The new Windows 10 May 2019 update adds new security features that break certain browser (Chrome, Brave and Edge) based dapps for Ledger Nano S (and Nano X). This is the latest “big” update that is part of Microsoft’s plan to add additional functionality and security to Windows 10. Currently the update has already been scheduled for public release, although it is not mandatory. A new pop-up will display when connecting to the hardware wallet labeled “Windows Security“.
New Windows Security Prompt to interact with Ledger Nano S
This prompt is not present in previous versions of Windows 10 and is a new feature that is meant to prove hardware security. Unfortunately some websites like MyEtherWallet, MyCrypto and IDEX will have certain delay issues when unlocking the wallet.
Unlock Device error: UNKNOWN_ERROR (0x6804)
Fixing Ledger Nano issues on Windows 10 1903 Update:
To fix comparability issues between Ledger Nano (S or X) and Windows 10, try the following:
Install Latest Ledger Live
Update to the Latest Ledger Nano Firmware
Do not click or interact with the pop-window.
This is not an issue with hardware wallet itself but rather an interaction issue with various websites. These websites need to be updated to reflect changes with hardware security in Windows 10. As of now, there are no known methods to disable new security features in Windows 10. Please refer to the official response from Ledger on this compatibility issue.
Ledger Live is Unaffected
Ledger Live App’s operation is not affected by the new security changes. Currently asset management and Leger Manager operations are fully functional as of this update. It seems that the new security changes only affect the web based applications.
In this article we give you the top 10 best ways to keep your cryptocurrencies safe.
Cryptocurrency and Bitcoin is an exciting emerging field bringing new ways of understanding technology and value. The rewards from investing in cryptocurrencies can also be huge. Therefore, hackers and thieves are constantly stepping up their game. And when theft from a remote location is possible and tracking hackers are almost impossible, it is very easy to lose everything. Therefore, you have to always take vigilance in your hands.
1. Understanding ownership of cryptocurrencies
Ownership of cryptocurrencies is via holding a Private Key. Anyone with this Private Key is able to withdraw your cryptocurrencies, similar to someone knowing your PIN code for your bank account.
With banks, if someone makes an unauthorised withdrawal from your bank account, you always can request your bank to reverse the transaction. This is not possible with cryptocurrency transactions which cannot cannot be cancelled or reversed.
This makes it all the more important to keep your Private Key to yourself.
Notably, many cryptocurrency holders store their cryptoassets on exchanges for trading. Some may also use online wallets for convenient storage and use. In these cases, the exchanges and wallets hold the Private Keys to your cryptocurrencies. Therefore, storing cryptocurrencies on exchanges and online wallets is essentially putting the security of your assets in the hands of third parties. Clearly, this is not something you would want to do.
2. Be wary of phishing scams
Phishing is malicious activity that involves deceptive emails or websites to solicit a user’s personal details. For example a phishing email disguised as a cryptocurrency exchange can direct you to a fake website and ask you to enter your login and password information.
One way to protect yourself is obviously be wary of any emails asking for your login information or requesting you to login onto their website. Especially if you have not done anything that may trigger this e.g. requested to reset your password.
As a good practice, you should also always check website security certificates on your email and any cryptocurrency exchanges you visit. But do note this is not 100% accurate.
3. Protect Your PC or phone against malware
Hackers can find ways to access your desktop wallet remotely using specialized malware. Therefore, always make sure your trading computer does not have any unknown programs.
Antivirus programs can add an extra layer of protection.
Some people may have phones or computers which they only use for trading or transacting with cryptocurrencies.
4. Avoid using public Wi-Fi networks
An additional measure to protect your computer is to avoid public Wi-Fi networks and especially accessing your cryptocurrency wallets or trading in public. These can be an avenue for foreign infiltration and theft of your cryptocurrencies.
5. Use a hardware wallet
Hardware wallets
Hardware wallets are external offline devices you can use to store your private keys and thus your cryptocurrencies. As they are offline, your cryptocurrencies will be protected against malware or viruses.
They do cost money but it is worthwhile for the sake of the security of your cryptoassets.
Examples of hardware wallets include the Ledger Nano X and the Trezor Model T. You can check out our Ledger Nano X review, or our Trezor Model T review for more information.
