Since Bitcoin introduced the idea of digital forms of money to a massive audience, the characterizing topic of basically all crypto tokens has been their extraordinary instability. But soon all that can change for the asset-backed cryptocurrency and asset-backed tokens (ABT).
The world is loaded up with resources, including land, stocks, gold, oil, among numerous others. The vast majority of these benefits are not actually transferable or sub-dividable physically. A change to a computerized framework along the lines of blockchain presents a suitable answer for these issues, subsequently the developing enthusiasm for asset-backed cryptocurrency.
An asset-backed cryptocurrency or token is a cryptocurrency that utilizes a physical asset, such as real estate, for investment and revenue purposes.
They are considered to be the most reliable because the revenue system is backed by a physical asset which can be seen and accessed and therefore, it is easier to trust. Some analysts consider asset-backed cryptocurrency to be the next steps in the growth of cryptocurrencies.
There exist numerous digital currencies on top of the blockchain. The currencies (or tokens) can be used to transfer ownership of assets or objects outside the blockchain. This, in essence, is the tokenization of real assets.
Land, gold, fiat money or oil are all examples of resources that could support and be part of the development of crypto tokens and possibly asset-backed cryptocurrency.
Being connected to a physical resource gives something extra and can influence how that asset-backed cryptocurrency is being transacted. Since most resource sponsored coins are attached to outer markets on which those benefits are exchanged.
Let’s take, for example, precious stones or silver. If the awareness of the token grows, at that point financial specialists will exploit the disparity and money out the physical resource.
Exactly how the basic resource of the token is overseen and secured in this procedure it will keep on being of fundamental significance. Institutional and standard financial specialists will be attracted to those coins upheld by systematised activities for managing and stripping resources.
Read more on Mainstream cryptocurrency adoption
While the tokenization and asset-backed tokens of genuine resources come with a guarantee, there are some challenges to overcome. Financial motivation help solve some of these challenges, and organizations and governments take part in the goal of creating a strong foundation in this field. Here are some of the issues:
Read more on Regulation of Cryptocurrency Around the World Report
By joining the upsides of blockchain and traditional venture instruments, tokenisation can affect exchanges and speculation. The advantages of tokenization and asset-backed cryptocurrency are various and can be outlined as pursues:
Read more on How to earn free cryptocurrency (without investing or mining)
As the digital currency advertise keeps on advancing, develop, and expanding, asset-backed cryptocurrency and tokens will be the portal to more extensive applications.
Mining cryptocurrency like Bitcoin is an automatic process, a decentralized mechanism that creates Bitcoin out of thin air to provide rewards to miners for processing transactions. The result: a booming business in mining.
All you need to get into the business of mining cryptocurrency is a rack of high-speed computers and access to electricity anywhere in the world and you can essentially create cryptocurrency, simply by running free software.
In the early days of crypto, mining was a business for small-time entrepreneurs. The business soon became increasingly competitive, as miners purchased massively powerful computers while scaling up their operations to remain profitable.
Risks seemed low, as the original Bitcoin software was supposed to account for falling prices, making it easier to mine as the number of miners remaining in the game dropped, thus ensuring that there would always be enough miners to process all the transactions.
Then the Bitcoin crash came, severely limiting the ability for miners to churn out crypto while still making a profit. As it turns out, inefficiencies in the mining algorithm, combined with market pressure on the transaction fees that were supposed to partially compensate miners, has led to a squeeze on the ability for anyone to mine at a profit.
Legal crypto mining using electricity at market rates is now becoming increasingly unfeasible, even in places like Iceland, which have exceptionally low electricity rates combined with temperatures conducive for data centres filled with heat-generating computers.
In Washington State, hydroelectric power generates far more juice than locals can consume, thus attracting a booming business in crypto mining.
“The region’s five huge hydroelectric dams, all owned by public utility districts, generate nearly six times as much power as the region’s residents and businesses can use,”
Explains Politico journalist Paul Roberts. “Most of the surplus is exported, at high prices, to markets like Seattle or Los Angeles, which allows the utilities to sell power locally at well below its cost of production.”
By 2015, however, the Washington Bitcoin mining craze had run its course. “Margins grew so thin—and, in fact, occasionally went negative—that miners had to spend their coins as soon as they mined them to pay their power bills,” Roberts adds.
