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The Difference Between Cryptocurrencies and Digital Assets

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Cryptocurrencies and Digital Assets

There several misconceptions about the terms “digital assets” and “cryptocurrencies”. You see the two words used interchangeably but that is technically not correct. In every way, a cryptocurrency can be regarded as a digital asset but substituting the latter for the former is more often than not wrong. There are some attributes that are quite differentiating about the meaning of a digital asset and what should be referred to as a cryptocurrency.

Cryptocurrencies like bitcoin and litecoin were originally created and designed to be used as currencies that are capable of replacing cash in the future, while digital assets, on the other hand, go beyond the purpose of being used as a currency.

Digital Assets

Digital assets simply put are data that exist in form of binary files, these assets can be seen as those tangible things we often claim ownership and control over the value. Digital assets are stored on digital devices like computers and smartphones.

The emergence of blockchain technology has really been a booster for digital assets creation due to the simplicity it offers to developers to digitize assets or create new pure digital assets. Many of the digital assets that exist today are based on the blockchain-based tokens that have been built on the Bitcoin blockchain or the Ethereum blockchain.

Digital assets utilizing the bitcoin blockchain platforms are built on top of counterparty or Omni. These are decentralized platforms that leverage on the success of Bitcoin blockchain for their respective platform. These platforms allow users to create their own assets tokens on the blockchain with also the right of setting the parameters of how functions.

The Ethereum network, on the other hand, is a blockchain system that securely supports the development of decentralized applications and smart contracts without a third party interference.

Of these two blockchain systems, Ethereum has so far emerged as the preferred choice for digital assets token creation. Most of this digital assets tokens are not created to be used as currency.

One could see the reason why Coinmarketcap differentiates them into currencies and digital assets. Based on the CoinMarketCap listing of digital assets some of the major ones include:

Golem (GNT), which is an Ethereum-based decentralized supercomputer that offers the sharing of computing power.

Iconomi (ICN), which a platform for that allows investors, even newbies to invest in a portfolio of digital assets.Augur (REP) it’s a decentralized financial forecasting tool that rewards users who accurately predict on any topic even real world events.

Augur (REP), which it’s a decentralized financial forecasting tool that rewards users who accurately predict on any topic even real world events.

Maid Safe (MAID), which is an OMNI-based network that helps provides security and privacy to your data online through a process they termed “Self-Authentication”.

Cryptocurrency

Digital assets in the traditional sense should not be regarded as cryptocurrencies. Real digital currencies like bitcoin, litecoin, DASH, ZCash, and PIVX have their own features and original blockchains, unlike digital assets which are built on top another layer of a blockchain. Another major difference between this two is that cryptocurrencies are usually mineable while digital assets are usually issued during an initial coin offering and are often not minable.

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Bitcoin ETF Proposals Possess Substantial Market Influence

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Bitcoin ETF

This article aims to ensure that all market participants understand the significance of a potential Bitcoin ETF, what exactly a such an ETF entails, when they are likely to be implemented, and how they will impact the overall market.

ETFs Defined

Exchange-traded funds, commonly known as ETFs, are a traditional investment vehicle offered on all major stock exchanges around the globe. They allow exposure to an underlying asset or basket of assets offered in the form of a security that is proportionally represented by the fund’s shares. Most importantly, they allow exposure to a market without needing to physically hold or store the underlying asset. ETFs have become one of the most popular methods for passive investment by the masses in the capital markets.

As ETFs allow an individual to buy a basket of multiple assets, they mitigate strong price swings which individual stocks often suffer from, especially in the incredibly volatile cryptocurrency market. Any losses from assets which do not meet up to their promise are counterbalanced with assets which have performed particularly well and the growth of the overall industry during that period. Driving up the funds share price over time. The notorious investment tycoon Warren Buffett once proved the power of ETFs with a successful bet that the S&P 500 would outperform a collection of well-regarded Wall Street hedge funds over the period of a decade. His victorious bet displayed to the masses the power of such funds.

