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Many aspects of Bitcoin echo the core characteristics of gold.

Gold is scarce, hard to mine and a great store of value. Bitcoin emulates these traits as best it can. It’s scarce, as only 21 million Bitcoins will ever exist, it’s hard to mine, and it has quickly become a great store of digital value in this ever-progressing digital world.

Mining can be a weird concept to get your head around but, before ploughing into it, we’re going to go into a bit of background using the Bitcoin network as an example.

Blocks
Every time a transaction is made, the details of that transaction get stored in a block. Every ten minutes we have a new block filled with all the transactions made during that ten-minute period. Imagine holding a bucket under an ice dispenser for ten minutes and every ice cube dispensed being a transaction. At the end of that ten-minute window, the bucket would be sealed and replaced with a new bucket. Each bucket (or block) is then added to the chain of buckets before it, thereby creating a blockchain.

Now imagine that this blockchain is simply a spreadsheet that details a big list of blocks: open source, decentralized, transparent and immutable. That’s the basics of blocks and a blockchain. Currently, Bitcoin blocks are 1 megabyte in size and contain an average of 2,000 transactions.

Rewarding the bitcoin miners
This is where the miners come in. They act as auditors. They go through every single transaction and verify it. But in order to motivate people to verify and keep the blockchain audited and functioning, you have to reward them. The way this works is that every block has a password and whoever comes up with the closest guess within a ten-minute timeframe wins the block and gets rewarded.

The creator(s) of Bitcoin wanted to make it a scarce and a deflationary asset like gold, so they programmed the Bitcoin algorithm to decrease the reward paid out for each mined block over time. At the start, the reward was 50 Bitcoins per block, but it halves every four years. As of November 2017 the reward is 12.5 Bitcoins. The algorithm will get harder and harder, with ever-decreasing rewards until the last Bitcoin is mined in the year 2140.

This is a bit like me writing down a number between 1 and 1,000, putting it in an envelope with 12.5 BTC (Bitcoins), then giving a group of friends ten minutes to guess the number. They can have as many guesses as they like and, at the end of the ten minutes, whoever guesses it first, or gets closest, wins. The guess has to be either equal to or lower than the actual number to count. In the event of a draw, whoever made the most guesses and put the most work in wins the reward. It’s called a ‘proof of work’ system and it’s extremely energy-intensive.

Back in the real world, miners have to guess a 64-digit hexadecimal password – in other words, a password that includes numbers and digits and looks something like this: 0​0​0​0​0​0​0​0​0​0​0​0​0​0​0​0​0​3​2​f​r​c​1​0​8​c​f​6​1​3​0​q​9​9​i​2​7​c​5​7​0​2​3​0​3​e​1​w​1​6​9​t​t​5​0​m​7​p​l​3​33​8​e​b​. As you can imagine, it takes a lot of computing power to guess something like this and, as time goes by, it’s becoming increasingly difficult to be a profitable miner unless you have an expensive, fully dedicated mining rig. A mining rig is basically a large number of specially designed single-purpose GPUs that just crunch numbers in order to guess as many combinations as possible. The biggest cost is electricity. It burns through it and the rig produces a lot of heat, so you need to spend more on cooling equipment to prevent it from burning itself out. That’s why so many of the world’s biggest mining operations are either done in cold countries like Iceland or in areas where electricity is cheap, either through government subsidies or hooked into renewable energy plants like dams and wind turbines. Gone are the days where you could mine a few hundred Bitcoin from your laptop.
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If you google ‘cryptos’, you’ll see the terms alt(ernative) coins and tokens a lot. Most of the time they are incorrectly blurred into the same thing. As we’ve established, cryptos are simply digital currencies that are governed and secured by cryptography. Bitcoin was the first horse out of the gates with this new asset class, and, as it was a digital currency that incorporated cryptography, the term ‘cryptocurrency’ was born.