If not Washington, then, what about Iran? “I come across some very interesting cases,” notes Mohsen Rajabi, an Iranian blockchain entrepreneur. “I recently set up a rig for a middle-aged customer who was not tech-savvy at all and had simply heard of mining and its potential profits. He wanted to start with ten devices installed at his factory because it can legally use extremely cheap industrial electricity.”
The electricity is the greatest cost of the mining business. If you can manage to cut that out, that chances of making a profit increase at once. In the early days of Bitcoin, college kids would use the university electricity to power their rigs from their dorm.
Today, in contrast, stealing electricity is serious business. “A Shanxi Datong [China] man named Xu Xinghua stole power from the poles near the West Second Plant of the Kouquan Railway, which was borrowed from November to December 2017,” reports Liu Yulin, writing in Chinese for The Paper.
“The coin ‘mining machine’ and three electric fans were operated for 24 hours,” she continues. “Xu Xinghua mined a total of 3.2 bitcoins, earning 120,000 yuan [$17,700], and the electricity generated by the stolen electricity was 104,000 [$15,340] yuan.”
What happened to the thief? “Xu Xinghua was sentenced to three years and six months in prison for committing theft and was fined 100,000 yuan [$14,750],” she reports. He also had to reimburse the electric company for the stolen power and forfeit his equipment.
This story is one of many, notable merely for the fact that the perpetrator was caught and the story appeared in the local paper. Many more instances are sure to be out there, as yet unreported.
Another popular, if potentially unintentional, way to steal electricity: set up a mining operation, take the profits, and then go out of business.
This is the story of one of the Washington State mining companies. “U.S.-based bitcoin mining firm Giga Watt has declared bankruptcy with millions still owed to creditors,” writes Yogita Khatri for Coindesk. “Creditors include the utilities provider in its Douglas County [Washington] base, having a claim of over $310,000, and electricity provider Neppel Electric, which is owed almost half a million dollars.”
One silver lining: there may be a possibility these stiffed utilities will eventually get some of their money back, as Giga Watt raised about $22 million in its ICO – and it’s possible the scammers were unable to spend or secret away all of the proceeds before the bankruptcy shut them down.
Illicit cryptocurrency mining (known as cryptojacking), has surpassed ransomware as the most popular form of cybercrime targeting enterprises.
Cryptojacking means introducing crypto mining software onto a target victim’s computer without their knowledge. The software starts generating crypto for the hacker while stealing processing power and electricity from the victim.
The cryptojacking problem, in fact, is much worse than it was when I wrote my article Top Cyberthreat Of 2018: Illicit Cryptomining in March 2018.
“Despite the volatility in the value of various cryptocurrencies, the trend of illicit cryptocurrency mining activity among cybercriminals shows no signs of abating,” according to David Liebenberg, senior threat analyst at Cisco Talos.
One of the reasons why the cryptojacking problem is getting worse is because the malware is getting better. One such package: Rocke. “Talos assesses with high confidence that Rocke will continue to leverage Git repositories to download and execute illicit mining onto victim machines,” continues Liebenberg.
Git repositories are where most of today’s enterprise software developers store and manage their source code – but such repositories are not Rocke’s creators’ only target. “It is interesting to note that they are expanding their toolset to include browser-based miners, difficult-to-detect trojans, and the Cobalt Strike malware [malware that leverages Cobalt Strike penetration testing software].”
Another cryptocurrency mining business model is to evade sanctions.
For example, a pair of Iranian Bitcoin miners tried to take advantage of their local USD exchange rate: “At the time we bought the mining device, the rate of the US dollar in Iran was still quite high, so we figured we would make about $90 to $100 a month,” explains Ali Hosseini, an Iranian miner. “The cost of electricity is relatively low in Iran, so the math seemed viable.”
Hosseini’s cousin also spoke up. “Foreign exchange rates and Bitcoin prices have fallen and our profits have been slashed, but we’re not seeing losses yet,” says Pedram Ghasemi, another Iranian miner. “According to my calculations, the US dollar must drop below 110,000 Rials [about $2.60] and Bitcoin must be down to $2,000 for us to really lose.”
Another example is North Korea. Priscilla Moriuchi, a former top National Security Agency official and now director of strategic threat development at Recorded Future, estimates that North Korea may have earned up to $200 million in 2017 mining crypto.
