Our Uphold review explores everything you need to know about the company’s history, the exchange’s utility, how to best use the exchange, a signup bonus, and more.

Uphold Exchange Key Information

About the Uphold Company: Diving into the Cryptocurrency Exchange’s History

Launched in 2014 under the name Bitreserve as a Bitcoin trading platform, Uphold has established its reputation as a scandal-free functional exchange through multiple bull and bear cycles. It shares this standing with exchanges like Kraken (founded 2011), Coinbase (founded 2012), and Gemini (founded 2015). 

However, Uphold is a relatively lesser-known exchange compared to its graduating class, which strikes us as strange given the resume of its founder, Halsey Minor. 

Halsey Minor is best known for also founding CNET, an early blog covering computers and software largely considered a pioneer in profitable blogging. Between 1995 and 2000, CNET was one of the top fifteen largest websites in the world based on traffic and generated billions of dollars in revenue. Minor is also credited with foundering or co-founder companies such as Salesforce, Google Voice, OpenDNS, E! Online, NBCi, and Vignette.

In addition to Uphold, Minor launched cryptocurrency companies like Live Planet and Vivid Labs, both of which involve tokenizing computing power, video, and NFTs. We interviewed Minor in 2018 about Live Planet and his thoughts on cryptocurrency.

Minor is no longer with Uphold in an employment capacity today; the current CEO is Simon McLoughlin. 

Uphold currently boasts over 10 million users. 

The company is based in 80 East Sir Francis Drake Blvd., Ste. 3D, Larkspur, CA, north of San Francisco.

About the Uphold Exchange

The Uphold website exchange interface offers a clean, minimalistic UI– closer to the simplicity one would expect from Coinbase and less so from the more complex trading screens on Kraken.

Uphold excels from the cryptocurrency exchange pack in that it also offers four commodities: precious metals: Gold (XAU), Platinum (XPT), Palladium (XPD), and Silver (XAG).

Users can trade over 250+ cryptocurrencies. 

Uphold sign-up bonus: Uphold currently offers a $50 BTC sign-up bonus when you trade at least $600. 

Uphold’s mobile app is available on both Android and iOS. Out of over 4,300 reviews on the Apple App Store, Uphold has a rating of 3.6 stars. The Uphold app is rated 4.2 stars with 15,260 reviews on Google Play. 

Uphold Fees: Deposits, Trades, Withdrawals

Since Uphold supports all sorts of fiat and cryptocurrency options, its fee structure can be complex for newer traders. 

Opening an account and holding funds on Uphold is free. It’s also free to fund an Uphold by depositing cryptocurrency or from another Uphold account. This means that all member-to-member transactions are free. 

Uphold also doesn’t charge any fees for bank deposits or withdrawals for U.S. users using ACH. 

Debit cards come with a 2.49% fee, and credit cards have a 3.99% fee.

Uphold makes money on the spread (difference between the bid and ask) on transactions– it claims its spread is typically between 0.8% to 1.2% on BTC and ETH. The spread can be higher for lower-liquidity cryptocurrencies– Uphold urges users to check rates at the Preview confirmation screen before trading. 

Spreads for other trading assets and commodities range from 0.65% to 3.95%. 

Precious metals are a 3% spread, in addition to the bid-ask spread charged by Uphold’s supplier. 

Fiat currency trading comes with a 0.2% spread.

There is a $1 transaction fee when the amount transacted is under $1. 

Uphold’s debit card comes with a $9.95 one-time fee, and each withdrawal costs $2.50. 

A complete updated list of Uphold’s fees can be found on its fee page. 

Uphold Competition and Alternatives

Uphold is considered one of the top ways to buy cryptocurrency, but there are always other options for various desires:

Maybe you prefer a different fee structure? Coinbase, Kraken, and Gemini all offer comparable fee structures and are typically a hair under those of Uphold. 

You may want a different mobile trading experience. Robinhood offers a clean mobile trading experience, albeit with higher costs per trade.

Maybe you just fear hot air balloons, and Uphold’s logo terrifies you. Whatever you do, do not look up the hot air balloon festival in Cappadocia, Turkey.

How Do I Open an Account on Uphold?

Begin by visiting the Uphold website.  Snag that $50 in BTC bonus when you trade at least $600– if you want. 

Creating an account is a seamless experience and takes less than fifteen clicks from registration to purchase for individuals. You must go through the standard KYC and AML identity verification processes, such as submitting your ID. 

You can also open a business account on Uphold, a unique offering, as most popular cryptocurrency exchanges only focus on individuals. However, creating a business account may take longer, requiring a more substantial verification process. 

Security: Is Uphold Safe?

Overall, Uphold has a strong security track record, and its users are content with the security of the service. The exchange checks all the boxes you’d expect for a modern and compliant cryptocurrency exchange:

• Two-factor authentication (2FA) is the default for all accounts
• It has a bug bounty program
• It claims 90% of cryptocurrency is kept offline in cold storage

One minor security incident in November 2018 saw Uphold temporarily suspend BTC withdrawals– a third-party mail account was compromised, not Uphold’s existing inbound mail system;  hackers tricked users by sending a phishing email that said anyone could send between 0.1 and 50 BTC to a specified address and get back 15 percent more. The hackers made away with just $2,200 from two transactions.

Security is a paramount concern for cryptocurrency exchanges. 

Regarding a 2018 QuadrigaCX exchange scandal, where the founder Gerald Cotton allegedly died with private keys to $190 million, prior UpHold CEO JP Thieriot commented:

“While it’s certainly suspicious that an exchange would allow one man to hold $190 million, we can’t be sure that this was not the case. With all due sensitivity to the situation, an exchange’s cold storage being vulnerable in this way is bound to invite speculation of malfeasance. A fact pattern including $22m in frozen funds by the CIBC is also not encouraging.

Unfortunately, schemes like this are not new to the space, and continue to tarnish the reputation of exchanges, and discourage new investors. If we want to make the leap to the mass market, we have to take steps to prevent issues like these from becoming commonplace.

Universal Protocol has alluded to the systemic problem by offering recoverability of private keys, though we never contemplated an event of this scale. While this may be potentially bullish for BTC, the bigger focus is on how these events impact the industry in the long run as we collectively aim for mass adoption.”

Can You Trust Uphold?

Uphold has a very catchy tagline in the wake of cryptocurrency industry chaos… Sometimes boring is better…

Uphold claims that its funds have always been and always will be 100% reserved, and it never lends out your cryptocurrency, so it’s always available to withdraw. 

However, instead of publicly lying about the safety of its assets *cough* Alex Mashinsky. Celsius Network *cough* Uphold publishes its reserve status live. 

Anyone can see all of Uphold’s assets, obligations, transaction volume, and number of transactions on Uphold’s site– updated live.

The transparency section of the site highlights different views in several asset tiers and various fiat holdings.

Uphold Fiat Currency Options and Trading Limitations

The exchange supports 28 fiat currencies. This is an area where Uphold excels over the vast majority of exchanges. Most major fiat-to-crypto exchanges don’t support currencies outside of USD, EUR, GBP, and CNY.

It also supports over 250+ cryptocurrencies, including BTC, ETH, DASH, LBA, LTC, BAT, BCH, BTG and XRP. 

An early Uphold innovation was the innovative things about Uphold: the ability to use email to send Bitcoin (BTC) to people in over 150 countries– a feature launched in 2018.

Access is available in every nation except for the Central African Republic, Cuba, Iran, Libya, North Korea, Somalia, Sudan, and Syria. 

