Cryptocurrency

Cryptocurrency, News

Could Bitcoin Price Plummet when Mt. Gox Refunds its 140,000 BTC?

MtGox

The main cryptocurrency in the market could suffer a price drop if the more than 140,000 bitcoins (BTC) reinstated by the Mt. Gox hack are sold. As of this writing, it is trading at $21,600, having hit its lowest in over a year three weeks ago.

This was reported by the analyst Healthy Pockets, given that the lawyer behind the hacking of the Mt. Gox exchange announced that the refund of 141,686 BTC to those affected is being prepared . These are the compensations that the users of said platform will receive for the theft of 850,000 BTC that it suffered 8 years ago, in 2014.

The resolution of the case determined that those affected can receive compensation in BTC, bitcoin cash (BCH) or dollars valued at the time of the hack. Of these options, Pockets indicates that the majority probably choose bitcoin because it is the most profitable.

Such a decision leads him to believe that, upon receiving the funds, those compensated from the Mt. Gox hack could sell their repaid bitcoins . Considering that, he warns that this action could have “serious consequences” for the price of the cryptocurrency. Precisely the value of BTC tends to fall when there is more supply than demand.

For comparison, remember that the recent sale reported on CriptoNoticias of just over $10,000 BTC by miners likely propelled the cryptocurrency’s decline to its lowest in over a year.

Although it should be noted that the fall of bitcoin to USD 17,600, the minimum in more than a year that it touched three weeks ago, was not only due to the sale made by the miners. It was triggered by widespread supply action by investors in the market. In fact, this was also seen in stocks after the disappointing macroeconomic environment .

The action of those compensated for the hack of Mt. Gox could impact the price of bitcoin

In this scenario, a sale of more than 140,000 BTC may not affect the price of the cryptocurrency if there is strength in demand at the same time. But if this is not the case, bitcoin could continue to decline .

Also, consider that those compensated for the Mt. Gox hack could decide to hold their refunded bitcoins instead of selling . This action would not generate a negative effect on the price of the cryptocurrency. Therefore, it is necessary to see how they act when receiving the refund and what impact it causes in the crypto market.

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Cryptocurrency, Horror Story, News

Why did Terra (LUNA) collapsed? What is the Death Spiral?

terra chart

The cryptocurrency that went from $54 to only a few cents in less than a day.

For the past few years, Terra has been building its name as a leader in the stablecoin space. Terra is a layer 1 blockchain built on top of Cosmos that specializes in stablecoin transactions. In late 2020, Terra introduced its own algorithmic stablecoin, TerraUSD (UST). This stablecoin was always supposed to be worth $1.00. However, this stablecoin quickly lost the stability it was meant to have and fell sharply. Many are wondering if the Terra UST failure is the beginning of the end for the project or if there is still room for a recovery.

Why is Terra (LUNA) down?

Terra is a blockchain protocol that hopes to increase the general use of stablecoins in the open economy. Stablecoins are known for their pegged prices, a stark contrast to the extreme volatility seen in most cryptocurrencies.

LUNA is the token that feeds the Terra protocol. Its primary use is to provide liquidity for trades and keep the price of UST stable. Users can stake their tokens to provide merchants with liquidity and earn rewards. This liquidity is also used by the Terra protocol to keep the price of UST at a constant $1.00. However, this system failed and allowed the price of UST to drop to $0.30.

To keep the price of UST stable, Terra will burn or mint LUNA tokens. Since LUNA is used to support UST, influencing supply can be used to keep the price of UST constant, at least in theory. When the price of UST drops below $1.00, LUNA is created and UST is burned. This increases the amount of LUNA per UST and raises the price of USTs. Conversely, when UST rises above $1.00, LUNA is burned and UST is created. This decreases the amount of LUNA per UST and reduces the price of UST.

While this idea should work in theory, the creators of the project were not prepared for the possibility of a massive sale.

The Death Spiral

During the first two weeks of May 2022, some large UST withdrawals were made. This sale of UST increased supply and lowered the price of UST. When the price dipped slightly below $1.00, many panicked and also sold. This caused the price to drop even further. In an attempt to combat this, Terra began burning UST and minting LUNA tokens. However, his system had a maximum amount of UST that could be burned. Once that cap was reached, the stablecoin began to free fall.

In the case of LUNA, when UST fell, many also left their positions in LUNA. This is because UST is an integral part of Terra’s protocol, so its failure could mean bad things for LUNA. Then the price of LUNA started to drop due to the liquidation of UST. However, LUNA’s supply was also increasing rapidly in an attempt to keep the UST price stable. This further decreased the value of LUNA.

In the last week, LUNA has dropped from almost $90 to around $1.00. Investors who owned LUNA lost almost all of their position.

Terra (LUNA) Price Movements

During the second half of 2021, and until the fall of UST, LUNA had been rising steadily. In fact, it appreciated over 1000% from its lows in May 2021 to highs of nearly $120 in April 2022. This surge was due to the steady increase in demand for stablecoins and UST. LUNA rose continuously until May 2022 when the price of UST crashed.

After UST started to drop, LUNA dropped more than 95% in just one day. The fragility of the project was shown, with many abandoning their positions as more holes began to appear. Additionally, the market capitalization fell from nearly $30 billion to just over $1 billion.

Cryptocurrency market cycle

One way the cryptocurrency market can be measured is by comparing Bitcoin to other tokens. If altcoins, or any non-Bitcoin token, outperform Bitcoin, then it is considered “altcoin season.” It is currently not altcoin season, which means Bitcoin is outperforming at least 75% of the top 50 cryptocurrencies. In fact, Bitcoin is outperforming almost all other major tokens.

While Bitcoin is outperforming other tokens, this is a relative term. The crypto markets have been suffering for some time, with major tokens down more than 50% in recent months. While this price drop may not be the direct cause of LUNA’s decline, it could certainly be a major factor.

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Cryptocurrency, FAQs, News

Ethereum 2.0 is cancelled!?!

What you need to know?

The Ethereum network has for many years been the cradle of thriving innovation. We have thus seen the emergence of various phenomena such as ICOs , DeFi , NFTs and more recently the Metaverse .

However, the performance of the network cannot keep up with the growing demand. Thus, for several months Ethereum has been the victim of significant congestion . One of the main consequences of this congestion has been the drastic increase in charges on the network.

