Crypto Currency

What is the difference between Bitcoin and Ethereum?

It has been a very exciting year for Cryptocurrency with the market value of most major Cryptos increasing dramatically over…

It has been a very exciting year for Cryptocurrency with the market value of most major Cryptos increasing dramatically over the past 12 months. Investors saw the increasing adoption of Cryptocurrency as a payment method and decided to back its potential.

In addition to inflows of capital from investors keen to hold Cryptocurrency, substantial resources were also invested in the technical development of various Cryptocurrencies.

The underlying infrastructure needed to support the wider adoption and use of Cryptocurrency also benefited from increased levels of innovation and development throughout the year.

In the midst of all this activity two Cryptocurrencies in particular have attracted a lot of attention; Bitcoin and Ethereum. This has been for a variety of reasons, but it has resulted in these two Cryptos being the most widely held ones at present.

But what is the difference between Bitcoin and Ethereum? This article will take you on a short journey through the Crypto landscape to explain what these differences are.

 

Bitcoin

 

Bitcoin was the very the first Cryptocurrency. It was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.

It operates on a peer-to-peer basis with transactions taking place between users directly, without an intermediary. Essentially people can send Bitcoins to each other directly thus transferring value to each other without having to go through a bank or other payment provider.

These transactions are verified by network nodes through the use of cryptography and recorded in a publicly available ledger known as a Blockchain.

 

What exactly is a Blockchain?

 

A Blockchain is a public record of all transactions in a particular system that have ever been executed. It cannot be tampered with or edited and is protected by cryptography.

A Blockchain thus stands as an unchangeable record of all transactions on a network, accessible to all participants. It is essentially a public record of all of the transaction which have taken place on a particular network, but it can also be much more.

 

Enter Ethereum!

 

Whilst Blockchain technology, in the beginning, was used as a method to simply record transactions between people using things like Bitcoin, it is now being developed further and used to support applications which are beyond just a digital currency like Bitcoin.

Ethereum is one of those advances. Launched in 2014, it is an open-ended decentralized software platform that enables smart contracts and Distributed Applications to be built and run. This is designed to happen without any downtime or interference from a third party by using Blockchain technology in a different way to Bitcoin.

Ethereum is not just a platform but also a programming language running on a blockchain. It is designed to help developers to build and publish distributed applications, not just transfer value between each other. It is far more than just another Cryptocurrency.

No one owns the Ethereum network itself, but the system runs it cannot be run for free. The network needs ‘ether’, a unique piece of code that can be used to pay for the computational resources needed to run an application or program. Ether is the token you see traded widely on Crypto exchanges.

The potential applications of Ethereum are wide-ranging and it is really only at the beginning of what could be a very exciting journey.

 

Difference Between Bitcoin and Ethereum?

 

While both Bitcoin and Ethereum are powered by the principle of a distributed ledger that is really where the major similarities end.

The difference between Bitcoin and Ethereum is their purpose. While Bitcoin is created as an alternative to regular money and is thus a method of payment and store of value, Ethereum is developed as a platform which facilitates peer-to-peer contracts and other software applications.

While Bitcoin and Ether, the token which runs on Ethereum, are both digital currencies, the primary purpose of Ether is not to be used to make payments but to assist developers in running distributed applications on the Ethereum platform.

 

Conclusion

 

As we have seen Bitcoin was designed to transfer value anonymously just like any other coin but Ethereum has much more advanced aims. It wants to be a platform which can be used to distribute other software applications and facilitate far more complex types of interaction than just the transfer for value.

Ethereum and its goals are more in line with the greater discussion around Blockchain based technology we can see today. Companies around the world see the Blockchain as something which can be used for much more than just value transfer.

It is certainly a very exciting time to be involved in this area. A public peer to peer ledger that cannot be tampered with offers up so many more possibilities than what it is being used for at present. Possibly far more than Satoshi Nakamoto could have envisaged all the way back in 2008.

