Top 3 Types of Bitcoin Scams

 

Top 3 Types of Bitcoin Scams

TheMerkle Bitcoin Scam Types

 

It is not hard to see the cryptocurrency world has successfully attracted a lot of nefarious individuals looking to scam others. In fact, it appears there are more bitcoin-related scams showing up every single day. As one would expect, there are a few different types of scams that are more prevalent than others. Never change a winning tactic, according to criminals.

3. PONZI SCHEMES

Virtually every platform offering bitcoin investment should be treated with a lot of scrutinies. While there is a way for people to make money with other’s money  – trading altcoins, for example – no one has successfully done so on a large scale. Trading itself is a very risky business, yet it is also the most legitimate way to increase cryptocurrency holdings over time.

Unfortunately, there are quite a few large-scale investment opportunities, all of which will eventually turn into a scam. Ponzi schemes in the bitcoin world will always attract desperate people and shills, and there is quite an abundance of these programs available right now. Never trust any online platform claiming to let you earn money without doing anything.

2. MINING HARDWARE

The Cryptocurrency world is home to some great innovation, especially where mining hardware is concerned. Gone are the days of FPGA mining, as it is all about ASICs right now. There are quite a few companies who claim to manufacture hardware, and most of them will offer pre-sale discounts to anyone investing in that company. It is not surprising a lot of these companies offering pre-sales are complete scams, as most of them do not even have any ASIC research and development lab whatsoever.

One of the more recent scams revolving around bitcoin mining hardware goes by the name of Foxminers. The company provides no evidence of their mining hardware or research. Companies like these often trick people into depositing funds in the hopes of getting a cheaper new bitcoin miner. However, they will continue to delay shipping and eventually run off with the money.

1. CLOUD MINING

Perhaps the biggest industry of bitcoin scams comes in the form of companies claiming to run a cloud mining operation. One of the biggest cryptocurrency cloud mining scams to date goes by the name of HashOcean, a company that successfully paid miners for over a year until they finally disappeared and could no longer maintain paying out users accordingly.

Every cloud mining venture should be looked at very closely, as the number of legitimate companies can be counted on the fingers of one hand. Even then, ensuring a return on investment is virtually impossible due to volatile bitcoin prices and mining difficulty increases. Cloud mining can be somewhat lucrative if one is lucky, yet directly buying the cryptocurrency in question and holding onto it for the same duration as the mining contract will usually generate better returns.

Chris Corey CMO MarketHive

   April 28, 2017

Jack

Mysterium To Build Blockchain-based VPN for Secure, Anonymous Internet Connection

Mysterium To Build Blockchain-based VPN for Secure, Anonymous Internet Connection

 

This is a paid press release, which contains forward-looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality of the press release.

27th April, Zug, Switzerland: Blockchain startup Mysterium Foundation has announced its token crowdsale scheduled for the 30th of May. Mysterium is building a decentralized Virtual Private Network (VPN) that anyone can use to connect securely and anonymously to the internet. The system is also designed so that users who share their spare bandwidth to the network will be able to earn digital tokens in reward. The Mysterium platform will operate via its native MYST token, available through the crowdsale.

Until now the public has had to trust their private data to large centralized VPN providers. Now Mysterium will offer an alternative decentralized peer-to-peer (P2P) network that aims to take back power from big corporations. Mysterium acts as a distributed marketplace for the give and take of VPN services and is backed by secure Ethereum blockchain technology.

Internet privacy is under attack. Last month the U.S. reversed a set of important consumer protection rights allowing Internet Service Providers (ISPs) to track customer activity and sell that data to the highest bidder. According to the Electronic Frontier Foundation customers will now be subject to ‘new and invasive ways to track and deliver targeted ads to customers’ [1]. As a result, the U.S. has seen a huge surge in demand for VPN’s as people seek to restore their privacy. Most users are unaware that they are simply moving their private data from centralized ISP’s into the hands of centralized VPN providers.

Mysterium offers a real alternative – an open source, decentralized and encrypted VPN solution with levels of privacy unmatched by centralized providers.

Mysterium Network is specifically designed to combat this erosion of our privacy at a time when corporations, governments, and other entities are becoming increasingly invasive in their surveillance tactics. The peer-to-peer platform will be completely Open Sourced — so no hidden code that can secretly do something you don’t want it to and no hidden or central servers secretly collecting your data. 
-Robertas Visinskis, Founder, Mysterium Network

The Mysterium platform is designed so that anyone with bandwidth to spare can join the network as a VPN node provider and earn MYST tokens in reward. To enable the system to scale, transactions will be handled through the platform’s own decentralized micropayment system called CORE.