Fortunately, the developers have imagined several developments aimed at improving the performance of the network and allowing it to process a larger volume of transactions, without negatively impacting the user experience.

These evolutions have long been grouped under the name of Ethereum 2.0 . Thus, Ethereum 2.0 designates various updates:

  • The change in consensus , with the passage from proof of work to proof of stake;
  • The deployment of sharding , a solution to split the network into multiple subnets, in order to increase throughput.

“Ethereum 2.0”… it’s over

In a post published on January 24 on the official blog of the Ethereum Foundation , it announces the end of Ethereum 2.0 . Don’t worry, we’re only talking about the terminology and not the various changes included in this update.

Indeed, in the old versions of the roadmap, Ethereum as we know it had to give way to a new version of the network, hence the name Ethereum 2.0.

“As part of this roadmap, the existing proof of work chain (Eth1) would eventually be deprecated via the difficulty bomb. Users and applications would migrate to a new proof-of-stake Ethereum chain, known as Eth2.”

However, changes to the roadmap have disrupted the course of this transition.

Thus, with the appearance of The Merge , which aims to connect a part of each of these two versions of Ethereum, it no longer makes sense to differentiate them.

Indeed, The Merge aims to connect the “application” part of Ethereum as we know it, namely the entire application ecosystem, to the consensus part of Ethereum 2.0 in proof of stake. As a reminder, this consensus layer was deployed in December 2020, via the launch of the beacon chain.

Execution and consensus layer

This is why the developers decided to drop the name of Ethereum 2.0. Instead, they offer the following designations:

  • Ethereum 1.0 becomes: execution layer ;
  • Ethereum 2.0 becomes: consensus layer ;

Therefore, Ethereum will now be the addition of these two entities.

Execution layer + consensus layer = Ethereum.

In practice, this does not change much. However, this helps to bring more clarity and not to lose newcomers, who are new to Ethereum, Ethereum 2.0 and may find it difficult to understand the link between the two.

“A major problem with the Eth2 appellation is that it creates the wrong thinking pattern for new Ethereum users. They intuitively think that Eth1 comes first and Eth2 comes after. Or that Eth1 ceases to exist once Eth2 exists. Neither is true. By removing the Eth2 terminology, we save all future users from navigating this confusing mental model.”

This decision was made due to the imminent arrival of the said fusion of the execution layer and the consensus layer via The Merge. Thus, the connection of the two entities has been announced for around June 22, 2022.

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FAQs, Cryptocurrency

Will Bitcoin become the World Reserve Currency?

Key facts:
  • The petrodollar standard is running out of steam with China’s negotiations with Saudi Arabia.
  • There is a crisis of confidence in the dollar as a result of US sanctions on Russia.

An event of great importance is taking place on a world level: the dollar has weakened as an exchange currency in the commodity market, which opens the possibility that a new world monetary reserve will be decided. While this is happening, China’s renminbi (better known as the yuan) and bitcoin are on the table as two options to become the next world currency.

To understand why and how all this is happening, we must first do a brief historical review and go back to the last century. By the early 1900s, the monetary system that governed the world was very different, since it was based on gold reserves. Each country undertook to guarantee that its currencies were worth a certain amount of gold that was under its protection. However, with the outbreak of two world wars, the international economy underwent a violent transformation and the gold standard saw its end.

By 1944 an agreement of great importance for the financial memory of the world would be signed, the Bretton Woods. This event gave birth to the World Bank, the International Monetary Fund (IMF) and established the use of the dollar as the world currency. The idea was that the United States would become an issuer of currencies backed by its important gold reserves, and that this money could be used by other countries to market goods and services.

However, the idyllic system proposed by Bretton Woods did not last long, because in the 1970s we would see the beginning of the financial chaos that we still carry today. The US president at the time, Richard Nixon, delinked the dollar from the gold standard during a period of inflation caused by the US war in Vietnam. This produced an international financial collapse, as well as many tensions in foreign countries, where some decided to float their currencies on the open market to support the value of their economies.

This measure determined the beginning of the depreciation of the US dollar, although it continued to be the currency with the greatest dominance in the international market. Currently, 90% of currency trading is done with the dollar, and it remains the most common reserve currency, accounting for 60% of world reserves. A much higher percentage than that of other highly relevant currencies, such as the euro, the yen, the renminbi and the Canadian dollar.

But… what is the reason for the continued success of the dollar as a currency of exchange if the economic decisions of the United States in recent years have not been the most successful? Well, in general terms, this has been determined by the political power of the American power and its international relations, with oil being a very important piece in its use as a world currency. In addition to all of the above, to understand the current situation it is important to know a concept: the petrodollar.

Oil, the cornerstone of market dominance

Also in the Nixon government and with the intention of financing the war without depending on gold reserves, the United States reached an agreement with Saudi Arabia so that the oil of this country would be sold in exchange for dollars. Alex Gladstein, director of the Human Rights Foundation, explains that through these negotiations the American country was able to accumulate oil and that the oil-producing nations invested their profits in the US debt .

To make a long story short: the United States achieved what it was looking for, since shortly after the agreement with Saudi Arabia, OPEC – which is one of the most important organizations of oil countries in the world – also agreed to sell its products only in exchange for dollars. In this way, almost 80% of crude oil production worldwide is still traded under the petrodollar system. Nations of the European Union, China and even Russia have been forced to have the dollar to buy or sell oil. Yes, in a nutshell, they have to use a foreign currency to price their own raw materials or buy from other states.

And although on several occasions there have been attempts to overthrow the petrodollar pattern, the reality is that the United States has jealously protected its dominance in this market. Let’s take an example, in the 2000s one of the bloodiest wars described as “oil wars” broke out, after Saddam Hussein, president of Iraq, tried to sell his crude oil to Europe in exchange for euros. Although the US government argues that the war started because of Iraq’s terrorist connections and its development of weapons of mass destruction (atomic bombs). However, with the end of the war for some it became clear that the hegemony of petrodollars was protected.

Venezuela has been another country that recently tried to market its oil with a currency other than the dollar, in this case the Chinese yuan. Crude oil was quoted in different international currencies, trying to disassociate itself from the US government that had recently imposed sanctions on the country, but at present this had no major repercussions. And even today the Caribbean country is once again in talks with the United States to market its crude oil.

