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How Accepting Bitcoin Can Help Your Business

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Education will be essential to increasing Bitcoin’s acceptance and usage by merchants, institutions, and individuals. Start accepting Bitcoin for business.

Recently, cryptocurrencies and bitcoin have become the main topics in the financial industry. A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining characteristic of a cryptocurrency and arguably its most endearing allure is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. Cryptocurrencies have their benefits and drawbacks. The paper elaborates different aspects of cryptocurrencies, starting with their early development, challenges and risks, opportunities, advantages and disadvantages, and their future. Also, the paper covered issues related to the practical and technical function of cryptocurrencies. It was concluded that it is not easy to predict the future of cryptocurrencies since there is a lot to be done especially in the field of formal regulations. However, the banks and other financial institutions should see and consider cryptocurrencies as an alternative for the financial transactions in the future.

 

Faster, Cheaper Payment Solution

Bitcoin transactions can occur at any time, are fast and have lower fees. The average Bitcoin transaction is executed in 10 minutes with fees for simple P2P transfers to remittances coming in at under 1%. This is due in large part to the fact that traditional third-party financial institutions like banks are removed from the transaction process. Merchants and individuals using bitcoins are not restrained by set banking hours, withdrawal limits or long transaction execution periods before funds become available.

 

Safeguards Against Currency Manipulation

Bitcoin is not owned or controlled by a country or governing body. Additionally, unlike many other forms of currency, the number of bitcoins that will be issued is finite, exactly 21 million. The benefit of this lack of ownership and the limited amount is that the bitcoin supply cannot be artificially manipulated. When it comes to fiat currency, governments can easily print additional paper or mint coins, devaluing existing money in circulation and causing inflation. The decentralized nature of bitcoin decreases monetary concerns and mostly leaves fluctuations in value up to natural supply and demand economics.

 

Greater Consumer Protections

The use of bitcoin as an alternative to fiat currency protects the downside that can occur with traditional bank accounts. This includes the threat of bank failure or skimming. In the event of a bank failure, a customer can face frozen bank accounts while liquidation plans or bailouts are hashed out. In some countries, traditional bank customers may even find that banks will skim money off of customer’s accounts to remain solvent. This occurred during the banking crisis faced by Cyprus in 2013. With bitcoin, individuals remain in full control of when and how their assets are retrieved, transferred and spent. Essentially, digital currency users become their bank.

 

Greater Transparency

Because all bitcoin transactions are permanently recorded on the blockchain, all sales are public and traceable. The balance associated with each address is also part of the public record. The blockchain makes bitcoin much more transparent than many other monetary systems.

 

Private and Secure

Although all bitcoin transaction details are stored publicly on the blockchain, the identities of the users involved remain relatively anonymous. Because payments can be made without including personal identification information, Bitcoin provides inherent security against identity theft. Additionally, there is no risk of being charged twice or of fraudulent charges being assessed to your wallet thanks to the blockchain, which monitors unique coin addresses and eliminates the possibility of paying multiple people with the same bitcoin. Bitcoin doesn’t offer the complete anonymity of cash but is undoubtedly a far more private experience than making online payments or transactions using debit or credit cards.

 

Final Thoughts

Bitcoin is currently the most valuable and widely adopted digital currency. A growing number of businesses, charities, and other organizations are accepting bitcoin payments ranging from e-retailers to law firms to sports franchises. Further, recent inflationary and banking crises across the globe have highlighted some of the critical threats inherent to fiat currency. This creates additional opportunities for decentralized digital currencies. Education will be essential to increasing Bitcoin’s acceptance and usage by merchants, institutions, and individuals. The system will also need to address common criticisms around illicit use of bitcoin and work diligently to build regulatory and legal frameworks around the world.

 

A guest post by KillerLaunch.com

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Bitcoin and Dark web: Transactions increasing, Values decreasing

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The bitcoin transactions on the dark web, underground illegal marketplace have doubled in the last year (2018) in comparison to 2017.

The bitcoin transactions on the dark web, underground illegal marketplace have doubled in the last year (2018) in comparison to 2017 while the value of the transactions has decreased from around $700 million in 2017 to $600 million in 2018 as revealed by Chainalysis’s report.

 

Dark web not affected by the bear market:

It seems that the dark web is not affected by the bear market trend which led to the price of bitcoin to fall from over $19000 to around $3200 last year. Even during the bear market, the transactions on the dark web have been rising.

According to the report by Chainalysis, a blockchain analysis company, the value of the total transactions on the dark web was around $700 million in 2018 while the value of bitcoin transactions in 2018 was around $600. This was probably due to the shut down of dark web markets such as AlphaBay and Hansa in 2017.

