Connect with us

Bitcoin

3 Reasons Why You Should Stay Away from Bitcoin Binary Options

Published

on

bitcoin binary options

Binary options are a type of financial instrument that allows individuals to bet on whether the value of an underlying asset, such as a stock, bond or even bitcoin, will be higher or lower after a specific pre-determined time period. If you are correct you receive a financial payoff. If you lose, you lose your entire invested amount.

When browsing through Facebook, you will likely see ads from online brokerages that offer bitcoin binary options trading and claim that it is a great way to make money off the boom in bitcoin. Alternatively, you will also find a lot of individuals on Facebook groups encouraging people to sign up for binary options trading claiming that it is a great way to make money online. However, nothing is further from the truth.

Not Real Investment Products

Binary options are being marketed as easy-to-use investment products that allow you to make money online by simply betting on whether the price of an asset will go up or down within the next five, ten, or thirty minutes. However, what binary options brokers do not share in their aggressive marketing campaigns is that the odds are not actually 50/50. Instead, they are much worse as the binary options market moves with the price of the underlying asset.

Say, for example, you want to bet $100 on the price of bitcoin closing higher within the next five minutes as the price of bitcoin has just ticked up a little and you think it will continue to rise. In that case, the price of a bitcoin binary option could be something like 52/48. Meaning that if you want to “go long” and buy a call binary option, your payoff will be 0.48 * 100 so you can earn $48 if you end up correct. Should you be incorrect, however, and the price of bitcoin drops below the strike price after the five-minute period, then you will lose your invested $100.

Simple maths tell us that if you play a game that gives you less than a 50 percent chance of winning over and over again you can only lose. Especially, in a game with a binary payoff where the potential winnings are always less than the potential losses.

As binary options have been falsely marketed as investment products when they are really a form gambling, they have been banned in Israel, Canada, and Belgium. Furthermore, the U.S., France, and the Netherlands have fined several binary options brokers for their consumer-harming activities.

Bitcoin is Too Volatile to Bet on Short-Term Price Movements

Should you decide to try binary options regardless because you like gambling, you should know that bitcoin is more volatile than traditional asset classes such as stocks and bonds, which makes it impossible to predict its short-term price movements.

The price of bitcoin is very news-driven and you cannot predict what headlines will hit the newswires next. So placing a bet on whether the price of bitcoin will be higher or lower within the next five or ten minutes is a very risky affair that will likely end up with you losing your money.

Binary Options Trade on Fictitious Markets

Finally, it is important to note that binary options do not trade on the actual price of the underlying asset. Instead, binary options brokers create their own markets. In other words, you are “trading” on fictitious markets that the binary options brokers control. You are not betting on the actual price of bitcoin, a real stock index or the price of gold. Instead, you are betting on the price of a fictitious underlying market that is supposed to replicate the price movements of the actual asset.

It is, therefore, no surprise that binary options are banned in numerous countries and that the majority of users who try binary options platform end up losing money.

If you have seen the flashy looking online ads that recommend binary options as a great way to make money trading bitcoin, don’t click on them. You can only lose money with binary options over the long run!

Bitcoin

Bitcoin Wallet Luno Adds SegWit Support to Lower Transaction Fees

Published

on

Luno Adds SegWit Support

Luno, one of the most popular bitcoin wallets in Africa, has announced full SegWit integration for bitcoin send and receive transactions. Previously, Luno customers could only receive BTC through a legacy wallet address, which was not integrated with the recent Bitcoin blockchain upgrade SegWit. Only send transactions were SegWit compatible.

With the full integration of SegWit, Luno users can now enjoy cheaper and faster bitcoin transactions.

“By implementing SegWit internally, Luno has managed to reduce the send fees paid by customers by over 25% already. As customers start switching over to new SegWit addresses, this will translate into a further reduction in sending fees in the coming weeks and months,” Werner van Rooyen, head of marketing and communications at Luno stated.

Luno currently operates in South Africa, Nigeria, Malaysia, UK, and in 35 other European countries.

What is SegWit?

Segregated Witness (SegWit) was an upgrade to the Bitcoin blockchain that is intended to address Bitcoin’s scalability challenges as well as fix the issue of transaction malleability. With SegWit, signature data is separated from transaction data in order to enable more transactions to fit into each block. The signature data is kept in an extended block called the witness. As a result, bitcoin transactions become faster and transaction fees become lower.

In theory, the Bitcoin network can handle seven transactions per second. However, in reality, it is around four transactions per second. With the number of bitcoin transactions increasing as bitcoin’s popularity grows, transactions take longer as the unconfirmed transactions pool increases. Therefore, bitcoin users who can afford it have been paying higher transaction fees to incentivise miners to prioritise their transactions and, thereby, increase the speed of their transactions. At the end of 2017, this has led to the average bitcoin transaction fee spiking to over 35 dollars.

