CryptoURANUS Economics: 08/02/18


Thursday, August 2, 2018

Bag Holder: Defined in CryptoCurrency

Bag Holder

What Is a Bag Holder?
A bag holder is an informal term used to describe an investor who holds a position in a security that decreases in value until it descends into worthlessness. In most cases, the bag holder stubbornly retains their holdings for an extended period, during which time, the value of the investment goes to zero.

Bag Holder Example(s):
A bag holder refers to an investor who symbolically holds a “bag of stock” that has become worthless over time. Suppose an investor purchases 100 shares of a newly public technology start-up. Although the share price preliminarily rises during the initial public offering (IPO), it quickly starts dropping, after analysts begin questioning the veracity of the business model. Subsequent poor earnings reports signal that the company is struggling, and the stock price consequently plummets further. An investor who holds onto the stock, despite this ominous sequence of events, is a bag holder.

Suppose an investor purchases 100 shares of a newly public technology start-up. Although the share price preliminarily rises during the initial public offering, it quickly starts dropping, after analysts begin questioning the veracity of the business model. Subsequent poor earnings reports signal that the company is struggling, and the stock price consequently plummets further. An investor who is determined to hang onto the stock, despite this tumultuous sequence of events, is a bag holder.

The History of Bag Holders:
According to the website Urban Dictionary, the term “bag holder” hails from the Great Depression, where people on soup lines held potato bags filled with their only possessions. But the term has since emerged as part of modern-day investment lexicon. A blogger who writes on the subject of penny stock investing once quipped about starting a support group called “Bag Holders Anonymous.”

Disposition Effect:
There are several reasons an investor might hold on to under-performing securities.

1.) neglecting one's portfolio, and only be unaware of a stock’s declining value, and an investor will hold onto his position, because selling it means acknowledging a poor investment decision in the first place.

2.) There is a phenomenon known as "the disposition effect", where investors tend to prematurely sell shares of a security whose price increases, while stubbornly retaining investments that drop in value.

This translates into an investors psychologically hate losing more than they enjoy winning, so they consequently cling to the hope that their losing positions will bounce back.

A phenomenon known as "the prospect theory", where individuals make decisions based on perceived gains, rather than perceived losses. This theory is by the example where investor receives $50, rather expected $100 and lost half the amount in negative returns.

Sunk Cost Fallacy:
The sunk cost fallacy is an where investor may become a bag holder.

Sunk costs are unrecoverable expenses that have already occurred.

Suppose an investor purchased 100 shares of stock at $10 per share, in a transaction valued at $1,000.

Now, If the stock falls to $3 per share, the market value of the holding is now just $300. Therefore the $700 loss is considered a sunk cost.

Investors may wait until the stock slingshots back up to $1,000, to recoup their investment, but the losses have already become a sunk cost and should be considered permanent.

In this think-tank perspective, any investors holding onto a stock long enough to drop in value is known-as an unrealized loss, which is not reflected in their actual accounting until the sale is complete; [the begining].

Atomic Swap: Defined in Cryptocurrency

DEFINITION of Atomic Swaps:

Atomic swap is a smart contract technology that enables exchange of one cryptocurrency for another without using centralized intermediaries, such as exchanges.

Atomic swaps can take place directly between blockchains of different cryptocurrencies or they can be conducted off-chain, away from the main blockchain. They first came into prominence in September 2017, when an atomic swap between Decred and Litecoin was conducted.

Since then, other startups and decentralized exchanges have allowed users the same facility. For example, Lightning Labs, a startup that uses bitcoin’s lightning network for transactions, has conducted off-chain swaps using the technology.

Cryptocurrencies and decentralized exchanges, such as 0x and, have also incorporated the technology.


As it occurs today, the process for exchanging cryptocurrencies is time-consuming and complex. This is due to several reasons. For example, the fragmented nature of today’s cryptocurrency ecosystem presents several challenges to average traders.

Not all cryptocurrency exchanges support all coins. As such, a trader wishing to exchange her coin for another one that is not supported on the current exchange may need to migrate accounts or make several conversions between intermediate coins to accomplish her goal. There is also an associated counterparty risk, if the trader wishes to exchange her coins with another trader. 

