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How to Prevent Bitcoin Fraud by Securing Your Identity

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bitcoin fraud

bitcoin fraud

Theft has been a problem in all of history, but the digital age brings new challenges. While digital currency has several advantages over cash, it comes with some unique risks, like hacking and online fraud. Cryptocurrencies such as Bitcoin solve some of these issues, but you should still take care.

The fact of the matter is no form of money is ever 100% safe without proper protection. Just because Bitcoin is more secure doesn’t mean you shouldn’t be careful with it. Like with any other kind of currency, you must take steps to keep it safe.

Safety Advantages of Bitcoin

Bitcoin already boasts several security benefits over traditional currency. When you buy something with a credit card, a third party pulls the funds from your account (known as a pull transaction). Bitcoin, on the other hand, uses push transactions, where you hand the payment over yourself.

With pull transactions, hackers can pretend to be you and get your bank or credit card company to move money for them. With a push transaction, though, they need access to the money itself, not just your personal information. That’s not where Bitcoin’s safety features end, either.

Bitcoin leverages the blockchain, so it’s decentralized and immutable. Some scholars suggest using Bitcoin to prevent identity theft because the system is so secure. There are still some precautions you should take, though.

Recent Bitcoin Fraud Cases 

It may be more challenging to commit fraud with Bitcoin, but it’s not impossible. If a criminal steals your identity, they may be able to access your Bitcoin wallet. Since there are 15 million cases of identity theft each year, it’s no small risk. 

In 2018, a fraudster stole $5 million worth of cryptocurrency through a scheme called SIM swapping. This process involves tricking phone companies into transferring numbers to a SIM card that you control. By stealing phone numbers, you can access a wealth of accounts, sometimes including Bitcoin wallets.

>> How Accepting Cryptocurrency Could Save Businesses Money

With Bitcoin, your transactions are secure, but your wallet may still be vulnerable. To get the most out of Bitcoin’s security advantages, you need to make sure your wallet’s safe. 

Guarding Private Security Keys

The easiest way into your wallet is with your private security keys. If you want to keep your Bitcoin secure, you’ll have to adopt safe security key management. The first step is to keep offline backups of all your keys.

You should take steps to make sure these offline backups are safe, too. The most straightforward way to do this is to store them off your computer, like on a flash drive or physical document. Be careful to protect these storage solutions, too, not letting them slip into the wrong hands.

You can also turn to security software to keep hackers from accessing your backups. If you choose to go this route, make sure you update your software and operating system frequently.

Crypto Account Management

If you use a service to store or protect your Bitcoin, you’ll have to secure that account. If a fraudster can convince the service that they’re you, they can gain access to your cryptocurrency. Since email compromise is the leading type of online fraud, you can start by securing your email.

Use two-factor authentication for all of your email addresses. You may consider using email security software as a second layer of defense as well. While you’re at it, it’s a good idea to set up two-factor authentication on any service you can.

Make sure you never use the same password for more than one account. If you have trouble creating or remembering strong passwords, you can use a password manager.

Other Standard Security Practices

As with traditional currency, be careful where you send your Bitcoins. While hackers may not be able to access your wallet through a transaction, they can fool you into paying them. Always double-check to make sure a company or product is legitimate before paying them.

Using more than one Bitcoin wallet is always a safe practice. That way, if hackers get into one, they won’t be able to access all your money. You may also want to use a VPN while accessing your wallet and update your operating system regularly.

Plan to Use Bitcoin? If So, Keep Your Data Secure

Bitcoin allows you to secure your finances more than you’d be able to with a credit card. It’s possibly the next step in digital currency, offering more financial freedom and safety. Just be sure that you don’t get too comfortable with its security.

You should be just as careful with Bitcoin as you are with traditional money. If you take the right steps to secure it, though, then you can use cryptocurrency without fear.

This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission!

Featured image: DepositPhotos © Frank-Peters

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How is the Rest of the World Regulating Digital Assets?

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While bringing US-based institutions on-board with digital asset trading is key to enlarging crypto’s overall market cap, crypto will only be successful as a truly international force—and not one only limited to the G-7. To that end, I’m going to shed light on other countries’ unique approaches towards digital asset classes in order to understand what the future of crypto regulation may look like.

Singapore

The Singaporean government has recently instituted a major regulatory framework for cryptocurrencies and crypto payment services. The framework will include a licensing regime for crypto payment providers—a descriptor that includes exchanges—and will regulate the following:

  • The issuing of accounts and electronic money.

  • The transfer of money within and out of Singapore.

  • The acquisition of merchants who will use their platform.

  • Money changing and the dealing in and exchange of digital payment tokens such as Bitcoin.

Singapore instituted this new framework with an intention to bolster its economy’s already strong financial technology presence. Association of Cryptocurrency Enterprises and Startups Singapore (“ACCESS”) chairman Anson Zeall has pointed to recent developments in Singapore’s crypto regulatory regime, noting that it is becoming more competitive at the international level with recent developments such as a new voluntary ‘code of practice’ that aims to proactively allow crypto players to adhere to anti-money laundering standards to promote public and commercial trust in their services.

New Zealand

As of September 1 of this year, companies in New Zealand can legally pay their employees in cryptocurrencies such as Bitcoin. This new guidance from the government lays out specific rules, however, that govern how companies will be able to take advantage of this opportunity, including:

  • That the payments must be in regular, fixed amounts.

  • The digital currency of choice must also be pegged to at least one regular currency.

