- How service works?
- Why when transferring money in the Ethereum network the error "Out of gas" pops up?
- What are Memo/Destination Tag/Message and why and when we need them?
- I was asked to clear Cookies and Cache. How can I do it?
- What is the Bitcoin network approval?
- How to track the status of my application?
- What is card verification process and why it has to be done?
- I didn’t receive an e-mail with my password/account activation
- I forgot the password to my account. How can I restore it?
- What are your fees?
- Is it possible to cancel my application?
- Why does the processing of my application take so long?
- How long does the processing of the application take?
- I paid for the application, but I didn’t receive money on my account. What is the reason?
- What is referral program and how can you earn on it?
- How to create an application?
- How to contact us?
- What does online-service 24bestex do?
- What Is Cryptocurrency?
- Chapter 1 – Cryptocurrency
- Chapter 2 – How does blockchain work?
- Chapter 3 – How can I invest in cryptocurrency?
- Chapter 4 – Frequently asked cryptocurrency questions
How service works?
Work schedule – 24 hours.
Why when transferring money in the Ethereum network the error "Out of gas" pops up?
The Gas limit value is responsible for the processing speed of your transaction. The higher it is, the higher priority it will have on the Ethereum network. If you initially sеlect a too low Gas Limit, then the transfer can stay unprocessed for an indefinite amount of time. The main amount of payment in ETH will be returned by the network within 1-30 minutes, but Gas spent on the transaction fees will be lost forever.
You can see which Gas to sеlect when transferring from your wallet here, where Safe Gas Price is the minimum recommended fee, and Propose Gas Price is the priority fee.
What are Memo/Destination Tag/Message and why and when we need them?
A distinctive feature of Stellar/Ripple/Xem transfers between wallets is the additional verification of the transfer by indicating Memo/Destination Tag/Message. This is an additional field in the wallet or on the exchange, which must be filled in order not to lose the transfer.
They are unique and with their help, the exchange indicates who transferred the funds and on whose account they must be allocated.
Without specifying a Payment ID, you can lose coins during the transfer forever. About whether a Payment ID is needed or not, you will be informed in the payment instructions.
I was asked to clear Cookies and Cache. How can I do it?
The web pages of our site may not be displayed correctly due to the fact that changes have been made there, and your browser continues to use outdated data from the cache.
In such cases, we ask you to clean the Cookies and Cache in order for all the functionality to fully and accurately work.
You can find the instructions for clearing cookies and cache in your browser.
What is the Bitcoin network approval?
Usually, when receiving Bitcoin, the new owner cannot immediately use it. Once the transaction is completed, it is sent to the Bitcoin network for processing and it must be included in the block in order to become legitimate. The process of including a transaction in the found block is called transaction confirmation. Inclusion in 1 block = 1 confirmation, when there are 6 or more confirmations – the transaction is considered confirmed. Such a function was introduced to protect against repeated spending of the same bitcoins.
Our service requires 3 confirmations from the Bitcoin network, for your application to be processed.
How to track the status of my application?
You can track the status of your application in your account in the “My Applications” section.
This information is also available by mail, which you entered when you created the application (registration). You will automatically receive messages with information about the change in the status of your application.
What is card verification process and why it has to be done?
This is a procedure of the user data confirmation, which increases the security of transactions and personal data within the exchange service. During verification, you need to upload photos and scanned copies of your documents. After the verification procedure of the account, sales/purchase of cryptocurrency using Visa/MasterCard bank cards are available for the user.
I didn’t receive an e-mail with my password/account activation
If you did not receive a letter confirming the email address within 24 hours from the moment of your registration, then, first of all, you need to make sure that you entered the correct email during the registration. In addition, some mail services may move such messages to spam folder or not deliver them at all. The following points can help you solve the problem:
1. Make sure that you entered the correct email at registration. Go through the registration procedure again in order to do that. If a message appears that the email address was already used, then it was entered correctly;
2. Make sure that you check the mailbox that you entered during registration. This is especially relevant for those who use several e-mails, or several family members use the computer;
3. Check the “Spam” folder;
4. Check your spam filter settings (if you use them);
5. Contact the technical support of your email service and find out, were there any limitations from their side.
If none of the points haven’t helped, contact the online support on our website.
