For the first time since 2014, the IRS released two new pieces of guidance—Revenue Ruling 2019-24 and frequently asked questions (FAQs)—on October 9, 2019, indicating how taxpayers should proceed when it comes to reporting and paying taxes on virtual currency.
Fundamentally decentralized, cryptocurrency has no single official body directly responsible for regulating it—and so frequently it ends up standing at the intersection between fiat money and assets. In the United States, the IRS is the single biggest establishment player that “touches” crypto with rules, since failure to comply can lead to penalties or even incarceration.
Releases like this one from the IRS can have a significant impact on the decisions that cryptocurrency holders will make in handling their property. This week’s release has generated a lot of buzz.
What was new in this release?
The IRS primarily addressed the case of hard forks, where a new branch appears in the blockchain protocol and does not recognize old blocks and transactions. Hard forks most commonly arise when a new spin-off cryptocurrency comes about (e.g. Bitcoin Cash from Bitcoin), or when Ethereum created a hard fork to reverse the DAO hack.
The release indicates that once the new fork appears, the taxpayer has a new tax obligation tied to the new fork. The taxpayer has to have “dominion and control” over the currency, meaning they have to be able to transact with it, which is technically true regardless of whether the taxpayer stores this cryptocurrency in an exchange or in a private wallet.
This release also addressed airdrops, and specifically noted that not all hard forks should be considered as airdrops. Essentially, it is only when a hard fork results in new currency that this should be reported as gross income; and per the IRS’ release, this can occur via airdrop and result in a new tax liability.
The new IRS release generates a new set of questions.
One-size-fits-all rules are a challenge within the widely varied world of crypto. This release by the IRS has generated even more questions about how to handle various situations that may arise, even within the context of a hard fork. The biggest questions center around how to treat the “old” currency:
How do you determine value of the old and new coins?
What if the coin is in a private wallet?
If the coin is in an exchange and not a wallet, the exchange will declare the new and old coins and note whether new assets—and therefore new tax obligations, as clarified under this release—were created.
But if the coin is held in a private wallet, demonstrating this can get tricky. While Q27 of the release tries to answer the question of how individuals can determine a cryptocurrency’s fair market value if there is no published one, this can get tricky since cryptocurrency doesn’t carry intrinsic value.
People frequently turn to wallets with private keys for increased security, and so they will not welcome added layers of complication to wallet ownership.
While public buzz notes that the IRS recognizes actions taken in good-faith, this does not necessarily assuage the fears of a public seeking clarity and security that they will not be penalized, particularly if any further changes arise in the future.
How has the release been received?
The release’s reception could perhaps best be summarized by the CCN headline, “IRS Tries, Fails to Explain Your Crypto Tax Liabilities After a Hard Fork.” Twitter was set ablaze with reactions to this ruling from everyone in the cryptocurrency and blockchain community, who were overall disappointed with the release.
One recurring sticking point has to do with the way the release handles airdrops, and how value is taxed even before the value is truly recognized—such as by a sale. ConsenSys’ legal expert Matt Corva likened it to oil: “If I discover oil is on my property, I don’t recognize income (thereby forcing me to set up a mining operation to extract it to offset my tax burden).” Instead, he recommends the same for both oil and crypto airdrops: “no tax until manipulated.”
Another contention with this release has to do with how this tax guidance could be used as a weapon by one exchange against another. If an exchange were to hard fork a cryptocurrency and then use a bit of capital to inflate the “fair market value,” this would create a new, unforeseen tax liability for those holding the original cryptocurrency—including other exchanges.
According to Cointelegraph and Blockonomi, this particular release came as a result of the Congressional Blockchain Caucus’ request for clarity on how to report cryptocurrencies for tax purposes. It will be interesting to see what further clarifications, if any, will be requested over time.
The IRS is maintaining high visibility in their attempts to educate the public, having even sent out letters to taxpayers who may have filed incorrectly. As a result, the IRS might have a stronger case for the prosecution of noncompliant taxpayers.
Author Bio: Andrea Pretorian is Content Manager over at BitIRA, leaders in digital IRA set-up and management
This is a guest post from Dimitris Tsapis. The views expressed are his own and do not reflect the opinions of the editors of other writers of BTC Geek. This is not investment advice. Cryptocurrencies are highly volatile and could lose money. Never invest more than you can afford to lose
Editors Note: We do not agree with some of the picks, like XRP. However, we strongly believe in having diverse opinions on this blog, and include writers whose views we don’t fully agree with.
In the last few years, the cryptocurrency market has seen many new coins enter the space. With more than 1600 cryptocurrencies to invest in 2019, choosing the best coins becomes a complicated task.
Most of these new coins promise high returns for early investors and try to revolutionize the market, one way or another.
But do they have the potential? Will they perform as they claim?
Sure enough, many of these coins have made their investors very rich, since their price appreciated more than 100-fold over a relatively short timeframe.
But let’s not forget the older coins as well. Bitcoin, Ethereum and Litecoin created many “overnight millionaires” back in the early days of crypto.
So how can we estimate which coins have the best opportunity to increase in value over the next bull-run?
How can we find true gems when practically everyone can create a new cryptocurrency? This question is especially relevant to invest in cryptocurrencies in 2019 as opposed to say 2017 when we had a massive bull run. In 2019, things have settled down and we’re more in the accumulation phase as opposed to a massive bull market.
