Coinbase, a major U.S.-based crypto exchange, has found that Texas voters are interested in the crypto subject and presidential candidates’ postures on the issue. 21% of all Texan adults (4.7 million people) own crypto, with 74% of these owners likely to support candidates who recognize the significance of the national crypto industry. Coinbase Reveals Texas […]
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Why Staking is Becoming A Hot Topic
In the last 12 months, cryptocurrency holders around the world have demonstrated a remarkable shift in sentiment after a huge uptick in cryptocurrency trading volume burned the hands of numerous traders.
As such, both short-term and long-term holders are beginning to look for low risk, stable investment options that generate a healthy profit. Among these options, cryptocurrency staking stands out as one of the most promising, since numerous Proof-of-Stake (POS) coins have generated substantial yields for stakers over the long term.
A Low-Risk Alternative
After acquiring cryptocurrencies for the first time, investors tend to fall into one of two camps. They either enter the long-term hold mentality, leaving their cryptocurrencies untouched in the hopes that they will naturally appreciate in value, or they begin attempting to trade on cryptocurrency spot or derivatives markets.
However, although trading has the potential to generate significant profits, the risks involved are also considerable, since the majority of retail traders lack trading experience and tend to lose money. Similarly, while many cryptocurrencies have naturally gained value due to improving fundamentals, this is not the most effective way to generate additional value—since there is no compounding involved.
Because of this, rather than taking risks and attempting to trade cryptocurrencies or relying on simple price appreciation, many cryptocurrency holders are beginning to look for ways to grow their portfolio in a way that is practically risk-free but still generates a healthy return.
One increasingly popular way to do this is through coin staking—a process that sees cryptocurrency holders lock up a stash of Proof-of-Stake coins in return for regular rewards.
Right now, there are more than two dozen POS coins, though some of the more popular ones include Tezos (XTZ), LOOM and V-Systems (VSYS). With an average yield of around 12.49% per year, staking can be a viable passive income stream for those with low-risk appetite.
What is Staking Exactly?
As many cryptocurrency users are aware, the original consensus model used to keep blockchains secure and free of corruption is known as Proof-of-Work (POW).
For POW cryptocurrencies, the transaction validation process is carried out by miners that typically use specialized computer hardware to discover blocks, which are then filled with confirmed transactions. However, this is an extremely energy-intensive process, which has led to the creation of various alternatives—with Proof of Stake and various off-shoots being easily the most popular.
POS cryptocurrencies also need to validate transactions, but instead accomplish this in a completely different way. Rather than using energy-intensive mining hardware to achieve transaction finality, POS blockchains use a network of validator nodes, which work together to agree on which transactions are valid, and which are not. These nodes are responsible for bundling confirmed transactions into blocks.
However, in order to ensure that nodes participating in-network consensus remain honest, and can hence be trusted with securing the network, they need to stake coins as collateral. In return for participating in network consensus and staking coins, these nodes receive rewards in the form of network fees or newly minted coins—this is usually in proportion to the number of coins that were staked.
Typically, holders of POS coins are able to participate in the staking process through the official full node wallet client for the project, or less commonly through a third-party wallet that supports staking. However, as we will see, new options make stating more accessible than ever, allowing POS coin holders to stake without needing to run a resource-intensive full node wallet.
Along Comes Non-Custodial Staking
Although Binance and several other exchange platforms have recently begun implementing staking options, these require cryptocurrency holders to store their crypto assets on a centralized exchange. Not only does this inevitably lead to increased centralization of the staked asset, but it also places the crypto asset holder at risk, since cryptocurrency exchanges are notorious for being breached.
Fortunately, great strides have been made both reducing the barriers to cryptocurrency staking, while significantly improving the safety of the practice. Among these, Switchain stands out as arguably one of the projects doing the most to help POS supporters securely stake their coins thanks to its new staking API.
Wallets integrating Switchain’s staking API are able to provide easy to access staking functionality to users, helping to strengthen staking coins while providing users a low-risk passive income opportunity. Wallet developers are also incentivized to add staking support to their client since Switchain allows developers to earn a commission on staking rewards—which can be combined with revenue generated from Switchain’s non-custodial exchange API.
As it stands, Switchain’s solution features support for Tezos, but will also be adding both LOOM and Cosmos (ATOM) staking concomitant with the launch of ETH 2.0 in early 2020. With that in mind, we recommend performing your own due diligence before investing in staking coins, since not all are viable investment options.
Image by Hans Braxmeier from Pixabay
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Crypto Week in Review: Institutional Investment Still a Hot Topic Amidst Low Exchange Volumes
Prospects for the cryptocurrency industry are beginning to look up, with prices marginally increasing throughout the week. But are the bulls really back?
Institutional Investment Sees Interest Continue
Discussion regarding institutional interest has continued, with this prior week seeing a variety of news pieces regarding the growing number of institutional entry points.
Coinbase Custody Sees Successful Launch
Coinbase has just launched its long-awaited custody service to institutional clients, bringing unique security features to more wary investors.
A Medium post from Sam Mcingvale, product lead at Coinbase Custody, wrote:
“Over the past six years, Coinbase has pioneered leading crypto storage techniques and is currently responsible for the custody of more than billion in crypto assets. Coinbase Custody builds on this expertise to offer a brand new, independent solution for our institutional customers.”
Bloomberg has reported that the service has already been met with success, accepting ten deposits from a mix of family offices and hedge funds in its first week. Due to the fact that the service only accepts a minimum of million in crypto assets, these ten clients bring at least 0 million in institutionally-tied cryptocurrencies under Coinbase’s control.
Coinbase’s aspirations do not end there, with the firm hoping to manage cryptocurrencies with a collective value of billion by the end of 2018. Many have high hopes for the success of the service, as many Coinbase Custody fills the growing gap in viable security options for wary institutional investors.