 

More articles on cryptocurrency in our cryptocurrency section

 

 

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Crypto Currency

The Top 10 Tools for Managing your Crypto Wallet

Buying and Selling Cryptocurrency is relatively straightforward, there are a huge number of guides available online which make the process…

Buying and Selling Cryptocurrency is relatively straightforward, there are a huge number of guides available online which make the process very clear. However, storing and managing your crypto wallet can be a lot more confusing.

Whilst Crypto is stored in a wallet, there are many different types of wallet available all with different features and levels of functionality.

The vast majority of holders of Crypto use ‘hot’ wallets which are software programs which are connected to the internet at all times. They are the most readily available and the easiest to set up. This is especially true of those new to the Crypto market.

This article aims to provide the majority with some insight into the top tools available to help manage Cryptocurrency.

Here we go!

Increase Security

One of the most useful tools for managing your Crypto, especially if you are new to the market is a ‘cold’ wallet, one that it is not connected to the internet.

Currently, the most widely used and tested ones are –

Ledger Nano S

This is a smooth, strong, safe and affordable hardware wallet and one of the most competitively priced. Widely used, it is a multicurrency wallet integrated into a smartcard device.

It is very light and easy to use. To use it you simply connect it to a USB port and you are ready to go. It works on any computer, regardless of the operating system.

TREZOR

One of the best-known hardware wallets. It supports the major Cryptos so would work well as a Bitcoin Wallet or an Ethereum Wallet. There is full support for Windows (version 7 and higher), OS X (version 10.8 and higher) and Linux.

You can also use your TREZOR with Android devices which have USB On-The-Go. Trezor is considered to be one of the most secure ‘cold’ Crypto wallets available on the market today with complex security.

KeepKey

KeepKey works with the wallet software on your computer by taking over the management of private key generation, private key storage, and transaction signing. KeepKey generates a private key using its hardware-based random number generator, combined with randomness provided by your computer.

Once your private key is generated, you are given the one-time opportunity to write down a backup of your KeepKey in the form of a twelve-word recovery sentence. This is one of the simplest wallets to use an is widely available in major online retailers.

Archos

This well established French company with many years’ experience also recently launched a hardware wallet. Many of the features to be found on popular hardware wallets such as the Ledger Nano are replicated here, including the ability to generate a private key and support for a range of currencies.

Bitcoin, bitcoin cash, ethereum, litecoin, and zcash will all be supported, with more to be added. The device can also be used to add an additional layer of security to other third-party wallets.

Manage Your Portfolio

CryptoCompare

If you are one of the many people that hold Crypto across multiple wallets, then this may be the tool for you.

This is an excellent mobile app that aims to assist you to manage your portfolio of Cryptos across multiple wallets. With this app, you not only enter what your holdings are but where they are stored. This may seem like an unusual feature but, it is an excellent one.

It allows you to monitor how much Crypto you have stored in ‘hot’ wallets giving you the opportunity to move them into a ‘cold’ wallet for greater security. This can be an important thing to monitor given how rapidly Crypto values can change.

CoinTracker

This is a platform which you can also use to track your crypto across all exchanges and wallets. CoinTracker automates this process. You start by connecting it to every exchange you use (once it’s supported by the software) and can also add the public address to any wallet that holds Bitcoin, Ethereum, Litecoin, and Dogecoin.

It will automatically read the balance and update it in your portfolio. A useful tool to manage your Bitcoin wallet and Ethereum wallet in particular as these can contain very high values depending on when you entered the market!

Increase Trading Speed

SikurPhone

If you use a ‘cold’ wallet then you are aware of the disadvantages. You may not have it with you when markets change especially when you want to dispose of some Crypto quickly, or even buy more. The potential solution here is SikurPhone.

This is a very high security mobile phone with a built in Cryptocurrency wallet which can be used as a Bitcoin wallet or Ethereum wallet for example.

Don’t get caught out by the markets through your use of a ‘cold’ wallet. Take your wallet with you in this device which also functions as a mobile phone. Far more natural to carry around with you than bringing another hardware wallet that you need a computer to use!

