Is the Bitcoin an Alternative to Fiat Currency?

Article written by Riya Thakur

Recently there has been a lot of talk about a new virtual currency called the Bitcoin that is growing very rapidly, its gaining a lot of media attention and its value has increased dramatically.

The current financial turmoil in Europe and around the world has also made people invest in alternatives to fiat currency such as the Bitcoin. For most people it is strange that someone can take seriously a currency that is not backed by a Government or central institution, but that is the precise advantage of this coin.

Bitcoin developers spoke to the Guardian’s James Ball at their home in central London and these were some of their comments:

Bitcoin is a virtual currency just like dollars, pounds, euros but at the same time we have a type of currency that isn’t control by central institutions, its completely decentralized. You can send money to whoever you want, whenever you want, wherever you want in the world and no one can stop me.

The Bitcoin is a very interesting concept that is gaining acceptance by many companies on the internet like PayPal, WordPress, Reddit, Microtronix and many others. In fact ATM machines are already on the way to be used.

David Zimbeck says that some of the critics of Bitcoins say that they are facilitating buying drugs on the internet, but the developers say that the virtual currency is just a tool and you can use it for good or bad and that since Bitcoins popularity a lot of people have been using it for better purposes. He wants to see the use of cryptocurrency commercialized because it restores trust in finance.

Fiat currency has the disadvantage that central institutions can print as much as they want, therefore it is always losing purchasing power. The same principle applies if you have money in the bank. Instead what you should do is put your money on an asset that keeps its value or increase it.

At this moment the Bitcoin seems a good option because its increasing its value, however this can change in the future. Another alternative is to invest your money on something productive like a business or land that increases in value or invest it in gold.

David Zimbeck suggested that even though the virtual currency is a good way to diversify your portfolio and not depend on paper money or bank deposits, it also makes sense to pay attention to emerging cryptocurrencies that may be technologically superior. Out moded forms of investing such as Gold is actually artificially inflated. Even warren buffet would defer to commodities with real utility value such as food, land and electricity. Cryptocurrency gets its value from its utility and limited supply and popularity in speculative trading markets.

For more info about David Zimbeck visit at:  http://www.imdb.com/name/nm3681237/

Advertisements

Bitcoin Trading Tips

David

Article written by Riya Thakur

David Zimbeck the developer of BitHalo had a conversation with me about some of the success and failures of trading currency. He here I write to offer to you this helpful set of Bitcoin Day Trading Tips. There are critical elements of Bitcoin trading which are usually learned only from experience.  The years of trial, error, successes, failures, gains and losses are very difficult to accumulate.  These important tips were collected from our over 15 years of experience to be able to aid you in your trading.  The tips are absolutely free and they cover what we consider the three critical areas of trading; the market, the method, and the environment.

Trading method tips are related to the actual trading strategies themselves.  There are many trading systems and methods available and it can be quite confusing.  But, whether you are trading using traditional day trading techniques or long term trading techniques, the method tips will certainly be useful to you.

Tip: There is something you can do which is so easy to do and provides enormous benefits but not 5% of traders take the time to do it.  It is called documenting the trades.  Experts have proven that there are certain chemical reactions which happen in the brain when you write things down.  These reactions work to reinforce good behavior and help you avoid bad behavior.  It works best when you physically write it down on paper; not on any type of electronic ledger.

Tip: Have you heard of Computer Vision Syndrome (CVS)?  It is an eye disorder caused by prolonged use of digital devices.  It is not just the staring at the screen that hurts you but it is the very nature of the pixels in the digital image that harm your eyes.  There are several natural remedies to relieve CVS and actually improve your overall eye health.

David Zimbeck says that to achieve consistent success with Bitcoin trading requires harmony between the trading market, the trading method, and the trading environment.  These trading tips also work well in other markets too.  Our free trading tips document covers these and many other actions you take to improve you’re trading results.  The document contains links to the sources of our data for you to study further.  It also contains our specific recommendations of items to acquire, which helps you to avoid making the same mistakes that we have made.

Bitcoin Day Trading Tips

Trading is truly a noble profession.  Many amateur traders have “day jobs” and attempt to use trading to supplement their “main” income.  If done properly, trading can provide the disciplined professional trader a very high standard of living.

Bitcoin markets are up till now still unregulated, and by definition, extremely risky.  Mitigation of that risk requires discipline, self-control and proper planning. It makes sense when trading to try to get involved in an investment as early and as low as possible. Also it is best to only choose investments with considerable hype and community support. The key is to not be fooled by a fancy website and promises of features that may never actually exist. This is the beauty of BitHalo which is fully developed software which was years ahead of its time for smart contracts and markets.