I forgot the password to my account. How can I restore it?
Go to the password recovery page (“Forgot password” button) and enter the registered e-mail (login). An email will be sent to your mailbox with a link to confirm the password recovery. You have to open the letter and go to the page. After confirming the change of the password, you can fill in a new password.
What are your fees?
The fees of our service are already included in the exchange rate and are displayed at the stage of application processing, including the transfer fees of the payment system.
Is it possible to cancel my application?
In case your application was processed, your funds cannot be refunded.
If your application was paid, but not processed, you can get a refund (excluding the service fees), by writing to our online support on our website.
Why does the processing of my application take so long?
1. The exchange is processed manually by the operator and takes from 5 to 30 minutes. After receiving of payment, the applications are processed in order of priority. The speed of processing an application depends on the workload of our operators. There may also be other reasons:
The first and most common reason is that the application was not created. Remember, if you did not click the “I paid” button, the application is not created and we do not see it in the list of applications awaiting processing. If you accidentally closed or reloaded the page with this button, write to us online support and we will help you with this problem.
2. Check if the amount you sent matches the amount indicated in the application. If the payment amount differs from the amount indicated in the application, the application will get the “Deleted” status. In this case, also contact online support on our website and we will be happy to help You.
3. Incorrect details may also cause a delay in processing your application. Carefully check the specified details when filling in the application. If a mistake is made, we will not be able to transfer funds to you and the application will be on “On review” status. In this case, send us the correct details with the number of your application by email to [email protected] and we will process your application manually as soon as possible.
4. Check if you have copied our payment details correctly. If we wouldn’t receive payment on the application on our account, your application will be moved to the “Deleted” status. Also, there are currently frequent cases of spoofing addresses on the clipboard. In this case, it is necessary to check the computer for viruses and not use it to make payments until the virus is completely removed. If you did not notice the substitution and made a transfer to the wrong details, we, unfortunately, will not be able to help.
How long does the processing of the application take?
The exchange is processed by the operator manually and takes from 5 to 30 minutes after receiving of payment on application, the exchange speed also depends on the workload of our operators.
I paid for the application, but I didn’t receive money on my account. What is the reason?
There could be different reasons for that. In order for the exchange to be successfully completed, please, make sure, that you did everything correctly:
1. Check if you have correctly entered your transfer details (wallet, account or card numbers). If the details are incorrect, the status of your application will be “On review”, and then you will receive an e-mail with a description of the reason. If the incorrect details were used, a refund is impossible. We recommend that you carefully verify the accuracy of the specified data before creating the application;
2. Check if the amount was charged from your account. If we wouldn’t receive your funds your application would be deleted;
3. There may be a delay in the transfer from the payment system or the bank. In this case, we are unable to speed up the process, we can only wait. To find out the reasons for the delay, you can call or write technical support for your payment system or your bank;
4. All reasons are individual. Therefore, if your reason does not correspond to any of the above, you can write to us on the online support on our website.
We are always happy to help!
What is referral program and how can you earn on it?
We created a simple and beneficial partnership program. This program provides you the opportunity to receive bonuses from us if your friends use our services.
You can receive additional bonus from us in amount of 0,05-0,025% from the amount exchanged by the person, who used your referral link. In the future you will receive bonuses from all the exchanges of your referral.
The amount of the bonuses:
- 500-4999 USD — 0,05% of the exchanged amount
- 5000-9999 USD — 0,1% of the exchanged amount
- 10000-24999 USD — 0,15% of the exchanged amount
- 25000-49999 USD — 0,2% of the exchanged amount
- more than 50 000 USD — 0,25% of the exchanged amount
Our partnership program has 5 levels. Partner moves to the next level of the program automatically after your referrals exchange the certain amounts.
Everyone can earn with our partnership program. You just need to register on our website and use the special partnership link, that You can find in your profile in the section Partnership program.
