Recently I attended the North American Bitcoin Conference in Miami. Ledger, one of the leading hardware wallets manufacturers were selling their merchandise at the event and I decided to finally do my Ledger Nano S review which I have postponed far too long.
So I bought myself a specially engraved Ledger Nano S created just for the conference and today I’m testing it out for the first time. If you’ve been an avid reader of 99Bitcoins you probably know I’m a long time fan of TREZOR, Ledger’s main competitor. But I’ve been hearing so many good things about the Ledger Nano that I decided to do a TREZOR vs Ledger type of comparison.
Before I begin my review a quick word about Bitcoin hardware wallets. Hardware wallets are probably the most robust form of security you can have for your Bitcoins or any other cryptocurrency. They allow you to send and receive Bitcoins on any computer, even one that is compromised with malware, with the knowledge that your transaction will still go through as intended. For more information about Bitcoin wallets in general watch out latest Bitcoin Whiteboard Tuesday episode.
The way the hardware wallets achieve maximum security is by storing your private key and signing your Bitcoin transactions offline so someone trying to “hack” your wallet remotely won’t be able to do so. Most hardware wallets also use a second screen / device to verify actions on your wallet such as signing transaction. This way, if a hacker gain control over your computer, he still can’t do any harm since he requires access to the physical device connected to your computer as well.
I’ve reviewed the former Ledger model, the Ledger Nano in the past. Back then I concluded that the added protection that a TREZOR wallet gives you with it’s second screen protection is superior to the Ledger Nano. However the Ledger Nano S now features a second screen feature as well. So this comparison is going to be interesting.
Design-wise the products are pretty much the same. Both are small and compact, however the Ledger Nano S does have a slight advantage in the sense that its metal casing makes it more durable in my opinion (and also a bit sexier). Both wallets will both fit pretty easily into your pocket or hand as can be seen below.
The way the Ledger Nano S works is pretty similar to any hardware wallet. When you first set it up you will choose a PIN to protect the device from unwanted access. Later, you will receive a 24 word seed that will be used to create your private keys (this is what’s known as an HD wallet, more on that here). This seed should be written down in a safe place and NOT on your computer, as whoever knows this seed has control over your Bitcoins. A good suggestion would be to write this seed down using a Cryptosteel device.
The Ledger Nano S has two buttons that allow you to control it. The initial set up of the device is pretty simple and takes about 3 minutes. Most of the time is spent on writing down your seed.
This seed creation is one of the places where the second screen comes into play. If your computer is compromised a hacker will be able to see the seed if it’s displayed on your screen. This is exactly why the seed words are shown on the small device screen that is tamper-proof, so you know that only you see your seed.
Once the device is set up, all that’s left is to install an app that allows you to interface with the device (i.e. send and receive Bitcoins).
The app I used is a Chrome extension that gives you the following functionalities:
The app is pretty similar to the one TREZOR uses although it has a sleeker design.
The interface (as shown above) is pretty intuitive and doesn’t require any manual to get the hang of it. Also you can rename accounts and don’t have to call them in general names like “account #1”. TREZOR allows this as well but requires you to connect a Dropbox account.
The Ledger Nano S can also use existing Bitcoin wallets instead of the current chrome extension interface. Such wallets include MyCellium, Electrum, Bitgo, GreenBits, Copay and MyEtherWallet.
Here’s a complete review of how the device works done by BTC Sessions on YouTube:
The Ledger Nano S includes Bitcoin, Litecoin, Ethereum and Ethereum Classic companion apps, and other blockchain-based cryptocurrencies. Here are the current altcoins supported:
You can send and receive payments, check your accounts and manage multiple addresses for each currency from the same device.
TREZOR on the other hand recently announced that they have partnered with MyEtherWallet to support Ethereum on their device as well. Other currencies supported through TREZOR are Dash, Zcash and Litecoin (via Electrum LTC).
Ledger was founded in 2015 in France. The company has since gained substantial traction in the Bitcoin and cryptocurrency sphere and has grown to be a worthy competitor to SatoshiLabs (the creators of TREZOR). TREZOR on the other hand has been in the market since 2014.
Both Ledger and TREZOR use open source code for their apps, and both have demonstrated excellent customer support and stability in the past few years. Even though TREZOR is the more mature and respected company, it’s hard to say the Ledger falls behind.
