NuCoiner

Ethereum is more exciting than Bitcoin: Game Changer

Ethereum is way more exciting than Bitcoin. Bitcoin started this whole cryptocurrency revolution. Bitcoin still dominates over 65% of the total cryptocurrency market cap. It’s also not changing much.

Ethereum was designed to solve different problems than Bitcoin using smart contracts. This programmable currency has opened up a new world of possibilities across several different applications.

DeFi: Decentralized Finance

Ethereum’s smart contracts provide better options for saving money. This programmable business logic allows developers to start decentralized apps that run themselves. Lenders can reduce the amount of overhead required to run their organization and pass these savings on to clients.

Companies like Fulcrum, Compound Finance and dYdX provide borrowing and lending services with real-time interest rates. This means that your savings increase dynamically according to the current interest rate. I love watching my earnings increase right before my eyes in real-time saving DAI on the Oasis app.

PoolTogether is another example. A “no-loss, audited savings game” for DAI – a stable coin on the Ethereum network that is pegged to the US dollar. PoolTogether is unique because you don’t lose your money. Any tickets you purchase can be withdrawn at any time or automatically rolled into the next draw. Pretty cool stuff!

Game Assets and Microtransactions

Microtransactions have been driving a wedge between gamers and developers for years. Smart contracts have the potential to make these transactions a win-win for both sides.

We’re living in a world where game developers still own all of our game assets. We’re entering a world where we can hold game assets in our wallet and trade them with other gamers. This allows us to make money from our efforts (or cash out when needed).

Game developers still earn a percentage of every trade our asset is involved in. Win-win! The gaming industry continues to grow while developers like UbiSoft explore partnerships with blockchain game developers like Dapper Labs (CryptoKitties, Cheeze Wizards). This industry will be huge for user adoption in the coming years.

Use-Cases are More exciting than Bitcoin

Ethereum is easy to get started with thanks to Brave browser. Users can get set up within minutes using Brave’s built-in MetaMask wallet. They can also add MetaMask to their browser of choice.

You can earn cryptocurrency (BAT) each month and exchange it for Ether with Brave’s ad-based rewards system!

There are a number of games, DeFi services, dApps, DAOs and other “D” things (don’t Google that) ready to interact with you right now. This rapidly developing ecosystem is why Ethereum is more exciting than Bitcoin.

How to research Bitcoin and other cryptocurrencies

Everywhere you hear about crypto, you hear the same disclaimer. “Do your own research (DYOR). This is not financial advice”. So how do you properly research Bitcoin?

Isn’t the blog post I’m reading, or the video I’m watching considered research? God, no. That blog post or video is designed to fill somebody’s pockets.

In order to properly research a cryptocurrency project, you should be asking certain questions.

Be realistic with your goal

Are you trying to make a quick buck? Or do you actually believe in the project? Answering this question can dramatically change your perspective on an investment decision.

Here’s how I would approach Bitcoin today if I were looking to make a five-year investment.

How to research Bitcoin

Bitcoin is the top blockchain project to date, so how does it look through the lens of a five-year investor? Has the dramatic rise and fall of the price made it a bit too risky?

What is price?

The first thing I learned about cryptocurrency was how to calculate the price of a coin. Price is simply just the result of supply and demand: the total market capitalization (market cap) divided by the circulating supply.

In the case of Bitcoin, we’ll use some make-believe numbers. Let’s say the total market cap is $100,000,000,000 and there are 20,000,000 coins in circulation, the price of 1 Bitcoin would be $5,000:

100,000,000,000 / 20,000,000 = 5,000

Market Cap and Supply

Once you understand market cap and supply, you can ask some better questions:

Market Cap

How does the market cap compare to other projects in the industry?

Is there room to grow? Smaller-cap projects tend to have more risk of failing, but larger-cap projects usually offer smaller percentage gains.

How many other projects are there in the industry?

Is the industry saturated with new projects? If so, how does this project compare?

What is the combined market cap of the industry? How does it compare to the market cap of an equivalent centralized industry?

Is there potential for new money to flood into this industry?

Circulating Supply

What is the maximum supply for this project?