In this article, we will analyze the factors that determine the best cryptocurrencies to invest in. We will also make a somewhat risky guess for our top contenders. Let’s get started.
A Closer Look at Cryptocurrency Investing
Investments of all kinds should be made after performing in-depth research and patient market observation. This is especially true with cryptocurrencies since they tend to follow historical patterns.
Therefore, before you invest in a cryptocurrency, make sure you train yourself to become emotionally detached from “trendy” coins and other external influences.
After all, the investment decision is yours only, as are the profits and losses that come with it.
Start by focusing your attention on what matters most. And by that, I don’t mean YouTube videos from self-proclaimed experts. Nor do I mean sponsored posts with heavy promotion.
Your goal should be to get information from reliable resources and form an opinion based on a coin’s future potential and technological development.
This step is very important. In-depth research will help you put emotions on the side and create a strategy to achieve your investment objectives.
Start by asking yourself the following questions:
What is the amount I want to invest?
Am I in it for the long term potential or short term gains?
What is my goal profit? At which price am I going to sell?
How strong is my emotional intelligence and patience?
How easily am I influenced by others?
Cryptocurrency investing is pretty similar to other investment markets. Some people will buy and sell their assets often, while others implement a more “long-term” approach, hoping to make more profits.
While the first option is often preferred in bear markets, it is the latter option that has proven to give investors the most optimal returns over time.
Take a look at the top cryptocurrencies for instance. Bitcoin and Ethereum didn’t reach their peak price overnight. It took a lot of patience and belief from investors not to sell throughout all this time.
On the other hand, exponential profits can also occur in the short term. Initial Coin Offerings (ICOs) are a great example. Most of them saw immediate growth after their release into the market.
But, as with everything that seems too good to be true, so with ICOs, one needs to do his due diligence before buying unknown coins. Very often, coins like that have nothing to offer to the space and are simply created to generate profit for the founders.
When looking for a coin that has the potential of performing great, what we look for is:
Relative price stability during the latest bear market
Big upside potential in case of a new bull market
That being said, let’s look at the best cryptocurrencies to invest in for 2019.
The term “Bitcoin is king” has not been given to the cryptocurrency without a reason.
Not only is it the first and only decentralized cryptocurrency, it is also the most popular one, having reached a peak price of $19750 during the latest bull run of 2017.
Here is why we think Bitcoin is one of the best cryptocurrencies to invest in:
Rich historical data for its price fluctuations
It has the highest market cap of all coins
It is the most popular cryptocurrency and the only truly decentralized one
Most merchants that accept cryptocurrencies, opt for Bitcoin
Due to its market dominance, it determines the direction of the market
Bitcoin presents a really good investment opportunity, especially for those who are looking to make a long term investment.
The future of Blockchain technology has yet to come, and the price of Bitcoin will likely follow.
XRP is currently the third large cryptocurrency by market cap. Created in 2012 by Ripple Labs, the token has seen some impressive gains starting from $0.006$ in March 2017 to its all-time high of $3.65 in January 2018.
Even though the recent market conditions were not favorable, XRP should not be overlooked. And here is why:
The team invests a lot of money and time in marketing and PR
Has a large fan base
Currently placed third by market cap
XRP is not only a store of value but also a reliable payment method
To add the last point, this means that transactions can be confirmed instantly when other coins are struggling with scalability issues.
As a result, many financial institutions have already started making transactions with XRP. Banks like JP Morgan, Saudi Arabia Central Bank, American Express, and China LianLian International are already using the system, increasing investors’ confidence and trust in the token’s future.
Ethereum is the first smart contract platform to have ever been created, enabling decentralized applications to become a reality. In its 2 years of existence, it managed to lead the ICO movement that saw many new coins enter the market.
Ethereum is one of the cryptocurrencies that has been around longer than its competitors.
The coin is currently sitting in the second position by market capitalization, with a total market cap of $17 Billion.
With generally good market sentiment and consistent transparency from its founder, Vitalik Buterin, Ethereum has managed to improve its community trust during the latest bear market.
And these are just to name a few. If you dig deeper, you will come to realize that many financial institutions are starting to implement smart contracts, which in turn makes ETH a very useful token.
Adding to that, we believe that the best cryptocurrencies will be those who help improve the space. And Ethereum is doing just that. Its ecosystem helps anyone create decentralized apps and new cryptocurrencies, hoping to improve the blockchain industry as a whole.
Using Bitcoin’s source-code, it is a fork of Bitcoin with some technical changes to the code, making it one of the fastest cryptocurrencies. Its mission is also to be a global, peer to peer currency.
Litecoin is known for its strong fan base and the numerous acronyms it has received as being the silver to Bitcoin’s gold.
Created in 2011, Litecoin is one of the oldest and most popular cryptocurrencies in 2019. It’s creator, Charlie Lee, is a well-known computer scientist who also happens to work as the Director of Engineering in Coinbase.
And while he publicly stated that he sold all of Litecoin close to the peak of the latest bull market, Charlie is still heavily supporting and promoting Litecoin to the public.
So what makes it a great investment?
Litecoin is a top 5 coin by market capitalization, currently sitting at a $4.5 Billion market cap.
It has a high trading volume as it is listed on the world’s biggest exchanges.
It has high community trust and a rather high media interest.
It follows the same “halving” protocol as Bitcoin, currently rewarding miners 25 Litecoin per block.
