to intervene with the transactions. Each transaction is secured with the help of keys (the private key, as the name suggests, is only revealed to those parties that conduct the transaction). One should also keep in mind the fact that Blockchain is an immutable ledger, which cannot be tampered with. Blockchains cannot be hackers (hypothetically, it would take a quantum computer to do so, but there are already quantum-proof Blockchains in the likes of IOTA). Considering that 40 percent of financial bodies face economic crimes that lead to significant losses. At the same time, Blockchain’s mechanism is extremely difficult to corrupt. Greater efficiency. Blockchain would be able to cut the operational costs of major banks by 50 percent. The technology will allow banks to drastically reduce the cost of transactions while simultaneously bringing more transparency to the table. Another study, which was conducted by consultancy firm Bain, shows that Blockchain could reduce trade finance operating costs by up to 80 percent if implemented right. The cost reduction would be primarily the result of faster transactions — according to their estimations, the speed of settlements, billings and payments by four times could experience a three-fold increase. Sending money to another country is not an easy feat. For instance, Wells Fargo clients have to pay a $45 fee in order to perform an international wire transfer. This is objectively a huge waste of money considering the yearly volume of cross-border transactions reached $180 trln last year. Ripple, for instance, is viewed as an alternative to mainstream bank transfer systems (SWIFT remains the main target for disruption). There have been numerous rumors about a potential partnership between the two, with some suggesting that SWIFT could eventually buy Ripple. However, Ripple CEO Brad Garlinghouse dispelled these rumors back in November, stating that they are hell-bent on taking over SWIFT. Garlinghouse also reveals that almost ‘at least’ 100 SWIFT-connected banks are already utilizing their xCurrent product. In other news, Euro Exim Bank, the very first bank that started using Ripple’s xRapid, is testing its new trade finance system with the help of the Ripple Blockchain. The cost of commercial claims resolved through litigation around the world reaches a staggering $870 bln (and that sum of money doesn’t take into account contract mismanagement). Smart contracts debuted with Ethereum in 2015. This feature allows encoding information about the terms and conditions of a contract on a Blockchain, and they cannot be tampered with due to its immutability. It is worth mentioning that smart contracts are also self-enforcing, which means that there are no financial intermediaries. Money is only released from an escrow when the terms of the contract are met. Blockchain could cut the red herring in the banking industry, completely eradicating complicated legal documentation. Smart contracts could be used for loan servicing, insurance, etc.Each financial institution has to shell out on average $48 mln in order to conduct KYC for their customers. Back in 2017, Thomson Reuters reported that reported that KYC-related procedures for banking giants with annual revenue of $10 bln exceeded $142 mln. Notably, the cost of such procedures tends to go higher each year. With Blockchain, storing data that pertains to the customer’s financial history is much easier. An immutable ledger could keep all information about the source of funds, loan history, and the customer’s business activity. The information is securely stored on a Blockchain, and it can be shared with other banks. Just like in the previous case, Blockchain could significantly reduce the cost of auditing and reporting information to regulatory authorities. Undoubtedly, regulatory compliance is crucially important, but it doesn’t necessarily have to be that expensive.U.Today already reported that Big-Four auditors are trilling Blockchain technology within a consortium with 20 Taiwanese banks. The tamper-proof technology is the perfect choice for verifying the authenticity of transactions.Digital wallets represent a huge threat to the banking industry. Hence, banks take matters into their own hands while the industry is still nascent. The total number of people with a credit card is 1 bln, which is 40 times bigger than the size of the public with a cryptographic wallet (25 mln). Rabobank, a major Dutch multinational banking company, already planned to integrate a cryptocurrency wallet into its online banking system. Bank of America, for instance, was awarded a patent for secure crypto storage, which gave ground to many speculations that it’s going to operate a crypto wallet. It may come as a surprise, but in the age of bleeding-edge technologies, people still mainly rely on fax for syndicated lending (when multiple institutions join forces in order to provide a loan). On average, it takes 19 days for a bank to approve your loan, and your loan amount will most likely get disbursed in 5-7 working days. Yes, you guessed it – Blockchain could substantially alleviate the process of taking out a loan. That’s exactly why global banking giant Credit Suisse launched a commercial platform for Blockchain-powered syndicated loans in 2019.Literally, almost every bank under the sun. Currently, up to 99 percent of banks and investment firms are either exploring the new technology or already utilizing it. CEOs of the biggest banking institutions in the world recognize the disruptive potential of Blockchain, and they are actively working on new use cases that are based on the new technology in order not to be left behind if it indeed explodes and becomes bigger than the Internet.As U.Today reported earlier, Bank of America (BofA) is one of the leading companies by the amount of Blockchain-related patents, along with such behemoths as IBM and Alibaba. On the flip side, the fact that BofA is fighting tooth and nail in order to become the leader in the Blockchain race doesn’t necessarily mean that it’s going to use all of its patents. It’s more likely that the second largest bank in America is simply reserving a spot for the future. The trend is seen worldwide — only 10 percent of banks have actually implemented Blockchain. Meanwhile, JPMorgan Chase went as far as creating a separate division for exploring the potential of Blockchain (the Quorum division). Similarly, Goldman Sachs enjoys a reputation as one of the most crypto-friendly banks. The Bank of Montreal also debuted a Blockchain-powered system for fixed-income transactions.In June 2018, Deutsche Bank collaborated with US tech giant IBM to test bank transfers that are powered by Blockchain. Earlier, Deutsche Bank’s CIO also claimed that Blockchain’s potential is huge. IBM’s Martin Schroeter explained that major financial institutions in the likes of Deutsche Bank are using Blockchain to enhance the level of security and scalability.Santander Group, a multinational commercial bank in Spain, was among the first to roll out the Ripple-Net powered service 'Santander One Pay FX' for conducting cross-border transactions. Eight of the biggest Polish banks are currently testing a Blockchain-based platform designed by Billon Group for storing and managing the customer’s personal data. In the future, Billon Group