Miner profitability metrics are based on a handful of factors regulating difficulty and emission, which are hard-coded into the blockchains attributes, making it predictable to work with. While predictability does not always immediately translate into profitability, it gives a blockchain certain parameters to rely on when predicting when mining cryptocurrency will become profitable, at which price level, and at which difficulty level during the emission cycle.

Some cryptocurrencies, such as Bitcoin (BTC), go through emission cycles with events such as the halving. In Bitcoins case, halvings occur once every 210,000 blocks roughly every four years until the maximum supply of 21 million Bitcoin has been mined.

This feature, self-adjusting difficulty, provides an incentive for an individual miner to join or leave the network depending on the current Bitcoin price level. Together, these incentives create a logarithmic price regression curve, which represents a probable Bitcoin exchange rate and, therefore, predictability of profitability in the current emission cycle. If Bitcoins price falls under this regression curve where the bottom line is roughly around the 200-week moving average in this emission cycle, nearly all of the miners should be at a net loss. If the price stays above this figure, at least some of the miners should be at a net profit.

Bitcoin mining difficulty is currently at an all-time high between 110 and 120 million terahashes per second, indicating that a lot of new mining capacity has been added to the network, but since the price hasnt fully recovered from the dip caused by the emergence of COVID-19, we should expect most of the miners being temporarily at a loss. However, should Bitcoins price rise back up again into the current emission cycle and go into a bull run, the economic risk miners would have taken at that point should be greatly rewarded.

Ethereum mining has been, for a while, among the most profitable in the altcoin space primarily because of the high average price of its token. However, Ethereum as a network has a primary focus on building a blockchain with a slightly different purpose compared to Bitcoin. Ethereum is a smart contract platform. While mining has previously supported the network in the phase where it isnt widely used for transactions, in the future, the network will be compelled to take on staking nodes as validators in order to provide sufficient transaction capacity. In the long run, this may have a positive effect on mining if we assume that mining will be phased out gradually. A substantial amount of coins are predicted to be locked in staking, which is going to drive up the price.

Staking is a mechanism that allows users to deposit some of their coins into a staking address owned by a validator node and locks them for a period of time. The validator node then secures the network by producing blocks relative to the number of coins deposited in it. The blocks are produced according to a hard-coded voting mechanism that calculates the staking reward from the total amount of coins staked in the network for each node.

Related: ETH Miners Will Have Little Choice Once Ethereum 2.0 Launches With PoS

The price of electricity is a defining factor in miner profitability. Currently, most industrial miners reside in countries with cheap electricity on power purchasing agreements with electricity producers ranging from hydropower to solar. However, most retail miners mostly depend on retail price fluctuations and have to calculate this factor into their investments. Moreover, the price of electricity isnt a factor when mining profitable altcoins with GPU rigs.

Equipment prices tend to fluctuate according to price cycles. At the bottom of each cycle, buying equipment is relatively affordable, but toward each cycle peak, equipment may not be affordable but also unavailable. At this point, it would likely be profitable to take a moderate risk in mining, especially in GPU mining. Regarding profitability alone, mining Bitcoin would probably require an investment beyond the reach of most retail miners on the initial cost to be remarkable at the peak of this emission cycle.

Apart from only turning a profit, mining is a way to produce coins with no prior history. For users who care about their privacy, mining represents economic freedom, making a means of payment with no ties to a specific entity accessible. This unique feature is only present in proof-of-work cryptocurrencies and connects many people on the fringes of society with often legitimate use cases to the wider world, acting as a guarantor of human and social rights.

For some organizations, maintaining a blockchain at a nominal loss can act as an investment either by supporting profitable services or by maintaining infrastructure to run services for public use. In legacy systems, this type of arrangement is comparable to public service, or a utility.

While utility provision can be an advantage for a network of entities running on a permissioned blockchain or a PoW blockchain intended for a well-defined use, on open public blockchains, in the long run, miners can be assumed to operate on a profit motive. With difficulty adjustments and profitability in public blockchains with significant utility value such as Bitcoin, mining can be seen as a profitable business in the foreseeable future.

The only credible factor that may upset the status quo in mining PoW cryptocurrencies at the moment seems to be the theoretical introduction of widespread quantum computing with enough accessible tools to create an incentive to attack public blockchains. However, this kind of risk can be exaggerated because quantum computing proof algorithms exist and are likely to be developed precisely to mitigate a risk arising from this quite predictable factor.

In this light, mining will probably not become profitable in the upcoming bull market, but more relevant in ways that are not only economically.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Iskander Khasanov is a crypto miner and trader. He established himself first as a real estate entrepreneur and then became involved in the cryptocurrency business in 2016. Iskander is the director at Crypto Accelerator community and shares ideas of mass adoption of cryptocurrency.

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Cryptocurrency Mining Profitability in 2020: Is It Possible? - Cointelegraph

After finishing the month of July in incredible style, cryptocurrencies across the market have taken step back led by Bitcoin, Ethereum and Ripple. Bitcoin, for instance, is settling for consolidation between the support at $11,500 and $12,000. This follows recovery from a dip to $10,500. Although bulls desire to push above $12,000, they seem to lack enough volume to support the price action.

Bitcoin is exchanging hands at $10,800 at the time of writing. As reported in the price prediction earlier, the confluence resistance at $11,899 remains the biggest hurdle preventing action above $12,000. Technical levels are mainly positive with the RSI and the MACD sending bullish signals. BTC also trading above an accelerated trendline. Support is envisioned at $11,500, $11,000 and at the main trendline in the event of a reversal.

Ethereum like Bitcoin had a tremendous July and a good start in August; from trading around $230 to highs above $400. A yearly high was traded at $415 but bears gained traction perhaps due to some investors taking profits. At the time of writing. ETH/USD is teetering at $395 after recovery above $400 became impossible during the Asian hours.

Bulls are still relatively in chart even though gains remain limited. The Elliot Wave Oscillator has begun printing the first bearish session in August. This reflects the reversal from $415 to $395. The RSI is still above 70 but its downtrend shines the light on the strengthening bearish trend. If support at $390 fails to hold, buyers must endeavor to defend $380 and $350.

Ripple is nurturing a consolidation trend above $0.30. The sideways trading comes after a retreat from August highs traded at $0.3250. Support at $0.30 seems to have settled well in the last couple of days. All technical indicators including the RSI and MACD reinforce the sideways trading. However, with the 50-day above the 100-day SMA, it becomes apparent that bulls have anupper hand in the current session.

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Cryptocurrency Market Update: Bitcoin, Ripple and Ethereum begin consolidating - FXStreet

Bitcoin surged in the public consciousness during late-2017 when one bitcoin was suddenly worth 20,000 dollars. Overnight nerdy bitcoin miners became millionaires, and the ignored coder cousin of the family became everyone's favourite. Many investors who had no idea about any sort of cryptocurrency started to look towards the profit in this digital asset.

Heralding the times of a digital market, Bitcoin is a pioneer in the fresh field of crypto-currency that is slowly and steadily changing the finance landscape.There are many important subsets of the Bitcoin concept outlined in the bitcoin billionaire.

Bitcoin Origin

Bitcoin first emerged in January 2009 under mysterious circumstances. It was founded by a still-unidentified group (or individual) under the name of Satoshi Nakamoto. The central idea of the concept was that Bitcoin would be a revolutionary new form of currency that will operate in a peer-to-peer network. This means a financial transaction that involves bitcoins will be carried out directly between the two parties without the need of a third-party overseer, as is done in credit cards and online transactions.

Blockchains and Miners

The process is carried out through block-chains. A block-chain is essentially a collection of blocks where each block is a group of transactions involving bitcoins that are bunched together and stored in a decentralized manner. These decentralized public ledgers are maintained by "miners" who are motivated by rewards in bitcoins itself. These rewards are limited by their number, with only 3 million of them remaining currently. This helps to eliminate issues like inflation that is caused by normal currencies.

Transparency and security

The ingenuity of Bitcoin lies in the way it's operated. The block-chains that are made to record all transactions are completely transparent. These can be seen developing live by any user. For breach of security, the hacker would have to control 51% of the computational power spent to maintain the ever-widening Bitcoin chain, which, with already 10,000 nodes, is difficult to achieve. And even if the hacker manages to perform this seemingly impossible task, the user may just create another block-chain and foil the villain's efforts completely. Along with that, numerous layers of coding involving rigorous cryptography makes the hacking of bitcoins a considerable task that not many computers are equipped to perform.

Bitcoin Transactions

The transactions involving bitcoins are a little like normal bank transactions. A user is given two sets of keys to access this unique cryptocurrency and its form of finances. These keys are a long series of numbers and letters that are encrypted through a suitable mathematical algorithm. The public key acts like ones bank account number that is given to other parties to receive and send bitcoins. The private key serves similarly to an ATM pin, which is used to provide authoritative access to the transaction. Since these keys are too long to just remember, users are advised to store them in encrypted offline storage devices or printed on physical paper that can be scanned later to access the important codes.

Bitcoin Legitimacy

As of now, Bitcoin is not backed by any banks or governments. The value of Bitcoin as a commodity is also not recognized. It primarily functions as a mode of exchange that exists solely on decentralized networks. Finance pundits are generally divided in their opinions about the cryptocurrency. Some laud it as the future face of finance while others caution against its volatile valuations due to which every rise in its value is followed by an equally drastic decline. Despite such issues, the popularity of bitcoins continues to rise, with many exploiting its high exchange rate for lucrative investment ventures.