Unlike Bitcoin and Litecoin which aim to be used as currencies, the Binance coin is a utility token. Which means its value comes from how useful it is (and how much demand there is for its utility) within the Binance ecosystem.
Binance has proven to be very strong in the current market conditions. In fact, if you had invested in BNB at the beginning of the latest bear market, you would have made the biggest returns to date.
Let’s see why BNB is a great investment choice:
BNB is the token of the most popular cryptocurrency exchange worldwide, Binance.
The coin’s price has appreciated 3x (in BTC value) since the peak of the latest bull market.
Changpen Zhao (Binance CEO) has achieved positive publicity through Twitter.
Even with the 7000 BTC hack that Binance suffered, the coin’s price remained stable.
Binance is launching a decentralized exchange, Binance DEX, which is estimated to increase the utility of BNB.
Apart from the above, the coin has large liquidity, due to its utility on Binance exchange.
Therefore, if you are looking to diversify your portfolio, we strongly suggest Binance coin as one of your top options.
A final word
Investing, in all its forms, always comes with a certain amount of risk. The options above are simply an educated guess based on our experience in the space and the information we have available.
To sum up, here are the cryptocurrencies we strongly believe in:
– Bitcoin (BTC)
– Ripple (XRP)
– Ethereum (ETH)
– Litecoin (LTC)
– Binance coin (BNB)
When looking for the best cryptocurrency to invest in, it is important to gain a lot of different perspectives and conduct thorough research on the fundamentals of your coins’ options.
The best way to get started is by checking your current portfolio and start reading upon the coins you are currently holding. How experienced is their team? What are the key characteristics that will help this coin grow?
Good luck with your future investments and remember to only invest what you can afford to lose. We are not financial advisors and can only give you our personal opinion when it comes to the cryptocurrency market.
Dimitris Tsapis is writing content for Paybis, one of Europe’s top cryptocurrency exchanges, where you can buy bitcoin and other digital currencies fast and easy.
Bitcoin and its processes are like a coin with two sides to it. If you have some knowledge about bitcoin, you’ll agree that it is the best and excellent way to make anonymous transactions like donations, purchases, etc without incurring a loss of money or been affected by unstable prices, that’s one side of the coin.
The other side, however, is the fact that any transaction made is not totally anonymous as any activity or activities carried out are recorded and made available to the public through Blockchain (a compendious database responsible for keeping all records of bitcoin transactions). In fact, this is more apparent when bitcoin is used to pay for goods and services because there is always a need to provide salient information like name, address, phone number and sometimes email, what this implies is that a third party has access to your ID and can trace or track you and your transaction as well.
To this effect, bitcoin mixing (also known and referred to as tumbler or bitcoin laundering) has been offered as the best solution to the seeming challenge of privacy and anonymity in the bitcoin system. Bitcoin mixing offers an opportunity to ‘swap’ your bitcoins for different ones that can’t be traced to its original source. In essence, it mixes one’s bitcoin with other people’s bitcoin in order to make trailing to the original owner a herculean task. To better understand the concept, it operates the same concept with moving of funds around, through banks located in countries with strict bank secrecy laws such as the Bahamas, Cayman Islands, etc. Basically, one sends one’s bitcoin to a bitcoin’s mixing company and gets an equivalent amount of other people’s ‘tainted’ bitcoin sent to the new address. It’s like getting someone to pay for your goods and services, of course, this comes with a little mixing fee in order to avoid advanced analysis, also, such transaction will be delayed a while to prevent tracking.
How Does a Bitcoin Mixer Work?
The easy steps of the process of mixing bitcoins are as follows;
The individual sends their bitcoins to the chosen bitcoin tumbler;
The coins along with other people’s bitcoins are deposited in a secure common pool and mixed;
After mixing, the individual receives coins which are made up of other people’s coins or sometimes coins from the reserve system of the chosen bitcoin tumbler.
After these steps have been carried out, the link between the old and new wallet addresses is broken thereby giving such an individual an anonymous, new start on the blockchain.
Why is Bitcoin Mixing Necessary?
Many don’t see the need to remain totally anonymous, many don’t even care about their transaction information been displayed to anyone who cares to see it, against the mindset that those involved in shady dealings are those who need or make use of bitcoin mixing, it is a necessary tool for all bitcoin users especially for those who actively use bitcoins for transactions. As said earlier, cryptocurrencies operates using blockchains, therefore, every singular transaction is recorded and made public which in turn means that the third party has knowledge of an individual’s wallet address, also able to view all financial history of such user including the balance in the wallet, not only that, the third party will also be able to monitor future transactions and can share the individual’s wallet address with others especially with cybercriminals which the internet is full of.
Therefore, in order to avoid sad stories and to keep one’s personal anonymity including all information concerning one’s cryptocurrency funds, it is best to make use of bitcoin mixing.
How Safe is Bitcoin Mixing?
Many of the bitcoin mixer companies operated online use .IO and do not request for any form of user registration, e-mail or personal information at all. Also, most of them are legal as they have been reviewed on bitcoins platforms, e.g. bitcointalk.org and are being recommended to other bitcoin users.
However, one has to be very careful and make necessary research when choosing a bitcoin mixer company as there are so many cybercriminals on the net who are out to exploit people. One wants to be sure that one doesn’t become a victim of the very thing one is trying to avoid.
