As we expected, since publishing Crypto TREND we have received many questions from readers. In this edition we will answer the most common one.

What kind of changes are coming that could be game changers in the cryptocurrency sector?

One of the biggest changes that will impact the cryptocurrency world is an alternative method of block validation called Proof of Stake (PoS). We will try to keep this explanation fairly high level, but it is important to have a conceptual understanding of what the difference is and why it is a significant factor.

Remember that the underlying technology with digital currencies is called blockchain and most of the current digital currencies use a validation protocol called Proof of Work (PoW).

With traditional methods of payment, you need to trust a third party, such as Visa, Interact, or a bank, or a cheque clearing house to settle your transaction. These trusted entities are “centralized”, meaning they keep their own private ledger which stores the transaction’s history and balance of each account. They will show the transactions to you, and you must agree that it is correct, or launch a dispute. Only the parties to the transaction ever see it.

With Bitcoin and most other digital currencies, the ledgers are “decentralized”, meaning everyone on the network gets a copy, so no one has to trust a third party, such as a bank, because anyone can directly verify the information. This verification process is called “distributed consensus.”

PoW requires that “work” be done in order to validate a new transaction for entry on the blockchain. With cryptocurrencies, that validation is done by “miners”, who must solve complex algorithmic problems. As the algorithmic problems become more complex, these “miners” need more expensive and more powerful computers to solve the problems ahead of everyone else. “Mining” computers are often specialized, typically using ASIC chips (Application Specific Integrated Circuits), which are more adept and faster at solving these difficult puzzles.

Here is the process:

• Transactions are bundled together in a ‘block’.
• The miners verify that the transactions within each block are legitimate by solving the hashing algorithm puzzle, known as the “proof of work problem”.
• The first miner to solve the block’s “proof of work problem” is rewarded with a small amount of cryptocurrency.
• Once verified, the transactions are stored in the public blockchain across the entire network.
• As the number of transactions and miners increase, the difficulty of solving the hashing problems also increases.

Although PoW helped get blockchain and decentralized, trustless digital currencies off the ground, it has some real shortcomings, especially with the amount of electricity these miners are consuming trying to solve the “proof of work problems” as fast as possible. According to Digiconomist’s Bitcoin Energy Consumption Index, Bitcoin miners are using more energy than 159 countries, including Ireland. As the price of each Bitcoin rises, more and more miners try to solve the problems, consuming even more energy.

All of that power consumption just to validate the transactions has motivated many in the digital currency space to seek out alternative method of validating the blocks, and the leading candidate is a method called “Proof of Stake” (PoS).

PoS is still an algorithm, and the purpose is the same as in the proof of work, but the process to reach the goal is quite different. With PoS, there are no miners, but instead we have “validators.” PoS relies on trust and the knowledge that all the people who are validating transactions have skin in the game.

This way, instead of utilizing energy to answer PoW puzzles, a PoS validator is limited to validating a percentage of transactions that is reflective of his or her ownership stake. For instance, a validator who owns 3% of the Ether available can theoretically validate only 3% of the blocks.

In PoW, the chances of you solving the proof of work problem depends on how much computing power you have. With PoS, it depends on how much cryptocurrency you have at “stake”. The higher the stake you have, the higher the chances that you solve the block. Instead of winning crypto coins, the winning validator receives transaction fees.

Validators enter their stake by ‘locking up’ a portion of their fund tokens. Should they try to do something malicious against the network, like creating an ‘invalid block’, their stake or security deposit will be forfeited. If they do their job and do not violate the network, but do not win the right to validate the block, they will get their stake or deposit back.

If you understand the basic difference between PoW and PoS, that is all you need to know. Only those who plan to be miners or validators need to understand all the ins and outs of these two validation methods. Most of the general public who wish to possess cryptocurrencies will simply buy them through an exchange, and not participate in the actual mining or validating of block transactions.