How many coins can be minted in total? What is the maximum number the market cap will ever be divided by?

Can more coins ever be minted?

Some projects are not fully decentralized and allow the developers to mint more coins or tokens at will. This can dilute the price per coin as more become available.

How are coins minted?

Some projects use mining, others use a staking algorithm. Most projects also include an anti-inflation mechanism called “halving”, which reduce the minted supply and usually cause a change in price action.

Read the whitepapers

Make yourself a nice cup of coffee, tea or kombucha and dive into the whitepapers. You can find them at the main website for any cryptocurrency worth a damn.

Whitepapers are usually super dry, scientific papers written by computer scientists. They are a slog, but they are the only way to truly understand the vision of a project without relying on some YouTube shill artist’s paid hype video.

Does the project have a clear use case? Do you believe it?

Is the team listed on the website? Are they credible? Links to their LinkedIn?

Does the project have a working product? Have you tried it?

Partnerships and Third Parties

It’s time to consider what the rest of the market thinks after learning about the price, project and team. Who else is excited about the project?

Focus on influencers like large companies or celebrities that are fuelling user adoption. People need to learn to use blockchains before the industry really becomes mainstream. It’s these companies that will pave the way.

Applying our research to Bitcoin

So how does Bitcoin look based on this little framework? At the time of writing, Bitcoin boasts a market cap of $154,663,273,808 and has a circulating supply of 18,179,550 BTC.

Bitcoin is the top-ranked cryptocurrency by a long shot, dominating 66.1% of the total combined market cap for all cryptocurrencies ($234,065,247,724; data from CoinMarketCap)

Bitcoin’s market cap and supply

While the total market cap is huge, the total coin supply will ever be 21,000,000. Many (myself included) are optimistic that the $154 billion market cap will increase to the hundreds of trillions, effectively pushing the value of Bitcoin above $1 million USD per coin.

This is definitely possible when you compare Bitcoin’s market cap against traditional “store of wealth” assets like gold.

The Bitcoin Project

As the original open-source blockchain peer-to-peer cryptocurrency, Bitcoin has the strongest mining network and the largest market cap of any other project. It also served as the starting point for thousands of new cryptocurrencies after the 2017 bull run.

Bitcoin is also one of the most common trading pairs across cryptocurrency exchanges, serving as a gateway currency to purchase other cryptocurrencies.

Partnerships

As an open-source project, there are no formal partnerships with Bitcoin. However, there is an ecosystem built around it in the form of payment processors, wallets and other third-party applications that integrate with the blockchain.

Progress is being made on countermeasures to improve scalability and reduce transaction fees as the network grows. Some doubt Bitcoin’s ability to keep up with newer projects, but it has yet to be knocked off the throne.

Bitcoin Research: Conclusion

I’m a fan of Bitcoin. Not a maximalist, but I like the project and appreciate what it’s done for technology. I do see the potential for value as a store of wealth and I’ll aim to keep a certain, fixed amount of Bitcoin in my Ledger Nano for the long term and see what happens.

Do I think you should buy Bitcoin? I think you should do your own research because this is not financial advice 😉

Trading crypto like a pro: How to deal with FOMO

Trading crypto was tough for me at first…

Fear of missing out was a huge problem for me. I was one of many who bought my first Bitcoin during the epic downtrend of early 2018. I eagerly pumped money into a few altcoin projects that don’t even exist today because I thought they were cool ideas.

Needless to say, I’ve learned a lot since the early days. Here’s how I learned to protect myself, from myself.

Sleep on it. You’re probably dreaming anyway.

I couldn’t contain myself in the beginning. I was excited about technology I didn’t fully understand, frantically researching project after project and letting my mind run wild with dreams of Lambos and private islands.

I exchanged lots of Bitcoin for “promising” projects that turned out to be honest failures or exit scams. In hindsight, I should have just held on to that Bitcoin.

Give yourself a minimum of three full days to think about any cryptocurrency investment. It works like a charm. You’ll find the excitement usually wears off before the three days is over, making your decision a simple one.

But what if the price goes up?

