Author: Frederik Nielsen (Page 3)

What is a Hard Fork?

Knowledge of what hard fork is necessary for users who have contact with the cryptocurrency world. Consider how the forks pass, what are their pros, cons and how to benefit. A hard fork cryptocurrency is the introduction of significant changes in the program code of the blockchain chain, as a result of which a new branch of the network is created that functions by its own rules and do not interact with the “parent” system. In this review, we will consider in detail the key points regarding hard forks, and we will understand why it is being held.

As mentioned above, hard fork cryptocurrency is a modification of the source code of the blockchain, as a result of which new rules for the functioning of the system are created, incompatible with the old algorithms. Since the old and new rules cannot work within the same chain, the network is ramified (hence the name of the process, because the hard fork translates as “hard fork”). The “mother” system continues to operate according to the established algorithms, while the new blockchain has its own ecosystem.

In most cases, the result of the hard fork is the creation of a new cryptocurrency, which runs within the same payment system. Sometimes this operation does not imply the creation of a new asset. Changes are made in order, for example, to correct the principle of extraction of a coin. In this case, division occurs. The best example of hard forks is Bitcoin Cash. For a long time, the BTC blockchain worked, satisfying user needs, and everyone was happy with everything. In 2017, there was a proposal to change the settings and increase the block size to 8 MB. The step was to solve cryptocurrency scalability problems: reduce transaction costs and increase the number of transactions per second.

What changes are made during hard fork?

We have already found out that often due to hard forks a new cryptocurrency appears. This asset is formed due to the fact that the organizers make fundamental changes to the original blockchain, which are incompatible with the old algorithms. As a rule, the following aspects are touched upon when holding a hard fork:

• Sets the maximum issue of the new currency.
• The time of block generation is prescribed.
• Sets the amount of the reward for the disclosure of the block and the frequency of its adjustment.
• An algorithm that regulates the complexity of mining is created.
• The block size is set (the possibilities of the subsequent change of this parameter are additionally specified).

In fairness, we note that the organizers of the hard fork extremely rarely subjected to drastic changes absolutely everything. As a rule, they cover only a couple of aspects. For example, one of the most successful forks of Bitcoin Cash is in many ways similar to the original Bitcoin. It has the same emission (21 million coins), approximately the same block generation time.

Conclusion

Taking into account all the above, we can say that despite some drawbacks, hard fork cryptocurrency is a rather positive development. Of course, attackers often use this, and ordinary people burn through on projects that are not successful. However, dramatic changes in blockchain networks stimulate their development, expand the possibilities of application, make payment systems as user-friendly as possible, and give new chances for investment. The main thing is to observe a competent approach when working with one or another hard fork in order to minimize all risks.

What Is A Paper Wallet?

A paper wallet is a special document with which the storage of a virtual coin is ensured. Such storages are in demand among users of crypto networks who own a large number of cryptocurrencies and aim to protect the savings from intruders. The peculiarity of such wallets is the availability of copies of two types of keys (public and private).

The convenience of the store lies in the possibility of using QR codes that provide quick identification and adding keys to the desktop client for conducting operations in a crypto network. What are the features of such wallets? How to create a paper wallet Bitcoin and what is required for this? What safety measures to follow during use? These and a number of other issues will be discussed below.

What are public and hidden keys

To better understand the essence of cryptographic keys, let’s simulate the situation from the real world. Imagine a vending machine. Anyone can throw coins into it. But not everyone will be able to get them back because this requires a special key. The only person who takes money from the device is its owner with a unique key.

In this example, the vending machine symbolizes a public address to which money can be sent to you. You own a device with its own unique hidden key. With it, you get access to the funds and the right to dispose of them at its discretion. The public key is the address to which money is sent to you, and the secret key is what you will use to send the coin to someone else. Remember, only you must know the secret key, otherwise, anyone can use your wallet and send money to any address.

How to make a paper wallet

You will need a program that randomly generates unique private and public keys. This is an open source program, and if you know about programming, you can see for yourself that it doesn’t do anything extra. Moreover, the keys will be created offline so that they do not hit the Internet, and when the job is done, you need to remove the program to get rid of all traces. You do not need to be a programmer or to understand encryption: you need only a computer, a printer, an internet connection and a sheet of paper. First, you need to make sure that there is no malware on your computer. The best is just a new computer, but, of course, not everyone can afford it.

