The online cryptocurrency Bitcoin is rapidly becoming 2017’s go-to currency. The Bitcoin demand is on the rise, and one Bitcoin is worth around $1010 and rising. Currently, there is a threat of a “hard fork” on the cryptocurrency network, causing many users to concern over their cryptocurrency accounts. Bitcoin is a form of digital currency, which is not controlled by any organisation originally developed by a software developer called Satoshi Nakamoto. The idea was to create a decentralised form of currency, which would be used for economic transactions with low transaction fees, according to CoinDesk.

Bitcoin price surpassed the $1,115 mark during the early hours of March 22, 2017.

Where does a Bitcoin come from?

Bitcoins are not printed physically because they are created digitally by a community of people that can be joined by anyone in the world. The currency creates “mining” bitcoins, which means that transactions for online coins are tracked by computers, in order to confirm that they have a monetary value.

The copy for every blockchain is available for anyone participating in the cryptocurrency business, but miners have to confirm that the blocks -seeing as they’re not being regulated by anyone- are in fact a legitimate transaction. To do this, they run a mathematical formula to the block, turning it into a “hash,” that allows miners to know if a block has been tampered with, meaning that the block is fake.

 

Bitcoins are not physically printed, but instead, they are digitally verified.

“The bitcoin network deals with this by collecting all of the transactions made during set period into a list, called a block. It’s the miners’ job to confirm those transactions, and write them into a general ledger,” explains CoinDesk. “This general ledger is a long list of blocks, known as the ‘blockchain’. It can be used to explore any transaction made between any bitcoin addresses, at any point of the network”.

Miners use hashes to seal off a block, and they use software written to mine the blocks. When a miner creates a successful hash, they earn 25 bitcoins, and the information is added to the blockchain. However, creating hashes from data available isn’t too hard -although more specifications to filter the number of successful hashes have been added- and the cryptocurrency network is growing larger every day.

Upcoming hard fork could be worse than ‘Ethereum’s hard fork’

Cryptocurrency is growing so fast as a currency option, that a hard fork is predicted for Bitcoins. Circle Internet Financial, a technology company that offers user online wallets for cryptocurrencies, sent out an email to users on Monday suggesting that they should sell all of their bitcoins, to avoid the potential consequences of the upcoming hard fork.

The tech company used to trade bitcoins while users were able to sell and buy bitcoins on the page, but it stopped offering the service in December, only keeping the online wallets. The company explained in the email, that if a hard fork were to happen, their bitcoin services would be disrupted for an extended period of time.

 

Analysts are predicting a possible hard fork regarding Bitcoins.

“As it relates to blockchain technology, a hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid block/transactions valid (or vice-versa), and as such requires all nods or users to upgrade to the latest version of the protocol software,” according to Investopedia. “This essentially creates a fork in the blockchain, one path which follows the new upgraded blockchain, and one path which continues along the old path.”

The hard fork is not unheard of in the cryptocurrency network. Last year, the “Ethereum hard fork” took place in October, when a software development team, named Ethereum, designed a hard fork to increase the gas cost of transactions. However, the hard fork increased the number of service attacks, known as DoS attacks. This has lead to Bitcoin users raising their concern about the called “replay” attacks that the server may suffer after the hard fork. The Merkle describes the bitcoin replay attack as an issue that would allow attackers to steal other user’s coins. The coins stolen may or may not go to the attacker’s wallet, but either way, the vulnerability could empty users’ wallets.

The rise in cryptocurrency exchange

The rise of cryptocurrency is fueled by economic measures around the world, as the bitcoin is calculated taken the world’s economy into account. Estimates predict that with President Trump’s economic policies, the currency could rise to $2,000 dollars in 2017. The rise has been real, as in early December the Bitcoin was traded at $754. Boby Lee, CEO of BTCC talked to CoinDesk about the rise in the cryptocurrency.

“I think 2017 could be a continuation of 2016, in terms of it being a growth year for bitcoin’s price,” said Lee. “We are clearly in a bull market for bitcoin now, and my experience tells me that bitcoin bull markets don’t end until the previous high ($1,150 in December 2013) is exceeded, and that the new price is several multiples higher than the previous high.”