The Ledger Nano S sells for €58 (about $65) while the TREZOR sells for $99. This makes the Nano S a more attractive bargain since their features are almost identical. One can argue that the TREZOR can also act as a password manager but I’m not sure how useful this feature is at the moment.
In all honesty, I think the Ledger Nano S wins due to the lower price. But both companies created a great product. The Ledger Nano S seems to have the upper hand in design and usability, while TREZOR’s reputation has more impact in the community (although not by much). Since most of us are price sensitive in this case the price tag tips the scale towards Ledger.
Personally, I use a TREZOR, mainly because when I first started using hardware wallets Ledger wasn’t around yet. Today I think I may start using both, storing some of my funds on a TREZOR and some on a Ledger. I have to say that the progress Ledger has made in the past year is truly impressive, and there product shows it.
U.S. regulators slapped the bitcoin exchange BTC-e with a $110 million fine for a slew of alleged financial crimes from facilitating dark net drug sales to financing public corruption.
One of the site’s operators, a Russian national, Alexander Vinnik, was arrested in Greece this week and the Treasury Department’s Financial Crimes Enforcement Network assessed a $12 million penalty against him for his alleged role.
BTC-e is one of the world’s virtual currency exchanges by volume and has conducted over $296 million in bitcoin transactions, Fincen said Thursday. The company facilitated ransomware, computer hacking, identity theft, tax refund fraud schemes and drug trafficking, the agency said.
The fine was the Treasury’s first action against a money-services business located in a foreign country, and the second against a virtual currency exchange. (Ripple was the first in 2015, but its six-figure fine pales in comparison to BTC-e’s.)
It was also the second action this week by a U.S. regulator in the cryptocurrency space. The Securities and Exchange Commission released an investigative report on Tuesday that concluded certain so-called initial coin offerings are subject federal securities laws, potentially cooling a white-hot funding market for startups and software developers.
The BTC-e action “should be a strong deterrent to anyone who thinks that they can facilitate ransomware, dark net drug sales, or conduct other illicit activity using encrypted virtual currency,” Fincen’s acting director, Jamal El-Hindi, said in a press release.
BTC-e failed to obtain required information from customers beyond a username, a password and an email address, Fincen said. It also did not prevent money laundering, as users openly and explicitly discussed criminal activity on BTC-E’s user chat, and gave advice on how to process and access money from illegal drug sales from dark net markets like Silk Road, Hansa Market and AlphaBay, the agency said.
From 2011 to 2014, BTC-e processed transactions totaling 300,000 bitcoin stolen from another bitcoin exchange, the now-defunct Mt. Gox, Fincen said. It also concealed its geographic location and its ownership, violating U.S. anti-money-laundering laws and regulations, the regulator said.
As of Thursday morning, the BTC-e site was down; a maintenance situation was cited.
Fincen worked with the U.S. Attorney’s Office for the Northern District of California on assessing the fine. The Internal Revenue Service’s criminal investigation division, the FBI, Secret Service and Department of Homeland Security conducted the criminal investigation.
Monday marked the seventh anniversary of what is said to be the first recorded instance of Bitcoins being used in a real-world transaction. Over the course of seven years, Bitcoin’s value has multiplied 879,999 times. If an investor had decided to spend five dollars on about 2,000 Bitcoins back then, that stake would be worth $4.4 million today. With $1,200 spent on some 480,000 Bitcoins, the investor would be worth at least $1.1 billion today.
Bloomberg interview with Bill Gates. “Bitcoin is the answer.”
At first, Bitcoin didn’t really catch on, and it was solely the domain of the early adopters. There were very few businesses which accepted bitcoin as a payment method, and it was something which was almost frowned upon by most governments. As more and more businesses and governments accepted bitcoin, it gradually went up in value, more and more people were starting to embrace the idea of a decentralized currency, and as more people jumped on board, the price began to rise. Since the beginning of the year 2017, the value of Bitcoin spiked after gaining legitimacy in countries like Japan.
The main advantage of bitcoin is that it is decentralized – meaning, there’s no central bank or government which controls it. This freedom is the main reason why Investors have come to see the currency as something of a safe-haven-asset in a problematic geopolitical world — and there’s been plenty of that in recent months in Europe, Russia, Brazil and the United States. There is also an additional advantage in Bitcoin – there is a mathematical limitation to the number of Bitcoins that can be created, which means – no printing money, so the rules of economy work perfectly. Where there is a limited supply of something, and the demand goes up, the price goes up along with it.
