Author Archives: Dan
Dan is a penny stock trader that decided it was time to start playing with crypto currencies several years back. He bought into bitcoin early but sold early. He currently invests in several coins and blogs about it.
Author Archives: Dan
Dan is a penny stock trader that decided it was time to start playing with crypto currencies several years back. He bought into bitcoin early but sold early. He currently invests in several coins and blogs about it.
If you haven't heard of bitcoin you must have been living under a rock (no offence to those who actually live under rocks). Since its abrupt rise in value during the past year or so, Bitcoin has certainly become a household word for millions of people. What few people realize, however, is that there are hundreds of different types of cryptocurrencies available.
Altcoins, which simply refers to “Bitcoin alternatives”, are wide and varied and represent a unique investment alternative for people interested in the crypto market. At the time of writing this article, Coin Market Cap listed over 900 different cryptocurrencies. This means that there are numerous opportunities to invest in Altcoins, many of which are directed towards certain ends and purposes that attract certain types of investors.
While researching the different Altcoins available and understanding how they work is an essential task for any potential investor, you also need to find an Alt coin wallet that will safely and securely keep your cryptocurrency protected and available to you. Below, we take an in depth look at the best wallet for altcoins currently available online.
While there are literally hundreds of different cryptocurrency wallets on the internet, the five Altcoin wallets reviewed below are quality software programs that allow you to send, receive, and safely store a wide variety of different Altcoins.
Cryptonator: While the name of this wallet might remind you of an Arnold Schwarzenegger film, it is actually one of the best wallets for Altcoins. It has a built in exchange app for a wide variety of cryptocurrencies including Bitcoin, Litecoin, and Dogecoin. One of the downsides of this wallet is that your private key is not necessarily yours, but rather is safeguarded by the company. However, they store over 90% of their data on offline servers, thus making it generally safe to keep your altcoins stored with them. If you are looking for an easy way to invest in Altcoins and exchange different coins based on their fluctuating market value, this wallet is an easy and simple way to get involved in the world of cryptocurrency trading.
Komodo Wallets: This company recently acquired Agama, so many people might recognize the Agama namesake. Komodo wallets offer support for 12 different cryptocurrencies and works well with several different types of operating systems including Mac, Windows, and even Linux. While they do offer both desktop and paper wallets, Komodo is still working on a mobile app for their wallet. Furthermore, this best alt coin wallet is unique in that you can run this wallet in several different modes. You can either download the blockchain for every different Altcoin that you plan to purchase, or you can run the program in basilisk mode. While this might make the wallet run a little slower, you do not have to worry about having to download heavy blockchain apps for each and every coin you have. This is a major benefit for investors looking to purchase small amounts of different types of alt coins.
Exodus: If you are looking for an easy to use desktop wallet for your Altcoins that makes it easy to understand how to send, receive, and store your cryptocurrencies, Exodus wallet might be the best option for you. This altcoin wallet gives you complete control over your private keys and also encrypts them for you, thus offering maximum security and privacy. Furthermore, this wallet allows you to easily exchange your cryptocurrency with one easy click, thus switching between the eight altcoins that they currently support. If you are looking to invest in some of the more obscure Alt coins, this wallet isn’t for you as they only support coins that are in the top 20 market cap for cryptocurrencies.
Jaxx: Jaxx is considered by many cryptocurrency experts to be the best wallet for altcoins, especially for Ethereum and other popular alternatives to Bitcoin. Furthermore, this wallet has a unique built in exchange platform as well as a mobile and desktop app. The cold storage program that they offer keeps your coins protected and off-line, though it does not include encryption services. Furthermore, Jaxx is reportedly in the process of adding platforms for a wide variety of new alt coins. This alt coin wallet could very well become one of the best for people looking to bring together different cryptocurrencies into one, easy to manage investment platform.
Coinomi: Lastly, we come to Coinomi. This widely used cryptocurrency wallet supports several different types of altcoins. While many Altcoin wallets only support 10 to 12 Altcoins, Coinomi supports upwards of 64 different Altcoins. Furthermore, they have a built in exchange platform that makes it extremely easy to buy and sell your different types of Altcoins. The privacy setting associated with this alt coin wallet is also second to none, as Coinomi is an open source software and is committed to storing your private keys locally while also encrypting these keys for maximum privacy.
In recent months, the cryptocurrency market has been affected by the decision of several large online platforms to ban all types of ads that contain different types of crypto related content. Advertising and publicity are essential to almost every type of company and business, and this decision is certainly affecting the cryptocurrency market from continuing to grow.
