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In 2017, the cryptocurrency conjecture went mainstream. By going mainstream, it means that the market isn’t dominated by cryptocurrency enthusiasts anymore. We’ll have to accept that the mainstream investors with even a little bit of knowledge of cryptocurrencies are in charge of the market.

A Wall Between Investor And Stupid:

The unit price of a coin is a pointless basis for making investment choices. Even a bitcoin could’ve been a sub-cent item if Satoshi had chosen the final cap to be 21 quadrillions instead of 21 million and the unit price of a bitcoin would’ve been $0.00001697 right now instead of $16,790. But the total market cap still would be $284 billion. Nothing would change except that everyone would have million times more bitcoin and the unit price would be also quite cheaper.

 

Since many cryptocurrencies, as well as bitcoin, are divisible down to Satoshis (10^8), no matter what the supply is, as long as the currency has enough particles to go around for the economic use cases imagined so it could function properly. The number isn’t much important itself, although it doesn’t affect the unit prices, which automatically means that it has a massive impact on the investment choices of mainstream investors.

 

You must’ve been wondering the reason why we look for the market caps when we compare coins. Well, this is because it is how we compare cryptocurrency’s values as a whole, instead of just looking at the unit prices. To envisage this in a fine way, we can normalize the supply for various altcoins to see what the prices would be if they all had the same supply.

 

Zcash is the best example to explain what this actually means. Zcash supply when all the coins are mined the same as bitcoin (21 million), but right now, there are only 31 million mined ones. Also, when you’re looking at sites like Coinmarketcap, it’ll tell you that Zcash has a market cap of just $2.1 billion. It places Zcash far down on the list because it has just 0.6% of bitcoin’s market cap.

 

The price of Zcash is $727 which is almost 3.2% of bitcoin’s $16,098. You’ll have to pay 0.035 bitcoin to buy Zcash if you’re buying with a bitcoin. Zcash must accumulate a market cap of $12bn, to climb to the 12th spot on Coinmarketcap. The reason why the site is listing the coins the way they are is that it tells us what the implied valuation is for coins when they’re bought at current prices.

 

You can get far in your determinations to become a more informed trader than most of the people in the market by just using your common sense and a calculator. Being able of properly comparing the coin valuation doesn’t matter if no one else is doing it.

 

It’ll take a lot of time for the markets to eventually force these prices to sort out themselves. Until they do it, it’s your diligence to ensure that you’re on the right side of that alteration.

 

Story credits: news.bitcoin.com

Image: Google images

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The theory behind a Bitcoin transaction

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Everyone on the network is aware of the word “transaction” but, does anyone ever wonder how bitcoin works?

A Bitcoin transaction may sound simple but it’s actually very complex. In this article, we’ll be outlining how this process takes place and what are its key steps.

Both your Bitcoin wallet address and Bitcoin network must go through series of steps to ensure that the right amount reaches the recipient.

To begin with, it’s important to understand that a bitcoin isn’t a single record of a coin but it’s actually registered as a transaction, that consists of three parts- a transaction input, transaction output and an amount.

  • Transaction input- This is the bitcoin address from which the money is sent.
  • Transaction output- The bitcoin address to which the money is sent.
  • Amount- The amount of bitcoins sent.

theory behind a Bitcoin transaction

When someone sends bitcoins to you, the address they used to send them to you is registered as the transaction input on the bitcoin blockchain, and your address as the transaction input.

When you send those bitcoins onto someone else, your wallet creates a transaction output which is the address of the person who is receiving the coins. That transaction is then registered on the bitcoin network as the transaction input.

With the help of this system, people can trace transactions back to when bitcoin was first born. This creates a completely transparent system in which all the transactions can be viewed at any time.

How can you send bitcoins?

To send bitcoins, you require two things- a bitcoin address and a private key.

A bitcoin wallet address is generated at random and is simply a sequence of letters and numbers.

A private key is another sequence of numbers and letters, but this cannot be disclosed to anyone else.

theory behind a Bitcoin transaction

This infographic explains how bitcoins can be sent.

Are there transaction fees?

Certain bitcoin wallet address allow you to set your own transaction fees. Any portion of a transaction that isn’t traced or picked up by the recipient is the transaction fees. This goes to the miners to solve the transaction block as an extra reward.

Why should I wait for my transaction to clear?

Your transactions are verified by miners and there is a set block time of 10 minutes. So, you might be told to wait until they are done mining.

You can view all the transactions in a block chain with a hex editor. A block chain browser is a site where every transaction in the blockchain can be viewed in human readable terms.  If you want to make your activities on the bitcoin network more opaque, you’d have to not use the same bitcoin address repeatedly and avoid sending large amounts of bitcoins to a single bitcoin address.

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The Dos and Don’ts of Safe Peer-to-Peer Bitcoin Trading

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For some reasons, people are hesitant to buy bitcoins in face-to-face transactions. They are afraid of the risk that comes with it and would rather trust a Bitcoin exchange with their bitcoins. However, every method comes with its own set of dos and don’ts.