Bitcoin’s wild success set off a chain of events that sparked an explosion of development in this industry. As such, it wasn’t long before other cryptos appeared, and there’s now a vast array of different types of crypto, each with its associated ecosystem. Unfortunately, because nearly every new crypto that emerged for the first few years was a copycat cryptocurrency, the term has stuck and now people obliviously use it when referring to all sorts of crypto. It’s a bit like calling all vehicles a ‘car’, which is incorrect. The first internal combustion engine vehicle was a car, and after the car industry took off there were all sorts of variants being created – vans, lorries, trucks and motorbikes, among them. So, using the term ‘cryptocurrency’ when referring to the general crypto market is an incorrect blanket term. This is why I use the term ‘cryptos’, as it covers all crypto-based assets whether it’s a currency or not.

Read related post: Reasons Why Cryptocurrency Won't be Ruined

But getting back to the topic of the difference between ‘altcoins’ and ‘tokens’, we should first look at the word ‘coin’. In simple terms, a coin is historically a metal circular disc that has been used to transfer value from one party to another. But a coin hasn’t always been a metal disc as there have been civilizations that have used stones, wood, gems, emeralds and diamonds for the material and squares, triangles and rectangles for the shape. The key defining trait of a ‘coin’ is the fact that it transfers value from one to another. So, the basic definition of an altcoin is any cryptocurrency (other than Bitcoin) that transfers value. But there’s slightly more to it than that because we also have to see whether it’s a free-standing crypto or a crypto based on another platform.

Read related post: Understanding Bubbles And The Standard Bubble Wave

Since 2017 there has been an explosion of crypto platforms that help people build their own cryptos (just like WordPress is a website-building platform). These are referred to as DApp platforms – decentralized app platforms, and prominent examples are Cardano, NEO and Ethereum. So when someone creates a crypto based on one of these DApp platforms, these are referred to as tokens. These tokens are used to transfer information and/or value. So one could argue that there are cryptos out there based on a DApp platform which are also transfers of value, but the easy way to look at them is like air miles. If a new airline wanted to have an air miles system, they could simply sign up to an air miles system like Avios and then their customers could accrue Avios air miles points.

Perhaps an easier way to get your head around it is by looking at web page builders like wix.com. Wix is a simple platform where you can use their templates to very quickly create a simple, nice-looking website or landing page. But we all know that you don’t really have a proper website if it’s created by Wix because your site is not a free-standing website as it relies on Wix. What would happen if Wix went bankrupt, or its servers got broken or hacked? Your Wix website wouldn’t load. So, continuing with this analogy, an altcoin is like a proper free-standing website not based on a third-party platform, and a token is like a website that is based upon a third-party platform like Wix.
Typically, a token is a crypto that is built upon another platform and an altcoin is historically a crypto that transfers value.
There are also companies now trying to ‘tokenize’ their business in order to raise capital – in other words, do a crypto cash-grab. So people then ‘invest’ into these projects and are issued tokens which represent a share or stake in that company or project. Even though you can sell those tokens later, as you could with any normal share, it’s not a currency. The token in this instance is a digital representation of the underlying asset. So, in this case, projects/cryptos like this would be classed as a token, not an altcoin.

Read related post: 7 Reasons Why You Should Own Some Cryptocurrencies

You now know the two main points that determine the difference between tokens and altcoins. Let’s add something else into the mix. There are also many cryptos out there which are free-standing cryptos but are not designed to be cryptocurrencies. So what would you call these? An altcoin or token? Which determining factor takes priority, the transfer of value or whether it’s free-standing or not? Personally, I feel that the industry has progressed to the point that we just can’t have two pigeonholes for cryptos anymore. In this example, I would call a free-standing crypto which isn’t a transfer of value a tokenized asset/security.
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Here are 2 common mistakes that new crypto investor make. Even experienced traders will benefit from these reminders. – Part 1


Mistake 1: Following Email Updates
Some of the best traders in the world read and subscribe to trading email updates, only to take the opposite view.

