Author: mymegaportfolio.com

The courses are going crazy, maybe now is the time to sell the jackpot. But getting out of the bitcoin game, ether, ripple, and the like, you have to prepare in advance.

Having a wallet filled with cryptocurrency can be rewarding for the ego, but to make purchases, these funds must also be repatriated in hard and hard currency, in internationally accepted currencies (euros, dollars, or others).

Having hundreds of thousands of euros in cryptocurrency is therefore one thing. It is quite another to own those funds. There are, however, services to make a conversion. But here again, if for small sums the procedure is relatively simple, for large investors, the problem can turn out to be more complex.

Why leave the game?

Bitcoin is having a hard time. The cryptocurrency is experiencing one of the largest drops in its history with a drop in value of around 70% since its record level in December 2017. At the time, a bitcoin could be worth 20,000 dollars against only 6,000. currently. This tumble may motivate currency owners to retire.

Especially since the turmoil is inherent in the very existence of bitcoin. In November 2013, the currency was already experiencing one of its worst days. As Reddit points out, the face value was lower back then, but the coin’s price drop was still around 87%.

Still, this roller coaster may have got the better of your recklessness. In this case, there is an adage that a portfolio owner should always keep in mind: Buy low and sell high. It is, therefore, in principle, not useful to resell your assets in a low wave. Better to wait for a comeback. Unless you decide to play off the beat. In this case, it is recommended to have strong kidneys.

Services that exchange bitcoins/euros

Once the decision is made, it is advisable to go through a third-party service to transfer your assets to a traditional currency. But like a foreign currency, it is particularly important to spot the exchange rates and thus determine which will be the preferential rate to use. The “exchange rate” may indeed vary depending on platforms such as Bitfinex, Poloniex, Bitstamp, Coinbase, Binance, CEXio, Kraken, Cryptopia, Bittrex, or GateCoin.

Subsequently, services such as Paymium, BitStamp, Bitfinex, Coinbase, or Kraken allow you to transfer your cryptocurrencies to a bank account (for which you will have to provide the identifiers). There is no shortage of this type of “office” on the Web.

Note that the platforms may impose a delay of several days between the exchange request and the actual transfer to verify the identity of the wallet holder and account details.

What about taxes, Mo Money Mo Problems?

In principle, if your payments from the bitcoin wallet are important about your regular resources, this will arouse the curiosity of your bank. In this case, she will seek to know the origin of these funds. It is therefore mandatory to be able to justify each profit recorded. Still, you need to make your operations transparent.

As for taxes, the question is a bit more complex. As a matter of principle, the tax authorities should be notified when a person realizes a capital gain from one year to the next. Each taxpayer is therefore

required to declare the money earned from the time a purchase was made with or transferred in conventional currencies (no declaration is necessary if you are keeping your wallet).

Bitcoin as a coin

If you are not a cryptocurrency professional and the income generated is unusual, these gains will be considered non-trading profits (BNC). In this case, it is a question of a tax of around 34% for a threshold below 33,200 euros of annual turnover.

On the other hand, if you regularly reinvest in bitcoin, you change the regime. The gains are then subject to the industrial and commercial profits (BIC) regime. It may then be interesting to go through the micro-enterprise regime to take advantage of a ceiling of 82,800 euros per year for an average tax rate of around 15%.

Practice “Money Management”

Money Management is the art of managing your capital while controlling risks. It concerns both professionals and individuals. The primary objective of the trader is thus to maximize and protect his gains while limiting his losses. Protecting gains and limiting losses involves changing your strategy over time to optimize the risk-return ratio, that is, the ratio between the expected return and the risk represented should not be too out of balance. It’s a bit overwhelming, but having to keep an excellent logbook, paper, or chart, where you record all your trades is a good way to keep an overview of the evolution of your portfolio and your positions. Thanks to this data, you will be able to understand several things: Which trading profile suits you best? What are your strengths and weaknesses? How to build and improve your trading strategy.

Opt for a trading strategy

Training in bitcoin trading strategies is an essential prerequisite. Your strategy will guide you in three areas: entering a trade correctly, monitoring it, and exiting cleanly. Here are three different possibilities for investing in bitcoin. It’s up to you to choose the one that best suits your profile and your character.

Day trading

Day trading is an investment strategy that involves taking positions and closing them on the same day. This method takes time to quickly seize opportunities. Be careful, however, to control the leverage effect. Leverage refers to the use of debt to increase investment capacity.

Swing trading

Swing trading is also a trading technique that is perfectly adaptable to bitcoin trading. Unlike day trading, which takes a very short-term approach, this method has a rather medium-term horizon. It allows traders to spend less time in a day trading and focus on variables. Traders who prefer swing trading often use technical analysis to anticipate future price movements.

Bitcoin scalping

This technique is even shorter than day trading. We also often speak of “micro-trading”. It is about doing a lot of back and forth between buying and selling on the same day. The large variations in the price of cryptocurrencies and bitcoin make it possible to resort to scalping quite easily. But, be careful, it is important to master the technique.

Analyze the markets

Once your method is set up and your account is opened, verified, and credited, the analysis begins. To make your investment choices, you can then favor the method of technical analysis or that of fundamental analysis. Or combine the two.

The basis of technical analysis is the study of charts to determine the ideal time to buy or sell. Users of technical analysis seek to establish trends by drawing support or resistance lines. The analysis of the past behavior of the curve also allows conclusions to be drawn in the technical analysis.

