How Do I Buy Ethereum?

How Do I Buy Ethereum?

You’ve done your research, you feel confident about Ethereum and now you want to buy it. But, there’s a problem, you don’t know how to. Well, you’ve come to the right place. Below, we’ll walk you through the steps on how to buy Ethereum and introduce you to some of the places where Ethereum is bought and sold.

How Do You Buy Ethereum?

We’ve outlined 5 easy steps below to help you along in your journey of buying Ethereum.

Step 1: Find an Exchange and Create an Account

An online exchange is the only way to buy and sell Ethereum, as is the case with all cryptocurrencies. So the first thing you’ll need to do is a bit of research into online exchanges and choose the one which is right for your needs. For example, not all exchanges work in all countries, or they may have certain restrictions imposed on them based on where you live. So do your homework first and when you settle on the exchange for you, go ahead and create your account with it. 

A good starting point is to look at the most popular exchanges: Coinbase, Bitstamp, Kraken, and Gemini are all good starting points. 

Step 2: Set Up Your Account

Most exchanges require that you upload a number of personal documents for verification purposes in order to fully set up your account (and if an exchange does not require this, it may not be a trustworthy exchange). For example, you may need to upload your passport or driver’s license. The reason for this is that exchanges want to be sure you are who you say you are and that you are reputable. Exchanges need to complete “Know Your Customer” (KYC) and Anti-Money Laundering (AML) checks on each person that registers for them; for this they will need both proof of address and photo identification from you.

Verification of your account may take up to several days. How long depends largely on how busy the exchange is.

Step 3: Deposit Fiat Currency into Your Account

Fiat currency is a currency that is considered legal tender by a government, which takes its value from supply and demand rather than the value of the material the money is made of. Most world currencies, such as the US dollar, are fiat currencies.

That means you need actual money in order to start buying Ethereum (as opposed to, say, trying to buy it with gold), which generally isn’t going to be a problem for most people.

Once your account has been set up and verified, you’ll need to deposit fiat currency into your account in order to purchase the ether. This can be done either through a direct bank or wire transfer or through credit or debit payments. Some exchanges may specify that you transfer money into your account in a certain way.

Transferring money into your account may take several days, again this depends on the exchange. Also be aware that most exchanges charge a fee each time you transfer money in. You can find the details of an exchange’s fees located in the footer of its website.

Step 4: Buy Some Ethereum

Once you have money deposited into your account, you’ll be able to start buying Ethereum (or other cryptocurrencies) on the exchange. Each exchange works a little differently, but generally, you can expect to confirm your transactions, wait for them to go through, and then see the ether you’ve purchased show up in your account. Again, processing times will all differ from exchange to exchange, and will also depend on how many transactions you’ve requested.

Most exchanges will limit the amount of cryptocurrency you can purchase at any given time.

Step 5: Withdraw Your Ethereum into a Wallet

This is one extra step that most users will probably want to take, to better secure their purchases. Withdrawing your Ethereum, or any other purchases you’ve made on an exchange, into an online wallet helps to protect your tokens from being stolen if the exchange is hacked, which can and does happen. A wallet is a place where you can store tokens privately; only you can see them and only you can access them (except in extreme cases when the wallet is compromised).

You’ll have to download and install a wallet with Ethereum capabilities in order to store your purchased ether and create an account for this as well.

Once that’s done, you’ll be able to put your wallet account address into the exchange so that you can transfer your ether securely into your wallet.

Generally speaking, if you’ve only purchased a small amount of Ethereum, it’s probably better to just keep it in the exchange, so you don’t have to pay a transaction fee to transfer it out (which may end up being more than the small amount of ether is worth). However, for larger purchases, you’d be better off securing it in your wallet.

To sell your Ether, you will have to transfer it back to the exchange from your wallet.

>>Ethereum Smart Contracts: What Are They & How Do They Work?

What should I be aware of when buying Ethereum?

Buying Ethereum is simple once you’ve followed the steps listed above. However, there are a few important things to note when considering purchasing it.

All Ethereum transactions are final and non-exchangeable. That means, once you buy it, you can only get rid of it again by selling it in a second, separate transaction.

Sometimes, Ethereum transactions will be invalid, such as when a user doesn’t have enough funds to complete the transaction. In these cases, the transaction will not be completed and will therefore not be included in the Ethereum blockchain.

On the reverse side of this, all completed (valid) transactions will be stored on the Ethereum blockchain, and they will live there permanently.

Where can I buy Ethereum?

As mentioned above, there are several exchanges where Ethereum can be bought (and sold). Although most exchanges work approximately the same as far as the steps go, not all exchanges do the same thing, and not all exchanges work at full capability in all countries.

First and foremost, you want to ensure that you are signing up for an exchange that accepts Ethereum transactions. There are exchanges that allow you to sell Ether, which is what you want to use, but there are also platforms that only allow you to speculate on the price of Ethereum. These you’ll want to avoid, assuming you actually want to buy Ether. An example of one of these is eToro. You won’t have access to your coins on eToro, nor will you be able to send any coins to anybody else.

Next, you’ll want to make sure the exchange will work properly in your country.

Below is a list of some of the most popular Ethereum-equipped exchanges.

Coinbase

Coinbase is one of the simplest exchanges to use, however it is not available in all countries, and in some countries, Coinbase doesn’t allow you to trade Ethereum. Check what you can do on Coinbase first before getting an account.

Coinbase allows you do use either a credit card or pay directly from your bank account. Once you’ve set up your payment method, you can click “Buy/Sell”, select the amount you want, then click “Buy Ethereum” (or “Sell Ethereum”).

Coinbase charges a 1.49-3.99% fee per transaction, with credit cards at a higher fee than wire transfers.

Coinmama

Coinmama sells Ethereum worldwide. You can buy Ethereum with your credit card, and the exchange rates aren’t too bad.

CEX.io

CEX.io is another exchange that allows you to buy Ethereum with your credit card. Fees are included in the exchange rate, which is why they are higher than most other exchanges. CEX.io also works around the world.