Wences Casares has been called Bitcoin’s “patient zero” by the Silicon Valley elite. He got Bill Gates, Reid Hoffman, and countless other luminaries into Bitcoin at gatherings of the rich and famous such as Sun Valley.
The Argentinian-born Casares has founded an internet service provider, a video game company, and a bank, plus he sits on the board of PayPal, but it’s Bitcoin that Casares says he’s dedicating the rest of his life to, and he now runs a startup called Xapo that stores Bitcoin. At a dinner organized by the cryptocurrency policy group Coin Center in New York last night, Casares delivered the keynote speech, including some advice about how to get into Bitcoin.
The formula, according to Casares? Take 1% or less of what you own, buy Bitcoin with it, and then forget about it for at least the next five years; ideally the next decade. “You either lose one percent of your net worth, which most people can take, or you make millions.” he told a room of cryptocurrency advocates at the Westin in Times Square.
Casares pegs the odds of bitcoin failing completely and going to zero dollars at 20%. “If it fails, it will be worthless,” he says. “If it succeeds, in five to seven years a single Bitcoin will be worth more than a million dollars.” He puts the chances of success at greater than 50%.
Casares has an interesting reply for those people who believe they have already “missed out” on the bitcoin train and are afraid that they are joining too late. He said he’s seen people who bought bitcoin at cheap prices—as low as $13 who lost money because they tried to trade their way to profits, while those who bought at high prices even just a month ago have done “spectacularly well” by simply buying and holding.
Click this link to register a free account in Etoro. Why Etoro? It’s a fully regulated platform and a brand you can trust. There are endless reviews about Etoro world-wide, and people are very happy with their services. It is much safer to buy bitcoins with a regulated brand like Etoro than any other service.
Make the minimum deposit of $ 200 or more, depending on the amount you wish to invest.
Once you’ve made your deposit, enter in the top search bar the word “Bitcoin” or “btc.”
Click the “trade” button in order to buy the bitcoin currency. Since you’re not going to do any trading, do not touch any settings like “leverage.” Simply select the amount, for example, $200 or any amount for which you wish to buy bitcoins. Set the “stop loss” to let the system know the lowest price your bitcoin price can go to, and then set “take profit” at the highest price in which you’d like to convert back to your currency. For example, in the screenshot below, as soon as I make a $200,000 profit, I wish to sell my bitcoins and take the profit in US dollars.
Click the “open trade” button, and you’re done.
Congratulations! You are now part of the bitcoin community. If the price of the bitcoin rises – you can withdraw your money from Etoro as cash… whenever you want. Think about this – the most you can lose in the deal above is $250, but the profit you can make can be as high as $200,000 if the value of Bitcoin rises as expected. If you were to make the same deal 6 years ago, that same $250 you just put in would be now worth over $2,000,000. So how much will you have this time next year?
The digital currency ecosystem has had a crazy year. The Bitcoin market capitalization has grown from $11 billion on June 5, 2016 to almost $47 billion USD on June 5, 2017.
Negative news during that time included a 120,000 BTC heistfrom Bitfinex, worth $65m then and $350m now. The Winklevoss twins sought to create an exchange traded fund dealing in Bitcoin, but they were denied. Positive events were much broader, including Japan recognizing the coin as a legal payment method, Russia reversing their prior stand against Bitcoin, and Australia adjusting its policies to remove a double taxation problem for those accepting digital currencies.
Now a new phenomenon is sweeping the market, the Initial Coin Offering.
As of May of this year, over $380M has been invested into ICOs. Many of these companies are raising millions of dollars with nothing more than a white paper and a cryptocoin dependent on a small network of nodes running their blockchain. A year ago Bitcoin was 80% of the entire market capitalization of cryptocurrencies, and now it’s less than 50%, despite its meteoric rise in price.
Something is clearly happening here, so I spoke with Michael Terpin, a pioneering investor in the space, James Prestwich of Storj, a company that has offered ICOs on two different blockchain platforms, the co-founder of Ethereum, Anthony Di Iorio, and Ted Livingston, the CEO of KIK, the first $1 billion company to announce an ICO.
But first, what is an Initial Coin Offering? This phrase, like cloud and blockchain before it, is becoming overloaded as the market seeks to explain new concepts.