plans to introduce Blockchain-powered solutions for other major banks, including transferring fiat money. Russian banking giant Sberbank has been on the Blockchain train since 2017. Sberbank CEO Herman Gref recently predicted that industrial-level adoption of Blockchain will take place in one or two years. Raiffeisen Bank also announced that it would use the DLT technology for issuing digital mortgages. China is already jumping feet-first into the Blockchain industry in spite of its infamous crackdown on crypto. On Dec. 29, the China Banking Association (CBA) signed over ten major Chinese banks (including HSBC and Bank of China) to a new Blockchain-powered trading platform. In the nearest future, CBA expects that smaller-caliber banks will follow suit. While China strives to be at the forefront of Blockchain innovations, it would be rather challenging for the country to make this transition given that its local trade ecosystem is still paper-based and labor-centric.On Jan. 29, the Economic Times reported that major Indian banks, including ICICI Bank, HDFC bank and Axis Bank, have formed a consortium to launch the very first Blockchain-powered funding platform for small and medium-size businesses. When it comes to cryptocurrency, however, a hostile line persists. The Gulf Region channels China’s ambitions when it comes to adopting Blockchain in banking. Remarkably, the UAE, Saudi Arabia, and other countries are also not big fans of crypto, but they recognize the aforementioned advantages of decentralization in the banking industry.On Dec. 27, U.Today reported about the National Bank of Kuwait (NBK) teaming up with Ripple in order to launch a cross-border remittance service dubbed ‘NBK Direct Remit’. Jordanian citizens will be able to send transactions in a matter of seconds.African banks are also warming up to Blockchain. Namely, Barclays Africa Group, the third biggest bank in South Africa, became the first financial institution in the country to join other 45 R3 members. The South African Reserve Bank (SARB) spearheaded the collaboration of the country’s biggest eight banks for Project Khokha, which utilizes the Ethereum-based Quorum Blockchain for performing fast bank-to-bank payments. Still, the pace of adoption remains sporadic across the country. On Dec. 15, Reuters reported about Brazil’s Itaú Unibanco becoming the very first bank to close its club loan. That was conducted with the help of R3 Corda Connect, which cuts the red herring, helping banks approve club deals digitally. It is worth mentioning that the country’s central bank started dipping its toes into the Blockchain technology long before that by starting to test Ethereum and Quorum back in 2017.Back in July, the Central Bank of the Argentine Republic also requested 42 books in order to understand Blockchain technology in a better way, which shows that they are ready to openly accept the currency. The abovementioned use cases show how much potential the technology has, but it doesn’t mean that we should write off the world’s banking industry (at least for now). Some experts predict that it would take a very long time for Blockchain to replace traditional banking, and it would have to undergo years (or even decades) of additional transformations to come up as a viable replacement. The technology is still facing the so-called ‘scalability trilemma’, which refers to the tradeoff between scalability and security for the sake of optimization.Blockchain is currently in the very early stages of its development. In the future, there could be global coordination between multiple banks that could utilize the technology for the common good. As of now, the major challenge is to come up with common standards for financial institutions, which are necessary for implementing new solutions. Another obstacle that currently hinders the adoption is lack of awareness about Blockchain. According to a PwC report, only 24 percent of executives in the banking industry are familiar with the technology. Key stakeholders within a certain financial institution have to realize the benefits of Blockchain. Lastly, we cannot ignore the elephant in the room – regulations. Mainstream adoption won’t happen without a proper legal framework. However, as of recently, it seems like lawmakers are finally warming up to the new-fangled technology. Case in point: Wyoming, a crypto-friendly US state that recently unanimously passed a Blockchain bill that would give a huge push to Blockchain integration in the cowboy state. On Jan. 29, they passed yet another Blockchain bill. Umar Farooq, who spearheads the Blockchain department at JPMorgan, believes that DLT technology can indeed offer applications for banks, but its cost-saving abilities are largely exaggerated. Blockchain, according to Farooq, is mainly about creating new products. Meanwhile, simply using it as a tool for cutting expenses and labor force significantly limits its possibilities.Yes, the adoption rate is still rather slow, and major banks are not going anywhere, but there is one sector where Blockchain is already making waves: banking the unbanked. About 2 mln people around the world still remain unbanked. That issue is not restricted to third-world countries – nationwide, almost 8 percent of households in the US remain unbanked. Not surprisingly, things are getting much worse in regions with a low level of financial inclusion, as 34 percent of people in sub-Saharan Africa remain without a bank account. CNBC earlier reported that people in South Africa (one of the most developed regions) still transfer funds with the help of a bus driver given the inefficiency of bank transfers, which is why it’s becoming one of the focal points of the crypto gold rush. As of now, there are plenty of Ethereum-based projects that are designed to tackle the issue.Hierarchical deterministic (HD) wallets generate new addresses with every new transaction, which substantially complicates the task of hacking the wallet. HD keys represent an algorithm that divides public and private key storage into several parts. When a hefty transaction is involved, you can simply split it into several parts, thus making it impossible for somebody to track the amount of money you are sending or receiving. Gregory Maxwell, a genius cryptographer, who is considered to be one of Bitcoin’s original developers, was behind the original idea of the HD walletType 1 (sequential wallets). Private keys are derived from a number of combinations of digits. This type of wallet has a significant disadvantage – you are supposed to back up every wallet separately due to the inability to recreate a lengthy private key. The old-fashioned Bitcoin wallets would require a fresh backup. Blockchain.info served as a stepping stone to the introduction of HD wallets. However, one should take into account that the phrase was only needed for unlocking the wallet from their server. Type 2 (hierarchical wallets). Wallets can be regenerated from the original seed, which alleviates the backup process. Case in point: Electrum wallets. BIP-32 wallets, however, went a tad further by introducing a tree structure, which was later improved by BIP-44. Every wallet uses a standard 12-word master seed key that allows creating a slew of new addresses. Subsequently, the experience of recovery with the help of the