For more about David Zimbeck visit here: http://www.imdb.com/name/nm3681237/

How to Sell Bitcoin

Article written by Riya Thakur

David Zimbeck says that selling and buying Bitcoin isn’t quite as straightforward as one would think.

When deciding how to sell your bitcoin, you first need to consider which method best suits your situation: selling bitcoin online or selling bitcoin in person. Each option has its own advantages and disadvantages. BitHalo was designed to have unbreakable contracts that did not require the trust of either in person or online services. Purchases instead can be made peer to peer within the client and any method of transfer cannot result in theft or loss because of the deposits in the contract that both sides make.

Zimbeck

Here are some alternative methods for selling bitcoin online:

1. Direct trades: Websites that offer this type of selling structure include Coinbase and LocalBitcoins in the US, and BitBargain UK and Bittylicious in the UK.

On these sites, you will usually have to register as a seller. This involves verifying your identity, which we will discuss again later. Once you have registered, you can post an offer, signalling that you want to sell, and the website will alert you when a buyer wants to trade with you. From there, your interaction is solely with the buyer, but you use the website to complete your trade.

The process of selling on Bitbargain UK and (more so) Bittylicious can be quite involved and requires some patience. However, support at the former site has been great in our experience. Bitcoin users with bank accounts in the United States should consider using Coinbase or Circle, which have both won many fans with their simplicity.

2. Exchange trades: David Zimbeck says that the other way to sell bitcoins is to register with an online exchange. You will still have to verify your identity, but in this case you won’t have to do as much work when it comes to organizing the sale.

Exchanges act as an intermediary who holds everyone’s funds. You place a ‘sell order’ (just as you would place a buy order), stating the volume (amount) and type of currency you wish to sell (eg bitcoin), and the price per unit you wish to sell for.

As soon as someone places a matching buy order, the exchange will complete the transaction. The currency will then be credited to your account.

The downside that accompanies this ease of use is that, if you are selling bitcoin for fiat currencies, you will need to withdraw those funds to your bank. If the exchange is facing liquidity problems or issues with its banks, it can take an inordinate amount of time to receive your funds.

3. Peer-to-peer trading marketplaces

According to David Zimbeck BitHalo is the best and only way to really do this. As the double deposit nature of the contracts prevent contracts from being broken. In addition there is a decentralized marketplace within the client for performing actions like this.

The marketplace acts as an intermediary, offering users the platform, bitcoin wallet and escrow for transactions.

Tips for Successful Bitcoin Trading

Article written by Riya Thakur

Bitcoin has encouraged many to take an interest in finance and allows easy access to financial exchanges. Consequently a large number of people are attempting to trade Bitcoin, without any prior trading experience.

At BTC.sx we sometimes see traders make simple mistakes that could be avoided with a basic understanding about trading and investing.

David Zimbeck provides following most common mistakes new traders make and how to avoid them:

  1. Do not invest more than you can afford to lose

Any financial investment can produce losses, rather than returns. With a highly speculative investment, such as Bitcoin, there is a high chance that you can see very large gains or losses. By trading Bitcoin, there is also further scope to lose money from poor decision-making.

One should invest such an amount that they feel comfortable with losing completely — be prepared for the worst eventuality. There are two reasons for this.

  1. Set goals for each trade

David Zimbeck suggests that setting goals helps traders remain level-headed during periods of extreme volatility. This is highly important for Bitcoin trading. When placing a trade, determine what price to take profits or cut losses in advance.

The benefit of this is that it is easier to prevent trading decisions based purely on emotions. For example, a trader with no target price may make a profitable trade, become greedy, and then fail to realize their profits while the market is still on their side.

  1. Learn how to read charts

Although technical analysis is a difficult skill to develop, new traders at a minimum should know the basics of chart reading to identify market trends.

The most widely used Bitcoin charting tool is Bitcoin Wisdom. Despite looking overwhelming at first, it is actually very intuitive.

  1. Do not set stop losses too low

A stop loss is an automatic trigger to liquidate your position if your losses reach a certain value — essentially stopping you from losing any more. They are a good tool to take advantage of.

However, at BTC.sx we recommend that traders do not use a stop loss that is too small. Choosing 10:1 leverage means that your deposit is 1/10th of the position size. This deposit determines the stop price, the price at which a position can drop to until the deposit can no longer cover the position’s loss. At $200, the default stop will be $20 away (or 10% of $200). Anything less than the position’s default stop will increase the risk of a position closing out very quickly because of minor fluctuations in the price of Bitcoin.

