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So, what’s a decentralized system? In simple words, we can say that a decentralized system works with no servers and each member is permissible to execute transactions. But in the case of the blockchain, each member must have to do some system-tasks as well, such as; storing transactional data.

cryptocurrency Security

Fork: Even a group of members can run an alternate-version of reality, which is called “fork.” The fork works by the similar regulations as the original decentralized system – though it might have a diverse state.

Let’s enlighten you about the hierarchical nature of cryptocurrency security!

First Layer – Tokens and Crypto Coins

  • One of the first and foremost thing in the crypto world is your cryptocurrency security.
  • Whenever you choose a cryptocurrency, you take all the perils and risks related to the protocol.
  • If someone can recognize and utilize protocol flaws, they can compromise the whole network, even including you; it won’t be much important which exchange/wallet you are using.

In the first layer, you can find two different types of currencies which include, the coins (Bitcoin, Ethereum, Bitcoin Cash etc.) and all ICO-issued tokens such as; MOBI or EOS.

What is the Difference?

Well, the difference is in the technical features. Each coin is either an independent network protocol or just a copy of some of it. When you research a crypto protocol from a security stance, make sure to find out if it can be centralized.

Let’s take an example!

In the case of Bitcoin, it’s now centralized around four major mining pools which also means that if all of them collaborate, they can possibly compromise the whole network.

Another advice! Whenever you look for proof-of-stake crypto, make sure to have a look at the genesis. This is also quite imperative, as whoever keeps the preliminary and initial stake can vote for transitions, as well as the network will be also trusting those who have higher stakes. If we take an example of NEO, a PoS network of China, which is same as Ethereum, was distributed 50/50 amid its ICO sales and developer community – unlike Ethereum distribution. Also, the NEO token distribution makes sure that no major stakeholder from the exchange platform or the developing side has enough stake to compromise the whole network.

Tokens

  • Now if we talk about tokens, all of them are based on a smart-contract aspect of few of the coins, which means their reliability and security is first based on the parent cryptocurrency – only subsequently on the smart contract’s code that issued it.
  • Mostly, all ICO coins (tokens) are based on Ethereum and just some of them are issued by smart contracts.
  • Also, it is imperative to point out that Ethereum got hacked a few years ago due to the DAO protocol hack – later hard forked and rolled back to the state. This also shows that the founders of Ethereum probably have a time machine as it looks like they have the ability to go back in time – yet again if it’s required.

Second Layer – Exchanges

One thing that everyone must understand about the exchanges is that they are written in custom-code with infrastructure security and has got nothing to do with blockchain. If we talk about an exchange, it is just a standard centralized web service arrayed in a data centre. That’s why whenever we talk about the exchanges, we always mention reliability and trust.

Almost every month we hear news about the data breaches and security events that occur because of exchanges.

Examples

Here are some latest examples!

  1. Back in December 2017, $63 million in cryptocurrency was stolen from NiceHash by hackers.
  2. At the beginning of this year, January 2018, more than $500 million in cryptocurrency was stolen from Coincheck by hackers.
  3. In February 2018, almost $195 million in cryptocurrency was stolen from BitGrail by hackers.

The hype around cryptocurrencies is due to the number of data breaches. Many exchanges have recently started their business – without investing in proper security measures. Simultaneously, if someone steals tokens/crypto coins from an exchange successfully, it’s nearly impossible to do anything about recovering it.

Third Layer – Wallets

Well, the third layer is linked to your personal security in the crypto world and you must’ve heard a lot about it before.

When you select a wallet for cryptocurrencies, you’ll have two options:

  1. Hot Wallet
  2. Cold Wallet

Hot wallet Vs Cold Wallet

  • The hot wallet is just like an account in exchange or in simple words, it is a website-based wallet.
  • In the case of a hot wallet, your tokens/coins are under the control of your wallet provider.

Whereas, a cold wallet can be a hardware, software or just a paper.

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What is Bitcoin and How Does it Work?

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Introduction to Bitcoin

Bitcoin is a new cryptocurrency in the digital world. To begin with, the bitcoin network isn’t under control of any one central authority with Bitcoin investment. Which means, no banks! No need of heavy fees for transactions. No need of central authority’s order to confirm the transaction and you can carry out transactions anonymously. Also, bitcoin stores details of every single transaction that ever happened in the network, in a huge version of a general ledger called the blockchain, which keeps a record of every transaction and verifies them through proper ways.

How Bitcoin works?

Bitcoin is pretty much like cash for the internet and is used to purchase things electronically.

How does Bitcoin work?

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How Is China Stifling Bitcoin and Other Cryptocurrencies? Let’s find out!

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World’s biggest community of Bitcoin miners, China, is cracking down on cryptocurrency. A proactive step has been taken by regulators for shaping the stratospheric increase of Bitcoin. According to President Xi Jinping, there’s been booms and busts in the economy for a decade. As a result, the role of China in the cryptocurrency’s world is going down.

Is it allowed to trade Bitcoin in China?