seed phrase becomes much better. Before starting to use any HD wallet, you will be required to write down a seed phrase, which typically looks like this. With the appearance of HD wallets, you are supposed to back up your seed only once. On top of that, there is no need to store individual keys given that each of them will be recreated deterministically.With all BIP44-compliant wallets, addresses are split into accounts. In order to make it easier, let’s imagine run-of-the-mill bank accounts – your funds can be redistributed across multiple accounts. HD wallets work in the same way (except for the fact that here you are dealing with cryptocurrencies). Each account has ‘infinite’ external and internal chains that allow creating millions of addresses.The majority of popular HD wallets have already implemented the following standards: BIP-32, BIP-39, BIP-44. Hence, you are able to send funds to another sender that has also implemented these standards. Pay attention to the fact there are some discrepancies as far as the implementation of these standards is concerned (for instance, BIP-39 wallets are not compatible with other wallets due to the fact that they use the same vendors). BIP-32 details the process of creation of a hierarchical wallet.BIP-39 describes the implementation of the mnemonic phrases apart from giving a good understanding of how these phrases are created. The list of apps that support the BIP-39 mnemonic system includes:BIP-44 offers a specific tree-like hierarchy, describing a structure that contains multiple accounts.However, you might still wonder how secure these 12 words are. In order to determine that, one Reddit user went on a mathematical adventure. It is also worth noting that different wallets have different dictionary sizes. For instance, Trezor has 4096 words, which allows creating ~10^43 combinations. The table below shows the level of security each dictionary can offer. After that, the Reddit user went further by calculating the hack time that would be required for compromising the security of an HD wallet, using the power of Antpool, the biggest mining pool owned by crypto behemoth Bitmain. It would take almost ~1012 years to calculate all of these combinations (for comparison, the age of the whole universe is only 109 years).NB! Some wallets also allow 12-word seeds (13 words or even 24 words) While HD wallets represent a huge step forward, they also have some downsides. For instance, some developers allow their users to set passphrases by themselves, thus jeopardizing their security. It’s also not advisable to share the seeds between wallets from different software/hardware wallets (as mentioned above, not all wallets follow the same standards). As a result, you may find it hard to access some coins given that they are non-sharable. Yep, it’s clear mnemonic phrases are pretty much safe (unless singularity happens and we all merge with robots). However, it doesn’t mean that your wallet is safe as well (once you lose your backup phrase, you lose access to your wallet and your funds).Now that we’ve determined what HD wallets are, let’s focus on the set-up process. If you are willing to create an address for a certain currency, you have to follow the guidelines provided by the coin issuers.The address node’s private key is used in order to sign a transaction.As mentioned above, all modern wallets are of the HD type.Write down a recovery phrase (make sure you keep that recovery sheet!). NB! Do not use hardware wallets with pre-filled recovery phrases.Despite the fact that HD wallets were initially created by the team of Bitcoin developers, they can be used for any coin (Ledger, for instance, supports a slew of altcoins). It goes even further than this: HD wallets have found numerous use cases outside the realms of the cryptocurrency industry (passwords, PGP keys, SSH keys). For instance, Ledger, the leader in the hardware wallet industry, has already introduced an app for managing passwords.Hopefully, now you have a better understanding of how deterministic wallets work. U.Today wishes you a safe cryptocurrency investment experience!It is a vivid fact that mining is one of the most popular ways of making money with cryptocurrencies. However, nowadays lots of digital assets require ASIC-miners for it. In this article, we will analyze those coins which can be mined with GPU\CPU on your PC in 2019.Many years ago, at the dawn of mining, conventional processors (CPUs) were used to mine Bitcoin. Users who believed in the bright future of cryptocurrency installed special software, entered the wallet number, started the calculation and waited for the reward. Later, when the first high-speed graphics cards (GPU) were invented, mining with CPU ceased to be so relevant, as the complexity of the network immediately increased. The logical continuation of the development of the industry was the emergence of the first devices based on specialized chips, the so-called ASIC-miners.The repeated growth in network performance forced all other owners of outdated devices to stop cryptocurrency mining due to the fact that the payment for electricity exceeded the benefit.Today, huge farms exist for mining cryptocurrency. Most of them are located in the East, particularly in China. In addition, most companies which distribute ASIC-miners also come from Asia.ASIC-miners became a potentially major problem even at the time of their appearance on the market. The emergence of specialized mining equipment for the SHA256 algorithm, which was more efficient than mining on a CPU or GPU, significantly complicated the life of Bitcoin miners and forced large mining farms to get involved in the race for computing power and cheap electricity.It should be noted that the majority of relatively young blockchains, including Ethereum, have hashing algorithms that are resistant to the use of ASICs equipment to a certain extent. For example, the developers of anonymous cryptocurrency Monero deliberately complicate the lives of ASIC manufacturers, making changes to the algorithm every six months.Even the slightest differences make ASIC a useless device: this equipment is optimized for the mining of specific cryptocurrencies, and changes in the algorithm drastically reduce their effectiveness, sometimes making them completely useless.The use of ASICs obviously causes harm to the entire industry, as it leads to the centralization of the network, and the emergence of large miners.CPU mining is performed similarly to the process of obtaining cryptocurrency according to the Proof-of-Work algorithm (PoW).Most of the blockchain networks have built-in mechanisms for adapting the complexity of the computations performed, due to the fact that the confirmation time for one block must be constant. Therefore, as the total computational power increases, it is necessary to increase the mining complexity so that the time spent by the sides remains the same. There are some coins whose mining is specially optimized for processors, which is done to get the highest degree of network decentralization and to ensure the widest possible access to cryptocurrencies.GPU mining is the process of cryptocurrency mining using graphics processors. To do this, one uses a powerful video card on a PC or a specially built farm from several devices in one system. Video cards