The idea around an ICO is that you create a digital coin or token and then you offer this coin or token for sale in an initial offering. An ICO is in some ways similar to an initial public offering. Both are done to raise funds, but, instead of stock, your ICO purchase gets you a new type of coin or token, an asset rather than a security.
The token can represent some sort of value or be of value itself. An ICO might involve attributing equity to a token so that ownership gives you voting privileges and access to dividends, which is what the now infamous fund raising effort of The DAOdid. Their use case for a token is the most similar to that of an IPO, however, the majority of use cases are for something different. The typical use case of a token issued in an ICO is the creation of an asset that gives you access to the features of a particular project. Instead of having cash or Bitcoin as the way to pay for goods and services from the ICO offerer, you use their token. You can think of these tokens as being similar to a store specific loyalty point, something you purchase with a general purpose digital currency and use at a specific location.
Ok great, now you have digital store specific loyalty point, why are these loyalty points so special? The reasons are tradability and use in decentralized applications.
Because these tokenized loyalty points are put onto a public blockchain, the points are not limited to being traded in exchange for services within the platform, but instead can be traded anywhere. If there is enough activity within a given ICO’s environment, their tokens will become globally traded on the various exchanges that handle cryptocurrencies. Successful ICOs are the product of careful thought on economics and game theory, and as a feature they intend that their tokens will increase in value as the volume of the activity on their platform rises.
As such, these loyalty points now have a variable value, based off of market perception and growing use of the platform. This creates a very interesting incentive mechanism because now the users of the platform who are receiving the tokens have incentives to bring other users to the platform in order to increase the value of their tokens.
I spoke with Anthony Di Iorio, co-founder of Ethereum, the most successful ICO to date with over a $35 billion market cap, on the benefits of combining a token with a crowdsale. “Part of the goal of the [Ethereum] crowdsale was to create a community of ambassadors for the Ethereum project. We managed to grow our base of ambassadors by attending meetups around the world, targeting groups and leaders in certain communities. Once they got on board, these communities would become advocates for our project. In addition to being able to conjure up a massive community behind the project, about 9,000 people participated in the crowdsale, we were able to sell across the world.”
Combining a token with an initial offering through a crowdsale allows you to build an international network of early adopters and investors who will actively work to educate and spread awareness of your project. Unlike a traditional crowdsale on a system like Kickstarter, where the users who invest typically only have an incentive to invite others to enjoy the product with friends and family, the users who participate in a token crowdsale have the additional incentive of a gain on the value of their asset.
So what about the use case for decentralized applications? This is not as easily applied for typical companies. This assumes that you want to create an application that, instead of being centrally hosted by a company, is hosted in a decentralized manner. The main value of this is that, since there is a reduction in intermediaries, users have more control of the application and it can be faster and cheaper to use the application for certain use cases. A perfect example of a decentralized application is Bitcoin.
Bitcoin represents a decentralized monetary system, whereby users have direct control of their money and can send money to one another in a peer to peer fashion. No one company owns Bitcoin or verifies the legitimacy of transactions, instead, this is done in a decentralized way by stakeholders called miners, and to a lesser extent, user nodes. Everyone is incentivized to maintain the system through transaction fees directly from the users and the creation of new tokens, which in this case is the mining of Bitcoin. This mix of incentives and decentralization make it such that, for the first time, users no longer need to rely on a third party to issue, hold or transact with funds digitally.
But there are additional layers of complexity that a token can add to a decentralized application. I spoke with James Prestwich, co-founder of Storj, a pioneering decentralized storage platform, to learn more.
“Storj is a distributed network where machines can autonomously sell their storage space and bandwidth. Any computer can join the network and they pay each other with Storj. Storj Labs is a company built on top of this infrastructure. No one wants to learn how to use a distributed network and cryptocurrencies to push & pull data, so Storj labs inc builds the tools to make it easy.
Shawn Wilkinson ran the initial crowd sale in the middle of 2014, selling 500k USD worth of Storj coin in exchange for Bitcoin. Storj executed a second crowdsale ending May 25th, where we raised $30m USD worth of tokens. The coin is used to buy and sell storage space on the network. Micropayments to the users hosting storage space will be a lot easier than with Bitcoin or Ether itself, since the coin is built with the Storj use case in mind. But the reason for the token goes beyond payments. It is necessary for the system to have everyone on the same token to ensure that people are following the protocol rules and behaving fairly. This will be done through network specific smart contracts that will incentivize people to behave fairly and punish users who try to cheat the system.”