It probably will go up. Then sharply down, back up and then down again in a nauseating rollercoaster of volatility. That’s what cryptocurrencies do right now. Welcome to trading crypto, friend!

The concept of missing a good entry point used to stress me out quite a bit and lead me to making some pretty terrible buying decisions. Nothing good has ever come from my emotional trading.

Sleeping on buying (and sometimes selling) decisions has allowed me to make some really well timed trades, while allowing me to do more research on the project and gain a better understanding of what the market is doing.

Learn the technology before trading crypto

I’d be very interested to see how many cryptocurrency owners actually understand the technology behind their investments. Learn what makes blockchain special in comparison to traditional ledger systems. Look into the potential for smart contracts to change everything from gaming to real estate. Look for some real products in use.

There are a lot of flash in the pan projects out there, but some great ideas are starting to take shape among them. The ability to recognize an undervalued project comes from a deep understanding of the technology behind these projects.

Wrapping up.

It’s extremely difficult to talk yourself out of a “sure thing” in crypto, but you can usually save yourself some pain by walking away from the decision for a few days. Sometimes the best action is no action.

How to Store Bitcoin: 3 Quick Tips for Safe Storage

How do you store Bitcoin once you’ve purchased it? It has to live somewhere safe. My old, stinky leather wallet sure doesn’t seem like it’s going to work. So what gives?

When I first purchased Bitcoin, I stored it in a custodial exchange wallet for months before realizing it was a bad idea, purchasing a Ledger Nano S and transferring my holdings over for uber-max security.

Tip #1 – Buy a Ledger Nano

These little hardware wallets make it virtually impossible for a hacker to steal your keys (and your coins). Investing in a Ledger Nano before buying any cryptocurrency is the smartest thing you can do. It’s like buying a safe for your most valuable items before moving them into your house.

Ledger supports hundreds of cryptocurrencies, weighs less than a traditional wallet and fits on a keychain.

Ledger Nano X - Store Bitcoin in the secure hardware wallet

Tip #2 – Do not store your Bitcoin on an exchange – ever!

Cryptocurrency exchanges disappear or change their rules regularly. It’s an unfortunate part of the industry. Trusting any third-party with the custody of my coins is a no go after CryptoBridge (a former cryptocurrency exchange) withheld my balance due to new KYC rules and shortly thereafter closed their doors.

Store your coins offline, in a wallet that you are the sole owner of (hello, Ledger Nano!). You should be the only one with the keys to this wallet. The coins should only leave your wallet if being used to trade, make a purchase or interact with a decentralized application.

Tip #3 – Encrypt Your Wallet and Back Your Keys Up

One of the scariest pitfalls of cryptocurrency is losing your coins. It’s estimated that 20% of all Bitcoin is completely lost, unrecoverable and never to be seen again. That’s around… $28,900,000,000!?!

Don’t let that stop you from encrypting your wallet, because you really need to protect yourself from hackers. They only need to grab one file to gain access to an unlocked wallet. Here’s what I recommend:

Encrypt your wallet with a strong passphrase
Write your passphrase down on a piece of paper (do not save digitally)
Make duplicates of your passphrase
Store your passphrase backups in multiple secure locations

If you purchased a Ledger Nano to store your Bitcoin, you’re in luck! The process of securing a backing up your wallet is made simple with a little wizard during setup.

How to buy Bitcoin, from (mostly) anywhere in the world

People around the world are wondering how to buy Bitcoin. Some countries are already experiencing a collapse in the stability of their local fiat currency. This leads to insanely high prices for every day items, like bread and toilet paper.

What do people see as an alternative to their failing currency? Bitcoin. The cryptocurrency is now a household name, but not everyone knows how to buy it.

So, how do you buy Bitcoin from anywhere in the world?

A few important things!

