How To Secure Your Cryptocurrency In 2020

There is a history of cryptocurrency being lost or stolen.

Unfortunately, in the cryptocurrency industry, there is a history of coins being lost or stolen.  One of the most notable occurred with the Mt. Gox exchange in 2014.  Approximately 850,000 Bitcoins belonging to customers and the company were missing and likely stolen, which amounted to more than USD 450 million at the time.

Figure 1: The Binance hack caused the price of the cryptocurrency to slip drastically.

More recently, in 2018, Tokyo-based cryptocurrency exchange Coincheck lost approximately USD 533 million worth in cryptocurrency.  Online digital wallets lost an estimated 500 million NEM tokens. Just last May 2019, hackers withdrew 7,000 Bitcoin worth about USD 40 Million at the time from Binance via a single transaction in a "larger-scale security breach."

Use common sense and apply necessary security principles to protect your cryptocurrency

Figure 2: Two-factor authentication is a good security measure.

As Eric Larcheveque mentions, many exchanges due to the rapid increase of investors, attracted by the hype, did not have the time or resources to build resilient security solutions.  Crypto exchanges are prone to hacks because they centralize the risk and must keep part of their private keys online to allow for real-time withdrawals.  Larcheveque, recommends to use common sense and apply necessary security principles as follows:

• Don’t use a cryptocurrency exchange for long-term storage.
• If you do, use two-factor authentication, preferably one that is not limited to devices connected to the internet.
• For your hardware wallet, choose a PIN code that you can remember, but is secure and not easy to guess.
• Keep your 24-word recovery sheet well secured and never enter it on any device that is connected to the internet.
• Only trust what you can see on your hardware wallet screen. Verify your reception address and payment information on the device.
• Always treat with caution information shown on your computer or smartphone screen. Assume software can get compromised anytime.

Personally, from time to time, I move cryptocurrency from exchanges that I use for trading to my desktop wallet, mobile wallet, or a hardware wallet for long-term storage.  I also diversify risk by using more than one exchange.

There are many different types of cryptocurrency wallets.

According to Simona Vaitkune (2017), there are five types of cryptocurrency wallets that you can use:

Figure 3: MyEtherWallet allows you to send ether and compatible ERC-20 tokens.

1)  Online Wallets (also known as "hot wallets"): Online wallets run on the cloud so they can be accessible from multiple devices with an internet connection.  They are practical and convenient to use.  However, they are also more susceptible to theft, as is evident by many past hacks of online wallets used by cryptocurrency exchanges exemplifies.  Besides utilizing online wallets provided by exchanges, you can use your own such as MyEtherWallet or Metamask.

Figure 4: The Jaxx multi-cryptocurrency wallet has a responsive design.

2)  Mobile Wallet (also known as "warm wallets"): Mobile wallets are applications that run on your smartphone device.  They are very convenient because they are a means of payment.  Overall, mobile wallets are considered to be safer than cloud-based, online wallets.  Of course, there are still risks associated with mobile wallets such as losing your crypto assets in case your phone breaks down, gets stolen, or becomes hacked.  Examples of good mobile wallets are Blockchain, Trust, Jaxx, and Mycelium.

Recommendation:

Figure 5: The Robinhood wallet allows you to invest in a variety of assets—all commission free!

The Robinhood mobile wallet allows you to invest Commission-Free! Invest in stocks, ETFs, options, and cryptocurrencies, all commission-free, right from your phone or desktop.

Figure 6: The Celsius wallet allows high annual interest payments on stored cryptocurrency.

The Celsius mobile wallet allows you to get 10% annual interest or more on stable coins such as TrueUSD (TUSD), Gemini Dollar (GUSD), Paxos (PAX), USD Coin (USDC), MakerDAO (DAI), and Tether (USDT).  Plus, you can also get an annual interest on other popular cryptocurrencies.

Figure 7: The Exodus multi-cryptocurrency desktop wallet has an intuitive interface.

3)  Desktop Wallet (also known as "warm wallets"): Desktop wallets can be downloaded and installed on your desktop or laptop device.  These desktop wallets are considered safer than online wallets or mobile wallets.  However, you can still lose your crypto if your computer is infected with a virus, gets hacked, or becomes damaged in some way.  Examples of good desktop wallets are Exodus, Atomic Wallet, Bitcoin Core, and Jaxx.

Figure 8: The Ledger Nano cryptocurrency cold storage wallet.

Figure 9: The Trezor cryptocurrency cold storage wallet.

4)  Hardware Wallet (also known as "cold wallets" or "cold storage"): Hardware wallets store users' private keys typically on a USB drive.  Some even can make online transactions.  However, most of the time, they are kept offline to be secure.  Examples of good hardware wallets are the Ledger Nano, the Trezor, or the ColdLar Pro.