Atomic swaps solve this problem through the use of Hash Time-lock Contracts (HTLC). As its name denotes, HTLC is a time-bound smart contract between parties that involves the generation of a cryptographic hash function, which can be verified between them. (See also: Understanding Smart Contracts.)

Simply, atomic swaps require both parties to acknowledge receipt of funds within a specified timeframe using a cryptographic hash function. If one of the involved parties fails to confirm the transaction within the timeframe, then the entire transaction is voided and funds are not exchanged. The latter action helps remove counterparty risk.

An example of an atomic swap transaction is shown below:

Suppose Alice is a trader interested in converting 101 bitcoins to an equivalent litecoins with Bob. She submits her transaction to bitcoin’s blockchain. During this process, Alice generates a number for a cryptographic hash function to encrypt the transaction. Bob repeats the same process at his end by similarly submitting his transaction to litecoin’s blockchain.

Both Alice and Bob unlock their respective funds using their respective numbers. They have to do this within a specified timeframe or else the transfer will not take place. Atomic swaps can also be used in conjunction with a lightning network to conduct off-chain exchanges. (See also: Bitcoin's Lightning Network: Three Possible Problems.)

ATH: Defined in CryptoCurrency

ATH: Defined in CryptoCurrency

What is Record High:
ATH: Defined in CryptoCurrency as the term “All-Time-High” relates to the highest price that an asset has achieved on an exchange, for the current trading pair that is being referenced.

For example, if a share of stock in XZY Corp comes to IPO at a price of $5 per share, then trades as high as $20 per share, before falling to $10 in a certain period of time, we could say that the “All-Time High” for the XZY Corp share price was $20.

In the bull-run of late 2017, many cryptocurrencies set new All-Time High records, with Bitcoin setting a new ATH in mid-December.

Each cryptocurrency exchange has a different ATH value for Bitcoin. In some markets, each coin was being traded above the mark of $20,000, but many consider that Bitcoin’s ATH was approximately $19,665.

The ATH value represents the theoretical maximum price that one could have sold the particular asset for, and also represents the maximum price that another trader was willing to pay for that asset, during that period.

However, given the fractional nature of most digital assets, it is possible that the ATH was derived through the trade of a fraction of an asset, rather than a full coin or token.

For example, during the height of a bull-run, a trader may make a purchase of 0.1BTC for $5,000 just before a big drop.

Proportionally speaking, this would give Bitcoin a new ATH at the price of $50,000 per unit of BTC, although only 0.1 BTC ever traded at that price.

The concept of All-Time High may also be applied to the values of market capitalization (market cap).

In early January 2018 - a couple of weeks after Bitcoin’s ATH - the market cap of the entire cryptocurrency market reached an ATH of about $661.2 billion.

The opposite of ATH is the “All Time Low” (ATL) which is used to refer to the lowest price point an asset has traded at, typically only recorded after an asset is listed and begins trading on an exchange.

Another similar perspective:

A record high is the highest historical price level reached by a security, commodity or index during trading.

The record high is measured from when the instrument first starts trading and updates whenever the last record high is exceeded.

The values for record highs are usually nominal, which means they do not account for inflation.


All-time record highs typically represent significant price news for companies and markets.

Investors may be enticed to purchase stock, believing this company will continue to perform well in the future.

Companies that constantly reach record highs quickly catch the eyes of prospective investors, while those who repeatedly hit record lows tend to scare off buyers. On the other hand, investors employing a more contrarian strategy may look at record highs as an indicator that a stock will go down in price, presenting an opportunity for shorts.

Many investors will sell out of a "fear of heights," especially repeated record highs, if a stock starts edging upward into uncharted territory.

Some economists say this is because record highs feel and sound unnatural to investors, even though achieving a record high can be viewed simply an example of a market or security doing exactly what it is supposed to do, as long as the government keeps printing money and the economy keeps growing.

Price increases don't always go up in a straight line, and overall, prices go up more than down, so when someone sells at a record high, the odds are not in their favor.