Uphold requires the standard AML and KYC verification processes to use the exchange. During registration, the exchange collects info like date of birth and phone number. To become a verified member, you need to provide the following three items: current residential address, government-issued ID (passport, national ID card or driver’s license), and a clear photo of your face. 

Customer Service Experiences

Uphold boasts an overall rating that is generally better than many exchanges, according to third-party review sites like TrustPilot.

While Uphold excels in many areas, the negative reviews mostly focus on issues related to customer service requests. Account locks after filling out verification information or depositing funds appear to be common. Some users have reported that they have talked with multiple customer service representatives over periods of days or weeks and have not been able to resolve their issues.

Still, many complaints listed in reviews are unfair. For example, some users gave bad reviews for long and/or inconsistent ACH transfer wait times. For the most part, this issue is outside of the control of Uphold or any other exchange.

In most scenarios, this has more to do with the processing capabilities of an individual’s bank.

Uphold Staking Updates

Uphold offers its staking program everywhere it operates except the United States.

The exchange suspended its staking services in the United States following SEC guidance– similarly, exchanges like Coinbase, Kraken, and Gemini were beckoned to do the same. 

The SEC considered Staking-as-a-Service providers as offering securities, which is a notion currently being challenged in courts. As per proof-of-stake blockchain programming, staking essentially helps validate transactions and secure a blockchain network– which is different from the context implied by offering securities.

However, rules are rules, and Uphold is playing ball. 

If the argument is successfully challenged, uphold plans to reintroduce staking in the United States. 

Uphold does offer its crypto-staking service everywhere else in the world. It offers ten popular staking-enabled cryptocurrencies, such as:

• Ethereum (ETH)
• Cardano (ADA)
• Polkadot (DOT)
• Solana (SOL)

Final Thoughts: Is Uphold Legit

Overall, Uphold boasts some features that should qualify it as a top exchange choice for any beginner to intermediate. 

The exchange’s history since 2014 has so far been anticlimactic, which is an excellent quality in an industry still dazed by the likes of FTX, Celsius Network, Voyager, and BlockFi.

However, it’s worth noting that Uphold, like all other centralized exchanges, takes custody of your private keys and assets, which is one significant layer of control away from being fully decentralized and in control of your funds.

By most cryptocurrency exchange grading systems, Uphold is a perfectly good (thankfully, boring) exchange that is running in accordance with all regulatory guidelines. What really sells us on the exchange is its public publishing of assets and obligations that showcase the exchange isn’t lending out your assets ever. 

The fees are reasonable, and the exchange has offered periodic no-trading fee periods to encourage new user sign-ups. 

Uphold is right for you if:

1. You want a simple, straightforward exchange with a clean user interface that you can trust to keep your cryptocurrency safe, given you take the proper user precautions. 
2. You want to access and spend your cryptocurrency online and in stores using the Uphold debit card.
3. You want to dabble in fiat currency exchanges and commodities in a single platform. 

Ultimately, the decision to make an account on Uphold is up to you– it offers a $50 BTC sign-up bonus when you trade at least $600. 

 If your experience with the exchange or company is different from what we’ve described above, please reach out to us and let us know.

“Uphold Disclaimer: Assets available on Uphold are different per region. All investments and trading are risky and may result in the loss of capital. Cryptoassets are largely unregulated and are therefore not subject to protection“

The post Uphold Exchange Review: Can You Trust Uphold with Your Crypto? (Updated 2024) appeared first on CoinCentral.

However, Robinhood has maintained its posterity as a user-friendly investment app, and is a popular destination for many beginners and intermediates.

So, how does Robinhood’s cryptocurrency trading feature stack up? Let’s explore.

Robinhood Exchange Key Information

User Interface and Mobile App

When compared to most exchanges, the trading interface on Robinhood Crypto is fairly basic. For those who are new to cryptocurrency, this might be considered a positive. For traders who want to use more advanced interfaces (i.e. candlesticks, real-time order books, etc.), Robinhood is not likely to be the best option for you. However, the fact that this exchange offers access to fiat trading makes it an enticing option.

Robinhood Crypto doesn’t have its own dedicated app. Instead, you’ll have to download the ordinary Robinhood app for iOS or Android. The cool thing about this app is that you can also use it to invest in other markets (i.e. stocks and ETFs). For many people, Robinhood provides a more convenient option than having to use multiple platforms to manage various investments, assets, etc.

Mobile app reviews are quite positive overall. On Google Play, Robinhood has 4.6 stars with 80,595 reviews. On iTunes, it has 4.8 stars with over 628,200 reviews. It’s also ranked as the 14th most popular app in the Finance category on iTunes.

Trading Options and Availability

Available cryptocurrencies on Robinhood include:

• Bitcoin (BTC)
• Bitcoin Cash (BCH)
• Bitcoin SV (BSV)
• Dogecoin (DOGE)
• Ethereum (ETH)
• Ethereum Classic (ETC)
• Litecoin (LTC).

Compared to most crypto exchanges, the number of coins available is quite limited. Although not currently available for trading on the exchange, Robinhood also supports real-time market data for ten additional cryptos. These include Bitcoin Gold (BTG), Dash (DASH), Lisk (LSK), Monero (XMR), NEO (NEO), OmiseGO (OMG), Qtum (QTUM), Ripple (XRP), Stellar (XLM) and Zcash (ZEC). It’s possible that these might be added to the list of tradeable cryptos on Robinhood Crypto at some point in the future.

One of the biggest limitations of current trading options is a lack of stablecoins. When trading an altcoin on another exchange and then transferring funds to Robinhood to cash out to fiat, this could present an obstacle for some traders. Essentially, if you want to convert crypto to fiat, you should be aware of how long it takes for funds to reach your Robinhood Crypto account and the potential price fluctuations in that time period.

Robinhood Crypto is only available in the United States, as of March 2019. This includes 37 states and Washington D.C. Robinhood excludes citizens of the remaining 13 states from signing up. While this can be discouraging for many users, it’s important to note that Robinhood is actively working to expand its geographic availability. It’s clear that a lot of progress has been made on this front. For instance, when the exchange first launched in 2018, it was only available in five states. You can find an up-to-date list of available states here.

Security: Is Robinhood Crypto Safe?

Compared to other services offered by this company, cryptocurrency funds aren’t as secure. For instance, Robinhood insures stocks up to $500,000 in value. Meanwhile, the company does not insure crypto funds. If someone is able to access your account and steal funds, you don’t have the ability to easily report this situation to the company and receive reimbursement.

Similar to other centralized exchanges like Coinbase, with Robinhood, you don’t actually own your coins or private keys. Many regard this as the biggest issue with Robinhood. Additionally, you are unable to transfer crypto from your account to a wallet outside of Robinhood without further verification steps.

Overall, Robinhood has never suffered from a large-scale hack across any of its services. Still, users have reported hacks of single accounts on various social media platforms. If you choose to use Robinhood Crypto, there are a few different ways that you can enhance the security of your account. For example, on the mobile app, you can enable Touch ID or Face ID. You can also add a custom PIN code or turn on two-factor authentication.

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Robinhood Fees, Trading Limits, Approval Wait Times

As of March 2019, Robinhood Crypto (like other trading options with Robinhood) claims to have zero fees, commissions, or hidden charges. However, the 19-page “Robinhood Crypto User Agreement” seemingly contradicts this statement. There is a section titled, “Rebates and Pass-On of Fees” that some say could be interpreted as a way for the exchange to blend fees into the price of trades. For example, the exchange could offer higher than market average prices for certain coins. Even though this might not be the case, it’s probably a good idea to compare price points in real-time with other exchanges before trading.