One of the methods employed by a trusted mixer is the availability of a Letter of Guarantee where the obligations of such company are confirmed to the user by a cryptographic key, in most cases, the Letter of Guarantee can’t be falsified. If any of the obligations are not met, the user can file, submit and publish a complaint in the official thread of the company on the BitcoinTalk forum.
How long does it take to mix Bitcoins?
This all depends on the company chosen and the terms and conditions that apply; some companies send new set of coins immediately originating from unrelated/unconnected wallets to the individual once the initial coins appear in their pool and the first miner confirmations are accepted, some delay delivery in order to completely throw ‘hounds’ off their track, others also come to terms of agreement with the individual on delivery time settings.
CHARACTERISTICS OF A GOOD BITCOIN MIXER
It must be able to guarantee 100 per cent anonymity such that it is untraceable and defiant to complex or advanced methods of blockchain analysis.
It must be safe, non-complex, dependable and service fees must be logical/rational and made visible to the user/customer.
It should provide detailed guidance on the use of the service, educational articles and useful materials in order to make the experience smooth.
It should be able to protect against the return of old coins in ensuing mixing.
It should be able to automatically and permanently destroy the history of successful transactions maximum after 24 hours.
It must not ask for any identifying and traceable information for any use.
Privacy and security policies must be created and enforced to preserve and uphold anonymity.
Must be Tor-friendly and SSL secured
Must charge logical or rational fees.
Best Bitcoin Mixing Services
Mentioned earlier is the fact that not all bitcoin mixers online are dependable, however, some have been reviewed and recommended over the years, some of them are;
BESTMIXER.IO: it has been rated especially on the BitcoinTalk forum as the leading bitcoin mixer on Clearnet. It separates new from old addresses by sending coins to other people and delivering theirs to the client ensuring anonymous transactions. BestMixer works with a range of cryptocurrencies including Bitcoin, Ethereum, Litecoin and Bitcoin cash, its speed depends on the delivery time setting chosen by the user. It is Tor-friendly and secured with an SSL certificate, it boasts of servers protected from any form of influence from locations in numerous dependable data centres, it also follows strict security and privacy policies assuring clients of complete anonymity. To this effect, it operates a 24-hour stint for histories and then totally remove them. It also has a great interface which is device-friendly, making it easy to use for everyone, even with a mobile phone. It operates a minimum transfer of 0.005 BTC, BCH, or LTC. It offers automatic and free membership and generates a code unique to each user, the more the transactions, the more the discount it offers its users.
BITCOIN LAUNDRY: this mixer cuts ties off all old and new addresses, thereby ensuring that history of the chain of transactions fades and the identity of such user becomes imperceptible, it also promises a friendly user interface, low charges and advanced security in the mixing system. Bitcoin Laundry charges a fee of 1% plus 0.00008 BTC per payout address and backs up transactions from .0005 to 38 BTC. It also provides an opportunity for users to send their coins to about 5 payout addresses to guarantee extra anonymity. It also offers users the ability to choose a preset or random delay for their payout for each address which makes it a herculean task for third parties to trace the transactions. It keeps history logs for one week and automatically delete them once the week elapses, to this effect, users are also provided with the opportunity to delete their history logs at any point. The platform can be accessed via clearnet at bitcoin-laundry.com, or TOR at btcdryi67te57itq.onion.
BIT BLENDER: launched in 2014 by an anonymous crypto-enthusiast and software developer, BitBlender is considered one of the oldest and easy-to-use bitcoin mixer, which is popular among the darkweb.net. it offers a randomized fee of 1 to 3% and operates as much as ten different addresses to ensure maximum privacy. It offers options of either opening/registering an account (in order to use the full range of tools) or to quickly mix their bitcoins without registering an account. It ensures that a user doesn’t get the same bitcoins sent in a previous transaction. It boasts of two additional tools scarce in other bitcoin mixers which are Auto-Withdrawal and Quick-Withdraw;
The Auto -Withdrawal tool affords the user the opportunity to set addresses to which the website will automatically mix the coins to once confirmations are received. This tool will make multiple and regular mixers’ users find it easy to mix.
The Quick Mix tool is enormously beneficial for those who desire to make it fast and simple. This feature also works for the frequent client that has no wish to create an account.
In conclusion, bitcoin mixing is a very essential tool for all bitcoin users and potential clients; it guarantees maximum anonymity and protects one from cyber-crime.
Taxes are an inevitable fact of life for everyone no matter what one thinks about it. As Benjamin Franklin famously and aptly puts it, it is the only certain thing in the world aside from death. Cryptocurrency miners are not exempt from paying taxes. In fact, the IRS is quick to remind people and businesses who earn from virtual currency transactions to report their earnings in their income tax return yearly as seen in this year’sIR-2018-71. But what exactly do you need to remember when paying cryptocurrency taxes for your 2019 return? Here are some crucial things to keep in mind when dealing with the taxman about your virtual earnings.
What Virtual Currencies are Taxed?
According toIRS Notice 2014-21, cryptocurrencies that can be exchanged for real currency (such as Bitcoin) are the ones that are taxable. However, these virtual currencies are not treated as currency but as business, investment or personal property. This means that the same principles of issuing and declaring taxable properties apply to your virtual money, according to the government agency.