Bitcoin can be traded only in over-the-counter markets. According to some analysts, it is a slower process that increases the credit risk.

Is China anti-cryptocurrency?

Not really. A bank named “The People’s Bank of China” has run trials of its own prototype cryptocurrency, as it is a prime step to being the very first central bank, that is going to issue digital money.

What is China doing exactly?

Well, China banned initial coin offerings (ICOs), that are equal to initial public offerings for new virtual currencies. Later, it stopped local exchanges from trading cryptocurrencies and also delineated proposals to dampen bitcoin mining. Then it moved to Chinese companies that were listed in abroad skirting to stop its domestic ban on ICOs. Now it’s intended by the officials to block the domestic access to mobile apps and other online platforms that offer such services for cryptocurrencies.

Companies that promote themselves as blockchains, to boost their shares are also being targeted by domestic stock exchanges. It’s a part of an effort by agencies like China’s Ministry of Industry and Information Technology, central bank and the cyberspace administration.

 Bitcoin Value in China

 

What is the reason behind the crackdown in China?

Cleaning risks from financial markets have been government’s statement for almost two years, but there’s been no clear explanation yet. The thriving shadow banking sector is also among the main concerns of the government, although digital currencies also provide a way to move money out of China.

 

Where else are officials clamping down?

South Korean is known as the home of most of the frantic cryptocurrency trading. Some banks are being inspected because of the allegation of money laundering and the country is considering to close such cryptocurrency exchanges. Also, in the past year, the U.S. Securities and Exchange Commission started to work fast on digital token sales.

What’s the effect of China’s actions?

Because of inexpensive power and cheap labour, miners gathered to China, but now they may have to look somewhere else. Bitmain is running China’s two major Bitcoin-mining collectives and is setting up district HQs in Singapore. The #3 mining pool, also known as “BTC. Top” is also opening a facility in Canada. Wallet services and bitcoin exchanges in the country are also leaving. Also, they’re setting up over-the-counter shops in Hong Kong and in other areas of Singapore/South Korea.

What about cryptocurrency prices?

The prices appeared to shrug off the news of increased regulations in China. However, according to analysts, the growing tide of regulation has a hefty impact on digital currencies and it’s also helping in explaining the hefty losses since the starting of 2018.

Story credit: fortune.com

Image Credit: BitNews

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A Beginner’s Guide to Getting Started with Bitcoin Mining

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Getting Started with Bitcoin Mining

Bitcoin is a digital currency that has taken the market by storm over the past few years. However, there is still a long way to go before the banks, government and business corporations worldwide start accepting as an authentic form of payment.

But this has not stopped the individuals to try their luck with BTC as the number of people looking to take a dive into Bitcoin world is increasing significantly. But since the majority of the lot consists of beginners, they lack the proper knowledge as to how to earn/generate bitcoins.

A process called “Bitcoin Mining” is what bitcoin miners all around the world use to generate bitcoins. Bitcoin Mining can be little tricky if you are a beginner. However, by keeping some basic steps in mind, it can be as easy as ABC.

In this article, you will learn about:

How Does Bitcoin Mining Work?

Bitcoin mining is used to generate bitcoins and is completely legal. The speed at which a user earns bitcoins is measured in hashes per second.

How to Start Bitcoins Mining?

The first step is to acquire a bitcoin mining hardware. In the early days of cryptocurrency, it was possible to mine coins using regular PC. But it longer works that way.

Over the years, several custom Bitcoin ASIC chips have been developed that provide 100x more computing power as compared to your traditional system.

Mining with anything less efficient will only result in lower bitcoin generation and higher electricity bills.

Best Bitcoin Mining Software?

There are several mining programs but CGminer and BFGminer lead the pack. CGminer is an open-source, cross-platform for OS X, Windows, and Linux and is developed in C.

BFGminer is also an open-source, cross-platform for Mac, Widows, Linux and includes support for OpenWrt-capable routers.

If you prefer user-friendly GUI, EasyMiner could be the most suitable option for you as it’s a simple, click and go Linux/Android/windows program.

Join Mining Pools:

After setting up everything, your next step should be to join a Bitcoin mining pool. These pools are groups of miners working together to solve a block. Once the block is solved, the pool will receive a reward which is then split equally among its members.

Getting a Bitcoin Wallet:

Bitcoin wallet works the same way as a traditional bank account does for paper money. They are used to send, receive and store bitcoins. A Bitcoin wallet address is protected by security key which is only known by the owner.

However, the fact that whole Bitcoin transaction process is based on services that work online makes bitcoin wallets vulnerable to security threats.

The best way to protect your wallet is by enabling two-factor authentication or keeping it on an offline computer so it’s immune to all kinds of attacks.

Conclusion:

These are some steps to go through while taking a dive into bitcoin mining. In a nutshell, all you need is mining software, join a mining pool and set up a bitcoin wallet to store coins.

Good luck with the venture.

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What Are Some Sharp Strategies to Assemble Gold Bullion Using Bitcoin

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Bitcoin Mining

Bitcoin first came into circulation in 2009 – almost 8 years ago. During that short period, the Bitcoin has grown into an extremely strong currency. Currently, it is trading at values higher than gold in the market.