are initially designed for processing large amounts of data by performing operations of the same type, as is the case with video processing. The same case is observed in cryptocurrency mining because here the hashing process is of the same type. In this regard, laptops or processor integrated chips with full-fledged discrete video cards are used.Currently, you can get the most income from CPU mining if you choose coins that operate on the Cryptonight cryptocurrency algorithm: Monero, Bytecoin, Electroneum, DigitalNote, etc.The cryptocurrency was launched in 2014. It is a coin with an emphasis on transaction privacy. Monero operates on a Proof-of-Work algorithm for verifying transactions. The digital asset works fine with a CPU, which makes it an excellent option for miners with small budgets.To start mining Monero with a CPU, you need to create a wallet on one of the exchanges or install a local version of the wallet by downloading it from the official Monero site at https://monero.org/downloads/.It should be taken into consideration that the full synchronization of the wallet with the network can take some time, and it requires a lot of disk space. In the latest versions of Monero wallets, you can use synchronization with a remote node, which significantly reduces synchronization time and takes up almost no space.The launch of Dogecoin took place on December 8, 2013, as a “comic currency.” Today it has become one of the top cryptocurrencies in the world, and its market capitalization has reached more than $185.17 million. This makes it attractive for investment and mining.The setting up of Dogecoin mining is carried out similar to Monero. First, you need to have a wallet and find out its address. Then you will need to create an account on one of the mining pools, add a new worker, enter the wallet address and update your account. Then choose the appropriate miner program, download it, install it on your personal computer and configure it.The principle of Zcash operation is the same as that of other cryptocurrencies. Its blockchain consists of blocks where information about transactions is stored. Miners confirm these blocks and get a reward for that. The mining process remains the same. First, you choose a wallet and find out its address. Then you select the mining pool, register there, enter the address of your wallet in your personal account and update your account. Then, choose the appropriate software, download the program and install it on your computer. The best option in the context of mining Zcash would be nheqminer. You can download this software from Github.Subsequently, Zcash can be exchanged for Bitcoin or other cryptocurrencies, and some exchanges allow you to exchange it immediately for dollars or euros.Bitcoin Gold officially started on October 24 on the block 491 407, but the network was launched on November 13. The main task is to return mining from large farms to PCs, for the sake of which the transition from the SHA-256 crypto algorithm to Equihash is done. In this regard, Bitcoin Gold does not support ASICs.Maintaining a large mining farm on a GPU requires much more effort than ASIC data-centers, so the major players choose the latter, leaving the mining on video cards to small companies and individuals. So decentralization in Bitcoin Gold network is higher and larger blocks (2-4 MB) increase throughput.Zencash is another representative of a rather extensive family of digital coins based on the Zerocoin protocol, launched in May 2017. At the same time, it was formed as a fork of the non-basic Zcash cryptocurrency, and another Zclassic fork. Zencash can be called an interim solution between the previous two: if the ZEC miners give the developers a fifth of the rewards for each block found, and the ZCL miners keep everything for themselves, then the ZEN miners receive 88%.Zencash has an open and private blockchain, which allows both to quickly carry out transactions and to guarantee anonymity where it is needed.In addition, the Zencash blockchain also allows exchanging encrypted messages, acting as a private messenger.Zclassic is a fork of the popular and widely used cryptocurrency Zcash. The principal difference from the maternal coin is that the entire reward goes to miners, while 20% of the mined ZEC goes to the addresses of the developers. Zclassic also gets rid of those 20 thousand blocks that were mined in Zcash during the pre-mining period.The absence of a 20% commission potentially makes Zclassic more profitable for mining than the original chain.Since the Bitcoin bubble popped, there have been numerous stories about people losing their fortunes by throwing money into crypto when prices were going through the roof. However, despite market bears reigning supreme since January, there were 54 mln new users in 2018 (the number almost doubled compared to 2017). That essentially shows that the interest is still there (‘What is Bitcoin’ was among the most popular Google searches in 2019). So, is it too late to invest in Bitcoin? Not really. There are actually plenty of reasons why you shouldn’t write off Bitcoin as a good investment opportunity.Crypto desperately needs a dose of reputational repair – Bitcoin, despite its ten-year long history, is still mainly perceived as the currency of drug dealing and crime thanks to loud headlines about Silk Road, Mt. Gox, etc. However, crypto is currently getting a much more positive response from institutional investors. Their learning curve starts with skepticism, which is absolutely understandable given the tainted history of crypto, but many institutions are fascinated with the technology. 2018 was already a precursor to large-scale institutional adoption. As U.Today reported earlier, Wall Street permabull Mike Novogratz is certain that major institutions will start embracing the cryptocurrency space by Q1/Q2 2019. Novogratz’s words have also been channeled by Asian crypto enthusiast Henri Arslanian, who claimed that more major banks would start dipping their toes into crypto in 2019. Banks around the world have already adopted many Blockchain-based solutions, but they retain a hostile attitude towards crypto. BlockTower Capital CEO Ari Paul, however, believes that Wall Street has adopted a lazy ‘wait-and-see’ approach. Now, he predicts that adoption won’t happen until Q3 2019, dismissing his previous prediction as ‘too optimistic.’ Fidelity also launched Fidelity Digital Assets in October 2018, finally crossing the threshold into cryptocurrencies. Thus, Fidelity became the first Wall Street incumbent to bridge crypto with the traditional market. At the time of writing this article, ICE-backed Bakkt is already on the verge of launching Bitcoin futures (the delay was allegedly caused by the government shutdown). Bakkt’s long-anticipated Bitcoin futures offer trading and hedging opportunities for Wall Street sharks. Nasdaq, the world’s second largest stock exchange by daily trading volume, is expected to launch Bitcoin futures in Q1 2019. Notably, the New York Stock Exchange (NYSE) also decided to step its game in the Bitcoin futures niche by rolling out its own product. However, before these contracts can be offered to retail investors, they have to be given the green light by the US financial watchdog.In 2019, the face of money will continue changing, and it’s not a huge reach to suggest that cash could become obsolete in the nearest future. PayPal, Visa, and other global payment services actually represent digital information. Cryptocurrencies are simply the next logical step given that they represent the first form of digital money. The idea that cryptocurrencies will eventually replace fiat sounds a tad futuristic. However, one has to recall the quick rise of smartphones (there are around 2.5 bln smartphones in the world), which can serve as a one-fits-all storage solution for cryptocurrencies. The Samsung Galaxy S10 leak shows that the soon-to-be-released smartphone already has a built-in Blockchain KeyStore app.Why invest in Bitcoin? Yes, it is natural that Bitcoin, like any other disruptive technology, is currently facing harsh criticism. For instance, the president of Western Union stated that the telephone had many shortcomings in 1876, and it couldn’t be considered to be a viable means of communication. Bitcoin obituaries keep rising, but the coin, as you can see, is not going anywhere, and its fundamentals are actually becoming stronger. Generation Z could turn Bitcoin into the currency of the future. Guess who won’t be part of this future? Obviously, those who fail to buy crypto in 2019.Of course, there are plenty of other options on the table, but Bitcoin is the ultimate OG coin whose hegemony has remained untouched over its ten-year run. Coinbase, the San Francisco-based crypto unicorn, has more users than the total Bitcoin supply, which is limited to 21 mln. The scarcity of Bitcoin will continue increasing while the number of BTC owners will actually decrease. Bitcoin holders are also scarce — less than 5 percent of addresses hold more than $1,000 in crypto. If that’s not enough, you should also take into account the fact that Bitcoin’s total market cap represents roughly 0.006 percent of the total world assets. No one can say for sure whether it is too late to invest in Bitcoin. However, 2019 could be a nice opportunity to secure your place in the sun when in the imminent era of digitalization arrives.With the trade war between the US and China and the looming global economic crisis, people turn to digital currencies as a source of stability. That explains the skyrocketing popularity of Bitcoin in the Latin American region, which is mostly plagued by economic woes. A recent JPMorgan article vividly shows that it cannot act as a hedge asset given its price volatility, but one has to take into consideration the fact that Bitcoin is not controlled by any centralized body. On top of that, it doesn’t have to be transported in its physical form like gold. Learning how to invest in Bitcoin today could make it much easier to fight the financial turmoil. There is also a theory that the current crypto rout is simply the result of a natural market cycle, which flies in the face of those who push the crypto narrative. aXpire’s CEO Gary Markham claims that there are actually many similarities between Bitcoin and gold futures – the graph below shows practically the same price pattern. Gold futures started trading on New York’s exchange on Dec. 31 in 1974. As you can see, the launch of the futures was followed by a brutal price drop (it took almost two years for the gold price to bottom out). This bearish trend was followed by a ten-fold increase compared to its previous ATH. Taking this into consideration, one could predict the Bitcoin price could skyrocket up to $180,000 when it’s time for another bull run. However, one should also take into account the fact that there are numerous discrepancies between the two markets, which complicate the task of making any concrete predictions:Many market participants were unaware of Bitcoin futures.Unlike the precious metal market, the cryptocurrency market is much more competitive with more than 2,000 coins and tokens listed on CMC.Bitcoin as an investment is more susceptible to different kinds of speculations. Its price highly relies on whales, the industry and, of course, the underlying technology. For example, quantum computing attacks could put a damper on the public-key cryptography that underpins Bitcoin. Want to look at a similar price? Then look at the so-called ‘Wall Street Cheat Sheet’, which perfectly displays the oscillation of human emotions. ‘Euphoria’ is the highest point when an investor is willing to go all-in without a modicum of rational thinking. Security tokens (STOs) represent a pivotal opportunity for the mainstream adoption of cryptocurrencies given that they combine the best from both worlds: an emphasis on regulations is combined with more liquidity and more funding opportunities. They have numerous advantages over traditional financial assets while simultaneously appearing to be a much safer option than ‘wild west’ ICOs, 70 percent of which failed to exceed their initial valuation.tZERO is an SEC-regulated Blockchain subsidiary of the e-commerce behemoth Overstock. The security token exchange platform went live on Jan. 29. As of now, tZERO will only operate during Wall Street hours given that they have to work in sync with broker-dealer Dinosaur. However, in the long run, they want to allow their clients to trade around the clock. There are those who are shooed away by the word ‘security’, supposing that it would bring greater scrutiny to the space, but, as mentioned above, that could actually be a significant advantage over ICOs. Their enhanced legitimacy could trigger a ripple effect and attract many institutional investors on board. On top of that, STOs could be a major catalyst for cryptocurrency growth in 2019, a spillover effect. Tokenized securities have the potential to bridge companies globally, substantially expanding the community of investors. The double-whammy of sinking prices and constantly rising mining difficulty was a complete knockout for Bitcoin miners. U.Today determines whether you should stick to Bitcoin mining in 2019, and what other altcoins could be a good option the following year.Due to the decline of cryptocurrency mining, it is rather challenging to find a new coin to mine given that cryptocurrency price predictions change almost every day. If you want to pick a new currency, you should perform an in-depth fundamental analysis (the technology behind the coin, the team of developers, etc.). We’ve compiled the list of top factors you have to take into account when mining new coins:Meanwhile, these are some of the ‘red flags’ that you most likely want to avoid when choosing a new coin:‘copy and paste’ coins in the likes of Ravecoin that do not bring anything new to the table. Once you’ve picked the coin that suits all the above-mentioned parameters, you have to make sure that running your mining operation will result in generating a profit (a rather challenging thing to do considering the current state of cryptocurrency mining). There are numerous factors that you have to take into account, such as electricity expenses, mining difficulty, etc. We won’t enumerate all these points since there are plenty of complex mining calculators.Another important point you should keep in mind is that these parameters are constantly fluctuating, which essentially makes the mining industry so unpredictable. Case in point: mining giant Bitmain, which recently sacked half of its employees after