It is welcome to use our advertising materials You can also find in your profile in Partnership program section.
Referral bonuses are allocated in Perfect Money USD, Advanced Cash currency right after the processing of the exchange application. You can submit a withdrawal application immediately after the referral money is allocated.
Minimum amount of withdrawal is 10 USD.
How to create an application?
To create an application You need to follow the instruction:
1. Choose the direction of the exchange (for example, in the column “You give” – Ethereum, in the column “You receive” – Bitcoin) and fill in the amount You would like to exchange or receive.
2. Fill in your information in the column “Personal information”, such as you e-mail, wallet number (account or card number) where you would like to receive money.
3. Press the button “Exchange” and after that the window with our payment details pops-up.
4. Copy our payment details and go you your wallet. Paste the amount stated in the application and our payment details. Confirm the transfer. Make sure that the amount was withdrawn from your account.
5. Then go back to our website and confirm the payment by pressing the “I paid” button. And it’s done.
6. After creating the application You will receive an e-mail with the status of your application.
How to contact us?
You can write us in online-chat;
Send an e-mail on [email protected];
Call us on +380947100330.
What does online-service 24bestex do?
24bestex.com is an online service, that you can use for safe and momentary conversion of the electronic currency. There are more than 1000 currency pairs on 24bestex.com.
Service launch date: January 8, 2016.
We have been listed on BestChange monitoring since August 25, 2017.
24bestex.com is the official exchanger for Perfect Money and AdvCash payment systems.
With the help of our exchange you can:
- Withdraw Bitcoin, Bitcoin Cash, Ethereum, Zcash, Ripple, DASH, Monero, Stellar, Litecoin, and many other top coins on Privat Bank or any other bank card;
- Recharge the account on EXMO.com exchange, deposit/withdraw money on Perfect Money, AdvCash, and PAYEER.
What Is Cryptocurrency?
- How does blockchain work?
- How can I invest in cryptocurrency?
- Frequently asked cryptocurrency questions
Chapter 1 – Cryptocurrency
- What is cryptocurrency?
- What makes cryptocurrency unique?
- Why is it called cryptocurrency?
- What is public-key cryptography?
- Who invented cryptocurrency?
- What is the difference between cryptocurrencies and tokens?
- What is a crypto wallet?
What is cryptocurrency?
A cryptocurrency (or crypto) is a form of digital cash that enables individuals to transmit value in a digital setting.
You may be wondering how this sort of system differs from PayPal or the digital banking app you have on your phone. They certainly appear to serve the same use cases on the surface – paying friends, making purchases from your favorite website – but under the hood, they couldn’t be more different.
What makes cryptocurrency unique?
Cryptocurrency is unique for many reasons. Its primary function, though, is to serve as an electronic cash system that isn’t owned by any one party.
A good cryptocurrency will be decentralized. There isn’t a central bank or subset of users that can change the rules without reaching consensus. The network participants (nodes) run software that connects them to other participants so that they can share information between themselves.
Centralized vs. decentralized networks.
Centralized networks are what you’d expect something like a bank to use. Users must communicate via the central server. Decentralized networks there is no hierarchy: nodes are interconnected and relay information between themselves.
The decentralization of cryptocurrency networks makes them highly resistant to shutdown or censorship. In contrast, to cripple a centralized network, you just need to disrupt the main server. If a bank had its database wiped and there were no backups, it would be very difficult to determine users’ balances.
In cryptocurrency, nodes keep a copy of the database. Everyone effectively acts as their own server. Individual nodes can go offline, but their peers will still be able to get information off of other nodes.
Cryptocurrencies are therefore functional 24 hours a day, 365 days a year. They allow for the transfer of value anywhere around the globe without the intervention of intermediaries. This is why we often refer to them as permissionless: anyone with an Internet connection can transmit funds.
Why is it called cryptocurrency?
The term “cryptocurrency” is a portmanteau of cryptography and currency. This is simply because cryptocurrency makes extensive use of cryptographic techniques to secure transactions between users.
What is public-key cryptography?
