Guide to Investing in Cryptocurrencies in Malaysia
A friendly warning before you proceed If you're new to cryptocurrencies, then welcome to the world of cryptocurrencies!!! Before you proceed further, if your intention is to invest in cryptocurrencies, please be informed that cryptocurrencies are VERY high-risk high-return investments. If you have the money, you can earn a lot but you can also lose all and CRASH & BURN! Just as with any other conventional investment vehicle, you need to do your own research and make up your own strategy including the important exit strategy i.e. when to cut your losses.
In general, for risk-averse conservative investors, it is advisable to allocate not more than 10% of your portfolio to high-risk instruments such as cryptocurrencies.
Enter AT YOUR OWN RISK and if you lose your money, it is NOBODY's fault but yours!
You have been warned.
TABLE OF CONTENTS
Post #2 1) What are cryptocurrencies? 2) How to buy cryptocurrencies (bitcoins) in Malaysia (using MYR)? 3) How to buy altcoins? 4) Where should I keep my BTC and altcoins? 5) Sending bitcoins/altcoins to exchanges/addresses and wallets 6) SPECIAL WARNING on cryptocurrency addresses 7) Incurred fees 8) What is the current price of BTC or altcoins?
Post #3 1) Important advices and tips for cryptocurrencies
Post #4 1) Why you should consider getting some good altcoins
Cryptocurrencies are the digital media of exchange which use cryptography and shared transaction ledgers to create a secure, anonymous, traceable and potentially stable monetary system. Cryptocurrencies take their name from their use of cryptography. Cryptography is the study of the methods of encrypting information, primarily with the intention of sending a message securely and privately but also for tasks such as data security and authentication. Crypto, the prefix in both words, comes from the Greek word kruptos, which means “secret.” Cryptocurrencies incorporate many of the technologies and theories developed by cryptographers in order to create a digital money exchange system that is resistant to both censorship and fraud. In the two decades prior to 2008, there had been several attempts at creating a decentralized currency that would rely on cryptographic protocols and distributed networks. It is only with the launching of Bitcoin, however, that the idea has really taken root and started to attract multiple followers all over the globe. Bitcoin remains the most popular cryptocurrency, but there are now virtually thousands of cryptocurrencies with various levels of popularity, value and originality. Cryptocurrencies other than Bitcoin are often referred to as “altcoins.” While there are many altcoins that are simple clones on the Bitcoin system, the most successful ones tend to have a unique hook or advantage that Bitcoin either can't or chooses not to provide. The best-known examples of popular altcoins include Ripple, Litecoin and Dogecoin. (source taken from Cointelegraph)
How to buy and sell cryptocurrencies (bitcoins and altcoins) in Malaysia (using MYR)?
Note : This guide does not cover obtaining cryptocurrencies through mining.
In Malaysia, using MYR, there are limited options to buying and selling bitcoins (BTC). Unfortunately, at the moment, it is only possible to buy and sell BTC and ETH directly with MYR; all other cryptocurrencies can only be bought and sold by converting through either BTC or ETH first.
You can buy and sell bitcoins through these platforms (click to go to the website): 1) Localbitcoins 2) Remitano 3) Luno
Important : Do note that due to the lower liquidity in Malaysia, cryptocurrency prices on these websites are often a few percentages higher compared to the average global prices. But you can sometimes get a good price if the seller is desperate to sell. In order to get the best BTC or ETH price, it is recommended that you check out the prices on all the exchanges mentioned above. For example, on 29th April 2017, Localbitcoins and Remitano prices are higher for BTC, but the best BTC buying price was at Luno. The only problem with Luno is that you need to login/sign up to see market details, and before you can buy any coins, you need to transfer money to the exchange's bank account first, which will only be reflected in your exchange account after they have processed it. Also, VERY IMPORTANTLY, whichever website you use to buy or trade cryptocurrencies, it is of utmost importance to activate 2-factor authentication (2FA) for better security.