  • The digital currency must be able to be converted directly into a standard form of payment.

While this guidance isn’t anything new, as the US, UK, and Australia have offered similar rules, it is yet another sign that crypto adoption and use is only increasing.

>> Bakkt is All Set to Launch Options on Bitcoin Futures in December

Liechtenstein

Liechtenstein regulates cryptocurrencies under the remit of its Due Diligence Act, which has a primary purpose of combatting money laundering and other illegal activities. While its Financial Market Authority recognizes that “the production and the use of virtual currencies as a means of payment are currently not subject to any [business] licensing requirements,” the Authority assesses licensing requirements and ICO filings on a case-by-case basis, leading to some uncertainty about when exactly certain regulations apply.

In addition, Liechtenstein is in the process of implementing a groundbreaking “Blockchain Act” that allows every possible asset, including real estate, bonds, and securities, to be tokenized, digitalized, and listed on a cryptocurrency exchange. This legislation creates a clear regulatory environment that counters risks, provides clarity, and facilitates the development of a token economy.

Finally, Liechtensteinische Post AG, its postal service, now offers cryptocurrency exchange services at its brick and mortar locations.

Belarus

Belarusian President Alexander Lukashenka issued a decree in 2018 that fully legalized cryptocurrencies, initial coin offerings (ICO), and smart contracts. The decree also instituted a zero percent tax on crypto holdings until 2023. The move was designed to boost crypto innovation and attract interest in Belarus’s HTP, a special economic zone that has been likened to the country’s own Silicon Valley. Belarus’s government declared earlier in 2018 that a full crypto regulatory regime was a top priority in order to transform its economy, public administration and social services.”

Regulatory Innovation

Many small jurisdictions like Belarus, Singapore, and Liechtenstein are crafting sector-specific rules for crypto, attempting to attract companies by providing regulatory security as well as tax breaks. On the other hand, larger countries with more established financial sectors are taking a more conservative ‘wait and see’ approach. In my view, much of the innovation in crypto regulation is coming from smaller countries due to a prevailing attitude of crypto as an opportunity, not as an active threat to established financial orders.

This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission!

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Trading with Crypto Exchanges and Crypto CFDs

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crypto cfd

crypto cfd

CFD could be a very foreign word for a crypto trader, but for traditional market traders, it is one of the most useful assets to trade with on different markets. CFD is an abbreviation for Contracts for Difference, which are basically assets that help you “buy a price” and not the asset itself. It may sound a bit confusing, but it is still quite easy to understand once you know the basics.

The primary difference between actual cryptos and crypto CFDs is the ownership. Meaning that when you are trading on a crypto exchange, you are using actual cryptocurrencies. But when you are trading crypto CFDs on a CFD broker’s platform, you are trading with the contract, meaning that you don’t actually own cryptos. Immediately it should spark some controversy as to why you should even consider such a trade, so let’s check out the advantages and disadvantages.

Crypto CFD: Advantages

Crypto CFDs are exclusive to CFD or Forex brokers. These companies are able to offer leverage on these assets, which is the primary reason why they are so attractive. For example, if I go to this CFD broker and engage in a $100 trade for BTC CFDs, I can then use a leverage of 1:100. Basically what that leverage does is increase the volume of my trade by 100, meaning I can now trade with $10,000 instead of $100. This, in the end, may earn me more than I would with my own assets. Basically, the broker lends you funds in order to increase your trades and thus your profits as well. Crypto exchanges rarely have this feature, which is why CFDs are not as well known among the crypto community.

Liquidity is also an advantage of crypto CFDs because they can be sold for fiat currencies, making them a lot more valuable.

Another small advantage is the lack of a crypto wallet, as there is no need for one. Therefore traders have all of their assets on one single platform, which helps the logistics. Unfortunately, this is where the advantages end and massive disadvantages begin.

>> How to Become a Bitcoin Trader: A Beginner’s Guide

Crypto CFD: Disadvantages

Leveraging can be a double-edged sword. Although leveraging can offer bigger profits, it can also lead to massive losses, which may cause the trader to fall into debt with the broker. If you ever decide to engage in a crypto CFD trade with leverage, make sure to set a stop-loss on a point where you have half of your initial investment left. So if you invested $100 and got 1:100 leverage, you would have to set the stop loss at somewhere around $9,950 to avoid a complete zero-out of your account.

Another disadvantage is that CFD trades have deadlines. This means that when you place an order, that order will expire in a few days or so. This renders long-term investments completely useless. You could technically still do it, but the over-night fees for maintaining the position would just make it unprofitable. The over-night position is as it sounds, a position that lasts more than 24 hours, and it is usually accompanied by a fee.

Another disadvantage is that you don’t actually own cryptocurrencies, meaning that you cannot allocate them anywhere you like. For example, let’s say that there is a service that is only available in Bitcoin or Ethereum; you would not be able to pay with a Bitcoin or Ethereum CFD, because they are not real cryptos. Furthermore, the allocation may become a problem as a broker’s policies may change about crypto CFDs, which could stick you with the trade or force you to opt-out in an unprofitable position. With crypto exchanges, it’s different as you can immediately allocate the cryptos to another exchange’s account.

Conclusion

We have two very clear paths in front of us. Crypto CFDs come with advantages as well as disadvantages, so deciding how you want to proceed requires extensive research and comprehension. Hopefully this article can be a starting point to both.