Most in the crypto sector believe that in order for digital currencies to survive long-term, digital tokens must switch over to a PoS model. At the time of writing this post, Ethereum is the second largest digital currency behind Bitcoin and their development team has been working on their PoS algorithm called “Casper” over the last few years. It is expected that we will see Casper implemented in 2018, putting Ethereum ahead of all the other large cryptocurrencies.

As we have seen previously in this sector, major events such as a successful implementation of Casper could send Ethereum’s prices much higher. We’ll be keeping you updated in future issues of Crypto TREND.

Stay tuned!

It would seem that for college students the best investing years are still to come. The promise of starting salaries well in excess of the meager income we derive from part-time jobs or allowances will surely make it easier to save in the future. While it is likely to be easier to contribute to your IRA from your future salary, do not underestimate the power your current dollar has.

I. Low Income Tax Bracket

II. Power of Compounding

III. Tax Advantaged Space

I. Likely by the time your paycheck has grown to the point in which you feel you can comfortably allocate a portion to your savings, you will be in a higher tax bracket. Your investment has taken a haircut equivalent to your tax bracket.

Lets assume that we are investing in our ROTH IRAs the maximum limit of $5,000. It would cost the average college student $5,500 to fill up this tax advantaged space and the average college graduate $6,1250. By investing in college you had to earn $750 less than the average college graduate.

II. The power of compounding is the most valuable investment advantage college students have. Assuming you are twenty years old and plan to retire at age sixty you have at the very least forty years to allow the powers of compounding to work (your money is still compounding while you drawl from your portfolio). As you can see in the table above every dollar you invest today is worth forty-five dollars if your portfolio were to receive the average rate of return. With this in mind suddenly minimum wage from your work-study does not look as meager and your time is looking a lot more valuable.

$7.25 X $45.26 (from Table 1.2) = $328.14 per hour

While 10% is considered the average rate of return for the stock market past returns are no guarantee of the future. Lets assume a safer, inflation adjusted, average return of 6%. While hardly as impressive as a return on investment of 10% each dollar is worth approximately ten dollars.

$7.25 X 10.29 = $74.61

(On a side note I believe it is incredibly valuable to realize what your time is worth. Even if we are focusing on the future value of your time.)

III. Finally you must consider the fact that once tax advantaged space is gone, it cannot be recovered. By beginning to invest earlier you have increased your likelihood of minimizing your future tax consequences. Proper planning and utilization of tax advantaged space can result in the ability to retire significantly earlier then if your savings were instead in a taxable account.

DigitalTicksExchange: An advanced cryptocurrency exchange!!!

DigitalTicksExchange is just not another crypto-crypto trading platform. It is designed by traders for traders. The inception of the idea started way back in December 2017. DigitalTicksExchangeteam is coming up with THE FIRST EVER COMMODITY CRYPTO EXCHANGE. The team aims to provide the best trading platform for the cryptocurrency market.

Mission & Vision of DigitalTicksExchange

With the major aim to be in the top 3 crypto currency exchanges in terms of market capitalization, the team has deployed a robust, more powerful and best in class technology required by an advanced cryptocurrency trading exchange 2018 with the intention to be the best online trading platform for cryptocurrency. Our team is dedicated to offer the most customizable exchange platform to the traders and brokers and thereby achieving a step closer to the goal of being the only user-friendly exchange with the ease of trading crypto currency and crypto commodity.

With the increase number of crypto exchanges around the world the cryptocurrency exchange market has seen plenty of new users attracted towards trading these currency swaps but the major challenge for any crypto currency exchange is to tackle with the Security of the exchange and thereby building the Trust and confidence in the mind of the end users. DigitalTicksExchange with its multi cryptocurrency wallet exchange and advanced Security Audit systems and regular vulnerability testing, plans to be one of the most trusted digital currency exchange around the globe.

DigitalTicksExchange team comprises of traders, industrialists. Entrepreneurs, Blockchain enthusiasts. To make the exchange successful DigitalTicksExchange innovative developers have given all the extra efforts to understand the needs and requirements of the traders starting from novice to professional. The platform is customized in such a way that it is easy to use by all the market participants be it a Hedger, Scalper, Arbitrager or Speculator.