Eidoo

Again this app adds functionality to the traditional wallet and increases trading speed. The app works by creating a mobile app that serves as a multicurrency digital wallet for Bitcoin, Ethereum, and all ERC20 tokens.

Additionally, Eidoo functions as a hybrid exchange, allowing users to sell, buy, spend and convert cryptocurrencies on one platform.

Once users download the Eidoo mobile app, they can secure all their multi-asset accounts and addresses, as well as their signing keys. Eidoo simplifies and protects wallets by allowing users to access their cryptocurrencies in one place with one password, which is comprised of 12 words.

In case of emergency, Eidoo also offers a “recovery tool” designed to provide users with their tokens in a simple manner.

A very cool app and an interesting one to watch from this Swiss start up.

Reduce the number of wallets you need

Whilst you can increase trading speed and security one of the best tools to use is a multicurrency wallet that reduces the number of wallets you need to hold. You can try these two to start.

Exodus

Exodus is designed for people who have never used an exchange. It is really simple to use and particularly good for those trading Bitcoin or Ethereum.

Exodus currently supports Bitcoin, Bitcoin Cash, Bitcoin Gold, Dash, Ethereum, Ethereum Classic, Litecoin and unusually Decred.

Jaxx

Very popular Jaxx was first developed in 2014 and serves not only as a Bitcoin wallet but an app which can store multiple cryptocurrencies such as Litecoin, Dash, Ethereum and Bitcoin Cash.

Ripple is not currently supported but the Jaxx team have hinted they may support this feature in the future.

 

That’s it!

Clearly, there are a huge number of tools out there to help you to manage your Cryptocurrency wallet. Hopefully, this article has given you a good place to start!

 

 

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Crypto Currency

Top 10 Cryptocurrency Exchanges

When entering the Cryptocurrency market or leaving it you will at some stage have to use a Cryptocurrency Exchange. There…

When entering the Cryptocurrency market or leaving it you will at some stage have to use a Cryptocurrency Exchange. There is an ever-increasing number of exchanges available globally, with new entrants to the market appearing all the time. This short guide aims to show you what the top 10 Cryptocurrency exchanges are at present. This will allow you to make an educated choice when choosing what exchange to use to buy and sell Crypto.

Deciding which exchange to use can be difficult. There are pros and cons to each one, some are better for those living in a particular jurisdiction, others more suited to those who are holding a Cryptocurrency that is not heavily traded.

Here we go!

The Cream of the Crop

 

Poloniex – https://poloniex.com

This may seem like an interesting choice for number one but it’s a Cryptocurrency Exchange on an upward trajectory. Poloniex was one of the first exchanges to make it easy to trade Monero and Stellar Lumen. It facilitates trading in a wide range of currencies and US dollar Crypto pairs.

Its also very reliable and users of this Exchange have experienced very little downtime over the last three months, not something that can be said for every Exchange. Its daily withdrawal limits are sensible and its user interface very straightforward. Users gain access to detailed trend analysis and a lot of trading data.

The most exciting thing about Poloniex though was that it was recently acquired by Goldman Sachs backed Circle. Circle is a well-known peer to peer payments firm. Who knows what additional services the already excellent Poloniex will be able to offer over the next 12 months as the two firms are integrated.

 

Coinbase – https://www.coinbase.com

This may be number one for a lot of people. Coinbase is a huge Cryptocurrency Exchange based in the United States. It is the first point of call for many of those who are new to Crypto and its user interface makes it very easy for first-time market participants to use.

It has the advantage of allowing users to buy Crypto with a credit or debit card as well as by bank transfer. Very few Exchanges have this option. Both limits and liquidity are high, the market for Bitcoin is particularly active on this Exchange. Again, it offers a huge variety of Cryptos to choose from.

For those based in Europe, it also facilitates SEPA transfers which can be a great cost saving.