How, then, would North Korea turn that crypto into hard currency? “North Korea has such extensive criminal networks that have been well-established for decades to facilitate illegal activities,” Moriuchi says. “If Pyongyang were able to cash out into physical currency, it would be relatively easy for them to move that currency back into North Korea and to buy things with the physical currency. I would bet that these coins are being turned into something — currency or physical goods — that are supporting North Korea’s nuclear and ballistic missile program.”
This doesn’t come out as a rational business model, unless ensuring that crypto transactions can be completed is your primary motivation.
We know that crypto is (or at least use to be) essential to the operation of the Darknet. Many illegal businesses and organized crime syndicates depend on the successful exchange of crypto to move their contraband.
Should the value of Bitcoin or any other crypto drop to the point that no one could make money mining it, then such syndicates would likely step in to fill the void – mining at a loss to keep the crypto running.
For all the crypto fanatics out there, therefore, there is a reason to take heart – there’s no way crypto values will ever drop far enough for mining to cease. Organized crime wouldn’t let that happen.
Beginner exchanges are exchanges that offer a simple way to buy bitcoin and other cryptocurrencies, with as little confusing jargon and setup time as possible. Here are 6 cryptocurrency exchanges that are fairly easy to use by a new cryptocurrency investor.
Coinbase is one of the best options for a new crypto investor. Coinbase is the best-known cryptocurrency exchange in the US. It is the simplest and easiest on-ramp for crypto beginners.
Coinbase is the most trusted place for all things crypto.
It allows you to deposit fiat and crypto, offers a small variety of crypto (Bitcoin and Ethereum included) and has never been hacked before! As for security, you can activate the two-factor authentification and it is available in 100+ countries around the world (January 2020).
As any entity operating with fiat, there will be some fees, especially for deposing fiat. Coinbase Fees vary based on location and amount.
The user interface is intuitive, and the design is clean and simple. You can link up your bank account or pay with a card. There’s also a deep library of guides and explainers for newcomers.
Coinbase has a limited choice of cryptocurrency options to keep things simple. However, they consider the addition of more altcoins.
As for security, Coinbase stores 98% of customer funds in cold storage, in safe deposit boxes and vaults around the world, making it relatively secure. The remaining 2% is insured in case of hacks.
Lastly, there’s a handy mobile app to buy and sell cryptocurrency on the go.
Get started on Coinbase.
Shapeshift is a crypto-only exchange. You can’t buy cryptocurrency with dollars or euros. You can only trade between cryptocurrencies. However, due to its simplicity, we still recommend it for beginners.
The crypto offer is vast, and you can trade anything for anything and it is available all over the world. Make sure to switch on the two-factor authentification, in case of a future security breach. The exchange rate shown is exactly what you’ll receive, minus only the “miner fee.” There is no exchange fee, or service fee.
ShapeShift allows you to transfer currency between addresses of your choosing, rather than between accounts on its platform. It means ShapeShift doesn’t hold any customer deposits, making it relatively safe.
ShapeShift has been hacked three times, which all occurred in the same month due to internal sabotage. The exchange was extremely transparent in what happened over the hack, with the CEO going so far as to write a blow-by-blow explanation of what exactly happened.
Get started on ShapeShift.
Gemini was founded by the Winklevoss Twins. It’s a US-based exchange noted for being a licensed platform (Regulated by NYSDFS). Gemini gained headlines in 2019 by announcing full insurance coverage for funds on its exchange and in custody.
We believe that crypto investors deserve the same protections as investors in other asset classes, so we’ve built a rules-based marketplace with security at its core.
They operate in all U.S. states except Hawaii. Other countries in which they operate are Canada, Hong Kong, Singapore, South Korea and the U.K. Gemini has never been hacked before and the few selected trading pairs are perfect to start your journey as a crypto investor.
Gemini and the Winklevoss Twins pride themselves on being fully compliant and working within existing regulations. As such, there’s a decent amount of safety from fraud and insurance coverage on this exchange. Of course, that comes at a cost: handing over a lot of personal information.
Gemini offers a decent chunk of volume, though few trading pairs compared to other exchanges. Security wise, aside from the standard 2FA, withdrawal address whitelisting is a welcome sight.
The Gemini app is also slick and easy-to-use for beginners.
Get started on Gemini.
Changelly is a crypto exchange similar to ShapeShift. It is address-to-address so Changelly never holds your funds. You can exchange crypto to crypto or fiat to crypto. A vast number of trading pairs are available.
Changelly is a cryptocurrency exchange with the most favorable rates and the fairest terms.
Your exchange has never been so smooth.
