Boxmining v2

Author: ronalthapa

  • Ethereum Censorship Explained: Your Stablecoins Can Be Frozen Without Warning

    Ethereum Censorship Explained: Your Stablecoins Can Be Frozen Without Warning

    If you hold stablecoins on Ethereum or other EVM platforms, you must be aware of this smart contract feature…

    Token Issuers on Ethereum Can Freeze Your Funds Without Notice

    In order to issue tokens on EVM platforms including Ethereum and Polygon, the first step is deploying a smart contract, which is then used for transferring tokens. However, the token issuer can define support for transaction censorship and token freezing in the contract. This is how Circle, the issuer of USDC, froze 75,000 USDC in user funds with ties to Tornado Cash, in compliance with U.S. sanctions.

    Not many users are fully aware of this feature. This can be compared to how traditional banks have the authority to freeze your funds without notice. If the stablecoin ecosystem depends on a centralized entity for issuing tokens, it could prove to be risky for all crypto users.

    USDT and USDC — Regulatory Compliant Stablecoins

    Paxos and Circle, the issuer of USDT and USDC respectively, are required to comply with regulators in order to be allowed to tokenize US dollars on blockchain platforms. One of the major regulators is the Office of Foreign Assets Control (OFAC), who not just sanctioned Tornado Cash, but also oversees Ethereum block validations.

    It is important to note that regulations for the crypto industry is not necessarily bad. They protect the interests of investors and prevent fraudulent activities. However, this is in conflict with the basic principles of decentralization, especially when user funds are on the line.

    How are Transactions Censored on Ethereum?

    Although a deployed smart contract can never be stopped or otherwise manipulated by a third party, token issuers, however, can write whatever they want in smart contracts, including censorship features. Here’s how:

    In order to mint fungible tokens on Ethereum, developers must follow the ERC token standards including the ERC-20 (token), ERC-721 (NFT) or ERC-1155 (multi-token). These standards define a common list of rules that EVM tokens should adhere to. A customized and deployed smart contract is then used each time tokens move from address to address. However, a smart contract can define any behavior that the EVM will allow, which includes the ability to censor transactions based on a blacklist or freezing an account. As a result, any Ethereum user may lose the ability to spend or use the tokens in any way. This is what the smart contract for USDT looks like:

    Source: cexplorer.io

    As shown in the image above, Paxos has the power to blacklist token owner accounts and burn their funds. Of course, one could argue that this is for our safety, freezing the account of someone who has been involved in criminal activity. After all, the blockchain industry should not be a way for criminals to circumvent the law. But herein lies the dilemma: how is decentralized finance (DeFi) different from traditional finance if we still have to trust the system?

    Key Takeaway

    It is true that certain censorship features in place help protect investors’ interest, but the blockchain industry is meant to be different from the traditional financial world. Take the Tornado Cash incident for example, one of the developers was arrested for simply writing code, and several users who used Tornado Cash without malicious intention ended up having their funds frozen.

    If we blindly accept the rules of the existing system, we will not be able to create anything innovative. It is not true self-custody if a third party can control the tokens you have in your own wallet. Nevertheless, the blockchain industry is still in its infancy, and if we are being pragmatic, a common ground must be reached between crypto users and regulators. For DeFi to move forward, we can only construct a system that remains decentralized and that regulators have no objections to.

  • Meme Coins 2023: How Smart People Get Rich Investing in Them

    Meme Coins 2023: How Smart People Get Rich Investing in Them

    2023 started off with the explosive rise of Bonk ($BONK), a Solana-based meme coin. In the process, some people made a lot of money, and some did not even have to invest a dime as they were eligible for $BONK airdrops as Solana users. It is important to remember that meme coins are purely speculative and extremely volatile, but smart traders are able to recognize patterns and trends, allowing them to capitalize on these opportunities.

    What are Meme Coins?

    Meme coins are cryptocurrencies that are created for the purpose of entertainment and humor. They are often based on popular internet memes. Dogecoin is the most famous example, a dog-themed token based on the viral Doge meme in 2013.

    What started as a joke quickly became a driving force in the crypto market. Thanks to Dogecoin’s success in 2021, the meme coin market rapidly expanded, and is now valued over $17 billion in total market capitalization.

    Why are Meme Coins So Popular?

    Investing in meme coins present a low-entry barrier. Since meme coins are typically valued at pennies per token, investors can acquire large amounts of tokens for a relatively small price. As a result, investors can gain significant profits if these tokens spike up in price. Many investors view meme coins as a way to make a quick profit, as they are often volatile and can be traded for a profit.

    In contrast to actual blockchain projects such as Ethereum or Aptos, meme coins have no utilities at all. They are less about technology and solutions, and more about fun and community engagement. Additionally, meme coins are often seen as a way to show support for a particular meme or cause, which can be a powerful motivator for investors. Instead of complex blockchain terminologies, meme coin communities focus on building on their biggest facility — humor. Because of this, meme coins are a good at exposing newcomers to the crypto space.

    The Psychology Behind Investing in Meme Coins

    The originator of the term “meme” is Richard Dawkins. In his book “The Selfish Gene”, he explains that when a cultural meme becomes viral and is attached to an exchangeable value, it can theoretically become an actual currency. With blockchain technology, memes can literally become cryptocurrencies.

    As such, they have become increasingly popular in the cryptocurrency space due to their ability to post rapid gains and reach incredible market capitalization and popularity levels in a very short period. This phenomenon can be attributed to two main factors: Social Media Hype and Fear of Missing Out (FOMO).

    Social Media Hype

    We are currently living in the Internet age, where our average attention span is short. As such, memes could prove to be a powerful marketing tool because they are simple, entertaining, and engaging. When used properly, memes are a low-effort marketing strategy that can drive organic engagement.