However, when SegWit addresses are used, bitcoin transactions become faster and the required resources decrease as well. Consequently, the transaction fees reduce.

How Can You Add a SegWit Wallet Address on Luno?

To add a SegWit address on the Luno wallet you have to follow these steps:

  • Open your Luno account either on the mobile app or the web app
  • Choose “wallets” from the menu
  • Click on your “BTC wallet”
  • Choose “receive bitcoin”
  • Click “add address” and follow the prompt

To receive bitcoin, use your SegWit bitcoin receive address. Legacy bitcoin addresses begin with 1 while SegWit bitcoin addresses begin with 3. Even after adding a SegWit wallet address, bitcoins sent to your previous legacy bitcoin address will still work. In addition, you can still send bitcoin from a SegWit wallet to a legacy wallet and vice versa since the transactions are still taking place on the same blockchain. But if you are sending bitcoins to and from a SegWit wallet, you can benefit from reduced fees.

Continue Reading

Bitcoin

Bitmart Opens Cryptocurrency Mining Hardware Store in South Africa

Published

on

Bitmart Opens Cryptocurrency Mining Hardware Store

Bitmart, South Africa’s leading supplier of mining hardware, has opened a cryptocurrency mining hardware store in South Africa. This makes Bitmart’s retail outlet the first cryptocurrency mining store in Africa.

Products and Services Offered by Bitmart

Bitmart was founded by CEO Jacques Serfontein in 2015 to offer cryptocurrency mining hardware to South Africans. Currently, Bitmart offers GPU rigs, ASIC miners, GPU rig mining software, graphics cards, international mining rig monitor app, cryptomatic watches, hardware wallets, and motherboards. Customers can find GPU mining rigs that mine cryptocurrencies such as zcash, monero, decred, bitcoin, and litecoin.

Additionally, Bitmart provides services such as bitcoin mining farm design and deployment, mining training, antminer repair tickets, mining farm management using Genesis Hive, and shepherd services.

Through its shepherd services, Bitmart helps owners of second-hand miners to find buyers. Therefore, both sellers and buyers are assured of safe and secure transactions through Bitmart’s SSL-secured online shop.

According to MyBroadband, Bitmart is an authorised distributor of Avalon Miners, Genesis Hive, Trezor, Ledger wallets, KeepKey, and UniSat (satellite mining solutions) in Africa.

The company also supplies mining hardware to countries such as Japan, Dubai, North America, Australia, and England.

What Does Bitmart Plan for the Future?

Bitmart will be holding seminars in Johannesburg and Mbombela. The seminars will focus on bitcoin basics and advanced cryptocurrency trading. In addition, Bitmart will be introducing a satellite mining connection in partnership with Uniwisp that will allow mining rigs to mine from any place in the world. Uniwisp is an Internet service provider based in Nelspruit, South Africa.

 

Continue Reading

Bitcoin

Kenya’s BitPesa Acquires Spanish Money Transfer Platform TransferZero

Published

on

BitPesa Acquires TransferZero

On February 8, 2018, BitPesa announced that it has acquired TransferZero, a Madrid-based online money transfer platform, which operates in over 200 countries using more than 50 currencies.

Why Did BitPesa Acquire TransferZero?

BitPesa, which is already operating in Africa and Europe, will be able to “set deep roots to UK and European licensing, bank accounts, and integrations” through this acquisition, according to the company’s statement on its blog.

“Europe is a hub for global remittance and payments companies. Digital currencies and decentralized technology have hit critical mass in the financial services and payments space. It is no longer a question of whether this technology will have staying power [but] which specific technology and what product iteration will launch and scale first […],” Elizabeth Rosiello, founder and CEO BitPesa said.

“BitPesa has the support of top-tier, institutional investors and a network that will help to bring TransferZero’s technology to the next level. With this support, we will be able to provide even more efficient transfers and user experience,” Luis Cambronero, former TransferZero CEO and present Managing Director, BitPesa stated.

Setting Up Infrastructure Across Europe and Africa is a Priority

“Setting up infrastructure across Europe and Africa has always been a focus of ours. […] We’ve just doubled our bank accounts, our infrastructure, and it’s licensed by the Bank of Spain as a payment institution. So we are fully compliant with PSD2 regulations […],” Rosiello said.

“This is truly a partnership where the whole is greater than the sum of the parts, allowing BitPesa to solidify our leadership in this space. By bringing our regional and technological expertise together, we will further accelerate our month-to-month growth,” Rossiello asserted.

TransferZero will neither change its name nor its headquarters. In addition, its employees will remain with Bitpesa.

This acquisition from an Africa-based bitcoin startup of a European fintech startup shows that leading African startups can make waves beyond the borders of the continent and create a positive impact on a global scale.

Continue Reading

Popular Posts