Changelly accepts users from any country in the world. As well, they will accept payments in any currency, but it will be converted to either the Euro or USD. They have never been hacked before and it supports two-factor authentification. There is a flat fee of 0.25% for each transaction made via the service.
There’s a simple frontend for buying bitcoin and converting it to whatever cryptocurrency you would like. Much like ShapeShift, Changelly transfers happen between addresses you own, rather than between accounts that the exchange controls.
It’s super fast and efficient. There’s a mobile app too for making transactions on the go.
Get started on Changelly.
Luno offers a great platform for African and European traders looking to get started. Alongside their exchange, Luno offers a wallet service with a companion mobile app. The exchange has been around since 2013 and has never been hacked, giving it a fairly solid reputation for security.
Luno makes it safe and easy to buy, store and learn about cryptocurrencies. Upgrade your money today.
Luno supports fiat/crypto exchanges on a few selected pair, which will be fairly easy to use by a new crypto enthusiast. They have never been hacked before and the platform supports two-factor authentification. Fees Maker / Taker. Makers fees are a flat 0% and takers fee range from 0.20% to 1.0%.
It’s designed to be as simple as possible, including an “instant buy” feature.
Get started on Luno.
Coinmama is a good choice for those looking to buy crypto using a credit card or other fiat sources. Coinmama is a broker so you’re buying directly from the company itself which makes transactions fast.
Trusted by over 1,800,000 people across 188 countries since 2013
However, there are some things to be aware of. Coinmama is “buy only” so you cannot sell cryptocurrencies on the platform. There is also no wallet feature on the exchange, so you need to withdraw directly to a wallet. This is no bad thing as keeping your funds on an exchange is risky, but you will need a wallet set up first.
Unfortunately, Coinmama’s simplicity is offset by the incredibly high fees charged for every transaction. Coinmama’s market rate is based on the XBX + 2%. In addition, there is a commission fee of up to 3.90%. For credit/debit card transactions, there is an additional 5.00% processing fee. This fee will be added after choosing your method of payment.
Get started on Coinmama.
We hope you have found the best cryptocurrency exchange that works for you. And if you ever decide you are serious about the cryptocurrency world, then remember there are ways to earn free cryptocurrency and Bitcoins.
What you need to remember is that all transactions are recorded and stored on the blockchain.
Some cryptocurrencies offer their own official wallets, while other products allow you to store multiple currencies within the same cryptocurrency wallet.
But different digital currencies have different address types, and you’re usually able to send coins between like wallet addresses only. For example, you’ll need to send Bitcoin to a Bitcoin wallet address and Ethereum to an Ethereum wallet address.
What is a cryptocurrency wallet used for? A crypto wallet (or more generically, an electronic wallet) keeps tabs on security keys used to sign transactions digitally, but also, it stores the address onto a blockchain in which a specific asset resides.
There are two varieties of crypto wallets: hardware and software (also called hot and cold storage pockets ( respectively). Hot storage pockets are available via an online service like Coinbase, among the most significant cryptocurrency exchanges which provide online wallets for consumers, and it may be further segregated into online wallets and client-side wallets handled locally on an individual’s personal computer or mobile device.
Additionally, there are paper pocket generators, which make keys which may be printed out or left as QR codes.
Cold storage pockets are downloaded and live offline onto a piece of hardware like a USB drive or a smartphone. Exodus.io and Dash QT are two examples of cold storage wallet software. Cold storage pockets may also be bought as devices using the applications already installed; vendors like Trezor and Ledger offer these sorts of devices.
Hardware pockets can be divided into crypto-assist type wallets, which deal with the keys and registering of random data and are occasionally referred to as hardware security modules (HSMs). “And then there are hardware wallets that handle generating and signing complete transactions that are then sent to the distributed ledger network,” Huseby said.
When you speak with all the blockchain, the hardware communicates via the codes onto the apparatus.
A cold storage pocket is more secure than the usual hot wallet since it is not on the web. Many cryptocurrency heists have happened when a hacker strikes an internet wallet support and transports the critical keys to their wallet. Basically, transferring the related funds.
In 2014, as an instance, the Japanese online crypto trade Mt. Gox endured the theft from the hot wallet of 850,000 bitcoins valued at over $450 million. In 2018, bitcoin exchange support Coincheck suffered a theft of nearly $1 billion worth of cryptocurrency out of its alluring wallet support. Many smaller thefts have happened within the previous five decades, mainly through the hacks of internet wallets.