Those who have experience of the market would know that it’s a great time to accumulate digital currency and gold bullion on daily basis.

However, people who lack the experience of the market are going to find it extremely difficult. If you are new to the currency and looking for a way to garner gold bullion, here are some methods that you can use.

Start with Finding a Company That Sells Bullion:

finding a company that sells gold bullion is no big deal. Just do a simple Google search and several gold-bullion-selling companies will pop-up in search results. However, finding one that offers an incentive program to its clients can be a tough nut to crack.

While on the hunt, you should be searching for a company that offers much more than just selling gold. It should be renowned for selling quality products, selling billions in small grammage (1gm, 2.5gm, etc.).

Gold that is being sold must be 24 karat gold; which is the highest quality for gold products.

The advantage of an incentive program is that the company offers special commissions to the clients who refer people to the company.

Get A Bitcoin Wallet:

A Bitcoin wallet address is equivalent to having a bank account for cash. The difference is that it is only used to store bitcoins and make bitcoin transactions with other users.

There are several Bitcoin wallets available to users. Copay, Xapo, Green Address are few to name.

While choosing a wallet, look for a company that offers an offline vault to protect those coins. This is because storing Bitcoin is never safe and the wallet is always vulnerable to hackers trying to steal your digital currency. On the other hand, offline storage keeps your coins fully protected.

Don’t forget to read our guide on what are the safest Bitcoin wallets, and also how to secure a Bitcoin wallet.

Start Mining:

There are two ways of bitcoin mining – online mining and offline mining. Online mining is pretty simple as all you have to do is to join a bitcoin mining farm. However, there’s a danger that comes with theses farms: scammers.

The scammers falsely claim to have a mining form and invite users to join it. The sole purpose of scammers is to steal your coins. So be cautious while choosing an online form.

In offline mining, the user is required to buy a bitcoin miner which is a computer hardware. The computer is set up at home and the user is required to connect to the internet to start mining.

The coins mined through this technique are then automatically sent to his online bitcoin wallet.

Want to start mining? Learn how to set up a Bitcoin miner.

Lastly – Purchase the Gold Bullion:

Now that you have a permanent & easiest way to get bitcoins, you are ready to buy gold bullion. However, there is a specific way that needs to be followed to make the purchase.

The buyer needs to link his Bitcoin wallet to visa card which is offered by his bitcoin wallet company. The card is then used to purchase the bullion.

Good luck with your purchase.

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Federal Reserve Governor talks about Crypto-Market Volatility

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According to the Federal Reserve Governor, Lael Brainard, the central bank is examining the intense volatility of cryptocurrencies, especially Bitcoin, however, she doesn’t think that virtual currencies stance a present threat to financial stability of US.

These remarks were made by Brainard on 3rd April, during a speech at Stern School of Business in New York. She alerted investors to be careful about speculative asset classes, like; cryptocurrencies.

Brainard said:

federal reserve

“One area that the Federal Reserve is monitoring is the extreme volatility evidenced by some cryptocurrencies…. For instance, Bitcoin rose over 1,000 percent in 2017 and has fallen sharply in recent months. These markets may raise important investor and consumer protection issues, and some appear especially vulnerable to money-laundering concerns.”

“As in other highly speculative markets, individual investors should be careful to understand the possible pitfalls of these investments and the potential for losses. But it is less clear how the valuations of cryptocurrencies currently could pose a threat to financial stability. Nonetheless, we will continue to study them,” Brainard continued.

Risk Factors

According to Brainard, the perils related to the banking sector and traditional asset classes like bonds and stocks are balanced by the past standards due to the modifications that were introduced after the financial crisis of 2008.

She also said:

“Credit growth is robust, and banks are registering strong profitability relative to their international peers.”

Jerome Powell Views

The opinion of Lael Brainard on cryptocurrencies resounded the thoughts of Jerome Powell, who is the Federal Reserve chairman.

In November 2017, Powell said:

“I have nothing against bitcoin… We generally look at some of the risks of cryptocurrencies associated with money-laundering and those sorts of issues, but we’re not broadly opposed or supportive of alternative currencies.”

Latest comments from the Federal Reserve follow the price swings of bitcoin and other digital currencies, that sustained momentum for few weeks. However, during the past four weeks, the price of bitcoin plunged more than a few times.

Although these inconsistent fluctuations in the price of Bitcoin have scared some investors, cryptocurrency “preachers” still remain bullish, as they say, that the recent slump in the market is momentary, and only the result of “sharp regulatory scrutiny” in major markets such as South Korea.

Bitcoin Prediction

The Former COO of Skype, Michael Jackson said:

“Regulators seem open-minded and are now working to eliminate the risks for consumers…. So, I see no reason why bitcoin shouldn’t fulfil its dream. And if it does, then recent price falls will appear trivial.”

Jackson earlier said that the price of bitcoin could shoot up to $1 million, as he believes that its value as a payment method is irrefutable.

 

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