Public-key cryptography underpins cryptocurrency networks. It’s what users rely on to send and receive funds.
In a public-key cryptography scheme, you have a public key and a private key. A private key is essentially a massive number that would be impossible for anyone to guess. It’s often hard to wrap your head around just how big this number is.
For Bitcoin, guessing a private key is about as likely as correctly guessing the outcome of 256 coin tosses. With current computers, you wouldn’t even be able to crack someone’s key before the heat death of the universe.
Anyways, as the name might suggest, you need to keep your private key secret. But from this key, you can generate a public one. The public one can safely be handed out to anyone. It’s feasibly impossible for them to reverse-engineer the public key to get your private one.
You can also create digital signatures by signing data with your private key. It’s analogous to signing a document in the real world. The main difference is that anyone can say with certainty whether a signature is valid by comparing it with the matching public key. This way, the user doesn’t need to reveal their private key, but can still prove their ownership of it.
In cryptocurrencies, you can only spend your funds if you’ve got the corresponding private key. When you make a transaction, you’re announcing to the network that you want to move your currency. This is announced in a message (i.e., transaction), which is signed and added to the cryptocurrency’s database (the blockchain). As mentioned, you need your private key to create the digital signature. And since anyone can see the database, they can check that your transaction is valid by checking the signature.
Who invented cryptocurrency?
There have been a handful of attempts at digital cash schemes over the years, but the first of the cryptocurrencies was Bitcoin, which was released in 2009. It was created by a person or group of people using the pseudonym Satoshi Nakamoto. To this day, their true identity remains unknown.
Bitcoin spawned a huge number of subsequent cryptocurrencies – some aiming to compete, and others seeking to integrate features not available in Bitcoin. Nowadays, many blockchains do not just allow users to send and receive funds, but to run decentralized applications using smart contracts. Ethereum is perhaps the most popular example of such a blockchain.
What is the difference between cryptocurrencies and tokens?
At first glance, cryptocurrencies and tokens appear identical. Both are traded on exchanges and can be sent between blockchain addresses.
Cryptocurrencies are exclusively meant to serve as money, whether as a medium of exchange, store of value, or both. Each unit is functionally fungible, meaning that one coin is worth as much as another.
Bitcoin and other early cryptocurrencies were designed as currency, but later blockchains sought to do more. Ethereum, for instance, does not just provide currency functionality. It allows developers to run code (smart contracts) on a distributed network, and to create tokens for a variety of decentralized applications.
Tokens can be used like cryptocurrencies, but they’re more flexible. You can mint millions of identical ones, or a sеlect few with unique properties. They can serve as anything from digital receipts representing a stake in a company to loyalty points.
On a smart-contract-capable protocol, the base currency (used to pay for transactions or applications) is separate from its tokens. In Ethereum, for instance, the native currency is ether (ETH), and it must be used to create and transfer tokens within the Ethereum network. These tokens are implemented according to standards like ERC-20 or ERC-721.
What is a crypto wallet?
Essentially, a cryptocurrency wallet is something that holds your private keys. It can be a purpose-built device (a hardware wallet), an application on your PC or smartphone, or even a piece of paper.
Wallets are the interface that most users will rely on to interact with a cryptocurrency network. Different types will offer different kinds of functionality – evidently, a paper wallet cannot sign transactions or display current prices in fiat currency.
For convenience, software wallets (e.g. Trust Wallet) are considered superior for day-to-day payments. For security, hardware wallets are virtually unmatched in their ability to keep private keys away from prying eyes. Cryptocurrency users tend to keep funds in both types of wallets.
Chapter 2 – How does blockchain work?
- What is a blockchain?
- How are blocks added to a blockchain?
- How does crypto mining work?
- Can cryptocurrencies scale?
- Who makes decisions for cryptocurrency software?
What is a blockchain?
A blockchain is a special kind of database where data can only be added (and not removed or changed). Transactions are periodically added to a blockchain inside what we call blocks (made up of transaction information and other important metadata).
We call the structure a chain because each block’s metadata includes a piece of information that links it to the previous one. Specifically, it includes a hash of the previous block, which you can think of like a unique digital fingerprint.
