Yuri Molchan

Russia in Second Place by Number of Traders on Crypto Exchanges: Research

Belarusian digital agency BDCenter publishes a detailed market analysis of crypto exchanges that shows crypto exchanges are mostly used in the US, Russia and China
Russia in Second Place by Number of Traders on Crypto Exchanges: Research
Contents

BDCenter, an agency from Belarus, has released a report sharing details of a marketing analysis of crypto exchanges from August to November 2018.

In the report, the researchers point out that due to a decline in market activity on the ICO market, a great deal of crypto market players are now in search of projects with higher returns. The authors believe crypto exchanges to be one of the most promising lines here (they are describing the fast rise of Binance as an example).

Exchanges falsify data on volumes

The research analyzes the cost-effectiveness and profitability of 43 crypto exchanges, their actual trading volumes, and the cost of token listing (based on the data from Blockchain Transparency and CoinMarketCap). Comparing the actual turnover and the one they report in public, experts found out that turnovers of 29 exchanges out of the 43 ones do not match those they publicize.

The biggest gap was found on CoinEx, LBank, ZB.COM, Huobi and OKEx. From those five, OKEx and Huobi have a difference of over $1 mln. The turnovers published by Binance, Bitfinex, Coinbase, and Kraken match the figures that were made public.

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Listing costs

No exchange publicly shows the price of token listings. Many trading platforms get it across only after they estimate the project and analyze the form the project reps filled for their token to be listed. Some exchanges require a non-disclosure agreement (NDA) to be signed before they sound the price of listing.

It is possible to get listed for free on ‘monster’ exchanges, though, (such as Bitfinex, Coinbase, Kraken, Coinex, Poloniex) but to do that, a project has to pass a severe control of experts and the community.

Some exchanges can take part of the payment in projects’ native tokens (e.g., HitBTC, BCEX, Coinsuper, TopBTC, Bitinka, LATOKEN).

Big money comes not from listing

Analysis shows that exchanges get the lion’s share of their profits not from listings but from trading. The most profitable platforms regarding trading fees are Binance ($148 mln), Bitfinex ($46 mln), Coinbase ($38.7 mln), Gemini ($28 mln). The exchanges that make most from listing are Huobi ($17.5 mln), Coinsuper ($9.5 mln), Bit-Z ($5.3 mln), Binance ($5 mln) and Coinbene ($3.6 mln).

Exchange users – who they are, where they are from

The majority of crypto exchange traders are in the US, China and Russia. From the US – 30.47 percent, and Russia comes second with 15.37 percent. The third is China – 11.23 percent.

At least 50 percent of crypto exchange users are university graduates, majoring in maths or economics. Besides, part of them are completing a Bachelor’s or a Master’s degree.

Traders on all exchanges are 70 percent male. Exx.com is rather an exception: women traders there are 52.6 percent.

On almost all exchanges, there can be seen a rule that the majority of traders are between 25 and 34 years old. Bitbank.cc exchange is also an exception, with traders mostly being between 35 and 44 years of age.

In China, an average trader is 20-30 years old (50 percent of Huobi traders are between 30 and 50 years old).

In the US (Kraken exchange), the average age of a trader is 30 years, and for Binance it is men aged 25-35.

Half of Russian crypto traders are aged 25-40. 30 percent of traders in this country are in the age between 18 and 25.

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Cryptotips Andrew Strogoff

Examples of Cryptocurrency Trading and Cryptocurrency Platforms

💡 Cryptotips
Examples of crypto trading, main types of orders, trading platform window and its features
Examples of Cryptocurrency Trading and Cryptocurrency Platforms
Contents

Professional traders and investors place orders almost in a “blind mode” meaning they pay a little attention to what buttons do they click or what fields they have to fill in. They have all necessary skills and experience having months and even years of trading behind them. However, for many newcomers placing orders is a kind of “science fiction” as they are getting lost every time they open their exchange trading account.

We have decided to create a special complete guide, related to examples of cryptocurrency trading. Here we give you several illustrations of how to place orders and what types of trading position you can use when dealing with different exchanges.

Example of cryptocurrency platform

The first thing you see when you start trading with any crypto exchange is the platform. There are different types of websites with wide range of features. Let’s see the typical platform using an example of Bitfinex.