    Generating hype via social media channels has been a successful strategy for many meme coin projects. By creating shills and utilizing prominent influencers and mainstream celebrities, projects can generate excitement and attract potential investors, even if there is limited information available about the project. This growth, although organic, is based on “unverified beliefs” and inflated utility. Meme coins have been particularly successful in leveraging this strategy, leading to a surge in their token prices.

    Fear of Missing Out (FOMO)

    The volatile nature of the crypto market is often driven by ambitious investors who jump into new projects with the hope of making a profit or not missing out on the project’s potential success. This fear of missing out on further profits has been a major factor in the success of meme coins.

    The price growth that follows the hype marketing is further augmented by FOMO and widespread hype. This trend has enabled meme coins to gain hundreds of thousands of followers, mainly due to their meme culture, before they adopted a reasonable utility. Additionally, as meme coins generally appeal to less experienced retail investors, they tend to jump on the bandwagon in hopes of making profit and being part of a large community.

    The Risk of Investing in Meme Coins

    While meme coins can be a great way to make a quick profit, they also come with a certain amount of risk. As with any investment, there is always the potential for losses. Additionally, because meme coins have no utilities, they are purely speculative assets. Therefore, they are often highly volatile, meaning that prices can change quickly and without warning. As such, it is important to do your research and understand the risks before investing in meme coins.

    Key Takeaway

    At its core, meme coins are purely speculative, and investing in them is somewhat of a gamble. However, smart traders are able to identify trends before they break out. Because meme coins typically rely on hype, they monitor activities on the niche market via social media channels or word-of-mouth. Because these tokens are usually valued at pennies per token, they are able to secure a position before any price surge or drop. But from that point on, it is really just a bet.

  • Will Bitcoin (BTC) Market Rally Continue Throughout Q1 2023?

    Will Bitcoin (BTC) Market Rally Continue Throughout Q1 2023?

    It has been an explosive week for the crypto market, as most cryptos see double-digit gains for the first time since the FTX contagion started in November 2022. This rally was led by Bitcoin (BTC) and Ethereum (ETH), which surpassed the $21,000 and $1,590 mark respectively. It is important to understand what factors are causing these uptrends, so that we, as investors, can recognize and capitalize on these patterns.

    Why is Bitcoin (BTC) Pumping in January 2023?

    Over the past week, Bitcoin has seen large numbers of purchases with robust trading volume. According to Glassnode, the exchange outflow volume of BTC has hit an early year-to-date high, with nearly $300 million worth of withdrawn BTC moving into crypto wallets. Moreover, most of these withdrawals were made in large installments ranging from $1 million to $10 million of BTC. This is corroborated by on-chain aggregator Santiment, where Bitcoin whales have been loading up their wallets with a lot of BTC, suggesting institutional action.

    Across the broader crypto market, more than $1.3 billion of crypto assets in short positions were liquidated over the past 8 days, according to data sourced from Coinglass. Additionally, more than 200,000 traders were liquidated, with the most significant liquidation being a $6.84 million short position against Bitcoin, contributing to the surging price movement in the crypto market.

    Apart from market activities within the space, there are other macroeconomic conditions that contribute to Bitcoin’s pump.

    Inflation Slowing Down According to U.S. Consumer Price Index (CPI)

    The price surges in the crypto market also reflects the market’s expectations that inflation is cooling ahead of the release of the U.S. Consumer Price Index (CPI) data. Bitcoin began the week trading at $17,207 and has since seen an upward trajectory, with the CPI report meeting market expectations indicating that inflation in the U.S. economy is slowing. Other equities markets have also responded positively as a result.

    Investors are now anticipating comments from the Federal Reserve which should hint at future policy, including the size of interest rate hikes. The Federal Open Market Committee (FOMC) meeting will be held between January 31 and February 1. According to CME FedWatch Tool, the committee is currently expected to yield a hike of 25 basis points istead of the previous 50 basis points.

    Now, the prevailing narrative is that U.S. inflation has peaked in 2022, which means softer rate hikes going forward. This stimulates all economic activities including in speculative markets, but with the crypto industry, any surprises could spark additional volatility.

    Bitcoin Halving Event in 2024

    Another factor contributing to Bitcoin’s pump this month is the upcoming Bitcoin halving event in 2024, in which Bitcoin rewards to miners are cut in half. This event occurs after every 210,000 blocks are created, which is roughly every four years. Around next year, miner’s payout will be reduced from 6.25 BTC to 3.125 BTC.

    Historically, halving events have been seen as a positive sign for Bitcoin’s price, as it helps to contract the supply of BTC. This is due to the fact that Bitcoin has a fixed supply, and the halving event directly relates to Bitcoin’s deflationary tendency, driving its price up as a result of supply and demand mechanisms. According to Coindesk, we can see from Bitcoin’s halving history, the events have always been able to establish long-term bullish drivers for Bitcoin’s price.

    Correlation with the U.S. Dollar Index (DXY)

    Another factor contributing to Bitcoin’s price movement is its relationship with the U.S. Dollar Index (DXY). The crypto market generally correlates negatively to the DXY due to the purchasing power of fiat currencies. When the DXY declines, investor sentiment for riskier assets such as crypto tends to increase. This year, the DXY dropped to seven-month lows, momentum has slowed as it is beginning to retract. Typically when this happens, it is followed by Bitcoin price moving in the opposite direction.