The probability of two pieces of data giving you the same output from a hash function is infinitesimally low. Because of this, if someone attempted to modify an older block, its hash would be different, meaning that the next block’s hash would also be different, and so on. It’s therefore obvious if a block has been changed, because all the blocks that come after it would need to be changed as well.
Each block’s hash is included in the next block. This forms the chain of blocks, or blockchain.
The blockchain is downloaded in full by network participants. Remember how we said that anyone can validate transactions and signatures with public-key cryptography? When a node receives a block, it performs a number of checks. If anything is invalid, the block is rejected.
When a node receives a valid block, it makes its own copy of it and then propagates that block to other nodes. They then do the same until the block has spread throughout the whole network. This process is also carried out for unconfirmed transactions – that is, transactions that have been broadcast, but not yet included in the blockchain.
How are blocks added to a blockchain?
A blockchain’s integrity is undermined if false financial information can be recorded. At the same time, there is no administrator or leader in the distributed system that maintains the ledger – so how do we ensure that participants are acting honestly?
Satoshi proposed a Proof of Work system, which allowed anyone to suggest a block to append to the blockchain. To put forward a block, users must sacrifice computational power to guess at a challenge set out by the protocol.
Proof of Work is the most tried-and-tested scheme for achieving consensus amongst users, but it is by no means the only one. Alternatives such as Proof of Stake are increasingly being explored, although they have yet to see proper implementation in their true form (though hybrid consensus mechanisms have been around for some time).
How does crypto mining work?
The process referred to above is known as mining. If the miner finds a solution, the block they constructed would extend the chain. As a result, they would receive a reward denominated in the blockchain’s native currency.
The cryptographic puzzle miners must solve involves repeatedly hashing data to produce a number that falls below a particular value. Hashing with a one-way function means that given the output, it is virtually impossible to guess the input. But given the input, it is trivial to verify the output. In this way, any participant can verify that the miner has produced a ‘correct’ block, and rejects those that are invalid. In this case, the miner receives no reward and has wasted resources by trying to forge an invalid block.
This results in some interesting game theory that makes it costly for an actor to attempt to cheat, but profitable for them to act honestly. No malicious entity has the resources to indefinitely attack a strong network. Therefore, we expect those with resources to make a return on their investment by participating correctly.
Can cryptocurrencies scale?
As you can probably tell, distributed networks aren’t very efficient. Unfortunately, cryptocurrencies can only be secure and censorship-resistant if all nodes can sync a copy of the blockchain. The lower the requirements to keep pace, the easier it will be for people to join.
You can see why a blockchain that only adds a small block every ten minutes is preferable, in this regard, to one that adds a huge block every five minutes. The latter would require nodes to run high-powered computers to stay in sync, and push lower-powered ones to go offline. This would result in greater centralization, as there are fewer peers on the network.
But with smaller blocks, we can’t achieve many transactions per second (TPS). That also means that, in busy periods, transactions can take a while to be added to the blockchain. It’s inconvenient if you want to make a fast payment, but it’s the price that must be paid for decentralization.
We call this issue a scalability dilemma. A system that scales well is one that can easily adapt to increased throughput with minimal downsides. Blockchains do not scale well – as we’ve explained, simply upping the throughput with bigger blocks undermines the entire purpose of the distributed network.
To increase TPS in a way that doesn’t harm the network’s decentralization, off-chain scaling appears to be a viable approach. This encompasses a broad range of solutions – centralized and decentralized – that allow transactions to be made without logging them to the blockchain.
Who makes decisions for cryptocurrency software?
Cryptocurrency networks are opt-in. Nobody’s forcing you to run software that you don’t want to. In a good protocol, the code will be entirely open-sourced so that users can be sure of the system’s fairness and security.
Generally, cryptocurrencies enable anyone to participate in their development. New features or edits to the code are vetted by a community of developers before being agreed on and published. From there, users can review the code themselves and choose to run it or not.