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The Ultimate Guide to Getting Payments with Bitcoin

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Bitcoin

Bitcoin

Bitcoin and cryptocurrencies are now a given. Whether you want them to or not, they will be gaining popularity every year. Obviously, it’s best to start learning about Bitcoin now. Here’s your ultimate guide to getting payments with Bitcoin.

Understand How Bitcoin Works

The first thing you must do is understand what Bitcoin is and how it works. As defined by BBC, “Bitcoin, often described as a cryptocurrency, a virtual currency or a digital currency – is a type of money that is completely virtual.”

You could say that it is an online version of cash that can be acquired in three ways:

  • Creating with a computer.
  • Buying with “real” money.
  • Selling things and getting paid with Bitcoin.

Bitcoin is not as popular as the usual money you are used to, but it is quickly being adopted by many big and small companies. However, you should still keep in mind that BTC is banned in some countries.

To put it simply, every Bitcoin is a computer file that is stored in a digital wallet app on a mobile or desktop device such as a computer or smartphone. You can send and receive Bitcoins or parts of Bitcoins to your digital wallet.

Every transaction is recorded in the blockchain, which is a public list. This makes this technology extremely secure as nobody can spend coins that aren’t theirs, copy coins, undo transactions, or perform other malicious actions.

Determine Your Storage Method

The next step is determining your storage method. This is very important as it will help you keep yourself protected from hackers. Moreover, this will also protect everyone else you communicate with while performing BTC transactions.

Of course, Bitcoin is already a very secure currency, but there have still been instances of theft when users stored their Bitcoins on unreliable websites. To avoid such situations, you must choose a platform that has a good reputation.

>> Ethereum (ETH) Slumps 50% From Highs in 2019: What to Do Now?

Open Your Bitcoin Wallet

You will have to open a mobile wallet that is an app supported both by Android and iOS. Some notable apps of such kind include Airbitz and Copay. Some mobile wallets can even provide you with discounts and special offers if you use them for making purchases on a daily basis.

Alternatively, you can set up a web wallet, also known as an online wallet. This option is better for those who are planning to convert their Bitcoin to a fiat (national) currency or trade it for other cryptocurrencies. BitGo and BTC.com are both examples of these.

It is important to keep in mind that there are other types of Bitcoin wallets and just like mobile and web wallets, they also have their own flaws. It is impossible to have an entirely secure wallet, but you can still choose something more or less reliable.

Promote On Your Website

After you’ve done all the technical parts, it’s time for you to get the word out about your Bitcoin acceptance. If you own a business, it would be a great idea to start accepting payments in Bitcoin, so make sure to promote this feature on your official website.

If you have already created your ICO paper, then it would be a great idea to get it in other languages. In fact, translating your ICO can give you extra exposure along with the one you already get from promoting your new Bitcoin acceptance feature on your website.

In case you don’t have an ICO paper and aren’t planning to get one, you can still promote your Bitcoin compatibility on your website. Here are a few ways you can do it:

  • Add a logo somewhere on your website that says that your website is crypto compatible.
  • For online stores, you could add a button for accepting Bitcoin payments.
  • Lastly, you can promote this new feature on your business’s social media profiles.

Get Help from Specialists

One of the ways to get Bitcoin is to mine it. However, this is a very difficult and complicated process that must not be carried out by a beginner. But even if you are not planning to mine Bitcoin, it is highly recommended that you seek advice from specialists concerning how you must manage your Bitcoin transactions.

Once you get advice from the experts in this industry, you will be able to conduct safer operations with a smaller risk of being hacked. Besides, you can get invaluable tips that you might not find as easily by simply searching online.

Alternatively, consider finding relevant courses online or offline that you can attend and learn how to manage Bitcoin step-by-step. It’s a great option for those who don’t want to keep surfing the Internet for the information they need on this topic.

>> Ripple Escrow Wallet Transfers Another 500 Million XRP to Company

Follow Best Practices

Lastly, there is no need for you to invent something new, as the best practices are the methods that have proven to be effective. Here are some techniques you should adopt to make your experience with Bitcoin a positive one:

  • Don’t store your Bitcoins in the same place you keep them in during the day while making transactions. Just like you would take out real money from the cash register at the end of the day, withdraw your Bitcoins and store them elsewhere when you are not using them.
  • Consider exchanging your Bitcoins for a national currency immediately after receiving them. It’s not a difficult process and can be carried out by anyone through a virtual exchange house.
  • Alternatively, get a hardware wallet for fully controlling your private keys and storing your currency offline. This will make it harder for hackers to get through to your money. Nevertheless, make sure you keep this hardware wallet in a safe place.
  • Take into account many factors when choosing your storage wallets. Consider such factors as the platform’s regulatory frameworks, interaction with fiduciary currencies, the fees charged by the platform, and the availability of customer support.
  • Back up your wallet once in a while to be ready in situations when both humans and computers fail. Prioritize this feature when choosing your platform. Use strong passwords and make sure that all your linked accounts are strongly protected as well.
  • Avoid scammers at all costs. Bitcoin is an attractive currency as it is fairly new and already very popular, so there are many inexperienced people trying to get started with it. Don’t fall for scammers who claim they have a magic tool to double your Bitcoins. It’s not true, and you will simply lose everything you have at the moment.
  • Remember about HODL, which means “hold your Bitcoins.” Many beginners don’t have the necessary skills to earn a lot with trades, so don’t buy into all the success stories. It takes time, effort, practice, and patience before you figure everything out.

Final Thoughts

All in all, even though Bitcoin is not a stable currency yet, it already costs a lot and has a fair share of the market. By investing in Bitcoin now, your future will be more determined, bright, and hopeful.