The steps for buying Ethereum from CEX.io are similar to those from Coinbase.

Coinhouse

Coinhouse only works for countries listed with the EU. You can buy Ethereum with your credit card, debit card, or with Neosurf.

 

So there you have it!; the basics to start you on your Ethereum journey. Happy Buying!

Featured Image: twitter

What is an Ethereum Smart Contract?

Ethereum Smart Contract

An Ethereum smart contract is considered by many to be the best smart contract available but why is that? Why is Ethereum’s Network considered the greatest? and what exactly is a smart contract and what is the benefit of using one? This beginner’s guide to Ethereum smart contracts will answer all of these questions for a better understanding of this highly misunderstood topic. Let’s start with the basics.

What is an Ethereum smart contract?

A smart contract is similar to a regular, run-of-the-mill contract that you might receive from a lawyer or broker – your typical ‘standard contract’. Well, a smart contract is the same in its form, composition, agreement, everything – but it has one vital difference – it is digital.

A smart contract binds the relationship between the contract parties with a cryptographic code, whereas a standard contract merely outlines the terms of that relationship in a way that is enforced by law.

Smart contracts are meant to be a way to exchange money, shares, or really anything of value, in a conflict-free environment without the need for a middleman.Smart contracts are designed to carry out the exact tasks given by the original makers, or, to execute exactly as directed by the creator of the smart contract. 

The idea behind the smart contract (first thought up by cryptographer and computer scientist Nick Szabo in 1993) is that it works like a digital vending machine. Digital currency can be dropped in, digitally tracked and transferred, and the result is whatever was originally agreed on by the parties when they created the smart contract. Out pops that result like a snack would from a vending machine after inserting money.

Most of the time, smart contracts work in tandem with each other, with each additional related smart contract helping to complete the first one.

What is the benefit of a smart contract?

Smart contracts are considered to be much more efficient than a regular contract and as such there are many benefits to using one instead of a standard contract. Let’s list them:

  • They are digital: No need for reams of paper and faster accessibility, shareability to the contract.
  • They are more Autonomous: cutting out the middleman (and the subsequent back and forth that that entails), making things easier for all parties involved. The originator of the contract is the primary executor of the agreement. This eliminates the risk of error, or even corruption, from a third party.
  • Trust:  The digital format means that the information of the smart contract is encrypted. The encrypted data is stored on a shared ledger (shared between the parties only) and it will always be there and be accessible; therefore, it can’t be lost or ever off limits to you and all data is constantly backed up, as it is updated.
  • Safety: Because all of the data of the contract is encrypted (ie. not stored in its original format, and unlockable only with the right key), the skills needed to hack into the system and discover what the data holds is incredibly high and extremely rare. Smart contracts are not easily decrypted and so they are incredibly safe.
  • Speed: The digitization of a smart contract also makes it faster. No paper is required and it doesn’t need to be manually constructed. The program does it all.
  • Cost effective: With more speed comes more saving; less time and therefore less money is needed to spend on smart contracts. Also, say goodbye to any lawyer or third party fees.

What can a smart contract do?

The fundamental use is to manage agreements between parties. They act as ‘multi-signature’ accounts, meaning that funds will only be spent if the required percentage of people agree. Smart contracts can work in tandem together to build on each other and verify each other and can also be used to store information about an application, such as domain registration information.

What’s the connection to Ethereum?

Smart contracts can be encoded on any blockchain, but Ethereum’s platform was built specifically to create smart contracts. The Ethereum platform was designed in a way that would give developers the ability to write their own programs and build their own smart contracts. There is a far broader range of computational instructions within the Ethereum platform, than in, for example, Bitcoin, which is what allows this to be possible.

Bitcoin is limited in its ability to process documents. Ethereum, on the other hand, allows for complete freedom in terms of the coding and implementation of smart contracts.

Because Ethereum does allow developers to program their own smart contracts, the developers are referred to as ‘autonomous agents’ – they control the smart contract completely. Smart contracts are also automatic on Ethereum. Ethereum will run a smart contract code when a user (or another contract) sends it a message with enough transaction fees.

As an example, a person using Ethereum could send 10 ether to somebody else through the use of a smart contract. They would do this by creating a contract and placing the data which is coded for this transaction into the contract itself. The smart contract would then be able to execute the desired command once the 10 ether has been given by the creator of the smart contract.

The Ethereum smart contract tools which are built into the Ethereum platform are not intended to be used in isolation. The intent is that they can provide the base for any decentralized application, or even for whole decentralized autonomous companies.

When multiple smart contracts are running together, ether transactions will be required for each. How much the fee is will depend entirely on how much computational power is required to run the smart contract.

Featured Image: twitter

What is Ethereum? Ethereum for Beginners

What is Ethereum

What is Ethereum?

Many people ask the question ‘What is Ethereum?’, but not many people have the answer – or at least, not the answer that is comprehensible to the average reader. We’re going to simplify and explain, step by step, what Ethereum is and how it works. If you’re new to the cryptocurrency world, you’re in the right place, we’re just going to cover the basics.

The first thing to establish about Ethereum is that it is a form of online currency – cryptocurrency. Users are transferring it from one place to another, and every transfer, transaction, and storage place is tracked by the Ethereum online network. Ethereum takes things a step further by turning the way we normally store things online on its head. This explains how.

What is Ethereum
Source: worldcoinindex.com

How does the normal online storage system work?

Any information that you put on the computer – passwords, financial information (including credit card data and transaction history), personal data, etc. – is collected and stored in the online world through clouds and servers owned by companies such as Google or Apple. With this method, these companies are able to secure all of your data so that you don’t have to do so yourself.

However, this method also leaves your data vulnerable to attack or infiltration without your knowledge. It can be changed, stolen, or leaked by outside sources out of your control, leaving both you and the third-party storing your information without much of a defense.

This is what is known as a centralized design for the Internet. Cryptocurrencies are a way of decentralizing the Internet, and so that is what Ethereum, at its simplest, is attempting to do.