Here is the list of few unique features that would be offered on DigitalTicksExchange

Semi-Algorithm Functionality

Single order Portfolio View

Hot Keys Function

Multiple Trading Instruments

Multiple Device Compatibility

DigitalTicksExchange Token (DTx)

DTx is DigitalTicksExchange UTILITY Token. DTx Utility token can be bought using Bitcoin, Ethereum and bank wire transfers. The pre-sale of this token had begun on March 25, 2018, and the Public sale on April 15, 2018. The token sale ended on June 15, 2018.

The team is happy to announce about its successful Token Sale. During the token sale team have sold a total of 64 millions of tokens thereby raising 30 million USD. There are currently 30,000 plus community members of DigitalTicks and the count is growing much faster.

Benefits of trading on DigitalTicksExchange

The trading platform of DigitalTicksExchange is much smoother and offers a great User Interface with multiple functionalities required by the traders. One of the major benefits of using our platform is that the exchange will not charge any transaction fees for the first few months. This can be a great profit oppurtunity for high-frequency traders. We will also offer volume-based incentives to those high-frequency traders going ahead. We love our users and would like to create a fair market for all our registered users thereby helping them trading cryptocurrency for profit by providing regular research reports prepared by our team of expert researchers.

Conclusion

With the incentives like Volume Based model, Maker-Taker Concept DigitalTicksExchangeis focused by providing the ease of doing trading and charging a fair price for a trade. With the aim to be at the top, DigitalTicksExchangeteam is dedicated to provide all tools and support required by any of its traders to trade the crypto currency market. The exchange will be completely developed and launched on or before end of August 2018. The team believes that DigitalTicksExchangewould be the most advanced cryptocurrency exchange platform to trade different crypto – crypto as well as commodity to crypto.!!!!

Cryptocurrency have been around for a while now and there are multiple papers and articles on basics of Cryptocurrency. Not only have the Cryptocurrency flourished but have opened up as a new and trusted opportunity for investors. The crypto market is still young but mature enough to pour in the adequate amount of data for analysis and predict the trends. Though it is considered as the most volatile market and a huge gamble as an investment, it has now become predictable to a certain point and the Bitcoin futures are a proof of this. Many concepts of the stock market have now been applied to the crypto market with some tweaks and changes. This gives us another proof that many people are adopting Cryptocurrency market every day, and currently more than 500 million investors are present in it. Though the total market cap of crypto market is $286.14 Billion that is roughly 1/65th of the stock market at the time of writing, the market potential is very high considering the success despite its age and the presence of already established financial markets. The reason behind this is nothing else but the fact that people have started believing in the technology and the products backing a crypto. This also means that the crypto technology have proven itself and so much that the companies have agreed to put their assets in the form of crypto coins or tokens. The concept of Cryptocurrency became successful with the success of Bitcoin. Bitcoin, which once used to be the only Cryptocurrency, now contributes only 37.6% to the total Cryptocurrency market. The reason being, emergence of new Cryptocurrencies and the success of projects backing them. This does not indicate that Bitcoin failed, in fact market capitalization of Bitcoin has increased, rather what this indicates is that crypto market have expanded as a whole.

These facts are enough to prove the success of Cryptocurrencies and their market. And in reality investment in Crypto market is considered as safe now, to the extent that some invest as for their retirement plan. Therefore what we need next are the tools for analysis of crypto market. There are many such tools that enable you to analyze this market in a manner similar to stock market providing similar metrics. Including coin market cap, coin stalker, cryptoz and investing. Even thought these metrics are simple, the do provide crucial information about the crypto under consideration. For example, a high market cap indicates a strong project, a high 24hour volume indicates high demand and circulating supply indicates the total amount of coins of that crypto in circulation. Another important metric is volatility of a crypto. Volatility is how much the price of a crypto fluctuates. Crypto market is considered as highly volatile, cashing out at a moment might bring in a lot of profit or make you pull your hairs. Thus what we look for is a crypto that is stable enough to give us time to make a calculated decision. Currencies such as Bitcoin, Ethereum and Ethereum-classic (not specifically) are considered as stable. With being stable, they need to be strong enough, so that they do not become invalid or simply stop existing in the market. These features make a crypto reliable, and the most reliable Cryptocurrencies are used as a form of liquidity.

