What is Tether? Is the USDT Stablecoin Legit?

Tether is a cryptocurrency pegged to traditional fiat currencies and backed 1:1 by reserves of these traditional currencies held in accounts under Tether’s control. There are currently Tether tokens backed by US Dollars (denoted by the symbol USD) and by Euros (denoted by EUR). A Tether token pegged to the Japanese Yen (JPY₮) is on the way. These reserves are guaranteed by the promise of regular audits of the reserve accounts by the Tether Foundation.

The mission of Tether is to bring the ease of transfer, record keeping ability and other benefits of a blockchain-based digital currency to traditional fiat currencies. This allows merchants or traders to convert digital currencies into their fiat value, transfer these fiat-pegged tokens as easily as other digital currencies, and price services or products in traditional currencies while avoiding the overhead of converting digital currencies into fiat currencies.

How Does Tether (USDT) Work?

Tether Limited, the business entity in charge of Tether, is responsible for accepting fiat deposits and withdrawals and creating and destroying Tether in accordance. They also manage the Tether website that allows storage and transfer of Tethers, work on Tether integrations with exchanges and other third parties, and have custody of the fiat reserves backing the Tether tokens. The Tether Foundation has said that it’s dedicated to transparency and will regularly publish public audits by external auditors to their Transparency Page.

The Tether transparency page on December 4, 2017

The Tether technology works by embedding metadata in the Bitcoin blockchain itself via the Omni protocol. The Omni protocol allows for the creation (or granting) and destruction (or revocation) of digital tokens represented by metadata on the Bitcoin blockchain. These tokens, including Tether, can be stored in the Omni wallet and their circulation can be viewed on the blockchain through the Omnichest viewer.

You can store, buy and sell Tether through the Tether mobile wallet site.

Who Uses Tether (USDT)?

The implication that Tether tokens can be treated as Dollars or Euros has led to the adoption of Tether as a major trading pair on most of the larger exchanges. Bitfinex, Bittrex, Poloniex, and Binance do not deal in fiat currencies at all but have dedicated USDT markets for most of the major coins. Traders use Tether to hedge their trades and to get in and out of the crypto markets they are trading in.

The circulation of Tether is approaching 1 billion tokens, and more and more are being created as more and more funds reportedly flow into the Tether reserve accounts. As the circulation of tether continues to increase, the use of these tokens as a replacement for USD and other fiat currencies as a store of value increases as well.

What Are the Concerns with Tether (USDT)?

As the use of Tether as a replacement for fiat currencies grows on major exchanges, the Tether price of Bitcoin and other currencies is now synonymous with the fiat price, meaning buying and selling with Tethers is influencing the price in “real” money. As long as a Tether is truly representative of a fiat note like the dollar, this isn’t an issue.

However, there are some concerns surfacing recently about the legitimacy of Tether’s reserves and as to whether the company intends to honor their promise of audits. There are a lot of rumors floating around about the relationship between Bitfinex (the largest cryptocurrency exchange by volume) and Tether, with allegations of money laundering, collusion, and fraudulent Tether “printing.”

Bitfinex and Tether have come out in the press and promised an accredited audit to squash these concerns, calling the claims slander and dismissing any allegation of wrongdoing on their part. Further articles on new developments related to these allegations are on their way and will be updated as we go along.

That being said, the Tether whitepaper addresses these concerns and others, like the possibility that Tether Limited goes bankrupt or that Tether Limited attempts to take off with the money. They note that nearly all exchanges and third parties who manage crypto assets face these same risks, and therefore they are not a special case.

They tout their accounting and transparency process to eliminate the risk of bad behavior on the part of Tether employees or leadership, and they note that in the event of Tether Limited filing bankruptcy the reserves of fiat backing the tokens themselves will remain safe and redeemable.

Final Thoughts… Legitimacy TBD 

In 2019, the Office of the Attorney General for the Southern District of New York announced an investigation into Tether Ltd, which as brought ghosts of the past into the mainstream conversation again. Whether Tether seemingly intentionally opacity in disclosing its USD collateral is mischief, strategy, or sheer mismanagement, the cryptocurrency and broader regulatory ecosystem are looking at this current investigation to shine some light. One argument posted on Medium positions Tether as being one of the greatest exit scams in motion, and is worth the read for those willing to explore further. 

The post What is Tether? Is the USDT Stablecoin Legit? appeared first on CoinCentral.

Source: Coin Central

Should You Use Multiple Cryptocurrency Wallets?

As more people enter the cryptocurrency ecosystem than ever, it’s important to rehash a few common concerns about keeping cryptocurrency safe. 

Many beginner to intermediate-level users wonder whether or not they should have a dedicated cryptocurrency wallet for each digital asset. 

One of the best ways to guarantee security, beyond taking the usual precautions like having a hardware wallet, is to diversify your assets over multiple wallets. 

Rather, don’t keep your eggs all in one basket. 

With the variety of multi-cryptocurrency wallet providers, there is no shortage of alternatives to spread your assets over. 

Cryptocurrency Wallets: Do You Need an Alt-Coin Wallet?

The average cryptocurrency user can likely go their entire lives without using an alt-coin wallet. However, those with significant amounts in a single digital asset like Litecoin or Ripple may find some value in keeping them safe in their own wallet, just as they would with Bitcoin. 

While most modern exchanges do a great job at keeping cryptocurrency funds safe compared to their predecessors, they’re still some of the largest targets for hackers. 

The concept of security diversification is to spread your holdings over multiple different wallets to reduce the probability of a hacker finagling their way into the lion’s share of your digital asset wealth on one account. 

So, in theory, let’s say you’re planning to hold Bitcoin, Ethereum, NEO, and Ripple long-term. 

The lion’s share is in Bitcoin and Ethereum, and you don’t plan on selling and want to minimize as much risk as possible, so you throw them on a hardware wallet like a Ledger Nano S or Trezor.

Next, they may choose to use a NEO-specific wallet, designed to make staking NEO for NEO Gas a seamless process. 

Now, let’s say you want to keep Ripple within market reach, as its regulatory status has been a bit turbulent. Ripple holders may elect to keep their funds on any multi-currency wallet that supports XRP despite its recent unlisting by popular exchanges. To get faster and easier access to your XRP, you’d likely want to keep them on an exchange or another software wallet. 

For example, StormGain pays 10% APY on any cryptocurrency users hold with them, including Ripple. 

This way you’ve effectively kept your Bitcoin and Ethereum away from prying digital hands, but are still utilizing a portion of your assets to generate a return, regardless of market volatility. 

To better understand the true value of diversifying your alt-coin holdings over different wallets, it might help to review one of the platforms: StormGain. 

What is StormGain?

StormGain is a cryptocurrency wallet provider with a free Ripple wallet. Launched in Jul 2019, the Seychelles-registered StormGain functions as a centralized exchange and cryptocurrency wallet for multiple digital assets. 

Once a user installs the StormGain app, they automatically get a Ripple (XRP) wallet. Although convenient, this isn’t necessarily a unique feature to StormGain– what sets it apart is that it offers a 10% APY on Ripple deposits. This is a unique offering for a wallet-first provider, rather than a cryptocurrency interest account platform

While exchanges such as Coinbase are delisting Ripple to stay away from the crosshairs of regulators, there are still independent wallet providers not only capable of storing the XRP, but paying interest on it. 

Users may also enjoy a few other StormGain features:

  1. You can buy cryptocurrency with fiat using Visa and Mastercard, although this feature may only be available in Europe. 
  2. The platform doesn’t require KYC. 
  3. It has a Cloudminer Tool that allows users to mine cryptocurrency directly from the mobile app. 

There are two StormGain features that appeal to our argument of spreading your altcoin holdings.

