Is Bitcoin A Ponzi Scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money, or the money paid by subsequent investors, instead of from profit earned by the individuals running the business. Ponzi schemes are designed to collapse at the expense of the last investors when there is not enough new participants.
Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns. Like other major currencies such as gold, United States dollar, euro, yen, etc. there is no guaranteed purchasing power and the exchange rate floats freely. This leads to volatility where owners of bitcoins can unpredictably make or lose money. Beyond speculation, Bitcoin is also a payment system with useful and competitive attributes that are being used by thousands of users and businesses.
Faq On Bitcoin Transaction
If the price of Bitcoin increases or decreases, does that indicate the listing on the Darknet Market will become more expensive or cheaper?
The answer is not at all! The price remains the same in such conditions. Say, for example, if a vendor has a listing for $20 and the price of the Bitcoin drops, then the item will still be $20. Only the Bitcoin equivalent will change in this case. The vendor is supposed to lose money in this situation following someones purchase when the price of Bitcoin drops.
Is it necessary for both the Bitcoin Wallets to be online simultaneously?
Absolutely not. In order to make transactions, it is not mandatory or necessary to have both the Bitcoin wallets to be online. The transaction will be processed automatically but you have to make sure that you follow the tips in the following chapters.
What is Satoshi?
Currently, the Satoshi is the smallest unit of Bitcoin currency that is recorded on the blockchain. On calculation, it is one hundred millionth of a single Bitcoin . Find more details in the guide.
How Does Bitcoin Have Value
Another common question asked about Bitcoin is how a currency system and units thought up a decade ago, based entirely on computer code and not officially endorsed by any government or international body can have real value. The answer is rather simple and the same reason as any other asset has value supply, and demand. The demand for Bitcoin comes from the fact that people believe in it as a medium of exchange and in its intrinsic value as a finite commodity .
A working currency needs to be scarce, divisible, portable, durable, fungible and easy to verify. The value of fiat currencies, which are also not backed by any physical asset, is in the fact that they are accepted as a representation of value and means of exchange. The only real difference is Bitcoins status as a currency is not endorsed by any government or central bank but simply by user-generated demand.
While a growing network of merchants do now accept Bitcoin as a means of value exchange to pay for goods and services, this quality is still very much in the early stages of development. Currently, Bitcoins value is derived from the fact that there is demand for it based on its prospective future exchange value and potential to become a universally accepted means of value exchange.
Its value is also considered intrinsic in a similar way to gold because, unlike fiat currencies, supply is limited. More Bitcoin cannot be created out of thin air in the same way fiat currencies are through monetary policy.
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Most Popular Ways To Earn Bitcoin For Free
Lets not forget that Bitcoin recently surpassed $65,000!
I am not too surprised by this crazy run because the concept of truly decentralized, borderless, and uncensored digital money is revolutionary and worthy of attention. People around the world have also started appreciating Bitcoins power.
Besides, for citizens of countries like Argentina, Venezuela, Zimbabwe, and Greece, the idea of having a currency that increases their purchasing power is unique and exciting. The realm of Bitcoin is spreading every day.
Many have fallen into the pit of scams to earn or buy bitcoin. It is why in this article, we will discuss some of the authentic and low-entry barrier ways to earn Bitcoin.
How Does Mining Help Secure Bitcoin
Mining creates the equivalent of a competitive lottery that makes it very difficult for anyone to consecutively add new blocks of transactions into the block chain. This protects the neutrality of the network by preventing any individual from gaining the power to block certain transactions. This also prevents any individual from replacing parts of the block chain to roll back their own spends, which could be used to defraud other users. Mining makes it exponentially more difficult to reverse a past transaction by requiring the rewriting of all blocks following this transaction.
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Bitcoin Private Keys: Everything You Need To Know
What if you lost all of your bitcoins tomorrow? What would you do?
Let me stress this point:
If you dont own your private key, you dont own your bitcoins.
Yes, you read that right.
Even the most knowledgeable man on Bitcoin says:
The private key must remain secret at all times because revealing it to third parties is equivalent to giving them control over the bitcoins secured by that key. The private key must also be backed up and protected from accidental loss, because if its lost it cannot be recovered and the funds secured by it are forever lost, too.
