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New York-Based TokenBnk Launches Crypto Savings Account

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The blockchain ecosystem is budding with innovation. TokenBnk has added its name to the list of most interesting blockchain startups when it launched a decentralized application that functions very much like a traditional savings account.

Traditional Finance Meets Cryptocurrency

New York-based TokenBnk is the world’s first Ethereum-based savings account. The general idea behind TokenBnk is that you can deposit tokens into your Savings Contract (instead of a savings account) and earn rewards in the same token you hold. It operates very much like a traditional bank account, only for cryptocurrency. That’s kinda what we’re all about here at Hacked.

To illustrate how the platform works, suppose you receive 1,000 TBK as a reward and hold 500 of them in ether and 500 in OmiseGo. You will receive the same proportion of tokens back into your Savings Contract, thereby boosting your position size.

To withdraw ether from your savings account, you must pay a predetermined fee using the platform’s native TBK token. The fee is distributed as an award throughout the network via smart contract. The amount network participants receive is proportional to the percentage of the Total Network Value they represent.

The Launch

TokenBnk emerged-by-stealth on or about Thursday, much to the surprise of the author, who has been anticipating this project for quite some time. The release was accompanied by an 11-page whitepaper and plans for a Nov. 30 token launch.

The protocol is being audited as we speak before beta testing goes live. TokenBnk will launch via mobile app some time in Q1 2018, followed by a full platform launch later in the year.

The development team behind TBK is impressive, with the main website listing 14 young men who can’t be more than 35 years old. The team hails from some of America’s most prestigious universities, such as Stanford, Princeton, Columbia, Carnegie Mellon and NYU. Private sector experience is also exemplified with stints at Amazon, AngelList and J.P. Morgan. (We’re glad the former JPM employees at TokenBnk didn’t drink from the same Kool-Aid as Jamie Dimon.)

TokenBnk CEO Shayne Coplan makes a strong case for his platform, especially for those of us keen on investing in cryptos over the long term.

“Currently, most long term holders leave their tokens in their Ethereum wallet, but why do that if you can yield automated regular returns by storing them on the blockchain as part of the TokenBnk network?” Coplan told Hacked. “The idea of holding fiat currency long term and earning no ROI is considered foolish, and it will be no different for cryptocurrencies.”

Coplan was part of the ETH presale back in 2014. With ether prices recently surging past $300, most market participants probably regret trading it right off the bat.

“In hindsight, the buy and hold strategy massively outperformed even the most successful of traders,” Coplan adds. “With the new wave of tokens arriving in the market over the next few years, hopefully TokenBnk can help token holders avoid making that same mistake.”

Ether trails only bitcoin in the race for market cap and is widely considered one of the most promising cryptos from a development point of view.

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 502 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 502 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 502 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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Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

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