The Psychological Trap of Record High vs. Cost Basis:

As a market or stock moves higher, more investors get locked into the psychological trap of not buying back in after taking profits because a stock's price is higher than when they sold.

Economists and analysts point to the fact that human beings are behaviorally predisposed to latching onto the price at which a stock is bought.

This study basing those decisions on how the current price compares with their cost basis.

Preferred method is an unemotional approach to buying and selling should be more a question of a stock's current valuation, not historical price.

Of course whether a price is at a record high or low, a smart investor will also look at the business prospects of a company.

If it is well run, and business prospects for the company appear to be in line with future growth, it may make sense to ignore the distraction that a record high or low may be.

There are so many factors that play into the price of a stock, and often times, company financial fundamentals and business health aren't always what investors react t

Alphanumeric: Defined in CryptoCurrency (OptEdit-UnCon Needed)

Defined in CryptoCurrency

Alphanumeric is something made up of both letters and numbers.
Alpha- comes from the word “alphabet” and -numeric comes from the word “numerical” meaning relating to numbers.

Bitcoin address on the Main Network is made up of the character '1', concatenated with the base58 of 20 bytes from a ripemd160 hash concatenated with 4 bytes of checksum of alphanumerics.

Since log(220 * 8 + 4 * 8)/log(58) + 1 ~= 33.7, we get the 34 upper bound.

What I don't understand is the 26 character lower bound. If the ripemd160 hash is super low, then the Bitcoin address would be super short. (If the ripemd160 hash is 0, we only have the checksum and the leading '1', which means we could get it down to 11 characters.)

Where does the lower bound of 26 come from?

Bitcoin Address Formats and Protocol

  1. A wallet address, is a string of 26-35 alphanumeric characters it takes to send and receive bitcoin. 
  2. Any bitcoin address can be used to transfer cryptocurrency to any other address on the network, provided sender’s wallet-software/Hardware supports that address type. 
  3. With so many multiple address formats to choose from, and wallet providers and exchanges only supporting certain address types, and it pays to familiarize yourself with the differences if you are going to invest into cryptocurrencies.

Bitcoin Address Formats Need to Know

There multiple versions of the Internet IPv4 and IPv6 Protocol as are multiple bitcoin address formats by example.

These do not conflict with one another via transactions zipping seamlessly across networks between custodial and non-custodial user wallets.

Three Bitcoin Core address formats are to choose from, P2PKH, P2SH, and bech32.

Only a handful of these service providers supporting all of them.

Your preferred wallet and-or exchange does not support at least one of these formats.

The bech32 is most likely to be omitted.

Learning cryptocurrency Pros, and Cons, the quirks of each address format and this will enable your decision by choose a needed bitcoin wallet, and node-server exchange that suites your end-needs.

This enhances a deeper personal knowledge of Bitcoin’s workings, and the trade-offs of each format in terms of security, flexibility, functionality, and best of success via economic gains.

P2PKH or Legacy Address Format

If your bitcoin address starts with the number one (1), you’re using a P2PKH or a legacy address, as example here below.

Example of P2PKH or a legacy address: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.

This was Bitcoin’s original address format and it still works faithfully to this day.

P2PKH, by definition translates into: "Pay-to-Pubkey Hash", or in other translation "pay to a hash of the recipient’s public key".

Legacy addresses are not "segwit compatible".

You can send BTC from a P2PKH address to a segwit address without any problems.

Average fee when sending from a P2PKH address is higher than sending from a segwit address.

This is; because, that legacy address transactions are larger in size costing server-node has-time per/ms.

P2SH Address Format

P2SH addresses is structured similarly to P2PKH.

The P2PKH addresses start with the number three (3), and the P2SH addresses start with the number one (1)

Our P2PKH is exampled here: 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy.

This P2SH, translation is "pay-to-script-hash".

This enables elaborate functionality than legacy addresses.

The P2SH address, as a script function, is used for multisig addresses that specify multiple digital signatures required to authorize the transaction(s).

Now, P2SH address format is used to enable non-native segwit transactions using a process identified as P2WPKH-in-P2SH.