This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission!

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A Closer Look at Satoshi Nakamoto

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Satoshi Nakamoto

Satoshi Nakamoto

Satoshi Nakamoto is the alias used by a person or group who authored the Bitcoin whitepaper. Satoshi is the creator of the first release of the Bitcoin protocol and blockchain database. The alias was used in email and forum correspondence from August 2008 through April 2011.

History

Satoshi’s first appearance in the world was the publication of the Bitcoin whitepaper to several mailing lists on October 31, 2008. Beginning in 2007, Satoshi wrote the initial codebase for Bitcoin and released it on Sourceforge on January 9, 2009. On January 3, 2009, Satoshi created the ‘Genesis Block’ of Bitcoin containing the text, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This text is in reference to the headline of the front page of “The Times” newspaper from England and Satoshi’s dissatisfaction with Fractional Reserve banking.

For two years, Satoshi was very active in creating and promoting Bitcoin, including:

From mining Bitcoin in the early days, addresses belonging to Satoshi have amassed approximately one million Bitcoins.

His last verifiable communication to the world was in April 2011, simply stating:

“I’ve moved on to other things. It’s in good hands with Gavin and everyone.”

Attributed Innovations

Both Bitcoin and the Blockchain Protocol have been attributed to Satoshi Nakamoto, as well as Predicative Script.

Possible Identities of Satoshi Nakamoto

There has not been any verifiable proof as to whom the individual really is. The following individuals have all been thought potential Satoshi Nakamotos at one time or another.

Dorian Nakamoto

A high profile article in Newsweek penned by Leah McGrath Goodman suggested that Dorian was Bitcoin’s creator. He is a Japanese American man with the birth name of Satoshi Namakoto. He was trained as a physicist at Cal Poly Pomona and worked on classified defense projects. He has also done work for Citibank. He was laid off twice in the 1990s and was libertarian. In an interview, he responded to a question by stating:

“I am no longer involved in that and I cannot discuss it. It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”

Later, it was revealed that he had no connection to the cryptocurrency, and he misunderstood the question as relating to his work with Citibank and not Bitcoin. Within twelve hours of the article being released, Satoshi Nakamoto’s account on the P2P Foundation website was hacked and posted the message:

“I am not Dorian Nakamoto.”

This message was posted by the hacker due to the vulnerabilities in GMX’s email system.

>> The Most Common Misconceptions About Bitcoin: Breaking the Mold

Hal Finney

Hal lived a few blocks from Dorian Nakamoto. Between this and a writing analysis, Hal is the closest possible candidate for being Satoshi Nakamoto. However, there is one event that discredits Hal as being Satoshi. In January 2009, when Hal and Satoshi were working on the early versions of Bitcoin, Hal encountered an error and posted a debug log to the mailing list:

“Hi Satoshi – I tried running bitcoin.exe from the 0.1.0 package, and it crashed. I am running on an up to date version of XP, SP3. The debug.log output is attached. There was also a file db.log but it was empty.”

Satoshi acknowledges the bug and releases 0.1.2 with a fix:

“All the problems I’ve been finding are in the code that automatically finds and connects to other nodes, since I wasn’t able to test it in the wild until now.  There are many more ways for connections to get screwed up on the real Internet.”

In the early days of Bitcoin, Bitcoin sent and received transactions directly between clients using IP addresses. The debug log reveals the IP address of three users connected to the IRC channel. On January 10, 2009, there were only two people working on the project at that time. Hal and Satoshi.

Tracing the IPs reveals Hal’s IP address and an IP address out of Van Nuys, California on a DSL connection.

Nick Szabo

Skye Grey, a blogger, linked Nick to the Bitcoin whitepaper using some writing analysis. Nick is a decentralized currency advocate and published a paper on “bit gold.” This is where things get iffy, vis-a-vis Szabo being Satoshi. Based on correspondence between Hal and Satoshi, while Bitcoin was being created, Satoshi was unaware of Bit Gold. Between January 2009 and March 2009, the reference to Bit Gold was added to the Bitcoin.org website.

Craig Wright

On December 8, 2015, Wired magazine wrote that Craig:

“Either invented bitcoin, or is a brilliant hoaxer who very badly wants us to believe he did.”

Craig had established an elaborate scheme of website postings and email correspondences to create the appearance that he and David Kleiman were Satoshi Nakamoto. A very lengthy article written by Sam Biddle and Andy Cush for Gizmodo on December 8, 2015, unpacks Craig Wright’s assertions and business dealings leading to many more questions than answers.

In May of 2016, Craig Wright went on several interviews with the BBC, The Economist, and GQ and claimed to provide technical proof that he is Satoshi. Gavin Andresen originally stated that Craig Wright was Satoshi before retracting his claim.

Despite his assertions, the clearest proof that he is Satoshi has never been provided—none of the original wallets with Bitcoins mined by Satoshi have ever been moved in any way.

Featured image: DepositPhotos © info@crashmedia.fi

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California is Leading the Future of America’s Crypto Economy

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cryptocurrency economy

cryptocurrency economy

Despite growing support, cryptocurrencies have yet to see mainstream implementation in the US economy. Many people and regulatory agencies are unsure of what to do with crypto, stalling its adoption. California has made some significant strides in this regard recently, setting an example for the rest of the nation.