The first is that StormGain is registered in Seychelles and adheres to a different set of regulations that popular U.S-based exchanges such as Coinbase do. 

While United States exchanges do and should work together with regulators to pave the way for a safe maturation of the cryptocurrency industry, users may find some value in having their individual cryptocurrencies held on international platforms. 

The second feature is that StormGain allows users to earn interest on their digital assets, which is slowly becoming more commonplace in the industry. For the purposes of comparison, 10% on coins such as Ripple is very competitive compared to other cryptocurrency interest account providers. 

Final Thoughts: Should I Use Multiple Cryptocurrency Wallets?

Since a good majority of cryptocurrency wallet providers are free, the decision to use multiple wallets usually comes down to convenience and security. 

Do you want to only have to worry about one wallet, or have your funds spread over 3 exchanges, 4 hot wallets, and 2 cold wallets? 

Do you want your eggs in one basket, or do you want them spread over multiple? 

If the above reasons appeal to you, we recommend testing the waters with small deposits in various hot wallets. If they can earn you some interest in the meantime, all the better. 

The post Should You Use Multiple Cryptocurrency Wallets? appeared first on CoinCentral.

Source: Coin Central

Global Party Brand Space Yacht Joins the Crypto Art Space with NFTs

Space Yacht started as a small music industry party in the back alley of a Los Angeles speakeasy in 2015, and has since become a heat-seeker for the next-up of dance music talent.

Before COVID kneecapped the industry, the tastemaking brand had been running weekly residencies and events internationally, throwing 150 shows per year. Its approach to events took the world by storm with surprise performers, forward-thinking bookings, and spontaneous pizza deliveries at the party’s peak. 

When COVID halted Space Yacht’s traditional revenue streams, the party promoters set their sights on becoming a burgeoning digital empire–hosting live-streamed sets on Twitch, launching a new record label, and becoming the first EDM brand to enter the crypto-art space earlier this summer on Nifty Gateway, a digital art gallery for NFT and crypto-based art.

Editor’s note: to learn more about cryptocurrency art and Non-Fungible Tokens, check out our guides here:

  1. Non-Fungible Tokens (NFTs) 
  2. How blockchain is changing art
  3. An exploration of the blockchain art market

Space Yacht’s first collection, a collaboration with renowned crypto-artist Goldweird, sold out in a matter of minutes and became a springboard for a whole new sector of creativity for the brand.

Space Yacht's collection on NiftyGateway.

Space Yacht’s NFT collection on NiftyGateway.

Space Yacht’s second NFT collection drops today, and consists of three distinct themes that have been at the core of the brand from its inception: pizza, smiley faces, and their trademarked motto “WE ARE SO F☺CKD.” Most people might not understand the connection, but If you’ve attended a Space Yacht event, you may have eaten a free slice of pizza on the dance floor at 1 a.m. handed to you by one of the founders – a tradition that takes place at every show. Or, if you have purchased a t-shirt or hoodie over the past few years, it probably has the WE ARE SO F☺CKD motto or Twerking skeleton somewhere on the garment.

 

We interviewed Space Yacht Co-Founder and crypto-art collector Rami Perlman about adapting their event series to succeed amid the shutdown of the nightlife industry, and what the future of crypto-art looks like in the electronic music space.

What is Space Yacht is best known for? How has it built up its reputation in the music space?

Space Yacht started five years ago as a weekly party in Hollywood on Tuesday nights.  Originally, it was a hang for industry people and DJs.  It quickly turned into the epicenter of underground dance music in LA. The value proposition was that you could come to our events and see new talent who was 18 months away from hitting the main stage.  We built our reputation as curators who found talent before the labels and bigger event companies found them.  

Over the years, we grew our footprint, moving to Sound Nightclub (one of the best clubs in LA) and setting up residencies across the country in places like Las Vegas, San Francisco, and San Diego.  Over the last two years between touring, festivals and residencies we were averaging 150 events per year, and even did a tour in Asia before Covid hit.  Off the back of our events business, we’ve been able to start a record label and create a thriving apparel business. 

How did Space Yacht end up cryptocurrency art?  

I studied visual art in college and have been a collector for years. I was introduced to the guys at Nifty Gateway through a friend and we immediately hit it off. I wasn’t aware of the NFT space until then, but instantly got hooked and started collecting. From there, I went down the rabbit hole of crypto and got equally hooked and excited about all of the possibilities, both from a financial perspective as well as how the blockchain could be relevant to the music industry.

Space Yacht's collection on NiftyGateway.

Space Yacht’s collection on NiftyGateway.

The August drop was a collaboration with an established NFT artist named Goldweard, who creates a series of NFTs based on the Space Yacht Brand. Then, I composed all of the music for each animated piece, so it was cool to be able to talk about music in a largely visual medium. 

When you launched your first crypto-art drop this past summer, did your fans understand the connection between the NFTs and your brand?  

Education was a big part of why Nifty wanted to do the drop with us.  We actually assumed that our fans didn’t know anything about NFTs, but our goal was to integrate our brand iconography, both from a visual and music perspective, and use that as an entryway to where we could talk about the tech behind NFTs.  

Prior to the drop, we did a number of things to raise awareness, such as email blasts, blog posts, podcasts, and even featured the Nifty guys on our Twitch show to explain the technology. By the time the drop hit, our fans knew what it was and we actually saw a lot of sales from first-time buyers.  

What makes cryptocurrency collectibles so valuable? 

It’s all about authentication.  We trust the authenticity of a physical piece of art when it’s signed or hand-numbered, or in some cases comes with a historical certificate that shows the history of who owned the piece and how much it sold for. I explain that an NFT takes the place of all of that, but in a sense, the blockchain does a better job of authenticating since it can’t be forged. People have been buying digital goods for a long time, whether it be in a video game or buying a song on iTunes.  For digital natives, the world of NFTs is no different. 

Do you see a place for NFTs in the music business landscape? Is it and how is it poised to disrupt existing record label models?

I don’t see NFTs as replacing the existing label models, but rather becoming a whole new lane where music artists can distribute and monetize their music.  For decades, music lovers would collect vinyl or tapes or CDs, which are all basically unlimited copies of the original work. With NFTs, you can create a rare collectible and give music fans their first chance to actually OWN a piece of music just like owning a piece of art. NFTs take the concept of collecting music to an entirely new level!

Electronic music artists like 3lau and RAC have recently launched their own drops in the NFT space on platforms like Nifty Gateway & Super Rare.  How do you see this trend evolving?

Covid has forced all of us to figure out new ways to monetize.  It has especially decimated the dance music industry since most DJs make 95% of their revenue from touring. It makes a lot of sense to me that electronic music artists would be early to the space since tech is the framework through which we create music.  I’ve already had managers, agents and artists hit me up asking about NFTs because they see the potential to monetize. I have a feeling we are about to see a major boom in this space.  

As a collector yourself, what makes a great NFT?

It all starts with the quality of each piece.  It’s not enough to just whip something up on photoshop and tell people to buy it.  The artist needs to have a point of view that creates an emotional connection and entices people to want to buy or assign value to the piece. 

Disco (Rare) #2/35

The sales information for Disco (Rare) #2/35 of Space Yacht’s collection on NiftyGateway.

Just like physical art, NFTs have to make you feel like “I NEED TO HAVE THIS!”

Can you tell us about the latest NFT drop?

We wanted to make this collection a shout out to the fans who have been with us since day one. Like our first drop, this second drop integrates our brand iconography into each piece, as well as original music. We’ve been using these same themes in a lot of our visuals and merchandise, so it seemed appropriate to make an entire NFT collection around these themes. For the new crypto-art collectors who have found out about us through our first NFT collection, this is a great introduction to the world and imagery of Space Yacht.

