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The point of using a digital currency is that it’s completely decentralized and disconnected from any government control. Yet, some exchanges completely defeat the purpose of digital currency by placing it into third-party systems. It is essential to understand that we no longer have to give up our control over our assets and shouldn’t be dependent on governments to protect them.

This is a review of “Tim Swanson’s” – “Eight Things Cryptocurrency Enthusiasts Probably Won’t Tell You.” Read on to know more.

Here are eight areas that require your attention:

crypto world

1. Bitfinex

A Hong Kong-based digital currency exchange that is known to be hacked several times in the past. A little over a year ago, $65 million dollars’ worth of bitcoins were stolen from the exchange. Till now, Bitfinex has failed to provide evidence as to how they were hacked or where those funds led to. Users were fooled by the potential for returns but in turn faced a major loss as their accounts were left empty.

2. Ransomware, Ponzi’s, Zero-fee and AML-less exchanges

A report from Xinhua was released last month that read:

China’s two biggest bitcoin exchanges, Huobi and OKCoin, collectively invested around 1 billion yuan ($150 million) of idle client funds into “wealth-management products.”

In simple words, these exchanges were functioning while charging zero-fees by using customer deposits to invest in other financial products without the customer’s knowledge. According to insiders and reporters that many exchanges in China carried out similar practices. Also, exchanges in developing countries lacking AML and KYC measures majorly benefit from scams and thefts.

3. Initial Coin Offerings (ICOs)

Many investors are chasing quick profits instead of utility. Recently, many firms are aiming towards scamming practices due to which several other legitimate ICOs are suffering. Several ICO boot camps in China were set up with past experience in pyramid schemes, this leads to not just single fraud incidents but very frequent ones as well.

4. VC-backed entities

5. The decline of Maximalism

6. Market caps

We have very little idea of what is really happening with Bitcoin transactions or any cryptocurrency for that matter.  Market cap is based mainly on a company’s assets and future cash flows but with cryptocurrencies, it is completely misleading. Especially, when random meaningless coins sell a small segment of their total supply then, claim a huge market cap.

7. Buy-side analysts and con media

Many big-name media companies practice a biased reporting which mainly focus on the benefits of coins but not equally shed light on the potential risks as well. They cover basically everything and anything regarding market caps, statistics and basic buy/own cryptocurrencies articles. But what if these major companies are funding other odd companies side by side?

The point is, that if these firms want to be taken seriously, they might as well take on the best practices so they support long-term capital inflows.

 

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ICOs – A Remarkable Figure Despite Challenges, but how?

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successful ICOs

2018 has been a very dramatic period for blockchain and cryptocurrencies from the start. The crypto world has seen a nonstop slump in the price of Bitcoin and other altcoins, as most of the tokens traded below their ICO price, still there’s been no relent in the amount of money that was raised during this time.

Even with the institutional and political struggles that the cryptocurrency ecosystem faced, specifically paying attention to ICOs (Initial Coin Offerings), this steady rising trend raises curiosity.

Quality of ICOs As A Whole

LKI Consulting is a PR firm that has conducted few ICOs especially, in the last couple of months. The founder of LKI Consulting, Laura Kornelija Inamedinova believes that this ICO trend is linked to the upsurge in the quality of ICOs as a whole. Furthermore, Inamedinova explained how time has shown that these features are essential in order to have a successful ICO.

Even though the ICO market has rocketed and noted remarkable facts, still there is a number of projects that haven’t accomplished in attaining there “set out” goal, that makes them unsuccessful.

Why ICOs attract investors from outside the industry?

Founder of Cashaa, Kumar Gaurav believes that the industry must look ahead of the crowdfunding exercise which has been carried out by many projects at this time in terms of ICO. Gaurav’s company dismissed around $14 million of the $33 million that was raised in an ICO due to acquiescence reasons.

Gaurav identified a problem that ICOs attract investors from outside the industry who only take interest in their own profit and not in the technology. Similarly, there are plenty of beginners who are really interested; however, they just started to learn and might be frightened of the market’s volatility.

Gaurav identified another trend, that is the salvaging of investments inside the ecosystem which appears to expand the industry beyond its actual capability. He noted that most of the investors just try to sell older tokens and buy new ones.

Complicated System

Apparently, most of the ICO investors are just speculators for the short-term and this is something that makes it a little bit difficult for project developers and builders in executing their objectives, efficiently. It’s quite common these days to categorize an ICO as successful, depending just on the amount it raised through the crowdfunding process. To avoid being seen as a failure, companies began to set lower goals deliberately. Gaurav further explained that to find out what successful ICO is, we may also need to have a look at what will happen to the company after a year.

 

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What Are The Best Altcoin To Invest in 2017?

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Here are some suggested best Altcoins you might consider to invest in 2017:

Ethereum:

Vatalik Buterin stated in late 2013, this blockchain based, public, and open source distributed computing platform is the great rival of Bitcoin. The Ethereum’s main target was to program required agreement into the blockchain that led to the introduction of a new smart contract hallmark. It has gone from $8 to $130 1st of January to 17th of June and its worth is $235.91 at the time of writing which is impressive.

Litecoin:

Litecoin is a peer-to-peer virtual currency which allows flash and almost zero cost subsidies to anyone who is producing it. This digital currency is a global remittance and an open source channel which is totally decentralized without any major credit. Math defends the arrangement and offers the people to regulate their own investment. The main features of Litecoin include advanced storage capacity and high-speed transaction verification times than the other digital currencies.

Dash:

Dash is the first decentralized and independent system which offer their users all that Bitcoin has to offer. It also presents their users some advanced capacities which include private transaction, instant transactions, decentralized governance. Dash offers the users the solutions for applying increased time to confirm a transaction, double spending dilemma, and secrecy concerns etc.

