What If You Wish to Buy and Hold Crypto Coin Using a Cryptocurrency Exchange?

What if you want to enter positions multiple times a day using a trusted cryptocurrencies trading platform, and need to keep a close eye on the smaller, narrower timeframe charts – the five-minute charts or the one-minute chart for example?

You can do this in the equities market; can you do it in cryptocurrency? Of course, you can.

Let us make use of Coinbase to illustrate the point.

During 2017, in anticipation of market demand for this kind of shorter-term cryptocurrency trading, Coinbase created a platform called GDAX.

GDAX is very similar to the platforms that traders use to buy and sell more traditional financial assets. Think of it as a cross between ETrade’s Active Trader platform (for the equities traders out there) and MetaTrader 4 (for Forex traders).

The platform allows for rapid order filling on purchases and sales of a wide variety of cryptocurrencies (including bitcoin) and also offers a comprehensive charting package that includes all the standard features – different chart types, multiple time frames, on the chart order placement, all that sort of thing.

In the interest of balance, it is worth noting that there are many other platforms that also, offer charting facilities similar to that of GDAX, but the latter is quickly becoming the industry standard.

So, how can you gain access to GDAX?

Again, this is a relatively simple process. First, you need to sign up to the platform and open an account. Once you have an account in place, you need to fund your bitcoin wallet with BTC.

Once funded, you are free to open and close positions just as you would with any other financial trading platform.

If you expect the price of bitcoin to rise in relation to Ether, for example, you can go long the BTCETH pair, simultaneously buying bitcoin and selling Ether. When you want to close out the position (so, in an ideal world, once the pair has risen by a certain amount), you sell bitcoin and buy Ether simultaneously, returning to a net flat exposure. The profit you’ve made is calculated by the difference between the amount of bitcoin you paid for the Ether and the amount of bitcoin you received when you subsequently sold the Ether you temporarily held.

Most Cryptocurrency exchanges will offer to buy and sell access to a pretty substantial number of cryptocurrencies. Some will even provide cross-asset pairs, meaning you can trade ICO tokens off against one another.

For now, let’s just stick with bitcoin.

There’s another way to trade bitcoin, however; one that doesn’t necessitate you buying the underlying asset at all.

This is through bitcoin exchanges.

The best way to think of this concept is a sort of hybrid between contracts for difference and forex. It’s similar to CFDs in the sense that you can take a position on the asset in question (in this case, bitcoin) without actually taking ownership of it. It’s like forex in the sense that you take a position based on the fluctuations in valuation between a base and a quote currency and – generally – it’s done through a platform that operates very similar to (or, in many cases, also is) a currency trading platform.

This is why we’re referring to this method of trading bitcoin as doing so through a bitcoin broker. It’s not technically a bitcoin broker that you are going to be using – at least not in the vast majority of cases. Instead, it’s a forex broker that offers bitcoin (as measured against another asset, generally USD but also sometimes other cryptocurrencies) as a CFD.

The mechanics of the trade, of course, are almost identical to those with which you would trade bitcoin using a bitcoin exchange. If you think bitcoin is going to increase in value against the USD, you buy the BTCUSD pair and close out the position when you think it’s done increasing.

Just as with the bitcoin exchange platforms, the most used method of tracking the price fluctuations is through the use of price charts, which practically every forex broker is going to offer you free of charge.

So, if the process is so similar, why would anyone use a forex brokerage to trade bitcoin as opposed to a bitcoin exchange?

Well, because through a forex brokerage you can very quickly go short on bitcoin.

Until recently, going short on bitcoin was a pretty tedious process. Sure, you could sell once you though the price was done increasing, converting your capital to fiat and then buying bitcoin once you believed price had corrected to an optimal point.

Through this just described method, however, you’re not actually profiting from the decline. You can visit Rubix on Bitcointalk as well.

If you use a forex broker to short a bitcoin CFD, however, you can profit from downside action. With the help of website builders like Weebly, brokers have a presence online.

With a short sell position through a forex brokerage on a bitcoin pair CFD, you are actively profiting from the volatility. Visit here to find out: https://cryptoexchange2019.wordpress.com/

This is really the only technical distinction between the two types of trading but, for many, it will be enough to justify foregoing the ownership of the underlying asset and opening an account with a forex brokerage that offers access to cryptocurrencies.

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How Can Companies Raise Money Through an Initial Coin Offering Through Crypto

This is where Ethereum, as stated by top Cryptocurrency Exchanges, comes in to play.

As things stand, something like 95% of ICOs has been conducted using the Ethereum platform. This is really for no other reason than it is the platform most suited to the process, both in the sense that you can create a smart contract-based DAO through the platform and create or issue tokens all in the same place.

So how does it work?

Considering the high-level technical concepts that underpin the system, it’s actually incredibly simple to set up, conduct or take part in an ICO.

