South Korea Cryptocurrency Regulation

South Korea has over the past few years become a hub for investments in cryptocurrency. Almost a third of the country’s population living in Seoul is surveyed to be investing in popular cryptocurrencies like Bitcoin or Ethereum. The country saw a huge potential in the market especially with various provisions and new coins to delve into. Cryptocurrency is going headstrong with some service binding portals also having rewards.

The growth of cryptocurrency in South Korea is an outcome of proper education upon the market and its workings. South Korea is getting so evolved with the situation of the cryptocurrency that the government plans to launch a cryptocurrency of its own named S-Coin. Keeping in mind the foothold cryptocurrencies had gained, few regulations to curb the blockchain process were introduced during this period.  For a nation that is adaptive to the cryptocurrency wallet for a vast majority, what do these new rules mean?

  • The Financial Service Commission levied new rules to tackle illegal activities including cases of money laundering. Implementation of this makes keeping identity anonymous difficult which hampers the investor market.
  • The main concerns it had with cryptocurrency is that it dealt with vast amounts of money that were transacted around the world. The new laws imply that all trade and transactions thereof can only be processed for accounts with real names and those with linked bank accounts.
  • The law makes the import of a majority of cryptocurrency from China harder. Foreigners under this new regulation will not be able to open new accounts which further slowdowns the economy.
  • Verification of additional information when linking to cryptocurrency exchanges will be put into action. Identity checks are at the crux of this new change to eradicate illegal activities. Anonymous transactions as a possibility are ruled out under such circumstances. This is a big blow in the cryptocurrency market.
  • As per the new laws, if banks suspect any illegal transaction then they are liable to submit a report at the earliest. This means that if an account holder withdraws more than $10,000 a day then they will be under the radar of the bank. There will be a heavy investigation and probing done.
  • The new rules have jittered the market a bit. The prices will be seen to fall until further regulations and laws are established clearing it.

The cryptocurrency market is habituated to major price swings and with the regulations, it is sure to have an effect that needs tracking.

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Ethereum Hack 2017

Blockchain technology and its multiple advantages have made things easier and quicker for the technologically advanced 21st century. However, a single fault or error in this advanced technology can have devastating consequences. The Ethereum hack of 2017 is a coding error that headed to the theft for 30 million dollars worth of ether. In fact, matters could have been much worse as an additional 75 million dollars worth of ether could have been stolen. However, some ‘white hat’ hackers were successful in rescuing these funds.

Ether token is a digital currency that is similar to bitcoin. In 2017, due to a minor coding error, approximately 153,000 ether tokens were stolen from the ether wallets of at least three projects that had completed their ICOs or initial coin offerings. Amongst these, 44,055 ether tokens were stolen from Swarm City, an e-commerce digital platform. The other two projects that became victims were Edgeless Casino and Aeternity. Aeternity had suffered a theft of around 82,000 ether coins. There was a staggering fall in the value of ether coins from $235 to $196 once this Ethereum hack came into public view. Although the value of ether coin has since improved to $213, it has failed to achieve its initial prime value.

Parity, a software developer had explained the source of this goliath Ethereum hack. Parity’s web browser is basically integrated with the Ethereum blockchain and users can store their funds in its wallet. The wallet is based on a skeleton of multi-signature technology that is highly secure and allows safe and reliable transactions of digital currencies. The Ethereum hack of 2017 was a direct result of an error in the multi-signature technology of Parity’s wallet. It was a highly embarrassing error wherein just a single word was missing and that led to a catastrophic effect. As soon as Parity became aware of the error, they had requested users to shift their funds somewhere else from the wallet. According to a report given by Parity’s founder Gavin Wood, a group of ‘white hat’ hackers was successful in saving over 377,000 Ethereum coins from being stolen. The Ethereum hack had a serious impact on the value of the ether coins and the market is still trying to recover from it. Programmers and Ethereum wallet users need to be careful and the same applies to the users of any other digital currency.