How does the Ethereum storage system work?

As it stands now, people’s information is controlled by third parties in the system described above; Ethereum is looking to keep that control in the hands of the users.

Ethereum will replace the use of Internet third parties that control user information by using what is called a blockchain. This blockchain will allow developers to create and distribute decentralized applications – meaning that no central authority will be able to hold the information creating those applications; only the actual users will.

The clouds and servers of the centralized system will be replaced by thousands of “nodes”, which are run by volunteers all around the world. This will allow people to have control over their own information, but will still allow them to also have the ability to obtain that information whenever they like.

Not everybody is for this decentralizing system (of Ethereum or any other cryptocurrency). Those cynical of the decentralized system predict downsides and remind everyone that it is still a new industry, with lots more to learn. It is still unclear whether the applications of a decentralized system will prove to be useful, capable, or, most importantly, secure.

What does Ethereum’s blockchain do?

Ethereum’s blockchain structure is a shared record, through the multitude of nodes around the world, of a complete transaction history for the user – everything that the user does with Ethereum, or stores via Ethereum, is tracked by the nodes. The network for Ethereum is made up of these nodes, and the basic unit of Ethereum is the account of transactions stored by these nodes.

This means that Ethereum’s network is made up of a thousand computers, all processing the same program at the same time.

This is what allows Ethereum’s nodes to store the most recent state of the user’s information or transactions. The network keeps track of all the up-to-date information, including the user’s balance of Ethereum and where it’s all stored.

The Ethereum blockchain tracks this information at its most updated, and is maintained and updated by the many nodes connected to the network. So, rather than a third-party keeping track of information, the Ethereum blockchain aims to have the user keep this ability for themselves, through the use of the network of nodes.

what is ethereum
Source: ethereum.org

How is Ethereum exchanged?

Ethereum is exchanged through the use of its crypto tokens, which are called ether. Ether is designed to be used as the payment method for hosting and accessing apps on the Ethereum blockchain (and it is these ether transactions that the blockchain keeps track of).

Just as with any other token of a cryptocurrency, ether has a value and can be bought or sold for an equivalent value of Fiat or other cryptocurrencies. Ether is also completely dependent on supply and demand, and it is therefore extremely volatile. However, it is this volatility of ether’s value that makes it an ideal asset for trading.

Ethereum is exchanged, or tracked, in a similar way to actual money (but less like money, ether value may be worth more or less depending on the day, thus affecting how much of it must be transferred). Whatever the current value of ether is at the time of the transaction will be transferred between accounts, the way you would transfer money from one bank account to another.

Due to the up-to-date transaction tracking that is done by Ethereum’s network and placed in the users’ hands, users (or, as they are actually called, miners) can ensure that no one is double spending their ether (and therefore their money).

Ethereum has demonstrated good growth in its value as of late, and this increase can be attributed to a number of different factors. There are many different developments currently taking place with the Ethereum platform, which is positively affecting its future potential and boosting the present trading activity of ether.

What’s the most important thing to take away about Ethereum?

Ethereum is looking to decentralize the online world. It wants to take away the control of personal data, such as passwords, financial information, and transaction history, from third-party users, and put that control back with the original users.

Ethereum uses blockchain technology to do so. Through a network of nodes coming from across the world, ether transactions are tracked and stored, with up-to-date values, amounts, and locations, ready at the ether miner’s hands.

Transactions occur as they would at a bank, transferring from one account to another. The value of ether fluctuates, so it may be worth more on some days than it is on others.

Featured Image: twitter

Want to Understand Ethereum? Look no Further!

What is Ethereum? Many people are asking this question, but not many people have the answers – or at least, not answers that are comprehensible to the average reader. We’re going to simplify things and explain, step by step, what Ethereum is and how it works. If you’re new to the cryptocurrency world, don’t worry, we’re just going to cover the basics.

The first thing to establish about Ethereum is that it is a form of online currency – cryptocurrency. Users are transferring it from one place to another, and every transfer, transaction, and storage place is tracked by the Ethereum online network. Ethereum takes things a step further by turning the way we normally store things online on its head. This explains how.

 

How does the normal online storage system work?

Any information that you put on the computer – passwords, financial information (including credit card data and transaction history), personal data, etc. – is collected and stored in the online world through clouds and servers owned by companies such as Google or Apple. This method enables these companies to secure all of your data so that you don’t have to do so yourself.

However, this method also leaves your data vulnerable to attack or infiltration without your knowledge. It can be changed, stolen, or leaked by outside sources out of your control, leaving both you and the third-party storing your information without much of a defense.

This is what is known as a centralized design for the Internet. Cryptocurrencies are a way of decentralizing the Internet, and so that is what Ethereum, at its simplest, is attempting to do.

Source: DepositPhotos/ limbi007

How does the Ethereum Storage System work? 

As it stands now, people’s information is controlled by third parties in the system described above; Ethereum is looking to keep that control in the hands of its users.

By using a blockchain, Ethereum will replace the use of internet third parties that control user information. This blockchain will allow developers to create and distribute decentralized applications – meaning that no central authority will be able to hold the information creating those applications; only the actual users will.

The clouds and servers of the centralized system will be replaced by thousands of “nodes”, which are run by volunteers all around the world. This will allow people to have control over their own information, but will still allow them to also have the ability to obtain that information whenever they like.

Not everybody is for this decentralizing system (of Ethereum or any other cryptocurrency). Those cynical of the decentralized system predict downsides and remind everyone that it is still a new industry, with lots more to learn. It is still unclear whether the applications of a decentralized system will prove to be useful, capable, or, most importantly, secure.

 

What does the Ethereum Blockchain do?

Ethereum’s blockchain structure is a shared record, through the multitude of nodes around the world, of a complete transaction history for the user – everything that the user does with Ethereum, or stores via Ethereum, is tracked by the nodes. The network for Ethereum is made up of these nodes, and the basic unit of Ethereum is the account of transactions stored by these nodes.

