Madelina Feliks

17
May
2019

Make Entreprenueral Headway by Venturing into Bitcoin ATM Operations

Bitcoin ATMs are fast becoming in demand in almost all major cities in the world. The U.S. is currently at the forefront, with approximately 60% of all global Bitcoin ATMs, operating in nearly all American regions. At present, New York City is in the lead for having the highest number of Bitcoin ATMs in operation.

Apparently, the world is becoming cryptocurrency friendly, with bitcoin as the most popular virtual currency in use. In fact, cryptocurrency is fast making its way into becoming a mainstream mode of payment, where acceptance of bitcoin in exchange for goods and/or services is now common among enterprises trading in or out of the Internet.

Potential Growth of Bitcoin ATM Operations in Other American States

The rising popularity of cryptocurrencies is actually attributable to its viability as a lucrative form of tradable investment, in view of its fluctuating value.

Although some U.S. cities are seeing only a handful of Bitcoin ATMs in their midst, increase in numbers is possible. The virtual currency machines will prove to be good for the business, particularly in states that have high concentrations of small to medium enterprises (SMEs) accepting bitcoins as payment for products and services. Arizona for one, has great potential for a Bitcoin ATM venture, seeing that the City of Tucson has been experiencing tremendous growth in almost all business sectors.

The only perceivable reason why cryptocurrency investors are taking cautious steps in bringing their Bitcoin ATM to Tucson, is the lack of specific state regulations governing the use and trade of bitcoins. Regulations tend to vary per state, where most statutes include requiring MSBs involved with operating Bitcoin Machines, to have a surety bond in addition to other legal business requirements.

Legal Document Preparation in Tucson is likely to be complicated and it would be best therefore to employ providers of legal and accounting services. Doing so will eliminate guesswork, and will ensure the processes involved will run smoothly and in order. After all, lack of virtual currency statutes in Arizona, does not necessarily mean prohibition or deregulation, because there are U.S federal laws and regulators governing virtual currency matters.

Federal laws and state laws prevail, unless there is language specifying the prevalence of one over the other.

Overview of Federal Laws Governing Bitcoin

Installing and operating a Bitcoin ATM requires registering the business with the Financial Crimes Enforcement Network, more popularly known as FinCEN. It is a bureau of the U.S. Treasury Department, tasked with collecting and analyzing information related to the financial transactions of a business. That is because, FinCEN’s main directive is to combat threats posed by domestic and foreign money laundering activities, terrorist financing, and other modes of financial crimes.

Section 314(b) USA PATRIOT Act: Financial institutions with the ability to share information with one another, under a safe harbor that offers protections from liability, to best identify and communicate indicators of potential money laundering or terrorist activities.

On a federal level, Bitcoin ATM operators have to register with FinCEN as a Money Services Business or MSB. An MSB for virtual currencies is further sub-classified as an “exchanger.”

FinCEN registration must be completed within 180 days prior to start of operation, to which registration must be renewed every 2 years.

As MSBs, operators of virtual currency ATMs are required to maintain and monitor records of transactions, as well as report particular information related to FinCEN’s task of detecting and preventing money laundering and terrorist financing activities.

Moreover, MSBs must collect and conduct verification of information supplied as identity and background of their respective customers. That being the case, operators are required to develop and implement a ‘know-your-customer” (KYC) method and policies for verification.

Additionally, an MSB has to institute its own anti-money laundering (AML) program comprising 1) Internal Controls and Procedures, 2) a dedicated Compliance Officer, 3) a sound Hiring and Employee Training System and 4) initiative for periodic and on-demand Independent Audits.

Posted by Madelina Feliks in Cryptocurrency, Finance
24
Apr
2019

Blockchain: Understanding Its Significance to the Security of Cryptocurrency Transactions

Blockchain may seem a bit confusing when trying to know your way around cryptocurrency transactions. Yet a clearer understanding of its significance, will give you greater confidence when entering into deals that allow or require cryptocurrency payments such as bitcoin.

The term blockchain in its simplest meaning refers to digital information stored in a database of cryptocurrency transactions. That is why other blockchain definitions refer to it as the public ledger, as every block includes a record of the (1) date, (2) time (3) amount transacted, and (4) the username of the the person initiating the bitcoin payment, and of the person or entity who will receive thè specified bitcoin amount.