Aside from investment, bitcoins are now also used as a common form of crypto-currency that can be used for daily commercial transactions as its acceptance is gradually gaining traction. Many retailers, shop-owners, and businesses accept bitcoins as a legitimate form of payment along with traditional methods such as credit cards, debit cards, e-banking, etc.

Bitcoin has become the original front-runner of the crypto-currency field, and now many more forms of digitally encrypted currencies are following suit with growing numbers. These virtual currencies are together called Altcoins. The steady rise in popularity and acceptance of such currencies signal a future of digitally thriving marketplaces.

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Cryptocurrency: The Currency of the Future - Techtree.com

Ethereum has dethroned Bitcoin as the top cryptocurrency, according to Weiss Ratings.

The ratings agency has updated its overall crypto rankings which consider adoption, technology, market momentum and investment risk. Weiss now places Ethereum (ETH) in the number one spot, followed by Bitcoin (BTC), Cardano (ADA), Litecoin (LTC), and Stellar (XLM).

In addition, the crypto ratings agency names Cardano as the coin with the best technology. With the Shelley hard fork a success, Weiss analyst Juan Villaverde says his firm has already factored in the blockchains long-awaited upgrade in the coin rankings.

Shelley is already reflected in our technology model because we had full confidence that it would come out with this (fork). Were also reflecting on that same model that Cardano is capable of running smart contracts and dApps because we think these things will come out eventually so when Cardano pushes a code update, it doesnt really reflect on our ratings, unless its something new on the roadmap that wasnt there beforeAs the fundamentals for the blockchain, that is Cardano, improve over time, it will be reflected in our ratings.

Weiss also considers Cosmos (ATOM), Fantom (FTM), Tezos (XTZ), and Ethereum as the top coins in terms of technology.

As for the state of the crypto market, Juan Villaverde says the bull rally appears to have more legs as investors continue to focus on large-cap names.

The second story looks at the small-cap perspective. Weve seen small caps post stellar gains when a true crypto bull run is underway. This weeks pattern suggests to us that the crypto markets arent frothy yet and that higher prices await us still. We usually see the smaller altcoins outperform the broad crypto market once the rally enters its later stages.

The fact that the rally weve seen so far as remarkable as its been has been concentrated mostly in high-quality names tells us that caution still remains high among crypto market participants.

Weiss Ratings has provided financial market research and analysis for more than 30 years, and published its first crypto rankings in early 2018.

Featured Image: Shutterstock/Sergey Nivens

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Weiss Ratings Places Ethereum Ahead of Bitcoin As Top Cryptocurrency, Says Cardano Has the Best Technology - The Daily Hodl

So far, this year has been a big one for Bitcoin: after a spectacular price crash in March, BTC managed to hold levels between $8,500 and $9,800 for nearly three months, occasionally kissing $10,000. Never before had Bitcoin managed to sustain something so close to $10,000 for such a long time.

Now, however, it seems as though $10,000 may be in Bitcoins rearview mirror for some time to come: on Monday, July 27th, Bitcoin broke past the $10,000 marker and hasnt looked back since.

The Most Diverse Audience to Date at FMLS 2020 Where Finance Meets Innovation

In fact, Bitcoins now seems to be courting the $12k resistance level. Since Tuesday, July 28th, Bitcoin has been dancing between $11,200 and $11,800 and has occasionally reached alllllllmost up to $12k (according to CoinMarketCap), or even past it (on certain exchanges). Now, some analysts are identifying $50k as Bitcoins next major target.

Whats driving this latest bull run? Will Bitcoin keep up its momentum, or will BTC once again fall below $10k?

Many experts within the cryptocurrency space seem to agree that there are several main factors that are pushing BTC upward: primarily among these, however, is global economic instability.

Indeed, Marie Tatibouet, chief marketing officer at cryptocurrency exchange Gate.io, told Finance Magnates that the price of Bitcoin may have been boosted by the current situation of the world.

This includes the instability caused by the pandemic, the stock market falling, the US and China market wrestling dollar vs. yuan, or a big fear of inflation on a global scale, just to highlight some, she said.

Indeed, the economic turmoil that has resulted from the global pandemic has also caused people to reconsider their beliefs about their national currencies, a factor that could also be contributing to Bitcoins ascent.

For example, Evan Bayless, the operator of WhatIsMoney.info, also pointed out to Finance Magnates that we as a society are very accustomed to looking at the value of everything in terms of our national currencies: we think that dollars and other major fiat currencies are stable, he said.

However, the incredibly fast and drastic response of the Fed and other central banks to the COVID-induced lockdowns (and the subsequent economic fallout) has caused the idea that fiat currencies may not be a consistent yardstick for measuring value to begin to enter the public consciousness, he said.

In other words, the massive amount of quantitative easing that the United States central bank decided to do earlier in the year seems to have shaken the public perception of the almighty dollar and other major fiat currencies.

Therefore, Bitcoin may be capitalizing off of its functionality as an inherently scarce asset: as central banks continue to pump liquidity in the system, investors are looking for anything that has a limited supply and cannot be debased, Evan Bayless told Finance Magnates.

This is why youre seeing blue-chip stocks, gold, and bitcoin seeing massive rises with other assets following suit, in accordance with how easy it is for producers to create more of the asset and push the price back down. We are seeing a scramble for asset preservation.

Gate.ios Marie Tatibouet also believes that the current public discussion about the nature of money may be benefiting Bitcoin: Bitcoin was created as an alternative option, and its price movements are proof of how more and more investors are opting for that alternative.

However, its unclear whether or not the momentum that Bitcoin seems to have gained from the global events of this year will continue into the future.

Now that Bitcoin seems as though it may have stabilized above $10k, a number of Bitcoin-bullish commentators and analysts seem to have focused in on a new target: $50,000.

For example, Vinny Lignham, chief executive of CivicKey and general partner at MultiCoinCapital, wrote on Twitter that because Bitcoin doesnt conform to the typical Sharpe Ratio calculations, it could be possible that if Bitcoin doubled from here, its likely to go past $50k, which would be a 5x increase from today. This essentially means a 2x increase produces, in effect, a 5x upside.

Additionally, Altcoin Forrest reported on August 1st that $150,000 worth of Bitcoin (BTC) $50K call options for June and December 2021 strikes had been traded on LedgerX over the course of the past several weeks.

Introducing Axiory Intelligence, an Independent Market News-ProviderGo to article >>

The traders who bought these options were essentially paying $1,000 for the privilege of purchasing Bitcoin 440% above the current price in 18 monthsanother factor that seems to demonstrate a strong belief that Bitcoin is on its way up to $50k.

And at the moment, things do look positive for Bitcoins future: Sergei Khtirov, founder and chief executive of Listing.Help, told Finance Magnates that currently, [] there are still huge volumes on the market, and the market is constantly fueled by positive news and the growth of other cryptocurrencies.

Still, though, as good as $12,000 may feel for the moment, it may be too soon to say that Bitcoin will hit $50k anytime within the next 12-24 months.

Indeed, the $50,000 mark for Bitcoin is still far enough away, Khitrov told Finance Magnates.

In other words, there are plenty of steps on the road from $12k to $50k: for example, in our opinion, the previous resistance level at $14000 may be tested in the second half of this year, Khitrov said.

And, of course, there is still a good chance that Bitcoins current momentum above $10k could come to a screeching haltand even reverse.

It is always possible that a Bart Simpson trading pattern will be repeated in case of negative news on the market, Khitrov said. In this case, a retest of the level of $10,000 is quite possible, which remains a significant psychological benchmark. Falling below it will mean the end of the recent bull run.

After all, it wouldnt be the first time that Bitcoin seemed as though it was there to stay over $10k before falling back to much lower levels.

For example, throughout much of June, July, and August of 2019, the price of Bitcoin sat comfortably above $10k, at one point reaching as high as roughly $13,500.

However, in September, BTC seemed to lose its momentum: by midway through December of 2019, BTC had fallen to roughly $7,170.

Indeed, Daniel Worsley, co-counder and chief operating offcer of LocalCoinSwap, told Finance Magnates that it is definitely possible that we will see sub-$10k prices again.

Bitcoin has a history of high volatility, Worsley explained. Although it has reduced in recent times, it is still prevalent. I do not think it will ever sit below this price for long moving forward. I would expect to see strong resistance at the $10k level as this is a big barrier for investor psychology.

On the other hand, though, in 2015, Bitcoin reaching $100 seemed unrealistic, Worsley pointed out. Now, a price that low is unimaginable.

Therefore, Worsley believes that just as Bitcoin could fall back below $10k again, its also possible that Bitcoin could easily hit $50k.

After all, the pandemic is far from over and more and more people are now learning about Bitcoin and cryptocurrencies.

And indeed, it does seem as though more people than ever are interested in learning about and investing in cryptocurrencies as a way to make extra money: a number of cryptocurrency exchanges and fintech apps that support cryptocurrency trading have reported high numbers of new users over the past several months.

Increased levels of interest in cryptocurrencies that have developed recently are also evidenced by the altcoin boom that has been taking place: a number of altcoinsparticularly in the DeFi sectorhave made headlines over the past several months for their positive price performance.

Of course, some of the altcoin success seems to be tied with Bitcoins performance: altcoins play a game of cat and mouse with Bitcoin, Evan Bayless explained. When Bitcoin surges, traders sell alts into Bitcoin, and vice versa.