Instead of holding physical coins, a cryptocurrency wallet is electronic and includes a public and private key.
What are the desired traits of a crypto wallet and how hard can choose a wallet to be?
Wallets can be broken down into three distinct categories – software, hardware, and paper. Software wallets can be a desktop, mobile or online.
To send funds from your wallet, you’ll need a wallet address — or the recipient’s public key. These addresses are either:
Once you have this address, you will need to:
Note that the exact process varies depending on the brand of wallet you choose. For example, hardware wallet users typically need to connect their wallet device, enter a PIN or password and manually verify the transaction on the device.
Most experts recommend keeping crypto keys in a colt wallet. This means creating a paper copy of these keys and keeping that newspaper in a safe place like a bank safety deposit box.
Paper may also be utilised as a kind of wallet via applications that produce a QR code which may be scanned to allow blockchain transactions. Otherwise, Gartner urges the use an internet exchange with a pocket service which enforces two-factor authentication through drive technology. Push technology evolves the next aspect to some documented cellular phone so that an operator’s telephone can accept an entry request pushed out from the market wallet’s authentication support.
However, cryptocurrency hackers also have successfully stolen the SIM identity of a cell phone using a phone-based wallet onto it.
It is crucial to realise that hackers can circumvent most mobile authentication techniques utilising an assortment of technologies, according to Gartner. These include “SIM swaps,” in which a hacker registers an existing to their telephone so that it pushes messages or notifications to be delivered to this phone, rather than to the valid owner. Hackers do so typically through social technology of cell phone customer support agents, Gartner’s report stated.
There are ways to mitigate all of these attacks, but the best solution so far is to use some hardware wallet and also to have a hard copy backup of your secret keys somewhere safe,” Huseby said. “The hardest part of wallets is that they are responsible for the secure storage of small, highly sensitive data. Most people are not familiar with the levels of security and paranoia that is required to truly defend against people determined to steal your keys.”
Wallet security is crucial for any crypto owner, so keep these tips in mind to keep your funds as safe as possible:
Used by the most secure and trustworthy wallets, two-factor authentication requires a regular username and password combination and another authentication method.
It’s often a PIN code texted to your smartphone, expiring after a set time and different every time you log in. This means that an attacker would need to know your username and password and also have your phone.
Some crypto wallets require you to install a secondary app on your smartphone that generates these PIN codes for you, adding another layer of security.
The most critical problem with a cold pocket, however, is in case you have not backed up the info on it or saved a hard copy of it somewhere secure, and you also lose that device, you shed your electronic assets once and for all. In other words, you do not understand where your cryptocurrency resides to a blockchain or possess the keys to authenticate that those assets belong to you.
Hot storage wallets, by comparison, have the advantage of the support of the provider. Should you lose your access code into the wallet, you will find challenge-and-answer queries which will make it possible for you to regain them.
There are limited procedures for recovering private keys at a cold storage pocket that’s been missing, and they’re generally not simple to use. By way of instance, Coinbase permits consumers a restore mechanism which is composed of 24 arbitrary word retrieval phrase users should record when they produce their own wallet.
Blockchain ledgers work predicated on a trustless consensus mechanism, which means that you do not need to be aware of the individual or people you are transacting with about the ledger. A dispersed ledger will anticipate any trade properly signed with a legitimate secret key.
“Wallets serve the purpose of storing those keys securely and doing the digital signing necessary for the distributed ledger to accept the transaction,” Huseby said.
While the vast majority of crypto wallet software is utilised to store cryptocurrencies like Bitcoin, Ethereum, Ripple or even Litecoin, the program may also save the keys to fungible and non-fungible digital tokens representing products, monetary resources, securities, and services.
By way of instance, a token saved in a crypto wallet can signify concert or airplane tickets, unique art or products in a supply chain. Practically anything using an electronic value attached to it.
All distributed ledgers with decentralised consensus mechanics trust the capacity security model, meaning possession of an encryption key, demonstrated with an electronic signature over a trade, authorises the actions the trade represents.
“So any application modelled on a distributed ledger requires users to have wallets that they use to sign transactions that work for that application,” Huseby said. For Bitcoin, the transactions just transfer bitcoins to another encryption key and therefore to another owner. For things like a supply chain, they sign transactions that track the asset being managed (e.g., electronic parts, raw materials, etc.).”