Figure 10: An example of a cryptocurrency paper wallet.

5)  Paper Wallet: Paper wallets are the safest option to store your digital assets but not necessarily the most convenient or practical to use. Basically, a paper wallet is a physical copy of your generated public and private keys and can even refer to a printed sheet of paper. You can send funds by transferring the cryptocurrency to the wallet's public address, and you can withdraw or send your coins by entering your private keys or by scanning the QR code on the paper wallet.

Related Articles:

Top 10 Passive Ways To Make Money With Cryptocurrency

Top 10 Active Ways To Make Money With Cryptocurrency

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Top 10 Passive Ways To Make Money With Cryptocurrency

 

Figure 1: Warren Buffet Quote.

One of my favorite investors, Warren Buffet, says, "if you don't find a way to make money while you sleep, you will work until you die.".  Most people think that to get rich, you need progressively higher-paying jobs, but this is only half of the equation.  More often than not, as you go up the corporate ladder, you get higher-paying jobs but also much more stress and have less time to devote to your investments.

Figure 2: Lounging on a beach.

Now, imagine lounging on the beach and still making money through passive sources of income!  The good news is that there are a wide variety of sources for passive income.

Figure 3: The game Cashflow 101 by Rich Dad.

One way to generate passive income is by owning real estate so you can charge people rent.  You can also receive stock dividends or royalties from books or songs you have produced.  Additionally, you can own a business that is managed by someone else. An excellent game to play to learn about generating a passive income that I recommend is "Cashflow 101" by the Rich Dad Series.  Remember, most millionaires on the average have seven streams of income that are mostly passive income-based.  The great news is that there are many new and exciting ways to make passive income with cryptocurrencies.  Using all my research, practical experience, and the occasional run-in with scams, here are the top 10 passive ways to earn income with cryptocurrencies that I discovered:

• Buying / Building a Mining Machine
• Invest in a Mining Farm
• Lease a Mining Share
• Own a Mining Farm
• Direct Dividend Coins
• Exchange Dividend Coins
• Staking
• Masternodes
• Hard Forks
• Trading Bots

Passive Method 1: Buying / Building a Mining Machine

A great way to make passive income with cryptocurrency is to buy or build a "money-making" mining machine. When you maintain a mining machine, you aid with the global proof of work network used by many popular cryptocurrencies such as Bitcoin.  There are two types of ways to mine for cryptocurrency, either graphics processing unit (GPU) based or application-specific integrated circuit chip (ASIC) based.  Figure 4 shows a basic 6 GPU Mining Rig, and figure 5 shows an ASIC based, AntMiner S9 Bitcoin Miner.  GPU based mining is not as effective as ASIC based mining but is less expensive, consumes less power, and generates much less sound.  Hence, GPU mining can be done at home or in your office.  ASIC based miners have high performance but are more expensive, consume lots of power, and generate deafening sound.  Therefore, ASIC based miners are better suited for warehouses or rooms with lots of soundproofing and sound blocking amenities that also allow for lots of power consumption.

Figure 4: A 6 GPU Mining Rig

Figure 5: AntMiner S9 Bitcoin Miner

Tip: A great website to purchase pre-built GPU mining rigs is www.mining.sg or cryptocurrencyminingrigs.info.  For purchasing ASIC based miners, asicminermarket.com is a useful resource, but available units are frequently sold out!

Passive Method 2: Invest in a Mining Farm

Alternatively, for a passive income, you can invest in a cryptocurrency mining farm.  You can spend money on an upcoming mining farm endeavor.  Cryptocurrency mining farms typically are ASIC based because of the high return on investment (ROI) of ASIC based mining versus GPU based mining.   Many are located in colder climates to lessen cooling costs.  Mining farms typically mine the most established cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), etc.

Tip: If you want to invest serious money into a mining farm endeavor, it might be worthwhile for you to visit the mining location in person first.

Passive Method 3: Lease a Mining Share

For people who are not technically inclined or don't have space or time to maintain a GPU based miner at home or in their office, leasing a mining share, also known as cloud-based mining, is a viable option.  Again beware of many online scams and Ponzi schemes, especially concerning cloud-based mining.  Double-check with http://www.badbitcoin.org/ if the site is a verified cloud-based mining operation.  It is very convenient to lease a mining share temporarily.  Typically, 1 to 2-year mining share contracts is available.  Mining shares that give the best ROI are those that have minimal energy and cooling costs.

Tip: Hashflare, Genesis Mining, and Minergate are dependable cloud-based mining services.