Therefore, Daniel Worsley believes that the current altcoin season could draw to a close if Bitcoins positive performance keeps up: many low-cap altcoins will be adversely affected by increased Bitcoin prices as current holders will convert these holdings to Bitcoin in an attempt to maximize profit, he said.

However, higher-cap and more established altcoins like Ethereum will likely benefit from increased interest in Bitcoin by proxy as new investors will look at other investment opportunities in the crypto-space and these have a proven track record and use-cases.

On the other hand, though, Evan Bayless believes that we may be at the cusp of another period similar to 2016/2017 where scammers (and some well-intentioned entrepreneurs) attempt to hijack bitcoins momentum by promising bitcoin but better and duping retail investors into parting with their bitcoin in order to get in on potentially higher gains.

What are your thoughts on the recent price movements of Bitcoin? Will Bitcoin reach $50k? How is Bitcoin affecting altcoins? Let us know in the comments below.

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Bitcoin Has Held Over $10k for Nearly Two Weeks: What Happens Now? - Finance Magnates

Down-in-class runners, CRYPTOCURRENCY, TOP SHELF and BASTUSROL, competing on claim tags for the first time ever, face in-form POLLY B at five furlongs round in Saturdays $850,000-800,000 optional claiming event at Caymanas Park.

POLLY B made all at the level,at five and a half furlongs, two Saturdays ago, beating MR UNIVERSE in fast splits of 22.2 and 45.3. However, at 118lb, POLLY B is too close in the scale with CRYPTOCURRENCY, TOP SHELF and BALTUSROL, runners who have been keeping better company.

BALTUSROL and CRYPTOCURRENCY, especially, are strong early runners. Oneil Mullings is aboard CRYPTOCURRENCY, who led super-fit run-on sprinter PRINCE CHARLES on June 27 before resorting to her habit of hauling up.

Last Saturday, CRYPTOCURRENCY was matching strides with FATHER PATRICK before being squeezed for space near the half-mile marker.

Should CRYPTOCURRENCY run an honest race, similar to her recent effort behind two return winners, 2000 Guineas champion, WOW WOW, and UNIVERSAL BOSS, she will be a tough horse to beat in the second of nine races scheduled.

First post is 1:00 pm.

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Cryptocurrency the one to beat in optional claiming event - Loop News Jamaica

The Cryptocurrency Mining Software market study added by Market Study Report, LLC, enumerates an in-depth analysis of the powerful trends prevailing in the industry. This study also encompasses valuable information relating to the profitability prospects, growth dynamics, market size, market share forecast, and revenue estimation of this business vertical. The study descriptively charts out the competitive backdrop of eminent players partaking in the industry share, in consort with their offering portfolio & business strategies.

The recent report on Cryptocurrency Mining Software market is an in-depth documentation of various dynamics at play in the industry space. As per the report, Cryptocurrency Mining Software market is poised to amass substantial revenues while growing with a y-o-y growth rate of XX% over the forecast period.

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Cryptocurrency Mining Software Market Incredible Possibilities, Growth Analysis and Forecast To 2025 - The Daily Chronicle

2gether has revealed a cyberattack in which roughly 1.2 million in cryptocurrency has been stolen from cryptocurrency investment accounts.

Founded in 2017, 2gether offers a cryptocurrency trading platform within the Eurozone for buying and selling without additional fees. The organization's native coin is the 2GT token, which is -- or, at least, was -- due to be issued during 2020 following a pre-sale in Spain.

However, on July 31 at 6.00 pm CEST, the trading platform suffered a cyberattack on its servers.

The unknown threat actors reportedly behind the attack made off with 1.183 million in cryptocurrency in investment accounts, which equates to 26.79% of overall funds.

See also:Cybersecurity 101: Protect your privacy from hackers, spies, and the government

In a stream of Twitter updates posted by 2together CEO Ramn Ferraz Estrada, the executive was keen to emphasize that general wallets and Euro accounts were not impacted, nor were the financial details of payment cards used to deposit funds.

However, user passwords were also compromised in the security breach, and it is recommended that users change them.

2together has not revealed how the security incident took place. An investigation is underway to find out how the cyberattackers managed to obtain access to the company's servers, as well as the full extent of the damage caused.

The cryptocurrency platform added that information is being "gathered" to give to local authorities.

In an update posted August 1, Ferraz, Chairman Salvador Casquero, and Director Luis Estrada said the "extremely difficult situation has brought us all a lot of uncertainty," branding the hackers responsible as "soulless individuals."

The executives said that following the theft, the platform does not have enough funds to cover all of its bases and so an emergency discussion took place with an unnamed "investment firm" to try and secure a cash injection.

However, an agreement was not reached -- and so the only alternative is to offer users the equivalent of their stolen cryptocurrency in the native 2GT token.

CNET:The best home security camera of 2020

"We want to compensate the amount of stolen cryptocurrency (26.79% of your position before the attack) with a volume in 2GT equivalent to the issuance price of 5 cents," the team said. "On top of that, we commit to keep looking, at top capacity and as soon as possible, for additional funds to make up for every single one of your cryptocurrencies."

The executives said that if it was possible to use other funds, they would, but in the meantime, the technical team is working on reestablishing the trading app to reopen access "as soon as possible and with all the security measures available."

A Reddit Ask Me Anything (AMA) will take place in the next few days to answer investor questions, according to 2gether.

TechRepublic:Security analysts: Industry has not solved the talent gap or provided clear career paths

"We hope you can see these hard times and adverse events compensated soon, whether you decide to give us the vote of confidence we're asking you for or not," the team added.

In other cryptocurrency news, last week, China arrested 109 individuals in a massive sting connected to the PlusToken Ponzi scheme.

The South Korean exchange was touted as a high-yield investment for those with little experience in cryptocurrency, while also offering a commission for members who sign up new traders. When the team performed what is thought to be an exit scam, an estimated $3 - $6 billion in deposits was taken, and many of the PlusToken management team fled abroad.

Have a tip? Get in touch securely via WhatsApp | Signal at +447713 025 499, or over at Keybase: charlie0

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2gether hacked: 1.2m in cryptocurrency stolen, native tokens offered in exchange - ZDNet

Courtesy of Matt Sauer, MWSWNB Investments:

Is it a derivative, an asset or a currency? Look at its effect on the efficient frontier. Confidence is the key in any currency.

The advent of crypto assets and specifically cryptocurrency has garnered a significant amount of attention from investors. Is this the dawning of a new asset class or tulip bulbs? While there is diverse opinion on the subject, we observe cryptocurrency from three vantage points:

Asset Allocation

Modern Portfolio Theory constitutes the prevailing wisdom on selecting assets based on forecasted returns of each asset together with the correlation to the others to determine the mix of the allocation. The risk measurement is introduced through the volatility of the returns and is utilized to determine the weights of the assets in the portfolio. The introduction of uncorrelated assets has been labeled a free lunch because of the potential of return not being solely driven by correlated risk. Investors have observed the traditional asset classes of bonds, stocks and cash increase in correlation especially since the correction that occurred in the early 2000s.

The goal of asset allocation is to generate a return pattern for different risk profiles that minimize the drawdown. The more correlated the assets, the increase in difficulty of achieving the goal. The factor that MPT left out is how path dependent asset returns are. Additionally, because financial asset prices are lognormally distributed rather than normally distributed, the tails are fatter than occurs in normal distributions.

One of the fallacies that occurs in asset allocation is the belief that the investors are arbitraging time so short-term volatility is not a concern. This ignores the path dependency of the returns because geometric averages are non-ergodic. The result of the differences in return pattern is labeled the volatility tax which is simply the difference between arithmetic and geometric averages. While the arithmetic averages are simply the average of the returns the geometric returns are the average of the logarithms of the average price changes. A logarithm is a concave function so the bigger the loss the steeper the curve and the greater the penalty paid by the portfolio.

So how does an investor mitigate the volatility tax? We will explore the costs of hedging versus the introduction of non-traditional assets in the portfolio to obtain the objective of maximizing the compounded annual growth rate.

Crisis Proofing

In a recent academic study (Harvey et al. 2019), the goal of crisis proofing portfolios was analyzed. Purchasing rolling S&P 500 puts was costly at 7.4% annualized cost (thus wiping out the expected performance) while also finding the strategy of utilizing 10-year US Treasuries as unreliable. The best solution found was a long/short strategy of quality minus junk utilizing Fama and Frenchs work. This leaves a long only portfolio manager with few options to avoid the impact on the geometric averages of swift downturns.

Introducing crypto assets as a low cost non-correlated asset will provide a different return pattern. After the original transaction costs, the carrying cost of 50-100 basis points per year of the asset only accrue 10-20 basis points overall to the cost of the portfolio for a 2% position. As a diversifying asset it is the cheapest form of owning the largest sigma of returns. This strategy does not require dynamic hedging by either rolling puts or simply buying the dip. These strategies both increase the size of drawdowns while rolling options becomes more expensive as implied volatility increases during swift downturns.

Research has established that the risk-return tradeoff is distinct from stocks, currencies and macroeconomic factors (Liu and Tsyvinski 2018). Additionally, factors specific to cryptocurrency markets (momentum and investor attention) drove returns.

