centralized options are winning on this front.

Who might want to use a DEX?

If you fit the below profiles then you may consider using this type of platform for your day to day investing activities.

  • Those who are concerned with privacy.
  • People who want complete control of their funds.
  • Investors looking to buy more obscure assets.
  • Traders looking for lower transaction fees.

Should I use a DEX or a centralized crypto exchange?

When deciding what type of platform to use you need to look at your usage. If you are primarily focused on day trading and trying to pick up small bits of money from slight price variations in assets, then you need a high volume option with swift transaction speed. In this case, a centralized platform is likely your only option. Many DEXs simply are capable of providing this. The transactions will be too slow, and the market’s volume will prove inadequate.

If privacy and control of your own assets is your biggest focus, then you will likely want to pursue a decentralized trading option. These exchanges offer protection of privacy and control of your funds that no centralized option can match. The transaction volume on these exchanges is often just fine for doing one-off trades on a regular basis, and you’ll do just fine buying your coins or tokens here.

Are you looking for an exchange that offers a wide variety of assets? A DEX is likely the best choice. These exchanges are typically the very first to list brand new coins or tokens, and you stand to make some decent money if you can get in on them before they make it to larger, centralized options where the big volume is.

In closing, when choosing an exchange it’s important to know all the facts. Before transferring any money to these exchanges you should make sure that you’re familiar with all of the rules of the website and have properly identified your specific needs. If you need a little help in choosing an exchange, then Cointobuy.io also now offers an exchange ratings page!

Using this page you can quickly evaluate the exchanges that you are considering based on aggregated data. This can help you to choose the safest exchanges and even filter them based on certain criteria. This is an easy way to compare different exchanges at a glance.

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Why Does the Price of Crypto Vary Between Exchanges?

If you’re new to cryptocurrency investing then you may be confused by the fact that the cost for crypto coins or tokens can sometimes greatly vary between different exchanges or even different trading pairs! This is because every platform has its own order book that must be reconciled between the buys and sells for that particular asset and for each pairing.

For that reason, the cost of certain assets can vary dramatically between exchanges. Some smart investors even use this to their advantage arbitrage the prices between these services for quick profits. In this article, we’re going to talk about how cryptocurrency exchange order books work and how you can take advantage of these cost differences.

Even if you’re not interested in using the arbitrage method to make money, it’s still important to keep tabs on these changes to make sure that you’re not overpaying or undercharging when you buy or sell your investments on a trading platform.

Even small discrepancies in this number could cost you when you look at the big picture. A few cents here and there on thousands of cryptocoins can add up to a substantial chunk of change! First, let’s learn how the order book works on these exchanges and what the terms here mean.

What is the buy amount?

The buy price for a certain asset is the amount that people are willing to pay for it at that given time. In many cases, people or even bots will strategically change their offers in order to take advantage of the market. When you submit a buy it is placed in the order book, and then whatever the highest price someone is willing to buy for becomes the “market prices” for the different coins on the exchange so to speak.

For some assets, this cost can fluctuate greatly depending on how actively investors are exchanging that token. As a result, you’ll likely find much smaller differences between the price of large-cap coins on trading platforms than you would with small-cap coins.

Investors should keep in mind that the order book only shows people’s offers, and for a better representation of what people are actually willing to pay you should see the trade history instead. This will tell you of any recent trades that have occurred, and it may give you an idea as to whether you can offer more or less for your assets.

The order book is just a bunch of people haggling over the price of particular cryptocurrencies and trying to get their peers to either offer more or less for them so they can secure a profit for themselves.

What is the sell amount?

Much like the buy price, this is what people are willing to sell their assets for. Every website and even every trading pair has its own sell book. The users participating in that particular market determine the sell price. That means that depending on what activity is going on at the moment on the exchange that the cost here could be significantly different than on another service for the same asset.

Once you submit a sell order, it goes into the book, and then the software tallies these up and presents the lowest sell price as the current market value. If someone is desperate to sell their coins or tokens on that particular exchange then the prices of that asset will go down. For that reason, this can sometimes cause value discrepancies on one platform that do not exist in another.

Investors should keep in mind that cryptocurrency trading volume also tends to have an effect on the value of the asset in question. Sites with lower trading volume tend to have the largest trading discrepancies. That’s because with less coins to go around, it may be harder for the prices to even out.

Less trading volume gives people more liberty in choosing their own selling cost, especially within smaller trading pairs that not many people are using. That means a moderately sized holder deciding to dump their bags on the exchange could have serious effects on the price of a coin, even if only in the short term. This does, however, present an interesting opportunity for savvy investors who are looking for a bargain!

How can I take advantage of exchange value differences?

I’m sure it didn’t take you very long to figure out that it could actually be a financially viable idea to take advantage of the difference between the value on these exchanges or even between two trading pairs. This is called arbitrage, and there are tons of people who do this everyday to make money in various markets.

At any given time there can be a price fluctuation of a few cents or possibly even more sometimes on a particular asset on different platforms. This is most notable with lower value assets which tend to have the biggest price swings due to their lower trading volume.

In order to find these deals, there are a number of tools online that can help you do this. If you look at various cryptocurrency aggregator sites, most of the time they will list this data for you in their exchanges section.

In most cases, each coin or token will have the exchanges its currently traded on listed, and next to each of those entries will be the current trading volume and the price the asset was last reported trading at on these platforms. Using this information you can easily purchase those cryptos for a lower cost on one exchange, and then flip them on a higher priced market for a profit.

In many cases, the profits here will be very small. You’ll only earn perhaps a couple of cents per token, but the idea is to do enough of these trades so that they add up in value. This can, of course, be easier said than done, because there’s a ton of other people also looking for these deals.

That means that your window of opportunity for flipping these coins is very small unless you want to hold them long term of course. This can be particularly tricky on some exchanges with slow funds transfer times, as by the time you get your money confirmed to buy the coins, someone else may have already scooped them up.

The name of the game here is speed, and if you want to play the arbitrage game then you’ll need to take the time to learn how to identify great deals and be in the right place at the right time to take advantage of them.

As an investor, it’s up to you whether this method is worth your time, but it is a possibility, and if you enjoy watching the market for bargains then it’s a decent way to make yourself a little income. It can be an exhausting endeavor if you don’t actually like watching exchange information like a hawk, and if that’s the case you may just want to buy and hold some coins and forget about this mess. It’s obviously not for everyone.

In closing, it’s important to look at a variety of exchanges before making any cryptocurrency purchase. This can help you make sure that you’re actually paying the fair market value for these assets and not an inflated price.

This is extra important for low market cap coins because even relatively small buy or sell orders can skew the market prices in one direction, and that means it’s easy to either pay too much for a coin or even sell for too little if you’re not paying attention! The “market price” is not always telling you the whole story, and it would be in your be interest to learn how to read what these trading platforms are telling you.

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Do You Need a Hardware Cryptocurrency Wallet?

Cryptocurrency enthusiasts have a higher level of responsibility when it comes to managing their funds than those investing in a traditional financial market would. Aside from choosing the right projects and making sure your ICO investment is legitimate, it will also be up to you to manage your assets appropriately. That means storing your funds safely, and for that, you’ll need an adequate cryptocurrency wallet.

For most investors, a standard option will suffice, but a permanently live wallet is not the best option. There are many ways where scammers can steal your passwords or keys. This is especially prevalent when using an exchange for storing coins or even a web storage option.

One of the main issues with web storage is that it uses a domain name for access, and this is a prime target for scammers to utilize for phishing scams. You should be wary of any messages you get asking for your passwords or information, these are all attempts to steal your passwords and your funds right out from under you.

Though client or app-based wallets are not without their own downfalls. While it is less common than thefts through other means, it is possible for hackers to take your funds by using malware which cracks your encryption password. This is because all of these are “hot wallets”.

A hot wallet is constantly live to the internet, and that leaves it open to attack from malicious software. If you are running a client program, then it’s important to keep your computer’s anti-virus software up to date. Perform frequent scans to make sure that there are no malicious softwares installed and be careful about the sites you visit.

If you have a significantly sized investment then you may be interested in storing your funds in a much safer cold storage option. These wallets are on kept external devices, and they are not live on the web in any way. This makes them much safer options for any cryptocurrency enthusiast to utilize because it eliminates the chance of your funds being stolen. That makes these wallets a great option for anyone making a sizeable long-term investment that they would like to stow away for the long term.

The most popular of these options is called a hardware wallet. While there has always been the option of paper wallets which holders could print out, but in recent years these new devices have become more popular. The reason is that they offer much more functionality. For starters, you can actually store multiple currencies on most of them, and if you don’t want to keep up with a bunch of paper wallets, then this is an excellent choice.

A hardware wallet will also include the ability for you to create an easy recovery phrase. This means that if you were to lose or damage your machine that you’ll be able to get access to your money on a new device. This is superior to the paper storage method as you would have no ability to recover the funds should that piece of paper be destroyed.

Paper storage methods also have no security features, and if anyone were to find it and know what it was, they could easily steal your coins. Conversely, hardware storage options will permit you to choose a pin number to restrict who can use your funds.

What kinds of crypto hardware wallets exist?

There are a few major varieties of hardware wallets, and whichever one you choose will largely be based on the types of assets that you want to hold in it. Each one has its own advantages and disadvantages, and you should take a moment to explore each option before coming to a decision.

Ledger

This is one of the most frequent choices when it comes to cryptocurrency hardware wallets. It offers a very simple yet secure device which is secured using a pin code. All transactions must be verified with a button press on the device itself which protects you from transactions not coming directly from you. This essentially works as its own 2 factor authentication. Investors who choose this device should make sure that they set a pin code that they will remember.

Part of the security features for this device include wiping its contents after a certain number of incorrect attempts! This device also stores a wide variety of cryptocurrencies including Ripple, Litecoin, Bitcoin, Ethereum, Neo and many others. It does, however, have to be managed through the matching Chrome add-on which many find irritating to use.

Trezor

The Trezor offers crypto enthusiasts a wide variety of features including pin code protection. The device does not store the code, which means it can’t be taken from you even if your computer is harboring compromised software. The optional two factor for this device revolves around limited use passwords which can be utilized for maximum protection when protecting your trades.

These particular wallets do give extra data with which to manage your investments when using their own Chrome application if you’re interested in that. However, the functions seem a bit clunky, and it is likely not the easiest option to use. Trezor supports a generous amount of cryptocurrencies including Doge, Ethereum, Bitcoin, Dash, and tons of ERC20 tokens.

KeepKey

A lesser known option, but possibly one of the nicest ones. This one tends to be more expensive, but it makes up for it in extra features. This unit features a very large LCD screen and simpler operation than the other two. If you enjoy the slick interfaces and ease of use offered by Apple devices, then this device is likely for you.

It also includes a very durable and nice looking all metal frame. Users of this wallet will be able to utilize security features such as recovery phrases, hidden wallets, manual transaction confirmations, and superb ease of use features that will make it the easiest to use of all three options.

The list of currently supported coins here is a little smaller, but KeepKey will soon be rolling out native ERC20 token support. This is important because usually, these wallets have to work in conjunction with MEW to offer this. MEW is a hot wallet, and that’s obviously not ideal. It adds a possible means of your funds being stolen, and adding this could very well put them above other options on the list.

This particular wallet also offers some cool features that will allow you to make one-click purchases from merchants who accept Bitcoin without ever plugging in your wallet. By using these features you can keep a greater portion of your cash in cold storage.

What happens if my hardware wallet is lost?

If your wallet is lost, stolen or destroyed you can regain access to it with the use of your seed phrase that you made upon booting it up. You may need to purchase a new hardware wallet, and when you boot up the machine it will prompt you to input this recovery phrase.

Keep in mind that this will not wipe your pin number. That means it’s just important for you to remember this as it is for you to preserve your seed phrase. Without both of these items, you will not be able to gain access to your funds. Therefore, it’s important to protect these items by any means necessary.

Do I really need a hardware wallet though?

As an investor, it’s important to research all the options when it comes to properly storing your money. If you’re new to the world of cryptocurrency, then it’s important to remember that there are no insurance policies here. If your funds are stolen then there is no one to return them to you.

This is a lot of responsibility, but with that responsibility comes a greater degree of freedom. That freedom allows us to transact and manage our assets in the way we see fit. When choosing to purchase a hardware wallet, you know that you are putting your safety first.

If you own a decent cryptocurrency nest egg, then tucking away at least a portion of it on a hardware storage device is certainly a good idea. Even if you do need funds to trade with this will protect the bulk of your capital on a safe device. It’s important to remember that these devices are not foolproof.

They are electronics, and electronics can fail suddenly and without warning. So it’s important that you immediately back up your seed phrase that is given to you when you first make your wallet. You’ll need to stow this away in a secure place. Possibly in a safe or even a safety deposit box in case of disaster.

If you have a family member or friend which you greatly trust, then you could perhaps keep a copy with them as well. You should be careful, however, because this would allow an untrustworthy person to get access to your money on a new device.

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Investing in Small Cap Coins VS Large Cap Ones: Risk Tolerance

There are now more than 1,500 different cryptocurrencies, and as an investor, it can be exhausting trying to figure out exactly what to invest in. However, the first step you should make here is actually determining your risk tolerance. Risk tolerance is the amount of risk you are willing to take in order to make gains on your portfolio.

In most cases, younger people can take on more risk than older people, because they have more time available to them before they retire. Older people tend to be more conservative with their investments both because they have a larger nest egg that they are gambling with, and they will need the money much sooner.

In this article, we’re going to go over the pros and cons of investing in large or small cap cryptocurrencies. We’ll also discuss how you can use both of these asset classes in your portfolio together to get the best results for your money. However, first let’s talk about risk and how you can determine your specific risk tolerance. This will be important when trying to decide how much of your portfolio you should dedicate to which cryptocurrencies.

Are you risk averse?

When investing it’s important to find an approach that works for you. While smaller market cap assets do offer more opportunities, investing in them is not for everyone. Are you risk averse? If so then you may want to go with currencies that have a larger market cap. This will allow you to have a more hands-off investing approach.

If you are a very busy person or if you just don’t want to have to watch the markets or learn a lot about new projects, then this may be a good choice for you. This is particularly true if you find yourself having a heart attack every time an asset goes down for a bit.

However, if you don’t mind going with the flow and watching your holdings take a dive will not make you freak out, then you may be able to handle a little more risk. Investing in low cap altcoins is a lot of work, and you’ll need to be prepared to spend a good deal of your time researching these projects to find the best ones to put your money into. You may also need to watch your investments a little more closely.

The best way to invest however is to take a balanced approach. This option gives you the best of both worlds because you can make some very nice gains while still protecting yourself from total financial disaster. How much risk you want to take on is up to you, and there’s no hard set rule here, but it is important to identify your options and consider them carefully before making any large investments.

Small-cap coin investments

When someone says that they are investing in small-cap coins they are referring to assets with a low market capitalization. These coins or tokens are not yet proven in the market, and that means it’s more dangerous to invest in them. However, it also means that there’s a much bigger potential to make a large amount of money on these particular markets.

The reason being that there is still room for much growth potential. A small cap coin has yet to see its full potential reached. This particular cryptocurrency is likely still in the development stages, and they have not yet acquired a large audience.

If you are looking to invest in small market cap assets then you are looking for a project with potential that is not yet realized. This is easier said than done, and you’ll need to wade through many, many startups that just aren’t that great before you find your gems.

You may also need to be very quick in order to catch these new assets before everyone else. This means keeping yourself available on various websites or social media channels so you can keep an eye out for new and up and coming projects. Investors willing to take the risk on these new cryptocurrencies can see excellent growth in their portfolios.

How does this work? Well, these coins tend to be very low in price and very low in trading volume. That means it’s much easier for someone to come in and alter the price drastically just by producing a small amount of buying or selling activity. That’s exactly how people make money in altcoins, and you’ll need to decide whether to keep holding or sell and take profits.

Even if you fully believe in a project’s future, it might be a good idea to at least take some profits. Some people believe in taking half of the amount out for safe keeping when a cryptocurrency doubles in value.

When investing in small market cap coins or tokens, it’s important not to overextend yourself. Even a good startup with an excellent team can run into potentially devastating problems. For this reason, it’s important to diversify yourself to avoid big losses.

This is usually not difficult since most small-scale projects are also quite low in price. By evenly dividing your bankroll between these different startups and blockchain companies you can reduce your risk while still benefiting from the massive gains they are capable of.

Large-cap coin investments

Large market cap assets are the big ones that everyone already has or wants. This includes big-time cryptocurrencies like Ethereum or Bitcoin. It’s of course still very possible to make big gains on these cryptocurrencies as well, but it is not nearly as easy as it is with small-cap coins. When investing in a currency that is worth a penny it’s easy for it to fluctuate a cent or two on any given day. This can effectively double the price of your stack.

This is much more difficult for a large-cap currency, and it will require a dramatic event to happen for it to do so. However, it is not impossible. Bitcoin’s all-time high price was achieved in a very short time frame that surprised many holders.

Large market coins and tokens are however much safer bets for your money. These are much more established projects. In most cases, they already have working products, a user base, and big brand recognition. This keeps them from dropping quite as dramatically as coins with a smaller market cap would.

When an asset has a large trading volume it makes it much more difficult for people to trigger price fluctuations when buying or selling. A coin or token that has a daily trading volume in the billions will suffer much less from someone dumping or buying a few thousand dollars worth. This provides a good deal of stability that many people enjoy once a project gets to a certain level, and that can be a very good thing.

When building your portfolio you shouldn’t discount these types of projects immediately. While it is true that they have peaked much more so than other options, there’s still a place for them in your portfolio!

Cryptocurrency is still very new as far as financial markets are concerned, and even famous projects like Bitcoin or Ethereum still have room to grow. This growth will be slower and a little safer in most cases, but that’s the beauty of diversifying it literally gives you the option to have your cake and eat it too.

If an altcoin investment earns you a pretty penny, then it might be a good idea to diversify at least some of those holdings into something a little more solid. These large-scale projects will still give you plenty of growth potential, but your portfolio won’t be hit nearly as hard if one of your less proven projects turns out to be a real stinker.

This scenario can happen more often than you think. A coin may look like a winner this month, but then next month something unsavory surfaces and the whole thing goes south. By storing enough of your capital in large-cap currencies, this can be easily prevented. Keep in mind though that cryptocurrency as a whole is still volatile, and even high dollar assets can take an unexpected tumble.

Conclusion

In closing, when deciding whether to invest in small or large scale projects, you should really not assume it is a one or the other type of scenario. There are of course benefits to both approaches, and a healthy mix of both of them will give you a cryptocurrency investment portfolio that has a better foundation in the future.

If you use Cointobuy.io for your investing help, then you can even sort certain startups by their safety rating. The computer’s algorithm takes much of the work out of this for you, and projects are evaluated on several metrics to provide this number.

This can help you to identify which investments may be a greater risk than other options, and then you can distribute your funds appropriately to build a safer portfolio.

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Should You Invest in a Masternode? List of Good Masternodes

When it comes to making your cryptocurrency investments there are certainly more ways to make money besides day trading or even long-term holding. If you’ve explored mining, and you’ve found that the equipment and work involved were not for you, then there is another option.

While mining is the consensus method of choice for proof of work currencies, for proof of stake currencies it is often the masternode.

What is a masternode?

While many cryptocurrencies use miners to confirm their transactions, there is yet another method. Some cryptos utilize what are known as masternodes to do this. An investor interested in running their own masternodes must lock up a certain number of tokens or coins to do so. This effectively gives them a stake in the network and allows them the privilege of participating.

Those who choose to run a node will be paid for doing so. The rate will vary between every currency, but in many cases, it is a substantial annual gain. This can be as low as 5% or even enormous percentages that could earn you two or three times your investment in a year’s time. If you’re looking to earn some income from cryptocurrencies, then this is a solid method with which to do so.

What is required in order to run a masternode?

Running masternodes is a little more complicated than staking coins in a desktop client wallet. While the process is similar, in most cases you will need dedicated resources in order to do so. This usually means that you will need to purchase a VPS in order to run your node.

Many of these virtual private servers also run using Linux based operating systems, and if you are not yet familiar with them you will need to learn before getting started. Installation procedures usually are lacking in a GUI, and you’ll be required to use command line methods to install your staking wallet and manage it on your VPS.

Fortunately, the cost for doing this is not substantial. In many cases, you can acquire adequate hosting for as low as $5 per month. Most currencies recommend that your VPS package offers at least 1GB of RAM, and it will need to have a dedicated IP address for every one that you wish to run.

You can run multiples of these on the same VPS in many cases, but they must all have their own IP address. Most hosts will allow you to purchase additional IP addresses for an additional fee, so this is no problem.

How do I choose masternodes to invest in?

Since there is a real monthly cost associated with running your node you will need to make sure that the amount of coins that you earn will be worth this expense. In most cases, this will not be difficult. Unless of course, you choose a node that does not pay very well. There are many resources available that will give you this information before investing, and you should utilize them before coming to a decision.

You should, however, keep in mind that sites that aggregate this data are not totally accurate, and their information may not be up to date. You should always verify with other holders on social media as to their actual return numbers before proceeding with an investment.

When choosing a coin that you would like to use for this purpose you should look for a balance. The return of different nodes varies wildly, and there are some outrageously well-paying ones out there. However, you should keep in mind that this is not always a good thing. Sometimes having an asset that pays too well can actually hurt you.

This is because if there are too many new assets being minted that they will inevitably end up on exchanges for sale. This causes massive amounts of sell pressure, and it can push down the value of your investment. This can make it very difficult for your currency to gain or even maintain value, and you should be wary of it.

It’s also not the best idea to choose an asset that is paying a low percentage. In many cases, these assets will be prohibitively expensive or not really worth the return. It’s best to choose an asset which strikes up a nice balance that will net you a decent return without flooding the market with useless currency.

What are some good masternodes?

If you need a little help in choosing your masternodes, then this list can provide some suggestions. However, you should keep in mind that cryptocurrency returns and viability change very quickly. You should make sure to take the time to verify that these investments are right for your particular situation.

Prices have not been included because that amount will change on a daily basis. Instead, we have provided the number of coins required for the masternodes and the estimated annual percentage return.

You can then use these figures to calculated an updated estimate on how much it will cost for you to acquire the node and what kind of return you can be anticipated by running it. These metrics provide more reliable information over the long term.


High Return

These assets are generally cheap to acquire and they provide investors with a large number of stakes. They may not be the most stable, however, and you should be cautious investing here.

Many of these are extremely low cap assets. Some of them may actually produce a large number of assets, but this could adversely affect the price of your masternode due to how many are being consistently produced.

Pure (PURE)

This is a high return asset that’s available for a very attractive price. If you don’t mind investing in a cheap but potentially highly volatile asset then this node can earn you a return of as much as 3000% annually. You’ll need just 5,000 coins to get started here. While it’s certainly a risk investing in something like this, the investment required is pretty low anyway.

Rhenium (XRH)

This lesser-known asset will earn you somewhere around 340% for investors willing to take a risk on a lesser known coin. You’ll need 10,000 coins to get started here, which is more than usual, but not expensive considering the price of the asset itself.


Medium return

These assets typically provide a good balance between return and price to acquire. Choosing a masternode in this price bracket is likely a good option as it provides a good mix between risk and reward.

Many times the projects in this range are more established and they can provide a decent monthly income for investors who choose to run these masternodes. They produce a nice return without flooding the market with new coins, dropping the price of your node.

Ignition Coin (IC)

This node offers a particularly attractive annual percentage and is cheaper to acquire than many other similar nodes. Investors will require 3,000 coins to run a masternode, and they can expect to earn a whopping 136% for running a node on this network.

Smart Cash (SMART)

This node is a little harder to calculate because investors will actually get a percentage of the block reward from the network transactions that pass through Smart Cash’s insta pay system. If you’re interested in cashing in on potential transaction growth, then this is a way to do it.

A node of this type benefits by the fact that your percentage will grow with the network instead of being a set percentage. You’ll need 10,000 coins for this node. This is a pretty nice, low-cost introduction if you’re interested in owning masternodes.

Stipend (SD)

Investors interested in this masternode can expect to earn around 197% annually on their investment. Only 5,000 coins are required for this node, making it an attractive option for those looking to pick up a reliable cryptocurrency who don’t have enough to invest in one of the more expensive options.


Low return

These masternodes usually have the highest price assets but the lowest rates. Many of these nodes will be prohibitively expensive to most new investors, but if you have a substantial amount to invest and you’re looking for something that can hold its value more reliably, then this is likely the way to go. Be prepared to have a very large bankroll to invest in any of these nodes.

Dash (DASH)

This is one of the most popular assets, and it commands the highest price. You’ll need 1,000 coins to create a node here, and it will earn you approximately 7% annually on your investment.

Diamond (DMD)

This is a very old cryptocurrency with a very low supply. It has a dedicated community, and the returns remain low to preserve its value. 10,000 coins are required to create a masternode, and investors can expect to earn approximately 7% annually here.

PIVX (PIVX)

This node belongs to a privacy-focused cryptocurrency. Investors will need 10,000 coins to run this particular node, and they can expect an annual rate of around 7%.

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What Does Ethereum's Change to PoS Mean for Investors?

Ethereum is getting ready to put out some of their biggest releases to date, and investors who are looking to get in on a top tier project that still has much to offer the world had better pay attention because it’s going to be a big deal.

While it’s easiest to make a profit on low market cap altcoins who have a ton of growth potential, it’s important that you don’t count out large cap coins like ETH. Cryptocurrency is still developing, and there’s plenty of room even for these giant projects to keep growing. In this regard, Ethereum is one of the most promising.

While ETH has already achieved gratuitous mainstream success, the development team is not prepared to let ETH stagnate. Instead, they are releasing some of their most ambitious developments yet, and that could make this coin very valuable in the future. In this article, we’re going to take a look at those developments and what they could mean for you as an investor.

Casper and the move to POS

Ethereum is finally making their move to a proof of stake algorithm and moving away from their legacy proof of work model. The advantages to going with a proof of stake algorithm are numerous.

For starters, it would solve one of the largest problems currently plaguing the proof of work sector: centralization. Despite the fact that cryptocurrencies were originally birthed to be a decentralized payment exchange, the reality is becoming quite different. Mining has become prohibitively expensive, and only those with large amounts of start-up money can afford the equipment required to mine on large networks like Bitcoin or Ethereum.

Everyday miners have been completely pushed out, and this leaves the majority of the hashrate in the hands of very few miners or groups. This is a troubling development, and while many think there’s no reason for these groups to act maliciously, that may not always be the case.

Proof of stake does not require any such machinery, and the electricity required to mint coins via proof of stake is significantly smaller than the massive amounts needed for a proof of work setup. This not only makes POS a better choice economically but also ecologically.

POS also comes with a much lower barrier to entry than POW, and almost anyone can learn how to mint coins using POS in an hour or two, even with no prior knowledge of the software. This allows more people to pick up their own piece of the pie, and it also allows the entire network to become more distributed since now more computers can participate.