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Here you can see several functional parts. The main is the chart where you can analyze quotation using different types of tools. Bitfinex offers Tradingview platform, which is one of the most popular nowadays. This type of chart allows traders to benefit from the most interesting and useful indicators. You can also switch between different timeframes, set the appearance of the chart.

However, there are some limitations here as the complete version of Tradingview also offers many different graphic tools including Fibo retracement, Pitchfork, trend line, horizontal levels, channels and some drawing tools.

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If you need them badly, you can open Tradingview and conduct all analysis there. Once done, you can then switch browser window to your trading platform and place orders.

On the left side of the platform there is an area to place orders. We will get back to it once we are done with the description of all functional parts of a standard trading terminal.

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Another important feature of any trading platform is Order Book. Here there are all orders that took place already. You can learn trading volumes from this window. There are bids and asks here. Those are the prices at which exchange clients are ready to sell and to buy cryptos.

It is to mention that there is no single market in cryptocurrency industry meaning different exchanges offer different prices. Those differences may be minor, but they exist. When you see an exact price in reviews, for example, this quotation is taken from one or another marketplace or are average, based on rates from different exchanges.

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Now let’s get down to examples of cryptocurrency trading. Here there is a working area from Bitfinex platform.

Examples of Limit Orders

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The first order type that you can use trading with Bitfinex is Limit. Here you can set the amount of the underlying asset to buy or sell. We have put one BTC. The system automatically calculates the amount of USD you need to pay in order to execute this trade.

Let’s say you want to buy one BTC. The price of this crypto is nearly $7,159.50 in the moment of writing meaning you have to pay this price for one Bitcoin. However, you are able to name your own price using Limit Orders meaning it may vary from the current exchange quotation.

Let’s suppose you want to buy BTC/USD for $7,000. You put this amount in the PRICE USD window and click on the Exchange Buy button. The order will be placed into the Book of Orders and wait for the price to reach this level before it executes.

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One of the main features of this type of trades is that your order may be executed partially. Why does it happen? Mostly because of the nature of cryptocurrencies’ exchange trading. All trades are executed between website’s clients.

When there is an opposite order matching your requirements your trade will be executed. Let’s say you want to purchase one Bitcoin in exchange of USD at $7,000. You place an order and the system starts to look for other orders in the Book in order to find an opposite one matching your requirements.

Let’s suppose the system finds one, but a trader wants to sell 0.5 BTC for $7,000. The order will be executed partially in this case as you will purchase 0.5 Bitcoin instead of one. Once done, you are able to either wait for other opportunities or to cancel the order without reaching its final goals.

The same is for selling BTC/USD or any other asset. You put the amount of crypto you want to get rid of and the price at which you are ready to “shake hands” with the buyer. Once the system finds an opposite order matching your conditions (even if the buyer wants to purchase less amount of crypto).

Examples of Market Orders

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Market Orders are similar to Limit ones but they are executed by current market price. Let’s see how it happens. You want to buy one BTC/USD. The current market price of the asset is $7,183.75 in the moment of writing. Once the order is placed, the system will automatically search for opposite trades matching your conditions.

As soon as it finds a seller who is ready to sell at this price, the order will be executed regardless of the amount meaning your trade may be done partially as well (and you will get less than one BTC).

However, there is a trick here as you may pay even higher than you planned as the system will search for cheaper prices first. If there are no such offers it will go through the Book of Orders and find the most appropriate ones even if their price is a bit higher than the market one at the moment.

Let’s get down tour example. The system finds 0.7 BTC at $7,183.75. However, this is a unique offer as the others want to sell their bitcoins at $7,200.00. You will buy the rest (0.3 BTC) at $7,200.00.

The same is with the Market Sell Orders. You need to choose the amount you want to purchase. The price appears automatically according to the best offers from the Book of Orders. Once placed, your order will be executed at best quotation. If the amount of the offer is less than your one, the system will search for others until it is done.

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Examples of Stop Limit Order

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This type of order is used by traders to open trades when the price moves fast in one or another direction. There are two main steps to place those positions – Stop Price and Limit Price. First, you indicate the Stop Price. This one activates the order.

The second step is to indicate Limit Price. This one opens the position. Why do traders use this type of trades? Professionals want their daily routine to be more autonomous. Sometimes during the serious price movement, it is almost impossible to “catch” the desired price.