In my earlier guide on Bitcoin wallets, I have used two terms extensively- Private Address and Public Address . These keys are what makes Bitcoin the safest and most widely used cryptocurrency.
To understand private keys and public keys, let us look at an example.
Consider a mailbox where you receive your physical mail.
It has a unique and specific number . If someone has to deliver you a letter, he/she must know your house/flat number to deliver it.
And as the receiver, you have a private address to unlock the mailbox and collect your belongings.
In real life, do you give your keys to someone unknown?
- No. Of course not.
You always keep track of your key and dont jeopardize the contents inside of your mailbox.
In the next section, I will tell some basic technical aspects of these keys.
Doesn’t Bitcoin Unfairly Benefit Early Adopters
Some early adopters have large numbers of bitcoins because they took risks and invested time and resources in an unproven technology that was hardly used by anyone and that was much harder to secure properly. Many early adopters spent large numbers of bitcoins quite a few times before they became valuable or bought only small amounts and didn’t make huge gains. There is no guarantee that the price of a bitcoin will increase or drop. This is very similar to investing in an early startup that can either gain value through its usefulness and popularity, or just never break through. Bitcoin is still in its infancy, and it has been designed with a very long-term view it is hard to imagine how it could be less biased towards early adopters, and today’s users may or may not be the early adopters of tomorrow.
Legal Status Tax And Regulation
Because of bitcoin’s decentralized nature and its trading on online exchanges located in many countries, regulation of bitcoin has been difficult. However, the use of bitcoin can be criminalized, and shutting down exchanges and the peer-to-peer economy in a given country would constitute a de facto ban. The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. Regulations and bans that apply to bitcoin probably extend to similar cryptocurrency systems.
According to the Library of Congress, an “absolute ban” on trading or using cryptocurrencies applies in nine countries: Algeria, Bolivia, Egypt, Iraq, Morocco, Nepal, Pakistan, Vietnam, and the United Arab Emirates. An “implicit ban” applies in another 15 countries, which include Bahrain, Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar, Saudi Arabia and Taiwan.
Do Bitcoin And Other Cryptos Have Any Added Advantages Over Equities
Bitcoin has shot up in price at the start of the week following a major upgrade to its network. Even the rejection of a spot bitcoin ETF by the SEC appears to have done little to damage bitcoins price prospects. At press time, the token, post some correction was trading at the $65.8k mark. Nonetheless, whats the projected price mark for the largest cryptocurrency.
Gareth Soloway, the chief market strategist at stock technical guidance platform InTheMoneyStocks.com believes that the token still had some room to left to record a fresh new ATH. Although, BTC needs to cross one specific benchmark.
According to his narrative, BTC could reach the $75k to $77k mark if it sustains trading above $67,000 for at least two weeks. Nonetheless, there are certain possibilities of a corresponding price correction. Likewise, BTC might be affected.
Source: Kitco NEWS
Consider the plot mentioned above, a double top, historically, whether theyre stock charts or crypto charts, there could be significant highs before major moves to the downside.
So, the last thing an investor wants to do is put in new capital before knowing for sure that this is a major break to the upside. Now, if it gets kind of above the recent highs and holds above $67,000 for a week or two, then I think it will go to at least $75,000 to $77,000. Thats my next calculated resistance level, Soloway said.
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How Can I Tumble Bitcoin
When you have already decided to tumble, you need to go through this path: Bitcoin Exchange -> normal wallet -> Tumbler -> Electrum on Tails -> DNM. This way you do not directly indulge in sending the Bitcoins you bought to a tumbler that could get you into difficulties as explained in the foreword.
Important: If you are using a centralized tumbler, visit the tumbler website on Tails, store any of the information it provides you such as some tumbling services provide you with a PGP signed message having your details for your tumbling process and write down the Bitcoin address where you are required to send the Bitcoins to. After that boot your regular OS and send the Bitcoins to that address . If the tumbler offers a random time delay and/or multiple output transactions, then use them.
It is additional while free OpSec strengthening only costs you a bit of time. If you fail to choose these options, it might serve as a trivial to spot your cleaned Bitcoins. Take for example, if you send 1 BTC to a tumbler, what all an adversary has to do is just to monitor the Bitcoin transactions over the next couple of minutes and reach out for a transaction that is as huge as 1 BTC minus the tumbler fee. Now he has found out the Bitcoins that you think are clean. The smart step on this is to use a random time delay and multi-output transactions whenever offered.