tons of hype surrounding its upcoming IPO that is already shaping up to be a big underperformance.Let’s start with an ultimate O.G. currency – Bitcoin, which turned into a multibillion-dollar business. This December, the mining difficulty of the king BTC experienced a 15 percent decline due to smaller miners leaving the Bitcoin Blockchain en masse after major experts failed with their predictions. In the middle of the crypto rout, Bitcoin miners still managed to rake in an impressive $4.7 bln, but the point is that large mining farms are primarily responsible while run-of-the-mill miners remain on the sidelines.The exodus of miners that was followed by a difficulty drop makes it much easier for new miners to enter the market. Moreover, it has been recently estimated that mining Bitcoin is still 50 more profitable than mining one of its iterations – Craig Wright’s ‘mining-friendly’ Bitcoin SV.The same pertains to another major currency – Ethereum, which has been facing bearish predictions the whole 2018. Miners who can benefit from low electricity prices still remain in business in the yo-yo market as the mining difficulty continues to drop. Since Ethereum is way too established, you might also opt for Ethereum Classic, whose mining difficulty has been tanking as of recently. Monero is currently the 13th biggest currency by market capitalization. The flagship privacy coin is particularly attractive for miners given its ASIC-resistance. That essentially means that you could mine Monero without buying expensive hardware, thus disrupting Bitmain’s monopoly, which could be already facing serious woes according to expert predictions. Bitmain came up with a special miner for Monero, but the dev team throttled it with a fork that could make ASIC mining inefficient. Of course, the coin’s mining profitability tanked due to the crypto rout, but cheap GPU prices combined with low electricity still make a good combination for mining Monero in 2019. However, do not expect to gain profit from selling XRM on a daily basis despite some positive price predictions. Alternatively, you can also consider mining another privacy coin – ZCash, which is responsible for more than 90 percent of all Equihash mining, though the recent rate spike was a blank swan situation for miners who were up to different predictions. Back in July, ZCash made headlines because of its remarkable mining profitability: it outperformed Bitcoin by 400 percent. According to whattomine.com, Horizen (previously known as ZenCash before the rebrand happened) remains the Equihash-based currency with the highest level of rewards. In 2019, it is still one of the best currencies to mine with your GPU. Keep in mind that Horizen is still in its early PoW days, and they have already paid out 5.3 mln coins to miners. It would be ludicrous to expect sizeable mining profits in the current bearish market, but the project might pick up some steam in the future despite some gloomy price predictions. Litecoin is yet another old-timer on the block that has been around since 2011. It poses a good option for those who want to opt for an already established currency instead of buying coins with little to no background. LTC stands out because of faster transaction confirmations (the block generation time is restricted to ten minutes), and a more efficient storage solution. A quick look at r/litecoinmining will tell you that the community is in low spirits right now, with some mining for the sake of heating the house or simply keeping their hobby. However, our recent price prediction shows that Litecoin is currently following a bullish path.Bitcoin Gold is a fork of Bitcoin that was created specifically for GPU mining. Apart from disrupting the hegemony created by super-powerful ASIC miners, Bitcoin Gold is also a marginally safer coin since miners do not have to rely on the hardware that is specifically designed to mine this coin. Hence, BTG miners won’t have to throw away their Antminer if their cryptocurrency lives up to most pessimistic price predictions since they can easily put their botnet on something else.We’ve listed some of the most conventional (and fairly unconventional) choices, but it’s rather challenging to boil down your choice to one specific coin when there are more than 2,000 options on the table. Hence, it would make sense to mine several coins simultaneously (up to all major mineable currencies) to hedge against potential losses. It is not a piece of investment advice, but swapping currencies is an objectively good option in the highly volatile market where price predictions tend to change very quickly. Yes, you heard it right – CPU mining is still a thing in 2019 (just like in Bitcoin’s early days when even the boldest price predictions couldn’t foresee its present-day price). Of course, do not expect to make a single dollar (or even a single cent) with your old laptop. However, for the sake of collecting coins whose price could skyrocket one day, you can consider mining the following CPU-oriented cryptocurrencies:You can constantly keep track of new GPU coins with the help of the website newcpucoins.com. One of the best strategies that you can pick is to mine a coin that is basically worth nothing after doing in-depth research of the project and the team. The cryptocurrency market is still very nascent, and there’s a good chance that the value of a new coin could blow up in the future (just make sure not to sell them prematurely). Over the past few years, cryptocurrency mining has turned into an industrial-level venture, which means that the days when somebody could make quick dollars with crypto mining are pretty much over despite some predictions about the comeback of mining craze. In the first half of 2018, cryptocurrency prices began to fall, and many miners were forced out of business. With the right approach, mining can still be profitable, but it’s a not a get-rich-quick scheme anymore, and the profitability margin is much lower. Even if most bullish price predictions come true, expect more super powerful ASIC miners to appear on the market. After all, you can still mine 1 BTC in Venezuela while only forking out $531 because of its extremely low electricity rates. However, don’t be tempted to pack your bags to this ‘crypto paradise’ given that the local government is not particularly welcoming to miners, with some of them even going to jail. There is also another option: Iran, where mining still turns a profit with the country’s government subsidized energy. Hopefully, U.Today helped you to come up with the best mining strategy to survive this crypto winter.Cryptocurrencies represent the first new asset class in decades, so it’s not an easy feat to come up with the right investment strategy. In this article, U.Today sheds light on the main peculiarities of cryptocurrency investment and most popular long-term and short-term strategies that could be useful for those who are only kicking off or trying to survive the bear market.Despite the top cryptocurrencies shedding more than 90 percent of their value in 2019, there are still plenty of reasons to invest in the market. When it comes to Bitcoin, for instance, if you buy 0.28 BTC at this point, you can be absolutely sure that no more than 1 percent will own more BTC that you do. Hence, you can easily become a 1 