  • MetaMask Security Guide: Protect Yourself from “Address Poisoning” Scams

    MetaMask Security Guide: Protect Yourself from “Address Poisoning” Scams

    Wallet Address Poisoning Scam: What You Need to Know

    MetaMask warned crypto users of a new scam that is running rampant called “address poisoning”. This scam involves malicious actors copying and pasting wallet addresses in order to steal funds from unsuspecting users. In this article, we will discuss how address poisoning works and what users can do to protect themselves. Also, check out Gemmy’s video for more information on how to secure your MetaMask contacts! (https://prodavinci.com)

    How Does Wallet Address Poisoning Work?

    Address poisoning is a scam that exploits copy-and-paste tendency of most crypto wallet users. Since wallet accounts have cryptographically-generated address with long hexadecimal numbers, users tend to only remember the first and last few characters of their address. As a result, users rely on copying and pasting their addresses to save time. MetaMask addressed this in their blog post, and here’s how it essentially works:

    Attackers usually has softwares that monitor token transfers. If they pick up on your address, they can use vanity address generators to create an address that looks very similar to yours. The attacker then sends you worthless tokens to “poison” your transaction history. If you are not careful, you might copy and paste their address from your transaction history, sending funds to the attacker’s address.

    This method is rather amateurish, compared to other scam types, blockchain attacks, or smart contract exploits. While this would not give the attacker access to user wallets, it relies on user carelessness and haste — something that is common in Web3 when users want to send funds quickly to capitalize on DeFi opportunities.

    The Increasing Cases of Wallet Address Poisoning

    According to an article jointly published by crypto analysts X-explore and Wu Blockchain on 2nd December 2022, over 340,000 addresses have been poisoned on-chain, resulting in $1.64 million stolen from unsuspecting victims. The cases began spiking at the end of November, and is still a prevalent issue now.

    The article suggested that MetaMask should improve its UI features to prevent such attacks from happening, such as letting users identify trusted wallet addresses in transaction history using color markers or other prompts.

    How to Protect Yourself from Address Poisoning

    Metamask recommends users to always double-check the address before sending funds, making sure every single character is correct. As the attacks are still ongoing, users are also advised to avoid copying addresses from transaction histories and block explorers. Users can also add trusted wallet addresses in Settings > Contacts.

    More importantly, it is much safer to use hardware wallets when transferring funds, as users are required to check and confirm any address they are sending funds to before the transaction is authorized. If you are interested in getting a hardware wallet, feel free to check these out:

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  • The Flippening: Will Ethereum Overtake Bitcoin in 2023?

    The Flippening: Will Ethereum Overtake Bitcoin in 2023?

    The Flippening Narrative: Bitcoin vs Ethereum

    The concept of the “Flippening” has been increasingly gaining traction in the crypto space. It refers to the hypothetical moment when Ethereum (ETH) surpasses Bitcoin (BTC) as the most valuable cryptocurrency by market capitalization. The Flippening is important because it would signify a major shift in the overall direction of the crypto landscape, signalling a change in investor sentiment and adoption patterns.

    https://www.youtube.com/watch?v=0lQ8bz9QRBo

    While the Flippening is not set in stone, there are compelling data that indicate it is coming, and sooner than you think… Here’s why:

    The Case for Bitcoin

    Being the world’s first cryptocurrency, Bitcoin has maintained its throne on the crypto market since its genesis block in 2009. It is often considered as the safest digital store of value by investors, with its limited supply structure similar to the scarcity of gold, hence its nickname “digital gold.” As such, Bitcoin is usually the primary choice of cryptocurrency for financial institutions looking to get involved. As far as mainstream adoption goes, Bitcoin has led the way so far.

    However, Bitcoin’s Proof-of-Work (PoW) consensus model is highly energy-intensive, sparking criticisms of the network’s impact on the environment. Additionally, the usage of Bitcoin is only limited to exchanging and storing value. This is where Ethereum has much more to offer.

    The Case for Ethereum

    As the second most valuable cryptocurrency, Ethereum is designed to be used as the foundation of a decentralized, blockchain-based internet — an idea that is become known as Web3. Apart from exchanging and storing value, Ethereum introduced smart contract functionalities that allows developers to do all kinds of innovative and creative things on the network. This brought about a proliferation of financial products that have enabled a much broader range of investors.

    Ethereum earned its nickname “digital oil” because it is a utility-based asset like oil, fuel or gas, and its value is largely dictated by supply and demand mechanisms. Similar to how the world’s global supply chain is fueled by crude oil, Ethereum lays at the heart of the Decentralized Finance (DeFi) space as well as GameFi and Non-Fungible Token (NFT) market. And as the Web3 landscape progresses, demand will increase as more and more people are recognizing the potential of a decentralized internet. It is only a matter of time when Web2 evolves to Web3, and Ethereum is at the centre of that.

    Do “Ethereum Killers” Hinder the Flippening?

    It is worth noting that Ethereum faces competition from other prominent layer-1 blockchains such as Aptos, Cardano, Solana, BNB Chain, Polkadot, and Avalanche. There is a trending “Ethereum Killer” narrative in which user adoption will be distributed amongst these blockchains instead of focusing on Ethereum only. However, most of these blockchains in fact depend on Ethereum, as one way or another they are associated with the network’s smart contract. As shown in the image below by Cryptowatch, all of the top layer-1 blockchains are closely correlated with Ethereum’s price action.

    Comparing Market Share between Bitcoin and Ethereum

    As of 11th January 2023, Ethereum’s market share increased by 3% among global crypto assets, signalling its dominance on the rise. According to Coinmarketcap, Ethereum’s market dominance is at 19%, valued at around $856 billion. On another note, Coingecko’s metrics were slightly different, indicating Ethereum’s dominance at 18.3%. But both aggregation websites show that Bitcoin’s market dominance is decreasing, from 40% to 38%.