6. Use a paper wallet (for those who are extra careful)
Paper wallets are simply a piece of paper with your private and public keys printed on it. This paper wallet is kept in a safe location. For example, some people may store it in security deposit boxes or in a secure location at home.
This is the safest way of keeping your cryptocurrencies safe, despite being the most rudimentary.
7. Enable two-factor authentication (2FA)
Google authenticator
Two-factor authentication is when you enter 2 separate passwords to log in or to approve any withdrawals. The preferred methods are either by SMS or using Google Authenticator.
SMS authentication is where in addition to entering your username and password, you also request an SMS be sent to you with a unique code to log in.
However this method has been known to be vulnerable to SIM swap attacks. This is where hackers impersonate you to your telephone service provider and request a new SIM card. Therefore the requests for a SMS code will be sent directly to them.
The preferred method for two-factor authentication is using Google Authenticator. This is where a unique string of 6 numbers are generated every 30 seconds. When logging in, you go to the Google Authenticator app and log in with the generated numbers before they expire.
Most cryptocurrency traders enable two-factor authentication for any cryptocurrency exchanges they use, their online wallets (if any) and their email. The latter is because many cryptocurrency exchanges will send you a confirmation email to approve any withdrawals.
8. If it’s too good to be true, it probably is
The most common method for scammers to entice people is to feed upon people’s greed. Many scammers have websites or “exclusive” chat groups promising unreasonably high returns. These groups may require you to pay a membership fee to participate or to give them some of your cryptocurrencies so they can invest on your behalf.
As mentioned earlier, cryptocurrency transactions are irreversible. So you are left with no recourse if you later change your mind. These scammers may also operate in different jurisdictions so you have very little chance of tracking or taking any legal action against them if their promises do not materialise.
9. Keeping your information private
Telling people how you store your cryptocurrencies or flaunting your wealth is the same as painting a target on your back. Whilst it is certainly wrong for hackers or scammers to steal from you, you do not want to expose yourself as a target.
As mentioned before hackers can operate remotely. Therefore, taking a photograph of your private keys, login information or hardware wallet recovery phrase is essentially the same as posting a photograph of your credit card details online.
Similarly, when setting up any cryptocurrency wallets or exchanges, or accessing or transacting with your cryptocurrencies, make sure you are in a safe location without any cameras around.
10. Test send is your friend
Cryptocurrency transactions are irreversible, so you need to be extra careful in making sure you are sending to the correct address. Here are 2 common pitfalls you will want to watch out for.
The first pitfall is sending your cryptocurrency to an incompatible wallet. For example, you cannot send Ethereum to a Bitcoin address. Another example is for some exchanges like Binance, they have recently switched from Omni to ERC-20 for their Tether (USDT) address. So even if you are sending the same currency i.e. USDT, you need to make sure the address type is the same.
The second pitfall is sending to the wrong address generally. Cryptocurrency addresses are long strings of digits which are case sensitive. So you should check every digit of the address before you press “send”.
For extra security, some people may also request the recipient to send a voice message dictating the first and last few digits of the wallet address. This is to avoid hackers who have taken over either party’s devices and sent out their own wallet address instead of the recipient’s.
Therefore to minimise losses, especially when sending large sums of cryptocurrencies, consider doing a test send with a small amount before sending the remainder of your coins.
Conclusion
Cryptocurrencies bring a shift in the way we hold and transact assets of substantial value. The power of being in full control of your digital assets undoubtedly comes with the duty to ensure their security. With cryptocurrencies, this duty falls squarely on the user. It may seem intimidating, but anyone can store, send and trade cryptocurrencies when armed with knowledge and exercise caution.
With our top 10 best ways to keep your cryptocurrencies safe, you can be sure to navigate this space with confidence.
Further reading
Now that we’ve looked at the top 10 ways to keep your cryptocurrencies safe, we move on to cryptocurrency exchangees. Cryptocurrency exchanges are an inevitable aspect of being involved in the cryptocurrency space when we want to exchange between different types of coins. So be sure to check out our ranking of the top best cryptocurrency exchanges of 2019 here.