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Web 3.0 Ethereum

Web 3.0 can be referred to as the new Internet that is not under the control of the center. The journey of the Internet started with web 1.0 where websites were relatively simple. Later, web 2.0 came into existence. This update came with the incorporation of complex webpages and social media websites. With the development of technology and industrial advancement, the amount of data generated today is absolutely massive and as a result, data privacy and integration are major areas of concern. There is also a lingering threat of data hacks with the Ethereum hack being a reality check in 2017 when over a million Ethereum coins were stolen. This is where web 3.0 came into the picture as it comprises a stronger and safer framework and more robust blockchain technology.

Web 3.0 will restore data control to the user and companies will benefit the most from this. Industries will be able to make use of better network business models, thereby developing meaningful products and services. Bitcoin was the first stepping stone in the journey fo web 3.0 followed by blockchain and Distributed Ledger Technologies (DLTs).

Ethereum of ‘The World Computer’ came into existence in 2013. It provided a platform to users and data miners where they could create their very own cryptocurrencies and other applications. It makes use of ‘smart contracts’, a blockchain in which codes are stored. Such codes are resistant to any fraudulent activities and censorship and are entirely secure.

Ethereum uses an Ethereum Virtual Machine or EVM in which, the smart contracts are written in multiple relevant programming languages. Web 3.0 will soon be entirely dependent on the robust Ethereum platform that is absolutely decentralized in nature.

The era of web 2.0 is almost at its end and major platforms such as Google Cloud and Azure are now trying to adopt a more decentralized networking platform. Several projects are currently underway that are paving the way to web 3.0. These are IPFS, Filecoin, Golem, and ENS. The web 3.0 applications are referred to as DApps or Decentralised Applications that are made on the Ethereum blockchain and written in Solidity, a programming language. A lot of work is yet to be done before the new wave of the Internet revolution assumes full freedom from the center and hence, the development of DApps is on the rise.

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Is Cryptocurrency Traceable?

Cryptocurrencies are decentralized non-governmental digital currencies and are widely tradeable as per James Angel, an associate professor of the Georgetown University. Although Bitcoin is the most popular form of cryptocurrency, there are several other options as well.

Most of the cryptocurrencies run on the blockchain technology in which transaction data are added to a ledger of past details of transactions. Cryptocurrencies have their own sets of benefits and disadvantages. While it gives full data control to the user, a simple mistake on the users’ end might cause them to lose their data forever. In short, the traceability of cryptocurrencies is a matter of concern.

Bitcoin is actually fairly traceable. It is because although bitcoins have no numbers, a unique digit is assigned to the wallets. Whenever a digital transaction is made, these unique numbers are investigated along with the IP address and the amount of transaction. The traceability of Bitcoin or any other cryptocurrency such as Litecoin or Ethereum can be optimized with some simple protocols. One should always create a new wallet at the beginning and end of each transaction. This will allow the investigator to follow the transaction pathway easily. Coinbase is a popular US exchange that inherently follows this protocol for maintaining cryptocurrency transparency and traceability.

On the other hand, users can wash their money by buying foreign currency through debit or credit cards and then just shifting it back to the cryptocurrency’s wallet. This is referred to as ‘washing with a combinator’. If a user wishes to assume an appreciable level of anonymity, he can transfer the existing coins through wallets in the form of exchanges and gambling sites, thereby reducing traceability.

Each and every transaction is added to the blockchain that is mutually shared by all the participants in the network. Therefore, all the transactions are public and supposedly traceable. Exchanges take a record of the users’ KYC (Know your customer) when they purchase the coins. Subsequently, all the following transactions can be ideally traced back to the user. Nowadays, there are several firms that are capable of tracking the exchange of digital currencies. This helps in the tracking of illegal or fraudulent transactions. The only downside is that blockchain does not record the identities of the two parties involved in the transaction. Hence, bitcoin and most other cryptocurrencies can be best described as pseudo-anonymous rather than being anonymous. The identities can, however, be traced back to the initially recorded cryptocurrency address.