Do you need a paper wallet

The answer to this question depends on the specific circumstances. If you want to spend a summer day trading in currency, then you will not need such a carrier. But if you are going to save money for a long time, for example, you are going on a long journey, then a paper wallet is a great way to keep your savings safe.

Risks of paper wallets

As far as paper carriers are protected from virtual threats, so are they vulnerable to physical ones.

• Abduction: there are always people who are ready to break the law for the sake of something valuable. Bandits can crack your safe just like hijack Lamborghini. They do not know what is inside, but since it is protected, it means it is valuable.
• And the moral here is simple – do not shout at every corner about your investments in cryptocurrency. It doesn’t matter whether it’s online or in the real world. Remember.
• The unreliability of the carrier: after all, it’s just paper. It is easy to damage, and the paint eventually erases. So periodically make copies of the document.
• Theft: since the keys are written on a sheet, they can be seen, photographed and stolen your money.
• Disasters: a sheet of paper is not protected from natural disasters and can be easily destroyed if you have not made backup copies.

Conclusion

The use of a paper wallet is relevant for those cases where the holder of a cryptocurrency focuses on long-term investments and does not plan to frequently conduct transactions with coins. Despite a number of security advantages, paper vaults have a number of disadvantages that are important to remember before registering. But you have to tinker to prevent physical trouble: the loss, theft or damage to secret keys. Always keep their location secret and install new storage in case of minimal suspicion of privacy vulnerabilities.

The best solution is diversification. As the old saying goes: “Don’t keep all your eggs in one basket.” Always distribute them. Keep a part of the currency (most) in paper wallets, just in case, make backup copies.

Most Popular Ways To Sell Ripple

Ripple cryptocurrency in recent months has risen sharply in value due to the increased interest of investors and traders. A positive role in this was played by the news about the beginning of testing the technology of interbank payments on the Ripple blockchain by Asian banks. On January 11, 2018, another well-known financial company providing the Moneygram international money transfer service also announced its cooperation with Ripple. They believe that the use of XRP technology and cryptocurrency will allow making transfers quickly and cheaply to any country in the world.

The market capitalization of coins in circulation (about 38 billion XRP) as of January 13 is 80 billion US dollars, with an average rate of $ 2.02.

How To Sell Ripple and XRP

Due to the sharp depreciation of the XRP rate, the volume of Ripple capitalization has noticeably decreased. This means that more and more people are choosing to sell Ripple. But not everyone knows how to do it most profitably and quickly. Let’s figure it out.

Although many do not recommend getting rid of their assets in XRP, predicting the upcoming growth of the ripple in the long run, some people still decide to sell Ripple. The easiest way to do this is to use the exchanger. Let’s see how to choose the exchange office that offers the most favorable exchange rate.

SBI MoneyTap

The most profitable way to sell XRP is to exchange them on a cryptocurrency exchange. We look, what platforms work with a coin, what methods of withdrawal and other conditions. Some exchanges can only work with cryptocurrencies (Binance), for example, you can exchange Ripple for Bitcoin and withdraw it to another wallet. There are exchanges that work with Fiat and you can sell Ripple for rubles, dollar or other currencies.

Sell Ripple on Bitstamp

Exchange Bitstamp provides an opportunity to purchase 12 cryptocurrencies (Bitcoin, Ethereum, Dash, Litecoin and others) and 1 token (KICK). Among the languages present are Russian and Ukrainian. The cryptocurrency exchange has been operating since 2013, it is registered in the UK, the number of clients at the end of 2017 exceeded 1 million people. Available currency pairs with Ripple: XRP / USD and XRP / BTC.

Sell Ripple on Binance

XRP sale and exchange on the cryptocurrency exchange. The most suitable option, since the courses will be better than in exchange offices. Which exchange to choose the final decision for you. The Binance cryptoexchange is popular, where you can sell cryptocurrency for rubles, dollars, euros, hryvnia and withdraw using available methods: advcash, payeer, perfect money, okpay, Yandex money, after verifying a bank transfer, to Visa or Mastercard, neteller and other.