Robinhood limits deposits and withdrawals to $50,000 daily. It also has waiting requirements for withdrawing funds from your account. This applies to funds that you transfer to your account as well as funds you trade on the Robinhood Crypto exchange.

Approval can take a few days (or longer) if additional documentation is needed to complete account verification. Once Robinhood Crypto approves your verification, you can link your bank account to deposit up to $1,000 instantly. It typically takes four to five days for the deposit to clear with a US bank account.

Customer Service Experience

There are several options for contacting Robinhood’s customer support team. For example, they have a dedicated Twitter account for customer questions. You can also contact them via email: support@robinhood.com. The major complaint that most negative reviews have in common is that users receive “copy, paste” answers that don’t necessarily address the concerns of the customer.

Even with this being the case, customer support reviews appear to be mostly positive. Still, most customer reviews to date apply to other services offered by the company and aren’t specific to crypto trading. This is understandable, especially considering cryptocurrency is both a newer and more geographically limited part of Robinhood’s business model.

Final Thoughts: Is Robinhood Crypto Worth Your Time?

In terms of trading options, Robinhood still has a long way to go before it can be considered a top contender among crypto exchanges.

It’s worth noting that Robinhood doesn’t actually give you custody of the cryptocurrency you own on the platform, so you can’t send it to other wallets. However, it’s still a solid option for those simply looking to trade cryptocurrency on a very convenient user interface.

Robinhood currently has a promotion where new users can receive a free stock valued anywhere between $2.50 to $225 when they sign up.

The fact that it supports an easy way for many in the US to trade using fiat means that it will likely continue to gain traction where available. Zero fees, the established user base for other Robinhood services, and the momentum of the 2018 pre-launch all help increase the number of potential users for this exchange. However, some issues like fund ownership and limited geographic availability will likely need to be addressed in the long term.

The post Robinhood Crypto Review | How Does This Exchange Compare? appeared first on CoinCentral.

The following article explores everything you should know about mainnets; we’ve included an analysis of two different crypto mainnets. 

What is a Cryptocurrency Mainnet: A Detailed Look

As alluded to above, think of a cryptocurrency mainnet as the main network for a blockchain project such as Bitcoin or Ethereum. These mainnents are made of distributed computer nodes that all communicate to form a peer-to-peer network keeping that blockchain live.

Often referred to simply as “nodes”, these individual computers or servers all form a cryptocurrency mainnet– as opposed to a single computer, therefore a single point of failure, hosting the mainnet. These nodes are incentivized by various financial mechanisms to verify, process, validate, and record user transactions– whether that be through Proof-of-Work mining, or Proof-of-Stake staking, or whatever new consensus algorithm emerges to keep these hosts incentivized.

It’s important to note that mainnet’s typically refer to Layer-1 projects, such as Bitcoin, Ethereum, Solana, Binance Smart Chain, which have their own native currency. ERC-20 tokens, for example, run on Ethereum.

Testnets are the prototypes that demonstrate the potential capabilities of a project. Mainnets are the actual “end product”, which is available for the public to use. However, just like testnets or code frameworks, mainnets can be changed whenever project teams or cryptocurrency open-source communities decide there is a need for updates and/or revisions.

Should I Invest in a Project Without a Mainnet?

While it might be ideal that all projects already have a mainnet released at the time of ICO, this is rarely the case. In fact, a lot of projects don’t even have a testnet prepared during the ICO period. In terms of fundraising, tons of blockchain projects have been able to raise sufficient capital based on potential use cases, technical concepts, and other factors like the team behind the project and partnerships. Oftentimes, teams use a lot of the funds from their ICOs towards building out the testnet and mainnet versions of their projects.

So how does a mainnet help an investor/user of a particular cryptocurrency?  From an investor’s perspective, the mainnet proves that a project is making technical progress. Even if you don’t want to invest in a project before the mainnet launch, it’s important to realize how a mainnet can have a positive (or even potentially negative) impact on a cryptocurrency’s value. Many investors choose to buy cryptocurrencies in advance of a mainnet because a successful launch can sometimes lead to significant increases in value.

How Does a Mainnet Launch Affect Prices?

Does a successful mainnet correlate to higher price values of a given cryptocurrency? Not necessarily. It’s also important to understand the market context as well. To get a better understanding, here are two mainnet-related events from this year so far.

BTC and the Lightning Network: March 2018

As outlined earlier in this post, initial main nets launches aren’t the only important milestone determining the success of a cryptocurrency project. Continuous updates and integrations to the mainnet are also a major part of trying to understand the ever-changing value of any given cryptocurrency.

One recent example is the Lightning Network launch on the Bitcoin mainnet on March 15, 2018. The Lightning Network is an off-chain solution that adds a “second layer” on top of the blockchain. While this project will ultimately try to help all cryptocurrencies scale up, the most important implementation to date is on the Bitcoin mainnet. The Lightning Network is significant because it aims to make BTC a more scalable cryptocurrency by adding the capability to handle far more transactions per second. Without the Lightning Network, BTC can only handle around 7 transactions per second.

Despite the launch of the Lightning Network mainnet, BTC’s prices didn’t increase immediately afterward. Looking at the data, in the period from March 1 to March 30, the value actually decreased from around $10,600 to around $6,900.

Why is this the case? It’s important to look at this event in the context of the market. In March, pretty much the entire cryptocurrency market realized stagnant or declining prices in an extremely bear market. Even though this was a significant technical milestone, other factors limited BTC’s prices from rising at that time. Therefore, it’s difficult to say whether or not the Lightning Network’s launch on the Bitcoin mainnet had any real effect on BTC’s value in the short-term.

Golem (GNT) Mainnet Launch in April 2018

Golem (GNT) first launched as an Ethereum token, but it was not an ERC-20. It swapped over to an ERC-20 contract in November 2020, changing its ticker to GLM. The following example follows the original GNT mainnet.

Golem’s Brass Mainnet source code was released on Github on April 10, 2018. The purpose of Golem (GNT) is to offer a P2P system for sharing computing power. Essentially, users who need extra computing power pay GNT to users on the network who have extra computing power. Looking at the data from March 31 to April 29, the price did increase from around $0.20 to $0.60. This includes a spike to $0.73 on April 13.

At first glance, this would indicate a direct correlation between the Brass Mainnet launch and value increases. However, just like the Lightning Network launch on Bitcoin’s mainnet, it’s also important to look at this case in a market context. It’s possible to conjecture that GNT’s value increased at a more significant rate because of the mainnet (especially on April 13), but this is still difficult to conclude for certain. That’s because a vast majority of cryptocurrencies increased in value throughout April’s bullish market. It could very well be argued that the price would have risen at the same rate simply due to favorable market conditions.

Final Thoughts: How Should We Look at Cryptocurrency Mainnets?

Mainnets are important because they prove or disprove the ability of a project to take a blockchain project from ideation to implementation. While the initial release of a mainnet doesn’t always give a good insight into a project’s overall progress, it’s an essential technical aspect to consider when investing in cryptocurrencies. As seen in many cases throughout the past, it’s difficult to tell exactly what effect mainnets have on short-term price changes. However, they do indicate the potential for better overall functionality.

Still, other factors like the overall market trends and real-world adoption are also equally, if not more, important to consider. Regardless if an initial mainnet version is considered a success or not, it’s important to remember that mainnets are constantly improving with new iterations, making cryptocurrency projects more innovative and functional over time.

