Major Crypto Exchanges are Focusing on OTC, Do They See
Major Crypto Exchanges are Focusing on OTC, Do They See
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The importance of Fungibility, your future = your choice.
I took notice that there are more and more people interested in crypto and I would like to make them realize that this is a technology that can save us all or enslave us all. Or at least make some people think about fungibility and it’s importance in this “new world” they are being introduced to. Short example posted above TLDR First off, what is fungibility? Taken from https://www.investopedia.com/terms/f/fungibility.asp If Person A lends Person B a $50 bill, it does not matter to Person A if he is repaid with a different $50 bill, as it is mutually substitutable. In the same sense, Person A can be repaid with two $20 bills and one $10 bill and still be satisfied, since the total equals $50. Conversely, as an example of non-fungibility, if Person A lends Person B his car, it is not acceptable for Person B to return a different car, even if it is the same make and model as the original car lent by Person A. Cars are not fungible with respect to ownership, but the gasoline that powers the cars is fungible. Hypothetical question: You have money to buy one Bitcoin and are confronted with two options:
1) You buy it from a regulated reputable exchange. 2) You buy it from your friend who got it as payment from a recent extortion.
Immediately you are faced with two fundamental problems:
1) Clean BTC should actually be more valuable then dirty BTC, since you would obviously want the BTC that can not be backtraced to any criminal activity. (Note that what China defines as criminal activities for instance may not be the case in another country) 2) BTC could be confiscated at any point in time since it’s origin can be traced, even when it hasn’t been blacklisted straight away. You could be facing serious consequences.
We see this already today, addresses that hold coins related to criminal activities are closely being monitored. When they move, it gets noticed and all eyes are on them. https://news.bitcoin.com/bitcoin-worth-282k-from-the-2016-bitfinex-hack-on-the-move/ If you buy OTC or through DEXes how will you know that your BTC is clean? This is not a post to tell you criminals should get away with their activities because they shouldn’t, i’m trying to explain that you should never be in any position where your money can be confiscated because it suddenly gets tied to those activities. Your money being confiscated could actually be the least of your problems in such a situation anyway. Think about how easy it becomes to imprison someone that your government doesn’t like. I’m sure the governments would love to fade out regular cash though, because obviously they can just block your account and take away your basic rights. It happens already to people all over the world who use digital money services like PayPall for instance. https://www.elliott.org/blog/banned-from-palpal-account-limitations/ For people like Snowden, or for Wikileaks bitcoin was their solution at that time. Today, there are better alternatives and everyone should think carefully about what world they want to live in. To bitcoins defense, there are certain things you can do to make your transactions more private. Bitcoin mixing is a thing. Bitcoin's Lightning Network is expected to give users the option to make transactions that will not be recorded on the blockchain. Optional privacy raises eyebrows though, authorities could be knocking on your door asking you why you made an optional private transaction. Privacy by default is what we need in the future we see in front of us. You can find tons of information about deanonymization. This is something that China can “easily“ accomplish. This is taken from here https://blockchain.princeton.edu/papers/2018-10-ben-kaiser.pdf Deanonymization: Bitcoin is designed to preserve the pseudonymity of its users, meaning that their real-world identity cannot be linked to a Bitcoin address they have used to transact. However, in practice there are complications that make deanonymization attacks possible. China might seek to deanonymize users for two reasons. First, they may wish to enforce laws and regulations; for example, enforcing capital flight restrictions by identifying users purchasing foreign goods or exchanging Bitcoin into foreign currencies. They might also use a deanonymization attack for ideological (or political) ends: to publicly reveal malfeasance by subversives or political opponents or simply to demonstrate the superiority of centralized control as an ideology and discourage enthusiasm for decentralized systems. We identify four attacks that China could use to deanonymize specific users. First, they could use known research techniques to (a) heuristically cluster pseudonymous identities (e.g., connect multiple addresses to the same user) [31,44]. The simplest example of such a heuristic is to cluster addresses that appear as multiple inputs to the same transaction, as they presumably belong to the same user. The only required capabilities are access to the blockchain and marginal compute power to run the analytics, so these attacks are not unique to China; virtually anyone could commit them. Where China has an advantage over typical adversaries is in linking these pseudonyms to IP addresses. One approach would be to covertly (b) monitor Bitcoin network traffic and identify which IP addresses transactions originate from [4,27]. Because Bitcoin traffic is unencrypted, this can be done through deep packet inspection (DPI). China could also use (c) coercion or regulation to covertly compel service providers that deal in Bitcoin, such as merchants or exchanges, to identify their users. Further, it has been shown that when Bitcoin is used for online purchases, enough information is leaked to web trackers that they can uniquely identify the transaction on the blockchain and link it to any identifying information provided by the purchaser . China could covertly (d) intercept this tracking information over the Internet (using DPI) to perform the same attack, compel domestic tracking companies to provide the information (also covertly), or inject their own trackers into Internet traffic to collect similar information themselves. Tracker injection could be detected by anyone specifically monitoring Internet traffic for such attacks, so we note that it would be overt. Finally, China could target users directly using (e) coercion or regulation to compel them to deanonymize themselves or their transaction partners. Again, as long as targets are compelled to keep quiet about orders to reveal information, this attack is covert. For fungible coins these deanonymization attacks are probably not impossible but a hell of a lot harder. Just to clarify i am not an expert on the matter. I just feel that to few people are aware about the importance and hope this post maybe sparkle some interesting opinions and conversations along the way. If you made it this far I applaud you :-), now check how much balance this guy has in his wallet and see how much he earns every month :D https://moneroblocks.info/search/4AdUndXHHZ6cfufTMvppY6JwXNouMBzSkbLYfpAV5Usx3skxNgYeYTRj5UzqtReoS44qo9mtmXCqY45DJ852K5Jv2684Rge Example: Imagine you want to buy a CAR, and your friend needs to sell his CAR. You did some digging in the market to find an agreement on the price and proceed with the transfer. It happens OTC because there is no need for a middleman, it’s your buddy right?! (For clarity, you both sign a contract to change ownership) You are super excited with your new cool ass CAR, never had one before :-) do some drinking and have an accident. You turn up in the hospital and while you pay for your way out you get arrested. Apparently the CAR was stolen and used in a kidnapping affair. 1st point: A lot of people can buy CARs, and since the CAR owners/transactions are all stored somewhere on a ledger... do you think the authorities will let you keep that CAR when they find out it was stolen or maybe something worse? 2nd point: a CAR is a non fungible asset, meaning that you can trace past owners/origin and could end up with a CAR that should actually be worth A LOT less than what you paid for (because it was obviously dirty) Now go back to the beginning of the example and switch CAR with BTC, then you will know why fungibility matters. TLDR; to fungible or not to fungible, that is the question and the answer will either save us all or enslave us all. Edit: added short example
Recent posts here on the sub mention (example) that "big companies" are finally thinking about integrating Bitcoin, that New Zealand has recognized Bitcoin as a valid payment method for employees, etc. Very interesting developments, on the surface. But I can't help but think the following. Bitcoin (and 99% of "crypto"currency out there) is functionally a bit like having a bunch of notes in your wallet that have written in them the history of all payments and people the note has been involved with and used for since its creation. Of course, since real bank notes have no such history, you cannot reasonably in most cases be held accountable for whatever indiscretions the previous owner(s) have committed with that money. The situation changes, most of you surely realize, the moment the money goes digital: you will be held accountable and you will be investigated if "suspicious" (exactly what constitutes suspicious activity seems to never shrink, in fact it just keeps growing) funds are tied to your account. Bitcoin and similar "crypto"currencies compound this problem tremendously, since by design every transaction is permanently stored on a public record. "But the addresses are pseudonymous, not tied to my name!", I hear you say. Maybe, maybe not. Exchanges are collecting information on all your transactions, and they know who you are. If it hasn't already, all that data will be sent to centralized, globalist organizations to "fight money laundering" (translations: keep tabs on everyone). From that origin point, such centralized databases can then track, in real time, all your account movements - and that is exactly what is desired, after all the same already happens with your bank account, your paypal, etc. "But I'll just mix my BTC", I hear you say. And now you are accused of actively laundering money. "I'll just buy OTC and never tie a single BTC to a KYC account!", you protest. I hear you. Why voluntarily doxx yourself to a third-party that in all likelihood will end up losing the treasure trove to hackers any time from now to infinity? Why make yourself a target by having your face, your name, and your address floating around in connection to how many bitcoins you have in your name? https://github.com/jlopp/physical-bitcoin-attacks This stuff is different than a normal bank account. You get scammed big time, or coerced into making a transfer, if you're lucky your bank will make you whole. Someone knocks on your door with a screwdriver and knows exactly how much BTC you own and whether you have moved it or not, and it's gone. Forever. Many of you are beginning to wake up to the dire issues with personal privacy and data protection stemming from centralized control of vast troves of personal data, data that people (stupidly and naively) thought would be safe in the hands of giant multi-national corporations hellbent on making a profit. There is nowdays even a term for their business model: surveillance capitalism. I want to ask you, how exactly does having transparent money that betrays your financial situation in a real-time stream to the world improve things? Are we going to have more personal freedom or less personal freedom, when a conglomeration of big trans-national corporations (to say nothing of the government) can track vast percentages of "crypto" transactions, with real identities attached, in real time? (For the resisters, just bear in mind that transacting with non-KYC'd bitcoin addresses in a world of mostly KYC'd bitcoin addresses is bound to bring attention to your transactions) Privacy is not a crime - privacy is a human right, even according to the UN, who anyway of course does essentially nothing to rock the boat on the matter. It takes a special kind of organization to claim privacy as a basic human right and then stay mostly silent about mass-surveillance, of the internet, of entire countries, of all our financial transactions. Remember the Internet before Snowden? It was a conspiracy, the government couldn't be spying on everyone. They are, and they were. That so many of us fail to recognize the grave danger in allowing this situation to continue is a testament to the peaceful lives most of us lead. We don't even recognize imminent danger anymore. Wake up, the government shouldn't be spying on you 24/7. The problem is not going to go away on its own, and if you do nothing, and the next guy does nothing, and the next girl does nothing, then nothing will change, in fact it will only get worse. And one day, history shows, it will become worse enough that you will think to yourself, "why didn't I do anything about it?". But by then it will be too late. All the dissenters will have been silenced already. You will know in your bones that speaking against the official stories will bring unwelcome attention to yourself and your loved ones, and likely will carry severe consequences. You will keep quiet. Out of fear. We're not there yet, and we don't have to go there (yet again). Privacy is not a crime, but remember this: in a world where privacy is criminalized, only criminals have privacy. It's time to face the truth. We live in a world of mass-surveillance, and our inertia and inaction allows the situation to worsen day after day after day. Part of the solution is technological, but another part is social. You have to at least start paying attention to all the little ways you are being tracked. And not just you - everyone else too. If you are a happy sheep and "have nothing to hide and nothing to worry about", then the usual invitation stands: please post in the comments section a picture of yourself, links to all your social media, your email address, how much crypto you own and in which addresses. As usual, I am willing to bet, exactly zero of you will take on the challenge, and that is because at some subconscious level at least, you realize that privacy matters. Blockchain technology is revolutionary, but the transparency-by-default is a bug, not a feature. It will bring tremendous problems for personal freedom and financial independence later on. Optional privacy will only cause private transactions to stand out against the crowd. Fortunately, a solution already exists that works today, and has sub-1cent fees. It will empower and liberate you financially, if only you would dedicate some time to learning more about it. TL;DR (by popular demand): Mass-surveillance is not normal nor is it acceptable in a free society and will inevitably over time widen the power dynamic between the government and large corporations, and the citizenry. Surveillance over others brings power over others, mass-surveillance over societies eventually brings totalitarianism. Totalitarianism, history shows, is not a nice system to live under. Choose freedom, choose privacy, eschew transparent surveillance money and embrace private digital cash.