Localbitcoins - Peer-to-peer exchange (P2P) where the website serves as a platform for you to deal directly with a seller (or buyer) - Since you are dealing with a stranger, it is very important to : ----- a) Deal with verified trader who has very good reputation/feedbacks and has done many deals. You can check their profile by clicking on their ID. ----- b) Ensure they are online ----- c) Read the traders terms & conditions before you trade ----- c) Ensure you can do instant bank transfer especially for different banks. If possible, it is preferable to use the same bank to avoid delays. - the good thing about Localbitcoins is that you can send messages (and pictures if needed) during your trade. Say you want to buy 1.0 BTC, you click the "Buy" button, indicate the amount you want to buy, and type the message. I usually type something like "Wanna buy BTC. Can proceed?" and wait for them to respond. - once you have transferred the money, you have to click on the "I have paid the seller" button. The seller will be automatically notified and will release the BTC when he confirms the money is in his bank account. You must NEVER accidentally press the "Cancel trade" button when you have already transferred the money or you will lose your hard-earned cash!!! The "Cancel trade" button is only used when you really want to cancel the trade and have not transferred any money. - for safety purposes, once you initiate a trade, the BTC is kept in escrow (kept by the website) until the trade is complete. In the event that there are problems with the trade, the BTC will be held until the issue is resolved. - your BTC is kept in the websites BTC wallet
Remitano - P2P exchange that supports both BTC and ETH - operates similarly to Localbitcoins except you can't communicate with the seller - your BTC is also kept in the website's BTC wallet.
Luno - Online cryptocurrency exchange, supporting several cryptocurrencies like BTC, ETH, XRP and LTC. - LUNO has been gaining popularity in recent months as they are able to process fiat deposits even on weekends. If you deposit MYR using Instant Interbank Transfer from Maybank (and have filled in all the fields correctly), you should typically see your LUNO account credited within 15 - 30 minutes. - The popularity of LUNO also directly results in a much higher liquidity, and subsequently there is a smaller buy/sell spread.
How to buy and sell altcoins?
As previously mentioned, at the moment, except for a few select cryptocurrencies like ETH, XRP and LTC, there are limited ways to buy and sell altcoins using MYR. You have to buy BTC/ETH first (XRP and LTC have limited pairs with other altcoins) and send it to an exchange that can convert it to altcoins, and when selling, you need to trade your altcoins into BTC or ETH first, the send to the local exchange and sell it. There are many exchanges available. Take a look at this link : https://www.cryptocompare.com/coins/btc/markets/USD You can use any exchange but different exchanges have different altcoins. Some unique ones worth mentioning are as below (click to go to the website):
In general, you would want to keep your coins out of reach of hackers and the best way to do that is to keep it offline i.e. your coins are not connected to the internet. A hardware wallet is a very good option. NEVER keep any significant amount of cryptocurrencies in online exchanges, except those that you plan to use for trading.
Currently, there are two hardware wallets that are the most popular: 1) Trezor - https://shop.trezor.io/ - supports BTC, ETH, ETC, LTC, ZCash, Dogecoin, Dash, Namecoin and Testnet; similar to the Ledger Nano S, it also supports all other ERC20 tokens via MyEtherWallet.
2) Ledger Nano S - https://www.ledgerwallet.com/products/ledger-nano-s - natively supports BTC, ETH, ETC, LTC, XRP, ZCash, NEO, Dogecoin, Dash and Stratis, with more being added every now and then; also supports every other ERC20-type token via the use of online platforms like MyEtherWallet - Click here for more details
The only problem is that it is quite difficult to get these wallets locally as cryptocurrencies are still not popular in Malaysia. It may be easier in future when it becomes more popular here.
Sending bitcoins/altcoins to exchanges/addresses and wallets
There are a few things you have to keep in mind when you transfer cryptocurrencies: 1) It is not instantaneous. It may take a few minutes to a few hours! - take a look at BTC's confirmation times : https://blockchain.info/charts/avg-confirmation-time - there's a whole lot of issues on this but it is hoped that the long confirmation time will be resolved soon.
2) Ensure the address is correct - This is EXTREMELY important. If you send to the wrong address, you WILL lose the coins! Refer to the next point for further elaboration.