 

Bittrex – https://bittrex.com

Bittrex is another huge Crypto Exchange that is based in Las Vegas. It is similar to Coinbase with the Coinbase user interface perhaps slightly easier to use. However, for the more advanced trader Bittrex offers a really interesting feature.

Bittrex allows a certain amount of customization to facilitate users undertaking algorithmic trading. A real advance and something that is in line with the more traditional financial markets.

Supporting over 190 Cryptocurrencies, it again offers a great source of liquidity and fees which are broadly in line with the general market.

 

Kraken – https://www.kraken.com

Kraken probably would have been further up the list 12 months ago. Kraken is everything you would want from an Exchange and the technical detail available to traders is excellent. A nice user interface is complemented by reasonable fees and again it facilitates SEPA transfers.

However, it did experience some downtime at the turn of the year. During the major December 2017 trading period, it was a little slow and the promised technical upgrades were not delivered as quickly as some users may have wished.

Still an excellent option for traders and one worth having an account on.

 

ANX Pro – https://anxpro.com

Some may consider this an unusual choice for number 5. This Hong Kong based Crypto Exchange has a sizeable European user base after it took on the clients of a Norwegian Exchange some years ago. The user interface is very straightforward, the site rarely has down periods.

It may not have all the bells and whistles of other Cryptocurrency Exchanges, but the technical support is excellent. Even in the busy December period questions to this Exchange went answered within a reasonable time period, with all queries addressed.

The downside is that bank transfer fees to a lot of banks can be quite high. This company has its accounts in Hong Kong so something to consider if you are trading and withdrawing small amounts of Crypto.

 

Notable Mentions

 

Bitstamp – https://www.bitstamp.net

Bitstamp is the oldest Bitcoin Exchange out there founded in 2011. They have competitive transaction fees and a long track record for an exchange.However, the user interface is not as straightforward as other Exchanges and there are not as many payment options.

Still, a tried and trusted Exchange that has been around a long time.

 

CEX.io – https://cex.io

Established in 2013 as the first cloud mining provider, CEX.IO has become a multi-functional cryptocurrency exchange, trusted by over a million users.

The Exchange has developed a multi-level account system with an individual approach to each customer, from Bitcoin beginners to institutional traders. It offers worldwide coverage, multiple payment options, and 24/7 support.

 

Gemini – https://gemini.com

A solid Crypto Exchange with famous backers. The main downsides being it is very limited in what it does. It only accepts US dollars and you can only trade Bitcoin and Ethereum. No speculating in rare Altcoins here!

 

Cryptopia – https://www.cryptopia.co.nz

Founded in 2014 this Exchange is based in Christchurch, New Zealand. Cryptopia is notable in that the first level of verification happens very quickly, and only requires an email address for initial verification.

While Cryptopia does not support fiat money trading, it does support a large number of cryptocurrencies, over 400 to date! Not supporting fiat is clearly a big downside.

 

Revolut – https://www.revolut.com

This may seem like a strange entry, but it is one to watch. This digital bank now allows Bitcoin trading within its excellent app. The convenience and potential of the banking/crypto exchange functionality means that this option deserves a notable mention at least.

Probably one of the most interesting options in the future and potentially a very useful alternative for the casual Crypto trader.

 

That’s it!

Whilst there are a huge number of Cryptocurrency Exchanges out there this article aims to point you in the direction of some of the best.

They may not all be right for you, but this guide gives you a good grounding if you’re starting your search for a new Crypto Exchange.

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Crypto Currency

How are Cryptocurrencies Taxed in the US?

The value of most Cryptocurrencies has skyrocketed over the last six months. Although there has been a recent fall in…

The value of most Cryptocurrencies has skyrocketed over the last six months. Although there has been a recent fall in prices, if you invested in a Cryptocurrency or received it as payment before December 2017 you are still probably sitting on a substantial financial gain.

As with any financial transaction you are subject to tax in the United States if you are a US citizen. The IRS has been very clear on this since 2014, it’s therefore important for you to understand whether you have a tax liability and how much that liability may be.