As far is crypto market is concerned, volatility comes hand in hand, but so do its most important property i.e. Decentralization. Crypto market is decentralized, what this means is that the price fall in one crypto does not necessarily means down trend of any other crypto. Thus giving us an opportunity in the form of what are called mutual funds. It’s a Concept of managing a portfolio of the crypto currencies that you invest in. The Idea is to spread your investments to multiple Cryptocurrencies so as to reduce the risk involved if any crypto starts on a bear run

Similar to this concept is the concept of Indices in crypto market. Indices provide a standard point of reference for the market as a whole. The Idea is to choose the top currencies in the market and distribute the investment among them. These chosen crypto currencies change if the index are dynamic in nature and only consider the top currencies. For example if a currency ‘X’ drops down to 11th position in crypto market, the index considering top 10 currencies would now won’t consider currency ‘X’, rather start considering currency ‘Y’ which have taken it’s place. Some providers such as cci30 and crypto20 have tokenized these Crypto indices. While this might look like a good Idea to some, others oppose due to the fact that there are some pre-requisites to invest in these tokens such as a minimum amount of investment is needed. While others such as cryptoz provide the methodology and a the index value, along with the currency constituents so that an investor is free to invest the amount he/she wants to and choose not to invest in a crypto otherwise included in an index. Thus, indices give you a choice to further smooth out the volatility and reduce the risk involved.

Conclusion

The crypto market might look risky at first look and many might still be skeptical of its authenticity, But the maturity that this market has attained within the short period of its existence is amazing and the proof enough for its authenticity. The biggest concern that investors have is volatility, for which there had been a solution in form of indices.

Want to get to 70 fast but don’t know where to start? This guide will show you exactly how to grind your way to 70, and will show you the best leveling spots in each zone.

Hellfire Peninsula 60-61

The best grinding spot in this area are the Wrathguards at the Legion Front. Most of the mobs in this zone are non-squishes, so these are the mobs that die quickly.

Zangarmarsh 61-63

Funggor Cavern is the best grinding spot in the zone as the Marsh Elementals die quickly and do not deal much damage. It’s a good place to hang out for awhile, however you should focus more on doing the quests in this zone though.

Terokkar Forest 63-65

Although not all of the mobs in Firewing Point are easy, they are the best mobs to grind in the zone. Sometimes the adds may slow down the grinding a bit. This may not be a great grinding spot but it’s probably the best one in this zone. Make sure you get the quests for Firewing Point before you go there.

Nagrand 65-67

The Vir’aani Clan around Oshu’gun (especially at the 3 little crystal areas) are the best grinding spots for this zone. also the Voidspawns around this area die fast too.If you find you can’t get enough XP doing the quests, then you can hang out here for a little bit grinding these etherals.

Blade’s Edge Mountains 67-68

Questing is the easiest way to level up here as there is no single good grinding spot.

Netherstorm 68-69

This zone really does not have any good grinding spots, the Wrathbringers and Terrorguards are probably the best mobs to grind in this zone. Another decent place could be at the Ethereum Staging Grounds, at 55.39

Shadowmoon Valley 69-70

The Legion Hold is one of the best grinding spots period. The Shadow Council Warlocks die extremely fast and drop good loot. Occasionally there is an Elite that you need to watch out for.

Now you know exactly where to grind. Happy leveling!

Cryptocurrency keeps getting better each day. It keeps on amplifying your wealth, just like your viral posts on social media. A contagious financial tool for a good portfolio and a catalyst for growth. One interesting fact is that there are more than 5000 cryptocurrencies.