The MYST token pre-sale opens on May 30th at 13:00 UTC. Funds raised will be used to support the development and the launch of the platform.

For more information visit: https://mysterium.network

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

Chris Corey CMO MarketHive.com

By Bitcoin.com -April 28, 2017

Jack

There’s a Big Difference Between Electronic Fiat and Cryptocurrency

There’s a Big Difference Between Electronic Fiat and Cryptocurrency

With all different types of digital money these days and accounts represented electronically, people often wonder what’s the difference between traditional electronic currency issued by banks and permissionless cryptocurrencies like Bitcoin.

The Big Push for a Cashless Society

Over the past few years, there’s been a lot of discussion concerning the world’s progression towards a cashless society. Furthermore, bureaucrats and government authorities worldwide have also bolstered the idea further by individual notes of tender from circulation by demonetizing cash reserves. Before the seventies, cash was a dominant form of money, but since then most people now transact with an electronic representation of their local currency in their day to day lives.

For instance, only 8 percent of the world’s money is represented by physical notes, and everything else is a form of digital fiat. Countries everywhere around the world have slowly been progressing towards a cashless society. In the U.S. the practice of electronic deposits into bank accounts became popular in 1975, and a decade later people were using these balances with debit cards.

Now throughout a few particular countries, large denominated notes like the $100, $500, and $1,000 bills are becoming rarer as governments are removing them from circulation. One country, in particular, India is suffering from a cash crisis as leaders started a demonization process last year. The use of cash within India is becoming less visible as Indian authorities are pushing hard for a cashless society by replacing it with digital fiat.

The Glaring Differences Between Electronic Fiat and Cryptocurrencies

 

There are significant differences between the traditional digital currency in your bank account and cryptocurrencies like Bitcoin. One of the biggest contrasts between the two is bitcoin’s deflationary attributes which is backed by the currency’s 21 million capped supply. Many economists believe this is a great benefit as the public knows that there are only so many bitcoins, which causes people to save, and purchasing power usually increases.

With traditional digital fiat reserves, there is no telling how much money is circulating, and no one knows if the central banks are printing money on a whim. Economists who are against this type of monetary practice, such as those from the Austrian school, believe the world’s citizens are experiencing a silent robbery called inflation due to central planners printing vast amounts of fiat reserves. Sometimes central bank’s like the Federal Reserve tell the public they are creating more money with concepts like quantitative easing and the recent bank bailouts.    

Another reason the world’s traditional fiat currencies are no good is because the electronic form is also used to monitor the public’s wealth. Cash is harder to track, and governments can keep a keen eye on funds moving around their electronic databases. Furthermore, other government agencies such as the UK’s GCHQ, the NSA, the FBI, and the CIA have been known to being spying on citizens and the world bank’s monetary movements.

With this power, central authorities can censor people’s privileges to move money in any way they see fit. There are clear examples of banks, credit card companies, and Paypal freezing peoples funds or halting operations because of reasons they don’t particularly agree with.

Censorship Resistance and Unstoppable Tax Protests

With bitcoin, people can move their wealth in a permissionless way using their individual sovereignty. Bitcoin users can utilize the decentralized currency for operations that are typically frowned upon by third party forces. This includes online storefronts selling pornography, illicit drugs, and other black market activities. Cryptocurrencies can also be used to avoid taxation as it leaves the decision of reporting to tax officials up to the user.

The infamous whistleblower Edward Snowden has agreed with this sentiment explaining to his Twitter followers on November 13 stating;

Coincidentally, new technologies raise the possibility of unstoppable tax protests.   

Because the public is embracing bitcoin and blockchain-based permissionless currencies authorities worldwide are trying to co-opt the technology. Rather than be disrupted, central monetary planners believe adding the word “blockchain” to the incumbent databases used today will lure more people towards a cashless society. One that will still be monitored, controlled with censorship, and even “editable” for those trying to erase fraudulent behavior.

There is a big difference between the electronic money used by banks today and bitcoin, as the latter is far superior for those who embrace freedom.

What do you think about electronic fiat currency in comparison to cryptocurrencies like bitcoin? Let us know in the comments below. 