  1. Close unprofitable & leveraged positions within 24 hours

Leverage is borrowing or lending an asset in hope that it appreciates or depreciates, respectively. At BTC.sx, we give traders the ability to enter long (buy) or short (sell) positions with 2:1, 5:1 or 10:1 leverage.

If a trader shorted 1 Bitcoin at 5:1 leverage, for example, the total investment is 6 Bitcoin. To make a profit the price must fall, allowing the owner to reclaim ownership at a lower price.

David Zimbeck says that however, the price of a Bitcoin must fall sufficiently to cover the trading fee and the interest fee charged on borrowing the 5 Bitcoin. Do not fear if this sounds complicated! We have integrated a breakeven calculator into our trading interface to automatically show what price movement is required to return a profit.

Bithalo, Blackhalo, and NightTrader: Revolutionary Smart Contracts Technology now in Beta

Article written by Riya Thakur

Central banks complain today that innovation in cryptocurrency is too quick, and business adoption is too fast, for them to prepare their laws and lay down their rules as Moses did from the high mountain.

Cryptocurrencies’ response was to switch innovation to second gear by inching closer towards the implementation of smart contracts. David Zimbeck announced today the beta version of the “first known two-party electronic contracting system anywhere in the world” which he calls Bithalo for the protocol to be used with Bitcoin, Blackhalo for the protocol to be used with Blackcoin and NightTrader, a decentralized exchange. In a press release David Zimbeck stated that:

“Almost every sector of the economy that involves third parties runs the risk of loss to the consumer. This protocol now gives individuals full control over who they decide to trust and how they decide to structure that trust”

Smart Contracts

“Smart Contracts” is a term coined by Nick Szabo in 1993 to describe a conceptual computer protocol which facilitates, verifies and enforces negotiations and the performance of a contract in the process erasing the need for courts, brokers and other middlemen.

Our society’s solution to the evolutionary problem of cheating has been to create a complex system of laws and regulations enforced by a central authority, which in itself can often be unaccountable, but is generally effective at enforcing relations between two parties where its own interests are not affected. We need therefore to trust a third party, including parliament, the civil service and the courts, to adjudicate independently of their own self-interest.

A Closer Step towards Smart Contracts

A step was taken today in that direction. In a video tutorial preview of the software, the process is shown step by step, from the making of the offer, counter-offer, acceptance, to the transaction being shown on blockchain.

In an e-mail exchange, David Zimbeck explained a simple transaction of say 1 bitcoin or 1 blackcoin for $600. Firstly, the selling party sends the coins to be purchased, plus a deposit, to the escrow. The buying party in return sends only a deposit to the escrow, followed then by the sending of the 600 dollars. Once the dollars are received, both parties will want their deposits back, and the buying party will want the coins. Therefore ensuring that neither has any incentive to default, while the need for an agreement from both parties to release the funds ensures that neither can abscond with the funds.

The Golden Standard

Bithalo, Blackhalo and NightTrader, do not rely exclusive on the inbuilt script system of bitcoin. A complex framework developed by Satoshi Nakamoto, which allows for the creation of complex smart contracts tied to each transaction.  Instead it leverages joint accounts and game theory to perform the contract. To better understand scripting, the Bitcoin Scripting Wikipedia page might seem forbidding to someone not well versed in computer science as it lacks any real world examples of ways the script programming language could be used.

Benefit from Upcoming BitHalo/BlackHalo Update

Article written by Riya Thakur

One of the more interesting stories to keep your eye on in the world of cryptocurrency and altcoins these days is the future development of the BitBay project. While most, if not nearly all of the work is being done by David Zimbeck. Let’s see what the most recent post is all about!

One of the things being worked on by  right now is ensuring the release of both Linux and Macintosh BitBay distributables. No official ETA has been provided as of this writing, but they should be ready for release relatively soon.

David Zimbeck on the other hand, is working on a huge update for BitHalo and BlackHalo. As Halo has also been integrated into the BitBay project, this means it will affect BAY as well. This update will be released within a few weeks, and we will keep an eye out for further information regarding this update.

The coding the decentralized markets rest completely on the shoulders of David Zimbeck as well. Given the huge size of such an undertaking, it will take a fair bit of time until the markets have been completed. Unless some additional developers get added to the tea, that is, assuming they can work at a proper speed.