This means that Ethereum’s network is made up of a thousand computers, all processing the same program at the same time.

This is what allows Ethereum’s nodes to store the most recent state of the user’s information, or transactions. The network keeps track of all the up-to-date information, including the user’s balance of Ethereum and where it’s all stored.

The Ethereum blockchain tracks this information at its most updated, and is maintained and updated by the many nodes connected to the network. So, rather than a third-party keeping track of information, the Ethereum blockchain aims to have the user keep this ability for themselves, through the use of the network of nodes.

 

How is Ethereum Exchanged?

Ethereum is exchanged through the use of its crypto tokens, which are called ether. Ether is designed to be used as the payment method for hosting and accessing apps on the Ethereum blockchain (and it is these ether transactions that the blockchain keeps track of).

Just as with any other token of a cryptocurrency, ether has a value and can be bought or sold for an equivalent value of Fiat or other cryptocurrencies. Ether is also completely dependent on supply and demand, and it is therefore extremely volatile. However, it is this volatility of ether’s value that makes it an ideal asset for trading.

Ethereum is exchanged, or tracked, in a similar way to actual money (but less like money, ether value may be worth more or less depending on the day, thus affecting how much of it must be transferred). Whatever the current value of ether is at the time of the transaction will be transferred between accounts, the way you would transfer money from one bank account to another.

Due to the up-to-date transaction tracking that is done by Ethereum’s network and placed in the users’ hands, users (or, as they are actually called, miners) can ensure that no one is double spending their ether (and therefore their money).

Ethereum has demonstrated good growth in its value as of late, and this increase can be attributed to a number of different factors. There are many different developments currently taking place with the Ethereum platform, which is positively affecting its future potential and boosting the present trading activity of ether.

 

What’s the most important thing to take away about Ethereum?

Ethereum is looking to decentralize the online world. It wants to take away the control of personal data, such as passwords, financial information, and transaction history, from third-party users, and put that control back with the original users.

Ethereum uses blockchain technology to do so. Through a network of nodes coming from across the world, ether transactions are tracked and stored, with up-to-date values, amounts, and locations, ready at the ether miner’s hands.

Transactions occur as they would at a bank, transferring from one account to another. The value of ether fluctuates, so it may be worth more on some days than it is on others.

Ethereum is growing in popularity as a cryptocurrency. Many companies and start-ups have already adopted Ethereum as a way to complete transactions, and the number keeps on growing.

 

 

Source: worldcoinindex.com

 

Why should you Invest in Ethereum now?

First and foremost, investing in Ethereum is going to be much cheaper than investing in Bitcoin. This means that you could get more Ether for the same amount of money than you would Bitcoin, which could benefit you when Ethereum climbs, as it has been doing since the start of this year. While Ethereum is a cheaper cryptocurrency than Bitcoin, it is still a highly popular one. People are buying it, and they are selling it. This is driving the price, perhaps not as fast as Bitcoin, but steadily.

Of course, any cryptocurrency is going to have its ups and downs, but Ethereum has had a relatively consistent growth this year. Since the beginning of the year, Ethereum has seen an increase of almost 8,300%, going from $8 to its most recent price of $706. Ethereum’s growth may be due to its ability to be bought on Coinbase, which is now the most popular app on the Apple App store.

If you would like to learn more about Ethereum and how it works, click here.

Featured Image: DepositPhotos/ bestforbest

Ethereum Smart Contracts: How Do They Work?

Smart Contracts

Like many things surrounding the blockchain community, Ethereum’s smart contracts can be a confusing concept to most.

Smart contracts seem a bit difficult to understand because the term confuses the base interaction described. They are a new possibility due to the ethereum public blockchain.

A smart contract binds a relationship with cryptographic code, whereas a standard contract is an outline of the terms of a “relationship” and is usually enforced by law.

To describe them a little more clearly, smart contracts are programs that carry out the exact tasks set by their original makers. They help you exchange money, shares, or anything of value in a conflict-free way while staying away from the needs of a middleman.

Nick Szabo a cryptographer and computer scientist, first developed the idea back in 1993 and had the idea of it being a ‘digital’ vending machine.  In a simple example, you drop 10 ether into a ‘vending machine’ (i.e. ledger), and your driver’s license or escrow drops into your account. Smart contracts automatically enforce and define the rules/penalties around the agreement originally created. Ethereum’s platform is built specifically to create these smart contracts.

These tools aren’t meant to used in seclusion but are meant to shape the building blocks for the decentralized applications and decentralized autonomous companies described in our previous articles.

How do these “smart contracts” work?

Contracts can be encoded on any blockchain and Bitcoin was the first to support the most basic of smart contracts. It was the transferring of value from one person to another but it is very limited to the currency use case.

Instead, ethereum replaces bitcoin’s limited ‘language’ and succeeds it with a language that grants the developers opportunity to write their own programs.

Ethereum’s ‘turing-complete’ supports a wider set of computational instructions and allows developers to program their own smart contracts.

Smart contracts provide:

  • Autonomy – The originator of the contract is the primary executor of the agreement. You don’t need to rely on a lawyer or a broker and it knocks out the dangers of error or corruption from the third party.
  • Trust – Your information is encrypted and stored on a shared ledger, there is no way it can be “lost.” With that, it’s also backed up with all the nodes in the network storing your data.
  • Safety – Cryptography, the encryption of websites, keeps your information safe and it would take an abnormally high skilled and wealthy hacker to infiltrate the system.
  • Speed – Without the need of paper and having to manually construct each contract, it presents the opportunity for businesses to save time and money.
  • Savings – As just previously stated about businesses saving money with these contracts, individuals are able to save on notary/lawyer fees that occur when someone is needed to witness or process your transactions.
  • Accuracy – Instead of having to fill out piles of paperwork with a larger margin for error, automated contracts avoid those errors.
Source Image: blockgeeks

Blockchains That Are Able To Process Smart Contracts:

  • Bitcoin – Excellent for processing Bitcoin transactions but limited processing documents.
  • Side Chains – Block Chains that run adjacent to Bitcoin and offer a bit more for actually processing contracts.
  • NXT – Public blockchain that provides a few choices of smart contract templates. You are unable to code your own contracts.
  • Ethereum – Public blockchain that allows complete freedom with coding and implementation of smart contracts but you are responsible for the computing power with “ETH” tokens.

