Cryptocurrency

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Excitingly it is now possible to lend out your Monero and other crypto currencies to other investors. Crypto currency lending is a bit like peer to peer lending for crypto, but the lending purpose is exclusively for other customers margin requirements so not diversified.

Lending crypto currency needs to be done via a crypto currency exchange where your currency is loaned to other exchange customers so that they can establish short or margin long crypto currency trading positions.

This article chiefly considers lending out Monero XMRbut the principal applies to any other crypto currency that allows exchange lending. The rates on exchanges are typically quoted in daily returns, so a daily rate of 0. An example annual to daily interest rate calculator is here no affiliation. We use Poloneix for lending, and find it monero archivesinteractivecrypto good liquidity and relatively monero archivesinteractivecrypto trading interface and order book.

As of Monero archivesinteractivecrypto to our knowledge, no one has ever lost significant money lending Monero or any crypto currency on poloniex or other exchanges so far. The attractive returns are not just a free lunch. Here are some basic monero archivesinteractivecrypto. The main issue with exchange lending is it assumes that the exchanges algorithm for exiting customers out of their margined positions will not result in major loss.

Essentially when lending on the exchange, your monero archivesinteractivecrypto is loaned to other exchange customers so that they can establish short or margin long positions. As usual for margin trading the exchange requires some capital level to be maintained in a customers exchange account, for the duration of their short or margin trade. If the crypto monero archivesinteractivecrypto market moves against the customers positions and they no longer have the margin capital required to maintain their position, then the position will be exited by the exchange.

This will likely be at a sizable customer loss. The theory is that the exchange has modeled the maximum likely amount capital required across ALL customers to meet an extreme move. In theory the crazy moves monero archivesinteractivecrypto occur rarely and the exchange should be able to control any loses by forcing customers to liquidate their positions in real time.

Basically they can take out multiple customers over their margin limit, but in theory not all customers at the same time should be affected in theory! However in practice these huge moves tend to happen more frequently than the statistics would predict. A good recent real life example is when the Swiss monero archivesinteractivecrypto move meant several foreign exchange FX trading firms had to eat a few million of customer losses.

This was in the FX currency market, but the principal could easily apply to crypto currency lending. Therefore you are depending on your exchange to have well executed customer margin requirements and forced trading position liquidation strategy. Exchange lending and indeed storing any crypto currency monero archivesinteractivecrypto any exchange is subject to platform risk.

That is monero archivesinteractivecrypto risk that the actual exchange platform fails and you lose some or monero archivesinteractivecrypto of your crypto currency balance. This could occur through hacking monero archivesinteractivecrypto poor exchange security or even an issue with the particular crypto protocol that can be exploited. Basically there is a slight possibility that your coin on an exchange just disappears overnight. You can obviously reduce hacking risk on your individual account by using website security features like two factor authentication.

For example, storage solutions for monero are to maintain a cold storage off exchange wallet under monero archivesinteractivecrypto control. That requires significant technical know how to setup, but is likely worth it to maintain your stash monero archivesinteractivecrypto.

Important takeaways highlight these two possibilities storing your coin on exchanges: Bitfinex distributed the monero archivesinteractivecrypto against monero archivesinteractivecrypto customer balances irrespective of cash or coin. The Bitfinex partial loss example has an interesting piece of moral hazard. Essentially you were exposed to Bitcoin security flaws even if you had zero Bitcoin balance — which seems somewhat logically unfair.

The point is that you could be exposed to balance loss monero archivesinteractivecrypto any coin on an exchange — even you did not think you were. The non bitcoin crypto lending market is typically less than 2 years old for most coins.

Lending crypto currency on any exchange may mean that there may technology glitches eg unable to liquidate as required monero archivesinteractivecrypto lack of volume eg not able to lend out all monero archivesinteractivecrypto currency you wish to, because there are not enough people to lend to. However we have tried this though and have been able to lend out several thousand XMR for about a week relatively easily.

This also all assumes a relatively low default rate which may not be true for people trading crypto currency on margin in the long term only have a few months of real data to work from. It maybe monero archivesinteractivecrypto term profitable monero archivesinteractivecrypto well, but given that that there are monero archivesinteractivecrypto statistics yet on this market, it is hard to make accurate projections.

This approach monero archivesinteractivecrypto also monero archivesinteractivecrypto similar to peer to peer lending eg prosper and lendingclubso could offer similar returns, but is probably a level up on the risk spectrum above say junk bonds.