Proof of stake also has another great benefit. Miners have no vested interest in holding a particular currency. In fact, in most cases they will simply mine whatever is most profitable for their hardware and then dump those coins on an exchange in order to trade them for something else.

When using POS, the more coins you are holding the more stakes you can make, and that means a switch to this algorithm actually incentivizes you to hold at least a certain amount of Ethereum at all times. In fact, it becomes beneficial to hold as much ETH as you can to earn even more stakes.

However, unlike POW, low weight wallets will not simply be excluded from staking. While it may take them more time to do so, they will stake eventually, and the cost for electricity is so negligible that it will not result in weeks of net loss for low power miners like POW would.

There are still many who are critical of the proof of stake algorithm though, as it is arguably less secure than proof of work. The main security mechanism for this particular algorithm is based upon the idea that those who would be holding a majority of the network’s coins would not do anything to jeopardize their sizeable investments.

For many this is not enough, and they fear manipulation may soon be an issue. However, the ETH development team has come up with a solution for this as well. It’s called Casper, and this protocol will force anyone who wants to mint coins using POS on Ethereum’s network to actually have something at stake in order to participate.

This works as a type of collateral scheme. In order to mint coins, you must have locked up a certain number of ETH. Anyone who is found to be validating bad transactions or not acting in the best interests of the network will be punished.

These coins that are locked in a smart contract will be taken from them. This adds a sizable loss potential for bad actors that would make them think twice before trying anything, and it seems to be a suitable solution to the grievances presented by those who dislike the algorithm switch.

Sharding and the quest for blockchain scalability

The next big announcement for Ethereum will be sharding. This is effectively Ethereum’s version of side chaining. In the current system, all of the data on the blockchain must pass through every single node on the network. This was originally instituted for security purposes, but it is not a very efficient way to handle data, and it makes the whole process very slow.

Ethereum holders quickly learned that thanks to Cryptokitties, and it has become a large pain point for the entire network. It’s hard to be a launch pad for decentralized applications when those applications can’t actually do anything on your network without paying an exorbitant fee for the privilege. Once the ETH network gets clogged up transactions grind to a halt, and the gas prices go through the roof.

With the implementation of sharding, now these transactions will not have to pass through every single node. Instead, a small group of nodes will verify each transaction instead. This takes pressure off of the network, but enough of these nodes will still be used so as to provide reliable security that can’t be compromised.

According to the Ethereum FAQ, the developers want the network to be capable of processing 10,000 transactions per second to make it a real contender for hosting applications. When combined with POS, sharding should cut both the issue of slow transactions and high fees off at the knees. Allowing users to participate in these new decentralized applications more quickly and with lower costs.

Plasma and child chains

The development team has also been hard at work on Plasma. This is a technique that will allow for projects launching on Ethereum to run on their own child chains. Not only does this give them the freedom to manage their own chain, but it also allows them to perform their operations without clogging up the rest of the network, leaving users outside of their space to transact freely.

This will allow a greater deal of scaling ability to current and new applications looking to place themselves within the ETH framework. You could think of this as a blockchain on top of a blockchain. While these chains are connected to Ethereum for security reasons, they are for all intents and purposes their own unique entities.

Conclusion

In closing, thus far ETH has been a proof of concept. They have proved that their project has the base components required in order to launch these decentralized applications. However, they are now bringing that idea to full fruition. With developments for Casper, plasma, and sharding well under way, soon investors will see the true power of this project and even mainstream consumers will find it hard to ignore what the blockchain has to offer.

Over 1,600 projects have launched on the Ethereum network to date. They have massive market penetration and many developers with a vested interest in their infrastructure. Now they have come to the point where they will be fine tuning that offering in order to give those developers and the users of their applications a flawless experience. One that lacks any centralized points of failure or censorship that would be a threat with the traditional hosting of these applications.

It’s going to be a long, bump road for the blockchain, but these developments will likely help others outside the space to view these projects a little more objectively. Perhaps the biggest triumph of the Ethereum network will be that it can help to convince outsiders that the blockchain is good for more than simply speculating on the price of digital currencies.

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What's the Difference Between POS and POW Coins?

There are generally two protocols that cryptocurrencies use to operate. These are called proof of work and proof of stake. You have likely heard of crypto mining before, this is part of the proof of work model. If you’ve ever heard of staking or masternodes, then you’ll likely know that this is part of the proof of stake protocol.

Both of these methods have their own pros and cons, and in this article, we’re going to discuss the differences between them. Both of these setups will allow investors to earn additional coins by participating in the network, and which one you prefer will depend on your individual situation and the resources that are available to you.

Both of these protocols are very interesting, and if you have even a passing interest in how cryptocurrencies function, then you should take the time to explore both of them more thoroughly.

What is proof of work?

Proof of work is a method through which cryptocurrencies can reach consensus. This essentially allows for the network to be governed without intervention from any outside governing body, and it prevents people from using the network in nefarious ways for their own greed.

Every transaction must be validated by miners before it is confirmed. They do this by solving complex mathematical problems with their computers, and they are then issued a reward for doing so.

In order for the blockchain to stay on track, all of these miners must agree with each other on the proper direction of the chain. This is a built-in security feature that prevents anyone from acting in a self-serving manner. The idea is that the majority will recognize this wrongdoing and their efforts will quickly be negated by the group.

In order to mine, users need to spend a good deal of money and resources on both hardware and electricity. This is part of the security setup of POW, because it makes it very expensive for someone to control a large portion of the mining pool. That means that it’s unlikely that they could control the blockchain in any way.

The large expense involved with mining limits the ability of people to behave poorly within the ecosystem, and many people agree that this is one of the most secure means to manage the blockchain, but it is also very resource hungry.

Mining operations require an ever-growing pool of electricity. Plus, thanks to how fast technology evolves, the computer components required to mine must be constantly upgraded, and the profitability of mining operations is constantly falling. This makes POW mining a venture that is now too costly for the majority of people.

What is proof of stake?

POS is a secondary consensus method. Instead of using the hashing power of PCs to validate blocks, it instead does it based on the investor’s wallet weight. The algorithm determines the “power” of a particular node based on how many coins are in that particular wallet and how long they have been there, as time adds weight as well.

This number is then pitted against the total weight of the network to decide when to offer that wallet a transaction to confirm. This gives those who hold a larger stake in that particular currency a larger portion of the rewards.

The logic behind this being that people who are greatly invested in a particular currency would not act in a way that would damage the network, as this would likely destroy the value of their investment, which would be worth far more than the price they would get for validating false transactions.

While this method is much more energy efficient than POW, and it allows for better scaling, some believe it does not do enough to disincentivize bad actors.

To that end, Ethereum has introduced Casper, their POS scheme. This protocol would actually punish people who act maliciously toward the blockchain by removing a portion of their stake if they are found to be validating bad blocks.

Everyone who wishes to stake on the Ethereum network when it goes live will need to offer a portion of their investment as collateral, those who are found to not be acting in the network’s best interest will have a tangible loss, that will offer a greater incentive to behave themselves.

This change makes the security of proof of stake more viable than it was in the past. This could allow POS to provide cryptocurrencies with the many benefits of its protocol, without the downfall of less security.

Which protocol is better?

There is much debate about which of these protocols is the best. As of now, POW is arguably a safer method, but it is becoming centralized. The cost to begin mining has now gone through the roof, and many smaller miners have been pushed out. Plus, the upfront costs of mining rigs and the resources needed to run them are not advantageous to many people.

This creates a much smaller pool of validators, and it allows large-scale mining farms to eat up the hash power, causing security issues for big cryptocurrencies like Bitcoin or Ethereum.

POS has no need for massive amounts of hardware or electricity, and it also comes with a much easier learning curve. While it takes specialized knowledge to run a mining rig, none is needed to participate in a POS environment.

The only issue, of course, being that security in traditional proof of stake setups is not as high as proof of work. However, with Ethereum’s Casper protocol rolling out, we could soon see a solution to that problem.

Some are understandably worried that a POS model will completely shut out the little guy due to the cost of the initial investment. While this is an understandable concern, using proof of work doesn’t really solve this problem either.

There’s no possible way for the everyday person to mine Bitcoin. They would never find a block. Likewise, it is harder to stake coins with a smaller investment, but it’s still possible.

You just have to wait longer to do it. It also incentivizes people to hold on to their coins rather than dump them immediately upon minting. More coins mean more frequent stakes after all, wherein a mining only system, some will mine simply for income, even if they have no interest in the coin.

It doesn’t have to be one or the other!

The truth is that what’s better for one currency may not be better for another. Fortunately, we don’t have to only have one way to do things. Cryptocurrencies are diverse, and it’s likely that both of these protocols will continue to exist side by side.

Each one will be improved upon, and in the future, it will be more clear which is the best solution. Even if a winner is crowned though, don’t expect the other to just go away.

In fact, many currencies actually use both POW and POS. Many proof of stake currencies are initially created using mining, and then POS is implemented. In some cases, they actually continue to use both methods, and this could be a very viable solution that allows as many block validators as possible to participate in these networks. A hybrid model could have many benefits and the future is not yet seen.

Can I earn money from POS and POW?

You can earn coins for yourself using either of these models. If you have high-end computer equipment, then you may want to look into mining some lesser known altcoins which may still have a low difficulty rating.

If you don’t have any such hardware, then you may want to instead invest in a POS currency with an attractive return. This is a much better option for enthusiasts who are not as well versed with computers and software.

The knowledge required to begin participating in proof of stake is far lower than that of proof of work. You’ll only need to acquire your coins, and then download the desktop client wallet in most cases. However, you can easily learn to participate in proof of work mining as well within an afternoon if you have your heart set on learning more about the POW process.

How can I get started with POW?

After establishing that your computer hardware is sufficient to mine, you’ll need to find a mineable currency with a low difficulty rating. There are many websites that can help you with this, and you’ll be able to quickly identify which algorithm and cryptocurrency will be the best for your specific hardware.

After finding a coin, you’ll need to download the mining software, and in most cases, you’ll need to find a pool to connect to. While it is possible to solo mine, it’s usually not very profitable for casual miners, and you’ll make more using a pool.

A pool is a group of miners who bundle their hash power to find blocks. You can use the pool to get more frequent payouts, and it’s generally fairly easy to get started this way.

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Privacy Coins Explained – Should You Invest in Them?

Many people think Bitcoin transactions are anonymous, but this is nowhere near the truth. In fact, every single transaction is recorded in the ledger. That means if you were to find out someone’s wallet address, then you could actually follow their transactions like a trail of breadcrumbs. Since you have to provide this address to someone in order to receive any payments at all, this is not difficult information to get a hold of.

Because of the growing concerns that many crypto advocates have about privacy, certain cryptocurrencies have been created to address these issues. They are referred to as privacy coins, and these currencies have implemented several features which can help to mask, cover the tracks of or even erase your transactions.

Even if you have no intention of using these coins for purchases yourself, as an investor it can be a good idea to have some in your portfolio for diversification purposes. So, in this article, we’ll be talking about private currencies and a little bit about how they function.

How do privacy coins work?

In the old days, before anyone had access to currencies that would protect your transaction data, people would use something called a mixer. This is essentially software that will bounce your bitcoin between different wallets in an effort to confuse people who may want to trace your activities. This method worked well enough, but it meant you had to trust an outside source with your money and hope that they would not steal it.

To that end, privacy-focused currencies were created to essentially do the same thing, but without the need for a third party and on a grander scale. The way they do this can vary a little between each currency, but here’s the main features that privacy coins tend to implement.

Ring signatures

This is a method by which some privacy-focused cryptocurrencies try to fool those who may be spying on the network. It takes all of the transactions happening on the blockchain, and it makes it look as if all of those parties are transacting with each other.

This makes it almost impossible to see where a transaction has come from, effectively protecting all parties, because none of them can be singled out. While theoretically, it’s not totally foolproof, this is currently one of the best methods for hiding transaction data and protecting participants.

zk-SNARK

This privacy protocol is still developing, and it is not yet widely used. However, it is part of the zero-knowledge proof system. Essentially, the easiest way for a system to not reveal information about you is if that information was never there in the first place.

By using this technology, blockchains will be able to verify the information of both parties without ever revealing it by asking a series of questions repeatedly until a consensus on the transaction is made. There is some worry that these answers could be spoofed though, and that’s why zk-SNARK is not as widely used yet as ring signatures are.

Stealth addresses

If you give someone your Bitcoin address, it’s possible for them to see the entire balance of your wallet. This is obviously undesirable for many reasons, and most people don’t want everyone to know exactly how much money they have.

This makes you a prime target for theft and social engineering scams. Many private coins use stealth addresses. These addresses will not reveal your wallet balance, and it allows you to safely request money without revealing your wallet’s true location.

What is the best method for private transactions?

The future of private transactions likely sits with zero knowledge, however, the technology is not yet fully developed, and there are a few security concerns to address still. Ring signatures are quite safe, and while there is, of course, a chance that new technologies will be able to link the transactions of currencies like Monero, at this point in time it is not very likely.

Some currencies offer private features but do not require all transactions to be private. This causes problems for some people in that the network is not fully trustworthy if every transaction is not private. However, some coins have allowed for the choice so as to entice merchants to adopt their coins for payment, since some are hesitant to accept these cryptocurrencies.

Why should I invest in private coins?

Some people believe that these coins are only for criminals, but this is not true. They are simply for anyone that does not approve of the way that governments or organizations handle their private data. Using a private coin allows you to protect yourself by hiding your wallet information from those who would try to compromise it, and in many cases, this is the best way to protect your assets from theft or fraud.

While many people still believe that all cryptocurrencies are more or less anonymous, those attitudes will likely change in the future. Once this information becomes more apparent to the general population, it’s likely that more cryptocurrencies will adopt stealth features, but the already established ones such as Monero or ZCash will begin to see more use. Especially after they achieve more adoption with vendors.

Stealth coins are just another sector in the cryptocurrency ecosystem, and it’s a great place to diversify your assets a little. Socking a little of your gains away into a large market cap stealth currency such as Monero is both a great way to preserve the value of your portfolio and prepare yourself for the future. You may even want to invest in a couple of different coins that you see potential in.

Some coins to consider

Monero

The most famous of all privacy coins, if you invest in Monero, then you will have a great store of value currency. This is the most widely used privacy option, and it has widespread adoption with many vendors. Monero is the most likely candidate for any merchant to integrate if they are interested in accepting a privacy-focused cryptocurrency.

This particular coin also benefits from having many exchange listings, and if you want to transfer some of your money into Monero, then it’s very easy to do. This is typically the first choice for anyone who is interested in using or owning a privacy-focused investment.

ZCash

Likely the second most popular stealth coin, ZCash’s innovated Zk-SNARK protocol is loved by many, including Edward Snowden. While not as widely accepted as Monero, this currency is working towards the future of private transactions.

They do not, however, have nearly as much adoption as Monero does, and they are lagging a little further behind because of it. That could very well change in the future though, and as an investor, you may want to put a little money here as well.

PIVX

If you’d like to own a lesser-known private coin that is also a proof of stake asset, then this may be a good option for you. This currency provides instant and private transactions, and you’ll be able to mint new coins to spend instead of buying them, effectively limiting your ties to transactions.

The annual return is a nice bonus if you plan to hold a good deal of your investment in a privacy-focused cryptocurrency, and it gives you a good opportunity to continually add new funds to your portfolio without any actual new input from yours. Investors should keep in mind that this currency is not nearly as proven as the other options on our list, and it will likely not hold value as well in the event of a crash.

Conclusion

There are of course many other currencies to consider, and you should take a moment to familiarize yourself with all of the options out there before proceeding. While a top market cap coin will help preserve your investment, there’s still smaller cap assets which could net you some very nice returns. New technologies are cropping up in this corner of the crypto-verse every day, it’s worth it to try to keep on top of these new developments.

Before investing in any currency, you should of course fully research the project’s goals, team and their roadmap. Ask yourself what this particular currency brings to the table. Is it doing something new that will make it better than the current options already available?

It’s important to remember that Monero has a very established foothold here, and in order for a new privacy coin to take its place, it will need to do something truly spectacular. Something that’s just another clone but adds no real functionality is not going to cut it for your portfolio.

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What Is the Difference Between Crypto Coins and Tokens?

As a new cryptocurrency investor, there’s a lot of stuff to learn in this space. This includes learning about the many different types of cryptocurrencies that are out there and the technology behind each one.

One thing you may have noticed is that there are both coins and tokens, but you may still be confused as to what each one represents. In this article, we’re going to talk about the main differences between coins and tokens to help you decide exactly what you might want to invest in. Ready? Let’s get started!

A coin is its own asset. It has its very own chain and functionality. Some prime examples of a cryptocurrency coin include Bitcoin or Ethereum. These are their own solutions. Tokens, however, do not have their own chain. They are usually built on top of another blockchain, and while they have specific rules to govern themselves for the most part, they are still tied to the asset which they are built on top of.

The most obvious example is Ethereum

This coin has launched the most popular platform with which other projects can tokenize themselves and launch their new platforms. These are called ERC20 tokens. This provides some advantages over creating your own coin too. For the most part, these tokens can take advantage of any services currently available to Etheruem, including wallets and even many decentralized exchanges.

This gives these assets a leg up that they would not have if they launched on their own. Ethereum is not the only blockchain that serves this purpose though, and there are other projects such as Waves and Neo which also have additional assets hosted on top of their main chain.

While sometimes these new assets are simply representative of their own projects. In others, they are actually improvements to their base chains. Some projects like this will allow for side chains, sharding or even new capabilities for smart contracts to improve their functionality. An example of a project like this is POA Network. Their solution creates an entirely new public sidechain for Ethereum apps to run on.

Another key difference between a coin and a token is that coins are typically mineable, and tokens are not. This is not really by design, as 0xbitcoin has actually created a mineable token, but more to preference.

Initial coin offerings and swaps

Most companies tend to host an ICO for their project, effectively using the Ethereum blockchain as a placeholder for their development. This allows them to collect money for their startup, while still offering their investors a tangible asset which they can trade with one another.

Sometimes these startups choose to simply stay an ERC20 token, such as Dragonchain. If there’s no reason for them to host their own blockchain, then this is honestly a good move. It gives their investors a lot of advantages that they might not otherwise have.

In some cases though, such as with EOS, the ERC20 asset is simply a placeholder. Once the mainnet for the project is launched, investors will swap these placeholders for the real token on the project’s new blockchain. If you plan to invest in tokens, then you’ll need to look out for this. If you make a large token investment and stow it away, you could come back to find that your investment is now worthless if you missed the swap!

When investing in a token, you should always try your best to verify whether that project will be staying on its host chain or migrating to its own chain after the fact for this reason. It’s also a good idea to keep up with your favorite cryptocurrencies on their various social media channels. This way you’ll be the first to know in the case of a swap.

Tokens are also typically not meant to be used as a currency. Though they do still have value obviously. In many cases, these assets are for utility. Unlike Bitcoin, which was meant for purchases and exchanging value between parties.

Usually, the idea of a token is to hold it for some purpose within the network. Though the reasons for this will vary for every single cryptocurrency. Investors should also be sure to watch out for assets with empty use cases, as these are normally money grabs for the project, but hold no real value for you.

How to invest correctly?

In closing, when choosing what type of asset you want to invest in, you should take a moment to appreciate the differences between coins and tokens. When investing in a token, you are more likely investing in a portion of a startup or a company.

Many times ICOs are big budget affairs with large development teams full of professionals and advisors. They also tend to have large development budgets and venture capital partners to help streamline the process.

When investing in a coin, it is typically a community-owned venture. While the budgets for marketing or development may be slim to none, they do offer a more personal experience for investors. Bitcoin is an open source platform for transferring value, it can’t “go out of business” or be shut down.

Even if every developer left the team tomorrow, new ones would simply take their place, and in many cases, that’s just not something you’d get from a token. That’s not to say that tokens are not good investments, there are many great companies who issue them. The point is, that it’s up to you, the investor to evaluate exactly what type of investment you want to make.

Before putting money into any project, it’s important to research it thoroughly. There are plenty of projects out there that are blatant scams, no matter if they are a coin or a token. If you’re not sure about a particular project, then you can use Cointobuy’s many features to evaluate the many cryptocurrencies out there and their teams.

Using aggregated information can help you to vet your investment decisions more quickly than if you had to do all of the research on your own. It’s a good idea to take a look at these tools to help you make an informed decision.

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Cryptocurrency Staking Explained: How to Find Good PoS Coins?

In the world of cryptocurrencies, there’s generally two ways in which a currency can support the network. This includes Proof of Work, the method by which currencies such as Bitcoin confirm transactions, and Proof of Stake, an alternative method that offers the benefit of providing not only faster transactions times but also uses less electricity. These currencies also tend to have cheaper transactions because of these factors.

While proof of work utilizes the hashing power of a computer’s GPU in order to confirm transactions and mint new assets, a POS setup does this by instead taking into account the weight of a wallet’s investment in the network. The logic behind this idea being that those who are heavily invested in the network will not endanger it in any way so as to negatively affect their investment.

Proof of Work cryptocurrencies are increasingly finding that they are in dangerous territory due to the level at which the cost to operate a mining rig are rising. The hardware and electricity required to confirm transactions has become very expensive, often discouraging smaller miners from participating. This is obviously very dangerous, as it allows a very small number of people to potentially control the entire network of a large cryptocurrency.

POS does not come with any of these requirements, and that gives it an opportunity to allow more people to participate in confirming transactions. It’s also much easier to get started with staking than it is with mining, which often requires not only a large amount of hardware but also specialized software and a good deal of knowledge of the process to get started.

Your ability to stake will instead be based on how many coins you own and how long those assets have been in your wallet, versus other investors participating in the network and their own personal wallet weight.

How do you mint coins by staking?

Investors who are interested in earning some money to aid their favorite proof of stake cryptocurrencies will be relieved to know that it’s pretty easy to get started. You don’t need any special hardware or mining software to earn money, and it’s typically very easy to learn to do.

1. Identify the currency that you’d like to stake

The first step is, of course, finding a coin that you’d like to stake. Sometimes it can be hard to find lists of assets which allow staking, but there are many sites that give out masternode statistics. In many cases, these projects also allow staking without owning a node. You can use this information to get started and even get an idea of what type of return you can expect.

2. Acquire an appropriate number of coins

While you can begin staking with any number of coins, in most cases it could take you a very long time to mint anything if you don’t have a high enough wallet weight. Usually, if you look around in the project’s social media channels someone will be talking about their average return, but if not you can actually get a good idea of how many of them you will need by using the explorer. Most projects have a public wallet explorer, and if you click on enough addresses here you’ll soon be able to see the average stakes people are getting based on their balance.

3. Download the official wallet

After purchasing your coins from an exchange you’ll need to send them to the project’s official wallet. This is typically the only one that will allow you to earn anything. Third-party providers like Jaxx or Coinomi will not be able to provide you with any stakes.

4. Encrypt your wallet

Create a strong password and make sure it is something you remember. If you lose this then you will not be able to regain access to your funds. You may want to write this down on a sheet of paper and keep it somewhere safe.

5. Unlock your wallet for staking

Most wallets will require you to unlock it for staking. This is typically found in the settings menu, and after entering your password your balance will begin minting new assets.

Keep in mind that most currencies have a waiting period before you can become eligible to begin earning rewards. This varies greatly between projects, and it could be a few hours, but it could also be a week. You’ll need to look for documentation that is specific to your investment to be sure about this.

You’ll also need to keep the program running in order to earn rewards. In some cases, you may be able to still stake opening it only periodically, but running it all the time is typically the best option.

How do I find good proof of stake coins?

Finding good proof of stake currencies can be hard sometimes. Most aggregator sites do not denote what algorithm a coin uses. Many times you’ll need to verify manually that a coin allows for staking, but you can often start by using services that report the returns of masternodes. Many of these projects also allow for staking, and it can be a great start to finding solid projects that offer their investors good returns.

When choosing a proof of stake asset it’s important to remember that the currencies that offer the highest percentage are not always the best. In fact, many times this just means that there will be a large number of coins constantly being dumped on the market, making it hard for your stakes to maintain their value.

High supply assets also tend to require a huge number of coins in order to begin staking. Sometimes requiring millions of tokens in order for you to acquire enough weight to participate on a regular basis. The best currencies will strike a good balance between return and required investment. If you plan to use this for income rather than a speculative investment, then you may also want something that tends to keep a steady value.

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Cryptocurrency Whales: Who Are They?

If you’re a new cryptocurrency investor, then you’ve likely heard others reference “whales” before. You might not, however, know who these people are or what it means to be a whale. In this article, we’re going to go over this term to give you a better idea of who these people are, and why your fellow investors repeatedly tell you to watch out for them.

Investing in cryptocurrency is not for the faint of heart, and it takes a strong stomach to keep holding sometimes. Much of this roller coaster feeling you have is due to market manipulation, and it’s really just how financial markets work.

Even in more traditional markets, people are constantly trying to play on the fears and greed of others in order to make themselves more money. If you learn how to deal with these things though, you can protect your investment from the biggest enemy you have, yourself!

What is a cryptocurrency whale?

Whales are the big money cryptocurrency holders. These individuals typically hold a large number of coins within a specified asset, or perhaps just a very large amount of cryptocurrency as a whole.

This can give these individuals an abnormal amount of power when it comes to trading. Especially if the cryptocurrency that the whale is holding has a lower trading volume than other assets in the market. Very new coins can often have this problem or possibly quiet community developed projects.

You may have also seen people talking about assets which have had unfair distributions. Part of that complaint also stems from whales and the possibilities of price manipulation. This is a common concern for coins or tokens that had short-lived airdrops or very large premines.

Many times this is even seen as a manipulation tactic as it means that the orchestrators of an ICO or community projects have in essence made themselves the whales. This makes many investors nervous as it means that these developers can constantly dump coins on to the market if they choose to squeeze money out of a project they are not really dedicated to developing.

Why are whales dangerous?

When you hold a substantial portion of a particular currency it gives you the ability to greatly influence markets, especially smaller ones. That means it’s possible for these particular investors to cause large spikes in the price of certain assets.

Many times pump and dump groups will participate in these types of tactics on community coins with typically small trading volume. They will actually accumulate a good number of these coins for cheap prices and begin to spike the volume upwards. This creates a sort of feeding frenzy where other investors see the price going up and then buy in as well, hoping for quick gains.

Unfortunately, the people orchestrating these shenanigans are fully prepared for this, and once the price has reached it is peaked they start dumping all of their coins on the market, crashing the price. This leaves novice investors like you holding the bag while these individuals add to their pot.

It’s a dangerous game, and you should be very suspect of any asset you see pumping well beyond what it normally should. If you see a bland, half dead cryptocurrency suddenly skyrocket 1,000% out of nowhere, then this is likely what happened.

What about institutional money?

While there are even bigger whales who have corporate account level money, many of these individuals will instead utilize OTC trading. This type of trading allows these large-scale investors to purchase their coins off the traditional exchange order books.

This means that they can make trades without disturbing the natural flow of the markets and to buy or sell their cryptocurrencies without drawing unneeded attention to themselves. Many of them could not even utilize exchanges, because they would be placing orders too large for the books to even fill.