[Wall of text incoming. Sorry about that.] TL;DR: Coinbase is a company at the cutting edge of the Bitcoin ecosystem, who follows all laws in the jurisdictions they operate in. They are an extremely easy to use on- and off-ramp into the Bitcoin economy, and legitimize the space for people who aren't extremely technically oriented. If you were around in the wild-west days of Bitcoin, you know how much the process of buying and selling coins has improved in just a few short years, even my parents would be able to do so now. So tell me, why all the hate? Hey /bitcoin, we need to talk about Coinbase, and the attitude of this community towards them. First, a bit about me: I've been involved in the Bitcoin community since early 2011, I work professionally as a programmer, have a degree in Computer Science, and I am not affiliated with Coinbase (other than having transacted thousands of dollars with them over time). In the early days, buying Bitcoin (off-exchange) was a nightmare. I'm not sure how many of the people reading this went through the process way back when, but if you did, you know what i'm talking about. You would get an IRC client, hook up to the Bitcoin OTC channel, and find someone willing to sell some coins for whatever payment method you might have handy. Then, the "fun" part began: Registering a PGP key to your name, building up trust, figuring out how the hell all of this confusing technology worked, and hopefully in the end, ending up with some coins in your wallet. This process was cumbersome, slow, and required extensive technical knowledge (or hours spent painstakingly following tutorials on how all of it worked). Even when you managed to follow all of these steps to the letter, you had an unreliable exchange rate from each OTC seller, who wanted a variable percentage of the transaction for doing business. These days, buying Bitcoin is easier than ever. Paypal? Credit cards? People will work with those. Cash? Check out Localbitcoins, Bitcoin is widely distributed enough that people probably have them near you. Bank account? Things get complicated. The existing banking structure leaves much to be desired, I will admit, but regardless of its current shortcomings, the existing structure exists, and anyone looking to be a major player in the Bitcoin space needs to work within it. Full stop. End of discussion. If you disagree with that fact, you are blind to the realities of the world around you. I've seen so much undeserved vitriol directed at Coinbase recently, I wanted to reach out to the community, and understand where all the hate is coming from. Some arguments that I've encountered: Transaction monitoring? This is a necessary evil, which is introduced by being a major player in the Bitcoin space, and needing to interact with the existing banking structure. If you purchase Bitcoins at Coinbase, and they see them go somewhere illegal, they are legally obligated to not sell you more Bitcoins. If Coinbase told the government "Actually, once the coins leave our system, we aren't going to track them and see if they go bad places. Sorry, not going to happen, we have principles.", they would be shut down faster than you can say "Intelligence Reform & Terrorism Prevention Act of 2004". In fact, their behavior towards people who have violated their TOS is not to confiscate funds: In literally every case I've heard, Coinbase lets you withdraw both your USD and BTC balances with no hassle, they just shut down your ability to make purchases or sales of coins. 5-day delays for payments? Thats not Coinbase's fault, that's literally the time your money takes to go through clearinghouses and intermediaries before it ends up in their account. 1% fee? Even if you transact $10,000 with them, you get hit with a $100 fee. That would pay a developer for 2 hours of their time, less after taxes. How do you expect them to make money? They don't run a fractional reserve, so that can't be it. I'm ignoring their exchange for this discussion, I feel that is a different product entirely, despite being linked to Coinbase itself. Both products need to produce revenue: business-wise, they would do best to shut down unprofitable ventures. Cancelled purchases? Okay. This one is a valid complaint, and the only one I've encountered so far. They cancelled one of my purchases in the past when the price moved significantly against them, but reinstated it after I complained, their customer service was superb. I have a feeling that the cancelled purchases are due to risk exposure for Coinbase, when they aren't sure whether a transaction will go through or not (not buying the coins right away in case someone interrupts the bank transfer early on in the process, perhaps), but that's purely speculation. Shift payments card? The amount of hate for this product has been absolutely astounding to me. Here we have a company offering a debit card that converts your Bitcoin into USD at the point of sale, effectively letting you spend your coins at any brick-and-mortar retailer that takes Visa cards, and the community is up in arms about it being "useless" and "stupid"? Seriously? As a programmer, I literally cannot think of another way that would be possible to do this. Unless the merchant already accepts Bitcoin at the point-of-sale, if you want to pay in coin, you need to:
Convert them into USD.
Transfer the USD to the merchant.
That is literally what this card does. Am I missing something here? Because this seems like a very nice use case for me personally, and in fact, one of the Shift cards is on its way to me right now. Just because you personally aren't the target audience of the card, isn't enough reason to disregard its utility for anyone else.
Hello! My name is Slava Mikhalkin, I am a Project Owner of Crowdsale platform at Platinum, the company that knows how to start any ICO or STO in 2019. If you want to avoid headaches with launching process, we can help you with ICO and STO advertising and promotion. See the full list of our services: Platinum.fund I am also happy to be a part of the UBAI, the first educational institution providing the most effective online education on blockchain! We can teach you how to do ICO/STO in 2019. Today I want to tell you how to sell and transfer cryptocurrencies. Major Exchanges In finance, an exchange is a forum or platform for trading commodities, derivatives, securities or other financial instruments. The principle concern of an exchange is to allow trading between parties to take place in a fair and legally compliant manner, as well as to ensure that pricing information for any instrument traded on the exchange is reliable and coherently delivered to exchange participants. In the cryptocurrency space exchanges are online platforms that allow users to trade cryptocurrencies or digital currencies for fiat money or other cryptocurrencies. They can be centralized exchanges such a Binance, or decentralized exchanges such as IDEX. Most cryptocurrency exchanges allow users to trade different crypto assets with BTC or ETH after having already exchanged fiat currency for one of those cryptocurrencies. Coinbase and Kraken are the main avenue for fiat money to enter into the cryptocurrency ecosystem. Function and History Crypto exchanges can be market-makers that take bid/ask spreads as a commission on the transaction for facilitating the trade, or more often charge a small percentage fee for operating the forum in which the trade was made. Most crypto exchanges operate outside of Western countries, enabling them to avoid stringent financial regulations and the potential for costly and lengthy legal proceedings. These entities will often maintain bank accounts in multiple jurisdictions, allowing the exchange to accept fiat currency and process transactions from customers all over the globe. The concept of a digital asset exchange has been around since the late 2000s and the following initial attempts at running digital asset exchanges foreshadows the trouble involved in attempting to disrupt the operation of the fiat currency baking system. The trading of digital or electronic assets predate Bitcoin’s creation by several years, with the first electronic trading entities running afoul of the Australian Securities and Investments Commission (ASIC) in late 2004. Companies such as Goldex, SydneyGoldSales, and Ozzigold, shut down voluntarily after ASIC found that they were operating without an Australian Financial Services License. E-Gold, which exchanged fiat USD for grams of precious metals in digital form, was possibly the first digital currency exchange as we know it, allowing users to make instant transfers to the accounts of other E-Gold members. At its peak in 2006 E-Gold processed $2 billion worth of transactions and boasted a user base of over 5 million people. Popular Exchanges Here we will give a brief overview of the features and operational history of the more popular and higher volume exchanges because these are the platforms to which newer traders will be exposed. These exchanges are recommended to use because they are the industry standard and they inspire the most confidence. Bitfinex Owned and operated by iFinex Inc, the cryptocurrency trading platform Bitfinex was the largest Bitcoin exchange on the planet until late 2017. Headquartered in Hong Kong and based in the US Virgin Island, Bitfinex was one of the first exchanges to offer leveraged trading (“Margin trading allows a trader to open a position with leverage. For example — we opened a margin position with 2X leverage. Our base assets had increased by 10%. Our position yielded 20% because of the 2X leverage. Standard trades are traded with leverage of 1:1”) and also pioneered the use of the somewhat controversial, so-called “stable coin” Tether (USDT). Binance Binance is an international multi-language cryptocurrency exchange that rose from the mid-rank of cryptocurrency exchanges to become the market dominating behemoth we see today. At the height of the late 2017/early 2018 bull run, Binance was adding around 2 million new users per week! The exchange had to temporarily disallow new registrations because its servers simply could not keep up with that volume of business. After the temporary ban on new users was lifted the exchange added 240,000 new accounts within two hours. Have you ever thought whats the role of the cypto exchanges? The answer is simple! There are several different types of exchanges that cater to different needs within the ecosystem, but their functions can be described by one or more of the following: To allow users to convert fiat currency into cryptocurrency. To trade BTC or ETH for alt coins. To facilitate the setting of prices for all crypto assets through an auction market mechanism. Simply put, you can either mine cryptocurrencies or purchase them, and seeing as the mining process requires the purchase of expensive mining equipment, Cryptocurrency exchanges can be loosely grouped into one of the 3 following exchange types, each with a slightly different role or combination of roles. Have you ever thought about what are the types of Crypto exchanges?