But today, the dominance of the petrodollar (and the dollar as a world currency) is facing one of its greatest threats since the moment of its creation. China, which is the buyer of 25% of the oil generated in Saudi Arabia, is in talks with the country to close the trade in crude oil in yuan. This is a discussion that has been going on for years without a resounding answer, but today China’s political relations with this kingdom in the Middle East are stronger than ever, while US relations with the Arab country have weakened. .

With this move between China and Saudi Arabia, it is clear that the Asian giant wants to take away ground from the dollar as the world currency and who will also impose a petroyuan standard. It is not the first time that China has tried to introduce oil contracts quoted with the yuan to the market, just as the government has promoted a fierce campaign for the adoption of its cryptocurrency (the digital yuan) as the new currency of commerce.

If we take into account the power that China has in world trade, it is obvious that this movement endangers the hegemony of the dollar. Additionally, the war that is taking place in Ukraine as a result of the Russian invasion can also change the rules of the game and worsen the already precarious situation that the US dollar is experiencing.

Collapse of confidence and change to a new monetary order

If the floor of the petrodollars is collapsing, the confidence generated by the traditional financial system and the dollar as a world reserve is also cracking after years of erosion. With the constant sanctions that the United States has imposed on countries such as China, Venezuela, North Korea, Iran and Russia, the message has been clear and forceful for the citizens and leaders of the world. The money does not belong to everyone, but to the one who issues it, protects it and distributes it. Ergo, the United States .

This represents, statistically, that a country of just over 300 million inhabitants can control the lives of the more than 7 billion that are on earth and that (possibly) do not share the same culture, the same geographical reality, or much less the same economic benefits. This, for obvious reasons, generates an imbalance in world finances that different powers want to correct by promoting the use of their own currencies (as is the case with China).

As if that were not enough, the war has also generated a new economic climate (due to sanctions) that brings new elements to the table, such as the blockade of Russian oil. Russia is another of the countries that leads the export of crude oil worldwide, along with the production of gas and other raw materials. However, because the entire country was blocked from accessing dollars through the SWIFT system, the Eastern European nation has been unable to benefit from the current rise in oil prices, the price of which has plummeted, according to data. of Ecoanalytics.

For financial experts like Zoltan Pozsar, from Creddit Suisse, this is the beginning of an economic crisis that will generate a new monetary order , baptizing it as «Bretton Woods III». Poszar predicts that, due to the current weakness of the dollar and the euro —as well as the lack of confidence they are going through— it could generate a debacle in the world commodity market. Due to this, interest in foreign money grows over the internal money that each country has, with products such as flour, oil, gold and gas rising more and more in price.

The analyst points out that, because the raw material from Russia was left out of the game, the value of all the raw material from the other countries has grown. Those who are allied with Europe and the United States will stop doing business with the sanctioned country. However, powers like China, which are decoupled from Western interests and do not want to depend on the dollar, could see Russia’s raw material as an opportunity to continue carrying out their petroyuan contracts and support their currencies such as oil. (and gas) from Russia.

For Poszar, everything that is happening today is the prelude to a new era of money, in which the renminbi will emerge stronger and the dollars will be seriously affected. Even so, he does not believe that China is the only strong piece in this chess game, but instead proposes that if Bitcoin manages to survive this situation, it could also benefit greatly.

Does Bitcoin have life in that scenario and who will stay with the reign?

It is not yet known who will get the title of “the world currency” in case the dollar finally loses its power, the answer is probably not as simple as simply saying the yuan, the yen, the euro or bitcoin. However, if we must take into account that in a globalized world like the one we live in today, going through a huge institutional and confidence crisis, it is difficult for a single currency to prevail as the dollar did in the past.

China also has many “buts” in its financial system because, although it knows how to take advantage of the situation, there is great resistance in the West to accept the way in which the government of the Asian giant works. With the possibility of losing privacy over your finances and freedom of decision, there are not a few people who reject the use of the digital yuan and any form of adoption of the Chinese monetary system. In the case of the yen or the euro, they do not turn out to be the favorite options nor are they powerful enough to generate the expectation that they will be the substitutes for the dollar.

Likewise, it must be taken into account that, although the dollar is weakened, the United States continues to be a country of great political and economic influence, so it will not be so easy for an abrupt change to occur in the world economy without the American power of the battle to stay.

In the midst of all this context, it is curious that a new name has crept into the table of candidates to become a reserve currency. With the adoption of bitcoin (BTC) as legal tender in El Salvador, Satoshi Nakamoto’s cryptocurrency has reached the governmental leadership and is shown as an option to store value that is supported by those who seek greater freedom, privacy and decentralization in world finance.

Alex Gladstein, in the aforementioned article, points out that “bitcoin is an asset that is competing to become the new world reserve” in a context where money is centralized in the hands of a dome. With people thinking that this way of using money is unreliable and fair, Bitcoin is presented as an option that cannot be controlled by a few for manipulation or censorship, just as it is impossible to change its monetary policies to benefit one. group of people above others.

In an ideal world, where all humans have the right to choose what money to use and enjoy the same benefits of the financial system, it is likely that Bitcoin will be the currency that governs the world and not a currency issued by a Central Bank with its own agenda. However, we must also be realistic that cryptocurrency has not even reached 20 years of its creation and is still a very niche form of money, which may not yet be ready for the level of demand that it has. it would generate him to become the new world reserve .

In conclusion: we will have to wait and see what the current power struggles decide, but it is obvious that money as we know it will never be the same again and that it will be difficult for the dollar to emerge victorious from the current crisis in which it finds itself submerged.

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Tutorials, Cryptocurrency

Tutorial on how to staking Tezos from Ledger

One of the ways to get cryptocurrencies passive income with less risk of staking is to cryptocurrencies using ” Proof of participation ” or “Proof of Stake”. I bring you this tutorial on how to staking tezos from Ledger so that you can staking by storing your Tezos in the safest way and earn more than 6% per year.

To secure a blockchain with proof of possession, you must mount a specific computer, make sure it is connected 7 days a week, 24 hours a day, with all the difficulties that that entails.

At Tezos you can delegate your coins to someone else (or account) so they can staking you for you, taking care of all the technical aspects, while keeping control of the private keys for a small commission on performance.