California is no stranger to embracing change, so its support for a cryptocurrency economy may not come as a surprise. Given its high population, economic status, and cultural significance, it also holds major influence over the rest of the country. As California moves toward legitimizing crypto, the rest of the nation, and even the world, may follow.

Through recent legislation and an independence movement, California is demonstrating how economies and governments can embrace cryptocurrency.

California Legislation Empowers Crypto Companies

On August 13, California’s State Assembly unanimously passed AB-2150, which would clarify crypto’s status as an asset. In California and the rest of the US, the SEC could classify crypto tokens as securities. If written into law, this bill would exempt cryptocurrencies from this classification, giving crypto companies more freedom.

Securities are subject to strict regulation, which has been a problem for some cryptocurrency issuers. Some have had to pay millions of dollars due to these restrictions, which can discourage crypto innovation. In the face of these challenges, companies could potentially give up on pursuing crypto or move to another country.

The US is already experiencing a tech talent shortage, with roughly 1.4 million more openings than applicants. If legal regulations keep driving tech innovators away, this problem will only increase. Legal protections for cryptocurrencies could help keep crypto companies in the US, bringing more money into the economy.

In light of the recent recession from the COVID-19 pandemic, the US needs new ways to bolster the economy. If California’s support for cryptocurrency works well enough, that could be a potential national solution. The US, as a whole, could ensure that laws allow for crypto innovation, leading to new economic opportunities.

Calexit’s Potential Crypto Impact

Since 2014, there has been a movement to make California an independent nation called Calexit. Calexit’s leader, a campaign called Yes, California, recently hired crypto expert Alastair Caithness to see how crypto could serve as the basis for California’s economy. The group believes that a crypto-based economy could give citizens more economic liberty.

If this crypto-based economy works, then it could inspire the US to follow suit. The core concept could serve as inspiration, too, giving other lawmakers the idea to look to crypto to run some economic functions. Since California has the fifth-largest economy in the world, a change like this would not go unnoticed.

Only 32% of Californians supported Calexit as of 2016, but that’s higher than its 20% approval in 2014. Even if California doesn’t secede, it may not abandon the crypto economy concept. The mere fact that such a massive economy considered moving to a crypto-based platform could inspire other legislations.

Cryptocurrency Paves a Way Forward for the Economy

Today’s digital, fast-paced world presents some new economic complications, so traditional solutions may be insufficient. As more of the global economy moves towards digital transactions, internet-native crypto becomes a more appealing resource. Citizens and lawmakers alike in areas like California are starting to wake up to its potential.

As California moves to embrace a cryptocurrency economy, it sets a prominent example for the rest of the US. If these crypto-friendly endeavors turn out to be successful, they could give the world the push it needs to recognize cryptocurrency’s legitimacy. The US is warming up to cryptocurrency, and California is leading the movement.

This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission!

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When will China Legalize Bitcoin Again? The Impacts on the Market

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China

China

In September 2017, China conducted a nationwide blanket ban on cryptocurrencies, exchanges, and ICOs.

This had a global impact. After all, before the crackdown, the country of the red dragon accounted for nearly 80 percent of the world’s crypto transactions and ICOs and housed the biggest crypto mining operations. So what happened after the ban?

Well, cryptocurrency development didn’t stop. The miners moved, most going to Mongolia. ICOs registered in Singapore. And the big Chinese exchanges just moved to Japan or Hong Kong. So what’s up with China?

Hope on the Horizon

There is hope on the horizon for miners, investors, and exchanges both in and outside China. As I said, just because the government banned crypto (even if it is the government of the most populous country in the world) doesn’t mean development stopped. Because of this fact, a few new developments have surfaced.

Bitcoin as Actual Property

A business conflict arose over the holding and transferring of crypto assets in China. An unnamed plaintiff signed a contract that allowed the defendant to manage, trade, and invest in a pool of cryptocurrencies on behalf of the plaintiff. As things sometimes go in business, the deal went belly up, and the defendant refused to return the plaintiff’s cryptocurrencies.

A local news outlet reported on a ruling by the Shenzhen Court of International Arbitration, which decided that cryptocurrencies must be legally protected “by law due to its property nature and economic value.

>> IBM Shipping Blockchain Grows with Two More Carriers on Board

The Shenzhen Court decided that Bitcoin and other crypto assets should be legally protected by China’s Contract Law, even if crypto is considered illegal tender in the country: “Bitcoin has the nature of a property, which can be owned and controlled by parties, and is able to provide economic values and benefits.

This is solid news. I dare say it is something like a repressed minority gaining rights. Perhaps that is a bit much as a comparison, but there is some truth to it. Cryptocurrencies are a minority of financial assets. They’re growing. And even though they are illegal tender in China, they are still being given rights.

Cryptocurrencies as Currency

Despite China’s crackdown, cryptocurrencies are being given more than rights in the country—they’re being given use cases. For example:

  • September 2018 saw the start of the Ethereum Hotel. This opened in the National Scenic Area of Four Girls Mountain, and it accepts Ether as payment.
  • On October 1, Beijing Sci-Tech Report (BSTR)—an established technology news source—announced it would accept Bitcoin as a payment method. Starting in February 2019, its subscriptions may be paid for with BTC. This was done “to encourage the utilization of crypto in a real-world setting for practical actions.”

This all happened thanks to the two digital assets, Bitcoin and Ethereum, being recognized as properties under local laws in China.

Granted, it’s not all rainbows and sunshine. Trading Bitcoin and other cryptocurrencies remains strictly banned. Yes, merchants are technically allowed to accept cryptocurrencies—but trading, crypto events, ICOs, and any form of OTC are still very much prohibited and enforced with jail time.