Featured Image: twitter

Decentralized Application: What is it?

Decentralized Application

Every single person that uses the internet today, does not have primary control of the data they share on certain websites.

Ethereum stands out from the rest, as it attempts to employ the blockchain as a way to correct what the designers of the internet.

The best way to describe it would be a “decentralized appstore” where anyone is able to publish their apps (dapps). Unlike today’s apps (such as Google Maps or Youtube) they do not need a middleman to function or control that user’s info.

These “dapps” link the user and provider directly. There isn’t just one definition of a dapp, as it is a new and emerging concept.

One example would be a decentralized Facebook that is resistant to posts being banned by Facebook itself. Once a message is published on the blockchain, it can’t be removed by anyone.

The main traits they hold is that they are open sourced and don’t possess a central point of failure.

Three Dapps

While ethereum promoters may be excited that the new technology is out there, the ethereum white paper splits the “dapp” capabilities into just three categories. The three different categories include: apps that manage money, apps where money is involved but isn’t the primary objective and apps in the “other” category, which involves but is not limited to, voting and decentralized governance systems.

In general, there are three types of applications on top of Ethereum. The first category is financial applications, providing users with more powerful ways of managing and entering into contracts using their money. This includes sub-currencies, financial derivatives, hedging contracts, savings wallets, wills, and ultimately even some classes of full-scale employment contracts. The second category is semi-financial applications, where money is involved but there is also a heavy non-monetary side to what is being done; a perfect example is self-enforcing bounties for solutions to computational problems. Finally, there are applications such as online voting and decentralized governance that are not financial at all.

In the first type of financial application app, it provides users more authoritative ways of managing and entering into contracts using their money. It uses the network’s distributed network nodes as a way of distributing this data.

Source Image: coindesk

The second type of application combines money but has a heavy non-monetary side with information from outside of the blockchain. As a brief example, a crop insurance app that is primarily dependant on an outside on-going weather feed.

Source Image: coindesk

There is some skepticism among some developers about a decentralized way to gain the information from outside of the blockchain. In order to execute the smart contracts, though they rely on that up-to-date outside data.

Source Image: coindesk

If Bitcoin is able to do away with financial authorities, are companies and organizations able to do the same?

Decentralized autonomous organizations are one kind of this third dapp. The aim is to form a leaderless company, make rules in the beginning about how each member is allowed to vote and how company funds are released. Once this is done they just, let it go.

Featured Image: Depositphotos/© nils.ackermann.gmail.com

67 Mind Blowing Bitcoin Facts!

Bitcoin Facts

Do you want to be able to impress your friends and family with how much you know about Bitcoin? And, no, I am not talking about the general facts, like how Bitcoin has seesawed from one extreme to the next.

The statistics compiled in the infographic below are not the kind of thing that a quick Google search will find for you. They are the result of many hours spent combing through all the data out there, looking for the most up to date, and most useful stats.

For example, 40% of the total Bitcoin in circulation are owned by just a thousand people. Or, Bitcoin can be used to pay for things as varied as pizza and hotel stays. When booking online through Expedia, for example, you can pay with a credit or debit card, a voucher or with Bitcoin.

Believe it or not, the first commercial transaction for Bitcoin was the purchase of two pizzas for 10,000 Bitcoins. That was in the days when the currency was thought to be pretty worthless.

Today we know a lot better. Cryptocurrencies have burst onto the market and have created a tidal wave of new investment opportunities. Bitcoin and other cryptocurrencies have changed the way we raise money for business and taken cloud funding to a whole new level.

It is really an exciting new world in the cryptocurrency sphere. You have the chance to get in at the ground level and make a real difference in the development of companies. Companies raise funds through selling their own tokens or forms of cryptocurrencies.

These Initial Coin Offerings were inspired by Initial Public Offerings in the “real” world but work differently. Buying ICOs does not automatically afford you the rights of a shareholder as having shares would in a traditional company.

Bitcoin, cryptocurrencies, etc. Forget what you think you know and learn about the real truth below.  

 

Bitcoin Facts
Source: bitcoinplay.net

Featured Image: bitcoinplay.net

  • Wow, Karthik, this was a great article to read. It was so informative!
    Its not easy for everyone to get started in bitcoin investing though, I got started around 2013 and struggled to make money or comprehend how to make any passive income with bitcoin, but I invested in a few good ICO’s and using different methods here and there. Like this one, what do you think? http://bit.ly/2CrP3TH

The History of Bitcoin

History of Bitcoin

By now, most people are somewhat aware of Bitcoin, what it is and all that the cryptocurrency has to offer. However, there is one aspect of Bitcoin that remains a little fuzzy and that is the actual history of Bitcoin. To try and clarify this confusion we have compiled what we do know about its ambiguous history – it’s worth brushing up on it, considering the virtual currency has taken the world by storm, and people are constantly debating about where the future of bitcoin is heading. By knowing a little bit about the history of the coin, you will be able to join in on these conversations and add in your own two cents.

The Early Life of the World-Famous Cryptocurrency

Who started Bitcoin?

Bitcoin has always been mysterious, with questions going as far back as to who created it. In fact, that has been a big question within the sector because the world only knows the pseudonym of the creator: Satoshi Nakamoto.

In 2008, Nakamoto published a paper in which he – or she – detailed the ideas that lay the groundwork for Bitcoins. This was the first appearance of the name Satoshi Nakamoto on the Internet.

Then, in April, as reported by Davis, Nakamoto stated that he – or again, I repeat, she – had “moved on to other things,” which resulted in the creator vanishing in thin air. When I say vanish, I mean all of Nakamoto’s accounts are now inactive, and it appears all of the coins in his/her wallet appear to be unspent.

