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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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How Pantera Capital Engineered a 10,000% Return Investing in Cryptocurrency

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When it comes to bitcoin’s most ardent supporters, few can compare to Dan Morehead, the CEO and chief investment officer of the California-based Pantera Capital. Back in 2013, Morehead outlined a vision for what he believed was the greatest trade of a generation. Five years later, he is reporting back.

Eye-Popping Returns

Since its inception in 2013, Pantera Capital’s bitcoin fund has returned 10,136.15%, net of fees and expenses, Morehead reported Friday in a five-year anniversary post. Unsurprisingly, Morehead and fellow investment officer Joey Krug are still bullish on bitcoin. To that end, they shared two emails sent by the fund in 2013 to “share the original logic – as it is equally compelling today.”

At the time the emails were sent, bitcoin was trading at $104. It was morehead’s assertion that the cryptocurrency would spike to $5,000 because “bitcoin dominates cash, electronic fiat money, gold, bearer bonds, large stone discs, etc. It can do all of the things that each of those can. It’s the first global currency since gold. It’s the first borderless payment system ever.”

He added:

“In my opinion, it’s like deciding whether to buy Microsoft back in the day at $0.20 a share. It was hard to do when the stock was just at $0.10. In the fullness of time…clearly a great trade. I believe bitcoin right now is just like that. The world’s first global currency since gold and the world’s only borderless payments system (frictionless to boot) at a market cap of $3bn? Now that Silk Road is gone, a new wave of sophisticated investors are entering. It feels like it’s happening. A melt-up which could be orders of magnitude.”

Still a Great Time to Buy

Although Morehead incorrectly predicted bitcoin’s bottom back in May, he believes that the bear market can largely be attributed to institutions “buying the rumor and selling the fact” in anticipation of quality-regulated custodial services. In his view, bitcoin’s current price relative to its previous peak is one of the more compelling reasons to buy the cryptocurrency.

On a more fundamental level, Pantera believes cryptocurrency is the only viable method for achieving borderless payments. In the 2013 letter, Morehead described bitcoin as the first global medium of exchange since gold and the first borderless payment system ever.

Since its inception, Pantera has expanded beyond bitcoin to include companies, tokens and other blockchain-based projects. This includes launching a dedicated hedge fund to invest in blockchain companies.

At the time of writing, Pantera’s investment portfolio comprises 63 cryptocurrencies and ICO projects. In addition to bitcoin, the company has exposure to Ethereum, OmiseGo, Zcash, Ripple, ICON and Augur.

Diversification is key to ensuring Pantera picks the Amazon.com of cryptocurrency. In a March interview with CNBC, Morehead said it doesn’t matter how many failures you have insofar as you pick the one that will foster the global payment revolution. At the time, his fund’s lifetime return was 16,000%.

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 547 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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Altcoins

Crypto Real Estate: The Time Is Now

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If you’re a Russian oligarch, an Asian billionaire or just a simple kid from South Jersey with giant aspirations, it is time for action in the newly emerging world of crypto real estate.  Here is why.

For the average home buyer the price of a home has increased about 1.72% annually over the past 10 years.  That is just slightly more than the 1.49% rate for the U.S. economy. Things have changed somewhat in recent time and we read Case Shiller numbers placing the rate between 5%-7%.

For investors in bitcoin, the action is taking place elsewhere in the real estate world.  It is in the world of the super high-end real estate where BTC and other cryptos can play a role.

If your soul contains an ounce of cynicism, at this point,  you are probably saying what is new about the connection between crypto and real estate?  The answer is arbitrage. Never have high-end property prices been so high and crypto prices so low.  It would be a classic arbitrage to sell high-end real estate and buy bitcoin.

Natural Buyers For Bitcoin

There are plenty of statistics on housing and loads of public records revealing who owns a given piece of property.  The US government claims that 9.6 million Americans own second homes and perhaps 16% own investment property.

But when it comes to the true high-end market, global real estate is definitely in the billions. For example, take penthouse in 432 Park Ave in New York that, when new, sold for over $100 million in cash and you get the idea.  This is a market where anonymity is prized and protected. This has long represented the “no brainer” for bitcoin to gain acceptance. And best of all, it is perfectly legal medium of exchange.