percenter in the hypothetical Bitcoin world. For starters, it’s worth mentioning that every investment strategy presupposes a set of rules that are supposed to make the most of your investment portfolio. Different investors have different styles and approaches, but overall, all of them try to achieve the same thing: predicting how a certain asset will behave in the nearest future based on the market data that is already available. Depending on the type of data, we can distinguish two major investment styles – fundamental analysis and technical analysis. The fundamental analysis defines an intrinsic value of a certain coin while technical analysts primarily focus on trading patterns that could give a good idea of where a certain asset is going in the nearest future. When it comes to cryptocurrencies, you have to check all the boxes mentioned below in order to perform an in-depth fundamental analysis:Market capitalization. The very first thing that you are supposed to do when scrutinizing a certain cryptocurrency is to open CMC and look at its market cap. For instance, Bitcoin, the king of crypto, has a market cap of $62.7 mln. Ethereum and XRP are constantly see-sawing, battling for second place. White paper. Sure, during the peak of the ICO bubble investors would blindly throw money at literally any project and still managed to profit. However, once the bubble popped, investors realized that it was a recipe for defeat, and they started doing at least a bit of homework. Reading the project’s white paper could be a good place to start in order to define whether the currency has an intrinsic value.News. FUD spreads like fire in the crypto space given the industry’s extreme volatility. Keeping tabs on the most recent events could give you a good idea of what cryptocurrencies you should buy and sell.Now that we’ve covered fundamental analysis, let’s focus on technical strategies. There are three major types of technical analysis:Moving averages (determining price trends over a certain period of time)Chart patterns (support and resistance, trend lines, reversal patterns);Dollar-cost averaging (DCA) is an investment approach that presupposes routinely purchasing a fixed dollar amount of cryptocurrencies. For instance, you can set up a schedule on Coinbase in order to buy $100 worth of Ethereum (ETH) every month.This is the laziest strategy out there – you have to put in zero effort (just make sure that you’ve deposited funds to your Coinbase account). The lower the prices, the bigger amount of crypto ends up in your hot wallet (and vice versa). + DCA helps to reduce the extreme volatility in the long-term, which is one of the main pain points of the cryptocurrency market - As studies show, risk-averse clients usually see fewer profits with DCA than those who go for lump-sum investment. Value-averaging strategy is an alternative strategy that seems to work for those investments that are highly volatile. This is a very simple strategy, which presupposes selling off crypto at the height of the bull market and buying a lot when bears reign supreme. It doesn’t even sound like a strategy – just the rule of thumb of crypto. However, there are certain recommendations that you want to follow in order to remain in the loop. Here, you must know exactly when the price of Bitcoin or Ethereum is going up in order not to lose your bread money. Make sure that you do not exceed your monthly spending limit. Bitcoin investors who pick this strategy can mitigate their risks by equally dividing their portfolio between different digital assets. This is also a complete no-brainer – you simply invest the same amount of money in each cryptocurrency on your portfolio (Bitcoin, Ethereum, Monero, etc.). + This strategy is for those who are iffy about what coin they should stick with. - You won’t be able to maximize your profit. As the name suggests, investors create a market-value-weighted portfolio (top 10, top 20 or top 50) coins that will accurately reflect the current state of the mercurial market. Alternatively, you can also invest in cryptocurrency index funds that usually stick to the same approach. Originally, crypto index funds were created by investment mastermind John Bogle, who came up with an idea of balancing the portfolio with the help of a market index. Hence, you are not subjected to any risks that are connected to individual coins – you only care about the general market sentiment. Institutional investors who are willing to dip their toes into the crypto space can consider the following cryptocurrency index funds (Coinbase Index, CRYPTO20, Bit20).+ You are not supposed to dip your toes into separate coins whose price might be whittled down. - With cryptocurrencies, the whole market usually copycats Bitcoin Managing an unbalanced investment portfolio is a tad more challenging given that one cannot know for sure what coin will witness the best performance. However, the reward will be much bigger if you manage to hit the bullseye. In the current bear market, it is advisable to invest in reputed currencies that are here to stay. Obviously, only a professional investor will be able to determine what coin will pick up steam in the future and become the next Ethereum by using a systematic form of analysis. Hence, this investment strategy is definitely not beginner-friendly. If you decided to get involved in that risky business, you should have a penchant for predicting a positive price momentum.There are many approaches to coin picking, with small cap investing being one of them. Obviously, this is the riskiest among them, but it can potentially bring huge benefits in the future. The modus operandi is fairly similar to the traditional stock market. The only difference is that you invest in projects that may hardly represent anything more than a whitepaper. Investors usually shy away from coins that are sitting outside the top 50, but it might a good idea to devote a substantial amount of time to studying individual tokens. Given the speculative nature of cryptocurrencies, you should be extra-careful picking a certain coin. There are tons of outright clones that simply copycat the code with a few basic changes. Case in point: Apollo, the NXT fork, which is currently trying to play out a massive pump-and-dump scheme. + The obvious advantage of coin picking is that you can jump on the bandwagon early before a certain coin makes it into the mainstream. The next Bitcoin is somewhere near! - It’s much more likely that the coin you’ve chosen will flop (CMC is ridden with plenty of dead coins). HODL (‘hold on for dear life’) is probably the most popular term in the cryptocurrency space. Yes, many people felt let down after cryptocurrencies got caught in the death spiral, but you truly believe in the fundamental value of cryptocurrencies. If the most bullish Bitcoin price predictions turn into reality, you might be able to earn a fortune. It’s very likely that the current bear market is simply a bump in the road. Let’s recall the example of Ronald Wayne, who sold his ten percent stake in Apple for 10 percent in the 70s (in 2018, Apple became the first company to reach a $1 bln capitalization). Crypto baron John McAfee, for instance, predicts that Bitcoin could breach the $170,000 mark by the end of 2019. Meanwhile, he still stands by his prediction that Bitcoin could hit $1 mln by the end of 2020. Crazy? Maybe. However, one should keep in mind that hardly anyone could predict that Bitcoin could cause such a disruption in the financial world.