Some updates will be backward-compatible, meaning that updated nodes will still communicate with older ones. Others will not be backward-compatible – older nodes will be “kicked off” the network unless they’re updated. Check out Hard Forks and Soft Forks for an explanation of this.
Chapter 3 – How can I invest in cryptocurrency?
- What cryptocurrency should I buy?
- What should I learn before investing in cryptocurrencies?
- Where to buy cryptocurrencies
- Centralized exchanges (CEX)
- Decentralized exchanges (DEX)
- P2P exchanges
What cryptocurrency should I buy?
This is a choice only you can make – you should Do Your Own Research (DYOR) and decide based on your own analysis. With that said, there are many tools out there that can help you make better decisions. For example, Binance Research provides excellent insight & analysis pieces on the market, along with comprehensive reports on individual projects.
If you’d like to be able to assess what cryptocurrency to buy, it’s absolutely essential for you to first understand how Bitcoin works. Good news, that’s exactly why we created our What is Bitcoin? guide!
What should I learn before investing in cryptocurrencies?
Where do we even start? There are a plethora of ways to analyze the financial markets, and generally, most professional investors will use widely different strategies. On a high level, though, there are two main schools of thought to assess an investment: fundamental analysis (FA) and technical analysis (TA).
Fundamental analysis is a method to assess an asset’s valuation based mainly on economic and financial factors. Analysts who use this method look at both macroeconomic and microeconomic factors, industry conditions, or the business underlying the asset (if there’s one). In the case of cryptocurrencies, they may also look at public blockchain data, which are sometimes referred to as on-chain metrics.
This can involve looking at the number of transactions, addresses, the top holders, the network hash rate, and countless other pieces of information. The goal with this analysis is to come up with a valuation for the asset and compare it to its current valuation. In the end, this approach aims to determine whether the asset is currently undervalued or overvalued.
With all that said, it’s important to remember that cryptocurrencies are a new and flourishing asset class. Fundamental analysis has little room to shine when it comes to determining their valuation. Simply put, there’s no standardized framework for determining the valuation of cryptocurrencies, and most existing models can’t be trusted to a high degree. The success or failure of a cryptocurrency project may depend on many different factors, for which no current framework can account for.
Technical analysts take a different approach. Unlike fundamental analysts, technical analysts don’t try to determine the intrinsic value of an asset. Instead, they evaluate trading and investment opportunities based on historical trading activity. They do that by focusing on price movements, chart patterns, indicators, and various other charting tools to evaluate a market’s strength or weakness. In essence, technical analysts believe that the previous price movements of an asset can be valuable to try to predict its future price movements.
Since technical analysis can be applied to essentially any market with historical data, it’s widely used by cryptocurrency traders.
So which one should you learn? Well, why not both? Most market analysis tools work best when used in combination with other tools. In either case, it’s absolutely vital to understand financial risk and risk management, and never to invest more than you can afford to lose.
Where to buy cryptocurrencies
There are various ways to buy cryptocurrencies. The first thing you’ll need to do, though, is convert your fiat currency into cryptocurrency. Then, you can choose to either HODL, trade it with other cryptocurrencies, or lend it and earn interest. Let’s take a look at the different types of cryptocurrency exchanges.
Centralized exchanges (CEX)
You might find the concept of a centralized exchange a bit confusing since cryptocurrencies are often referred to as decentralized. In short, centralized exchanges are online platforms that facilitate trades by connecting buyers and sellers.
The way this works is that users deposit their fiat money or cryptocurrency to the exchange and trade within its internal systems. If you’re familiar with how cryptocurrency wallets work, you’ll know that, in this case, your cryptocurrency is custodied by the exchange. But it should be fairly easy for you to withdraw your funds and keep them in your own wallet, if you want to.
Some might prefer keeping their funds on the exchange, either because they trade regularly or for convenience. However, if the exchange is hacked, user funds might be at risk.
Decentralized exchanges (DEX)
Decentralized exchanges are different. When you’re using a DEX, there are no custodians involved. In fact, a more accurate way of referring to this type of exchange would be non-custodial exchange.