Later on, a brand new, “trustless” global market could be contingent upon blockchain and crypto wallets which allow everything from individual professional or financial histories, tax info, medical advice, or customer tastes to corporations preserving employee or spouse electronic identities and controlling program access.
There’s no one-size-fits-all cryptocurrency wallet. The right crypto wallet for you is the one that matches your needs. If security is your No. 1 concern, you’ll likely choose a different wallet than someone who wants fast and easy access to their coins.
Do your research and compare wallets. Start with our crypto wallet reviews to get an idea of what’s available and key features to consider.
How do you know if a cryptocurrency is a coin or a token? Cryptocurrency is either a coin or a token. Here’s the main difference between coins and tokens:
Coins have their own blockchain. Tokens do not.
Most big-name cryptocurrencies (Bitcoin BTC, Ethereum ETH, and Ripple XRP) are coins. These coins have their own blockchain, meaning that a decentralised, peer-to-peer network records all transactions on a digital ledger.
A token does not have its own blockchain.
The Ethereum blockchain is the most popular platform for token creation, though you can theoretically create a token on any blockchain. 0x (ZRX), Maker (MKR) and Basic Attention Token (BAT) are examples of ERC-20 tokens, meaning a specific type of Ethereum-based token. In other words, their protocol exists ‘on top of’ the Ethereum blockchain.
Read more on What is cryptocurrency, and why do we need it?
Since coins have their own blockchains, it makes sense that they serve as currency, a means of exchange, within that network.
This is why Bitcoin is called digital gold and Ripple is known for its fast transactions: Bitcoin is a store of value, like gold, and Ripple facilitates cross-border bank transactions.
Also, it’s easier to exchange USD for a coin, rather than a token. Investing in a token usually requires exchanging USD for a coin first.
The value of a token is a little more complicated. Tokens are typically released in ICO, which stands for Initial Coin Offering. ICOs are like IPOs for cryptocurrency. ICOs give the investor access to tokenised services or products or represent a stake in a cryptocurrency company.
This is where tokens get a little confusing: Tokens fall under different SEC regulations depending on what they represent. You can separate tokens into two types of cryptocurrency that represent either a utility or a security.
Read more on Why Should You Use Cryptocurrency?
Understanding the distinction between these two types of cryptocurrency is absolutely necessary for investors, cryptocurrency companies and the government.
In other words, the SEC (U.S. Securities and Exchange Commission) has much stricter regulations for security tokens than it does for utility tokens because, as their name suggests, they’re considered to be digital securities.
Most Tokens Are Utility Tokens
If you can buy or trade a token on a cryptocurrency exchange without being an accredited investor, then it’s a utility token. In broad terms, a utility token gives an investor access to a service or product. This can mean that a token can represent exclusive access, a discounted rate, or early access.
When you hear about smart contracts and DApps, you should assume that a utility token is involved.
Basic Attention Token (BAT) is a utility token that has received a lot of press. It’s a means of exchange for digital advertising attention, hence the name. Integrated with the browser Brave, BAT works in three ways:
BAT represents attention, not stock or currency, making it a utility token. This means that anyone can trade utility tokens on a cryptocurrency exchange.
Read more on Blockchain Games Will Be the Catalyst for Blockchain Mass Adoption
Security Tokens are different.
Like securities, security tokens represent part-ownership in a tradeable, real-world asset external to the blockchain. And because security tokens are regulated by the SEC like securities, you have to be an accredited investor to participate in STOs, meaning Security Token Offerings.
The SEC decides whether something is a security token using the Howey Test. In simple terms, the Howey Test determines whether a cryptocurrency investment is ‘speculative’, meaning that the investor makes money based on the labour of a third party.
Investing in security tokens is slightly more difficult. Investors must use a security token issuance platform, like Polymath or Swarm, to buy and trade tokenized securities.
Unlike Coinbase or Binance, which are cryptocurrency exchanges that allow anyone to create an account, security token issuance platforms require their users to meet specific requirements. This typically means having your accredited investor status confirmed by a KYC provider. The platform will then create a customized profile that specifies how and how much each investor can trade.
Read more on Blockchain technology used in non-cryptocurrency applications
Since companies have access to a much smaller investment pool with security tokens, some try to pass off their security tokens for utility tokens. There is also debate over whether tokens can represent currency, like coins, rather than access to a service. To make matters less clear, stablecoins are often technically ‘stabletokens’.
What is a Stablecoin?
