Cryptocurrency

• Cryptocurrency transactions are digital entries in a public ledger called the blockchain
• The blockchain acts as a public spreadsheet — which ensures that all transactions are transparent and permanent
• All transactions verified in a decentralized manner by cryptocurrency miners

Cryptocurrency transactions are digitally signed using cryptography and confirmed by the network. These transactions are added to the blockchain through consensus mechanisms like Proof of Work (PoW) and Proof and Stake (PoS), ensuring no one entity owns the blockchain. PoW and PoS have penalties to prevent malicious actors from adding false or spam transactions.

The blockchain acts as a public spreadsheet that records every transaction, broadcasting details like sender and recipient wallet addresses, amount of exchange, and timestamp. These transactions are grouped together and recorded as a ‘block’ on the blockchain. Once added and confirmed, a block is publicly visible and permanent.

How the Bitcoin Blockchain is Like a Spreadsheet

Imagine a blockchain as a spreadsheet. Everyone has access to the data within each individual cell and saves a copy to their personal computer. The data within the spreadsheet is shared between multiple people. However, nobody can alter an individual cell or change the existing information. In the blockchain world this is referred to as “immutable”—the inability to change or modify something over time. Now, imagine you wanted to add a new cell to the spreadsheet. This would require approval from members who have access to the spreadsheet data. Once a majority of the spreadsheet owners approve the new cell, the data would then be added to the main spreadsheet.

How the Bitcoin Blockchain Works

If Bitcoin trader A traded one bitcoin to person B, that transaction would be recorded in the Bitcoin blockchain ledger. Viewing the ledger would show how much bitcoin was exchanged when the transaction occurred, and the corresponding bitcoin addresses of each trader that sent and received the transactions.

Bitcoin Miners

Once a transaction has been made, it must be verified by people called miners. When a transaction occurs it is grouped together in a mathematically protected “block” with other transactions that have happened in the same time frame. Miners then use powerful computers to solve the block mathematically. The first miners to solve the block and validate the transactions are rewarded with bitcoin. This is the only way that bitcoin can be created. Then, each block is connected to the previously verified block, creating a chain of blocks, hence the name blockchain. These blocks are then immutable – once the data has been added into a block, it can never be changed for all eternity. Once a trade of bitcoin is made, and the transaction is verified, you cannot get it back or cancel the trade.

Bitcoin Mining

Bitcoin miners verify legitimate transactions and create new bitcoin as a reward for their work. A transaction is considered verified once the miner solves a cryptographic (mathematical) puzzle. Bitcoin uses a protocol called proof of work, which has a broad goal to prevent cyber attacks from any single entity or group. 

Proof Of Work

• Proof of work (PoW) is a decentralized consensus mechanism where network members solve an encryption puzzle.
• Proof of work is also called mining, in reference to receiving a reward for work done.
• Proof of work at scale requires vast amounts of energy.

Proof of Work (PoW) is a consensus mechanism that uses cryptographic verification through complex mathematical puzzles. Miners compete to solve these puzzles, and the first to solve one gets to add a new block of transactions to the blockchain. If other miners agree, the new block is confirmed by the network, and the miner who solved the puzzle earns cryptocurrency rewards.

Proof Of Stake

PoW is highly secure and has helped make Bitcoin the most valuable cryptocurrency in the world. Proof of Stake (PoS) offers an energy-efficient alternative to PoW, selecting validators based on their number of coins they hold and their willingness to “stake” as collateral. This reduces computational power and ensures the blockchain remains secure. However, PoS has been criticized for potentially allowing the network’s biggest holders to accumulate more cryptocurrency, potentially leading to increased centralization.

The verification process for cryptocurrencies is important because it solves the double-spend problem and the centralized entity problem. The blockchain’s public accounting system helps solve the double-spend problem, as all transactions are public, making it impossible for users to cheat. The centralized entity problem is solved by the blockchain’s verification process, which doesn’t require investors to trust a centralized entity but simply needs to trust the blockchain’s verification process.

Segments taken from: Coinledger.io

Bitcoin could eventually hit a price of $700,000, according to BlackRock CEO Larry Fink.

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Bitcoin fans are hoping that the world’s most valuable cryptocurrency will keep climbing. But even some crypto enthusiasts admit that Bitcoin continues to be incredibly volatile. It’s not digital gold just yet.