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Stop Price is often placed at certain important price levels. If the price crosses this level, it will eventually develop the progress and trader will be allowed to open trades at the desired level.

Let’s say a trader wants to buy one BTC/USD for $7,212.8. But the price is lower currently and is approaching a serious resistance level at $7,207.6. Trader places a Stop Limit Order with the following options: Stop Price level is at $7,207.6 (resistance area) and Limit Price at $7,212.8. Once quotation reaches $7,207.6, the order triggers. However, it remains in a “stand by” mode until the price reaches $7,212.8 level.

Example of Trailing Stop Order

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This one is used by traders to protect their risks and close positions in case if the price goes the opposite to investor’s forecast direction. Some exchanges allow clients to use classic stop losses. Bitfinex and some of their competitors offer Trailing Stop Order that gives traders a more flexible tool to manage risks.

How does it work? Let’s say you buy BTC at $7,300 and place a Trailing Stop Order at $7,180. The difference between them is $120. This will be the distance at which Trailing Stop Order will “trail” the price. If the price moves to $7,400, Trailing Stop will move automatically at $7,280.

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One thing to remember here is that Trailing Stop moves in one direction only. If you buy a crypto and places this type of order, it will follow the price when it goes upwards only. When it declines, Trailing Stop stays in place without any changes.

If the price declines towards this kind of stop order and reaches it, it triggers finally and the position is closed. Depending on the positions of the final price as compared to its position in the beginning of your trade, you can lose or earn some money.

Unlike Trailing Stop Orders, classic Stop Losses do not move automatically. Once placed, they remain at their position regardless of what is happening with the price. They are less flexible and sometimes need adjustments.

Example of Fill or Kill Order

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This type of position means the order should be executed immediately at the current marketplace or removed. What is the main purpose of this order? It is created in order to allow traders to benefit from immediate position opening at the very same price.

What happens when an investor places a big long order? The price may start to grow and this order will be executed partially step-by-step with growing price. Fill or Kill allows you to be sure that you position be either opened entirely or “killed.”

Let’s say you want to buy 100 BTC/USD at $7,180. You place this Fill or Kill order. The system will automatically search for this amount at the exact price within the Book of Orders. Once successful, it executes the order. If not, the position will be canceled.

Example of Scaled Order

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Scaled Orders are rare meaning they are offered by a limited number of exchanges. Those position types aimed to facilitate trader’s routine by helping him or her to place several orders within a certain price range.

Let’s say you want to buy BTC/USD within the $7,200 and $8,000 price range. You set the lower and the upper price, amount of BTC to buy (5 in our case), order count (the number of positions to open), and finally variances of price and amount. Once done, you can preview your set up by clicking on Exchange Preview button.

Those are the examples of cryptocurrency trading. We hope that you find this article useful as we had done a great work in gathering maximum information on all types of orders.

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What is a Decentralized Exchange?

📚 Wikicoin
Remaining anonymous and still using an exchange is possible with a DEX, but there are downfalls
What is a Decentralized Exchange?
Contents

In an era of decentralization made possible with the advent of Blockchain technology, we are seeing many everyday things that we use start to shift from centralized to decentralized forms. Bitcoin is the best example of this as it is a currency that does not have a central issuer, instead it is controlled by all the millions of miner nodes on the network. There is no central authority figure who is controlling it all. So how can decentralization translate to an exchange? Sure there are crypto exchanges, such as Coinbase, Gemini, Bittrex, etc., but these exchanges are still centralized.

The decentralized exchange

A decentralized exchange (DEX) is an exchange market that does not rely on a third party service to hold the customer's funds, such as Coinbase. Instead, trades occur directly between users in a p2p network through an automated process. This system is created by making proxy tokens, which are crypto assets that represent a certain fiat or cryptocurrency. Another way to do this is to use assets, which can represent shares in a company for example, or through a decentralized multi-signature escrow system, among other solutions that are currently in development.

This system contrasts with the current centralized model in which users deposit their funds and the exchange issues an IOU that can be freely traded on the platform. When a user asks to withdraw his funds, these are converted back into the cryptocurrency they represent and sent to their owner.