Users ending and receiving coins doesn’t need to concern themselves with the more complex functionality that the P2SH format.

Primary is that the address type is widely supported and can be used to send funds to both P2PKH and bech32 addresses.

Bech32 Address Format

Bech32 addresses appear different from P2-style addresses.

Address type starts with “bc1” and is longer than a legacy or P2SH address on account of this prefix.

The Bech32 is the native segwit address format.

This, Bech32 address format, is supported by the majority of software and hardware wallets, and a majority of exchanges.

Ledger and Keepkey wallets currently don’t support bech32, for instance, and while most exchanges enable sending funds to bech32 addresses, they don’t enable users to receive them with this format.

At present, less than 1 percent of BTC is stored in bech32 addresses, although this number is increasing slowly.

Bitcoin Cash Address Formats

Bitcoin Cash addresses follow either legacy format, (which starts with a 1), or  Cash Address (Cash Addr) format.

The Cash Address (Cash Addr) format is based on bech32 and starts with ‘q’ or ‘bitcoincash:q’. BCH wallets support both formats, with tools to switch between Cash Addr and legacy formats.

Primary reason for using Cash Addr format is to distinguish BCH from BTC and thereby prevent funds being sent to the wrong address, remember that, OK?.

Ifwallet and Cash Accounts

On the 10th anniversary of the Bitcoin genesis block, Bitcoin Cash (BCH) developer Jonathan Silverblood launched his platform.

(Jonathan Silverblood, (Twitter) known as Jack-of-all-trades.
Using payment codes with Cash Accounts gets you an account name that is secure, decentralized and meaningful, effectively solving Zookos trillemma).

This platform allows users to tether human-readable names to BCH addresses in order to make payments easier.

Now the BCH light client Ifwallet has become the first public wallet with Cash Accounts sending support.

Bitcoin addresses are long strings of numbers and letters, a format that to some users can be nerve-racking and cumbersome.

The  BCH software programmer Jonathan Silverblood, (YouTube), has been working on a project that helps bypass some of the friction associated with BCH addresses.

He’s created, a platform that allows users to register a one-time human-readable name that is tied to a BCH public address. tested the application, the day before the official launch on Bitcoin’s 10th birthday.

The platform hashes a name into the BCH blockchain by using an OP return transaction and after the transaction is registered into a block the name will be validated.
Ifwallet becomes the first public BCH wallet to integrate the Cash Accounts system.

When Silverblood first launched the project he also mentioned that he had been reaching out to wallet developers so they could possibly support Cash Accounts in the future.

The shows the programmer has discussed the idea with Electron Cash, Edge, BRD,, Stash, Ledger Wallet and more.

Next, the Cash Accounts founder explained that the cryptocurrency light client Ifwallet has added support for the name address system within the sending interface.
Johnathan Silverblood giving “Congratulations to Ifwallet for releasing the first public wallet with ash Accounts sending support,” he stated on Thursday.
The developer continued:
When you go to send you can now type in a Cash Accounts name and if they have compatible payment information in them they will show up in a dropdown list.
The OP return transaction process.

Ifwallet and Cash Accounts Experimenting

Ifwallet is a cryptocurrency wallet with a focus on bitcoin cash and provides users with a secure asset management tool for token support.

The mobile wallet is backed by investors -i.e. Coinex and is partnered with projects like, Viabtc, BCH Club, and Wormhole.

Ifwallet also supports the Wormhole project by implementing WHC integration and incorporating the token factory.

The Ifwallet project launched the decentralized applications (dapp) store module and deployed a variety of dapps that can be used with the wallet.
On tested the Ifwallet application and the client’s speed was similar to using the Japanese Yenom wallet.

The wallet makes you create a six-digit PIN to access the interface but biometric settings like Apple’s Face ID/Touch ID can also be set up.

The wallet doesn’t compel you to back up the wallet’s mnemonic phrase, (A seed phrase, seed recovery phrase or backup seed phrase), immediately and there is a warning message displayed until this part of the process is complete.

