Bitcoin

Companies Are Backing Out Of The Facebook Libra – Here’s Why

October 14, 2019 By Amanda Blankenship Leave a Comment

Facebook has been talking about launching its very own cryptocurrency for a few months now. Mark Zuckerberg has been able to find some pretty big companies and names to back the social media crypto idea, including Mastercard, PayPal, eBay, and Visa. However, this week, many companies and investors have decided to back out of the Facebook Libra.

About the Facebook Libra

If you’re interested in cryptocurrencies, chances are you’ve already heard about the Facebook Libra, also known as GlobalCoin. The social media giant proposed the idea of its own cryptocurrency to combat unbanked individuals around the world. Believe it or not, there are billions of people without bank accounts worldwide.

In Southeast Asia alone, 438 million people (73 percent of the population) are without bank accounts. India’s population has the second largest unbanked population at 190 million. Women make up a majority of the unbanked individuals around the world (55 percent).

The Facebook Libra would help allow people to pay and be paid virtually without a bank account. As smartphones and technology have become more affordable and available around the world, it is making lower cost services available. Just about everyone has a Facebook account, making a Facebook-based cryptocurrency a viable solution.

Why Key Investors Are Backing Out

At first, the Facebook Libra was backed by 28 large companies, including Mastercard, Visa, PayPal, Stripe, eBay, and Mercado Pago. This week, those six “founding” members decided to take a step back from the project. Why?

Well, the Libra has failed to prepare to meet any regulatory standards as far as currency goes. The G7 task force produced a report that helps outline rules for G20 economies. It notes that currency like the Libra that have the potential to scale at a rapid pace could pose potential problems.

Any supporters of global stablecoins, such as the Libra, will need to be legally sound. Additionally, the companies must be able to ensure consumers are protected and any currency is not being used to launder money or fund terrorist organizations.

The report stated, “The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed.” Facebook has already warned investors that regulatory scrutiny may delay or completely stop the launch of the Libra.

On top of that, any loss in confidence where the cryptocurrency is concerned could threaten global economic instability. Because of this, many of the key players have stepped out of supporting the Facebook Libra, along with any other stablecoins.

Now, the Libra has lost approximately $60 million of its initial funding after six key players backed out, leaving the future of the currency uncertain. The social media giant may find comfort in the fact that it hasn’t lost all of its supporters. It has also gained the support of tech leader IBM. But will that be enough to save it?

Readers, what do you think about the Facebook Libra and other stablecoins?

What The Facebook Libra Means For Bitcoin Trading

June 28, 2019 By Amanda Blankenship Leave a Comment

Many people were wondering whether or not bitcoin was on its way out as fast as it had made its appearance. The cryptocurrency fell below $4,000 for much of 2018. However, earlier this week, bitcoin rose over $14,000. All of this stemmed from Mark Zuckerberg’s announcement that his social media website would soon introduce its own cryptocurrency: the Facebook Libra.

About The Facebook Libra

That’s right – Facebook announced it would be dipping its toes in cryptocurrency. The Facebook Libra, as the currency will be called, will be used to send payment via Messenger, WhatsApp, and several other third-party apps.

This isn’t the first time Facebook has dabbled in digital payment. Folks in the United States have been able to send money through the Messenger app since 2015. Facebook in France and the United Kingdom began a similar service in 2017. So, why develop Facebook Libra?

Facebook founder and CEO Mark Zuckerberg wants Facebook to expand this option on an international basis. With the Libra, you’ll be able to send money to anyone anywhere, even if they don’t have a bank account. Additionally, those advertising on the site will be able to sell items and collect payments directly through their ads.

Before you start converting to the Libra, you should know a few things.

Facebook Libra is fairly stable. While bitcoin has been unstable, the Libra will be tied to bank accounts and government securities. As long as international currency remains stable, so will the Libra.
The currency will not be controlled by Facebook. The social media site isn’t known for its security, and it knows that. So, the company has partnered with larger names in finance, like Visa, to make the Libra a success.
It could be an easy way to pay (if it works). There is no telling if the Libra will actually work or take off. However, if it does, it could be one of the easiest, fastest ways to pay online.

Facebook Libra vs. Bitcoin

The Facebook Libra has not yet been released, but there are some pieces of information that allow us to compare it to other forms of digital currency. When it comes to the Libra vs. Bitcoin, these are the main differences…

Facebook, WhatsApp, and other Facebook properties will be where you can use the digital currency at first. With bitcoin, you can pay for just about anything (just about anywhere). Libra payments may also be accepted at websites within the Libra Association (a group of companies working with Facebook on the Libra). That has not been confirmed yet though.
Where the Libra is used is completely under the control of Facebook. On the other hand, bitcoin is deregulated. In some cases, it has been used to purchase black market items.
Libra is also much more centralized, meaning more people have a say in what happens with it than bitcoin. The Libra Association is projected to grow to 100 members by the end of 2020 and each member will have a say in the currency’s evolution. In bitcoin blockchain, if you own 51% or more, you have the final say.