Passive Method 4: Own a Mining Farm

If you are technically inclined and have time and space to devote, then you might consider building your own home-based cryptocurrency mining farm instead.  Home-based cryptocurrency mining farms are typically located in the garage or storage area and employ GPU based mining more often due to the lower cost involved, lower power usage, and less sound. However, ASIC based mining can be accomplished as well if the mining room has excellent sound-absorbing / proofing amenities and can support higher power consumption too.

Tip: There are some ASIC based miners specifically built for home use such as the Antminer R4 model though the return on investment with these types of miners is typically less than their much louder counterparts!

Passive Method 5: Direct Dividend Coins

A dividend is a distribution of a portion of a company's earnings.  Similar to traditional stock dividends, some cryptocurrency coins offer dividends too.  You hold the crypto coin and get regular dividends, which vary for each cryptocurrency coin.

Tip:  Here are some examples of direct dividend coins:  Neo (NEO), OmiseGo (OMG), Ark (ARK), Lisk (LSK),  and Waves (WAVES).

Passive Method 6: Exchange Dividend Coins

Exchange dividend coins are similar to regular dividend coins but supported by an official exchange.  They usually contain other perks, such as the ability to pay for various exchange fees using their official coins.  Exchange dividend coins are also an effective way to raise money through crowdfunding.

Tip: Here are examples of exchange dividend coins:  Binance (BNB), Kucoin Shares (KCS), Huobi Token (HT), and BiBox (BIX).

Passive Method 7: Staking

Figure 6: Proof of Work and Proof of Stake Illustration

Instead of Proof of Work (POW), also known as mining, you can do Proof of Stake (POS).  POW relies on proof that a certain amount of work has been done to verify transactions and was the chosen way of the first cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.  POS, on the other hand, only requires participants to hold a certain amount of native cryptocurrency in a specific wallet for a specified period.  POS nodes are called "validators" instead of "miners."  For POS, no specialized computer hardware is needed to become a node.  POW nodes also tend to become centralized over time, while POS nodes tend to stay decentralized.  Furthermore, POS is much more environmentally friendly because significantly less power is used to maintain the validator nodes.

Tip: Staking, POS, seems to be the future trend for the next generation of cryptocurrency coins because of a multitude of advantages.  However, critics argue that POS might lead to centralized creation of the coins which the POW methodology prevents.  Some coins are a combination of both POW and POS methodologies.

Passive Method 8: Masternodes

Masternodes are the highest form of staking with the corresponding highest payouts, but you need to buy much more of the coin.  A Masternode is a full crypto node, a computer wallet, that supports the network by hosting an entire copy of the coin's ledger in real-time.  It also allows the user to take part in governance and voting too.  Furthermore, it enables the treasury and budgeting system in cryptocurrencies.  However, a significant drawback is that Masternodes require running your node non-stop, similar to a mining rig.

Tip: Here are sites for information on available Masternodes:https://masternodes.pro and https://masternodes.online.

Passive Method 9: Hard Forks

Figure 7: Soft Forks versus Hard Forks

A soft fork is a backward compatible method of upgrading a blockchain.  On the other hand, a hard fork creates a new permanent divergence from the previous version of a blockchain.   Hard forks are needed to add new functionality to existing cryptocurrency.  They are a great way to earn free crypto!  From time to time, there are hard forks such as when Bitcoin Cash (BCH) was developed from Bitcoin (BTC) or when Ethereum classic (ETC) diverged from Ethereum (ETH).

Tip: You can get information about an upcoming hard fork from an insider group or blog.  A few days before the expected hard fork, buy a lot of the original coin.  After the fork date, you will get the same amount of the new cryptocurrency coin!

Passive Method 10: Trading Bots

Trading bots or Algo trading or auto trading is not a new way to trade.  Institutions have been using trading bots for decades, but it is only recently that they have been made available to the broad public.  Trading bots use algorithms that are programmed to take trades on behalf of the trader.  They use various market actions to determine their entry and exit points based on such metrics as price, time, order, volume, etc.  Trading bots can also be set up to handle multiple exchanges simultaneously. Thus market arbitrage is possible.  The price to use trading bot varies; some have a one-time fee, while others use a pay-per-use or subscription-based model.

Tip: Trading bots can be a great tool to use. They can save you a tremendous amount of time, especially if you are an experienced trader, though they are quite technical to set up and require some necessary programming-related skills for advanced features, so take baby steps in using them!

Recommendations:
Shrimpy is an excellent platform to use that allows you to manage your crypto assets stored on different exchanges automatically.

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Top 10 Active Ways to Make Money With Cryptocurrency

Scam Alert!

Now, this is critically important! Many scams are in the cryptocurrency industry! A great site to use to check if a cryptocurrency-related website might potentially be a scam is http://www.badbitcoin.org/, which has already vetted many websites, but it is not foolproof!
Due to always new investment opportunities popping up in the cryptocurrency industry, many sites might not prove to be valid, and you don’t want to fall prey as one of the initial victims! Therefore, you should always use your sound judgment! If the promised returns seem too good to be true — it probably is!