+ If you hold your coins, there a good chance that you could pull a Kristoffer Koch, and become filthy rich without even knowing about it. - On the flip side, plenty of investors who didn’t sell their coins at the height of the bull market got burned. Diversifying your investment portfolio U.Today has described the main ways of managing your cryptocurrency portfolio, but, in fact, your investment choices shouldn’t be restricted to digital assets. Don’t hold all your eggs in one basket. In the middle of the bear market, it is worth looking at numerous other financial instruments (apart from Bitcoin and Ethereum). For instance, eToro offers over 1,200 investment options over six asset classes (stocks, indices, commodities, etc.).+ There is less volatility in the traditional market, which means that your funds are more likely to be safe. - You won’t likely derive huge profits from investing in the stock market (unless you hit the bullseye by pouring money in a low-market cap firm that could become the next Amazon). By running a cryptocurrency master node, you can secure a good (or even excellent) passive income. It depends on what incentive model is implemented for master node operators. Hence, you get a return on your investment over a certain period of time. Each coin has a specific amount of coins required to run a master node. With Dash, for instance, you are supposed to have 1000 DASH collateral ($67,934 at the time of writing this article). Of course, this amount of money is out of reach for the lion’s share of beginner-level investors, but there is plenty of small caliber coins that are significantly less expensive.+ Masternode operators are incentivized with a block reward (running a masternode can turn into a great source of passive income) - You are required to have a substantial amount of tokens that will be locked away as a stake. Running small-caliber master nodes might not pay off. On top of that, many critics see masternodes as the breeding ground for centralization. One of the main rules of cryptocurrency trading is not to be afraid of losses (given that even seasoned traders are not immune to them). Of course, that pertains to traditional market as well (ardent crypto hater Warren Buffett lost almost $23 bln during the 2008 financial crisis. However, the age of AI brought a brand-new option to the table – cryptocurrency trading bots that will allow you to trade even when you sleep or work. Of course, your success mainly depends on a chosen trading strategy – FUD is a powerful force that could make you sell off your crypto if bad news persists in a situation where holding would be more appropriate. On the flip side, there is also greed, which blinds rational thinking and is why many people fail to jump ship on time. Bots also save your time given that you may wake up just to see that a couple of your trades have been already executed.+ Trading bots save your time and make trading emotionless. - Trading bots can be costly (for instance, Haasbot will set you back $1,200 per year), and they cannot factor the most recent trading moves.In the majority of countries, Bitcoin mining is not profitable at current prices, and even with top-notch ASIC miners, you will hardly earn any substantial amount of money that will at least let you cover the cost of your mining hardware. However, the rapid decline of the mining industry has its silver lining – extremely cheap mining hardware. As U.Today reporter earlier, this is shaping up to be a global trend – from China to South Africa. Hence, we are dealing with another ‘buy the dip’ situation in case Bitcoin mining becomes profitable again. Do not forget that you can also mine Ethereum as well as plenty of other altcoins (Ethereum mining was more profitable in 2018). + You will be at the top of your game if Bitcoin mining profitability goes up. - If the market remains in the doldrums, your used graphics cards are heading straight to a trash bin given that they are not popular on the secondary market. With every strategy, there is always room for improvement. Hence, let’s take a look at these most common investment tools that will help you make investment more efficient. Common mistakes investors should avoid Now that we’ve covered all major strategies, it is worth mentioning a couple of don'ts that pertain to your cryptocurrency investment experience:Do not put your money in a project you have no idea about. Do not forget to do your homework.Do not go all-in with a single asset. Diversify your portfolio.Do not margin trade if you are not an experienced investor. Lastly, we should also point out that it is crucially important to avoid different Bitcoin high-yield investment scams in the likes of Bitcoin Profit. USI Tech, which was once on the list of the best investment strategies, turned out to be a mammoth-sized scam. Another recently exposed fraud pertains to the project called ‘Filecoin’ – a Hong Kong-based entrepreneur was accused of scamming people by selling them the hardware that is specifically designed for mining this coin. Cryptocurrency pump-and-dump schemes are also fairly common, and you should avoid them at all cost. Do not listen to ‘gurus’ who are willing to give you investment advice on a particular coin. In order to not be a victim of such a fraud, read our tutorial on how pump-and-down schemes work and what you can do about them. That’s it! Hopefully this article will help you survive this crypto winter. Stay tuned to U.Today for more exciting content.Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.Blockchain is mainly known as the currency that powers Bitcoin. The technology made its grand debut in Satoshi’s legendary white paper, but there were also many precursors to its appearance. Despite the fact that Bitcoin remains its most famous use case, there are plenty of other applications of the DLT technology in a slew of other industries. Not surprisingly, the traditional banking sector was the among the first industries that Blockchain took by storm. However, after the crypto rout, many naysayers still wonder whether banks are still interested in Blockchain in 2019. In this article, U.Today explains why it could be the case. Here’s how banking institutions can benefit from utilizing the disruptive Blockchain technology:High transaction speed. The major reason why many banks around the world are jumping on the Blockchain bandwagon is the speed of bank transfers. An ordinary bank transfer takes up to three days to be verified, but Blockchain helps to eliminate this long wait by reducing the transfer time to minutes or even seconds. For example, a Switzerland-based startup called Liquineq has managed to design a Blockchain-powered bank transfer platform that is able to process up to 50,000 transactions per second with the help of sharding. In the long-term perspective, Blockchain would allow exchanging money with the speed information moves at today.Top-notch security. Apart from an impressive-speed, Blockchain technology also offers a high level of security. Reduced transaction time means that there are fewer possibilities for someone
23 Oct 2017
3 min read
1
5
