Beyond Bitcoin: Why There Will Be More Than One Successful Cryptoasset

It was created in 2009 when its pseudonymous inventor, Satoshi Nakamoto, figured out how to do a seemingly simple thing: send money over the …

People often ask me, “If bitcoin is so great, why do we need all these other coins like ether?”

Or, “Why do 2,000 different cryptoassets even exist? Shouldn’t we all just use the best one?”

It’s a logical question.

Various Hand Tools Hanging On Pegboard In Workshop

Why are there 2,000 different cryptoassets? Because each one is optimized for a different use case.


We’re taught to think about bitcoin and other cryptoassets as currencies. Viewed that way, having multiples makes no sense. Why do we need multiple digital currencies if there’s only one internet?

The answer is that the term cryptocurrency is misleading.

Traditional currencies like the dollar, the euro and the yen all do essentially the same thing; they are payment tools in different countries or regions. But cryptoassets like bitcoin and ether actually do very different things. Understanding those differences is the key to understanding which ones will be important in the future.

Bitcoin vs. Ether

Bitcoin was the first and is today the most valuable cryptoasset in the world. It was created in 2009 when its pseudonymous inventor, Satoshi Nakamoto, figured out how to do a seemingly simple thing: send money over the internet safely without using a bank.

The software that allows this to happen is called the “Bitcoin blockchain.” As the first blockchain ever created, the software underlying bitcoin is pretty basic. Essentially all you can do with it is send, receive, and store bitcoin.

Ether, by contrast, was created in 2015. The software that underlies ether is called the “Ethereum blockchain.” It’s much more flexible than the Bitcoin blockchain. In fact, the Ethereum blockchain is “Turing-complete,” meaning you can program it to do anything. If Bitcoin is a beeper, Ethereum is a smart phone.

It’s easy to imagine why Ethereum’s flexibility is a big deal. If you can programmoney, you can replace many of the things that the traditional financial services industry charges us huge fees for.

What Could Ethereum Do? Here’s One Example

Before I joined the crypto industry, I was the CEO of a business called We didn’t always have that URL, however; we bought it from a squatter for quite a bit of money.

When we bought it, we didn’t trust the squatter: We weren’t going to wire him money before he sent us the URL. Similarly, the squatter didn’t trust us: He wasn’t going to send us the URL before he got his money.

To facilitate the transaction, we hired a lawyer to sit in the middle and act as an escrow agent. We wired our payment to the lawyer, the squatter sent him the URL, and the lawyer crossed the transaction. For this service, he charged us something like $2,000.

Today, rather than hiring the lawyer, we could write a small program for the Ethereum blockchain. The program would say: When Matt uploads the money (in ether) and the squatter uploads the URL, cross the transaction. We would save $2,000! Multiply that by a hundred different simple financial services and you can see why ether is potentially a big deal.

Does That Mean Ether Is Better Than Bitcoin? No.

Does that mean ether is “better” than bitcoin?


From a software security perspective, Bitcoin’s limited functionality “limits the attack surface” for cyber attacks. As a software that handles money, security is hugely important, and Bitcoin’s simplicity makes it super secure.

Moreover, from an ease of use perspective, having only “send”, “receive”, and “store” as your options makes it easier to avoid human error.

As such, bitcoin’s underlying software is optimized to be extremely secure and easy-to-use: Perfect for bitcoin’s primary use case as a kind of “digital gold.”

By contrast, ether’s underlying software is more flexible, which is why people talk about it disrupting the broader financial industry. It’s not as good as Bitcoin at storing value, but it’s way better at replacing overpaid lawyers and investment bankers.

Other leading cryptoassets are optimized for other use cases. XRP, for instance, is optimized for speed, and is designed to replace traditional international payment systems. Monero is optimized for privacy, and is optimized to complete with private/offshore banking solutions. And so on.

Does this mean we need 2,000 different cryptoassets? Of course not. Most of them are worthless and will trade to zero.

But my guess is that a handful of them will find major addressable markets and become quite valuable in the future.

PS: Crypto experts will undoubtedly point out that people are working to expand bitcoin’s core functionality using off-chain enhancements, such as the Lightning network. It’s true, and that work is very interesting. I’ll address the idea of off-chain enhancements to various blockchains in a later column.