The cost of dynamically hedging a portfolio is too expensive so the best alternative for the portfolio manager is to introduce assets that exhibit anti-fragility. Investments that benefit from chaos are extremely valuable to a portfolio manager and as cryptocurrency exhibits these characteristics once, no portfolio manager will sit on the sidelines the second time.

Portfolio managers must acknowledge that cryptocurrency does not act as a traditional hedge, but it does raise the efficient frontier. This becomes more important if bond prices become more correlated with stock prices and flatten the efficient frontier.

We suggest a new version of MPT that has a z axis that is defined by purchasing power of the portfolio in a basket of currencies. The efficient frontier becomes a plane that is advantaged by owning diversified currencies. This is another building block in crisis proofing portfolios as the debasement of a currency held as the primary currency can be a much greater tax than the volatility.

Asset Class

Critics of cryptocurrency have stated that the growth is not based on investment factors but derivative factors such as money laundering. These attempts to undermine an emerging asset class are not new and have always been part of the growth.

The recent volatility of prices may suggest to some pundits that cryptocurrency is not an asset class but a speculative game. This is the expected reaction to volatility as common stocks were treated with the same apprehension following the 1929-32 price movement. Lawrence Chamberlains 1931 quote in Investment and Speculation was that only bonds could be bought for investment. Obviously, this quote was a result of market movements at that time rather than an attempt to protect wealth against inflation in the long run but that is the point. Todays fears over volatility are tomorrows missed returns.

High yield bonds have long been known by their pejorative title of junk bonds. Investors were lambasted in 1990 for being so foolhardy as to have invested in an asset class that was down 8.46% when high grade bonds were up 8.96%. There was a media frenzy over the death of junk bonds as an asset class. However, 1991 was a rebound year as junk was up 43.23% versus 16% for the high-grade bonds. Back to back 18% years in 1992-93 put junk back to asset class status and it has been high yield ever since.

Speculators are deemed to trade strictly on greed and fear. Invoking Keynes beauty contest analogy, they are evaluating what the other speculators will do and attempt to do it first. The coordination game they are playing involves looking for the Schelling point for the path of least resistance in the short run. Therefore, momentum and investor attention has driven the price, investors are trading short term momentum from the media coverage and have been utilizing investor attention to create liquidity both up and down. As the asset class matures, the Schelling point is not media opinion but focal point investors. This allows institutional investors to coordinate without communication. As the allocations of the new asset class are made independently, the coordination game played by market participants is utilizing their own Schelling point.

Asset classes become relevant because of recent superior performance whether it is quality stocks, gold or high-grade bonds. Institutionalization occurs after the speculator fallout as investors slowly migrate to the investment.

Currency

Currencies are the domain of countries because of taxing capability, regulation and the ability to affect supply. The idea that cryptocurrency is a true currency has been a question. The growth in government debts and obligations globally has not been perceived by the financial markets as an issue yet the risks are mounting. The dollar is no longer backed by gold or any liquid asset other than taxing ability. Bretton Woods is only a memory.

There is no risk that an investor in United States Treasury bonds will not be repaid principal. The question is what the purchasing power of that principal in terms of a basket of other currencies, oil and gold will be.

What are the experts thinking and writing about government policies and the effects on purchasing power?

International Monetary Fund viewpoint

A recent IMF working paper espoused the following thoughts on debt:Sovereign debt is a Janus-faced asset class. In the best of times it relaxes the domestic constraint on savings, smooths consumption, and finances investment. Investors see it as a safe haven, as delivering alpha, and as a means of portfolio diversification. In the worst of times it is associated with debt overhangs, banking collapses, exchange-rate crises and inflationary explosions. Investors see it unenforceable, illiquid and prone to messy debt workouts.

Currently global debt is about $244 trillion and about 318% of GDP. In January 2019, the International Monetary Fund warned governments to reign in debt and build buffers against risks. If a government can borrow at very low rates or in some cases negative rates, the path of least resistance is to increase the money supply and borrow more to keep the world economy rolling.

United States Congress viewpoint

Congressman Brad Sherman has proposed cryptocurrency be banned because it poses a threat to the dollars role as a reserve currency and the fact that the international settlement of oil is in dollars. As unworkable a policy that he suggests, there is a hint of fear among those responsible in the United States for debasing the dollar.

Our viewpoint

Developing countries have gold and currency reserves to underpin their currency. Developed countries utilize sovereign stability to create demand for their currency and then exploit the demand by increasing the amount of currency to maximize domestic asset values. As governments find it more difficult to sustain asset values necessary for tax receipts the debasement will continue. The global lack of the velocity of money supply has had governments pushing on a string since the last asset crisis of 2009. The next crisis will be led by asset price downturns but will morph into a crisis of currency value as governments try to flood the market with paper money to support asset prices. In this case the assets that rise in value will not be tied to a currency, be portable and not debasing.

What exactly is Cryptocurrency?

Cryptocurrencys strength is that it can solve several fundamental problems in the global marketplace. Like having the transient properties of being a solid, liquid and gas; crypto assets can function in as a derivative, an asset and a currency. The investment holding that reconstitutes Modern Portfolio Theory and adds a z axis of currency risk also allows for a solution that is the new efficient frontier as it progresses into an asset class that is anti-fragile. Inflation protection is the tangible outcome of rethinking risk as defined by purchasing power across all currencies rather than the loss of it in one.

--Matt Sauer, MWSWNB Investments. Originally published here.

Continued here:

What Really Is Cryptocurrency? - TheStreet

BTC/USD continues trading below $12,000 although bulls are getting closer to the crucial resistance level.

ETH/USD has stabilized around $400 which is the most important resistance point in the short-term.

XRP/USD has been able to stay above $0.30 in the past 24 hours while the daily 100-EMA and the 200-EMA are getting closer to a bull cross not seen since two years ago.

According to Genesis, a digital currency broker, and DeFi leader, Q2 marked around $2.2 billion in originations which is a 324% increase over the last year.

German police have seized around $30 million in crypto from movie2k.to, a streaming service that used to hold illegal movies. It seems that the revenue of the website was used to buy Bitcoin worth around $30 million today. The report alleges that the sites programmer has acquired more than 22,000 Bitcoin in total.

A new crypto derivatives exchange called Alpha5 has raised more than $1.5 million in their initial seed funding round. Announced around December 2019, Alpha intends to become an all-in crypto exchange with many unique features like a late liquidity pool and credit proxy futures.

What cant kill Bitcoin, makes it stronger.

Mark Wittkowski

Continued here:

Cryptocurrency Market News: $1.2 billion in Bitcoin was withdrawn out of exchanges in the past week - FXStreet

This year marks Paxfuls fifth year in operation and its taking some time to reflect on its journey thus far.

Thats not to say the firm has anything to regret, quite the opposite.

Paxful now boasts 4.5 million registered wallets and recently reached a trading volume of $4.6 billion. On top of that, each year has seen one million new users signing up to the platform with an additional two million expected to join Paxful by years end.

On its journey, the firm has learned a few lessons and one of those lessons is that while there might be a few big players in the cryptocurrency sector, there is still room for newcomers.

We welcome seeing more players enter the space, as it raises awareness and educates the public on the crypto-economy and P2P finance. It contributes to the growth of economic opportunity and financial inclusivity for people around the world as more individuals are using bitcoin in their everyday lives, says co-founder and chief executive officer at Paxful, Ray Youssef.

So with opportunity seemingly available, what can Paxful share with others looking to get into the space.

It should be obvious that the safety of users should be paramount but above and beyond implementing safety measures, its about constantly investing in new safety measures, keeping up with compliance and managing risk.

Over and above that, many users are still very confused by cryptocurrency and incidents such as Silk Road and Dread Pirate Roberts, and robberies of cryptocurrency exchanges dont help the cause.

Its for this reason we see firms like Paxful and Luno embarking on education campaigns to inform users about what cryptocurrency is and why its rather safe.

Cryptocurrency is popular all over the world, but Paxful says that in emerging markets there is a growing appetite for financial tools.

Bitcoin continues to change the way people manage their finances. Our customers in Latin America, Africa and Southeast Asia are getting around the limitations of their financial systems by realizing the full potential of the Bitcoin-economy, using it for both personal finance needs and entrepreneurial ventures including paying bills, purchasing goods and services, and building businesses, says Youssef.

But beyond just appetite from users, there is growing demand for professionals versed in blockchain.

Mindful of this, Paxful highlights how important investing in the next generation of talent is. We saw this last week with the announcement of several free webinars that the public can attend to learn about cryptocurrency, and blockchain.

In addition to nurturing talent, Youssef also says that partnerships in this industry are vital.

We are witnessing more industry collaborations that successfully play to each others strengths, adding value, increasing functionality and unlocking more trading options for customers. We are always excited to partner with businesses who share our passion and vision of economic freedom, a world where everyone has equal access to finance, no matter who they are, or where they are from, the co-founder says.

Partnerships of note include Paxful and OKEx, one of the largest cryptocurrency exchanges in the world.

Locally, weve also seen partnerships between Luno and several firms which have made the platform more accessible or even earn interest on cryptocurrency holdings.

Its clear that rather than going at it alone, sometimes, especially when it comes to managing digital currency, a trusted partner may be a better avenue to pursue.

View post:

What Paxful has learned over five years in the cryptocurrency space - htxt.africa

When it comes to cryptocurrency-related crime, every year seems to have its own particular flavor. 2018 was the year of massive exchange hacks (remember Coincheck?); 2019 was seasoned with an air of massive ponzi schemes (PlusToken, OneCoin) with a few scandals thrown in the mix (QuadrigaCX, anyone?)