Chris Corey CMO MarketHive.com

By Jamie Redman -April 27, 2017

 

Jack

Bitpay Gearing up to Test Extension Blocks

Bitpay Gearing up to Test Extension Blocks

Recently, the Bcoin team released the specifications and particulars for launching extension blocks for a blockchain protocol upgrade. They have now nearly completed implementing these extension blocks. Bitpay’s CEO Stephen Pair responded with an article on April 24 saying that Bitpay would be willing to test these “secondary blocks” on a testnet.  

Also read: Bcoin Developers Plan to Test Scaling Concept ‘Extension Blocks’

Bitpay Gearing up to Test Extension Blocks

Pair said, “The bcoin team has released specifications and working code for the developer community to critique. At Bitpay, we think this idea of extension blocks holds a lot of promise, and we intend to participate in its technical evaluation”.

This news of testing extension blocks comes at a time of great divide within the Bitcoin community over whether Segwit should be activated. Pair suggests that extension blocks could solve the problem because these “secondary blocks” act as a non-contentious hardfork. In a previous article, Pair said that the communities need to avoid initiating a contentious hardfork at all costs. He said:

“One very important challenge we must resolve is how to successfully upgrade Bitcoin in a safe, deliberate and non-contentious manner. And we must be able to upgrade Bitcoin because no organism can live in its own waste products.”

How Secondary Blocks are Non-Contentious; Pair’s Three Step Formulation

This “secondary block” or “extension block” upgrade is non-contentious and will disallow Bitcoin to wallow in its own excrement, because of the manner in which it solves the problem of filled block sizes. In Pair’s previous article, he outlines a three step outline on how extension blocks could be implemented. He said the nodes will acknowledge new rules for these secondary blocks, and thus they will start accepting data.

“In this step, nodes begin upgrading to support the new rules. Nodes will validate and relay valid data that can be included in the secondary block (imagine some new form of transaction, but it could really be any kind of data). These nodes will not relay data considered invalid according to the new rules.”

In phase two, Pair suggests that a second soft fork is performed. However, he mentions instead of adding new rules to the protocol, old blocks will be “deprecated.” This means that transactions will no longer be allowed in the old block.

Finally, in phase three, the protocol will start to shed its old skin and stop rolling around in its own filth. Pair clarified this step, “After the soft fork that deprecates use of the original block has activated, all transactions and data will be in the new secondary block. At this point we can schedule a hard fork that simply drops the old block and adopts the secondary block as the primary block structure.”

Pair seems confident that the “secondary block” or “extension block” plan is the way to go for a non-contentious fork and upgrade of the bitcoin protocol. Of course, others disagree.

Do you think a “secondary block” upgrade is the solution to the scaling dilemma? Let us know in the comments below.


Images via Shutterstock and fintech.nl


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even look up the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

Chris Corey CMO MarketHive.com

By Sterlin Lujan

April 25, 2017

Jack

Weekly Round-Up and Cryptocurrency Markets Update

Weekly Round-Up and Cryptocurrency Markets Update

No consensus was reached last week towards Bitcoin scaling, in fact, the battle is getting protracted with each camp holding an entrenched status. Quite interestingly, Bitcoin price breached the $1200 line in midst of all the hostility and even went beyond $1300, however it has since reverted to the $1200s.

In a related development, Rhett Creighton, a Blockchain engineer and hacker who was with the Bitcoin Unlimited camp although left a couple of weeks ago has predicted neither Segwit nor Bitcoin Unlimited can activate. Creighton believes since Segwit needs 95 percent signalling to activate, which is impossible, whilst there is no way BU can obtain the super majority hash rate power to launch an attack on a minority chain to take over Bitcoin.  In his opinion a split is imminent.

In an unexpected move, the National Bank of Cambodia has indicated it is working towards a blockchain payment system for its citizens in conjunction with the Japanese startup Soramitsu. The startup is in fact, a subsidiary of Linux Foundation’s open-source Hyperledger project.

The most heartwarming news for the week was the revelation by billionaire hedge fund investor Mike Novogratz, that 10 percent of his net worth is in Bitcoin and Ether. The Billionaire was quoted by CNN as saying investing in the digital space was the best investment of his life.

In other exciting news, Litecoin gave hope to the ecosystem when it reached a unanimous decision to activate Segwit soft fork. Charlie Lee wrote on Twitter that this has taken too long for his liking.

With a twitter announcement made on Tuesday, the Cryptocurrency Exchange, Poloniex gave an indication it is delisting 17 altcoins. Cryptos that were axed include Boolberry and Voxels among a dozen others.