We’re going to keep releasing NFTs, so there will likely be more rockets, smiley faces, and pizza topped with bitcoins instead of pepperoni. Maybe some twerking skeletons haha! It’s all still in the conception stage, but the energy of our team is through the roof, and I know we’ll come up with something that our fans will really love.

The post Global Party Brand Space Yacht Joins the Crypto Art Space with NFTs appeared first on CoinCentral.

Source: Coin Central

Exploring ShapeShift’s “Project” Rainfall: HODL FOX, Get Free USDC

ShapeShift recently released a nifty new feature called Rainfall, which rewards ShapeShift users simply for using the platform.

Here’s how Rainfall works: The entire system is based on holding FOX tokens.

What is a FOX token? 

FOX token is an ERC-20 token pioneered by the non-custodial exchange ShapeShift that grants users the luxury of zero-commission trading, among other benefits. These tokens don’t expire, and offer this zero-commission trading structure in proportion to the number of FOX tokens held. 

For example, 

  • 100 FOX = $1,000 trading volume per month.
  • 160 FOX = $1,600 trading volume per month.
  • 200 FOX = $2,000 trading volume per month.

So, a user holding 5,000 FOX tokens would be able to trade up to $50,000 worth of cryptocurrency in any single month. 

Screenshot from ShapeShift.com/rainfall (12/4/2020)

Screenshot from ShapeShift.com/rainfall (12/4/2020)

Enter Project Rainfall

ShapeShift launched Rainfall to incentivize user engagement and involvement. 

Rainfall rewards ShapeShift users with free USDC every time someone trades. As a user, you basically don’t have to do anything but hold FOX in your wallet to be eligible to receive a randomized “rainfall” of tokens in real-time. For every single trade that happens on ShapeShift, a random user gets USDC.

The more FOX tokens one holds, the better their chances of winning.

ShapeShift users can automatically enroll into rainfall by holding FOX in their wallet. If you don’t have ShapeShift yet, you can snag yourself 10 FOX tokens for free by following this link and signing up for an account.

For the more experienced corner of the cryptocurrency trading world, Rainfall can be seen as a combination of the user benefits of DEX trading (liquidity) and exchange trading (availability.) 

Centralized exchanges, such as Coinbase and Binance, primarily exist to provide massive liquidity to users. If you want to sell Bitcoin or trade Ethereum, you won’t have a hard time finding a counter-party to fill your trade. 

Decentralized exchanges, or DEXes, exist to allow direct peer-to-peer trading. ShapeShift, for example, is a non-custodial decentralized exchange, which allows users to trade– and ShapeShift doesn’t take custody of their assets to do so. Since DEXes are primarily peer-to-peer, they must incentivize or reward users to provide liquidity. 

Rainfall aims to take the best of both worlds– the liquidity of a classic exchange and the user rewards of a DEX.

So, here’s what this means for you as a potential ShapeShift user. 

  1. If you hold 100 FOX tokens, you can trade up to $1,000 in volume every month with no fees. Yes, that makes ShapeShift a zero commission, zero spread, and zero trading fee platform up to the extent of your FOX holdings, although standard network mining fees apply
  2. These 100 FOX tokens enter you into the Rainfall program. Anytime a user trades on ShapeShift, you’re eligible to get a USDC reward. This USDC is generated from the transaction fees.

Final Thoughts – The TL;DR

By creating a ShapeShift account and holding FOX tokens, you have the possibility of winning some USDC on every trade. You don’t need to take any other action than just holding FOX tokens. 

A reputable entity in the cryptocurrency space since 2014, ShapeShift prides itself in being a non-custodial exchange that offers extremely competitive trading rates. The exchange is completely decentralized, so users always retain full custody of their private keys. 

If this sounds like music to your ears, give ShapeShift and Project Rainfall a shot. Get your 10 free FOX tokens.

The post Exploring ShapeShift’s “Project” Rainfall: HODL FOX, Get Free USDC appeared first on CoinCentral.

Source: Coin Central

6 reasons bitcoin is trading at its highest level since 2017 — and 1 warning

Bitcoin is baaack!

The popular digital currency, which is arguably one of the most polarizing in financial markets, is approaching heights not seen since the frenzied rush into cryptocurrencies three years ago.

Bitcoin’s price BTCUSD, 1.37% on Wednesday briefly hit an intraday peak at 18,358.98, and was pulling back in recent trade but still on pace for the fourth-highest finish in its history since December 2017, when the asset briefly flirted with $20,000 before collapsing in dazzling fashion, according to Dow Jones Market Data, based on a 7 p.m. Eastern close.

But now bitcoin is drawing eyeballs and wallets again, outshining gold prices GOLD, -1.74% and the stock market, with a year-to-date advance that has exceeded 150% so far in 2020.

So why does the asset, based on the distributed-ledger technology, suddenly appear ready to surpass its 2017 peak at $19,783?

There are a few key reasons:

Scarcity factor

Bitcoin was created in 2009 and as a part of its creation by a person, or persons, using the name Satoshi Nakamoto, who embedded a limit of 21 million coins in the original bitcoin code. That means only 21 million bitcoin can ever exist. Currently, 18.5 million are in circulation, or nearly 90% of that total.

Bitcoins are digitally mined by those who expend outsize sums of computer power to solve puzzles and who are rewarded with coins in exchange for verifying transactions on the anonymous blockchain network.

Nakamoto designed the coins to be harder to get as the network gets closer to the maximum float. It’s estimated that it will take 120 years to “mine” the remaining 10% of bitcoins needed to get to the 21 million limit.

The perceived scarcity, or supply limit, of an asset doesn’t magically confer value to it. But the belief that there will be fewer opportunities to obtain bitcoin, or that it will reside in the hands of a select few, is often cited as a reason that demand for bitcoins has returned.

Familiarity breeds…buying?

Bitcoin doesn’t have the cachet or tradition of other assets that have been around for much longer, including gold, which boasts a history stretching back thousands of years as a store of value and medium of exchange.

However, bitcoin’s popularity has been growing among average folks and institutional investors alike, supporters say.

Bitcoin as a so-called uncorrelated asset, one not directly linked to price swings in, say, gold, bonds, or the Dow Jones Industrial Average DJIA, 0.15% or S&P 500 index SPX, 0.41%, has led to some buying of bitcoin as a financial hedge.

“Derivatives have taken a robust role in these markets, aiding the product variety available for active traders to advance their understanding of market dynamics and core risk management,” Catherine Coley, CEO of Binance U.S., one of the world’s largest crypto exchanges, told MarketWatch in an emailed exchange.

The rise of stablecoins

Another factor tied to familiarity is the emergence of stablecoins, or those cryptocurrencies that are usually pegged to a fiat currency, like the dollar DXY, -0.01% or the euro EURUSD, 0.19%. These coins don’t have nearly the volatility that is associated with a generic cryptocurrency because of their peg to a traditional currency that often underpins it.

Stablecoins have become a major source of liquidity in cryptocurrency markets, experts say.

Such coins backed by governments or corporate groups also have conferred the air of legitimacy of the digital-currency sector, with the Federal Reserve exploring the possibility of issuing its own digital currency, amid reports that China is moving forward with a digital yuan. The second-largest economy in the world launched a trial of a digital currency last month, according to reports.

The U.K. is also pushing the idea of a stablecoin for its central bank, according to a statement from Chancellor of the Exchequer Rishi Sunak.

Among major institutions, JPMorgan Chase & Co. JPM, -0.10% launched an interbank payment systems using their own blockchain-based technologies to create a dollar-pegged digital asset called JPM coin.

Fall of the buck and gold rivalry

Worries that governments are printing heaps of money to paper over problems created partly by the 2008 financial crisis was at least part of the reason that bitcoins were created over a decade ago. That thinking is also the basis for this resurgence in bitcoin, crypto experts said, as the COVID-19 pandemic forces governments and central banks to spend to limit the economic hit.