Growing Potential For A Crypto-Based ETF
Cryptocurrency Exchange-Traded Funds (ETFs) continue to be a topic of discussion in many cryptocurrency circles, with recent news indicating that crypto ETFs could be just around the corner.
In an unexpected move, Europe’s largest trader of ETFs has made indications towards moving into the crypto industry. Despite disapproval from Dutch regulators, Flow Traders NV has begun making markets with Bitcoin and Ether backed exchange-traded notes.
The arrival of the Flow Traders into this industry may signal to the public and other financial institutions that cryptocurrencies are legitimate, bringing higher levels of credence and interest.
Once crypto secures capital form institutions, it is highly speculated that regulatory bodies will finally begin to ponder the addition of cryptocurrency ETFs onto trading platforms. Many see cryptocurrency ETFs as the perfect method of tying in retail and institutional money into the market, bringing adoption and interest levels to new highs.
BitMEX’s CEO commented on crypto-based ETFs in a recent CNBC appearance, saying:
“We are one positive regulatory decision away, maybe an ETF approved by the SEC, to climbing through ,000 or even ,000 by the end of the year.”
Gemini Hires Wall Street Executive In Move Towards Institutional Investors
Gemini, a well-known American-based exchange, has just hired Robert Cornish, who is now Gemini’s first Chief Technology Officer (CTO). Cornish’s experience is not something to scoff at, as he has worked as the Chief Information Officer at the NYSE.
Seeing such a talented individual move from the traditional assets space to cryptos has many excited, and may indicate that Cornish sees a real future in the industry.
Tyler Winklevoss, Gemini’s CEO and co-founder, elaborated on the hire, giving the media the best of what Cornish has to offer:
“He will ensure that Gemini continues to deliver the best platform experience to our customers possible and set the standards of excellence for the cryptocurrency industry as a whole. Rob is globally recognised for his abilities in leading high-performing engineering teams, his expertise in exchange and matching-engine architecture, and running high-throughput platforms that are both secure and resilient.”
It is clear that the new CTO will become an integral part of the Gemini team as the platform moves to join Coinbase, Circle, and Blockchain in offering institutional-focused services.
Market Sees Cautious Move Upwards Despite Declining Exchange Volume
The cryptocurrency market saw a brief resurgence last Friday, as exchanges saw an influx of buying volume, pushing up prices by over ten percent. But since then, the cryptocurrency market has quietened down, with exchange volumes moving from a high of billion to billion today.
Low volume levels have historically been held as a negative sign for financial markets, as it can often indicate declining interest. Holding this economic ideal in mind, many were surprised to see a positive week for the cryptocurrency market, with the collective value of all crypto assets rising by five percent.
Some have begun to speculate that there are viable reasons for the declining volume figures. A few pessimists chalked it up to CoinMarketCap recently cracking down on questionable exchanges, which may have been reporting volume levels which are in no way representative of the current market state. While the optimists speculated that volume has moved to OTC exchange pools, due to the constant talk of institutional interest.
Despite posting declining volumes, the cryptocurrency market has taken a cautious move upwards, with Bitcoin and Ethereum seeing 4% gains over the past seven days. A majority of other crypto assets have followed, with many altcoins seeing similar moves to the upside. It is probably too early to say whether the bulls have returned, but if prices continue to rise moving into next week, a bull market might just be in sight.
Image from Shutterstock
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Richard Sherman: Bitcoin Becoming a Common Conversation Topic in NFL
Speaking with CNBC, NFL star Richard Sherman, cornerback for the Seattle Seahawks, claims players are keen to learn more about cryptocurrencies, revealing that the Bitcoin boom at the end of 2017 prompted a number of players to start paying attention — and some, like himself, to invest. “The way Bitcoin boomed from nothing to ,000 at one point, that really caught the eye of a lot of people. Ever since then it has been common conversation for a lot of us.”
Sherman was an early adapter of cryptocurrencies, beginning to accept Bitcoin for merchandise purchases on his website as early as 2014. And as he recovers from an Achilles injury, the 29-year-old has been getting up to speed on the latest cryptocurrency news: “There are a ton of different coins,” he says, and that he and other NFL players are “trying to figure out which one is the one they should get.” Sherman owns Bitcoin, Litecoin, and Ethereum. He’s also a spokesman for the exchange platform Cobinhood, and an investor in the company’s coin, COB.
Despite his knowledge and enthusiasm, Sherman isn’t interested in giving investment advice: “Who knows,” he says, “You read up, you hear great things about some, you hear terrible things about others, they fluctuate throughout the day. It is such an unpredictable market.”
With the top-earning NFL stars taking home more than million every year, many of them are trying to take the right steps to protect or grow their fortunes. “A lot of them have just been trying their best to become more educated on not only cryptocurrencies, but just stocks and trading in general,” said Sherman.
Often, he hears more simple questions from other football players, like, “Are there physical coins?” Or teammates will ask, “What is the difference between this and a stock? Or this and a bond?” According to Sherman: “None of us really grew up with financial literacy.” Because of this, in the past, a lot of players have been taken advantage of by financial advisors. Either way, Sherman, it can be sure, is playing his part in informing the people in his world about cryptocurrencies: “It is difficult to try to advise anyone, but we definitely have a ton of conversations about it.”
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Bitcoin Network Fees Remain a Topic of Debate
Bitcoin transaction fees have always been a topic of substantial debate. A lot of people feel the average Bitcoin fee is far too high for the regular user. There is a certain truth to this statement, although it also depends on which service is being used. A new screenshot shows how a BitPay transaction charged … Continue reading Bitcoin Network Fees Remain a Topic of Debate
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