Aug 112018
 

Bitcoin Dominance

In a recurrence of history not repeating but rhyming, as the crypto bear market of 2018 deepens, the Bitcoin dominance index has been on the rise. Today, for the first time in 2018, it has passed the 50% mark. Based on historical trends, during the exuberance of a bull market, ‘altcoins’ rally relative to Bitcoin. During the bear markets, however, Bitcoin takes away what it gives during the bull markets, i.e. the relative ‘altcoin’ prices fall with respect to Bitcoin.

The Bitcoin dominance index, which measures the relative weight of Bitcoin in the full tradable basket of cryptocurrencies, has crossed the 50% mark, an important psychological level but otherwise without fundamental merit. It should also be noted that today there are an order of magnitude more cryptos in the market than even 2 years ago, so Bitcoin retaining 50% of the entire market even as new entrants enter this market is impressive.

Dominance History

Bitcoin dominance peaked around 80% before the bull market of 2017, when it dropped to as low as 35%, before recovering. This has usually been the case with Bitcoin and the crypto markets when the relative weight of Bitcoin falls during a bull market. The altcoins tend to be more volatile than Bitcoin.

This was also the time of the ‘flippening‘ narrative put forth by the Ethereum community that the Ether market capitalization would exceed that of Ethereum very soon. That was not to come in 2017. Even prominent venture capitalists who have invested in the space for a few years, like Fred Wilson, were completely wrong on their prediction of the flippening. It is a common human bias to project a recent trend into the future, and recency bias makes us weigh recent data more than older data. Needless to say, even prominent investors are not immune to these, and seldom correct their world view distorted by these biases.

Different Value Sources

The other thing for crypto investors to keep in mind is that the value of different ‘altcoins’ today come from very different sources, and thus it is not always fair to compare Bitcoin to them. For example, the value of a coin like Golem primarily comes from the usage of its network for compute resources. This is not true for Bitcoin. Bitcoin is more of a true store of value that is converting to a convenient medium of exchange via innovations like the lightning network.

This was different when the best known altcoins were similar to Bitcoin, such as Litecoin. Today, the crypto market is much more diverse in its offerings.

The value of Bitcoin is affected also by the broader economy and market, such as providing shelter to ordinary people in countries like Venezuela, Iran, and Turkey where inflation is rampant. Bitcoin provides a way for these people to store their wealth in a non-depretiating asset or work for foreign entities and capture some of the value they create.

Aug 022018
 

This is a guest post by Anupam Varshney

“Like all great travellers, I have seen more than I remember, and remember more than I have seen” – Benjamin Disraeli

We all love to travel. Some prefer a weekend getaway, others go out for a few weeks and then there are avid travellers who have been travelling for years. One thing all international travellers can agree on is the hassle of currency conversion when you visit another country.

My friend visited Vietnam a few months ago and this is how his $500 in Vietnamese Dong looked like:

Travel Digital Currencies

“I’d have been screwed in Vietnam if it wasn’t for Bitcoin” – Vibhor Jain

As it turns out, 1 USD is equivalent to 23,042 Vietnamese Dong!

The worst part is, you don’t even know where to get the best rates for converting to local currencies. Is it the airport or somewhere in the city? Your guess is as good as mine.

And what happens when you’re left with the local currency after your trip is done? Well, they usually stay with you. I’m sure my friend still has some Dong lying around.

Let’s not even get started on how much ATMs charge when you withdraw cash internationally using your card. It’s anywhere between $5 to $25 for each withdrawal. Swiping your credit card at stores will cost you even more.

Wouldn’t it be great to have a global currency that eliminates the hassle of high fees and carrying a lot of cash?

Digital currencies like Bitcoin, Ethereum and others allow you to do so.

Five years ago it may have been slightly difficult to travel using just cryptocurrencies, but blockchain space has evolved so fast that you can pretty much use cryptocurrencies in all aspects of travelling and replace it with fiat.

Before you travel

Planning phase of travelling is probably the most exciting part for some people, however, entire process can be very tedious. On average, a traveller spends 30 hours and browses 38 websites before finally booking a trip.

If you’re a DIY kind, you can still do everything with Bitcoin and other cryptocurrencies one by one.

Flights

Accommodation

  • Expedia is one of the largest travel booking websites. It accepts Bitcoin for hotel bookings.
  • Gyft.com allows you to buy gift cards in Bitcoin that can be used on Hotels.com, which offers 150,000 hotels worldwide

Watch out for Beenest, a platform to book Airbnb like homes using their native BEE tokens.