3) Ensure the address is correct for the type of coin - Also very important. You CANNOT send BTC to an ETH address. Cryptocurrency addresses are not compatible with each other.
4) There's a transfer fee for all transfers, which depending on network congestion, may not be insignificant. Always check the gas fees before transacting.
5) You can always track your transfer. Just enter your receiving address into the link and you will be able to see the status of the transfer : https://blockchain.info/
SPECIAL WARNING on cryptocurrency addresses
A lot of people have been confused by the long and confusing addresses when sending or receiving coins, so it is worth to take a few minutes to understand the concept behind these addresses. Cryptocurrency addresses are derived from a mathematical function, and are always paired with a private key. The private key is the sole identifier of ownership of the coins within that address, so if you lose your private keys, you effectively lose your coins (i.e. you can see it on the blockchain, but you can never access those funds again). Also, the very nature of a decentralised distributed ledger protocol ensures that all transactions are irrevocable and irreversible, so it is EXTREMELY important that you NEVER send your coins to a wrong address by accident.
Bitcoin addresses use a Base-58 format, which is alphanumeric but without the characters that would be confusing to normal people (i.e. 0, O, I and l). A normal bitcoin address would look something like this: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2 and the length may vary anywhere from 26 - 35 characters. It is absolutely imperative that bitcoin addresses are entered EXACTLY as they appear, including both capital and small letters, because bitcoin addresses are check-summed and have the version-number built in, so even a single wrong character will result in a completely different address.
For Ethereum, often times the addresses will be presented in the "raw" format, which is pure hexadecimal form (i.e. includes all numbers and all alphabets, for example 0x4cbe58c50480......). In this form, users will sometimes encounter addresses with some capital letters, and sometimes addresses with only small letters. It should be noted that both types of addresses (with or without capital letters) are valid, and can be used without any concerns, because Ethereum addresses are essentially not case-sensitive (the capital letters are a feature for some compatible wallet software to use the check-sum feature, so if some addresses have no capital letters, the software will just ignore the check-sum feature). It also means that if your address originally had some capital letters, but was later changed to small letters only (e.g. when transferring to a paper wallet), do not worry, as both addresses are exactly the same and both can be used.
However, as good practice, it is advisable to just put the addresses (for any coins) exactly as they are without any modifications, and it is definitely prudent to double and even triple check your recipient address prior to any transaction, to avoid any unfortunate mishaps and lost coins.
Incurred fees
Keep in mind that, just like any other investment vehicle, you will be charged some fees when you make a transaction or transfer, depending on the platform you use. Here's how it generally work: 1) Buying BTC - generally free 2) Selling BTC - free or fees charged by platform 3) Sending BTC from one address to another - network transfer fees 4) On exchanges, fees vary.
Examples of fees being charged: - Transfer from Airbitz mobile app (in phone) to hardware wallet twice - 0.000812 & 0.00045 BTC. ---- If BTC was USD 1000/BTC, that would mean a transfer fee of USD 0.812 & USD 0.45. Do note the difference of fees is also affected by the price of BTC at that time. - Transfer from localbitcoins to Poloniex - Transfer from Remitano to Poloniex - buy altcoins from poloniex (direct buy) - buy altcoins from poloniex (bidding)
What is the current price of BTC or altcoins?
There are a lot of ways to check the prices. Coinmarketcap.com is one of the more popular websites. Another popular one is Cryptowatch. Cryptocompare.com is also one of the very popular sites, where you can see:
1) ALWAYS activate the 2FA security feature (2 factor authentication) - most exchanges provide 2FA security feature - it is very important to use 2FA. Hackers can easily gain access to your username and password but if you have 2FA enable, it makes it virtually impossible to hack your account unless they get hold of the 2FA code.