Fundamental analysis takes the external environment much more into account and will consider the asset concerned in its global environment. When you decide to invest in the dollar after intervention by the European Central Bank, you are doing fundamental analysis. The moment external variables enter into your investment choice, you are in fundamental analysis. This also applies very much to bitcoin.

A tip: keep track

Despite these details, it is important to keep in mind that you may need to be able to justify your winnings. So be sure to keep the traces, evidence as you move forward to demonstrate the origin of the gains. By being transparent, the tax services will be better able to advise and support you.

The market for digital assets is still young, so volatility is a natural part of this market. Before wanting to enter the game for the first time, it is necessary to take into account that this market is prone to irrational phenomena.

The market for digital assets is still young, so volatility is a natural part of this market. Before wanting to enter the game for the first time, it is necessary to take into account that this market is prone to irrational phenomena.

Diversification is a key part of risk management, but is it really important to be exposed to a variety of assets and Cryptocurrencies?

The answer is yes, it is worth diversifying investments to mitigate risk.

Trading cryptocurrencies using a spread betting or CFD trading account can be much safer than investing directly in crypto through a digital wallet for several reasons.

When you own cryptocurrencies, you are at the mercy of price swings, which can be sudden and significantly change the value of your investment. You will also have to open a digital wallet, which can be difficult to set up and manage and weigh the risks of possible cyberattacks on the cryptocurrency exchange.

However, when you trade cryptocurrencies through CFDs or spread betting you will have access to the same risk management tools as when you trade any of our other major assets. This can help you enjoy the same market opportunities, with less exposure to risk.

The rules of the risks associated with trading cryptocurrencies are not impossible to follow. In this article, we will talk about risk trading and how to manage your cryptocurrencies safely.

Risk refers to the probability that a negative event will occur in your activities, an event that is contrary to the results you had anticipated. Risk is an integral part of cryptocurrency trading It is the possibility of an unwanted result during trading, which translates into losses. For example, a 50% risk on a short position simply means that there is a 50% chance that the price of bitcoin will go up, causing you to lose.

In this article, we will teach you the simple rules that you must follow when managing risk in cryptocurrency trading.

Risk Types

The world of cryptocurrency trading is vulnerable to four main types of financial risks:

Credit risk

This risk affects cryptocurrency projects. It is the probability that the parties behind the cryptocurrency project will not meet their due obligations. Credit risk is mainly attributed to theft and fraud in the cryptocurrency market. 

Legal risk

Legal risk refers to the probability that a negative event-related to regulatory standards will occur. For example, the prohibition of cryptocurrency trading in a certain country. A practical example of legal risk is when the states of Texas and North Carolina issued a cease and desist order for the Bitconnect cryptocurrency exchange due to suspected fraud.

Liquidity risk

In cryptocurrency trading, liquidity risk refers to the possibility that a trader cannot convert his entire position to a fiat currency (USD, YEN, GBP) that can be used for daily expenses.

Market risk

Market risk refers to the possibility of currency prices going up or down against a position you have opened.

Operational risk

Operational risk is the possibility that a trader cannot trade, deposit or even withdraw money from their cryptocurrency portfolio.

Main Risk Management Strategies

The general rule of thumb in cryptocurrency trading is: “don’t risk more than you can afford to lose.” Given the severity of risk in cryptocurrency trading, we normally recommend traders not use more than 10% of their monthly budget or income. Also, it is not advisable to use borrowed money for trading, as this puts traders in a position of credit risk.

Risk management strategies can be classified into three categories: risk/reward ratio, position size, and stop loss and take profits.

1. Position size

The size of the position dictates the number of coins or cryptocurrency tokens that a trader is willing to buy. The possibility of making big profits from cryptocurrency trading tempts traders to invest 30%, 50%, or even 100% of their trading capital. However, this is a disruptive move that results in serious financial risks. The rule of thumb is: never put all your eggs in the same basket. Here are three ways to determine position size.

Entry price vs. the amount to risk

This approach considers two different quantities. The first is the money you are willing to invest in each operation. Traders should consider this amount as the size of each new position they open, regardless of its type. The second represents the risk money, that is, the money that you can lose if the operation fails.

The entry price is calculated in this way:

A = ((Stack size x Risk per trade) / (Entry price – Stop Loss)) x Entry price

Let’s say we want to buy BTC with USD with a target of $ 13,000. Our parameters would be:

Stack size: $ 5,000

Risk per operation: 2%

Entry price: $ 11,500

Stop Loss: $ 10,500

Our entry price would be:

A = ((5,000 x 0.02) / (11,500 – 10,500)) * 11,500 = 1,150

The ideal amount to invest in this operation would be $ 1,150 or 23%. However, due to our Stop Loss, we only risk 2% as the trade will stop once it reaches the set level.

Risk trading in cryptocurrency

Elder’s “sharks” and “piranhas”

This concept of position size is related to the diversification of your investments. This concept is attributed to Dr. Alexander Elder, who suggests two rules:

• Limit each position to 2% risk. Elder compares the risk to a shark bite. Sometimes you want to risk a very large amount, but the risk would be great and catastrophic, like a shark bite.
• Limit trading sessions to 6% per session. If you are going through a losing streak, you may gradually end up spending everything you have. Elder compares this risk to attacks by piranhas, which take small bites from their victim until they are all consumed.