So far in 2020, however, the most memorable crypto-related criminal moments seem to be taking a new shape. As cryptocurrency exchanges have continued to beef up their security measures, and global regulators and law enforcement are learning how to curb crypto crime, criminals are increasingly attacking from a new angle: socially-engineered cyber attacks.

The Most Diverse Audience to Date at FMLS 2020 Where Finance Meets Innovation

Of course, these kinds of manipulative tactics have been a part of the cryptosphere since its inception: even outside of the cryptosphere, cyberattacks that exploit human trust are as old as time (or at least as old as the internet). Phishing, stolen identity scams, and many other kinds of exploitative scams are, unfortunately, very popular.

So far this year, socially-engineered attacks appear to be playing an outsized role in cryptos scam landscape. Is 2020 cryptos Year of the Phish?

After all, it certainly seems that the most memorable crypto-related cybercrime story of the year so far was based on multiple angles of trust exploitation.

On July 15th, the Twitter accounts of dozens of high-profile individuals across political and celebrity spheres tweeted out messages saying that they would double the amount of Bitcoin that was sent to their wallet addresses and send it back. This is called a Giveaway scam.

Dozens, or even hundreds, of unsuspecting users sent a total of more than $100,000 to the bitcoin addresses they believed to be associated with Barack Obama, Elon Musk, Joe Biden, and many others.

How did this happen?

Legend has it that a vampire cant enter your house unless they are invited inand, sure enough, when 17-year-old Graham Ivan Clark was able to access and post from the Twitter accounts in questoin, it was because an unsuspecting Twitter employee accidentally handed him the keys to the kingdom.

Indeed, Clarks attack was designed to manipulate and exploit human trust from beginning to end: he reportedly used phishing email tactics to convince a Twitter employee that he was a coworker in the companys IT department. He then got the employee to provide their credentials, allowing him to access Twitters God mode.

However, Graham Ivan Clarks attack on Twitterwhile it may be the most famous crypto-related cyberattack this yearis only one of many socially-engineered cyberattacks in the crypto space.

In fact, just this week, attacks that closely resembled Clarks attack on Twitter have rocked the world of Youtube.

Specifically, hackers appear to systematically be taking over prominent Youtube channels. They hackers then change the names of the channels, and then post videos urging viewers to send Bitcoin with the same promise that Clark offered victims on Twitter: that their coins would be doubled and sent back to them.

Business Insider reported that unlike the Twitter scams, the exploited Youtube accounts dont appear to have been compromised through a widespread security breach of Youtubes internal operations. Rather, hackers appear to have only gotten ahold of the credentials for the specific accounts theyre interested in hacking.

The hackers also appeared to take advantage of the SpaceX landing that occurred last week as a means of getting more clicks on their videos: the names of the compromised channels were changed to terms like SpaceX or Elon Musk to exploit the increased interest in SpaceXs collaboration with NASA.

Esports commentator Rod Breslau also pointed out that some of the channels livestreamed Bitcoin scam videos may have used viewbotsbots that artificially inflate the number of views that a channel hasto heighten their visibility.

Youtubes crypto hack problem isnt just limited to last weeks events.

In mid-July, Finance Magnates reported that a number of Youtube accounts were co-opting the identities of a number of prominent figures within the cryptosphere to make the same kinds of fraudulent promises: send us your crypto, and well double it and send it back.

On July 12th, Charles Hoskinson, the founder of the Cardano (ADA) cryptocurrency network, posted publicly on Twitter about the scams: it has come to my attention that a scam has been floating around using my conference keynote to promote a giveawaythis is a scam. Please report it to YouTube. We will take legal action if we can against those responsible.

Around the same time, however, CoinDesk reported that a number of other fake videos and accounts had sprung up under the identities of Ethereum founder Vitalik Buterin, Gemini founders Tyler and Cameron Winklevoss, and others.

Other than removing reported videos, its still unclear what Youtube is doing to try and curb these scams. A Twitter user alleged that the fraudsters behind the fake Youtube videos are also putting [their videos] in youtube ads which is insane, he asked. Is youtube ignoring this for revenue? How are they not vetting the ads?

Finance Magnates reached out to Youtube, but didnt immediately receive a response. Comments will be added as they are received.

In addition to co-opting the identities of individuals within the cryptocurrency sphere, however, hackers also seem to be increasingly taking on the identities of platforms.

Specifically, blockchain trading and analytics firm Whale Alert published a study in July with findings that crypto scammers are increasingly building fake cryptocurrency exchanges.

Some of these fake exchanges may take on the appearance of existing, legitimate crypto exchanges, while others may set up shop on their own before disappearing with users funds. The fake exchanges are also a convenient way for hackers to rack up large amounts of users personal data: identity records, credit card numbers, bank account information, and more.

In its report, Whale Alert commented that the change in method and the increase in quality and scale suggests that entire professional teams are now behind some of the most successful of these fake exchanges, and that it is just a matter of time before they start using deepfakes, a technique that will surely revolutionize the scam market.

And indeed, on the whole, Whale Alert noted a trend in cryptocurrency fraud after the mid-July Twitter attack: the scale and the boldness of the attack confirm our fears that the scammers are becoming more professional and dangerous.

Specifically, what started with mostly bulk sent sextortion emails and malware has now evolved into fake enterprises offering round-the-clock customer support with dozens of websites and thousands of fake social media accounts used for promotion.

This apparent increase in professionally built, socially-engineered cyberattacks appears to also have dramatically increased the amount of money that hackers have managed to abscond with.

Indeed, Whale Alerts report found that scammers BTC income appears to have surged throughout the first six months of this year.

So far we have been able to confirm 38 million US dollar in bitcoin alone stolen by scammers over the past 4 years (excluding Ponzi schemes, which are a billion-dollar industry on their own), the report said, $24 million of which [were stolen] during the first 6 months of 2020.

At the moment, Whale Alert seems to believe that this will only get worse: by the end of 2020, we predict [the crypto scam market] will have grown over twenty-fold since 2017 to an annual revenue of at least 50 million US dollars.

Can anything be done to stop the growth of the cryptocurrency scam market?

It seems that yes, falling victim to these kinds of scams is certainly preventable: the social media platforms that are being used to spread these scams are certainly taking action.

Twitter, for example, told users that were accelerating several of our pre-existing security workstreams and improvements to our tools. We are also improving our methods for detecting and preventing inappropriate access to our internal systems and prioritizing security work across many of our teams.

Other platformsincluding Youtubeappear to have taken an approach to quick response and removal of fraudulent cryptocurrency-related accounts and videos.

Additionally, regulators and law enforcement agencies around the world seem to be continuously learning and developing strategies for dealing with crypto-related fraud.

However, Whale Alert alleges that the primary responsibility of fraud prevention at the moment lies on the cryptocurrency community.

For example, while crypto giveaway scams may seem like they may only affect the most gullible among us, legitimate blockchain and cryptocurrency platforms often hold legitimate crypto giveaways.

Therefore, established blockchain companies play a big role in normalizing the idea of free money through giveaways and should be more thoughtful about what message they carry outwards and stop with these kinds of promotions altogether, Whale Alert argues.

Additionally, crypto companies should use their power and presence to effectively communicate the risks of the fraudulent crypto world to their users: as the gateway between fiat and cryptocurrencies, exchanges especially should be actively educating newcomers on the dangers in blockchain and prevent them from sending anything to known or suspected scam addresses.

More here:

Year of the Phish? Socially-Engineered Attacks Populate Crypto in 2020 - Finance Magnates

Ripples investment arm Xpring is throwing three more years of support into the development studio XRPL Labs and its crypto banking platform Xumm in a push for mass adoption.

Warren Paul Anderson, Xprings head of developer relations, says the company views the Xumm platform as one of the best representations of the XRP Ledger. The banking app allows users to hold and spend Ripples native token XRP with the goal of allowing people to be their own bank. In the long haul, XRPL Labs says Xumm plans to give people a way to spend dollars, euros, and XRP without the assistance of a financial institution.

First unveiled in 2019, Xumm has been in public beta since March. XRPL Labs says Ripples continued support will help drive the widespread adoption of its XRP-focused platform.

With Xpring supporting XRPL Labs with an additional investment to support the next three years of growth and development of its Xumm App & Platform, XRPL Labs will be able to focus on their road map, working towards adoption, XRP ledger accessibility & building the bridge between consumers, businesses and developers.

The startups new mid-term to long-term roadmap for Xumm includes adding fiat on and offramps while also introducing a new amendment to the XRP Ledger called Hooks. The proposed change will offer new business logic functionalities such as automatic saving and tipping as well as blocking of transactions related to scam activities.

Featured Image: Shutterstock/Willehard Korander

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Ripple Reveals New XRP Investment in Push for Mass Adoption of Cryptocurrency Banking Platform - The Daily Hodl

MEXICO CITY, MX / ACCESSWIRE / August 5th, 2020 Venture capital and blockchain incubator Krypital Group has announced plans to enter the LATAM crypto market with the upcoming launch of the Mexo crypto exchange. Set to launch on August 20th with backing from Krypital Group, Mexo is a cryptocurrency exchange designed to serve the needs of Latin American crypto users. Growing demand for digital assets in Mexico and across LATAM inspired the creation of Mexo as a platform tailored to cater to the unique needs of this region.