Enter Propy (PRO)

Here is a company that appears to be positioned to take advantage of transactions in the global ultra high-end real estate market. Before getting started, one thing needs to be disclosed.  I neither own or am being compensated for writing about Propy. I stumbled across the name purely by accident.

Propy.com fancies itself as being dedicated to solving the complexities of purchasing property across borders.  They claim to be the world’s first international marketplace. The PRO token is built on the Ethereum ERC20 standard. Propy raised $15.4 million with their ICO last September which places a value on the company of roundly $100 million.

So PRO may not rank with the likes of Telegram but they are not exactly chopped liver either. With the spread between the price of ultra high-end real estate and bitcoin never having been greater and the perpetual need for anonymity, the team at PRO may find itself in a sweet spot no matter if the like it or not.

The First Crypto Test In Rome On June 28

CCN.com reports that PRO has managed to team up with the Hilton family-owned real estate broker Hilton & Hyland in an auction of a Roman villa named the Palazetto Mansion aiming to snatch $38 million in dollars or crypto from the buyer.  This is not first effort of its kind but it is by far the largest.

Arbitrage In The Air

Events in Rome on June 28 will be most interesting as much for bitcoin as for PRO.  This is not to say that bitcoin is the only crypto in the world, just the largest and best known. Nevertheless, the total value of bitcoin is now just a little over $114 billion so every billion of future real estate transactions will make a difference at these levels.

Perhaps this is all wishful thinking on the part of someone who owns neither PRO nor BTC but several things are obvious.  First, those folks that put their hidden billions in real estate using corporate identities are not casual investors but savvy players with lots of high priced advisors.  Arbitrage spreads between ultra high end real estate and crypto present a pretty irresistible attraction. Just something to consider when investor psychology toward crypto in general stinks.  

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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4.4 stars on average, based on 96 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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VanEck Reignites Debate Over Bitcoin ETFs With Recent SEC Filing

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New York-based investment firm VanEck has filed a formal request to list a bitcoin ETF, according to a June 5 filing with the U.S. Securities and Exchange Commission (SEC).

Bitcoin ETF Filing

VanEck has partnered with blockchain company SolidX to develop a new bitcoin-linked ETP that will provide investors with direct exposure to the volatile cryptocurrency. The new fund will be physically backed by bitcoin, which means it will hold actual units of the cryptocurrency instead of merely tracking its price through the derivatives market.

SolidX chief executive officer Daniel Gallancy told Bloomberg that “regulators are concerned right now about having an ETF that is available to retail investors,” but that the mood “will change over time.” In his view, now is the best time to push the conversation forward.

Jan van Eck referred to bitcoin as the new “digital gold” in a press release that circulated on Business Wire. The CEO of VanEck said the new bid goes above and beyond previous attempts to get bitcoin-based products approved by the SEC, which remains hesitant about exposing retail investors to the highly volatile asset class.

“A properly constructed physically-backed bitcoin ETF will be designed to provide exposure to the price of bitcoin, and an insurance component will help protect shareholders against the operational risks of sourcing and holding bitcoin,” he said.

Striking Out with the SEC

Since January, about a dozen applications to list bitcoin-based funds have been rejected by the SEC, with federal regulators appealing to investor protection and issues related to market manipulation, liquidity and the impact of forks on market prices. VanEck was among the several firms turned away by SEC regulators earlier this year.

The SEC maintains it is open to engaging sponsors in the development of these funds provided that the underlying issues are resolved. However, it’s not entirely clear what will convince regulators to grant the first bitcoin exchange-traded fund.

ETFs are viewed as the next frontier for digital currencies because of their low management fees, ease of access and broad diversification benefits.

While pure-play bitcoin ETFs may be off limits for now, the development of blockchain-based funds is growing at a rapid pace. Several blockchain funds have launched recently, including Amplify Transformational Data Sharing (BLOK), Reality Shares Nasdaq NexGen Economy (BLCN), First Trust Indxx Innovative Transaction & Process (LEGR) and Innovation Shares NextGen Protocol (KOIN).

There’s a growing belief on Wall Street and around the world that it is only a matter of time before we see the first bitcoin-backed ETF. The launch of bitcoin futures last December paved the way for mass innovation targeting institutional investors. The half-year slowdown in the cryptocurrency market has sparked a debate over whether institutional money will spark the next wave of adoption.

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 547 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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