This post will outline the various dos and don’ts you must keep in mind while trading bitcoin face-to-face.

 

Carry your device with you

Do not forget to carry your personal device, be it your mobile phone, laptop or tablet when you’re going to the meeting. Make sure that you already have a bitcoin wallet if you’re the buyer. It is best to take your own device so that you can verify the trade on it rather than filling out your personal information on the other party’s device.

 

Do not cancel trade if price of Bitcoin drops

Feedback is everything. Do not try to walk out on a trade when you can negotiate. If the prices have dropped then it is best to try to negotiate on a price that benefits both the parties. When you cancel a trade, it is going to lessen your chances of earning a good feedback early.

 

Decide on a price ahead of time

To avoid any debate on the price later on during the meeting, it is best to agree on a price beforehand. Do not try to get a higher rate out of the seller after the price has been decided, this attitude can cause things to go sour very quickly. If possible, get an escrow service as it guarantees the payment to the seller and the buyer is sure that he will receive the bitcoins before releasing the payment.

 

Don’t expect to get rich overnight

You need to keep track of the rapid price changes taking place while trading. You need to prove that you are a good and reliable buyer/seller in order to gain a better reputation on any exchange platform. Be sure to remain patient when dealing with bitcoins, as nothing comes easily. Do not be fixed onto selling your bitcoins the moment it hits a high note since it is very volatile.

 

If you follow these pointers, then you are sure to develop a good reputation on any exchange platforms and have nothing to fear.

 

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Mining Rewards – What Will the Price of Bitcoin Price Do?

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1080ti GPU from Nvidia is considered as the benchmark altcoin mining hardware for everyone mining Bitcoin or other altcoins. Though ASICs demand awe, GPUs are the smart means to get into mining with low risk.

mining bitcoin

ASIC

You can easily buy a dodgy piece of fire hazard equipment with an ASIC, which would be good for only one or two algos, that consumes electricity, and might get bricked by the time you get it.

GPU:

  • You can get a piece of kit with a GPU that can be easily sold to gamers.
  • It can mine a world of old and new coins.
  • It obviously doesn’t sound like a jet engine and probably won’t impair your hearing – perhaps, it will get you cited by the city.
  • GPUs are the best for amateur miners.
  • Plus, the 1080ti is the sweet spot amid the GPUs.

Investing in cryptocoins or making an investment in tokens is extremely speculative especially when the market is mainly unregulated. So, anyone considering it must have to be ready to lose their whole investment.

Nvidia doesn’t really like miners, however, they surreptitiously like the huge price premium which they have formed for their equipment. Also, it won’t be critical for their brand since they will be getting hundreds of dollars for a 1080ti GPU.

  • Recently, a 1080ti was making as much as $8 per day.
  • At the same time, this also meant that a miner could get their investment back in almost four months.
  • The price of Bitcoin also rebounded from almost $6,000 to $10,000 – making the rewards for mining double.
  • Later, general mining rewards began to plunge, so did Bitcoin.
  • A 1080ti hit $1.40 per day in mining rewards before they started to recover together with the cryptocurrency market.
  • The increase has taken the regular mining reward to a present $2.40 a day.

Usually, alterations in mining rewards lead the price of Bitcoin and basically are a very valuable indicator of what will happen to the crypto prices in the future. A market which is much volatile as the cryptocurrencies, a trader wants as many indicators as he can get and it’s quite better if they are closer to the elementary demand and supply fundamentals.

Mining Rewards

  • Mining rewards are thoroughly linked to open demand for coins since buyers have to go to exchanges in order to get coins real-quick and miners can sell their coins there after they get them.
  • When demand receives the supply, mining rewards escalate instantly and because of mining’s nature, mining rewards are a complex yet delicate indicator of the market wide activity.
  • An overall upsurge in the demand will encounter a less flexible supply of coins – determined by the emission regulations of the several blockchains.
  • That, at the same time, feeds through into price and onto the mining rewards immediately.
  • You could attempt and watch hundreds of coins at the same time, however, the mining rewards will provide you with a clear index-like outline

Mining Reward Fluctuations

If you are looking for a good place to track mining rewards, then whattomine.com and nicehash.com are there; as they are mining profitability pages. These rewards vary over the long-term due to a complex series of features, however, their movement in the short-term is a robust sign of which coins are hot and what ones are not.

  • The fluctuations in the mining reward make a near-term Dow- or FTSE-index like an indicator.
  • Although, they are not the ones that tell you about the present and the past but, they also hand out to the vigilant investors and traders – probably to push prices over the upcoming weeks.

A week is considered as a long time in the crypto world and for the time being, the mining rewards are directing to positive sentiment. As Bitcoin is set to break above the $10,000-mark, mining rewards will probably be a good sign to watch -because in such an erratic trading, you must have to focus on each and every signal that you get.

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Thinking of Investing in Bitcoin? You Need to Read This First

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Investing in Bitcoin

Are you fascinated by the incredible rise of Bitcoin? Are you planning on making a Bitcoin investment but always hold due to the lack of essential insight? Then you have come to the right place. Here we have discussed the paramount factors that – as a potential Bitcoin investor – you will need to know.