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Taken From Fool.com – Refreshed Review Updated Feb. 17, 2022

Bybit is a cryptocurrency derivatives exchange with a wide range of advanced trading tools. It has top-notch security and a no-down-time commitment, but it’s not available in the U.S. Read our full Bybit review to find out if it’s right for you.

Full Bybit review

This cryptocurrency derivatives exchange is a good fit for: Non-U.S. cryptocurrency traders who want to use margin and other derivatives.

Pros

• Up to 100x leverage on crypto
• Advanced tools supported by great technology
• Risk-free test environment to learn and experiment
• Educational resources

Cons

• Not available in the U.S.
• Crypto derivatives are extremely risky
• Not suited to spot trading
• May share your data with third parties for marketing

Top perks

Before we get into the perks, let’s take a quick look at what exactly derivatives are. Derivatives are financial instruments — also known as contracts — that base their value on an underlying asset. You don’t own the asset. Instead, you own a contract to buy or sell that asset at a specific price in the future. In this case, that asset is cryptocurrency. Bybit is a cryptocurrency derivatives exchange, which means it’s a place where those contracts are bought and sold.

Up to 100x leverage on crypto

You can trade cryptocurrencies on Bybit at up to 100x leverage. This means you could trade a position of $10,000 from a $100 investment. Experienced traders can make high profits from leveraged trading as it magnifies the potential trading rewards. But it also magnifies the risk.

Users can go long or short on the 15 available currencies (bet on the price rising or falling, respectively). Bybit offers a range of advanced trading options.

Technology and tools set it apart

Bybit says it can handle 100,000 transactions per second, which is significantly faster than its competitors. It does everything possible to avoid any server downtime, a problem a number of exchanges face whenever a change in the market pushes a lot of people to trade at once.

Its charting tools are popular with traders as they have a lot of functionality and extra features. You can also download data in various formats.

Risk-free testnet environment

Bybit has a testnet site where new traders can test strategies and learn how to use the site without using real money. If you’re new to derivatives, it’s a way to get used to these advanced — and sometimes complex — tools.

Since leveraged trading can be extremely risky, it makes sense to gain confidence in the test environment before risking your hard-earned cash. If you decide to trade for real, start small and make sure you understand how to minimize risk.

Educational resources

Bybit has an impressive selection of resources, news, and insights for traders of all levels. For example, “Bybit Learn” explains how to use technical tools and understand chart patterns. It teaches users about decentralized finance and has detailed analysis of individual coins. Plus, Bybit hosts classes on social media twice a week.

That’s a good thing, since futures and margins are advanced financial tools and you’ll need to have a sound understanding before you use them.

What could be improved

Not available in the U.S.

The United States has strict regulations in place to control both derivatives trading and cryptocurrency exchanges. Bybit is not available to customers in the U.S. and some other countries, such as the U.K. To use its site, you have to actively confirm you are not from the U.S.

How Bybit works

Bybit does not have any KYC requirements, so you only need a phone number or email address to open an account. You can deposit cryptocurrencies or use a third party app to buy Bitcoin with fiat (traditional) money.

It offers margin and futures trading at up to 100x leverage. Bybit users can get 100x leverage on Bitcoin and 50x leverage on other currencies. Customers can also take out short-term insurance against losses. For advanced traders, both the website and mobile cryptocurrency app are packed with useful features.

Is your cryptocurrency safe with Bybit?

Bybit has a number of security measures in place to protect your assets. It stores 100% of client funds offline in cold storage. It also individually reviews each withdrawal request manually to avoid unauthorized withdrawals.

Bybit participates in a bug bounty program that encourages ethical hackers to report any loopholes in its system. It also carries out background checks on all its employees.

At a user level, Bybit has enabled two-factor authentication for withdrawals and changes to account security settings.

Bybit is right for you if:

• You’re a non-U.S. resident who wants to trade with margin.
• You are confident using advanced trading instruments.
• You want to learn to use cryptocurrency derivatives and are comfortable with the risk.

BY THE DAILY CALLER NEWS FOUNDATION – SEPTEMBER 8, 2022

Jack McEvoy on September 8, 2022

The White House believes that the federal government should reduce cryptocurrency mining as it is threatening the Biden administration’s climate agenda, according to a report released Thursday.

The White House claims that mining cryptocurrencies are endangering the Biden administration’s climate goals as they generate substantial amounts of carbon emissions and consume large amounts of electricity, according to a report produced by the White House Office of Science and Technology Policy. The report, which was commissioned by the Biden administration as part of a March executive order on digital asset regulation, recommended that the federal government impose crypto mining regulations to curb the power usage that mining requires.