While this what happens in most cases, that’s not always true. The Mt Gox bankruptcy representative was not very well likely recently, because he apparently dumped large quantities of Bitcoin on to the open exchange market, angering Bitcoin holders who saw their holdings diminish in value.

Keep in mind that the price dropping does not stop at the person who sold originally. Other investors will see the price drop, and then sell their investment as well out of fear! This creates a domino effect which can devastate the entire market since all cryptocurrencies tend to follow Bitcoin very closely.

How can you protect yourself from this type of trading activity?

In some cases, you can’t. If the price of one of your holdings is being manipulated, then you’ll just need to learn how to identify this and go with the flow. This means not panic selling or buying based on emotions, but instead keeping a calm and level head.

You can of course benefit from this activity if you’re already holding a coin that decides to take a ride. This gives you a prime opportunity to sell for a profit if you’re quick enough. However, you may find that the ride is over just as quickly as it began, and you’ll need some impeccable timing to catch it.

You can, however, avoid popular pump and dump assets. Most of the time these are very low volume coins that would have a lower supply. This makes it easy to accumulate them on the cheap and manipulate the price, especially if you already have a substantial cryptocurrency bankroll.

Avoid any promises on social media of fast money, these people are looking to make a sucker out of you. They hope that you’ll buy up an asset that they’ve already pumped in price so they can make a profit. Avoid these situations entirely, you will not win here. Especially as a novice investor. Chasing these schemes will only end with you out your hard earned cash.

Instead, invest in solid projects that you have researched heavily before purchasing. Be prepared to hold these coins or tokens for the long haul, and don’t throw away your investment every time you see a short dip in the market.

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A Guide to Cryptocurrency Airdrops: How Do You Get Free Tokens?

In the world of cryptocurrency a popular method of both distributing the initial supply of a coin and even rewarding holders after the fact is the airdrop. It can take some serious scouting to get in on these deals though because most of the time it’s too late if you’re hearing about it on many websites.

Drops are typically a very limited engagement, so you need to be quick about it. Investors interested in getting some freebies will need to keep an ear to the ground in the right places in order to find these new projects.

There’s plenty of opportunities for you to get some free coins, but you should keep in mind that in most cases these are not huge amounts. Typically drops are distributed evenly between a great number of people, but they can still be valuable. Especially if you can get a good deal of them. Okay, let’s talk about different types of airdrops, and how you can get some of them for yourself.

Coin launch airdrops

Some coins will actually premine their entire supply and then airdrop all of it to the community in a free distribution procedure. The reasons they choose to do this vary, but it can create some serious problems. For starters, it floods the market with new coins or tokens. Many of the people participating in the airdrop likely don’t care about the project, and they only want free money.

This greatly lowers the price of the asset initially, and it can make it hard for it to gain traction since so many of them are circulating at once. It can also result in the coin’s supply being poorly distributed, with some people holding obscenely large amounts of the currency.

An example of this type of airdrop is Flashcoin. Every coin has already been distributed, and there’s no way for anyone to ever mint or mine any ever again after the drop was completed. Now you can only get Flash coins by buying them from people who participated in the drop or those who bought them from these people.

While this did lead to an immediately large circulating supply, it also removes people who would otherwise just mine the coins and then immediately dump them. Now only people who actually want the coin will be holding it, and the sell pressure will eventually die off.

Holder airdrops

While it’s often the newer coins that hand out freebies, sometimes even older projects will still have airdrops available! DeepOnion famously held a 40-week airdrop where every week holders were rewarded with additional coins for holding on to their investment.

There are many other projects that do this as well. Though some of them may not advertise it as well. PundiX and Smartcash reward holders with similar drops to their wallets through distributions and rewards. Nothing is required of you to earn these other than being a holder of that asset.

Often times the drops for these are much smaller, but they happen on a recurring basis. That means that it can add up fast, and it’s possible for you to gain new coins or tokens every month, or even every week in DeepOnion’s case just for holding on to your investment.

Some of these programs have stipulations you must complete every week like being active in their forums, but others have no such requirements. Smart Cash will simply send you new coins just for having a wallet and not touching the contents. No other participation is required.

How do you get these airdrops?

In most cases, not a lot is required for investors to claim these drops. The project leads may require you to join certain social media channels such as Telegram or Discord, or they may require you to submit other information. Typically a date will be announced, and you will need to join by that date to claim your tokens.

Sometimes you can even get a bonus by referring others, as the developers want as many people as possible to join the drop to help launch the coin. While it may seem that giving out free money is out of the goodness of their heart, this is often times a clever marketing ploy to get attention for the new asset which might otherwise be ignored by investors.

When claiming your airdrops, make sure to read all of the information provided by the developers carefully. If you don’t follow their instructions exactly then you may not be eligible for the drop, and you could miss out on your coins or tokens.

How do you find airdrops?

In order to find airdrops, you need to seek out places where new coin projects are hanging out. In most cases, this will be the Bitcointalk forums. Almost every new cryptocurrency launches itself here, and if there are any airdrops available, this is where you will hear about them. If you visit the “coin announcements” section, then you’ll be in a good position to find projects like this.

Unfortunately, this is also one of the most active boards, and these announcements will be quickly buried by threads that are getting replies. You’ll need to keep on top of things, and it may be possible for you to subscribe to new topics. That way you don’t miss any new announcement threads. Or you could just start scanning the front page every day. Usually, if there is an airdrop it will be listed in the topic’s title, and it should be easy to pick out these projects.

Twitter is also a good place to learn about these kinds of events. It’s also a little easier to search than the forums because you can use hashtags to filter through the noise a little bit. Twitter, unfortunately, has the misfortune of attracting a lot of scammers though. Airdrop holders will never ask you to send them any money to participate, and if anyone on Twitter requests money from you for an “airdrop”, then you should report their account as a scam.

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Defining Bull and Bear Cryptocurrency Markets

Due to the age of the average investor in the cryptocurrency market, this is likely their first experience with investing at all. This means that there’s a lot to learn. If you are new to investing, then you’ve likely heard people talking about crypto bull or bear markets, but you might not be sure what they mean by that. In this article, we’re going to go over exactly what this means for you and your investments.

It’s possible to make money in both bull and bear markets, but there are different strategies for each one. Investors should be cautious when putting their money into cryptocurrency markets no matter what type of investing environment we are experiencing. There’s serious pitfalls to avoid here though, so we’ll also be going over some strategies that you can use in both markets.

What is a bull market?

In the world of investing, a bull market is generally a positive thing, and it even makes people who generally would not care about certain investments stand up and take notice. Cryptocurrency investors experienced this toward the end of 2017, and they saw many of their investments skyrocketing overnight.

A lot of new money entered the cryptocurrency space, and that pumped a ton of money into many projects. This interest was brought about by the massive gains Bitcoin experienced, attracting the attention of the mainstream media, and dragging in those who had never heard of or at least had never been interested in cryptocurrency before.

Investors who are coming into the space during a bull run should be extremely cautious. What goes up must come down, and it’s easy to buy in at the top when the bulls are running. While this can feel like a great decision at the time, you could be setting yourself up for disaster a couple of months down the road. When choosing your investments you should carefully analyze each asset to be sure that it is not trading at an inflated and unstable price.

If you’re interested in making money here you’ll need to choose your investments carefully. Look for high-value projects which are still under the radar. Don’t buy into ones that are already rocketing up in volume as this is a good way to catch them just in time for the value to crash back down to Earth. Make sure to analyze the long-term price charts, and not just the recent volume and price changes to see if you’re truly getting a good deal.

What is a bear market?

A bear market is one which is in a downward trend. At the beginning of 2018, our fabulous bull run ended, and the charts began correcting themselves. Since cryptocurrency is a very new and unproven space, this greatly shook buyer confidence. After prices began to fall many of them panicked and sold their investments as well. This put a great deal of sell pressure on the market as a whole, and it has not yet managed to recover.

While owning a losing investment can make anyone depressed, it does present a very interesting opportunity. Depressed cryptocurrency markets tend to slash the prices of every project since they all follow Bitcoin so closely. This means that investors who are willing to wait out this depression could find themselves in a very good position when the bear cycle decides to recede. For value investors, crashing markets are a dream come true.

Investors looking to take advantage of these prices, however, should spend a good deal of time researching their chosen assets. There’s a lot of great deals around, and if you can find a good deal on a token or coin that you believe has a solid project, then you have a great opportunity to establish a position that you otherwise would not have had access to a few months ago.

How to prepare your portfolio when you believe the bears are coming

If it seems that everything is going crazy and you’re afraid that a bear market may be imminent, then it may be in your best interest to reduce many of your positions. Especially positions in less proven currencies that may now be highly inflated. Though even top coins or tokens like Bitcoin and Ethereum can experience heavy losses in bear markets.

Your best bet is to move much of your holdings to other assets such as cash or perhaps precious metals. These assets will not only hold up better during a crash, but they could also put you in an excellent position to be able to buy up dips in the market when the bear does rear its ugly head.

Many quality cryptocurrencies will be available for rock bottom prices, and it’s possible that you could double or even triple the amount of coins in your portfolio by taking profits at the right time and then buying back in at a later date.

How to prepare your portfolio when you believe the bulls will be running

If the bleeding in your investments seems to have stopped, and you can see volume starting to pump back into different projects, then it might be time for the bear market to go into hibernation. It’s often extremely difficult to identify the bottom, but if the market has been chopped down at the knees it’s likely a good time to start accumulating.

Keep in mind that investors will likely be much more picky when buyer confidence and trading volume returns if they have been burned previously. Only place your money in solid projects with real-world use cases. This is a great time to get in on projects which may have been too expensive for you to invest in before.

As always, it’s important to do your own research, and you should never invest more money than you can afford to lose. Cryptocurrencies are still very new as far as financial instruments are concerned, and they are extremely volatile. It’s important to diversify your assets in order to secure your financial future.

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Blockchain Cloud Computing and Storage Projects to Look out for

One of the most populated niches in the crypto space is for cloud computing. The reasons for this are that the blockchain is an obvious choice for it. Since the advent of DApps on the blockchain, projects have been looking for new ways to use these platforms as a means to power applications.

It’s a great use case, but as an investor, it can be quite confusing with so many options running around. However, the technology is strong, and you can be sure that the blockchain will come out on top in this area. When that will actually happen nobody can say for sure though. Adoption in this space could take many years to come to fruition.

While this sector could certainly be slow to evolve, the benefits that blockchain technology can offer this industry are undeniable, and investors would be wise to investigate some of these offerings. Adding a distributed computing crypto project to your portfolio would definitely be a smart move, and in this article, we’re going to go over why that is. First though, let’s talk about some of the problems inherent with the current centralized cloud computing system.

What’s wrong with cloud computing right now?

The current cloud computing system has a problem. It’s very centralized. Most serious websites actually use things like cloud storage and content delivery networks, because these services offer a certain degree of reliability in content hosting. The problem though is that the market share is controlled by just a few large companies.

When there is an outage with these providers it can cause an enormous domino effect, taking down a large number of websites with it. As the market share of providers like Amazon Web Services continues to grow, this will only get worse, and some are legitimately worried about what this could do to the internet.

Not only does this provide security and stability issues, but it also raises concerns about freedom of speech or privacy. With only a few companies controlling so much data, it would be very easy for them to silence content they disapprove of or misuse personal data.

Additionally, once power is centralized, there’s little reason to price competitively. The market is controlled by a few companies who could collude on pricing. In a decentralized hosting environment there is more pressure to offer fair pricing to those utilizing a particular service. If a fair price is not offered, they can easily walk away to a new provider, and that’s exactly what the blockchain is aiming to achieve.

What are blockchain projects doing to fix these problems?

Golem

Golem is a blockchain based supercomputer. The team behind this cryptocurrency has created a decentralized computing network that allows anyone to tap into superior computing power at any time. If you needed to perform some high-intensity work, but your computer is not quite up to snuff, Golem can connect you with a computer that can handle the load. This includes things like rendering, machine learning, and simulations.

Golem taps into the power of any computers on the network, and then it pays those individuals for the usage of their processing power. Their system makes it fast and easy to perform any tasks regardless of the hardware you currently have available to you. This makes them a great option for those who may not be able to afford the hardware that they need for their work.

Storj

Is a decentralized cloud storage provider that allows for total protection of your private data. The network is distributed and all files are end to end encrypted. Unlike a centralized provider like the one you would get when using Google, your files are yours alone. Their pricing is also more attractive and very transparent.

Users only pay for exactly the storage space that they need and nothing more. If you have extra hard drive space lying around, you can also sell that space on the Storj network to others who would utilize it, earning tokens for yourself in the process.

Likely the best part about Storj over competitors is that their pricing is easy to understand. This makes them a more friendly solution to mainstream users looking for more affordable cloud storage for their files.

iExec

iExec is a decentralized cloud computing platform. Their solution runs on the Ethereum chain, and they allow for developers to easily access computing resources to launch their applications. This solution will compete with centralized providers like Amazon Web Services, allowing developers to offload their application’s computing needs to a cloud server instead of paying for expensive dedicated servers which they would then need to maintain themselves.

Who would use something like this? Well, Netflix currently serves all of their content using AWS. Would a giant like this be open to a lower cost option provided by the blockchain? It’s a likely scenario, they have tight profit margins, and if there’s a viable way to cut their operating costs, any business would be stupid not to take it.

While Ethereum does already allow for the hosting of Daaps, it’s not very good at many of the required computations. iExec is looking to raise the bar, making blockchain applications a viable alternative for resource hungry cloud apps while offering them better prices thanks to their peer to peer network.

Resource providers can earn tokens by lending their computing power to the network to power these applications, and the developers gain access to a cheaper and more reliable hosting resource thanks to the distributed network.

Cloud Token

At first glance, it doesn’t look like there’s anything really special about the token. In fact, they do a pretty bad job of explaining it in most of their material. However, if you dig a little deeper, you can see that this platform actually has a pretty interesting angle to spur adoption of their service.

Right now, their Token is distributed by Cloudwith.me, a platform that actually sells managed hosting from centralized service providers such as Amazon Web Services. They, however, make it a three-step process that allows anyone to begin using a host like this for their website without any technical knowledge at all. Additionally, users who purchase the token will actually be able to purchase services from these providers at about a 50% discount of the normal rate.

The second part of their plan involves creating their own decentralized cloud computing service. Customers of the initial centralized service will likely be transitioned here with little to no friction. In fact, due to the way everything is set up, they might not even know at all.

Their ease of use solution will likely be a serious boon to the blockchain sector, which is still very confusing to many people outside the space. Making distributed application processing easy enough that your grandma could use it is this company’s goal.

Conclusion

In closing, while there are a lot of projects in this space, it’s worth exploring them. Cryptocurrency is full of trash ICOs and bad projects, but once you dig through you can find some real gems that provide the space with true value, even to mainstream users with no intentions of ever using cryptocurrencies as payments for anything.

Blockchain is so new that it’s still hard to see where it will be most effective, but storage and distributed processing power look like ideal candidates that will aid people in not only finding cheaper processing solutions but possibly even creating entirely new income streams for them.

Imagine earning some spending money every month for renting out your idle computer resources! This could, in fact, be a reality for many people, especially in parts of the world where even small amounts of money could be life-changing. Or, where having access to cheap computing power could open up entirely new avenues of expansions for underserved communities.

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5 Mistakes People Make When Building a Cryptocurreny Portfolio

Congratulations on your decision to start investing in cryptocurrency! The growth in this space is just beginning, and smart investors willing to take a chance on it stand to be rewarded in the future.

In this article, we’re going to discuss how to build a good cryptocurrency portfolio and some of the mistakes that people generally make when trying to do so. While this list is by no means extensive, it should give you a good idea of how to get started.

There’s obviously a lot more information to consider here, but fixing just a few of the items on this list could have a dramatic effect on your returns. Just remember that everyone is different, and you don’t have to follow any investment strategy one hundred percent. Your decisions must be based on your situation, and your individual financial goals. Okay, let’s get started!

They ignore the circulating supply of an asset

As a new investor, it’s easy to see a killer project and think that you have the next Bitcoin on your hands. Unfortunately, many of these individuals fail to take the supply of the asset into consideration. Part of the reason for Bitcoin’s astronomical growth is the fact that the supply is severely limited.

If you invest in a coin that issues billions of tokens then you can’t expect it to experience the same growth in price. There’s simply too many of these coins or tokens being dumped on the market. If you want to figure out the price potential based purely on the supply then you could compare it to another successful project with similar numbers.

While the supply is not the end all of investing, it should be considered and many people forget to take it into account. Be sure to have more realistic price goals for projects with high supply. This can be particularly apparent for coins which have airdropped their entire supply at once!

This not only makes it very difficult for price appreciation, but it can also bring the decentralization of the project into question since they likely were distributed to very few people.

They put too much capital into one project

Yes, the project you picked might be great, but it’s still not a good idea to keep all your eggs in one basket. Diversification is important, and if you don’t spread out your risk then you could be in big trouble if your project has a spot of bad news coming its way. Putting your money into multiple projects is a great way to keep your entire portfolio from crashing based on a single event.

How you choose to do this is up to you, but you could consider diversifying based on different sectors such as banking, healthcare, IOT, or logistics. You could even diversify by country or with projects that are in the same industry if you believe multiple options could be successful. It’s likely that in most niches there will never be one winner, and there will be room for multiple projects to succeed.

Similarly, market cap is a popular way to diversify as it allows you to take advantage of the growth potential of small caps while keeping some money in safer large cap options as well. It might help to write out your potential investments on a sheet of paper, and then create allocations for each of them based on some of the above criteria. If you find that you’re too exposed in some areas then you may want to swap some things around for your own protection.

They don’t research a project thoroughly before investing

Investing requires not only that you commit monetary resources but also time-based ones. In order to pick a good investment, you need to spend a good deal of time doing research. Before you start throwing money around you should know everything about a project. This means reviewing not only positive information but also negative reviews.

It’s easy to become emotional about your investments, and that allows you to ignore potentially dangerous red flags about the integrity of a project or its team. Don’t write off every critique of a project as FUD. If these complaints have merit then you’d better get the real story before you invest your money.

Make sure to find out whether the coin has a use case, what kind of marketing plan they have, whether the team is capable of accomplishing their goals, if they have a good community behind them, etc. Never accept any investing advice without verifying it yourself first.

They get impatient and sell too early

Cryptocurrency has a remarkable amount of impatient people in the space. Many of them somehow feel entitled to be rich after holding for just a couple of months, and when they aren’t they sell everything, sometimes at a loss. Don’t be this person. Often times these mistakes arise from not having clear goals.

When you research a project you should set a target price, and then challenge yourself not to sell until this price is reached. Some people believe in selling half of their investment if it doubles, and then they will keep the rest. However, you can set whatever rules you want as long as you’re willing to stick to them.

Flip-flopping and not having clear financial goals is a good way to lose money, and you should avoid this type of behavior. If the market’s ups and downs are making you nervous then stop looking at it. Forbid yourself from watching the charts every hour to save yourself from making trading mistakes.

They don’t pay attention to market caps

The market cap of a coin helps you to determine the return you can hope to expect. While you can make money in any market cap, it is easier to do it on small-cap coins. They simply have more room to grow. Many investors either only invest in large cap assets, which limits their growth potential, or they only invest in small-cap assets which leaves them dangerously exposed to more volatile markets.

If you’re in the latter party, remember to take some profits off the table and put them into some larger cap coins like Ethereum for safe keeping. If you’re in the first camp, then consider making some small-cap investments as well to up the growth potential of your portfolio.

This is likely the first place you should look when trying to diversify your holdings. Keep in mind that small caps tend to take the biggest hit when the market falls. So don’t put too much of your portfolio here. Decide on a healthy balance and stick to it.

Conclusion

In closing, there’s many things to consider when you begin building your portfolio. These entries are suggestions, but keep in mind that your exact approach may vary from others. You won’t always make the right moves, but it’s important not to get hung up on minor setbacks.

Instead, you should see these as learning experiences and grow from these mistakes. You can use these instances to improve your holdings for the future. You should also remember that investing is a long game. Don’t get discouraged if you aren’t making money right away.

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Blockchain Startups Set to Shake up the Healthcare Industry

The healthcare industry is still surprisingly inefficient. Despite records being digitized, there’s still not a good way for various healthcare facilities to share patient information, and that means many times some very important information can get lost in transit.

This not only leads to some potentially dangerous diagnoses due to the fact that important care information is missing, but it also takes up a large chunk of time from medical professionals. Doctors and nurses only have so much time in the day, and when much of that time is taken up repeating useless paperwork, it takes away time they could be using to see their patients.

Another paint point for the industry is security. While it does not initially seem that security would be a big deal here like it would be in the financial sector, it is. Medical records contain a lot of private information, not to mention financial information in regards to insurance or payments. Many times information is not handled securely, creating concern for patients and medical facilities too, since they are subject to very strict regulations on the sharing of this data.

What could healthcare and medical research do with the blockchain?

Data is the most valuable commodity of our time, and that’s no less true for health care than any other industry. While this is mostly thought of as something that only marketers and brands would want, that’s not exactly true.

A global database of health data could be useful for other cases such as for medical research where medical facilities could gain access to a plethora of new information about their treatments or the general ailments of patients which could be used to create new drugs.

A system such as this could create a sample size much larger than what would be possible in a private study, possibly unlocking important trends not seen before. Some blockchain projects will even allow for patients to sell their information to these companies, allowing them to monetize their health information for the first time in decentralized marketplaces.

On an individual level, a global data system could make it easier to transmit sensitive information securely on a patient basis where your medical records could follow you seamlessly to different facilities or care providers. This not only saves you and your doctor a lot of time, but it might also allow them to provide you better care.

Some blockchain-based applications are planning to implement data from wearable devices that would allow healthcare professionals to better track the everyday condition of their patients in ways not possible in an office setting. Computer algorithms can then help analyze this data to see patterns or trends that might lead to a faster diagnosis or even better treatments in general.

What Cryptocurrency projects are working in the health sector?

Docademic

This interesting medical startup plans to bring free basic healthcare to anyone in the world. The only requirement is that they have a smartphone and download the Docademic app. While this seems too good to be true, it is true. Users of this application will be instantly connected with licensed medical professionals that give them advice or even a diagnosis through video chat. Why would medical professionals do this? It’s all about networking.

The team behind Docademic originally created another platform called DoctorDice. This was a social networking site for doctors that soon became the largest site of its kind in Latin America. This gives Docademic a really great resource in that they already have access to a huge database of medical professionals for their new service.

The platform has already been launched and is currently live in over 20 countries already. This application will also be used as a paid data hub where hospitals, researchers, doctors and even governments will be able to purchase information about the users of the Docademic application.

Lympo

Lympo is the first platform to allow users to monetize their health data. This system is actually more like an incentive platform which provides users with rewards for exercising and improving their health.

Their system utilizes wearable devices that millions of people are already utilizing such as Fitbit to collect health data. This data can be stored on the blockchain, and then the application’s community can use their data later for various purposes such as improving their overall health.

This data can also be leveraged to your advantage through rewards. Brands and businesses can become sponsors and pose fitness challenges. Upon completing these health goals, users can be rewarded with Lympo tokens, which they can spend in the marketplace for various goods or services such as time with personal trainers, fitness equipment, clothing and food.

The Lympo platform can also be used as a loyalty program for local gyms, and users can receive personalized fitness and diet advice based on their tracked data.

Farmatrust

Prescription drug fraud is surprisingly prevalent, and fake drugs kill somewhere around a million people every year. Farmatrust have proposed a supply chain tracking system specifically for the pharmaceuticals industry to prevent the movement of these dangerous counterfeit drugs. By utilizing technology that can easily be plugged into legacy systems already in place by these industries, they will allow for these drugs to be transparently tracked from the manufacturer all the way to the consumer.

In fact, anyone can use the blockchain to publicly verify the legitimacy of the products they have received to eliminate any doubts and make it more difficult for counterfeit items to enter into the system.

This also creates another boon for pharmaceutical companies in that by utilizing the ledger and smart contracts, they can automate many of the regulatory headaches that come with the territory of their industry.

Farmatrust can automatically submit the proper regulatory paperwork, and it can even automatically submit payments to their partners within the supply chain. They also have planned “future proof upgrades” which include smart labeling, IOT devices and RFID tags for identifying products in the chain.

Medishares

Medishares is a decentralized marketplace which allows for their users to create mutual aid insurance policies. They do this via trustless smart contracts. Not only can anyone purchase an insurance policy through the platform, but anyone can become an insurer as well.

They have a set of smart contract templates, and by using them you can offer your own insurance policies for a variety of things, including medical related issues. This allows for a free market distribution of insurance policies regardless of location, which can have beneficial effects on the price of these services for those seeking to be insured.

The Medishares platform is understandably worried about fraud within their system, so they’ve devised an interesting way to combat it. Any users who can find and prove fraud will be rewarded with tokens. This makes trying to commit fraud on the platform something that would give many pause, as there are many eyes watching them.

The low operation costs and high levels of personal freedom involved in this system present an interesting opportunity to reform the insurance industry, which has consistently raised premiums on consumers to suffocating levels for their care. Could a decentralized insurance market be in all of our futures?

Patientory

Patientory will allow for patients to easily and safely store their private medical data. Their application can automatically connect with any electronic health records system so that patients and medical professionals can better communicate with each other. The application is also regulatory compliant. Doctors are subject to HIPPA standards when they share patient information, and Patientory makes it easy for them to comply with this.

Patients and their doctors will be able to access the same application. That means that doctors can get a better overall picture of a patient’s health and what kind of work their colleagues have done already. Blood tests, health data, allergy information, past procedures, medications and more will be available to them in a universal system.

Patientory plans to monetize itself with a number of products inside its own Software as a Service platform. The project will provide care professionals with machine learning that can be used to aid in patient diagnoses, and even cloud computing for decentralized health applications. In fact, Patientory has a lot of exciting things on their roadmap investors may want to check out.

Conclusion

In closing, the blockchain and the medical industry seem to be a match made in heaven. Every day new startups emerge with exciting new ideas that can help us better manage our health by utilizing new technologies, and as an investor, it would be in your best interest to do a little research here.

While there are many great projects in the healthcare sector, it’s important to spend time learning about them before making any investments. You should also keep in mind that some of these projects could be years away from a marketable product, and you may need to be prepared to hold on to your investment for a long time before seeing a return.

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AI and the Blockchain: How to Invest in This Exciting New Tech

Artificial Intelligence is one of the most abused buzzwords in cryptocurrency, but it is a legitimate niche that has stellar applications. In fact, it’s likely the area where we will see the most growth in the next few years.

Humans are becoming more and more connected to each other via the internet, mobile devices, social networks and other items, but now we’re looking to connect with more things. Not only can we communicate with each other, but now our cars, phones, appliances, homes and any other machines will be able to do so as well.

The Internet of Things is a network seeking to connect these machines and allow them to not only talk but also transact with each other. Unfortunately, this requires microtransactions, which up until now, there was no good way to transfer value between these services. Thanks to cryptocurrencies, this can now become a reality, and the way our devices interact will change the way that we do things every day.