The Storj system is a bit complex, as it handles two commodities – spare storage space and unused bandwidth of those providing that storage. Unlike Uber, where there is a central company organizing everything, Storj is completely decentralized and all the funds go directly to the storage holders. Lacking a centralized service ensuring that everyone is behaving correctly, there has to be some means of enforcing the agreed upon behavior. This is where smart contracts enter the picture.
The easiest way to think about a smart contract is allowing for the movement of money, without a third party involved, based solely on data input that is defined when the contract is made. Since Storj coin is built atop Ethereum they have access to a Turing Complete programming language for smart contracts, which is the computer scientist’s way of saying it’s a full featured language.
Storj smart contracts require that funds be held in escrow for users to participate in the system, either as storage providers or renters. If a user tries to cheat the system in some way, the smart contract can drain the funds from the escrow account of the cheater and return it to the user affected by the cheating. By leveraging the Storj coin, the value of these smart contracts become more predictable and correlated to the Storj platform, instead of being subject to the volatility of general digital currency markets such as Bitcoin or Ether.
Storj’s approach to building a company working on top of an infrastructure that is built with a team of Storj Labs developers in addition to the open source community is a very common approach for decentralized applications. This is done to create a more transparent environment for the infrastructure and to create an open platform that encourages other companies to build on top of and contribute to the system.
While Storj & Ethereum participated in crowdsales for the initial offerings of their tokens, they are careful to never use the term ICO, fearing that it is too closely associated with an IPO. Alan Cohn, co-char of Steptoe & Johnson LLP’s Blockchain and Digital Currency practice and head council to the Blockchain Alliance, explains that by calling an ICO a token crowdsale, it helps investors understand that they aren’t purchasing equity or a security, but an entirely new asset class. This is important for protecting investors in addition to protecting the startups themselves so that the SEC does not confuse their tokens with an asset that does not pass the Howey test. That being said, there are many ICO that intentionally act as securities, the most popular of which being Blockchain Capital, which raised $10 million in six hours.
So why are investors so excited about the new technology? I asked Michael Terpin, who invested in the original ICO, Mastercoin, and has advised 30+ ICOs, including top ICOs such as Ethereum, Factom, Augur, Golem and Gnosis, either personally or through his company Transform Group.
Terpin explains that “as a angel investor, you can put 25k into company equity, then the company goes through many more rounds of funding, and perhaps sells for $300m, but your stake has been diluted to almost nothing if there’s a down round anywhere along the way. With tokens, you can do the same kind of analysis of team and technology, but because it’s a trading token and not private equity, you can get out whenever you want. Even though tokens are typically not securities, they act more like gold or public stock from day one in terms of liquidity. This alone, coupled with the current bull market for ICOs, means a lot of investors are saying ‘I’ll take my chances with tokens’. Investors like it. Companies like it. Companies don’t give up any equity, just tokens, which in most cases are their product. Because it’s a product, it’s more akin to wine futures than stock. It’s a product with a resale value.”
Another unique sign that ICOs are becoming mainstream is Kik’s upcoming Kin coin. Kik is a chat platform popular with U.S. teens with over 300 million users. Ted Livingston, Founder & CEO of KIK, explains, “A cryptocurrency creates a new way to economically align a large group of developers to work together to create a new ecosystem of digital services that are compelling for consumers, and fair and lucrative for developers. Doing an ICO is a new and exciting idea, and it took some time to run experiments like the Kik Points pilot program to prove that we could build an economy inside of Kik…[T]his was a new and viable way to monetize a community – instead of showing ads or selling items to our users, we could grow the value of a cryptocurrency with a larger community.”
Instead of relying on an ICO to raise money in order to build a product, Livingston sees this as a way to reduce friction for goods and services that already change hands via Kik, as well as creating the foundation for exciting new projects.
However, a token doesn’t have to be about raising money. My company, Bitwage, leverages the Bitcoin blockchain to help workers receive their wages faster and cheaper when working across international borders. We are looking at ways to leverage a token to create momentum around a new peer to peer recruitment platform we are launching. There will be no initial offering or selling of the token, we’re going to provide a method to earn tokens in a way to incentivize users to refer others and create a community.
If you are thinking of running or investing in an ICO yourself, make sure to check out my next article on the “dos & don’ts” for running your own ICO and how investors should evaluate potential ICOs and tokens to invest in.