What to know before you trade Ripple

In fact, this is part of the name of the company Ripple Labs (until 2013, OpenCoin). And, of course, it is often called the network created by this company, designed to process payments by financial institutions. But the token released by Ripple Labs and operating in the Ripple network is formally called XRP. However, since the word Ripple is easier to pronounce than the abbreviation of the three consonants, this name is likely to remain popular.

How safe is Ripple?

At the beginning of 2018, Ripple Labs owned about 60 billion XRP, while all these tokens can be produced 100 billion, that is, the company owns about 60% of the currency. Some people believe that in this connection, control over XRP in the Ripple network can be considered centralized, which is not suitable for some activists — they prefer unconditionally decentralized systems. Ripple Labs notes that even in the absence of centralized control, the presence of large players in the Bitcoin network and other networks leads to actual oligopoly. Moreover, the company believes that шеы XRP controlled emission plan gives it an advantage.

Right now, we are living in the digital world where almost everything is advanced with innovations. The blockchain is one among many and currently, it is one of the leading platforms for digital possessions. This platform is becoming increasingly important to the modern world. But why should someone use blockchain? Well, there are several reasons for using blockchain.

The blockchain is a peer-to-peer network linked with several computers to record and maintains all the transaction of cryptocurrency. It is more likely a traditional database with extremely decentralized and improved security. Therefore, innovation can be beneficial enough within the country through censorship is a considerable issue. These sorts of acts are severe on the procedure level of a blockchain. As long as it is gaining popularity, Blockchain innovation is investing part of their loans to do some researches on making it more developed.

Key Factors of Blockchain

There are some key factors for which many organizations and people choose blockchains over any standard database systems. Such as;

Safety Issues

The first thing that strikes in mind, “are blockchains safe?” The blockchain technology is safer compared to other centralized database systems. The network system is far less likely to be the target of a hacking attempt or a point of failure. The system is updated enough to detect any kind bug and declines and expels the hacked block instantly before it creates any damage to the blockchain. Usually, the more the nodes in a network, the more secure it is. Therefore, Bitcoin is considered as the most sophisticated and secure blockchain these days.

Blockchain: Cost Effective or Expensive

The highly distributed blockchain technologies operate through some network of odes where the user will never need to hire a professional to maintain the DevOps system. Some small companies can save expenses by embracing all the innovations of blockchain and smart contracts. This helps to lock out the intermediaries for the administrative tasks and financial services. 

Are Blockchains Open?

Blockchain innovation is an interesting business all around the world because of its incredible transparency. This derives that it is ideal for other users and developers with the chance to modify it as they deem fit. Another exciting fact is modifying any information kept on the blockchains is nearly impossible and throbbing. It is because of the existence of multiple nodes in the network monitoring the modifications on records.

The velocity of Blockchain Transactions

In some conventional banks, it takes days or even weeks for settling a transaction completely. It can be the reason for sophisticated protocols in the transferring software in banks. Moreover, banks are open during the regular company hours in five days a week. Similarly, some banks are located in different locations in a different time zone which can complicate things as well. However, blockchains work 24 hours a day and seven days a week. So, the blockchain based transactions happen instantly and take less time to process and update.

Summary

After finding out almost everything about blockchain innovation, it can be said that it has passed all the major assessment and performing quite well. The entire discussion above is a quick reflection of blockchain utilization. The blockchain technology offers some fantastic advantages to the conventional database which cannot be ignored. It is just a matter of time when blockchain takes over the traditional databases in every aspect of our everyday lives.

5 Crypto Trading Tips You’ll Love

At the initial stage, many experienced market participants are watching their colleagues’ hobby for digital money, which will pass in a short time. Virtual money that does not have real values, is not material incarnations, even now perceived by sceptics as a large-scale scam or a toy for visionaries.

Nevertheless, gradually the advantages of virtual payment instruments and technologies are becoming more accessible for people who were initially skeptical of cryptocurrencies. Virtual coin owners can easily make payments around the world. The received intangible money, in turn, can convert funds into the right currency using special exchanges.

Tip #1: Trade as carefully as possible.

Any investment is a risk, analysts say. Cryptocurrency is the same risky direction of investment as any other market sector. However, the risks of investing in Bitcoin are higher than the risks of investing in stocks or commodities. The cryptocurrency market is still very young, so a trader must understand the danger that this or that step carries to his funds.