    It is unclear whether this trend will continue, but according to data sourced from Blockchain Center, the Flippening has been on an uptrend since July 2021. And we are nearly halfway for it to happen. It is also worth noting that Ethereum came closest to the Flippening in 2017, when Bitcoin’s market dominance’s dropped by 40.6% and Ethereum took over 32% of the market amidst the situation.

    In reference to the data provided by Blockchain Center, there are also other metrics apart from market cap that determines the Flippening. As of now, Bitcoin is still by far superior in trading volume, which is a crucial metric for adoption usage. However, Ethereum has Bitcoin beat in active addresses, transaction count and volume, and total USD transaction fees.

    Outperformance of Ethereum will be primarily driven by the strength of its post-Merge fundamentals. The upcoming Shanghai Upgrade will significantly reduce the risk and opportunity cost of staking ETH, which is likely to attract participation from more crypto users.

    Key Takeaway

    Despite Ethereum’s increasing adoption and market dominance, Bitcoin still reigns supreme in the crypto space. In fact, Bitcoin saw significant adoption in 2021-2022 from retail and institutional investors, public companies, and even countries. As of now, El Savador and the Central African Republic (CAR) have adopted Bitcoin as a legal currency. This is a monumental step towards mainstream adoption.

    But that is not to say the Flippening will never happen — it is certainly a possibility. After all, both Bitcoin and Ethereum have different visions. Bitcoin aims to become the global reserve currency, whereas Ethereum aims to become the infrastructure of a global digital economy. The Technology Acceptance Model (TAM) applies to both assets, but it all comes down to supply and demand mechanisms. If demand in digital money is higher, then Bitcoin dominates. But if demand in utility-based asset in building out a decentralized ecosystem is higher, then Ethereum is generally favored.

  • FTX Victims Must Read: US Government to Help Recover Lost Funds?

    FTX Victims Must Read: US Government to Help Recover Lost Funds?

    ​​U.S. Government Launches Website for Victims of FTX Collapse

    The U.S. government has launched a website for victims of the FTX collapse to communicate with law enforcement in regards to former FTX CEO Sam Bankman-Fried’s “alleged” fraud. In an order late Friday night, U.S. District Judge Lewis Kaplan in Manhattan authorized federal prosecutors to use the website to speed up the process given the massive scale of the FTX collapse.

    FTX owes money to at least 1 million people including creditors and customers. This would help prosecutors with their case immensely as it is ‘”impractical” to contact each victim individually and get their testimony, the prosecutors remarked in the court filing.

    Federal Law Requires Prosecutors to Contact FTX Victims

    Federal law requires prosecutors to contact possible crime victims to inform them of their rights, including the rights to obtain restitution, be heard in court and be protected from defendants. “If you believe that you may have been a victim of fraud by Samuel Bankman-Fried, A/K/A/ ‘SBF,’ please contact the victim/witness coordinator at the United States Attorney’s office using the email address listed below for assistance in verifying whether you are a victim in this case,” stated in the website.

    In criminal cases, prosecutors are required to notify victims ahead of plea or sentencing proceedings and allow them enough time to give testimony if they want to be heard. Based on the number of victims who provide such notice, the court will rule on the manner in which victims will be heard at such proceedings,” Kaplan wrote in his court order.

    FTX Victim Testimonies Strengthen Arguments

    Recently, Bankman-Fried has pleaded not guilty to eight counts of wire fraud and conspiracy over the FTX collapse. Prosecutors have said he stole billions in customer deposits to pay debts for his hedge fund, Alameda Research, and lied to investors about the exchange’s financial condition.

    Though Bankman-Fried has acknowledged risk management shortcomings, he did not consider himself criminally liable. In such a case, the direct evidence regarding the case may not be enough, hence testimonies of the victims can greatly strengthen arguments. Moreover, for the many other victims who did not come forward to cite legal trouble or other factors, this website could help them take the first step to recover their funds, and build a stronger and more compelling case with their testimonies, given the massive scale of damage Bankman-Fried has done.

    FTX Owes Money to Over 1 Million People

    The US Attorney suggests more indictments to follow. According to FTX’s bankruptcy filing on November 11, it owes money to more than 100,000 creditors and at least 1 million affected FTX and FTX US users.

    John Ray, currently CEO of FTX, testified at the U.S. House Financial Services Committee in December, asserting that his team is implementing a restructuring plan that will potentially help customers and creditors get their money back.

    One of the core objectives is asset protection and recovery. It involves extensive tracing of money flows and asset transfers from the time of FTX’s founding. Ray said that they are in the process of “collecting and reviewing dozens of terabytes of documents and data, including records of billions of individual transactions.”

    U.S. Customers Accounted for 2% of All FTX Traffic

    In an analysis of monthly active user data by CoinGecko, customers in the U.S. accounted for 2% of all traffic. Ray mentioned in his testimony that there were 2.7 million users in FTX US and 7.6 million users in FTX. But since “a small number of U.S. customers” were also among the FTX users, he overstates the actual customer relationships due to the possibility a customer may have more than one account.

    Therefore, Ray aims to get to the bottom of the actual customer numbers. And the website for FTX victims can help speed up the process by providing information and clarity, since it is unlikely that most customers will not be able to appear at the Manhattan court in person.

  • Bitcoin Price Dips After Fed’s December Meeting Minutes Release

    Bitcoin Price Dips After Fed’s December Meeting Minutes Release

    The Federal Reserve’s December meeting minutes revealed the central bank’s plans to continue raising the federal funds rate to control rising inflation. This could potentially impact the crypto market as economic activity is further tightened, signalling consumers and investors to save money and mitigate risk. Shortly after the news, the price of Bitcoin and Ethereum had dropped momentarily before bouncing back to the $16800 and $1250 range respectively.