How Your Taxes are Classified
The IRS tax virtual currencies depending on what entity you are (individual or business) or how you acquired it. Payments for goods and services are considered as part of your business or individual gross income in your tax return. Meanwhile, withholding and payroll tax applies if you work as an employee and get wages in crypto money. If you are a cryptocurrency mining hobbyist, successful transactions or activities are covered under your gross income as well. Your earnings are subject to self-employment tax if you do mining as an independent contractor or business.
Track Your Virtual Earnings
Since cryptocurrencies are treated as property and not as money, filing it as part of next year’s income tax returns can be quite tricky or confusing especially for miners. The fair market value of your mining transactions can also change dramatically. Therefore, it is important to keep tracking all of your transactions within the year to avoid slip-ups in your tax return. Keep all the related information about these transactions as well, as you might need it for your return.
The Issue of Losses
Another somewhat complex factor to deal with when it comes to filing your cryptocurrency mining transactions in your return are losses. The IRS determines gains and losses from these transactions depending on whether it is considered a capital asset on your part. If you have losses on a cryptocurrency transaction that you own for personal or investment purposes, then you might be eligible for a tax deduction. If you’re unsure, it’s best to consult an accountant or tax professional about it.
Summing It Up
Cryptocurrency taxes are fairly new and a bit tricky to handle as compared to other types of taxes. However, it can eventually be easier to understand and file on your tax return in time. As long as you stay updated and continue to keep a record of all your transactions using effective tools, filing next year’s return will be a cinch.
Myrtle is a freelance content writer who specializes in creating unique, high quality content. She usually write articles under taxes including filing tips, planning, and reform; financial health, investments, and healthcare, that aims to educate and provide useful information to her readers. Aside from writing, Myrtle is also fond of traveling and baking.
This is a guest post from Mike Dalton, a regular contributor to Unhashed
Obelisk—the sister company of Sia that is responsible for producing the coin’smining hardware—is currently facing a class action lawsuit. Thelawsuit alleges that Obelisk failed to deliver on its promises concerning two ASIC devices. In essence, Obelisk’s mining devices seem to not meet the company’s projected performance specifications.
According to the lawsuit, two of Obelisk’s ASIC devices are not as profitable or as efficient as the company originally claimed. Those ASIC devices, the SC1 and the DCR1, apparently have not achieved their projected hash rates—800 GH/s and 1500 GH/s respectively. Furthermore, the devices were not delivered by Obelisk’s stated deadline, which was June 30, 2018.
A refund is also at stake: David Vorick, who serves as the CEO of both Sia and Obelisk, originally claimed that a full refund would be given to customers if Obelisk did not fulfill its guarantees. However, Vorick later indicated that the company did not have the money to refund every customer. Obelisk temporarily opened a refund process, but refunds have apparently not been issued to members of the class action lawsuit.
The lawsuit tackles a very important issue: profitability is a delicate promise in the face of a volatile crypto market and a highly competitive mining landscape. The issue is even more critical due to the fact that Sia had beenplanning to block competing mining devices—and not simply manufacturer its own—meaning that Sia miners had little choice but to buy their hardware from Obelisk.
The Sia community has been calling for a lawsuit for some time, but whether this particular lawsuit has teeth is another matter. Although it seems to get the facts right, the lawsuit has been filed by a very minor blockchain company called UnitedCorp. This company has alsofiled a lawsuit concerning the Bitcoin Cashhard fork, and it has attempted tosue Facebook over certain patent violations. These two lawsuits seem to be opportunistic, to say the least.
It should be noted that this is not the only mining-related lawsuit in recent months. Nvidia recently faced a lawsuitclaiming that mining drop-offs damaged the company’s revenue, hurting stock market investors. Bitmain, meanwhile, hasbeen accused of configuring user-owned devices to mine for its own benefit. As it becomesharder to profit from crypto mining in general, it is possible that these sorts of accusations will become much more common.
I’m interested in knowing…. where do you go to learn about cryptocurrency? What’s your go-to website? (I know you’re saying, “btcgeek.com”, right!?)
The internet is full of biased opinion on pretty much every single industry, including cryptocurrency. So, guess what? Here’s some more biased opinion on where you should go to learn about cryptocurrency, haha!
I say biased, it’s not really since the team over at ICOholder.com have covered a fair few different resources in the infographic below, which hopefully will give you a level playing field of resources to learn from.
21 Places to Learn How Cryptocurrency Works Infographic from ICOHolder.com
We don’t all learn in the same way. I remember a million years ago, when I was back in school, if I was expected to learn just via a teacher talking to me, the information used to go in one wax-filled teenager’s ear and straight out the other. I had to be doing some form of writing, whether that was on the back of reading a book, watching a video or just taking class notes.
So, if you’re similar to me, perhaps taking one of these cryptocurrency courses will work out for you: The Complete Cryptocurrency Course, Cryptocurrency Trading Course 2018: Make Profits Daily, and Bitcoin And Cryptocurrency Technologies.
If only this information was available back in 2013 when Bitcoin went bananas… actually, wait, it was the world that went bananas, over Bitcoin. Satoshi Nakamoto has a lot to answer for; imagine how loaded he, or they, she, it, whatever, would be if they created an initial monopoly on the “how to learn about cryptocurrency” market. Instead, they launched Bitcoin, sat back, laughed at the confusion, and reaped the rewards… how cleverly selfish!