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Cool Hip Tech Brands Don’t Get Bitcoin, But Global Brands Do

Singh, a financial technology veteran hired by BitPay for his ability to bring new products to market, believes Bitcoin is the least expensive way for …

“I talk to cool hip tech brands who are spending all this money on marketing right now,” says BitPay Chief Commercial Officer Sonny Singh. “All they have to do is accept bitcoin to get new customers. The whole crypto community, which has been valued as high as $800 Billion, would know about these brands. [They] would probably be doing about 5-10% of their online sales in bitcoin. And of that 5-10%, nearly 60% of those customers will be first-time customers.”

BitPay hired Singh for his fintech experience.

Sonny Singh, Chief Commercial Officer, BitPay

Karina Louise Photography

Singh, a financial technology veteran hired by BitPay for his ability to bring new products to market, believes Bitcoin is the least expensive way for brands to acquire new customers quickly.

“Yet, cool hip tech brands are the ones not doing it,” he says. “It boggles my mind when I talk to these mid-tier brands and they don’t even know about [bitcoin]. These are cool tech kids that are running these companies, backed by VCs. And they don’t even understand how Bitcoin works?”

Global brands like Microsoft, NewEgg, ATT, Avnet, Dish Networks all accept Bitcoin, but very few silicon valley startups or technology unicorns do.

“I get snail mail every day from new startups trying to get me to buy their sleeping mattresses or eye glasses when they could increase their sales dramatically by accepting Bitcoin,” he says. They’ll say they’re too busy or that they can’t hold bitcoin on their balance sheet.

“And we tell them they don’t have to,” says Singh. “They can settle in US dollars the next day. It is still not interesting to them. They’re going to get [potentially millions] in new revenue per year. Do they care about that? Still, they say, it’s not a fit for them right now or they’re too busy.”

According to Singh, merchants tell BitPay – which processed over $1 billion-worth of cryptocurrency transactions in 2018 for the second year in a row – that 53% of their customers that spend with bitcoin are new customers. Since you’re not spending much money to acquire these customers, the customer acquisition cost is, therefore, relatively low. And growing companies need revenue the most. But, while they might pay millions of dollars for an advertisement, they won’t implement Bitcoin and court its community.

“If you want to go after a community that is 18-45, affluent, 80% male, then the quickest way to do that [for those companies] is to accept Bitcoin,” says Singh.

When compared with credit cards, BitPay offers real savings. Accepting Bitcoin through BitPay costs 1% and is cheaper than a credit card by about 4%. There is no chargeback exposure. Merchants pay 2.75% through Stripe with a 2% chargeback risk on top of that. “You can make 4% margin on every product you sell Bitcoin versus credit cards,” says Singh.

Air Baltic, one of the largest airline carriers in Europe, charges a 5 euro fee on credit card purchases. With bitcoins, which the company accepts through BitPay, there is zero fee. Airlines and cell phone providers, such as new bitcoin accepting AT&T, have tight margins. Though mid-level tech brands aren’t always convinced by increased revenue and lower fees, payment managers at Microsoft and Newegg, both of which accept Bitcoin, recognize the payment value proposition. Singh doesn’t think they’re too concerned about $10 million to $20 million in new revenue.

When first considering accepting Bitcoin, big brands first want to know the legal implications of accepting Bitcoin. The legal team looks at it, and since there is nothing illegal about accepting Bitcoin payments, they sign off on it. Their next question often centers around if the payment method needs to be marketed any differently. They don’t.

“A lot of the project managers at Microsoft and AT&T, and the people doing the implementation, don’t know bitcoin and neither do most of the executives,” says Singh. “It takes longer to explain because they haven’t used bitcoin before.” Sometimes, BitPay’s educational efforts lead to individual converts. By the time BitPay went live at Avnet, for instance, a couple of the guys on the implementation team owned their own bitcoins. But, in general, big companies don’t have a lot of bitcoin champions internally.

When implementing Bitpay, big corporations assign project teams, and make a big deal of the timeline. “It’s great to watch them do it that way versus regular merchants [who] install a code and put it live,” says Singh. “They accept their timeline and dates and update calls every week, and do testing every week – it’s pretty amazing.” Eventually, it goes live.

“They just see it as a great payment option that they themselves might not use,” he says. “Then they learn why it’s better during the whole implementation process, and how supportive the community is by all the media attention they get. When big brands see Microsoft and Dish Networks go live, they take notice. It helps move brands.”

BitPay processed $1 billion in transactions in 2018.

A mobile, QR-code payment made via the BitPay app.