Diversifying Your Portfolio Is A Good Practice

A good practice is to diversify your portfolio — don’t put all your eggs in one basket! Practice an incremental approach, one step at a time, as you learn more and become aware of potential scams, you can invest more money. Always start with a tiny investment first! Please don’t get pressured by the hype and follow the herd because of the fear of missing out (FOMO) — go at your own pace!

Active Ways To Make Money With Cryptocurrency Requires Time And Energy

Active methods require you to devote your time and energy towards generating income with cryptocurrency, similar to a typical job or a business that you manage yourself. The good news is that there are many exciting ways to make active income with cryptocurrency. Using all my research, practical experience and the occasional run-in with scams, here are the top 10 active ways to make income with cryptocurrencies that I discovered:
1) Buy and Keep (HODL)
2) Trading
3) Cryptocurrency Payment Gateway
4) Invest in Initial Exchange Offerings (IEOs)
5) Invest in Security Token Offerings (STOs)
6) Cryptocurrency Education
7) Cryptocurrency News & Trends Subscriptions
8) Forming an Inner Circle
9) Bounty / Rewards Programs
10) Gaming

Active Method 1: Buy and Keep (HODL)

Figure 1: HODLing Cryptocurrency

The simplest, though not necessarily, the most lucrative strategy is to buy and hold your favorite cryptocurrencies, also known as HODL (“hold on for dear life”) in the community. HODLing is a long-term investing strategy that requires proper fundamental analysis. The topic of fundamental analysis is a huge one, but some basics to look out for are:
1) Company Analysis: Management has a history of success, right products, well-financed, good marketing, etc.
2) Industry Analysis: Not too much competition; government regulations are open; environmental factors are favorable, etc.
3) Economic Conditions: Are we in a bear or bull market? Are there any unforeseen economic conditions that can affect the product or service?
4) Future Profit Outlook: Will the products or services be in demand in the future? How large is the total addressable market? In what time frame might the product or service become obsolete?
After doing your fundamental analysis for a particular cryptocurrency-related product or service, and choosing your top picks, an excellent strategy to use is dollar-cost averaging. For example, if you get paid once or twice a month, you can allocate a small portion of your earnings to invest in your favorite cryptocurrency endeavor. In a few months after doing some more fundamental analysis, you might choose to rebalance your portfolio in favor of another cryptocurrency project, as well.
Tip: Coinmarketcap.com does some fundamental analysis for you already that is accessible if you view the rating tab for a particular cryptocurrency. Another good site to use is coinpaprika.com.
Recommendations:
If you are a long-term investor, you might also want to consider storing your crypto assets in high yielding mobile wallets as a form of savings. Using the Celsius App, long-term investors can get an annual interest rate of up to 10% with some stable coins such as USD, PAX, DAI, TUSD, GUSD, and others.

Active Method 2: Trading

Figure 2: Trading View

If you are technically minded and like to look at visual charts, you might also consider becoming a cryptocurrency trader. Figure 2 shows a popular trading platform used by many cryptocurrency traders known as Trading View. Cryptocurrency exchanges are open 24 hours 7 days a week so you can perform trades anytime, unlike traditional markets such as equities. Many types of traders require different levels of both involvement and risks. Here are some of the different types of traders:
1) Trend Traders: follow the trend to buy low and then sell high
2) Swing Traders: take advantage of market volatility
3) Margin Traders: bet prices will fall so short the market instead of going long
4) Futures Traders: They hedge against volatility with fixed asking & selling prices
5) Options Traders: bet it’s going to be a buyers’ or sellers’ market
6) Day Traders: open and close multiple positions within 24 hours
Tip: Good YouTube channels to use to learn about cryptocurrency trading are Data Dash and Ready Set Crypto. They offer many free videos to learn about using technical analysis for trading.
Tip: For a listing of top cryptocurrency exchanges by volume visit https://coinmarketcap.com/rankings/exchanges/
Recommendations:
Here are some cryptocurrency exchanges that I recommend:
1) Binance: The largest cryptocurrency exchange in the world! Now supports margin trading!
2) Coinbase: This is a prevalent cryptocurrency exchange, especially in the US, that supports fiat to crypto conversions.
3) KuCoin: This exchange allows you to invest in new coins and coins you won’t find on the larger exchanges!
4) LocalBitcoins: This exchange has a vast number of ways to buy Bitcoins and other cryptocurrencies that are sometimes even discounted from the market rate!