I would say that one of the most popular mediums of learning about all-things-crypto-and-blockchain is probably a combination of podcasts and YouTube. Learning by listening is coming back into the fold in a big way; so many people are listening to audiobooks and podcasts while they’re driving to work or dropping the kids off at school, or even while they’re working (I’m hugely guilty of this… who said men can’t multitask?)
Going back to the whole biased opinion side of things, just be careful, especially if someone is offering you investment advice on one of the coins. It could be they’re trying to alter price action in the market, or it could be that they’re trying to promote their own coin.
For example, the Bad Crypto Podcast have actually launched their own coin, which is an amazing idea and, while they put out some really useful information, they’ve obviously jumped on the back of this to create their own product i.e. the Badcoin.
Either way, Joel Comm and Travis Wright are quite fun to listen to and, if you are attracted to a laid-back style of learning, this can be a great resource.
Who knows what the future of cryptocurrency holds, especially with another recent crash in the price of Bitcoin. I don’t actually know why everyone seems so surprised about this, because, quite honestly, it’s not surprising considering the popularity of the niche in general. Surely there’s a level of realization that the more coins that exist, the more competitive the market is and, therefore, prices of coins will drop and stabilize over time?
Whatever your take on the market, or how in-depth your knowledge of crypto is, these cryptocurrency resources are an excellent way to expand your interaction with, and knowledge of, the crypto world.
This is a guest post from Chris McDonald of ICO Watchlist
2017 had been a great year for ICOs, in spite of the broader crypto bear market. Figures captured by ICOWatchList show that the 11 biggest ICOs achieved a return on investment (ROI) between 253% and 23,000%. The question many potential investors should be asking is: was this a one-off? To help answer this, some key indicators need to be factored in. Here are some indicators to help investors out –
The volume of ICOs held steady throughout 2016, rising and falling marginally. However, this was just a warm-up year to the explosion of new ICOs during 2017 Q2. Since then, the volume of ICOs has been accelerating exponentially on a month-to-month basis.
Capital flows trend
Capital flows mimic past ROI trends. If investors consider past ROI trends to have been positive, they are more likely to inject funds into ICOs. On the other hand, if they consider past trends to have been negative, they will either withdraw or shy away from funding new ICOs. According to CoinDesk, capital injection in ICOs in the first quarter of 2018 was 118% higher than during all of 2017.
Equity vs ICO (initial coin offering) trend
Initially, most funding for blockchain ventures was in the form of equity funding (venture capital). For example, according to Business Insider, in 2016 Q1, equity funding accounted for $17 million compared to ICO funding of only $12 million. In 2017 Q1, equity funding settled at $139 million after a consistent drop, while ICO funding settled at $38 million after a steady rise.
In 2017 Q2, ICO funding surpassed equity funding for the first time at $757 million against an equity funding value of $258 million. Whilst equity funding stagnated at $259 million in 2017 Q3, ICO funding shot up to $1.3 billion.
Clearly, ICOs have become the preferred investment vehicle for blockchain projects as compared to equity funding.
ICO vs VC (venture capital) Return trend
Research, based on historical data provided by CoinMarketCap, shows that ICO funding has overtaken VC funding. This is due to the 16% CAGR (Compound Annual Growth Rate) that ICOs offer investors compared to the CAGR from VC of only 10%.
Institutional vs Retail trend
At the beginning of the ICO phenomenon, most investors were small-scale retailers. This trend continued into early 2017; however, towards the end of 2017 to early 2018, there was an upturn in the value of institutional investment. As of mid-2018, institutional investors are leading retail investors—not in volume but in value. This is a positive indicator of investor confidence in ICOs.
The above indicators point to one conclusion: ICO success is going to continue for the foreseeable future. The ROI picture reflected by the infographic below should be enough to convince any doubting investor that ICOs are worth their consideration.
An ICO Pool is referred to as the collection of several investor funds – that are pooled together with the primary intention of making an investment in some ICO. The ICO pools are usually overseen by some group of individuals which manages the contributions made forward by each investor. Upon participating in any ICO pool, the pool of investors is usually given the access to the research of the pool. This offers them the opportunity to assess the overall quality of any ICO pool by themselves.
While most of the ICO pools would want you to make a good deal of investment as the minimum amount to ensure the private sale, as an individual investor it might turn out feasible to do the same. However, as you might know, that a majority of the benefits come with the private sale. As such, you might start looking out for other investors or friends to make the combined investment –in the hope to receive the given benefits.
However, soon enough it turns out that finding other investors to come & join your idea of ICO might not only turn out to be time-consuming, but also not so realistic. As such, the best option out there that exists for you is to join a reliable ICO pool or the investment pool – with an already existing group of ICO experts along with several other individual investors.
Types of ICO Pools
The typical ICO pools are usually categorized into two forms:
Trustless ICO Pools
Non-Trustless ICO Pools
The Trustless ICO pools are known for making use of the smart contracts for ensuring that no single party exercises direct control over the respective funds of the investors. As a result, this would consequently require no specific trust to be placed in the involved individuals who might be managing the particular ICO pool. The Ether is sent to the particular smart contract address – displaying the ICO address of the recipient along with another important piece of information.
The smart contract turns out to be an open-source medium. As such, the investors can review the overall validity of the available smart contracts before sending over any funds. After the completion of the respective pooling process, the Ether is then directly sent to the Ethereum address of the ICO. The investors then receive the specific ICO tokens in proportion to the respective initial investment.
