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Acquiring Bitcoin: Making A Peer-to-Peer Trade Step-By-Step

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If you’re new to trading Bitcoin, or having Bitcoin, there is one thing you need to understand right off the bat. Imagine that Bitcoin is cash, and that you are constantly holding it in plain view, and most of the places you can spend this cash can disappear overnight. This is to say, in Bitcoin the risk of a scam is high. In peer-to-peer trading, it has, over time, lowered, but it still exists.

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This is why when you go to purchase your first coins on LocalBitcoins (in later articles we will cover other recommended peer-to-peer sites), the sellers will be taking a leap of faith on you.

If you have a brand new account, you will have no feedback. So your best bet is to start small. Note: you will need a LocalBitcoins account to create your first trade.

Also read: Acquiring Bitcoin: How to Avoid Centralized Exchanges

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Step 1: Decide on Your Payment Method

This user prefers Paypal second to Bitcoin. It is the easiest and in some ways the safest way to send fiat currency over the web. On LocalBitcoins, you can use virtually any payment method that people accept. Anything from Google Play store credit, iTunes gift cards, Wal Mart gift cards, prepaid debit cards, you name it. But the markets that are most thriving are cash, Paypal, and bank deposits, as well as Western Union and Money Gram.

As the buyer, the odds are in your favor that the trade will conclude successfully for you. Most sellers are only looking to cash out their coins, not to scam. Using a reversible payment method further increases your safety, but the fact is that if you can prove to LocalBitcoins itself that you have sent the funds, they will force the release of the escrow. This is why, in this article, the writer will not recommend in-person cash trades, as there have been problems with those in the past. This is not to discourage a person who is secure in their person and believes they can make a good trade in person. It is for the safety of the greater general population that we suggest using digital methods, at least at first.

In this tutorial, we’re going to create a Paypal for Bitcoin trade on LocalBitcoins. It could as easily be a bank deposit trade, or a Western Union/Moneygram trade, or another form of trade.

Note: you always also have the option of buying Bitcoins by going through one of the sellers who has posted a trade. By creating your own trade, however, you have the ability to set your price and terms of trade.

Step 2: Create Your Trade

First, as shown below, click “Post a Trade.”

Begin filling out the form. It is pretty self-explanatory but there are some parts that need explanation. In the “price equation” field, you need to specify what you’re willing to pay. For this example trade, and so as to not waste anyone’s time, we’re going to set a discount of 20% on the coin. We do this by entering btc_in_usd*0.8 in the field. The price of Bitcoin in USD times .8, or 20% less than the price of a coin.

We also restrict the amounts people can pay, and set a high minimum and maximum amount of trade. While this is actually to ensure that no one wants to take the example trade, these tools are useful for limiting headache. You can say that the maximum amount per trade is $100 at first, for instance, and this will help you build up trust and feedback by doing multiple trades with a certain amount of funds to invest.

Fill in the terms of the trade. You can say anything you want here, and during any dispute the LocalBitcoins staff will consider these terms when making a decision. You can decide to only trade with people who have 100% feedback ratings, or a certain volume of trade, for instance. In Paypal, the typical terms include the type of payment that the buyer will send to the seller. Goods/services and family/friends have different fee structures within Paypal. Some buyers also decide to even that score by deducting the same percentage for those that need it sent as family/friends. This is not the most friendly approach, but the point is that you can be pretty creative here.

We also fill in the “payment window” time slot. This is the amount of time you will have to conclude the trade before it can go into dispute mode. Some people give themselves six hours, others give themselves 30 minutes. If you don’t mark the payment as complete within that window, then it is automatically canceled by the system. You also have the option of canceling any trade for any reason.

The next option is track liquidity. This allows you to only trade your investment amount, instead of allowing continual trades with the same terms. Then you can set some identification requirements and other bells and whistles at the end of the form.

Step 3: Publish Your Purchase Advertisement

When you’re ready, post it.

Now that your advertisement is published, you can edit it as the market changes. To get to the top of the list, you will want to offer higher amounts and more payment methods. This all depends on how eager you are to acquire more bitcoins.

In our next installment of Acquiring Bitcoin we will discuss the do’s and don’t’s of peer-to-peer trading. In later articles we discuss other methods of peer-to-peer trading, including those which are less used but still useful.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 1 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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What’s Behind Cardano’s Rising Popularity in South Korea?

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Cardano, better known as ADA in South Korea, pronounced as “aeda” in the local market, is growing at an exponential rate due to UpBit.

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UpBit, South Korea’s second largest cryptocurrency exchange behind Bithumb, is operated by Dunamu, a subsidiary company of Kakao, the operating company of KakaoTalk and KakaoPay. The two mobile applications, KakaoTalk and KakaoPay, have a market penetration rate of over 90 percent in their respective markets–financial technology (fintech) and messaging.

Although UpBit remains as the only cryptocurrency exchange that has integrated Cardano within the local South Korean cryptocurrency exchange market as of date, the popularity of Cardano on UpBit is increasing rapidly. According to CoinMarketCap, 75 percent of Cardano’s daily trading volume is processed in South Korea, by UpBit.

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Within its debut month, more than 3 million South Korean users signed up to use KakaoPay, the country’s most widely utilized fintech app. KakaoPay operates as a mobile bank, allowing users to send and receive money, obtain loans, and conduct financial activities. KakaoPay supports UpBit because a subsidiary company of Kakao in Dunamu operates UpBit.