BitPay has executive meetings with Fortune 2000 companies, and their executive teams often want to learn about Bitcoin. They want to know what they can do with it. BitPay sometimes does more education in these meetings than selling, giving them background on Bitcoin, how it works, the crypto community, cryptocurrency regulation and things like that.

The Fortune 500 brands BitPay talk to generally don’t understand how bitcoin transactions work. And so BitPay talks to them over and over again. Payment managers, who are supposed to be payment experts, don’t know how Bitcoin works. “They assume they have to hold it on their balance sheet and it is too volatile,” says Singh.

When they learn they do not need to do this when using BitPay, accepting Bitcoin makes more sense. The follow-ups begin to look more like traditional sales once the educational aspect is through.

For big brands like AT&T, it comes down to the pros and cons. “It’s cheaper and quicker than a credit card,” he explains. “People all throughout America get it.”

AT&T began accepting Bitcoin through BitPay in 2019. Anything that’s in their web app and the mobile app can be paid for in bitcoin. BitPay started engaging with AT&T a year and a half ago. AT&T is actually charging that 1% fee back to the customer.

“The AT&T excitement gets all these other brands moving faster now, that really helps everything out,” says Singh.

When Avnet, a world-leading distributor of electronic components and services, began accepting bitcoin payment process BitPay in March 2019, the news made Avnet the third largest technology company in the U.S. to accept Bitcoin payments, behind Microsoft and Dell.

“If you’re in Brazil, and you need to buy $2 million IBM servers from Avnet, you send Avnet $2 million and you pay 2% FX spreads on both sides, and it takes five days,” says Singh. “We can help Avnet get paid in one day, for a 1% fee and settled in USD.”

To BitPay, that’s really the pain point that Bitcoin can solve for cross border payments. They’re cheaper and quicker than wires in most regions in the world. “CFOs hate bank wires,” said Singh. “You send a million dollars from Thailand and it comes out in America at $950,000 dollars. What happened to the $50,000? FX fees. They might not even tell you how much it’s going to be half the time or how long it’s going to take.”

While some Bitcoin purists are upset that the whole world’s not accepting bitcoin yet, Singh is convinced of BItcoin’s value position in payments and confident in the progress it has made.

“From a Fintech point of view, Bitcoin’s actually working,” says Singh. “It’s making great progress. Everyone around the world knows the name Bitcoin now and understands bitcoin a little bit. It’s got the same brand recognition as Coca Cola or IBM, Argentina, Brazil or India now, which is pretty remarkable because it happened naturally and virally. Nothing in fintech moves fast, and this is moving faster than anything we’d ever seen in fintech before. “

Singh, is not concerned Bitcoin is not yet at McDonald’s. “It doesn’t solve a pain point at McDonald’s. But, we’re slowly seeing its adoption in use cases around the world.”

BitPay employees in the US, Europe, and Latin America receive part of their salaries in Bitcoin. In Argentina, its employees take one hundred percent of the salary in bitcoin. Why?

“Not because they think bitcoin is going up,” says Singh. “Because their own currency goes down. That’s the value of Bitcoin the American’s don’t quite see. Because in America it’s just been trading or speculation. People outside and America and Europe need bitcoin. They trust it more than their own currency.

He adds: “In the US, we all trust USD, and in Europe they trust the euro. Outside of that, most people don’t trust their own currency. Bitcoin enables them as a currency hedge. If you’re in India, and you want to buy something on Microsoft’s website, your Indian credit card wouldn’t work anyway. Bitcoin enables people all over the road to be part of the global economy now and you are getting the same Bitcoin in India as in Argentina and the US, which is the same bitcoin that Microsoft accepts. It’s actually working in a full circle and brings everyone together. That’s the message people miss.”

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Canadian Bank of England Governor Mark Carney Calls for a Global Monetary System to Replace …

He also is unusual in his appreciation of the future and the place of next-generation virtual currencies – Synthetic Hegemonic Currencies.” Clippinger …
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Last week Canadian Governor of the Bank of England, Mark Carney unleashed a firestorm at the Economic Policy Symposium in Jackson Hole, Wyoming, USA by stating that while the U.S. dollar is facing pressure due to globalization and trade disputes – and the impact on national economies is stronger today than it was in the past, there needs to be a new global monetary system to replace the US dollar.

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The U.S. economy is about 25 percent of the global economy in terms of total dollars but is significantly less if you adjust for price differences across countries. The American dollar is even smaller relative to world trade- but, the dollar is the dominant currency for trade invoicing and cross-border payments across the world. More than 50 percent of all international trade is denominated in dollars, while 30 percent is denominated in euro. The remainder is a blend of other currencies – the British pound, Japanese yen, and Chinese yuan.