The post What is a Cryptocurrency Mainnet? appeared first on CoinCentral.

For example, you must consider things like the specific algorithm used by the Proof-of-Work cryptocurrency you want to mine. Additionally, the type and quantity of bitcoin mining hardware needed to make a dent in any profitable bitcoin mining operation can cost thousands or even tens of thousands of dollars.

With all of these challenges, it might be a good idea to look at alternative ways to profitably mine Bitcoin, which brings us to the idea of cloud mining.

Cloud mining involves leasing equipment or renting computing power from data centers with infrastructure powerful enough. Rather than individually setting up physical mining hardware, sourcing electricity, and maintaining your hardware, cloud mining allows you to simply “pay to play” with a company that already has this established.

Of course, cloud mining comes at a cost.

The following cloud mining vs traditional bitcoin mining guide explores which option is more profitable option in the long-run. 

Costs of Bitcoin Mining Hardware 

Bitcoin mining hardware requires a substantial upfront financial commitment.First, it’s important to consider how much mining rigs cost, which depends on the type of cryptocurrency you want to mine, as well as how expansive and powerful your mining operation needs to be.

If you want to mine BTC, for example, you’ll most likely need an ASIC mining rig. These are typically much more expensive compared to GPU and CPU mining rigs. Despite their potential to mine at much faster hash rates, ASIC mining rigs often face scrutiny for the fact that they cannot be repurposed. This means that, if a cryptocurrency project makes changes to their hash algorithms, ASIC miners will have to buy new gear. This can lead to some significant costs that can easily negate revenues and even lead to net investment losses.

In contrast, GPU and CPU mining gear can generally be repurposed if algorithm changes occur. In addition, these rigs are usually much less than their ASIC counterparts. Additionally, more projects are continuing to trend toward ASIC-resistance rather than ASIC-acceptance. For most miners, this means an overall reduction in both upfront and ongoing costs.

While having one mining rig might be a good first step to see if you can indeed become profitable, many people start out with more rigs to have a multiplier effect. However, even with rising prices, starting with multiple rigs should be done cautiously as each additional rig will likely add to the number of months it takes to make back your initial investment.

Of course, other factors like electric bill costs have to be considered. These vary by geographic area, making it difficult to put a precise amount on how much money is needed for keeping hardware rigs operations.

Costs of Cloud Mining

In comparison to hardware mining, costs for IT cloud mining are much simpler to calculate. Most companies run on a monthly subscription model that is determined by the cryptocurrency you want to mine and the hash rate speeds as seen on popular sites like Genesis Mining and HashFlare. 

Prices for 2-year contracts of ETH mining with Genesis Mining currently vary from $1,520 at 40 MH/s to $12,960 at 360 MH/s.

HashFlare offers 1-year contracts of ETH mining for $1.80 per 100 KH/s.

Make sure to read reviews and check out projected ROI on any cloud mining service. The fact is that there are many services with extremely low profitability and even some which are known scams. Luckily, there are a few guides available on the best ways to identify potential cloud mining scams.

Hardware Mining ROI

Even though there is no way to say for certain how long it will take to break even on investments in hardware mining equipment or cloud mining, it’s still crucial to do research on estimated time frames. According to most miners, it’s difficult to expect to become profitable within 3 to 6 months. 10-15 months is realistic for many, though. A lot depends on crypto prices, electric costs, and the type of mining rig you use. Nicehash provides a good calculator for determining this.

IT Cloud Mining ROI

Based on information from Reddit forums, reviews, and ROI calculators, it is clear to see that cloud mining isn’t all that popular or profitable. For example, as of May 30, 2018, HashFlare Scrypt and SHA-256 currently take 3,828 and 3,983 days (or a little over 10 years) to reach ROI on BTC respectively according to this calculator from Coinstaker. Genesis Mining for ETH has an even worse ROI, taking around 25,992 days (70+ years). In both cases, it’s difficult to justify cloud mining over hardware mining.

The problem with keeping a subscription for cloud mining is that it can be difficult to keep paying monthly even in bear markets. These stats could certainly improve if we see a massive bull run as seen in December 2017; however, it can be pretty difficult to predict when a bull market will begin and end.

Compare this to using Bitcoin mining hardware, and the choice is a bit more obvious. That’s because, even if the market is bear, most costs are upfront and not recurring. Sure, there are costs like electric bills to consider with hardware mining, but there are several locations throughout the world where energy consumption is very cheap and hardware mining is legal, making it a clearly more profitable option than cloud mining even in bear markets.

Final Thoughts: Cloud Mining Vs. Bitcoin Mining

Despite the high upfront costs, the consensus is that Bitcoin mining hardware remains much more profitable than cloud mining. Possibly the biggest benefit of cloud mining is its overall ease of use since it requires no difficult hardware installation and avoids potentially unpredictable electric costs. However, most in the cryptocurrency community would agree that if you can’t start a hardware mining operation, it’s probably best to make profits through trading rather than going the cloud mining route.

The post Is Cloud Mining More Profitable Than Bitcoin Mining Hardware? appeared first on CoinCentral.

We look at everything from user stats to fund security, payout fees, and more in this NiceHash vs. Minergate comparison article.

User Stats

Minergate receives around 2,000 signups per day on average. Over 500,000 miners have reportedly profited from using the site. This platform is used by around 3,700,000 miners worldwide. Meanwhile, in January 2019, NiceHash has more than 303,000 daily active workers, 101,000 miner users, 4,168,000 orders and 195,000 BTC in payouts.

Feature Comparison

Bother Minergate and NiceHash allow you to turn on automated algorithm switching. This provides you with a solution for finding the most profitable coin to mine in real-time.

Minergate has several different options for merged mining. In June 2014, MinerGate became the first CryptoNote pool that features merged mining. In October 2016, Minergate added this functionality for mining XRM, XDN and FCN simultaneously. This is due to the fact that all use the CrytoNight algorithm. As of January 2019, NiceHash doesn’t offer any merged mining options.

Minergate: Company Trust, Uptimes and Fund Security

Even though it’s easy enough to download and run the software, Minergate has had a few users complain about a number of issues. For example, some have claimed they were not able to withdraw funds or couldn’t see available funds on their accounts. Additionally, a number of reviews online attach affiliate links to the Minergate website. While the latter doesn’t equate it to a scam necessarily, it does make it slightly less trustworthy.

Some users also say that Minergate is not transparent about hash rates. For example, reviewers state that Minergate lists a lower hash rate for your device than what it actually should be. Effectively, this means that Minergate allegedly takes potential earnings off the top. Despite the existence of these issues, some users have also reported success stories of using the platform.

Minergate does have 99.97 percent uptime, which is quite good. For fund security, it utilizes Google two-factor authorization. All coins mined are pure coins, which means that they come directly from the block that is mined. This possibly makes it a better choice than other options that first go to a third party before transferring to your wallet.

NiceHash: Company Trust, Uptimes and Fund Security

At the end of the day, NiceHash is a third party. Therefore, there are some doubts among users about whether or not the platform can be trusted. That being said, most reviews online seem to be equally skeptical about NiceHash and Minergate. Although NiceHash does have more transparency, some trust issues still remain.