Traditional Cryptocurrency Exchange: These are the type that most closely mimic traditional stock exchanges where buyers and sellers trade at the current market price of whichever asset they want, with the exchange acting as the intermediary and charging a small fee for facilitating the trade. Kraken and GDAX are examples of this kind of cryptocurrency exchange. Fully peer-to-peer exchanges that operate without a middleman include EtherDelta, and IDEX, which are also examples of decentralized exchanges.
Cryptocurrency Brokers: These are website or app based exchanges that act like a Travelex or other bureau-de-change. They allow customers to buy or sell crypto assets at a price set by the broker (usually market price plus a small premium). Coinbase is an example of this kind of exchange.
Direct Trading Platform: These platforms offer direct peer-to-peer trading between buyers and sellers, but don’t use an exchange platform in doing so. These types of exchanges do not use a set market rate; rather, sellers set their own rates. This is a highly risky form of trading, from which new users should shy away.
To understand how an exchange functions we need only look as far as a traditional stock exchange. Most all the features of a cryptocurrency exchange are analogous to features of trading on a traditional stock exchange. In the simplest terms, the exchanges fulfil their role as the main marketplace for crypto assets of all kinds by catering to buyers or sellers. These are some definitions for the basic functions and features to know: Market Orders: Orders that are executed instantly at the current market price. Limit Order: This is an order that will only be executed if and when the price has risen to or dropped to that price specified by the trader and is also within the specified period of time. Transaction fees: Exchanges will charge transactions fees, usually levied on both the buyer and the seller, but sometimes only the seller is charged a fee. Fees vary on different exchanges though the norm is usually below 0.75%. Transfer charges: The exchange is in effect acting as a sort of escrow agent, to ensure there is no foul play, so it might also charge a small fee when you want to withdraw cryptocurrency to your own wallet. Regulatory Environment and Evolution Cryptocurrency has come a long way since the closing down of the Silk Road darknet market. The idea of crypto currency being primarily for criminals, has largely been seen as totally inaccurate and outdated. In this section we focus on the developing regulations surrounding the cryptocurrency asset class by region, and we also look at what the future may hold. The United States of America A coherent uniform approach at Federal or State level has yet to be implemented in the United States. The Financial Crimes Enforcement Network published guidelines as early as 2013 suggesting that BTC and other cryptos may fall under the label of “money transmitters” and thus would be required to take part in the same Anti-money Laundering (AML) and Know your Client (KYC) procedures as other money service businesses. At the state level, Texas applies its existing finance laws. And New York has instituted an entirely new licensing system. The European Union The EU’s approach to cryptocurrency has generally been far more accommodating overall than the United States, partly due to the adaptable nature of pre-existing laws governing electronic money that predated the creation of Bitcoin. As with the USA, the EU’s main fear is money laundering and criminality. The European Central Bank (ECB) categorized BTC as a “convertible decentralized currency” and advised all central banks in the EU to refrain from trading any cryptocurrencies until the proper regulatory framework was put in place. A task force was then set up by the European Parliament in order to prevent and investigate any potential money laundering that was making use of the new technology. Likely future regulations for cryptocurrency traders within the European Union and North America will probably consist of the following proposals: The initiation of full KYC procedures so that users cannot remain fully anonymous, in order to prevent tax evasion and curtail money laundering. Caps on payments that can be made in cryptocurrency, similar to caps on traditional cash transactions. A set of rules governing tax obligations regarding cryptocurrencies Regulation by the ECB of any companies that offer exchanges between cryptocurrencies and fiat currencies It is less likely for other countries to follow the Chinese approach and completely ban certain aspects of cryptocurrency trading. It is widely considered more progressive and wiser to allow the technology to grow within a balanced accommodative regulatory framework that takes all interests and factors into consideration. It is probable that the most severe form of regulation will be the formation of new governmental bodies specifically to form laws and exercise regulatory control over the cryptocurrency space. But perhaps that is easier said than done. It may, in certain cases, be incredibly difficult to implement particular regulations due to the anonymous and decentralized nature of crypto. Behavior of Cryptocurrency Investors by Demographic Due to the fact that cryptocurrency has its roots firmly planted in the cryptography community, the vast majority of early adopters are representative of that group. In this section we cover the basic structure of the cryptocurrency market cycle and the makeup of the community at large, as well as the reasons behind different trading decisions. The Cryptocurrency Market Cycle Bitcoin leads the bull rally. FOMO (Fear of missing out) occurs, the price surge is a constant topic of mainstream news, business programs cover the story, and social media is abuzz with cryptocurrency chatter. Bitcoin reaches new All Timehigh (ATH) Market euphoria is fueled with even more hype and the cycle is in full force. There is a constant stream of news articles and commentary on the meteoric, seemingly unstoppable rise of Bitcoin. Bitcoin’s price “stabilizes”, In the 2017 bull run this was at or around $14,000. A number of solid, large market cap altcoins rise along with Bitcoin; ETH & LTC leading the altcoins at this time. FOMO comes into play, as the new ATH in market cap is reached by pumping of a huge number of alt coins. Top altcoins “somewhat” stabilize, after reaching new all-time highs. The frenzy continues with crypto success stories, notable figures and famous people in the news. A majority of lesser known cryptocurrencies follow along on the upward momentum. Newcomers are drawn deeper into crypto and sign up for exchanges other than the main entry points like Coinbase and Kraken. In 2017 this saw Binance inundated with new registrations. Some of the cheapest coins are subject to massive pumping, such as Tron TRX which saw a rise in market cap from $150 million at the start of December 2017 to a peak of $16 billion! At this stage, even dead coins or known scams will get pumped. The price of the majority of cryptocurrencies stabilize, and some begin to retract. When the hype is subsiding after a huge crypto bull run, it is a massive sell signal. Traditional investors will begin to give interviews about how people need to be careful putting money into such a highly volatile asset class. Massive violent correction begins and the market starts to collapse. BTC begins to fall consistently on a daily basis, wiping out the insane gains of many medium to small cap cryptos with it. Panic selling sweeps through the market. Depression sets in, both in the markets, and in the minds of individual investors who failed to take profits, or heed the signs of imminent collapse. The price stagnation can last for months, or even years. The Influence of Age upon Trading Did you know? Cryptocurrencies have been called “stocks for millennials” According to a survey conducted by the Global Blockchain Business Council, only 5% of the American public own any bitcoin, but of those that do, an overwhelming majority of 71% are men, 58% of them are between the ages of 18 and 35, and over half of them are minorities. The same survey gauged public attitude toward the high risk/high return nature of cryptocurrency, in comparison to more secure guaranteed small percentage gains offered by government bonds or stocks, and found that 30% would rather invest $1,000 in crypto. Over 42% of millennials were aware of cryptocurrencies as opposed to only 15% of those ages 65 and over. In George M. Korniotis and Alok Kumar’s study into the effects of aging on portfolio management and the quality of decisions made by older investors, they found “that older and experienced investors are more likely to follow “rules of thumb” that reflect greater investment knowledge. However, older investors are less effective in applying their investment knowledge and exhibit worse investment skill, especially if they are less educated and earn lower income.” Geographic Influence upon Trading One of the main drivers of the apparent seasonal ebb and flow of cryptocurrency prices is the tax situation in the various territories that have the highest concentrations of cryptocurrency holders. Every year we see an overall market pull back beginning in mid to late January, with a recovery beginning usually after April. This is because “Tax Season” is roughly the same across Europe and the United States, with the deadline for Income tax returns being April 15th in the United States, and the tax year officially ending the UK on the 6th of April. All capital gains must be declared before the window closes or an American trader will face the powerful and long arm of the IRS with the consequent legal proceedings and possible jail time. Capital gains taxes around the world vary from jurisdiction to jurisdiction but there are often incentives for cryptocurrency holders to refrain from trading for over a year to qualify their profits as long term gain when they finally sell. In the US and Australia, for example, capital gains are reduced if you bought cryptocurrency for investment purposes and held it for over a year. In Germany if crypto assets are held for over a year then the gains derived from their sale are not taxed. Advantages like this apply to individual tax returns, on a case by case basis, and it is up to the investor to keep up to date with the tax codes of the territory in which they reside. 2013 Bull run vs 2017 Bull run price Analysis In late 2016 cryptocurrency traders were faced with the task of distinguishing between the beginnings of a genuine bull run and what might colorfully be called a “dead cat bounce” (in traditional market terminology). Stagnation had gripped the market since the pull-back of early 2014. The meteoric rise of Bitcoin’s price in 2013 peaked with a price of $1,100 in November 2013, after a year of fantastic news on the adoption front with both Microsoft and PayPal offering BTC payment options. It is easy to look at a line going up on a chart and speak after the fact, but at the time, it is exceeding difficult to say whether the cat is actually climbing up the wall, or just bouncing off the ground. Here, we will discuss the factors that gave savvy investors clues as to why the 2017 bull run was going to outstrip the 2013 rally. Hopefully this will help give insight into how to differentiate between the signs of a small price increase and the start of a full scale bull run. Most importantly, Volume was far higher in 2017. As we can see in the graphic below, the 2017 volume far exceeds the volume of BTC trading during the 2013 price increase. The stranglehold MtGox held on trading made a huge bull run very difficult and unlikely. Fraud & Immoral Activity in the Private Market Ponzi Schemes Cryptocurrency Ponzi schemes will be covered in greater detail in Lesson 7, but we need to get a quick overview of the main features of Ponzi schemes and how to spot them at this point in our discussion. Here are some key indicators of a Ponzi scheme, both in cryptocurrencies and traditional investments: A guaranteed promise of high returns with little risk. Consistentflow of returns regardless of market conditions. Investments that have not been registered with the Securities and Exchange Commission (SEC). Investment strategies that are a secret, or described as too complex. Clients not allowed to view official paperwork for their investment. Clients have difficulties trying to get their money back. The initial members of the scheme, most likely unbeknownst to the later investors, are paid their “dividends” or “profits” with new investor cash. The most famous modern-day example of a Ponzi scheme in the traditional world, is Bernie