    Key Takeaways:

    • Feds opted to raise interest rates by 50 basis points, putting the target range for federal funds rate to 4.25%-4.5%.
    • The new restrictive policy in place will fight inflation, but it also tightens economic activity including investments in the crypto market.
    • The price of Bitcoin and Ethereum dropped 1% after the Federal Reserve’s December meeting minutes were released.
    • The Fed’s minutes noted the collapse of digital asset exchange FTX, but said it didn’t have a serious effect on the wider financial system.

    Fed Signals Hawkish Interest Hikes in 2023

    The Federal Open Market Committee (FOMC) and Federal Reserve officials concluded its December 13-14 meeting, publishing new projections for expected inflation in 2023 which is higher than previously anticipated. Against the macro backdrop, Fed officials agreed to raise interest rates by 50 basis points, putting the target range for the federal funds rate to 4.25%-4.5%.

    Higher interest rates mean higher borrowing costs, which in turn affects consumer spending and investments in speculative markets including the stock market and crypto market. The news of the Fed’s plans to continue raising interest rates has caused investors to be cautious, as they are wary of its potential impact on the crypto market. Occasions such as this would prompt traders and investors to sell U.S. equities as well as Bitcoin and other digital assets to mitigate risk.

    This caused the price of Bitcoin to dip nearly 1%. Ethereum, the second largest digital asset by market cap, also dropped by 1%. According to Cryptowatch, the correlation between Bitcoin and Ethereum sits strong at 0.82. Therefore, it is expected that Ethereum will mirror Bitcoin’s price movement.

    Despite the dip, Bitcoin is still up 0.4% in the past 24 hours and 1.2% in the past week. Ethereum is down 0.1% at the time of writing but has seen 5.1% gains in the past week.

    Fed officials also noted the collapse of FTX, acknowledging its impact on the crypto ecosystem. However, they claimed that the situation did not have a serious effect on the wider financial system. The meeting summary stated, “while the spillovers from this situation had been significant among other crypto lenders and exchanges, the collapse was not seen as posing broader market risks to the financial system. (Valium) ”

  • 2022 Crypto Recap: The Good, The Bad, and The Uglies

    2022 Crypto Recap: The Good, The Bad, and The Uglies

    The crypto industry had a tumultuous year in 2022, with coins tanking at the start of Q2 and never rallying, signalling the beginning of a crypto winter. To make matters worse, the collapse of Terra Luna and FTX led to a devastating contagion across the industry. Despite the challenges, we shouldn’t forget about the progress and achievements the industry has made. Here’s a brief recap of some of the biggest news in 2022.

    Crypto’s Role in the Russia-Ukraine War (February)

    During the Russia-Ukraine war, cryptocurrencies have been immensely valuable to Ukrainian refugees. Russian attacks have destroyed critical infrastructure, rendering many Ukrainians inaccessible to withdrawing money from ATM machines. Therefore, many Ukrainian refugees relied on digital currencies sent from relatives or donors abroad to purchase goods and services.

    All that is needed for them to access their cryptocurrency wallets is a mobile phone and internet access, which was being provided by the thousands of Starlink satellite internet dishes provided by Elon Musk’s SpaceX at the time.

    Feds Interest Rate Hike (March)

    Despite Bitcoin reaching an all-time high of $69000+ in November 2021, what follows is a series of market decline. This is in part due to the U.S. Federal Reserve announcing its first interest rate hike in March to fight increasing inflation. As a result, the macro backdrop began to worsen, not only affecting crypto assets but also every other investment asset class. This also called into question Bitcoin’s reputation as an inflation hedge as Bitcoin itself started to trade in tandem with Nasdaq tech stocks, according to the New York Times.

    Collapse of Terra Luna (May-July)

    The collapse of the Terra Luna ecosystem in May 2022 was one of the most devastating black swan events in crypto history, wiping at least $60 billion off the market which triggered a dangerous domino effect across the industry such as the fall of several high-profile crypto firms, namely Three Arrows Capital, Voyager Digital, and Celsius Network.

    Amid the crash, the UST algorithmic stablecoin, which was supposed to maintain a $1 peg via on-chain mechanisms with Terra’s native token LUNA, depegged, bottoming out at $0.006. This was caused by a massive continuous selloff on both UST and LUNA, resulting in a death spiral. Terraform Labs (TFL) developers and founder Do Kwon are facing multiple investigations as well as lawsuits into its collapse. (Canadian Pharmacy) As of now, South Korean authorities and Interpol have issued a warrant for the search and arrest of Do Kwon and his accomplices.

    Recovery Plan of Terra Luna Classic (August)

    As of now, the Luna Classic blockchain is managed and governed by the community after Terraform Labs (TFL) developers abandoned the chain in support of Luna 2.0. On August 26th 2022, governance was restored as citizens of Luna Classic could delegate, stake, and vote for the future of the ecosystem. Proposals and the associated implementations are being passed by the Terra Classic Decentralized Autonomous Organization (DAO).

    Feds Sanction Tornado Cash (August)

    On 8th August 2022, the U.S. Treasury Department imposed sanctions against Tornado Cash, a privacy-focused Ethereum mixing service that obscures the trail back to the fund’s original source. They claimed that Lazarus Group, a cybercrime group run by the North Korean government, has been using Tornado Cash to launder illicit funds.

    Moreover, one of the developers for Tornado Cash was arrested in the Netherlands. The crypto community and privacy advocates bashed Netherlands authorities as the developer was simply writing code and had nothing to do with illicit activities. Ethereum co-founder Vitalik Buterin also criticized the move as he himself used Tornado Cash to make donations to Ukraine’s cause.