This short article will give you some guidance as to how you might begin to figure out what that tax liability might be.

 

How Cryptocurrency is defined by the government

 

According to the IRS virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value. That describes Bitcoin or any Altcoin you may hold or have sold at a profit. The IRS has stated that the sale or exchange of convertible virtual currency, or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.

For federal tax purposes, Cryptocurrency is treated as property. General tax principles applicable to property transactions apply to transactions using Cryptocurrency. Under the currently applicable law, Cryptocurrency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.

This is an important technical distinction to note as many people view Crypto trading like forex trading, the IRS ,however, view it as a sale of property.

 

When does a tax liability arise?

 

Taking payment in Cryptocurrency

 

A taxpayer who receives Cryptocurrency as payment for goods or services must, in computing gross income, include the fair market value of the Cryptocurrency, measured in U.S. dollars, as of the date that the Cryptocurrency was received.

For U.S. tax purposes, transactions using Cryptocurrency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of Cryptocurrency in U.S. dollars as of the date of payment or receipt. There is an easy way to calculate the fair market value If a Cryptocurrency is listed on an exchange and the exchange rate is established by market supply and demand.

The fair market value of the Cryptocurrency is determined by converting the Cryptocurrency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied.

If you are self-employed and received Crypto as payment this includes you too. Self-employment income includes all gross income derived by an individual from any trade or business carried on by the individual as other than an employee. The fair market value of Cryptocurrency received for services performed as an independent contractor, measured in U.S. dollars as of the date of receipt is such income too.

 

Making an investment gain from trading Cryptocurrency

 

A taxpayer generally realizes capital gain or loss on the sale or exchange of Cryptocurrency that is a capital asset in the hands of the taxpayer. For example, stocks, bonds, and other investment property are generally capital assets. For most investors in Cryptocurrency, their coins will be a capital asset as they are bought as an investment, not as part of any business.

If this is you then you have to make a capital gains tax (CGT) payment on any gain.

For tax and accounting purposes, capital gains and losses are calculated by determining how much your cost basis has gone up or down from the time you acquired the asset. When you calculate your basis, you’ll figure the purchase price plus any related costs, such as commissions.

You need to pay the CGT when you sell or dispose of the Crypto. You may have a taxable event even if you don’t formally cash out. Anyone using cryptocurrency to pay for goods or services must treat each purchase as a sale.

Some exchanges will offer a summary of transactions which can be used to help you file your taxes but if you withdraw cryptocurrency from an exchange, the exchange can no longer track what happens, so you must make sure that you do.

 

What about mining Cryptocurrency?

 

When a taxpayer successfully “mines” Cryptocurrency, the fair market value of the virtual currency as of the date of receipt is includible in gross income.

If a taxpayer’s “mining” of Cryptocurrency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.

 

What if I swap my Crypto for something else?

 

If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the Cryptocurrency, the taxpayer also has a taxable gain.

 

In summary

 

Whilst trading or taking Bitcoin or any Altcoin may seem like fun, as many projects involving blockchain technology most certainly are, these activities generate serious financial obligations in the United States.

It is important that you are careful and maintain detailed records of any transactions you make using Crypto, in particular, the equivalent US dollar value of the Crypto at the time of the transaction.

As summarised above your tax liability, be it CGT or otherwise, depends on how you are using Cryptocurrency. This short guide will give you a start, but it is always best to get professional advice when it comes to your exact tax liability, especially if your activity in this area is substantial.

Taxpayers may be subject to penalties for failure to comply with tax laws and they can be very large.