So far, 2017 is shaping up to be a historic year for the crypto space with nary a dull moment. If you’ve been moving around in cryptocurrency circles, you probably already know that there’s value to be found in rebelling against conventional wisdom. Bitcoin was built on a foundation that rebelled against fiat currencies and centralized financial authorities. We’ve seen the bust and boom cycles of Bitcoin – and the cryptocurrency has proved that it can survive alongside fiat currencies. We have also seen the rise (and occasional fall) of dozens of other cryptocurrencies. Now, braver folks are venturing beyond the shores of traditional cryptocurrencies to seek their fortunes in the “new way to invest”—Initial Coin Offerings (ICO).
An ICO is simply a process by which cryptocurrency startups raise funds for new ventures. ICOs are similar to crowdfunding, except that they are almost always designed to raise funds for cryptocurrency projects, that might not be eligible for the capital-raising process of banks and venture capitalists. During an ICO campaign, enthusiasts and potential investors will buy some of the tokens of the new cryptocurrency project. Just yesterday, Tezos announced the largest ICO to date, raising $232 million worth of bitcoin (BTC) and ether (ETH) coins, making it the largest ICO to date. Tezos is just a part of the current wave of interesting companies who have already been through or are currently in the process of an ICO.
Meet some other interesting ICOs:
Augur is created to be a decentralized prediction market where people can bet on the possible outcome of events – a betting/forecasting platform of sorts. Augur has practically created a betting platform where you can bet on “everything from elections to the destruction of our solar system.” if your forecast/prediction is correct, you’ll earn rewards in the form of Augur’s Reputation (REP) tokens. Augur’s ICO helped the firm to raise more than $5.2M in a token sale, with $2.5M in the first three days. Augur has already rewarded its early investors as its REPs currently trade around $26 and the price may continue to rise as more people come on board to the betting platform.
Chronobank is another cryptocurrency startup that has found a way to fund its business by holding an ICO. Chronobank is simply the Uber of recruitments as it works on creating an ecosystem where freelance projects are bought and sold with cryptocurrency. When the ICO ended, ChronoBank had raised a total of $5.4M collected in seven cryptocurrencies and USD. Chronobank now has a market capitalization of more than 5,400BTC. The firm’s CEO, Sergei Sergienko notes that “we have the funds we need to launch a successful platform and forge the relationships to make ChronoBank a major disruptive force in the recruitment industry”.
Agrello is yet to hold its ICO, however, it has the potential to become one of the biggest success stories in the cryptocurrency world for smart investors. Agrello is simply a platform for building legally binding smart-contracts, using AI without having any prior legal skills or knowledge of coding. The Agrello token is called Delta Δ and it is being offered with Tier 1 at 0.0001Ƀ, Tier 2 at 0.00011Ƀ, Tier 3 is set at 0.00012Ƀ, and Tier 4 is set at 0.00013Ƀ.
One of the key factors that hint at the potential success of Agrello, is its application across a wide range of industries. For instance, Agrello recently inked a partnership deal with Finnish manufacturing giant INCAP, to provide smart agreement prototyping for INCAP’s labor management process. Agrello also has a deal with ViewFibn to develop a digital identity engine.
New investment vehicles arrive
Investing in the cryptocurrency market sounds simple enough by buying cryptocurrencies at a low price and selling them off at a higher price. Sophisticated investors may also consider putting their money into ICOs in much the same way that traditional investors look for promising IPO in stocks.
However, as the cryptocurrency markets start to mature, new kinds of investment vehicles and opportunities are coming to the limelight. One of these investment vehicles is the cryptofund, which can be likened to a hedge fund owning different sorts of cryptocurrencies. A cryptofund is simply a portfolio that seeks to make gains by trading cryptocurrencies — some cryptofunds might also be engaged in the mining of cryptocurrencies.
If you want to gain a diversified form of exposure into the cryptocurrency market, cryptofunds can provide you with a smart tool to access these markets. For instance, eToro’s CryptoFund, provides access to six unique cryptocurrencies in order to offer a balanced exposure to the cryptocurrency market. The diversification of the fund allows investors to be uniquely positioned to record gains across multiple cryptocurrencies and it protects them against massive losses in any single cryptocurrency.