Madoff’s $100 billion fraudulent enterprise, officially titled Bernard L. Madoff Investment Securities LLC. And in the crypto world, BitConnect is the most infamous case of an entirely fraudulent project which boasted a market cap of $2 billion at its peak. What are the Exchange Hacks? The history of cryptocurrency is littered with examples of hacked exchanges, some of them so severe that the operation had to be wound up forever. As we have already discussed, incredibly tech savvy and intelligent computer hackers led by Alexander Vinnik stole 850000 BTC from the MtGox exchange over a period from 2012–2014 resulting in the collapse of the exchange and a near-crippling hammer blow to the emerging asset class that is still being felt to this day. The BitGrail exchange suffered a similar style of attack in late 2017 and early 2018, in which Nano (XRB) was stolen that was at one point was worth almost $195 million. Even Bitfinex, one of the most famous and prestigious exchanges, has suffered a hack in 2016 where $72 million worth of BTC was stolen directly from customer accounts. Hardware Wallet Scam Case Study In late 2017, an unfortunate character on Reddit, going by the name of “moody rocket” relayed his story of an intricate scam in which his newly acquired hardware wallet was compromised, and his $34,000 life savings were stolen. He bought a second hand Nano ledger into which the scammers own recover seed had already been inserted. He began using the ledger without knowing that the default seed being used was not a randomly assigned seed. After a few weeks the scammer struck, and withdrew all the poor HODLer’s XRP, Dash and Litecoin into their own wallet (likely through a few intermediary wallets to lessen the very slim chances of being identified). Hardware Wallet Scam Case Study Social Media Fraud Many gullible and hapless twitter users have fallen victim to the recent phenomenon of scammers using a combination of convincing fake celebrity twitter profiles and numerous amounts of bots to swindle them of ETH or BTC. The scammers would set up a profile with a near identical handle to a famous figure in the tech sphere, such as Vitalik Buterin or Elon Musk. And then in the tweet, immediately following a genuine message, follow up with a variation of “Bonus give away for the next 100 lucky people, send me 0.1 ETH and I will send you 1 ETH back”, followed by the scammers ether wallet address. The next 20 or so responses will be so-called sockpuppet bots, thanking the fake account for their generosity. Thus, the pot is baited and the scammers can expect to receive potentially hundreds of donations of 0.1 Ether into their wallet. Many twitter users with a large follower base such as Vitalik Buterin have taken to adding “Not giving away ETH” to their username to save careless users from being scammed. Market Manipulation It also must be recognized that market manipulation is taking place in cryptocurrency. For those with the financial means i.e. whales, there are many ways in which to control the market in a totally immoral and underhanded way for your own profit. It is especially easy to manipulate cryptos that have a very low trading volume. The manipulator places large buy orders or sell walls to discourage price action in one way or the other. Insider trading is also a significant problem in cryptocurrency, as we saw with the example of blatant insider trading when Bitcoin Cash was listed on Coinbase. Examples of ICO Fraudulent Company Behavior In the past 2 years an astronomical amount of money has been lost in fraudulent Initial Coin Offerings. The utmost care and attention must be employed before you invest. We will cover this area in greater detail with a whole lesson devoted to the topic. However, at this point, it is useful to look at the main instances of ICO fraud. Among recent instances of fraudulent ICOs resulting in exit scams, 2 of the most infamous are the Benebit and PlexCoin ICOs which raised $4 million for the former and $15 million for the latter. Perhaps the most brazen and damaging ICO scam of all time was the Vietnamese Pincoin ICO operation, where $660million was raised from 32,000 investors before the scammer disappeared with the funds. In case of smaller ICO “exit scamming” there is usually zero chance of the scammers being found. Investors must just take the hit. We will cover these as well as others in Lesson 7 “Scam Projects”. Signposts of Fraudulent Actors The following factors are considered red flags when investigating a certain project or ICO, and all of them should be considered when deciding whether or not you want to invest. Whitepaper is a buzzword Salad: If the whitepaper is nothing more than a collection of buzzwords with little clarity of purpose and not much discussion of the tech involved, it is overwhelmingly likely you are reading a scam whitepaper. Signposts of Fraudulent Actors §2 No Code Repository: With the vast majority of cryptocurrency projects employing open source code, your due diligence investigation should start at GitHub or Sourceforge. If the project has no entries, or nothing but cloned code, you should avoid it at all costs. Anonymous Team: If the team members are hard to find, or if you see they are exaggerating or lying about their experience, you should steer clear. And do not forget, in addition to taking proper precautions when investing in ICOs, you must always make sure that you are visiting authentic web pages, especially for web wallets. If, for example, you are on a spoof MyEtherWallet web page you could divulge your private key without realizing it and have your entire portfolio of Ether and ERC-20 tokens cleaned out. Methods to Avoid falling Victim Avoiding scammers and the traps they set for you is all about asking yourself the right questions, starting with: Is there a need for a Blockchain solution for the particular problem that a particular ICO is attempting to solve? The existing solution may be less costly, less time consuming, and more effective than the proposals of a team attempting to fill up their soft cap in an ICO. The following quote from Mihai Ivascu, the CEO of Modex, should be kept in mind every time you are grading an ICO’s chances of success: “I’m pretty sure that 95% of ICOswill not last, and many will go bankrupt. ….. not everything needs to be decentralized and put on an open source ledger.” Methods to Avoid falling Victim §2 Do I Trust These People with My Money, or Not? If you continue to feel uneasy about investing in the project, more due diligence is needed. The developers must be qualified and competent enough to complete the objectives that they have set out in the whitepaper. Is this too good to be true? All victims of the well-known social media scams using fake profiles of Vitalik Buterin, or Bitconnect investors for that matter, should have asked themselves this simple question, and their investment would have been saved. In the case of Bitconnect, huge guaranteed gains proportional to the amount of people you can get to sign up was a blatant pyramid scheme, obviously too good to be true. The same goes for Fake Vitalik’s offer of 1 ether in exchange for 0.1 ETH. Selling Cryptocurrencies, Several reasons for selling with the appropriate actions to take: If you are selling to buy into an ICO, or maybe believe Ether is a safer currency to hold for a certain period of time, it is likely you will want to make use of the Ether pair and receive Ether in return. Obviously if the ICO is on the NEO or WANchain blockchain for example, you will use the appropriate pair. -Trading to buy into another promising project that is listing on the exchange on which you are selling (or you think the exchange will experience a large amount of volume and become a larger exchange), you may want to trade your cryptocurrency for that exchange token. -If you believe that BTC stands a good chance of experiencing a bull run then using the BTC trading pair is the suitable choice. -If you believe that the market is about to experience a correction but you do not want to take your gains out of the market yet, selling for Tether or “tethering up” is the best play. This allows you to keep your locked-in profits on the exchange, unaffected by the price movements in the cryptocurrency markets,so that you can buy back in at the most profitable moment. -If you wish to “cash out” i.e. sell your cryptocurrency for fiat currency and have those funds in your bank account, the best pair to use is ETH or BTC because you will likely have to transfer to an exchange like Kraken or Coinbase to convert them into fiat. If the exchange offers Litecoin or Bitcoin Cash pairs it could be a good idea to use these for their fast transaction time and low fees. Selling Cryptocurrencies Knowing when and how to sell, as well as strategies to inflate the value of your trade before sale, are important skills as a trader of any product or financial instrument. If you are satisfied that the sale itself of the particular amount of a token or coin you are trading away is the right one, then you must decide at what price you are going to sell. Exchanges exercise their own discretion as to which trading “pairs” they will offer, but the most common ones are BTC, ETH, BNB for Binance, BIX for Bibox etc., and sometimes Tether (USDT) or NEO. As a trader, you decide which particular cryptocurrency to exchange depending on your reason for making that specific trade at that time. Methods of Sale Market sell/Limit sell on exchange: A limit sell is an order placed on an exchange to sell as soon as (also specifically only if and when) the price you specified has been hit within the time limit you select. A market order executes the sale immediately at the best possible price offered by the market at that exact time. OTC (or Over the Counter) selling refers to sale of securities or cryptocurrencies in any method without using an exchange to intermediate the trade and set the price. The most common way of conducting sales in this manner is through LocalBitcoins.com. This method of cryptocurrency selling is far riskier than using an exchange, for obvious reasons. The influence and value of your Trade There are a number of strategies you can use to appreciate the value of your trade and thus increase the Bitcoin or Ether value of your portfolio. It is important to disassociate yourself from the dollar value of your portfolio early on in your cryptocurrency trading career simply because the crypto market is so volatile you will end up pulling your hair out in frustration following the real dollar money value of your holdings. Once your funds have been converted into BTC and ETH they are completely in the crypto sphere. (Some crypto investors find it more appropriate to monitor the value of their portfolio in satoshi or gwei.) Certainly not limited to, but especially good for beginners, the most reliable way to increase your trading profits, and thus the overall value and health of your portfolio, is to buy into promising projects, hold them for 6 months to a year, and then reevaluate. This is called Long term holding and is the tactic that served Bitcoin HODLers quite well, from 2013 to the present day. Obviously, if something comes to light about the project that indicates a lengthy set back is likely, it is often better to cut your losses and sell. You are better off starting over and researching other projects. Also, you should set initial Price Points at which you first take out your original investment, and then later, at which you take out all your profits and exit the project. That should be after you believe the potential for growth has been exhausted for that particular project. Another method of increasing the value of your trades is ICO flipping. This is the exact opposite of long term holding. This is a technique in which you aim for fast profits taking advantage of initial enthusiasm in the market that may double or triple the value of ICO projects when they first come to market. This method requires some experience using smaller exchanges like IDEX, on which project tokens can be bought and sold before listing on mainstream exchanges. “Tethering up” means to exchange tokens or coins for the USDT stable coin, the value of which is tethered to the US Dollar. If you learn, or know how to use, technical analysis, it is possible to predict when a market retreatment is likely by looking at the price movements of BTC. If you decide a market pull back is likely, you can tether up and maintain the dollar value of your portfolio in tether while other tokens and coins decrease in value. The you wait for an opportune moment to reenter the market. Market Behavior in Different Time Periods The main descriptors used for overall market sentiment are “Bull Market” and “Bear Market”. The former describes a market where people are buying on optimism. The latter describes a market where people are selling on pessimism. Fun (or maybe not) fact: The California grizzly bear was brought to extinction by the love of bear baiting as a sport in the mid 1800s. Bears were highly sought after for their intrinsic fighting qualities, and were forced into fighting bulls as Sunday morning entertainment for Californians. What has this got to do with trading and financial markets? The downward swipe of the bear’s paws gives a “Bear market” its name and the upward thrust of a Bull’s horns give the “Bull Market” its name. Most unfortunately for traders, the bear won over 80% of the bouts. During a Bull market, optimism can sometimes grow to be seemingly boundless, volume is rising, and prices are ascending. It can be a good idea to sell or rebalance your portfolio at such a time, especially if you have a particularly large position in one holding or another. This is especially applicable if you need to sell a large amount of a relatively low-volume holding, because you can then do so without dragging the price down by the large size of your own sell order. Learn more on common behavioral patterns observed so far in the cryptocurrency space for different coins and ICO tokens. Follow the link: UBAI.co If you want to know how do security tokens work, and become a professional in crypto world contact me via Facebook to get all the details: Facebook
