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Blockchain Startup EverMarkets Enters Race for Bitcoin Futures

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Futures broker

A new blockchain startup by the name of EverMarkets has announced its foray into the bitcoin derivatives industry, where it will compete alongside CBOE and CME Group.

EverMarket Launches Blockchain-Powered Exchange

After a year of development, a team of experienced traders have unveiled EverMarkets, a new derivatives platform and clearing house for bitcoin and other financial assets. The EverMarkets Exchange (EMX) will launch later this year for non-U.S. residents and will future both cryptocurrency and traditional futures contracts.

The bitcoin derivatives market is only a few months old but is already dominated by high-speed traders on Wall Street. According to the official press release issued by the company, EverMarkets is being designed to one day compete with the major exchanges and do so in a manner that benefits smaller investors who don’t have access to the speed-trading algorithms currently employed by the big banks.

EMX will also feature significantly lower fees and pro-rate call auctions, which reduces volatility and improves executive of larger orders.

“EverMarkets will play a vital role in the adoption of cryptocurrencies throughout the wider financial industry over the next several years, and achieving that means creating a market that is secure, reliable and trusted; which is what we’re committed to doing,” CEO and founder James Bai said in a statement. “More than just transforming the futures markets, we intend to demonstrate how cryptocurrencies and blockchain can make every aspect of trading much more efficient and safe.”

The Palto Alto-based company is also panning to issue its own cryptocurrency, EVR, which will be used as a unit of transaction, settlement and administration. Specific details about the token sale have not yet been announced.

The Rise of Crypto Derivatives

Leading derivatives players CBOE and CME rushed to launch their bitcoin futures products in December amid much fan-fare. At the time, bitcoin was hitting record high after record high, with demand so big that leading crypto exchanges had to temporarily shut their doors to new registrants. Since the new year, bitcoin and its altcoin peers have experienced multiple crashes. Although declines have been multifaceted, the fear of new regulations has been consistent throughout.

Traders have long yearned for alternative ways to invest in the crypto boom without having to deposit their money on volatile exchanges. Multiple hacking attempts, both successful and unsuccessful, have also plagued the major exchanges and called into question whether existing regulatory measures are enough.

Against this backdrop, derivatives products may become more attractive for investors seeking exposure to cryptocurrency. In addition to EMX, Nasdaq is also reportedly developing its own bitcoin futures product that could launch sometime this year.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.6 stars on average, based on 505 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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Masternodes as an Investment Vehicle

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Generally, there are thought to be only two ways to make money investing in crypto: holding long-term, or daytrading. These are the methods most often discussed, but there are many other ways as well. You can mine crypto, you can invest in crypto companies, or you can even work as a developer building solutions using blockchain technology.

The method we are going to talk about today is by using a masternode. This is the closest method to buying a dividend stock and collecting the returns, and many crypto-enthusiasts are finding it to be incredibly useful.

Explaining Masternodes

To start with an analogy, a masternode is to proof-of-stake as a miner is to proof-of-work. Rather than solving complex computational problems to receive cryptocurrency, a masternode has you “stake” a large amount of cryptocurrency and collect fees for updating and managing the blockchain.

Masternodes generally require a large amount of cryptocurrency to be staked, since this disincentivizes bad actors from costing themselves money.

The beautiful thing about masternodes is not only do you benefit from receiving coins in exchange for processing transactions, but your coins then appreciate in value. And to sweeten the deal even more, those coins can become part of your masternode and earn you more coins.

How to Run One

Now that you understand the basics of what a masternode is, it is time to think about how you would go about running one. Much like investing in an equity, you would want to do your research on which cryptocurrency you think is the best investment of your time and money. There are a lot of protocols which accept masternodes, but Dash is the most well-known one right now. The level of risk and reward you are looking for will determine your answer here, but make sure to do your own research.

Two of the main things you need to set up a masternode are storage space and an IP address. Once you have these, you will likely want to set up a virtual private server (VPS) for security purposes.

Now it is a matter of making sure you know how to use the Linux command line, or hiring a third-party service to help set up your masternode. This is your decision, but it won’t cost a lot and you don’t want to risk losing your crypto because you were overconfident in your technology skills.

To get your masternode running, buy the required amount of coins, transfer it to your desktop wallet, and download the blockchain. Now you are ready to go, but will need to look up the actual technological steps from a reliable source.

There are two major mistakes beginners make. First, they fail to keep their desktop wallet open and running 24/7, and second, they forget to configure their wallets to stake their rewards. Both of these mistakes cost rewards over time, and it is best to avoid them from the start.

Examining the Risk and Reward

As with any investment, you want to examine the risk and reward to figure out whether running a masternode on a network suits you. The risk is clear, you are putting up a significant amount of cryptocurrency. There is a slight risk of the coins being stolen, but your bigger worry is the coins go down in value. You would then have a large position in a cryptocurrency which is dropping, and would be exposed to lose a lot of money. Dash has a 1000 unit minimum, which amounts to approximately $260,000 right now. That is a huge investment and shouldn’t be taken lightly. This is where the argument can be made to invest in lower cost coins.