Valery Vavilov, CEO of BitFury stated at the  Russian Internet Forum in Moscow on Wednesday that more 100,000 properties in Georgia has been registered on the Blockchain. It will be recalled that in February, the government of Georgia signed an agreement with Bitfury to register properties on the Blockchain.

Markets Updates (As Of Sunday)

The third week of April saw some reshuffle on the top 10 of CoinMarketCap. As indicated earlier, Bitcoin has been able to withstand all the infighting and it is rising to the respect of analyst and community members. It closed the week at 22:00 GMT with a price of $1216.78. The market leader actually lost 0.44 percentage point.

Rising 2.16 percent at 2nd place, Ether was sold for $49.71. It was an improvement of last week’s $48.49 price score. Let’s see how it turns out for the king of Smart Contracts this week. 

At the third place, Ripple went down by 0.79 percent selling at $0.031222. It was a departure from last week gains.

Meanwhile, Litecoin seems to be cashing in on its prudent decision to come to a compromise to activate Segregated Witness avoiding the needless antagonism that has saddled Bitcoin. At the end of the week, it was sold for $13.49 compared to last week’s $10.71. It also ended the epic battle that has been raging on with Dash by taking over number four from Dash.

Selling at $69.19 with a downward trend of 2.79 percent, Dash didn’t have a good week like the previous one. Its $75.23 price then has declined abysmally.

Occupying number six with style, Ethereum Classic had a wonderful week dislodging Monero and closing with a whopping 14.78 percent upward score. The $3.68 market price was an improve to write home about.

Monero after losing number six made a slight gain of 0.09 percent to be the 7th most valuable Cryptocurrency. The Exchanges listed its price at $19.98.

Number eight is being held by NEM which plummeted 0.14 with a $0.030872 price. It is a great improvement from last week, as it has doubled its price.

At the last but one on the top 10 is Augur. It managed a scanty gain of 0.93 and a price of  $11.79.

Maidsafe was safe after bouncing back from number 11 to displace newcomer PIVX. Last week PIVX took the spot from the Scotish giant but it couldn’t stand the heat of the top. The market price was $0.232537 and it appreciated by 2.84 percent.

Gainers and Losers

Below top 10 to 20, Decred made a strong statement with a 20.32 upward adjustment. It is at number 11 and appears to be eyeing top 10 glory.

Waves deserves a mentioning since it also went up by 18.56 percent at number 17. PIVX went down 19.41 percent to be the biggest loser. Looks like its migration to a new wallet is upsetting its growth. Until next week, always read CCN for all your Fintech news.

Featured image from Shutterstock.

 

Chris Corey CMO Markethive Inc

Frisco d'Anconia on 24/04/2017

 

 

Jack

Merchants No Longer Pay Merchant Fees. So Stop Paying Them.

Zero Fee Solutions Now has the absolute best program for merchants in the entire United States

We are a Michigan based merchant services company
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Merchants can now pass on their merchant processing
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They process over $100 billion dollars in card volume per year.

 

With over 30 years of experience and
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Zero Fee Solutions

(810)308-0872

ccorey@zerofeesolutions.com

 

Jack

Merchants No Llonger Pay Merchant Fees. So Stop Paying Them.

Zero Fee Solutions Now has the absolute best program for merchants in the entire United States

We are a Michigan  based merchant  services company
changing the way  that merchants do  business.  

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Merchants can now pass on their merchant processing
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They process over $100 billion dollars in card volume per year.

 

With over 30 years of experience and
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Zero Fee Solutions

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ccorey@zerofeesolutions.com

 

Jack

Arbitrage – What it is and how it works

Arbitrage refers to the process of instantly trading one or more pairs of currencies or odds for a nigh risk-free profit.

Usually, this involves two exchanges (this is then called a two-legged arbitrage); although more are, of course, possible.

crypto currency arbitrage

There are several steps when executing an arbitrage:

Find a suitable opportunity
Execute trades
Rebalance accounts

Step 1: Find a suitable opportunity

This step is relatively easy. Simply check the order books of as many exchanges as you like, compare bids vs asks, and check if you can find a negative spread.

A small discourse into what a spread is

I will assume you're familiar with bids, asks and what an order book is – if not, you should definitely look up those first. As for the negative spread, I'll elaborate a bit more on that. The spread is what is used to refer to the difference between bids and asks – lowest ask – highest bid = spread. This should be (and typically is) a positive value, since the best bid at an exchange must be lower than the lowest ask of an exchange – otherwise the matching engine of the exchange would settle these orders automatically.