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Cryptocurrency and Innovation

One of the greatest innovations to have appeared in recent times has been the ascent of the digital asset, The Cryptocurrency. Based on the blockchain technology, cryptocurrencies have transformed the way asset transactions take place. It, in one stroke, removed pesky third party presence, made peer to peer transactions faster and cheaper and since digital assets did not have any form, eliminated the fear of fraud. As the technology evolved, newer additions appeared. Some of the notable ones were smart contracts, DApps et al.

Also, with the passage of time, Bitcoin, the original one, spawned an entire universe of new-age cryptocurrencies. These new cryptos became the epitome of innovation, providing services ranging from automated digital wallets to platforms where developers can create new services and tokens as well.

However, the greatest innovation that cryptocurrencies really brought was to create a decentralized peer to peer environment and yet remain safe and secure. This was partly because it was based on the blockchain technology and partly because the world needed a change.

Let us quickly look at some of the key characteristics of cryptocurrencies:

Borderless

Drastically reduces fees and processing times due to a lack of cross-border restrictions

Censorship-free

Prevents governments or major institutions from blocking financial activities at the whim

Greater financial control

Individuals can have total control of their funds

Greater security

Prevents fraudulent alterations from third parties

Lower costs

Lower transaction fees thanks to fewer third parties

Greater Accessibility

Reduces or eliminates traditional barriers to capital markets

The current role of crypto goes beyond simply replacing cash. The new token-based economy is evolving into a super environment whereby influencing spheres hitherto not imagined earlier. Areas like finance, security, identification, social engagement, and ownership. Cryptocurrency, through its frontier innovation model, has transformed the way things can be done. Future models indicate that this innovation spree would be relentless.

  • Payments

Digital cash can be used for both eCommerce and brick-and-mortar retailers

  • Store of value

A new form of scarce native currency and a means of settlement

  • Programmable money

Borderless money that enables easy conversion between currencies

  • Stablecoins

Crypto version of fiat which is tied to the value of resources like gold or the U.S. dollar

And because if the above uses, cryptocurrencies are slowly but surely becoming one of the rages in the financial world.

Cryptocurrencies are adding both value and utility to the digital economy, and to the global financial market as a whole.

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Transformation of the Banking Sector and the rise of the crypto

Financial markets are abuzz with questions regarding the nature and viability of digital currencies. As far as rated financial institutions’ risk exposure is concerned, however, S&P Global Ratings believes that it is much ado about nothing. In our opinion, in its current version, a cryptocurrency is a speculative instrument, and a collapse in its market value would be just a ripple across the financial services industry, still too small to disturb stability or affect the creditworthiness of banks we rate.

Cryptocurrencies are digital currencies that use encryption techniques to regulate the generation of units of currency and verify the transfer of funds. They have attracted a significant amount of attention from the market over the past 12 months. Cryptocurrencies are independent of central banks, and the risk of them infiltrating the traditional financial systems, exposing them to a possible bubble burst, is raising eyebrows at regulators.

However, in spite of the difference in their scale of operations, it is imperative to know that Bitcoin, taking into account the upheavals, is worth almost $250 billion. That is worth more than 50% of the entire market cap of the Altcoins, taken together.

This raises questions about the nature of doubt one might have regarding the viability of cryptocurrencies. However, some concerns are logical.

Cryptocurrencies, in their current version, have many characteristics of a speculative instrument. Hence, retail investors would be the first to bear the brunt in the event of a collapse in their market value.

If cryptocurrencies become an asset class, the impact on financial services firms will be more gradual. That is because there is a possibility that their future success will largely depend on the coordinated approach of global regulators and policymakers to regulate and enhance market participants’ confidence in these instruments. More importantly, blockchain technology–which is what upholds cryptocurrencies, enabling the creation of a shared digital transaction ledger–could be a positive disrupter for various financial value-chains. If widely adopted, blockchain could have a meaningful and lasting impact on the celerity, traceability, and cost of financial transactions. The financial market infrastructure segment might also see medium-term benefits from cryptocurrencies and blockchain through the launch of new income-generating products, such as futures or exchanges based on cryptocurrencies, or the replacement of current practices by new ones based on blockchain.

Cryptocurrencies, despite all its deficiencies, is the tech of the future.