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Android, Antivirus, Apple, Crypto Currency, Enterprise, GDPR, Internet Security, iPhone, Mobile

10 Cyber Security trends to look out for in 2018

It is still too early to predict whether 2018 will be safer than 2017 when it comes to cybersecurity. It…

It is still too early to predict whether 2018 will be safer than 2017 when it comes to cybersecurity. It is fair enough to say that this question has been raised since last year wasn’t the best for many IT companies and global organizations. However, experts have already made a few predictions for 2018 based on the current cyber security trends. Let’s have a look at them one at a time:

 

1) A.I. Cybersecurity

Artificial intelligence has come a long way from where it once started. AI-powered programs today are capable of monitoring events which can help identify incoming cyber attacks. However, according to experts, cybersecurity AI may beat the purpose for what it is designed as it may be able to assist hackers in carrying out even more complex attacks. Some have even called them double-edged swords.

 

2) IoT (Internet of Things) with improved security features

Internet of Things, which is a growing topic of conversation today, is the correlation of computing devices with physical objects via the internet, such that they are able to send and receive data. From Apple Watches to Nest Thermostats, IoT will see a growth like never before with some professionals estimating over 20 billion connected units by the end of this year. If anything can cause an obstacle in this positive transformation, it would certainly be a collapse of security. After the massive amounts of DDoS attacks in 2017, security leaders have gotten a heads up about possible compromises through IoT devices. We certainly can expect a good amount of improved security features associated with IoT devices this year.

 

3) Biometric Authentication

Let’s face the truth! Usernames and Passwords suck! They are impersonal and put a burden on users in remembering them. With the introduction of fingerprint sensors on mobile phones and the huge success of Apple’s FaceID, we should expect more of biometric-enabled devices in the coming months. While it might be a little too early to expect biometric authentication in all our daily accounts, we might see a start of a new identity authentication evolution.

 

4) GDPR – General Data Protection Regulation (GDPR)

General Data Protection Regulation is probably something we haven’t heard till lately. GDPR is a set of regulations, expected to go into effect on May 25, 2018, that is intended to strengthen data protection for all individuals and businesses within the European Union. While its to early to predict anything, the GDPR is expected to have a significant influence on the digital sector of Europe.

 

5) Cyber attacks on global organizations

Mainframes are the backbone of most global organizations. These are the computers responsible for processing bulk data such as statistics, census, bank operations and ATM transactions. While security firms focus more on protecting mobile and computer systems, mainframes are being overlooked.

 

6) Cloud security

With the automotive industry recently joining the cloud family, providing users with state of the art navigation systems, it is predicted that there would be huge investments to secure the cloud environment. The priority would be to generate trust among cloud users to store data without hesitation on servers they don’t own.

 

7) Increase in Ransomware

Ransomware, as the name suggests, is a malicious virus where the victim’s access to information is blocked unless a ransom is paid. Typically, the ransom amount is in hundreds or thousands of dollars although sometimes even higher. Last year itself, there has been an increase of 36 percent of ransomware and the trend doesn’t seem to slow down. The Petya Ransomware that caused mayhem in almost all of Europe and other parts of the world in 2017 is a warning to expect more.

 

8) Cryptocurrencies and Blockchains

Cryptocurrencies have been an evolution. However, they do have certain drawbacks, especially when it comes to bitcoins. Since Bitcoin transactions do not require identity verification and can be done anonymously, they have fueled events of ransom threats like never before.

This is predicted to continue growing as we progress into 2018. Cryptocurrencies have been built around the concept of blockchains and this technology is just limited to them. While it is tough to predict what other implications blockchains might have on cybersecurity, some educated predictions say they could be used in decentralizing access control and improving identity management.

 

9) Threats to serverless apps

While serverless apps have some considerable advantages, they are potential threats to cyber-attacks, the reason being – the lack of servers. It might seem counter-intuitive at first as for the most part, the security of the serverless application is controlled by the customer itself. However, that isn’t always the best idea, as a users device might not always be the safest location to store important information.

 

10) Safer for everyone

2017 was a year when we experienced cyber attacks we have never seen before. Such events have pushed security experts to carry out careful investigations to make sure certain cybercrimes do not repeat. Governments and tech-firms have invested an immense amount of money to tackle a problem that caused more than $3 trillion of damages worldwide just last year. The increased amount of general awareness and the proper preparedness from various authorities should make the internet a much safer place for everyone.

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