A blockchain, as the term denotes is something larger than just of a single, linear digital information. It comprises multiple transactions linked or chained together and recorded as if appearing as one page of a physical ledger. A blockchain though does not have a standard size like a ledger page, but it can store as much as 1 MB of data coming from multiple bitcoin transactions.

However, not all information of a digital currency or bitcoin transaction entering the cryptocurrency database, immediately becomes part of the chain comprising a blockchain. Certain conditions must be met before one gets stored as a component of a blockchain.

When Does a Block Become Part of a Blockchain?

A block of digital information becomes legitimate public ledger entry only if it has been verified, conformed and transformed as component of a blockchain.

First off, if you are the sender of a bitcoin payment you must have a private key known only to you. You obtained a private key when you received that bitcoin, also by way of a transaction that went through your cryptocurrency network.

Private Key vs. Public Key Validation

A private key is a specific code that gives you the legitimate ownership and authorization to use, or send that specific bitcoin to a bitcoin peer in the same network. A private key though, gives you legitimate ownership of the bitcoin only if it is compatible with a public key generated by the database. If a private key and the public key do not make a match, then the bitcoin transaction is invalid and will not be broadcasted in the network as a legitimate bitcoin transaction.

Although a private key validates your transaction, digital currency procedures require confirmation by a third party who will attest to the legitimacy of the transaction. This is where bitcoin miners come into the picture, because their job is to make mathematical computations that will confirm or counter-check if such a transaction has indeed transpired within the network.

Confirmation by Bitcoin Miners

Currently, best practices recommend at least 6 confirmations to be regarded as sound guarantee that the broadcasted bitcoin transaction is legitimate. A confirmation is evidenced by a hash produced by way of mathematical computation, making it unique and attributable only to the block representing the bitcoin transaction. Moreover, that same hash will link with the hash of the most recent block that càme in as new addition.

Each block therefore, once appearing in a blockchain will be difficult to alter or modify. Anyone attempting to do so, has to tamper with several unique hash data linked together as codes of a block.

Posted by Madelina Feliks in Cryptocurrency
26
Mar
2019

Cryptocurrency or Digital Currency: How Much Do You Understand and Know About It?

Transacting by way of bitcoins is an undertaking that requires a whole lot of understanding before a person gets the confidence to enter into cryptocurrency transactions.

First off, it is not the same as paying real cash to another party through a bank or via an ewallet to complete an online transaction. Here, a cryptocurrency payer needs to be part of a network of peers or persons agreeing to pay and receive payments by way of cryptocurrency.

What is Cryptocurrency?

Cryptocurrency represents value of money that was paid or received by a peer to another, then entered as a transaction in a database of entries. In order to send cryptocurrency as payment, the payor or sender of the cryptocurrency must be the holder of a private key that validates his or her right to send that amount of cryptocurrency to a peer.

The recipient peer, on the other hand, will receive his own set of codes that will serve as his private key. That set of key will then give him the right to use the cryptocurrency received for his own future cryptocurrency transaction.

Every private key assigned to a transaction that has been entered in the cryptocurrency database must match a public key. Take note that entries in the database cannot be altered or modified unless that particular condition is met. Otherwise, an invalid private key cannot create a valid cryptocurrency transaction.

Presently, the cryptocurrency widely used is the bitcoin. Persons wishing to use cryptocurrency as means of sending payment must first buy a bitcoin value using real money.

How to Buy Bitcoins

The simplest way to buy bitcoins is to buy them from a reputable bitcoin trader that usually deals with bitcoin exchange transactions. Since real money must be paid in order to acquire a sum of bitcoin by way of credit or debit card, a first time buyer must make certain that he is buying from a legitimate site.

Usually a legitimate bitcoin dealer will sell only minimal amounts, e.g. $50 or less. So once a purchase has been made, the transaction enters the cryptocurrency database. The buyer then receives a private key that will allow him to use the bitcoin for whatever purpose it will serve him.

If a bitcoin buyer wishes to store bitcoins, maintaining a bitcoin wallet is advisable. Here, a person can easily keep track of how much bitcoin he owns, as well as determine the actual real money value of his stored bitcoins.

At some point in time, he may also want to sell some of his bitcoins at a higher price than its actual cost in order to gain profit. However, the value by which a bitcoin is sold depends on the current free market exchange rate, which means the current price index that most bitcoin buyers are willing to pay in exchange for real money.

Posted by Madelina Feliks in Cryptocurrency