Since we've all been goxxed now is the time to buy those $50-60 coins floating around and profit from everybody else's misery. Or you could wait for Gox to come back online and crash down the price even further but good luck trying to do any trading there to buy coins, the trading engine is already broken I don't expect the new one to work flawlessly due to epic 3yr history of GOXXING BTC-E.com To pay into this exchange, you need a BTC-E code, PM or Okpay. Take pics of your ID and utility bill and pay the $10 to Okpay for 'quick verification'. You can pay bitcoins directly into your Okpay account for initial funding or wait and see how long it takes for reg verification. Now either wire money, or instant money transfer (MoneyPolo, Contact-sys, Unistream) to fund your account or find an Okpay exchanger somewhere. Or Ukash/CashU. Just because contact-sys is Russian doesn't mean there aren't sending points in every country in the world. BTC-E codes you buy on #bitcoin-otc from verified gpg authenticated traders with good ratings, or on bitcointalk.org forums in the currency exchange forums. Perfect Money is a shady HYIP digital currency run by Russians much like Liberty Reserve. You sign up for free, and load your account with wires (if verified) or you use an exchanger. This is what talkgold.com is for to find legit exchangers. I use wm-center.com to wire WU/Moneygram and get PM. Click on 'Interkassa' payment method in BTC-E and select Perfect Money. Instant load. You can also obviously dump Litecoins you bought on Vircurex to fund the account, or a gagillion PPcoins Bitfloor.com Fastest way to deposit is through CapitalOne P2P or cash deposit https://bitfloor.com/docs/#funding-deposit Be aware Bitfloor is insolvent due to owing 25k bitcoins that were stolen last year but they have a repayment schedule that may or may not bankrupt them. Use at own risk but most ppl trade there everyday with no problems. Bitstamp.net Great exchange in Slovakia? I think. You have to pay with Euro SEPA wire, then for some stupid reason they convert the money to USD. You can pay in here using transferwise.com if you're from UK, or XEtrade and other Forex online money transfer companies. Google 'free money transfer fx' and review your options. Most don't charge you anything if over a certain amount of money. They take your internet billing or other local payment, convert to EUR and send SEPA for you if you request it. If they don't then check with Bitstamp what a SWIFT wire costs (probably nothing, I think they use Latvian banks that charge no receiving fees). If you want a bank account in Latvia then sign up here: http://www.rietumu.com/ if you have a local corporation or business where you live you can, maybe a personal account too. You can always incorporate a dirt cheap Delaware LLC or Oregon LLC from anywhere in the world and use it to open up worldwide bank accounts. Bitcoin-24.com Takes direct wires, all sorts of other methods: https://bitcoin-24.com/fees You can also use Liqpay if you have a USD or EUR card. Sign up to liqpay.com, then they block a small verification amount you have to sign into internet banking (for the card) to check. It's usually $1.something or less. After that you are verified to load $1-100 or so, but I'd just try $50 at first. Any more than that and Liqpay will seize the funds and ask for your bank to authorize a fax they send which no bank will do because of privacy reasons, so pointless to load anymore money. Liqpay may also call you to verify card details this is normal. Liqpay is meant for Russians and CIS countries to use like Ukraine so due to epic fraud of credit cards don't expect to load too much this way unless you find a Liqpay exchanger, but what's the point when you can just wire money to bitcoin-24 anyways. Vircurex.com Good exchange, had some problems due to DDoS but so did all exchanges. They only accept BTC, altcoins and VouchX for payment. You buy Vouchx here: https://www.aurumxchange.com/ or from somebody on Bitcointalk, or IRC (with rep). You can buy a bunch of litecoins anywhere to fund this exchange such as the bitcointalk forums or IRC. Warning: the so-called official twitter account is fake, don't use it. Cavirtex.com Can only fund if in Canada, they accept cash deposit and internet billing. Price has been steady at ~$90 all day though no panic selling. LibertyBit.com https://www.libertybit.com/funding various easy methods, new exchange in Canada that takes intl wires and shockingly Interac deposits (easily frauded). Bitcoin China https://btcchina.com/ fast growing exchange, you pay in with Alipay or Tenpay both Chinese methods that westerners can't use or figure out due to no translation. You can probably use Alipay if you find and exchanger to load it, they do exist. **Edit they now support Liberty Reserve deposit and withdrawal Check english forums to see if anybody exchanging Alipay or taking wires. CampBX.com Accepts money orders, and CapitalOne P2P payments. Also accepts Dwolla but you need to be verified. Bitcoin-central.net Just had a major outage due to instawallet hack, appears to be back online. You get your own quasi-bank account when you verify here much like how ecardone.com (liberty reserve) does banking so can transfer to other users legally with vouchers. You can buy a voucher p2p on Bitcointalk forums or IRC or send a bankwire. VirWoX.com You can pay with Paypal to get Second Life "Linden Dollars" then convert to BTC, or at least you used to be able to. I have no idea if this is still the case I've never used them. Or course there's all the fixed price exchangers https://en.bitcoin.it/wiki/Trade and https://bitcointalk.org/index.php?board=53.0 for everything from Moneypak to Skrill. You can also risk buying coins on Silk Road with moneypak ==============R U L E S ================================
Learn to use #bitcoin-otc, you'll thank me later. It has the most buying/sell options. Use localbitcoins.com too if you can to avoid bullshit exchange problems
ALWAYS USE 2-FACTOR ID ON EVERY EXCHANGE
Always use 2-factor ID on the email you used to sign up for the exchange
Don't click any links in BTC-E.com chat trollbox!!!
Don't click any links PM'd to you on BTC-E.com from other users
Enjoy buying all the way down the crash once Gox comes back online and the great sell off begins! Hold them for a year and they'll be worth 10x as much just like the 2011 crash. Bonus points if you speculate on Litecoin, rumor has it Gox will be trading them when they come back online but again, this is MtGox we are talking about so the site could implode on the zerg rush of people trying to get into their accounts or trading engine could sell all your coins for $0.0001 again like they did in 2011. Great successez!
Bitcoin overview Bitcoin (₿) is a cryptocurrency, a form of electronic cash. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Bitcoin’s price started in 2017 at $998 and rose to $13,412.44 on 1 January 2018. On 17 December bitcoin's price reached an all-time high of $19,666 and then fell 70% to $5,500-$6,000 in Q3 2018. Even though we know that Bitcoin price won’t stop being volatile and there is a long way for Bitcoin to be accepted by the regulators. Billionaire investor Tim Draper still predicted that Bitcoin price will hit $250,000 by 2022 and all the stats are showing that Bitcoin is still worth your investment. 3 ways to buy and invest bitcoin/BTC Coinbase Coinbase is a digital currency exchange headquartered in San Francisco, California. They broker exchanges of Bitcoin, Bitcoin Cash, Ethereum and Litecoin with fiat currencies in around 32 countries, and bitcoin transactions and storage in 190 countries worldwide. Coinbase users can sync their Coinbase wallets with their bank accounts, which made hassle free payment transfers. Coinbase also offers auto-buy function and Coinbase mobile app.Note that there is a verification process (similar to PayPal’s) when you register. https://preview.redd.it/4j441pw9s1n11.jpg?width=1926&format=pjpg&auto=webp&s=7fc21abc289a336fdcf6ea272cfbc8b2a3fae424 OTC Exchange offers convenient low-fee escrow service and a marketplace to perform currency exchange operations between PayPal funds and Bitcoin. The escrow service is using automated verification procedures thus providing payment/funds delivery guarantee for both trading parties. OTC Exchange marketplace does not require its members to maintain any kind of internal balance and employ deposit/withdrawal procedures. Funds are only kept by the marketplace till order fulfilment. Should order originator wish to close non-fulfilled or partially fulfilled order, correspondent Bitcoin amount is sent back to its respective owner. PayPal funds are not kept by the marketplace at all; they go directly member to member. Local Bitcoin ATM A Bitcoin ATM is a kiosk that allows a person to exchange Bitcoin and cash. Some Bitcoin ATMs offer bi-directional functionality enabling both the purchase of Bitcoin as well as the sale of Bitcoin for cash. In some cases, Bitcoin ATM providers require users to have an existing account to transact on the machine. Even though they might look like traditional ATMs but they do not connect to a bank account. They may also charge a high transaction fee and may have really over rates exchange rates. https://preview.redd.it/58j5is7is1n11.jpg?width=1586&format=pjpg&auto=webp&s=4863b8bd02c2ad8551e1ebbba6cdbc9f02654d66 www.BitWin888.com
After four months, I have some observations and lingering questions about bitcoins
I decided to put some money into bitcoins back in December (great price!) and since then have been buying small batches. I have a few observations about what I've learned: There's no right time to buy Bitcoin's price has been fluctuating crazily since I first bought in, and it probably wont stop for awhile. If you're thinking of buying in for the first time but want to wait, I'd suggest just go ahead and buy in now. There wont be a magic moment to buy in (unless you keep a sharp eye out for a quick drop) and the price will keep changing. At this rate, it will probably only go up, so you might as well get off the fence and make a decision. I wish I did back in November! Buying bitcoins is annoying People write all the time about how easy it is to buy bitcoins. I felt comfortable investing in bitcoins because of all those kinds of statements. But I'll go ahead and say it's misleading to say buying bitcoins is easy. Rather, it's easy to buy some kinds of bitcoins- and usually at a higher price. Here are the ways I know for buying bitcoins (note, I'm in the US):
Deposit cash at a bank/CVS/walmart, etc. which uses a third-party service to deliver the money to your exchange website (Mt.Gox, bitfloor, etc.). This can be pretty quick if you live near one of the deposit locations. I'll note that this process can be problematic if your store doesn't do moneygrams often. But the real problem is that there are various fees involved, sometimes up to 4% or higher of your money. Then, if you use a service like bitfloor, their btc prices are about $2.00 higher than the market rate. For the sake of rapidity, you can lose a big chunk of change if you're not observant and aware of the fees and higher rates.