Never invest all your funds in Bitcoin at once. This can not be done even if you are tempted to get a huge profit. Indeed, Bitcoin has risen in price recently. However, in the first stage, you can only invest part of your money. The remaining funds can be invested in other cryptocurrencies. After a certain time, you can invest in Bitcoin even more, but also not in a hurry, but think over each step as much as possible.

Tip #2: Invest what you can lose

No matter how trite this advice may sound, it is extremely archival. Have a good salary, and the loss of $ 500 will not cause serious damage to your finances and will not cause family quarrels? Great: you can safely invest them in trading. If this is your salary for the last couple of months and, having lost this money, you will have nothing to buy food … Obviously, in this case – not the most sensible waste of money. Investing too much money in a single transaction can also do more harm than good. The fear of losing a rather large amount can seize a trader, which will most likely lead to a series of fatal actions. You are more likely to be led by the market or the crowd, making mistakes.

Tip #3: No need to invest blindly

There will always be scammers who want to make money on new investors. They will recommend you to buy an ICO token with the promised hundredfold growth in a few months. A reasonable investor will always make decisions and carry out analysis on his own in order to assign responsibility for the achieved results only to himself.

Tip #4: Think with your head

In the Telegram and other resources, there is enough information that promises fabulous profits to traders. Trading signals, of course, are efficient and timely, many of them really help to make money, but you should not blindly rely only on someone’s word. A reckless decision that can cost you dearly. Any professional trader, even having “caught” a promising signal, before buying a coin according to a third-party recommendation, will conduct his own mini-research of the asset in which he is going to invest. In addition to studying the forums, the information in the media and open sources, it would not be superfluous to review the Whitepaper project and consult with experts, if any.

Tip #5: Invest not only in cryptocurrency but also in traditional assets.

A professional trader will never invest all his money in risky assets. A novice investor must take into account all risk factors and invest his money not only in bitcoins but also in stocks and bonds. Thus, you can get a guaranteed income and minimize losses that will occur if you make a wrong investment. Investors like to say that it’s wrong to put all your eggs in one basket. Therefore, a novice investor should take into account such advice when building his strategy.

What Are Non-Fungible Tokens?

It is a virtual token that you create in order to prove authenticity and the right to own an asset using cryptography. For example, if you have a virtual property – a virtual work of art, you can create a non-interchangeable token to tokenize the piece. The NFT that you now have reflects that ownership of the work belongs to you. It is not interchangeable since your work is unique. NFT is stored on the blockchain as your property.

What are some examples of non-fungible products?

When it can be interchangeable (in this case a token), it can be replaced by something identical. For example, a banknote worth $ 1 is no different from other banknotes of the same denomination. If you are a brief acquaintance with the dollar, it is unlikely that you will return to it. Items that cannot be replaced even by identical ones. An example is a plane ticket. You will not be able to board an aircraft with someone else’s ticket.

How are non-fungible tokens different?

They can offer their holders unique characteristics that make coins very rare. Most cryptocurrencies (including Bitcoin) have fully interchangeable coins. For the Altcoins, the ERC-20 standard created on the basis of Ethereum is most often used.

For unique tokens, there is also a solution – ERC721. This standard can be compared with baseball cards. Each card has unique information, while the card itself can be very rare. By the way, the ERC-721 is already used by baseball teams.

Are unique tokens needed at all?

The world is gradually rejecting the paper, and supporters of unique tokens believe that they will be of interest not only to collectors.

For example, they can be used as a reliable and immutable counterpart of birth certificates, university diplomas, guarantee certificates, and identity cards, as well as documents confirming the ownership of real estate and art objects.

In this case, the physically existing assets will be properly digitized and placed in a cryptocurrency wallet, where they will be kept safe, protected from tampering and falsification attempts by third parties.

What are the pros and cons of non-fungible tokens?

ERC-721 is not perfect, like ERC-20 this standard has its drawbacks. These tokens have all the advantages of ordinary altcoins based on Ethereum, which we wrote about earlier. For example, unique tokens can help transfer almost any asset to the blockchain with one hundred percent protection against any attacks and hacks.