Car Travel

  • CheapAir and Destinia allow users to rent a car and pay in Bitcoin
  • There are decentralised carpooling apps: Lazooz and ArcadeCity
  • Many local travel agents now accept payments in digital currencies who’d happy to rent you a car

While you travel

When you’re travelling in a different country, use digital mapping tool CoinMap to locate stores and restaurants where Bitcoin is accepted.

A few companies offer their native cards just like Visa and Mastercard, which are filled with digital currencies and can be used at any store where Visa or Mastercard are accepted. So you pay in the local currency but Bitcoin (or some other supported digital currency) equivalent of that amount is deducted from your personal wallet.

The most popular project working on this is Monaco. They support BTC, ETH, MCO, BNB, and fiat, whereas TenX supports BTC, ETH, and LTC. Bitpay is another company that offers this service, but for US residents only. It supports Bitcoin and charges 3% for international transactions.

If carrying another card is not your thing, you can simply use Bitcoin ATM Map to locate a Bitcoin ATM nearest to you and fill your digital wallet with Bitcoins!

Conclusion

The tourism industry is one of the earliest adopters of digital currencies because it perfectly fits a traveller’s needs – a currency that is safe to carry around and accepted internationally. So the next time you decide to go to another country, try leaving your credit and debit cards at home.

This is a guest post by Anupam Varshney of Please.com. With Please.com you can book your travel in minutes. The platform provides a list of pre-designed trips created by the locals of the city you’re visiting. All you need to do is say, “Please, book me a romantic dinner in Paris” – that’s all.

Nov 272017
 

Buy Fractions of Bitcoin UK
This is a guide to buy fractions of a Bitcoin in UK. When I lived in London and introduced several of my co-workers, friends, and their friends to Bitcoin, it seemed harder to buy Bitcoins in London than New York. I hope this guide helps my UK friends to buy fractions of a Bitcoin more easily. Also, see our previous post on how to buy fractions of Bitcoin.

Before we proceed, a quick note on buying fractions of a Bitcoin in the first place. At the time of this writing, one Bitcoin costs around $9600 or £7200. That’s a lot of money for someone just trying to buy their first Bitcoins. However, the good news is, you don’t need to buy a full Bitcoin. You can buy a fraction of a Bitcoin. Here’s a quick sample guide:

  • 1 mBTC (milli Bitcoin) is 1/1000th of a Bitcoin. The cost is £7.2 – the cost of your Shoreditch avocado sandwich.
  • £100 is 0.014 BTC – the cost of your black cab from Heathrow to your shared flat in Shoreditch above the avocado sandwich place.

You get the point. Bitcoin is in fact divisible into 100,000,000 parts, so really, you can buy a penny’s worth of Bitcoin if you’d really like.

To buy fractions of a Bitcoin in UK, you need a provider where you can easily pay GBP to get your BTC. The easiest way to do this is with Coinbase. In fact, if you have your UK drivers license with you right now, you can start buying Bitcoin on Coinbase instantaneously. This is the smoothest buying experience, in my experience, for my UK friends who are new to Bitcoin and don’t have an account anywhere.

Coinbase essentially functions very similar to a bank account. You can go sign up right now, with an email address and create a password. To really buy Bitcoin though, you need to connect your bank account, which you can do with a debit card. If you use a debit card, you can start buying Bitcoin with Coinbase immediately. If not, you will need to wait for a SEPA bank transfer. Both options are fairly good, but the debit card one might be more convenient in a fast-moving market.

Remember that Coinbase is a wallet and exchange provider, which allows you to quickly buy Bitcoin in UK. It will therefore need to do basic identity check on you, called KYC (Know Your Customer). If you have a drivers license, you can just take a photo of it, and it is processed instantaneously in most cases. If not, someone will need to manually review it, which may take time. In my experience, it is usually fairly accurate and I haven’t had many issues with friends. Make sure the photo is taken in good lighting.

If it goes into manual review, I’d advise patience. This is because Coinbase is adding 100,000 users a day, so obviously they are a little swamped at the moment.

After you buy your Bitcoin through Coinbase, you can leave it on their online wallet or transfer to your personal wallet. If you leave it with them, it acts as a custodian wallet. If you transfer to your own wallet, you need to be extremely careful with security. There are different risks with each approach – research them before you make a final decision.

If you plan to hold a large number of Bitcoin, say over £2000 or so, I’d suggest getting a hardware wallet. These are secure against most online attacks (your computer is likely not secure enough, and you can lose all your Bitcoin on an infected computer). You can buy a ledger nano s or trezor for this purpose.