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Operational DEXs to check out

Key differences between centralized and decentralized exchanges

Anonymity

Decentralized cryptocurrency exchange platforms are all about anonymity. Consider them to be the distributed Blockchain-equivalent of centralized exchanges.

Government regulations that have entered into force has led to the adherence to strict identification laws. It is difficult to trade anonymously on a centralized cryptocurrency exchange platform. Just recently Coinbase forced all its users to add addresses, social security numbers and identity documents, if customers want to continue using the exchange’s services. Who knows what kind of government reporting Coinbase will be forced to do come tax time in early 2019.

Authentication

There is no need to rely on a third-party intermediary for user authentication. With smart contracts in place and a number of Blockchain protocol implementations, the entire system is built to provide trust-less authentication and authorization of crypto exchange transactions. The system is designed to run on it with the smart contacts enforcing the policy of the exchange and ensuring that users can’t double spend and that they are getting promised payments. The third-party authenticator is removed from the equation.

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Benefits of decentralized cryptocurrency exchanges

Funds controlled by users

A decentralized exchange is owned and controlled by all the participants so there is no central authority that has custody of deposits. The control of the money is always in the hands of the customer since the network uses a p2p network. Smart contracts regulate and ensure the proper execution of trades and payments, which occur between users in the network. Additionally, users control their private keys as well as their funds at all times in a decentralized exchange. There are no issues between the exchange authority and the user so some issue, such as lost funds surface.

Transactions: quicker, cheaper

Potential to provide a platform that facilitates faster, cheaper and more cost-effective crypto exchange/trading transactions than centralized exchanges. The removal of the third-party authenticator drastically reduces fees and lag time before buy/sell orders are processed.

Hacks and server downtime mitigated

A decentralized exchange is far less susceptible to attacks than centralized exchanges. There have been many high-profile hacks on major centralized crypto exchange platforms that demonstrate just how susceptible centralized exchanges are to cyber attacks. decentralized exchanges have no single point of entry, akin to a Blockchain. As such, a hacker will need to compromise more than half of the network to be able to commandeer the system. If only one node is taken offline, the entire network is not compromised.

Hardware wallets are easily integrated

Many decentralized exchanges offer smooth integration with hardware wallets, which ensures a much safer transaction. Users can send tokens directly from their hardware wallets to smart contracts on many decentralized exchanges. In centralized exchanges, conversely, this is not possible because users must manually enter private keys to move coins from hardware wallets to centralized exchanges. This opens the transaction to phishing as well as keylogging and stealing keys and passwords.

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Drawbacks of decentralized cryptocurrency exchanges

While it sounds like a decentralized exchange is the panacea for all the ills of the centralized exchanges, we are not there quite yet as these exchanges are still very green and not geared towards a novice user.

Advanced users

Centralized exchanges have easy to understand tabs and buttons on their websites, whereas many decentralized Bitcoin exchanges have a confusing exchange dashboard that takes some getting used to. These are not for the beginner, and since many people in the cryptosphere are new users, they are going to be left out, until the technology simplifies.

Basic trading only

As of now most decentralized exchanges only support the basic cryptocurrency exchange functions: buy and sell. Many of the advanced trading features such as margin trading, stop- loss trading, etc. is one of the reasons why decentralized exchanges have not achieved much popularity in the larger cryptocurrency trading environment. However, as with any technology, we can anticipate that these features will be arriving in due course.

No crypto/fiat trades

The DEXs out there do not have the ability to trade fiat at the moment which requires there to be crypto in the bank already, or the possibility to move it through another centralized exchange, which kind of defeats the purpose of using a DEX if you must pass through a centralized exchange first.

Low liquidity

Since exchanges are not so popular with the masses, that means they have low volumes and low liquidity. This can be a big problem if there is massive sell order that is executed and all the funds dry up. Users are going to be stuck trying to make withdraws until some buy orders come across the transom.  

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Three benefits to decentralized exchanges

  • The user controls his/her funds

  • The user remains anonymous

  • Hacks are mitigated due to decentralized nature, an exchange cannot go down

Three negatives to centralized exchanges

  • The user does not control his/her funds, the exchange does

  • The user cannot remain anonymous, they must submit to providing ID

  • Hack and server downtime can bring down the entire exchange

The future is here!