Bear in mind that any monero archivesinteractivecrypto that occur could be long term expensive, because you lose out on the long term price appreciation potential of your currency of choice — it would be disappointing if you lost half your coin stash on lending, only to see your chosen coin price rise into the clouds in the following months.

It would almost definitely not be prudent lending out your entire monero stash, in case in does not perform as expected. Monero XMR — Trading Update needs to be given this week, specifically because the market has recently monero archivesinteractivecrypto massively upwards since the latest trading update in March Please note that due to market monero archivesinteractivecrypto it is quite hard to capture consistent pricing for screenshots — so any prices given or calculations done using those price are only indicative but they should still be approximately correct.

As of Aug 22nd there are currently available approximately This size compares it with a small penny stock, so it still has significantly size to grow if it is even slightly adopted for any mainstream uses.

The following screenshot from coinmarketcap. In the last 2 years there have been many such coins created for a diversity monero archivesinteractivecrypto purposes. One of the main selling points of Monero is that it can mathematically provable as monero archivesinteractivecrypto anonymousunlike Bitcoin with can be traced via the Block Chain. It is one of the foremost alternative crypto currencies that has actually survived long enough to potentially become a replacement for the well known Bitcoin BTC.

For some more background you can review our original investment from last year. This monero archivesinteractivecrypto the mini price bubbles on inception, in MarMar and most recently in Aug This price move appears to be a significant move on large volume, therefore worthy of a trading update.

Monero XMR is going up because of fundamentally wider adaption in other market places, which means that it will get used as currency of choice monero archivesinteractivecrypto more people who want crypto currency. Specifically this move has been driven by news that leading dark net market will start supporting Monero.

The assumption is it will win the war to be adopted monero archivesinteractivecrypto the primary crypto monero archivesinteractivecrypto, potentially ultimately replacing bitcoin but that is several years out. The following chart zooms in to show the significant volume move year to date up monero archivesinteractivecrypto August From a low of 0. In the monero archivesinteractivecrypto week Monero has traded approximately 65, BTC on poloniex. For example if positive Bitcoin related news caused the Bitcoin price to rise faster, the XMR BTC will go down even though nothing may have fundamentally changed with Monero.

That is if you hold USDT it attempts to represent the equivalent in Monero archivesinteractivecrypto cash in your local bank account, but actually as a coin so you can trade to buy other coin.

However presumably it is safe enough for a few weeks while you plot your next investment move or move monero archivesinteractivecrypto to physical USD.

In the spirit of full disclosure, our current position is approximately 0. However that has been held from more than a year. The aim is for a buy and hold investment though and we very rarely trade the core position for example, have made no sales for more than a year. We could exit or scale back significantly if something materially affected the Monero marketplace, however we are more likely to add on weakness not sell. The cost basis of the investment is relatively low, so we are not monero archivesinteractivecrypto trading day to day.

We have no plans to sell monero archivesinteractivecrypto Monero yet, but if the price went exponentially higher we would sell to cover our original cost basis. The following chart shows the price swings for Monero since monero archivesinteractivecrypto, highlighting the recent move up in Feb You can track the real time price here. The following chart zooms in to show the significant volume move in Feb only.

However this price move monero archivesinteractivecrypto to be a significant move on large monero archivesinteractivecrypto, therefore worthy of a trading update. Usability as a medium of exchange is one of the distinctive characteristics they have in common. Adoption is both a critical measure and a crucial means of success for monero archivesinteractivecrypto medium of exchange.

Confidence in the liquidity monero archivesinteractivecrypto fungibility of a currency monero archivesinteractivecrypto a crucial monero archivesinteractivecrypto enabling adoption. The US dollar, for example, has wide spread adoption.

Many worldwide markets transact with it. Consequently, governments and banks around the world keep US dollar reserves. Since World War II it has taken the place of the dominant global reserve currency. The US dollar has popular confidence, because the US government promises never to default on their debts.

This promise is respected in part because it is easy to keep, as the US government can always issue more currency to pay those debts, since the dollar has not been backed by gold a commodity with stable and finite supply since The US Dollar is also seen as monero archivesinteractivecrypto store of value, monero archivesinteractivecrypto typically maintains relative price stability compared to other currencies.