The process that has been used most widely to date is as follows:

A company decides it wants to conduct an ICO and, logically, decides that it wants to do it through the Ethereum platform. Said a company needs to do two things to give itself a chance of success:

The first is to create tokens for the issue. The second is to make these tokens look attractive to buyers or investors.

The first part is easy.

The company uses the Ethereum platform to create what are called ERC20 standard tokens.

You can either do this at Ethereum itself, or there are numerous third-party trading platforms available that make the creation of these tokens simpler to people who aren’t familiar with Solidarity, which is the language (that is for the most part) used to code in Ethereum.

Phase 2 is more difficult. It is during this phase that you, as a company looking to conduct an ICO must convince people that what you’re trying to create is worth their investment in.

Or, to put that another way, and in line with our previous discussion on what these tokens are, that the symbols which represent your company and that the buyers receive in return for their cash are likely to increase in value over time.

The standard way of going about this right now is through the production of a white paper and the publishing of this white paper online as part of a website that – pretty much invariably – details the team, the concept and the history of the company (which is often relatively thin).

Once everything is live, you set a start and end date for the ICO, which is basically just a crowd sale that starts and ends as defined by the restrictions you’ve just created.

After that, you’re good to go.

So where does Ethereum come into all of this?

To buy tokens as part of the crowd sale, individuals need to send Ether (the token used as a reward on the Ethereum blockchain, as outlined above) to a particular Ether wallet (which is owned by the company in question).

On setting up the ICO, the company that is raising the money will have developed smart contracts that can register the receipt of Ether to the wallet in question and can execute on a return transaction that sends a predefined number of tokens (as defined by the amount of Ether sent to the wallet) to the initial sender.

What you should pay attention to is that the only actual smart contract that the company conducting the ICO needs to set up is the one that’s detailed in the previous paragraph – the one that deals with the receipt and issue of Ether and tokens respectively.

The underlying business, the operational activity, and company that the person buying the tokens are funding can be nonexistent.

This is why the ICO market is so risky right now.

Investors must rely on white papers, which in many cases are beyond the technical understanding of those reading, to make informed investment decisions. There is no real regulation (as yet), and there is no obligation on the part of the ICO company to actually execute on the strategy outlined in its white paper. No legal obligation that is.

Of course, this hasn’t stopped people from taking part in ICOs – nowhere near.

During the first six months of 2016 alone, technology startups raised close to $1.3 billion

Through the above-described mechanism. Records are being broken virtually every week, with the current highest amount of capital raised (as of August 2017) being Tezos‘ huge $232 million haul mid-July. Before that, the record was held by Bancor, which raised $153 million in just three hours in June and totaling a haul that came in at $51 million more than it sought to pick up.

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How One Can Participate in the ICO Market Through a Top-Rated Cryptocurrency Trading

All an investor looking to take part in an ICO through using a quality Cryptocurrency exchange needs to do is to send Ether to the wallet listed on the website of the ICO in question during the period when the crowd sale is open.

To do this, of course, you will need Ether, so let’s talk about how to pick some up for yourself.

Ether is, of course, different to bitcoin in the sense that it is a different cryptocurrency and it’s resting on a separate blockchain. From a transaction standpoint, however, it is remarkably similar. To store bitcoin, you need a bitcoin wallet. The same is true of Ether but, in this instance, it’s an Ether wallet you need. Similarly, just as you can open an account with an exchange like Coinbase and by bitcoin, you can open an account with Coinbase and buy Ether.

Coinbase also offer Ether wallets, which is one of the reasons that the platform has become so popular over the last few years – it makes everything incredibly easy for beginners to the space and does so in a (relatively) secure fashion while offering clean and straightforward access to the ICO boom.

So, let’s break this down in a simple, easy to understand transaction flow.

Head over to an exchange like Coinbase, open an account, create an Ether wallet and use either bitcoin that you already hold or fiat currency (either in your online wallet or through credit card or bank account linked to the account in question) to buy Ether over the exchange.

You’ve now got a bunch of Ether sitting in your Ether wallet.

The next step is to head on over to the website of the ICO that you are looking to take part in and to find out the Ether address that is linked to the crowd sale. More often than not, there will be a page dedicated to taking part that will offer either an address in the form of letters and numbers or in the form of a QR code.

Once you have the address or the QR code, you can use the Coinbase platform (or the exchange/wallet of your choosing) to send Ether to the crowd sale wallet and the wallet, in return (and as dictated by the smart contract that’s governing the issue) will send you tokens in return.

Where do I store these tokens, we hear you say?

Remember we mentioned earlier that the company doing the issuing needs to create ERC20 standard tokens? There’s a good reason for this. ERC20 standard tokens are tokens that are designed to be compliant with Ether wallets and – by proxy – can be stored in any Ether wallet.