The biggest problem with fund security took place in December 2017. Back then, NiceHash was hacked, and a total of 4,700 Bitcoins (BTC) were stolen. At that time, stolen funds held a value of around $65 million. After this event occurred, NiceHash’s CEO resigned. According to a blog post from January 2019, NiceHash has returned 71 percent of stolen funds to users in twelve rounds of reimbursements. This reimbursement process is still ongoing. The investigation surrounding the hack also appears to be ongoing, even in early 2019. No platform uptime statistics are available for NiceHash.

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Available Cryptos and Mining Algorithms

Minergate supports Bitcoin (BTC), Bitcoin Gold (BTG), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), Zcash (ZEC), Bytecoin (BCN), Monero (XMR), Monero-Classic (XMC), FantomCoin (FCN) and Aeon (AEON).

Compared to Minergate, NiceHash has a considerably higher amount of available cryptocurrencies. On its website, NiceHash lists 37 different mining algorithm options and more than 70 available coins. The minimum order price is 0.005 BTC for every algorithm. This can be viewed as both a positive and a negative. For instance, you can mine more coins but deciding to choose some lesser-known altcoins could potentially be risky or not worth the initial investment.

Minergate Payouts and Fees

Minergate allows you to withdrawal as little as 0.01 of any coin you mine on its platform. It uses two distinct payment methods: Pay Per Share (PPS) and Pay Per Last N Shares (PPLNS). For PPS, fees are 1.5 percent for LTC, BCN, XMR, XMC and AEON. All other coins have zero fees. For PPLNS, all coins have fees of 1 percent except for ZEC, which has zero fees.

Besides the fees, what are the major differences between these two payout options?

According to the Minergate website, PPLNS includes a luck factor. Using PPLNS, payout per share will have a large range (30 percent more or less on payouts). However, PPLNS earns more than PPS (by 5 percent or so) on average in the long run (a month or more).

In contrast, PPS is a more direct method where you get a standard payout rate for each share completed. This eliminates the luck in your payout but can decrease your total income per share by around 5 percent. Using PPS, you get a set number of cryptocurrencies per share of work you have solved. Since no luck is involved, the payouts don’t fluctuate.

In essence, PPS is for people who want to mine faster and earn higher payouts on average. PPLNS is for miners who want to use a statistics-driven approach for upsizing mining power.

NiceHash Payouts and Fees

Unlike Minergate, NiceHash doesn’t pay out in the coins that are actually mined. For instance, if you want to mine Litecoin (LTC) or Ethereum (ETH), you can only get paid in Bitcoin (BTC). Considering the NiceHash hack of 2017, some users might not like to have this option. It’s also less inconvenient if you actually want to mine a coin and hold it directly, as you can with Minergate or other mining options. To do this with NiceHash, you would actually have to use the BTC payout and go to an external exchange. In some cases (depending on trading pair availability, liquidity, and other factors), this might mean that you have to make two trades and pay high fees just to hold a specific coin.

Although the lack of payout options is a disadvantage for NiceHash, it possibly has a big advantage over Minergate when it comes to the fee structure. NiceHash fees are more complicated yet appear to be much lower than Minergate in most scenarios. Withdrawals from 0.001 (minimum amount) to 0.1 BTC to any Bitcoin wallet, there is a fee of 0.0001 BTC. If the withdrawal is greater than 0.1 BTC to any Bitcoin wallet, the fee is 0.1 percent of the withdrawn amount. Those looking to exchange funds via Coinbase can do this quite easily. Most importantly, there is no fee for any amount sent over 0.001 BTC to a Coinbase wallet.

Conclusion

In the NiceHash vs. Minergate debate, it’s difficult to choose a clear winner. Both have unique advantages and disadvantages you should consider before signing up. When it comes to cloud mining, both are top competitors in this space and have massive user bases.

The post NiceHash vs. Minergate: Whose Cloud Mining Is Better? appeared first on CoinCentral.

Upfront and Continuing Costs

The question of how much Bitcoin miners make is complicated. There are several key factors that go into determining profitability. Although there might be other things to consider, here’s a short list you should be aware of.

Hardware Costs and Capabilities

The costs of mining equipment can vary greatly. From less powerful CPU rigs to high power ASIC miners, this is the largest upfront expense. While going with a cheaper rig might save money upfront, you will likely earn less BTC (or other cryptocurrencies) over time when compared to the more expensive options that are capable of producing faster hash rates.

Electric Costs (Location, location, location)

One of the biggest challenges to determining precise Bitcoin mining profitability is a mining operation’s geographic location. Places that have high electric costs and warmer environments can make it much harder to achieve a solid ROI. Locations with cheaper electric costs and cooler environments at least make profitability a possibility. Typically, places that have an abundance of hydroelectric energy, for example, have more large-scale mining operations. However, local laws implemented in recent years throughout many jurisdictions prohibit Bitcoin mining altogether.

Setup Time and Ongoing Hardware Costs

Since investing money into mining rigs can be quite expensive, one might assume that the setup process is quite easy. This is not the case. The reality is that you must be highly tech savvy to assemble rigs and maintain them over time. For many miners, the fact that Bitcoin hasn’t undergone any major mining algorithm changes presents some stability over other cryptocurrencies that have.

Whenever other crypto projects have changed to ASIC-resistant algorithms, mining rigs valued at thousands of dollars oftentimes become incapable of mining. Nevertheless, Bitcoin’s maintained support for ASICs means that miners are more likely to have to pay more per mining rig.

Mining Difficulty and Competition

Even in bear markets, there is some good news. Generally, lower BTC prices lead to less competition among Bitcoin miners. The bad news is that people wanting to immediately convert back to fiat would probably do so at a deficit. Therefore, mining is generally better for those that are willing to HODL during bear markets.

On the flip side, bull markets bring on more competition, which generally means fewer BTC per miner. Nonetheless, there is a good possibility of converting back to fiat at a profit during these times.

Varying Fiat Values and Crypto Values

The term ‘profitability’ is relative. Of course, the value of BTC can fluctuate wildly. However, it’s also important to recognize the cost equivalents in your local fiat currency. In many instances, high inflation of fiat currencies might mean that you are able to reach relative profitability sooner. Then, there are additional, complicated questions to ask yourself. For instance, do you plan on using BTC mining rewards immediately to purchase things? Do you HODL crypto in hopes of higher values later on? Do you want to immediately convert back to fiat?

Halving Events

Bitcoin has a mining reward that is designed to reduce by half at certain blocks. In 2019, Bitcoin miners receive 12.5 BTC each time they successfully mine a block. By the end of May 2020, the next halving event should occur. When this happens, the mining reward will only be 6.25 BTC.

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How Much Do Bitcoin Miners Make in 2019?

Considering general, long-term costs and profitability (featured in the section above) are important. Still, people want to understand what profitability looks like in the short-term. The simple answer is that BTC profitability (as of late April 2019) is bleak. This is due to the relatively low value of BTC when compared to that of the previous bull market of 2017. Of course, this could always change at any point in time if the value of BTC were to increase. To put 2019 profitability into better perspective, it’s good to use a real-world scenario based upon realistic factors.

Scenario 1

In this scenario, let’s say a miner wanted to use the Bitmain Antminer S9. Note that by changing to a different mining rig, the results will vary but just slightly. The Antminer S9 has a higher hash rate (14.0 TH/s) and power consumption of 1350 W than many competitors.

As most crypto miners do, it’s likely that you would join a mining pool. Fees with this can vary, but one percent is considered to be standard.

Finally, the cost of electricity is the most vital expense to factor in. If we look at states within the US, for example, net returns or losses depend heavily on these rates. Oklahoma, for instance, has the lowest average electric cost at $0.088 kWh as of January 2019. Based upon April 2019 BTC prices, it would take some time to get any return on investment.