Deposit money through a bank transfer to your exchange or other website. This was the first route I took and I quickly learned there are many hassles involved. Direct deposit would be ideal, but to actually get the money from your bank to an exchange usually means giving up serious amounts of personal information and possibly very long waiting times to be verified. I tried linking my bank account to dwolla then sending money to mtgox. I also looked into linking directly with mtgox. As it turns out, I had to verify myself by sending a photo id copy to dwolla and to mtgox. And then waiting for a verification, which with mtgox is currently an indeterminate wait. Personally, I was unwilling to give up that information, so I can't comment much further. But I'll point out that requiring photo verification is not industry standard for most comparable services, and it's very intrusive.
Buy bitcoins locally or on an irc bitcoin freenode. Buying locally can be done through localbitcoins.com or similar services. Basically people who live near you will sell their btc face-to-face for cash or whatever they want. This can be good if you live in a large city, but it's risky if the seller is unverified or not reviewed. The big drawback is that buying local means you pay way over market price, sometimes egregiously. And if you don't live near a big city (like me) don't expect to find many sellers if any at all. A bitcoin freenode is a basically a type of chatroom where people will sell you bitcoins through different services like paypal, dwolla, bank transfers, that aren't usually offered by major vendors (see http://bitcoin-otc.com/). I found the rates to be very high and as a layman I was unfamiliar with how these kinds of freenode things work. I'd say they are high risk because of the unverified nature of the vendors and the higher prices. But it's an option.
Using a service like coinbase. This is a hybrid that involves linking a bank account or depositing cash, and then buying bitcoins from the site at their rate for a nominal fee. Full disclosure, I do not like coinbase right now. But I recognize that it could be a good service in the future. The basic transaction occurs like this: you give money to coinbase for btc, coinbase takes your money and makes you wait about one week, then delivers your btc at the rate you purchased. Coinbase can unilaterally cancel your transaction or not deliver the bitcoins at the agreed upon delivery time (which is legally dubious). They basically act as a third-party vendor. While it's easy to use, you lose flexibility, interest value on your bitcoins, and valuable time. And because these services are still new startups, you don't know how safe your money is with them.
There are variations on these themes, but mostly all services for buying bitcoins rely on (1) cash deposits through third-party transfer services; (2) direct bank deposits; (3) some other exchange of money or goods with an independent seller. While some are easier than others, each involves a degree of risk, time, effort, and variable pricing. Right now, buying bitcoins is a hassle for most people not familiar with the processes involved, and it will probably stay that way until a new service comes along.
Bitcoin transfers are not instantaneous This was something that really caught me off guard at first. Here is this new type of money that is totally digital, so it should very fast to move around. And nearly everyone claims that it is. In my experience, however, that's not true at all. I've had simple transfers of btc that linger for hours. I have no idea where they go or why certain transfers take so long, but they just do. Eventually, everything shows up, but it's very disconcerting not knowing where your digital currency is in cyberspace. Services like coinbase highlight even more the non-instantaneous nature of bitcoins. If you stick to a major exchange like mtgox, you can expect much faster transfers, but don't panic if something takes longer than a few seconds, minutes, hours etc. Real-time bitcoin data is not always available This is important and has a significant impact on trading. There are several sites that track btc prices in close to real-time, but often there are significant lags. This is mainly due to mtgox. The real bitcoin trading currently occurs at mtgox and the market rate is pegged to mtgox. So any lapse in data or service that occurs at mtgox ripples through the other services relying on mtgox market rates. Why does that matter? If the price of btc starts dropping by a few dollars every few minutes, and then suddenly there is no longer real-time trading data, lots of people panic and start selling. The price drops even more. It's an artificial bubble popping of sorts. While btc is decentralized, unfortunately market rates/data is still pretty centralized. And that means that information can go offline... There's a lot about bitcoins that may go unknown I find, for most people, bitcoins are understandable up until a certain point. When me and my buddies discuss bitcoins, inevitably we get to the question: but what are bitcoins? While we all know they're rooted in mathematical equations in "blocks," none of us understands what that means. Maybe that doesn't matter, but for some people, it will be a hard sell if you want inspire confidence in this new currency. Here's some lingering questions I still have about bitcoins, even after four months of intensive use and familiarity:
What is a bitcoin really? Is it the answer to a mathematical equation? What equation? Who are all these people "mining?" Are they just computers linked together using combined resources to solve an equation?
How did bitcoin start? I know about Satoshi whoever, but that just leaves me way more skeptical of its inception, and it's hard to explain that to someone without btc sounding illegitimate or conspiratorial.
How does a paper wallet work? Why can't I find an extremely simple explanation of how to make a paper wallet? I'm talking, never-uses-the-internet simplistic explanation.
Anyways, those are just some thoughts I've had recently and felt like sharing. Here's a tldr: TL;DR: With bitcoins, (1) first time investor? there's no right time to buy, just jump in; (2) buying bitcoins can be very annoying and overly-costly; (3) bitcoin transfers are not always instantaneous; (4) bitcoin market data is mostly centralized and not always available; (5) there are bitcoin complexities and unknowns outside the grasp of most laypeople. edit: thanks for the informative and helpful responses! [edit: format]
Fellow Canadians, refer to this brief and straightforward guide if you're still unsure how to correctly report cryptocurrency on your taxes
The moderators of this subreddit have been removing posts regarding cryptocurreny and taxes, and directing people to this page. If you were directed to this page but your question is not answered by information on this page feel free to message the mods, or make a post where in the body of the post you link to this page (to show you've considered the information on this page). This page was thrown together in order to provide answers to those who ask HOWEVER is not expected to be a high quality, definitive resource on the subject matter. This wiki page is of similar quality to the comment responses you would have got on your thread - but it's certainly not perfect. It is helpful in that it links to real resources from the CRA on cryptocurrency and taxation whereas your thread likely would have contained uncited incomplete responses If you find any issues or errors with this page, let us know.
Digital currency can also be bought or sold like a commodity. Any resulting gains or losses could be taxable income or capital for the taxpayer. Paragraphs 9 to 32 of Interpretation Bulletin IT-479R, Transactions in Securities, provide information that can help in determining whether transactions are income or capital in nature.
Generally, buy and hold would be considered capital - similar to investors who buy and hold stock and report capital gains. It could also be considered business income where the activity is considered to be similar running a business. High volume traders, those who hold a particular crypto for only a very small period of time, etc. might need to consider if their activities appear to constitute a business. Again, see IT-479R for information about whether it is income or capital in nature. I have cut out the most relevant paragraph below: Specifically, this paragraph:
Some of the factors to be considered in ascertaining whether the taxpayer's course of conduct indicates the carrying on of a business are as follows:
(a) frequency of transactions - a history of extensive buying and selling of securities or of a quick turnover of properties, (b) period of ownership - securities are usually owned only for a short period of time, (c) knowledge of securities markets - the taxpayer has some knowledge of or experience in the securities markets, (d) security transactions form a part of a taxpayer's ordinary business, (e) time spent - a substantial part of the taxpayer's time is spent studying the securities markets and investigating potential purchases, (f) financing - security purchases are financed primarily on margin or by some other form of debt, (g) advertising - the taxpayer has advertised or otherwise made it known that he is willing to purchase securities, and (h) in the case of shares, their nature - normally speculative in nature or of a non-dividend type.
What if I didn't cash out my cryptocurrency to cash? What if I used it to buy stuff? What if I used it to buy other cryptos? What if I used it to buy stuff, then bought more Bitcoin later?
When you buy a cryptocurrency your cost basis is considered to be the fair market value you bought it for. For example if you used $100 cash and there was a fee of $10, then the cost basis was $110. The cost base is subtracted from the sale price to come up with your gain. If you sell your crypto that you bought for $110 total for $200, then you have a reportable capital gain of $90, which would be included as income at 50% (the "inclusion rate") of that - so you'd have income added to your return of $45. However, if you sold an item or service for a cryptocurrency then the most reasonable basis would be saying that you provided the services/goods at a rate similar to that which the same cryptocurrency was being traded in the market. You would also need to consider the taxation of the services/goods sold (which would likely be business income). For example, you provide services and charge 1 Bitcoin for it. Bitcoin are currently selling for $15,000 at the time. Therefore the Bitcoin you received has a cost base of $15,000, and you also have $15,000 of business income to report (for the services provided). If you use your cryptocurrency to buy goods, then again you need to consider it similar to if you disposed the cryptocurrency for cash, and then used the cash to buy the good. You need to report the gains on the cryptocurrency "sale". For example, you buy goods using cryptocurrency valued at $200 in the marketplace at that time, using Bitcoin you bought for $110. Similar to the first example you have a reportable capital gain of $90. If you use your crypocurrency to buy other cryptocurrency then, again, you need to report it as if you sold the original cryptocurrency for cash, then used the cash to buy the new cryptocurrency. You would have gains on the original cryptocurrency, then a new cost basis for the new cryptocurrency. For example you buy CAD$110 of Bitcoin, it rises to CAD$200, and then you buy CAD$200 worth of Ethereum using the Bitcoin (never converting to cash). You would report $90 capital gain/income on the Bitcoin, and then you would consider the Ethereum to have been bought for $200 when you eventually do sell it/use it. If you buy more cryptos at any point you just add the cost of those to the cost of the other cryptos you already have. They are considered to be in the same "pool" so you can't assert your sold your most recent/a specific coin when you transact. You transact from the average cost of the pool. This page from the CRA details these kind of transactions (barter transactions): https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/it490/archived-barter-transactions.html This page is from Taxtips.ca that is dedicated to Cryptocurrency and taxation: http://www.taxtips.ca/personaltax/barter.htm
Why report Bitcoin/cryptocurrency gains?