Experts and cryptocurrency-trading companies say that there is a plan to protect users’ Bitcoins in the event of a hard fork. However, if a hard fork takes place, two copies of the blockchain, two networks and two versions of the software would be created, leaving users to gamble on which one to use. Experts also said that if the hard fork takes place, all exchanges are likely to freeze for a period of time before and after it occurs.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Top Cryptocurrencies With High Block Rewards

With so many alternative cryptocurrencies in existence, it becomes difficult for developers to make their coin stand out. Some developers prefer to offer large block rewards, even though that will only add to coin inflation as time progresses. Below are some of the alternative cryptocurrencies with the largest block rewards in history. Not all of these projects are still operational today, though.

While the list is ranked based on the raw amount of coins that a cryptocurrency’s network rewards, we also measured each crypto’s reward as a function of its total supply. You will be surprised to find out that while a cryptocurrency may reward users with 10,000 coins per block when factoring in its total supply some of the coins’ rewards are very close to that of Bitcoin. This is a reminder to always keep data in perspective.

Bonus

                                                  

Perhaps the only altcoin with a somewhat intriguing name is Bonus, listed as BNS on various cryptocurrency exchanges. Although this altcoin doesn’t offer much in terms of innovation, the block reward of at least 2,300 BNS is plenty of reason for some miners to jump in. The block reward rate of 2,300 is the minimum as a random bonus will be assigned on top of the original reward.

If we were to compare Bonus’ reward to that of Bitcoin, since there are 2.5 billion BNS in circulation, a 2300 block reward would equate to a 23 BTC reward if the network was Bitcoin. Remember that Bitcoin would have 21 million total coins in existence which is roughly 1/1000 that of BNS. It is important to keep these values in perspective when comparing block rewards.

Mazacoin

                                                   

MazaCoin is one of those altcoins which has seemingly been around for quite some time. Despite gaining some initial momentum, there are very few use cases for this particular currency. That said, the coin made it onto Poloniex, which is considered to be the leading altcoin exchange to date. Mazacoin had an initial block reward of 5,000, which halves every 12 months. Due to its low trading volume on exchanges, and the 50 million pre mine MazaCoin never amounted to much. With a total supply of around 2.4 billion and a block reward of 5,000, if MazaCoin was a Bitcoin network, the reward would be roughly 50 BTC.

EarthCoin

                                                  

At one point in time, many people thought Earthcoin could become the next Dogecoin. Rather than positioning itself as a meme, EarthCoin intended to change the world and protect out natural ecosystem  Things did not work out all that well. With a variable block reward – usually, around 10,000 – the coin is plagued by significant inflation. With no clear use cases and no one interested in using Earthcoin, that inflationary supply is doing more harm than good. With a supply of 13.5 billion and a block reward of 10,000, Earthcoin has roughly 500 times the supply than that of Bitcoin. If it were a Bitcoin network, the reward would be around 20 BTC.

Dogecoin

                                                    

Once called the joke-coin of the internet, Dogecoin turned into something much more powerful than that. Dogecoin gained a lot of mainstream media recognition by sponsored various sports teams and even a NASCAR driver. Even though there is no limit as to how many Dogecoins can be generated in the end, many people still like this concept. The current block reward still sits around 250,000 DOGE, which is way too high. Dogecoin still generates a fair bit of trading volume across exchanges, though. With its current supply of 108.619 billion coins, there are a lot of DOGE in the world. In fact, the number of coins is 5,172 times higher than bitcoin. If this were a bitcoin network, the block reward would be 48.34 BTC.

ReddCoin

                                                    

When it comes to finding an altcoin with a very large supply, look no further than Reddcoin. There will be 109 billion coins at the end, which will be achieved due to the currency’s high block reward. After initially starting at 300,000 RDD per block, the reward dropped to the 100,000 mark. However, the currency eventually dropped proof-of-work altogether.  It is not a surprise the value of RDD has tanked significantly as more time elapsed. Reddcoin has a total supply of 28.279 billion, resulting in there being 1,346 as many coins as bitcoin. If this were a bitcoin network, the block reward would be 74.29 BTC.