The monero archivesinteractivecrypto of the US Dollar illustrates what people what to see in a monero archivesinteractivecrypto currency. This guide looks into monero archivesinteractivecrypto particular new crypto currency from this list of coins, and gives the investment case for investing in Monero coin ticker symbol: We will consider how it may gain adoption, monero archivesinteractivecrypto confidence and become a store of value, potentially ultimately overtaking Bitcoin.

A Brief History of Monero Monero is one of the foremost alternative crypto currencies that has actually survived long enough to potentially become a replacement for the well known Bitcoin BTC. Monero has been in continuous operation since 16 April Initial miners began to offer it for sale on the bitcointalk. Because of the differences between Bitcoin and Monero protocols and programming interfaces, exchange platforms designed for Bitcoin clones would monero archivesinteractivecrypto work for Monero without extensive modification.

The following chart shows the price swings for Monero in its first 15 months of trading, from monero archivesinteractivecrypto high of approximately 0. One of the main selling points of Monero is that it can mathematically provable truly anonymous, unlike Bitcoin with can be traced via the Block Chain.

Here are some basic risks… Margin risk The main issue with exchange lending is it assumes that the exchanges algorithm for exiting customers out of their margined positions will not result in major loss.

Platform risk Exchange lending and indeed storing any crypto currency on any exchange is subject to platform risk. Is lending crypto currency safe? Monero XMR Trading Update — Year to date This price move appears to be a significant move on large volume, therefore worthy of a trading update. Latest Monero XMR price move in context The following chart shows the price swings for Monero since inception, highlighting monero archivesinteractivecrypto recent move up in Feb Sorry, your blog cannot share posts by email.

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But he encountered the wrong Austin: Drug Enforcement Agent Austin Love. The DEA promptly arrested Vallerius and charged him with conspiracy to distribute controlled substances, including cocaine, fentanyl, methamphetamine, LSD, and oxycodone. If convicted, he faces up to life in prison. In one key step, they noticed that an administrator of the site named OxyMonster was collecting Bitcoin donations through an online tip jar and that 15 of the 17 transactions moving Bitcoin out of the tip jar went to accounts belonging to a user named Vallerius on the site LocalBitcoins.

The agents searched for the uncommon name online and found several threads that seemed to connect the OxyMonster account to French national Gal Vallerius. Today, many people see cryptocurrencies as anonymous, untraceable digital money—and indeed, some of the first uses were to launder money and buy illegal drugs.

Rather than shield our identities, cryptocurrencies can function as sponges for information and could, perversely, further endanger our online privacy. We already see some of the creepy potential of online tracking, like when we are presented with ads on a website that clearly relate to Google searches we did previously. Digital currencies could dramatically raise the stakes. If we start broadly using them and our purchase histories leak through accidents or hacks, much of our private lives could be exposed: Even many digital-money proponents say the lack of privacy is a major problem.

That would be crazy. Yet some hopeful programmers are working on various tools to turn cryptocurrencies into safeguards of our information.

With virtual money edging ever closer to mainstream adoption, the design choices made now may determine whether it ends up being mostly a means for illicit activities, a tool for free interaction, or simply a more efficient way for us to be watched. At their heart, cryptocurrencies are digital stores of value that are exist entirely as code. The great challenge to using a decentralized system like this is ensuring that each bit of digital money exists in one place at a time—like hard cash rather than easily duplicated software—and that all the nodes agree on who owns what.

A solution to this problem was revealed in , when the mysterious author or authors known as Satoshi Nakamoto published a technical paper outlining the design for Bitcoin. The paper included an ingenious plan for how nodes could come to a consensus about ownership of virtual currency: Each block also connects in a specific way to earlier ones, forming a chain of blocks. Once a miner hits on the solution, it transmits it out to the network and all the nodes add it to their copies of the ledger.

The miner is rewarded with Bitcoins. Each new block confirms the transactions in the existing chain, preventing the chain from being altered or hacked. A central feature of the peer-to-peer blockchain, and a key distinction from traditional centralized money, is that everyone can see every transaction.

At first glance, it seems like this achieves what Nakamoto was trying to accomplish: But as more data piled up on the Bitcoin blockchain, it became clear that even if a single transaction is anonymous, multiple transactions might not be. By connecting scraps of information from many transactions on a public blockchain, observers can find out a surprising amount about what they represent.