Bitcoin ETFs Market Impact

Bitcoin ETF ProposalsOne of the major barriers to mainstream investor fund inflow into the blockchain ecosystem has been the lack of institutional investors’ ability to purchase assets using traditional methods. Many do not understand that such market participants are simply not going to risk their capital on unfamiliar and unregulated cryptocurrency exchanges.

Instead, institutional money will enter the space once they can acquire cryptocurrencies without needing to hold the underlying asset, in a highly regulated and fully insured manner. Thus, for institutional investors crypto ETFs mitigate the risks of the industry whilst allowing them to profit from one of the greatest financial revolutions of our time. 

Although the impact of such institutional investors on the market will likely be of a speculatory nature in the first instance, this huge influx of money to the market will bring much-needed market exposure. The media love to shame the cryptocurrency ecosystem as much as feasibly possible, calling it a scam or a fad on a regular basis.

Institutional money would bring credibility to the entire industry and allow well-respected entities who have been quietly investing in the cryptocurrency space to come out of the woodwork and into the spotlight. Ultimately, this could lead to mainstream cryptocurrency adoption long term, as a result of the perceived integrity of the industry as a whole, and, potentially, a massive boost for the price of bitcoin.

Bitcoin ETF Calendar

Issuer Company Filing Date Status SEC Date
“Physically” Backed by Bitcoin Holdings
Winklevoss Bitcoin Shares Winklevoss Cap Mgmt 01/07/13 Denied 26/07/18
VanEck SolidX Bitcoin Trust VanEck & SolidX 05/06/18 Postponed 30/09/18
Bitwise HOLD 10 Cryptocurrency Index Fund Bitwise 24/07/18 Awaiting Approval Unknown
Derivatives Based
GraniteShares Bitcoin ETF GraniteShares 15/12/17 Denied 15/09/18
GraniteShares Short Bitcoin ETF GraniteShares 15/12/17 Denied 15/09/18
Direxion Daily Bitcoin 1.25X Bull Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 1.5X Bull Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 2X Bull Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 1X Bear Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 2X Bear Direxion 05/01/18 Denied 21/09/18
Evolve Bitcoin ETF Evolve Funds 21/09/17 Awaiting Approval Unknown

The table above displays cryptocurrency ETFs that are currently laying the foundations for their approval. Such firms are on a waiting list ready for their hearing with the U.S. Securities and Exchange Commission (SEC), who will ultimately determine their fate. The Winklevoss twins’ fund has already been turned down for the second time as of July, 26. Following this, the SEC has denied a following nine applications, predominantly from Derivatives based ETFs such as GraniteShares and Direxion. Such a decision results from their perceived inability to provide significant liquidity due to their market size, which could lead to significant market manipulation.  

BitcoinDespite such dismissals, the most important ETF which market participants should be fully aware of is the VanEck SolidX Bitcoin Trust who plans to release their ‘physically’ backed ETF on the Chicago Board of Options Exchange (CBOE). Recently, the SEC hearing date was postponed to the 30th of September. The CBOE has true industry influence as the largest options exchange in the world and has proven itself in the cryptocurrency market by introducing Bitcoin futures in December 2017. They have meticulously studied the failures of all previous ETF denials and reviewed their application accordingly. If an ETF is likely to get approved this year, this will most likely be the one.

Despite all the hype, some sceptics suggest that ETF delays are usual, with Copper being the last ETF to pass through the SEC. With their reasoning, the likelihood of an ETF being approved in 2018 is minimal. However, regardless of whether a decision happens in the next few months or not, the market has certainly been responding rapidly to both positive and negative news. The first Winklevoss twins ETF denial news caused a flash crash which quickly corrected, whilst the delay of the major CBOE proposal caused a more prolonged fall in bitcoin’s price. Ultimately, the market appears to be in a stalemate until a further delay, approval or disapproval occurs. The latter could cause a long-term downtrend, whilst an approval could see prices increase exponentially. As September, 30, looms, the market tension builds. Be sure to have a plan for all situations to ensure one maximises or minimises the ETF decisions’ impact on the market. 