This could be a significant problem even for non-Chinese traders: Buying into an unregulated ICO is actually one of the biggest mistakes investors make.

>> This UK Financial Regulator has a Problem with Facebook’s Libra Coin

Being Cautious

ICOs are strictly forbidden in China—no exceptions. But what about STOs (Security Token Offerings), the upcoming darling of the cryptosphere? These are also being watched with apprehension by China.

Pan Gongsheng, acting deputy governor of the People’s Bank of China, spoke at a financial forum in Beijing:

The STO business that has surfaced recently is still essentially an illegal financial activity in China. Virtual money has become an accomplice to all kinds of illegal and criminal activities.

Alas, we won’t be seeing STOs in China anytime soon—but they may be coming out of China. Why? Because, despite the caution, people and businesses in China are pressing for the legalization of cryptocurrencies. They understand cryptocurrencies are the future, and if China keeps strangling them, then they risk being left behind.

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Understanding the Cybersecurity Risk of Bitcoin

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cybersecurity

cybersecurity

Are you interested in purchasing Bitcoin? If so, it’s essential to understand the potential security risks surrounding it. With cybercriminals ramping up their attacks, cryptocurrency will likely be a target.  Here’s what you need to know.

Wallets Carry Risks

Cryptocurrency enthusiasts use both hot and cold wallets to store their Bitcoin. A hot wallet has an internet connection, which makes it potentially hackable. You might wake up one morning to find your funds depleted by an infiltrator overnight.  A May 2019 cyberattack on a Binance hot wallet led to a theft of $41 million—more than 7,000 Bitcoin.

Storing your Bitcoin in a cold wallet—one without an internet connection—does not make you free and clear, however. Take the example of Gerald Cotten, a cryptocurrency exchange CEO who passed away while being the sole holder of passwords to his accounts. That situation restricted access to approximately $137 million in cryptocurrencies held in cold wallets and owned by about 115,000 customers.

When experts eventually took Cotten’s laptops, they found that someone emptied the wallets about eight months before the CEO died. That revelation caused some people to wonder if he faked his death and ran off with the funds.

Stolen Data May End Up Sold

Most tech-savvy people know that one of the consequences of being an internet breach victim is that their data may end up on the dark web, sold to any party willing to pay the price. That outcome can happen with cryptocurrency details, too.

Reporters said that the hacker allegedly behind the infiltration of Ethereum.org took information from customers associated with several leading cryptocurrency wallet brands. The cybercriminal has three databases collectively containing information from 80,000 people, including emails, home addresses, and phone numbers.

Although the hacker did not put cryptocurrency-related data up for sale, this example shows you must always be aware of your information’s value and work hard to protect it. Many people appreciate dealing with Bitcoin because of its decentralized nature, believing it’s safer than doing business with a bank. Regardless of whether that’s your mindset, any data you use to sign up for a cryptocurrency site or service could end up in the wrong hands.

Investment Advisers Must Take Cybersecurity Precautions

A recent report about investment advising and cryptocurrency revealed that clients who want to expand their portfolios are increasingly likely to inquire about the digital currency. For example, 76% of all advisers polled received crypto questions from their customers in 2019. Bitwise also expects 13% of advisers to allocate funds to cryptocurrencies this year—up from 6% in 2019.

>> Prevent Bitcoin Fraud by Securing Your Identity

Maintaining robust cybersecurity is a crucial part of operating as a responsible investment adviser. Statistics say 91% of businesses follow a risk-based cybersecurity framework. That approach only works well for investment advisers if they know which threats exist. Scheduling evaluations such as penetration tests can help them understand the existing weaknesses, but these professionals should also stay abreast of crypto-related cyber threats as they arise.

Customers trust investment experts to manage and grow their wealth. Relationship building is a crucial part of the job, but unaddressed cyber risks could erode any trust accumulated through interactions over months or years.

Social Media Scams Could Fool Bitcoin Owners

Bitcoin is a hot topic these days, and it’s natural to follow social media profiles of thought leaders in the crypto and tech industries. Doing so could give you a head start on knowing about significant developments before others.

However, another cybersecurity threat associated with Bitcoin and other cryptocurrencies concerns scams spreading through social media. Criminals trick followers by impersonating famous people, then posting messages about “giveaways.” The premise is that if you send a small amount of cryptocurrency to a provided address, you’ll get double, triple, or more in return.

The parties offering such free money never take action to part with their funds. They merely sit back and watch the crypto transfers arrive. People familiar with this kind of wrongdoing also raise concerns because they assert that social media sites don’t do enough to police this fraudulent activity and ban those responsible for it.

This approach is similar to emails that many people receive claiming they won the lottery or received an inheritance from a long-lost relative, and need to provide their bank account details to get the money. No funds show up, of course. Always exercise critical thinking and ponder the details carefully before taking action you may regret.

Potentially Worthwhile, but Not Without Risks

After reading this coverage and doing your own research, you may conclude that investing in Bitcoin still interests you. An ideal way to protect yourself as a cryptocurrency owner is to thoroughly understand the pros and cons of any move before making it. Then, you’re more likely to be well-educated before making your decision. Bitcoin is not a risk-free investment. Educating yourself about cybersecurity risks is an ideal way to avoid them.

This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission!

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Back to the Basics | Can Stablecoins Save Crypto’s Soul?