In a perfect world, all markets and all market participants would have the same information, hence all top bids and all top asks of all exchanges would be the exact same, after fees were applied.

If you've seen the recent US elections, however, you're probably aware that the world isn't perfect, though. Hence, not all participants of a market know the same thing as the others, resulting in bids at exchanges which are higher than the asks at other exchanges – and this is what is called a negative spread.

Step 2: Execute trades

Let's assume you've found an amazing opportunity at exchange A and exchange B – a negative spread of 100$!

Exchange A: Ask 1BTC@450$
Exchange B: Bid 1BTC@550$

Luckily, you have proper funding at both to match these instantly – but how do you go about doing that? Easy! Just place an order on the opposite side at each exchange with the quote's prices!

Exchange A: Place Bid of 1BTC@450$
Exchange B: Place Ask of 1BTC@550$

Since your placed order match an order on the opposite side of the book, the trading engine matches them and the trade is settled, leaving you with a theoretical profit of a smooth 100$! Why theoretically, you ask? I'll get to that point further below.

Step 3: Rebalance Accounts

Unfortunately, you were only able to trade once today, but hey! Tomorrow's another day – but in order to be able to properly trade, you need to even out your balances. Right now, your accounts look like this:

Exchange A: 2 BTC | 50$
Exchange B: 0 BTC | 1050$

Hence, you go about and send 1 BTC from Exchange A to Exchange B, and 550$ dollars to Exchange A from Exchange B. No magic here – all accounts are re-balanced and you're ready to make a fortune again, tomorrow.

Exchange A: 1 BTC | 550$
Exchange B: 1 BTC | 550$ 

Arbitrage – Why everyone's not doing it

This all sounded wonderful? That's exactly what I thought when I first set out with my own arbitrage bot. However, there a some technical aspects that can really turn a sunny day into a poopy rain on your parade.

Caveats and risks

1. It needs to be as close to real-time as possible

This is possibly one of the hardest things to get right, and also the most underestimated aspect of arbitrage in crypto currency. The markets, compared to ForEx trading, are ridiculously slow – at busy exchanges, there may be a couple of dozen trades executed. Which gives the illusion, that polling data for bots via the most common API type, RESTful, is enough to trade risk-free. This is a misconception. Maybe for today this may appear to be enough – but what if markets picked up the pace? just 1 trade (or simply a placed order) within one second can change your opportunity from profit to loss.

2. Always trade limits, never market orders

Under the aspect of being the fastest, it might seem like a good idea to use market orders in order to be settled asap – you'd be terribly wrong. As discussed above, your data could be as old as 1 second (with above mentioned one order messing up your opportunity) – perhaps someone cleared the entire top level and all you're left with is a bid for twice the price you intended. Yikes.

3. REST API call rates make your life hard

Many exchanges employ a API call rate limit – that is, you're allowed to query data at the exchange X times every Y seconds. The differences are wide and nearly every exchange does its own little thing when it comes to limits. The problem with them is, they severely limit your actions. If you don't constantly keep an eye on how often you send a request, you might run into the limit when it seriously counts – for example when you have to cancel an order, because you couldn't place its counter part at another exchange. Unfortunately, websocket APIs are still rare and their brother on steroids, FIX sockets, even rarer – leaving you stuck with the turtle of programmable interfaces.

4. Integration with APIs can be a nightmare

There is no unified, standard definition for what an exchange API can do, or what data it returns. Which technically wouldn't be a problem, if they were documented properly. Incidentally, the exchanges with seemingly many opportunities also have the worst documentation (take btc-e.com's Documentation for example – heresy!). Of course, also the opposite is true – GDAX, Kraken, Bitfinex all have excellent documentation. But nonetheless you have to dig through them to understand how they work, what their rates are, how they handle data types, authentication and so forth. That is, if they even mention anything about that.

5. Fees will minimize, if not eliminate your profits

In my above step-by-step guide, I purposely omitted fees of all kind. But of course, they're essential to successfully arbitraging. The most commonly known fees, are trade commission fees – these range anywhere from 0.1% to 0.6% and need to be considered in Step 1: Find a suitable Opportunity. On top come fees for deposits and withdrawals during Step 3: Rebalancing Accounts. Depending on your preferred pair, these may range from feasible (transferring crypto currencies usually is cheap enough) to quite steep. For example, a deposit / withdrawal at Bitfinex entails the following fees:

Bank wire withdrawal & Deposit: 0.1% of amount deposited/withdrawn, 20$ minimum
And this does not include processing fees of your house bank – for me, for example, that's an additional 10€ for deposits, plus a 1% conversion fee. If you do the math you'll quickly realize that you don't even have to bother starting to trade at Bitfinex, unless you have a really big stack to trade with.