1) It's easy. Any accountant should be able to handle this, and getting a handle yourself on capital gains/business income taxation is not super challenging. 2) The CRA is going nuts about this lately. The CRA loves to watch something for a while, plan an approach, and then a few years later audit the living hell out of anyone according to some sort of scope. Just because you haven't been caught yet doesn't mean it's out of scope. See the PayPal order where suddenly people who filed with no issue from 2014 to late 2017 thought they were fine, and then now they all need to panic and adjust their misfiled returns: https://www.paypal.com/ca/selfhelp/article/cra-information-request-faq3755 The same thing could happen on a larger scale for, say, any person who has sent money to certain exchanges or received money from them, or has a username at a certain exchange that receives a similar order. These people could be scoped in for a full audit if they have no Bitcoin/cryptocurrency income reported. 3) Penalties and interest are harsh. Failure to report income will result in penalties over 10% of the amount failed to be reported, plus interest. Don't wipe out your cryptocurrency gains with massive penalties. Furthermore you'll be at a higher risk of audit for life. If you already reported your tax return but forgot about cryptocurrency it's not too late! So long as the CRA has not already chosen you for audit or found your mistake you can file a Voluntary Disclosure to report the income and avoid penalties! https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/voluntary-disclosures-program-overview.html
T1135 and "Specified Foreign Property"
Canadian taxpayers that hold cryptocurrency directly or through funds should consider their filing obligations under the foreign reporting rules in section 233.3 of the ITA where such cryptocurrency is situated, deposited or held outside of Canada. The CRA considers that cryptocurrency is funds or intangible property and therefore, “specified foreign property”. Further the CRA is of the view that the interest in a foreign partnership which in turn invests in cryptocurrency (to the extent the partnership is not a “specified Canadian entity”) would also be “specified foreign property”. Therefore, where the cost amount of such cryptocurrency exceeds CDN$100,000 at any time in the year and the cryptocurrency is not used or held exclusively in the course of carrying on an active business, the taxpayer must file form T1135 to report the property. These reporting obligations must be carefully considered given the CRA’s automatic application of the late filing penalty in subsection 162(7) of $2,500 (after 100 days) and the six-year normal reassessment period under paragraph 152(4)(b.2) of the ITA.
A group of ICN aficionados opened up the #otc channel on the Iconomi slack. If you are interested in the purchase or sell of higher amounts of ICN token come and pay us a visit. Please be sure to read our #otc guideline before engaging in any kind of trade. Iconomi OTC Guideline This guideline will cover best practice procedures to help you initiate OTC buys and sells via the Iconomi slack channel #otc. Disclaimer: The Iconomi OTC channel is not maintained by any current or past founder or employee of the Iconomi company. All buy and sell offers are based on a private arrangement between a selling party, a buying party and if applicable an escrow, accepted by buy and sell side. Please be aware that OTC deals can inherit substantial financial risks, which might eventually lead to the loss of your assets. Always do your own due diligence, before initiating an OTC trade. Be aware that the buy, sell and/or escrow party might have bad intentions. Why should you consider an OTC trade? For many crypto investors, there is substantial practical difference between OTC and major exchanges. Improvements in electronic quotation and trading have facilitated higher liquidity and better information. However, there are reasons an OTC sale might better suit your needs. On an exchange, every party is exposed to offers by every other counterparty, which is not the case in the Iconomi OTC channel. Here are a few reasons you could benefit from an otc trade.
Trading a substantial sum of ICN token against FIAT or another crypto currency will most likely result in a notable slippage of the price. OTC trades are usually arranged on a fixed price per token and since being a private trade have no immediate effect on the current market price
Direct ICN to FIAT trades
As of now, ICNs major crypto exchange does not support the direct trading of ICN token against FIAT currency. If you wish to cash out your ICN savings into FIAT you will have to take a detour by trading against BTC or ETH first.
Private Equity deals
For some citizens, private OTC trades might have a positive effect on the declaration of their taxable crypto incomes. Depending on the country you reside, OTC trades could be regarded as a private equity deal which might free you from potential tax obligations. What forms of OTC trades are supported? Via our otc channel, you can initiate one of the following forms of trade: ICN to Crypto OTC trade If you decide to exchange a sizable amount of ICN token for another crypto currency an escrow on the otc channel can help you with the arrangement of the trade. Buy, sell and escrow party will either publicly or privately agree on a buy price and the currency the ICN token will get traded for. After the decision on the buying price and the escrow fee, the escrow will collect crypto assets from the buy and sell side. The escrow wallet addresses of both crypto currencies are known to all parties of the trade. Once all crypto transfers have been collected by the escrow, the escrow will declare the completion of the deal and send the balance of both currencies, minus the escrow fee to the addresses provided by buy and sell side. Should at any time either buy or sell side decide to not further pursuit the OTC trade, the escrow will refund all collected crypto assets to their originating owners. Arrangements of the trade should cover the following items:
Amount of ICN involved
Amount of other currency/goods involved
Price per token
Who bears the transaction fees, both on ICN-side and the other side
The deadline for completion of contract
ETH address for funds receipt
Other currency processor address for funds receipt
Risks: Make sure to always select an escrow with a high reputation. Also be aware that scammers might try to impersonate the identity of a well know escrow. Start with smaller OTC trades to limit your potential losses and as always, use your brain.... ICN to FIAT OTC trade OTC trades of FIAT currencies for ICN token can be initiated on a pay as paid basis, supported by an selected escrow. After the decision on the buying price and the escrow fee, the escrow will collect ICN token from the sell side. After the escrow confirmed the ICN token transfer, the buy side will initiate a bank transfer of the funds agreed upon to the sell side. After the attestation of received funds from the sell side, the escrow will send the balance of ICN token, minus escrow fees to the address provided by the buy side. The trade is now officially settled. Should the sell side claim to not have received the agreed upon amount of funds, the escrow will ask the buy side for a proof of remittance. The buy side can prove the FIAT transfer by providing one or all of the following :
Receipt of the bank transfer, issued by the bank, the transfer was initiated from
The escrow can request a remote session on the computer of the buy side. The buy side logs on to his online banking portal and proves that he actually initiated the bank transfer.
Attestation of bank transfer, provided to the escrow directly by an employee of the bank. The buyer authorizes his bank to give out all necessary information regarding the fiat transfer to the escrow. Thus the escrow can personally inquire on the status of the bank transfer
If the escrow sufficiently determines that the bank transfer has been completed as agreed upon by buy and sell side, he will release the ICN token to the wallet of the sell side. If the escrow comes to the conclusion that the funds, agreed upon have not been either partly or entirely transferred to the sell side, the escrow will issue a full or proportional refund of the ICN token back to wallet address of the sell side. Risks: Additionally to the risks which come along with a crypto to crypto OTC sale be aware that scammers have become more and more resourceful when it comes to scamming people. If you are the sell side, make sure that the bank transfer has been completely cleared by your bank. Make sure that your funds cannot be retransferred by the buy side. Please also keep in mind, that bank transfers can take a long time until they become finally cleared by the receiving bank, especially if it is an international transfer. Buyer and seller should agree on a time frame, the transaction should be processed by. When trading ICN for reversible methods (such as paypal or credit card transactions), beware of chargeback risk. It is strongly recommended to avoid PayPal, credit card or other 4th party transactions with persons of unknown reputation, since even with escrow, your counterparty may chargeback the PayPal or CC funds after receiving the ICN. Trust your instincts and cancel the deal if you do not feel completely comfortable. Disputes In case of dispute, it is a advisable to have a double-gpg-signed contract prior to the transaction. This way, if any party claims non-receipt of funds to an address, incorrect price, or other issues, you have a gpg-signed contract you can lean on. Of course, this won't help you if you have run into a scammer who is just out to take the money and run, but it will be helpful in case of a legitimate dispute between honest parties. Some suggested items to include in your contract text (complete list may vary depending on nature of the transaction): Amount of ICN token involved Amount of other currency/goods involved Price per token Who bears the transaction fees, both on bitcoin-side and the other side The deadline for completion of contract ETH address for funds receipt Other currency processor address for funds receipt
Bitcoin (BTC ou XBT) é o primeiro e mais importante dinheiro eletrônico sem autoridade central, baseado numa tecnologia open-source inédita chamada Blockchain, que foi desenvolvida por Satoshi Nakamoto em janeiro de 2009. Essa tecnologia permite a criação de um "banco de dados" confiável P2P (ponto-a-ponto), o que abre caminho para muitos tipos de inovação, sendo uma delas o próprio bitcoin e outras como contratos descentralizados, por exemplo. Nota: normalmente emprega-se "Bitcoin" em maiúsculo para se referir ao protocolo (baseado na tecnologia Blockchain) e em minúsculo "bitcoin" para se referir a uma unidade da moeda. O Bitcoin, além de um bem digital, pode ser considerado também um sistema de pagamento, totalmente independente de qualquer sistema já existente, como cartões de crédito, Paypal, bancos e outros. Sua capacidade atual estimada é de 7 transações por segundo, mas essa capacidade pode ser aumentada com o passar do tempo se houver necessidade. Por ser puramente digital e distribuído, o Bitcoin funciona 24/7 e tem alcance mundial, além de ter locais especializados de troca pela moeda local (chamados exchange) nas principais cidades do mundo. A segurança da rede do Bitcoin, ou seja, o que garante que não existirá um chamado "gasto duplo" do mesmo dinheiro, é o consenso da rede P2P feito pela validação das transações por parte dos mineradores. Para que um minerador consiga incluir um bloco válido na rede, ele precisa utilizar um grande poder computacional. O processo de mineração consiste na realização de cálculos matemáticos para a seleção de quais transações válidas serão incluídas no próximo novo bloco do Blockchain, excluindo aquelas que tiveram uma tentativa de "gasto duplo" naquele período. Cada nó da rede, além dos mineradores, também é capaz de verificar a validade das transações incluídas no bloco. É nesse processo também que aparecem os "bitcoins ainda não descobertos". A distribuição dos bitcoins é feita de forma previsível, tendo uma queda de recompensa pela metade de 4 em 4 anos. Serão encontrados no máximo 21 milhões de unidades da moeda.
Quanto vale um bitcoin?