The Rise and Fall of Bitcoin

As mentioned above, bitcoin skyrocketed this week when the mention of the Facebook Libra was made. Many people were surprised by this because bitcoin has been called a “bubble” in the past, meaning eventually it would burst and longer carry any value.

Even though it did drop in value last year (hovering around $4,000), interest in digital currency seems to continue to drive bitcoin up. Not to mention, any time there is any mention of a trade war or other political issues that may cause a decline in value of a currency, people tend to look to bitcoin as a safety net.

The rise this week can be partially attributed to the announcement of the Libra but can be tied to other occurrences as well. China and the U.S. are also in the middle of a trade war. Bitcoin is an easy way to get money in and out of China during this time.

On top of that, the Democratic Party continues to suggest a wealth tax. Presidential candidate Elizabeth Warren has proposed a 2 percent wealth tax. This may increase the desire for having bitcoin in your wallet because cryptocurrency is able to be held outside the reach of tax authorities.

Consider Currency Risk Before Investing

Before you go converting your money to the Facebook Libra, bitcoin, or any other form of digital currency, be sure to do your research. There are a number of reasons to be skeptical about investing in bitcoin.

The most important of these reasons seems to be that none of the cryptocurrencies on the market are safe. Each of them carries some type of risk. As we’ve seen with Bitcoin, the value of the currency can swing drastically in one way or the other, losing you thousands of dollars. This is possible with Facebook Libra as well. If international currency rates drop, Libra owners could lose up to 10 percent.

The risk would only cease to be a factor if you did all of your transactions in Facebook Libra, bitcoin, or other cryptocurrencies. But to eliminate that risk, you’d have to get rid of every other type of currency, which just isn’t likely to happen.

Readers, what do you think about the Facebook Libra? Would you use it?

When Do You Pay Taxes on Bitcoin and Other Cryptocurrency?

April 8, 2019 By Jackie Cohen 8 Comments

Taxation of bitcoin and other cryptocurrencies is pretty similar to the way you pay taxes on any other type of investment. And regulators are slowly but surely making it harder and harder to evade this type of tax.

You pay capital gains taxes when you sell a cryptocurrency like Bitcoin, whether you harvest into dollars or any other currency.

If you had held the cryptocurrency for less than a year, the sale is taxable as income tax; hold it for more than a year before selling it, and you pay the capital gains tax rate, which is lower.

How to Pay Taxes on Bitcoin

The only thing related to cryptocurrency that you need to report to the Internal Revenue Service concerns sales of cryptocurrency into any other currency you get to declare a loss or gain.

(If you own any cryptocurrency funds and they paid dividends, you’d have to pay taxes on those dividends but it’s highly unlikely that a crypto fund would be paying dividends anytime soon.)

You report this activity in Schedule D of your tax return. Input the difference between what you paid for the currency and what you sold it for. If you made money, it’s a capital gain. If you lost money, it’s a capital loss.

The IRS Always Knows

Like it or not, the IRS will eventually get wind of your crypto trading profits, as it is now privy to information from any U.S. exchange you might have transacted on; the agency essentially won the right to this data in court in November.

Spare yourself the interest and penalties you might end up owing from attempting to not report capital gains on cryptocurrencies. The IRS typically takes at least six months to catch up on nonpayments, so you’ll end up owing extra money as interest or penalties.

And even if you did a cryptocurrency transaction on a site that is not based in the U.S., and move the funds into a currency other than the dollar, these sites aren’t immune to the tax treaties that the IRS has already been brokering with foreign countries.

It might take longer for the IRS to obtain information on activities on foreign sites, but eventually, the prevailing trend in the IRS’ fact-finding will play out here as well.

Although cryptocurrencies’ origins included a lack of real taxation on them — and policies to support that — slowly but surely regulators around the world are making it harder for people to dodge this type of tax.

For more information on how the IRS handles cryptocurrencies, click here.

Readers, are you still confused about whether there are taxes on bitcoin or other cryptocurrencies?

Will Bitcoin’s Rebound Return to Previous Heights?