This guide is for setting up a physical Vechain Observer Node using Docker on Synology Attached Storage (NAS). We will create observer nodes that will receive transaction data and observe blocks being created on the network. This guide will run the same code that is on the 101 Authority nodes that power the network. This node will allow you to gain access to the Vechain API – so you start programming on the Vechain network and query transactions.
Note: This is a fun exercise that allows you to run a node that observes the network. In order to participate in Block creation (and gain block rewards), you’ll need to be selected as an Authority node by the Vechain Foundation.
Vechain’s code can be found on Github : https://github.com/vechain/thor. Nodes run the ‘thor’ client which is written in the GO language.
This guide requires a Synology Network Attached Storage. These are physical servers that you can store files on and also run software. This guide is tested with DS918+ running DSM 6.2.2.
Install Docker
For this guide, we’ll be using the official Docker package. This allows the easy install of the Vechain Thor node without the hassle of compiling the code from source. Install Docker via the “Package Center”
Pull the Vechain/thor docker image from the Registry
Open up Docker and access the “Registry” tab. Here you’ll get the option to search for “Vechain” and download the Vechain/thor docker image.
Launch the Docker Image
Now comes the final part – launching the Docker image with the correct settings. In the Launch menu, select “Advanced settings” -> “Volume” and add a folder. Personally I created a folder in “docker/vechain” and mounted it to “/root/.org.vechain.thor“. This will allow the client to store the blockchain safely a designated folder on your NAS.
Lastly add the execution command “–network main“. This tells Thor to connect to the vechain mainnet.
After this apply the settings and click “Next” and “Apply” to launch the Docker container.
Happy Observing
Now you’re done! The observer node should will be running and receiving blocks.
You can see the progress of the node as it synchronizes with the network.
This guide will get you started setting up a Lightning node to send and receive Bitcoin on the lightning network. The node will be always online – you’ll be able to send and receive lightning transactions at any time. We’ll be using a Docker container allow for faster deployment and updating. Remote Lightning nodes are great for anyone who wants to make some extra money routing lightning network transactions for passive income.
Difficulty: Intermediate
Time required: 1h
Setup type: LND with Docker
Prerequisites: Ability Deploy nodes on AWS or DigitalOcean
Note: For this guide we’re going to be using the Bitcoin Testnet – a test environment where we can make mistakes without serious consequences. Once you’re comfortable with deploying the node, you can switch over to the bitcoin mainnet by replacing “testnet” with “mainnet” in the code.
Remote Node Setup with Docker
For this setup, you’ll need to setup your own remote node on a cloud hosting service such as AWS or DigitalOcean. In this example, I deployed a t2.micro instance on AWS running Ubuntu Server 18.04. You can deploy any type of server, so long as it supports Docker you’re good to go. Note: must have 1GB or more of RAM on the VPS. Anything less will result in frequent crashes.
To get Docker, install it with these commands
sudo apt update
sudo apt install docker.io
Installing the Lightning node
For the container, we’ll be using an image built by Zap – it’s already pre-configured with everything you need to get started (lnd, lndconnect). The first step is to create a “volume” which allows our data to be preserved in case the container is destroyed in the future. The volume we are creating is called “lnd-data”.
Note: some installations docker don’t require “sudo”, if you run into problems, run docker without elevated “sudo” privileges.
sudo docker volume create lnd-data
Next step we’re going to run the latest image from “lnzap/lnd:latest”. We’re going to connect to the Bitcoin Testnet – this way if we make any mistakes we won’t be losing real Bitcoin.
We are also connecting to public neutrino clients – this greatly lowers the hard disk requirements for this node.
Before executing, make sure you fill in your IP in the YOUR_EXTERNAL_IP section.
This will give you a Bitcoin address where you can send Bitcoin to to fund the account. Since we’re on the Bitcoin Testnet, you can use https://coinfaucet.eu/en/btc-testnet/ to fund the account for free.
PRO TIP: You can check if your node is working by scanning port 10009 and 9735 using https://www.yougetsignal.com/tools/open-ports/. This is a great way to check if there are any firewalls blocking your node from communicating and if the overall setup is successful. Running nodes will always have an “OPEN” status for the 2 ports.