See what I mean when I say the history is a little fuzzy? To top things off, rumors have surfaced – a number of times, actually – that the ‘creator’ of Bitcoin is actually a group of people, formed by Charles Bry, Vladimir Oksman, and Neal King.

It’s very likely that Bry, Oksman, and King are the brains behind the operation. Why? Because, according to various reports, these three men filed a patent that was related to secure communication two months before the Bitcoin.org domain was purchased. Coincidence? Maybe. But when the world needs answers, sometimes we have to settle for coincidences.

History of Bitcoin- The Facts

That being said, it’s not all speculation; we do have some facts:

1) In 2008, someone, under the name of “Satoshi Nakamoto,” posted “Bitcoin: A Peer-to-Peer Electronic Cash System” to a cryptography mailing list. It was then, and through this mailing list, that Hal Finney, a console game developer, found Nakamoto’s proposal for Bitcoin. Finney stated in 2013 that he was engrossed by the idea of having a decentralized digital currency – and now the entire world is too.

2) A couple months later, someone – or someone’s – registered and purchased the Bitcoin.org domain

3) A year later, the very first version of Bitcoin was rolled out, which then commenced the start of Bitcoin mining.

Regardless of who actually invented Bitcoin, whether it was one person or multiple, the fact that remains is that bitcoin probably won’t ever come closing to comparing to a traditional currency – which is a good thing – as it has no central bank and does not require regulatory authority to back it up.

What’s the Purpose of Bitcoin?

There are so many articles out there that describe what Bitcoin is used for, but only a few actually take the time to talk about how the use of Bitcoin relates to the history behind it.

It is crucial to remember that before Bitcoin, payment methods were never this advanced. Essentially, Bitcoin changed the game; it now allows for lower transactions, faster payment, and it is independent of governments. Further, Bitcoin allows individuals to actually own their coins.

Even though the origin of Bitcoin remains a little choppy, one thing we can all agree on is that Bitcoin has changed how the world works in ways that were probably never imagined.

What Does the Future Entail for Cryptocurrency Bitcoin?

There are a lot of skeptics out there, and there are a lot of people out there hoping for Bitcoin to fail. However, the thing to remember is that even though Bitcoin is not 100% a sure thing, and has experienced a number of slumps, it is still a new technology and the ‘next big thing’ so whether or not the price of bitcoin climbs or drops, it’s still probably going to continue to capture the attention of the masses.

So, what does that leave? All I can recommend is you educate yourself on all that is Bitcoin, so whenever something monumental happens, positive or negative, you will be able to formulate an opinion. 

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How Did Bitcoin Futures Affect the Bitcoin Market?

Bitcoin Futures

Bitcoin futures began officially trading on Sunday, December 10, 2017, first by the Chicago Board Options Exchange and, at a later date, by the Chicago Mercantile Exchange. There was a lot of debate about what Bitcoin futures would do to the market, but before we can get into that, it’s important to understand what Bitcoin futures are.

What are futures?

‘Futures’ are an agreement to buy and sell Bitcoin by a certain date. This is so regulators, in this case, the Commodities Futures and Trade Commission, can oversee anything going on in the market. As Bitcoin itself is not regulated, many people are still hesitant about it, but Bitcoin futures hopes to eliminate that hesitation, and so far it appears to have been successful.

‘Futures’ can help investors to speculate on the price of Bitcoin in the future, and it can also help to control the risk of investing in Bitcoin.

Here’s how this applies to Bitcoin: if any Bitcoin owner believes that Bitcoin prices will fall in the short term, investors can protect themselves against this by selling, or shorting, Bitcoin futures. It can be sold for a price that it is believed Bitcoin will be at further in the future (which is hopefully more than the price predicted for the short term). The seller will then have to buy back what they sold once the predicted time that they sold for arrives, and they will either make or lose money based on what the price is actually at compared to the predicted price.

So, as an example, let’s say that in two months time, Bitcoin is predicted to be at $18,000. Based on Bitcoin futures, a person could choose to sell their Bitcoin at that predicted price. Once the two months have passed, they will have to repurchase what they sold. Let’s say the actual price of Bitcoin in two months time ended up being $16,000, rather than the predicted $18,000. This means that the person has earned $2,000, despite the fact that Bitcoin price dropped.

What happened when Bitcoin futures launched?

When the first iteration of Bitcoin futures officially launched on December 10, 2017, it went crazy, so crazy in fact that the Chicago Board Options Exchange (CBOE) had to temporarily stop the bidding in order to restore some calm. The Bitcoin price jumped as much as 26% when Bitcoin futures first launched.

The CBOE initially started with three bitcoin futures, one to expire in January, one in February, and one set for expiration in March.

The anticipation of Bitcoin futures and the waves that were caused by the actual launch of Bitcoin futures venerated those who have long believed in the continued success of the cryptocurrency. To them, the commencement of Bitcoin futures and its initial success meant that Bitcoin wasn’t going anywhere. It also seemed to legitimize Bitcoin, or at least make it sound more appealing to those that had been more hesitant about joining the cryptocurrency world. With the launch of Bitcoin futures, thousands of new users started trading in Bitcoin; nobody wanted to miss out on the action.

Now, with the increasing demand for Bitcoin futures, the actual price of Bitcoin will no doubt climb as a result, as more established investors begin getting involved with Bitcoin, as is already being seen. The mere announcement of Bitcoin futures, in fact, was enough to increase the price of Bitcoin.

There are also those that believe that Bitcoin futures will make it easier to short Bitcoin, namely big-time Wall Street institutions such as J.P. Morgan. This idea, however, has led to even greater debate.

Why won’t shorting be the best move for Wall Street?

Most people have credited Wall Street institutions with the plan to short Bitcoin for the near term, meaning that they’ll sell Bitcoin based on the predictions of the futures, and then earn a profit by buying it back at a cheaper price. However, others believe that this won’t actually end up working for them, that there won’t be any profits to be earned from shorting because the predictions about future Bitcoin price will be wrong.