Speaking of extra developers, if you know Assembly, C++, and Python and have at least 10 years of experience, you are more than welcome to apply for the job. Do keep in mind you will most likely end up working under a Halo contract, to avoid procrastination or providing fake credentials.

BitBay community members have also enquired about the potential development of coin pegging. However, very few people seem to realize this means a protocol change is required, new mining rules come into play. Regardless of all of that, David ensured the community pegging is coming to BitBay, but will take time to fully develop.

Last but not least, there is the topic about marketing. As there is no finished product, there is basically nothing to throw marketing at. David Zimbeck is considering some sort of bounty system, which will be organized on Trello at some point.

For more reviews on Bitcoin, bithalo and their workings by David Zimbeck click here or visit us at: http://pdfsr.com/pdf/about-david-zimbeck.pdf

Things to Consider Before Buying Bitcoins

Article written by Riya Thakur

When the central bank in Cyprus froze bank accounts and limited the amount of cash that could be withdrawn from bank accounts it created a huge uproar that was felt around the world. If consumers did not have access to money how could they buy and sell the things needed to carry on in our modern world? The reality is they cannot so consumers around the world started to look for safer alternatives to fiat currency. Fiat currency is currency that has no tangible value aside from what the government assigns to it.

Consumers are looking for a way to store their buying power to protect themselves from having bank accounts frozen for indefinite periods of time. Many people started trading in Bitcoins. As explained by David Zimbeck this is a crypto-currency which means it cannot be easily counterfeited but before anyone starts buying into this new currency it would be prudent to understand the risks.

Bitcoins are not issued by any central bank or government so there is no accountability whatsoever. If you are dealing with Dollars,Euros or Pounds you have the assurance that the government behind it will honor the debt while Bitcoins do not provide any guarantees at all. The fact that no one truly knows who made this currency so there is no way of knowing whether it could be stolen right from under our eyes.

According to David Zimbeck that these Bitcoins are stored inside a digital wallet that can be encrypted on your computer. While this should provide a sense of security if your computer is lost your Bitcoins are gone as well. It is not like a credit card where you can get a replacement and carry on like nothing has happened.

While the security of this currency is a concern by far the biggest worry is the value of it. The perceived value of a Bitcoin can change in a moment and unlike fiat currencies that are backed by hard assets owned by a country if a Bitcoin value drops you have nothing of value at all.

There are a few exchanges around the world that sell and buy Bitcoins, but you should not buy them thinking they are going to rise in value. They are a digital commodity which some would classify as a “fad”. Tomorrow it could lose all its real value and never recover.

So to recap the risks, you do not have any real security with Bitcoins since they are not provided by a government. The value if highly volatile and could be reduced to zero in a heart beat and the simple fact that the currency has only been around for a few years shows it is not proven to be reliable.

If you are looking for a way to preserve value then precious metals like gold,silver and platinum may be more beneficial since they have been used for centuries as a medium of exchange.

When it comes to investing you should never make rash decisions but weigh the risks and potential payoff and remember that there is no sure things when it comes to digital currencies like Bitcoins so approach at your own risk.

To know more about David Zimbeck click here or visit us at: http://www.imdb.com/name/nm3681237/

Bithalo is a Game Changer for Bitcoin Adoption and Online Payments

Article written by Riya Thakur

Many people have been waiting for Bitcoin’s killer app. This is the one app that would provide a use case where it actually makes sense for the average person to use Bitcoin on a regular basis. It seems that we may have finally had the first such app in the form of BitHalo. This new innovation from David Zimbeck comes packed with a variety of new, exciting features for online commerce as a whole, and it doesn’t seem like the full impact of this new software will be felt until the full version is released. One of the main problems that Bitcoin has had up to this point is that some consumers are scared of irreversible transactions. It seems that BitHalo may have been able to solve that issue without any added costs.

Escrow without a Third Party

According to David Zimbeck the potential for BitHalo to have a massive impact revolves around its ability to perform escrow through the use of smart contracts. Most people who pay for things online today use some form of escrow because they want to have a bit of protection for situations where a merchant tries to rip them off. These escrow services, such as PayPal, Visa, and Mastercard, also come with fees that vary from country to country. For some merchants, the cost of using these systems for escrow isn’t even practical for their business model. In the case of BitHalo, there are no fees for the decentralized escrow service. BitHalo gets around the need for a fee by having the merchant and customer both send bitcoins into a smart escrow contract. The following is an example by David Zimbeck of how this could work:

Bob is looking for a used Nintendo 64 to buy on Craiglist, but the only one he can find is in another city. He agrees to buy the video game console from the seller, but he insists that BitHalo is used for escrow.