2) Cryptocurrencies are VERY HIGH RISK investments - You can get 1000% in a short time but you can also lose 1000% very fast - Only investment the amount you are willing to lose. Please do not gamble with your life-savings by putting everything into cryptocurrencies. Yes, you might be filthy rich but you might also become bankrupt! - If you cannot stand losing 20%, 30% or even 100%, cryptocurrencies is not for you. Do look at other investment instruments - For safe investors, it is advisable to only allocate 10% of your total investments to high-risk instruments like cryptocurrencies
3) Decision to buy or sell is yours and yours alone - Do not blame others for your actions - There will be a lot of rumours and chatter floating around so you have to decide yourself and take whatever action you think is necessary
4) Study and do research - It is important to know what you are getting into - Read on the coins you are interested in and judge for yourself whether you want to invest in it - There are links above on cryptocurrency news. You can also google for more information.
5) Have a proper strategy and do not trade with emotions - It is imperative that you have a proper strategy. DO NOT buy cryptocurrencies blindly - Your strategy can change as you go along but it is important to stick to it - Do not trade with emotions. - Have a cut-off level where you might want to sell off your coins if it is making huge losses. However, for good coins, they will usually recover after a drop. - Don't fall in love with a coin and hold it even if there are bad news on the coin
6) Don't keep too much money on exchanges - There are many instances where exchanges were hacked and investors' money were lost - Only keep the amount you want to trade on exchanges. Transfer out the rest, preferably to a hardware wallet. 7) Ensure you know how cryptocurrency wallet works - Refer post #10 on "Cryptocurrency wallet FAQs"
8) Cryptocurrency trading runs 24/7, you're body does not!!! - Do have enough sleep. Cryptos will still be there when you wake up.
This post has been edited by kmarc: Jul 23 2017, 09:26 AM
Why you should consider getting some good altcoins
I want to discuss on the multiplier effect of bitcoin and why you should also get some good altcoins.
Before that, here are some advertisements..... I mean disclaimers. I am only 3+ months in cryptocurrency and I have no TA or FA skills. However, I have super NA skills. If you don't know the meaning, in stocks, TA is technical analysis where you analyze charts to make smart trades. FA is fundamental analysis. NA is .... noob analysis. I am not in the financial sector and am not a pro-trader. Just a normal guy and the following is only my opinion. You should do your own research and buy the coins which you think is good. Lose money don't blame me!
In terms of investing in cryptocurrencies, these are the coins you must consider: 1) Bitcoin - this is a no brainer. From the trends, it looks like it will go up more, until bad news comes along 2) ETH - world wide web 3.0. It has great potential and will probably go to great heights too
Now here comes the interesting thing. Besides investing in just bitcoin and ETH, you should consider putting a percentage of coins in other good altcoins that is paired to BTC. Pairing to BTC means that the coin doesn't have a fiat value by itself. It's value is paired against BTC and is expressed in a ratio. For example, if ETH/BTC is 0.1, it means that ETH has a value of 0.1 compared to BTC (i.e. 10% of BTC's value). Again, I'm may be seen as bias as most of my funds are in altcoins. I only have 0.5BTC in my hardware wallet.
Anyway, the reason I recommended good altcoins is as follows:
1) Diversify you investment. I guess this applies to any investments in general 2) Some altcoins can go ballistics with thousands of percentage gains! 3) Most altcoins are paired to BTC, resulting in rise of BTC actually multiplying the effect of the rise in altcoins. This is what I want to concentrate on.
Say bitcoin is at USD 1000 and an altcoin is altcoin/BTC 0.010 (face value of USD 10). Now, say BTC rises 10% to 1100 and altcoin/BTC doesn't change at 0.010 (zero % increase). Because the altcoin is paired to BTC, the value of altcoin has also increased! Now it is USD 11! Now in the same scenario, if the altcoin ratio increased 10% (i.e. 0.011) and BTC increases 10%, the actual value is multiplied by BTC's increased i.e. 0.011 x USD 1100 = USD 12.1. (1.1 x 1.1 = 1.21)
Here's a clearer picture:
BTC same, altcoin 0.010 = altcoin value USD 10 (1.0 x 1.0 = 1.0) BTC increase 10%, altcoin 0.010 = altcoin value USD 11 (1.1 x 1.0 = 1.1) BTC increase 10%, altcoin increase 10% = altcoin value 12.1 (1.1 x 1.1=1.21)
As you can see, if both BTC and altcoins rises, the gain from holding altcoins is much greater than holding BTC alone! Even if BTC rises and the altcoin drops, the value might not change much depend on how much the rise is against the drop.
