One of the major strengths of cryptocurrencies is the security and immutability of transactions. This is made possible by blockchain technology. Most of the cryptocurrencies have blockchain as the back-end technology that is used to store all the transaction data. A blockchain is basically a digital ledger that stores a cumulative list of records of transactions that are linked using cryptography. In this post I am going to take you through how this technology is able to keep transactions secure in the presence of so many hackers on the internet

First all let’s look at how data added to the blockchain?

One block on the chain can contain thousands of transaction data depending on the size of block of that particular blockchain. For instance, a typical bitcoin transaction is 570 bytes in size. One block of the bitcoin blockchain is 2MB in size. This means each block will contain a minimum of about 3500 transactions.

The transaction starts right from when you send someone money from your available balance on any cryptocurrency wallet. After clicking the send button, this transaction is added into a block of unconfirmed transactions that are awaiting to be processed by miners. A miner is someone who offers their computer to be used in the processing of these transactions in a blockchain. These transactions are distributed among miners to start the verification process.

The role of a miner is to verify the authenticity of the transaction based on the data in the blockchain. This data incudes information like the balance one has on their wallet app and whether it’s enough to do the transaction they intend to do. Once all the requirements to process the transactions are met, the next step is adding the transaction to the blockchain so that it is registered on all nodes (computers on the blockchain network). Most cryptocurrencies give people the option of paying higher transaction fees in order to have their transactions processed faster. Transactions that have the higher fees are what miners normally give priority.

Verification and adding this transaction onto the blockchain will require adding a digital signature or hash output to prove that the transaction is valid. This is what is referred to as proof of work. Adding this signature requires solving complex mathematical equations that needs a lot of computing power. After generating this digital signature, the transaction block is now ready to be verified by other miners before it can be added to the blockchain.

After a hash output has been added, the block is shared with all other miners to also verify and reach at some form of consensus that the hash output is complex enough. When other miners verify that the transaction block is valid, the block is now added to the blockchain. This block is also shared with all other nodes (mining computers) so that they add it to their blockchain as well. This process of all miners verifying a block and reaching consensus is what makes it hard or almost impossible to compromise the block chain by adding a fake transaction.

Immutability of the blockchain

In a blockchain, every block has a digital signature and that of the previous block. This means that if data in any block is removed (e.g. deleting a transaction), there will be need to change all the hash values of the following blocks which requires you to convince all the miners on blockchain. It also requires a lot of computing power to regenerate all these hash values for the following blocks. So even if a hacker is able to access one of the computers used to mine, he’ll have to also get access on all other computers on the chain in order to remove or add data which is close to impossible. That is why it is extremely hard or almost impossible to delete any data within a blockchain.

Blockchain technology can be applicable in several other industries

The immutability of blockchain makes it the most secure system as far as data integrity is concerned. This makes this system ideal for several other applications and not just cryptocurrency transactions. Some of the industries that can take advantage of this technology include;

• Security organs for storing criminal data
• The medical industry for storing people’s medical data
• Academic institutions to store academic records
• The blockchain can also be used in voting systems to make sure every voter information added to the blockchain is not altered

Using blockchain technology in the institutions above will ensure there’s no alteration of the data that maybe essential for future reference. There are a couple of industries even some that I have mentioned above that are already using blockchain technology to store their data.

Conclusion

Blockchain is mainly secure because of two major reasons we have discussed above that is; the need for consensus from all miners in order to add a block to the chain and also the complexity involved in removing any data from the blockchain. So, the chain does not depend on anyone for security but miners who all have to reach consensus regarding adding and removing transactions data from the blockchain.

However, the only drawback of this process is it slows down transactions. This is why centralized payment methods like VISA and Mastercard have way faster transaction speeds than decentralized platforms like Bitcoin. Several Cryptocurrencies are on a race to finding a solution for this issue by making a couple of modifications in their blockchains to make them more efficient. And with computing power increasing, we expect this problem to be solved in a couple of years.

הפוסט HOW THE BLOCKCHAIN KEEPS TRANSACTIONS SECURE הופיע לראשונה ב-500 Markets Reiviews.