Unfortunately, there are also disadvantages. ERC-721 is a relatively new standard, so unique token transactions last longer than ordinary token transactions. In addition, developing an ecosystem that would make collectible items on the blockchain meaningful is rather difficult.

Is there any other uses for the ERC-721?

Many crypto enthusiasts believe that this standard can be used not only for collecting.

For example, with the help of unique tokens, one could store birth certificates, diplomas, contracts and identity documents. You can even token objects of art and property.

How are the unique tokens created?

Each developer can make his project completely from scratch, but it is more rational to use ready-made standardized solutions.

At the moment, the development of a decentralized application is quite a costly process, which at the release stage may not pay off at all. In addition, the release of its own unique tokens leads to confusion on the crypto market.

What Are ICO Bounties?

In pursuit of new investors, the organizers of the primary placements of coins tried different ways: they placed advertisements in social networks and search engines (alas, now this method is practically unavailable), started topics on specialized forums and finally offered a kind of “partner programs” on mutually beneficial terms. The Bounty can be attributed to the last and quite successful marketing move.

Initially, the concept came from the world of computer games and much less romantic everyday life. Bounty is a reward for performing a specific task. So, in reality, bounty-hunters (they are also “bounty hunters”) are engaged in capturing criminals, executing government orders where there are not enough powers or powers of the relevant bodies.

Bounty ICO: Motivation and Technology

Recently, gamification of processes has become a popular phenomenon, applicable in many areas – from retail to healthcare. It is important to understand that the concept of “gamification” does not equate to the game as such, rather it inherits its certain principles. For example – rewards for completing quests.

Why does the project need bounty?

Today, only those who are not connected to the Internet have not seen various attractive offers on the network. “Collect a new car for a month”, “bring friends and become the happy owner of an apartment in the city center”, “how I made a fortune in my 23 years” … taking similar moves for the next “sect” or pyramid. However, actively following the news of digital currencies, users also look with skepticism: knowing about the percentage of unsuccessful ICOs, failed projects and fraudulent frauds, not everyone will be led to the offer to “earn without investments”.

However, it cannot be said that the rewards offered by startups are “pennies for bad work” or unambiguous “prokid”. The organizers of the ICO themselves are interested in attracting new investors, and this is practically impossible without promoting and disseminating information.

Bounty hunter

First of all, it is important even before applying for participation in the bounty to honestly answer the question: what exactly are you ready to do for the project? Depending on the type of tasks chosen, the sum of award tokens is calculated:

• placing ads / signatures / using avatars with a company logo – the easiest and lowest paid quest;
• placing advertising information in social networks and blog will bring a little more tokens;
• translation of articles and materials of the site will add “tokens” to the final award;
• Writing a detailed review, creating news notes, or recording a video clip requires certain skills from the “bounty hunter”, therefore it is paid accordingly;
• Aerobatics is testing prototypes and working with codes, a person with relevant skills on a project is invaluable.

It is worth noting: the less effort is needed to complete the tasks, the less reward, however, it allows you to participate in several projects in parallel. How to properly allocate time and energy – everyone decides for himself. Some prefer to tackle several parallel startups with the idea that at least a couple of them and shoot. Others – carefully choose the project with which they intend to cooperate, and give it maximum attention.

Summary

Participation in the ICO bounty is a fairly easy way to get your first tokens and become a participant in a large and rapidly developing cryptocurrency market. In order to become a “hunter”, you will have to spend some time looking for an interesting project and studying it further. But such efforts, as a rule, pay off, if the startup turns out to be really interesting.

The method does not provide any guarantees of real earnings: CIOs are not insured against failures. And, nevertheless, this is one of the safest ways to join in the transformation of economic spheres.

Introduction to Paper Wallets

Before you start working with cryptocurrencies, you need to understand where they will be stored. A variety of repositories allows you not to dwell on one thing, but now the paper wallet cryptocurrency is on the agenda as one of the most reliable options. The name already contains an explanation – the paper wallet is actually transferred from the computer to paper in the form of two keys, one of which is private (blockchain-address, which allows receiving transfers), the second public (allows you to make transactions yourself). Both keys are necessary for high-grade work with the account, and their loss completely protects the user from personal capital. Once they get to a stranger, the new owner will have full access to the assets.