Active Method 3: Cryptocurrency Payment Gateway

Many retailers and online sellers now accept cryptocurrencies for payments. You can set up a cryptocurrency payment gateway yourself in your retail or online store. The model is similar to how PayPal, Mastercard, and Visa are accepted. Sellers make money with transaction fees and some margin in price. Some retailers also maintain cryptocurrency-based ATMs. You can buy real estate, cars, gold, and many other items with Bitcoin and other cryptocurrencies.

Figure 3: Some subway franchises accept Bitcoin.

Figure 4: Some retail outlets also maintain cryptocurrency ATMs.

Tip: For buying gold and silver with cryptocurrencies, I recommend goldsilver.com.

Active Method 4: Invest in Initial Exchange Offerings (IEOs)

Initial Exchange Offerings (IEOs) were invented to build more trust with investors after many shady Initial Coin Offerings (ICOs) failed. I worked on a few ICO projects as a consultant, and I can say that the vast majority of them, >95%, turned out to be scams or just had wrong business models or tokenomics. ICOs did, however, open up suitable investments to small investors. Traditionally, only affluent investors were able to partake in top tier investments. For example, say you wanted to buy some Apple or Amazon stock, this would cost you thousands of dollars to buy one share. Using ICOs allowed small-time investors to invest even a few dollars into top tier investments. IEOs differ from ICOs because they occur on an officially trusted exchange itself, so the investment offer is better vetted. Again proper fundamental analysis aids when deciding to invest in an IEO.
Tip: Binance Launchpad is a good example of a platform used by IEOs.

Active Method 5: Invest in Security Token Offerings (STOs)

Security Token Offerings (STOs) are the most regulated cryptocurrency token offerings. The security is backed by actual collateral: assets, equity, commodities, land, real estate, etc. Therefore, STOs are subjected, protected, and regulated by some national-based authority. However, due to the different definitions of securities and varying classification of cryptocurrencies as a financial asset class concerning each country, the definition of what exactly constitutes a “Security Token” is still debatable.
Tip: For a listing of upcoming STOs, visit https://tokenmarket.net/security-token-calendar/.

Active Method 6: Cryptocurrency Education

Figure 5: Many online and offline courses now offered about cryptocurrency.

Many websites now offer cryptocurrency education for a fee. There are courses on Udemy.com and Lynda.com on investing and trading cryptocurrencies. Once you gain knowledge and experience, you can teach people about cryptocurrencies yourself by using books, e-books, webinars, seminars, etc. However, there are still many free ways to learn about cryptocurrencies, especially on YouTube.
Tip: I recommend the YouTube channels, Data Dash and Ready Set Crypto for free learning and the AMTV Bitcoin academy, a paid service.

Active Method 7: Cryptocurrency News & Trends Subscriptions

Figure 6: Trends in the cryptocurrency industry are popular subscriptions.

Professional crypto traders and investors are interested in the latest news & trends to make informed decisions. Many online venues offer up to date news and trends, usually for a monthly based subscription. In return, you get daily or weekly newsletters and membership to some online community with live training and chat available. If you like to do market research, like social media and are a talented technical writer, then this might be a sufficient income option for you.
Tip: For subscription-based services, I recommend Ready Set Crypto and The Dollar Vigilante.

Active Method 8: Forming an Inner Circle / Joining a Signals Group

Figure 7: Buy the rumor and sell the news.

Another good strategy that you can employ is to form an inner circle or join a signals group. You can join a private WeChat, WhatsApp, Telegram Group, etc. Some of these groups are free, and some require payment. Usually, in these types of groups, you get what you pay for in terms of price. In joining these types of groups, your goal is to hear rumors before the rest of the retail traders do. In this way, you can buy the rumor when the prices are still very low and then sell the news when the prices are at a peak. You can start your private chat group with your most informed and connected contacts that can give you buy and sell signals.
Tip: A strategy that I like to use is following different channels on Twitter, Facebook, YouTube, and Telegram on investments and topics that I’m most interested in learning. I then view the posts that generate the most buzz.

Active Method 9: Bounty / Rewards Programs

Figure 8: Coinbase Earn allows you to earn crypto while watching educational videos.

You can also earn crypto by performing specific tasks. For example, you might write a positive review, create a cool logo, answer trivia questions, etc. You might also be able to receive free crypto by participating in token airdrop campaigns.
Tip: My favorite cryptocurrency reward program now is on Coinbase Earn. You watch videos on various cryptocurrency projects, answer questions, and then receive free coins in return.
Recommendations:
The Brave browser lets you effortlessly earn cryptocurrency just by surfing the net and joining reward programs too!
Crowd Holding, which is currently in Beta as of this writing, is an open innovation platform empowering anyone to earn rewards, and entrepreneurs to get insights from key stakeholders, employees, and consumers.
PublishOx is a great way to get paid in crypto for reading and writing blog articles!

Active Method 10: Playing Games!