Following Elder’s Sharks and Piranhas approach, the result is no more than three open positions at 2% each or six at 1%. By limiting the results with a reverse compounding, the losses get smaller and smaller with each subsequent loss you suffer.

Kelly’s criterion

Developed in 1956, the Kelly Criterion is an accurate formula given by John Larry Kelly. It is a position sizing approach that defines the percentage of capital to bet. It is suitable for long-term trading.

A = (% Success / Loss Rate in Stop Loss) – ((1 -% Success) / Profit Rate in Take Profit)

Using the previous example, the characteristics would be:

Stack size: $ 5,000

Amount invested: $ 1,150

% success: 60%

Entry price: $ 11,500

Stop Loss: $ 10,500

Loss rate: 1.10

Take profits: $ 13,000

Our result would be:

A = (0.6 / 1.10) – ((1 – 0.06) / 1.13) = 0.19

This means that you should not risk more than 19% of the total capital of $ 5,000 to obtain the best possible result in a series of operations.

2. Reward/risk ratio

The risk/reward ratio compares the actual level of risk with the potential returns. In trading, the riskier a position is, the more profitable it can be. Understanding the risk/reward ratio allows you to know when to open a position and when it is not profitable. The reward/risk ratio is calculated as follows:

R = (Target Price – Entry Price) / (Entry Price – Stop Loss)

Taking into account the above:

Entry price: $ 11,500

Stop Loss: $ 10,500

Target price: $ 13,000

Our relationship would be:

R = (13,000 – 11,500) / (11,500 – 10,500) = 1.5 or 1: 1.5

A 1: 1.5 ratio is good. We advise traders not to trade less than 1: 1.

3. Stop Loss + Take Profit

Stop Loss refers to an executable order that closes an open position when the price falls below a certain limit. On the other hand, Take Profit is an executable order that liquidates open positions when prices rise to a certain level. Both tools are very good at managing risk. Stop Losses prevent you from making unprofitable trades, while Take Profits allow you to exit a position before the market turns against you.

You can use Trailing Stop Loss and Take Profits that follow rate changes automatically. However, this feature is not available on most cryptocurrency exchanges. Luckily, using terminals like Superorder, you can configure your Trailing Stop Losses and Take Profits directly from the terminal.

Winning Strategies:

Accept failures

Risk is part of trading. Also, we cannot delete it, we can only manage it. Therefore, you must accept your losses and make decisions based on a plan to profit from future operations.

Take into account the commissions

New traders are often unaware of the commissions involved in trading. These include withdrawal fees, leverage fees, etc. You must take all of this into account when managing risk.

Focus on profits

The risk will always be present to discourage you when it comes to trading. However, focusing on the number of times you win will help you develop a positive attitude in trading.

Measure losses

This refers to the total decrease in your initial funds after a series of losses. For example, if you have lost $ 1,000 out of $ 5,000, the loss will be 10%. The higher the amount, the more you will need to inject in an operation for it to recover. As Dr. Elder advises, the risk limit should be kept at 6%.

What does blockchain technology bring to cryptocurrencies and how should we invest in it?

Bitcoin is considered one of the highest-yielding assets of the decade, outperforming even traditional financial instruments like gold, stocks, and bonds. Bitcoin has produced huge returns to investors in just over a decade. Many institutional investors have started to include a percentage of their investment portfolios; consisting of bonds, indices, stocks; to the main digital assets Bitcoin and Ethereum.

It is an accepted reality that prominent cryptocurrencies like Bitcoin and Ethereum have yielded massive returns to investors in the past. However, the cryptocurrency markets have expanded far beyond the top ten digital assets list. Cryptocurrency markets now incorporate a multitude of utility tokens, security tokens, Defi tokens, privacy tokens, gambling tokens, and more.

Also, building a cryptocurrency portfolio with only Bitcoin and Ethereum is not enough. To take full advantage of the gains from this rising industry while reducing the risk factor, it is necessary to diversify a portfolio containing multiple cryptos from scratch. In this guide, we explore the need to diversify a portfolio beyond Bitcoin and also one of the diversification strategies for a brighter outlook.

What is cryptocurrency portfolio diversification?

Crypto portfolio diversification is the process of disbursing investment funds into different crypto projects to reduce the risk factor if one or more projects fail. The objective is to create diversification with investments in different areas/niches to reduce the overall risks of investments. For example, investors investing in Bitcoin in 2017 had the first-hand experience when the price of Bitcoin fell sharply in 2018.

The basic idea is to reduce the factor of the negative event. This can be done by investing in multiple tokens and coins so as not to lose the overall value of your investments. To this end, a smart investor recognizes that it is safe not to put all your eggs in one basket, that is, in Bitcoin.

It is important to manage your business operations on a reliable and trusted cryptocurrency exchange platform. This makes it easier for an investor to increase their overall portfolio diversification experience.

How to get started with portfolio diversification

There are different strategies to diversify a cryptocurrency portfolio. This can include creating a portfolio taking into account different factors depending on the investor. We have discussed one of the strategies that a trader can employ to build a portfolio that caters to the different properties of tokens, including market capitalization, liquidity, stability, and functionality.

Bitcoin

While a portfolio shouldn’t be made up entirely of Bitcoin, the leading cryptocurrency should contain a considerable percentage of your investments. One of the factors is the growing trend of investment in Bitcoin by hedge funds, corporations, institutions, and investors. Major financial companies have also started offering different services related to Bitcoin.