Although this calculation in the graphic below shows an estimated return of $1.56 per month, it doesn’t include the cost of this particular mining rig (~$3,000). Assuming that BTC prices remained the same (~$ 5,325), it would take over 162 years to get to profitability, even in the place with the cheapest electric costs in the US. This doesn’t even factor in the possibility of rising electric costs over time.

Scenario 2

In Scenario 2, let’s keep all of the above factors in Scenario 1 the same besides location/electric cost. By opting to mine in Hawaii, the state with the most expensive electric costs at an average of $0.3209 KWh, you would be running a deficit of $224.82 per month. This doesn’t even include the cost of the mining rig. Thus, it would be nearly impossible to reach profitability in Hawaii, even if the value of BTC increases significantly.

Return to Mining Profitability?

Even in the ideal location with a high-quality mining rig, it’s clear that reaching profitability in a reasonable amount of time via BTC mining is practically impossible to accomplish (at least as of early to mid-2019). However, this doesn’t mean that this will always be the case.

If a bull run occurs, those who were able to successfully mine BTC will have a chance to get a return. Still, this can be difficult to predict. In summary, if you’re looking to get a short turnaround on ROI, it’s probably best not to consider BTC mining. Still, there is always potential that BTC value could return to previous highs, making mining profitable in the long-term.

The post How Much Do Bitcoin Miners Make Nowadays? appeared first on CoinCentral.

Here’s how USI Tech pulled off a Ponzi scam costing its investors tens of millions of dollars.

What Exactly Is USI Tech?

USI Tech (United Software Intelligence Technology) is a company that claimed to develop the world’s first automated trading platform for Bitcoin (BTC). Starting in May 2017, USI Tech started concentrating on selling BTC packages to traders and miners who wanted to automate these activities.

At first, a lot of people bought into this plan. However, after some time, they began to increasingly suspect that USI Tech was really a Ponzi scheme. But how did the company pull it off in the first place?

USI Tech Owners

A lot of cryptocurrency project websites provide tons of relevant information about founders and team members. However, many also do not. In the case of USI Tech, the latter was true. On the project website, there wasn’t much info about who the USI Tech owners were. Furthermore, the site didn’t provide much information about the products that USI Tech was selling.

What we do know is that Joao Severino and Ralf Gold founded the project. Before starting USI Tech, Severino was banned from all financial activity in Portugal because of his involvement with another scam company called AMC Invest. Even worse, Ralph Gold had been involved in all sorts of Ponzi scheme companies. These included AdsProfitReward, MX Fast Money, World Consumer Alliance, HourlyRevShare, AdsProfitWiz, APR Clicks, and Upper Game.

The company also claimed to be based in Dubai. However, the registration of the business is actually from Ras al Khaimah, another city in the United Arab Emirates that is well known for its offshore business registration services.

How Did the USI Tech Claim That Users Could Make Money?

BTC packages started out at around 50 Euros each. The more packages you bought, the higher your return would be, allegedly. USI Tech’s automated software was supposed to provide a way for users to make passive income. The returns (one percent daily payout on average over five days per week) sounded promising to some people. The company also claimed to offer a staggering 140 percent return over the course of a 140-day package. It also stated (without proof) that some people had already received 150 percent returns.

Looking at these promises, it’s clear that this was too good to be true. However, put in context with the bull market of late 2017 and the introduction of new/eager traders, it’s easy to see how some people could fall for this. Still, there were other factors that pointed to the malicious nature of the company. For example, USI Tech openly operated as a multilevel network marketing company, which made many people view it as a pyramid scheme from the start.

USI Tech Update: Timeline of Events

• October 2017: USI Tech starts the Tech Coin ICO. USI Tech users hand back over 11,500 BTC from the same payments they were receiving from multiplier packages and member purchases.
• December 2017: USI Tech receives a cease-and-desist order from the Texas State Securities Board.
• January 2018: USA and Canada users stop receiving BTC payouts.
• March 2018: USI Tech packages are no longer available for purchase or rewards.
• March 2018: SEC requests documents from members.
• April 2018: Spain’s financial regulation agency (Comisión Nacional del Mercado de Valores) adds USI Tech to its warning list.
• August 2018: The Financial Markets Authority of New Zealand warns that USI Tech has all the characteristics of a scam.

What Lessons Can We Learn from USI Tech’s Scheme?

Regardless if you are someone who lost funds from this scam or chose to stay away from this particular one, there are a lot of things to take away from the USI Tech story.

First, sending funds to a third party that guarantees high returns is generally a bad idea. As we’ve covered in a previous article, there is another blatant scam on Twitter similar to this. The cryptocurrency market is volatile, and there are certainly no guarantees of making a profit.

Second, it’s essential to research the project’s background. In the case of the USI Tech owners, the evidence couldn’t be clearer. Many members had already experienced scam artists well before working for USI Tech. This should have been the only red flag needed for most people.

Third, you shouldn’t blindly trust success stories about how people made money through investing in a particular cryptocurrency, product, etc. In any pyramid scheme, this story could simply be a lie. 

USI Tech Could Still Be Scamming

Even though there is ample information about the scam available from various sources online, the USI Tech owners and team members are still trying to fool potential investors. According to one Facebook group dedicated solely to calling out the project as a scam, people associated with the project are now using new language to avoid getting caught.

For example, members have been told to avoid using terms like “return of capital” and “investment.” In the future, it’s even possible that the company could change its name to keep the pyramid scheme going. Still, don’t let this fool you into falling for this specific scam or a similar one.

Final Thoughts: USI Tech is a Classic Crypto Ponzi

Hopefully, you now have all of the information you need to know about USI Tech and the company’s large-scale cryptocurrency scam. As a cryptocurrency investor, always be sure to investigate in-depth and make informed decisions. More importantly, it’s crucial to learn from cases like this. With this knowledge, you should be able to prevent yourself from falling for similar scams in the future.

The post How USI Tech Pulled off One of the Largest Crypto Scams appeared first on CoinCentral.

Why Use a USB ASIC Miner Over Mining Hardware?

Before getting started, it’s important to ask yourself, “Why should I buy a USB ASIC miner?” Depending on your purpose, the disadvantages can vastly outweigh the advantages.

Advantages of USB ASIC Miners

Lower Costs

Even an average-quality ASIC mining rig can cost a few hundred dollars. A high-quality ASIC rig could cost over $3,000. In comparison, a USB ASIC miner costs less than $50 in most cases. There are some units like the 21 Bitcoin Computer that cost $150, which can technically be classified as a USB miner, but these are on the high end. 

There are also a few other investment factors to consider. For example, projects are changing consensus algorithms to become more ASIC-resistant. This means that expensive ASIC mining rigs could become obsolete out of the blue. Because they can’t be reconfigured for other purposes, this could mean a significant loss. Yes, this would affect USB ASIC rigs as well. However, the loss of investment would be significantly less in comparison.

Easier Setup Process 

One of the most difficult aspects of starting a successful mining operation is the setup process. For the most part, mining rigs aren’t plug-and-play. It takes a while to configure one and start mining cryptocurrencies. In contrast, the process of setting up with a USB ASIC miner is pretty simple, and several tutorials are available.

Greater Mobility

If you’re an experienced miner or even someone who is new to mining, you probably know about how expansive mining operations can be. In many cases, even small operations can take up a lot of space.