Figure 9: Minecraft was one of the first games to use BTC as an in-game currency.

Last but certainly not least, you can earn cryptocurrency by playing games! Now here is a real story; I once met a guy who became a Bitcoin millionaire by playing Minecraft. The story goes is that he was playing the game a lot during his college days and accumulated a lot of Bitcoin as the in-game currency. Then he got a serious girlfriend, so he didn’t play the game for a long time. Many years later, he logged in and found out that he still had all those Bitcoins, but they were worth tremendously much more, so he was now a Bitcoin millionaire!
There are many games now that use cryptocurrency as the in-game currency. For example, in Ether Quest, you compete with other players for Ethereum. As of this writing, on the Apple store, good games for earning crypto are Alien Run, Storm Play, Free Bitcoin, Bitcoin Aliens, and Blockchain.
Tip: Have your little cousins or kids use your game account to earn you crypto! It’s the best of both worlds; they are kept busy and enjoy while you make some crypto on the side!
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Learn About Crypto With Coinbase Earn! (Endorsement)

Today, we are going to discuss something a bit different.  For our first official endorsement, we would like to introduce a way for our followers to earn crypto while learning about crypto too!

We highly recommend Coinbase Earn to people that are brand new to cryptocurrency.  It is also suitable for people that desire to learn more about popular cryptocurrency.

As the very first step to earning cryptocurrency through Coinbase Earn, you will need to create a Coinbase Account.

Many Types Of Cryptocurrency Rewards Programs

Cryptocurrency rewards programs come in a variety of forms—from airdrop programs, bounty programs, referral programs, etc.  Though in our opinion, the most educational and fun way to start learning about cryptocurrency is through the Coinbase Earn program.

Bitcoin was invented in 2008, and the first people to receive some got it through mining for the cryptocurrency for the first five years.  In the next five years, from 2013 to 2018, people got crypto by buying it, exchanging their fiat currency for cryptocurrency.  Now many believe that people will get crypto by earning it.

Crypto Learning and Earning Together

Learning and earning go together on Coinbase Earn.    As you engage and use the crypto, not only do you learn by doing but also get paid in crypto too!

Coinbase Earn has created many high quality educational and entertaining videos for you to watch to learn about popular cryptocurrency.  The videos are relatively short, no longer than 10 minutes, and after watching you answer a simple quiz.

Excellent Variety Of Popular Cryptocurrencies To Learn About

The table below summarizes the popular cryptocurrencies that you can learn about on Coinbase Earn:

Table 1: Popular Cryptocurrency On Coinbase Earn

Pass Fun Quizzes To Earn Crypto

To earn your crypto, you need to pass the quiz, but they are reasonably straightforward and you can re-watch the educational video as many times as you want.  Also, there are referral programs so you can earn some more crypto by referring your friends.

After you have created a Coinbase account and started watching the educational videos, you can also refer your friends to learn and earn too!  Here are examples of referral programs on Coinbase Earn.


EOS (Earn $50 in EOS): https://www.moneywisealpha.com/recommends/eos


Stellar (Earn $50 in XLM): https://www.moneywisealpha.com/recommends/xlm

Note: Due to supply and demand, not every cryptocurrency learning opportunity will be able to give you coins.  You might need to apply first.

Good Starting Crypto Income

If accepted in all the programs of Coinbase Earn, you can easily make a few hundred dollars in crypto in about an hour of watching the fun and educational videos!

Now a few hundred dollars may not seem like a lot of money for those in developed countries such as the US, UK, and Canada.  However, in many developing countries, this can be a big deal for starting crypto money that you can use for trading and investments too!

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Why Bitcoin Is Digital Gold

Figure 1: US President Herbert Hoover Quote

Figure 2: Prominent New York Banker, J.P. Morgan Quote

Gold And Silver Have A Long History Of Monetary Use

Figure 3: Ancient Roman Gold and Silver Coins

Historically, the most recognized kind of commodity money has been based on bimetallism—gold and silver—in the form of coins (See Figure 3).  Gold and silver are commodities that are durable, portable and readily divisible into smaller amounts.

For over 5,000 years, only gold and silver have maintained their purchasing power.  There have been thousands of different fiat currencies.  These currencies are not backed by gold or silver and they have all gone to zero purchasing power.  It is a 100% failure rate.

Why Bitcoin Is Superior To Gold

However, using gold as legal tender again has weaknesses in this digital era.  Using cryptocurrencies such as Bitcoin has advantages over using gold as legal tender in the following areas: Divisibility, Malleability, Counterfeit-adversity, and fungibility.  The following summarizes each of these advantages.

Figure 4: Even divisible gold bars are not identical on an atomic level.