While DEXs offer potential, they are in the beginning stages and won’t be a major competition for traditional exchanges just yet. However, are more trading tools and feature are added along with the ability to buy and sell fiat, then watch out! Traditional exchanges are going to have some major competition to contend with.  

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Media Reports Binance Exchange Ordered to Cease Operations in Japan, Binance CEO Denies

Mainstream media outlets worldwide are reporting that the major cryptocurrency exchange Binance has been asked by Japan’s FSA to cease operations.
Media Reports Binance Exchange Ordered to Cease Operations in Japan, Binance CEO Denies
Contents

A local news outlet, Nikkei, has reported that cryptocurrency exchange Binance was ordered to cease operations in Japan following its unauthorized expansion into the country. Japan’s Financial Services Authority (FSA) is the regulator that oversees the nation’s licensing program for cryptocurrency exchanges. Following a half billion dollar theft from Japan-based exchange Coincheck earlier this year, the FSA has reportedly been cracking down on crypto exchanges.

Shortly after Nikkei ran its story, Binance CEO Zhao Changpeng denied the rumors, tweeting:

Nikkei showed irresponsible journalism. We are in constructive dialogs with Japan FSA, and have not received any mandates. It does not make sense for JFSA to tell a newspaper before telling us, while we have an active dialog going on with them.

— CZ (not giving crypto away) (@cz_binance) 22 марта 2018 г.

Really big deal

Japan and Binance are both extremely important to the cryptocurrency sector. Japan presently has the largest Bitcoin trading volume in the world, with 56% of Bitcoin trades denominated in yen. Meanwhile, Binance is the largest cryptocurrency exchange in the world, by volume, with $1.7 bln in trades over the last 24 hours. Many of the top altcoins are heavily traded on Binance; the exchange is #5 by volume for Ethereum, #7 by volume for Litecoin, and #1 by volume for NEO.

Carrot and stick

Japan seems to be adopting a carrot-and-stick approach to dealing with Bitcoin. Last spring they made Bitcoin a legal payment method, but shortly thereafter began imposing licensing requirements on cryptocurrency exchanges. The strategy seems to be to offer an olive branch, then bring on the regulation. Put differently, Japan’s government seems to have some faith in cryptocurrency, but only so long as it remains within the nation’s existing regulatory framework. “Rogue” Bitcoiners must be shut down with alacrity.

 

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🎤 Interviews Katya Michaels

Future of Crypto is Selective Transparency: Rob Viglione of ZenCash on Privacy Protocols

🎤 Interviews
As concern about government grows, privacy coins are attracting more attention. But are they a promising investment or a haven for criminals?
Future of Crypto is Selective Transparency: Rob Viglione of ZenCash on Privacy Protocols
Contents

 

In the past few months, the news on cryptocurrency regulation has brought uncertainty and skepticism to the cryptocurrency market. The reality of impending regulation runs contradictory to the principles of decentralized cryptocurrencies, putting privacy focused coins in the spotlight.

However, privacy coins, even more so than Bitcoin itself, are perceived by many regulators and consumers as vehicles for facilitation of criminal activities. CryptoComes spoke to Rob Viglione, co-founder of ZenCash, for a more nuanced look at what privacy coins are today and what they could become in the future.

How privacy coins work

Katya Michaels: What makes a privacy focused coin different from “regular coins”? Are transactions handled in a different way?

Rob Viglione: One issue with Bitcoin that we started realizing early on was that it’s really not that private. All of the transactions are linked, which is the whole point of the Blockchain, and everything is public in the ledger where anyone can look at it.

As soon as you link one transaction to an identity, you can backtrack the entire chain to figure out every single transaction. This is a big deal because there are a lot of people who just don't want what they're doing to be publicly broadcast to the world.

Initially, transactions were mixed to obfuscate who is doing what. Then, there was the realization that individual transactions could be adapted for mixing, and also that mixing could be done at the protocol level. We could mix every transaction that ever, ever happened with other transactions.

Then, this other class of cryptography evolved, called zero-knowledge cryptography. This transformed the entire aspect of the transaction, so you can't even see who is sending money, to whom or for what amount.

What we are doing at ZenCash now is not just currency transactions, but an encrypted chat protocol where you can’t see any aspect of the communication. That’s a bit of the evolution of where we've come as an industry and where we are right now.