But this does not just apply to BTC-Fiat pairs. Alt-coins suffer a similar fate. In order to make arbitraging worthwhile, you will have to have enough funds at as many exchanges to make trades AND re-balancing worthwhile. And this quickly gets to a point where you realize your last month's savings aren't equipped to get the job done.

To give you a further example on how fees affect your profits, let's take a look back at the example from step 2, this time factoring in all fees. I'll walk you through it. For the argument's sake, we'll pretend to be a european trading BTCUSD at Bitfinex (Exchange A) and Kraken (Exchange B).

Bitfinex: Ask 1BTC@450$
Kraken: Bid 1BTC@550$ These prices are raw- they do not include trade commission fees, not transaction fees. Let's add those….

We'll define a taker fee of 0.25% at both exchange – the taker fee applies whenever you remove liquidity from the order book. Next, let's add deposit & withdrawal fees to the mix. At Bitfinex, we pay a minimum of 20$ for each fiat withdrawal & deposit, or 0.1% of the moved amount (if its more than 500$). At Kraken, we pay 0.09€ per fiat withdrawal, deposits are free. In addition, btc withdrawals cost 0.0005 BTC at kraken, while Bitfinex charges no fees for this. Deposits cost nothing at both exchanges. Furthermore, we can't transfer fiat directly from exchange to exchange – an additional 10€ fee per sent out transaction needs to be facotred in, as well as 1% conversion fee whenever we receive or send fiat from our bank account (2 times total).

Let's list these fees to try and maintain an overview

  1. Profit from arbitrage (bid – fee – ask + fee )
  2. Withdrawal Fee Bitfinex (20$)
  3. Deposit Fee Kraken (0.0$)
  4. Miner Fee for withdrawal at Kraken (0.0005BTC)
  5. Transaction Cost of our house bank (10€) (Bank to Bitfinex)
  6. Conversion Fee of our house Bank (1% of transfer amount x 2)

Let's put some numbers to these:

  1. (550 – 550*0.0025) – (450 + 450 * 0.0025) = 97.5$
  2. Move ~497$ to House bank = 20$
  3. 0.0$
  4. 0.0005BTC * 500$ = 0.25$ # Assuming this is the end of day price of the coin
  5. 10€ * 1.05 = 10.05$
  6. (497 * 0.02) = 9.94$

Which brings us to net profit of: 57.26$ This translates to 42.74% reduction of your originally seen profit.

This is neither a worst, nor a best case scenario – it's merely designed to show you how many hidden fees are involved in an arbitrage. Also, keep in mind that a 22% arbitrage opportunity is practically non-existant.

As a matter of fact, had the spread been anything less than 40$, the fixed fees of our house bank and Bitfinex alone would have made our supposed arbirtrage opportunity a loss.

6. Volatility of coins is your enemy

"No matter where the market goes, arbitrage makes a profit anyway!"

This is true – if your currencies don't tend to drop or rise by 50% within 24 hours. Ideally, both currencies you trade in should be relatively stable, while still showing a certain volatility – no volatility would mean the chart is a flat line, resulting in no opportunities for you.

The problem with pure crypto currency arbitrage (LTCBTC), however, is that Alt-coins can go completely fubar – as opposed to a fiat-based crypto arbitrage (i.e. BTCUSD). A personal anecdote:

When ZEC launched, I was instantly fascinated at the terrible market efficiency and arbitrage opportunities of almost 5% regularly. Hence, I bought in at 1ZEC@1.2BTC, thinking this is probably where market will stay at (at least it's not as bad as the guy who bought a ZEC for 3k BTC). I started arbitraging and immediately increased the amount of ZEC I was holding – completely oblivious to the fact that since I started trading, the price had fallen to 1ZEC@0.1BTC. My ZEC was worth 90% less, and I lost almost half a bitcoin worth of money.

Some volatility is great for arbitrage – too much volatility isn't.

7. Exchanges aren't as technically robust as they ought to be

Most of the time, you will find that smaller exchanges offer opportunities more often than big exchanges. This is in part due to the previously mentioned slow movement of information, but also their (often significantly lower) trading volume. Initially, this may appear like a steal – but there's usually a reason that particular exchange only has the low volume it currently does.