Here’s what happens when you trade on a DEX. Instead of depositing your funds to the exchange’s wallet, you’re trading directly from your own wallet. When a trade is executed, the funds are transferred directly on the blockchain using the magic of smart contracts.
Since there’s no entity acting as a custodian, some consider this a safer choice than CEXs. Another upside might be that most DEXs don’t require you to provide any personal information other than a blockchain wallet address. At the same time, taking custody of your own funds requires some amount of technical expertise, and you’re entirely at your own responsibility.
A peer-to-peer (P2P) exchange is also a place that connects buyers and sellers, but it’s different from both a CEX and a DEX. In this case, the exchange itself does nothing more than connect buyers and sellers, and they can settle the transaction in whatever way they agree on. So, the deposit and settlement method can be decided by buyers and sellers for each individual transaction.
Chapter 4 – Frequently asked cryptocurrency questions
- Is cryptocurrency legal?
- Is crypto dead?
- Is cryptocurrency safe?
- Is cryptocurrency anonymous?
- Is cryptocurrency valuable?
- Are all digital currencies cryptocurrencies?
- What is the market capitalization of a cryptocurrency?
- Why do I need to pay transaction fees?
- I lost my key. Can I get my funds back?
- What is the future of cryptocurrency?
Is cryptocurrency legal?
Very few countries place an outright ban on buying, selling, and storing cryptocurrency. In the vast majority of the world, Bitcoin and other virtual currencies are perfectly legal. But before getting started with them, you should check if your jurisdiction permits it.
It’s important to remember that each country has a different approach to regulating cryptocurrency activities. Make sure that you’re not in violation of any rules surrounding taxation or compliance.
Is crypto dead?
The media have pronounced cryptocurrency dead hundreds of times in the last decade. And yet, it continues to work just as it did in 2009. That’s not to say it isn’t volatile – the price fluctuates wildly. To those solely trying to turn a profit, bear markets can be disheartening.
However, it would be a mistake to describe cryptocurrency as “dead.” It continues to attract new users, and the technology and infrastructure are only growing more sophisticated.
The core innovations of Bitcoin and Ethereum will undoubtedly play an important part in reshaping our existing monetary systems to be more suitable for the current age. Immutability, censorship-resistance, trustlessness, or near-instant transactions using a public monetary system could completely revamp the mechanics of economic activity on the Internet.
Is cryptocurrency safe?
There’s a degree of risk taken on with cryptocurrency. If you forget the password to access your bank account, you can just have it reset through customer support. But, if you forget or lose the private keys that give you access to your crypto, there’s no one that can help you. Using a reputable exchange can be a more forgiving option – it requires trust, but you aren’t at risk of losing your private keys.
Public-key cryptography has not yet been broken. With good security measures, you’re probably more likely to have any of your other online accounts hacked than you are to have your funds stolen. Best practices inсlude being aware of common scams (social engineering, phishing, etc.), keeping your private keys offline at all times, and backing them up in a secure location.
Is cryptocurrency anonymous?
Your name isn’t connected to your cryptocurrency addresses – they look like random strings of numbers and letters on the blockchain. Be careful when assuming that this makes you anonymous, though. You’re pseudonymous – you still have a sort of on-chain identity, it just isn’t the one you use in real life.
There are certain methods that may allow people to tie IP addresses to your activities. On this front, things like dusting attacks and other analysis techniques can be used to deanonymize you. Remember that blockchains are essentially massive public databases. If you’re concerned about your privacy, you should try to make it as difficult as possible for others to link your transactions to your name. Cryptocurrencies like Bitcoin aren’t private by default, but methods like coin mixing and CoinJoins can make analysis heuristics unreliable.
A small subset of cryptocurrencies (known as privacy coins) are able to obfuscate the source, destination and amount of funds in transactions, using methods like Confidential Transactions. They have stronger privacy by default but are not totally resistant to deanonymization.
Is cryptocurrency valuable?
In financial systems, value is a shared belief. Just like with anything valuable, the value isn’t inherent to cryptocurrency itself – it’s assigned by people. In other words, something has value if people believe it does. This is true regardless if the object of value is a precious metal, a piece of paper, or some bits in a database.