There are a few important things to mention before we get into it, so please don’t skip this section:

Wallet – You should already have a crypto wallet setup and fully synced to the network before buying Bitcoin (or any other cryptocurrency).
AML/KYC – Anti-Money Laundering (AML) legislation came into effect on January 1st, 2020 requiring all cryptocurrency exchanges to verify user information (KYC) before authorizing trades. I’ll try to post options that are free of KYC and make a note of it where applicable.
Local Restrictions – Some users’ governments may restrict the browsing capabilities of their internet. Proxies can likely be used to get around this. Feel free to ask for help in the comments, but take any advice with a grain of salt. Always be skeptical in this space and never provide any wallet keys or other sensitive information.

How I would buy Bitcoin from (mostly) anywhere in the world

The easiest way to buy Bitcoin from anywhere in the world is via a non-custodial exchange. Changelly is my favourite option in this space.

Do you have a wallet ready to rock? If so, you can buy your first Bitcoin right below starting with as little as $50USD!

Changelly

If Changelly is not an option for you, keep reading below for a couple of alternatives.

How to buy Bitcoin from ATMs

Most Bitcoin ATMs are free of KYC, but pose the same security risks as any other ATM machines. Ensure the ATM you are using is in a public location, or bring a friend or two with you.

You can deposit cash for crypto, or crypto for cash. You’ll need a scannable QR code for your crypto wallet address in order to make life easy for yourself.

Coin ATM Radar is a great resource for locating cryptocurrency ATM machines around the world.

Local Custodial Exchanges

Custodial exchanges always require KYC. If they don’t, I don’t trust them as far as I can throw them. However, you will need to buy Bitcoin through a custodial exchange if Changelly and Bitcoin ATMs are not an option for you.

We’re going to put together a special page for this, but you can filter through the list of exchanges here to locate a local custodial Bitcoin exchange for now.

Bitcoin Security: Practice Safe Coining

Welcome, NuCoiner!

Congratulations on your decision to do some research before investing in a new technology. By reading this, I’ll assume you’ve already made the decision to invest in Bitcoin (or another blockchain project) and you’re wondering how to get started. Grab a cup of coffee… let’s dive on in!

Understanding the Risks

We need to address the scary stuff before we get to the fun part. There is a lot of potential for things to go wrong and ultimately cost you money. From hackers to hype, there are a bunch of little obstacles that you may encounter on your cryptocurrency adventures and it’s best to be prepared. I’m not trying to scare you out of investing in Bitcoin… I’m hoping to terrify you into making good decisions along your journey

Note: Two quick things!

When I say Bitcoin, I’m lazily referring to any blockchain token or cryptocurrency coin investment.
Keeping you safe is what NuCoiner is all about. We feel strongly that this is the most important article on the website. If you feel like we’re missing anything here, please drop a comment below.

Nasty Little Hackerses

It’s extremely unlikely that a hacker would target your personal Bitcoin wallet without a prior knowledge of your Bitcoin holdings. If it isn’t obvious, please keep that information to yourself for your own benefit. Not only will people generally like you more, but you won’t make yourself a target for hackers.

Apart from scammers and social engineers, hackers usually target poorly secured cryptocurrency exchanges and other large publicly advertised service providers. Unfortunately, those wallets usually contain coins owned by folks who don’t practice the safe coining tips found below.

Always hold your own coins

Once you’ve made a purchase from an exchange, immediately transfer your balance to a wallet that you own. This means a hardware wallet, paper wallet or local PC wallet. But, why?

Every Bitcoin wallet contains a unique private key that is responsible for the contents of the wallet. This private key can be encrypted with a passphrase and used to restore the wallet in the event of device migration or accidental deletion. You should generally be the sole owner of your key, unless you really trust who you’re sharing it with.

“Not your keys, not your coins”

I’d rather you hear this phrase now than in some Discord server as a smug community member is making a bad day worse with their “told-ya-so” attitude. Any service that requires you to send your coins to a third-party (no/shared private key access) wallet poses a potential risk for your coins to go missing. Stop and assess the risk before using anything like this. Sketchy exchanges included.

Protecting your private keys

Wherever possible, I recommend using a hardware wallet. Nothing comes close to the security of having your private keys stored on a separate chip from your wallet software. If that’s not possible for you, store your local (wallet.dat) backups on an encrypted USB drive in a safe or other discreet location. If you can’t export your private keys, you need a better wallet. Each project should have their own core wallet software that you can setup on your local machine.