In a time where any one in the world can open up an exchange running on his raspberrypi and Ethereum, trading on the more alternative exchanges can be a serious risk to your investment.

From things like DDOS attacks and overloaded matching engines not matching your orders, to more serious issues like stuck withdrawals due to too low miner fees, or even theft – and the latter is a very omnipresent issue not exclusively affecting small exchanges, as the Bitfinex Heist has shown this summer; the list of potential technical failures is long and you should be aware of these at all times.

Conclusion

I'm aware this answer is overtly negative – this was intentional. Arbitrage, as well as crypto currency in general, is not the quick buck everyone on forums and dubious sites advertising trading bots make you believe. While its inner mechanisms and workings are still quite cryptic* to even the most professional traders (sorry for the pun), even the fabled cryptographic adheres to some basic principles, afterall. The 'quick way to wealth' usually will just end up quickly making you wealthless.

Start by opening up some of the well known exchanges … do not use ones such as localbitcoins .. far too risky. A good one is OKCoin.com as they have a good verification system.

(*) Another great myth is that the chinese dictate the BTCUSD market. There is no empirical proven correlation between chinese and american markets. The only defacto correlation that has been found was that of google searches for bitcoin to btc trading volume – but whether this was positive or negative was inclusive.

If you believe that my message is worth spreading, please use the share buttons if they show on this page.

Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


Jack

Trade Coin Club Reviews – Is It A Scam Or A Legitimate Opportunity?

Trade Coin Club Reviews – Is It A Scam Or A Legitimate Opportunity?

 

Trade Coin Club

I found out about this company called Trade Coin Club as I was surfing the web. This company is a fresh new company and as always, I have decided to have a detailed look at their business.

I am sure if you are like me, many of you would also like to know more about this new venture. Even more so, those of you, who are looking to invest in this web MLM business.

To help you guys, I have spent some time researching and prepared this Trade Coin Club Review. I have divided this into company profile, products, compensation plan and finally my thoughts.

Let’s check what I dug up about them!

What Is Trade Coin Club? 

Trade Coin Club may very well be the newest of the online bitCoin based MLM business. As for the domain registration, this company just started its operation in November 2016. I am not scared of being involved in a company in its infancy because if it is a good company I can get a head start. 

Like most of the online businesses similar to this one, this company does not have any information about the company owners, stakeholders or management teams., however, they are licensed as a legitimate trading platform. Another point to note they offer all trades to be logged and viewed in the back office. 

They have registered their domain name for 10 years. 

Products Trade Coin Club Offers

Trade Coin Club does not have any physical or digital products to sell or rent.

After becoming an affiliate member, members can sell or promote memberships of Trade Coin Club. Each member is set up with a trading platform that allows them to have their cryptocurrency ie "Bitcoin" traded against the top ten cryptocurrencies. I like this because of the aligator tooth (the up and down price of Bitcoin) this allows members to not really be concerned about the lack of knowledge of trading because it trades on auto-pilot and they choose the level of risk. High, medium, low. More on this later in the study.

The Trade Coin Club Compensation Plan

You can join Trade Coin Club by signing on for one of 3 available investment plans.

  • Apprentice – Invest 0.25 to 0.99 BTC and receive a 0.35% daily ROI for 8 months
  • Trader – Invest 1 to 4.99 BTC and receive a 0.4% daily ROI for 12 months
  • Senior Trader – Invest 5 BTC or more and receive a 0.45% daily ROI for 12 months

However, you have to pay a 25% fee on your earned ROI every four months. So basically, you are actually earning 75% of their promised ROI.

Affiliate members can also earn referral commission on unilevel structure up to level eight. Your unilevel positions can be filled by both your directly sponsored members and their own sponsored members.

  • Apprentice – 10% on level 1, 3% on level 2, 2% on level 3 and 1% on level 4
  • Trader – 10% on level 1, 3% on level 2, 2% on level 3 and 1% on levels 4 to 6
  • Senior Trader – 10% on level 1, 3% on level 2, 2% on level 3 and 1% on levels 4 to 8

When you advance in affiliate ranks you receive rank advancement bonus.