Stablecoins are an increasingly popular type of cryptocurrency, especially in a Bitcoin bear market. This is because stablecoins are “pegged” to traditional assets like fiat (meaning government-backed currency like the US Dollar or Euro) or gold.
For example, the theoretical exchange rate between a stablecoin pegged to the USD and the US Dollar itself is 1 to 1. In theory, the company behind a stablecoin has the same exact amount in assets, stored in bank accounts, as they do tokens.
The advantage of stablecoins is that in a bear market, crypto investors can move their money from volatile cryptocurrency to stablecoins, a more ‘stable’ asset class in theory. This is instead of converting it back to USD, which can be a two-step process that incurs transaction fees. When a bull market returns, investors can convert their stablecoin back into other more volatile currencies at little to no cost.
Historically, however, stablecoins have ‘broken their peg’ in both directions. For example, controversial stablecoin Tether (USDT) has been worth less than a dollar, and Gemini Coin (GUSD) has exceeded the value of a dollar.
This highlights another feature of stablecoins: Most have “USD” in their name. But keep in mind that not all do. For example, Maker (MKR), another stablecoin, does not.
Stablecoins Are Generally Tokens
Despite being called stablecoins, stablecoins are usually tokens, meaning that they don’t have their own blockchain.
Maker (MKR) exists on the Ethereum blockchain. Tether (USDT) was built on the Bitcoin blockchain. Similarly, both these “tokens” function as “currency,” which is a characteristic of coins, not tokens.
As we develop new applications for digital currencies, distinctions between types of cryptocurrency become increasingly blurred, which makes SEC regulation even more uncertain.
Why should you care whether something is a coin or a token, a utility token or a security token?
Though the world of digital currency appears new and unclear, every prospective investor should know the value of the crypto they’re considering and, above all, how current and future SEC regulation will affect it.
Furthermore, the distinction between coins and tokens represents two potential forks in the evolution of cryptocurrency: cryptocurrency as tokenized securities and cryptocurrency as a payment method.
Will crypto replace the stock market, the US Dollar or both? As it stands, both revolutionary applications of cryptocurrency are making headway.
Yes, you can earn free cryptocurrency and the list of services offering free cryptocurrency is growing.
Currently, the most popular way for people to get hold of a cryptocurrency (aka electronic money) is to buy it on an exchange with fiat currencies or through mining, but there are other ways you can earn cryptocurrency without getting out your wallet. In this article, you will discover services and platforms to help you earn free cryptocurrency without investing or mining.
No matter how you call it, electronic money, cryptocurrency or digital currency is something the entire planet started to be interested in.
While mining cryptocurrency and Bitcoin isn’t the cheapest way to get cryptocurrency, new blockchain platforms have emerged and are ready to help you earn this new electronic money, which is called cryptocurrency.
As Bitcoin makes it more and more on the international news, companies have come up with a different way in which you, can take part in this blockchain world, without investing any fiat money, or mining the cryptocurrency.
Sure, by signing up for any of these apps, you won’t be able to quit your day job anytime soon. But they give you the opportunity to earn money while you practically sleep and they also provide you with valuable experience in the up-and-coming decentralized sharing economy.
Something you shouldn’t miss on is the chance of earning free cryptocurrency! Since you are already online, so why not earn cryptocurrency online?!
Where to find services which help you earn cryptocurrency without investment? Here is what we found so far. (The list of where to get free cryptocurrency is updated regularly).
A decentralized open innovation platform empowering anyone to earn cryptocurrency,
Crowdholding is a co-creation platform were you log in, give feedback and earn crypto for it. They have over 70 crypto startups and over 40,000 signups. They have new startups as well as establish coins such as SmartCash, DeepOnion and ITF. (All on CoinMarketCap).
It’s free to sign up! How do you earn free crypto? After you sign up, you can give feedback, take part in bounties and airdrops to earn free cryptocurrency without investing.
The stages of Crowdholding, according to their website:
Earn anywhere, anytime, from any device
What is Storm?
According to its website, “Storm Token is a premium cryptocurrency reward used to fuel the world’s only blockchain-supported microtask platform.”
Storm Play is an app started in 2017, which pays you Bolt for doing a simple task such as downloading apps, surveys, and quizzes.
Storm (STORM) intends to make a blockchain-based, gamified, micro-task market (Storm Marketplace) that empowers users to earn STORM ERC-20 tokens by completing different tasks.