On the other hand, the non-trustless ICO pools do not make use of the smart contracts. Instead, these pools are known to mandate the fact that the overall collection of the funds from the investors are done by the respective pool managers. The investors are responsible for sending the funds to some Ethereum address as specified by the pool managers. The pool managers then have the responsibility of redistributing the tokens that have been received to the respective correct investors.
Working of the ICO Pools
The ICO pools are regarded as the proper responses to the increasing trend of the respective ICOs aimed at raising the individual required amount of investment – referred to as private presales. The private presales are usually closed to the general public. These are specifically opened only to the venture capitalist firms or Angel investors including investors or individuals who are able to afford the investment of a large sum of money.
Most of the ICOs in the recent times are selecting the option of suspending the public sale – occurring after the private presale. This is because this helps them in raising the overall required investment during the presale stage. Due to this, most of the retail investors out there find that they are mostly unable to make investment in a particular project that they find interesting. As such, through participation in the ICO pool, a specific retail investor could rapidly increase the overall bargaining power through the aggregation of the funds and investment of the funds along with other individuals in the given pool.
Because ICO pools could be identified as the simple aggregation of the funds from the investors, the ICOs have nowadays started to offer lucrative pre-sale discounts & offers to any given pool that could be interested in making an investment into the particular project. As such, there are higher chances that a retail investor might receive more tokens by investing in an ICO pool, than investing on their own.
How to Join an ICO Pool?
If you are considering joining an ICO pool, it is vital to know & understand which ICO pool should be the best decision to join. This is because there are several numbers of fake ICO pools and investment groups out there that could make you fall into the respective traps. Once you know that you have come across the right, reliable ICO pool – the one that fits your budget and personal requirements, you can simply visit the specific website and become a member of the same. There are some ICO pools out there that tend to offer a premium membership with additional bonuses and offers like the lifetime free membership, unlimited free trading signals, and so on after you have submitted the initial joining fee.
Pros of ICO Pools
Access to the Resources of the Pool: On the basis of the specific ICO pool that you join, the investors are mostly granted access to the respective resources of the pool. This allows them to analyze the overall merits of the target ICO pool for themselves.
Potential ICO Offers & Discounts: As discussed above, due to the involvement of large sums of money as raised by the respective ICO pool, some of the ICOs out are incentivizing increased investments in the projects by offering lucrative discounts and offerings to the investors. Such discounts might help the investors to participate in the given ICO pool if the main motive is the maximization of the tokens under their ownership.
Participating in the ICO pools out turns to be lucrative, however, they might come with potential risks at the same time. Therefore, you must conduct proper in-depth research before investing in any ICO pool. To get the most of your ICO membership, learn all that you need to know about ICO pools and their work. How has ICO pool investment been useful to you? Leave your valuable comments below!
About the Author
My name is Alex Fleming andI am a full stack and blockchain solution developer. I have 7 years of experience. I can help you with launching ICO, creating own crypto etc. I see the future in blockchain technology and I like it. The last 2 years I have been working in this field. I think blockchain will transform the world in the future not only in the financial sector.
On 9th June 2016, Bitcoin reached a very important milestone – the second halving. In Bitcoin, halving occurs after about every four years, during which the mining reward is reduced by half. It’s a planned part of the Bitcoin ecosystem that controls the new supply of the cryptocurrency in the market. In the second halving, the reward went down to 12.5 BTC from 25 BTC. The block 420,000 was recently mined by Chinese Bitcoin miner F2Pool, setting the milestone of the first reduced block mining reward since 2012. The block contained 1,257 transactions, with an estimated transaction value of 1,688.69 BTC. The third halving is scheduled to occur sometime in 2020. So let’s compare the facts and figures between first halving that took place on Nov 28, 2012, with the second halving that occurred recently.
The relatively higher hash rate of the Bitcoin led to an earlier second halving. It occurred five months earlier than it was scheduled. Hash rate determines how powerful the miner’s machine is, and the profit of a miner is directly proportional to the hash rate, so this rate is adjusted every 2016 blocks and hash power increases or decreases in between. First halving was done after the mining of 210,000 blocks. The second halving is done after the mining of 420,000 block. At the time of first mining, 10,500,000 Bitcoins (50% of 21 million) were in circulation and at the time of second halving, 15,750,000 Bitcoins (75% of 21 million) are in circulation. After first halving, inflation rate (yearly) also dropped from 25% to 12.5%. In second halving, the inflation rate dropped from 8.4% to 4.2%.
Over the past few years, Bitcoin experienced a sharp rise in the price and gained the attention of the masses. It had been trading around $12 and reached a high of $30 after the first halving. However, after a few months, it reached to $266 in April 2013. The price kept rising until it touched the all times high of $1200 in November 2013. Currently, Bitcoin has been traded around $585. In a nutshell, Bitcoin experienced 5400% increase in the exchange rate from first halving to the second halving. Similarly, market cap increased from $128 million to $10 billion, which is 8000% increase.