Earlier this month, Bitcoin, the most popular and well-known cryptocurrency fell 9% to below $8,000 dollars, and many experts attributed this most recent fall in value to the decision by Google and other influential online platforms to ban all types of cryptocurrency advertising.
One of the first major online companies to ban crypto ads was Facebook. At the end of January of this year, the company went public with the decision to ban all sorts of crypto ads from their online platforms. About a month later in early March, the tech giant Google repeated this policy as they also created policies banning crypto ads, including initial coin offerings (ICOs), wallets, trading advice, market predictions, and more. Google will not begin to actively ban crypto ads until June of this year, though the policies are already in place.
Earlier this week, Twitter followed the steps of their main competitors by also blocking all crypto ads from showing up on Twitter feeds across the world. A spokesperson for Twitter confirmed yesterday that:
“we are committed to ensuring the safety of the Twitter community. As such, we have added a new policy for Twitter Ads relating to cryptocurrency. Under this new policy, the advertisement of Initial Coin Offerings (ICOs) and token sales will be prohibited globally. We will continue to iterate and improve upon this policy as the industry evolves.”
Snapchat is yet another well-known online platform that is banning crypto ads as well.
The parent company of Google, Alphabet, makes enormous amount of money from online advertising, and they are obviously concerned about protecting the image of safety and security on their online platforms.
Google recently released a “trust and safety” report on the advertising spaces they offer, and the decision to ban crypto ads might very well stem from a company concern about the perceived safety of investing in cryptocurrency due to the volatility of the market and the high number of unregulated ICOs popping up around the internet.
Google, along with Facebook and Twitter, actively monitor the ads that are placed on their online platforms as a way to supposedly protect users from fraud, scams, and other schemes that often fill the internet. While cryptocurrencies have proven to be a legitimate investment opportunity for millions of people, the fact that much of the market is unregulated by government institutions has been one of the leading motivations for Google, Facebook, and Twitter to ban any and all crypto ads on their online platforms.
In the short term, the news of the ban of crypto ads will most likely negatively affect the crypto market. The media tends to dramatize any new announcement, and given the popularity of cryptocurrencies in the news during the past months, the media attention to these bans should cause a dip in the market value of many types of cryptocurrencies. The current dip in Bitcoin´s value certainly seems to confirm this short-term effect.
A longer-term negative effect that is possible is that several legitimate ICO offerings might find it difficult to get the publicity they need and to find funding for their projects. Nonetheless, one report shows that in 2018, over three billion dollars have already been raised for new ICOs. Despite the Facebook, Twitter, and Google banks, ICO offerings should continue to attract a wide network of investors and enthusiasts.
Lastly, though the ad bans will certainly make it more difficult for cryptocurrencies to gather large scale followings on the main social media channels, it should also strengthen new ways to get the word out related to ICOs and other cryptocurrency ads. Bounty programs or bounty campaigns are one such as way that many crypto businesses are spreading the word about what they offer.
For the moment, there are still several online platforms and websites that allow cryptocurrency ads. Microsoft, which owns the major search engine “Bing” still allows for cryptocurrency ads. Instagram is another major social media company that also has not followed the precedent set by Facebook, Twitter and Google.
Snap is another website that allows cryptocurrency ads, though their official policy bans ads related to initial coin offerings (ICOs). Lastly, AOL and Yahoo, which are owned by Oath (Verizon´s umbrella company), states that they only allow ads and ICOs for certain companies.
Cryptocurrencies have been falling for the past couple of weeks but I am still bullish on long term cryptocurrency ira investing.
Saving for retirement is a major financial goal. The vehicle that the majority of (US) investors use is the Individual Retirement Account (“IRA”). IRAs provide a host of tax benefits. Most investors use them to invest in ‘traditional’ investments such as stocks, bonds, and mutual/index funds.
But in recent years, self-directed IRAs have become more popular. According to global consulting firm McKinsey:
“Global alternative investments across retail and institutional segments doubled in AUM between 2005 and 2011, to $6.5 trillion”.
This is because self-directed IRAs allow you to invest in a far greater range of investments than what you would get in a traditional IRA.
As the name implies, it is simply an IRA where the owner of the account handles all investment decisions made through said account. This freedom allows the account owner, you, to invest in alternative investments such as real estate, precious metals, collectibles, and yes, even cryptocurrencies.