Another real-life example is my own holdings, say CLAMS. I first bought clams at 74000 sats on 13/3/2017. At that time BTC was around around USD 1200. Now clams is about 220000 sats. In terms of gains, my clams would have gained roughly 297%. However, note that BTC is now roughly USD 2500. So:
Initial buy, say 100 coins clams: 100 x 0.00074 x USD 1200 = USD 88.8 Profits if BTC is USD 1200 now: 100 x 0.00220 x USD 1200 = USD 264 (297% gain)
Now here comes the great thing, BTC has gain 208%! (USD 2500/1200 x 100%) So, my 100 clams is worth : 100 x 0.00220 x USD 2500 = USD 550 (619% gain!)(2.97 x 2.08 = 6.19)
So if were to hold only BTC, I would have gain a good 208%. Not bad. However, because I hold clams that is paired with BTC, my gains is actually 619% instead of just 208% for BTC or 297% for unpaired clams!!!
Of course, the above only holds true if the trend of the past 3 months continues. Meaning: 1) BTC is still slowly rising 2) BTC sudden rise leads to a sea of discounted coins to pickup! 3) Once BTC stabilize, altcoins recovers or even gain much more. 4) In most instances, altcoins gains outnumber altcoin loss in terms of percentage and number of coins (i.e. more green coins most of the time and higher percentage gains rather than loss (e.g. 50% gain but only 30% loss)
Do note that this multiplier works both ways, meaning if BTC were to drop together with altcoins, BTC will multiply the effect of altcoins drop.
I'm not exactly sure what would happen if there were sudden bad BTC news as I have not gone through a "Mt Gox" scenario.Due to this noob observation, I am of the opinion that to get greater gains, one should consider some good altcoins. For newcomers, be patient and wait for good discounts.
Again, this is just my observation and I do not know what will happen in the future. Invest safely and hope everybody makes money from cryptocurrencies!
This post has been edited by kmarc: Jun 10 2017, 08:56 AM
Malaysia's government stand on cryptocurrencies is still very vague. There's no law regarding this and investors are unsure what type of tax is involved.
The Bitcoin is not recognised as legal tender in Malaysia.The Central Bank does not regulate the operations of Bitcoin.The public is therefore advised to be cautious of the risks associated with the usage of such digital currency.
In Malaysia, a major drawback to bitcoin adoption is the lack of regulation surrounding digital currencies. Nearly 90 percent of investors said they would buy more bitcoins if the government passed some sort of laws around it, indicating that “regulation, when it arrives, will be a major boost for bitcoin and ensure that bitcoin trading reaches a new high,” said Pattnaik.
KUALA LUMPUR: Bank Negara Malaysia (BNM) will issue guidelines on cryptocurrencies by the end of the year.
BNM Governor Tan Sri Muhammad Ibrahim said on Tuesday he was looking at this matter and the details as the new form of currency had attracted a lot of attention around the globe.
"We hope that before end of year to come out with guidelines on cryptocurrency in particular those relating to anti money laundering and terrorist financing. We want to ensure that there are clear guidelines for those who want to participate in this sector," he said.
Muhammad was speaking on the sidelines of the Global Symposium on Development Financial Institutions here at Sasana Kijang.
On the ringgit, he said the local unit should always be reflective of Malaysia's economic strength and fundamentals.
"What is important is not so much the level of the ringgit but what is more important is that the ringgit must reflect the economic strength of Malaysia. If economic growth and inflation is under control then the exchange rates should reflect that," Muhammad said.
This post has been edited by kmarc: Sep 19 2017, 07:50 PM
Grow your money on Poloniex - How to lend out your coins
Before we begin the tutorial on lending, the general rule of keeping your coins safe still applies. However, the disadvantage of keeping it in cold storage is that it doesn't generate money besides price appreciation. You can consider another option which is to lend some of your coins to traders on Poloniex WHILE enjoying price appreciation if any. Do note that you need to have the coins on your Poloniex's account to lend them out.