• Divisibility: Separating gold into smaller chunks is not very easy at all and keeping the pieces uniform in size is nearly impossible.  Bitcoin is easily divisible down to 100,000,000 perfectly uniform pieces.

Figure 5: Smelting gold

• Malleability: Combining tiny gold pieces into a larger coin or a bar is difficult. In order to do this, you would need a furnace to melt the gold coins and then combine them together.  Bitcoins all conveniently fit into your digital wallet and automatically account for themselves without any extra efforts on your part.

Figure 6: Counterfeit gold bars.

• Counterfeit-Adversity: Someone can counterfeit a gold bar or coin by wrapping a layer of gold outside with a thick core of Tungsten. On the other hand, Bitcoin is famously counterfeit-adverse, because we all can have a copy of the distributed ledger and can see everyone else’s’ Bitcoins and can easily tell if someone is lying.

Figure 7: Even standardized gold coins are not exactly equal on the atomic level!

  

• Fungibility: Last but not least, which some claim is the most important criteria. Fungibility is the quality of the parts being judged equal to all other parts of the same denomination.  Gold can be poor at this because the purity of gold can vary.  How can you tell if one gold coin that looks similar to another gold coin is truly worth that other coin?  You cannot do this without using a lab.  Meanwhile, Bitcoins are all simply ledger entries, so there is nothing different about them even on an atomic level.

Fiat Currencies Are Prone To Failure

 

Figure 8: Fiat currencies don’t stand the test of time.

The problem with using traditional fiat currency, both paper and digital, which Keynesians promote is that there is no way to tell how much money is circulating and no one knows if the central bankers will decide to start printing more, which will cause inflation and eventually hyperinflation.  Cryptocurrencies such as Bitcoin, in contrast, are deflationary because there is a fixed amount, thereby increasing its value through time.

Cryptography Empowers Cryptocurrencies

Figure 9: How basic cryptography works

Cryptocurrencies derive their name from the form of mathematics they used called cryptography.  This allows participants to have a unique address, a wallet, sort of like a bank account but only the individual has access to their wallet.  This wallet is the person’s digital address and can be cryptographically checked for accuracy but cannot be altered or modified.

Figure 10: How a bitcoin transaction is processed

Bitcoin is “Digital Gold”

Bitcoin is currently the most popular cryptocurrency.  Bitcoin is essentially digital gold.  There is a finite supply of Bitcoin just like gold at 21 million coins.  There is also a predictable rate at which Bitcoin is mined similar to the somewhat predictable rate that gold is mined.  Figure 10 explains how a Bitcoin transaction is processed.  Mining for Bitcoin takes significant electricity and computational power to do.  Therefore, Bitcoin is seen as a real electronic unit of work by some analysts.

Four words that define the cryptocurrency paradigm shift and why they are a completely new asset class are “limited supply unlimited demand”.  Most people view digital things as not unique and easily replicable.  Every other digital asset that has existed by its nature has been able to be replicated.  For example, CDs, an artist can instantly have their song in front of millions who listen digitally.  The song can be copied over and over again, thereby allowing for maximum distribution.  These songs can also be copied illegally to the disappointment of the artists and record companies.  However, Bitcoin and other cryptocurrencies are the first digital asset that cannot be copied, allowing them to act as property, something digital can now be limited.  Therefore Bitcoin and other cryptocurrencies are a limited digital commodity similar to a type of “digital gold”.

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Bitcoin Prevents Fractional Reserve Lending

 Figure 1: A simple illustration of how fractional reserve lending works

Most of the money used today comes from fractional reserve lending

Fractional reserve lending / banking is where most of the fiat based money in use today comes from and the means by which banks burden people with debt.  Figure 1 shows a simple illustration of how the Fractional Reserve Lending system works.  For example, say you had $100 USD that you deposited to a bank.  If the bank had a 10% reserve requirement, it can loan out $90 USD.  The process then repeats, the $90 USD loan out can be deposited into another bank with a 10% reserve requirement, so $81 USD can be loaned out again.
This process can continue an infinite number of times.  From, just this example of 3 banks, what started out as $100 USD of money deposited became $171 USD of money loaned!  Now if everyone, or at least more than 10% of a banks depositors, went to the bank to withdraw all their money at once, there would not be enough to cover all the obligations.  This event is also known as a “bank run”!

Figure 2: Famed Economist, John Maynard Keynes Quote on Inflation, Deficit Spending, Fractional Reserve Lending & Taxes

The banking system is subtly stealing people’s buying power and assets

Fractional Reserve Lending, allows banks in a very subtle way to loan out much more money than they currently have in reserves and burden people with debt and long-term inflation!  Famed economist, John Maynard Keynes once said that in a fiat based monetary system, inflation, deficit spending, and fractional reserve lending are a means by which banks that control governments can steal people’s buying power and hard assets too (Figure 2)!