May 14, 2018 By Tamila McDonald Leave a Comment

Bitcoin is rallying again: Over the past few weeks, the value has risen from below $6,700 in April to just shy of the $10,000 mark. However, it still has a long way to go to reach the high of more than $19,000 reached in December. The question now is: Will Bitcoin continue to rise?

Will Bitcoin Continue to Rise?

To understand whether Bitcoin will continue to rise, you first need to know why it fell so dramatically in the first place.

Over the past year or so, the cryptocurrency landscape changed. Countries began exploring regulations, and banks began restricting the use of credit cards to purchase cryptocurrencies.

Overall, these developments harmed Bitcoin and other cryptocurrencies that are available today. But then things turned around more recently with some positive events that sent the value back up again.

Positive Developments

Among the more significant of them, Goldman Sachs stated it was working on setting up a desk for cryptocurrency trading.

Regulators have also required cryptocurrency exchanges to register with entities like the Securities Exchange Commission, which provides stability and increases confidence among investors.

Intercontinental Exchange, which owns the New York Stock Exchange, is also working on a trading platform for cryptocurrencies, representing a significant step forward for the industry.

Ultimately, Bitcoin’s value is a reflection of supply and demand. And when investors’ confidence in the currency goes up, that usually brings up demand too. If all of these trends continue, Bitcoin just return to its previous highs.

But Are Bitcoin Investments Safe?

Even though Bitcoin is recovering, that doesn’t take away any of the risks. Cryptocurrencies are still relatively new, and there’s a lot yet to be worked out. For example, further regulation changes could hurt the market.

Similarly, some other types of cryptocurrencies have turned out to be scams, and this hurts the overall perception of them, impacting demand for Bitcoin.

Additionally, it’s important to remember that Bitcoin and other cryptocurrencies still aren’t backed by a government or a physical commodity. Without that backing, if prices tumble and the cryptocurrency fails, you lose your money, and there’s no way to recover it.

In the end, Bitcoin is still a very high-risk investment.

So Is Now the Time to Invest in Bitcoin?

If you’re comfortable with the risk, then now may be a good time to invest in Bitcoin. However, it shouldn’t be the only thing you invest in.

Committing your entire retirement savings to cryptocurrencies would be incredibly dangerous. It wouldn’t be unlike taking all of that money and heading to a casino.

But, there is some potential. If you have a bit money to spare and aren’t afraid to lose it all, then you could have a lot to gain if Bitcoin keeps going up.

Just make sure to be smart about how much you invest, because it could all be gone in an instant.

Readers, have you been curious about investing in cryptocurrencies? Tell us about it in the comments section beneath this post.

Looking for more articles about Bitcoin? Give these a try:

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Anonymous Crypto Exchanges

April 23, 2018 By Susan Paige Leave a Comment

anonymous cryptocurrency exchanges

Demand for decentralized crypto exchanges seems to be on the rise. Governments around the world are cracking down on centralized exchanges and demanding that they enforce anti-money laundering rules. Most exchanges feel threatened and some have already started closing down.

A lot of crypto traders are also against the idea of governments regulating exchanges, and they are looking for alternatives. Decentralized exchanges seem to be an ideal option for many traders who want to trade anonymously. However, there are also several centralized exchanges that require no registration or verification of any kind. Here is an overview of the most private crypto exchanges and how they operate.

Peer to Peer Exchanges- Buy in Cash

The easiest way to buy bitcoins anonymously is to use cash. Access a website like Localbitcoins.com and look for a customer willing to buy bitcoins in cash within your locality. Local Bitcoins holds the coins in an escrow account until the seller confirms they have received the payment. Since you will be using cash and trading with a stranger, none of your personal details will be used anywhere. However, keep in mind that buying or selling Bitcoins with cash has several limitations:

Safety- how much cash can you carry when meeting a stranger? Buying bitcoins is not safe, especially where large sums of money is involved
Liquidity- in most P2P exchanges, traders sell low amounts of coins. On Localbitcoins, for example, it’s hard to find someone willing to buy more than 50 Bitcoins
Trust-buying cryptos on P2P exchanges means you have to trust other traders to honor their side of the deal, and this doesn’t always happen

Centralized Anonymous Exchanges

Some cryptocurrency exchanges offer a great deal of anonymity when trading on them. Take ShapeShift, for example. The exchange is owned by Erik Voorhess, an American. ShapeShift works as an altcoin exchange that can be used as an API on a wallet, as an app or as a web-based exchange. ShapeShift offers one of the easiest ways to trade coins while keeping you anonymous.