Lending rates Let's start with this as lending rates are the main factor why one would want to keep their coins on Poloniex and lend them out.
Lending rates depends on supply and demand. It can fluctuate and swing widely. It can be very low but it can also be very high. Even higher than the rates of loan sharks!
Here are some of the spot rates at the moment:
Coin
Rates
Bticoin
0.1595%
BTS
0.0001%
CLAM
1.2997%
DASH
0.0587%
ETH
0.0029%
XRP
0.0096%
As you can see from the table above, rates also vary widely between coins. Dash previously had a rate of 0.88% when the demand was high. Clam had low rates previously but because it is in demand now, it is at super loan shark rates!
Huh, the rates are so LOW???!!!??!? Before you stomp away upset, do note that the rates are quoted PER DAY (24 hours) and not per year!! For example, if you loan out CLAM for 1%, you will get 1% of clams after 24 hours! In the unlikely event that you can lend out for a whole year, the returns will be 365 days x 1% = 365% return!!!! However, as you will see later, it is almost impossible to loan out for long periods unless you are very very VERY lucky.
The interest generated are the same coins you loaned out. If you loan out CLAMS, you will get CLAMS for interest.
Another thing to know is that the interest starts calculating the moment the loan is taken up. The site updates the active loan every 20-30 seconds and you can see interest being generated. So even if your loan was taken up for only 5 minutes, you will already get some interest although it would be negligible.
Note : I guess it goes without saying that you would need a significant amount of coins and a good lending rate to make lending worthwhile. From observation, it seems bitcoin has a consistent demand with relatively good rates. You just have to calculate the returns for yourself to see whether it is worth your while or not.
Loan duration
Ok, here comes the reason why you won't be getting rich by getting a 365% return.
When you offer your loan, you will need to specify the rate, amount and duration. Default duration is 2 days and the range is 2 - 60 days.
If you lent out for 2 days and the loan is taken up, it doesn't mean that it will be loaned out for 2 days. It can sometimes be returned in a few hours or even a few seconds! This is the main disadvantage of lending, where you need to manually check to see whether your loan is running.
There is a lending bot that can automatically set up loans for you but it is 3rd-party where you would have to give it access to Poloniex to run the loans. I don't recommend it so this guide won't cover lending bots.
Lending risk As with any loan, there are risk to lending. You can't be going about spraying red paint when your loan is not returned.
I'm not entirely sure what the risks are or how high the risk is. I have asked this in Poloniex and they say that the risk is minimal because they have certain safeguards. For one, the coins you loaned out cannot be transferred out of Poloniex. Even if you loaned out 1 BTC and the price of BTC crashes, it is still one BTC that will be returned to you!
So, lend at your own risk and don't throw red paint at my house if something happens!
Poloniex lending facility
Ok, let's get down to actual lending out your coins. I only have experience with Poloniex so we will only cover Poloniex.
On Poloniex, you'll notice 3 sections/tabs - Exchange, Margin and Lending.
Click on the Lending tab to go to the lending page.
A word of advice : Don't ever go to the margin tab. Very risky to play margin trades.
This is what you will see on the lending page.
1) My Balances - This is where you can view your balances across all 3 facilities - Exchange, Margin and lending - It only shows the available amount of coins. If you have open orders or coins under loan, it will not be shown in the total. - You can also see the type of coins you can loan out. At the moment, only 12 coins can be loaned out. - Important : From here, you need to click on the coin you want to loan out. Once you select the coin, you can then set your rate and amount.