O preço de mercado de um bitcoin é determinado através da lei da oferta e da procura, portanto estando sujeito a variações de preço por causa de acontecimentos políticos e econômicos (como desvalorização e inflação de moedas estatais, conflitos, maior demanda por Bitcoin etc). Assim como nas moedas estatais, o preço do bitcoin varia e pode ser diferente dependendo do lugar em que for negociado. Se você for comprar dólares no Brasil, você terá que procurar uma casa de câmbio que poderá ter a cotação de R$ 3,00 por dólar, por exemplo. Caso vá a outra casa de câmbio, você poderá notar que o preço poderá ser ligeiramente diferente, além das taxas também variarem. Com o Bitcoin não é diferente. Essa variação entre as exchanges (nome comumente usado para se refererir aos locais de compra e venda de bitcoin) são equilibradas pelo mercado através de operações de arbitragem (comprar num lugar mais barato e vender num mais caro). Para se ter uma ideia do preço médio do bitcoin, você pode dar uma olhada em sites como os que seguem:
Por ser uma moeda ainda muito recente (inventada em jan/2009) e ainda não muito utilizada, seu preço de mercado ainda é muito volátil. Isso faz do bitcoin um investimento de risco atualmente. O preço tende a ficar mais estável ao longo do tempo, quando o mercado puder definir com mais exatidão seu "preço real". As oscilações também tendem a diminuir conforme o seu market cap (quantidade de moedas x preço) aumentar. Hoje (2015) o market cap do bitcoin é de US$ 3 bi, o que pode ser considerado pouco se comparado ao valor de algumas empresas como a Dell (US$ 24 bi) ou ainda de outras commodities como o ouro (US$ 2.600 bi). Para um gráfico da volatidade ao longo do tempo, acesse:
O bitcoin é um bem digital e assim como outros bens, pode ser adquirido de diversas formas:
Oferta de bens ou serviços em troca de bitcoins;
Trocando bitcoins por alguma moeda estatal como o real ou dólar em algum lugar especializado ou mesmo diretamente com alguma pessoa física (P2P).
Minerando bitcoins (processo que atualmente é lucrativo apenas a profissionais, e que será explicado posteriormente).
1. Negociação direta (P2P / pessoa a pessoa)
Uma das maneiras mais baratas de se negociar bitcoins, porque não tem taxas, é comprando diretamente de outras pessoas que já possuem a moeda. As duas partes chegam a um acordo de preço e a troca é feita. Geralmente quem tem menos reputação entrega o bitcoin ou a moeda local primeiro. Por ser uma maneira relativamente arriscada, pois não há um mediador para casos de descumprimento de uma das partes, a reputação de alguém deve ser muito considerada. Exemplo: prefira negociar com alguém do seu círculo de amizades (rede de confiança), alguém que você confie muito como familiares e amigos, ou por uma indicação (amigo de amigo). Se a outra parte tem uma reputação duvidosa, prefira negociar aos poucos (divida os valores em várias partes menores e vá trocando aos poucos). Algumas ferramentas auxiliam nesse processo de reputação e rede de confiança, sendo elas:
A mais tradicional, confiável e mais importante: Bitcoin OTC WoT que mantém um "grafo de confiança" e pode ser acessada através de comandos para um bot de um canal IRC. Se quiser aprender mais, entre na comunidade Bitcoin OTC WoT Brasil para pedir auxílio em português.
LocalBitcoins lista alguns interessados em negociar na sua região.
2. Negociação indireta (com intermediário)
Outra forma de se negociar bitcoins (e essa provavelmente é a maneira mais conveniente, embora não seja a mais barata) é utilizando um intermediário que viabilize a compra e venda de bitcoins entre pessoas interessadas. Esses intermediários são as "corretoras" ou "bolsas" de bitcoins (mais conhecidas por exchanges). Essas corretoras fornecem um serviço de intermediação entre compradores e vendedores de bitcoin, cobrando uma taxa para tal. Por causa disso o bitcoin nas corretoras tem um preço final um pouco mais alto do que se fosse comprar de outras maneiras, mas devido ao altíssimo volume, uma operação pode ser realizada instantaneamente. Além de usar exchanges, você também pode encontrar um intermediário na relação P2P, tornando-a mais segura. Exemplo: um amigo em comum, que pode levar uma comissão previamente combinada para intermediar as duas partes. Você pode conferir uma lista de corretoras no ExchangeWar. Algumas das principais corretoras brasileiras são:
Hoje é virtualmente possível gastar os bitcoins em qualquer lugar, usando algum intermediário para trocá-los imediatamente sob demanda por alguma moeda local, como numa exchange ou com serviços como Neteller, Xapo ou Gyft. Alguns locais porém já aceitam a moeda digital diretamente, como é o caso da Microsoft, Dell e Overstock, além de inúmeras outras ao redor do mundo. Confira uma lista com mais de 100 mil lugares que já aceitam diretamente o bitcoin em SpendBitcoins ou no CoinMap. Segue algumas listas de locais que aceitam bitcoin no Brasil:
Para minerar bitcoins você precisa executar um software em um computador especializado (ASIC) que possa realizar uma grande quantidade de operações matemáticas demandada pelo sistema de consenso P2P do bitcoin. Logo após a criação do Bitcoin em 2009, era possível e rentável minerar bitcoins utilizando o processamento de computadores pessoais (através de simples processadores e placas de vídeo), mas com o tempo essa atividade deixou de ser rentável e tornou-se praticamente impossível para tais máquinas. Isso aconteceu pois o interesse no Bitcoin aumentou muito, trazendo assim mais pessoas para a mineração e impulsionando uma corrida por maior quantidade de processamento. Com o avanço da tecnologia e o aumento do interesse por Bitcoin, mais poder de processamento foi adicionado à rede Bitcoin e isso resultou em um aumento da dificuldade para se encontrar novos Blocos. Essa é uma característica do protocolo Bitcoin: quanto maior o poder de processamento da rede, maior a dificuldade para se minerar bitcoins - ou seja, maior a dificuldade para se descobrir novos Blocos. Um bloco é um arquivo que possui uma identificação (data, hora e informações genéricas) e um registro das transações (movimentação de bitcoins entre endereços) mais recentes. Resumidamente, os mineradores são uma forma de manter a rede Bitcoin segura e operante, algo que demanda muito poder de processamento (o que torna inviável o uso computadores de propósito geral para tal fim) e que, como retribuição por essa tarefa importante, gera uma recompensa em bitcoins pelo trabalho. Todas as transações, ou seja, as movimentações em bitcoins realizadas entre endereços (carteiras), são anônimas pois se caracterizam como uma transferência de fundos de um endereço Bitcoin para outro, que, embora tenham relação indireta com pessoas reais, não possuem uma relação direta. Ou seja, não é possível dizer com absoluta certeza que determinada pessoa é detentora de um endereço a menos que ela diga isso em algum lugar - o que torna o Bitcoin algo pseudônimo, não anônimo (você é anônimo apenas se quiser e tiver conhecimentos para tal). Todas as transações da história da rede Bitcoin são públicas e podem ser conferidas em sites como o Blockchain Info. Então...é impossível minerar hoje em dia num PC comum ou notebook? Sim, mas não é lucrativo. Para isso existem os ASICs (Circuitos Integrados de Aplicação Específica, em inglês Application Specific Integrated Circuits), hardwares específicos para mineração. Há uma lista na Bitcoin Wiki, em inglês, onde estão listados todos os ASICs disponíveis no mercado e também placas gráficas e processadores. É importante notar que embora seja possível minerar bitcoins, não é algo recomendado aos brasileiros, uma vez que o equipamento é caro, importado e possui taxas de importação - além da energia elétrica brasileira, que inviabiliza totalmente o processo. Nota: Em processo de desenvolvimento:Guardando seus bitcoins e Ganhando bitcoins.
Unidades comuns do bitcoin
Quantidade em bitcoin
Unidade básica, usada no client padrão.
Padrão em diversos serviços.
Possível novo padrão a ser adotado.
Frequentemente usado para negociar altcoins, menor unidade possível.
12-21 18:57 - 'Don't forget the counterparty risk! Don't keep your coins in exchanges and e-wallets! Store your bitcoins somewhere safe!!!' (self.Bitcoin) by /u/shadowboyah removed from /r/Bitcoin within 0-5min
''' Now that the price is going to the moon, I'd like to bring back the topic of counterparty risk. Because I see new people coming in, I'd like to inform them that leaving your money to someone else, be it a bank, an exchange, a darknet market, a borrower etc etc, you face the risk of never getting your money back! In Bitcoin there have been many hacks, ponzis, scams which have affected it price very negatively. Some of the most famous ones where : Bitcoinica, Mt. Gox, BTCe, Poloniex, BitStamp, Cryptsy, Shapeshift, Gatecoin, Bitfinex, BTER, Vircurex, Mintpal, Bitpay, Cavirtex, Bitquick, the DAO, Bittrex, cloud mining scams, p2p lending, Darknet markets exit scamming/getting bust etc. The way they were hacked varied, some didn't lose customer funds, others refunded them, others lost altcoins etc, but the danger of losing everything is still there. Coinbase has had problems with the IRS demanding customer info, Cryptsy lawsuit because they helped Cryptsy's CEO steal and cash out customer funds, freezing accounts for gambling etc, not giving customer's Ethereum Classic after the Fork and so on. Some of the 'old guys' know about all that and prefer to stay safe. Others keep risking it. Just be the smart guy! Very few people profit from trading or arbitrage! Do you think you are in the 10-20% of people that constantly make money trading? Chances are you aren't... In a year you could have made more than 2-3x just by holding your coins in a private wallet! Some people were lending money at Bitfinex to earn interest (more than 10% per year). Guess what happened to them... They initially lost 36% and then it went down to 18% due to BFX's clever trick. And some people just kept USD in that exchange thinking nobody could take it from them. Don't get distracted by high yields by any altcoin like Dash, Nubits, Lending Club or Cloud mining scheme. 90-100% of all those are scams or just unable to keep their promises. Some people might have profited, but on the expense of others, and in total, more people lost than gained. And you are going to ask me: What if I want to sell or buy some coins? How do I do it? Well, nowadays there are many ways where you can do that safely. Might not very cheap, but these are probably some of the best ways to do it: Localbitcoin, Bitcoin.de, Paxful, Wallofcoins, BitBargain, Bitsquare, Tether (Omni Dex), Mycelium local trader, Purse.io, itBit, Gemini or Glidera, are some ways where you can buy coins with very little counterparty risk and OTC. If you still insisted in trading, BTCC and Kraken are currently the best exchanges in my opinion! The best way to buy coins would be to buy them with your debit/credit card and get them sent to your private wallet instantly! Some exchanges/services that I know are Glidera, Bitstamp, Coinbase, Bitx, Coinsbank and CEX.io. There might be others, but I don't know how good they are (I never buy with credit cards btw). I mainly use Kraken. I once deposited coins and sold them on Kraken and within 1 day I