From other wallets (desktop, mobile or online), where all information, including codes, are in digital format, the paper is quite material. In order not to trust the safety of data to third-party servers, you completely isolate them from the Internet, placing them on a piece of paper, and in order to operate with virtual currency, integrate them into an online purse.

A Bitcoin (virtual currency) paper wallet with QR codes and a coin are seen in an illustration picture shot May 27, 2015. REUTERS/Benoit Tessier/Illustration

Paper wallets in general

The need for such a purse arises when a rather impressive amount accumulates that you do not intend to turn to for some time. That is, it is not intended to participate in trade operations, and it is not planned to transfer it to someone. Because paper wallets are suitable just for long-term storage of cryptocurrency, and with proper treatment and proper handling are considered the best choice. If you plan to manipulate with them, because of sluggishness, this is not the most convenient option, and it is better to search for well-protected online wallets on time-tested and other users of resources.

This brings us to the question, should you go for a paper wallet?

According to the classics of the genre, there is two news – good and bad. Let’s start with the good. Contrary to the fragility of the carrier, the paper storage option of savings is considered the most reliable, since it does not constantly touch the World Wide Web, like mobile, desktop and online accounts. And if there is no way out of the Network, then it is inaccessible to hackers and viruses.

Now, look at the situation from the other side. Paper, as is known, material for important documents is so-so, because it is easy to destroy (tear, burn, wet) or lose. If during the formation of the wallet you forgot to disconnect the PC and printer from the Internet, there is a high probability that its copy remains on the Web and is now accessible to an outsider. This wallet is also very inconvenient if you are actively making transactions or other monetary transactions since you will need to read codes or enter access keys every time. To avoid this hassle, it is better to have reliable online or desktop wallets.

Also, newcomers often have confusion, under what circumstances to enter a secret, and under what public code, why transfers are made out incorrectly. It happens that while sending funds to someone’s wallet, the public code is scanned. As a result, money is debited from the account, but they never arrive at the recipient’s address.

Another situation is when, after applying the BIP38 system, the user prints the encrypted key, but loses access to the resource where he performed this manipulation. Without decryption in another way, access to your own funds will not work, so you have to forget about them. However, paper storage developers ensure that, while vigilance is observed, it is the safest way to contain large amounts of cryptocurrencies.

Paper Wallet: Set Up

To generate an address for a wallet, you do not need to be a programmer, because this is done by services specially sharpened for this. There are many of them, and the principle of operation is basically the same, except for some details. It is easy to work with them, and for clarity, we consider a few examples.

Wallet Generator is comfortable and easy to use the site. To form a paper wallet on it.

MyEtherWallet (MEW) is a free, open source user interface. The resource allows you to directly contact the blockchain, while you are responsible for the safety of your savings, keeping control of the keys.

You should also know that not all programs form QR codes, but only a set of characters. Such wallets are inferior in reliability in that, in addition to the character set, they additionally have a matrix barcode, and therefore the developers themselves recommend the latter option, as more advanced.

Conclusion

The very best aspect of paper wallets besides being protected is users are in a position to examine their balances at any time. Furthermore, users can pick to import their paper wallet details to their online wallets.

If you have coding knowledge, you’ll have a fantastic time establishing your paper wallet. Do not stress if you don’t have coding knowledge or skills. Given that keys are created offline there is no danger of exposing your delicate info to hackers.

How Cryptocurrency Prices Work

In fact, the price of Bitcoin is determined by the supply and demand for it. This market law is primary here and is executed at 100%. The more attention to the cryptocurrency market, the more actively the same Bitcoin as an asset or payment unit is distributed, the higher its price.

Digital currencies are as mobile as they are opaque. No one knows for sure what the total number of bitcoins or their analogs in the market is, or who exactly they belong to. This is important because, in such conditions, concerted actions of several large holders of such an asset (pampers) are enough to reverse the market trend. For a high risk, the owners of virtual currency have the opportunity of large-scale earnings – in case the market moves in the “right” direction.

Impact of population literacy

There are also secondary factors affecting the formation of the price of the virtual currency. For example, the growth of financial literacy of people and open access to information about events occurring in the market of cryptocurrency. The more attention to digital assets, the greater the demand for bitcoin and other currencies, the higher their prices. Improvements in infrastructure related to the cryptocurrency market, such as expanding account replenishment methods, transaction paths, options for converting funds and other options, have a positive effect on the growth of interest in it from investors. The simpler the “in and out” is, the better.