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What is a Market Cap in Cryptocurrency?

At the end of an exhilarating bull run, the cryptocurrency market now has a capitalization of $170 billion. That is a huge number to boot. But an even bigger question that needs to be answered here is why does this figure even matter. Why is market capitalization so important?

Market capitalization is a well-known metric for traditional securities but has unique implications in cryptocurrencies too. Market capitalization is a measure of the value of security. It usually consists of multiplying the amount of outstanding stock shares by the current stock price. In crypto, it’s defined as the circulating supply of tokens multiplied by the current price. If a coin has 100 tokens outstanding and is trading for $10 a coin, it has a market cap of $1000. There are around 16.6 million bitcoins in existence, and the price is around $5600 at the time of writing. Bitcoin’s market cap, therefore, is roughly $94 billion which is almost 50% of the total market cap, currently.

Usually, stocks and bonds have been analyzed through financial metrics and ratios. Measures like price-to-earnings ratio, earnings per share, the current ratio, earnings growth, and so on are used to examine stocks. However, crypto teams generally do not publish financial statements, what metrics that do exist become all the more important Market cap provides a quick and easy check on how valuable a cryptocurrency is similar to a company. It reflects the net worth of that particular organization. Bitcoin is sitting at roughly $94 billion. Ethereum is the second-biggest, at $32 billion. Ripple ($10 billion, Bitcoin Cash ($5 billion), and Litecoin ($3 billion) round out the top 5. Bitcoin, by virtue of its size, constitutes more than 50% of the market cap of the entire crypto universe. A high or low market cap can reveal a coin that is resistant to volatility, or vulnerable. Coins with small market caps consequently rock more when big news hits the market, or large buyers take positions. That isn’t inherently surprising – the crypto markets are among the most volatile in the world. But holders of tokens with small market caps are at risk of being crushed by larger traders. If several large buyers team together to sell at the same time, the price of a token can crash to nothing instantly. This would be much tougher with Bitcoin and Ethereum, which have large market caps and are not easily manipulated.

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How to stake Cardano?

Cardano is slowly transforming itself. It is currently on the road to Shelley which will allow it to introduce staking for the first time. It’s

Oroborous Genesis consensus mechanism will lead the way. The development arm of Cardano, IOHK, has been hard at work and all we can do right now is to wait with bated breath. However, before that comes on board let us quickly have a look at all the features that will come up once the integration is done.

In quite a few ways, Cardano’s staking system will be similar to any other staking system. If you use Cardano (ADA) and decide to stake it, you’ll definitely be earning a return on your investment. This in the long run, helps the network as well: staking is basically the process by which validators are selected to create a new block. The other option is in case if you don’t want to validate, you can go ahead and delegate your tokens to a staking pool, which, I must say, is a much simpler process.

However, this is where the similarities end. Unlike Ethereum, Cardano won’t offer solo staking. Individuals must either run their own pool or join an already existing pool.

And here comes the whammy from the developers. Cardano will not just be addressing support staking but it will have a unique way to do it too, unlike any other crypto. They intend to have separate keys for spending and staking. In layman terms, if you decide to stake your ADA tokens, they will never leave your wallet. Amazingly, Cardano will not lick your tokens for any length of time. You can unstake it at any given time. This is what will set Cardano apart from any one else.

However, the prevailing fear of getting too much power which would be centralised is also doing the rounds. A way though has been found.

Firstly, Cardano’s stake pools will subsequently offer lower rewards as they gradually get larger. This will encourage users to travel between pools on a regular basis, and this will in turn theoretically prevent any pool from gaining prominence. Meanwhile, there will also be a sorting tool which will help users find the most profitable pools at any given time.

Secondly, since the development of Cardano is community-driven, no individual staking pool will be given centralised power. That is to say, stake pools won’t vote.