2021 was a fantastic year, but where do we go from here?

Let us magnify the situation here. Both Bitcoin and Ethereum touched the higher bars of performance. Long-term investors are relying on it. By the time you read this article, there might be more wonderful news about cryptocurrency. I will try to present here the future possibilities of cryptocurrency.

New regulations are currently in place. They are under the carpets. Measures to minimize the risk from cybercriminals are in place. The purpose is to make this investment a safe tool for people. For instance: China declared in September that all cryptocurrency transactions are illegal. Clear regulations will remove all the hindrances to make it a safer trade.

How Will New Regulations Impact Investors?

IRS will find it easier to track tax evasion. Investors can transparently keep a record of transactions. For instance: recording any capitals gains or losses on crypto-assets will be easier. On the other hand, the price of cryptocurrencies will also be affected in the fluctuating market.

ETF Approval – An Important Factor to Consider

Bitcoin ETF made its debut on NYSE. It will help investors to purchase cryptocurrency from existing investment firms. Due to the rising demand, both the equity and bond markets deal with it. Let us watch in from an investor’s point of view. Easier accessibility of cryptocurrency assets helps people to purchase them without any hassles. If you plan to invest in a Bitcoin ETF, remember the risks are as same as any other cryptocurrency. You must be willing to take the risk. Otherwise, it is futile to invest your money.

What does the Future Hold?

Bitcoin is the best in the crypto market. It has the highest market capitalization rate. In November 2021, its price rose to $68000. In October, the rate was $60000 whereas in July it was $30000. There is a high fluctuation in the market rates. Experts suggest keeping the market risk for cryptocurrency to less than 5% in the portfolio. Talking about short-term growth, people are hopeful. The volatility in Bitcoin prices is a factor to consider. If you want to play for long, short-term results should not impact you.

Looking from it at an angle to amplify your wealth is not a good decision. Stick to traditional investment tools apart from cryptocurrency. For instance: if you want cryptocurrency as a tool to save for your retirement, it is time to reconsider your decision. Keep your investments small and diversify them. It will reduce the risk factor. At the same time, you will have more time to think about cryptocurrency.

It is necessary to spend your money wisely and then invest in cryptocurrency. One must assess the risk factor associated with it and make a decision. I hope this article helps you.

Cryptocurrency trading has taken the world by storm and this is what has become the norm for the majority of traders and investors. If you are keen enough to do your research before going into the trading, you stand a chance to enjoy real growth and profits in the end. The worst you can do when it comes to this kind of trading is going into it blindly simply because it is what everyone else is doing. A little research on the major currencies and getting deep into buying and trading fundamentals can make a huge difference. Below are a few guidelines that will jolt you into success with your trading.

Take time to understand how the block chain works

Blockchain technology has redefined transactions and it is changing everything. Blockchain can be defined as a list of records that continually grow into blocks secured and linked using cryptography. The blockchains are data modification resistant and serve as public transaction ledger between parties. The transparent and decentralized nature of block chain makes it highly secure and in the world of hacking it is truly functional and reliable. It solves manipulation problems that have become so apparent in the world today. Whereas no single person can claim to understand everything that is blockchain, learning a few fundamentals will give you a much easier time with your trading.

Know and learn the top currencies

The virtual currency space is becoming crowded thanks to how popular the currencies have become. The fact is that there are more than 100 cryptocurrencies today, which means you need to know which ones are top and popular, so you can choose your buying and selling properly with profitability in mind. Bitcoin accounts for half of the entire market with the highest volume, but Litecoin and Ethereum are also top and giving Bitcoin a run. Find out as much as possible regarding the currency you are interested in. The more you know the better you will be in making decisions; you can actually manage to trade more than one cryptocurrency without any challenge.