Connecting the Remote node with ZAP iOS app
The ZAP app on iOS allows you to easily access the node remote node, send transactions, manage channels and more. The ZAP app is free and downloadable from https://zap.jackmallers.com/
To connect ZAP with the remote node, run this command:
This gives you a QR code you can scan with your wallet (“Connect to a Remote Node”) to complete the binding. (Note: Older guides ask you to use zapconnect which no longer works and will give you an error).
Creating Channels with other nodes
To start making payments, you’ll need to create Lightning Channels with other nodes on the network. A great place to start finding other nodes is via https://1ml.com/testnet/. This is a list of all the testnet nodes.
You can scan the QR code for various servers via “Settings” -> “Manage Channels” -> “+”
Helpful Debugging tools and commands
Now you’re all done – the remote node is running and funded. To test out the configuration you can use these following tests:
Check LND status
This command checks for status of lnd and if you’re fully synchronized with the Bitcoin Network.
Proof of stake (PoS) is a consensus mechanism introduced in 2011 to improve upon the current most popular algorithm in use – Proof of Work (PoW). The main advantage of Proof of Stake two-fold it improves the speed of the Blockchain and also reduces the amount of electrical waste. Instead of consuming vasts amounts of computational power to “mine” for cryptocurrencies, Proof of Stake elects stakeholders to validate transactions. This election processes depends on the amount of cryptocurrency held by a node, hence the name Proof of Stake.
What is Proof of Stake
To truly understand PoS it is easier if we also explain the current system being used by Ethereum, and that is proof of work (Ethereum Mining). So basically when Ethereum is transferred, miners group that up into a ledger called a block chain and to do this they have to solve a puzzle. In creating this blockchain, a lot of computational power is also used. The amount of reward you get for creating a blockchain is a transaction reward. However, this depends on how much work you ie. how fast you can calculate and solve the puzzle.
So this is all going to go away once proof of stake comes along. With proof of stake, you don’t actually solve any puzzles. You remove the puzzle solving element from the system and thus change the way the reward is distributed. So instead of proving how fast you can calculate with hashrate, you need to prove how much Ethereum you own. You do this with something called a master node. When you create a master node, you have to lock up a certain amount of Ethereum to prove that you have it and rewards are distributed according to how much proof of stake you have. One can create multiple master nodes with a lot of Ethereum inside and you’ll earn more through this method.
Will Ethereum adopt Proof of Stake?
So you might have heard that Ethereum is considering changing its distributed consensus system to something called proof of stake. Here, we will try to explain what this is as well as how it may affect you.
So you might have heard that Ethereum is considering changing its distributed consensus system to something called proof of stake. Here, we will try to explain what this is as well as how it may affect you.
How does this affect me?
So that’s going to be extremely interesting for everyone. We’ve seen proof of stake currencies before. Dash is one example where 50% of the rewards is done by mining and the other 50% is done by proof of stake. And there is PIVX which is 100% proof of stake. The advantage of proof of stake is huge. One benefit is that you no longer have to do the calculations which mean you save a lot of computational power. Another one is that you actually lock up Ethereum. By locking up Ethereum you effectively create more scarcity which means the price should go up.
So hopefully, it’s going to happen sometime this year. To do so, the people in charge of Ethereum have to make sure the code is ready and stable. And they also have to make sure they have the support of the miners. That’s going to be an interesting thing to see in the coming months because if the miners don’t support this move then what can happen is that it might break up Ethereum again just like last year.
But there are mechanisms to help along this process. Ethereum actually has kind of a ‘time bomb’ that would blow up if the switch is not made. The switch has always been planned and it’s in a sense been hard coded to happen sometime so that’s kind of interesting to see how this will progress.
Miners also do not need to worry they will be without a job. There are other currencies that can be mined with the current hardware. For example, if you use AMD GPUs, you can start mining Zcash which is also extremely profitable right now. So I do see this as being very exciting for everyone.
Cameron runs the wonderfully informative and hilarious CryptoDaily Channel. Something we notice straight away the high quality render of his rugged beard and perfect bed hair. Today we find out what camera and recording gear CryptoDaily uses to create his awesome content, direct from the man himself!