                                                                       MoonCoin

                                                 

When MoonCoin was first introduced, a lot of people were very sceptical about this process. The developer deliberately introduced significant block rewards, which started at two million MOON. As more time progressed, the reward dropped to 1 million, although mining was halted shortly afterwards. With so many coins in circulation and no way to spend them other than selling MOON in favour of bitcoin, this project ground to a halt pretty quickly. It is still the altcoin with the highest block reward during the time it was actively mined. The current MoonCoin supply sits at 221.64 billion MOON, making it 10,554 times as common as bitcoin. If this were a bitcoin network, the block reward would be 94.75 BTC.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Strategies and Tips for Trading Cryptocurrency

Trading is not Cut in Dry

One fact of trading that’s best to make peace with is that you’re never going to perfectly time your buys and sells. What are the chances you’re going to purchase at the exact bottom and sell at the exact top, coupled with putting enough capital into the trade to make a dent in your wealth, Trading is not cut in dry in the sense that there is only one set path to take. Every person has different goals in investing and trading, and cryptocurrency trading is similar in that regard.

We know firsthand what it’s like to kick yourself over trades that haven’t worked or worked spectacularly yet not have the desired position size. All you can do is live in the now, the past is over. After all, hindsight is 20-20. It would’ve been nice to go all in when Bitcoin was $600 a year ago and cash out on a high return, but that’s not how it works. Imagine if you bought in 2013 when Bitcoin was 1,000, panicked when it dropped to 200 then sold? Imagine that sting. Hindsight is 20-20, we can’t predict the future. Learn from past successes and failures and apply it moving forward. Here are some tips, in our experience, for new cryptocurrency investors.

Understand the Power of Cryptocurrency

We liked our approach to stock investing. Bitcoin and cryptocurrencies are commodities; they are not stocks. They have prices, but they are fundamentally different. The exchange may be the only similarity between the two. We know that the underlying technology powering Bitcoin has potential to be adopted for institutional and retail capital alike. Cryptocurrency’s decentralised nature means that it cannot be shut down or manipulated easily. Many people ask why own Bitcoin, it’s that simple. We believe in the future and so should you. So we’re going along with Bitcoin anticipating capital will continue to flow as it’s potential is realised.

Determining a Strategy

How often will you buy or sell? Some people want to be day traders, but we’ve shown that holding could be the best bet. The general rule of thumb is that the longer of a time horizon you plan on holding for the less risk you incur. This rule carries over into the realm of cryptocurrency from stock investing. However, here may be times to simply cut and run. Declines due to unforeseen structural issues are an indicator to cut losses and sell out.

Initial Investments

Dollar cost averaging one’s purchases of Bitcoin reduces risk in sudden changes. This reduces the sting of or sudden pricing changes, reducing reliance on a single point of entry. By increasing your Bitcoin investment over time, you reduce the desire to buy or sell often. If there’s anything we’ve learned from the long run is that Bitcoin is here to stay (knock on wood). Stick to your gut, but don’t ignore others.

Hedge Your Bets

Various exchanges allow short orders. This allows one to place bets on either side of Bitcoin’s price movements. For example, a simple strategy would be to have 90% long and 10% short. This strategy assumes you are more confident in a long position. So this strategy may cater any level of risk.

Altcoin Trading

It is important not to neglect the power of altcoins, or non-bitcoin cryptocurrencies. Altcoins are less prone to public speculation. Their smaller market caps are more prone to larger swings in pricing. Each altcoin has a purpose and an intent, catering to different niches. There are larger risks associated with investing in altcoins, but also larger rewards. Our personal favourites are DASH, ZCash and Monero. An example would be allocating percentages based on your risk tolerance. It’s something like managing a fund. Some altcoins are more stable like Ethereum, while some are more prone to fluctuation. In one instance a trader might allocate 50% in Bitcoin, 25% in Ethereum, 20% in DASH, and 5% in ZCash.

Get into It

As Bitcoin heads toward a new all-time high, many are eager to reap profits. The ETF disapproval is a sign of changing attitudes for Bitcoin. It was unlikely the SEC was going to approve the ETF. This reinforces how important it is to stay up to date. Get involved; chat on boards, comment on blogs, and follow news on social media. A viable strategy for one person may not work for another. It’s all for naught if you don’t appreciate the power that cryptocurrencies mean.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member