How can the blockchain help facilitate AI distribution?

The blockchain offers an efficient way to not only host applications, but also to share them with others. This not only applies to apps like games, but also to artificial intelligence. In fact, some of the solutions we’ll be talking about will actually make it easy enough for anyone to deploy their own artificial intelligence software or smart contracts for whatever purpose they want with no programming knowledge.

Some of these services will even allow you to make money off of these solutions. Either through collecting data using products you already own or by selling your own software solutions to others that might require those services. Cryptocurrencies also allow for microtransactions that are needed to fund these interactions.

What cryptocurrencies are working on AI solutions?

Iota

Likely the most well-known project in this niche, Iota is the first one people think of when it comes to artificial intelligence. This cryptocurrency offers zero transaction fees, making it ideal for the microtransactions required to feed devices currently employed by the internet of things. The Iota foundation plans to make available a data marketplace, and in the not so distant future, a large number of connectable devices that you own will be able to participate in this network.

Essentially, it’s the sharing economy on steroids, and users will be able to sell information collected by their idle belongings. While social media giants and websites try their best to harvest data under sneaky hidden user agreements, Iota plans to give you the power to profit from your own information.

Sensors and data sources all over the world will feed valuable information into aggregators which can utilize this data for various purposes. The use cases for Iota are so vast that it can be overwhelming, but investors can envision this technology being used to collect things like weather data, traffic route optimization and to provide relevant data for logistics.

Adhive

This isn’t the application that people normally think of when it comes to AI, but it’s still an interesting use case. Adhive is an influencer marketing platform controlled by artificial intelligence. Influencer marketing is one of the most valuable forms of marketing, and it has blown up recently thanks to places like Youtube and Instagram providing mini-celebrities that are not only within the reach of smaller companies but could also be more profitable due to their niche and very engaged audiences.

The only problem with this strategy is that you must contact, negotiate and interface with each of these influencers individually. This is obviously very time consuming and inefficient for a large scale advertising deployment.

Adhive is using the blockchain and AI to alleviate this burden. Advertisers will be able to upload their requirements, such as requiring a mention in a particular post. They set their budget, and the project goes live. The advertising platform then automatically verifies via the AI whether desired actions have taken place.

Other users on the platform are then employed as quality control to make sure everything is up to par. After which both parties are paid for their contributions. This allows for corporate sponsors to easily create large scale promotions, and the platform is already up and running. Investors can see how it works by visiting the Adhive website.

Numerai

Numerai is a hedge fund that is run completely by artificial intelligence. You could call this a grand experiment in computer technology. By using this blockchain based platform, they want to connect their artificial intelligence software to the stock market. It’s also a giant competition.

Data scientists all over the world are challenged to create the best trading algorithms, and then they are rewarded with cryptocurrency for their efforts. Thus far, the plan seems to be working and the fund is making money. The project has unsurprisingly gained coverage by many financial based news outlets who are intrigued by their work.

The true goal of the project, however, is to find a way to let everyone win. Wall Street is competitive, and there’s no incentive to help anyone else succeed. Numerai hopes to create a system where cooperation is the key to fulfilling your own goals, and here it seems they have some more work to do as the scientists they employ continually try to game the system.

Matrix AI

This artificial intelligence blockchain project is doing much the same as their competitors, but they have one very important special feature. Ease of use. According to the team at Matrix, they don’t think smart contracts are very smart. While they allow users to perform lots of useful features, they are not in fact very user-friendly.

To that end, they’ve created what they call “intelligent contracts”, or ones that they believe are superior to what Ethereum offers. These software bits are pre-constructed, and they will allow anyone to deploy their own smart contract with zero programming knowledge. This essentially opens up the usability of smart contracts to anyone and not just those with blockchain programming experience. Users will only need to tell Matrix their purpose and conditions, and Matrix will create a smart contract for them.

They also offer a more lightweight network that’s capable of processing one million transactions per second, putting it far ahead of Ethereum’s processing power. Their built-in security features work around the clock, sniffing for vulnerabilities and evolving to meet any threats that the system may encounter in the future as well. The features offered by this project offer an exciting use case that allows for the mainstream to harness the power of AI and blockchain technology.

Singularity Net

Singularity Net is a decentralized marketplace for AI. While other platforms simply allow you to create and host your own solutions, this one will allow you to utilize the work of others as well. Users of this service will gain access to a database full of artificial intelligence services which they will be able to buy and sell. Much like SAAS products that have become popular as plugins for consumer software such as Wordpress or Shopify, these same developers will be able to monetize AI software as well.

Similarly, end users without programming knowledge will be able to purchase these AI for their own purposes to grow their businesses. The uses cases for this are abundant, but it could include things like security, financial trading, marketing, recommendation services and language processing for bilingual computerized customer service agents.

Conclusion

In closing, the applications for artificial intelligence are staggering. This industry has the ability to create many new jobs that could bring much needed income to many other sectors. The blockchain will be the on-ramp for these new services that will help us become more efficient in our everyday lives.

Which AI project you invest in will likely be a matter of opinion, but investors should remember to do their own research. This niche can be complicated, and it’s important that you have a firm grasp of a company’s technology, proposed solutions, development team, marketing plan, and the desire for their product before investing. There’s lots of options here, and investors would be wise to review all of them before making hasty investment decisions.

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Cryptocurrency Day Trading VS Long Term Holding

Everywhere you look in cryptocurrency there’s somebody selling you some technical analysis report that they claim will make you a fortune. As a new investor it can be tempting to follow this advice, but unfortunately, that can lead to some pretty poor decisions. That’s not to say that technical analysis does not have its merits, and there is certainly money to be made on short-term trades.

However, this style of investing requires you to be much more involved, and if you don’t know your stuff then you could quickly lose your shirt. In this article, we’re going to go over the basics of both crypto investing styles, and hopefully, once we get to the end you’ll be able to decide for yourself which is the best choice for you.

There’s nothing wrong with either of these trading styles and as long as you’re careful there’s nothing wrong with experimenting with either or both of them. Just make sure not to invest more money than you can afford to lose, and stay away from investing on borrowed money. Alright, let’s define these trading strategies.

What is cryptocurrency long-term hold investing?

When an investor decides to hold a coin or token in the long-term they believe in the project, and they think that in the future it could be quite valuable. This generally means that you are looking to hold on to this particular asset for at least a year. If you’re too busy to keep up with the market hype or if watching the market bounce up and down makes you sick then this could be the approach for you.

While going for the long hold is not quite as exciting as performing short-term trades, it can be better in some cases. For starters, it forces you to evaluate your investments with a more clear thought process. Does this project really have a future? Chasing short-term profits can be detrimental to a lot of portfolios, and this strategy can keep you grounded. Before choosing any long-term holds make sure to completely evaluate the project, the team, and future use cases. While this part is a lot of work after you’ve found a good project your work is done.

Arguably the best benefit of this strategy though is the fact that you’ll pay a reduced tax rate. Every time you exchange one cryptocurrency for another it is a taxable event. Any gain that you have made must be reported, and the government will expect you to pay taxes on it. However, there is special treatment for long-term capital gains, and as a long-term holder, you can take advantage of this.

You must hold your coins or tokens for at least one year for this to go into effect, but if you do the tax rate will be much more favorable. Short-term gains are generally taxed at regular income tax rates. Small amounts of capital gains may even be tax-free depending on your regular income.

Pros
  • Reduced tax rate thanks to long-term capital gains.
  • More hands-off than short-term trading.
  • Allows for cost averaging.
  • Forces you to research projects thoroughly.
  • Less paperwork involved for income reporting.
Cons
  • You may miss out on large gains.
  • Not as exciting as day crypto trading.
  • Harder to make daily gains or income.

What is day trading?

When you day trade you’re trying to take advantage of cryptocurrency price fluctuations that typically happen within a day. Though, you can also do swing trades which will happen over a series of a few days or even a couple of weeks. Often times these are smaller gains, but they can quickly add up if you have a lot of coins.

Many investors get caught up in the hype of this trading strategy when they see others making hefty gains. That’s because it’s exciting, and the allure of fast money is intoxicating. Unfortunately, this strategy is not as easy as it looks, and if you’re new to investing it would behoove you to be cautious here.

This strategy is not for everybody, and you’ll need to evaluate whether you’re prepared to keep up with it. Many traders watch the markets constantly, and if that doesn’t sound like fun to you then day trading might not be the way to go.

If you’re not afraid of putting in the work, and the market’s ups and downs don’t give you anxiety, then there’s plenty of money to be made in these short-term trades. You should, however, take some steps to protect yourself. There’s a lot of sharks out there waiting for fresh blood.

First and foremost, don’t buy into pump and dump groups. In almost every case you will be taken advantage of. These people want to use you to make money, and you shouldn’t let them. Many times these are performed on near dead assets that have a market cap that is easier to manipulate, and once the dump happens you’ll be stuck with a worthless coin.

Similarly, it can be dangerous to buy into a pump, because you could end up catching the downtrend and losing a lot of money. If you plan to day trade it would be in your best interest to review charts carefully and to make sure you have the whole story before investing. Don’t look at just the day’s chart. Zoom out and get the big picture version to be sure.

It’s also a good idea to never invest your entire bankroll in one trade. Spreading your risk around lowers your profit per trade, but it can significantly raise your chances of success. Keep in mind that not every trade will pay off, and you’ll likely need to average your wins against your losses.

Pros
  • Potential for big gains.
  • Can potentially provide you a new income stream.
  • More exciting than a long-term holding.
Cons
  • Carries higher risk than a long-term holding.
  • Higher tax rates.
  • More paperwork is involved.
  • You could end up holding a useless coin when it dumps.

Which cryptocurrency trading strategy is the best?

There’s really no right answer here, and it might even be a good idea to utilize both strategies. If you’re interested in learning how to day trade or swing trade then you could dedicate a small portion of your capital to it. There’s nothing wrong with this as long as you don’t overexpose yourself.

In fact, if you have a decent amount of coins of a particular type in your long-term holdings, then flipping them may help increase your portfolio. Many investors will actually trade a portion of their long holds on price swings to up the size of their bags.

Keep in mind however that it may not be wise to do this with the entire pot. Instead, commit to swing trade 25-50% of your holdings in a particular coin. That way, you can leave the rest untouched so you don’t miss out on a run, but you still have the ability to use small price swings to your advantage.

This can be particularly useful for assets that are trading in the 1-5 cent range. It’s routine for these coins to go up and down by a penny within the course of a day, and that means you could easily build up your holdings by trading the dips.

In closing, the best crypto trading strategy is diversifying yourself in order to mitigate your risk. If you do this properly then both long-term and short-term investments can be good calls, and it’s easy to mix and match them to fit your risk profile.

No matter what strategy you choose it’s important to do your own research. Take all investment advice with a grain of salt, and make sure to verify any information for yourself before proceeding with any trades.

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These Crypto Startups Are Taking Over the Energy Sector

Cryptocurrencies such as Bitcoin have been looked upon negatively in the media by some due to the huge amount of energy they consume. The entire network could consume the same amount of energy as some medium-sized countries even. However, what people are talking less about are the blockchain companies that could revolutionize the power sector as we know it.

This niche is not as widely talked about as other cryptocurrency niches such as AI, and that’s a shame, because these projects are working on some excellent solutions that could help us create better electricity solutions for ourselves and our communities.

These project’s goals extend beyond more efficient cryptocurrency mining. Instead, these providers will allow for citizens to take control of their electricity usage in ways they were not previously able to. Once these solutions reach their full potential, the world could see a more efficient usage of resources by using the blockchain to share the load.

In this article, we’re going to take a look at some of these innovative companies and find out exactly what they plan to do to revolutionize the way we power our everyday activities. First though, let’s take a look at the current state of the energy sector and see why it needs to change in the first place.

What’s wrong with the current energy sector?

While our society has made some great strides via alternative energy sources such as solar and wind, the fact is that these solutions are still not well implemented. Many people would love to take advantage of solar alternatives, but the infrastructure required to get started is outside the budget of many of those who would be looking to lower their carbon footprint. Unfortunately for the energy sector, this barrier to entry leaves a great idea stuck with little to no real-world execution.

The costs of traditional electricity creation methods are also rising, and there’s not a lot that individuals can do to relieve these burdens save for cutting their usage, which many do. However, there’s only so much you can cut without shunning modern convenience entirely, and most power providers are the only available option in a particular region or even an entire state!

This leaves them with no competition, and little reason to adjust their pricing. For citizens of these locales, that means paying whatever price that these companies ask with no recourse or ability to leave. Frankly, we can do better.

How will the blockchain fix these issues?

While the electricity sector is not as heavily populated as other sectors like banking or AI, there are still some great projects here.

Power Ledger

For example, Power Ledger is an Australian company in the energy sector that is deploying a P2P electricity network. This democratization of utility resources makes it so that individuals have more options when purchasing electricity.

No longer will consumers be chained to only one option, and this free market creates better prices for everyone. Those who already have solar equipment but produce more power then they can use will be able to profit from this energy instead of it going to waste. Those who do not already have equipment can buy cheaper energy from their neighbors, bypassing any middlemen or centralized utility authorities who have no incentive to offer competitive pricing.

Grid+

Grid+, another energy provider offers a similar service, but with a twist. They actually offer some very easy to use software and devices that allow you to smartly monitor the state of your electricity consumption in your home.

This involves a smart meter, grid agent, and their mobile phone application. It’s all very easy to set up, and once connected it can actually make predictions about the cost of energy, and then purchase for you at ideal times.

It can also automatically cut off certain appliances at peak hours when the costs to run these devices is the highest. If you have solar panels and battery backups already installed in your home, then there’s another great feature here for you. It’s possible to purchase electricity when the price is low, and then resell when it peaks, potentially earning yourself a nice profit.

That, of course, means that you’ll potentially need to install thousands of dollars in solar panels before this part of the project can benefit you. That’s a huge expenditure for most people, but the blockchain has you covered here too!

Sun Exchange

Sun Exchange is a platform that connects people who want to install solar panels with those who have capital. This works similar to peer to peer lending platforms. Individuals, businesses or organizations looking to add solar systems to their homes or offices can start up a project on the Sun Exchange platform. Investors can then come in to fund these project.

This allows for everyone to access the potential of solar power despite their economic position. After investors finish funding the crowd sale, the solar system will be installed. Sun Exchange then collects monthly rental fees which it pays out to investors. This makes for a very rare opportunity to both do good for the world and earn money at the same time.

Thus far, Sun Exchange is working with a number of conservation centers, schools and businesses in South Africa to fund their solar initiatives. Soon though, these expansions will be available all over the world.

Conclusion

In closing, the blockchain has the ability to completely change the way society currently looks at it. While now, people see the blockchain as a resource hog that will slowly rob our planet of precious resources, that narrative will soon change. Instead, the blockchain will likely be responsible for helping to save the Earth from our ever growing electricity needs.

The efficiency of the blockchain will soon allow for a distributed power grid that will allow communities to create their own electricity in a more clean fashion than purchasing it from a power conglomerate. The free market inherent in these systems will drop the costs of powering your home, and it will make it easier to spread the power grid to farther reaches of the globe.

The growth of solar panels in consumer homes will be strengthened, and possibly even financed by blockchain initiatives. Thus allowing even communities in lower economic positions to benefit from this new technology through their friends and neighbors. As an investor, it’s wise to examine all possible applications for a new technology, and the utilities sector is certainly not one to be overlooked.

There’s quite a few great companies here, and you should spend an afternoon getting acquainted with what they have to offer. In the next few years, everyone you know might soon be using these systems to power their homes and businesses in a way that’s not only better for their wallets, but also better for their communities and the world we live in.

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Blockchain Projects Set to Revolutionize the Banking Sector

Despite the digital revolution, it seems that the banking system has still somehow been left behind in some areas. Fraud continues to be a serious problem for the entire sector, and many consumers have serious concerns for their privacy from these centralized data systems.

This has not been lost on some obvious, and the original goal of Cryptocurrencies was, in fact, to allow people to act as their own banks. However, as much as crypto enthusiasts would love for everyone to adopt this technology exclusively, the fact is that not everyone will, and banks are not going away. They do still have their merits, and that’s something we must accept.

To that end, some blockchain projects are taking a different approach. They plan to actually work with these financial institutions in order to improve their systems in a way that will not only make them a more appealing option for consumers but also offer them a number of benefits that can improve their efficiency and their bottom lines.

Why would banks want to adopt blockchain technology?

Banks have a few major issues that could be addressed by the blockchain. One of the biggest is in the security of financial data. While many consumers are not aware, our current system for storing financial data is not very secure.

In fact, security breaches are a big issue for corporations of any type, and that includes banks. It’s estimated that over 16 million people every year are the victims of identity theft in the US alone due to misuse of private data.

Some proposed blockchain solutions would not only allow for better security but also more privacy for the clients of the bank. With more and more people becoming dissatisfied with the way private information is handled, it’s likely that in the near future a better system, like what the blockchain can provide, will need to be implemented.

The other area where Cryptocurrencies can shine is in providing speedy payments that are globally accessible. It’s still surprisingly annoying and expensive to send money across borders. It can take days for traditional bank transfers to take place when moving from account to account, but thanks to the blockchain, it can happen in a matter of seconds.

It’s also much more convenient to exchange these digital currencies for fiat currency once it arrives at its destination since cryptocurrencies are globally accepted as legal tender. Many traditional finance providers are seeing the benefits of this and some have even already secured partnerships with promising startups in this sector to advance their own financial products.

What Cryptocurrency projects are working on banking solutions?

Ripple

Ripple is by far the most well-known name in this space, managing to garner mainstream media attention for themselves. They’ve already established partnerships with a number of businesses and financial institutions including MoneyGram, RBC, and American Express. Their system allows for their partners to provide instantly settled and traceable payments using the blockchain.

While this doesn’t seem that special at first, the truth is that it solves many of the banking industries woes. One of the biggest being the ability to prove to the government that their transactions were not involved in money laundering activities. An immutable ledger leaves a trail that can relieve a lot of their headaches in this department.

Ripple’s system creates a win-win here where it gives the bank’s clients faster payments, and it gives the banks themselves an easy way to cover themselves legally. Some cryptocurrency veterans turn their nose up at this coin, but you can be sure that they are here to stay.

Stellar Lumen

Possibly the second biggest project in this space, Stellar focuses on speedy remittance, and the underbanked. Believe it or not, there are many places in the world where people do not have bank accounts.

The reasons for this are typical because traditional financial institutions simply do not cater to them, as the required infrastructure required would be costly or difficult to implement. Under Stellar’s ecosystem, smaller players in the space would actually be able to expand their financial and lending networks without added costs by utilizing mobile applications.

IBM, Stellar’s high profile partner, has been building their own products on top of this platform. They’re already responsible for creating applications for their high profile partners, and now they’ll do the same thing for Stellar, in order to allow businesses an easier way to integrate the platform into their existing systems. This will allow them to begin utilizing fast and cheap blockchain transfers.

Hydrogen

This is a much lesser known banking application, but they have some very interesting technology. Their products are targeted at upgrading the efficiency and security of banking applications. They plan to do this with a couple different protocols. The first, Raindrop allows for private financial systems on the blockchain to be publicly audited.

This means that the system can be held accountable if there is a security breach, and it can’t be hidden. Raindrop also acts as a secondary security level, forcing those who would attack a network to bypass multiple roadblocks from both the private security level and the one put in place by Raindrop.

That handles the security portion of their product, but there’s another very cool part of this project. It’s called Snowflake, and it secures the data of consumers. Onboarding for financial institutions can be painfully slow. There’s a lot of work that goes into verifying users identity, but it’s required by the government to prevent money laundering.

In Hydrogen’s solution, users will build a blockchain based identity that is unique to them and can be universally accessed, verified and accepted by financial institutions globally. This information is then encrypted, cannot be altered, and decentralized verifiers can vouch for the data you have submitted.

This not only allows you to securely transmit financial data, but it makes processing that information faster. This could potentially save banks and lenders tremendously in manpower and overhead.

BABB

BABB’s slogan is everyone is a bank. This is another type of service that wants to help the underserved, but with an interesting twist. They utilize something called social KYC. Instead of the traditional system, users can be verified by people they know who will vouch for them, and as long as you have a smartphone, you can create a UK bank account.

This speeds up the onboarding process, and they believe it will help the unbanked masses who may lack documentation to apply themselves. Keep in mind that their target audience lives in developing nations, and these people may not have access to normal bank accounts at all due to their location or economic factors.

After going through their quick verification procedure, new account holders will have access to the BABB application. This will allow them to instantly send money anywhere in the world, access peer to peer currency exchanges, and utilize a decentralized payment card which is not tied to Visa or Mastercard. Central banking institutions within these targeted locales will also be able to issue their own unique digital tokens if they choose.

OmiseGo

Another big player in the banking cryptocurrency space is OmiseGo, who plans to bank the unbanked with their decentralized payment application. While they have the typical remittance abilities needed for sending super fast and cheap transactions, that’s not their only game.

The team behind this project has also developed an SDK that will allow developers to easily integrate the wallet into their own applications for sending or accepting payments. The potential uses for this could include various games or even loyalty reward programs.

They also have a solution for the liquidity issue faced in many cryptocurrency markets. Users will be able to trade other blockchain assets using their integrated exchange. The system will automatically locate the most cost-efficient trade, and then execute it for you.

This will also be applied to cross chain payments where if a payment is requested in Bitcoin and you only have Ethereum, you’ll be able to pay in the currency of your choosing while the recipient will get the currency that they prefer as well.

Conclusion

In closing, the blockchain has a lot to offer to the banking sector. Investors should keep in mind that while this list includes some excellent projects, there are many more like them. It’s important for you to do your own research and to make sure that you understand everything about a particular solution before investing in it.

This is particularly true of new and unproven projects. While it can be exciting to get in on the ground floor of a big cryptocurrency project, it can also be dangerous. A lot can go wrong in that time frame, and you should be prepared for the fact that you could incur a loss.

You can mitigate these risks by spreading your investment across multiple coins or tokens. There will likely not be a single winner in the crypto banking space or any blockchain niche for that matter, and diversifying is never a bad idea.

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How to Add Passive Income to Your Cryptocurrency Portfolio

If the down market has you a little bummed out, then you may be interested to know that there are other ways to boost the value of your portfolio without your coin going to the moon. There’s several ways that investors can add much-needed income to their portfolios, and in some cases, it could be a significant amount.

Some of these options pay quite well, and if you can get a good deal on the required assets, then you’ll be able to collect “interest” while you wait for your bag to appreciate in value.

How do you get started with cryptocurrency passive income?

The secret to earning cryptocurrency with passive income is that you actually have to do some work initially to start earning it. There are several ways to achieve this using crypto, and we’ll go over some of them below. You can use one or all of these methods to create your income streams. In fact, it’s usually much more beneficial to diversify yourself across several areas.

Proof of Stake coins

Proof of Stake is an alternative algorithm to Proof of Work, and instead of using your PC resources to mint coins, you’ll use the value of your investment. Typically all you must do to earn via staking is to hold a number of coins in your wallet and then leave that wallet software running.

You will then routinely receive stakes based on how much you’ve invested versus how much others have invested. Generally, this can be a pretty affordable way to begin generating a solid monthly income from cryptocurrencies, and it’s a lot easier than day trading.

However, the expense needed to get started with this will vary greatly from project to project, and so will how much you can earn. There are some assets that offer staggering returns, but investors should keep in mind that typically these are very low-value projects, and while you may be getting a ton of coins, it could be very hard for you to sell these stakes if you are planning to use your newly found income for your day to day expenses.

These are also mostly unproven currencies, and there’s no telling where they may go in the future. They could even end up completely abandoned. For this reason, it’s usually best to try to find a balance. When seeking a Proof of Stake coin to put some money into you’ll need to look for a few key factors.

How many of these coins do I need to stake regularly?

Sometimes it can be difficult to find this information, but there are a couple reliable ways to find these metrics. The first is by asking in community forums what kind of stakes other people are receiving. Most of the time they will be more than happy to inform you, and in some cases, the answer will already be there if you’re searching.

If you’ve had no such luck here, then there is another sneaky way to do this. If you go to the coin’s explorer, then you can thumb through various transactions. Often these will say “minted”, and that’s how you know that this is a payment that was received through staking. By checking the balance of that wallet you can make an estimate of what kind of regular monthly or daily income you can expect to make. You’ll also be able to see how often they are minting as well.

What kind of future does this project have?

When choosing a project you really should approach it as a long-term investment. You are after all going to be holding this asset for a good while if you plan to earn any money. Familiarize yourself with the project, and find out what kind of updates they have in the works. Do they have a dedicated team? How does the community feel about the coin?

What is the average price of this asset?

When purchasing a staking asset you really want a rather stable price. If you plan to use this to begin creating alternative income streams, then it’s best to have something that you will be able to fairly accurately predict the price of, and not one that will jump up to $1 today, but be worth 10 cents tomorrow. However, some of these assets do experience regular dips, and with good timing, you can sell on the highs and accumulate on the lows fairly easily.

Can I afford enough coins to make stakes?

After you’ve determined exactly how many coins you’ll need to purchase to stake regularly, it’s time to do the math. Can you afford this asset? If the answer is no, then it would likely be better for you to find something that you can more easily afford. There are plenty of Proof of Stake options out there, and there’s likely one that will be appropriate for your needs. This approach is likely better than buying something very expensive that you will never have the network weight to stake.

What kind of return does this asset have?

Every asset offers a different percentage return. This percentage is usually publically available, but if it’s not you can use the figures that you gathered earlier to find out. Cryptocurrency returns are generally very generous, and if you’re looking for alternative income then you shouldn’t waste your time with low return assets. There are some tools available that will help you find staking coins that offer a high return.

Masternodes

Masternodes are like staking coins on steroids, and in many cases, POS coins will also have a masternode option available. These tend to pay better than staking, because you need more coins to do it, and you’ll also need a VPS.

This method is not quite as easy as staking, and it will require a monthly output on your part because server hosting is not free. However, it can be very worthwhile if you’re willing to take a few minutes to learn. Here’s what you need to run a masternode.

VPS with at least 1024MB RAM

You can purchase a suitable VPS for about $5 per month, and as long as the return of your coin exceeds this then you’re good to go. Keep in mind that for every masternode that you wish to run you’ll need a dedicated IP address. Pretty much every provider will allow you to purchase more than one for an upcharge, and it’s possible to run more than one node on your VPS. It’s not recommended to have less RAM than 1024MB, because your nodes could eat it up quickly.

The specified number of coins

This will vary between projects, and you’ll need to consult the coin’s website or the community for guidance on how many you’ll need. Ignition, for example, requires 3,000 coins, but if you want a Diamond masternode, then you’ll need 10,000 to get started. There’s several online resources you can use to figure out which ones will give you the best return for the investment. It would do no good to list any specific ones here as the price of these assets changes every day.

Some technical knowledge to set it up

Setting up a VPS is not quite the same as using shared hosting. Most providers use Linux operating systems because it’s free. If you have some experience using Linux then you’ll be in a good position, but if you’re mostly a Windows or Mac user then you’ll need to spend some time reading up on how it works before you put down any money for your nodes.