The Bitcoin asset is also gaining the attention of retail investors, thus driving its mainstream adoption. It continues to exceed conventional investment alternate like gold in 2020. Allocating a percentage of your crypto portfolio to Bitcoin mitigates risks by acting as a safe asset.

Ethereum and ERC-20 Tokens

Ethereum continues to rank second in the cryptocurrency markets. Furthermore, the real value of Ethereum lies in its ability to facilitate the creation of smart contracts and decentralized applications.

Its inherent usefulness subsequently provides a solid foundation for the valuation of your native ETH token. Although there are many other blockchain networks, Ethereum continues to dominate the industry.

The ERC-20 protocols are the utility symbols released on the Ethereum Blockchain network. These tokens act as a utility function for a landscape spanning a real industrial use case. Many of these altcoins have found success in their crypto projects. For example, OmiseGo (OMG) is an ERC-20 token that yielded five times more in 2020. In other words, a $ 1 investment in January 2020 is worth nearly $ 5 in November 2020.

Investing in altcoins makes it easy for the trader to leverage exponential growth in a relatively short period. At the same time, it poses threats of scams, project failures, and fraud. But this kind of risk is offset by safe assets like Bitcoin. For more information on the price of Bitcoin and how to buy Bitcoin, click here.

Passive income tokens

Like dividends, some cryptocurrencies give interest to token holders. Staking is a phenomenon that facilitates the rewards of cryptocurrencies in exchange for keeping crypto in a portfolio. In addition to diversification, staking also serves to allow a passive income from having cryptocurrencies.

Cosmos (ATOM) is a token that yields an interest of 8-10% in exchange for staking operations. Dash (DASH) is another token that produces an annual reward of between 5-6%.

Stable cryptocurrencies

Cryptocurrencies are well known for their volatile nature. While volatility can add advantages if trades are executed correctly, it also poses a risk factor. The established ones are cryptocurrencies that are used to mitigate the risks that arise from other tokens. These currencies are tied to the value of an asset such as fiat currency such as USD.

The Tether (USDT) is one of the most popular stable coins that is pegged to the value of the USD. It is advisable to secure a percentage of the portfolio to stable coins or stable cryptocurrencies. This eliminates the risk factor to some extent.

Final comments

Diversification is a strategy used by smart investors to mitigate their risks in traditional markets. The advantages of diversification are equally relevant to the cryptocurrency industry as well. Also, diversification can play a strategic role in cryptocurrency investments when the industry is in a nascent stage. Although it will not eliminate threats or double the value of your portfolio, it is an important tool when markets suddenly turn down.

Blockchain technology also called the “chain of blocks” brings multiple benefits and not only to cryptocurrencies and the financial sector but also to other sectors. It is the foundation that supports the structure of virtual currencies. It has great potential, which has provided its great evolution. The future that experts predict for blockchain technology is far from a failure, as the expectations placed on it are enormous. It only needs to successfully survive the obstacles that lie ahead and those who use it to instill fear in society by speaking ill of this technology.

It is one of the most revolutionary technologies of the century, but do we know what blockchain is?

The technology sector is advancing by leaps and bounds. Until recently, it was difficult to think of autonomous cars, smart homes, virtual reality simulators, or social media. All of them have meant, to a greater or lesser extent, a revolution in each of their areas. However, none of them have had the repercussion and impact that the blockchain, also known as the blockchain, currently has. It is, without a doubt, the most disruptive technology of this century. A concept that has revolutionized many industries and areas of our day to day and in which you can also invest. But do you know what it is and how to invest in this technology?

WHAT IS BLOCKCHAIN TECHNOLOGY

Let’s start at the beginning: What is this blockchain? The blockchain is nothing more than a decentralized information system that grows continuously, a kind of distributed and secure database that guarantees the privacy of transactions. In the blockchain, the blocks are all linked to each other and encrypted to protect the security of the users. Your most important requirement is that multiple users are validating these transactions so that they can be inserted into this huge ledger.

THE APPLICATIONS OF THE BLOCKCHAIN

Although the largest field of application of the blockchain is economic transactions, the truth is that this technology encompasses many more potential ideas. For example, the Japanese government has started a project to unify all urban and rustic property registration through blockchain. Some companies want to decentralize cloud storage so that it does not depend on a specific centralized provider. Another example is healthcare, in which the medical records of all patients could be stored through the blockchain. In reality, the potential of blockchain is practically limitless.

HOW TO INVEST IN BLOCKCHAIN

When we think about investing in blockchain, we are not talking about doing it directly in this technology, but about buying assets or securities that make use of it. These are some of the most interesting alternatives today.

Cryptocurrencies

Cryptocurrencies are undoubtedly the best-known use of blockchain technology. Their popularity has been growing over the last few years thanks to the guarantee of security and anonymity that they incorporate in transactions over the Internet. 

The best known is Bitcoin, but there are others such as Ethereum, Ripple, Litecoin, or Cardan. Currently, more than 1,300 different ones can be found. At the investment level, cryptocurrencies are characterized by their high volatility, in some cases higher than 80%. 

This makes them considered a high-risk asset and not very suitable for retail investors, as stated by the Security Exchange Commission (SEC). There are two options for investing in cryptocurrencies: buy them or mine them. 