    Ethereum Merge (September)

    On 15th September 2022 at 06:42:42 UTC at block 15537393, the Ethereum Merge was completed. This meant a merger of the Ethereum mainnet execution layer and the Beacon Chain’s consensus layer, transitioning from the proof-of-work consensus mechanism to proof-of-stake. This landmark update brings major changes to the network, including a 99.95% reduction in energy consumption and a 90% cut in ETH issuance.

    This is a significant achievement in the history of blockchain, allowing the Ethereum network to scale effectively as demand for Web3 and DeFi increase. Since Ethereum is the mother of all smart contract platforms, this could put Ethereum in a position to rival Bitcoin in adoption and even value.

    Downfall of FTX and Sam Bankman-Fried (November)

    On 11th November 2022, former FTX CEO Sam Bankman-Fried (SBF) filed FTX, FTX US, and Alameda Research for bankruptcy in the U.S. Once hailed as one of the top crypto exchanges, the sudden collapse of FTX came as a shocking blow to the entire crypto industry, setting off yet another contagion across the space. This affected 130 affiliated companies including several high-profile firms such as BlockFi, Genesis Trading, Grayscale, KuCoin, Gemini, Coinbase, Crypto.com, Sequoia Capital, and Galaxy Digital.

    Apparently, SBF was misappropriating customer funds for his own benefits without customers’ consent and knowledge, conducting unethical flywheel schemes with Alameda Research. As a result, SBF had been arrested in the Bahamas, facing many criminal charges including securities fraud, money laundering, and campaign finance law violations. However, on 22nd Decemeber 2022, the disgraced FTX founder was released on a $250 million bail.

  • Binance vs FTX Exchange Comparison Overview: Which is the Better Exchange?

    Binance vs FTX Exchange Comparison Overview: Which is the Better Exchange?

    Which Cryptocurrency Exchange is the “Best”?

    There is a lot to consider when it comes to cryptocurrency investment and trading, and crypto exchanges are a great way to start. It is a good platform for beginners to familiarize themselves with the market as well as for experienced traders to make use of the various products the exchanges offer.

    There are hundreds of crypto exchanges, and everyone is asking. “which crypto exchange is the best?” Everyone wants to get the best bang for their buck, whether it be low trading fees or lucrative products. We will be comparing two of the top and most talked about crypto exchanges in the world: Binance and FTX Exchange.

    FTX EXCHANGE (INCLUDING FTX INTERNATIONAL AND FTX.US) ARE NO LONGER IN OPERATION

    Both exchanges have filed for bankruptcy. Subsequently, the exchange was “hacked” and more than US$600 million worth of cryptocurrencies drained. The hacker is strongly rumoured to be a former FTX employee. For more about how this story unfolded and the latest news, check out these articles:

    What is FTX Exchange?

    Founded in 2019, FTX Exchange is a cryptocurrency trading platform that was built by Alameda Research, a quantitative trading firm that develops specialized algorithms for trading crypto. It has topped many trading charts by volume and is responsible for 30% of the market trading volume on major exchanges.

    The strong trading background of FTX shows that they live up to their claim of being an exchange “built by traders, for traders.”

    FTX is largely focused on the derivative and prediction market, offering a wide array of futures, options, and volatility products with competitive trading rates and discounts for specific users.

    FTX Exchange has been growing significantly over the past year, exploding past the likes of KuCoin and Kraken. They even managed to take market share away from Coinbase as well, which is the number one crypto exchange in the U.S. This is in part thanks to huge venture capital funding that is backing FTX.

    Check out FTX Exchange Guide for a full review and tutorial on how to use FTX Exchange. 

    What is Binance Exchange?

    Binance was founded in 2017 by Chengpeng Zhao (CZ), former Chief Technology Officer of OKCoin who has years of experience developing high-frequency trading software.

    Binance is, by a large margin, the world’s most popular cryptocurrency exchange. It has more than than $25 billion in organic trading volume per day and millions of users worldwide.

    Binance is largely focused on the spot market and has one of the most cryptocurrencies available to trade. It also has powerful trading tools such as leveraged trading, options trading and lending platform.

    For the longest time, the trading platform scene is dominated by Binance, and is held in high regard for being smart and proactive in their planning and actions, not only for themselves but also for developing the crypto industry as a whole.

    Binance has been highly active in collaborating with international regulators to support the development of a regulatory framework and policies for cryptocurrencies. In 2022, Binance as well as FTX has received regulatory approval to set up shop in Dubai and Bahrain.

    This is a significant step since it enables both exchanges to function in accordance with international standards, and meet the criteria of major regulators like the Financial Action Task Force.

    Binance vs FTX Exchange Overview

    In this section, we will take a closer look at what Binance and FTX have to offer and compare them based on these features:

    • Products
    • Supported cryptocurrencies
    • Fees
    • Security

    Products

    Binance and FTX have quite a lot of similarities based on their general offering. But the major difference is that Binance is more focused on the spot market and has more cryptocurrencies to offer, whereas FTX is more focused on the derivative and prediction market and has more volatility products. Therefore, FTX is usually seen as the preferred choice for experienced traders who want a wider (and potentially higher risk/reward) range of products.

    Both exchanges offer products that are exclusive to them. Binance offers Crypto Loans, a P2P market, and Binance Earn, while FTX offers volatility and prediction markets. The addition of FTX stocks makes it the first domestic crypto exchange to provide stocks on its platform, enabling trading of stocks and ETFs by U.S. users.