Airdrop/reward coins

These function a little differently, as you’re not really being paid to contribute to the network like you are with masternodes or staking. Instead, these assets simply offer their investors an airdrop style payment for holding their coins or tokens. The good news is that this means that you don’t need to spend time learning how to set up a VPS, and in many cases, you won’t even need to run your wallet to collect rewards like you would with Proof of Stake.

The bad news is that it can be a little more difficult to find assets that offer these kinds of perks. You may need to do some detective work in order to find these types of rewards, but social media sites such as Reddit or BitcoinTalk are a good place to start.

Unfortunately, these setups also don’t pay out nearly as much as the other two options, so if you’re looking to make serious passive income then it might be better to pursue staking or masternodes. Conversely, if you don’t have the capabilities to stake or run a node, then airdrops might work out well for you as an alternative.

In closing, there’s plenty of excellent ways to make money from cryptocurrency that don’t involve constantly watching the market or worrying about day trading. They can also provide passive income to you, either to grow your portfolio without additional contributions from your day job or even provide enough for you to supplement your monthly income. As always, you should make sure to do your own research, and never invest more funds than you can afford to spare.

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What Are Cryptocurrency Loans - Should You Invest in Them?

One of the most exciting new areas of cryptocurrency in the next few years will likely revolve around blockchain based lending. This new industry will offer an interesting opportunity not only for those who need loans but also for those with extra capital lying around.

The internet allowed peer to peer loans to flourish years ago as an alternative to banks or traditional investment vehicles, but the blockchain will take this one step further, making it not only easier but also safer to become a lender or to acquire lending to fund your ventures.

In this article, we’ll explain what cryptocurrency lending is and how any investors can utilize it to add valuable passive income or even an investment hedge to their portfolio.

What is cryptocurrency lending?

A cryptocurrency loan is a financial arrangement that typically happens in a peer to peer environment. A borrower must often put up some type of collateral in order to be approved for loans, and then a lender can fund it using their own tokens or even fiat currency.

The borrower will then repay the lender over the course of many months with an agreed upon interest rate. The lender sets the interest rate and the duration of the loan.

The benefits of this system are that the lender is sheltered from much of the risk due to the fact that the borrower has put up collateral in order to acquire the loan. The borrower is free from much of the regulation, hefty fees and red tape associated with getting a loan from a normal bank who will scrutinize your credit rating heavily regardless of your assets. This gives both parties the ability to transact freely, and it lowers the cost of these arrangements substantially.

What happens if the borrower does not repay the loan?

If a borrower does not repay their loan then they will lose their collateral. Depending on which platform they are using, this could actually be worth more than the loan itself. Since the collateral is always cryptocurrency tokens or coins, this could be worth even more than when they initially had taken out the loan.

For this reason, it’s unlikely that a borrower would default on their commitment, and that makes it a very safe and appealing option to potential lenders. Peer to peer lending has always carried significant risk since it was targeted to those who could not acquire traditional financing, but by utilizing token based collateral and smart contracts, cryptocurrency based lending remove much of this burden. This makes peer to peer lending a safer arrangement all around.

How does cryptocurrency lending work?

These loans are created via a platform which connects lenders and borrowers. This allows parties to set the terms of their loans such as interest rate or duration of the contract freely. After the terms are set, and the borrower and lender have agreed, the borrower sends their collateral to a smart contract.

The tokens are locked into this contract, and as long as they continue to make payments their assets are stowed safely. However, if they have not done so, then the lender can claim these tokens or coins to repay the debt.

Some sites also have what is known as a margin call. This means that if the assets within the contract fall below a certain value then the lender may have the option to sell the assets, or in some cases, the borrower will be allowed to add more collateral to cover what the platform designates as the safe zone. Borrowers should be careful of this in regards to volatile collateral.

Why would someone want to take out a cryptocurrency based loan?

Most people are used to getting a loan on credit, and so the idea of collateral-based lending may be confusing to them, but there are several legitimate reasons that you might want to do so. The most obvious being that you do not want to cash out your own assets.

If you were to take out a loan, then you could retain your coins or tokens, allowing them to continue to grow in value. At the end of the contract, they could be worth much more than what you had paid in interest.

It’s also a method for delaying tax events. If you need money but cashing out would lead to a large tax burden thanks to short-term capital gains taxes, you could instead take out a loan. Funds acquired through lending is not taxable income since it must be repaid.

You can then cash out your own cryptocurrency later at a reduced tax rate. Or, if you didn’t want to cash out at all, you could simply utilize this financing method for expenses, purchases, or other investments, and then continue to make payments on it.

Should you invest in cryptocurrency backed loans?

Cryptocurrency investors may scratch their head at the notion of earning a measly 5% in interest from lending when they could simply invest that money in coins or tokens. However, it may be best to think of this as a diversification method. If you were to make a particularly large gain on a certain investment, then you could cash some out to put into other areas.

If one of those avenues were in blockchain based loans, then you would not only have a new viable income stream which would pay you like clockwork every month but also an investment hedge.

If the market decides to nosedive, then you may be quite glad to have regular income coming in from your crypto loans. If cryptocurrency provides all or some of your monthly income, then this could be a welcome boost until the market calms down. If you don’t rely on your investments for income, then you could use these funds to buy up some dips while you wait for sprigs of green to start appearing in your portfolio again.

What blockchain projects offer loans?

There’s actually quite a few blockchain financing platforms coming into being, and some of them are already functioning. Whether you’re interested in becoming a lender, a borrower, or even an investor you should check out some of these projects.

Salt

The most recognizable blockchain collateral brand, Salt has been the first on the scene here. Potential borrowers can let Salt hold on to a number of different tokens, and then receive a fiat cash injection to their bank account in several different currencies.

They are unfortunately not as free with their terms, and they require you to have a large number of SALT tokens to use the site. They also have very strict KYC requirements, but that didn’t stop users from bombarding the platform so much that they had to actually stop taking applications for a while.

ETHLend

ETHLend is a decentralized lending platform that only deals in cryptocurrency. This allows them to go ahead without any KYC, but unfortunately they’ve recently blocked US users due to tightening restrictions. Why would you borrow more crypto with crypto? The ability to purchase additional assets or to even make better tax moves to save yourself some cash. The beta of this platform is live right now.

Elixir

This lending platform has lots of nifty tricks. It includes not only lending but also crowdfunding. They also offer loans that don’t need collateral for lending to friends or family members. They require no KYC, and loans even pay back an incentive to borrowers for making on-time payments. Who wouldn’t want that? Elixir has not yet released their platform yet though.

Conclusion

In closing, peer to peer financing on the blockchain is gearing up to be an exciting new industry that will benefit not only traders but also everyday people who want to get more out of their money.

If you’re looking for an investment vehicle that pays out regular monthly payments and can create a hedge against the rest of your portfolio, then cryptocurrency loans may be something you’ll want to look into. Just remember that the more diversified you are, that the better prepared you’ll be for a disaster.

You should also keep in mind that this is a long-term commitment. If you lend money to someone you need to be sure that you won’t need it again until the contract is up, because it will be locked away. This could be for 12 months or more. However, if you don’t have an immediate need for these funds, then loans could be a great addition to your portfolio.

A good strategy for this might be to actually fund several smaller loans that will end at different times. This staggering effect means that you would always have some type of free capital which you could either roll into another loan, use to purchase new assets you’re interested in, or even use for emergencies like big home or vehicle repairs. As long as you make sure to only invest what you don’t need immediately, loans can be a solid investment vehicle for the long term.

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Hard Forks Explained - What They Mean for You as an Investor

Cryptocurrency by nature has a lot of complicated functions that many people don’t fully appreciate. Even people who are passionate about blockchain projects and are heavily invested in their ability to change the world may not fully understand all of their aspects.

For a cryptocurrency newbie, likely one of the most confusing aspects of this is called the hardfork. Recently, the world went hardfork crazy, and it seemed that every project was trying to jump on the bandwagon, which leads to much confusion for the many inexperienced people piling into the scene.

In many cases, investors will not need to worry about this at all, but if one of your assets does announce an upcoming hardfork, then you need to pay attention! There is a lot going on here that could greatly affect your investment, and in some cases, your current assets could become worthless if a swap takes place, but first let’s talk about what a hardfork is and what it does.

What is a hard fork?

In the world of cryptocurrencies, a hardfork occurs when the community of a particular project decides that the coin’s protocol must go in a new direction. The exact scenario behind these forks can vary greatly from project to project, but in all cases, it means users interested in participating in this update must upgrade to the future software, and transactions will go to a new chain.

In some cases, all of the assets simply transfer to the new chain. Others though may have more drastic results such as resulting in a totally new asset or even a coin swap. As an investor, it’s important to keep up to date with news regarding projects you are invested in so that you’ll know exactly what will happen to your investment in the event that a hardfork takes place.

In some cases, the nodes and people following the old chain will abandon it, but in others such as the Bitcoin and Bitcoin Cash forks, they will keep running independently of one another. While the process can be confusing to newbie investors initially, it’s an interesting and integral part of the cryptocurrency ecosystem that you should take a moment to understand.

The hardfork not only allows for updates that keep your currency constantly evolving to better serve its users, but it also allows for the community to democratically decide in what direction the project should go. Freedom is one of the core principles of the blockchain, and these forks help to establish that.

What kinds of event can happen during a hard fork?

What happens during a fork will vary between projects, but here’s a few possible scenarios. Some of these will require little input on your part, but others are major events which you may need to take part in.

If you’re not sure that you want to deal with all of this, then you can always sell your coins before the fork, and then possibly buy back in afterward. Here’s what you can expect from an announcement of this kind.

Software update

The most casual of forks will only require a software update. This usually happens because of a vulnerability, bug or issue that has been identified within the current protocol. In most cases, investors will simply need to update their wallet software, and then everything will carry over to the new chain.

However, you should be aware that not all wallets or exchanges will update to support the updated software right away, or maybe even ever. If you utilize a third party wallet, then you’ll need to check to see if they will support the fork. If not, you’ll likely need to move your coins over to an official version of the wallet before the update. Typically these updates happen at a specific block, and you simply move your coins before this block happens.

If you don’t update then you’ll likely not be able to connect to the network or make transactions, however, you’ll pretty much always be able to update after the fact with no loss to you. Before updating, be sure to backup your wallet file for safe keeping, just in case you experience any issues.

Make sure to download the official wallet file from the project’s website, and you can usually check that the version you’re using is correct by clicking on the about section under the help menu in most any desktop client wallet as most of them use a modified QT wallet program.

Coin swap

In some more extreme cases, the team may decide to do a coin swap. This can happen for many reasons, but in the case of older coins, they may need to do this in order to keep improving upon their code. If their original chain is lacking by way of features, then a swap can be a good way to breathe life back into the project and to allow them to adopt features that they were previously not able to accommodate.

For those who have invested in an ERC20 token such as EOS, these assets are often placeholders for crowdfunding, and when the project launches you’ll be swapped for a new asset on the project’s main net. While this isn’t exactly a hardfork, it will likely work much the same way as a coin swap for a chain update would function.

If you’ve found that your asset will be experiencing a coin swap, then you’ll need to stay tuned to their social media for instructions on how exactly to participate. Investors should keep in mind that there’s typically a time limit for swapping, and if you miss this time frame then your investment could become worthless!

Most coins will give you a long time to swap such as a year, but others may give you only a few weeks. For this reason it’s important to keep tabs on your investments to make sure you’re not missing important events.

What you’ll need to do will vary based on the project in question. In some cases, exchanges will support the swap, and if you leave your coins there then you will be credited. In others, the coin may be delisted, and then relisted.

If this is the case, then you’ll likely need to keep your assets in an official wallet, and then send them to a swap address that the developers specify. In other cases, there may be a block snapshot, and then coin holders will be issued an airdrop of the new token. Make sure to ask in your coin’s community how to participate in the event.

New asset issuance

In some cases, a hardfork results in a completely new asset being issued. The most famous of these was of course Bitcoin Cash, but there are many other examples. The reason for a fork of this type is that the some of the team wishes to go in another direction, and they may be split on how they think that things should progress.

Keep in mind, that these forks don’t even have to actually have anything to do with the original project. In fact, Litecoin Cash had nothing to do with Litecoin at all.

If you find out about an upcoming fork of a coin that you own and you’d like to participate, then you’ll need to turn to the asset’s social media profiles to find out how. In most cases, you’ll simply need to hold your original coins in a compatible wallet. There will be a date posted for the fork, and after the snapshot occurs, you’ll receive an airdrop of the new asset to your wallet.

Please keep in mind that most of the time, exchange wallets can’t participate. You’ll need to store your coins in a wallet to which you own the private key, or the exchange will receive these newly minted coins instead of you!

Be aware that this can be a common way for scams to happen, and if anyone asks you to give them the private key to your wallet in order for you to claim these assets, then they may be trying to steal from you. Be careful, and never give your sensitive information to anyone.

In closing, while hardforks can be intimidating, there’s no reason for inexperienced investors to fear them. In fact, they can even signal an exciting time for your asset by way of new innovations and movement in a positive direction by the developers. You can keep tabs on your investments via different social media channels such as Reddit, Twitter or Discord.

If a hardfork is scheduled to happen, then they will always post about it here to keep their investors informed. When participating in an update such as this, be sure to backup your wallet file in a safe place, and then follow all of the instructions provided to your by the team.

If anything is unclear, don’t be afraid to ask questions, as other community members will likely be happy to help you. Remember to always stay informed on your investments and be safe!

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How to Avoid Common Cryptocurrency Scams

The world of cryptocurrency is new and exciting. Unfortunately, where there is opportunity, there are others looking to take advantage of it in some way. Thanks to the nature of how crypto transactions are processed, they are a prime target for thieves, and unfortunately, many new investors have fallen prey to their tricks.

In this article, we’re going to go over some of the most common cryptocurrency scams and tell you how to avoid falling prey to them. Keep in mind that this is not an extensive list and that you should keep your eyes open. If something looks too good to be true, then it probably is.

Domain replacement scams

This is a very common way that scammers will attempt to gain access to web wallets or exchange accounts. How it works is that the scammer will create a look-alike domain in order to trick you into thinking that you are on the official page for the exchange or web wallet. Usually, they do this by adding or removing a character to the domain name that they have registered, usually something very subtle that is hard to notice.

On most exchanges or web wallets, when you go to login you’ll be given a warning. The domain will ask you to verify that the address is correct, and at the top corner of the address bar, you should see a little lock verifying the authenticity of the domain.

This is a security certificate, and you should make sure it says something that references the name of the company. For example, Cryptopia’s says Cryptopia Limited (NZ) to verify that the domain belongs to their LLC.

If you want to avoid falling prey to this scam, be sure to type the address of the website into your address bar, or visit from a safe bookmark instead of googling it. Be extra careful clicking advertisement links, as these are almost always scam sites trying to steal your information.

If you believe that you have entered your information into one of these phishing sites, then go to the real site and change your password immediately. If your email address password is the same, then change that as well just in case. You may also want to contact support to let them know of the scam URL, so they can work to get it removed.

Email phishing scams

People looking to steal your account information this way will start by sending you a very official looking email. They’ll do their best to mimic everything that a real correspondence would contain, and the urgency of their message often leads people to jump without thinking.

You’ll likely be provided with a link to a copycat website, and you’ll be instructed to enter your login information. Once they have this, your accounts will be emptied, and the funds transferred to the scam artist’s own accounts.

This is nothing new, and it’s been going on for years with traditional banks, PayPal accounts, credit cards, and any other way that people pay for things. However, people are still falling for it, and these scammers are very sneaky.

Whenever you get an email, be sure to analyze it carefully, and remember that no legitimate companies will ask you for sensitive information like Pin numbers, private keys, or passwords in this way. If you get a suspicious email, then contact customer support through an official channel to ask about it or report it.

Twitter scams

On almost every single Twitter page there will be someone who is posting about giving away cryptocurrency in a comment. All of these are scams. While there are some crypto projects that do have airdrops and giveaways, they will not ask you to send them coins or tokens first!

Avoid these schemes at all costs, and if possible, do your favorite project a favor and report these fake accounts so they can be taken care of. Any giveaways by a project will be reported from the official account, and if it’s not then you can bet that it’s not real.

Fraudulent ICOs

ICOs have left a bad taste in the mouths of many cryptocurrency investors as of late. Due to the nature of these offerings, they can be run by literally anyone that wants to start collecting money from people.

While there are tons of legitimate projects that get off the ground from crowdfunding, there are just as many that are useless cash grabs. Most of these are not registered, and there’s no way to verify their “company” other than doing your own research.

A potential red flag could be not listing the members of their team, and if you can’t seem to link their supposed developers and CEO to any other projects or credentials, then it would be in your best interest to run far away. Likewise, if they are offering a lot of empty promises without anything to really back it up, this can also be a sign of a scam coin offering that’s out to steal your money.

Fake cryptocurrency exchanges

It’s surprisingly easy to start your own cryptocurrency exchange, and not all of these people have good intentions. Some of them will even operate normally for a short time before exiting with all of the investor’s assets. Using an unknown exchange can be very risky, and you should be cautious with how much money you keep or send to these entities.

This includes quick swap exchanges which mimic Shapeshift or Changelly as well. Before using a new exchange it might be a good idea to look around for some reviews or other opinions. If you really want to use it, and you’re still not sure, send only small amounts of money at a time.

It would also be in your best interest to never keep money on exchanges of any kind, but on lesser-known ones especially. Even if their intentions are not malicious, these overnight operations can easily go under, taking your investment with them. If you plan to buy or sell here, then do so, but immediately transfer your assets to a safe wallet on your own device after the fact. This will help to keep your money safe.

Fake cryptocurrency wallets

There’s a surprising number of fake wallets out there too. Users should be especially careful about this when looking for mobile wallets, as there are many unofficial ones that are not legitimate. While Google does attempt to take these applications down, by the time they do it’s likely too late for many investors who trusted these wallets.

It would be in your best interest to go to your coin or token’s website to see what the downloads for their official wallets or trusted partners are. If you’re not sure if a wallet is safe, then ask in the coin’s Reddit sub, as someone there will likely be able to help, or at least point you in the direction of a more safe wallet. Avoid any applications that don’t give you the private key.

Pump and dump schemes

This one may be a little bit less obvious than the other entries, and that’s because these people will not outright steal your money. Instead, they will use you to further their own investments. A pump and dump group uses their assets to artificially inflate the price of a coin or token that typically has a small market cap.

They will often use social media accounts such as Twitter or Telegram chats to try to trap cryptocurrency newbies looking for quick profits. Once these inexperienced individuals join, they are told to buy a particular coin at a certain time, insured that they will profit from this pump.

Unfortunately, the people behind this scam have already purchased their own coins or tokens for dirt cheap, and by the time these new investors start buying in the pump is already happening.

Once the calamity ensues, the orchestrators of the scheme dump their coins and collect their profits, leaving those newbies they recruited holding the bag. Since they always choose a low volume and practically useless asset, those investors will likely never recover their investment. Avoid anyone who is promising you quick profits, they are trying to use you.

Conclusion

In cryptocurrency, we must be extra diligent in order to protect our funds. There are sharks in the water, and they are out to get your hard earned money in any way that they can. New investors can protect themselves by being sure that they are utilizing safe coin storage habits or exchange usage and by avoiding any get rich quick schemes. Instead, invest long term in reliable projects that have real teams behind them.

While it can be tempting to give in to promises of quick money, these are almost always ways to steal your funds that will only put you farther from your goals. Whenever you’re considering using a new exchange, wallet or making a new investment, take a moment to consider all of the facts before acting. Be careful out there.

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What is a Coin Swap, and How Do You Participate in One?

Cryptocurrency is not like any other investment vehicle. It demands that its investors be involved on a level that has previously not been available to the general public. This offers a lot of freedom, but it also demands much responsibility.

On top of making sure that you’re being safe with your exchange procedures and making sure that your assets are stored securely. You’ll also need to keep up with news regarding your coin or token in the event of a coin swap.

While sometimes these are surprise events that take place when an asset needs room to grow, in other cases, these are planned upon the asset’s creation. As an investor, you should make it a point to be informed about any events that could influence the value of your investments.

In this article, we’ll go over exactly what a coin swap is and how you can be prepared for it if one of your assets is scheduled to go through this particular event.

What is a coin swap?

A coin swap is when the developers of a coin or token decide to issue an alternative asset to their community. In most cases, this means that the initial asset will become worthless. The original currency will no longer be supported, and it will likely be delisted from exchanges.

Often times there is a limited time frame for users to participate in this activity and to claim the new coin or token. For this reason, it’s important for investors to keep tabs on their investment’s various social media channels to make sure that they are not missing an important event like a swap.

If you do happen to miss the announcement, then there might not be anything that the development team can do for you. Your investment will likely be lost, and you’ll be out your money. This can understandably be scary for investors, but as long as you keep yourself informed then there’s no reason to be scared of a coin swap, regardless of the circumstances.

Why would they swap a coin or token?

The ability to do this is part of the bigger picture of cryptocurrency that allows it to continue to evolve to meet the needs of the community. Cryptocurrencies do not have to become outdated, they can simply improve themselves and be useful again. The specific reasons for a coin swap can vary, but in general, it’s either one of two scenarios.

Planned crowdfunding style swaps

Many projects use the Ethereum network to crowdfund their projects. While some of them will stay on the network permanently, for others Like EOS this is a temporary solution. Since these are proposed projects still in the development phase, their own networks are not yet ready. So instead, they issue a placeholder token for investors to trade on the Ethereum chain. This allows for an immediate economy for their growing ecosystem.

Once their own main networks launch, they will swap these tokens for the newly issued asset. If you invest in a lot of Ethereum based tokens, then you should be aware of this, and it would behoove you to take the time to see if your asset is going to be going through a swap or not. Usually, this will be included in the information at the time of the sale, but there are occasions where they may decide to add it later for various reasons.

In this case, you’ll likely need a new wallet, because it will no longer belong to the ERC20 token class. The team will release a compatible wallet sometime before the swap, and you’ll be required to download this in order to participate. Your new assets will go to this wallet.

There’s a problem with the original chain or it needs to be upgraded

In the case of some assets, there could be an issue with the original chain, or if it’s an older project, they may need to upgrade. If the code base they have used is not quite up to the standards of today’s assets, then the team may decide to change tokens.

This allows them to upgrade, with the potential to offer new features to their investors and community members that they may otherwise have been incapable of implementing. This could include new functionalities such as stealth transactions or the ability to plug into new kinds of software for usability.

Some projects could also issue a new token for the purpose of controlling the supply or fixing some type of catastrophe where much of the supply was lost in some way. Many times they do this to lower the supply to help with price appreciation, however, it could happen the other way as well if there were not enough assets for whatever reason.

Investors should be wary of these types of swaps because how they affect your investment could be rather unpredictable, and it’s unsure whether you’ll be coming out ahead or behind depending on how it’s orchestrated. It will be up to your discretion whether or not to follow through with the exchange or to sell before it happens.

How do you participate in a coin swap?

The procedure will vary depending on the project, and it’s up to the investor to keep tabs on these events by following the project’s social media channels. If there is going to be a swap, it will be announced on these channels repeatedly. The team will make the announcement, and then give a date for the exchange to occur.

Investors should make a note of this date and be sure that they are in compliance before it happens. In most cases, you’ll simply need to hold the assets in your wallet, and then wait for further instructions from the team. However, here’s some things you should know in order to be prepared that will apply in most scenarios.

Exchanges and third parties do not always support swaps.

While sometimes exchanges and third-party wallet providers such as Coinomi or Bittrex will support swaps, this is not always the case. You’ll need to consult your specific project’s team in order to be sure, and in almost every case it’s safer to keep your coins or tokens in a private client wallet designated by the team to make absolutely sure.

If you leave your assets on an unsupported wallet it could be difficult or impossible to participate, especially if the third party provider decides to delist or stop supporting your asset! It’s entirely possible that not every partner will be interested in continuing to support the project.

Make sure you have an official and updated wallet.

In most cases, you’ll need to download an official client wallet from the project’s website. You should make sure that you’re using the latest version and if you’re not, update it before the event date occurs to make sure you don’t have any issues.

Though most of the time you’ll still be okay as long as you have a compatible wallet. Keep in mind that in most swaps, you’ll need a wallet that you own the private key for. (Exchange wallets do not meet this criteria.)

Make sure your coins are in the wallet before the snapshot.

In many cases, a project will wait for a certain block before exchanging assets. That means you’ll need to have your assets in your wallet by that specific block in order to participate. Once this snapshot happens, you’ll be out of luck if they aren’t there.

Transfer your assets now rather than later to be safe, as there’s no guarantee you’ll be able to get any coins or tokens if you miss it. You should be able to see what block the chain is on by utilizing the coin’s explorer.

Make sure to follow the instructions of the team exactly.

Swaps vary for each project. The team will make all of the instructions available long before the date of the swap occurs. They may ask you to send your assets to a wallet address or to perform some other task to participate. Always read their instructions carefully, and don’t be afraid to ask if you don’t understand something. It’s better to be safe than sorry here.

What happens to assets that don’t get swapped?

If you’ve missed the coin swap, then you might be out of luck. Many times after the snapshot has occurred, then there’s no way for anyone to exchange their tokens or coins, and you could be left with worthless assets.

In some cases, some of these assets continue to trade on their old chains, but that’s not very common. The development team will no longer support the old asset, and it’s likely that these coins will just turn into dead coins.

For those who unfortunately missed their opportunity to exchange you might be able to contact the developers for assistance. In some cases, there may be a chance that they could help you out, but it would depend on the project, and often this is out of kindness to their community members.

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Cryptocurrency Trading Pairs Explained - How to Choose the Right One

Navigating the world of cryptocurrencies can be a challenging experience for new investors. There’s a lot of material to learn in order to be able to begin trading these volatile investment vehicles in regards to exchanging and even storing them safely.

One of your first concerns will likely involve trading pairs. Even if you’ve invested in other assets before such as stocks, you may be unfamiliar with this since those securities were likely traded against your local government issued currency.

Cryptocurrencies do not trade against fiat pairings in most cases, though there are some options popping up for this now, instead, you will be trading against the value of another cryptocurrency. These pairings help to establish the value of your coins. Typically an exchange will have multiple pairings available, and you’ll be able to choose which ones you want to use based on the currencies that you already own.

Bitcoin is by far the largest trading pair, as most coins tend to have the bulk of their volume situated here. However, some other common ones include Ethereum or Litecoin. Even Dogecoin can sometimes have a place as a trading pair, and it is often utilized for low market cap coins where it might be burdensome to trade them with something like Bitcoin. Some investors also favor Doge for this because its value tends to be quite stable, making it a good place to retain value.

A pairing essentially establishes a baseline on which you are trading other coins or tokens. In order to trade in one of these markets, you will need to own the base currency in order to purchase new currencies in that market. When you see a nice little green blip noting a gain on the chart for a Bitcoin pairing, this is how much your purchased asset has increased in value against Bitcoin’s price.