Finally, Coinbase lets you buy with your bank account or debit card. If you instead want to buy with cash, then LocalBitcoins is your best bet. You can meet up with someone and do a cash transfer. Otherwise, if Coinbase takes too long to verify you, you can use LocalBitcoins to transfer money via your bank account, and get the Bitcoins sent to your wallet.

Nov 142017
 

This is a guide to sell Bitcoin Cash for Bitcoin. Bitcoin Cash was hard forked from Bitcoin on 1st August 2017. This means anyone who held Bitcoin on this date would be able to access an equal amount of Bitcoin Cash on its own blockchain. This of course assumes that you held your private keys and didn’t leave Bitcoin with third-party custodians like Coinbase or exchanges. If so, then your ability to access Bitcoin Cash is restricted to what this custodian wishes to do. For example, Coinbase users still cannot access their Bitcoin Cash, but Coinbase plans to make it available around early next year in 2018. In the future, if you need to hold your Bitcoin private keys for future forks, you should buy a hardware wallet like Trezor, Ledger Nano S, or KeepKey.

During the subsequent months, its price against Bitcoin has fluctuated wildly, with a peak around 35% of BTC and a trough around 5%. In price terms, BCH/BTC saw a peak around 0.35 and a trough around 0.05.

A lot of Bitcoin holders see Bitcoin Cash as a sort of ‘dividend’ that is paid to them. Therefore, many Bitcoin holders want to sell their Bitcoin Cash for Bitcoin, in order to increase their Bitcoin holdings. If you sold at the peak, you could have increased your Bitcoin holdings by 35%. At the time of this writing, Bitcoin Cash trades around 0.2 BTC, i.e. if you sell all your Bitcoin Cash to Bitcoin, you will get 20% of your Bitcoin holdings. This is a great benefit to long-term Bitcoin holders.

Accessing your Bitcoin Cash

The first step is accessing your Bitcoin Cash in the first place. Depending on how you hold your Bitcoin and in what wallet, there are various options to access it. Here are some common ones:

Bitcoin Private Key

If you have access to your raw Bitcoin private key, then the easiest wallet that I found to use for Bitcoin Cash is Electron Cash. Electron Cash is a clone of the popular Bitcoin desktop wallet Electrum. It is open source and you’re free to audit the code. It allows you to input your private key directly, and lets you access your Bitcoin Cash that you’re entitled to.

Ledger Nano S

If you held your Bitcoin in Ledger Nano S, then you can use the same hardware wallet, Ledger Nano S, to access your Bitcoin Cash. However, note that you need a firmware upgrade to your Nano. This wipes the device out, so be extremely careful! Read the official Ledger guide for more information.

Trezor

Trezor created a handy ‘splitting tool’ that can be used to access your Bitcoin Cash. Just to be safe, make sure to send your Bitcoin Cash to another address inside Trezor, so that there’s no scope of confusing between chains. You just need to go with the splitting tool after connecting your Trezor, and ‘claim’ your BCH. Read the official Trezor guide for more information.

KeepKey

KeepKey has a simple way to claim your Bitcoin Cash. They have a beta version of the KeepKey client that you can use to access your Bitcoin Cash. Read the official KeepKey guide for more information.

Selling Bitcoin Cash for Bitcoin

Now that you have access to your Bitcoin Cash, it is time to sell it for Bitcoin. For this, you need exchanges, or other ways to convert your Bitcoin Cash to Bitcoin. Here are the ways to do it:

ShapeShift

ShapeShift is perhaps the simplest way to convert your Bitcoin Cash to Bitcoin. All you need is a Bitcoin address, and a return Bitcoin Cash address (in case the transaction doesn’t go through for some reason). Then ShapeShift will send you a unique address to send Bitcoin Cash to, and send the Bitcoin to your address. Just like that. You don’t need to create any account, no registration, no order books, nothing. Of course, you will likely pay a higher fee going through ShapeShift but it is a very simple option and definitely very convenient.

Changelly

Changelly is very similar to ShapeShift in that you just select that you want to convert Bitcoin Cash to Bitcoin, and it just does the conversion for you, sending Bitcoin to the address that you specify. They do ask for a basic account via email but nothing too elaborate. There’s no need for order books though, and you get your Bitcoin instantly to your wallet.

Online Exchanges

By now, you probably are a user at several online exchanges. These are proper exchanges in that there is an order book and you can put market orders or limit orders to sell your Bitcoin Cash for Bitcoin. There are several exchanges today that trade the pair BCH/BTC, depending on your accounts.