The dollar is down 4.2% so far in 2020, as measured by the ICE U.S. Dollar Index DXY, -0.01%, a gauge of the buck against a half-dozen currencies, including the euro. That puts the dollar on pace for its worst annual drop since 2017, when bitcoins were on the ascent.

“Bitcoin as a form of digital gold is also seeing its time in the sun as we see the floodgates open on monetary policy. Closing the sluice gate is more difficult than opening it,” Charles Hayter, founder and CEO of CryptoCompare, a company engaged in bitcoin data and analytics, told MarketWatch.

Anthony Denier, CEO of Webull, a crypto-trading platform said that low interest rates also have diminished the cost of owning bitcoins over dollars or bonds.

In an email exchange, Denier said “you have an extremely low interest rate environment which takes makes fiat cash stockpiles obsolete.”

Mainstream appeal…and more

PayPal PYPL, 0.32% recently said that users on its platform will be able to purchase bitcoin, as well as other sister cryptos like ethereum, Bitcoin Cash and Litecoin. PayPal’s decision last month was a further recognition of the legitimacy of digital currencies, crypto enthusiasts say.

“Today bitcoin has gotten to a place where institutional investors, banks, and family offices are legitimately pondering involvement as a defense against currency devaluation,” wrote Alex Mashinsky, CEO of Celsius Network, in emailed commentary.

“This isn’t a gold rush anymore, it’s a good investment,” he said. He predicts that bitcoin will hit $30,000 by the end of next year.

2017 vs 2020?

Some bulls make the case that this rally in bitcoin is different than the one three years ago that resulted in a massive and painful head-fake upward and crash lower for enthusiasts.

As the chart below shows, bitcoin’s price is…

Continue reading at MARKETWATCH.com

 

 

The Auric Elastic Supply Gold Peg

The Auric Network (“Auric”) created a digital currency that is pegged to the price of gold through programmatic supply fluctuation. In aspiring to create a synthetic commodity money that will become the cornerstone of decentralized finance (“DeFi”) on the Ethereum Network, the Hong Kong based blockchain solutions company left nothing to chance.

Through a partnership with Bluebird Merchant Ventures Limited (“BMV”), a publicly listed mining company (LSE:BMV), and Mine Foundation, a commodities investment marketplace, the new elastic supply token (“AUSCM”) can be used to purchase physical gold at a discount. 

The arrangement ensures that the fledgling synthetic commodity money not only maintains its price through rebasing, but also possesses a price floor grounded in reality.

Auric’s founder facetiously remarked that the use case is the first yield-farming asset that “uses bleeding edge technology to bring the world back a couple centuries”.

According to the press release, AUSCM will make it easier to take economic shelter in gold. The token is not just meant to be a refuge for the Ethereum DeFi community, but also broader society.

Joseph Lee, CEO of BMV Korea, mentioned present geopolitical and economic uncertainties and today’s unprecedented levels of demand for gold before stating, “We are pleased to partner with the Auric Network and Mine Foundation to broaden access to gold. The token is truly a breakthrough in financial technology and we are excited for the future.”

BMV’s gold-rich mines located in South Korea have been inactive since the 1970s due to legislative decisions to pivot away from mining to technology. Recent geological assessments have revealed nearly 4 million tons of ready-to-mine gold. 

“Since the initial assessments, we’ve discovered a number of additional veins of gold that continue beyond what we expected,” Joseph Lee reports. “Sharing access to these resources while providing an alternative investment source for the public is a win-win.”

 

Currently, Auric’s AUSCM is listed on Uniswap.org. There is a minimum AUSCM ownership threshold that must be passed to attain access to the gold discount. To learn more, visit https://auric.network.

 

The post The Auric Elastic Supply Gold Peg appeared first on CoinCentral.

Source: Coin Central

Stephane De Baets Owns the St. Regis Aspen Resort, and You Can Too: Enter Tokenization

Stephane De Baets visualizes a future where every asset, whether a small business or property, can be tokenized and sold on the blockchain– and he’s putting his tokens where his mouth is. 

Stephane is a Belgian-born real estate, hospitality, and investment entrepreneur with a penchant for standing out in each respective industry. As the Founder and President of Elevated Returns, an international asset management firm, Stephane launched the first major tokenized commercial real estate auction to sell a portion of his ownership stake in one of his properties– the idyllic Aspen St. Regis Resort in Aspen, Colorado. Stephane is also the Founder and Owner of Chefs Club, a restaurant group with a rotating residency of world-class chefs at its locations in Aspen and New York City. 

Stephane De Baets in a pool, courtesy of https://twitter.com/stephanedebaets

Stephane believes the tokenization of the St. Regis will lead to an avalanche of interest from real estate developers and mainstream investors into the blockchain industry. As a self-described “ultra-conservative old man in capital markets,” Stephane posits that his colleagues just need to see tangible proof of tokenized assets in action to see the value of allocating capital to blockchain-based investments. 

“Blockchain is about giving people the tools to do something that was restricted to a few selected individuals,” says Stephane. “Blockchain is a similar evolution as going from fax to email– was for communication. It made it easier and more efficient. People started finding new applications for communication through email, and then SMS.”

Stephane’s decade-long journey into blockchain isn’t just about making more money– there’s a rebellious element to his investment philosophy. Stealing fire from the gods and democratizing access for the masses is a sentiment not unfamiliar to those in the cryptocurrency industry. In Stephane’s case, this prodigal fire is the ability to invest in projects generally outside the purview of the ordinary investor. At the heart of Stephane’s key message is the disintermediation of the finance industry and creating a direct path for the creation and sharing of value between businesses and their customers.

“At  Elevated Returns, we think the current world is too elitist,” says Stephane. “Access to capital is limited to a very few privileged individuals. Giving access to this upper echelon of investing on a democratic basis, a la tokenization, would go a long way towards promoting equality. It’s not normal that five companies control an amount of wealth that is greater than the rest of the NASDAQ 100 combined. I think tokenization is low hanging fruit. I have a great deal of trust and conviction that sooner or later, there will be a great disintermediation that takes place no matter what, and the people should be ahead of it.”

The St. Regis Aspen, the hotel that the AspenDigital tokens represent partial ownership of.

Editor’s note: The following article is written as educational and informational, and is not to be construed as an endorsement, sponsorship, or investment advice for any of the entities discussed within. Cryptocurrency is an inherently very risky asset class, and always do your own research and consult a licensed financial advisor before making any investment or purchase. 


Luxury Real Estate 101: A Walk Through with Stephane De Baets

Stephane walks us through the traditional process for luxury real estate entrepreneurship. 

“If you want to own a hotel, you realistically need to be plugged into a very selective network of people that can show you what’s available for sale,” says Stephane. “Then, you need to raise the capital– typically a portion of debt and a portion in equity. Then you need to do your due diligence, bid for the asset, negotiate the contract, execute the contract, and if you’re successful, you will own property. Making an income on that property means you must also be good at effectively managing the asset to turn a profit, which is the excess of cash flow over the debt servicing and other expenses. When you flip the property, you make a capital gain.” 

This is the old way of higher-end commercial real estate, and according to Stephane, a small, incestuous world with a limited number of players. 

A screenshot of The AspenCoin August 2020 disclosure statement on tZERO

“There isn’t much value added beyond solving those cashflow inefficiencies,” says Stephane. “Tokenization changes the game completely. As a retail investor, you can go to a marketplace and choose a token corresponding to a property. For example, you can go on tZERO and look at AspenCoin, the digital token for the St. Regis. There is a disclosure statement, and you can see the performance of the asset.”

tZero, is a project launched by Overstock that functions as a platform for asset holders to tokenize their assets.  This system allows average investors to piggyback on the work of someone like Stephane, a process usually done privately. 