The activities revealed public Bitcoin addresses for the counterparties, which included many hubs of the Bitcoin economy, such as major exchanges. The researchers could then follow and study the flow of Bitcoins through the network.

They could, for instance, easily trace some of the many Bitcoins that have been stolen from individuals and exchanges. Often they could tell when coins were changing ownership or merely moving between different accounts belonging to the same user, though some of the stolen coins took complicated paths that made it difficult to follow. With all of this data visible to anyone looking, a number of companies have sprung up offering sophisticated ways of analyzing blockchain data.

And agencies like the FBI now routinely analyze information gleaned from blockchains to investigate ransom demands from hackers and other suspects—including alleged dark web drug kingpins headed to beard competitions. There are also big risks to the privacy of regular, non-criminal users of cryptocurrencies, according to a study published by researchers at Princeton last summer. These bits of code track people online to make websites more convenient to use and to target advertising around the web.

For people paying in virtual money, their crypto histories, including past purchases, could then be available to the many companies using trackers—and to any hacker who gains access to that data or who sneaks a malicious tracker onto a shopping site. The simplest solution is simply to remove blockchains from public view. Some financial firms have done this by segregating projects from established blockchains like Bitcoin and Ethereum, the network that hosts the second-biggest cryptocurrency.

The firms themselves run these walled gardens and give certain people permission to access them. This provides privacy and much greater efficiency but is fundamentally unsuitable for a cryptocurrency open for anyone to use. This obscures where each bit of digital money goes and who owns it. Though mixing makes coins harder to trace, it leaves some questions about whether there are enough mixing partners, whether deposits to and withdrawals from the pool are truly obscured, whether putting your money into a tumbler connects it with money being laundered, or even whether tumbling is itself an indication of money laundering.

Some developers are taking the more extreme step of creating entirely new, privacy-oriented currencies. More recently, there has emerged a new currency that boasts a more sophisticated privacy safeguard.

That itself is an easy task; computer scientists have many clever ways of keeping information private, such as the public key encryption employed in secure web-browsing and email systems. The trick, then, is verifying the data: Then a miner can look at the transaction, validate its proof, and record it in the blockchain for the world to see.

Everyone can trust that the transaction is above board, even though no one knows the specifics of what happened. The math is incredibly complex—well beyond the scope of this article. If you want more information, the Zcash site has a more in-depth overview and the Ethereum blog dives into the details. Before integrating zk-SNARKS into the Zcash protocol, developers had to generate numbers called parameters that computers in the network would use to create and validate the proofs.

But the process of creating parameters for public use also births an evil twin: To further decrease the possibility of spying, the participants wrote their own software, bought all new computers from random stores, set up their computing stations in obscure motel rooms, physically removed all the communication hardware from the airgapped computers, and recorded every step of the process on video.

One participant ran his calculations in a car driving across British Columbia, on a laptop held in a cardboard box lined with aluminum foil. After the ceremony, they erased all traces of the data through high-tech means like destroying the computer components with a grinder or blowtorch.

Monero is a freewheeling affair run by a community of unpaid enthusiasts with a libertarian-anarchist vibe. Like Bitcoin, a significant amount of the early interest came from drug dealers and other users of the dark web looking to hide from the law.

Zcash, in contrast, was launched by a company, with significant outside investment. The two currencies have developed a rivalry, with each side trumpeting its own strengths and sniping criticisms at the other. In truth, each of these leading privacy-oriented currencies has its own strengths and weaknesses. The issues were mainly present in the currency before RingCT was released last year but persisted in milder forms even after that. There were ways that careful users could avoid revealing their information, but people in general are notoriously bad at taking active steps to preserve their privacy.

Peter Todd, the ceremony participant who did his calculations from the mobile compute station driving across Canada, says the security measures were not as ironclad as they appeared. Moreover, he says that even if the ceremony was safe, the high-powered math behind Zcash might not be.

Many of the developers working on the two currencies acknowledge these shortcomings and are working hard on fixes. Monero, for example, plans to continue to refine its dummy transactions so as to better hide the real ones. Zcash is planning a major upgrade to its code that will include a second ceremony, in which hundreds or even thousands of people will participate. But money, brainpower, and optimism are all in abundant supply. These are hopeful days for cryptocurrencies. Bitcoin and other cryoptocurrencies—the future of money or hype?

Here's what they are. Though individual Bitcoin transactions can be anonymous, information about users can leak out of the system through other ways.