If you would like to invest directly in startups operating in the cryptocurrency market, you may want to consider investing in Pantera Capital. The firm seeks to provide VC funding to startups working in the blockchain and cryptocurrency industries. By investing with a firm such as Pantera Capital, you’ll get a chance to profit from price gains in cryptocurrencies and profit from the success of the firms behind such cryptocurrencies.
The prospects of cryptofunds going forward
Cryptocurrencies, tokens, and ICOs are already an integral part in the fast-growing decentralized economy. I strongly believe that ICOs are here to stay and we will continue to see growth and depth in the quality of ICOs and their ability to provide startups with much-needed funding. For one, the decentralized nature of ICO’s makes them open to regular investors and accredited investors. More so, the paradigm shift from traditional institutional financing to crowdfunded opportunities, that will help spread the word about blockchain technologies and ingrain cryptocurrencies, deeper into the economic fabric of the global financial markets.
Bitcoin decreased over 6% but remained above $2,150 as the virtual currency’s community faces a large scaling debate. Traders remained cautious as the Bitcoin community is entering a period of uncertainty until August 1.
The deployment day for SegWit2x, which is also known as BTC1, starts on July 14. This update would enable more transactions on the network, but it would also increase the capacity of a single blockchain, a move opposed by some miners. Volatility is to be expected following the SegWit2x deployment, but the modification should have a positive long-term impact on the cryptocurrency as it will alolowe cheaper transactions and exponential speed.
Bitcoin decreased 6.18% to $2,186.5 at 7:01 pm CET. The cryptocurrency remains 126.4% higher since the beginning of the year.
According to various reports the largest online marketplace located on the deep web, Alphabay, was seized by International law enforcement.
On July 11 Bitcoin.com reported on the Alphabay darknet marketplace going offline for over a week. In that report, we detailed a theory of a global “deep web” law enforcement task force that seized computers in Quebec and made a connected arrest in Thailand. On July 13 according to the Wall Street Journal and sources familiar with the international authorities — Alphabay has been shut down.
Founded in 2014 the marketplace Alphabay was a successor of the Silk Road and grew to be even bigger by 2017. Alphabay, like many darknet markets, was known for selling illicit narcotics and fraudulent credit cards. Wall Street Journal reporter Robert McMillan details the investigation was conducted by law enforcement agencies from a few countries including Thailand, the U.S., and Canada.
The international deep web task force arrested Alexandre Cazes, a Canadian citizen associated with the Alphabay marketplace on July 5 in Thailand. Interestingly the arrest was made the same day the Alphabay market went offline. Cazes was expected to be extradited to the U.S., an embassy employee from Bangkok told the press. Further, the investigation also took place in Canada as the Royal Canadian Mounted Police (RCMP) searched a home in Trois-Rivières, Quebec. However, Cazes took his life and was found hanging in his Thai cell on July 13.
According to Andrei Barysevich, a director of a company that sells data on deep web activities, Alphabay was far more diversified in sales than the Silk Road. Researchers from Carnegie Mellon University revealed that the Alphabay marketplace took in roughly US$600,000-800,000 in cryptocurrency revenue per day. Besides narcotics Barysevich said the market catered to credit card hackers and included fraud tutorials. Barysevich says over the past six months alone, Alphabay has sold “$5 million in stolen credit-card numbers.”
Alphabay was the biggest marketplace on the Dark Web
Alphabay will go down in history with the rest of the fallen darknet markets. At the moment there is no information provided on others involved with the daily operations of the Alphabay market or what Cazes actually did for the website. Reports from The Bangkok Post detail that authorities seized three Thai homes that belonged to Cazes worth 400 million baht (11.7M USD). Additionally Thai police claim they confiscated four Lamborghinis and said Cazes has been residing in Thailand for over eight years.
International law enforcement officials have arrested members from multiple markets over the past few years from websites like the original Silk Road, Nucleus, Agora, Sheep, Evolution, Hydra and many more. The difference between all of these markets is that Alphabay grew to be significantly larger in size and catered to a lot more people. The aftermath of the Alphabay takedown will surely be felt for quite some time by customers and vendors of the underground marketplace.
What do you think about the Alphabay marketplace takedown? Let us know in the comments below.
Last month, I found myself sitting next to a multimillionaire in the 56th-floor Horizon Club Lounge of the Island Shangri-La Hong Kong. He made no attempt to hide the fact that he was swimming in cash; I just wouldn’t have guessed he had made it all from Bitcoin. This is how he did it.