I sent 0.00041575 BCH – or a nickel – to the Ifwallet, without realizing there was an identical amount of BSV attached to the BCH. The Ifwallet split the transaction into two and my wallet ended up with 0.00041575 BSV as well.
Sending a nickel’s worth of BCH to “Jamiecrypto#116” using the Ifwallet on iOS. 
After the transaction confirmed, I simply used Silverblood’s directions and sent money to the name “Jamiecrypto#116.” The transaction immediately showed a sent transaction to the Cash Accounts name and the process was much simpler than copy and pasting an alphanumeric string to use as an address. Overall the application worked well and if more wallets integrate this feature it would likely make sending and receiving easier for newcomers. However, some people will definitely take issue with reusing addresses and may not find the Cash Accounts payment system compatible with efforts toward financial privacy.
What do you think about Ifwallet implementing Cash Accounts support? Do you think concepts like Cash Accounts is a good idea? Let us know what you think about this subject in the comments section below.
Disclaimer: Readers should do their own due diligence before taking any actions related to the mentioned companies or any of its affiliates or services. and the author are not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Neither nor the author is responsible for any losses, mistakes, skipped steps or security measures not taken, as the ultimate decision-making process to do any of these things is solely the reader’s responsibility. This editorial is for informational purposes only.

Image credits: Shutterstock, Ifwallet,’s Block Explorer, and

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Arbitrage: Defined in CryptoCurrency


Defined in CryptoCurrency

A beginner’s guide

In cryptocurrency trading, there can sometimes be significant price differences between exchanges.
Cryptocurrency arbitrage allows you to take advantage of those price differences, buying a crypto on one exchange where the price is low and then immediately selling it on another exchange where the price is high.

Remember, there are several important risks and pitfalls you need to be aware of before you start trading.

What is cryptocurrency arbitrage?

Arbitrage is the simultaneous buying and selling of an asset on different markets to profit from the price difference between those markets being traded.

In a highly simplified example of how cryptocurrency arbitrage works, you would search for a specific coin that’s cheaper on Exchange A.) than on Exchange B.) Then, You then buy the coin on Exchange A.), sell it for a higher price on Exchange B.), and pocket the difference.

Arbitrage trading is not a new one and has existed in stock, bond and foreign exchange markets for many years.

Understand that the development of quantitative systems designed to spot price differences and execute trades across separate markets has put arbitrage trading out of reach of most retail traders.

The arbitrage opportunities still exist in the world of cryptocurrency, where a rapid surge in trading volume and inefficiencies between exchanges cause price differences to arise.

Bigger exchanges with higher liquidity effectively drive the price of the rest of the market, with smaller exchanges following the prices set by their larger counterparts.

With smaller exchanges don’t immediately follow the prices set on larger exchanges, which is where opportunities for arbitrage arise.

How does cryptocurrency arbitrage work?

Arbitrage is typically made possible by a difference in trading volumes between two separate markets.

The reason behind this is simple: in a market with high trading volumes where there’s reasonable liquidity of a particular coin, prices are generally cheaper.

Within a market where there’s limited supply of a particular coin, it will be more expensive. By purchasing from the former and instantaneously selling on the latter, traders can theoretically profit from the difference.

Arbitrage opportunities also exist in the opposite direction, where you would buy on a smaller exchange and sell on a larger exchange.

The recent surge in the popularity of cryptocurrency has led to a dramatic increase in trading volumes on many exchanges around the world.

Those exchanges are not linked, and a low trading volume on some exchanges can mean that the price listed doesn’t adjust to the exchange average immediately.

As a result, this has seen the creation of price differences arbitragers could potentially exploit.

The most famous example of crypto exchange pricing differences was a phenomenon known as the “kimchi premium” which, in January 2018, saw the price of bitcoin (BTC) in South Korea rise to more than 50% higher than global prices.

How to do it:

The most basic approach to cryptocurrency arbitrage is to do everything manually – monitor the markets for price differences, and then place your trades and transfer funds accordingly. 

However, there are several cryptocurrency arbitrage bots available online that are designed to make it as easy as possible to track price movements and differences. Online or mobile trading apps, such as Blockfolio, can also simplify the market monitoring process.