The dark web websites have been experiencing massive growth in terms of the number of cryptocurrency transactions even though the prices of these cryptocurrencies have seen a tremendous decline over the past year. According to Kim Grauer, the senior economist at Chainalysis, the buyers and sellers on these dark web marketplaces really do not care about the price of bitcoin or other cryptocurrencies while transacting. She also believes the in the coming time, the value of these transactions may further decrease as the governments are taking strict measures in order to shut down these markets.

 

Binance using Chainalysis:

Binance, which is one of the largest cryptocurrency exchanges revealed last year that it was using Chainalysis’s KYC and anti-money laundering software to prevent any illicit transactions on the exchange. The software by Chainalysis is used by companies to perform investigations in terms of financial transactions. The same software is also being used by many institutional clients of security firms for compliance.

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Trump Government Shutdown: Impact on Bitcoin ETF, Bakkt and Cryptos.

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The ongoing government shutdown is devastating for the crypto industry. Major functions of the government are simply not working right now.

The ongoing government shutdown is devastating for the crypto industry. Major functions of the government are simply not working right now. The SEC announced that it will be limiting its operations reducing its staff during the shutdown and restricting the functions to those that meet critical needs and unfortunately the Bitcoin ETF may not be a critical need to the SEC.

The US CFTC is also doing limited staffing during the federal government shutdown. There is no time limit as to how long the government shutdown is going to go on but the longer it goes on, the longer will be the delays for these key items that the people have been waiting for. So the possibility of an extended government shutdown could definitely impact the cryptocurrency industry in the United States.

 

Will the government shutdown impact BAKKT?

Obviously, it impacts the launch of BAKKT, particularly their futures because the CFTC does not have the staff sitting around to regulate. In fact, BAKKT has announced that basically there is an indefinite delay at this point on the launch of their futures contract which is unfortunate but considering the dysfunction or the government shut down in America, it’s not really surprising.

But in the background of all this, it’s not as though that the Intercontinental Exchange has just gone to sleep and forgotten about all of the things that they want to do. They have recently acquired an established futures broker hoping to strengthen their bitcoin offering.

 

Impact on Bitcoin ETF

This government shutdown could lead to one of the SEC’s longest shutdown in recent years. So maybe the Bitcoin ETF is going to remain at the table for a long time from now because we have to realize that when these organizations come back to work there is going to be a massive backlog which will depend upon how long the government shutdown goes on. The SEC and the CFTC both have issued orders freezing all pending administrative proceedings until further notice and this will not be changed until we see the federal government gets back to work.

The fascinating thing here is that technically if the SEC fails to approve or disapprove the Bitcoin ETF by the deadline the ETF, in theory, shall be automatically approved but the reality is that probably won’t happen. The SEC will probably just put out a one page denial or a one page request for withdrawal or a one page delay notice or something like that so even though they are running with a low staff, they are probably just going to keep kicking the can down the road on all these things instead of just letting it happen but there is still a technical possibility of the Bitcoin ETF getting directly approved.

 

Reg A+

Obviously, the Bitcoin ETF and the Bitcoin futures contracts by BAKKT gets a lot of attention but that’s not all that’s going on. There are about sixty different countries which have applied for Reg A+. Reg A+ is basically a mini IPO. SO this permits the eligible issues to offer securities to the general public and not just to accredited investors and some of these will definitely be cryptocurrency projects. But like everyone else, even these companies need to wait until the government shutdown is over.

 

Is Bitcoin influenced by the government shutdown?

Looking at Bitcoin, we can see that it is not super influenced by events like these. Although the Bitcoin ETF, Bitcoin Futures, BAKKT and all of these things get a lot of people excited but of course remember that we don’t need Wall Street. The SEC and CFTC are regulating for projects, especially for Wall Street.

The IRS has had to send home 56% of its staff. This is an agency which is already dramatically underfunded and then to send home even more of their staff during tax season means that not a lot of audits are going to be happening and they are already struggling to adapt the new tax policies which were put in place recently.

 

The State Level Innovation:

While the Federal Government cannot regulate during the government shutdown, the State Governments are pushing ahead with very innovative legislation and playing with this technology and trying new things. For example, Vermont is putting insurance on the blockchain, Nevada has issued 1000 marriage certificates on the Ethereum blockchain, Wyoming is bringing land records to the blockchain, Bitpay is helping Ohio accept bitcoin for taxes, two Colorado senators have filled a bill to introduce a digital token act which would allow cryptocurrencies to bypass securities laws which if passed could turn Colorado to a leading legislation within the United States in terms of cryptocurrency regulations and lastly, New York has become the first state to create a cryptocurrency task force which will be studying the regulation use and definition of digital currency.

 

Even though the Federal Government is having a dysfunction due to the government shutdown, there is still innovation happening. What are your thoughts on the government shutdown? Tell us in the comments section below.

Credits to CryptoLark. You are doing a great job!