KM: There are other coins, ZCash specifically, that use the zk-SNARKS protocol. But you feel there is a way to build on and improve that technology for increased privacy and safety?

RV: I think that what ZCash did with zero-knowledge cryptography and zk-SNARKs is groundbreaking, so that technology itself is probably sufficient for most privacy use cases. What we are doing is building not just a cryptocurrency, but an entire platform based on zk-SNARKs technology.

So, basically, if you go to “https” on the web, you are creating a secure communication tunnel. We've done the same thing on our protocols with secure nodes - you can have a secure tunnel between the client and the node, or node to node, creating a secure encrypted network over which zk-SNARKs transactions occur. Our goal is a privacy oriented ecosystem, and this is just the infrastructure that runs the ecosystem.

Race for the TCP/IP of crypto

KM: On that subject, what do you think are the major components of crypto infrastructure that are defining the industry now and for the next few years?

RV: What might be different today versus the 1990s when TCP/IP started proliferating, is that we are actually starting to build standards that can make interoperability a reality. For instance, our R&D partner IOHK is actually building out an interoperability standard that cryptocurrencies like ourselves could adopt and use to speak to other protocols.

Right now it's a race to see who is going to be the TCP/IP of the cryptocurrency and Blockchain world, who is going to have this standard on top of which others are going to build a whole bunch of useful services.

Now, you don't have to have one protocol to rule them all, like The Lord of the Rings. What we should be doing is building out the infrastructure which could be interoperable with protocols that have different functions and niches.

Ultimately, what we want to do is to build some sort of mesh net or network of interconnected of services that do different things, but in aggregate can do a lot more together.

KM: Would you say that these kind of projects that are building the infrastructure to support Blockchains in the future are the best options for investment because they will have more longevity?

RV: There are two ways to look at it - either you are buying into an infrastructure play or you are investing into some company building some specific product. I personally gravitate toward the infrastructure plays because the ecosystem itself is much more valuable than any particular project. Of course, you can always find an amazing project that you can invest in directly. But there are more idiosyncratic factors when you do something like that.

Reconciling privacy and transparency

KM: Interestingly, both the transparency of the public ledger and the privacy of use have been praised as qualities of cryptocurrency that will revolutionize the financial industry. But those two qualities seem contradictory - or can they be reconciled?

RV: That's a really good question. The way that we look at it, we give the user the option. We have a system where an individual has a choice whether to make the transaction either transparent or private.

There is a whole class of privacy coins that are based on using ring signatures, like Monero, that force every single transaction to be private. When you do that, you're doing a great job of security and privacy, but you bump up against use cases in the real world where a lot of businesses are accountable to shareholders or to the government for taxes and a lot of things that we do on a day to day basis actually have to be transparent.

That’s why I think that when we talk about this technology going mainstream, we have to have the option to be selectively transparent.

This technology could almost be bifurcated into the privacy coins that are exclusively anonymous, and privacy coins that give you a choice to be anonymous but also allow you to do transparent stuff.

Regulations and future of privacy coins

KM: It seems that the trajectory of the U.S. government on regulations and tax regimes is encouraging investors and consumers to turn their attention to privacy focused coins. Do you think that’s a justified reaction?

RV: If you're looking at this from the perspective of a trader, I think you're absolutely right - in the near term there will probably be a shift in the market towards privacy coins.

From a technology perspective, in the long run probably all coins will be privacy coins. Even Ethereum is looking to integrate zk-SNARKs into their protocol. There is a huge need for privacy, a huge set of economic and social justifications for why individuals should have some data that is just private, period.

Sure, there will probably be some projects that don't offer you privacy because they're catering specifically to a government or a bank, but overall I think the option of privacy will be ubiquitous across the industry. That’s the real sweet spot - when you have a technology that gives you the option of selective transparency and control over your own data.

KM: In other news, the Coincheck exchange stopped support for Monero, Dash and ZCash. Do you think this is a reasonable decision? In general, what do you think about privacy coins being associated with illegal activities?

RV: Technology will always be available for criminals - I mean, cell phone technology has done wonders for crime. But there is also a massive socio-economic impact that comes with it.

I think the same thing is true of privacy coins. The initial backlash is a little bit overdone, and I don't think ZCash can be put in the same category as Monero. It doesn’t make sense for exchanges to ban zero knowledge cryptography coins like ours, because only transparent transactions are listed on the exchange. In that context we are no different than Bitcoin.

