Cryptocurrency

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
10
May
2019

Is It Smart To Invest In Bitcoins?

Bitcoin is probably the world’s most talked about currency, though it’s still a wonder to many. Let’s change that and cover a quick overview of Bitcoins. Here is all you need to know about Bitcoin before you even start trading them. Bitcoin, like the euro and the dollar, is a currency used to pay for goods and services online. As opposed to traditional currencies, Bitcoin features the following:

  • It follows a decentralized system where no government or central bank has control over the currency source.
    Bitcoin is entirely digital which means there are no physical coins or paper bills to represent bitcoins. Bitcoins are regularly monitored by blockchains which constantly update records that trace the history of each Bitcoin generated.
  • Bitcoins are linked with a wallet ID instead of your own personal details, however, this does not necessarily make it completely anonymous.
  • Bitcoin started in 2008 by Satoshi Nakamoto. This person released a paper speaking about how Bitcoins can potentially work and after a year it began being mined and traded.

People are so fascinated by Bitcoins because there are no middlemen like banks that charge too many fees. Because it prevails fully on the web, transactions are done entirely by the use of wallet IDs contrary to using your personal information.

Bitcoins can be purchased

You can easily purchase bitcoins using cash, credit or debit cards, or through wire transfers. However, before making a purchase, you will want to set up a bitcoin “wallet” from which the wallet ID is based on. This is simply a place to keep your bitcoins, much like your wallet keeps your money, cards, and other personal IDs.

Bitcoins can be mined

Bitcoin mining is much like mining gold online and thus the term mining. The process makes use of bitcoin trading bots such as those found in Pheeva.com. With banknotes, the government makes the decision as to when is it best to print notes and disperse funds, however, Bitcoin does not have any central regulator, that’s why anyone can mine bitcoins online.

Is it wise to invest in Bitcoin?

Be aware that investing some of your savings on Bitcoin is not the same as investing in the stock market. Having bitcoins is not similar to keeping money in banks.

Wall Street does not trade bitcoins and it also cannot be purchased or sold by brokers. So anything and everything is entirely up to you. Because of its irregular nature, Bitcoin is constantly fluctuating in price and occurs more often than other currencies. If you do not like the risk, you should consider a safer investment than Bitcoin. There is also no real value like gold. The value of bitcoin is what people think. Considering this, its value can be a bit daunting.

Seeing that the number of bitcoins is restricted and Bitcoin is no longer going to be generated after 2040, the idea of diving into some investment is a good idea and it could help broaden your portfolio. The future of Bitcoin is bright but bound on a risky path. Sometime soon, the government may purchase Bitcoin to be stockpiled like gold. This can have a lot of negative effects, but it means that the limited bitcoin would surge in demand.

Reminders when investing in Bitcoins

The most wide-spread type of investment in Bitcoins to buy and stick to Bitcoin and hope that it appreciates in value so that you could make a sale. As with all investments, you must not invest more than what you are willing to lose. Bitcoin is still a very dangerous investment. The key thing to consider when purchasing Bitcoins is to purchase only via reputable exchanges.

One more important reminder is to avoid purchasing all Bitcoins in one transaction. Instead, make use of the dollar cost averaging approach to purchasing fixed amounts on a monthly, weekly, or daily basis. This allows you to buy the largest bitcoin when the price goes up, and the least bitcoin when the price goes down.

Posted by Laney Seward in Cryptocurrency
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