Micro-tasks in the app have been ‘gamified’ into a reward system that allows you to easily earn tokens for playing games or trying out new products or service.
“Participate in short surveys, try out new products, watch videos, and help finish small tasks to earn rewards in Storm Token, Bitcoin, or Ethereum.”
Some of the tasks, for example, involve achieving goals in games you have to download. Some mobile gamers may find that StormPlay gets them the entertainment factor they need, all while earning cryptocurrency without investment.
Bolt is the in-app currency which you can convert to Bitcoin, Ethereum or Storm coin when you have reached the minimum withdraw limit.
Steemit, or as the founders say, ”Come for the rewards. Stay for the community,” is a Reddit-like portal which supports posting content as well as up and down-voting.
Steemit is based on a blockchain that runs on a native coin called STEEM.
Steemit’s developers say that their Blockchain, in contrast to Bitcoin’s proof-of-work, is based upon “proof-of-brain.” That is to say, cryptocurrency is generated by participants creating original content. If you are some sort of content creator, then you definitely have to have an account on Steemit and you can earn cryptocurrency without investing by simply creating the content you are really good at.
This works as follows: A certain pool of STEEM tokens is dedicated to incentivizing content creation and curation. And how exactly these tokens are distributed for specific pieces of content is determined by “crowd wisdom” – the participant community assesses the value of the content and its token reward.
LBRY is an open-source and decentralized platform for video content sharing which rewards you for content consumption. Yes, you read that right. Not only are you rewarded for content creation, but for content consumption.
Why is that? Of course, in the long run, the main point of LBRY’s economy will be the remuneration of content creators, namely with tips from content users in the app’s native LBC token (short for LBRY Credit). The app comes with a dedicated LBC wallet. Other ways to obtain LBC’s are contributions to the LBRY project and mining – see here for all the ways of earning LBC.
However, to encourage widespread adoption of the LBRY app, the LBRY team is currently providing in-app rewards for early adopters. They can be earned simply by surfing video channels and watching videos.
SMSChain is a decentralized SMS gateway. It is based upon one of the most classical sharing economy concepts: Take a resource that someone has paid for, but isn’t using, and enable that person to share this resource with others.
These messages mostly consist of standard templates, not individualized content. These templates will be defined in SMSChain nodes, and participants can choose in advance which types of content they wish to permit to go through their SIM card.
SMSChain offers exactly this marketplace, and the marketplace’s currency is their native token SMSTO. You can earn SMSTO simply by signing up for an account on the SMSChain website, and by agreeing to sell your unused SMS capacities.
In the context of SMSChain, you are known as a “miner” – similar to Bitcoin’s concept of mining. However, the mining mechanism in SMSChain is not wasteful proof-of-work, as in other cryptocurrencies, but proof-of-delivery. That means that you do the useful work of delivering SMS in order to earn your SMSTO.
The explosion of cryptocurrencies has created a market where you can offer your services and receive remuneration in cryptocurrency.
There are subreddits such as /r/Jobs4Crypto and /r/Jobs4Bitcoins, or you can simply contact ICOs if you have a desirable skill set. Got something to sell? There are also multiple sites where you can sell your unwanted items for cryptocurrency. Some examples are Bitify (a platform similar to eBay) and BazaarBay (a platform that acts like Etsy).
SweatCoin will help you earn cryptocurrency for simply walking around outside.
SweatCoin might be the app that sounds familiar to you because it’s the easiest to use, and therefore the most popular. SweatCoin pays you in a currency that will eventually be turned into actual cryptocurrency on the blockchain.
Blockchain games are taking gaming to a whole new level. And yes, playing games can actually help you earn cryptocurrency without investing. More and more startups and companies are on their way to change their business model and the gaming industry is a big part of it.
You can earn free cryptocurrency by playing arcade games such as Alien Run and collectable fantasy football games like FootballCoin if you are a football enthusiast. Let’s not forget about attention games like Block Stacker. All these games are ready to reward you for your time and attention. And if you get really good at any of them, this could a permanent way of earning free cryptocurrency.
Remember there is an essential difference between blockchain games and crypto games. The two notions mean different things.
These are some of the most in handy and obvious ways in which you too can earn free cryptocurrency without investing. If you have more suggestions, feel free to send them and we will happily add them to the list.
Remember that there is a big cryptocurrency market and it grows at an exponential rate. As always, the firsts ones are the most advantaged players.