With all that said, some consider cryptocurrencies and Bitcoin, something akin to a scarce digital commodity. Due to its predictable issuance rate and monetary policy, some argue that Bitcoin may act as a store of value in the future, similar to gold. Since Bitcoin has existed only for a little more than a decade, it’s yet to be seen whether it will stand the test of time in this regard.
Are all digital currencies cryptocurrencies?
No. You might have heard that many nation-states and central banks are working on creating their own versions of digital currency. However, these are just that – digital currencies. As a matter of fact, they’re often collectively referred to as central bank digital currencies (CBDCs). These are essentially digital versions of fiat money, and they don’t enjoy most of the benefits of cryptocurrencies. They are issued and declared legal tender by a central government and typically don’t use a distributed ledger, such as a blockchain, to keep a record of transactions.
You might also have heard about Facebook Libra, another type of digital currency. On the plus side, it’s planned to be built on an open-source blockchain system. However, it wouldn’t be permissionless such as Bitcoin or Ethereum, meaning that participants would need more than a simple Internet connection to use it. What’s more, the project and the activity on it would be run and managed by an association made up of a few selected members.
So, despite CBDCs and other forms of digital money making use of blockchain or cryptography, they’re quite different from cryptocurrencies such as Bitcoin.
What is the market capitalization of a cryptocurrency?
When you’re looking at the price of a cryptocurrency, you only see part of the picture. An equally important metric is how many individual units of that cryptocurrency exist out there, i.e., the supply.
More specifically, to assess the valuation of a cryptocurrency network, you need to know how many individual units exist right now. This is called the circulating supply. Different cryptocurrencies may adopt different issuance schedules, so it’s important to understand how the issuance works with each network.
The market capitalization (or market cap) is the price of an individual unit multiplied by the circulating supply.
Market Capitalization = Circulating Supply*Price
As you might imagine, the market capitalization of a cryptocurrency network is a more accurate representation of the value in the network than the price of an individual unit. A network with a lower-priced coin but a higher circulating supply might have a higher total valuation (market cap) than one with a higher-priced coin but lower circulating supply. And the opposite could also be true in certain cases.
It’s worth noting, however, that the market capitalization does not represent how much money entered a particular market. For instance, it’s a common misconception among newcomers that the Bitcoin market cap represents the total amount of money invested in Bitcoin. But that doesn’t make sense because the market cap depends on the price and supply.
Why do I need to pay transaction fees?
If you send one bitcoin to another address, you’ll notice that the address receives slightly less than what you’ve sent. That’s because you pay a small fee to reward miners for adding your transaction to the blockchain.
Many cryptocurrencies use a similar mechanism to incentivize users to secure the network. In Proof of Work systems, transaction fees are usually bundled with freshly-minted coins (the block subsidy) to form the block reward.
You can adjust the fee depending on the urgency of your transaction. Rational miners will always seek to make as much revenue as possible, so they’ll prioritize transactions with higher fees. You can look at the current pending transactions to get an idea of the average fee, and set your own accordingly.
I lost my key. Can I get my funds back?
If you’re sure you lost your keys, chances are you will never get them back. The great benefit of cryptocurrencies is the removal of custodians and middlemen from managing financial transactions. The downside of that, however, is that the responsibility is now entirely in your hands. So you need to be extremely careful not to lose your private keys, as they’re what give you ownership of your funds.
What is the future of cryptocurrency?
What the future of cryptocurrency will look like depends entirely on who you ask. Some believe that Bitcoin will rise to rеplace gold in the digital age and disrupt the existing financial system. Others argue that cryptocurrencies will always be a secondary system, existing as a niche market. We also have the ones that believe Ethereum will become a distributed computer, serving as the backbone of a new Internet.
Skeptics predict the industry will eventually collapse, while enthusiasts are happy with cryptocurrencies remaining niche monetary systems. There are many possible outcomes – it’s simply too early to say with certainty what will happen even a year from now. But we can’t deny that there is a huge potential for growth.