Cryptocurrency trading is like any other form of trading. You buy when prices are low and sell when they go high. In cryptocurrency, the buying and selling is done on a platform called an exchange where you can buy a cryptocurrency using dollars or sell it to get dollars. In theory, it sounds like it something that everyone can without any effort, but that’s not the case in real life. Unless you want to make money by luck (which is less likely to happen), earning as cryptocurrency trader will require you to do some homework. However, trading cryptocurrency is not rocket science or something that is only done by geniuses. It simply needs some amount of effort and the willingness to learn daily. If you are a trader or maybe you are someone who wants to start trading cryptocurrencies, this article is for you.

I am going to share with you everything you need to know to be successful as far as trading cryptocurrencies is concerned. I will try to explain with less technical language so that everyone can understand, including absolute beginners.

Tips #1: Only invest what you can afford to lose

Trading is some kind of calculated gambling, and losing is part of the game. If the amount of money you want to invest is an amount you can’t afford to lose, its better you don’t get into cryptocurrency trading. This is not meant to scare you but the reality that you have to live with. Cryptocurrency values are so volatile, and in a matter of minutes, the value of a coin can drop by a huge percentage. They are not like the usual currencies where the fluctuation can rarely reach 5% in a day.

Tip #2: Do your homework before you invest

To be successful with crypto trading, you need to be ready to read the news that is related to cryptocurrencies. It’s from this news and research that you will be able to judge whether a coin is going to increase in value or not. Doing research and analysis before investing is what they call taking calculated risks.

Tip #3: Learn to control your emotions

While doing crypto trading, you will, at some point, be clouded with emotions of greed and fear. For instance;  After doing your analysis and research and finding out that a particular coin’s value is most likely to increase, fear my cloud your mind, and you end up not investing. On the other hand, you may do an analysis that predicts a coin’s value is going to experience a drop in price, but the emotion of greed may make you feel like the value will increase hence to earn you more money and at the end of the day you end up not selling. In crypto trading, you only need to trust your research and analysis, not your emotions.

Tip #4: Don’t invest in only one coin

For the case of beginners, it is fine to start by investing in the cryptocurrency you understand the most. But as you get more experience in trading, you will realize that investing in one coin is not a good strategy. This is because if the coin you’ve invested in gets destabilized by uncertainties like a fork, your business will most likely be on a standstill. So, the only way out is choosing a couple of coins that have the potential of gaining value (after doing research and analysis) and invest in those. The most important thing here is to keep track of the factors that are likely to affect the value of the coins you will have chosen.

Tip #5: Invest with both the short term and long-term perspectives

While investing in cryptocurrency, you need to categorize coins that you can invest in the short term and those you will invest in the medium and long term. However, you need to base these decisions on researched data to avoid making the wrong choice. While researching, you need to identify coins that have the potential to rise in the future and categorize those as long-term investments. More established coins like Bitcoin and Ethereum would best suit to be in short term category since their rates are not likely to change by a significant percentage like those of newer coins.

Tip #6: Set a loss limit

A loss limit is a percentage of the original investment below which you decide to sell the coin no matter the loss. This will mainly apply for coins that you chose to invest in on a short-term basis. It will help also help you avoid getting into a situation where you lose almost everything. The hurdle here will be determining the loss limit. This will require you to do research and studying what has been happening in the past regarding the coins you have invested in. You can always change this value after some time especially when the dynamics in the market change

Tip #7: Be part of other traders’ forums

As a trader, it is crucial to always interact with like-minded people to share knowledge. Being in a crypto traders’ forum will allow you always to be informed about the happenings in the world of cryptocurrencies. This information can be of use as far as making your investment choices is concerned. However, I recommend that you should not take all the information on these platforms as the gospel truth since there are a lot of so-called gurus on these forums and the internet in general that, at times, give misleading information. But you can instead choose to use the information obtained from these platforms to guide your investment research.

CONCLUSION

Cryptocurrency trading is still a very fertile venture to earn you some money online. Many have gained millions of dollars trading, and likewise, many have lost. So, you need to enter the game knowing that if you don’t do your calculations right, you will most likely lose money. For those that are just starting, it is crucial that you start trading with amounts that you can afford to lose so that as you get more experience trading, you can then invest more. For more reliable information about crypto trading, you should always check out this blog.

הפוסט EVERYTHING YOU NEED TO KNOW TO BE SUCCESSFUL AS A CRYPTO TRADER הופיע לראשונה ב-500 Markets Reiviews.