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When the perpetually mysterious Satoshi Nakamoto, founder of Bitcoin, set out to build his own cryptocurrency, it’s fair to assume that he didn’t foresee where his creation would be just 10 years down the line.

This isn’t to say that the enigmatic developer didn’t have big plans for Bitcoin. After all, the aim of the digital currency was to ultimately overthrow the financial sector of the time. Instead, it became a capitalist dream—hurtling towards market values of almost $20,000 at its peak, before caving in on itself over the twelve months that followed.

Astoundingly, considering the unprecedented connectivity that we enjoy today, Satoshi Nakamoto has never been officially identified following the rise of his creation. Considering that he is rumored to own around 1 million Bitcoins that haven’t been touched—even during the cryptocurrency’s highest peaks—this has led to some investors to claim that Nakamoto died after founding his digital currency.

It would be quite something to hear Nakamoto’s thoughts on the ecosystem that he created. In the early days of Bitcoin, some adopters were keen to get the cryptocurrency up and running as a viable payment alternative—with some hip fast food places accepting the coin and a few businesses offering to pay salaries in Bitcoin.

Cryptocurrency startups established themselves in a bid to support transactions through Bitcoin. BitPay could’ve paved the way for the currency to be used to buy groceries or cinema tickets, but adoption wasn’t widespread enough to bring viability and Bitcoin began to mutate.

Last year, The Next Web found that 44% of all Bitcoin transactions are for illegal activities. Users found that Bitcoin was an ideal and untraceable currency for use on the dark web.

Writing for The Outline, Adrianne Jeffries said, “Nakamoto was a libertarian who wanted to create a system for payments that would circumvent governments, bankers, and corporations.”

He continued, “Instead, Bitcoin is now a get-rich-quick scheme that retains none of the exciting, anarchist features it proposed and has created a secondary economy with financial shenanigans that mirror the ones that led to the global financial crisis.”

It would be hard to classify Bitcoin as a failure, but it’s fair to say that the cryptocurrency has lost the soul it had as an emerging financial alternative off the back of 2008’s devastating financial crash.

There is, however, hope for the soul of the crypto-ecosystem as a whole.

2020 promises to be one of the biggest years for the world of cryptocurrencies. Stablecoins aren’t exactly new, but with the anticipated arrival of Facebook’s Libra and Wells Fargo Digital Cash, the volatility-free industry of stablecoins looks set to take centre stage.

Stability in the Face of Volatility

In December 2017, Bitcoin reached a value of almost $20,000; one year on it had dwindled to nearly $3,000.

As a digital currency that was designed to operate as a reliable alternate payment system, the success of the Bitcoin bull run in 2017 rendered the cryptocurrency unfit for its intended purpose.

>> Ripple Transfers XRP to New Trading Address: Bad News for Crypto?

Stablecoins, however, are pegged to real-world assets like the US Dollar or gold. Because of this, there aren’t any meteoric rises in value, but no crippling drops either.

Ethically speaking, stablecoins will be free from the clutches of speculators and profit-turning investors, leaving the digital coins to operate as they should—as a universal currency that can be used seamlessly beyond borders.

Practical Application

Stablecoins like Wells Fargo Digital CashTimvi (TMV), and Tether have been designed with convenience in mind.

When Wells Fargo announced its own digital stablecoin, the banking giants did so with an eye firmly fixed on enabling easy transactions. Lisa Frazier, head of the Innovation Group at Wells Fargo, boldly predicted that Digital Cash will be “faster than SWIFT, cheaper and definitely more efficient.”

Wells Fargo Digital Cash uses R3’s Corda Enterprise software to leverage swift book transfers internally—enabling funds to move seamlessly from a payer’s account to a payee’s account within the bank.

The true pace of Digital Cash remains to be seen, but if it is indeed faster than SWIFT, then it represents a step in the right direction towards utilizing crypto payments for everyday activities—like buying a coffee on the way to work.

Reaching the Unbanked

When Facebook announced Libra, its stablecoin that’s due to be released in 2020, it was done so from a humanitarian perspective.

Libra has been developed with the aim of reaching out to the unbanked citizens of the world. “For many people around the world, even basic financial services are still out of reach: almost half of the adults in the world don’t have an active bank account, and those numbers are worse in developing countries and even worse for women,” wrote Facebook subsidiary Calibra in a recent company statement.

Facebook, along with 28 other founding members of The Libra Association, including Visa, Mastercard, PayPal, Uber, Lyft, and Coinbase, among others, will focus on developing a stable universal currency that’s designed to accommodate low-cost transactions across borders.

“The goal of this new project is to build a financial ecosystem that can plug in and empower billions of people,” explained Dante Disparte, head of policy and communications for the Libra Association.

It’s early days yet, but 2020 may well be a watershed moment for driving the world of cryptocurrencies away from the soulless Wild West period of late-2017 and 2018 and into a new era of inclusivity and innovation. Hope springs eternal.

This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission!

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3 Stablecoins Everyone Should Know

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You may be familiar with the term stablecoin. But because it is a relatively new type of cryptocurrency, you may not be familiar with what it is.

So what is it? Why is there so much fuss surrounding these coins and what are the stablecoins you should know about?

Let’s dig in!

Stablecoins: What On Earth are They?

In its most simple terms, a stablecoin is a cryptocurrency that is pegged to a tangible, or stable, asset. Examples of a stable asset include gold or the US dollar. The idea of backing a cryptocurrency with a tangible asset is to reduce the price volatility associated with standard cryptocurrency. In doing so, digital coins become far more practical for everyday use, and it may encourage global adoption.