The first option is the most common and consists of getting the cryptocurrencies in the market. The second option is to create new coins and register them on the blockchain. However, it is an increasingly residual alternative, because the processing capacity to mine new cryptocurrencies is increasingly expensive. 

In any case, it is the user who can do it directly without resorting to an intermediate figure. In the case of the purchase of cryptocurrencies, you only need a virtual wallet to acquire them that provides access to the blockchain of those cryptocurrencies. In the case of mining, you just need to install software on the computer and let it work autonomously. 

ETFs 

ETFs (Exchange Traded Funds) are investment funds that contain a set of securities that replicate an index. There are already indexes that allow exposure to the blockchain. Some of the most interesting ETFs to invest in blockchain and their returns are as follows.

Stocks of large companies 

Large companies are betting heavily on blockchain technology. Companies such as Microsoft, Visa, and, above all, IBM, are developing solutions based on block technology. In general, almost any company that is listed on the Nasdaq, America’s tech stock index par excellence, has some kind of blockchain-based solution. So, if you want to invest in blockchain without having to assume the volatility that characterizes this sector and in a much more accessible way, it is advisable to bet on consolidated companies in the technology sector that are developing this technology. 

Cryptocurrency ICOs 

The Initial Coin Offering (ICO) or Initial Coin Offerings are a financing mechanism through which a company seeks to raise capital through cryptocurrencies such as Bitcoin or Ethereum. A kind of public offer for sale or business crowdfunding project that has a peculiarity: It uses the blockchain in the entire process of attracting economic resources. Its operation is simple. 

A project issues a certain amount of crypto assets or virtual tokens on a blockchain platform and investors pay through cryptocurrencies. If the project goes ahead and succeeds, the cryptocurrencies on which its financing was based gain value and that ends up offering an interesting return on investment for all these investors. The growth of ICOs has been spectacular. 

According to data from the ICO Bench, projects worth $ 1.2 billion were financed in May 2019 alone, and applications such as Telegram managed to raise $ 1.7 billion in several rounds. The returns are, in some cases, spectacular and far from those that can be obtained by any other traditional investment. The five most successful ICOs in history in terms of return on initial investment have been, according to Cointelegraph:

• NXT, with profitability of 11,547,519%.
• Spectercoin, with profitability of 676.227%.
• IOTA, with profitability of 522,900%.
• Ethereum, with profitability of 442,869%.
• Neo, with the profitability of 378,453%.

HOW BLOCKCHAIN’S EARNINGS WILL BE DECLARED

Although there is no specific regulation on the blockchain, as of today, assets such as cryptocurrencies are considered intangible assets for the Treasury. This category is the same as that used for web domains, farm exploitation rights, or the transfer of a bar. But what do you do when you convert your investment in cryptocurrencies or other blockchain-related assets to money? 

Well, the same thing we do with any other investment: Declare them in our income statement, incorporating capital gains into the tax base of savings. The amount that you will have to pay to the Treasury is obtained by subtracting the transmission value from the acquisition value, excluding expenses and commissions. The corresponding savings rates are applied to this value, which in 2019 are as follows:

If the investor is a legal person (for example, a limited company), the profits obtained are included in the tax base of the corporation tax, which has a tax rate of 25% on the profits of the company. In short, the blockchain is here to stay. More and more solutions based on this blockchain technology and its applications will continue to grow in the future. Given this reality, investing in blockchain is an interesting option, although, yes, as long as we assess the risks associated with such an incipient concept.

There are now several thousand cryptocurrencies. The jungle of digital currencies has become opaque and attracts many “black sheep”. Which cryptocurrencies are particularly suitable for trading and offer the best opportunities?

In this article, we examine the best cryptocurrencies to watch in 2021.

1. Bitcoin: the world’s most famous cryptocurrency

Bitcoin (short: BTC) is a digital currency based on a blockchain, which is secured and defined by cryptography. The Bitcoin network is the infrastructure for a completely new economic and financial system, which is completely decentralized and works completely without middlemen. In the system, there are no national borders and no central institutions, but this economic system works completely peer-to-peer, i.e. from person to person. Bitcoin is also the world’s first and, at the same time, largest cryptocurrency with the largest trading volume, which is particularly interesting for traders. The all-time high is already at over $ 42,000.

2. Ethereum: the number two cryptocurrency

Ethereum (currency: Ether (ETH) is mainly understood as an environment for intelligent contracts, so-called “smart contracts”) and is considered a second-generation blockchain. Invented in 2013 by Vitalik Buterin, Ethereum is more than just a means of payment Coins are only stored on the blockchain, it is possible to run programs using a so-called Ethereum Virtual Machine (EVM). Ether is the second-largest cryptocurrency after Bitcoin, measured by market capitalization, and also has a strangely high trading volume compared to Competing currencies. Above all, the range of practical applications is almost infinite. Ether is also likely to find increasing use in everyday life. However, it is unlikely that the Ethereum rate will overtake Bitcoin one day, as the crypto reserve currency has the first-mover effect.

3. Ripple: The number three of the most important cryptocurrencies

Ripple (XRP) is an ‘open source’ protocol for a payment network, i.e. it is based on a shared public database. In the final version, Ripple is to function both as a decentralized ‘peer-to-peer payment method, i.e. also as a foreign exchange market. Trading and the exchange of goods are possible without a central clearinghouse. The agreement between the network participants concerned takes place via a so-called consensus procedure. Against this background, the cyber motto XRP serves as a store of value as well as a trading instrument.