Never send your cryptocurrencies to anyone, unless it is a cryptocurrency buying and selling service that has a good reputation. When you send them, you no longer have power over them and you are placing your trust in him.

Tutorial on how to staking Tezos from Ledger Nano step by step

  1. Buy a Ledger Nano
  2. Set up your Ledger Nano and Ledger Live on your computer
  3. Download the Tezos app on your Ledger Nano from Ledger Live
  4. Add a Tezos portfolio on Ledger Live
  5. Receive Tezos in your Ledger wallet
  6. Choose a baker
  7. Tezos staking configuration from Ledger
  8. Wait 21 days and start receiving rewards

1. Buy a Ledger Nano

A ledger is a device that stores the private keys of all your cryptocurrencies

A Ledger Nano S is a physical device that is used to store, send, receive and consult cryptocurrency balances in the safest way. There are two Ledger Nano, the “S” and the “X”. While the “X” model is more expensive, it has more memory so you don’t have to uninstall and reinstall cryptocurrency wallets that you still have.

You can get the devices from their official store or Amazon:

  • shop.ledger.com
  • Amazon

2. Configure your Ledger Nano and Ledger Live on your computer

If you just bought the Ledger Nano S wallet, visit my Ledger Nano S and Ledger Live tutorial to do the initial setup and have your device ready to complete this tutorial.

3. Download the Tezos app on your Ledger Nano from Ledger Live

Click on the “Manager” menu on the left sidebar. Once inside, enter the name Tezos into the Ledger Nano application search bar. Finally, click on the “Install” button that appears to the right of the application bar.

The “Install” button will change to the text “Installed” in green and on your Ledger Nano S you will have the Tezos wallet with the cryptocurrency symbol.

4. Add a Tezos portfolio in Ledger Live

Click on the “Accounts” tab on the left side menu and then click on the “+ Add account” button under the Bitcoin wallet.

In the window that appears below, click on the “Choose a crypto asset” drop-down and type Tezos in the search bar. When you find it, click on the “Tezos (XTZ)” symbol and click on the “Continue” button.

Next, you must start your Tezos portfolio on your Ledger Nano S. Find the Tezos icon in the main menu of your Ledger Nano S with the upper buttons and click on both at the same time once located above.

In the Ledger Live application, click on the “Add acount” button.

The next screen is a confirmation message. Click on the “Close” button that appears next to the “Add more” button to close the window.

In your accounts tab, the Tezos account should appear below the Bitcoin wallet.

5. Receive Tezos in your Ledger wallet

Get your public Ledger address where to send the Tezos

You already have your Tezos (XTZ) wallet set up in the Ledger Live app, ready to receive tezzies, the Tezos blockchain currency.

Click on the Tezos account and the menu of your Tezos accounts will open. As you still do not have Tezos in your accounts, the following menu will appear. Click on the button in the center of the screen with the text “Receive”.

In the window that appears, click on the “Continue” button. The Tezos portfolio is checked by default.

In the second step, it shows you the public keys both in the Ledger Live application and on your Ledger Nano device.

Check that the address is the same on both screens for security reasons and, if they match, copy the address from the Ledger Live application using the button with the two overlapping squares to the right of the address, or double-click the address and then “Control + c “.

When you have the public address copied, click on the button at the top right of your Ledger Nano at the same time to confirm and go to the next step.

Click on the “Done” button of the Ledger Live application to finish.

Send the Tezzies to your Tezos address on your Ledger Nano

In this case I am going to send Tezzies, the Tezos currency (XTZ), from Kraken .

Login to your Kraken account and click on the “Funds” tab on the top bar. Next, find the Tezos coin and click on the “Withdraw” button.

In the next menu, you must add the Tezos address of your Ledger, which you copied in the previous step, to your Kraken account.

Click on the “+ Add address” button in the center of the screen, give this address a name to recognize it (for example: Ledger Nano), and copy the address in the “Tezos Address” box. Finally, click on “Save address”.

They will send an email to your Kraken email address to confirm the address. Once confirmed by clicking the link in the email received, refresh Kraken by pressing F5 and the address will appear. Select the added address, select the amount of Tezzies you want to withdraw and click on “Review withdrawal.”

Then, all you have to do is click on the “Accept withdrawal” button on the next screen after confirming the address and waiting for the withdrawal to take place and receive the Tezzies in your Ledger wallet.

Ready! You already have your Tezzies stored in the Ledger Nano wallet, safely and with the control of private keys. The difference between the amount withdrawn from Kraken and the balance of your Ledger portfolio is for the Kraken commissions (0.2 XTZ).

6. Choose a “baker”

You must choose a “baker”, which are companies or people that have a Tezos node to secure the network and give them permission to do staking (or “baking”, it’s the same) for you.

The mytezosbaker page lists the main Tezos bakers. To choose a baker, the most important parameters are:

  1. That he has sufficient capacity, that is, that he can accept Tezos to still delegate. If he does not have the capacity, he will not be able to delegate for you and you will have lost rewards. It’s the column with the name “Capacity”. Green is that it still has a lot of capacity and red is that it has little.
  2. Yield or “Staking Yield”. It is the percentage of your initial Tezos amount that you will receive annually. You want it to have the maximum performance. It varies depending on the commission and efficiency of the delegator during the last 30 days.
  3. Efficiency. Efficiency is how long the node has been up for the last 180 days. You want the efficiency to be AAA to make sure you don’t miss out on rewards. It’s in the column labeled “Efficiency.”
  4. Time it has been operating. The longer it takes, the more likely it is that they will not close the service and you will lose commissions.

I would choose the PayTezos delegator, number 6.

  1. It has a lot of free capacity.
  2. Yield of 5.63% annually, behind only P2P Validator and Tezgate, both without capacity.
  3. AAA efficiency.
  4. It has been operating since November 2018, right when the Tezos blockchain was launched, which means that it is quite reliable.

Once the baker is chosen, click on his row on the mytezosbaker website.

On the page of the chosen baker, under their name, you will find the Tezos address to which you must give permissions. Copy it using the icon that appears just to the right of the address, inside the red box.

7. Configuration for staking Tezos from Ledger

Go to the Ledger Live application and within the Tezos account, scroll down to the “Delegation” menu. Click on the “Earn rewards” button that appears on the right.