Back in 2012, most of the Bitcoin miners used Graphic Processing Units (GPUs). The miners were also fewer in number. However, the number of miners significantly increased due to Bitcoin’s increasing prices and the advent of new hardware in the form of Application Specific ICs (ASICs). Now with the new ASIC-hardware, Bitcoin mining is being done more professionally, out of reach for the hobbyists. Miners mine Bitcoins in specialized data centers located in the areas where electricity is cheap and stable. At the time of the first halving, mining difficulty was calculated to be 3,438,908, and now it has reached to 213,398,925,331. Similarly, the estimated hash rate has also been increased from 25 terahash/sec to 1,520,833 terahash/sec which is 6,083,232% increase. The decrease in Block value due to second halving is approximate $16,875+ to $8438+ whereas in the first halving the block value decreased from $600+ to $300+.
After the first halving, the Bitcoin industry started to gain the attention of investors, but it was not significant. However, in 2013, China’s interest in this currency increased, causing not only skyrocketing of Bitcoin’s price but also grabbed the attention of many investors. Now many venture capitalists and corporate investors have been taking a lot of interest in Bitcoin industry. Some of the prominent corporate investors of Bitcoin industry are Andreessen Horowitz, Tim Draper, AXA, and Goldman Sachs. At the time of first halving, the total industry wide investment was $2.1 Million and now it has reached to $1.1 Billion. Largest investment round publicly announced per company in 2012 halving was $1,500,000 and its $116,000,000 now. Similarly, largest commulative investment increased from 1,500,000 to 121,050,000.
Back in 2012, there was a single exchange “MtGox” for Bitcoin trading. Now that the number of exchanges has increased significantly and they are located at different locations around the globe, trading volume has also exploded along with other growth metrics. The increase in trading volume is hard to calculate because some exchanges provide fake information. The total trading volume on daily exchanges has approximately increased from 40,000 BTC to 2,000,000 BTC. Similarly, at the time of first halving, MtGox used to be the largest exchange by liquidity with 30,000 BTC per day, but now Bitfinex is the largest exchange with 57,150 BTC per day.
The number of Bitcoin users is not easy to calculate as anyone can access and download the software. Therefore, the total number of users can’t be determined. However, based on day-to- day usage stats, one can confidently claim a significant increase in Bitcoin adoption after the first halving. Daily on-chain transactions have increased from 30,000 to 200,000. At the time of first halving, the daily on-chain transaction was $3,000,000 and at the second halving, it is $200,000,000. The number of total merchants at the time of first halving was 1,000+ and now its 100.000+. Largest BTC accepting merchant has also shifted from WordPress to Microsoft in these four years.
The scalability of Bitcoin network has always remained a controversial topic because of some hurdles that tend to hamper Bitcoin’s growth. This issue resulted in high cost of participation in the network and resources that are needed to run a full node. Average block size and block chain size were approximately 0.1 MB and 4 GB respectively at the time of first halving. Now, after the second halving, the size of average block size has increased to 0.8 MB and blockchain size has increased to 75 GB. The unspent transaction output (UTXO) at first halving was 117 MB and it’s 1412 MB after second halving. Node count at the first halving was 10,000 and now it stands at 5,000.
James Freeman works as a Senior Analyst for The Bitcoin Banc – A Bitcoin Auto Trading Platform.
Things have been relatively quiet on the news front for bitcoin for some time, but that doesn’t mean the digital currency has gone anywhere. In fact, bitcoin has been steadily gaining momentum, rebuilding its value since bottoming at the beginning of 2015. Bitcoin has managed to bounce back from its first big test and another one is coming this summer.
Now that bitcoin has been stable for the better part of the year, fans of the cryptocurrency are preparing themselves for the next potential surge for its value. With the rise in value of Bitcoin, competition for “mining” Bitcoins is also on the rise, and the mining difficulty has been steadily increasing throughout the year.
Mining, for those unfamiliar, is a complex process specifically designed to be both difficult and time-consuming to keep the amount of bitcoins created at a near constant rate of issuance. Even as competition has heated up in the mining space, with more and more companies entering the fray and using more efficient equipment, the number of bitcoins is still issued at a fairly stable rate of 25 bitcoins per 10 minutes. There’s a limit on the total number of coins that can exist, set at 21 million. This helps to prevent any further inflation and devaluing seen from the overproduction of currency, like in traditional government backed currencies.
In order to ensure that the limit of 21 million coin mark is honored by the Bitcoin network, the value of mining bitcoins is cut in half every four years. Essentially, if 50 new bitcoins are created every 10 minutes, then now only 25 would be able to be created. The next time the halving will occur will be this July, and bitcoin enthusiasts are expecting prices to skyrocket when it happens. As the desire for bitcoins continues to increase and the rate of production is cut in half, prices are expected to go up accordingly.
It has now been more than seven years since the inception of bitcoin and the cryptocurrency is only becoming more commonplace with consumers. In 2012 (the last time mining was halved), a bitcoin went for close to $12 and had a market capitalization of around $100 million. Chump change compared to the rest of the world economy. However, fast-forward to today and a bitcoin is holding steady between $400 and $450 with a market cap of nearly $7 billion. Now we’re talking about some serious cash. Usage of bitcoin hit a record high in 2015 and apparently a good portion of this is through payments to major retailers. Businesses such as Dell and Overstock.com are reporting that up to 20 percent of their network activity now involves the currency. This is a far cry from its beginnings as the preferred method of payment on gray market platforms such as the Silk Road.
2016 has already been an interesting year for bitcoin, to say the least. With the halving coming around the corner, it’s only going to get more exciting this summer and bitcoin is looking like the most attractive investment it’s been in years.