Back that cash up regularly

I recommend a weekly backup to ensure it contains all of your updated wallet information. Always make a backup after changing your wallet password and delete any prior versions of your wallet backups.

FOMO and Emotional Trading

It can’t stop. It won’t stop. The fear of missing out can’t be controlled, but only contained.

I first entered the market in April of 2018, 4 months after the 20K bull run that made Bitcoin a household name. I was tired of missing out on a technology that I’d stupidly been ignoring since 2013 and I was going to get rich, too. Nope. I ignored all of the good advice and let my emotions take over. This cost me a lot, but provided a first hand education (which I seem to need) to establish some safer best practices.

Dollar Cost Averaging

Instead of trying to time the market, I’ve started dollar cost averaging into certain projects. I pick a set time on a set day every week and invest a consistent amount (ie. $50 every Tuesday at noon). When the price of Bitcoin dips more than 3.5%, I’ll consider investing another $50-100 if I can afford to lose it. This helps me increase my holdings without the stress and emotion of trading.

I’m not an expert trader and I was getting destroyed when trying to scalp the market. Most of the Bitcoin investors I follow recommend dollar cost averaging as the best way to enter the market for beginners. If you’re confident in your trading skills and want to play the markets, I wish you the best of luck.

DYOR: Do Your Own Research

Don’t take anyone’s word as gospel in this space. From YouTubers, to bloggers, to lead project developers, everyone has their own personal bias, incentives and agenda.

Before making any investment, using any service or sharing any sensitive information, please do your own extensive research on who or what you’re going to be dealing with. This expands well beyond the scope of cryptocurrency projects and is still overlooked by many “veteran” crypto investors.

Only Invest What You Can Afford To Lose

Cryptocurrency is a highly speculative new asset class. The demand is almost entirely based on idea-selling and there are very few tangible “products” on the market. It has been compared to the early days of the internet, before things became user friendly and accessible for the masses. Ensure that you consider the highly speculative nature of this asset class when balancing your entire portfolio.

ICOs and Exit Scams

Initial Coin Offerings and pre-sales allow development teams to sell coins to users at a “reduced rate” when compared to the projected coin price. In some cases (Ethereum), this can work out wonderfully for early investors. Bad actors quickly took notice of the crowd funding strategy and many exit scams took place during and after the bull run of 2017.

I recommend avoiding ICOs until some form of consumer protection is in place. As always, do your own research if you choose to stray from the beaten path.

You: The Single Point of Failure

It sounds rough, but it’s true! Bitcoin was designed to give you full control over your finances, but… as Uncle Ben said, “with great power, comes great responsibility”. Banks also provide you with several layers of security (and recourse) that you won’t find with Bitcoin in the project’s current state.

Blockchain networks are gaining popularity due to their unparalleled security, but personal mistakes, gullibility and technical incompetence can still cost you money.

Community Scammers

When following a blockchain project, you’ll likely be a part of several online communities. Whether that be Twitter, Discord, Telegram, or more. Avoid any “giving away free <X>coin”, spam invitations from unknown users, support requests from unverified individuals and suspicious or unconfirmed file downloads. Social Engineering attacks like these can be extremely tough to spot and are one of the most successful hacking strategies in the space.

Double Checking Means Indefinite Checking

When sending Bitcoin to another wallet address, always double check the receiving address. By “double check”, I can’t stress enough that I mean check and re-check that receiving address as many times as necessary to be absolutely sure it is correct. Once your Bitcoin is sent to the wrong address, it’s gone for good!

I usually compare the 6 first and last characters of the wallet address when confirming it is correct.

Be Honest With Yourself

Are you sure you’re ready for this? You’re willing to tread carefully, research thoroughly and experience the emotional highs and lows of being a Bitcoin investor? Are you comfortable enough with your technical experience to keep your coins safe?

If not, that’s ok! I manage coins for some of my family members who feel this way, but still want some skin in the game. Perhaps this is an avenue that you can explore with someone you trust (remembering the important of your private keys).

If you are ready… Let’s go setup your first Bitcoin wallet!