You have plenty of options when choosing a self-directed IRA custodian. However, it would also depend on which alternative asset class you wish to invest in. Once you’ve selected a reputable and relevant custodian, you can then fund your self-directed IRA as per the standard IRA rules (up to $5,500 per year if you’re under 50 and $6,500 per year if you’re over 50). You can also choose to roll over funds from other retirement plans, such as your regular IRAs or 401(k) into your self-directed IRA.
The withdrawal age for a self-directed IRA remains at 59.5, with a 10% early withdrawal penalty. Like the standard IRA, self-directed IRAs can also be traditional (tax deductible in contribution year, taxable upon withdrawal) and Roth self-directed IRAs (taxed on contribution, tax-free on withdrawal).
When deciding between the two you should consider your current and expected income levels, as well as years to retirement. A rule of thumb is that if you are closer to retirement age and with a high income tax bracket, the traditional IRA is a better choice, and vice versa. Here’s a handy comparison table.
A cryptocurrency IRA is a self-directed IRA that is being used to invest in cryptocurrencies. Some people refer to them by the type of cryptocurrency that the IRA holds e.g. Bitcoin IRAs or Ethereum IRAs. For all intents and purposes, they are exactly the same thing.
Before 2014, the IRS’ stance on cryptocurrency holdings and taxations was still unclear. Fortunately in 2014 they issued a notice stating that virtual currency is to be treated as property for federal tax purposes. This clarified things and opened up the way for cryptocurrency IRAs.
But just because you can use your IRA to invest in cryptocurrencies, should you? Let’s consider the main pros and cons.
Portfolio Diversification Away From Fiat Currencies – Most of the currencies in the world used to be backed by gold. Not anymore. Central banks continuously print more money to accommodate their monetary policies, and intelligent investors are rightfully wary. Unlike fiat currencies, each specific cryptocurrency is only in limited supply. For instance, Bitcoin has a hard limit of 21 million coins (of which less than 16.5 million have been mined so far).
Explosive Growth Potential – This one seems obvious. To say that Bitcoin has exploded in value would be an understatement. As of Dec 2017, it is trading at about $15,000, an appreciation of more than 15 times since the beginning of the year! Another cryptocurrency, Ethereum has also seen a price increase of more than 50 times. Putting a small percentage of your retirement portfolio into cryptocurrencies could result in outsized gains. There are no guarantees, but this is a risk that many consider well worth taking.
Long Time Horizon – There is little doubt that cryptocurrencies are here to stay. But the question is, which ones? There are currently over 1,300 cryptocurrencies in existence. Over the long term, it is hard to guess which ones will become the ‘staples’. Bitcoin may have started it all, but it might not be the one that survives. This long term horizon is particularly an issue since we are talking about using a self-directed IRA, in which you cannot make withdrawals without penalty until age 59.5. The farther away you are from retirement age, the higher the risk.
High Volatility – Cryptocurrencies are extremely volatile. This is due to their limited supply coupled with the fact with that their total value remains relatively small still (a $416 billion total market cap, which is less than Apple). However you will be somewhat protected against this volatility if you are investing in them via an IRA due to withdrawal rules. Even so it can be nerve wracking to watch the value of your investments move so much. If you are not emotionally prepared, don’t do it.
More Security Issues – Security issues surrounding cryptocurrencies have been well highlighted. Total value lost from the various hacks is more than half a billion dollars. However, most exchanges have greatly improved their security. Further, options such has hardware wallets are a very safe way to store your cryptocurrencies.
Ethereum is the second most popular cryptocurrency after Bitcoin. While it remains far cheaper than Bitcoin, at $449 as of Dec 2017, that is still a gain of more than 50x since January! Nevertheless its cheaper price means that many investors are looking at it as one of the most viable Bitcoin alternatives. There is also one important difference between the two that may make an Ethereum IRA more suitable for you.
Ethereum is also a blockchain platform that facilitates peer-to-peer contracts and applications. These ‘smart contracts’ are stored on the decentralized blockchain, which makes verification easy and fraud difficult. Decentralized is the key word, with all smart contracts replicated on every computer in the network. A common analogy in the crypto-community is ‘Bitcoin is digital gold while Ethereum is digital oil’. You can even create your own cryptocurrency on the Ethereum network (which many have).
This is the main feature that differentiates Ethereum from the other cryptocurrencies. It is also the one that appears to have the most long term applications. Because of this, long term investors i.e. those investing for retirement, may benefit more from an Ethereum IRA over a Bitcoin IRA. For more on Ethereum vs. Bitcoin, check out this article.