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Crypto Startup Ideas, 2019

Let’s talk about business. Big business. The year 2019 has been a good year for the cryptocurrencies. There have been no major collapses and the growth rate of most coins have stuck to expectations. This was not the picture in 2017/2018, which is being called a bloodied set of years. Bitcoin touched a euphoric $20000 a unit, only to fall, face first. It lost up to 75% of its value and it’s currently trading at INR 6000. Analysts believe that Bitcoin is poised to hit INR 10000 anytime soon. Whatever be the outcome, it is certain that cryptocurrency is here to stay and for new age investors, it is a gold mine.

With the advent of technology, blockchain is revolutionising transactions and quite a few ideas of today may well become the face of tomorrow.

Bitcoin Exchange

Let it be known that the most important action happening over a blockchain is an exchange. So if you have to make the most out of cryptocurrency, then create an exchange. And it is not tough at all.

However, a few basics first:

Cryptocurrency Exchange Platform – It is a website that executes cryptocurrency trading between any user or peer.

 Trader – Who buy or sell cryptocurrencies for Fiat currencies or for any other cryptocurrencies.

How does a Bitcoin trading work?

Bitcoin Trading is the process of transferring or exchanging bitcoins for fiat or normal currencies or for any other cryptocurrencies between two users through a fully secured exchange platform.

In the cryptocurrency exchange website, there will be three main players:

  • The Buyer
  • The Seller
  • The Admin

The admin’s role is varied. They are:

  • Connecting as we as creating a network of bitcoin buyers and sellers
  • Monitoring the Fund transactions and keeping an eye out for any fraudulent activities
  • Charging transaction fees for each successful transaction
  • Keeping the website secured by implementing set security protocols

Creating a Bitcoin Exchange is one of the best ideas of 2019.

Cryptocurrency Exchange/ Cryptocurrency Trading

Similar to a Bitcoin Exchange, the cryptocurrency exchange facilitates trading or exchange in any cryptocurrency or fiat currency. The workflow and the basics remain the same.

Bitcoin Wallet Service Startup

Cryptocurrency exchanges take place through a wallet. Every user will have a wallet with a Private Key. Creating these wallets is a prospective business with immense future growth.

Cryptocurrency is the future of the financial market and the correct time to hit the hammer is now.

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The Wallet that Holds

Cryptocurrencies deal in coins that are transacted across wallets. Each wallet has a private key which is only accessible to the owner of the wallet. However, choosing the perfect wallet, which not only safeguards your money but also is quick to respond to transactions, is a cumbersome task. This quick guide will help you overcome that confusion.

Hardware wallets

The Hardware wallets are small devices that are plugged into your electronic devices, namely,  computer or phone. The hardware wallet generates private keys securely in an offline environment. The best part about hardware wallets is that many unlike the other normal wallets which generate private keys on internet-connected devices like computers or mobile phones, they do to complete offline.

Advantages of hardware wallets

  • Private keys aren’t exposed to the outside world
  • Hardware wallets cannot get infected by computer viruses or malware
  • You must be in ownership of the hardware to confirm a transaction, thus preventing any possibility of remote hacking
  • Most hardware wallets are encrypted with a PIN or other security feature
  • If you lose your hardware wallet, you can still recover your coins

Among the most popular of hardware wallets is Ledger Nano S. Costs $95 and is built and distributed by Ledger, a France based company.

Cryptocurrency Software Wallets

Software wallets include an assortment of several wallets, but in reality, they are wallets that are downloaded or accessed digitally. These wallets are online/web wallets, desktop wallets, and mobile wallets.

Mobile Cryptocurrency Wallets

These are wallets that are downloaded from the app store in the form of an app. The said app, which you have downloaded stores the cryptocurrency.

Mobile wallets are easy to use and are safer than online ones. These are generally for those who pay for transactions.

Advantages

  • These apps are quite easy to use
  • They are safer than the online one
  • Mobile wallets are for those who use cryptocurrency regularly

Disadvantages

  • Though mobile wallets are safer than the online ones, they are still vulnerable as long as the phone is connected to the internet.
  • If the phone gets stolen, then your mobile wallet can be accessed.

One of the most popular mobile wallets is pocket 2.0. It is not just a wallet providing a safe and secure means to collect coins but also connects the user to a large number of dApps. Coinomi and Jaxx are other mobile wallets which play a similar role.

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