It’s also worth pointing out that hedge funds are increasingly moving into the cryptocurrency sphere.

For example, Singapore hedge fund Kit Trading is raising $10 million for a crypto arbitrage fund and is set to join the more than 80 crypto hedge funds that launched in 2017.

There are multiple strategies arbitrage traders can use to make a profit, including the following:
  • Simple arbitrage: Buying and selling the same coin immediately on separate exchanges.
  • Triangular arbitrage: This process involves taking advantage of the price differences between three currencies. For example, buy BTC in USD, sell it to make EUR, and then exchange those EUR back to USD.
  • Convergence arbitrage: This approach involves buying a coin on one exchange where it is undervalued and short-selling the same coin on another exchange where it is overvalued. When the two separate prices meet at a middle point, you can profit from the amount of convergence.

ASIC Miner: Defined in CryptoCurrency

ASIC Miner: Defined

An application-specific integrated circuit (abbreviated as ASIC) is an integrated circuit (IC) customized for a particular use, rather than intended for general-purpose use.

In Bitcoin mining hardware, ASICs were the next step of development after CPUs, GPUs and FPGAs.

Capable of easily outperforming the aforementioned platforms for Bitcoin mining in both speed and efficiency, all Bitcoin mining hardware that is practical in use will make use of one or more Bitcoin (SHA256d) ASICs.

Note that Bitcoin ASIC chips generally can only be used for Bitcoin mining.

While there are rare exceptions - for example chips that mine both Bitcoin and Litecoin - this is often because the chip package effectively has two ASICs: one for Bitcoin and one for Litecoin.

The ASIC chip of choice determines, in large part, the cost and efficiency of a given miner, as ASIC development and manufacture are very expensive processes, and the ASIC chips themselves are often the components that require the most power on a Bitcoin miner.

While there are many Bitcoin mining hardware manufacturers, some of these should be seen as systems integrators - using the ASIC chips manufactured by other parties, and combining them with other electronic components on a board to form the Bitcoin mining hardware.

Anonymous: Defined in CryptoCurrency

Defined in CryptoCurrency

Anonymous: Defined in CryptoCurrency, is a profile that interacts as an unknown person or group.

Anonymous is easily compare by definition with “pseudonymous” which means acting or done under a false name and-or profile.

This word "Anonymous" is often associated and noted for the "Group Anonymous" that currently recognized for International government being involved in global civil rights violations and the government watch-dogs who criminalize hackers be`it ethical, morale, or otherwise, regardless to international-law-enforcement involvement.

Bitcoin cryptocurrency, which was perceived by many as an anonymous currency, or payment method in its early years, is actually a pseudonymous and not at all an anonymous cryptocurrency.

This lack of anonymity severely hampers the fungibility, [-i.e.: fungibility , In economics, is the property of a good or a commodity whose individual units are essentially interchangeable, and each of its parts is indistinguishable from another part.], of a true currency system but currently, Bitcoin core devs are not paying any heed to this issue.

That is probably because they are too caught up with Bitcoin’s scalability issues.

As a result of that, more and more currencies are mushrooming everywhere and attempting to fix the privacy/anonymity/fungibility issues, but fall sort of the truer anonymous cryptocurrencies which are Monero (XMR), Zcash (ZEC), Dash (DOA), PIVX (PIVX), Zcoin (XZC), Komodo (KMD), NAV Coin (NAV).

Cryptocurrencies started with a decentralized ledger and anonymous transaction features that have changed the paradigm of the global economy as we know it from an idea.

While the world is still divided on the future of cryptocurrency in payments and transactions, cryptocurrencies have made a mark on the world.

But, not all cryptocurrencies provide the level of anonymity that we are looking for.

Some like bitcoin only offers partial anonymity that can be used to a good extent.

We are provided with private keys that are basically the keys to your bitcoin safe but we also have to put in a public key that appears on the blockchain.

In most cases, this public key is an email of the cryptocurrency account holder at the time it is transferred.

Many use anonymous emails and don’t get me wrong, they are effective to a large extent but certainly not anonymous enough for many people.