Who Controls The Bitcoin Network
Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can’t force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.
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Selling Bitcoins With A Bank Account
Probably the most common method for selling your Bitcoins would be via a wire transfer or some other form of transfer to your bank account .
Is Bitcoin Vulnerable To Quantum Computing
Yes, most systems relying on cryptography in general are, including traditional banking systems. However, quantum computers don’t yet exist and probably won’t for a while. In the event that quantum computing could be an imminent threat to Bitcoin, the protocol could be upgraded to use post-quantum algorithms. Given the importance that this update would have, it can be safely expected that it would be highly reviewed by developers and adopted by all Bitcoin users.
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Who Can Help Me Figure Out My Bitcoin Taxes
If you’re looking for more hand-holding, we urge you to consult a tax professional. The basic tax code is notoriously complex, and crypto activity can get awfully complicated quickly. When in doubt, hire a pro.
“I always tell people to inform your tax return preparer early on that you invest in cryptocurrency. Tell them during the year that you have crypto and you’re going to transact in crypto,” said Hunley. “And if you’re going to invest in cryptocurrency, if you can hold it for more than one year, you need to do that. Then you get a lower tax rate, and you want to take advantage of that.”
And, as with everything cryptocurrency-related: Do your research, pay your taxes and caveat emptor.
How Do You Sell Bitcoins
When you feel like its time to trade those precious Bitcoins back to fiat money there are a few things youll need to think about.
First, how do you want to get paid?
Do you want to receive money to your PayPal account? your credit card? your bank account? or maybe you prefer cash?
These considerations will lead you to the second question: Which exchange do you want to use?
Different exchanges provide different payment methods, fees, and exchange rates. Its important to conduct ample market research before choosing the right exchange.
Finally, theres the issue of taxation.
I wont go into detail about this one since its different for each country. Ill just say that its important to know how your country taxes cryptocurrency sales in order to understand if and when to report about the sale to authorities.
Some countries havent come up with clear guidelines, while others have very strict rules. Make sure to consult a CPA in your jurisdiction.
Now that weve got the basics out of the way, let me review the various methods you can use to sell Bitcoins.
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Did You Buy Your Btc Completely Anonymously
If you have bought your BTC completely anonymously , you must go:
Otherwise, you would just reveal information unnecessarily with the normal wallet in the default BTC sending path as described above. If you want to be extra cautious about it, you can go through this path:
In order to set up your normal wallet , just go to the Electrum website, download it and follow the instructions set out in the previous chapter to set up a new wallet.
This process is also included to add plausible deniability. You can always say that you have withdrawn the Bitcoins from the exchanges to your own wallet, i.e., the normal wallet. Then you sold them to any anonymous stranger, the one who owns the Electrum wallet on Tails, who then transferred them to the market. That way you do not at all incriminate yourself and have some plausible deniability.
With the recommended path, you can claim that someone else has sent the Bitcoins to a DNM and that the exchange will not ban your account as you did not send them to a DNM directly.
Note: Some darknet markets have a minimum limit of Bitcoins that you have to send for a deposit. Make sure to meet that requirement or else you could lose your money!
Easy Ways Of Earning Bitcoin
This concludes my write-up here. Before I leave you to explore all these options of earning Bitcoin, I want to address one thing Why didnt I talk about Bitcoin gambling or mining on this list?
I havent included them because gambling isnt legal and mining Bitcoins is not for everyone because of big mining farms and ASICs.
That being said, if you want to get involved in mining, you can join a cloud mining service like Genesis mining or Hashflare or buy an ASIC from Bitmain.
Now its time to hear from you: Which method you are using to earn bitcoins? How has your experience been? Did I miss any more super easy and effective ways to earn bitcoins?
Let me know your thoughts in the comments section below!
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You Can Manage Your Money In Any Way You Want
Money management is one of the most important aspects of a trading app our team believes that managing your money should be the easiest part of the trading process, not the other way around. Some trading platforms tend to make you go through long withdrawals or funding processes while thats not bad in most cases, it can be annoying for some people.
With Bitcoin Smarter, youre free to manage your funds in any way you see fit. The money you invest or gain is 100% yours, and you can choose to save it, re-invest it, or withdraw it to another account as soon as you want.