KM: Perhaps few people take the time or have the background to distinguish between different privacy coins. In general, the industry is always evolving, and technical aspects may not be fully examined before making regulatory decisions. Could that be part of the problem?

RV: Yes, I think it’s the lack of education. My background is in science, and I think a lot of the time people do a good job on the engineering side, but there is a huge gap in the industry in terms of stepping back and bringing actual scientists into the market to think about the deeper problems.

It’s one of the jobs that I see ahead for myself - to educate the general population. We are not drug dealers, we are not criminals, we just think that technology has a lot more potential for social good than for bad applications by bad people.

Instead of pursuing technologists that want to build something that could bring social benefit, law enforcement should focus on the criminals who might take advantage of those innovations.

Bringing back the cypherpunks spirit

KM: You mentioned in some of your talks that you want to carry forward the spirit of the original cypherpunks. How do you define that spirit for yourself and how do you think the crypto industry is departing from those principles?

RV: In the spirit of full transparency, I'm not old enough to be an original cypherpunk. I was a late generation cypherpunk. Really, it’s just that cryptocurrency came about when people realized we could use technology for social good, to empower the individual, saying individuals have a right to privacy. That's the core of what we do.

What I like to say is we are standing on the shoulders of giants. The biggest giant was Satoshi, who gave us an amazing technology for free. I think now we have an obligation to give back socially to the community and the ecosystem.

Cypherpunks are a very small minority of human beings out there. The technology has grown so much, and of course it's going to change. The use cases are going to change, the consumer base is going to change, and that's fine.

But we want to preserve the fundamental attributes where we're first and foremost a values based, community driven project.  Doing social good is probably the most important thing, and if we can create some economic value in the process, that's awesome.

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Exchanges Guide George Shnurenko

Kraken review

🎓 Exchanges Guide
Kraken, a San Francisco-based exchange that has been on the market for seven years
Kraken review
Contents

What is Kraken?

Kraken is one of the oldest cryptocurrency exchanges that was founded back in 2011 by its current CEO Jesse Powell. This US-based exchange has come a long way from an unambitious start-up to a global exchange with the highest Euro volume. San Francisco is the current Kraken exchange location.

It is worth mentioning that Jesse Powell was inspired to create Kraken currency exchange after what he had seen at Mt. Gox’s offices. Mt. Gox, a now-dead Japanese exchange, was responsible for almost 70% of all Bitcoin transactions back in 2014, but it didn’t stand the test of time and was closed after about $350 million were stolen due to a huge cyber attacks. Powell saw that the exchange was poorly managed and realized that it was on the cusp of collapse, so he decided to create his own alternative.

Kraken Bitcoin exchange is available in the US (except for New York because of BitLicense regulations), Canada, numerous European countries and Japan. However, the company has recently announced about its plans to quit the Japanese market due to a lackluster demand. After adding the Japanese Yen to the list of its available fiat currencies in 2014, the exchange hasn’t managed to meet its financial goals. As of July 5
th, the daily BTC/JPY trading volume reached $18,242 which is only 0.02% of Kraken’s total volume (for comparison, it was 0.9% back in April). The company doesn’t rule of the possibility of returning to the Land of the Rising Sun again, but Kraken exchange is not working with Japanese customers at that moment.


Kraken Review

There are 18 cryptocurrencies that include Bitcoin (BTC), Litecoin (LTC) and Ripple (XRP). Apart from the aforementioned coins, Kraken also features trading pairs with five fiat currencies.

That’s a major advantage since the majority of other exchanges do not support fiat money and require you to buy Bitcoin beforehand.

While doing a Kraken exchange review, it is important to mention that it has five account levels (which are also called ‘tiers’). There is a direct correlation between the account level and the daily trading limit: the higher your tier, the bigger amount of money you are able to withdraw. Also, pay attention to the fact that increasing your account tier also lowers the trading fees which will be discussed a bit later.

The ID verification is required in order to get to the third level (you are to send them the scans of your ID and hold a hand-written text in front of you). There are also some emergency situations when a certain user may be asked to confirm his identity.