Built on a foundation of high security, deep liquidity, and excellent customer service, Mexo is a modern exchange for seamlessly entering the cryptocomy. It offers spot trading, contract trading, trading academy, peer-to-peer marketplace, and professional local support team while giving users exposure to a full list of trading pairs and features.

Maggie Wu, CEO & Co-Founder of Mexo and Krypital Group, said: For years, we have been at the forefront of blockchain evolution and have seen the LATAM market gradually emerging as a major player in the space. In our eyes, the Latin American market and especially Mexico has the biggest potential to be the next center of blockchain.

Adrian Diaz Lujan, COO of Mexo, said: The cryptocurrency community in Latin America has been forced to endure suboptimal platforms that arent tailored to their needs and whose features are limited. I am excited that we finally have a platform like Mexo, with a robust technological structure that provides security, liquidity, and which is focused on communities and users in Latin America.

David Yao, CMO of Mexo, said: LATAM cryptocurrency users have been waiting a long time to access advanced products like contract trading with leverage as well as a full suite mobile app to manage their portfolio in a market that runs 24/7. Mexo users will be able to access powerful trading tools in the palm of their hand and connect with local customer service in Spanish. This will benefit the entire region.

Mexican and LATAM cryptocurrency traders with a range of experience and investment levels comprise Mexos target market. Novice and pro traders, OTC, P2P, and market makers are all catered for on Mexos purpose-built platform.

Mexico is estimated to have more than 800,000 cryptocurrency users, who currently have limited access to new products and growth markets, including derivatives and defi assets. Mexo will provide a safe environment for these individuals to familiarize themselves with such products and to advance their technical and fundamental skills to trade more effectively. Features include:

Mexo will launch in Mexico and Latin America on August 20th, giving cryptocurrency investors a new way to trade, learn, and profit.

About Mexo

Mexo is a cryptocurrency exchange developed by a professional team with years of industry experience. Localized for Mexican and LATAM traders, Mexo speaks their language and offers the products that Latin American investors are seeking. The platform provides the most reliable and user-friendly way to buy, sell, and trade cryptocurrency while learning practical skills to make smarter investment choices.

About Krypital Group

A global venture capital firm and blockchain incubator, Krypital Group has nurtured projects that have generated a total value of more than $1B and has brought in more than 2 million users to top blockchain projects. The company, which has invested in Filecoin and Tezos and incubated projects such as CyberMiles and ArcBlock, is the recipient of two Outstanding Awards by Nova Global Blockchain Investment Institution.

Contact for Krypital Group & Mexo.ioJane LuoKrypital GroupJane@krypital.com

SOURCE: InboundJunction

View source version on accesswire.com: https://www.accesswire.com/600478/Krypital-Group-to-Enter-LATAM-Cryptocurrency-Market-With-Mexo-Exchange-to-Launch-on-August-20th

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Krypital Group to Enter LATAM Cryptocurrency Market With Mexo Exchange, to Launch on August 20th - IT Business Net

In reply to an RTI submitted earlier, the Finance and Department of Economic Affairs (DEA) has said that the inter-ministerial committees cryptocurrency bill is awaiting approval of the government. Several ministries are currently examining the bill.

In February 2019, the inter-ministerial committee had submitted the bill titled Banning of Cryptocurrency and Regulation of Official Digital Currencies Bill 2019. Former DEA Secretary Subhash Chandra Garg heads the committee.

Mohammed Danish, lawyer and co-founder of Crypto Kanoon, had filed an RTI with the DEA requesting the status of the bill. In a short reply, the DEA wrote:

The government has set up inter-ministerial committee (IMC) for examining the issues of cryptocurrencies under the chairmanship of Secretary (EA).

The report of the IMC on VCs [virtual currencies] has since been submitted by its members, but is awaiting approval of the government. The report and bill now be examined by the government through inter-ministerial consultation by moving a cabinet note in due course.

Danish explained that the bill in question proposes a blanket ban on all cryptocurrency-related activities. He added that the bill prescribes punishments for every activity from mining, holding, advertising, promoting, buying, and selling digital assets.

He added that it is unclear and quite pre-mature to predict what the Ministry of Finance will do. However, it appears that the ministry does not want to proceed with this crypto bill for parliamentary clearance in the present form. He added:

If the govt. decides to pass a law banning crypto, this law can be challenged by crypto business, traders, or enthusiasts based on various rights available to them under the Constitution.

More here:

Indian government yet to approve the cryptocurrency ban bill - FXStreet

By: Steven Hay | Last updated: 4/24/20

Cryptocurrencies are the latest evolution of digital money. But what exactly is a cryptocurrency and what are its characteristics? This post explains it all, simply.

Cryptocurrencies are digital coins that arent controlled by a central authority but through a network of equally privileged participants that follow an agreed set of rules. The three ingredients that make a cryptocurrency are: A peer-to-peer (p2p) network, cryptography, and a consensus mechanism.

Thats the definition of a cryptocurrency in a nutshell. For a more detailed definition keep on reading, heres what Ill cover:

The term cryptocurrency is a contraction of cryptographic currency. While a cryptocurrency is a form of digital currency, there are many digital currencies today that arent cryptocurrencies.

For example PayPal, Zynga chip and even our traditional fiat currencies (USD, EUR, etc.) are mostly digital.

In March 2018, Merriam-Webster announced that they would include this term in their dictionary. Their definition is as follows:

cryptocurrency noun cryptocurrency krip-t-kr-n(t)-s , -k-rn(t)-s : any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions. First Known Use: 1990

Lets try to break this confusing sentence down to the 3 main ingredients that constitute a cryptocurrency.

Unlike traditional digital currencies, cryptocurrencies dont rely on any central authority to validate or facilitate transactions.

Instead, theres a network of equally privileged participants that validate and update transactions in a shared ledger called a blockchain.

Cryptography is the art of secure communication in a hostile environment. Cryptography is used in cryptocurrencies so peers can communicate securely without the need of a central authority to validate their messages.

Now that we have a group of equally privileged participants that can communicate securely, we need to establish rules for our cryptocurrency. These rules are known as a protocol and they also include a consensus mechanism.

The consensus mechanism is a rule regarding who gets to update our shared ledger of transactions. In Bitcoins case, the mechanism used is called Proof of Work. Different cryptocurrencies use different consensus mechanisms.

If we visit Websters definition again after understanding these core ingredients, you can see that it makes much more sense.

While all cryptocurrencies claim to be decentralized, the truth is far from it. In reality, you have completely decentralized currencies like Bitcoin and centralized cryptocurrencies like stablecoins and Ripple.

Centralized cryptocurrencies are usually issued by a for-profit company that established the cryptocurrencys protocol and also determines who can participate in the network.

A good example would be the upcoming Facebook Libra a coin to be issued by Facebook, that while all participants in the network are equal, the network itself isnt open to everyone.

Centralized cryptocurrencies can be looked upon as an upgraded version of traditional fiat currencies, as they are still prone to all of the risks of centralized management (fraud, negligence, control).

Decentralized cryptocurrencies are usually issued by a non-profit organization. With decentralized cryptocurrencies, the playing grounds are leveled for all to participate.

The classic example for this would be Bitcoin. Anyone in the world can participate in the Bitcoin network, receive funds or become a Bitcoin miner, without the need to request permission.

Truly decentralized cryptocurrencies are completely transparent, open to all and censorship resistant.

Its important to note that while some cryptocurrencies are indeed built as decentralized, they are in fact centralized since not enough people are participating in their network. This makes the decentralized platform effectively controlled by a small number of participants.

The main takeaway here is that true decentralization is a matter of both design and adoption.

One important distinction that needs to be made is the difference between cryptocurrencies and tokens.

Cryptocurrencies are coins that have all of the three ingredients Ive mentioned above, hence creating their own blockchain of transactions.

Token, on the other hand, are a representation of an asset that resides on an already existing blockchain. For example, Tether is an ERC-20 token that uses the Ethereum blockchain to operate.

So tokens can be considered as a sub coin of a certain cryptocurrency that has its own blockchain and has the ability to run code that creates tokens (also known as the ability for smart contracts).

Tokens can start as part of an already existing blockchain and then convert to their own cryptocurrency. For example, EOS started as an ERC-20 token and later on became an independent cryptocurrency.

Tokens can be divided into two main categories utility tokens and security tokens.

Utility tokens are tokens that promise the future use of a product or service. They arent meant to be an investment, they have a utility.

Security tokens, on the other hand, are tokens that represent tradable financial assets, a share or a bond from a company, for example. They are meant to be a form of investment.

Cryptocurrencies use blockchains in order to operate in a decentralized manner. Cryptocurrency is the coin and blockchain is the ledger of transactions that documents the coins transactions.

Another way to describe this is that blockchain is the technology behind cryptocurrencies.

Having said that, a blockchain is, in fact, the cryptocurrency itself as cryptocurrencies are just a record on a ledger (theres no actual physical coin). But for the sake of distinction, people use cryptocurrency to describe the end and blockchain to describe the means to that end.

Cryptocurrencies are the next evolution in digital currencies. Money has come a long way from commodities to coins, paper and finally digital information controlled by a central authority. Today, in its next phase of evolution, money is becoming decentralized through the use of cryptocurrencies.

Its important to distinguish between centralized cryptocurrencies, decentralized cryptocurrencies, and tokens. Hopefully, this guide made the difference clearer.