Returns are also important, and you should calculate the implied rate of return by looking at how many coins you are likely to earn on the coins invested. You definitely want to see more than a few percent on this, as this is a risky asset, and you should be compensated for taking the risk.

Finally, to assess your risk, look at the GitHub community and social media around the coins and see if it is relatively positive or not. The last thing you want is to buy into a sinking ship.

Featured image courtesy of 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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Crypto Credit Card? MasterCard Wins Blockchain Payments Patent

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MasterCard has moved one step closer to developing a cryptocurrency-backed credit card after one of its patents was approved by U.S. regulators.

Patent Approved

According to the filing with the U.S. Patent and Trademark Office, MasterCard has received the green light to develop a proprietary method for “managing fractional reserves of blockchain currency.” The new system will link blockchain-based assets such as bitcoin and Ethereum to fiat currency accounts, which virtually enables users to pay for goods and services in cryptocurrencies using their credit cards.

The approval was granted on Tuesday, more than three years after it was originally filed.

The document details MasterCard’s intent to create a system that could theoretically speed up cryptocurrency transactions and encourage more people to adopt digital assets for everyday usage. Until now, crypto assets have made excellent stores of value but payment options remain limited as blockchains address scalability issues on their networks.

MasterCard identified all the way back in 2015 how users were beginning to favor cryptocurrencies over traditional payment methods due to anonymity and fraud prevention. That being said, the patent also highlights limitations in using cryptocurrencies for everyday life, including the time it takes to process transactions.

Merging Crypto and Traditional Payments

While no products have been brought to market as a result of the patent, MasterCard believes that the proposed system could enable users to retain the benefits of distributed ledgers without sacrificing the convenience of traditional payment systems. For merchants themselves, such a system would enable them to accept cryptocurrency payments without the risk.

Nevertheless, bitcoin adoption among businesses has grown significantly since the bull market began in early 2017. Hundreds of thousands of merchants worldwide already accept BTC as a form of payment, including Overstock, Microsoft and Expedia.

Japan – a country that recently recognized digital currency as a form of payment – has also witnessed an upsurge in merchant adoption and acceptance of bitcoin.

Behind the scenes, blockchain companies are looking to bring new scalability to their networks. Back in March, a newer version of the Lightning Network went live following a yearlong consultation. The upgrade is said to enable faster blockchain payments without confirmation bottlenecks.

With respect to MasterCard, it is unclear whether the company will move forward with its new patent. In an email conversation with CNBC, senior vice president Seth Eisen that the application is a way for the company to safeguard intellectual property in pursuit of new innovations:

“We’re consistently looking at ways to bring new thinking and new innovations to market to create value for us and our customers and cardholders. Patent applications are part of that process, taking steps to protect the company’s intellectual property, whether or not the idea ever comes to market.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of 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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4.6 stars on average, based on 505 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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IBM Goes All In On Stablecoin Project as Mainstream Crypto Adoption Grows

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Dow blue-chip IBM (IBM) has teamed up with a financial technology startup to launch a new stablecoin that will be pegged to the U.S. dollar. The announcement is the latest in a series of positive developments linking mainstream business to the bustling world of cryptocurrency.

IBM Backs Stablecoin

IBM and fin-tech startup Stronghold are developing a new stablecoin by the name of “Stronghold USD,” which is backed by Federal Deposit Insurance Corporation (FDIC)-insured U.S. dollars. Reserves will be held in Prime Trust, a blockchain-focused asset manager.

By experimenting with virtual dollars, IBM is looking to develop new ways of helping financial institutions process payments more quickly and securely. The company is leveraging its existing relationship with Stellar to launch the new stablecoin. This means Stronghold USD will be backed by the Stellar blockchain.

This isn’t the first time IBM has tapped the Stellar protocol to experiment with cryptocurrency. Earlier this year, the technology giant joined hands with environmental startup Veridium to transform carbon credits into digital tokens. As Hacked reported in May, the carbon credits will be used by businesses to offset environmental damage.

IBM’s original partnership with Stellar involved work on a global payment network powered by blockchain solutions. Through Stellar’s digital ledger, IBM is seeking to develop 12 currency corridors in the South Pacific.

Stablecoins: Opportunity and Controversy

In principle, a stablecoin removes much of the volatility from digital currency trading by ensuring that each token is tied to a government-backed currency. Conceivably, each Stronghold USD token will be pegged to the U.S. dollar.

The problem with stablecoins is confirming whether the token is actually backed by an equal quantity of government-backed currency. Much of the controversy surrounding stablecoins emanates from Tether, a highly controversial project that has repeatedly failed to provide evidence of its U.S. dollar reserves.

Tether has also been accused of inflating the price of bitcoin by flooding the market with USDT tokens. Tether is run by the same CEO as Bitfinex, a leading digital currency exchange, prompting an investigation of both companies by U.S. federal regulators. This culminated in a subpoena by the U.S. Commodity Futures Trading Commission (CFTC) on Dec. 6.

Nevertheless, stablecoins have surged in popularity as investors search for a reliable funding mechanism to enter trades. Tether’s USDT token accounts for nearly one-fifth of total cryptocurrency trades, according to data provider CoinMarketCap.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of 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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4.6 stars on average, based on 505 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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