If you’re not on any crypto exchanges and want to trade BCH/BTC pair, Bittrex is probably the best place to trade. If not, HitBTC and Poloniex are also good options.

 

Jul 112017
 

This is a guest post by Anupam.

Bitcoin has been on a wild ride since the beginning of 2017. It started the year off trading at around $900 and has since tripled in less than 6 months. With daily volumes at over $2 billion, the currency shows no sign of slowing down.

India has always been an interesting region for bitcoin. Even though people at large are still unaware about the cryptocurrency, the small number of people who do understand and are interested in Bitcoin has been growing rapidly.

According to the Economic Times (a leading Indian newspaper), there are more than 2500 Indians investing in Bitcoin every day, despite the warnings from the central bank. It is important to note that buying bitcoin in India is legal. However, it is not regulated by the central bank, the Reserve Bank of India (RBI).

On December 24, 2013, the RBI issued a press release on virtual currencies (like Bitcoins, Litecoins, Ethereum, Dogecoins, etc.) stating that creation, trade, and usage of virtual currencies as a medium for payment is not authorized by any central bank or monetary authority.

After the recent wannacry attack, Indian government finally looks serious to tackle bitcoin and other cryptocurrencies. Last month, they sought public opinion on whether or not to regulate bitcoin. It seems like the government is in the process of drafting regulations around cryptocurrencies.

Regardless of what government comes up with, there is no way they can completely ban bitcoin. People are buying bitcoins in India and will continue to do so.

Up until two years ago it wasn’t very easy for an average Joe to get hold of bitcoins in India. Today, however, there are several exchanges from where Indian citizens can legally buy bitcoins. Few exchanges outside of India also let Indians buy bitcoin.

Bitcoin Exchanges in India

Zebpay

Zebpay is the largest Indian bitcoin exchange with daily volumes hovering around 4000 bitcoins. It has Android and iPhone apps that make it easy to buy bitcoins with a connected Indian bank account. Zebpay charges a minimal amount of INR 10 on every withdrawal.

Coinsecure

Coinsecure provides an interactive trading platform along with the exchange. The transaction fee is 0.3%.

Unocoin

Unocoin is another great exchange but their prices are usually a bit higher compared to other exchanges. They charge 1% fees on every transaction.

Pocketbits

Pocketbits is a new player in the market. Founder of the exchange is very active in buying and selling bitcoins on localbitcoins. They are super quick with verifications and deposits.

Local Bitcoins

LocalBitcoins is an escrow service which helps to match buyers and sellers. In India, the most common method of making the payment is IMPS transfer. It’s easy and quick. With LocalBitcoins you don’t need to go through any KYC process. Just select a reputed seller and buy bitcoins.

You may also find people willing to meet you in person to do the transaction. These meetings are not facilitated by LocalBitcoins in India.

Bitcoin Exchanges Outside India

Coinmama

Coinmama allows customers to buy bitcoins from any country including India via debit or credit card. They charge a ~6% fee on every purchase. You don’t need to verify your identity if you’re buying less than $150 worth of bitcoins.

BTCC

BTCC is based out of Hong Kong and let’s people trade in USD. You will need to wire USD into your BTCC account in order to buy bitcoin from the exchange.

ShapeShift

Shapeshift lets you buy bitcoins with altcoins like Ethereum, Litecoin, Dogecoin etc. You never need to create an account on Shapeshift. Exchanges happen almost instantly because ShapeShift never actually controls your tokens but simply exchanges them.

Conclusion

After the demonetization scheme, there is a sudden push by the government to move towards a cashless society. The move has made people in India to look at bitcoin as an investment opportunity.

India also has one of the largest remittance markets with a total value of more than $70 billion. A user generally ends up paying up to 15% in bank charges and conversion fees. This is where bitcoin’s true potential lies – quick transfers with negligible fees.

Clearly, the adoption of bitcoin is at a steady pace in the country. Only the time will tell if it can go mainstream.

Dec 232016
 

Circle Alternative

We covered earlier this month that Circle ended support for buying Bitcoin. Since then, we’ve gotten a lot of queries about what the best methods to buy Bitcoin are. This post is to give you alternatives to Circle to buy Bitcoin that are as convenient as Circle (actually, Circle was really good and convenient to buy Bitcoin, so it isn’t the same, but close enough I suppose).

The news and timing of Circle pulling out of the Bitcoin market couldn’t have been worse. The price of Bitcoin is rallying, and as of writing this, the price is hovering around $903 per Bitcoin. Compare this to the price of Bitcoin around $750 when Circle announced the shut down of the ability to buy Bitcoin on its platform and you get the idea why people were really unhappy. With the price rally, many people new to the Bitcoin markets are looking to get into it. Here are some good ways for them to buy Bitcoin.