What are your thoughts about cryptocurrencies? Are they indeed the future of money? Let me know in the comment section below.

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What is Cryptocurrency? A Short Beginner's Explanation ...

This article analyses the top 10 cryptocurrencies by market capitalisation.

Beginning with the largest, the top 10 are currently Bitcoin ($BTC), Ethereum ($ETH), XRP ($XRP), Tether ($USDT), Bitcoin Cash ($BCH) , Litecoin ($LTC), EOS ($EOS), Binance Coin ($BNB), Bitcoin SV ($BSV) and Tezos ($XTZ).

There are approximately 5,392 cryptocurrencies being traded with a total market capitalisation of $201bn (as of April 22, 2020).

Our site is packed full of free guides, crypto news, jobs, news about jobs in blockchain technology, cryptocurrency analysis, and lots of features such as women in blockchain. Please take a look at our site and use the search bar at the top of this page to make use of our resources. We have a real passion for helping people understand the world of cryptocurrencies and blockchain technology.

As a starting point, here are a few facts about the top 10 cryptocurrencies and some latest news for each one.

In August 2008, the domain name bitcoin.orgwas registered. On October 31st 2008, a paper was published called Bitcoin: A Peer-to-Peer Electronic Cash System. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.

The paper outlined a method of using a peer-to-peer network for electronic transactions without relying on trust. On January 3rd 2009, the Bitcoin network came into existence. Nakamoto mined block number 0 (or the genesis block), which had a reward of 50 Bitcoins.

Ethereum was launched by Vitalik Buterin on July 30th 2015. He was a researcher and programmer working on Bitcoin Magazine, and he initially wrote a white paper in 2013 describing Ethereum. Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldnt get buy-in to his proposal.

The development was funded by an online crowdsale between July and August 2014. The system went live with 11.9 million coins already mined for the crowd sale (about 13% of the total supply in circulation). Following the collapse of The DAO project in 2016, Ethereum was split into two blockchains. The new version became Ethereum and the original blockchain continues as Ethereum Classic.

Ripple is a real-time gross settlement system (RTGS) developed by the Ripple company. It is also referred to as the Ripple Transaction Protocol (RTXP) or Ripple protocol. It can trace its roots to 2004 when a web developer called Ryan Fugger had the idea to create a monetary system that was decentralised and could effectively allow individuals to create their own money.

RipplePay.comwas launched in 2005 to provide a secure payment system for members of an online community via a global network. Jed McCaleb began developing a digital currency system in 2011 in which transactions were verified by consensus among members of the network, rather than by the mining process used by Bitcoin which relies on blockchain ledgers. This new version of the Ripple system was designed to eliminate Bitcoins centralised exchanges, use less electricity than Bitcoin, and perform transactions much more quickly.

Story continues

Ripple was launched in 2012 to facilitate secure, instant global transactions supporting tokens representing fiat currency, cryptocurrency or any unit of value.

The EOS.IO platform was developed by private company block.oneand released as open-source software on June 2nd 2018. One billion tokens were distributed on the Ethereum blockchain by block.one. EOS is based on a white paper published in 2017.

Litecoin was released in October 2011 by Charlie Lee, a former Google employee. It was a fork of Bitcoin with the main difference being a smaller block generation time, increased maximum number of coins and a different script-based algorithm.

Bitcoin Cash was born out of the idea of making Bitcoin more practical for small, day-to-day payments. In May 2017, Bitcoin payments took about four days unless a fee was paid, which was proportionately too large for small transactions. A change to the code was implemented and Bitcoin Cash was born on 1st August 2017.

Tether was issued on the Bitcoin blockchain. In their own words Tether converts cash into digital currency, to anchor or tether the value of the coin to the price of national currencies. So, the value is meant to mirror that of the US dollar and each unit of Tether is backed by $1 held in reserve.

One of the main uses of Tether is to facilitate trading between cryptocurrencies with a rate fixed to the US$ allowing traders to take advantage of trading opportunities.

Stellar was founded in 2014 by Jed McCaleb and Joyce Kim. At launch it was based on the Ripple protocol but the network eventually forked. Stellar is an open source protocol for exchanging money where servers use the internet to connect to and communicate with other Stellar servers, forming a global value exchange network.

The TRON Protocol is pitched as one of the largest blockchain-based operating systems in the world, offering scalable, high availability and high throughput support that underlies all the decentralised applications in the TRON ecosystem.

An ICO campaign took place in September 2017 and raised US$70 million. The coin is called the TRONix (TRX).

To kick the month off weve had an extra $19B enter the market allowing Bitcoin to break past the previous resistance weve seen in 2019 and see all new highs. Bitcoin now is trying to break through major resistance of $6,000 which held for many months during 2018. Weve also seen a large premium on the exchange Bitfinex due to the news around Tether and reserve funds.

To kick the month off weve had an extra $16B enter the market allowing Bitcoin to break past the previous resistance weve seen in 2019. Tron ($TRX) has left the top ten leaderboard and has been replaced with Cardano ($ADA). Tether has dropped a few places this month as the sentiment is generally more bullish and people are taking cash out of Tether to buy back into the market.

This month we see a new entry in the top 10 as Binance Coin enters for the first time ever. Bitcoin SV drops out into the number 11 spot. The remaining top 10 are the same with some changes Ripple and Ethereum have traded positions once again and TRON has dropped two places.

The value of cryptocurrencies has grown this month with the value of the top 10 pushing back over $100bn following last months drop to $97bn.

The top 10 remains unchanged from last month in terms of the cryptocurrencies present, but there has been extensive jockeying for positions. Apart from the ever-present Bitcoin in the number-one spot, all the other cryptos have moved. TRON improved by two positions in the rankings, Stellar Lumens moved down three, and the remaining coins have seen a slight move up or down.

There has been a prolonged bear market in crypto, and the story this month is that from a market cap of $187bn on November 7th, the top 10 cryptocurrencies now have a combined market cap of $97bn. That is a remarkable drop in value over three months.

TRON reenters the top 10 at the expense of Cardano. This months big story is Ethereum regaining the number two spot from Ripple. It was a big story when Ripple became the second largest cryptocurrency by market capitalisation during November:

Ethereums rally is due to the anticipation of a series of upcoming hard forks. Ethereum Classic Vision will be airdropped to Ethereum holders at a ratio of 3:1 on January 11th. The Ethereum Nowa fork, meanwhile, is planned on January 12th:

There has been some minor movement up and down for the remaining top 10.

This month has seen a dramatic fall in values, and there has been a lot of movement in the top 10. Bitcoin SV appears as a new currency and is a new entrant following the Bitcoin Cash fork. Ripple makes it into the number two slot at the expense of Ethereum as the flippening happens. The price crash of the last month has led to changes in the rest of the top 10 with various currencies moving position.

These last two weeks have seen the biggest change in the Top 10 this year. Bitcoin Cash drops out following the Bitcoin Cash fork. Ripple makes it into the number two slot at the expense of Ethereum as the flippening happens. Prices have crashed over the last two weeks. This has led to dramatic changes in the rest of the Top 10 with Tether gaining the most places. TRON makes it back into the Top 10. It has been in the Top 10 this year and is always close but the removal of BCH makes room for it to take the last spot in the Top 10. There is frequent movement in the top 10 as values fluctuate, so expect older currencies to drop out and re-enter the list regularly.

This month sees all the cryptocurrencies remaining fairly stable in terms of market capitalisation. The only currency that has changed significantly is Tether which sees its market cap fall by $1.04bn. This has dropped it from eight to ten in the rankings allowing Cardano and Monero to move up one place each.

This month sees all the cryptocurrencies remaining in the same position in the Top 10. Whilst there is no change in rankings to report, its interesting to note that Ripple actually gained approximately $10bn during the month. Every other currency (except Tether) lost value.

The total value of the top 10 cryptocurrencies (as of 3rd September 2018) is $200.79bn. This is a drop of $27bn compared to the previous month (August). This is a dramatic fall of $80bn since June where the total value stood at the $281bn mark.

This month sees Monero as a new entrant to the Top 10. Tether moves up to number eight whilst IOTA drops out of the Top 10 altogether. All the other cryptocurrencies are in the same spot as last month.

The Top 10 remained the same as Julys. Litecoin dropped from the number six spot to number seven; Stellar Lumens rose from the number eight spot to number six and Cardano dropped one place to number eight.

Themarket capitalisation of the Top 10 cryptocurrencies grew by$4.34bn in a month (August 2018 vs July 2018).

There were 2,041 cryptocurrencies with a total market capitalisation of $253bn.

TRON dropped out of the top 10 into the number 11 spot. It was replaced by Tether.

The market capitalisation of the Top 10 cryptocurrencies fell by $57 billion in a month (July 2018 analysis compared to the June 2018 analysis).

There were 1,894 cryptocurrencies with a total market capitalisation of US$275 bn.

Bitcoin SV came into existence following the Bitcoin Cash chain split on November the 15th 2018. The chain split was caused at two competing software implementation for the Bitcoin Cash blockchain (BitcoinABC and Bitcoin SV) broke away from consensus, and was subsequentlysupported by two different groups of miners. After the time of the fork, users could claim tokens on each side of the fork if they had previouslyheld tokens on the old Bitcoin Cash chain.