So, what incentivizes someone like Stephane has to allow the public to reap the fruits of his labor? 

Stephane describes the experience of owning a luxury property as wonderful in terms of bragging rights, but short-lived. 

Owners like Stephane can relish the beauty of their property, but this romanticism is soon dampened with the understanding that they aren’t able to access their equity without the tremendous amount of complications that come from selling the property. 

“Owning a property basically means you have a balance sheet that tells how much you owe the bank and the value of your equity,” says Stephane, reducing the glamour of luxury property ownership to accountant-speak. “There is no price discovery, nor is there a way for you to monetize that equity position other than selling the hotel. When you tokenize your asset as the asset holder, you have price discovery and know the full value of your equity. Better yet, you have liquidity. Let’s say you get married and are starting a family. You can sell off a few tokens of your asset. If you think the token price is too cheap, you can buy them back.” 

Having your money locked in an asset rarely caters to the ebbs and flows of life; as the owner of a tokenized asset, Stephane suggests, you have the flexibility to increase or decrease your position and know the current going rate of your equity. To that end, giving asset owners the luxury of liquidity also makes that asset that much more attractive to hold. 

What is AspenDigital?

AspenDigital is the token associated with Stephane De Baet’s tokenization of the St. Regis in Aspen, Colorado– a prestigious getaway for society’s pinky-up upper echelon tucked into the Rocky Mountains.

How has the tokenization of assets been applied so far?

“We created a digital security as part of an ownership privilege program,” says Stephane. “For us, it’s wonderful because we’re able to reward token holders like a true owner. We save on marketing costs, travel agent costs, and so on. The cost to us, the property owner, is minimal and the benefit to the consumer is maximum.” 

According to Stephane’s description of the tokenomics of AspenDigital, 

  • If you own 10,000 tokens for 30 days or more, you’re entitled to a 20% cash rebate on your spend during your stay. 
  • If you own 100k tokens: 35% cash rebate.
  • If you own half a million tokens:50% cash rebate. 

Stephane implores us to think about a patron spending Christmas or New Year at the St. Regis: The average room costs about $2,000 per day around this time, and if you come to stay for seven days with a family that requires two rooms, you’ll be looking at a $28,000 bill. If the current price of one of these tokens on tZERO is $1.31, 10,000 tokens will run you about $13,100. 

AspenDigital on tZero

AspenDigital on tZERO

This lump sum of tokens entitled you to 20% cashback on your stay, or about $5,600 back, which is a bit over 42% return on the value of your tokens for that one stay. 

I’m dreaming of a world where I don’t have any bank loans, and I’m just sending rebates to people buying pre-paid stays at my hotel. I will prove that this is a cheaper way for an owner to finance a property than a traditional mortgage.

In other words, Stephane wants to cut bank loans out of the hospitality industry, and build the infrastructure for business owners to raise capital from their top customers. 

“We want to find a way to repay a hundred percent of our debt and yield the benefits of savings on your cash flow to the consumer,” says Stephane. “All that the bank is doing is bridging a mismatch in cash flows as entrepreneurs build businesses to provide services to customers. Your consumer is actually the party giving you cash to pay your employees, pay your bank loans, and make a profit. The ultimate line of disintermediation is to get funding right from the consumer.”

Direct fundraising from consumers is not a new concert. For example, Elon Musk did it recently with Tesla, selling the Roadster at a high price point to raise capital. Selling your future product tends to be the cheapest source of capital. 

How can an asset holder leverage the perks of tokenization?

The problem with the current system is that value that would otherwise be devoted to improving the business-consumer relationship leaks into the coffers of third-party intermediary banks.

“If you raised capital from banks and private investors, you must factor loan obligations and interest into the equation,” says Stephane. “The bank will say, Stephane, I need my 6% interest payment. And then you have private investors and partners asking for their 15% return on their money. So, as an asset manager, I’m primarily incentivized to pay my debts first, and this often isn’t aligned with providing the absolute best experience for the consumer.”

You need to make sure you can pay your owners and investors, or otherwise, you’re in a hot seat. 

The service provider and consumers are tainted by that evil intermediary called banking. If we can remove the bank out of the equation and have consumers fund us directly, we can focus our efforts on building a better relationship between us as a service provider and our consumers.

How can security tokens or utility tokens change the world of real estate? When businesses are funded by customers directly, Stephane asserts, an entire asset class can be changed: 

  1. The valuation of the asset becomes somewhat irrelevant. Someone buys an asset because they want to use it in the future at a better price. They want a good deal. They don’t want to own the asset, they want to access a service in the future at a more attractive price. 
  2. Tokenization simplifies the relationship between a service provider and a consumer. For example, as a hotel provider or hotel operator, your job is to provide the best service to your consumer. You want them to be very happy with the experience he receives at your establishment. If you’re raising money from your customers, who now become partial owners of your property, you’re better incentivized to invest further into the customer experience. Similarly, your customers are incentivized to support your business.

“In order to offer perks, you need to own the asset,” says Stephane. “If someone is promising perks on someone else’s asset, I get uneasy. In order to be successful in the model we’re developing, you need to be ready to own the asset you’re offering perks on.” 

This is why, Stephane concedes, traditional banking relationships will always have a place in business. In order to hold assets without your own capital, you need someone to lend you money. However, lending must evolve with the world, not antagonize it.“I see the lending market changing significantly in the next decade,” says Stephane. “Think about it; if you buy Aspen Digital, you have the leverage which is basically the mortgage of the asset. Let’s assume I pay the mortgage tomorrow and issue more tokens. You should be able to show a lender you own tokens that represent unlevered ownership over a hotel and ask for an increase of leverage on your wallet. I think you’ll eventually start seeing asset-based leverage moving to consumer base leverage.”

A screenshot of AspenDigital’s trading history on tZERO.

Stephane sees a future where digital asset holders, whether that be Bitcoin or a coin representing a luxury mountain hotel, can seamlessly take out loans from mainstream banks. 

*Note: There are a few cryptocurrency loan providers such as BlockFi and Celsius that provide crypto-collateralized loans on cryptocurrency deposits.*

There is also a significant utility of these tokens, Stephane posits, that shouldn’t be overlooked. 

“Utility means people have a use for it, which creates natural liquidity into the asset class,” says Stephane. “The perks you receive from your tokens can grant token holders a value much greater than potential capital gains.”

Waxing philosophical, Stephane describes cash as merely a medium to acquire goods and services in the future. 

“Cash is an instrument to create an exchange,” says Stephane. “If you don’t need that instrument because you have access to the services simply by holding the asset and not spending it, you’ll change the relationship between people and money.”

In other words, instead of value slipping out of the business-customer relationship into the hands of third-party intermediaries, customers can achieve entirely new benefits usually only granted to the high-rolling owners. 

Regulation and Innovation: A Historically Toxic Relationship

Stephane’s journey into blockchain seeking an alternative to a very aging capital market and banking system, a search spanning decades. 

“The fact that we’re still relying on the Securities Act of 1933, dealing with paper securities, and using a clearing agent is amusing in that it’s nearly 100 years old. The whole finance industry and derivative of finance were really ready for a revolution, and I believe the ability to tokenize assets on the blockchain is a rallying cry.”   

Stephane encourages a future where regulation grows alongside innovation, rather than impeding it.

Stephane De Baets PHOTO CREDIT: BENJAMIN LOZOVSKY

“As entrepreneurs, we need to be respectful of the authorities and regulators, because while innovation can open new doors, it can also enable scam, fraud, and abuse,” says Stephane. “Collaborative regulation ensures we don’t shut down an entire enterprise just to protect the masses from a very small few negative actors.”

To truly stimulate the evolution of a landscape, you need a healthy regulatory environment, infrastructure to onboard new users, and market leaders. 