In other words, if you’ve got an Ether wallet (the assumption is that you have since you needed one to send the Ether to the crowd sale wallet in the first place), then you’ve got somewhere to store your tokens.

Before we go on, let’s take stock of what’s happened so far.

  1. You started off by getting hold of an Ether wallet and topping it up with some Ether, either by using bitcoin in an existing wallet or by using fiat currency to buy Ether outright.
  2. You then sent some of your Ether to the wallet that’s associated with the crowd sale, the address for which you found on the website of the ICO that you are seeking to take part in.
  3. When the sending had been verified by the Ether blockchain (i.e., when the block that included your transaction had been mined), the smart contract was executed, and ICO tokens were sent automatically and autonomously to your Ether wallet.

Now, what happens?

Well, now you wait.

Just as with trading or investing in the stock market, the idea is to buy these ICO tokens low and sell them once they’ve risen in value. Then, of course, the value gained is rooted in just how much prospective buyers are willing to buy these for a while, at the same time, how much eager sellers would be willing to sell these for on an exchange. Some ICO tokens can take a while to even list on a Cryptocurrency trades (generally exchanges only contain the ones that are attracting some attention) so you may have to wait a while (say, a few weeks) before an open market price is even established.

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Gain a Better Understanding of Bitcoin and Cryptocurrency Exchange Technologies

There is plenty of excitement surrounding Bitcoin and other cryptocurrencies, which is why there are numerous cryptocurrency exchanges in place.

You may have heard all sorts of accounts on how the path to Bitcoin is strewn with corpses of failed attempts.

While Bitcoin does not provide the same benefits offered by cash or credit, it comes close enough to be considered useful. You see, you do not require your identity to make any purchases using Bitcoin. However, your transactions can be linked to making use of smart algorithms, which are connected to your identity if you are not careful.

What is more, Bitcoin does not work offline either. The good news is that there is no need for a central server in any way as it merely relies on a peer-to-peer network. Through micropayments and green addresses, offline payments are made possible in certain situations.

It was during 1983 when the idea to apply cryptography to cash originated with David Chaum. You may want to think of it as a physical analogy where one would hand out pieces of paper, stating that the note bearer may exchange their note for one dollar once he presents it to another person whose signature is on it. If others trust the fact that the signature on numerous pieces of paper cannot be forged, they would happily pass these around as if they were bank notes. This is how banknotes got its start by being passed around as promissory notes.

The same can be done by using electronic signatures, which may result in an annoying double-spend problem should you receive a piece of data that represents a unit of virtual cash. One could make two or more copies and pass it to different individuals.

A possible solution to avoid this from happening is to make use of unique serial numbers on each note handed out. The recipient of the bill would have to verify the signature as authentic and get on the phone to check if the serial number has not been used already.

This process works just fine digitally, provided a server was set up to initiate the signing and recordkeeping of all serial numbers.

Chaum had a good thing going. He figured how to keep the system he used anonymously while preventing double-spending through inventing a digital equivalent to cash spending. Essentially, it is as if the person receiving the new note would pick the serial number and let the other person sign it without them seeing the serial number assigned to it. They call this a “blind signature” in cryptography.

It is best to choose a long, random serial number so it can be unique.

During 1988, Chaum and two other cryptographers, Moni Naor and Amos Fiat suggested offline electronic cash.

At first, it might seem impossible should you try and spend the same digital coin in two different places. How could they prevent double spend unless they were connected to the same central entity or payment network?

The idea is to not worry about avoiding double spending but rather pay attention to detecting it later on when the merchant gets to connect to the bank server. This is how people can use their credit card on a plane where there isn’t a network connection. The actual transaction will happen later one the airline can connect and process the transaction. Should the card be denied, then the person would owe the bank money.

As you can see, Chaum, Naor, and Fiat’s idea for picking up double spending happened to be an intricate cryptographic dance.

What it managed to achieve is that every digital coin issued would decode your identity in such a way that no one except you can decode it. Every time a coin is spent, the recipient would have to decipher a random subset and maintain record of it. The decoding in itself will not be enough to allow them to establish your identity. However, if you double spend, it will reach a point where they would have to visit the bank to cash in their notes. That would be when the bank can determine what actually happened and decode the identities fully.

Over the years, many cryptographers looked at its construction and found ways to improve it in various ways.

Regarding any cryptocurrencies used these days, you should pay attention to what prominent cryptocurrency trading platforms say.

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Welcome to Little Kenadie

Welcome to Little Kenadie. We are repurposing the site in order to

Welcome to Little Kenadie. We are repurposing the site in order to be more centered towards roofing and cryptocurrency exchange. Yeah, that might seem like a weird make over, but we think that these topics can be quite important in the future. Especially as more and more people want to have more security on their trading platforms. So if that rings a bell with you, just come back and leave a comment.


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