If you’ve ever seen where any investment was worth more the next day, but it did not seem to show a gain, it’s likely because both Bitcoin and the asset in question rose against the USD, increasing their value without really showing it.

How do you choose a trading pair?

When choosing a pair, it’s important to evaluate all of the factors involved in your potential trade. However, the first step is, of course, checking to make sure that the exchange that you want to trade on will allow you to use that specific base currency, as they all have specific options available.

You can easily find this out by visiting the exchange in question and then viewing their market listings. When selecting an asset, you should see something that will denote the other currency that makes up the equation. If we were trading Bitcoin Cash for example, and the coupled currency was Bitcoin, then it would likely be displayed as BCH/BTC to denote the pair.

The number of pairs that your exchange provides will vary greatly with the platform, but most of them will have at least three of the more popular options. Typically they will allow all of their assets to trade for every one of these markets.

While some cryptocurrency exchanges do allow you to make your initial cryptocurrency purchase with fiat currencies, many of them do not. That means you may have to utilize something like CoinBase to make your initial purchase of a base currency, and then you’ll use that to buy an altcoin such as Neo or EOS. That means it’ll be important to identify that correct base currency that you’ll need before proceeding.

How does liquidity effect pairings?

When choosing a base currency it’s important to evaluate the liquidity that is available for that market. While it may sound like a great idea to trade Litecoin for your new assets instead of Bitcoin, due to lower transaction fees and quicker settlements, you should keep in mind that you could end up overpaying for your purchases this way.

Often times these secondary markets will have much less activity than the main pair does. The market will typically react to this by upping the pricing since there are not as many assets to go around in this market as there would be for a more popular pairing. If you’re not careful, you could end up paying a good deal over the real market price by utilizing an alternative base coin. This could quickly eat up any of the savings you may have gained in fees.

Remember to check other exchanges through before giving up hope on trading with your chosen pairing. Just because one exchange has an order book that’s on the light side that doesn’t mean that all of them will. You can usually utilize a cryptocurrency market aggregator tool to quickly see not only which pairings are available for the coin or token you want to buy, but also the exchanges that offer them and their trading volumes.

This will allow you to quickly identify where and how to make your trades quickly and for an attractive price. This is particularly useful if you plan to trade for a more obscure asset with a lower trading volume.

Is there any reason to choose one pairing over another?

Choosing a certain currency to trade against is partly personal preference. However, you could gain a couple other advantages. As we discussed in the previous section, the prices for one market could be quite different than those in other markets.

If you were wanting to sell a particular asset for a certain altcoin, it’s possible you could squeeze out some more profit if you were willing to wait for a trade. Others may simply wish to try to scoop profits out of another market that holds less competition.

Many ultimately choose other cryptocurrencies as pairs for lower fees and speedier transactions though. Whether or not you choose to utilize any alternate base currencies is up to you, and you’ll need to weight the benefits to decide whether or not they make sense in your situation.

What are the most popular base currencies?

While base currencies can vary quite a bit, there are a few tried and true ones that always seem to be around for you to utilize. They tend to have their own advantages or disadvantages, and it will be up to you to decide which one is the best for your particular situation. If you end up with the wrong one, most exchanges will allow you to swap major currencies anyway to put yourself into a better buying position.

Bitcoin

By far the most popular pairing and almost every asset can be exchanged for this currency. The only problem with using Bitcoin is that the fees can be high, and the transactions can be annoyingly slow if you’re trying to move some money around quickly.

However, if you want the most versatile base currency, then this is your best bet. Be aware that when withdrawing, exchanges will likely charge the highest fees for this coin.

Ethereum

Likely the second most popular base trading pair, Ethereum is also very versatile. For the few tokens which are not tradable for Bitcoin, they are typically exchangeable for ETH. This is due to the fact that most of these are ERC20 tokens which are built on the Ethereum chain.

This currency suffers from a similar problem to Bitcoin though, and if the network is getting congested from things like collecting digital kitties or farming Ether shrimp, then the fees and transaction times can become quite painful.

Litecoin

Litecoin is another very popular pairing, and most exchanges support it. This pairing benefits from having much faster transaction times than the previous entries, and they also offer much lower fees.

Unfortunately for Litecoin, the pairings are almost always in favor of big brother Bitcoin, and that means it can be challenging to trade with LTC without overpaying for your assets. If you want to utilize Litecoin, then you may need some patience to get a good deal.

Dogecoin

Dogecoin will be unusual to you if you don’t use any exchanges that trade low-value coins. However, it’s a solid pairing, and it’s actually very popular on exchanges like Cryptopia that list a huge number of coins in the low-value range.

Using Bitcoin to trade for such low-value assets can be burdensome, and Dogecoin fits the bill nicely. This coin also seems to hold a pretty stable value, and that makes it a favorite for trading.

USDT

While this currency tends to get some flack from enthusiasts, it is the most popular trading pair in its class, regardless of your stance on its management. This is actually a USD pegged cryptocurrency meant to always retain a peg that will equate it to 1 USD worth for each of these tokens.

This makes them not only valuable as a trading pair but also as a place for investors to stash away some money they don’t want subject to the cryptocurrency roller coaster but still available should a good buy spring up.

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Why is it Unsafe to Keep Your Cryptocurrency on Exchange Wallets?

This is likely the first advice that anyone will give you when it comes to cryptocurrencies. However, it’s also the most ignored advice, unfortunately. Since the exchange already has all of the wallets you need for all of your purchases, it just seems to be more convenient to store your assets there.

While most exchanges will, of course, tell their customers that they offer superior security, that is not always the case, and in the event that something does happen, investors will find they have little recourse here to regain their capital. In this article, we’re going to go over why you should not keep any assets on an exchange.

Cryptocurrency exchanges are not banks

Many who are new to the space are likely used to traditional financial agencies which often insure their assets, and in the event of a theft, users have their money returned to them in almost every case. Cryptocurrency does not work this way, and exchanges are not banks. They are not insured, and they will not return any assets to you in the event of a theft or loss.

While they do come with the convenience of being able to retrieve your account information for you, this is also part of what makes them less secure. If someone steals your assets from an exchange, the staff will most likely tell you that you’re out of luck. Cryptocurrency exchanges are not banks, and they will not return stolen or lost coins to you.

It’s your responsibility as in investors to secure your funds, and part of that security includes utilizing a safe, private wallet to which only you own the key. Holding assets on an exchange account is done at your own risk, and you could get burned very quickly with no one to help you recover your money.

Websites offer poor account security

Almost all exchanges function through websites, and this offers very poor account security. There are a number of ways someone can gain access to your information through a web-based account, but phishing is likely the most common one.

Scammers will often imitate an exchange through various methods such as fraudulent emails or even by placing ads in search results in order to gain your passwords. Once they do, they will quickly transfer your assets away, never to be seen again.

Due to the high profile nature of most of these exchanges, they quickly become prime targets for these phishing attempts, and scammers succeed in stealing from thousands of users this way. While you can, of course, secure your accounts with 2FA, this is no guarantee, and these security protocols can also be compromised.

Your assets are essentially stored in a hot wallet in most cases, with easily accessible login information, and if a thief gains access to your email address as well, then they may be able to change your 2FA security too.

For these reasons, trading platforms are prime targets for DDOS attacks and phishing attempts. The risk is low, and the potential for substantial rewards is high for these attackers. Even experienced traders have fallen prey to these incidents, and many have reported losses to the tune of thousands of dollars from cryptocurrency which they kept on exchanges for day trading.

It’s often difficult to even know your account has been compromised until it’s too late, and the transfer of funds to the thief's wallet has already begun. After which there are no means of retrieval.

Exchanges do not offer you backups or private keys

When using a privately owned cryptocurrency wallet you’ll be able to create a backup, and you can also access your private key. These will give you access to your funds should the wallet that you are using stops working, or your host machine become inoperative. Even if the organization which develops the wallet vanishes, in almost every case you’ll be able to restore access to your funds on an alternative option.

When storing your assets on an exchange, you do not have this option available to you. That’s because you do not own these wallets, the exchange does, and if the website goes down for an extended period of time or even shuts down completely, they can take all of your funds with them, and you’ll have no way to get them back.

Unfortunately, many cryptocurrency investors have already experienced this, when the company that was holding their funds either vanished without a trace or was shut down by a government raid on the facility and its founders. Even if they are taken down officially, it’s unsure when or if investors will have their assets returned to them. For this reason, storing assets in a wallet where you have access to the private key is the safest method in every situation.

Exchanges own your funds, not you

Not only does the exchange own the wallets that your funds are stored in, but they also have complete control over them. By leaving assets in an exchange wallet, you are trusting them to a centralized entity who can really choose to do whatever they want with your money. That means that they can hold or freeze your assets if they find something that they don’t like about your trading activity.

They can force you to submit more documentation, and they can even hold your money hostage until these specifications are met, or even indefinitely with little you can do about it. If you don’t have the ability to provide these documents, or if they suddenly stop servicing your country for legal reasons, it could prove very difficult to regain your investments.

Some of these outfits have made it particularly difficult to get your assets returned to you, and customer service could be virtually non-existent. It’s not uncommon for some investors to have their deposits or withdrawals stuck in limbo for weeks at a time with no response from the website’s staff.

Mt Gox, which at the time was the largest cryptocurrency exchange in existence, handling a whopping 70% of transactions filed for bankruptcy in 2014, and many investors have given up hope of ever seeing their money again.

Regulations could change quickly

Regulations regarding cryptocurrencies are still developing, and world governments have not entirely made up their minds about how they feel about these new currencies. This puts many exchanges in a legal grey area that could be prone to more regulation, or in the case of some countries, outright bans on their service. What will happen to your funds if this happens?

Nobody really knows, and it would be in your best interest to keep your funds in a private wallet safe from these difficulties, or even confiscation should your country enact some type of regulation that causes the exchange to cease all operations in their home country.

This concern may sound extreme, but nothing is set in stone yet for cryptocurrency, and investors should be extremely cautious. While this will likely not be a worldwide event, in some countries such as Pakistan, the central bank deemed cryptocurrencies illegal, leaving investors there in a precarious situation. Most of these investors will likely need to utilize decentralized options to continue trading, and any exchanges in their country would need to move or cease all activities.

Alternative options for coin or token storage

While it can be convenient to keep your funds in these places, it’s also a horrible idea. If you’re looking for a multi-asset wallet option, then you could try utilizing Coinomi, Jaxx or Exodus. These are multi-currency wallets that give you the option of storing multiple currencies in one place, but they also will allow you to own your private keys, and to give you backup and recovery options.

They don’t have the same risks associated with them as an exchange account does, because you’ll be able to restore access to your funds, even if the wallet provider vanishes, and they have no access to your money.

If you need to have funds available for day trading, then you could try looking into a decentralized option such as CryptoBridge or BitShares. These options work differently than traditional setups, because you gain the private keys to your wallets.

Unfortunately, decentralized platforms don’t have anywhere near the same trading volume as more centralized providers such as Binance or Bittrex, which leads many investors to continue to use centralized platforms, even if they aren’t really happy with them. If you do need to use a provider that does not offer you any methods to obtain your keys, but you still need to leave funds there for quickly executing trades, then be cautious with how much you leave there.

If you are day trading, it would be wise to only leave a very small amount of your funds as easily accessible collateral here. Once you’ve taken some profits, move them to a safer privately owned wallet to limit your exposure to this environment. While this method is not perfect, and it could still result in a loss, it’s infinitely better than leaving all of your assets on such a platform unshielded.

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Should You HODL or Sell? The Pros and Cons of Both Strategies

In most every cryptocurrency community there will be a huge number of people telling you that you should HODL your coins forever. While these community members are mostly well-intentioned, this may not always be the best advice for your situation.

In this article, we’re going to go over both strategies, the pros and cons of each, and hopefully, it will help you determine whether or not you should continue to hold your investment or know when it’s the right time to take profits. Either strategy is a fine way to trade, and honestly, you could even utilize both of them to secure your positions, and to build a winning cryptocurrency trading strategy for yourself.

The HODL strategy

HODLing is likely the most hands-off form of investing available, and in many cases, it’s how cryptocurrency millionaires got that way. These investors likely purchased a number of coins for a low price when there was no demand for them, and after holding for several years saw a great return on their investment.

While this strategy ultimately paid off for them, the truth is that their coin likely went through a number of highs and lows before arriving at this final price. If they would’ve taken advantage of these dips and rises, it’s possible that they could have added a substantial amount of new coins or tokens to their pot, while still taking profits.

However, if you’re more interested in passively investing, without much work involved on your part, then the HODLing method is likely the right choice for you. Investors in this category would do well to pick a solid project, lock it away in a safe wallet such as a hardware or paper wallet, and then not touch it for the next couple of years.

HODL investors should, however, make sure to keep tabs on their investment’s updates in the event that a coin or token swap is initiated. There’s typically only a limited time to participate in these events, and if you miss it your investment could become worthless. Reddit or Twitter is often the best place for investors to quickly glean this information from.

How do you know when to keep HODLing?

If your chosen asset is going through a rough patch, and you’ve already lost a significant portion of your gains, it’s typically unwise to dump your investment. Markets of all types trade in cycles and cryptocurrency is no exception. That means that if you were to dump an investment that was currently in a downward trend, it’s likely that you will miss the upside which will likely come back shortly.

Many impatient investors have fallen prey to this, and Reddit is full of remorseful sellers who got off the ride just before they could’ve made stellar profits. Chasing profits from pumping coins which you have no interest in is a fast way to lose money, and it should be avoided.

In order to judge whether or not you should sell, take a moment to evaluate your position. Do you need this money immediately? If so, you likely should not have invested it anyway, and if you don’t then after distancing yourself from the emotional loss, it might make more sense to hold on to your coins or tokens for a while longer.

It’s possible that in a few months time, you’ll be able to sell in a much better position than if you took the loss. Cryptocurrencies can be brutal, and in order to achieve gains, sometimes you just have to wait it out.

If most of your holdings are in this currency, and you feel that you are too focused on one area for your portfolio to be safe, then it might be a good idea to diversify a little bit when you’re close to the break-even point. However, this would be a decision that you’d need to judge for yourself, and you should consider the potential gains that you may miss if you sell before profit realization takes place.

On the other side of the coin, if your asset is experiencing a sharp downturn, and you truly believe in the project it might be time to buy more! Many investors in different markets utilize this strategy to lower the average cost of their asset, and if you feel that what you’ve invested in has a real future, then it can be a good move to increase your holdings.

The dip cryptocurrency trading strategy

Trading on dips is how many crypto investors end up adding additional bulk to their portfolios. The safest way to do this, of course, is by trading an asset that you plan to hold for a long time. If the price of a particular asset rises a great deal in a short amount of time, investors can then sell that asset to take profits.

Once the excitement dies down and it returns to a lower price point, they buy back in, gaining more coins or tokens in the process. This strategy can make some inexperienced investors nervous, and if your timing is wrong, then you could miss out on some potential gains if you don’t buy back in before it rises again.

You can mitigate these risks by only dip trading with a percentage of your holdings. The exact percentage will likely depend on a few factors such as the total number of coins you hold and the liquidity of the exchange. Flipping smaller amounts of cryptocurrency is, of course, faster than flipping larger bags, if the asset in question isn’t super high in trading volume, moving a lot of them can be difficult.

However, this strategy can be particularly effective for assets in this class, as it’s easy for a coin in the 5 cent or less range to move up or down by a penny or two in a day, creating a stellar opportunity for you to add more coins to your bag if you’re patient.

The key rules for this strategy are to not over trade and to never bet the farm on one transaction. If you’ve already made one successful swap, then it’s best to call it a day and wait for the next wave.

Likewise, you should only bet a small percentage of your holdings on one trade. That percentage will be up to you, but many people would use 20% as a rule of thumb for safety. The larger your holdings, the more careful you should be.

How do you know when to sell crypto?

If a cryptocurrency that you hold has experienced a sharp increase in a short amount of time, it’s likely a good time to sell it to capture some profits. A very large increase in price is likely a short-term gain, and it may not be sustainable.

If that price increase has no demand to hold it up, then a smart investor will likely sell at least part of their bag in order to buy back in at a lower price. Using a strategy such as this, you could likely double the amount of coins that you hold, increasing your portfolio position dramatically when the asset does reach your target selling price.

If you’ve only invested in one or two different projects, then this could also be a prime time to diversify your portfolio. By selling and buying back in, you have the possibility to regain your original investment, plus a new position in a different project.

By diversifying, you protect yourself from the downfall of one asset and spread your risk across additional currencies, hopefully in alternate sectors and markets. You could also stash some money into a higher cap coin that while not having the same ability to increase in market cap, would also have a greater ability to protect your capital in the event of a crash.

In closing, both of these strategies can work perfectly well, even for inexperienced or casual traders. If you do have an interested in dip trading, you should take a while to familiarize yourself with the cycles that your asset typically goes through.

If you take a look at the long-term price chart for a cryptocurrency, you may be able to establish a fairly routine pattern of it trading up and down. This is by no means foolproof, but it could give you a decent estimation of when to buy and when to sell in order to increase your position.

New crypto investors should keep in mind that investing is a long game and that by learning to make smart investment choices, they can establish a portfolio that will treat them well for a lifetime. Most large financial gains are not made overnight, but if you have the patience to see it through, your chosen project could treat you very well in the coming years.

If you do wish to experiment with some more risky investment methods, remember to never use your entire portfolio for it. Instead, dedicate a small percentage to riskier endeavors for your safety. This will give you a good mix of high reward and low-risk investment options that will offer you something to fall back on if it doesn’t work out.

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How to Use Fundamentals Analysis to Make Smarter Crypto Investments

While many new cryptocurrency investors scramble to learn the ins and outs of technical analysis, some of them actually forget that there is such thing as fundamentals analysis as well.

Likely the appeal of technical analysis is that it can seem like magic to identify patterns in a chart, but the fact is that if you’re looking to make a long-term investment, then a fundamentals analysis is equally, or even more important than a chart evaluation.

What does fundamentals analysis mean?

When you analyze the fundamentals of a particular asset, cryptocurrency or not, you are trying to pull out the merits. As an investor, you’ll be spending a good deal of time researching the project’s offering, their team, their future technology and many other factors that will allow you gauge what their future might look like.

By the time you have completed your analysis, you’ll ideally have a good understanding of how the technology of your chosen coin or token will function and evolve. It’s also wise to have a good understanding of competing projects in the space so you can be sure that the blockchain project that you’ve chosen is really the best choice.

There’s rarely ever one company in a sector or niche, and it’s a good idea to familiarize yourself with all of them. This can help you to not be too attached to one solution, and it can also help you to identify any potential problems in your first choice before you’ve committed any money to it.

What kinds of things should a fundamentals investor be looking at?

When doing your research, you may want to break it down into several sections. You should also keep in mind that while a project may be lacking in one or even more of these sections, that isn’t an immediate sign to toss it aside.

Many cryptocurrency projects are still in their infancy, and it may take a good deal of waiting before they really start to shape themselves. If you can see a project moving in the right direction to rectify their problems, then it could still be a very good deal.

Technology or product

What is the purpose of your chosen project? Every cryptocurrency has a reason for existing, and as a fundamentals investor your first question will likely be, what does this coin or token do? Who would want to use it? In most cases, new projects are less of a currency, and they are more of an advancement in blockchain technology.

While there’s nothing wrong with something that is purely a currency, the fact is that there are so many cryptocurrencies now, that one that has no other features other than to be used for financial transactions would need some serious benefits to survive.

When you choose a coin or token to invest in you should take a while to become familiar with their proposed product or service to evaluate exactly how it works, and if there is a demand. Potential investors should ask themselves who would use this solution and if it is a significant improvement over existing services.

Community

Technology is important, but the community surrounding a project might be even more important. Without the right push, no project can succeed, and in the world of cryptocurrencies, a lot of that push comes from the community that has gathered around a particular project, goal or service. Even blockchain companies need a dedicated community, and it will be in your best interest as an investor to evaluate this following before you decide to join it.

Fortunately, the internet makes this very easy, and these communities are often very public. Investors can usually find all the information they need here by visiting places like Reddit, Twitter, Discord, Telegram or BitcoinTalk.

Almost every project will have a presence on several of these sites, where you will be able to quickly judge their community outreach. Is their audience engaged with their project? How do people feel about it? You should be able to quickly draw a conclusion here on the public opinion of the company or currency.

Team

Next, you should focus on the team behind the asset in question. Most of the time this information is freely available on the website, and you should be able to get a good idea of who is behind the work that is going on here. This is usually true whether this is a blockchain company or a community platform.

Take a moment to look over the team, their expertise, credentials and the contributions that they’ve made. How is the team’s work progressing? Are they meeting their deadlines? Do they have a well thought out roadmap? What kind of goals do they have? All of these are important questions that you should be able to answer immediately.

Investors should keep in mind that community funded and developed projects may progress a little slower than a company owned blockchain project. Sometimes these developers and team members are not paid, and they can’t dedicate the entirety of their time to the project.

Some of these projects may also have teams that are very sparsely staffed, and this can create a problem if one or more members decide to leave. Investors should be sure to note whether or not a removal of certain staff members would cripple or destroy the project.

Marketing

Every project needs marketing regardless of size, and every coin or token should have a marketing budget of some kind. When looking over the project introduction and the white paper, it should be immediately apparent what the marketing efforts and possibly even the budget are.

If you can’t find this information, then it may be a good idea to ask about it. This is very important, and if there are no plans in place here, then your investment could falter very quickly.

Don’t think that fancy ICOs are immune to this either, many of these are lead by very inexperienced teams that while they have lofty goals, they actually have no idea how to get them off the ground. Buyer beware and establish where the marketing funds are coming from first.

Coin or token evaluation

While there are a ton of projects out there that are very exciting, many companies have started using cryptocurrencies as a glorified crowdfunding space. A lot of these platforms essentially have released a token that provides no real use case. This is a serious problem for investors, who could find that their assets have no growth potential other than pure speculation.

Before making a purchase, investors should establish exactly what the use case for an asset is. Why would people buy this token? What would they use it for, and does the use case justify using it over an existing solution?

The second part of this puzzle has to do with the coin supply. If you’re approaching investing from a pure price appreciation perspective, then you’ll need to take this into account. Part of the reason that Bitcoin has achieved its beastly price tag is due to the limited supply. A coin or token that has an available supply of a billion will have a much different future.

Pricing and market potential

The long-term chart price is also an important factor in determining whether or not you should purchase a particular asset. While some might think this would fall under technical analysis, the truth is that fundamentalists are also concerned with price. Ideally, you would be looking for assets which you believe are undervalued, and pricing is a big part of this.

You can approach this from one of two ways. The first is in comparing the potential of future pricing to past pricing. If an asset has tumbled recently, then you could be in a good position to pick up a great deal if it has met all the other qualifications on your fundamentals list.

The second is simply by trying to gauge the future performance of a low-value coin. Do you think that this asset could stand to move up in market cap? Is the value of the coin low in relation to the size of the supply? These could also be determining factors in making a purchase.

In closing, this is nowhere near an extensive list, but it’s a great start to get you going in the right direction for becoming a fundamentals investor. There are of course many other things you should take into account before diving in, but hopefully, this article has helped you to learn how to ask the right questions, and to learn how to identify good opportunities in the cryptocurrency space. It’s important to do your own research and to never jump into any investments blindly.

Fundamentals investing can be a lot of work, but it’s important if you want to be sure that you’re investing in something that will treat you well for the long haul. Learning how to properly evaluate an investment is the first step in cementing your financial security in any space, not just cryptocurrency.

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What Is a Pegged Cryptocurrency, and How to Use Them

Cryptocurrencies are extremely volatile, and while that makes them great for achieving gains quickly, it also makes them not so great in some other areas. If you’re looking to preserve capital, it can be hard to do so in the crypto space, they don’t tend to do well as a stable store of value.

Likewise, if you’re trying to create something free of fluctuations with which to make a purchase, they falter here as well. Due to the nature of these assets and their often low circulating supplies, they are often subject to violent price swings which can give everyday people and merchants trying to accept them a heart attack on a regular basis.

This can also be troublesome to traders looking to stow away some of their hard earned gains. To that end, pegged cryptocurrencies have come into existence in order to ease some of this burden on the space and its inhabitants.

What is a pegged cryptocurrency?

A pegged cryptocurrency is a cryptocurrency asset that’s value is pegged to something else in order to create a stable currency. In many cases, this peg is tied to the US dollar, but there are other options available as well. Each of these solutions has their own merits or shortcomings, and it will be up to the individual investor to choose which one is the best for their specific situation.

What’s so special about a pegged currency? Well, a stable currency must be backed up with what it’s pegged to. That means that if your currency is pegged to the US Dollar, then that also means that you must have an equal number of US dollars in reserve in order to preserve that backing. It’s not enough to simply say a currency is worth one US dollar. It must be physically present, and it must be auditable as well.

A good peg currency will be transparent with their reserves and will allow their users to see that these funds are available, and they will also hopefully be subjected to third-party audits of their financials to verify that these numbers are indeed true. This is very important to maintaining the integrity of a peg currency.

Why would you want to use a pegged cryptocurrency?

To new investors, it might seem strange to want a cryptocurrency that acts like a fiat currency. Isn’t that what cryptocurrency enthusiasts are avoiding? While it’s true that many people are in cryptocurrency for the massive gains that can be achieved, eventually you do want to get off the roller coaster and take a break.

Investors looking for a place to store their capital that is free from major price fluctuations often turn to these pegged currencies in order to do so. Let’s say that you recently achieved a great return on one of your cryptocurrencies, but you were afraid of those gains evaporating overnight.

You could trade those gains for a cryptocurrency such as USDT, and then your capital would be secure, without the constant price fluctuations inherent in even a larger cryptocurrency such as Bitcoin or Ethereum. If you sense an upcoming dip this could be a good way to pull some money off the table for safe keeping.

This opens up additional possibilities for you for trading as well. Should the market experience the previously mentioned dip, your peg currency’s value will remain intact. Since it is already a cryptocurrency, and it has not exited the market into a fiat currency, that means you can quickly swoop in to capitalize on that dip and make a purchase, growing the number of coins or tokens in your portfolio. This is likely the most useful aspect of a stable cryptocurrency and what most investors are interested in using them for.

Potential problems with pegged currencies

The problem with stable currencies is that it’s actually pretty hard to maintain a constant dollar value. While there are many solutions to this issue, none of them have managed to be unwavering in price, and some of them like Steemit’s Steem Back Dollar have outright failed, never actually even returning to their pegged value.

Many investors are also skeptical as to whether some of these assets really have any funds in reserve or if they just have claimed to do so. It can sometimes be hard to verify the authenticity of these claims, and that leaves many with a lot of questions regarding these assets. If the integrity of these currencies fails, then your money is no longer safe here.

Popular pegged cryptocurrencies

There are a number of stable currencies available, and they all are better or worse for certain purposes. Below we’ll go over a few of these options and their pros and cons. If you choose to utilize a stable cryptocurrency, you should research its price history to see how good it is at actually being a pegged asset, because some of them are surprisingly lacking in this department. Their availability will also be a concern because a good currency with no adoption is simply not useful.