Mind the inherent risks

Bitcoin and other currencies are quite volatile even when compared the stock market and gold. Remember that this is still a technology in its early days and it does face lots of challenges. The profit probabilities are quite high but so are the risks to. Public sentiment about a currency can actually impact its prices. What goes up is most definitely bound to come down so be careful with the trade moves you make. The higher the risks the higher the rewards might be but be ready for losses as well. The best you can do whatever the cryptocurrency you choose is to keep an eye on events that can affect prices and act fast.

Once you know everything that matters in cryptocurrency trading, you can then go ahead and open a brokerage account and fund it then you can start buying and selling the currencies. The rewards are numerous for keen traders.

Today, you can invest in cryptocurrency quickly and easily. You have the liberty to invest with the help of online brokers, but you cannot say for sure if this is a foolproof venture. There are a lot of risks and pitfalls that you need to face if you are thinking of entering this field. However, you don’t have to become a master in the world of computer science or finance to get started. What it means is that you have to make an informed decision. In this article, we are going to talk about some common mistakes that most cryptocurrency investors make. Read on to find out more.

1: You Buy the Wrong Coins

If you have made your mind to purchase Bitcoin, you have to be careful. There are different types of Bitcoin, such as Bitcoin private, Bitcoin SV, Bitcoin Gold, and Bitcoin cash. In other words, there are numerous offshoots that you need to watch out for.

Although these are not bad or scams, make sure you know what you are buying. Even if you purchase the wrong coin, you can still sell it back and look for the right one.

2: You’re not for the Wild Ride

If you want to enter the world of cryptocurrency, you have to have nerves of steel to face the volatility. Unlike the traditional finance world, cryptocurrency has extreme volatility, according to Theresa Morison who is a certified financial planner in Arizona.

According to her, as a new investor, you should invest a small sum in the beginning, such as $100 per month, and then forget about it. If you keep an eye on the market on a daily basis, it will drive you crazy.

Apart from this, just because you are a beginner, you may want to stick to 2 to 3 cryptocurrencies that you are familiar with. Ideally, you may consider the established coins first such as Bitcoin and Ethereum.

3: You don’t Double-Check the Address

Many cryptocurrency traders lose their coins just because they don’t double-check the address. Unlike a conventional bank transfer, you cannot just reverse a transaction. So, you have to be really careful when making this type of transaction using cryptocurrency. If you don’t be careful enough, you may end up losing thousands of dollars in seconds.

4: You Lost Access to your Wallet

Although there are a limited number of 21 million Bitcoins, the entire number of Bitcoins are not being created. The reason is that many of the coin holders have lost access to their wallets because of forgotten passwords.

According to the report from Chainanalysis, 1 out of 5 Bitcoins mined so far is not accessible because of Lost passwords. Therefore, make sure you store your password in a safe place before you start reading.

In short, we suggest that you avoid these four most common mistakes if you want to become successful in the world of cryptocurrency trading. Hopefully, these tips will help you be on the safe side and achieve success as a trader or investor.

2021 has become a boom-year for DeFi. The DeFi market grows so fast, and it’s even hard to follow all the changes.

Why is DeFi so special? Crypto market gives a great chance to earn more money in many ways: decentralized exchanges, yield aggregators, credit services, and even insurance – you can deposit your tokens in all these projects and get a reward.

But the hottest money-making trend has its tricks. New DeFi projects are launching everyday, interest rates are changing all the time, some of the pools cease to exist – and it’s a big headache to keep track of it but you should to.

Well, the solution is here. We created a ranking service of DeFi yield farming projects that will help you to find a reliable project with the highest interest rates for your safe investment of cryptocurrencies and tokens.

The aggregator of crypto yield farming ranking DeFiEarns.com was launched on 1st of August in 2021.

It maintains 56 projects – DEX’es (PancakeSwap, MDEX), Yield Farms, Yield Aggregators/Optimizers (PancakeBunny, Beefy Finance, AutoFarm), Lending Platforms (Venus, Annex Finance), and even Leveraged Yield Farming projects as Alpaca and Alpha Home are listed there.

DeFiEarns.com supports just 3 networks yet – Ethereum Mainnet, Binance Smart Chain and Polygon. But in 2 months it will be completed with other the most popular networks.