Just like shiny new trading systems, trading bots and live trading rooms, telegram groups, email updates from market ‘gurus’ are just as common. From experience I’ve found that a lot of these updates come from marketers who know a little about trading (just enough to sound credible) but, when you ask a question, there is no depth of knowledge. Just analyse the emails they send and there will be a link somewhere trying to get you to open a live trading account through some broker.

There are some good ones out there, but you have to be careful and, whatever you do, don’t blindly copy their trades. I’ve wasted thousands in the past watching a video update and becoming convinced that some currency is about to rise or fall, then placing the trade without any of my own analysis. This has never ended well. Even if you are convinced by an email or video update, just DYOR (do your own research). Never place a trade blindly without doing your own research.

Mistake 2: Not Having Risk Capital
You will absolutely need some learning capital while you develop your trading skills and experience. Just don’t expect to get your learning capital back!

Everything has a price. And don’t be fooled into thinking that the price is always in money. If you want to become a master knitter, the price will most likely be time in learning the skill and maybe a few bleeding thumbs. If you want to be a successful business owner or millionaire, the price you’ll most definitely pay will be in time, lack of sleep, stress and a diminished friend base, as well as possibly financial.

The reason why a lot of people aren’t millionaires or even wealthy is that they are not prepared to pay the price of becoming one. It’s far easier to clock in at work for eight hours a day, come home to dinner then go to the pub. Most people would shudder at the thought of quietly building a part-time business from 6 p.m. to 10 p.m. alongside their full-time job and managing their family. As any entrepreneur will tell you, stopping work for the day at 7 p.m. would be an early finish.

So how serious are you at becoming consistently profitable at trading? The ultimate reward is to be able to turn your laptop into a cash machine and live the luxurious life you want with just five minutes’ trading a day. The question is: are you prepared to take the time and effort to build your knowledge, to shoulder the cost of doing courses to learn from successful traders, and to spend the 12 months it takes on average to become proficient? More importantly, are you comfortable with losing a small bit of your capital? Every trader who has ever lived has lost trades, lost money and had losing streaks.

Tips:

  • Treat that first 2,000$ as learning capital and expect to make mistakes and lose it all. It’s best to get all your learning and losing done early on. I recommend that you stay on your simulation account until you are confident and profitable on it before opening a live 2,000$ trading account. Whatever you do, analyse every error and learn from your mistakes.
  • Whenever you put money into your live account, it should be risk capital that you can afford to lose.

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How would you like to go back in time to 2002 and buy Apple and Amazon stock during the aftermath of the original tech bubble crash? I know I would.

Bubbles fascinate me to the point where I’ve become a bit of an historian of them. They’ve happened in every market for as long as markets have existed. The key thing to remember is that, despite the nature of a bubble and the fact that people get burned, they present three of the greatest personal wealth building opportunities out there. These are:

  • profiting as it enters exponential growth
  • shorting it (profiting as it falls)
  • profiting from the slow but beastly rally once the devastation has settled.

There are four distinct phases of the standard bubble wave, as shown in this graph:


1- The stealth phase
In this phase, smart and Big Money, billionaires and visionaries identify an undervalued asset and start to build up a position. For example, in the 1970s the billionaire Bunker Hunt feared the decline of the dollar and started buying up silver at around $6 per ounce. He bought so much that he effectively cornered the market, and by 1980 the price per ounce had spiked to $49.45.

2- The awareness phase
Here, other sophisticated investors pick up the crumbs left behind by the big boys and also identify the undervalued asset, and they start to pile in. You’ll see a nice increase in prices towards the end of this phase, and it’s this increase that acts as a beacon in the sky for the general public.

Read related post: 7 Reasons Why You Should Own Some Cryptocurrencies

3- The mania phase
In this phase the public are like a moth to a flame. As soon as they see news articles about great returns and hear about friends getting rich, a massive pang of FOMO kicks in. Welcome to the mania phase (which I prefer to call the media phase because a large reason why the public are ploughing in is the noise made in the press and social media). Cryptos are tiptoeing into the mania phase now but it’s being held back by an abundance of scams, exchanges crashing and fake news. Once the exchanges get organized and the whole user experience becomes simpler, that’s when it will take off.