The argument behind this is that the Bitcoin price surge is occurring not because of the announcements relating to Bitcoin (such as the launch of a bitcoin future), but as a result of Bitcoin itself. Those supporting this argument believe that Bitcoin has entrenched itself well enough in the mainstream market that it can survive on its own. In other words, people don’t need something like a bitcoin futures agreement to buy Bitcoin; they were already interested in buying it and so the demand for Bitcoin is coming from the people themselves, not from the news generated about Bitcoin.

By this reasoning, Bitcoin price is going to rise on its own, and it’s going to continue rising. To have the price rely on news means that slower news days would result in a lower Bitcoin price; however, if the price of Bitcoin is actually reliant purely on Bitcoin and its integrated demand, then the price will continue to rise so long as the demand is still there. If that’s the case, anybody who shorts on Bitcoin may find themselves losing money. The only way you can earn money off of shorting on something is if that something’s price is less than what is predicted. But if the Bitcoin price rises and rises, then shorters will actually end up losing money because they will have to buy their Bitcoin back at a higher price than they sold it for – which completely defeats the purpose.

Under this argument, it doesn’t make sense for Wall Street institutions to short on Bitcoin. Why risk losing the money? If and when Bitcoin continues to rise in price, it seems far more likely that Wall Street will want to properly invest in Bitcoin and earn some money, rather than wasting their time (and potential cash) by shorting on it. After all, wouldn’t they want to take advantage of all the exploding interest in Bitcoin? Wouldn’t they want to make money off that interest?

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Bitcoin Wallets The Facts

Guide for Purchasing Bitcoin

You know how some people say the hardest part of University is actually graduating and putting your degree to the test? Well, Bitcoin is kind of like that. An individual can learn and master all of the digital currency’s basics, but it is an entirely different story when venturing out to get your “hands” on some bitcoins. But don’t worry – this guide will tell you everything you are going to need to know.

The Facts

Perhaps the most important thing for a potential bitcoin investor to know is that they have the option of purchasing bitcoin, a digital currency, from an exchange, or directly from other people through various marketplaces.

Paying for bitcoins is a fairly simple process as an individual can do so in a number of ways. But how, you ask? Well, you could, for instance, pay for your bitcoins with hard cash or a credit and debit card, or you could pay for them with wire transfers or even with other cryptocurrencies. Keep in mind it will all depend on who the individual is buying the bitcoins from and where the sender is located.

However, if you are looking to purchase bitcoins with your PayPal account or credit card, you might run into some trouble. Why? Because such transactions have the potential to be reversed with just one simple phone call to the card company. As a result, most cryptocurrency exchanges avoid this method of payment as it is extremely burdensome to prove that any goods changed hands in a transfer of bitcoins.

That said, not all hope is lost, as consumers in some countries are starting to see more and more options for bitcoin payment methods.

To elaborate, Coinbase, and Circle (all operated in the United States) offer bitcoin purchases with credit cards, while CoinCorner and Bittylicious offer their services in the United Kingdom, taking both 3D Secure-enabled credit and/or debit cards. It is important to keep in mind that these services will not accept credit or debit cards unless they are on the MasterCard or Visa networks.

If, however, you are an underbanked consumer in the United States, then you can look to expresscoin, which accepts personal checks, wire transfers, and money orders.

Setting Up Your Bitcoin Wallet

Before we dive into actually setting up a bitcoin wallet, it is important that we do a quick vocabulary review in order to avoid confusion.

Remember that “Bitcoin wallet” and “Bitcoin exchange” are not the same thing. A bitcoin exchange is essentially a place where you can trade Bitcoin for a fiat currency, and while exchanges offer some sort of wallet capability to the individual, it is not its only function. Most exchanges will suggest to users that it is best to transfer their currency to a secure wallet as exchanges try to shy away from the storage of bitcoins for long periods of time. Therefore, the best option to take is moving your coins to a wallet.

Got that? Great – let’s move on.

Some might find it beneficial to think of your bitcoin wallet as your go-to place to store your new bitcoins. This will help you get into a routine of putting all of your eggs into one basket, which will help tremendously with the organization when you actually want to purchase items with those stored bitcoins.

One of the great aspects of bitcoin wallets is that the user is able to choose the level of security that they want. What does this mean? Some wallets will take on the form of an everyday spending account (you can compare this to a leather wallet), while others provide top of the line protection.

Here are the top 5 options for bitcoin wallets:

  1. Desktop Bitcoin Wallets
  2. Mobile Bitcoin Wallets
  3. Internet-Based Bitcoin Wallets
  4. Paper Wallets
  5. Hardware Wallets

Let’s look at those five in a little more depth, shall we?

Desktop Wallets

There are a number of desktop wallets available, all of which come with different features. Some of the more popular options include MultiBit (if you use Windows or Mac OSX),  Hive (which is an OS X-based bitcoin wallet), Armory (which focuses on enhanced security), and DarkWallet (which focuses primarily on anonymity).

Mobile Wallets

If you are someone who finds themselves standing in brick-and-mortar stores, drooling, and wanting to purchase hundreds of items, then a mobile bitcoin wallet might be the option for you!

Essentially, the mobile wallet will run as an application on your mobile device. The wallet will store your private keys for your bitcoin address, as well as allow you to pay for items directly with your smartphone.

Internet-Based Bitcoin Wallets

Perhaps one of the main advantages of using an internet-based wallet is that the user can access it from anywhere, no matter which device they are using. How does it work? Well, internet-based wallets store your private keys online, on a computer that is controlled by a third-party and connected to the WWW.

Paper Wallets

It’s okay if you are looking for the cheapest option for keeping your bitcoins safe – most people are. That’s why we have something called a paper wallet. In fact, there are numerous sites that offer paper bitcoin wallet services.