MIT scientist and author, Dr. John Clippinger, did not mince words on the importance of Carney’s remarks:

“Mark Carney is the thought leader among Central Bankers who has an appreciation of the imminent climate and financial risks confronting the international monetary system. He also is unusual in his appreciation of the future and the place of next-generation virtual currencies – Synthetic Hegemonic Currencies.”

Clippinger is one to watch – he is working on how to design micro-monetary policies to enable value generation and retention within local economies to achieve resiliency, carbon reduction and equity in the digital asset space.

From Carney’s speech:

“Even a passing acquaintance with monetary history suggests that this centre won’t hold. We need to recognise the short, medium and long term challenges this system creates for the institutional frameworks and conduct of monetary policy across the world. Given the experience of the past five years, I will close by adding urgency to Ben Bernanke’s challenge. Let’s end the malign neglect of the IMFS and build a system worthy of the diverse, multipolar global economy that is emerging.”

Carney added that – due to the dollar’s dominance of the global financial system – risks of a liquidity trap of ultra-low interest rates and weak growth are growing.

There was a real sense of urgency in his speech – particularly when he stated that social turmoil and chaos could entail if policymakers ignore his warning of a global financial apocalypse.

Carney is not alone – chief economic adviser at AllianzMohamed El Erian, IMF Managing Director Christine Lagarde, Putin and the Kremlin, and the Chinese central bank have all suggested that a new currency is coming to replace the dollar.

The Canadian said that the best solution in terms of stability would likely be a diversified multi-polar financial system, something that could be provided by technology. He stated that the dollar’s destabilizing reserve status role in the world economy has to end, and explained that one option was for central banks to join together to create their own replacement reserve currency, one tied to a “Synthetic Hegemonic Currency”.


In order to try and avoid a global financial meltdown, Carney suggested another solution could be to make the IMF’s SDR a reserve currency, specifically saying that as a first step to reorder the world’s financial system.

Fiat Currencies

In terms of fiat currencies, Carney also mentions China’s yuan as the most likely fiat candidate to replace the dollar as the world’s reserve currency adding it has a long way to go before it is ready to assume the mantle.

“…for the Renminbi to become a truly global currency, much more is required. Moreover, history teaches that the transition to a new global reserve currency may not proceed smoothly.”

But according to Matthew C. Kleinat

“The more straightforward alternative to the dollar, at least in theory, is the euro. It is the currency of the world’s second-largest economy and the largest contributor to global trade. Europe is a rich democracy with strong property rights. Unfortunately, Europeans have been unwilling to accept the costs associated with reserve currency status. They do not want to issue enough debt to satisfy their own domestic needs, much less those of the rest of the world. This choice is essential for understanding the dollar’s continuing predominance.”

On Digital Currencies

Carney unsurprisingly talked about Facebook’s Libracoin as he broke ranks with other central bankers to say he was keeping ‘an open mind’ about Facebook’s new currency Libra – the most high-profile proposed digital currency to date according to Carney. But, he added that it faced a host of fundamental issues that have yet to be addressed. Carney is currently under fire by the UK media for secretly meeting Mark Zuckerberg at Facebook in California, on April 16, two months before Libra was unveiled.

“As a consequence, it is an open question whether such a new Synthetic Hegemonic Currency (SHC) would be best provided by the public sector, perhaps through a network of central bank digital currencies,” the head of the BoE added.

Such a system could dampen the “domineering influence” of the U.S. dollar on global trade.

Saga Foundation’s Founder, Ido Sadeh Man, believes there is a burning question that must be answered:

“Who will be the issuer of such a currency?”

“Mark Carney’s comments about the rising need in a global currency to replace the dollar stem from the fact that trying to manage a global economy based on national structures is no longer sustainable. How can a currency that responds to an America-first policy remain the reserve currency that impacts the global economy? We at Saga echo Carney’s thoughts on the need for an alternative, based on a basket of currencies rather than a single national currency.

“The alternative, however, can only be external; one that maintains accountability and relies on the representation of the people that are using the currency. Such a solution must be accountable to the holders of the currency and reflect the core fundamentals Carney suggests.