US Dollar Tether (USDT)

This is likely the most popular asset of this type. The USDT is pegged to the US dollar, and they invite users to view their asset balances in their transparency page. This allows you to see the amount of US dollars they have on hand to back up their token at any time.

USDT also has partnerships with many different companies including ShapeShift, Bittrex, and Poloniex which makes them the most widely available stable currency option. They’ve also done a fairly good job in holding their stable coin value, with only a short deviation from their target price.

Some investors do take issue with this currency due to its controversial history, and the fact that they continue to “print” tethers which some don’t believe they have the currency to back up. This is in part due to the fact that they have not revealed any auditing authority for their transparency accounts, and they do not offer any assurances that tokens will be redeemed for money.

Steem Backed Dollar (SBD)

The Steemit social media platform actually has two currencies, Steem and Steem Backed Dollars. Users who post on the platform are rewarded with both. Steem is used to power up the account for future rewards, but the SBD is meant to be a stable asset which users can then spend to purchase goods or service.

Each SBD is backed by exactly one US dollar worth of Steem. The details behind how all of this works are rather mysterious and many who have analyzed the white paper still don’t understand it.

There is one other problem with Steem Backed Dollars though. They are horrible for stability. Likely due to the much lower circulating supply of SBD to Steem, the coin was manipulated on the market, causing it to rise exponentially.

The coin never again dropped back to its tether price, and it seems no one really cares to fix it since it’s beneficial to the users. However, a coin that can’t hold its peg can go down too, and that should be worrying to anyone who’s actually looking to utilize a stable currency.

TrueUSD (TUSD)

TrueUSD is a stable coin meant to compete with USDT, and they’re doing a pretty good job of sticking to their peg for the most part. Interestingly, this company actually funds its users by utilizing a legal escrow scheme.

This allows them to provide investors access to a stable coin without the company ever touching the funds. Instead, a trusted third party manages this. A smart contract ensures that there is always an equal 1:1 accounting of tokens and USD between the escrow.

They also offer the legal protections that USDT seems to lack, offering purchasers the ability to always trade their tokens for US dollars, with full account transparency and frequent third-party audits.

While they have an excellent product, there are only a few exchanges which allow you to trade using this asset, and that means they have some catching up to do if they want to overtake Tether. However, they do have a very attractive offering.

Conclusion

In closing, there are many circumstances where it may make sense to hold some of your funds in a stable asset, and if you don’t want the hassle of exporting to your native fiat currency, then a pegged option could be the way to go. This not only gives you excellent capital protection, but it also gives you buying options in down markets.

Keep in mind that this is by no means an extensive list, and there are many other similar currencies out there that you might want to explore for yourself. Even decentralized exchanges can have them such as Bitshare’s BitUSD, this gives even the most private of cryptocurrency investors an option to limit their volatility exposure without cashing out to fiat. You can think of these currencies as just another tool to be utilized in your arsenal to make you a better trader and to protect your assets.

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Hot vs Сold Wallets: How to Protect Your Crypto Investments

As an investor, one of the most important decisions you can make is in regards to the wallet you choose to store your crypto assets. Not all wallets are created equally, and you should above all else, be sure that you’ve chosen a reputable one to store your assets. When choosing a wallet it should meet a few criteria before you decide to transfer any cryptocurrency there.

  • Comes from a reputable source.
  • Allows you to create a backup.
  • Provides you with your private key.

The one you choose will vary based on the asset that you are trying to purchase. In most cases, the official website is the best place to find out which wallets are legitimate, but sometimes community areas such as Reddit subs can also provide that information. However, you’ll also need to decide between a hot or a cold wallet.

What is a hot wallet?

A hot wallet refers to a storage medium that is always connected to the internet. While they are reasonably safe as long as you safeguard your information, there is always a chance that they can be compromised. It is not recommended to keep large amounts of money in a hot wallet due to this risk, as all computers inherently have some type of vulnerability that can be taken advantage of.

This is also true for web-based wallets which have the added misfortune of being vulnerable to not only attacks on their DNS, as MEW found out, but also to attacks via browser-based add-ons and scripts.

While a client or app is more convenient for sending or receiving money, it is often the least secure option of the two. Exchange wallets not only are hot, but you also do not own the private keys which presents additional problems should the company vanish. They provide you with no means to recover your funds, and they are a prime target for malicious attacks.

The hot wallet you use will vary based on the asset you have invested in, and in some cases, a client version may be the only option available to you. If this is the case, be sure to create multiple backups in safe places. In order to find a safe software-based option, go to the project’s official website. They will have available their own software packages or reputable partner options.

What is a cold wallet?

A cold wallet refers to funds that are kept on something that is not connected to the internet. These days, a hardware version is the most popular option, but if you don’t wish to spend any money on such a device you can still use the legacy version by creating a paper wallet. Paper versions were what people traditionally used to hold large amounts of coins.

Cold storage options are typically the safest bet if you have a large investment. Even if you’d prefer the convenience of a hot wallet, it still may be in your best interest to put the majority of your coins on a safer cold storage option for safe keeping. This solution comes with its own set of problems, but those can be easily remedied.

They can be damaged

Cold storage utilizes methods which require a physical device or item to store your coins. This means that there is a chance that these items could either be lost, stolen or destroyed in many circumstances if you’re not careful.

Obviously, it’s not in your best interest to tote around a device, or a piece of paper with potentially thousands of dollars contained on it. If you have significant holdings it would be in your best interest to either invest in a fire safe or possibly a safety deposit box.

You should also be sure to create multiple backups of your funds. You could perhaps store a copy of the drive or the paper with the seed on it with a trusted friend or family member. Having multiple copies protects you in the event of a disaster.

The human element

When stored on paper there are a few other unfortunate problems. For starters, if anyone who knows what it is sees your seed or private key, they could easily take it for themselves. All the more reason you should keep it safely locked away somewhere from prying eyes.

You could however also create a problem yourself. The password strings are quite long, and if your handwriting is not the best it’s possible that you could have trouble recreating the password or private key should you need to. If you plan to use a handwritten copy, be sure to write neatly and always double check that the restoration seed or key works.

What cold wallet option is the best?

Paper storage

Best if you don’t want to use a hardware device which can fail, or you do not wish to spend money on purchasing one. Unfortunately, this is rather old tech, and many new coins and tokens may not have a way to create them. However, if your investment is in an older coin such as Bitcoin, Litecoin or Ethereum, they will definitely have this option available.

As an added bonus, should you want to give coins as a gift to someone, such as perhaps your children, this is an easy way to do so. You can print off a paper wallet, load it with funds, and then give it to them to store away somewhere safe for the future.

Keep in mind that these should be created offline so the information has no chance of being compromised, and when you actually do want to access the coins, sweeping the wallet can prove frustrating initially.

Hardware storage

There are a few major hardware-based options which we’ll compare here. All of them are useful for their intended purposes, but they do have different features which you may like more or less. Some wallets will also be better depending on what you have invested in, as the coins and tokens that they can store greatly vary.

Ledger

This is the most popular option, and as such, they offer storage for the most coins or tokens. If you need to store a lot of different tokens, then this is likely the way to go. While you can store ERC20 tokens, Ledger does not natively support them. In order to manage your ERC20 tokens, you would need to connect the Ledger to MEW, which is web-based.

  • Does not natively support ERC20 tokens
  • Supports coins such as NEO, ETH, BTC, BCH, and Vertcoin
  • LCD display
  • Push button operation
  • Secured by PIN code
  • Backup recovery phrase
  • Offers companion apps for asset management
  • Software only accessible through Chrome or Android

Trezor

This wallet offers an advantage over the Ledger in a couple of ways. First off, if you have many Ethereum tokens, they offer native support for them without the need to use MEW, which is web based and more easily compromised.

The Trezor also acts as a secure password manager for your online accounts! With one press of a button, it can secure your web wallets or exchange accounts as well which is a pretty nice feature.

  • 2FA authentication
  • Natively supports ERC20 tokens
  • Password manager (For web based accounts)
  • Secure SSH access
  • Third party integrations
  • Offers native software for Windows, Mac and Linux
  • Minimalistic approach, removes anything unnecessary for added security

KeepKey

KeepKey is a lesser known device than our other two entries, but they have some merits of their own you may be interested in. The most obvious being the way the device operates. The KeepKey team has worked to make their device very easy to use, even for payments.

Users can actually keep all of their cryptocurrency on the device, and if they make a purchase from a retailer such as Overstock who accepts Bitcoin, they can plug in their device, and the KeepKey will automatically populate the information for them, helping to easily complete the checkout.

The largest shortcoming of KeepKey is that they don’t offer storage for nearly as many types of assets as their competitors as of yet. Users will be confined to storing Bitcoin, Bitcoin Cash, Doge, Litecoin, Ethereum, and Dash.

They have however rolled out a Beta version of native ERC20 support, which is nice, and they integrate with Shapeshift. This option is best for non-tech savvy users who invest in large cap coins or ETH tokens mostly.

  • Very easy to use
  • Native ERC20 support
  • Shapeshift integration for coin swapping
  • Works with PC, Mac, Linux and Android operating systems
  • Easy recovery phrase backup
  • PIN number verification
  • Large LCD screen

In conclusion, once your crypto assets have been purchased, you owe it to yourself to protect those assets. Please remember that there is no one who can retrieve your coins or tokens if they are stolen, or if your password is lost. You must take these steps yourself, and no matter what option you choose make sure that you put your seed or backup files in a safe place.

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Should You Invest in ICOs - How to Detect Scams

During the cryptocurrency explosion, ICOs, otherwise known as Initial Coin Offerings have also experienced tremendous growth. Due to the fact that these offerings are not fully regulated, it’s hard to guess exactly how many of these projects have popped up over the last year or so.

However, it seems like there’s a new one planning to be the next blockchain sensation everyday, and the potential for quick gains has tantalized inexperienced investors, leading many of them to throw money hopelessly at these projects. However is this a good idea? Here’s some things you may want to consider before investing in an ICO.

Many of them do not have working products

Since an ICO is the crowdfunding phase for a project, most of them don’t even have a product at the time of your investment. Typically they will have some kind of rough roadmap and maybe some proposals of how their project will work.

While that all sounds well and good, getting a product of any type to market is easier said than done. A lot of things can go wrong between that time, and if they run out of money for development or marketing it could be bad news for their investors.

You could also be quite disappointed if you’re hoping to make an investment in a product that will be ready to launch in a few months time. Since most of these companies are starting from square one, it could be years before you see the technology in the white paper actually develop into something that is polished and has a real user base behind it.

While the odds of finding an ICO with a functioning product are rather slim, you should do your best to evaluate their team and ask yourself if they are honestly capable of completing their mission. If there’s not enough information available for you to make this assessment, then it might be better to move on rather than to waste your money on something that may never be completed or viable in their chosen space.

ICO price is no guarantee of future price

While the ICO price is often given at a discount for early purchases, the fact is that many times the price of the token will drop after the fact. This is often from investors jumping from project to project hoping to make quick gains, causing others to panic and sell as well once they see the price dropping.

In the initial stages at least, the highest price point for the ICO’s token will likely be the short time frame directly after the ICO when it is first listed on an exchange. If you’re planning to buy into a particular project, this is the worst time to do so, as the price will likely be experiencing a huge pump.

What goes up must come down, and after this phase, investors may be distraught to see that the subsequent dump has left their investment below the price of the ICO offering, and if they would have waited, they could’ve gotten in much cheaper. While this does not happen in every circumstance, sometimes it’s better to wait a while to buy into a project for this reason.

However, in other situations, investors have bought into the ICO, and then immediately sold during this pump for a large profit. If you’re willing to take the risk, there is certainly money to be made here. Keep in mind that this is a tough game for a newbie though.

Some of these projects are straight up scams

There have been a number of empty ICOs that have made no attempt to actually be anything other than a money grab. Those behind the project took investor’s money and had no intentions of developing a product.

While it’s not always totally obvious, there are often some red flags regarding these offerings which can include poorly put together plans, mysterious development teams, lofty goals with no real road map to get there, a lack of or a poorly written white paper, and no auditable code repository.

If you’re looking to make an investment in an ICO, you should spend a good deal of time evaluating their team. Are they real people? What experience do they have in this field? Where have they worked before? Do the product and the white paper make sense?

An investment like this requires more due diligence to protect yourself. You’d be surprised how many of these fake startups will simply lift information or images from other sources, hoping that investors will not bother to check up on what they’ve been told.

Some of these will actually have expertly put together webpages, which is what they use to fool investors. However, if their homepage is filled with a bunch of buzzword mumbo jumbo with no real explanations for their product then it’s probably best to run in the opposite direction.

Your country may have strict laws regarding them

If you are an American, chances are that you are going to be excluded from most ICOs anyway, and if you reside in another country, then you might need to check out security offerings laws where you live. Even if you are allowed to participate, you’ll likely be facing some intrusive KYC registrations in order to purchase your tokens.

These will typically apply to anyone, and not just in certain countries. Sadly, most legitimate ICOs will likely require this information from their investors, as they have a need to protect themselves legally. If they don’t, then it might actually be a red flag that something is fishy.

You could instead wait to purchase a project, possibly at a discount at the exchange sometime after the initial sale to avoid most or all of these issues. By purchasing at an exchange you have none of the hassles of the ICO, and you may even be able to buy more privately.

The initial offering may also have a minimum buy-in amount which will not happen on an exchange if you’re not ready to invest quite so much in a risky new venture. This also gives you the added benefit of seeing how a project has progressed on their promises, and if they intend to make good on what they’ve offered their investors.

Should you invest in an ICO?

In order to answer that question, you should ask yourself if you are prepared to lose the money that you plan to invest. If the answer is no, then you may want to rethink investing in an ICO, or at least lowering your potential investment to a more reasonable level. Coin offerings come with many risks, and even if you think that you’ve got everything under control, a lot can happen that could render your investment worthless.

These concerns do not stop at things the company may do wrong, but also outside forces such as governments who could step in and demand that they cease and desist operations. This space is still a bit of a legal grey area, and while some of them are registering, most of them have simply set up operations in countries without any restrictions.

In closing, it’s important to think long and hard about whether or not to invest in an initial coin offering. This is not something that should involve just five minutes of research. In order to be safe, you need to really familiarize yourself with the entire project.

That means taking the time to research each team member and to hopefully establish their work history that not only confirms that they are who they say they are, but also that they have the technical expertise to backup the project in the long run. Launching a blockchain company is no easy feat, and it will take the skills of many people who have likely already been successful in other ventures in order to pull it off.

While it’s okay to gather outside opinions, it’s never okay to use those as your only basis for making an investment. Keep in mind that many of the reviews you will see for these offerings are paid for or incentivized with referral programs.

That means that the poster may not be totally honest with you as to the details of the company in question. Instead, it’s your job as an investor to verify that relevant information is presented accurately. There’s simply no other way to do that other than putting in the work required to research the project.

However, if you’re careful and you do your research well, it is possible to make some good investments in ICOs. While there are some bad players who have given this space a bad name, there are also many others who are legitimate. You just need to take the time to pick through the massive heap of bad coin offerings to find them, and investors who take the time to do so are often generously rewarded for their efforts.

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FUD and FOMO Explained - How to Protect Yourself from Both

In the world of cryptocurrency, there are many terms that investors must make themselves acquainted with during their time trading. Due to the nature of cryptocurrencies, and the way information is transmitted in these communities, sometimes it can be hard to tell what it actually the truth, unfortunately. The internet is a wonderful place where people are free to share information, but many times that information is just plain wrong or at the very least misleading.

People often become very passionate about the projects they support, and they can even be very attached to them emotionally. In many cases, emotion and investing do not go hand in hand, because it can cause you to make foolish mistakes. Blind hatred and blind love are both equally disastrous, and you should be wary of both when it comes to your money.

In this article, we’re going to go over two of the most popular terms in the world of cryptocurrency: FUD and Fomo. Both are dangerous for their own reasons, and you must learn to avoid them if you are to be successful in your endeavors.

What is FUD?

FUD is an acronym for fear, uncertainty, and doubt. It was originally popularized by the open source software movement, due to the fact that commercial software developers would try to scare consumers into purchasing their solution instead of using freely available alternatives.

In the cryptocurrency scene, the meaning is much the same. Keep in mind, however, that every criticism of a coin or token is not FUD. Usually, when people are referencing this tactic it means that the person spreading it is doing so without a valid reason. Usually, they will spread information that is not totally true or could be misleading.

You may be familiar with this in the form of “click bait”, which has become popular on the internet in recent years. Website owners will intentionally misrepresent the content of their post by using the title in an effort to pull clicks and valuable web traffic to their page.

FUD-ers may utilize a similar tactic in order to mislead a group of people into believing the coin or token that they invest in is better than a competitor’s project. Often times these posts are submitted without any proof in the hope that people will buy into the fear and just spread these items without doing their own research first.

Valid criticisms do not fall under this definition, especially one that presents evidence of a problem such as a software vulnerability just because you don’t like someone speaking badly about your pet project.

It’s important to distance yourself enough from an investment to be able to give your attention to these negative opinions as well. Otherwise, you may be making a mistake that you could regret later. Try to remember that valid opposing opinions are welcome, but fear mongering that has no basis in reality is not.

Cryptocurrencies as a whole have experienced this from people who claim ridiculous things like that cryptocurrencies are only used by criminals or that world governments will simply ban them. There is no basis for either of these things, and they are simply used as a means to spread fear to people who might be interested in adopting cryptocurrencies in order to scare them out of doing so.

How to protect yourself and your investments from FUD?

The only way to protect yourself here is to be informed. Most developers are very open to reasonable questions about their projects. You could try visiting Discord, Reddit, Twitter or Telegram and asking for clarification about something you’ve heard.

However, you could probably find this information yourself by viewing a coin or token’s white paper. Almost every project has this, and it will tell you everything about how their proposed solution or platform will operate. This will allow you to verify for yourself whether what you have heard is true.

If the item you are questioning is a news item, then try to verify if this item has been reported by multiple sources. If you can’t find multiple news outlets reporting on it, then it may not be true, and you could try asking the developers to acknowledge the post or article for an answer. Typically they will do this on their own, however.

Be aware that even after the project managers have made their statement, there will still be people who will report that news item. Either through ignorance or the fact that they do not want to accept what the truth is, and they hope others won’t either.

What is FOMO?

FOMO is an acronym for the fear of missing out. Investors saw a lot of this during the last bull run when new money scrambled to enter into the market. This boosted cryptocurrency to unprecedented levels, but this kind of growth never lasts. The walls came tumbling down and many people got burned by this fall.

While FUD can cause projects to drop without anything really backing it, FOMO can do the same in the opposite direction. Markets of all kinds operate on the news, and good news can cause spikes just like bad news can, but eventually, these unsubstantiated claims are proven false. However, many tokens and coins are not moving on news items, but may simply be being manipulated, especially those with smaller supplies.

For this reason, investors must be very cautious about coins or tokens that have recently experienced a sharp increase in price. If you buy in at the top of this, then it’s very likely that the market will crash down on you, and you’ll be lost a significant portion of your capital. While it’s easy for a market to spike in price and reach very high levels, it’s much harder to sustain that level.

Buying into a pumping cryptocurrency is a good way to get dumped on by whales, the big investors in this space that control a large portion of the currency. They use these cycles to accumulate more profit, quickly dumping their alt coins before the price can fall. Usually, by the time a casual investor sees the price going down, it’s too late.

How to protect yourself from FOMO

Protecting yourself from FOMO also requires being informed. While it can be tempting to chase profits from a pumping coin, it’s almost always a bad idea, and if you’re a new investor then this is likely the worst thing you can do.

Even projects which are seeing a sharp increase for legitimate reasons such as a new software release or an exchange listing will come down. So, don’t be too discouraged if you missed the price boost.

It’s likely that these assets will experience a correction in the next few days, and you’ll be able to get in at a much more attractive price if you are patient. This strategy will likely treat you much better than trying to jump between currencies chasing profits.

Likewise, if the cryptocurrency you’ve invested in is a little stagnant, you should not sell it only to jump into another coin which is going up. This is a bad move, and you’ll likely not only lose money on the pumping coin when it dumps, but you could also miss out on potential gains from the first project which you had invested in!

Conclusion

In conclusion, there’s much to learn for a new investor, but if you’re prepared you can earn some profits for yourself in cryptocurrency. You should always remember to take any investing advice you get with a grain of salt.

While there are some people on the internet that know what they are doing, there’s even more that will mislead you. Either due to their own ignorance on the subject or even maliciously because they want you to pump a coin that they plan to make profits off of and then dump.

Avoid any groups on Twitter that are offering you fast profits or promising to tell you when a currency will be rising in value. These are what are known as pump and dump groups, and they are trying to use you to make money.

In most cases, you’ll be the one who is getting dumped on. They use these channels to lure in new investors with hopes of quick money, and then use them as the bag holders, quickly selling off their own investments first for profit.

If anyone recommends a project to you, make sure to do all of your own research before putting in any money. Take a moment to read over what it is the project does, who their competitors are, familiarize yourself with their social media accounts, and really evaluate their offering.

If the project looks promising, and you’ve examined the long-term price chart to make sure it’s not overpriced, only then should you consider entering a position. Avoid get rich quick schemes and invest only in solid projects. If you can have a little patience, then your investments will likely offer you a nice return in a year or so.

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How to Choose a Proper Cryptocurrency Exchange?

There are almost as many cryptocurrency exchanges out there as there are cryptocurrencies, and this creates what’s called a dilemma of choice for investors. With so many options, which one will you pick? The most obvious way to choose is based on the assets you want to trade. If you’re looking to trade some lower market cap coins, then you may not have a choice but to go with some rather unusual choices.

However, for investors that are interested in trading higher market cap assets such as Neo or Ethereum, there are a lot more options to choose from. To that end, in this article we’ll be going over some considerations you’ll need to make before you choose your new crypto trading platform.

Country or region

Some exchanges may simply exclude your region, so this will likely be one of the biggest determining factors for where you set up shop. This problem is painfully apparent for Americans, who are excluded not only from ICOs, but also a large number of global exchanges who do not wish to deal with the regulation headaches of servicing them.

However, there are other countries where cryptocurrencies are not looked fondly upon, and if you live in one of these locales, then you may need to utilize an exchange which does not require any verification. A decentralized option is likely the best way to avoid being shut out due to your country.

Centralized or decentralized exchange?

You should also consider whether you want to trade on a centralized or a decentralized exchange. A centralized service is controlled by one governing body, which is typically the company behind it. Often times these exchanges have huge marketing budgets, and thus they control a large portion of the cryptocurrency market liquidity.

However, there are some serious drawbacks here. The centralized exchanges command power over your assets, and the wallets contained in your account are owned by them, and not you. This gives them the power to seize your assets, freeze your account or impose new regulations upon you at any time.

Once your funds are in their system, they can even force you to provide further documentation before releasing them. Some traders have also found that some less reputable options can vanish overnight with their funds.

Decentralized exchanges are not controlled by one person or entity, instead, they are often powered by nodes, and that gives more freedom to them. While the volume is not quite up to par with larger, more centralized institutions, many investors are finding that if they want to trade without the obtrusive red tape that cryptocurrency was meant to prevent, they will need to utilize these types of exchanges.

If you live in a country where it is hard to be approved for a trading account, then this is likely the best option for you. Likewise, if you are a privacy advocate, interested in preserving your anonymity, and not allowing a third party access to your funds, then this will be a good option for you too.

Security

Security is another big factor that investors should consider. A decentralized option often gives you the private keys to your own wallets, they belong to you, and if the company vanishes, you’ll be able to restore those wallets elsewhere. This is ideal, and a platform like CryptoBridge, even offers a desktop client/wallet so that your assets never need to go through a web browser, which is easily phished.

However, if you do need to use a centralized exchange that operates through a web interface, then you should look for security options to protect yourself. At the bare minimum, the website should have at least one 2 factor option, but preferably multiple ones. This prevents someone who happens to phish your password from accessing your account funds. Some also utilize optional pin numbers or security applications for better safety.

Do they use cold storage? This is a method of storing coins which takes them out of the hot exchange wallets and places them into safer offline storage where they can’t be hacked. Most reputable exchanges will utilize this for most of their assets until they are needed.

Before choosing one, it would be wise to look through their FAQ documents to see if they have verified their security procedures, but investors would be wise to never leave a large amount of these funds on any provider, no matter how good they say their security is.

Available assets

It doesn’t matter how good an exchange is if they don’t have the assets available that you want to trade. Investors should be able to easily scrutinize the markets and trading pairs available for the platform without even making an account. Take a moment to familiarize yourself with their available coins or tokens, and their base currencies.

A base currency is a coin you will be trading against. For most people, this is Bitcoin, but there are other options which could be utilized. Depending on your country, you may even be able to find a service that has a pairing in your own fiat currency, which will be very convenient. Keep in mind though that exchanges that offer this will have the most rigorous verification procedures.

If most of your assets are available on the exchange of your choice, then you may be able to supplement the few that aren’t with a quick swap type of exchange such as Shapeshift or Changelly, which often list some tokens as well, and can be good for smaller holdings or quick swaps.

To fiat or not to fiat?

Investing with your government issued currency is convenient, but it can also be a headache. Especially if your bank is being troublesome about cryptocurrency purchases. An exchange that deals in government-issued currency will also put up much higher walls to entry. It’s not because they want to, but because the governing bodies associated with these currencies force them to.

If you don’t want to deal with all of this, then it might be a better idea to purchase your initial cryptocurrency with cash from something like LocalBitcoins, before moving on to an exchange for acquiring other assets. This also gives you the option of purchasing your crypto privately.

Trading fees

Believe it or not, exchanges do not charge uniform fees. In fact, some of them have left a bad taste in trader’s mouths for raising their fees to exorbitant levels. This information will typically be hidden fairly well, as many of them are not upfront about it.

However, after some digging in the FAQ you should be able to find out what they are. Try to compare them to some competing options in order to get yourself the best deal. While the percentages don’t seem like much at first, they can add up for large or frequent trades, quickly robbing you of your profits.

Liquidity

Liquidity is the amount of available assets present on the exchange for a particular pairing. If there is not enough liquidity you could find that you will be paying over market value for your assets in comparison to other exchanges.

This is a big problem for smaller exchanges, and you should make sure to compare prices before making any purchases where there is a very small order book. A tiny order book can also create delays in completing your trades if there are not enough sell orders to fill the buys or vice versa.

Custom Support

Some cryptocurrency exchanges have atrocious customer support. They work just fine when they are actually working, but when they don’t traders cries for help can go unanswered for weeks at a time. While it’s hard to evaluate this metric without first experiencing it, if you go to their social media pages you’ll often quickly find out if users are unhappy with customer support or not.

Or you could also send a quick email about something account creation related to see how long it takes them to answer you. If you’ve waited 3 days or more with no reply and good customer support is important to you, then you’ll likely be able to make your own decision as to whether it’s time to move on to your next candidate.