Coinbase: Coinbase is the service most like Circle, and is the closest alternative to Circle. It is available in 30+ countries including the United States. If you’re a US-based person, Coinbase is probably the easiest way to buy Bitcoin. You just need to connect your bank account with your Coinbase account, and you’re all set to go. There are varying limits and verifications. If you’re sufficiently verified, you can buy Bitcoin instantly. Coinbase also has an exchange called GDAX. In addition, you can use Coinbase to buy Ethereum as well.

Buy Bitcoin on Coinbase

Gemini: Gemini is the latest US based exchange run by the Winklevii twins (of Facebook/the social network fame). The twins are seriously trying to get the first Bitcoin ETF approved in the US, and have a pending ETF application with the SEC. In addition to being a regulated exchange, Gemini has a closing auction that moves a significant amount of volume sometimes (similar to what the NYSE does at closing). It is newer than Coinbase but is focused exclusively on Bitcoin and is professional-grade.

Gemini auction data

Local Bitcoins: This allows you to buy Bitcoin peer-to-peer. To buy Bitcoin, you will transfer money to someone and you will receive Bitcoin into your wallet after the transaction is confirmed. The prices tend to be a bit higher but this method provides you with greater anonymity when buying Bitcoin. In addition, there are many different sellers, and you can use many different methods to buy Bitcoin, from ACH to Wire transfer to PayPal. Obviously the prices may be higher if you’re using chargeback methods like PayPal but you have the option. Depending on the city, you might also be able to buy Bitcoin with cash here.

Buy Bitcoin from LocalBitcoins

Bitsquare: This is not the best alternative to Circle in the sense that they are on the opposite spectrum when it comes to ease-decentralization spectrum. Circle and Coinbase are very centralized, and easy to use. Bitsquare is completely decentralized and hard to use. However, in the spirit of decentralization that Bitcoin promotes, here’s an alternative if you’re looking for one.

Photo Credit: derekbruff

Oct 252016
 

who pays for bitcoin transactions

In Bitcoin, who pays for transactions? In every Bitcoin transaction, there are two parties, the sender and the receiver (technically, it is possible to create more complex transactions types but we’ll ignore all that for now, and assume a Bitcoin transaction as a simple financial transaction between the sender and the receiver). There is also Bitcoin transaction fees. So who pays for Bitcoin transactions? The sender pays for Bitcoin transactions. It is important to know this feature, because when you use Bitcoin as a payment mechanism, you should know who bears the transaction fees.

Why does it matter?

Bitcoin was originally hailed as the solution for micropayments. However, in its current form, Bitcoin transaction fees are fairly high for micropayments. Therefore, if you’re trying to send someone a few cents via Bitcoin, you should know that as the sender, you have to pay the Bitcoin transaction fee to the Bitcoin network.

Also, if you don’t provide the proper transaction fees, then your Bitcoin transaction will be ‘stuck’. This means that the Bitcoin network ‘sees’ your transaction, but the network will not confirm this transaction. This is not a good situation to be in, so you should pay adequate recommended fees to the network.

What happens to the transaction fees?

The Bitcoin miners take the transaction fees. This is part of their incentive to verify transactions on the Bitcoin network. The other part is through inflation of monetary supply (i.e. creation of new Bitcoins). Your goal, as the sender of a Bitcoin transaction, is to incentivize miners to include your transaction in a block, which ultimately gets added to the Bitcoin blockchain.

In the future, when the rate of new Bitcoins being created keeps decreasing, miners will increasingly rely on these transaction fees.

How much do Bitcoin transactions cost?

This really depends on the current state of the network, and how soon you want your transaction to be confirmed. To confuse people further, the amount depends on the size of the Bitcoin transaction which can vary a lot. Therefore, it is recommended to use the Bitcoin wallet recommended fees, which is calculated dynamically.

If you want more information on how much your Bitcoin transaction might cost, check out the latest data from 21. Note that a satoshi is a hundred millionth of a Bitcoin (1/100,000,000 of a Bitcoin).

Who determines Bitcoin transaction cost?

There is no central authority that determines Bitcoin transaction costs. This depends on the current state of the network and how full the blocks are. If the blocks are near full, the fees will be higher. If the blocks have more space capacity, the fees will be lower.

So always remember to add an appropriate fee to your Bitcoin transactions.

Photo Credit: Richard Walker