“If you consider 2017 as the first mainstream wave, we’re looking at the second one now,” says Stephane. “We’ve had the perfect element of a relatively stable economy to allow innovation to stabilize before this second wave, and now this more unstable economic environment pushes the need to deliver financial aid straight to the hands of the people. It brings us to consider what are the actual strengths of the legacy banking environment, and how well-suited is it to the people’s best interests?”

Coming from capital markets, Stephane argues, this revolution isn’t a matter of if; it’s a matter of when, who, and how. 

“I can say within five years, everything’s going to be digital, including the Dollar and Euro,” says Stephane. “We will have a digital wallet in our hands and we will be able to manage our assets without having to go to the bank or an ATM machine and withdraw money or deposit money.”

Final Thoughts

Access to capital isn’t equally distributed across the world, and as Stephane notes, it’s a very small network of people that tend to have the highest access. The businesses that bring in the highest returns aren’t usually available as investment options for the everyday Joe. 

The primary lever of any business relationship sits in the hands of the party who holds the capital. This capital has historically rarely left the grips of banks and society’s ultrawealthy, and the barrage of tax breaks and bailouts in the United States, in particular, have made sure that big money stays put.

However, by getting rid of the capital intermediaries by democratizing access to investments by tokenization, the luxuries of society’s ultrawealthy will finally trickle down to the masses.  At least, that’s the argument Stephane De Baets is making with the tokenization of the St. Regis hotel. 

These intermediaries, a category the Elevated Returns Stephane De Baets admittedly falls into, don’t act in the best interest of the Hotel Owner Stephane or the Customer Stephane. However, the multi-faceted Stephane seems to align his professional identities under one banner: the democratization of access and the disintermediation of the engorged third-party of banks, and he wants to use AspenDigital to revolutionize the real estate industry. 

The post Stephane De Baets Owns the St. Regis Aspen Resort, and You Can Too: Enter Tokenization appeared first on CoinCentral.

Source: Coin Central

Federal Reserve Now Targets Inflation Above 2%, Bitcoin Breaks $11K

Federal Reserve officials said Wednesday they would hold U.S. interest rates at close to zero and work to push inflation above 2% “for some time.”

  • Federal Open Market Committee keeps interest rates unchanged close to zero, according to its statement.
  • Panel agrees to maintain accommodative monetary policy until inflation climbs above 2% “for some time.”
  • The central bank will increase holdings of U.S. Treasury securities and mortgage-backed securities “at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions.”
  • Projection materials released with the statement show officials, on average, expect rates to remain close to zero through 2023.
  • On average, officials don’t expect 2% inflation until 2023.
  • Robert Kaplan, president of the Federal Reserve Bank of Dallas and a voting member of the panel, voted against the plan. He “prefers that the Committee retain greater policy rate flexibility.”
  • Neal Kashkari, president of the Federal Reserve Bank of Minneapolis, also cast a dissenting vote. He prefers that interest rates stay on hold “until core inflation has reached 2% on a sustained basis,” according to the statement.
  • Economists weren’t expecting Fed officials to make any changes to U.S. interest rates – which in March were cut close to zero on an emergency basis – as the…

Continue reading at COINDESK.com

 

 

NFT Platform Cargo Founder on Building on Ethereum

Cargo is an all-in-one platform to create, manage, and sell digital collectibles. Because of the interoperability that Ethereum provides, users can manage all of their compatible digital collectibles on Cargo– not just the ones created on Cargo. 

Launched in July 2020, Cargo represented several years of Founder Sean Papanikolas’ research and experimentation within the Ethereum ecosystem. Sean helped pioneer scalable minting technology on the Ethereum blockchain. 

With the launch of the Cargo Marketplace shortly after, Cargo has grown to voter 265 accounts created and over 170 unique digital items added to the marketplace. So far, the highest an item sold for has been for around $1200. 

We connected with Sean to discuss his entrepreneurial journey within the cryptocurrency landscape and the future of Non-Fungible Tokens

Could you give us a two-minute movie trailer of your life? How did you end up involved in the NFT space?

In 2017 a friend introduced me to Ethereum and It immediately piqued my interest. I’m drawn toward new technologies, but I’ve found the best way to understand them is to build something on them. So, I decided to build a dApp. At the time, I was dating a woman who was a fan of The Bachelor, so I created a smart contract betting on who would win The Bachelor. 

Well, nobody used the contract and the relationship didn’t work out, but I saw the power of Ethereum and learned how to write smart contracts in the process.

I asked my friend if he had an idea about something else we could build on Ethereum and he came back with an idea – a marketplace of 3D models. We planned on calling it Pedddle with three d’s – you know for “3D” models. We had the Pedddle t-shirts made and we were off to the races. 

Through this, I got familiar with the ERC-721 standard and even came up with an ERC-20 token called xR coin that would be used to purchase the 3D models. By the middle of 2017, I had a working prototype where users could upload 3D models and the platform would create NFTs and you could sell them.  

Unfortunately, my partner dropped out, so I scrapped Pedddle and started working on a digital collectible iOS and Android app to bring crypto to the masses. The plan was to abstract all of the crypto stuff and users could pay with a credit card.

The app was called Dolli and it allowed users to buy and collect grungy characters – most notably of which was the infamous Pizza Rob, which was a pretty big hit that I designed. The app was completed and ready to ship, but right before the launch, the payment processor rejected supporting the Dolli app. (At the time, payment processors wouldn’t touch a crypto app with a ten-foot pole.)

I tried a couple of other payment providers but soon came to realize that I was facing a centralization of power – the exact thing bitcoin was supposed to fix. I decided to rebuild Dolli using a decentralized infrastructure. 

That was the catalyst for Cargo. I knew there had to be others like me who would benefit from a platform that allowed you to create digital collectibles, interact with and sell them within your application.

For someone looking to get involved, either as an investor or as an entrepreneur, how would you define opportunity in the cryptocurrency space?

I’m not an investor, so take this with a grain of salt, but you want to look at the technology and the team. Who’s the team building the product, what are they building, and can they pull it off? 

The same applies to launching a startup. Even if the technology may be difficult to understand, you want to look at the team. In my case, I was fortunate to have teamed up with Polyient Labs, an early-stage blockchain incubator founded by Brad Robertson. He and his team understand the crypto and blockchain space, which is why they saw Cargo’s potential.

How will NFTs change day-to-day life?

I think for many people, it’s only a matter of time until NFTs are part of their daily life.

NFTs help make sense for digital ownership. Think about all the digital things you can own – art, tickets, subscriptions, access tokens, the list goes on. 

So, it may be that everyone eventually owns a piece of digital art and has it hanging in an electronic frame on their wall, or they are buying NFT tickets that they can trade or transfer. 

Or imagine that in every video game you played you actually owned the in-game items and could take them out of the game and sell them on secondary markets, or even use them in other games. This is exactly the ecosystem that Polyient Games and I are building.  

What does Cargo accomplishing its 5-year vision look like?

Hard to tell where the space as a whole will be in five years. We are really at an inflection point now, but I imagine that we will have made great strides in usability and scalability. But no matter, Cargo intends to be the platform of choice to power any NFT project regardless of whether it is small or large. 

For now, Cargo will continue building on Ethereum, but Ethereum in its current state could look significantly different in five years. We may be building on the next iteration of Ethereum, or a layer-2 solution. No matter what we are building on, we intend to take our principles of usability and scalability with us.

Can you explain how Cargo differs from other NFT platforms?

Cargo has spearheaded and is the first platform to integrate EIP-2309 which is a standard event to track the infinite creation of NFTs. Using efficient data structures, Cargo pioneered a smart contract allowing creators of the batch-create as many collectibles as they want in one transaction. 