Cryptocurrency Volatility

Standard cryptocurrencies such as Bitcoin have high volatility. On any given day, the value can suddenly increase or decrease (often by significant percentages) for no apparent reason other than market hearsay or fear mongering. This is because the value of Bitcoin, and other cryptocurrencies, depends on what value is given to it by investors. It does not depend on a physical asset to determine its worth. Because of this, Bitcoin and most cryptocurrencies are inconvenient for daily transactions.

Imagine this: You are a vendor, and you sell a dress in exchange for 300 RPX. At the time of the transaction, 300 RPX could be worth $35 USD. However, the next day that same amount of RPX could now equal $23 USD. You wouldn’t be a very happy vendor. Further, you would be consistently aware of the ever-changing value to which your wares are a victim too.

Price changes like this are shocking for merchants and consumers alike. But the adoption of stablecoins may be a catalyst to the decentralized cryptocurrency system working mainstream.

>> Are Stablecoins the Future? The Winklevoss Twins Seem to Think So!

Stablecoins Offer an Optimal Currency

The goal is to create an optimal currency.

According to Forbes“an optimal cryptocurrency should have the following four traits: price stability, scalability, privacy, and decentralization.”

Price stability is the key trait, and this is what a stablecoin aims to achieve. As Forbes explains further, “Short-term stability is important for transactions and long-term stability is important for holding.”

So let’s look at some examples of stablecoin projects aiming to create the optimal cryptocurrency.

Tether: The Pioneer

You can’t talk about stablecoins without giving a nod to the pioneer. Tether is notable because it’s widely considered the first stablecoin.

1-to-1 USD

Tether claims it is 100% backed by fiat currency held in a reserve bank account. It is said to be backed 1-for-1 to the US dollar, with 1 Tether being equal to $1 USD. It will remain fully backed once all Tethers in circulation are less than or equal to all the fiat held in the reserve.

stablecoin

Most Established but Controversial

As it is the pioneering stablecoin, Tether is the most established and is well-integrated. However, Tether has faced controversy in the past, as its claims have not been legitimately proven. The company’s terms and conditions state that “Tether reserves the right to refuse to issue or redeem Tether Tokens.”

Some fear this statement gives the company credence to not redeem the currency at the 1-to-1 value it claims.

uBUCK: The All-in-One Convenience

uBUCK is a digital currency wallet that has fiat capabilities.

According to its website, uBUCK enables you to “pay people with uBUCK cash with lightning speed, make purchases online at approved merchants or withdraw cash at the ATM.”

With the ability to buy uBUCK Cash using either Bitcoin or Ethereum cryptocurrencies, a user is effectively “storing” their cryptocurrency in a stablecoin that is tied to the US dollar.

>> Circle and Coinbase Launch Their Joint Stablecoin USDC

How Does It Work?

It works like this: A user buys a prepaid uBUCK voucher from the uBUCK mobile application. As stated, you can use BTC or ETH to buy, but regular fiat credit and debit purchases are also accepted.

stablecoin

Users then load the uBUCK Debit MasterCard (linked to the uBUCK wallet) with their voucher credit, effectively converting the uBUCK Cash into dollars by doing so. This then means ATM withdrawals and regular shopping around the globe is possible with the uBUCK MasterCard.

Wallets

uBUCK comes with four secure wallets. These are the uBUCK Cash Wallet, a Bitcoin wallet, Ethereum wallet, and the USD Debit card. By having a multi-functional wallet, a user can manage their digital and fiat currency in one convenient place. Then, as stated, by using the uBUCK app, the wallet enables users to store, convert, and spend their fiat and cryptocurrencies.

Free Money Transfer

Another interesting feature of this platform is that users can send uBUCK vouchers to other recipients anywhere around the world for free. Essentially, the service allows free money transfers in only a few minutes.

MakerDao: Complex but Transparent

Maker is a decentralized autonomous organization, and its stablecoin is called Dai. Pegged against the US dollar, Dai operates on the Ethereum blockchain and, as such, it is transparent.

Asset Collateral

Each Dai is worth $1 USD, and the website states that “Every Dai is backed in excess by collateral at all times, so you never have to worry about its value moving up or down.

Further:

“Every Dai is backed by another asset of value. Our collateral portfolio is diversified, allowing multiple assets to guarantee the value of each Dai.”

stablecoin

Ethereum Blockchain

The system is said to be quite complex. To receive Dai, you have to first send your ETH tokens to the Maker platform where they will be “locked up.” Then using the Ethereum blockchain, Maker maintains stability by an autonomous system of smart contracts.

According to its website, Dai offers freedom from volatility:

“Dai stands to transform the financial industry by creating a stable and decentralized currency that will allow businesses to realize the future of money.”

>> Facebook Cryptocurrency: Is the Tech Giant Developing a Stablecoin?

The Takeaway

Stablecoins can bring stability to the crypto world and offer real potential for global adoption. The key is to create the optimal cryptocurrency inclusive of price stability, decentralization, scalability, and privacy.

The technology is still relatively young and will continually evolve, but it is clear that demand is there. People are looking for the balance between a decentralized payment network and stable value.

Everybody wants to feel secure in their transactions and know that they won’t lose value on their assets for no reason other than market hype.

We’ve mentioned only a few stablecoins here. There are more out there! Do you have any favorites? Do believe the technology will work and bring us towards that optimal currency?

Let us know below!

Featured image: DepositPhotos © zim90

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