James, the seller of the Nintendo 64, decides that using BitHalo is fine with him. Bob and James each send 0.05 BTC into an escrow smart contract. Bob also needs to send another few dollars worth of BTC into the contract (see steps 6 and 7).

James ships the Nintendo 64 to Bob. It’s important to note here that James would lose his 0.05 BTC if he decided not to ship the Nintendo 64 at this point. This is the key to the escrow system. It’s basically a way for the merchant to put up some collateral before the buyer sends them any money. The seller only gets their original deposit back if both parties agree that the transaction was completed successfully.

Bob receives the video game console and checks to make sure that it works. Everything seems to checkout, so he sends a message to the smart contract claiming that he received the package in the mail. He has an incentive to actually go back to his computer and confirm that he received the game console because he will want to get back that extra few dollars deposit that he had to put down.

James also confirms the deal is done, and he receives both his original 0.05 BTC deposit and the 0.05 BTC from Bob. The extra few dollars worth of BTC is now also sent back to Bob.

What makes it different from normal currencies?

Article written by Riya Thakur

Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.

David Zimbeck says that, Bitcoins’ most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.

What is bitcoin based on?

According to David Zimbeck conventional currency is based entirely on belief and politics. Theoretically, you might think that if you handed over a dollar at the bank, you could get some gold back but history shows us that is not always the case. But bitcoin isn’t based on gold or politics or law; it’s based on mathematics and peer to peer networks.

Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it. Everything is open source. This may be the first time in history where forgery is not possible.

What are its characteristics?

Bitcoin has several important features that set it apart from government-backed currencies here are some of them told to me by David Zimbeck.

  1. It’s decentralized

The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing.

  1. It’s easy to set up

Conventional banks make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another Kafkaesque task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.

  1. It’s anonymous

Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information. However…

  1. It’s completely transparent

…Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. The blockchain tells all.

If you have a publicly used bitcoin address, anyone can tell how many Bitcoins are stored at that address. They just don’t know that it’s yours.

According to David Zimbeck there are measures that people can take to make their activities more opaque on the Bitcoin network, though, such as not using the same Bitcoin addresses consistently, and not transferring lots of Bitcoin to a single address. Also trading from one currency to another is a simple way to remain anonymous.

  1. Transaction fees are miniscule

Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.

  1. Its fast

You can send money anywhere and it will arrive minutes later, as soon as the Bitcoin network processes the payment.

Simple approach to secure wallets

Article written by Riya Thakur

BitHalo and its sister-client, BlackHalo, allow for the creation of secure multisig wallets that then form the basis for the platform’s extensive smart contract applications. It was the first software in the world to use and implement multisignature wallets.

Decentralized contracting

BitHalo’s design carries implications for peer-to-peer and marketplace-style e-commerce, enabling buyers and sellers to exchange goods and services using secure, unbreakable contracts. As well, BitHalo gives parties who may not trust or even know each other the ability to engage in fair exchange without the risk of financial loss or fraud.

In order to enforce accountability between two parties that want to establish a contract, BitHalo requires proportional escrow deposits that act as a form of personal insurance.

As shown below, the user interface allows those drafting the contract to set the amount they want to put in escrow and the length of the contract duration. Each party puts in an equal amount, making one side just accountable for the success as the other.

As David Zimbeck explained:

“Lets say you wanted to employ somebody at $30 an hour. Employees have been known to not work hard and have been known to flake and conversely in many cases, employers don’t pay and hold power over employees. So to solve this both employee and employer put up $60 in escrow (a joint account with two keys). Then the employer can pay on the hour or on the milestone for work completed. If either party tries to cheat the deal then they actually lose money.”

BitHalo is set for an expansive period that will see the completion of BlackHalo’s public beta and the completed development of the BitHalo program. Once finished, the application of smart contracts will be available to both bitcoin and blackcoin users.

Another aspect of the overall project is NightTrader. Currently under active development and part of the BlackHalo beta, the decentralized exchange and trading platform gives users a marketplace for conducting contracts and performing trades of any two currencies.

According to David Zimbeck, NightTrader is an idea of decentralized exchange based on microtrading. Similar to his proposal for barter. Both parties form a Halo contract in Blackcoin and then trade smaller amounts of any two currencies of their choice. A simple yet elegant solution that does not require trust.

For more information about David Zimbeck click here or visit at: https://twitter.com/dzimbeck