Ripple is said to have a high potential for use cases and has therefore been able to work its way up quickly even in the early days of the crypto hype. However, due to the latest lawsuit by the US SEC, investors should act cautiously.

Ripple hit its all-time high in January 2018 at over $ 3.30.

4. Bitcoin Cash: waste product or secret winner?

Bitcoin Cash (BCH) is the result of a Bitcoin fork on August 1, 2017. The update called “SegWit” was the main trigger for the fork that the Bitcoin-Core team took over. As a world currency, Bitcoin Cash is intended to serve as a means of payment around the globe and not just be viewed as a digital replacement gold. The all-time high Bitcoin Cashs is trading at around $ 4,300 and dates back to December 2017.

What is a fork?

A fork is a disagreement in the consensus that only decides what is done or not done. The result is often a change in the source code so that soft or hard forks can occur so that changes can take effect.

The currency Bitcoin Cash is interesting because it is repeatedly traded as a competing currency to Bitcoin and in this context should have a high trading volume, which makes this interesting for investors. At the same time, Bitcoin Cash is recognized and accepted on exchanges in many places.

5. Litecoin: the secret tip for cryptocurrencies?

Litecoin (LTC) is a so-called digital ‘peer to peer currency that is integrated into ‘open-source software. From a technical perspective, the Litecoin project is very similar to the Bitcoin system. The production and transfer of Litecoins are based on an ‘open source’ encryption protocol. There is no central control. With this in mind, all transactions, balance sheets, and expenses are managed by a ‘peer-to-peer network. Litecoin is created based on a cryptological hash function, which in turn generates blocks: so-called mining. Litecoins can be exchanged for bitcoins as well as fiat money. The relevant processing usually takes place via online exchanges (so-called digital currency exchangers).

Litecoin has met with increasing interest in the past few months. Last but not least, the fact that the payment service provider PayPal wants to include the currency in its portfolio has made investors prick up their ears.

Litecoin reached its high point in the wake of the hype in December 2017, which is quoted at 420 dollars.

6. Stellar Lumens: The seemingly unknown number

Stellar is an ‘open source’ protocol and global network for money exchange and the exchange of values. The cryptosystem sees itself as an alternative and further development of Bitcoin. The interaction of the network participants takes place according to a consensus procedure via the software implementation of the protocol on different servers. The ultimate goal is to simplify international payment transactions and economic exchange and to reduce transaction costs. The coins or payment units developed against this background are also called lumens and can also be traded on online exchanges (so-called digital currency exchangers). The record is around $ 1.05 and dates back to January 2018.

7. Iota: the “internet of things”

Iota (currency: Miota) sees itself as one of the third generation crypto assets and is also referred to as the “internet of things”. Iota is not based on a blockchain, but a tangled network and works without a miner. The digital payment system aims to ensure that transactions are processed quickly without incurring high computing effort or any costs for the user. Also, better scalability should be achieved than with conventional blockchain-based cryptocurrencies. Iota has a professional ecosystem and could play one of the key roles given the possible coming IoT. Also, some industrial partners are already linked with IOTA. The all-time high at Miota was just under six dollars, which was reached at the end of 2017.

8. EOS: “The Ethereum of Asians”

EOS is a blockchain-based cryptocurrency that also functions as a platform for other blockchain-based applications, systems, and currency tokens. The platform pursues the goal of offering intelligent contracts (smart contracts) and decentralized storage solutions (dApps) for companies. In this context, the scalability problems of previous blockchains are to be overcome and a complete fee exemption for the users concerned is achieved. Mining is not required: consensus through delegated proof of stake. Eos sees itself as a further development of Ethereum. At its peak, EOS is quoted at over $ 23.

9. Cardano: The silent winner?

Cardano is a blockchain-based project for the transmission of complex contracts and values. It is a scalable, decentralized platform (Smart Contract & dApps) that, among other things, serves as the basis for trading with the crypto-currency ADA. The latter then also represents the internal means of payment for corresponding transactions. Like Ethereum, Eos or the platform/blockchain wants to enable the implementation of smart contracts and dApps in addition to its currency function and set new standards in security against this background. In January 2018, ADA hit a high of $ 1.40.

10. Dash: The new means of payment?

Dash (digital cash) aims to be the most user-friendly and at the same time most scalable crypto asset. While Dash is based on Bitcoin, the payment method offers not only an increased transaction speed but also all-important anonymity. Also, the cryptocurrency should optimize/reduce energy consumption during mining and guarantee higher network security against possible hacker attacks. Against this background, Dash sees itself as a further development of the classic Bitcoin blockchain.

The core of the Dash ecosystem is the peer-to-peer network, in which miners are paid for securing the blockchain, with master nodes trying to validate this and make it accessible to users. The all-time high for Dash is around $ 1,600.

Conclusion: The top 10 cryptocurrencies to trade

The future could lie in the cryptocurrency market and you have the opportunity to enter cryptocurrency trading directly. With the help of a CFD, you have the option to participate in the price development of numerous cryptocurrencies – without a wallet, in both rising and falling markets.

Make sure you have sufficient liquidity to trade and protect your capital with guaranteed stops. You can also hedge your physical positions and secure your capital efficiently.