4- The blow-off phase
It’s evident what happens in the blow-off, or dissipation, phase: a lot of people get financially and emotionally wrecked. Right now, cryptos are making the early adopters plenty of money, but I believe this bubble will pop around mid-2019. That’s my best guess but a better gauge would be market cap. As it stands, the crypto market capitalization (all the money that is flowing around this open market) is $650 billion. When you compare this against the rest of the world’s main markets, it’s tiny. Cryptos are $0.65 trillion, gold is $7 trillion, global stocks are $70 trillion, global bonds are $100 trillion and the currency market is the big dog at $1.4 quadrillion. That’s $5 trillion per day!

Global asset market caps: cryptos compared with the rest of the world’s main markets (T = trillion; Q = quadrillion)

The thing about the standard bubble wave is that it applies to all bubbles. Whether it’s cryptos or wheat futures, bubbles can happen anywhere and everywhere. The crypto bubble isn’t the only one around at the moment. We have a motor-loan bubble, a student debt bubble, a sovereign debt bubble, a pension bubble, a currency bubble, a bond bubble, a stock bubble and a personal debt bubble. There hasn’t been a time in human history with so many concurrent bubbles. The exciting prospect is that all it takes is just one bubble to pop and initiate a chain of events that could pop every other bubble.
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Mining through FaucetHub website


1. Choose mining menu in the faucet hub https://faucethub.io/
2. Using the power of your machine's CPU and your web-browser, you can mine FREE Bitcoin! In the background they are using your hashing power to mine Monero (XMR), and pay you directly in Bitcoin. This is all possible due to CoinHive and their Javascript mining technology.

3. Satoshis will accumulate in your pending balance, and will be paid automatically to your FaucetHub account after reaching 100 satoshi or more.

Mining through Cryptomining.Farm
  • Cryptomining.Farm was lunched on September, 2014 to give VIrtual Mining Contracts services to most people.
  • A: GHS is VIrtual Mining hashrate. We don't have any real bitcoin asic hardware.
  • Bitcoin is a peer-to-peer digital currency, created and held electronically. No one controls it.
  • Tether is a peer-to-peer digital currency, created in bitcoin blockchain. https://tether.to/.
  • You can get profit (estimaterate rate 0.0009USDT/1GHS/day) for 15 years.
  • A: Please visit https://www.cryptominingfarm.io/faq/profit-calculator
  • You may pay with BTC,UNIT on menu https://www.cryptominingfarm.io/buy
  • (GHS auto add to your account after 6 confirm )
  • A: you can mining on demo account in first 7day, your free miner are stop after 7day. you need to buy 20GHS minimum .
  • You can withdraw all your balance when you purchased minimum request.
  • Register in website https://www.cryptominingfarm.io/signup/. You get demo account with Free 50 GHS (Lifetime). I got the following dashboard:
  • Here the profit profile:
  • When you buy , you get the following

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Bitcoin and audits. Bitcoin sucks from a controls standpoint. A company holding bitcoin on their balance sheet has no way to demonstrate that they alone have control of their private key, and that no one else does. Compared to an organizations bank accounts, where a company can show exactly who has signatory authority over their funds.



Even if an organization transfers its coins to a new address, there will exist the question of if that address is exclusively under their control. What program was used to generate that address? Who can vouch for the both the hardware and software generators used to generate the private key associated with that address. Can the network or systems administrator be trusted to have not left a backdoor open?

The list could go on and on…

Whereas a business with a checking account can designate privileges for that account (Alice can sign checks up to $5,000. Bob or Carol needs to sign checks for $5,001 to $10,000, and both Bob AND Carol’s signatures need to be present for checks over $10,000), that method breaks down with bitcoin, as well. Yes, there are multi-signature (“multisig”) addresses, but Bob and Carol can’t get 100% assurance that the system administrator, Alice (she wears multiple hats at her job) didn’t get both keys. Is there?