“The question is, therefore, not ‘the what’ but ‘the who’: who will be the issuer of such a currency? We agree with Carney that Libra is not the solution as we will be losing even more accountability with an unelected corporate being in charge. What Carney is suggesting is for an alternative to be central-bank-issued, but this is just not going to happen. In the 50 years since the IMF issued the SDR, there have been many calls for the monetisation of this basket of currencies, but we don’t see the US accepting this from a political perspective. Why would the Federal Reserve agree to participate in an SDR currency which has a purpose to diminish the power of the dollar?”

“When we established Saga two years ago, it seemed absurd that a central bank would believe that the reserve currency of the world would not be issued by a nation-state. This assumption was reinforced by Jacob Frankel, a member of Saga’s Advisory Council and former Governor of the Bank of Israel, as well as Saga’s Chief Economist, ex-central banker at the Bank of Israel and member of the Bank’s Monetary Committee. Two years later, we have witnessed the ever-growing distrust and misalignment of the equilibrium between the central bank and their respective governments. With the next financial recession looking increasingly imminent, now is the time to take measures before it’s too late. We need to rectify the way our financial and governmental institutions are working, or else we’re in trouble when the next crisis arrives.”

The Saga Foundation’s advisory team includes the likes of Nobel Laureate in Economic Sciences Prof. Myron Scholes, Chairman of JPMorgan Chase International and Chairman of the Board of Trustees of the Group of Thirty (G30) Jacob A. Frenkel, PhD, Avi Licht, Former Deputy Attorney-General of Israel, Prof. Dan Galai is the co-developer of the Chicago Board Options Exchange’s Volatility Index (VIX), Prof. Emin Gün Sirer from Cornell University – globally recognised as a thought leader in the cryptography and cryptocurrency sectors, as well as well-known Israeli Blockchain players Matan Field, PhD and Eyal Hertzog from Bancor and others.

More from Carney’s speech in Jackson Hole:

“For decades, the mainstream view has been that countries can achieve price stability and minimise excessive output variability by adopting flexible inflation targeting and floating exchange rates. The gains from policy coordination were thought to be modest at best, and the prescription was for countries to keep their houses in order. This consensus is increasingly untenable for several reasons.”

“Globalisation has steadily increased the impact of international developments on all our economies. This, in turn, has made any deviations from the core assumptions of the canonical view even more critical. In particular, growing dominant currency pricing (DCP) is reducing the shock-absorbing properties of flexible exchange rates and altering the inflation-output volatility trade-off facing monetary policymakers. And most fundamentally, a destabilising asymmetry at the heart of the IMFS is growing. While the world economy is being reordered, the US dollar remains as important as when Bretton Woods collapsed.”

“…blithe acceptance of the status quo is misguided. Risks are building, and they are structural. As Rudi Dornbusch warned, “In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could”. When change comes, it shouldn’t be to swap one currency hegemon for another. Any unipolar system is unsuited to a multi-polar world. We would do well to think through every opportunity, including those presented by new technologies, to create a more balanced and effective system.”

Tyler Durden from Zerohedge outlines the end game in multiple articles, a few of which can be read here, here, and here.

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AboutRichard Kastelein

Founder and publisher of industry publication Blockchain News (EST 2015), a partner at ICO services collective Token.Agency ($750m+ and 90+ ICOs and STOs), director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of some two dozen Blockchain startups and has written over 1500 articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat.Irish Tech News put him in the top 10 Token Architects in Europe.

Kastelein has an Ad Honorem – Honorary Ph.D. and is Chair Professor of Blockchain at China’s first Blockchain University in Nanchang at the Jiangxi Ahead Institute of Software and Technology. In 2018 he was invited to and attended University of Oxford’s Saïd Business School for Business Automation 4.0 programme. Over a half a decade experience judging and rewarding some 1000+ innovation projects as an EU expert for the European Commission’s SME Instrument programme as a startup assessor and as a startup judge for the UK government’s Innovate UK division.

Kastelein has spoken (keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London (5x), Manchester, Minsk, Nairobi, Nanchang, Prague, San Mateo, San Francisco, Santa Clara (2x), Shanghai, Singapore (3x), Tel Aviv, Utrecht, Venice, Visakhapatnam, Zwolle and Zurich.