  • Trader Level 3 – Earn 10 BTC or more in monthly binary commissions and receive a Montblanc pen
  • Trader Level 4 – Earn 50 BTC or more in monthly binary commissions and receive a cruise
  • Trader Level 5 – Earn 100 BTC or more in monthly binary commissions and receive an “international Caribbean travel” cruise
  • Trader Level 6 – Earn 200 BTC or more in monthly binary commissions and receive a Rolex watch
  • Trader Level 7 – Earn 500 BTC or more in monthly binary commissions and receive a Toyota Corolla car
  • Trader Level 8 – Earn 750 BTC or more in monthly binary commissions and receive a BMW 320 car
  • Trader Level 9 – Earn 1500 BTC or more in monthly binary commissions and receive a BMW Z4 car
  • Trader Level 10 – Earn 5000 BTC or more in monthly binary commissions and receive a BMW 18 car
  • Trader Level 11 – Earn 10,000 BTC or more in monthly binary commissions and receive a Lamborghini Huracan car

They also provide residual commissions on binary compensation structure.

Your downline investment volume will be counted every day on both sides of the binary team and you will be paid commissions on the weaker side of your leg. The amount will be dependent on your rank.

  • Apprentice – 8% (capped at 2 BTC a day)
  • Trader – 9% (capped at 10 BTC a day)
  • Senior Trader – 10% (capped at 15 BTC a day)

Additionally, members can earn recruitment commissions through a 3×12 matrix. When an affiliate fills a matrix position they are paid 0.003 BTC a month, as long as each member continues to pay their monthly fee.

So I have researched results from other existing members. A member that I had talked with has earned a documented 174 Bitcoin since December 24, 2016. They were nice enough to show me in their back office and that they have received full withdrawal after the trade period was over. So I do know at this point this is a real trading platform.

To see the company presentation and to make your own decision Click Here

Chris Corey CMO MarketHive Inc

 

Jack

Bitcoin vs Onecoin

A lot of people seem to think Onecoin is a far better investment compared to bitcoin. While nothing could be further from the truth, it is not hard to see why people would invest in Onecoin rather than bitcoin. To the average consumer, bitcoin makes little sense. However, it is evident bitcoin will always be the superior currency.

2. ONECOIN

Over the past few years, Onecoin has made quite a name for itself. The people responsible for this project advertise Onecoin as a digital currency that will not only make investors rich over time but also provides a gateway to product and services as part of the Onelife ecosystem. However, there are quite a few caveats regarding Onecoin that most less tech-savvy people tend to overlook. After all, the concept looks appealing, but can its creators back up any of their initial claims?

That is where the Onecoin project falls apart almost immediately. While it is true investors will see their account balance update over time, that does not necessarily mean they own said funds. In fact, until they request  a payout from Onecoin, they will never control their profits or original investment ever again. Moreover, the account balances one sees update every so often is nothing more than a number in the Onecoin site database being changed, even though it has no value whatsoever.

Moreover, the Onecoin team claims they have made a digital currency, which is issued over a blockchain. So far, there has been no proof of a Onecoin blockchain, simply because it doesn’t exist. Nor will it ever come to fruition either, as the project team has no idea on how they would create such a technological marvel in the first place. It is evident Onecoin is not even a currency with proper use cases, other than the ones provided by the Onelife network. No one has ever been able to buy food or pay a bill with Onecoin directly, that much is certain.

1. BITCOIN

Which brings us to bitcoin, the so-called “inferior currency to Onecoin”, according to some of the platform’s investors. In fact, one can argue bitcoin is everything Onecoin is not and vice versa. Unlike the scammy counterpart above, bitcoin is an actual currency that can be used around the world without requiring approval from a centralized company that has no honest intentions whatsoever. It is rather interesting the OneLife network does not accept bitcoin payments, nor does any other merchant around the world accept Onecoin payments.

Moreover, bitcoin is a digital currency, as it does not merely exist in one website’s database. The entire world can see bitcoin transactions take place in real-time without having to install special software to do so. Onecoin transactions, on the other hand, have never been publicly documented. This begs the question whether or not there is any value to the Onecoin “currency” in the first place, considering it has no use cases.

Speaking of use cases, thousands of merchants and retailers around the world are accepted bitcoin payments as of right now. Both online and offline purchases can be completed with bitcoin. Additionally, there are also bitcoin debit cards, whereas Onecoin has no debit card whatsoever. That is quite surprising, considering the value of Onecoin seems to increase every so often. Striking a deal with a credit card issuer would not be all that hard in this regard. Then again, bitcoin has a value, and Onecoin does not, which explains why no card issuer wants to deal with Onecoin right now.

Chris Corey MarketHive Chief Marketing Officer

 

author: Jdebunt

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

 

 

Jack