Main Camera – Canon 1DX Mark ii Lens – Canon EF 11-24mm f/4L USM Lens Viewfinder – SmallHD 5inch This camera again is totally unnecessary, but it gives great colour accuracy, sharp image and smooth 50fps. The 4k quality is quite important because it allows you to punch in without losing image quality.
Side Camera – Canon 80D Lens – Canon EF-S 10-18mm f/4.5-5.6 IS STM Lens This is the part of my setup I am least happy with. The lack of 4k quality on it is in stark contrast to the main camera, but provides 50fps smooth image also. The ultrawide lens is important so it can be quite close to you in an office without looking like it is.
Display – 49-Inch 5k Super Ultrawide Display – Dell U4919DW Totally unecessary, but it does allow me to have notes on the side, my main window being recorded in the middle, and my OBS on the other side as though it was a triple monitor setup with no bezels.
Mic – Shure SM7B Mixer – Yamaha MG10XU I love the sound of this mic. I’ve tried many in the past, nothing is better for podcast audio in my opinion.
Monitor Speakers – Audioengine A5+ Ideally you edit with a pair of quality headphones, but I try to be wireless where I can. This are monitor speakers so ideally what I am hearing is what most people will also have recreated when watching my videos.
Keyboard – Logitech G613
Mouse – Razer Mamba Wireless
PC – GTX 1080 graphics card, 8700K CPU, 32gb Ram, Maximus X Motherboard, NZXT AIO, NZXT Case, 4TB Samsung SSD.
*Update: Added information about Binance Chain Memos and new withdraw panel
Binance just launched the Mainnet for Binance Chain – and there are significant changes such as a “BNB token swap” that you MUST know about. The Binance Token (BNB) will no longer be on the ethereum chain (ERC-20 Token), instead it will be fully migrated to Binance chain (BEP-2). This means if you hold BNB on an ethereum wallet, you must pay special attention or you might accidentally send it to the wrong address.
Binance has started the token swap for $BNB tokens. In the future, BNB address will begin with “bnb……” format instead of the ethereum “0x…” address.
New BNB withdraw page uses the MEMO feature that is unique to Binance Chain
BNB kept on Binance.com will automatically be swapped – no manual operation required. The new withdraw page will automatically use the Binance Chain address.
To deposit Ethereum based tokens based on the ERC-20 standard, $BNB tokens can be sent to the Ethereum deposit address on the Exchange.
Old ERC20 Binance BNB tokens can be deposited in “Ethereum” address for converstion
Once ERC20 BNB is deposited into the exchange, the token will be automatically swapped.
BNB Token Supply and Functionality
In terms of total supply, the amount of BNB remains the same. The initial supply of BNB will be 200,000,000 and 11,654,398 BNB will be burned on Binance Chain. Binance will burn ERC20 BNB tokens to keep the total supply constant as the token swap takes place
Binance DEX
Binance DEX has officially launched at Binance.org. This Decentralized Exchange is designed for advanced users who want to keep self-custody of their cryptocurrency assets (as opposed to centralized exchanges where funds are kept by exchanges).
Currently Binance DEX support their own token standard, the BEP2 token. For coins to be listed on the DEX, they need to be migrated to the Binance Chain. Whether coins are willing to migrate depends on what features they need:
Faster transactions – Accelerators and small number of Validators mean confirmation times are much faster
Centralized – Validators are pre-authorized and consensus is not open to general public
No smart contract support – Binance Chain is transaction only
Binance to Challenge Ethereum as top Token Issuance Platform?
With the introduction of the BEP2 token standard, Binance Chain can allow projects issue tokens via Initial Coin Offerings (ICO) or Initial Exchange Offerings (IEO). This feature allows BinanceChain to rival the ERC20 standard Ethereum which has been used by many popular projects such as Basic Attention Token (BAT) and OmiseGo (OMG). What sets BEP2 tokens apart is that it has a faster confirmation time and access to Binance DEX.
Whilst many have questioned if the success of Binance Chain would mean the demise of Ethereum, CEO Changpeng Zhao has denied this claim.