The gist of a paper wallet is that it will create a bitcoin address for you, as well as an image that contains two QR codes: the first is the public address that a user can use to receive the digital currency; the second is the private key, which the user uses to spend bitcoins that are stored at that address.

Hardware Wallets

As of right now, hardware wallets are pretty sparse in number. But, if you are lucky enough to get your hands on one, you should consider yourself lucky: these are extremely dedicated devices that have the ability to hold private keys electronically as well as facilitate payments.

Like most things, however, bitcoin wallets have both pros and cons. And while to date, there seem to be more pros than cons, one cannot completely ignore their known vulnerabilities. For example, anyone storing bitcoins locally on their computer will have to back up their wallet regulatory – just in case the drive spontaneously corrupts.

In the end, it’s just going to depend on how you manage your bitcoin wallet. One of the most important things to remember is not to lose your private key (which, as mentioned, is stored in your wallet)

A Closer Look: Bitcoin Exchanges and Online Wallets

It’s a well-known fact in the cryptocurrency sector that bitcoin rookies will be swarmed by a number of exchanges and wallets in an attempt to persuade the user into using their service.

Similar to most things, the exchanges will vary in terms of what they offer. For instance, some exchanges are primarily for institutional traders, while others cater to the simple side of life, offering more limited purchasing and selling capabilities.

That being said, the majority of wallets and exchanges will hold copious amounts of fiat or digital currency for you, taking on the form of a traditional bank account.

If you are looking to engage in regular trading and speculation, then your best options are bitcoin wallets and exchanges. Additionally, if you do not need 100% anonymity and don’t mind long drawn out processes that ask for proof of identity, then again, exchanges and wallets are your guys.

For the most part, this is the law in the majority of countries. In fact, no regulated exchange can work its way around this law. Why? Any company that is interfacing with the system is obligated to meet “know your customer” requirements.

Here’s a quick list of some of the best bitcoin wallets/exchanges around the globe:

  1. Unocoin: This is an exchange that primarily targets the Indian marketplace. Unocoin allows for an individual to sell, purchase, and store bitcoins. If you are looking to make a deposit, you can do so through any national online bank.
  2. Coinjar: This is worth adding to your “To-Watch” list as it was Australia’s market leader back in 2015. In fact, the Melbourne-based wallet and exchange provider raised $500K AUD in venture funding and won an award at Finovate Europe two years ago for its user experience.
  3. Coinbase: You might have heard of this wallet and exchange service before as it is quite popular. Originally a United States-based service, Coinbase has recently opened up to a variety of European countries.
  4. Xapo: Offering deposits in fiat currency that are converted to bitcoin, this wallet and bitcoin debit card service has made a name for itself as of late.

Keep in mind that after you set up your account, and have a bitcoin wallet, you will likely be asked to connect your existing bank account to your wallet. It will be during this step that you move funds between the two accounts through wire transfer. Generally speaking, this step will include a fee.

Even though the majority of people in most countries around the world have the ability to move money to overseas accounts, these fees tend to be extremely high and the user might experience long delays when turning their bitcoins back into fiat currency.

Risk to Keep in Mind

It is essential to keep in mind that, despite the positives, a bitcoin wallet or exchange does not have the same protections that conventional banks do. What do I mean by this? Well, a wallet or exchange does not tend to have insurance for your account if the exchange were to be robbed or go out of business.

Due to the fact that the digital currency isn’t seen as a legal tender in most of the world, authorities tend to be stumped when it comes to how they should approach thefts.

Here are some banks that have been known in the past to be biased against bitcoin:

  1. The Royal Bank of Canada
  2. Commonwealth Bank of Australia
  3. TDBank
  4. Bank of Nova Scotia
  5. Commerzbank (Germany)
  6. Barclays (United Kingdom)
  7. Bank of the West (United States)
  8. Chase (United States)

Yet another problem is that if a thief enters your personal wallet due to a password or security slip on your exchange, the user does not have a way to recover their funds.

Can You Make Face-To-Face Trades?

The short answer to this question is yes. Some people might opt out of dealing with the hassles of the bank and go straight to acquiring the digital currency through face-to-face trade.

Keep in mind that if an individual is preparing to meet face-to-face with a local seller, they will be required to have access to their bitcoin wallet. Additionally, you will need to bring a mobile device or laptop that is connected to the Internet in order to confirm the bitcoin transaction.

If, however, you are shy in nature and do not want to take the ‘one-on-one’ trading route, you can take a meander over to Meetup.com, which is a site that allows you to see where in your area has a bitcoin meetup group.

While every seller is different, it is still very likely that the user will be asked to pay a premium of roughly 5 % to 10% over the exchange price for an over-the-counter trade.

A Brief Overview: Bitcoin Mining

Before we conclude this guide to purchasing bitcoin, it is worth mentioning a word or two about bitcoin mining.

While you used to be able to mine your own bitcoins, there are now mining-specific devices that have been added to the network, which has increased the difficulty required to mine a significant amount of bitcoin.

If you are told that you can mine the digital currency with a PC or a graphics card, don’t listen to them. Their information is either from 2014, or they may be trying to dupe you into purchasing outdated equipment.

Can I Turn to Investment Trusts?

Some people might not be attracted to the idea of purchasing and storing copious amounts of bitcoins, and that’s totally okay. If you find yourself in this position, check out an investment trust, such as The Winklevoss ETF or the Bitcoin Investment Trust.

Are There Bitcoin ATMs?

Yup! However, this is still a relatively new concept. With a bitcoin ATM, an individual will insert their cash and scan their mobile wallet QR code in order to receive the codes needed to load the digital currency onto your wallet.

Keep in mind there will be an exchange rate, which could range from 3-8%.

The Takeaway

While purchasing bitcoin can be a lengthy or difficult process for some, there are a number of options that help make the process a tad bit easier for the user.

If you purchase but don’t spend your bitcoins or exchange them with other currency, it can be very easy to forget about them. The best way to avoid this is to start using your wallet immediately. And as always, make sure you read reviews and the fine print before finalizing any purchases or exchanges with your Bitcoin!

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