Clear interface and easy filters make everything simple. DeFiEarns.com users can keep up to date with interest rates both for a token and for a pair of tokens in multi-token pools where 3 or even 4 tokens can be deposited. Investors can also track the ranking change history and total value locked (TVL) in different pools and on different farms.

Don’t miss the yield just storing your tokens idly – multiply your crypto on DeFiErans.com

But note that investing in DeFi is risky: impermanent losses, project hackings, Oracle bugs and high volatility of cryptocurrencies – these are the problems DeFi yield farmers face all the time.

How does defiearns.com work

Just follow the link on DeFiEarns.com, and type the name of a token you have in a search box – then choose the best interest rate but don’t forget to check TVL first. The higher TVL ranking – the more reliable the project.

On DeFiEarns.com You can also find out what company audited the project.

What defearns.com stands for

We keep everything simple and go after just one idea – to give the opportunity to every DeFi enthusiast to choose the best interest rates in all the projects.

In the early days of its launch in 2009, several thousand bitcoins were used to buy a pizza. Since then, the cryptocurrency’s meteoric rise to US$65,000 in April 2021, after its heart-stopping drop in mid-2018 by about 70 percent to around US$6,000, boggles the mind of many people – cyptocurrency investors, traders or just the plain curious who missed the boat.

How it all began

Bear in mind that dissatisfaction with the current financial system gave rise to the development of the digital currency. The development of this cryptocurrency is based on blockchain technology by Satoshi Nakamoto, a pseudonym apparently used by a developer or group of developers.

Notwithstanding the many opinions predicting the death of cryptocurrency, bitcoin’s performance has inspired many other digital currencies, especially in recent years. The success with crowdfunding brought on by the blockchain fever also attracted those out to scam the unsuspecting public and this has come to the attention of regulators.

Beyond bitcoin

Bitcoin has inspired the launching of many other digital currencies, There are currently more than 1,000 versions of digital coins or tokens. Not all of them are the same and their values vary greatly, as do their liquidity.

Coins, altcoins and tokens

It would suffice at this point to say there are fine distinctions between coins, altcoins and tokens. Altcoins or alternative coins generally describes other than the pioneering bitcoin, although altcoins like ethereum, litecoin, ripple, dogecoin and dash are regarded as in the ‘main’ category of coins, meaning they are traded in more cryptocurrency exchanges.

Coins serve as a currency or store of value whereas tokens offer asset or utility uses, an example being a blockchain service for supply chain management to validate and track wine products from winery to the consumer.

A point to note is that tokens or coins with low value offer upside opportunities but do not expect similar meteoric increases like bitcoin. Put simply, the lesser known tokens may be easy to buy but may be difficult to sell.

Before getting into a cryptocurrency, start by studying the value proposition and technological considerations viz-a-viz the commercial strategies outlined in the white paper accompanying each initial coin offering or ICO.

For those familiar with stocks and shares, it is not unlike initial public offering or IPO. However, IPOs are issued by companies with tangible assets and a business track record. It is all done within a regulated environment. On the other hand, an ICO is based purely on an idea proposed in a white paper by a business – yet to be in operation and without assets – that is looking for funds to start up.

Unregulated, so buyers beware

‘One cannot regulated what is unknown’ probably sums up the situation with digital currency. Regulators and regulations are still trying to catch up with cryptocurrencies which are continuously evolving. The golden rule in the crypto space is ‘caveat emptor’, let the buyer beware.

Some countries are keeping an open mind adopting a hands-off policy for cryptocurrencies and blockchain applications, while keeping an eye on outright scams. Yet there are regulators in other countries more concerned with the cons than pros of digital money. Regulators generally realise the need to strike a balance and some are looking at existing laws on securities to try to have a handle on the many flavours of cryptocurrencies globally.

Digital wallets: The first step

A wallet is essential to get started in cryptocurrency. Think e-banking but minus the protection of the law in the case of virtual currency, so security is the first and last thought in the crypto space.