Spending also becomes an issue; an the CFO of a company, or its auditors, can examine Alice’s actions by looking at the checks she’s signed. Are the payee’s named the entities that the auditor is expecting to see? Easy enough to resolve. But with each Bitcoin transaction supposed to be sent to a new, unique address, the amount of work an auditor would need to perform to be certain that all of the spending that Alice initiated was indeed authorized and sent to the correct payee becomes a much larger task.

Not to mention the varying exchange rate at the time of each transaction and accompanying capital gain or loss that will have occurred…

Consumer-to-Business? Works great, especially if the company uses an intermediary like Bitpay or Coinbase to instantly convert the proceeds of each sale to dollars, prior to those dollars being received by the business itself. That way, no exchange risk is created, nor is there any headache of tax-lots, LIFO or FIFO, in regards to the company’s “currency”.

But for a businesses internal spending? There just seem to be too many gotchas involved to make it seem feasible for a medium or large sized organization.
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How would you like to go back in time to 2002 and buy Apple and Amazon stock during the aftermath of the original tech bubble crash? I know I would.

Bubbles fascinate me to the point where I’ve become a bit of an historian of them. They’ve happened in every market for as long as markets have existed. The key thing to remember is that, despite the nature of a bubble and the fact that people get burned, they present three of the greatest personal wealth building opportunities out there. These are:

  • profiting as it enters exponential growth
  • shorting it (profiting as it falls)
  • profiting from the slow but beastly rally once the devastation has settled.

There are four distinct phases of the standard bubble wave, as shown in this graph:


1- The stealth phase
In this phase, smart and Big Money, billionaires and visionaries identify an undervalued asset and start to build up a position. For example, in the 1970s the billionaire Bunker Hunt feared the decline of the dollar and started buying up silver at around $6 per ounce. He bought so much that he effectively cornered the market, and by 1980 the price per ounce had spiked to $49.45.

2- The awareness phase
Here, other sophisticated investors pick up the crumbs left behind by the big boys and also identify the undervalued asset, and they start to pile in. You’ll see a nice increase in prices towards the end of this phase, and it’s this increase that acts as a beacon in the sky for the general public.

Read related post: 7 Reasons Why You Should Own Some Cryptocurrencies

3- The mania phase
In this phase the public are like a moth to a flame. As soon as they see news articles about great returns and hear about friends getting rich, a massive pang of FOMO kicks in. Welcome to the mania phase (which I prefer to call the media phase because a large reason why the public are ploughing in is the noise made in the press and social media). Cryptos are tiptoeing into the mania phase now but it’s being held back by an abundance of scams, exchanges crashing and fake news. Once the exchanges get organized and the whole user experience becomes simpler, that’s when it will take off.

4- The blow-off phase
It’s evident what happens in the blow-off, or dissipation, phase: a lot of people get financially and emotionally wrecked. Right now, cryptos are making the early adopters plenty of money, but I believe this bubble will pop around mid-2019. That’s my best guess but a better gauge would be market cap. As it stands, the crypto market capitalization (all the money that is flowing around this open market) is $650 billion. When you compare this against the rest of the world’s main markets, it’s tiny. Cryptos are $0.65 trillion, gold is $7 trillion, global stocks are $70 trillion, global bonds are $100 trillion and the currency market is the big dog at $1.4 quadrillion. That’s $5 trillion per day!

Global asset market caps: cryptos compared with the rest of the world’s main markets (T = trillion; Q = quadrillion)

The thing about the standard bubble wave is that it applies to all bubbles. Whether it’s cryptos or wheat futures, bubbles can happen anywhere and everywhere. The crypto bubble isn’t the only one around at the moment. We have a motor-loan bubble, a student debt bubble, a sovereign debt bubble, a pension bubble, a currency bubble, a bond bubble, a stock bubble and a personal debt bubble. There hasn’t been a time in human history with so many concurrent bubbles. The exciting prospect is that all it takes is just one bubble to pop and initiate a chain of events that could pop every other bubble.
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