In the following informative pop-up window, it informs you that by delegating your Tezzies you are still in control of your coins. Click on the “Delegate to earn rewards” button.

The next menu marks you the baker “Stakin” by default. Click on the “select” text that appears marked in red to add the one you have previously chosen from mytezosbaker.

Next, select the text “Custom validator” that appears below the list of bakers or you can search if you find it in the list. The one chosen in step 6, “PayTezos” is in third position in the list.

You must enter the public address of the baker that you have chosen in step 6 in the unfilled field that appears. You just have to paste it and click on “Use validator”.

The next menu asks you to confirm the baker and shows you the approximate annual performance you will have. Click on “Continue”.

You must confirm this step on your Ledger Nano. Confirm that all the information that appears in the Ledger Live computer application is the same that appears in your Ledger Nano and when you have reviewed it, click on the right button of your Ledger Nano to confirm.

Once the transaction is confirmed, you already have your tezzies staking from your Ledger Nano safely and you don’t have to worry anymore.

The menu for your Tezos accounts should appear.

8. Wait 21 days and start receiving rewards

You should start receiving your first rewards after 21 days. Bakers have different systems for automating payments to users who delegate their coins to them.

In a maximum of 40 days you should start seeing transfers of tezzies to your account from the baker’s account every 3 days.

Happy staking!

9. Cancel the delegation of your tezzies to send them wherever you want

If you want to stop staking Tezos to sell them or to transfer them to another account, click on the three points to the right of the section of your baker that is marked in red. Next, click on “End delegation” from the drop-down menu, in the pop-up window that appears click on “Continue” and finally accept the transaction from your Ledger Nano by clicking on the upper right button.

Ready! You already have your Tezzies available to send them to any address.

Important comments

You can cancel the staking of your Tezos at any time without penalty. You will only have to pay a transaction commission to the people who secure the network through staking, as in any blockchain.

You can withdraw your Tezos and send them to an exchange to sell at any time quickly.

When you finish staking, you will receive tezzies for 21 more days (7 cycles), corresponding to the 7 cycles you waited for.

Other recommendations

If you want to find out more about the project, you can consult my fundamental analysis of Tezos .

If you still don’t know how to buy Tezos, you can visit my tutorial on how to buy Tezos on Binance , or my tutorial on how to buy Bitcoins on Kraken and buy Tezos instead of Bitcoin.

Staking is one of the safest cryptocurrency methods of earning passive income. If you have more experience and want to achieve higher returns with other methods and, usually assuming more risk, see my article: How to get passive income with cryptocurrencies .

If you are new to the world of cryptocurrencies, please read these basic tips to avoid fraud and major causes of money loss. I wish I had them when I started.

Lastly, take a look at my resource page , there are many very useful tools!

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Tutorials, Cryptocurrency, FAQs

How To Get Passive Income With Cryptocurrencies

It is better to invest in Bitcoin and cryptocurrencies at the beginning of the market cycle , because you can accumulate and wait quietly for the price to rise without worrying. If, in addition, the amount of cryptocurrencies increases as they appreciate in value, it is almost a gift.

Nothing has a risk 0 and less in cryptocurrencies, so first of all, you have to remember the number 1 rule of cryptocurrencies.

If they are not your keys, they are not your coins.

Andreas Antonopoulos

Cryptocurrencies are easy to use with basic knowledge. They are yours if you have the public key (it is shown to everyone, as a user) and the corresponding private key (it is not shown to anyone, like a password). If you have both, you can do whatever you want with them, it’s that simple.

Therefore, all the services in which you trust your keys and, therefore, your coins, are susceptible to being stolen or lost due to mismanagement. It is important that you analyze the security measures of the service where you have them stored, if you do not have the keys yourself.

The ways to get passive income are:

  1. Staking
  2. Exchange cryptocurrencies that pay out dividends
  3. Lend your cryptocurrencies with interest

1. Staking

All cryptocurrencies have a mechanism that secures the network so that repeated expenses of the same currencies do not occur and infinite inflation is created. The best known mechanisms are proof of work (Proof-of-Work) and proof of possession (Proof-of-Stake) .

Proof-of-work coins require expensive equipment to be assembled, make noise, use a lot of electricity, and require technical knowledge.

In contrast, coins that use the proof of possession mechanism require buying a quantity of coins and putting them to generate a return more easily. When you have coins that are securing the network, it is called ” staking “.

A few years ago, if you wanted to staking, most coins needed you to set up a team for this purpose. Nowadays, you can do staking from an exchange, with the risk that you do not have your private keys, and even from a physical wallet such as a Ledger or a Trezor , having control of your coins.

The amount of profit you can get varies by currency. Those that give a high yield are very attractive, but bear in mind that high inflation is a selling pressure and it is more difficult for the price to be sustainable over time. The inflation values ​​that I think are viable are all those below 10% per year.

What cryptocurrencies have proof of possession?

In addition, in some cases the “dividend” payments are through another currency, as in the case of NEO, which pays the rewards in the GAS token. I do not recommend these cryptocurrencies for the purpose of generating passive income, because the benefits do not accumulate or compound interest is generated and you have to be aware of two assets.

I am going to give a few examples of the cryptocurrencies that have a proof of possession mechanism, their annual profit percentages and where you can staking. It is not a purchase recommendation, just a brief summary, but they are the ones that seem most interesting to me: Tezos , Algorand , Cosmos and Harmony .

Personally, I have Tezos and Harmony and am staking both.

You can see my tutorial on how to staking tezos from a Ledger Nano wallet to be able to earn passive income safely.

Currency % Annual Staking From Exchange Staking From Wallet
Tezos (XTZ) > 5.5 Binance, Coinbase, Kraken, KuCoin Ledger, Trezor, Mobile Apps and Desktop
Algorand (ALGO) > 8 Binance, Coinbase, KuCoin Ledger, Mobile Apps and Desktop
Cosmos (ATOM) > 6 Binance, Coinbase, KuCoin, Poloniex Ledger, Mobile Apps and Desktop
Harmony (One) > 8 Binance Binance, Mobile Apps and Desktop

Advice

Most of the coins that have proof of possession require that you install and have your wallet connected 24 hours a day. The ones that I have included in the table can give you dividends from a physical portfolio such as Trezor or Ledger , you have the keys and therefore they are the safest way .