CEO Changpeng Zhao doesn’t see Binance Chain as a competitor to Ethereum
Currently Mithril (MITH) has chosen to migrate to be the first token to be migrated to the Binance Chain.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
An unknown group of Hackers stole more than 7000 BTC ($41,000,000 USD*) from Binance, the worlds largest cryptocurrency exchange. Binance reported that the hacker used a combination of phishing exploits and gained access to a large number of “API keys, 2FA codes, and potentially other info”. This marks the biggest hack for Binance.
For more information about Binance, check out our Binance Review.
Funds are SAFU
https://www.youtube.com/watch?v=JS_JKELYsHo
Binance was able to immediate respond that “Funds are Safe” – they have an emergency fund that can easily cover the $41 Million that were stolen. In fact, it is reported that Binance made a profit of $446 Million in 2018 alone, so this hack can easy be covered by the exchange.
As a safety precaution, Binance has halted all deposits and withdraws on the exchange for at least 7 days. The purpose of this suspension is to improve exchange security and reduce the impact of the stolen funds. The exchange still has resumed trading at this time.
We strongly recommended is to keep funds off exchanges and in hardware wallets such as the Ledger Nano X. Exchanges are large targets for hackers – ironically the bigger and more reputable the exchange, the more hackers they attract. Having a Cold Wallet (such as the Ledger or Trezor) allows for storage of cryptocurrency on devices that are not accessible to hackers.
CZ formally responds to the hack via Youtube
Decentralized Exchanges to the Rescue?
Decentralized Exchanges might be hard to use, but they offer full custody of funds.
In light of this hack, Decentralized Exchanges (DEX) are becoming more and more promising. With a DEX, users can keep their own funds and be safe from large hacks and suspension in deposit / withdraws. Binance has already been building a Binance DEX, supported by the Binance Chain.
Inside Job?
Various theories have surfaced about the Binance Hack, with some accusing the hack possibly coming for Binance Insiders who know the workings of the exchange and security precautions. Previous Binance talked about their “Big Data” AI which was meant to catch unauthorized withdraws and sim swap attacks
The amount of security efforts going on in an exchange is not easy to imagine. Here is an example of @binance's big data AI system preventing a user who got SIM swapped, email and 2FA both hacked from losing his 46 BTC. stay #safu. pic.twitter.com/NSb2lZIsld
The report showed that Binance had Internal controls for amount sent and manual review. However it seems hacker managed to withdraw amounts that were just under the manual review threshold. It might be possible that the hacker had information about the internal workings of the Binance defense system and how to bypass it. However, there is no conclusive evidence that it was done by someone inside Binance.
No Rollbacks – Bitcoin is Safe!
There was a proposal to rollback the hacker’s transaction on the Bitcoin Blockchain after the hack was initially discovered. This would reverse the transaction and “thwart” the hacker. This drew the ire of the Bitcoin community is it recognized that even with $41 M bounty to do a reversal, it would be extremely dangerous and near impossible to collude more than 51% of the hash-power.
Whilst Binance CEO Changpeng Zhao “CZ” initially humored this idea, it was quickly refuted.
In Crypto, not all trade volumes are visible – in fact “Darkpools” account for a huge amount of crypto trading and has an enormous impact on cryptocurrency prices. Darkpools include peer-to-peer trading, such as on sites like localbitcoins.com and also Over the Counter (OTC) desks. The reason why it’s unreported is because deals are done privately, for example Peer-to-peer trading can be done in person and with cash, leaving virtually no trace of the transaction ever happening. Large volumes are also traded OTC – this is more organised as private buyers and sellers are matched, with some form of escrow to allow the transaction to take place. OTC desk sometimes even require minimum volumes, like $100,000+ USD to up to 1 Million.
First things first. What’s an Over the Counter (OTC) desk?
Traditionally, OTC desks facilitate trading of securities that are not listed on formal exchanges, e.g. the New York Stock Exchange.
The trading of cryptocurrencies on OTC desks is similar to those in traditional markets.
OTC desks have a network of buyers and sellers. The trades themselves are facilitated by OTC broker-dealer who will locate and negotiate directly with prospective buyers and sellers over computer networks or by phone.
This is contrasted from trading over exchanges where the prices and order books are publicly available. For OTC desks, their broker-dealers will negotiate the trade price for you. Trades are also not publicly listed giving the parties privacy.