Conclusion

In closing, there are many things that investors must consider when choosing a cryptocurrency exchange, and it’s worth your time to learn these things before you deposit any money. For example, many exchanges will allow you to deposit money without verification, but then will force you to verify in order to withdraw it! If anything about an exchange is unclear, it’s often a good idea to ask around in their various social media channels, as someone can likely answer your question, even if the support team does not.

Even if an exchange looks like a great choice, you should still remember that it’s in your best interest to not keep too many assets here. If they go out of business, or a governing body steps in, your assets could be seized, and there’s no telling when or if they will be returned to you. Practicing proper financial safety can only benefit investors in the long run.

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Practicing Good Cryptocurrency Diversification

Due to the nature of cryptocurrency, it attracts many investors who are still quite young. As such, they may not be acquainted with something like diversification. However, it’s very important to learn how to do this properly. In this article, we’ll be going over some methods that can be used, but first, let’s define what diversification is.

What is diversification?

Diversification is the act of varying your activity in a way that you do not have a central point of failure. While this is typically applied to investments where investors will spread their risk across several assets classes or sectors in order to protect their capital, it can be applied to almost everything in life.

For example, you could diversify your income by investing in masternodes or running a website. This would mean that if you were to get laid off from your main job, that all of your income was not coming from one source, allowing you to continue to provide for yourself. That makes sense right?

Your crypto investments should be handled the same way. It’s dangerous to have all of your eggs in one basket because that means a bit of bad news could send down the entire value of your portfolio, which rightly causes most people to panic. You can protect yourself from this problem by spreading your money out a little more evenly.

How to diversify your cryptocurrency assets

When investing in cryptocurrency, there’s a couple of places where you can diversify. If you’re planning to diversify your assets, then it may help you to write out a game plan for yourself instead of just randomly picking coins or tokens that you hope to do well. Investing is often a long game, and having a plan can help prepare a nest egg that can aid you for your entire life.

Market Cap

The first place where we can add some diversification is a market cap. The market cap of a coin or token refers to the amount of money that is held within that particular asset in total. For example, Bitcoin and Ethereum are currently the highest market cap coins, but what does this mean for you as an investor?

High market cap coins are typically more stable than lower market cap coins. That may sound silly to say in an industry that is as volatile as cryptocurrency, but it’s true. Investors looking for slow, mostly sure gains are best served putting their money here.

However, these assets have already achieved a large amount of growth, and it will be harder to make a very large return on them. They will appreciate in value, but it will likely be slower than some other assets.

Small-cap coins, while more dangerous than their large-cap brothers offer investors the opportunity to achieve much higher gains. This is particularly true of coins that are trading in the 1-10 cent range, where the market cap growth can be very large.

However, you are taking a much bigger risk here. It’s quite possible that these assets will never pay off. Coins in this class still have a ways to go in regards to adoption, usability, and development. Fortunately, we can have the best of both worlds by investing in both of these asset classes through diversification.

The exact percentages that you should allow to large or small cap assets is really a matter of opinion and your position in life. If you are still very young and you are investing only a hundred dollars here and there, then the small cap is likely the way to go. You’ll get more for your money this way, and you have plenty of time to wait for them to appreciate.

However, if one of your small caps does manage to produce significant gains, it would be wise to remove part of that investment, and then place it into a larger market cap coin for stability. This not only helps to lock in profits and to keep your gains from evaporating, but it also gives you some free capital to buy additional opportunities when your assets are experiencing a dip.

Some investors utilize a rule of thumb where every time an asset doubles, they sell half. You could utilize this motto to some degree, placing a portion of your small-cap gains into a large-cap asset for safe keeping.

Sector or niche

The second place we can diversify is by market sector. What does your coin or token do? Is it a privacy coin, or does it offer supply chain logistics to corporations? We’ve already diversified by market cap, but we can spread our risk out further by putting our money into different sectors and businesses.

Why would we want to do this? Just like everything else, markets will have highs and lows in their lives. Let’s say that your entire portfolio is invested in ICOs from China. If tomorrow some bad news starts spreading around about how China will begin cracking down on these companies, it could send your entire portfolio into a tailspin.

For this reason, we want to diversify into multiple niches, and possibly multiple regions as well. The ones that you choose will mostly be up to you, but here’s a few areas that you could consider. Go through a coin or token aggregator, and try to pick out which coin you think has the best future in each of the niches listed below. These are just a few ideas, but there are of course many more.

  • Privacy coins
  • Supply chain/logistics
  • Gambling
  • Banking/payment processors
  • Decentralized applications
  • Lending
  • Healthcare

When writing out the plans for your portfolio, evaluate your choices and decide whether or not you’ve focused too much of your exposure into one sector. If you find that you have, then it might be wise to place some of that capital elsewhere.

Diversifying outside of cryptocurrency

The problem with cryptocurrency is that generally, all altcoins are tied to Bitcoin. This creates a problem for investors, because one stint of bad news topples the entire market, even if you are diversified very well. If you’ve made some significant gains in cryptocurrency, then you may also consider putting some of that money outside of the space entirely.

This gives investors an edge in more ways than one. Not only are your assets protected from a collapse of the cryptocurrency market, but if that wave of red does happen, you’ll be in a very good position to pick up valuable projects at a steep discount with that money. Where should you put it though? That will largely depend on how much you have to invest, but here’s a couple of ideas.

Precious metals

Precious metals have historically acted as a hedge for basically all other markets. If other assets are going down, then metals are typically going up. However, their appreciation is much slower, which makes them a welcome break from the roller coaster that is cryptocurrency.

Crypto enthusiasts who are anti-fiat could consider putting some of their gains into gold or silver for safe keeping. Whether you want to buy and store these metals yourself or keep them in a vault for quicker liquidity is up to you. There are many gold sellers and storage facilities that will allow you to pay in cryptocurrency as well, which is a great bonus!

Property

If you’ve made some very big gains, congratulations! You could consider investing some of that money in real estate. The property has the added bonus of being able to generate income via rent while you wait for it to appreciate, and as long as we’re not experiencing a housing bubble, it’s pretty safe.

Unfortunately, there is some upkeep involved here that’s not totally hands-off, and it’s much harder to sell it quickly if you have a pressing need for funds.

Peer to Peer lending

There are many smart contract based platforms now that will allow you to earn a steady income by lending out your cryptocurrency. If you’re looking for something that will provide you solid monthly income, then this could be a good option.

Cryptocurrency based loans are also secured by the fact that they are collateral based, so if someone ends up not paying, you just get their coins or tokens instead. If the market experiences a downturn, you may enjoy getting monthly payments to help sustain you or even to buy into the dips.

Conclusion

In closing, it’s important not to have yourself too focused in one area. Spreading your risk across multiple assets, sectors, and markets allows for you to have more peace of mind and to protect your capital from disaster. It also gives you the ability to act on buying opportunities to further your position or to create additional streams of income.

Diversification is not a hard thing to learn, and what you do will be largely based on your own needs. When you write up your investment plan, try to denote allocation percentages next to what you plan to invest in. For example, you could use something like this as a guide. This is purely a model to follow, and you should adjust the percentages and niches to fit your situation.

Large-cap coins (30%)
  • Currency coin
  • Dapp coin
  • Privacy coin
Income producing coins (30%)
  • Masternode 1
  • Masternode 2
Small-cap coins (20%)
  • Supply chain
  • Gambling
  • Lending
  • Medical/insurance
  • B2B services
  • Digital assets/intellectual property
  • Shared computing/storage
Precious metals (20%)
  • Gold
  • Silver
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How to Build Your Perfect Cryptocurrency Portfolio

Building your cryptocurrency portfolio is not a one size fits all solution, and there will, of course, be some room for your own personal preferences. When you start building your portfolio, you need to ask yourself a few questions in order to create a package of holdings which can meet your personal investment goals. Ready? Let’s get started!

Stability and safety

Are you more interest in creating a stable and safe portfolio that is less sensitive to market volatility? If that’s the case then you’ll likely want to dedicate the bulk of your portfolio to large-cap coins or tokens.

A large market cap coin is something like Bitcoin or Ethereum, these are the most popular cryptocurrencies, they have big followings, tons of trading volume, and they are generally quite far ahead in their developments and adoption by the public. These coins will still appreciate in value, but not quite as dramatically as some lower market cap assets would.

Generally, older people who are closer to retirement and can’t afford to risk too much of their capital would choose more stable investments. Most cryptocurrency investors are younger, and this means that they can take on investments with a little more risk and reward.

Income

Did you know that there are lots of cryptocurrencies that can provide you with income via staking or dividends? Having a secondary income stream can shield you from economic uncertainty, and while you’re waiting for your assets to appreciate, you’ll be able to collect additional coins for essentially no additional effort. You can do this by investing in proof of stake coins like Ignition coin, which also offer masternodes to produce passive income.

A masternode will require you to run a VPS, but if you are decent with computers you should be able to figure it out. Other tokens offer airdrop style dividends instead, where you will simply be rewarded with them by holding tokens or coins in your wallet. There are various online tools you can utilize to figure out which coins or tokens can offer you the best return for your money.

Aggressive returns

If you’re interested in achieving aggressive returns, like most cryptocurrency investors are, then you’ll likely need to put your money into some smaller market cap coins. A lower priced coin has an easier time gaining many times on its value than a large-cap coin. There’s just more room to grow.

The problem, of course, is identifying the projects which have the capabilities to actually do this. The sad truth is that many cryptocurrency projects will either fail or simply wallow in obscurity for years due to the fact that they have no marketing behind them, or they lack a dedicated team.

How to choose good cryptocurrencies to invest in

The sheer number of cryptocurrencies that are out there can be overwhelming. CoinToBuy.io alone lists over 1,500 different coins and tokens. No doubt the most exhausting job an investor has is sorting through the enormous amount of projects that don’t really do anything.

This information overload can make it difficult for investors to accurately gauge which projects have a future, and which ones could be a waste of money. Here are some key metrics you can use to decide which ones are worth buying. (CoinToBuy’s tool can help you identify these easier!)

Use case

One of the first things you should try to identify is the use case for the asset. What does this coin or token do? Being a cryptocurrency is not enough anymore, and a new coin needs to do something special in order to get noticed.

There’s also a lot of empty ICOs out there that pedal tokens to investors that have no real purpose. Your instant messaging application does not need a token, no matter what the white paper says. Ask yourself honestly, would you use this token? If there’s no use case, then there’s no demand, and without demand, the price can’t rise.

Community

Once you’ve identified an interesting project, it’s time to take a look at the community. Unfortunately, even great technology will fail if nobody knows about it. Investors should take some time to familiarize themselves with the project’s social media platforms. Some key places to check include Reddit, BitcoinTalk, Twitter, Discord, and Telegram.

Every project should be active on all, or at least most of these platforms. How often do they give updates? How many people are actively engaging in their communities? If it looks rather dead in these channels, then it could be a red flag of some serious problems.

Circulating supply

The circulating supply is the number of coins or tokens that are currently roaming around the market. If this number is very high it will put downward pressure on the coin. Part of the reason for Bitcoin’s massive growth is due to its limited supply, and if there were more of them, then that price could be very different.

This is not immediately a reason to neglect investing in a project, but new investors should be aware that assets with massive supplies will have a harder time gaining value due to people constantly dumping the coins.

Team

Don’t forget to evaluate the team of the project. Who are they? Are they professionals or community contributors? Are they meeting their roadmap goals? While there is nothing wrong with investing in a community project, you should keep in mind that most of these people are not getting paid.

That means that they can’t dedicate their full time to development, and progress could be much slower. A good team will be on time with their goals, and they will focus on keeping the community updated on their progress.

Branding

Branding is important. It’s the first impression investors will get off the project, and with the ease of acquiring a nice website and graphics, there’s really no reason for a project not to have a professional appearance. If the team is not willing to spend a little money to create a decent website, then they will likely be lacking in other areas as well.

How do you find these assets though?

Honestly, the only way to find them is through research and hard work. If you visit the main page of this site, you’ll be able to see all of the coins, and then sort them by various criteria such as price, market cap, safety ranking or profit potential. You’ll also be provided with an overview of each of these assets to help you understand what they do.

To get started, select your criteria, and then start browsing through for something interesting to research further. You can make this job a little easier by thinking about the criteria which you identified earlier based on your risk assessment.

If you want to mainly invest in more stable coins, then filter out everything else by selecting high market cap at the top of the list. There are undervalued assets in every category, and it’s your job as an investor to identify these potential gems.

Identifying undervalued cryptocurrencies

After you’ve found a project that looks interesting, it’s time to see if it’s a good time to put some money into it. If the asset you’re considering was recently hyped all over Reddit, or if it has just exited an ICO then be careful.

Directly after the ICO or an exchange listing is typically when the price of an asset is at its highest. Unfortunately, for many investors they see the price going up, and they buy in just in time to catch the downward movement and lose much of their investment.

Instead, you should look for solid projects that are down on their luck. These are coins or tokens that have possibly experienced a dramatic dip in their all-time high price. Make sure that you zoom out on the chart to get a better look at the big picture, as only examining the daily or even monthly numbers might not tell the whole story.

If you’d like some help in finding assets like these, then you can use ‘sort by potential profit’. This will show you the coins that have dropped the farthest from their all-time high price, and you can begin evaluating them to see if you think that they can get back to where they were previously. This is where you start doing the research that we talked about earlier to make sure that your gem is actually a diamond in the rough, and not just a rock.

Conclusion

Hopefully, by this point, you’ve got some ideas about the kind of portfolio that you want to build, and maybe you’ve even identified some potential investments for yourself. Make sure that you do not choose just one coin or token to invest in. If your project experiences some bad news, then your entire portfolio will be at risk.

Instead, try spreading your seed money across some other projects, hopefully in various marketcaps and sectors. There’s a blockchain project for nearly everything, and it’s worth your time to check out some of the stellar, real-world applications that these platforms can improve.

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How to Set Crypto Investment Goals, and Their Importance

Investing is important for everyone, but you can’t just go into it blindly. Sometimes it’s important to think ahead and visualize the future that you want for yourself. For young crypto investors, this can be a confusing experience. It’s an exciting time, but one that’s also full of uncertainty.

Many people at this stage of their lives don’t always have a complete plan for how their lives will play out, and that, unfortunately, conveys to investments as well. The good news is that since you’re reading this article, you’ve made the first step toward creating those milestones, but first let’s talk about why setting cryptocurrency investment goals is important.

Why is setting investment goals important?

Setting goals is important for most aspects of our lives. These targets keep us focused on the things we want to accomplish, and that not only motivates us, but it also keeps us from flailing around in every direction.

Setting good financial milestones can help you to secure your financial future, and if managed properly they can help you achieve things like owning a home, creating a second income or even enjoying early retirement. Setting a solid target can help you to be more diligent in contributing money to your investments than if you are just casually placing a bit of your paycheck here and there.

Setting goals can be intimidating, but it doesn’t have to be. Many people are afraid of setting targets out of their fear of not reaching them, but that’s okay. Having them is important, even if you miss because that gives you opportunities to improve yourself and to learn. However, if you do find yourself falling short frequently, you may need to reevaluate them, and perhaps make them a little more realistic to keep from discouraging yourself.

What are your future financial goals?

First, you should think about what it is that you want to do with your life. Do you want to own a house? Maybe you want to retire early? If you’ve never done it before, then you should really take a moment to actually write out your goals. Not only can this help you organize yourself, but it can also make them more real, which has a psychological impact.

Most people set financial targets for things like paying off their mortgage, paying off their college loans, creating additional income streams, buying a new vehicle, creating an emergency fund, jump-starting their retirement or even making enough money to retire early. When writing out your plan be sure to include both short term and long term financial goals, like this.

Short-term
  • Create an emergency fund
  • Contribute X dollars to my portfolio
  • Create a second income stream
Long-term
  • Own 1 Bitcoin
  • Pay off college loans
  • Buy a house
  • Retire

Once you’ve identified exactly what you want, you can then begin building a portfolio that can help you accomplish these things. It may also be helpful to place a time frame next to each goal to help you decide how much money you’ll need to contribute every week or month to reach them. In the next step, we’re going to actually put a price tag on these items.

How much is this all going to cost you?

While it’s hard to estimate the long-term price of cryptocurrencies, you can estimate how much your ideal lifestyle would cost you. While it’s not really necessary to do this, it will certainly help push you out of the “dreamer” category and into the “doer” camp. By attaching a value to your goals, you are making them more concrete. It doesn’t have to be exact, but you could say for example that you need $XXX,XXX for your dream house.

If that is your goal, then you can begin creating a plan that will help you work towards it. Planning is a powerful thing that makes you more focused in every aspect of your life, and sometimes it’s useful to look at your plan from time to time to remind you of what you’re working so hard to accomplish.

Once your write everything out, your ambitions may honestly be more achievable than you previously believed, and even if they are not you can at least start taking steps to remedy that situation. How? You could consider training in a field that would provide more money and greater potential for investing.

Or, if that’s not an option, you could consider cutting some of your monthly costs in order to inject a little more money into your plan. Almost everyone has something that they can cut out of their budget. Look over your statement to see where you’re overspending. A few dollars here and there every day could actually be your dreams evaporating!

Some common areas where people normally cut back on their budgets include skipping eating out, looking for more affordable grocery options, finding a cheaper mobile phone provider, or even carpooling to save on gas. While this may sound silly, cryptocurrencies can appreciate in value very quickly, and even having an extra $100 per month to contribute to your portfolio could help you reach your goals much faster.

Many people don’t realize exactly how much of their paycheck they are spending on eating out, or on overpriced coffee, but a few dollars here and there adds up to a lot of money at the end of the month.

How to set good crypto investment goals

There are a few golden rules for setting investment goals, which we will go over shortly. Keep in mind that there are no bad goals, and you can be as unrealistic as you want. However, setting a target which you have no idea how to achieve will only frustrate you. It’s important to strike up a balance when you approach your financial goals.

Set realistic goals as well as unrealistic ones

It’s okay to dream big, but goals are worthless if you don’t know how to reach them. When you place a marker on your life roadmap it should be quickly followed up with a series of smaller steps which will lead to that larger achievement.

If you don’t yet know what these steps are, then take a moment to figure them out. Even if that step is only to invest X amount every month, it’s a step in the right direction, and you’ll soon be on your way to crossing that big goal off your list.

Even small milestones like keeping up with your contributions can make a positive impact on you and help you to keep going. If you’re worried about not being able to add enough of a coin to your portfolio, don’t worry. Every asset has dips, and you can easily buy in again during one of these to get a good entry point.

Be consistent

Once you set a target, be consistent with your contributions. From our previous step, you should’ve been able to roughly figure out how much your goal will cost. How much do you need to invest per month in order to reach that goal? However much it is, make sure that you always set it aside instead of wasting it on things that will not help you achieve financial security.

If you have a problem with overspending then you can try a couple methods to help. For example, as long as the fees don’t eat up your purchase, there’s nothing wrong with buying $100 or so of crypto at a time and then stashing it away in a safe wallet. It’s likely a good idea to do this as soon as you get paid, before you have a chance to spend it.

If you’d prefer to purchase your investment all at once, then you can take it out as cash and set it aside somewhere safe until you’re ready to buy your cryptocurrency. If you tuck it away somewhere, it’ll be out of your sight, and it won’t get spent on impulse items as easily.

Investing pitfalls to avoid

Avoid “guaranteed money”

There’s always somebody in cryptocurrency that will promise you a million dollars for a very small investment and no work. All of those people are lying. Avoid pump and dump schemes that will only rob you of your capital. Those people are just looking to use you to make profits for themselves. Don’t fall for it. Instead, invest in solid projects, and be patient.

Don’t flip-flop

Don’t flip-flop too much on your investments. Chasing profits from coins that are pumping is almost always a good way to get burned. The people doing this are professionals, and it’s likely that you can’t compete with them in this. You’d be better served to hold on to some quality projects and wait for them to mature instead.

Diversify

Never put all your eggs in one basket, this puts your financial security in jeopardy. Instead, spread your risk across several different markets and niches. This maximizes your exposure, and if one of your assets takes a nosedive, you still have others to fall back on. This turns disaster into a bump in the road.

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5 of the Most Successful Cryptocurrency Investors

There are stories all over the internet about people becoming overnight millionaires in the cryptocurrency space. However, the reality is often quite different. Typically, these people held on to a very volatile asset, that nobody cared about for years before acquiring their fortunes.

Due to the sudo-anonymous nature of crypto, the identities of all of these players will never be known. However, there are some very public figures in this space who have come forward about their wealth, and in this article, we're going to highlight five of the most successful cryptocurrency investors across the globe.

The list is far more extensive than this, but these players have also made some very interesting contributions to the crypto sphere as a whole. These investors were not content to just sit back and get rich, they wanted to be actively involved. All of them have taken great strides to increase the presence of cryptocurrencies all over the world, and most of them are still actively pursuing ventures that will lead to increased adoption and usability in the crypto space.

The Winklevoss twins

Tyler and Cameron Winklevoss are some of the most famous guys in the space. They were originally turned on to Bitcoin back in 2012 before anyone was really interested in the digital currency. However, to be fair, they didn't exactly go from rags to riches thanks to Bitcoin. They were already pretty well off considering they sued Facebook for $65 million dollars, claiming Zuckerberg had stolen their idea to create Facebook in 2004.

The judge apparently agreed because they won, and that gave them plenty of money to dump into cryptocurrency. The duo claims that at one time or another they have owned over 1% of the total supply of the currency, clocking in at a billion dollars.

They've also pioneered several entrepreneurial efforts for crypto adoption, including BitInstant, a payment processor for Bitcoin. They also acquired a patent for settling exchange-traded assets revolving around alternative currencies such as Ethereum, Doge, and Litecoin. They've been included in the list as one entry, since essentially all of their business and investing has been done as a pair, and not as individuals.

Their patent presents an interesting opportunity for cryptocurrencies to earn additional market attention from those who would not typically participate in such a market. They have actually applied for this before, and have been rejected, however, their persistence has won out.

With the increased interest from institutional investors in blockchain companies, they hope to use this patent to bring futures contract type investments to larger markets with more capital. Whether or not this is actually good for cryptocurrencies as a whole is yet to be decided.

Dan Larimer

Dan Larimer is partially responsible for at least three different blockchain based platforms. As the driving force behind Social media platform Steemit, decentralized exchange bitshares, and the new darling of the crypto world, EOS, it's safe to say he has some serious experience in the space.

Whether he had traditional cryptocurrency wealth before these projects is unclear, but it's estimated now that his portfolio could be worth 600-700 million dollars. Depending on how much EOS he has retained for himself, that number could soon be much, much bigger.

Larimer was the first to pioneer the delegated proof of stake protocol, which all of these platforms are built upon. His initial test projects, Steemit and BitShares helped to establish a proof of concept for what would become the groundwork of EOS. This new project is a massively scalable platform for dapps, which could rival Ethereum.

While the platform has not yet launched its main net, it's perceived ability to process 20-50,000 transactions per second will leave its predecessor in the dust. When the project does finally come together, it's likely that Dan's holdings will be worth far more than what they are now. EOS is his biggest success yet, with a market cap exceeding 10 billion dollars.

All three of these projects remain in development, with no signs of slowing. While EOS is currently the new bouncing baby, big brothers Steemit and Bitshares are also increasing their market penetration. As more and more people search for ways to start earning their own online digital currency, it's likely that Steemit will also see some additional growth thanks to its ease of use.

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Cryptocurrency Trading Strategies for Beginners

Cryptocurrency has many merits, and while it can be quite fun, new investors must not forget that these are very volatile assets. It's always fun to watch the prices run up and to think about how much money you'll be able to make, but you must remember that these prices also go down.

For this reason, it's important to have a defined strategy before you go into any cryptocurrency trade. Making spur of the moment emotional decisions is typically a fast way to lose your hard-earned money. In this article, we'll look at a few strategies that investors of all walks of life and experience levels can utilize.

The buy and Hodl strategy

If you've spent any time bumming around cryptocurrency boards such as Bitcointalk or Reddit, then it's likely you've heard this at least once or twice. While this typo has turned itself into the biggest crypto meme, it is still sound advice. Almost everyone who has made significant money in cryptocurrency has done it by buying and holding. Some of these traders have held their assets for years in order to achieve the gains that they have.

If you don't really have the stomach for day trading, then this is likely your best bet for making gains as a beginner. While this method could probably work with any asset, as long as you're willing to hold long enough, it's best to buy something that has recently taken a downturn and is currently sitting at an attractive price.

As long as the project behind the asset looks solid, then it's ideal to buy a recently beaten down coin, and then wait for it to appreciate. However, don't buy just anything because it looks cheap, make sure that you understand all of the coin or token's fundamentals.

This is by far the easiest cryptocurrency trading strategy, and it will likely appeal to those who don't have time for anything else. Purchase your assets, store them in a secure wallet, and then forget about them. Try to avoid checking the price every day if it's giving you anxiety, as this may cause you to respond emotionally and to sell before your asset has matured.

The value investing strategy

Similar to the buy and hold method, this strategy was traditionally championed by Warren Buffet in the original finance market. He's what you would call a value investor or someone who spends their time looking for underappreciated companies to put his money behind. This can be a valuable strategy if you don't mind doing the research to support it, but it is a little more actively involved than the buy and hold method.

As a value investor, it's your job to search for well-structured projects that are down on their luck or not yet matured. These events can happen for all sorts of reasons, including some bad news that has temporary effects, or perhaps even missing an important deadline which disappointed their investors.

The point is, that these are temporary issues, and the emotional reaction of the sellers may not have been warranted. It will be up to you to decide whether or not the project has merit, but if you take some time to research it, that information should be easy to find.

The best place to do this is often in Telegram or Discord channels. Not many investors take advantage of these pathways, and they often reveal behind the scenes information that does not always make it message boards immediately, as you need to be closely following the project to find it.

When searching for a potentially undervalued project, you'll need to ask yourself many questions regarding the asset. Investigate all of their material, and make sure that you fully understand the project.

What problems does it solve? Is there a market for this? Do they have any competitors? Do they have a product yet? What about valuable partnerships with other companies? What is their marketing plan? What about the coin's supply, is it too large? These are certainly not all of the issues that you should make yourself aware of, but it's a good start.

This method is particularly attractive if you are still young and without much income to dedicate to cryptocurrency. It's perfectly reasonable to find severely undervalued projects for a few cents per coin if you do your homework.

While you can get some projects even cheaper than that, it's often hard to get in that early, especially for a beginner. There's also the fact that a project that is this early in its development has not yet fully formed its own ideals, and that can make it hard to evaluate whether it actually has a future.

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NOTE: having read the guides, tips, and reviews, it is important to do more analysis and research before making your final decision, we know that all our articles are written by experts but the crypto ecosystem is still in its beginning phase and cannot be 100% predicted even by professionals.

Crypto is built on blockchain which is a decentralized and distributed technology, meaning that it is owned by no one and also by everyone, it is the first of its kind invented and has been around for just 9 years which is a short period of time to draw conclusions.

Nevertheless, we can assure that the articles in this category will give one the best and right information needed to understand the workings of the crypto market, but cannot guarantee the profit.