Investing in cryptocurrency itself can seem daunting to a newbie. So investing in cryptocurrencies via an IRA may seem even harder. Here’s an easy way and a more complex one.
In the DIY version, you have to set up an LLC (for IRS compliance purposes). Your IRA custodian will hold this LLC as its asset. Although not technically the owner, you are the manager and thus choose how to invest the funds. From there, you can set up an account on the cryptocurrency exchange of your choice. But make sure that the account is set up under the LLC’s name.
Finding a cryptocurrency exchange that allows you to register an account under an LLC can be difficult. Further, if you decide to hold the cryptocurrency in a hardware wallet (recommended for larger amounts), make sure that the LLC owns the wallet. You can do this by using a debit card linked to the IRA’s checking account to purchase said wallet.
Does the above sound too complicated for you? If so, you can consult IRA custodians that specialize in cryptocurrency IRAs. These companies will guide you through the entire process with minimal hassle. Two popular companies offering cryptocurrencies today are Bitcoin IRA and Regal Wallet.
Speaking to CNBC a day after Christmas, Julian Hosp, Bitcoin entrepreneur and founder of TenX, a platform that allows users to spend and exchange virtual currencies in real time, said that “I think we're going to see bitcoin hitting the $60,000 mark, but I also think we're going to see bitcoin hitting the $5,000 mark.”
Nick Colas, an analyst who’s been covering Bitcoin for more than 4 years, most recently for DataTrek Research, said recently that the alt-coin could trade in a range of $6,500 to $22,000 in 2018.
Colin First, an analyst with FX Empire, believes that the market will stabilize next year, meaning that bitcoin will trade in the $10,000 to $50,000 range, which is far less volatility (5x) than we’ve seen in 2017’s (22x). He attributes the slower pace in price increase to a maturing market, bigger diversification in the alt-coin category and policy makers getting involved in the market.
The pattern that is clearly emerging here is that Bitcoin is a very volatile asset and that it is highly-speculative. Colas added that he sees Bitcoin losing market share to competitors as one of the drivers and that he expects “at least four crashes” of 40 percent or more in the year to come.
Bitcoin started off 2017 at around $900 and rallied to a record high above $19,800 midway through December. The alternative currency then went on to lose a third of its value in a single day, briefly sinking below $11,000 before regaining some of the ground it lost.
It’s a lot of different things, including these:
Many experts, including Hosp, as well as famed economist Paul Krugman, are likening the current situation regarding Bitcoin to the Dotcom bubble of the late 1990s and we all know what happened then.
After a brief period of licking wounds and reorganization, the modern internet was born, with Google and Amazon both launching among the ruins of that period. Lots of people are predicting the exact same thing here. After a period of high volatility with many winners and even more losers, cryptocurrencies will take a permanent seat at the global economic table.
As of May 2018, the price of a single Bitcoin is around $8,000 mark. Millions of people now regret not buying Bitcoin years ago. You’re probably one of them. Did you miss the boat? Is it too late to start investing in cryptocurrencies. The price has been fluctuating over the past few months but the general consensus is bullish.
The bad news is you missed out on your chance to become an easy millionaire through Bitcoin. But the good news is that it is not too late to begin investing in cryptocurrencies. In this guide, we will show you how to invest in cryptocurrency, namely Bitcoin, and how to profit from it.
Hype and fast money is what is drawing a lot of cryptocurrency investment today. This is not a good investment strategy at all, and is like gambling. The early adopters of Bitcoin (and those who have thus profited the most from its meteoric rise in price) were true believers. They believed that Bitcoin would become the first hard world currency that could not be manipulated by governments or central banks. In their ideal future, Bitcoin would eventually replace fiat currencies such as the dollar or the yuan.
Because of these beliefs, these early adopters were like long term investors. They did not use Bitcoin with the intent of a quick exit or fast profit. Hence, they did not worry about the inherent volatility in its value. If you wish to invest in cryptocurrencies, you should do your best to follow their mindset.
Cryptocurrencies may be currencies, but their trading patterns are more like volatile commodities. The central bank can and does print more fiat money to support its monetary policies (hence the continuously increasing money supply). But there is a hard limit on the number of cryptocurrency coins in circulation
For instance, the hard limit on Bitcoin is 21 million coins. How many bitcoins are left, you wonder? Well, according to Coinmarketcap, at present, there are 16.7 million Bitcoins in circulation. This means that there is only 4.3 million Bitcoins left to be mined.