Therefore, to fully understand what is going on in the cryptocurrency markets it is important to consider what is also happening at OTC desks. This is because large transactions happen on them on a daily basis.
What does a trader at an OTC desk do?
Traders at OTC desks are the broker-dealers mentioned above. Their role is to locate and match buyers and sellers, and negotiate the best deal for all the parties involved.
Part 1: Crypto trading/ Market Manipulation/ OTC Markets
Therefore, it is important for traders at OTC desks to have a keen eye on the cryptocurrency markets and be knowledgable of the market trends.
I had the opportunity to interview Charles Yang, Head Trader at Genesis Block Hong Kong, an OTC desk. In my interviews we discuss what’s really happening at OTC desks away from the public eye. We also discuss his thoughts on the market sentiment.
Is Tether Safe? Will Bitcoin & Ethereum Recover?
Secrets and Insights from an OTC Trader
Here’s a summary of the key points from the interviews with Charles.
There is still interest in cryptocurrencies
Charles observes there is revived interest in cryptocurrencies despite this bear market.
He notes that a lot of the customers from the OTC desk who were previously dormant have recently contacted them wanting to buy and sell cryptocurrencies.
The risk of Tether is exaggerated
Firstly, what is Tether? Refresh your memory with our Tether Explained guide below:
We’ve seen in recent news that USDT is not fully backed by cash. Instead, Tether is around 75% backed by cash, and the remaining 25% by other securities or loans.
Confused with what’s happening in this Tether scandal? Check out our video below which explains what is happening and the latest legal action surrounding Bitfinex.
Despite this, there is still demand for USDT in Asian countries such as China, where they are buying USDT at a premium.
This is because China bans cryptocurrency exchanges, so retail investors cannot buy cryptocurrencies such as BTC. What they do instead is they first buy USDT through peer to peer merchants, and then enter the cryptocurrency market at a later time when conditions are right.
Right now, Bitfinex who is being accused of “losing” customers funds is more at risk. Bitfinex will have to go bust first before people question USDT.
Charles believes that fundamentally short trading would have less losses because if USDT is at 97% and your prediction is wrong, then your loss would only be 3%. Whereas the opposite would be to bet that it goes to 0.
Mining is still profitable
The recent “official news” in China was that cryptocurrency mining has been banned.
Despite this ban, Bitmain is coming up with new models and generally summer is big for mining because electric costs falls.
There may be miners who start accumulating and building to maximize their margins
Charles notes there is news that big players are scrambling to get cheap damaged mining rigs. They are not the newest models but there are still returns from using them to mine cryptocurrencies.
So despite the official news about China banning mining the word on the street is that people are buying rigs and locking in contracts for the summer months.
Bitcoin mining Ban in China 1. Miners will "co-operate" and send in some old gear 2. Government will take photos claiming operation is successful 3. Mining with countinue in China as normal 4. Bitcoin demand will increase because Chinese people like to do opposite of Gov demands pic.twitter.com/d9GACAqd12
Simple guide to the aftermath of the Chinese Bitcoin mining ban
Initial Exchange Offerings (IEOs) are risky, but need not be avoided completely
If you participate and get allocation you would benefit. But ultimately it is the exchanges that benefit because you need to buy their token to participate.
For example Binance requires you to buy into IEOs with their BNB token. Of course it’ll be great for you in the short term if you get allocation and the coin pumps. However your risk is that you would be left with the exchange token if you don’t manage to get any allocation after the lottery.
IEOs are also highly volatile, especially immediately after listing
It may be better to trade with OTC desks than exchanges
Charles notices that there is quieter trade flow, so big players looking to buy or sell cryptocurrencies need to offer better prices. Therefore the margin between the buy and sell price is much less. Bigger players also can offer better quotes because of volume. Therefore it may be cheaper to trade with OTCs who deal exclusively with larger orders than exchanges.
And whilst exchanges require you to have the funds ready at the time of transaction, OTC desks allow you to lock in the prices and settle later. This gives people more flexibility .