To use the exchange:

Visit ShapeShift
Select the cryptocurrency in your wallet
Select the altcoin you want your cryptos exchanged to
Enter the amount of cryptos you need exchanges and appropriate wallet addresses
Visit your personal wallet and initiate the payment to an address provided by ShapeShift
Expect to receive your converted coins within hours

Flyp.me

Flyp.me is one of the most private exchanges. Like ShapeShift, this exchange is owned by someone. However, it’s designed in such a way that you control your trading activities. You hold your cryptos in a personal wallet and only use the exchange to buy and sell altcoins. You don’t need an account or verification of any kind.

Thanks to its focus on giving your privacy when trading, there is little chance of you losing cryptos to the exchange. Flpy.me can’t suspend your account because you don’t need one. In the unlikely case, the exchange gets hacked, you still wouldn’t lose your cryptos because they don’t store cryptos for you. The only issue you would have trading on the exchange is delayed payments, like when the Bitcoin blockchain is overloaded.

Changelly

Changelly and ShapeShift go hand in hand. They work in the same way, allowing you to exchange altcoins instantly with no verification needed. Like ShapeShift, Changelly can be accessed online, on apps or on their partnering crypto wallets and sites. The only difference between Changelly and ShapeShift is their owners. While Erik Voorhees own ShapeShift, Changelly is owned by MinerGate, a mining pool for Bitcoins.

Changelly also asks for registration; an email address where a password is sent to help you secure your account. Other than that, there is no verification required even when buying cryptos using fiat on the exchange. Using Changelly works in more or less the same way as on ShapeShift.

Decentralized Exchanges

In the spirit of decentralization, some exchanges allow traders to participate in managing the exchange through computer nodes installed in different parts of the world. This way, decentralized exchanges cannot be regulated or be required to enforce anti-money laundering rules. They don’t require users to create accounts or give in any form of personal information.

Traders on decentralized exchange trade with utmost anonymity. Despite this, however, decentralized exchanges have issues as well. Some exchanges are often criticized for poor management. Because the exchanges are still involved in the trading process, poor management of poorly programmed codes can affect efficient trading on the exchange.

BitShares

BitShares is a popular decentralized exchange built on a blockchain-graphene. The exchange requires users to create a simple account but no further verification is required. The exchange ranks 83rd on Coinmarketcap.com and has a daily trading volume of $7.7 million. BitShares lists a wide range of cryptos as well and allows trading with fiat currency. Keep in mind, however, that verification may be required when buying large amounts of Bitcoins using fiat.

Etherdelta

Etherdelta was among the most popular decentralized crypto exchanges in 2016 and 2017. The exchange was designed to cater for Ethereum and ERC-20 token traders. It’s built with smart contracts and the ethereum blockchain in mind. While Etherdelta allows you to make trades while remaining anonymous, it’s affected by all issues currently facing decentralized exchange.

Slow trades- Trades on decentralized exchanges have to go through blockchains, and this can take hours for a trade to be completed
Not user-friendly- many decentralized exchanges are not easy to use, at least not to beginners
Possibility to make mistakes- due to lack of ease of use to beginners, a lot of traders make mistakes when trading, often losing their funds
High Fees- most decentralized exchanges offer higher than average fees, which can be inconvenient to low-volume traders
Most decentralized exchanges are dependent on the Ethereum blockchain. If anything happens to Ethereum, it may affect a lot of trading on decentralized exchanges.
Low Liquidity- since decentralized exchanges are still a new thing, they have low liquidity compared to other types of trading platforms

What’s the Best Exchange with great anonymity? It’s difficult to decide the best exchange. If you want to trade cryptos anonymously, you have to research more and make the choice on your own. However, keep in mind that a centralized anonymous exchange like Binance or Flyp.me will be easier to use than a decentralized exchange.

How Do I Earn Money Fast and Securely Online?

March 21, 2018 By Susan Paige Leave a Comment

Making money has always been the driving force for most of us. We are driven to always look for new and innovative ways to earn that extra penny. Therefore in the search for more money, more and more people have come up with more and more ways to earn money. Thus the conception of the idea of making money online.

There are various forms of online businesses that one can rely on to earn a living or merely make more money on the side. A perfect example of an innovative online company would be a custom term paper writing online service. Online writing has become an alternative or supplementary source of income for most industry professionals.

However earning money is only half the battle, getting paid on the other hand is a challenge for some. For one to get paid online, you have to have any one of the conventional payment systems available and acceptable by online writing companies.

Most, if not all, of the time these conventional payment systems such as banks often charge large levies on your hard earned money just to allow you to transact with them. As such you only get a fraction of what you have worked for. What if I could tell you, with Bitcoin you can overcome all the challenges you experience while transacting online.