Because of high gas fees, this can save creators thousands (or even tens of thousands) of dollars in transaction fees when creating collectibles at scale.

We’ve also just announced Cargo Gems, which will function as a utility token and payment option on the Cargo platform, as well as a governance token for the upcoming Cargo DAO. What’s exciting is that Gems can be staked inside of any compatible NFT for token rewards.

Cargo is the only platform that allows users to deploy smart contracts which enable them to create an infinite amount of NFTs in one transaction for the same cost as creating one NFT on other platforms. ERC-2309, an open standard on Ethereum that makes this possible, was spearheaded by myself because I realized early on that to scale NFTs we’d need a way to create and transfer large amounts at one time for a price that worked. Recently OpenSea, the largest marketplace for digital goods, started supporting the standard that makes this possible. 

From a feature perspective, we are the first open platform to support 3D NFTs and we also support audio, video files in addition to image NFTs. On Cargo, you can lock digital content within your NFTs that only the token holder can unlock and that content is AES-256 encrypted. 

When I was building Cargo I never thought that it would be only an NFT marketplace and it’s not. Cargo was built to be the engine that powers other NFT projects in a way that scales and is cost-efficient. We have a robust API that allows you to use Cargo’s infrastructure directly in your platform.

From the beginning, we could collaborate with others and automatically split payments – this has been supported via our API.  We are seeing that people want this in the UI of the site, so we are working on including it in a future version of Cargo. 

This is a cool feature and opens the door for a lot of cool projects. 

For example, you could do an art series for charity and you can set it up so each of the charities will automatically receive payment when one of the pieces is sold. Or, if you’re an artist, you can collaborate with other artists, or create your own marketplace that other artists can join.

Where can our readers learn more?

Our next big release will be Cargo Gems which brings the exciting world of Defi to the NFT space. You can find more information here.  

Readers can visit Cargo here. They can also follow Cargo on Twitter

 

The post NFT Platform Cargo Founder on Building on Ethereum appeared first on CoinCentral.

Source: Coin Central

eToro Review 2020: Is eToro Legit, Safe, and Worth Your Time?

eToro is often referred to as the “Robinhood of Europe,” drawing comparisons to the U.S. Fin-tech unicorn for its user-friend trading experience. For U.S-based eToro users, the platform offers 15 cryptocurrencies for trade, such as Bitcoin and Ethereum. For international eToro users, the offerings expand to stocks and forex.

A few unique features give eToro separate eToro from the cryptocurrency exchange pack: social trading, CopyPortfolio, and CopyTrader– the latter feature allows you to simply “copy” the live portfolio of top cryptocurrency traders on the platform for free. Whereas traditional fund managers are formally accredited and can invest your money for a fee, eToro’s copyable traders are ordinary people that simply have had success or experience trading cryptocurrency.

While the hands-off cryptocurrency investing approach can be fairly attractive, we urge our reader to be very cautious when investing anything. Cryptocurrency is a very risky asset class, and just because your trades are on autopilot doesn’t mean you can’t get rocked all the same (set your stop losses!)

The following eToro review will teach you everything you need to know about the trading platform:

  • eToro’s company history
  • How to make an account on eToro
  • eToro wallets and accounts
  • What are eToro fees
  • How does trading work on eToro
  • What is the eToro Copytrader feature?
  • How to make money on eToro

Key points:

✅ eToro is a user-friendly social trading platform that offers United States traders the ability to trade a variety of cryptocurrency, and European traders to trade a wider variety of financial instruments like stocks, crypto, commodities, currencies, and more.

✅eToro is a very beginner-friendly exchange that allows for a direct fiat to cryptocurrency exchange– new users can get started trading cryptocurrency on eToro for as little as $50.

✅ Features like CopyTrader and CopyPortfolio are a pretty hands-off, albeit risky, approach to cryptocurrency trading.

✅ eToro is heavy on “social” trading and encourages users to discuss short-term and long-term cryptocurrency trades.

❌Trading fees are relatively higher than the industry standard for most other exchanges. We call this the “UI Tax”

❌Users can’t actually access their assets, they can only trade them for fiat. Although eToro is a great trading platform, we’re not too big a fan of the lack of custodial ownership over your cryptocurrency.

eToro’s Company Information

A quick walk down the history lane of the rising fin-tech star leads us through a user-first approach to design and a pivot to embrace the growing cryptocurrency market.

When was eToro founded? Founded in 2007 by entrepreneurs David Ring, Ronen Assia, and Yoni Assia in Israel, eToro has since grown to over 500 employees, operations in 140 countries, and over 13 million users internationally.

How much has eToro raised? eToro is fairly well-capitalized and has raised a total of $222.7M in funding in over 10 rounds, with the latest Series E round coming in April 2018.

Which companies has eToro acquired: eToro has acquired two organizations–Belgium-based cryptocurrency portfolio tracker app Delta in September 2019, and Danish smart contract infrastructure provider Firmo in March 2019.

The holding company eToro (UK) Ltd. is based in London, and eToro has additional registered offices in Cyprus, Tel Aviv, New Jersey, Sydney, and Shanghai.

eToro started with a primary focus on trading fiat currencies and commodities, introducing stocks in July 2013 and a broader array of cryptocurrencies in 2017. eToro offered Bitcoin trading in 2013 with CFDs and was one of the few FinTech platforms of the time providing access to the then-nascent Bitcoin.

In February 2017, eToro expanded its cryptocurrency offerings to Ethereum, XRP, Litecoin, and a handful of other cryptocurrencies. With the ensuing mid-2017 cryptocurrency market boom, eToro doubled down on its international customer acquisition to cement itself as a premier exchange in the cryptocurrency community.

eToro launched its eToro U.S. operations in March 2019, starting with a handful of cryptocurrencies available for trading and eventually growing to over 15.

The platform is unique in the cryptocurrency industry because of features like CopyTrader and social trading, allowing traders to share live trading information, copy the portfolios of the best-performing traders, and approach cryptocurrency investing from a relatively “hands-off” approach* we’ll get into it below..

*Let’s reiterate this important caveat:: don’t invest anything you cannot afford to lose, no platform can offer truly 100% guaranteed gains, all investing (particularly cryptocurrency investing) tend to come with a high degree of risk.*

Key Feature #1: What is the eToro Copytrader feature?

In 2010, eToro leaned into the title of being the world’s first social trading platform with the launch of OpenBook, a feature that allowed anyone in the world to copy successful traders using CopyTrader. OpenBook was regarded as a fairly revolutionary concept in FinTech at the time, winning the Finovate Europe Best of Show for 2011.

You may have been hit with a targeted eToro ad with Alec Baldwin before– here it is again for good measure; it’s actually a decent explainer of what the CopyTrader feature does.

CopyTrader, in our humble opinion, stands as one of the best features in FinTech.

Why? Being able to see how and what top traders are trading is something that some companies try to charge thousands of dollars for, or a percentage of assets under management. eToro takes it a step further by making it possible to “copy” their portfolios with one click. If this idea tickles your fancy, make an eToro account and take a look at the traders– you’ll have to access a particular version of the site depending on your location for regulatory reasons: eToro U.S. and eToro International.

The minimum amount to copy a trader is $200, and the max is $500,000. You can copy up to a limit of 100 traders at the same time.

Here’s our run-through of CopyTrader

Below, there are two sections: “Top Performing” and “Most Copied”

On the Most Copied section, we see the platform’s most popular traders, seemingly sorted in some sort of weighted popularity average rather than percentage gain.

Let’s check out what makes this QE4Everyone (Mati Greenspan) trader so popular.

After clicking on Greenspan’s profile, we see his social posts directed towards the eToro trading community, our current investment (we deposited $300 to test this feature) in his copy portfolio and it’s overall performance– thanks for the $17 bucks, Mr. Greenspan. We also see Greenspan’s bio– a published author, Founder & CEO of a company called Quantum Economics, and a former Senior Market Analyst at eToro.