He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He’s written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and, and his work and ideas have been translated into Dutch, Greek, Polish, German and French. A journalist by trade, an entrepreneur and adventurer at heart, Kastelein’s professional career has ranged from political publishing to TV technology, boatbuilding to judging startups, skippering yachts to marketing and more as he’s travelled for nearly 30 years as a Canadian expatriate living around the world. In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, ‘The Hitchhiker’s Guide to the Seas’ travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, Netherlands where he’s raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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Qualcomm targets Wi-Fi market in push to expand beyond phones

Qualcomm Inc recently announced a new range of Wi-Fi chips designed to work with Wi-Fi 6, the newest version of the technology and one that …
Qualcomm Inc recently announced a new range of Wi-Fi chips designed to work with Wi-Fi 6, the newest version of the technology and one that Qualcomm hopes will help boost sales of its separate 5G chips.

Qualcomm is the world’s biggest supplier of mobile phone chips, but has been looking to expand beyond that as the global phone market has stagnated in recent years.

The San Diego-based tech company has instead been pushing into chips for automobiles, headphones, laptops and other devices. Its Wi-Fi chips are found in devices such as the “mesh” Wi-Fi routers made by Alphabet Inc’s Google, which are designed to help provide better coverage over an entire household.

Separately, Qualcomm is also working with phonemakers such as Samsung Electronics Co to bring chips for 5G to phones.

With the new series of Wi-Fi chips, Qualcomm is hoping its two lines of business will one day come together. Both Wi-Fi 6, a new standard expected to be fully rolled out by 2022, and 5G technology differ from their predecessors in that they are designed to work more closely together, allowing Wi-Fi routers to more seamlessly connect with mobile phones and other devices that use both kinds of networks.

Moreover, unlike previous 4G technology where networks were primarily owned by telecommunications companies, 5G technology will allow businesses to build their own private 5G networks to better connect large campuses, factories and other locations that remain difficult to blanket with Wi-Fi.

Cristiano Amon, Qualcomm’s President and chief of its chip division, said the company hopes to one day sell chips for both technologies to the makers of business-networking gear. “You should expect in the future to see us talking about integrated platforms that have both millimeter-wave and Wi-Fi 6.”

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How to Invest in Bitcoin Using Your Bitcoin Wallet?

There are several ways to trade bitcoin. The most common and popular way to trade is directly from a bitcoin wallet. A wallet is a digital address that …

There are several ways to trade bitcoin. The most common and popular way to trade is directly from a bitcoin wallet. A wallet is a digital address that allows you to store your bitcoin. There are several trading platforms that allow you to purchase and sell bitcoin directly from your wallet. This compares to trading using contracts for differences which trade the underlying movements of bitcoin. When you trade bitcoin from your wallet, your address points to another address where you are exchanging your bitcoin for a fiat currency or another cryptocurrency.

What is a Bitcoin Wallet?

A Bitcoin wallet is a software program that allows you to store your coins using either private or public keys. The individual keys, which are basically passwords, allow you to send and receive digital coins. They also monitor your balances. If you want to use bitcoin to buy and sell products and services, you will need a bitcoin wallet to perform these functions.

When you want to acquire bitcoin, whether you are using a fiat currency like the dollar or the Euro, you direct the sender to a unique address issued by your bitcoin wallet. Your information is stored in your wallet in the same way you would store your computer files in a USB drive or in the cloud. This information only points to your cash’s location on the blockchain. This blockchain is a lspublic ledger which allows the information to be authenticated. When you spend your bitcoin, you are pointing your wallet to another address.

Using Mobile Wallets

For those actively trading Bitcoins daily, a mobile bitcoin wallet is an essential tool. Your mobile wallet is an application that runs on your smartphone, storing your private keys and allowing you to pay, buy and sell your bitcoin. This also works when you want to pay for items such as goods and services. Additionally, some apps enable users to use their smartphones’ near-field communication feature, which means they can simply tap their phone against the reader, without having to provide any information at all.

Trading Bitcoin

When you trade bitcoin, you are buying and selling a digital currency against fiat currencies such as the dollar or euro, versus another cryptocurrency such as Ethereum or Litecoin. The goal of trading bitcoin is to buy it lower than you sell it and generate a profit. Some bitcoin trading platforms provide margin which allows you to short bitcoin and benefit if the price falls. This is like shorting stocks. To be able to short bitcoin, you need to be able to borrow bitcoin, sell it short, and then buy it back to repay your bitcoin loan. Some trading platform provides margin which allows you to leverage your bitcoin and enhance your returns. The trading platform that you use will need access to your bitcoin address. This allows you to trade bitcoin using margin.

Note:This article is for an informational purpose only. Coinpedia is not responsible for the accuracy of the content provided in the article. Thereby, readers are advised to consider the company’s policy & T&C before making any investment.

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