Bitcoin is an ideal and relatively new technology that can be used by an individual as a simple way to transact online at minuscule costs. Also, businesses prefer to use Bitcoin as a mode of payment because it is an economical option of handling payments online. Bitcoin has also been integrated into various organizational structures to facilitate day to day activities. Bitcoin is a new kind of currency created in 2009 by an unknown developer and released to the public, for free, by an individual using the code-name “Satoshi Nakamoto.”

What Is Bitcoin Why Is It A Big Deal

Bitcoin was conceptualized during the collapse of the US financial and economic markets, when an inventor and software developer released a paper on Bitcoin, terming it as a viable P2P payment system. For now, Bitcoin can only do so much in the current markets and is still a long way from competing with world currencies such as the US dollar ($) and euros (£).

However, Bitcoin is on the right track, and that is why it has caught the attention of so many people who have considered it a world-changing technological breakthrough. Therefore this is why Bitcoin as a crypto-currency, matters and what needs to happen for it to succeed. Bitcoin offers users a new and innovative payment system.

The system operates without any centralized authority; that means no middlemen such as banks or any other financial institutions. Bitcoin is so popular due to it lacking a centralized authority, which ultimately means that you do not have to pay intermediaries to get your earnings. The network collectively manages the managing, transaction and the issuance of bitcoins. Nobody controls own or can lay claim to the design of bitcoin.

Another contributing factor that could explain why Bitcoin is so popular is because of its use as a universally accepted mode of payment for both products and services rendered and received. Bitcoin has surpassed most previous payment systems through its many exceptional properties not limited to anonymity and global acceptance as the leading factors. With bitcoin, you can pay for your hotel room, buy Xbox games, and shop for furniture… you catch my drift.

But there is a catch, the service provider or employee must be willing to accept it as a mode of payment. You can pretty much do anything with bitcoin, and best of all no hefty conversion fee that is usually charged by financial institutions who are in it to make a profit from the transactions you make.

As a way of introducing the currency to the people, mining the crypto-currency has been made easier. One is required to set your clients to a specific node and decipher a puzzle. Successfully deciphering the puzzle earns you 50 Bitcoins. The Bitcoins awarded are sourced from the small fees charged on verified transactions on the network.

Is Bitcoin Legal Currency Worldwide?

By definition cryptocurrency, such as Bitcoin, is a digital currency that employs various encryption methods to regulate its generation and also verify transactions. All these operations are independent of a centralized banking system and not monitored by any financial bodies. Bitcoin provides an outlet for decentralizing personal wealth that is beyond scrutiny, constraint, and confiscation by any government or security agents.

The legality or illegality of Bitcoin varies from one country to the next as either undefined or changing. A majority of the global economy does not make the use of Bitcoin illegal. However, its status as money is faced with regulatory implications while in others it’s openly accepted. You are permitted to use Bitcoins in the US, provided the transactions are taxed, and reporting is done; as is the case with any other financial institution in the US.

Perhaps the most notable of all of Bitcoin’s features is that the economics of the currency is not controlled by any one individual, institution, organization or even government. The economic functions are embedded into Bitcoin protocols developed by S. Nakamoto. Nonetheless, it is due to the uncertainty of the supply and lack of government control in the use of Bitcoin, that it is not considered a legal currency. Some authorities, such as the government of Ecuador, have gone as far as banning the cryptocurrency and others like it.

Why Is Bitcoin Prevalent As A Preferred Online Payment Method?

Bitcoin has taken the world by storm as being the simplest way to transact and interchange money with the added benefit of having most of the overhead costs slashed. The most crucial aspect that Bitcoin is its decentralized nature, though this has been the reason for it being banned in several countries worldwide. The reasons why Bitcoin became popular is mostly as a result of its characteristics. They include;

Availability at any time and any place
Easy setup as a mobile payment system
Anonymity, transparency, and security
Fast and reliable international payments
Miniscule and manageable fees
Has a wide range of applications

How Do I Earn Bitcoins As A Writer?

While working as a writer, there are various ways in which you can get your hands on some bitcoins; the first and obvious method is to mine them yourself by completing complex mathematical puzzles. This task is tedious and not preferred by most. On the other hand, you can visit online marketplaces known as “Bitcoin Exchanges.”

On these marketplaces, writers can buy any amount of bitcoins online using different currencies, probably earned from your work as a writer. Online writing companies have come to embrace the use of cryptocurrency and offer their writers the option to get paid with Bitcoin. The recipient need only have a digital wallet, stored in the cloud or on their computer as a kind of virtual banking system, to help him or she receives payments in the form of Bitcoins.