Cryptocurrency exchanges have also reduced the associated anonymity and people who store their coins in their wallets and servers give up most of their anonymity associated that was an original feature of cryptocurrencies.

Now why do you need anonymous cryptocurrency transactions? What is in it for crypto users to come back to the original focus of cryptocurrencies i.e anonymous transactions?

Why not just stick with just borderless, fast and secure transactions even without the anonymity part?
The reason is control.

Anonymous transactions were the cornerstone of cryptocurrencies for many people.

It allowed them to use their currency or earn it in a way that had no government oversight.

If we allow governments and big entities to intrude on this aspect of cryptocurrencies, we are in fact taking the energy out of the much needed change that is needed in free market economics.

We become limited free market cryptocurrencies.

This is why a few new approaches to cryptocurrencies are singling out anonymous transactions as the future of cryptocurrency development.

Yes, they definitely offer more privacy than bitcoin, Ethereum or other cryptocurrencies out there in the market.

With the new upcoming DeepSend feature by DeepOnion this will be one of the most secure and untraceable anonymous cryptocurrencies on the market.

Anonymous-Group is not so hacker safe, nor shall it ever again.

AML: Defined in CryptoCurrency

Defined in CryptoCurrency

Anti-Money Laundering (AML):
AML is a term mainly used in the financial and legal industries to describe the legal controls that require financial institutions and other regulated entities to prevent, detect and report money laundering activities.

Bitcoin exchanges may be considered to be money service businesses, or money transmitters possibly even, depending on the by state and or federal jurisdiction decisions made into law.

For money service businesses and money transmitters operating in the U.S., the Bank Secrecy Act (BSA) is the regulation the requires specific AML-related record keeping and reporting actions.

Anti-Money-Laundering (AML):
AML is a set of laws designed to prevent the conversion of illegally earned money into what appears to be legally earned money.

Money laundering is the process of making illegally earned money appear to be legally earned.

Altcoin: defined in CryptoCurrency

Altcoin: Defined

About AltCoin:

  • Altcoin is a cryptocurrency with exception for bitcoin, because it was the founding currency and all other cryptocurrency coins that are defined as alternative-coins. 
  • Altcoin is a combination of two words: “alternative bitcoin” or “alternative coin”. There are over 1,500 altcoins with many more planned for release.
  • Altcoins are the alternative cryptocurrencies launched after the success of Bitcoin.
  • The AltCoin project themselves as better substitutes to Bitcoin and the citizens desire a decentralized bank, and zero-no transparency.
  • Many altcoins target any perceived limitations that Bitcoin offers with newer security and decentralized competitive advantages.
  • The term 'altcoins' means all cryptocurrencies which are not Bitcoin, and there are hundreds of altcoins.


  • "Altcoin" is a combination of two words, "alt" and "coin"; alt signifying 'alternative' and coin signifying 'cryptocurrency.'
  • AltCoins imply a category of cryptocurrency that is alternative to the digital currency Bitcoin.
  • Countless successful story of Bitcoin investors making it rich have given birth to AltCoins.
  • Mmany peer-to-peer digital AltCoin currencies attempting to improve where BitCoin currency is lacking in decentralization, privacy, and slow transaction time.
  • Bitcoin was the first cryptocurrency, and remains most popular.
  • Bitcoin-Coin is now only one of hundreds of cryptocurrencies, which all seek to improve upon Bitcoin in various ways.
  • Many of the altcoins are built up on the basic framework provided by Bitcoin.
  • Most altcoins are peer-to-peer, involve a mining process by which users solve difficult problems to unlock blocks.
  • AlCoins offer efficient and affordable ways to carry out transactions on the web.
  • Altcoins vary widely from each other.
  • Altocoins differ themselves from bitcoin with a range of procedural variations.
  • CryptoTraders use proof-of-work algorithms.
  • The earliest notable altcoin, Namecoin.
  • Namecoin was based on the Bitcoin code.
  • The Namecoin used the same proof-of-work algorithm; like Bitcoin.
  • Namecoin is limited to 21 million coins.