This guest post was contributed by Adebayo Juwon, Country Manager (West Africa) at BBOD.io.

*Readers should do their own due diligence before taking any actions related to the company, product or service. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product or service mentioned in this guest post.*

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The Best Bitcoin Trading Platforms in 2018

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Bitcoin Trading Platforms

The high number of bitcoin trading platforms can make it difficult for newcomers to the cryptocurrency investment space to decide which platform to sign up for. To aid in this endeavour, Bitcoin Africa has compiled a list of the top five best bitcoin trading platforms available today.

Binance

BinanceBinance is a new cryptocurrency exchange that has already succeeded in making a name for itself as a popular trading platform. The exchange started its operations in July 2017 after raising a significant amount in its ICO. The Chinese platform is headed by Changpeng Zhao who has an impressive amount of experience with blockchain technology having previously worked at Blockchain and OKcoin.

The cryptocurrency exchange supports the trading of an impressive number of digital currencies. It is possible to trade well-known coins such as bitcoin, ether, and litecoin as well as smaller and lesser known digital currencies and tokens. Binance supports over 40 cryptocurrencies. This is an advantage for users who want to trade in tokens that are not easily available on other exchanges.

Moreover, Binance boasts of one of the lowest trading fees in the cryptocurrency market. The trading fee is not based on a tiered structure as is common amongst other platforms. Instead, it is fixed at 0.1 percent of your trade. Additionally, it is possible to slash this fee in half if you decide to use the native cryptographic token of the platform, called BNB. It is important to note this reduction is a temporary promotion being run by the exchange and will be stopped at some point in the future.

Without verification, it is possible to withdraw up to 2 BTC daily. However, after registration, you can withdraw up to 100 BTC daily. The withdrawal fees vary for each token and are updated regularly. Binance trading features are advanced and require an existing understanding of trading platforms.

Lastly, it is important to note that it is not possible to fund trades on Binance using fiat currency. To begin trading, you must fund your account with cryptocurrency by sending it to your account on the trading platform. This means you must first acquire cryptocurrency before you can start trading on Binance.

Bittrex

BittrexUS cryptocurrency trading platform Bittrex is one of the largest and most popular exchanges in terms of trading volumes. The exchange started operating in 2014 and is well trusted by the community.

Bittrex makes it a point to focus on security to ensure the safety of its customers’ funds. The platform utilizes industry-leading security practices and stores the bulk of the users’ funds in a cold wallet in order to avoid any losses through thefts or hacks. In fact, Bittrex is one of the few exchanges that has never been hacked since it started operating.

The exchanges most prominent feature is the large number of currency pairs it offers its customers. Furthermore, it features a fairly simple user interface that is easy to use for beginners and traders can withdraw up to 1 BTC daily without verification. To withdraw a larger sum, you need to submit to the KYC and AML practices enforced by Bittrex.

The trading fees on the platform are set at 0.25 percent of the trade. To begin trading, you must fund your account with the cryptocurrency of your choice. However, it is possible to purchase a minimum of $10,000 in bitcoin, ether, or USDT through a bank wire transfer with an ‘enhanced verified account.’

Kraken

KrakenKraken is one of the oldest and most established bitcoin exchanges in the market. It has been in operation since 2011. The design of the exchange makes it easy to execute trades while still offering a wide array of trading tools such as automated orders, stop-loss orders, and margin trading.

The San-Francisco-based cryptocurrency exchange utilizes encrypted cold storage to store its customers’ funds. Moreover, accounts on the platform must be secured using two-factor authentication to further enhance security. Additionally, Kraken prides itself on its ability to provide a high level of liquidity.

In addition to America and Canada, the platform supports customers from a number of European countries which makes it popular on the continent. Moreover, Kraken supports fiat trading pairs in a number of different currencies. This allows users from different countries to easily fund their accounts and begin trading. The exchange also has a dark pool, which allows users to trade anonymously.