Figure 3: The Illusion of the Modern Banking System

The modern banking system is based on an illusion

Figure 3 shows the game that bank use to control people with debt.  People work all their lives to earn money, fiat currency, that has a continually diminishing buying power through inflation and fractional reserve lending.  Banks simply create this fiat currency out of “thin air” by using their printing presses or nowadays simply typing some numbers into a computer screen.  They burden the people with more and more debt which they use not only to control people but also transfer hard assets from the vast majority of the population to the creators of money, the financial elite.

In a sound monetary system, which we had in generations past in a commodity based monetary system based on gold backing the money supply, fractional reserve lending, deficit spending and inflation isn’t possible.  For example, when we were back on a gold standard, the banks simply couldn’t create more money by printing it or using fractional reserve lending because they actually needed gold to back up the currency that they were creating.  It is also much more difficult to burden people with debt and long-term inflation in a sound monetary system.

Bitcoin will return us to a sound monetary system

In our current digital era, Bitcoin and other cryptocurrencies act as a type of digital gold.  The supply of Bitcoin is limited and the amount created every year is predictable.  Banks or other central institutions cannot simply create as much as they want of it.  Thus, Bitcoin is a limited digital commodity similar to physical gold.
Bitcoin and other cryptocurrencies make peer-to-peer (P2P) transactions and more importantly decentralized creation of money possible again similar to when our ancestors where using physical gold coins as money.  Fractional reserve lending, deficit spending, and long-term inflation will be prevented if there is mass adoption of Bitcoin and other cryptocurrencies. Furthermore, people will not be burden with massive amounts of debt using cryptocurrency!

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Bitcoin Prevents Too Much Debt!

Former U.S. presidents on debt

Figure 1: U.S. President Andrew Jackson on debt.

Figure 2: U.S. President John Adams on debt.

U.S. Presidents Andrew Jackson and John Adams, described debt as a form of slavery. In a fiat currency based monetary system, which we have today, people getting into debt is something much too common. Due to inflation, the buying power of currencies such as the U.S. dollar is diminishing through time. From my own personal experience with having lived in the U.S. for over 30 years, I can say that almost everyone I know living there is buried in debt! From car loans, student loans, and mortgages, people are struggling just to pay the monthly principle and interest payments.
Unfortunately, this phenomenon of being a “debt slave” is very common in many Western based countries such as the U.S. and the U.K. as table 1 depicts. The countries in most debt are also those with the highest, most extravagant, living standards. Fortunately, interest rates in the last decade have been kept at or around zero, thereby allowing borrowers the luxury to pay low monthly dues.  Eventually, interest rates will have to rise and this will lead to many payment defaults similar to what happened in the sub-prime crisis of 2008!  In these countries, there is too much peer pressure to maintain a certain standard of living standard that previous generations enjoyed. Unfortunately, due to inflation the buying power of the currency being used is diminishing through time, thus, people need to borrow more and more money to maintain their lifestyle and also impress their friends and relatives. It’s similar to that old saying of, “keeping up with the Joneses” but unfortunately the Joneses are now buried in debt.

Table 1: List of countries by external debt.

Source: https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

The financial elite control people with debt

Debt is a means by which the financial elite, those creating the fiat currency, can control the vast majority of the population into compliance. Additionally, it is a means by which the financial elite slowly transfers hard assets from the general population to their possession as Figure 3 depicts. For example, say you would like a car loan, a home loan, or a small business loan, banks are more than willing to let you borrow the money on the strict condition that you can continually pay the principal and interest payments due the same day of every month. If for any reason you miss a few payments, then after a while, the banks will send collectors to repossess your car, your house, or your small business.

This debt based financial system is one of the reasons why the gap between the rich and poor keeps increasing, especially in Western based countries, the rich keep getting richer while the poor keep getting poorer.

Figure 3: How the banking system transfers hard assets from the people using debt.

Unfortunately, this not only occurs in a micro level but a meta level too. International central banks such as the International Monetary Fund (IMF) can burden countries with so much debt that they can never pay off and if they miss enough regular monthly payments then the collector is sent. In this case, the collector is usually the U.S. military, which will lay claim to some resource owned by the country buried in debt.

Sound money doesn't burden people with debt

In a sound monetary system such as a gold standard, a commodity money based system, or a decentralized cryptocurrency based money system, burdening people with debt is much more difficult to accomplish.   Cryptocurrencies, such as Bitcoin, are a digital representation of the gold standard.  Bitcoin due to its nature is a limited “digital commodity”.  Lending institutions cannot simply lend out more of the cryptocurrency than they have in supply.  Therefore, it will be much more difficult to burden borrowers with too much debt using this type of sound money. 

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