    FTX’s crypto card is exclusively accessible to US residents via the FTX US platform, whereas Binance’s crypto debit card has gained enormous popularity. While FTX places a greater emphasis on specialized trading products, Binance has more to offer in terms of their Binance Earn, allowing users to earn passive income.

    Both Binance and FTX offers a mobile app for iPhone and Android so users can trade cryptocurrencies on the go.

    Supported cryptocurrencies

    Binance has the highest number of cryptocurrencies that any exchange offers to its users. It currently has 1,300 cryptocurrencies including its own native crypto, Binance Coin (BNB).

    Learn more about Binance Coin (BNB).

    Nevertheless, FTX offers a lot of cryptocurrencies for users to trade, though not as large as Binance’s. FTX supports over 460 cryptocurrencies including its own native crypto, FTX Token (FTT).

    Both exchanges however, are consistently adding to their lists of supported cryptocurrencies, including newly launched tokens.

    Fees

    The rates on both exchanges’ spot trade markets are extremely low, and they continue to decline as volume rises. However, FTX wins out since it assesses 0.02% as a maker fee and 0.07% as a taker fee for tier one accounts.

    This is significantly lower than Binance fees, i.e. 0.1% maker and taker fee. Even after using BNB for trading fees, the user will have to pay a 0.075% fee, which is higher than FTX.

    We can see that FTX is better for trading, and is clearly a winner in this category.

    Security

    One of the most important considerations when choosing an exchange is security. It’s safe to say that Binance and FTX are two of the most secure exchanges in the world.

    Both exchanges use two factor authentication, and they store account funds and data away from online platforms so that they cannot be hacked. They also insure their funds by putting a certain amount of fee away as an insurance fraud.

    Both platforms also employ round-the-clock monitoring and analysis, and in the case of a theft, user funds are protected by the reserves that both firms have in their treasuries.

    FTX is one of the few exchanges that have never been hacked, and while Binance has seen some hacking incidents in the past, both exchanges adhere to the strictest industry security guidelines, with the majority of funds being kept in cold storage. FTX also does third party transaction audits via Chainalysis, giving them a slight edge over Binance.

    However, we must also consider the fact that Binance has been around longer and has a much larger trading volume than FTX, making them a more attractive target to hackers. But Binance has managed to hold their ground and plan for the worst, and is still one of the top performing exchanges despite the bear market.

    Conclusion

    Binance and FTX have quite a lot of similarities based on their general offering. But the major difference is that Binance is more focused on the spot market and has more cryptocurrencies to offer, whereas FTX is more focused on the derivative and prediction market and has more volatility products.

    Binance offers the most cryptocurrencies to trade including new projects such as DeFi, NFT or metaverse gaming. If you are a beginner or looking for new tokens to trade, or even an experienced investor who prefers passive earnings, Binance would be a better option for you.

    If you are an experienced trader who strictly does day trading or skilled at volatility products, FTX would be the go-to for you as it offers all the products traders need, with significantly low fees.

    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.

  • Binance vs Coinbase Exchange Comparison Review: Features, Fees, Services and More

    Binance vs Coinbase Exchange Comparison Review: Features, Fees, Services and More

    Which Cryptocurrency Exchange is the “Best?”

    Cryptocurrency exchanges have been the central trading platform in the crypto space. Traders worldwide have made substantial returns on their investment just from pressing a couple of buttons. This has attracted many others to join in hopes of profiting from trading crypto.

    However, one of the key factors in successful trading is finding the right crypto exchange. With hundreds of crypto exchanges available, everyone is constantly asking “which crypto exchange is the best?” Traders want to make the most of their investments, whether it be low trading fees or lucrative services. In this article, we will be comparing two of the top crypto exchanges in the world: Binance and Coinbase.

    See also: Top Best Cryptocurrency Exchanges of 2023

    What is Binance?

    Binance is the world’s most popular crypto exchange by a large margin. It is rank one in organic trading volume per day ($14 billion at the time of writing) and in website and app user session (87 million visits).

    Sign up and get 20% off Binance fees!

    Key Features of Binance

    This is because Binance is largely focused on the spot market, supporting a wide range of cryptocurrencies for users to trade. On top of that, users can earn passive income on their holdings via Binance Earn. There is also no shortage of trading features for experienced investors such as leveraged trading, options trading, and lending platform.

    Since Binance is not accessible in the U.S., Binance started Binance.US in compliance with U.S. regulations for citizens to trade freely.

    See also: Binance Exchange Review (2022) Best Crypto Exchange?

    Who Founded Binance?

    Binance was founded in 2017 by Chengpeng Zhao (CZ), former Chief Technology Officer of OKCoin who had years of experience developing high-frequency trading softwares.

    Binance’s Milestones

    For the longest time, the cryptocurrency industry is dominated by Binance. The exchange is held in high regard for being proactive and astute in their planning and actions, not only for themselves but also for advancing the crypto space as a whole.

    Binance has been very active in collaborating with global regulators such as the Financial Action Task Force to support the development of crypto regulatory framework and policies. In 2022, Binance has received regulatory approval to set up locations in Dubai and Bahrain, which is an important step as the granted license allows them to operate in compliance with global standards.

    What is Coinbase?

    Founded in 2012, Coinbase is one of the earliest crypto exchanges in the world. Unlike other exchanges, Coinbase is based in the U.S. and subject to its regulations. As such, it is the largest cryptocurrency exchange in the U.S. by trading volume.

    Key Features of Coinbase

    Coinbase is split into several categories catering for different types of users. Coinbase itself is for retail investors, and only offers spot trading, unlike other exchanges which offer other products such as derivatives or futures trading.