The particulars we have covered here include:

Why Is Bitcoin Suddenly Gaining Worldwide Popularity?

Ever since the internet took over our lives, everything is becoming more and more reliant on it. And to make online transactions, we needed a currency that was more secure and less exposed to theft.

Several digital currencies tried to claim that spot, but Bitcoin is the only one that emerged as the victor.

The reason behind Bitcoin being the primary mode of online transactions is the security, reliability and complete anonymity that it gives to users.

Bitcoin is open to everyone and is not tied to a particular country; which makes it quite an exciting investment opportunity.

Why Invest in Bitcoin?

A bitcoin is worth well over a thousand USD. It may sound silly to some people but this is what the truth is.

Let’s take an example of gold to understand why bitcoin investment is a good idea.

Gold reserves on our planet are in a limited. The more we mine, the less is left and it becomes harder and costlier to find and mine.

Same is the case with bitcoins. They are finite and become harder to mine over time. Here are some key reasons as to why you should invest in bitcoins.

  • The monitory policy is predictable and can be verified by anyone.
  • Due to this predictability, it becomes possible to know how many bitcoins are in circulation and when new coins are created.
  • They can be transferred to any part of the world without government restrictions.
  • More corporations are starting to accept bitcoin as a form of payment.
  • If you understand Bitcoin, you would know that future belongs to this virtual currency.

When Is the Right Time to Buy Bitcoin?

As with any market, nothing is for sure. Throughout its history, Bitcoin has generally skyrocketed in value, followed minor, steady downfall until it settles.

If you want to understand current market trends and risks involved in the investment, go with the tools like Cryptowatch and Bitcoin Wisdom. These tools help you analyze charts and understand the price history of cryptocurrency.

Lastly, How to Secure Bitcoins?

As with anything valuable, thieves, con artists, and hackers are after your coins, so it’s necessary to keep them secured. But the question is, how to do so?

To gain maximum security, keep your coins in trustworthy wallets, such as Trezor and Ledger Nano S.

  • Trezor – it’s an offline wallet that generates private keys offline to keep your assets secure.
  • Ledger Nano S – a Bitcoin security company. Ledger Nano S offers a wide range of Bitcoin wallet addresss, and the wallets associated with this company are considered to be one of the safest out there.

You can discover more about these wallets on their official sites.

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Investors Are Worried After a Sudden Drop in Bitcoin Price

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After a series of ups and downs, bitcoin’s price went to its top. However, it plunged to less than half of that value later. The unexpected changes are now compared to the dot-com bubble and are highlighting the speculative nature of investing in cryptocurrency. Investors are worried due to bitcoin investment

The price of bitcoin fell below $10,000 for the first, on December 1. At one point, it fell below $9,300 on one exchange. The price later rose back to almost $12,000, however, the investors and economists are still not sure how long the price will stay there. It is also said that the recent skim was due to the fear of crackdowns in the cryptocurrency markets.

South Korea has suggested a ban on the trading of cryptocurrency, although no plans are settled yet. Also, same news has been reported about China.

Bitcoin is a decentralized digital currency, as it is the largest and well-popular digital currency, that is globally bought and sold in exchanges.

According to Timothy Lee (senior reporter at Ars Technica), it is not based on dollars. The value of bitcoin floats against other cryptocurrencies, in the same way the euro and dollar glide against each other. Users say that bitcoin has got a very effective system for authenticating transactions, as it is based on a revolutionary technology.

Bitcoin users also point out that the currency is not tied to government’s whims anBitcoin Investmentd according to them, it’s a good thing. Recently the price dropped, and that may not be a good thing for those investors who are trying to figure out what crash actually means for the cryptocurrency’s future.

Recently many cryptocurrencies have shown the same swipes. According to David Kotok (Cumberland Advisors chairman and chief investment officer), almost 20 years ago, the technology and the new internet stocks accomplished valuation of $7 trillion, just because of speculation. The prices of shares used to be very high and after they collapsed, investors got badly miffed. And apparently, the same thing is going to happen with these cryptocurrencies.

Same rise and fall in the price of bitcoin was seen by the investors in December.  After China announced that it was banning all the banks that were trading cryptocurrencies, bitcoin fell by 40 percent just within days after hitting a record price of almost $1,150.

There’ve been dramatic ups and downs in cryptocurrency’s price last year. Bitcoin had the value around $900 at the beginning of 2017, however, its value got tripled within few months. According to Kotok, cryptocurrencies are highly speculative and investing money in cryptocurrencies is a speculative thing to do.  There’s a chance that you may make a profit, but Kotok has seen many people who invested their money into bitcoin and now they’re having loads of trouble in getting their cash back when they try to sell it.

According to some analysts, the cryptocurrency is trying to find an impermanent price floor, but according to a CNBC report, Citigroup analysts think that the price of bitcoin would plunge again to half of its current value. According to Ars Technica’s Lee, it’s still going to be unpredictable. She thinks it’ll go more up and then it’ll crash again. So, no one knows how far down it’ll decline.

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