For people who either travel often or don’t have enough room to setup hardware mining rigs, it can be difficult to maintain a traditional mining operation. With a USB ASIC miner, however, you should have the ability to utilize both desktops and laptops. This allows you to mine from practically wherever you can connect to the internet.

Disadvantages of USB ASIC Miners

Lower Hash Rates

When it comes to cryptocurrency mining, the hash rate is quite possibly the most important factor. A lower hash rate drastically reduces your chances of finding the next block and receiving the mining reward. Competing against other miners who use a traditional mining rig (or several) with a simple USB ASIC miner isn’t a realistic goal.

Lower Profits

You should expect lower profits with a USB ASIC miner. However, it’s essential to look at this from an ROI standpoint. A smaller investment means that you won’t go into a large deficit. Is it possible to make a net profit from a USB ASIC miner? We’ll explain more in the costs versus profitability section below.

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Top USB ASIC Miner Devices

There are numerous ASIC, GPU, and CPU options on the market today. Unfortunately, there aren’t as many companies offering USB ASIC miner devices. 

Why is this the case? Let’s find out by taking a look at the technical details and customer reviews of three of the most popular units available in 2018. Note that shipping costs are not included in the following costs and that prices can fluctuate.

Bitmain Antminer U2

Cost: $49.97 (used)

Bitmain is the biggest player in the crypto mining market. The company produces all sorts of mining rigs intended for a variety of PoW consensus algorithms. The Antminer U2 is another great example of its diverse product lineup. As of September 7th, 2023, the Antminer U2 only had six reviews on Amazon.

One review is quite positive (5 stars). The reviewer highlights the fact that users can learn about mining, cloud mining, and more via this USB ASIC device. However, the other review is negative (1 star) and complained about the device not being recognized on three different computers.

According to one customer question that was answered in November 2017, this device doesn’t work anymore due to the fact that the BTC difficulty has increased. It’s important to note that the Antminer U2 only mines BTC and, like many other USB ASIC units, can’t mine other cryptocurrencies.

GekkoScience 2Pac

Cost: $44.95

The product description claims that the GekkoScience 2-Pac is the most efficient USB miner ever made. Don’t let the name confuse you, though. This is only one device and not two devices in a pack. This USB ASIC miner includes two Bitmain BM1384 chips (same as the chip in the Bitmain Antminer S5) and a fully-adjustable regulator design, which gives you a core voltage range of 550mV to 800mV. The typical hash rate is 15+GH/s, depending on clock rate. Efficiency is .31-.35 watts per GH.

GekkoScience also recommends that people use the CGMiner along with this device. It appears that most reviews are realistic about what this particular USB ASIC miner can achieve. For example, most don’t have high aspirations for an immediate ROI. 

NanoFury 2

Cost: $89

The NanoFury 2 miner comes with two Bitfury ASIC Chips. Speed per bits is 50 bits – 3.7-4.1 GH/s and 53-55 bits – 4.7-5.4 GH/s. It also includes a heat sink on the back to better disperse heat. This means that you should expect a better lifespan for this particular USB ASIC miner.

For those concerned with the possibility of a difficult setup, this device requires no additional drivers. It also comes with Bfgminer & Cgminer support. One would expect that this device to perform better over time versus cheaper USB ASIC miner units. In addition, it’s possible to mine a variety of SHA256 coins besides BTC, some of which include DigiByte and Joulecoin. 

Costs vs. Profitability

Unfortunately, the customers say that it’s difficult/impossible to achieve a good ROI with these units. Most say that the results aren’t worth the investment.

For example, one Rev 2 GekkoScience 2-Pac user recommends using a seven-port USB hub that can support USB sticks. This user also recommends that users choose cgminer and point to a P2Pool node. In total, the user estimates that you would have to spend $600 to $800, which would give you a break even timeline of 20 months. However, each time that the BTC block payout halves, it will take longer to achieve breakeven. It’s also important to understand that this advice was posted in January 2018 when cryptocurrency prices were at or around their highest point in history. With a bear market, gaining profits can become even more challenging.

You should also consider the amount of time and resources needed to mine daily and maintain your mining operations. At the end of the day, is USB ASIC mining worth it? If you’re looking solely at profitability, it’s far better to choose traditional hardware mining. However, if you’re looking at reducing upfront costs and don’t want to go through the process of setting up a full-scale operation, trying out USB mining might be a better choice.

The post Are USB ASIC Miner Devices Profitable? appeared first on CoinCentral.

In this article, we examine why regulators in the U.S. have been slow to legalize transactions made through bitcoin casinos. We also look at why these policies are unlikely to change in the coming years.

Gambling Industry: Overcoming A History of Heavy Regulations

As of 2018, Bitcoin gambling hasn’t developed much in the United States. Public misconception over the legality of online gambling, in general, remains a major obstacle to user adoption in the US. A lot of issues stem from a complex history of legislation regarding online gambling that has constantly changed in recent years.

For instance, the US Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA) as a part of the SAFE Port Act. This law made it illegal for US banks to process online gambling transactions. As a result, many gambling companies decided to leave the United States at that time.

On April 15, 2011, three of the largest online casinos in the US were indicted and forced to shut down operations. The online gambling community nicknamed this event “Poker’s Black Friday”. However, shortly afterward, clarification of this legislation brought back new opportunities for the gambling industry. In December 2011, US officials released a legal opinion that stated that the Federal Wire Act only applies to sports betting. Various types of online gambling (i.e. online lottery sales, online poker, and casino games) were thus considered to be legal.

Still, this series of events and varying state laws have made it difficult for many online gambling operations to thrive in the US market. Many companies in this space still fear potential shutdowns, large fines, and continued legislation changes. For players, however, the reality is that all online gambling sites are legally available in 41 of 50 states.

The Need for Anti-Money Laundering Compliance

Globally, online casinos have enjoyed massive market growth. However, bitcoin casinos face continued scrutiny in the US. Money laundering remains a big concern for regulators.

Stats show that bitcoin gambling is a potential risk of money laundering. The Center on Sanctions and Illicit Finance (CSIF) conducted a study bitcoin money laundering from 2013 to 2016. According to the report, bitcoin casinos made up 25.8% of all bitcoin-related money laundering. It’s important to note that this is still quite low when compared to money laundering via cryptocurrency exchanges (45.4%). 

While exchanges still have to go through AML and KYC checks, bitcoin casinos likely face a larger uphill battle. Bitcoin casinos must deal with the shady history of money laundering via traditional casinos of the past. 

Even though bitcoin gambling is considered to be 100% legal in the US, the number of possible options for players remains relatively low. 

Regulations Surrounding the Use of Cryptocurrencies Still Up in the Air

Regulations surrounding the use of cryptocurrencies are another major obstacle to the approval of bitcoin casinos in the US. In contrast, many land-based casinos and lotteries are widely accepted in the US. While officials could decide to approve of bitcoin gambling, a better revenue collection system is needed. 

Examining legislation passed by the US Congress in December 2017 provides a good insight into the future of cryptocurrency taxation. There is increasing pressure from government officials to develop thorough enforcement of cryptocurrency taxation (i.e. mining, income, and gambling). Even though the legislation exists and applies to bitcoin gambling, the rise of bitcoin casinos could potentially impact the future of government revenue.

In 2018, there are already well-established systems for fiat gambling in the US. While bitcoin gambling could become regulated similarly, developing these revenue systems is likely to be a lengthy process. Additionally, some officials are wary of the possibility that bitcoin casinos, once legalized, would use untraceable cryptocurrency payments. Theoretically, this could not only create the potential for criminal activity (i.e. money laundering) but also cut into the profits of state lotteries and casinos.