Ripple:

Ripple is a technology which allows the banks to send real-time payment worldwide across the network. It’s also a solution which exclusively relates to securing real-time payment among the banks at low cost, low risk, and a great speed. Some international banks such as Mizuho Financial Group, Siam Commercial Bank, UBS, and Fidor Bank have joined hands with the Ripple which show the remarkable potential of Ripple.

Primecoin:

Primecoin is an altcoin, produced by Sunny King. It finds the prime chains composed of Cunningham and the Bi-twin chain for proof-of-work, which may drive to some useful byproducts. These prime number chains consider being very important for the mathematical investigation.

Peercoin:

This digital currency does not have an inflexible limit on the possible coins like Bitcoin and Litecoin. Peercoin has designed to grow an annual inflation rate of 1 percent. If you have got a device which works for Bitcoin network then the same device will also work with Peercoin.

Dogecoin:

Dogecoin introduced on December 8, 2013. It made its online community rapidly and lead at a capitalization of 60 million USD in January 2014. Dogecoin project has a large number of the coin which is lower in value and suitable for transferring out the small transactions. It provides faster transaction and it’s also extremely cheap.

Feathercoin:

Feathercoin offers borderless transactions by using an end to end technology. It has enough uniqueness to bypass banking and it is one of the best features of Feathercoin. Conflicting to other digital currencies, it revives on regular basis to combine additional features and developments and providing a safeguard for the fork.

Monero:

Different from other digital currencies which are challenging to Bitcoin, Monero base on the CryptoNote protocol. It occupies basic algorithm irregularities and restating to the blockchain complications. It offers the characters with the Ring Signatures and Stealth Addresses. Monero has also a discreetly fleet production arcs.  Monero with a smaller inflammation of 12% per year is already acceptable and it’ll surely a risk for the Bitcoin rank in DarkNet markets.

Antshares:

Antshares is the newest platform to make a call on the market with a shouting cap of more than $7 million at the issuing time. It has produced some serious partnership with different chief multinational companies in the world as Alibaba.

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Digital currency under regulatory scrutiny- SEC

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Cryptocurrencies

After being spooked by the massive digital tokens crackdown, cryptocurrencies got another pushback by the feds recently. The Securities and Exchange Commission in the U.S has decided to gun down all the cryptocurrencies, especially Ethereum under regulatory scrutiny to whether consider it as security or commodity. After a remarked high range in digital currency world, this bull to bearish reversal is the result of investor anxiety gushes over the squabble between Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC).

ethereum icos

The second most popular digital currency after Bitcoin in the charts, Ethereum is considered under the category of security will have hard consequences. Not only for Ethereum cryptocurrency, but all digital currencies crowdfunded through ICOs, that is Initial Coin Offerings.

Coming under increased regulatory scrutiny by the U.S government, all these cryptocurrencies are viewed as securities due to their speculative nature all around. Regulators have already declared bitcoin as security. But undermining the liquidity of this second popular cryptocurrency can prove out to be disastrous for it and also the cryptocurrency economy. Though the basic mechanism working behind these two digital currencies is not merely same, but they contribute majorly to the cryptocurrency world.

Initial coin offering

Until the mid-2017, selling transaction of these tokens was not much of an exhausting task. A team would emerge through these blockchains and present their purpose of tokens in a ‘white paper’. They would then arrange an Initial Coin Offering Service, ICOs where they would offer coins to nearly anyone who would exchange them for cash or Bitcoins.

The main idea or theory behind this ICO was to fund and support the construction of that newly emerging online service. But later in a few cases, these ICOs were proved to be scams. Absconding of these organizers created an upthrust, where SEC fired a warning claiming that tokens sold in ICO may be considered as securities and their declaration will be mandatory. SEC values Ethereum similar to any public Company who strives every act to value their stock.

Now the developers are concerned that due to the fact that Ethereum ICOs investors bought the tokens in hope that their value will increase in the near future, it could be classed as security. But the plethora of issues is not that straight and easy here.

Ethereum co-founder denies

The whole dilemma was observed and addressed by the co-founder of Ethereum, Joseph Lubin in a conference. He says that the scrutiny doesn’t upset him. According to him and the developers, this does not meet the requirements of security and doesn’t have to be regulated, therefore. There were no concerns about the potential issues about the cryptocurrency. he further said, he never considered and identified the system as security ever.

The Howey Test

A case resided between the SEC and WJ Howey Co in 1946. In this case, the foundation to determine the event to be a commodity or a security was set. It is now known as the Howey Test.

In simpler terms, Howey Co. sold a part of their citrus farm to some investors. Their idea behind it was to gain profits from the operations performed on the farm. It was considered as a securities contract by the judge explaining that the scheme focuses on the idea to obtain profits from the efforts and labor of others.

Basically, in simpler terms, this test helps to determine if a transaction or profit is obtained solely by the hard work and labor of one party and not by the other party, combined in an agreement. This Howey Test has been greatly talked and argued about in the regard of these cryptocurrencies and ICO. As the basic phenomena in Ethereum ICOs reside the same. The investor expects profits primarily from others hard work and efforts.

Securities classification arguments

According to wall street journals, the future of the cryptocurrencies is under debate, whether it would be identified as security or not. Commodities and securities under which the legislation falls are regulated by different authority bodies. They are regulated and operated in different markets and agencies. These differences will greatly affect the investors, sellers, and buyers in the cryptocurrency market.

Despite all the fuss and controversy about the issue, a lot of experts are very positive and hopeful about the future and growth of Ethereum cryptocurrencies. Many have come up suggesting that Ethereum and such cryptocurrencies may be considered as unregistered securities after a continues refusal by the founders of them being never entertained as security. The growing market capitalization of Ethereum cryptocurrency has shown that this is not going anywhere this soon!

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