They usually have a “maturing” period, so you will have to go for a while without receiving rewards. However, when you withdraw your coins from the wallet, you will continue to receive rewards for a period equal to what you expected.

Make sure that the payments are in the same currency as the one you have ensuring the network. All the ones I have included in the table above meet this requirement.

If you decide to staking from an exchange, distribute your funds in different wallets or online services, for security.

Remember that you will earn a percentage of the amount you have, the more coins, the more reward and vice versa. Compound interest is generated, as you have more, you get paid more .

In addition, an increase in the price of the asset can increase the value of both the initial investment and the dividends . However, the same happens if the price decreases, keep in mind that you may lose your investment.

2. Exchange cryptocurrencies that pay dividends

Some exchange cryptocurrencies have their own token that offers dividends from the commissions they earn, commission reductions or advantages when investing in IEOs (Initial Exchange Offerings) or initial coin offerings.

Exchanges always win, like casinos, so it is a fairly safe way to make passive income with cryptocurrencies. However, it has its associated risks:

  • If the exchange loses volume, you will make less money and the value of the currency will likely decrease.
  • If the exchange is hacked, you lose your coins.
  • You are at the complete disposal of the business executives.

One of the best-known exchange tokens is Binance Coin , which is in the top 10 of the cryptocurrencies in market capitalization at the time this article was written. However, the cryptocurrency of the Binance exchange does not offer dividends , it only offers discounts and advantages on its IEOs.

List of high dividend exchange tokens

The advantage of these tokens over proof of possession coins is that they share part of the profits and can be higher percentages.

Although Binance Coin has no dividends, Kucoin and Bitmax have a high annual dividend.

In addition, an increase in the price of the asset can increase the value of both the initial investment and the dividends. However, the same happens if the price decreases, keep in mind that you may lose your investment.

The return of Bitmax is quite suspicious, so I recommend KuCoin Shares , staking or cryptocurrency loans with interest .

3. Cryptocurrency loans with interest

It consists of lending your cryptocurrencies to third parties in exchange for interest, like lifelong loans. Interest is payments in exchange for giving others the opportunity to create value.

In most they use central organizations that guard your assets and ensure that each party fulfills its obligations. DeFi, or decentralized finance , allows these processes to be carried out without third parties involved , through smart contracts.

You can lend your cryptocurrencies to earn interest in the following ways:

Ia. Loans in exchange to operate with leverage :

  • Kraken
  • Bitfinex
  • Poloniex

Ib. Loans on exchanges automated by bots:

  • Coinlend
  • Cryptolend

II. “Conventional” financial services :

  • Blockfi
  • Celsius Network

III. Decentralized financial services :

  • AVEE (LEND)
  • Compound (COMP)
  • Other platforms for making user-to-user loans without a central body (DeFi)

Ia. Exchange loans to operate with leverage

Loans on a cryptocurrency exchange so that other users can use leverage and trade a position larger than the funds they have.

Kraken

Under the “staking” tab, Kraken allows you to lend Bitcoin (XBT) , Dollars (USD) or Euros (EUR) in exchange for annual interest.

The loan is made directly into your leverage pool . Therefore, it is an annual fixed interest on the amount that you put at their disposal and they are in charge of lending it at the interest they deem appropriate.

The main advantage is that you do not have to worry about setting a rate nor do you have to be aware of whether the loan has ended . You put your coins at their disposal and they take care of the rest, although the interest is lower than in other exchanges.

The interests it provides are:


Bitfinex

Under the “Funding” tab, Bitfinex allows you to make your cryptocurrencies available to traders who want to use leverage.

You can define your own terms such as the interest rate , maximum loan duration , and amount . When a trader uses leverage, they use your cryptocurrencies to buy or sell another cryptocurrency (open a position). When closing the position, the money is returned to your wallet along with the interest, in the same currency as the loan.

The amount of interest you can earn is calculated:

Daily interest = Amount borrowed * defined rate * 0.85 * seconds borrowed / seconds a day has

In the following table you can see the calculation of the benefits that can be obtained by lending $10,000 with the interest rate of the day, of 0.017%.

Initial
Amount Borrowed		 $10,000
Interest Rate 0.02%
Loan Time (Days) Interest ($) Interest (%)
1 $2.01 0.02%
2 $4.02 0.03%
3 $6.03 0.05%
4 $8.04 0.07%
5 $10.05 0.09%
6 $12.06 0.10%
7 $14.07 0.12%
8 $16.08 0.14%
9 $18.09 0.15%
10 $20.10 0.17%
365 $733.65 6.21%

During times of high volume and therefore high demand for loans to open positions with leverage, the rate is 3 – 5%. Therefore, at the right times you can easily double this amount of interest.

You don’t lose your money if the person who asked for the money loses it . Bitfinex users can only borrow a% of their account and if they are at a 33% loss, their position is closed and the loan is returned to you.

The main problem is that you have to be aware of whether the loan has ended and renew it. Consequently, it is no longer really passive income. Bots like Coinlend fix it.

Poloniex

Poloniex offers the possibility of lending your cryptocurrencies so that other people can trade with leverage.

Unlike other exchanges, Poloniex does not guarantee the safety of your funds and warns you that you may lose your money if borrowers liquidate in volatile markets. In times of high volatility, they may not jump the stops and may lose more money than they are required to return, so they have more associated risk than Kraken or Bitfinex.

At the time of writing the article, it offers the possibility of lending the following cryptocurrencies:

  • Bitcoin (BTC)
  • Dash (DASH)
  • Litecoin (LTC)
  • Stellar Lumens (XLM)
  • Tether (USDT)
  • Monero (XMR)
  • Ripple (XRP)
  • Ethereum (ETH)
  • Ethereum Classic (ETC)
  • EOS (EOS)
  • USD Coin (USDC)
  • Bitcoin Cash (BCH)
  • Bitcoin SV (BSV)
  • Cosmos (ATOM)
  • Tron (TRX).

Annual interest percentages range from 0.03% for less demanding cryptocurrencies to 3% per year for Bitcoin or 7% per year for USDT.

Ib. Loans on exchanges automated by bots:

Loans in cryptocurrency exchanges through bots, to automate the loans and you can get passive income with real cryptocurrencies.