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Bitcoin Lightning Network Updates 2019: Advancements and Forecast

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The popularity and commercial use of Bitcoin Lightning Network has increased at a very accelerated pace during the last few months. The reason is the improvement of the network day by day and increasing convenient and secure way of the transaction between consumers through this network. Being a peer-to-peer connection, this network gives features that even if two consumers are not directly connected to each other through a channel, any consumer on the network can do the transaction with another consumer on the network.

 

Let us have a glance on 15 new additions in Bitcoin Lightning Network in the last few months and also what could be the new features to come:

 

1. Fast payment:

Now, the payment done on the lightning network is so paced and frequent. You can compare this speed of payments with the speed at which data is transferred on the internet between connections. This has reduced the scalability problem of bitcoin for surety. No. of payments per second in the network has been increased considerably.

 

2. No restriction in the duration of the open network:

There is no any type of timeout kind of thing between the lightning network. That means that if both consumers wishes, the channel between them would be open for an indefinite time. Their channel will not be closed after a time and hence cost and time required to closing and restarting the channel has been minimized.

 

3. The enforcement of third-party for security:

Earlier, if in a channel, one consumer who wanted to steal money, closes channel; the second consumer has to report within a given time period to prevent the theft. The network is now planning to enforce third-part which wouldn’t be given any control over transactions but only performing the above function.

 

4. More secure routing in the network:

Unlike normal routing, in this network, a peer has only information of the previous peer and the next peer. A peer doesn’t have the knowledge of the originating and destination peer of the network in  Bitcoin Lightning Network. Thus, making it a more secure mode of payments and fund transfers.

 

5. Support more kind of payments:

Bitcoin Lightning Network now supports more kind of frequent payments, thus, there are only a few loads on Blockchain payment channel. Now, blockchain payment has only to take care of payments like closing and opening of channels of payments. Thus reducing extra overheads from the blockchain channel.

 

6. Functionality to close channel whenever desired:

Unlike regular connection, where there is a fixed timeout to close the channel, in this network, now two parties if agreed to each other can cancel the channel whenever they want. So, they don’t have to wait for unwanted time to close the channel even if the fund transfer is completed, they can close it immediately after mutual agreement.

 

7. Payment without invoice:

With this new feature, payment can be funded from one consumer to other without creating the invoice for the payment first. This new feature creates a fast streaming payment of funds. Now, the need of creating an invoice ahead of the transfer of fund which makes the fund transfer slower is non-relevant.

 

8. The functionality of single-funded channel:

Suppose a consumer wants to pay second consumer and the payment is uni-directional, then there is no need of another consumer to add fund in the channel and just a single-funded channel can be created with only first consumer participating and adding fund in the channel.

 

9. Payments across different blockchains:

Now, the lightning network allows payments across various different routes of blockchain provided they have same hash locking. Hence, the payment can be done from one channel of blockchain to channels of another blockchain only if they have the same hash code and locking.

 

10. No trust with third-party institutions:

The channel is completely shared between two consumers and no other third party has any access over the funds during the process of the transaction. This gives more security and safety to the fund transfer process done in bitcoin lightning network channel.

 

11. Provision of conditional payment:

Depending upon the result of some payment, now a probabilistic model of payment can be performed. This feature is known as sub-satoshi kind of payment. For example, A created a 1-satoshi kind of payment and pay B 0.3 satoshi with an odd of 10-to-3. This means that 70% of the time, A pays him 0 satoshis whereas 30% of the time, A pays 0.3 satoshis.

 

12. Less transaction fee:

Bitcoin is aiming to capitalize on small stores also. Hence, this network would cost a very little transaction fee, perhaps the least for any kind of transaction of funds. Hence, it could be used for daily purposed also like paying for restaurants, stores etc.

 

13. More Anonymity:

It will be impossible to track the payments completed through lightning channel network as a major part of these transactions take place completely isolated of the main channel of the blockchain.

 

14. Bi-directional fund channel:

For the very first time after the evolution of bitcoin, the funding has now become of two-sides. The lightning channel of bitcoin supports bi-directional fund channel.

 

15. Decentralized network:

Early testing of the bitcoin lightning network depicts that it is possible to have a decentralized network above the layer of blockchain transaction resulting to transfer funds from one peer to another peer even in multiple hops.

 

However, there are various still shortcomings. Bitcoin is aiming for various changes and upgrade in its technology to provide a more convenient and secure channel above the layer of the payment channel of the blockchain, thus increasing the scalability of the bitcoin payment. Let us also a brief glance at some upcoming features that the lightning network aims at:

 

1. Evolution of hubs like nodes:

A node similar to a hub in a network which would finally collect more than one payments of one or more peers would make a strong centralized network.

 

2. Reduce the complexity of the channel:

In the present time, the channel is very complexed. Several attempts are made by the bitcoin to make it a little bit simpler.

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