Given that Cardano is one of the most popular cryptocurrencies on UpBit in terms of daily trading volume, naturally, as general consumers in the traditional finance market using KakaoTalk and KakaoPay move to the cryptocurrency market, the first few cryptocurrencies they are introduced to are bitcoin, Ethereum, and Cardano.

Cardano is also receiving significantly more mainstream and local media coverage than other alternative cryptocurrencies, specifically because the South Korean media has portrayed Cardano as a direct competition to Ethereum. Because Cardano is a smart contracts protocol, it is structurally similar to Ethereum.

The two key differences between Cardano and Ethereum are that Cardano uses a proof-of-stake (PoS) consensus algorithm and it also has two layers that are used for smart contracts processing and payment settlement.

In South Korea, cryptocurrency mania has swept across most major industries. 5 out of 10 people on the streets, in subways, buses, and cafes talk about bitcoin, cryptocurrency, and blockchain technology on a regular basis. As such, the majority of investors are more technical than other regions.

Most investors of Ethereum in South Korea understand that the Ethereum Foundation and its open-source development team has been planning a PoS update via Casper. When Cardano debuted with a PoS protocol, it led South Korean investors to believe Cardano is a more innovative platform and has a technical edge over Ethereum.

January 31

For cryptocurrencies with strong followers in the South Korean market, January 31 is an important date to keep track. On January 31, local cryptocurrency exchanges are expected to open account registrations to new users and six major local banks are set to provide banking services to cryptocurrency exchanges.

Consequently, on January 31, it is likely that a massive amount of Korean won will flow into the local cryptocurrency exchange market. The recent cryptocurrency exchange ban fiasco, which turned out to be false, further increased the presence and popularity of cryptocurrencies in South Korea.

Cryptocurrencies like Cardano, EOS, Qtum, and Ethereum that have strong bases in South Korea will likely increase in value throughout late January and early February.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.4 stars on average, based on 3 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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Fidelity Investments is Mining Cryptocurrency

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Fidelity Investments is a multi-billion dollar brokerage  that just so happens to be mining cryptocurrency. In fact, it has been at it for three years, using its own computers to harvest bitcoin and Ethereum.

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Profitable Experiment

CEO Abby Johnson recently told Fortune that its U.S.-based mining operation is “making a lot of money.” This comes despite running a relatively modest operation.

Hadley Stern, Senior VP of Fidelity Labs, described his company’s venture as an “experiment.”

The real reason we began mining, and still do, is to learn how the network works, how consensus works, how difficulty levels work,” he said in reference to the mining process.

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The key to profitability has been the dramatic rise in cryptocurrency over the past year. Bitcoin and Ethereum are the world’s No. 1 and 2 cryptocurrencies by market capitalization, and no-one else comes close.

Well Ahead of the Pack

The fact that Fidelity has been at this for three years speaks volumes about the company. Other, much bigger players are still dipping their toes in the market, but are unsure about how to proceed. Goldman Sachs is reportedly on the fence about starting a cryptocurrency trading operation, while J.P. Morgan has already begun handling customer orders for bitcoin-based instruments.

Fidelity is doing a lot more than just mining tokens. Earlier this year, it reached an agreement with Coinbase to let customers view cryptocurrency prices alongside other assets on their Fidelity homepage.

Coinbase is the world’s most funded cryptocurrency exchange with more than 7.4 million users.

Cryptocurrency Prices

The cryptocurrency market ended the week on a firm note, with bitcoin (BTC/USD) reaching a session high of $4,425.00. At press time, the index was up 1.6% at $4,368.

Ether is also trading higher against the dollar, with the ETH/USD rallying more than 3% to $305.

Ripple (XRP) lost momentum on Friday, but still managed a weekly gain of 21%.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 165 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Chinese Government Eyeing Fresh Bitcoin Legislation?

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The Chinese government could roll out fresh cryptocurrency regulation in the coming months permitting licensed brokers to operate, based on recent information from Xinhua.

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The state-owned news publication recently revealed that the government is mostly concerned with stamping out illegal activity involving bitcoin and other cryptos. Government authorities could be planning to regulate the market by creating a licensing program with strict Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.

The Case for AML

The need for KYC/AML protocols has long been raised by cryptocurrency proponents, especially in reference to initial coin offerings (ICOs). In response, the blockchain community has come together to create the Simple Agreement for Future Tokens (SAFT). The SAFT is both an instrument and open-source framework for token sales that vets accredited investors.

SAFT activity is quickly gaining traction, with the likes of Gizer recently issuing a presale of its ICO through SAFTLaunch.

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SAFT was officially created by Protocol Labs in close collaboration with AngelList and Cooley.

China’s Stance Looms Large for Cryptocurrency Market

Although digital assets have recovered from the China-induced flash crash of September, favorable regulations on the mainland could mean big business for bitcoin exchanges. Prior to the ban on ICOs and bitcoin brokers, Chinese investors were responsible for a quarter of all BTC trades.

According to Xinhua, China is likely to pursue a licensing program similar to Japan, a country that recently approved 11 cryptocurrency exchanges. CnLedger, a leading source of cryptocurrency news in China, recently had this to say:

“Xinhua News, official press agency of CN: Virtual currencies have become the top choices of underground economies. We shall adopt ‘0-tolerance policies’ towards crimes hidden underneath and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions.”

Is China’s cryptocurrency ban temporary? It certainly looks that way. Regulators must already know that the ban hasn’t stopped mainland investors from buying cryptocurrencies next door in Hong Kong or Singapore. A saner approach to an all-out blanket ban is a tighter regulatory framework that will stamp out money laundering and other underground activities.

«Featured image from Shutterstock.»

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 165 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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