Inflation affects indirectly

If you look deeper, another driver appears that affects the rate of the virtual currency, but indirectly, not directly. These are indicators of inflation in real life. Rates of Bitcoin, Altcoin, and others depend on the issue of money, that is, the number of coins already released into circulation and ready for use. This resource is finite because the source code allows you to produce a predetermined amount of bitcoins. But to inflation, Bitcoin does not have any binding (because it is not secured by anything, again). In this light, investments in cryptocurrency are presented to investors more and more attractive.

Speculators

Less significant factors of influence can be many. This policy, the number of active buyers and sellers, the amount of money in cryptocurrency, the mood of speculators and so on. The influence of the political factor can be easily tracked by bitcoin pairs with currencies of emerging economies – for example, with the Russian ruble.

About speculative players should be said separately. The virtual currency market is only developing, its volume is growing constantly, but intraday indicators still allow the artificial formation of a growing or downtrend. As it was said earlier, several large holders of cryptocurrencies may well “collapse” prices or direct the market into an up-trend.

Panic and hypertrends

The mood is another driver that determines cryptocurrency prices. “Market Panic” can both “bring down the course” and raise it “to the skies”. It all depends on the cause of market reactions at one time or another. If investors are positive and ready to buy, prices will rise.

In any case, when investing in cryptocurrency, it is worth remembering that a successful history of price increases in the past does not guarantee a repeat of this situation in the future. Risks will increase over time as the cryptocurrency market becomes more volatile.

What Are Bitcoin Futures?

For a long time, Bitcoin remained outside the law. Now everything has changed. Two major US exchanges – the Chicago Stock Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) – have launched bitcoin futures trading. So bitcoin as a financial instrument gained recognition from government agencies, and the launch of futures will allow legitimizing this tool for institutional investors, hedge funds and other participants in the financial market.

What is special about Bitcoin futures?

Futures – is a derivative financial instrument, or “derivative”; This is a contract that is concluded on an exchange between two parties: the seller and the buyer. Very often, the role of the contractor under the contract is performed by the exchange itself, which then finds the other participant as the second party to the contract.

Note that it is possible to trade in futures contracts at BTC without having the cryptocurrency itself, but only speculating on its price. That is how, in particular, transactions take place on such well-known exchanges as CME and CBOE, focused mainly on large investors. However, on the upcoming Bakkt trading platform, futures will be presented that involve the supply of physical Bitcoin after the expiration of the contract.

How does Bitcoin futures work?

Bitcoin futures is the obligation of one party to the other to buy or sell a certain number of bitcoins at an agreed price before the expiration of the contract in question.

The price of the futures is the guarantee of the contract. It can be 10-15% of the total amount of the transaction. This provides an opportunity to get a large income even with small investments by both parties due to the so-called leverage.

It is extremely important in this situation to correctly predict the future price of the underlying asset. Otherwise, losses are possible. Control over the fulfillment of futures obligations in accordance with current legislation provides the exchange.

The impact of futures on the course and the Bitcoin market

It’s no secret that demand creates supply. The same pattern is observed in the case of the course of Bitcoin – respectively, the cryptographic market as a whole. That is why many analysts believe that the emergence and closure of futures contracts for Bitcoin are of great importance for the course of the first cryptocurrency. The question is only in the degree of interest in Bitcoin of large financial institutions, whose work is carried out within the framework of current legislation.

Such interest of financial organizations strengthens the legal basis of cryptocurrency in the existing system. On the one hand, this will ensure the formation of digital currencies as tradable assets (respectively, this will inevitably provoke a rise in the cost of Bitcoin).

How will be trading Bitcoin futures

As a rule, non-professional traders make up the majority of the crypto market. Simply put, these are people who are willing to invest money in everything that shows a rise in price, believing that the growth trend will always continue. However, major market players are not like that. Where an inexperienced investor will buy, an experienced one, on the contrary, will sell.

Bitcoin futures trading follows clear rules, and most likely this situation will continue in the future due to the fact that this market is regulated. To prevent manipulation, futures have a limit on the number of contracts.