Clicking on his profile stats, we see his cryptocurrency trading performance per month. While the cryptocurrency market itself experienced some volatility these months, Greenspan seems to have handled it pretty well.

Further, we see how “risky” this trader is with a risk score assigned by eToro, as well as the number of recent trade copiers (of between $100k to $300k in copy value.)

We can get a bit more detail into Greenspan’s trades: we see the total amount of trades in the past year, and his most frequently traded assets.

On the portfolio tab, we see exactly what his trades are at the current moment. From here, we can either buy those same assets manually, or once we add some funds, we can copy Greenspan’s portfolio, and eToro will automatically mirror his trades until you tell it to stop, or until the copy stop loss hits.

While the Top Performing profiles look very appealing, we urge our readers to do the appropriate amount of research on eToro’s platform to understand how they’ve been able to achieve such results.

For example, many of these traders have simply bought one asset months ago that mooned and haven’t launched a trade since. So, by copying their portfolio, you’d basically just be “buying” the asset at its current price.

How to Use eToro’s CopyTrader:

CopyTrader is really simple. Once you’ve made your eToro account (eToro U.S. and eToro International) go to the CopyTrader section, select a trader to copy, and add the funds required.

For example, let’s say we want to copy crypto101_kevin (Kevin Stanley). He seems like a nice guy, but more importantly, he has a decent amount of other copiers and a 27% gain for this year so far.

An important risk-management feature here is the ability to immediately stop copying a trader’s profile if the value drops below a certain amount. Let’s assume we’ve decided we can stomach a 60% worst-case-scenario loss on an investment of $200– we would set the amount accordingly and deposit the funds.

We deposit the USD, and boom– we’re copying a trader.

Key Feature #2: CopyPortfolios

In 2016, eToro furthered its social trading offerings with the release of CopyPortfolios, a long-term thematic investment product of managed portfolios with bundled Top Traders or specific assets using a predetermined market strategy. The majority of eToro’s CopyPortfolios utilize machine learning to seek maximum returns.

There are three CopyPortfolios available in the United States. TheTIE, for example, builds its investment strategy on sentiment analysis, gauging the positive and negative tone of tweets on Twitter.

Key Feature #3: Virtual Portfolio

The eToro virtual portfolio is basically a sandbox, where users receive $100k in fake money to test-drive the platform.

This feature doesn’t seem to be available in the USA just yet.

eToro USA and eToro International

An important distinction to make for our wonderful readers spread all over the world: eToro has two different platforms due to regulatory compliance: one for eToro U.S. and one for eToro International users.

Is eToro available in the US? Yes, but only the cryptocurrency trading aspects. If you’re in the United States, you’ll have access to the same cryptocurrency investment trading platform as everyone else, as well as the CopyTrader and CopyPortfolio features, but you can’t trade stocks or forex (yet).

How to Use eToro in USA – Use the following link to make an eToro USA account.

eToro International: There’s a reason why eToro is often called the “Robinhood of Europe”– but that’s leaving some value on the table: the platform allows international users to trade forex, stocks, and cryptocurrency. If you are outside of the USA, use the following link for eToro international.

How to Sign Up

Ease of Use: A+

Signing up for eToro is a very streamlined experience with the basic “Know Your Customer” (KYC) requirements most exchanges in the US require.

  1. If you’re in the USA, use the following link to make an eToro USA account. If you are outside of the USA, use the following link for eToro international. You’ll land on a page with Alec Baldwin pointing to his phone
  2. Hit JOIN NOW and create your account information.

  1. Before submitting, we recommend taking some time to familiarize yourself with eToro’s Privacy Policy and Terms & Conditions. Once you’ve finished, check the boxes and CREATE ACCOUNT to submit your information.
  2. Now comes the fun part– KYC! As part of this process, newly registered investors are required to provide Proof of Identity such as a valid passport or driver’s license, and in some cases, Confirmation of Residence (such as a valid utility bill.)
  3. Further, new eToro users will be requested to fill out a brief questionnaire to help eToro better understand which features are best suited to their investor profile. Questions include things like: investor’s professional status, level of knowledge of the capital markets, financial liquidity, acceptable levels of risk, and investment goals.
  4. You’re set!

What are eToro’s Fees

eToro’s pricing policies are fairly transparent. They’re higher than the industry standard of cryptocurrency exchanges like Bittrex or Binance, but eToro is technically a different type of platform than just a standalone exchange.

eToro Spread Fees: Spread fees are basically how “no commission” brokers and exchanges like Robinhood and eToro make money– it’s a cost built into the buy and sell price of the cryptocurrency pair you want to trade. The difference of what the asset is on the market (ie. ETH = $200.23) and what it costs to buy it on a certain platform (ie. Buy ETH = $200.45)– the fee would be the additional $0.22 cents.

These fees are fairly reasonable for most cryptocurrency assets, currently ranging between .75% for BTC to upwards of 5% for Tezos, the latter of which is really high.

eToro Withdrawal Fees: There are no ($0) withdrawal fees on eToro in the US ($5 withdrawal fee for all other regions), but there is a minimum of withdrawing $30.

eToro Wallet fees: eToro doesn’t charge fees for sending or receiving transactions, although blockchain fees are still applicable. eToro does charge a .1% conversion fee set to eToro market rates.

To learn more about eToro’s fees, visit their fee page.

eToro Fund Security

eToro’s wallets are secured by multisignature and analytic behavior machine learning, which aims to help the platform’s security team identify and prevent potential threats from malicious third parties.

According to eToro, depositing fiar money into your account is safe, private, secure, and for US users, FDIC insured. Cryptocurrency, however, is not covered by FDIC insurance. Transactions are communicated through Secure Socket Layer (SSL), which helps keep personal information safe.

How to Trade on eToro

We’ll preface this section by saying that nothing in the investment world is guaranteed, and placing any cryptocurrency outside of your savings account carries some risk.

That being said, eToro makes cryptocurrency trading and cryptocurrency risk management a relatively passive, but not risk-free, endeavor if you’re using its CopyTrader feature. Pairing the CopyTrader feature with a Copy Value portfolio drop threshold should provide you both a cryptocurrency investment strategy on autopilot (ideally run by an experienced trader) with training wheels in case of a calamity.

Final Thoughts – Is eToro a Good Platform to Use?

Ultimately, eToro is a user-first company with enough venture capital money raised to ensure the platform meets the growing needs of its users. Everything from the open-market cryptocurrency exchange to the CopyTrader features is super intuitive.

We can see this platform being very successful in providing beginner and intermediate users a great user experience.

However, it’s worth pointing out that eToro seems to be primarily designed for trading, and users actually can’t access their cryptocurrency directly. For example, if you bought 1 BTC, you wouldn’t be able to send it to your hardware wallet (you may be able to send it to eToro’s wallet, but that’s another product for another day.) You would have to sell your BTC for USD, and then transfer your USD back to your bank, and then transfer it to an exchange that does allow you to withdraw the digital asset.

That being said, eToro’s CopyTrader and CopyPortfolio make it a pretty awesome product in the arsenal of any cryptocurrency user. The features are free and don’t charge you any fees on your gains, you just have to pay the spread fee as you would on any other exchange.

eToro is geared towards “social trading” where users can learn from each other; as more users join the eToro platform, we predict more experienced traders will be open to having their portfolios copied to build their reputations in the space. If you are an experienced trader looking to join eToro, they have a fairly appealing compensation program for Popular Traders.

If you do decide to use eToro, use one of the following links based on your location: eToro U.S. and eToro International.

The post eToro Review 2020: Is eToro Legit, Safe, and Worth Your Time? appeared first on CoinCentral.

Source: Coin Central