Is Kraken exchange safe? In the good ol' days, the majority of exchanges were anonymous, but as the crypto market grew bigger, they have to comply with anti-money laundering (AML) regulations. Now is it a mundane policy, so do not be shooed away by Krakens’ demands. This exchange is reputable enough to trust it with your personal details.


ow to Use Kraken?

  1. Fill out the sign-up form and confirm your e-mail address.
    sign up

  2. The drop-down list in the top left corner of the main page displays the list of available trading pairs (all in all, there are 41 trading pairs).
    list of coins

  3. Click on the ‘Chart’ section at the very top of the page to see the graphs which vividly depict the recent price fluctuation in terms of the chosen trading pair.
    charts

  4. Click on the ‘Funding’ where you can deposit or withdraw money.

  5. Go to the ‘Security’ page in order to enhance protection with 2FA and API keys. The neighboring tab helps you to adjust any account settings.

If you go to ‘Get Verified’ sections, you can see the information about your account status and withdrawal limits (daily and monthly).
 

Tier

Daily Withdrawal Limits

Requirements

0

$0

E-mail

1

$2,500

Phone number, a full name

2

$5,000

Address

3

$50,000

ID, utility bill

4

$100,000

All of the above + a support request

How to Buy on Kraken?

Before purchasing any crypto, you obviously have to deposit money to your newly created account with the help of the abovementioned ‘Deposit’ section. When it comes to payment methods, the only available option is a wire transfer.

  • ACH for Americans and Canadians;

  • SEPA for Euroepan customers.

  • SWIFT for international payments.

That means that credit/debit cards and PayPal are not accepted on this exchange. If you are looking for a variety of payment methods, consider such exchanges as Coinbase.

Those who do not want to engage in margin trading, can place a simple order. Simply specify the amount of Bitcoin that you would like to purchase and press a large green button to place your order.
simple order

How to Trade on Kraken?

Kraken exchange launched margin trading in 2015 that allows you to trade with 5x leverage. Go over to the ‘New Order’. You have to choose either ‘Intermediate’ or ‘Advanced’ mode in order to see the leverage buttons which are situated on the right.

Now have a look at the ‘Leverage’ section (for example, by choosing 3x leverage you will be able to triple your buying power). Then you can choose a limit order or a market order (in the first case you wait until the market reaches the requested price). At the bottom of the page, you will be able to see your pending order. If the market moves in your direction and you get profit, you call close out the current order by creating an opposing order for the same amount of money. Basically, it means that you have to sell crypto that you have recently bought by choosing the right leverage. Once you’ve done that, the profit will be added to your balance.


NB! You can open multiple positions that will be closed out in the same order.

leverage

 

Is Kraken Safe?

Kraken exchange reviews are mostly positive, so is Kraken a good exchange when it comes to security? While being on the market for more than 7 years, Kraken has never been experienced to a single security breach. In January 2018, Kraken was down for a couple of days, but that was due to maintenance. Almost all of its assets are securely kept in a cold storage eliminating the possibility of a hack. Users’ accounts are protected with two-factor authentication (TFA).

In 2016, some Kraken traders claimed that their accounts had been compromised by hackers and their funds had been stolen, but later it turned out that all these users had failed to enable two-factor authentication. In this situation, the users clearly suffered because of their own negligence. At the same time, it would be a nice solution for Kraken to make TFA mandatory.

Kraken‘s transparency doesn’t draw an ounce of criticism in any Kraken exchange review. Back in 2014, the company successfully underwent a “proof of reserves” audit which was aimed at checking the total amount of BTC held by the company. On top of that, Kraken became the first exchange that appeared on Bloomberg’s ticker which only adds more credibility.


So, is Kraken a safe exchange? Yes, definitely. With Kraken coin exchange, the only security drawback is probably is that the exchange holds your private key to your cryptocurrency address. A private key confirms that you are the owner of the currency.

Kraken Fees

Kraken cryptocurrency exchange offers extremely competitive fees which vary from 0% to 0.36%. The particular amount of the fee is not fixed – it depends on your trading pair, account level and the desirable payment method. For example, European customers only have to pay €0.09 if they want to withdraw money via a wire transfer which is extremely cheap which is ridiculously cheap. ACH transfer will set you back $5 per transaction. Pay attentions to the fact that both makers and takers are charged with Kraken exchange fees.

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