As a cryptocurrency trader, any uncertainty in the cryptocurrencies can be an advantage if you make your calculations right.  A fork is one of those uncertainties that usually happens in the world of cryptocurrencies. A fork in cryptocurrency refers to an upgrade in software that brings about technical changes to the blockchain. A fork can either be a hard fork or a soft one. A hard fork is one that happens after a radical change in the network protocol of a blockchain that makes previously valid transactions invalid and vice versa. On the other hand, with a soft fork, the transactions that were valid in the previous blocks will remain valid even after the Fork. With a soft fork, there’s a consensus of making the software update that will require all those associated with the mining of the cryptocurrency to do. Whereas with a hard fork, there’s no consensus that leads to some of the key players to remain using the old software and features, which in the end leads to a new coin for those using the new suggested features. So, it’s the hard Fork that causes the most instability leading to the creation of another cryptocurrency

In this article, the Fork that we shall give our focus is the hard Fork because it’s the one that causes the most uncertainty about the coin. Whenever there’s a split of one coin into two coins, there will always be either a significant drop or an increase in the value of the primary coin. So as a cryptocurrency trader, you must understand these dynamics. Because you can only take advantage of a fork if you truly understand what caused it and which of the two coins between the old and the new will give you better returns at the end of the day. Let’s look at what you have to do as a trader to benefit from a fork in a cryptocurrency

Safety first! Make sure your coins are in a safe wallet like Nano S wallet or any other secure wallet

Whenever there are speculations of a fork, it is always necessary to make sure your current coins are safe. This will ensure that after the Fork is complete, you can claim your coins and use them to transact. I recommend never to leave your coins in an exchange during a fork. This is because, after the Fork, your coins will remain at the mercy of the exchange, and claiming them might be a bit hard. So, when you suspect any form of Fork in the cryptocurrency you are trading, it is essential you remove your coins from the exchange and put them into a secure wallet. After the Fork, you will be able to claim both coins. For instance, if Bitcoin got a fork today and you have 10 BTC in your wallet, after the Fork you’ll be having 10 BTC and 10 coins of the new cryptocurrency that is formed after the Fork.

Don’t rush to invest in the newly formed coin after the Fork

After a fork, the freshly created coin often comes with more risks on the side of the investors than the parent coin. But you shouldn’t entirely abandon the new coin. You may ideally start your investment with the coins you initially had in the first coin since they will exist both during the Fork and after. Then you start doing your homework about the benefits the new coin has over the parent coin plus what the current people using the current coin say about it. This is because the value of a coin also depends on the demand the coin has. So, a coin that has huge positive reviews will widely be demanded more hence increasing in value

Don’t rush into selling your coins immediately after the Fork

Most people will always rush into selling their coins after the Fork with a fear that the coin may drastically lose value of even cease to exists. But as a wise trader, this is the time you need to start buying (mainly the parent coin).

It should be noted that bitcoin reached its highest ever value in December 2017 just a few months after the Fork. Just before the bitcoin fork in August 2017, its value was around $3000. But during December 2017, the value of the coin was able to reach its maximum of over $19,000. The same kind of scenario happened with Ethereum after the Hard Fork in 2016. So as a trader these trends should guide you on what to do to benefit from the Fork at the end of the day

Don’t trade during the unstable days just before and after the Fork

Another thing you need to avoid is buying or selling coins a few days before or after the Fork. It is always recommended that you take at least three days before and after the Fork without trading. This is because many incomplete transactions happen during this unstable period. So be a little patient during these periods and trade like 3three days or even five safe to be safer.

CONCLUSION

Cryptocurrency trading, like any other trading decisions, are based on speculations. But analyzing the history of events in a particular cryptocurrency and other all other players is very crucial if you want to gain from instabilities like Forks. These are the periods that you have to be sober the most and take decisions after analyzing history and expectations of the future. In most scenarios, it is the old coin that will come out with a higher value after the Fork. So don’t be in a rush to invest in the new coin as most of them don’t reach the expectations of most people.

הפוסט TAKING ADVANTAGE OF A CRYPTOCURRENCY FORK AS A TRADER הופיע לראשונה ב-500 Markets Reiviews.