However, depending on who you are, one upside or downside of OTCs is that they are not transparent. So while you can try to gauge whether there is a lot of trade flow through an OTC desk by reading their reports (if any), there is no way you can verify if they are being truthful. On the other hand you can conduct trades privately compared to on exchanges.
What coins to hold? Bitcoin Bitcoin Bitcoin (BTC)
Unlike other coins, Bitcoin (BTC) has a 10 year history. There is no founding team or leader. For this reason it is not affected by company politics and is the most decentralised.
We can see the prices for a lot of tokens crash during the Initial Coin Offering (ICO) crash. Some may be due to the project running out of funds, failing to deliver on its promises or in worse cases the founders and key personnel leaving the project altogether. Studies were shown that over 80% of ICOs in 2017 were scams.
I was standing in the same spot glued to my phone for 2 hours when this all went down.
We also see that the ICO game was not fair, some people were able to purchase tokens for a more favourable rate or terms even before the token was listed to the public. This however would never happen with BTC.
Is day trading profitable? No (sorry)
For retail investors, day trading is not profitable even for traditional markets.
This is because retail investors would be bogged down by trading fees, but not all trades are profitable.
Retail investors are also unprotected from market manipulation. This is especially true for cryptocurrency investing, which is generally an unregulated space.
Don’t do this
Conclusion
Ultimately, trading cryptocurrencies requires exercising caution and doing your own research. One can look at OTC desk reports to have a good grasp of what may be quietly happening with some big players, but at the end of the day, question everything. Also, whilst you may stand to gain several times your initial investment by going into highly volatile IEOs, bear in mind it is designed so that exchanges ultimately win. The most prudent thing to do is to never invest more than you can lose.
Enjin Wallet just added full native support for the Binance Chain and all BEP-2 (Mithril, ChangeNow) based assets. This means all Binance Chain assets can now be safely stored on both Android and iOS phones and transferred with ease (with “memo” support). This integrations comes merely a week after the official launch of the Binance Chain mainnet on April 23. Binance Chain boasts fast transactions, transaction finality and support for Binance Decentralized Exchange (DEX).
All Binance Chain assets can be added to the Enjin Wallet
This initiative is also a step in the right direction for Enjin, coming weeks after their collaboration with Samsung. With their partnership, Samsung Galaxy S10 Blockchain KeyStore will natively support ENJ, ERC-1155, Ethereum (ETH) and Ethereum based tokens.
“Like Enjin, Binance is a fast-moving, innovation machine — and one that we are proud to throw our support behind through this collaboration and many more to come.”
New Binance Coin (BNB) address start with “bnb…” instead of “0x….”
It’s Enjin Wallet is the most secure mobile wallet in the crypto space with a strong private key encryption mechanism and their own secure keyboard which. Enjin team claims these security features gives the wallet “hardware-like security. (www.spinabifida.net) ” To ease navigation, Enjin has a coin management system with features that allow one to customize fees and set limits.
Stronger BUIDLers stick together
Following this incorporation, Ted, lauded Enjin as a “community- and BUIDL-focused.” Apart from BNB support, Enjin also announced their plans of allowing clients to “place orders to Binance DEX’s on-chain order books—without leaving the Enjin Wallet’s secure interface” in coming days.
“We are excited to have the support of Enjin Wallet on Binance Chain. Enjin users will be able to transact from wallet to wallet on Binance DEX with full custody over their assets, increasing the level of freedom in the community.”
Ted Lin, the Binance Chief Growth Officer
If anything, this announcement complements Binance’s effort of launching a modern, liquid and easy to use decentralized platform effectively creating a liquid market place where participants can exchange digital assets without a third party via Binance Chain, a decentralized network from where the Binance DEX and all other Binance’s operations will operate from.
Binance CEO Changpeng CZ Zhao talks about the future of cryptocurrencies
“Binance Chain is a very simple chain in terms of application, but it can handle very large loads. It is our opinion that the load is more important than the features.”— Changpeng “CZ” Zhao, Binance CEO
Clearly, Enjin is strategically positioning itself and will tap on the success of Binance DEX. Besides, the announcement is a testament enough, revealing their code improvement and dedication of prioritizing the user which is the reason why the wallet as a 4.6-star rating at Google Store.