Coinlend

Coinlend is a program or bot that automatically lends your money on exchanges like Bitfinex , Poloniex or Liquid .

As I have discussed in your section, Bitfinex and Poloniex loans require you to update them periodically. It is a cumbersome process because you have to be aware of whether the loan has ended to set up a new one.

Bots like Coinlend allow you to automate it 24 hours a day, 7 days a week for a minimum commission of $ 4 per month and 5% of the interest generated. I have not tried it personally, but I am convinced that it has to be worth it.

Your money is stored in an exchange and, through an API, you give it permissions to access some functions of your account that you can control . So the real risk is the same as storing your coins on an exchange.

The accepted currencies are those that the exchanges have available for loans. The following image shows those available when the article was written.

Cryptolend

Cryptolend is an exchange lending bot much like Coinlend. It currently accepts the Bitfinex and Poloniex exchanges.

Connect the bot to your exchange account through an API and in a few clicks you have the bot configured to automate loans at the best possible prices.

The risk of losing your coins is the same as having your assets on an exchange. Although I still recommend saving your cryptocurrencies in a Trezor or Ledger , it is an easy way to get passive income with the assets you have on the exchange to trade or longer trades.

II. Conventional financial services

Blockfi

BlockFi offers loans in USD guaranteed by your cryptocurrencies.

They provide you with dollars in exchange for depositing Bitcoin (BTC), Ether (ETH), or Litecoin (LTC) as a refund guarantee.

Also, you can deposit certain cryptocurrencies to earn annual interest. The annual calculation is based on current rates and the payments received are added to the same account ( compound interest ).

The coins you can deposit are:

  • Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Paxos Standard (PAX)
  • Fiat currencies: USD Coin (USDC), Gemini USD (GUSD)

The approximate annual interests for each of them are:

Celsius Network

Celsius network is a mobile application that allows you to deposit, transfer, lend and take loans of different cryptocurrencies.

They offer interest on loans of a large amount of cryptocurrencies. Interest varies depending on the cryptocurrency you lend, but the values ​​range between 3% and 9%.

You can choose to charge the interest on your CEL token, which uses the Ethereum blockchain, or you can charge it on the asset you lend. The interests you receive are higher if you charge them in your token.

The following list shows the assets that can be lent, both cryptocurrencies and stablecoins.

  • Cryptocurrencies : Bitcoin (BTC), Ethereum (ETH), Dash (DASH), Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC), Ripple (XRP), Stellar Lumens (XLM), Omise Go (OMG) , Paxos Standard (PAX), Dai (DAI), Celsius (CEL), 0x (ZRX), EOS (EOS), Saga (SGA), Tether Gold (XAUT), Ethereum Classic (ETC) and Basic Attention Token (BAT) .
  • Stable or tokenized fiat currencies : True USD (TUSD), Gemini Dollar (GUSD), USD Coin (USDC), Tether (USDT), TrueGPB (TGBP), TrueAUD, TrueHKD, TrueCAD, Binance USD (BUSD).

III. User-to-user loans without a central body

This method to get passive income with cryptocurrencies is one of the safest, as with staking, you can earn interest while maintaining total control of your cryptocurrencies.

AVEE (LEND)

Aave (AAVE) is an open source, non-custodial protocol that enables the creation of money markets. Users can earn interest on deposits and borrowed assets.

AAVE changes the user-to-user (P2P) lending protocol to a pooled strategy. Lenders provide liquidity by depositing cryptocurrencies in a shared group contract.

Simultaneously, in the same contract, pooled funds can be borrowed by placing a guarantee, in the form of cryptocurrencies. Loans do not need to be matched one-to-one, but are dependent on group funds, as well as loan amounts and collateral. This allows instant loans based on the status of the group.

Unlike conventional financial services , you do not send cryptocurrencies to anyone and, therefore, you maintain control of the private keys of your cryptocurrencies . You can use wallets like Metamask or even Ledger . In this way, you lend your assets to get performance from them safely and without worry .

The returns it offers are between 0 and 13% and the assets it allows to lend are:

  • Cryptocurrencies : Ethereum (ETH), Dai (DAI), ETHLend (LEND), Basic Attention Token (BAT), Enjin Coin (ENJ), Ren (REN), Kyber Network (KNC), Chainlink (LINK), Decentraland (MANA) , Maker (MKR), Augur (REP), Synthetix Network Token (SNX), Wrapped Bitcoin (WBTC) and 0x (ZRX).
  • Stable coins or tokenized fiat currencies : True USD (TUSD), sUSD (SUSD), USD Coin (USDC), Tether (USDT) and Binance USD (BUSD).

Compound (COMP)

Compound (COMP) is a decentralized lending application that uses the Ethereum blockchain. Essentially, anyone who owns an accepted cryptocurrency can deposit it into a Compound smart contract, where it joins a pool and starts earning interest.

This interest comes from other users who borrow funds and pay interest on the loans. However, unlike banks, when you withdraw the funds, they do not stop earning interest.

When you deposit funds in Compound, the protocol generates tokens for you. If you deposit Ether (ETH), you receive an amount of cETH, which you can use as collateral (or surety) to request a loan and spend the funds while earning you interest.

The interest earned is regulated by smart contracts, based on supply and demand. If there are a large number of people borrowing a particular asset, the smart contract will increase the interest rate to attract lenders and make it more expensive to obtain a loan.

Compound currently supports assets:

  • Cryptocurrencies: Ethereum (ETH), Dai (DAI), Basic Attention Token (BAT), Augur (REP), Wrapped Bitcoin (WBTC) and 0x (ZRX).
  • Stable currencies or tokenized fiat currencies: USD Coin (USDC) and Tether (USDT).

Other platforms for making user-to-user loans without a central body (DeFi)

DeFi or decentralized finance is all the rage and there are many similar projects trying to take the lead in the sector.

Here is a non-exhaustive list that will grow in the near future. I have not personally checked if they are reliable, if they are scams and I do not gain anything by mentioning them.

  • Kava
  • Nexus
  • EOSRex
  • Fulcrum
  • NUO Network
  • Voluto
  • PoolTogether
  • Dharma
  • dYdX

If you liked the article on how to get passive income with cryptocurrencies, share it with your friends so they can benefit too!