Wallets are of the digital type. There are two types of wallets.

• Hot wallets that are linked to the Internet which put users at risk of being hacked
• Cold wallets that are not connected to the Internet and are deemed safer.

Apart from the two main types of wallets, it should be noted that there are wallets just for one cryptocurrency and others for multi-cryptocurrency. There is also an option to have a multi-signature wallet, somewhat similar to having joint account with a bank.

The choice of wallet depends on the user’s preference whether the interest purely in bitcoin or ethereum, as each coin has its own wallet, or you can use a third-party wallet that include security features.

Wallet notes

The cryptocurrency wallet has a public and private key with personal transaction records. The public key includes reference to the cryptocurrency account or address, not unlike the name required for one to receive a cheque payment.

The public key is available for all to see but transactions are confirmed only upon verification and validation based on the consensus mechanism relevant to each cryptocurrency.

The private key can be considered to be the PIN that is commonly used in e-financial transactions. It follows that the user should never divulge the private key to anyone and make back-ups of this data which should be stored offline.

It makes sense to have minimal cryptocurrency in a hot wallet while the bigger amount should be in a cold wallet. Losing the private key is as good as losing your cryptocurrency! The usual precautions about online financial dealings apply, from having strong passwords to being alert to malware and phishing.

Wallet formats

Different types of wallets are available to suit individual preferences.

• Hardware wallets made by third parties which have to be purchased. These devices work somewhat like a USB device which is deemed safe and only connected when required to the Internet.
• Web-based wallets provided, for example, by crypto exchanges, are considered hot wallets which purt users at risk.
• Software-based wallets for desktops or mobiles are mostly available for free and could be provided by coin issuers or third parties.
• Paper-based wallets can be printed bearing the relevant data about the cryptocurrency owned with public and private keys in QR code format. These should kept in a safe place until required in the course of crypto transaction and copies should made in case of accidents such as water damage or printed data fading through passage of time.

Crypto exchanges and marketplaces

Crypto exchanges are trading platforms for those interested in virtual currencies. The other options include websites for direct trading between buyers and sellers as well as brokers where there is no ‘market’ price but it is based on compromise between parties to the transaction.

Hence, there are many crypto exchanges located in various countries but with differing standards of security practices and infrastructure. They range from ones allowing for anonymous registration requiring just email to open an account and start trading. Yet there are others that require users to comply with international identity confirmation, known as Know-Your-Customer, and anti-money laundering (AML) measures.

The choice of crypto exchange depends on the user’s preference but anonymous ones may have limitations on the extent of trading allowed or could be subject to sudden new regulations in the country of domicile of the exchange. Minimal administrative procedures with anonymous registration let users start trading quickly while going through KYC and AML processes will take more time.

All crypto trades have to be duly processed and validated which can take from few minutes to few hours, depending on the coins or tokens being transacted and volume of trade. Scalability is known to be an issue with cryptocurrencies and developers are working on ways to find a solution.

Cryptocurrency exchanges are in two catergories.

• Fiat-cryptocurrency Such exchanges provide for fiat-cryptocurrency purchase via direct transfers from bank or credit and debit cards, or via ATMs in some countries.
• Cryptocurrency only.There crypto exchanges dealing in cryptocurrency only, meaning customers must already own a cryptocurrency – such as bitcoin or ethereum, – to be ‘exchanged’ for other coins or tokens, based on market rate

Fees are charged to facilitate the purchase and sale of crypto currencies. Users should do the research to be satisfied with the infrastructure and security measures as well as to determine the fees they are comfortable as different rates charged by various exchanges.

Do not expect a common market price for the same cryptocurrency with difference exchanges It may be worthwhile to spend time doing research on the best price for coins and tokens that are of interest to you.

Financial transactions online carry risks and users should factor in the caveats such as two factor authentication or 2-FA, keeping updated on the latest security measures and being aware of phishing scams. One golden rule on phishing is not to click on links provided, no matter how authentic a message or email is.