Hence, because of the limited supply, volatility is naturally higher compared to fiat currencies. Volatility is further increased because the total value of cryptocurrencies is still relatively small. Coinmarketcap shows that the total value of all cryptocurrencies (over 1,300 of them) is $382.5 billion. That’s less than the market cap of Apple, Amazon, or even JP Morgan Chase.
The procedures for investing in cryptocurrencies can seem daunting to a newbie. The jargon itself is unfamiliar. But it is much simpler than you might think. Here, we have broken the process down to three basic steps.
There are over 1,300 cryptocurrencies in existence today. You will probably choose to invest in the more popular cryptocurrencies, such as Bitcoin, Ether, and Litecoin. Most of the major exchanges will offer these top cryptocurrencies. However, you will have to seek out specific exchanges for the more obscure ones.
Coinmarketcap currently lists 174 exchanges. The list shows you the size of each exchange (defined as traded volume, currently Bithumb is in first place), the currency pairs (the fiat currency you can use to buy a certain cryptocurrency), and the price.
What set the exchanges apart are usually user interfaces and fees. Depending on where you live, geographical restrictions may also come into play. Keep in mind that once you’ve chosen your exchange, you will need to verify your account. There are no anonymous sign ups here; you will be expected to provide proper identification documents. Fraud is a huge concern for exchanges since blockchain transactions cannot be cancelled or refunded. Further, remember that although the cryptocurrency is decentralized, the fiat currency you use to buy it is not.
Security is a huge issue in the cryptocurrency community. No doubt you’ve read about the many hacks that have occurred in the preceding years, with hundreds of millions of dollars in value stolen. Hence, it is important that you decide how you intend to store your cryptocurrency.
Before we proceed, you should understand that all transactions on the blockchain are public, viewable in the form of public keys. Private keys show ownership of a linked public key, and these private keys are what cryptocurrency wallets store. If someone gets access to your private key, they will be able to access your cryptocurrency.
There are two types of storage options: hot and cold. Depending on your own situation, you can use either option or a combination of both.
Hot Storage is when you keep your cryptocurrency on a wallet that is connected to the Internet. If you intend to use and access your cryptocurrencies often, then you need a hot wallet. This can range from wallets offered by your exchange to both desktop and mobile clients. While more convenient, hot storage leaves you more vulnerable to hacking. Another benefit of hot wallets is that they are often free. Coinbase and Jaxx are two free and popular hot wallets.
Cold Storage is when you store your cryptocurrency on a non-internet connected device. These are also known as hardware wallets and are designed for the sole purpose of keeping your private keys safe. Unless the hardware wallet itself (which can be further protected by a PIN code) gets stolen, your cryptocurrencies are safe. The drawback is that hardware wallets are not free (averaging around $100), and are not the most convenient option for daily use.
Think of them like your own steel safe. If you have a significant amount of cryptocurrencies, or are more of a ‘cryptocurrency investor’ as opposed to a ‘cryptocurrency user’, we strongly recommend investing in one. Two popular hardware wallets are the Nano Ledger S and Trezor.
That’s it, you’re pretty much all set up! Just remember that every blockchain transaction from your wallet will cost you a nominal transaction fee. If you wish to transfer your cryptocurrency out of a particular exchange, just enter your wallet’s public key into their website.
To close off this mini-guide, we have to address this question. Despite what the cryptocurrency idealists say, the truth is that many people are still looking at cryptocurrency, and in particular, Bitcoin, as a pure profit enterprise. Well, as of 2018, here are the three primary strategies for making money with Bitcoin explained.
Self-explanatory. With how the price of Bitcoin has only trended upwards last year, this might be the best strategy at the moment. Minimal time and effort required.
A more complex strategy that requires a significant investment of both time and effort. Not recommended for cryptocurrency beginners. If you wish to start trading cryptocurrencies, we recommend starting with crypto/fiat currency pairs. Trading crypto/crypto pairs is far more complex and risky. Finally, do not fall into the ‘margin trading’ trap unless you absolutely know what you are doing; this is a good way to lose all your money in an instant.
Before the meteoric rise in the price of Bitcoin, mining was the most common way to make money from Bitcoin. But in 2018, competition is intense. Individual miners face stiff competition from huge mining farms run by foreign competitors. While you can still make money from Bitcoin mining as an individual, you have to be realistic. Try this online tool to get an estimate of your mining profit based on your computer’s hashing power. Don’t forget to take your electricity costs into account.