“Depending on the energy intensity of the technology used, crypto assets could hinder broader efforts to achieve net-zero carbon pollution in line with US climate commitments and goals,” the report said. “Global electricity generation for the crypto-assets with the largest market capitalizations resulted in a combined 140 ± 30 million metric tons of carbon dioxide per year, or about 0.3% of global annual greenhouse gas emissions.”

The White House instructed the Environmental Protection Agency and the Department of Energy as well as other agencies to create environmental regulations that would reduce crypto mining’s energy consumption. However, the report stated that the White House and Congress should pursue legislation to restrict or eliminate crypto-asset mining if the agencies failed to regulate the industry effectively.

“Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining,” the report states.

Crypto mining operations to acquire new tokens as well as validating transactions on the cryptocurrency blockchain require a substantial amount of power as multiple computers must be used to solve complex math problems, according to Business Insider.

Crypto mining operations in the United States account for between 0.9% and 1.7% of the nation’s total energy consumption; moreover, the U.S. mines about 38% of the world’s bitcoins in 2022, compared to 3.5% in 2020, according to the report.

The White House did not immediately respond to the Daily Caller News Foundation’s request for comment.

“Should these measures prove ineffective at reducing impacts, the [Biden] administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining”

BitcoinBTC +0.1%, using the energy-intensive proof-of-work consensus mechanism, could be banned in the U.S. under a proposal made by the White House Office of Science and Technology.

Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and successfully navigate the volatile bitcoin and crypto market

Following an executive order made by U.S. president Joe Biden in March in the aftermath of an extraordinary 2021 bitcoin price surge, the Office of Science and Technology said the government “has a responsibility” to “protect” people from pollution caused by cryptocurrencies.

The proposal comes amid a crypto market shake-up caused by ethereum, the second-largest cryptocurrency after bitcoin, beginning its long-await transition from proof-of-work to the far more energy-efficient proof-of-stake—something some think could trigger a massive bitcoin price crash.

“Electricity usage from digital assets is contributing to [greenhouse gas emissions], additional pollution, noise, and other local impacts, depending on markets, policies, and local electricity sources,” the report reads, adding: “The U.S. government has a responsibility to ensure electric grid stability, enable a clean energy future, and protect communities from pollution and climate change impacts.”

The climate impact of bitcoin mining has become a hot topic in recent months as the soaring bitcoin price pushed up bitcoin’s energy demands and fears over climate change reached fever pitch.

The bitcoin price rocketed higher at the end of 2020 and into 2021 only to crash back this year—though it remains around twice its mid-2020 level.

The bitcoin network is thought to use roughly as much energy each year as some smaller countries, with the Cambridge Center for Alternative Finance recently calculating it consumes around 110 terawatt hours per year, or 0.55% of global electricity production, equivalent to the annual energy demands of the likes of Malaysia and Sweden.

The Office of Science and Technology recommends creating so-called clean energy “performance standards” for bitcoin and cryptocurrency mining—which involves using powerful computers to both secure the blockchain network and create new coins—including encouraging the “use of environmentally responsible crypto-asset technologies.”

“Should these measures prove ineffective at reducing impacts, the [Biden] administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining”—referring to bitcoin’s proof-of-work.

Earlier this year, internal European Union documents revealed Swedish financial regulators and the EU’s European Commission discussed the possibility of banning bitcoin’s proof-of-work mining mechanism due to its environmental impact.

Meanwhile, ethereum, which still currently uses the proof-of-work system pioneered by bitcoin, has begun a long-awaited switch to proof-of-stake, removing its reliance on miners while reducing the ethereum network’s carbon footprint by 99%.

Ethereum is expected to complete its transition to proof-of-work around mid-September.

Billy Bambrough – Senior Contributor to Forbes.com
September 8, 2022

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Bitcoin has not only been a trendsetter, ushering in a wave of cryptocurrencies built on a decentralized peer-to-peer network, but has also become the de facto standard for cryptocurrencies, inspiring an ever-growing legion of followers and spinoffs. Let’s review the top altcoins out there.

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Investing in Bitcoin is hot but how exactly does a beginner get started? If you want to buy or sell cryptocurrencies, opening an account with a cryptocurrency exchange is a great way to start. 

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A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.

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