Note: Some of the services contain affiliate links. It is the only source of income for this blog and you do not lose anything by using them. I will never promote scams.

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Cryptocurrency, News

Greenidge became the first carbon-neutral Bitcoin mining operation in the United States

Greenidge is investing in its renewable energy investment program

In 2014, the Lockwood Hills landfill in Dresden, New York, was acquired by Lockwood Hills LLC, a subsidiary of Greenidge. Greenidge claims the site has been “safely maintained” for the past seven years, during which time it has phased out the use of coal-fired electricity at the neighboring power plant. According to Thursday’s announcement, the company plans to safely shut down and shut down the landfill, and Greenidge hopes to “install a solar project on the 143-acre site, which will generate up to 5 MW of power.”

The bitcoin mining company said the move is in line with the company’s efforts to improve New York’s environment. While working on projects like the Lockwood Hills landfill, Greenidge details that he is purchasing voluntary carbon emissions from US greenhouse gas reduction projects. Jeff Kirt, CEO of Greenidge, believes that bitcoin mining models could help operations preserve environmental safety.

On May 14, the Greenidge Generation company announced that, as of June 1, it will compensate 100% of its CO2 emissions resulting from Bitcoin mining. The company also intends to invest a portion of its mining profits in renewable energy projects in the United States.

To offset greenhouse gas emissions from a 7,000-piece ASIC facility , they will purchase voluntary carbon offset credits from a portfolio of polluting gas reduction projects.

These carbon offsets are bonds that represent a reduction in the carbon dioxide emissions that are produced, thus balancing the emissions made elsewhere.

The energy generating and mining company of bitcoin would have to acquire credits for the 14 MW it consumes (of the 106 it generates) to mine an average of 5.5 bitcoins per day .

The credits will be certified by recognized registries

These credits will be certified by one of the three most recognized registries in the field, as reported in the statement : the American Carbon Registry (ACR), the Climate Action Reserve (CAR) and the verified carbon standard (Verra).

“Bitcoin mining at Greenidge is already a model for the industry as we develop this emerging financial platform for people around the world in a way that fully protects our environment and promotes economic growth in New York State,” Kirt said. The move will make renewable energy a reality by leveraging bitcoin from mining profits to create a new solar farm on a landfill, Kirt added.

Bitcoin Mining, President of Greenidge, creates jobs, supports the local community and helps the environment

Greenidge is just one of many crypto mining projects seeking to rejuvenate the environment by transforming business models and eliminating waste. For example, Stronghold Digital Mining converts residual coal into alternative energy to mine bitcoins and other cryptocurrencies. In late May, EZ Blockchain partnered with a Texas oil service provider to generate revenue from natural gas wasted with bitcoin.

Prior to the Greenidge acquisition in 2014, the Lockwood landfill was allowed to store Coal Combustion Waste (CCR) and other waste. Greenidge says he will ensure that “the site will no longer accept any waste” by adding a water filtration system and a permanent membrane to stop erosion.

“For those of us who grew up here and still live here in the Finger Lakes, the Lockwood Hills landfill was in constant presence, overlooking Seneca Lake and the town of Dresden, and we were always hoping for something that would eventually not be necessary.” – According to a statement by President Greenidge Dale Irwin.

Irwin added that he is pleased that bitcoin mining facilities are not only able to create jobs and support local businesses, but also that crypto mining operations can “facilitate the development of renewable energy in this former landfill.”

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Cryptocurrency, Horror Story

Hackers sold my bitcoins cheaply to themselves to avoid the Poloniex alert system.

In early June my Poloniex account was hacked. It took almost no time for the hacker to empty the entire account with the 10 BTC in there. The hackers didn’t just transfer the BTC though, instead they used the web interface to do multiple trades. They couldn’t do a straight transfer because Poloniex would use email verification to perform withdrawals and this would have obviously alerted me. I would have been able to put a hold on the account. The hackers sold my coins to their for a low price then sold those coins back to me at a high price. Needless to say, after repeating this for 2 hours, the hacker was able to essentially drain the 10 BTC from my account. I immediately emailed Poloniex as soon as I found out and filed a ticket with them. This is the response I received:

We have identified the accounts involved and they have been banned. Unfortunately, as is normally the case in these situations the attackers immediately withdrew the majority of the coins and as these transactions have now left our system and have been confirmed by the blockchain then they are outside our control. We will continue to investigate further and see if we are able to recover any of the coins that were not yet withdrawn.

I’m taking the time to post and share this story for a few reasons.

First, to warn everyone to protect their accounts properly! Always use Two factor authentication! I was a lazy idiot and I didn’t do this. I thought it was too much of a hassle to grab my phone each time to log in. This would have protected my account from the hack and saved me $25.000!

Second, I’m trying to bring attention to my story in hopes that Poloniex will be able to do something to help me recover my lost coins. I really doubt this will be the case, but i figure it’s worth a shot.

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Cryptocurrency, Horror Story

Never store your Bitcoins on a cheap USB!

I started mining in late 2009, when Bitcoin was still new. Mining was just a hobby and wasn’t done by any professionals. I got into mining for fun, not really thinking it would ever amount to much of anything. I was testing my normal PC hardware and GPU on mining. At that time, even a single card could mine quite a few coins per day with such a small size blockchain. I mined for a pretty good length of time, but as the Bitcoin program grew in size to several gigabytes, my GPU couldn’t handle the mining anymore. I wasn’t interested in upgrading my system, so I deleted the software and backed up my encrypted wallet files on a USB stick. I figured keeping my keys offline was the smart move because that way they couldn’t be hacked or anything. They were hardly worth anything at the time, but I still wanted to keep them since I’ve already done so much work.

Around the end of 2013, the Bitcoin price peaked to  under $1000 USD and caught my attention, reminding me that I still had a USB-stick full of it. I thought it would be an excellent time to cash out some, or even all of it. I eagerly plugged in my USB stick to load the encrypted files, but to horrendously find out that the stick had died. There was no water damage or heat damage. It died cause it was too old! It was one of those cheap Chinese USB sticks where it felt so flimsy that it would snap in half if you pressed too hard. All my Bitcoins are now forever lost… Now I cringe every time I hear the word Bitcoin, thinking I could have been set for life! Worst mistake of my life.

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