Both potential casino operators and regulators would have to develop better policies that work for both sides. For example, regulators also have to consider constant cryptocurrency price fluctuations. Minor changes in prices could drastically affect taxation. 

International Examples and The Future Possibility of Domestic Bitcoin Gambling Sites in the US

In 2018 (and probably for a few years beyond) the possibility of opening up a bitcoin casino in the US is bleak. There are now at least two casino hotels in Vegas that allow people to use BTC. However, there is a caveat. BTC can only be used at places like the front desk or locations around the hotel. It cannot be used to gamble. This means that most bitcoin casinos must look to international options for their businesses.

Many locations around the globe offer the regulation and licensing of bitcoin casinos. Malta officially became the first place to legalize bitcoin casinos. It offers an MGA (Malta Gambling Authority) license and is home to Bitstarz Casino. In addition, Curaçao eGaming has two popular bitcoin casinos, Bitstarz and Bitcasino.io. Isle of Man and Costa Rica also allows for the establishment of bitcoin casinos.

While the reality of bitcoin casinos based in the US might be far off, these examples show that bitcoin casinos can work. Most importantly, they set a precedent for how the US could support domestic bitcoin gambling sites. 

Conclusion

As explained above, it is difficult for U.S. authorities to legalize bitcoin casino transactions. A history of complex legislation on gambling in general, a need for anti-money laundering compliance, and a concern over the potential loss of tax revenue generated by traditional casinos all present real challenges.

Despite the continued progress of opening up things like legal sports betting in states throughout the United States, bitcoin gambling doesn’t appear to have long-term stability for now. Although legal for American players, the rise of bitcoin casinos with operations based in the US is unlikely for the foreseeable future.

The post Reasons Why U.S. Authorities Are Challenged to Legalize Bitcoin Casino Transactions appeared first on CoinCentral.

Huobi Exchange Key Information

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User Interface and Mobile App

Available on iOS and Android, the Huobi mobile app features most of the functionalities available on the web platform. You can even complete tasks like account registration and verification directly via the app. In Google Play, the Huobi Global app has an average rating of 4.1 stars out of 3,730 reviews. However, in December 2018 and January 2019, some users have said that the Android app won’t let them login due to an error with Captcha. On the Apple App Store, Huobi boasts an average rating of 4.9 stars out of over 4,800 reviews.

Trading Options

Many centralized exchanges serve as the sole, centralized market maker. In contrast, Huobi also allows you to trade over the counter (OTC). This means that you can buy and sell cryptocurrencies peer-to-peer on Huobi. Even though this option exists on the exchange, it has yet to gain adoption from traders. Various commenters have said that there is a lack of OTC offers. Still, this is still an innovative technical feature.

If you are a margin trader, Houbi has a separate platform specifically for this. You can access this by going to the margin tab in the header. The amount of leverage you can have varies from coin-to-coin. For example, BTC is around 3x. Compared to other margin trading platforms, this is low. Nonetheless, it is an attractive option for potential users.

In December 2018, Huobi Derivative Market issued BTC contracts and ETH contracts (including weekly, bi-weekly and quarterly, respectively), and flexible leverages, including 1x, 5x, 10x and 20x. In the future, more digital currencies will be issued to meet various investment demands. 

Security: Is Huobi Safe?

Compared to other exchanges, Huobi continues to excel from a security perspective. Many top exchanges suffer from large-scale hacks, with varying results in terms of trading volume afterward. In 2015, a Bitstamp hacker withdrew 12,000 BTC from Huobi. However, this issue did not relate to the security of Huobi. Huobi reported a DDOS attack in 2015 but this did not cause a security breach. According to one review, an individual user lost USDT and EOS on Huobi. This reviewer states that the problem was caused by a technical error with Huobi’s 2FA. One comment suggests that it was the result of a phishing scam.

Huobi claims that its risk controls have been developed by the likes of Goldman Sachs. The exchange stores around 98 percent of funds in cold wallets. Moreover, Huobi now utilizes a decentralized exchange structure to prevent DDOS attacks. The exchange even has a User Protection Fund Initiative. Twenty percent of net revenue that the exchanges gains from trades will go to this fund, which it will use to buy back Huobi Token (HT). It also has a service called Huobi Security Reserve. As part of this, the exchange plans to store 20,000 BTC for insurance. This is a preventative measure that will help Huobi reimburse users in the case of any future hacks.

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Huobi Fees

Huobi has a 0.2 percent fee that applies to both market makers and takers for amounts between $0 and $5,000,000 over the course of a 30-day period. In comparison, other top exchanges like Binance have 0.1 percent fees. Meanwhile, GDAX has 0.3 percent fees.

In January 2019, Huobi Global launched a tiered fee structure that significantly reduces fees for higher volume traders. This is relatively competitive when compared to other exchanges. Users also have the option to reduce trading fees on Huobi by becoming a VIP member. This involves paying a monthly payment of HT, which varies depending on the membership level (1-5).

Like most exchanges Huobi has no fees on deposits. However, Huobi does have withdrawal fees and minimums that vary from coin-to-coin. For example, withdrawing Bitcoin (BTC) costs 0.001 BTC, with a minimum withdrawal amount of 0.01 BTC. For Tether (USDT), the flat fee is 5 USDT and minimum withdrawal amount is 20 USDT. Overall, this means that Huobi fees are generally higher than most exchanges for lower withdrawal amounts. A few exceptions exist. For example, TUSD has a withdrawal minimum of $20 but a withdrawal fee of only $2.

Currency Options

As of the end of January 2019, Huobi has 182 coins and 416 trading pairs. There are three major crypto markets for trading pairs (USDT, BTC and ETH) and one major fiat market (USD) for the US market. Some of the top crypto-to-crypto trading pair options (by trade volume) include BTC-USDT, ETH-USDT, TRX-USDT, EOS-USDT and EOS-ETH.

As of January 28, 2019, the only options for USD trading are BTC, USDT, and ETH. This is most likely because USD currency withdrawal and deposit services didn’t become available until January 4, 2019 for United States residents. Currently, for US residents wire transfers are the only option. Huobi also requires level 2 verification to access this feature.

For various locations throughout the world, you should check whether or not Huobi supports trading for your native currency. If you are in the US, for example, you probably won’t see the option to trade Australian Dollars (AUD) on the Huobi platform, but you will probably see an option for USD and vice versa. In other words, you probably will only see the fiat currency that is used in your current location.

Withdrawal Limitations

Similar to many exchanges on the market, Huobi has withdrawal limitations based on various levels of user verification. One thing you will notice is that withdrawal amounts vary greatly depending on your citizenship. For example, if you are a citizen of China, you can’t withdraw any funds as an unverified user or with level 1 verification. This option is only available at level 2 or above. In the United States, the exchange only requires level 1 verification. However, the amounts are relatively low: a daily limit of $2,000 and a monthly limit of $10,000.

Customer Service Experience

Compared to most exchanges, Huobi has above average customer service experience. Customer support is available 24/7, and response times only take two to three hours on average. Many consider this to be a rarity in the space.

There are two main methods that you can use to reach customer support. First, you can utilize the chat app that is available directly on the Huobi trading platform. Second, you can contact the team at support@huobi.pro. If you choose this option, Huobi asks that you use the registered email address associated with your Huobi account and include your user ID.

The post Huobi Exchange Review: How Does the Seychelles-Based Exchange Stack Up? appeared first on CoinCentral.