NFTs, or non-fungible tokens, are a type of cryptocurrency created on a smart bargain platform like Ethereum. They are unique digital objects that can be interesting to own or even profitable to trade. Think of them as digital trading cards. Generically, they start small that only enthusiasts care about, but if you get a rare one, it could rule a lot one day.

What are fungible and non-fungible?

Cryptocurrencies can be fungible, which means that all units of the currency (that is, tokens) are the same and the same, such as grains of rice or dollars.

Non-fungible tokens are the complete opposite: Each cryptocurrency platoon, or token, is unique and cannot be replicated.

This “non-fungible” property can be used for many things, including certain types of coins. But NFT’s blatant mania is primarily driven by digital art and collectibles. Kin has discovered that a unique digital object can be interesting, formidable, and even have a significant monetary value. That’s why space has recently flourished, encompassing thousands of projects involving artwork, games, and sports.

How do NFTs work?

It depends on the platform. But given that the vast majority of NFTs are created and traded on Ethereum, we will focus on that.

NFTs are created in Ethereum’s block captivity, which is immutable, meaning it cannot be modified. No one can undo their ownership of an NFT or re-create the same one. They are also “without permission”, so anyone can create, buy or betray an NFT without asking for permission. Ultimately, each NFT is unique and can be viewed by anyone.

So yeah, it’s like a one-of-a-kind collectible malleable in an ever-folksy wardrobe that anyone can honor, but only one person (or cryptocurrency wallet, to be exact) can own at any one time.

In a practical sense, an NFT is usually represented by a digital artwork, such as an image. But it’s important to understand that you are not pandering to just that image (which can be easily replicated). Its existence as a digital object in block captivity is what makes it unique.

How do I buy or change NFT?

NFTs are bought and traded like any other Ethereum-based cryptocurrency, only that to buy a certain number of tokens, you buy a single token.

To do that, you need to start by installing Metamask, a browser extension that allows you to interact with various facets of Ethereum, such as exchanges and dApps (decentralized applications). MetaMask is even a digital wallet for Ethereum and all tokens created on Ethereum (both fungible and non-fungible).

After installing the extension, you need to buy a little Ethereum (you can do it directly in MetaMask with a debit mailer or Apple Pay by clicking “Associate funds”). But be very careful with your funds: store your MetaMask password and private wallet essence for a safety reason. Then when you visit a website that sells NFTs (like NBA Top Shot) or an exchange where you can trade them (like Uniswap), connect your MetaMask wallet to the site (only do it on sites that you know are safe) and buy your first NFT.

Why are NFTs valuable?

Of course, before you buy a little, you will probably want to understand why it is a good purchase. In fact, why would anyone buy an NFT, and why should a buyer own a willing to buy even more tickets in the future?

Ideally, the worth of NFTs doesn’t just come from a digital hot potato hinge, where you buy little in hopes of selling for more down the road. And so on, until everything breaks. Ideally, the NFT should be of value to you because… you like it. If you are an NBA fan, you may wish to have an official NFT representing your protected gambler. Or maybe there is a digital merciful that you like.

Sure, in a way, many NFTs are just digital images that you can right-click and unlearn on your computer. But NFTs even reside in block captivity, which makes it extremely difficult to copy them in their entirety. The blockchain entry even transparently tells you who created the NFT. If a famous musician says, “Yes, that’s my Ethereum address that created this digital image of a possum.” So that can be corroborated in the block captivity.

• Larva Labs CryptoPunks are among the most coveted (and expensive) NFTs out there.
• Caterpillar Labs CryptoPunks are among the most coveted (and expensive) NFTs out there.

Some NFTs can be valuable in other ways. Say, for example, you buy an NFT related to a swath hinge. Perhaps that NFT will one day grant you a singular prestige in the hinge, or it could even be the mat for you to obtain some other difficult-to-get object; little that only you can have because each NFT is unique. If you’ve ever played World of Warcraft or a similar hinge, you know how valuable an alcove of armor or weaponry can be. Now with NFTs, no one can take it off, not even hinge owners.

Let’s go back for a second to the digital hot potato hinge. NFTs are a fledgling space, and there is a lot of hysteria and scams. You may see a certain NFT sold for millions and think that you can even buy a little for a few dollars and get rich selling it to someone else upfront. It can happen, but it is rare. And these things can be manipulated. For example, a crypto whale (someone who owns large amounts of the crypto ticket) can buy many NFTs and then “sell” them to himself (his other crypto address) for millions, artificially inflating the price. So be careful: just because some NFTs were traded for a lot of tickets, don’t think this automatically means that all other similar NFTs are even valuable.

What are the most expensive NFTs?

In the early days of space, we saw a blockchain hinge-like CryptoKitties selling virtual cats for tens or even hundreds of thousands of dollars. Music producer 3LAU recently sold a limited-run collection of 33 NFTs for more than $ 11 million. Musician Grimes (even known as little X Æ A-Xii’s mom) even sold his digital art collection for $ 7,500 each, for a total of $ 6 million in sales. Yes, these things can be very expensive.

Are NFTs a good investment?

Buying an NFT because you like it, or even to make (or lose) a few quick bucks is one thing. But upsetting at NFT is another. Again, it is an incipient space. Even a Van Gogh painting or a rare Babe Ruth baseball malleable required little time in the old days to become very valuable.

Given the digital nature of NFTs, it is difficult to compare them to prized physical works of art such as statues and paintings. On the other side, we live in a world where a Bitcoin is worth more than $ 50,000, so things in the digital realm can certainly be very valuable and even continue that value for longer periods.