Mr. Smith—who asked me to conceal his real name—has been traveling the world in ultra-luxurious style for the past four years. He only flies first class, stays exclusively in 5-star suites, and hasn’t cooked since Thanksgiving. In the past thirty days he’s visited Singapore, New York City, Las Vegas, Monaco, Moscow, back to New York City, Zurich and now Hong Kong. “Never a dull moment,” he says, lifting his glass of champagne in a Gatsby-esque salute. Then he shared his story.
After finishing college in 2008, Smith landed a respectable job as a software engineer for a large technology company in Silicon Valley. He was a good employee, close with many of his co-workers. It was through one of these “equally geeky” friends in July 2010 that Smith first heard about Bitcoin, shortly after its first major price increase, when the cryptocurrency appreciated tenfold from $0.008 to $0.08 over the course of five days. Smith’s response, though intrigued, was measured: “That price jump really got my attention, but I still waited a few more months before investing. I wanted to learn more about the underlying technology first.”
By October 2010, Smith was ready to jump in. “I had no idea how much to invest, but I was getting paid pretty well at the time, so I decided on $3,000.” He paid just over $0.15 per Bitcoin, giving him slightly under 20,000. At the time, expecting any sort of return was a moonshot; even in Silicon Valley, simply mentioning “Bitcoin” was enough to raise eyebrows. The cryptocurrency hummed along fairly quietly, and though Smith would check on the price every couple of months, he assures, “I knew from the very start that I was playing the long game. I wanted to see how high it could go.”
For the next three years, Smith worked his day job and largely forgot about his investment, until Bitcoin’s price leaps started making more mainstream news in 2013. “I couldn’t believe how quickly it was appreciating,” says Smith, speaking very quickly now. “It started rising by 10% or more every day. I was nervous, and excited, and terrified and confused all at the same time.” When the price hit $350, more than two thousand times what he paid for it, Smith sold 2,000 of his early stock; when the price hit $800 just days later, he sold 2,000 more. Just like that, Smith had landed upon a windfall of $2.3 million. “It was absolutely insane,” he says. “I quit my job and left on a round-the-world trip the following week.”
Just then, Smith’s girlfriend—a London-based photographer who accompanies him on about half of his travels—joined us. “He’s constantly talking about Bitcoin,” she said, shaking her head. “If he starts talking about it, he’ll never stop. Ever.” We’d been on the topic for over an hour at this point, but my curiosity was far from satiated.
I urged Smith to show me some proof to back up his claims; after all, he could just be a smooth talker with some family money to vaunt. After going through several rounds of security checks on his iPhone and requesting that I hand him my phone at the same time—“NFC scares me more than it should”—he turned it to me with his Bitcoin wallet exposed. Lo and behold, I saw what he had promised: a balance of 1,000.00 BTC, worth $2.6 million as of this writing.
Where did the rest of his 20,000 Bitcoins go? Smith walked me through a series of recent selloffs because, as he says, excessive speculation has pushed the price to an unsustainably high level. It was clear that he had a lot of thoughts on the notion of a current price bubble, but I decided to push for what I was really curious about instead: how much has he profited from Bitcoin overall? The answer came without any hint of hesitation or arrogance.
“$25 million, give or take.”
$25 million from an initial investment of $3,000—those are the sort of returns that make a Bitcoin millionaire. Of course, Smith still owns 1,000 Bitcoins, which he plans to sell, “When the price reaches $150,000,” a million-fold appreciation from his original buy-in price. “I really do think it will get there, he says confidently, “But a lot of governments and companies will have to be on board, first. No amount of speculation in the world will push it that high.”
When I ask Smith why he chose to sell when he did, and whether he’ll feel remorse if the price jumps tenfold again, he shakes his head. “I have everything I’ve ever dreamed of now. I fly all over the world visiting friends, I do whatever I want with my time and I never have to worry about money for the rest of my life. I’d be an absolute fool not to cash out now.”
Smith is the epitome of new money, a millennial millionaire with no reservations about flaunting his wealth. It’s been four years since he left his regular life in Silicon Valley behind, and in that span he’s been traveling non-stop. Even still, I have a strong feeling that whether he’s got millions in the bank or not, Smith will never find himself without a place to sleep.
If you can bring entertainment to people’s lives, you become special. And once you’ve built up that level of social capital, no matter how much money you have, you can always rest easy knowing friends will invite you over, serve you dinner and sit down on a couch to listen to your stories.