The fee structure on Kraken is somewhat complicated. Funding and withdrawal fees are dependent on the method and currency utilized. Trading fees are charged on a tiered structure according to trading volumes which are calculated on a thirty-day basis. Trading fees include a taker and a maker fee. Lastly, it can take up to a week for accounts to be registered on the site due to KYC and AML protocols.

Poloniex

PoloniexLaunched in 2014, Poloniex is a well-known and popular cryptocurrency exchange. The platform is best known for its trading tools. It boasts a number of tools and information packages that allow users to make the best decisions with regards to trades. Moreover, it supports lending and margin trading.

However, due to its comprehensive tools, the platform can be difficult for first-time crypto traders to use. Additionally, it is not possible to fund your account with fiat currency. The American exchange also boasts high trading volumes and subsequently liquidity thus it is possible to settle trades in a fairly timely manner.

Poloniex supports a wide number of cryptocurrency trading pairs. Creating an account is easy but the amounts supported for withdrawal are based on the verification level of your account. Trading fees are charged on a tiered structure based on trading volumes but are low in comparison to other exchanges.

Lastly, the platform stores the funds in a cold wallet. It also enforces two-factor authentication for all accounts. The platform did suffer one security breach in 2014 but made sure to refund all affected users.

Bitfinex

BitfinexHong Kong-based Bitfinex was started in 2012. The exchange is considered one the biggest based on daily trading volumes as it handles upwards of $2 billion daily. It provides users with a wide array of trading tools that support both basic and advanced level trading. It is possible to navigate the user interface as a novice but the platform is better suited for more experienced users. Moreover, the exchange has a mobile app for on-the-go trading.

Due to its large trading volumes, Bitfinex boasts a significant amount of liquidity. This enables the platform to quickly settle trades which helps users exploit changes in the market. The exchange supports margin trading, margin funding as well as more complex order types such as fill or kill and iceberg orders.

The trading platform has encountered a number of security breaches in the past. Due to this, it stores its funds offline with just enough to facilitate trades kept online. It also enforces two-factor authentication, encryption and other security measures to avoid other compromises in its security.

Fees on Bitfinex are tiered. The greater the trading volumes, the less the fees levied. The trading volumes are calculated monthly. The platform makes a point to update the fee structure regularly.

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Ugandan Socialite Zari Hassan’s Social Media Accounts Hacked – Attackers Ask for Ransom in Bitcoin

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Zari Hassan

Earlier this month, Ugandan socialite Zari Hassan had several of her social media accounts hacked. Interestingly, the cyber criminals asked for a ransom payment in bitcoin (BTC) from Hassan so that she could regain access to her account.

The Zari Hassan Hack

Zari Hassan

Image by instagram.com/zarithebosslady/

Zari Hassan is a popular Ugandan celebrity with millions of followers on social media. A few weeks ago, however, her Instagram and Facebook accounts were reportedly hacked.

Her attackers’ goal was to extort money from her, given that they had enough information about the kind of lifestyle she lives. They demanded $4,000 in bitcoin (BTC) to be sent to them as a ransom to release access to the account.

Hassan was able to retrieve access to her accounts but it is unclear whether she paid the ransom or whether the compromised social media platforms enabled her to re-access her accounts.

Hassan is among a number of several female celebrities who have had their accounts hacked in the past few months.

Keep Your Online Accounts Safe

There are lessons to be learned from this. For one, we need to take caution in securing our online accounts on social media. Things such as frequent password changes, allowing two-factor authentication, making use of privacy settings as well as limiting app permissions should not be taken for granted. We need to make use of them to keep our accounts as secure as possible.

Furthermore, for those of us that hold cryptocurrencies, we need to ensure we keep our cryptocurrency wallets and trading accounts safe and secure. Hackers have been increasingly targeting cryptocurrency users due to the irreversibility and relative anonymity of cryptocurrency transactions.

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