In any case, if you plan to turn NFT upside down, you will need to dive deep into this cumbersome world because each NFT market is slightly different. It’s costly too – trading Ethereum can be expensive enough as new network congestion is driving fees up. Finally, you will need to think strategically and follow the rapidly changing cryptocurrency trends.

In short, it is possible to win a ticket by investing in NFT, but you will have to do your homework.

News of hacks to exchanges and digital wallets is frequent. The main thing is to choose a secure exchange that stores the coins on servers outside the network so that they cannot be hacked.

There are many cryptocurrency scams that you can be a victim of. It is not enough to not deposit in trusted sites, they could impersonate you or hack your accounts.

But even in these secure exchanges, you can be a victim of impersonation, if they get your passwords through your email for example.

That is why they develop multiple security measures such as two-factor authorization (2FA), account verifications, and even the paralysis of transfers during days.

Find out how to configure your exchanges correctly and which mail and browsers are more secure.

The information security company outlines the top attacks on virtual wallets over the past year and tips for protecting them.

Electronic money is a type of alternative currency that does not depend on a central bank or regulatory entities of the national states. They are being used more and more frequently to pay for various products and services, appealing to both personal users and cybercriminals. ESET, a provider of threat security solutions, shared an analysis of the most important attacks that these cryptocurrencies suffered in 2017 and provides tips to protect them for the future.

“During 2017, cyberattacks against infrastructure providers were identified, including high-profile theft of users’ virtual assets. In addition to targeting online coin providers, trade and mining exchanges, and other related services, attackers are also targeting investors and industry employees, ”said Denise Giusto Bilic, IT Security Specialist at ESET Latin America.

The ESET Latin America Research Laboratory analyzed some of the most notable cybersecurity incidents that occurred in the cryptocurrency market, given that the enthusiasm for its success, yielded a revenue of $ 4 billion at the beginning of last year, created a scenario perfect for cybercrime:

• Targeted attacks: In February, the home computer of an employee of the South Korean exchange of bitcoin and ether, Bithumb, one of the most important in the world, was attacked. The data of more than 30,000 customers were compromised, being used for bitcoin diversion hoaxes above a million dollars.
• Hoaxes: Some $ 7.4 million ether, a currency similar to bitcoin, was stolen from investors, tricking them into sending their electronic money to a false address. The same happened with potential investors in Enigma, an Ethereum platform, where they were tricked into sending $ 500,000 in ‘cryptocurrency’ with ‘early sale’ tokens to the attackers’ account.
• Security Cracks: Another well-known attack involved a coding flaw in Parity, an Ethereum wallet, which facilitated the theft of around 150,000 cryptocurrency tokens. The value at that time was more than $ 30 million.
• Social Engineering: At the end of the year, the payment system of a Slovenian-based cryptocurrency mining market was looted, an equivalent of $ 64 million was stolen. The company described the breach as a “professional attack with sophisticated social engineering.”

“Virtual currencies seek to obtain money from increasingly broad sectors of society. The deceptions are made to catch the reckless, especially those users who do not have the most adequate security measures. It remains to be seen how, in the long run, the number of risks inherent in these new currencies, the fundamental security challenges they face, and increasingly stringent regulations turn out for virtual ‘money and its fan base. Unless the countless security concerns are addressed, more and more people will be involved with this currency who will have to face the various risks along the way, ”added Giusto Bilic.

Recommendations to avoid losing assets in cryptocurrencies

In this context, ESET developed the following tips to protect virtual wallets:

• Use a Bitcoin client. Regarding privacy, in addition to hiding the IP address, you can use a Bitcoin client that allows you to change to a new address with each operation. Also, transactions can be categorically separated into different wallets, according to their importance: a recommended practice is to keep a wallet for everyday transactions with small amounts, to recharge it when necessary.

• Protect identity. Be careful when sharing transaction data in public spaces to avoid revealing the identity together with the Bitcoin address.

• Use a “custody service.” When it is necessary to make a purchase/sale and you are not sure who is on the other side, you can use an “escrow service”. In these cases, the person who must make the payment sends their bitcoins to the custody service, while they wait to receive the item they requested. The seller knows that his money is safe in the custodian and sends the agreed item. When the buyer receives the merchandise, he notifies the situation to the custodian so that he can complete the purchase.

• Make a backup of the virtual wallet and encrypt it. When it comes to physical stores, like any critical backup policy, it is recommended to perform frequent updates, use different media and locations, and keep them encrypted.

• Avoid using wallets on mobile devices. Especially when it comes to large sums of money, using mobile devices should be avoided as these can be lost and/or compromised. Furthermore, in these cases, it is preferable to keep the wallet on computers without any type of Internet connection.

• Consider using multiple signature addresses. In the case of corporate transactions or those that require a high degree of security, it is possible to use multiple signature addresses, which involve the use of more than one key, usually stored on remote computers in the possession of authorized personnel. In this way, an attacker will need to compromise all the computers on which the keys are located, to later steal the bitcoins, which will make his task difficult.

• Delete a virtual wallet when it is no longer used. Deleting a virtual wallet when it is no longer useful requires a careful process to verify that it has indeed been destroyed. It is necessary to take the trouble to locate any possible copy that may have been created, by user or system action, and carry out this same process.

Smart Exit Strategy for cryptocurrency trading