Namecoin Introduced in April 2011:

  • This Namecoin primarily diverged from Bitcoin by making user domains less visible, private, allowing users to register and mine using their own .bit domains.
  • Namecoin intended to increase anonymity and censorship resistance.
  • Current leading examples of altcoin include Litecoin, Dogecoin, Ethereum, and Ripple.
  • Litecoin is seen as the closest competitor to Bitcoin.
  • Litecoin was introduced in October 2011, shortly after Namecode, Litecoin was branded as the 'silver to Bitcoin's gold.'
  • Litecoin, while fundamentally similar in code and functionality to Bitcoin, Litecoin differs from Bitcoin in several essential ways.
  • Litecoin allows mining transactions to be approved every 2 1/2 minutes, to Bitcoins 10 minutes.
  • Litecoin also allows for a total of 84 million coins to be created - exactly 4 times higher than Bitcoin's, and Namecon's 21 million coins.
  • Litecoin also uses a different proof-of-work algorithm than Bitcoin the scrypt.
  • Litecoin uses a sequential function that is much more memory-hard than most proof-of-work algorithms.
  • Litecoin is supposed to make it much more difficult to generate than bitcoins, as increasing memory space required for the proof-of-work algorithm reduces the mining speed, and makes it harder for any one user or group of users to dominate the blockchain.
  • As of May 2018 there are more than 1500 Altcoin cryptocurrencies available over the internet all except one of which are altcoins.
  • New altcoin cryptocurrencies can be created at any time.
  • There are many older cryptocurrencies which are no longer on the market.

Different proof-of-work algorithm:

  • The Proof-Of-Work-(PoW) algorithm used for mining Bitcoin is SHA2.
  • It was chosen because it is fast to verify and has been critically analyzed.
  • The SHA2 cryptography is used by ASICs developers and ASIC's pitch is that there is a much smaller risk of centralization, but this is not at all true; actually the opposite.

These mining algorithms are used in different altcoins:

  1. Scrypt proof of work.
  2. Combination of hashing algorithms in series (e.g. X11).
  3. Combination of hashing algorithms in parallel (e.g. Myriad algorithm).

  • The problem with having an algorithm that is "easy to mine with" as this is referring to the ability to CPU or GPU mine profitably.
  • This algorithm defines; mining should be harder for people who are poor not being able to afford more expensive mining equipment.
  • The excuse is to secure the network, but this is false, and in fact only allows the wealthiest to get richer only.
  • A higher peasant barrier in order to have increases profits.
  • Tthe time barrier within the first group to create ASICs will monopolize the market, and then and again those who large sums of cash, the wealthy.

Proof Of Stake:

  • In Proof of Stake-(POS), instead of sacrificing energy to mine a block, a user must prove they own a certain amount of the cryptocurrency to generate a block.
  • The more stake you own, the more likely you are to generate a block. In theory, this should prevent users from creating forks because it will devalue their stake and it should save a lot of energy.
  • Proof of Stake sounds like a good idea, but ironically, there is the "Nothing at Stake" problem.
  • Reason is, POS, mining Bitcoin is costly, it is not smart to waste your energy on a fork that won't earn you any money, however with Proof of Stake, it is free to mine a fork.

Application Built on Top of a Cryptocurrency:

  • Bitcoin is a similar to HTTP.
  • Bitcoin is an application layer protocol and tools can be built on it (like websites can be built on HTTP).
  • There is a class of cryptocurrencies that promise features like casino websites and exchanges and anonymity protocols to be built on top of them.
  • Protocol HTTPS is an encrypted version of HTTP, therefore it is useful and necessary.
  • Creating apps, such as "DarkSend", programmersdo not make a new protocol called "Darkcoin".
  • This is synonymous to making an HTTPS alternative (eg. HTTPSX) for your new encrypted chat website and not adding any new security or functionality to HTTPSX.
  • This is a new class of altcoin that is targeted at a certain demographic.

Useful Cryptocurrencies:

  • A cryptocurrency is useful if it accomplishes a task that Bitcoin cannot.
  • Acting as a keystore for things like decentralized domain registration.
  • Having demmurage or some other economic system that is one of the prohibited changes.
  • Allowing creation of and transmission of digital assets.