Bitcoin Cash ABC is now being recognised by most exchanges as Bitcoin Cash (the name of the original pre fork currency) with a separate listing for Bitcoin Cash SV.

Here is the original post:

Top 10 cryptocurrencies by market capitalisation

Editor's note: This column has been updated to disclose the writer's advocacy of blockchain technology--the underpinning of all cryptocurrencies--and a Consumer Financial Protection Bureau warning about these investments.

Cryptocurrency (digital currency) is taking off this year. New millionaires are being made almost daily as Ethereum, Bitcoin, NEO, Litecoin, Ripple, Stratis, and other cryptocurrencies reach all-time highs. It is becoming somewhat of a modern-day gold rush.

Bitcoin is worth thousands of dollars. Ethereum is worth hundreds of dollars. For coins that were once worth only pennies, investors have made serious money in the past few years.It should be noted here that I am an advocate ofblockchain technology.

Bitcoin might be the oldest, but it's not the only cryptocurrency on the block. In fact, the majority of people getting into cryptocurrency are flocking to Ethereum. Ethereum has had the most impressive gains this year after recently being the first cryptocurrency to be backed by major corporations such as Microsoft, Samsung, JPMorgan Chase, and others in what's being called the Enterprise Ethereum Alliance. Ethereum does for code and programming what Bitcoin did for financial transactions. For simplicity's sake, think of Ethereum like a more advanced and sophisticated Bitcoin backed and utilized by major corporations because of its technological advances and clear pathway to building a decentralized internet.

Editor's note: Bitcoin and digital currencies, as with any investment, may involve the risk of loss. The Consumer Financial Protection Bureau has warned that virtual currencies, including Bitcoin, carry "significant risk" to consumers.

One Ether (Ethereum's crypto token) was worth as little as $12 earlier this year, but the cryptocurrency is now worth multiple hundreds of dollars per coin with a total market cap well into the multiple 10s of billions. Ethereum is slowly but surely making gains on Bitcoin's market cap. Many spectators believe that "the flippening" will happen sometime this year, in which Ethereum becomes the most valuable (market cap) cryptocurrency in the world, overtaking Bitcoin in total value (total number of coins times price per coin).

Ethereum isn't the only new coin on the block, but it is definitely the most promising. Others to watch that I will explain and write about in future articles include NEO, TenX, Metal, Litecoin, and Siacoin. All these coins have something unique and technologically innovative about them.

Buying cryptocurrency is confusing for a lot of people. It's not a stock or a typical "investment." It's not like anything most people have ever seen or experienced. You don't get shares; instead you get digital coins or tokens. The coins are "better" than a paper dollar bill because they actually support a greater cause, as in Ethereum's case, to build a decentralized internet and host code and apps on a decentralized platform. And coins help "fuel" that cause, so to speak, without getting technical.

For most people in the U.S., Coinbase would be the easiest option to buy Ethereum, Bitcoin, or Litecoin (it doesn't support any others yet). After verifying your account, you can add a number of payment methods including credit or debit cards, U.S. bank accounts, or even wire transfers of funds. Other options for exchanges that will take U.S. dollars for coins are Kraken, and Gemini in the U.S. Typically you will need to verify your account with a driver's license and add other details to expand your buy limits. Since cryptocurrencies are "hard currencies," the exchanges don't want to risk getting ripped off, since you can't reverse a cryptocurrency transaction once it's done.

If you are looking for some of the newer coins like NEO that are making big movement but haven't made their way to the aforementioned exchange sites, you can look into Bittrex, Poloniex or Livecoin. You can transfer Bitcoin or Ethereum to these platforms from Coinbase and then exchange it for any other digital currency that you want.

If you are outside the U.S., here are a few options for exchanges that take your local currency: BTC Markets (Australia), Bitthumb or Coinone (Korea), CHBTC or Huobi (China), and QuadrigaCX (Canada.) You can find a full list on this page of where to buy Ethereum for your local currency.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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How to Buy Your First Cryptocurrency Coins (Ethereum ...

Using a trust to transfer cryptocurrencies keeps information about your coins private and out of probate.

When you have cryptocurrency, you need to consider how to include this asset in your estate plan. If you dont, your beneficiaries may not be able to access your crypto-investments after you die. One way to ensure your loved ones will inherit your cryptocurrency is to leave it through a will. Another way to pass along cryptocurrency is to leave it through a trust.

There are several advantages to using a trust. For example, a trust:

A trust is a flexible estate planning tool that can be created while youre alive or after you pass away through your will. A living trust is made by transferring some of your property to the trust during your lifetime.

Living trusts are popular because they can be revoked or changed during the trust makers lifetime. During life, trust makers usually act as trustees of their own trusts, managing trust assets just as they did before they transferred their property into the trust. When a trust maker dies, the successor trustee (named in the trust) takes over. What happens to the trust property depends on the terms of the trust. Some trusts will direct the successor trustee to distribute trust property to beneficiaries, ending the trust. Other trusts will instruct the successor trustee to continue to manage trust property for the benefit of the beneficiaries.

Putting your cryptocurrency in a trust makes it less likely that your cryptocurrency will go undiscovered after your deathbecause the existence of your cryptocurrency will be documented in the trust. This is important because, unlike other property, cryptocurrency is not an easily discoverable asset. It has little to no paper trail, so its difficult for your loved ones to discover it after you die. If they dont already know you have cryptocurrency and how to access it, this asset might be lost to them forever.

However, when your cryptocurrency is in a trust, its documented and youve made a plan for what should happen to it when youre dead. Your trust tells your successor trustee that your cryptocurrency exists, where to look for it, and what to do with it. This greatly reduces the possibility that your cryptocurrency will be lost after you die.

While your trust alerts your successor trustee to the existence of your cryptocurrency (and names who should get it), you dont have to leave all of the details of your cryptocurrency in your trust document. Instead, its wise to create a separate document that describes in detail how to find and access your cryptocurrency. You can leave this access plan for your successor trustee or whoever will need to access your coins after you die.

When you die, the law requires (most of) your property to go through a legal process called probate. During this process, your estate is submitted to the court, and your property is distributed to your loved ones either according to the terms of your will or by intestacy laws. This process can still take anywhere from a few weeks to a few months and can be quite expensive, especially if the estate must pay a lawyer or an executor, or both.

If you leave your cryptocurrency through your will (or you make no plan at all), your cryptocurrency will go through probate and your beneficiaries wont have access to your cryptocurrency until the probate process is completeweeks or months after your death. With the volatile nature of the cryptocurrency markets, your coins could lose tremendous value before your beneficiaries ever get access to your digital wallet while they wait for your estate to be probated.

Any property included in your trust wont go through the probate process when you die. Instead, your successor trustee will immediately have the right to access and distribute your cryptocurrency following the terms of your trust. Keeping your cryptocurrency out of probate will likely save your beneficiaries time and money because they will get access to your coins faster and with fewer court costs.

Another benefit of using a trust is that you can maintain more privacy for you and your beneficiaries. During the probate process, a will is filed with the court and can become part of the public record. So if you leave your cryptocurrency through your will, information about your cryptocurrency may not remain private.

This prospect is unappealing for people with large cryptocurrency assets. Any public information about your cryptocurrency will make it easier for hackers and scammers to target your loved ones.

In contrast, trust documents arent part of the public record and only your successor trustee will need to know about your cryptocurrency. This added layer of privacy will help maintain the security of your cryptocurrency for you and your beneficiaries.

Creating a trust for your cryptocurrency is a good idea if your beneficiaries are very young, aren't tech savvy, or are unable to manage their own finances because a trust provides a system of management for the cryptocurrency you leave behind.

If your beneficiaries receive your cryptocurrency through a will, legally, they will have direct access to your coins. In some cases, this may not be a good ideaparticularly if your beneficiaries dont understand what cryptocurrency is or how it works. It may be overwhelming for those beneficiaries to learn about digital wallets, figure out cryptocurrency exchanges, and maintain all the security practices needed to secure the cryptocurrency they inherit.

Under a trust, your cryptocurrency will be managed by your successor trustee after you die. Your successor trustee will be responsible for accessing, maintaining, securing, and distributing your cryptocurrency according to the terms of your trust. So you can lay out exactly what should happen to your cryptocurrency and give the responsibility of managing it to a person who can be trusted to know or learn how the system works. In this way, using a trust could be a great relief to your beneficiaries, especially in the wake of your death.

One of the greatest benefits of creating a cryptocurrency trust is maintaining some control of your investment even after you die. You can use your trust to dictate how an asset is used and for what purpose. This is different from leaving cryptocurrency through a will, which gives your loved ones complete control over your cryptocurrency after they inherit it.

For example, if you want your beneficiaries to stay invested in cryptocurrency for a specific period of time, the trust can hold your coins until then. This can prevent a premature sale of your coins if you believe your cryptocurrency will get more valuable as time goes on. A trust can also allow your loved ones extra time to understand cryptocurrency before they get control of it, or you can choose to have the trust manage this asset for them indefinitely. You can tailor your trust to fit the specific needs of your loved ones.

There are some challenges unique to cryptocurrency trusts, but you can cover your bases by consulting an estate planning attorney or doing the necessary research. Creating a trust isnt necessary, but it will ensure that your coins wont get lost after you pass away and help maintain a level of privacy. A trust also provides a trusted manager for your coins and relieves your loved ones from the burden of trying to figure out cryptocurrency after you die.

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Leaving Cryptocurrency in a Trust | Nolo

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