    Coinbase Pro is for individual professional traders, and Coinbase Prime is for larger institutional clients. Both platforms provide charting tools, real-time order books, among other tools to help advanced traders make the most of the exchange. Moreover, they also have cheaper transaction fees and more supported cryptocurrencies compared to Coinbase.

    Coinbase’s Milestone

    Moreover, Coinbase was the first crypto exchange to go public on the Nasdaq in 2021, establishing itself as one of the front-runners of the crypto industry. With its market value on the stock market worth $100 billion in 2021, this is an impressive achievement that would further advance the crypto industry as a whole.

    Coinbase Controversies

    However, Coinbase has also had its fair share of controversies, from experiencing outages in the 2020 bull run to insider trading and Securities and Exchange Commission (SEC) investigations this year.

    Nevertheless, Coinbase remains one of the top crypto exchanges in the world and will continue to be in the future. In fact, like Binance, Coinbase is also proactive, and has demonstrated time and time again the ability to turn unfavorable situations around.

    The exchange immediately discovered the root cause of the outage in 2020 and remediated traffic spikes through autoscaling procedures. Additionally, Coinbase has called on the SEC to develop a viable regulatory framework for digital asset securities following the insider-trading incident in July.

    Binance vs Coinbase Exchange Overview

    In this section, we will take a closer look at what Binance and Coinbase have to offer and compare them based on these features:

    Cryptocurrency and Products

    Binance is the winner in terms of the number of cryptocurrencies supported. It has more than 600 coins and tokens compared to Coinbase which has over 100. This is because Binance’s spot market includes many different crypto categories such as GameFi, DeFi protocols, and even meme coins. On the other hand, Coinbase largely focuses on low-risk cryptos with a high market cap such as Bitcoin and Ethereum.

    Both exchanges offer crypto earning products which allow investors to earn passive income on their investments. However, Binance offers more earning products such as liquidity farming, dual investment and DeFi staking, whereas Coinbase is only limited to savings and single token staking. Moreover, Binance also has the edge in maximizing return on investment (ROI). Though most of their products are estimated at APR, they outweigh Coinbase’s APY products.

    See also: APY vs APR in DeFi: What They Actually Mean for Your Rewards

    Moreover, Binance offers a wide array of trading tools such as leveraged trading, options trading and lending platform, whereas those features are only available on Coinbase Pro and Coinbase Prime.

    Fees

    The difference in fees between Binance and Coinbase is quite significant. Overall, Binance charges much less for trading crypto as well as funding your account. At the lowest-tiered account, Binance only charges 0.1% for their maker and taker fee. Its rate go as low as 0.02% at the highest-tiered account, which saves a lot of money for active traders.

    On the other hand, Coinbase charges users an average flat fee of 0.5% per transaction. Additionally, extra fees are also incurred based on the account used in the transaction, i.e. 1.49% for US Bank Account, 2.49% for Coinbase USD Wallet, and 2% for credit/debit card.

    Fortunately, we have a comprehensive guide that would allow you to avoid withdrawal fees. Click here to learn more.

    On another note, since Coinbase is subject to U.S. regulations, users in the U.S. have to pay capital gains tax on profits made and staking rewards. Users are responsible for reporting all profits made as income on tax forms, even if it is just $1. According to Coinbase, if users earn $600 or more through the exchange, Coinbase is required to report those payments to the Internal Revenue Service (IRS).

    Depending on the users’ location, Binance users do not have to pay taxes on their crypto gains. However, Binance.US also complies with U.S. tax laws, which means U.S. users also have to pay capital gains tax. Click here if you want to learn more about crypto tax-free countries.

    Security

    Both Binance and Coinbase have the highest cybersecurity score (AAA) audited by CER, the leading cybersecurity ranking and certification platform.

    Both exchanges require Know Your Customer checks (KYC) in order to open an account, and provide two-factor authentication via SMS or the Google Authenticator app. They also store account funds in cold storage and crypto vaults off the Internet so that they cannot be hacked.

    Though both have similar security protocols, Binance focuses more on access restriction, whereas Coinbase implements biometric access (i.e. fingerprints) for logins. Binance offers address whitelisting and device management to review and secure address books and devices, blocking other entries that users do not recognize. On the other hand, Coinbase has biometric fingerprint logins as well as AES-256 encryption and multi-signature security for digital wallets. This is because Coinbase has its own digital wallet, whereas Binance does not. But Binance partners with Trust Wallet, one of the most secure digital wallets with over 25 million users.

    The main difference between both exchanges is that Coinbase is one of the only exchanges that offers FDIC insurance on USD deposits, insuring up to $250,000 of deposited USD funds which is similar to traditional banks. This also applies to Binance.US but not Binance. User funds on Binance are protected by reserves they have in their treasuries.

    Conclusion

    Although Binance and Coinbase are two of the top crypto exchanges in the world, they offer very different user experiences. With new features being added on a regular basis, Binance offers more than almost any exchange on the market as well lower fees.

    On the other hand, Coinbase is a more reputable exchange on an institutional level. It was the first crypto exchange to be listed on the NASDAQ stock market with its market value reaching more than $100 million. This is an impressive milestone in propelling the crypto industry as whole as it signifies the recognition of cryptocurrency as tradeable securities in the global market.

    Although its fees are high and offer less products compared to Binance and other exchanges, Coinbase has a slight edge in security compared to other exchanges as it is subject to U.S. regulations. It is also one of the few crypto exchanges that has its own self-custody crypto wallet.

    But the bottom line is if you are looking for a wide variety of crypto products, Binance is the pick. Coinbase is better suited for beginners due to its spot market offering more secure long-term investments.

    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. (https://wbctx.com) 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.