2) Quick transfer - This is a quick feature to transfer your coins between the 3 facilities - In order for you to loan out your coins, you have to first transfer the coins from Exchange (that's where your coins probably are at the start) - If you don't transfer any coins to lending, you won't be able to loan out anything. - Likewise, if you finish lending and want to sell off the coins, you would have to transfer them from lending back to exchange
3) Loan - This is where you offer your loan - You have to enter the rate, amount and duration of loan - "Auto-renew" is if you want the loan to be listed again once the loan is given back. It is actually not a useful feature as loan rates seldom stay at the same rate for long. - Once you have set your loan parameters, you can click the "Offer loan" button and it will be displayed in the "Loan Offers" table.
4) Loan offers - This is where all loans are being offered - If you want your loans to be taken up fast, you would have to set a lower rate. Basically competing with each other to loan out the coins.
5) Loan demands - This is where all loans are requested - If you don't want to wait, you can just offer at the requested rate and it will straight away match - Loan demand rates are usually much much lower then ongoing rates
6) My open loan offers - You can see your open loans here i.e. loans that you have offered by not yet loan out
7) My active loans - Here's where you can see the loans that are taken up - If you see the first line, I have loaned out XRP at a rate of 0.0097% with an amount of 2221.2508. Duration is 2 days with auto-renew turned on. Up to that time, the interest is 0.00034912 XRP.
That's it! You are now ready to put up your loan!
Loan history/records This is how you can see your loan history.
Under "Orders" tab, select "My trade history & Analysis".
This will bring you to the following page.
From here, you have two options (as indicated in the picture): 1) Download the excel file containing all your loan records - easier to use this feature as you can sort out your loans and sum it up in excel
2) Show your "Loan earnings" - Will show you all your loans in a table - This is not easy to see as you can't sort it out. I already have 29 pages of loan history!!! - The easier way is to select the coin you want to analyse then click the analyze button.
Take a look at my analyzed loan earnings of CLAMS. It shows that I have earned 49.7 CLAMS with fees in total. Fees are 15% so you can roughly calculate your net profit by subtracting 15% from the total.
Note : This is the place where you can see your trade history too.
Lastly, do remember that lending is not without risk but I think the risk is negligible. Again, if you lose your money, don't blame me!
Happy lending like the loan shark that you are!!!!
This post has been edited by kmarc: Jun 10 2017, 09:23 AM
Here's a list of basic terms that you should know when you jump into cryptocurrencies. At the bottom, there are references you can check if you need more info. Alternatively, google is your friend you shouldn't forget.
Altcoin - Alternative coins which means other cryptocurrencies besides bitcoin.
FOMO - Fear Of Missing Out
FUD - Fear, Uncertainty and Doubt
HODL - Hold on for dear life
ATH - All time high (refers to cryptos reaching new highs)
Note : These are my opinion only. Unfortunately, most of these coins have gone up a lot so if you're still interested in the coins, you have to really do your research and think seriously before deciding.
Ethereum
Refer to WooTz's guide on ethereum, post #11. He's the expert in ETH and you can ask him if you have any questions.
Cryptocurrencies - Is it a big bubble ready to burst?
I have always wondered why bitcoin or any altcoin should have a rising value. Why can't bitcoin be just USD 10 or 20 or 100? Why does it need to increase in price where some even predict USD 100k a coin!!??!! The most famous true story is the guy who bought a pizza with 10,000 bitcoins. Now one bitcoin is worth around USD 2.8k and soon, you'll probably use one bitcoin to buy 10,000 pizza.
I guess the same can be said about gold, diamonds or any asset deemed valuable. To me, it is human nature to put a value on something which increases in price when demand outweighs supply.
Whatever the case may be, it is possible that we're in the biggest bullrun in the history of mankind or we're in the biggest bubble of the century. I sincerely hope that we're in the former scenario and have not reach the latter.... yet. As with any bullruns, there will come a time when a major correction occurs and everything crashes. Ride the bull but be prepared to bail out.
Some even go to the extend of saying that cryptocurrencies are all a scam. Only time will tell.
I like this picture, the possibility of cryptocurrency bubble, which reminds me to be cautious in this new crazy cryptoland where anything is possible:
The picture shows you that the amount of money in cryptocurrencies is still relatively small. If it were to pop, crash and burn now, it will probably be the smallest bubble to burst!
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Cryptocurrencies – Is it a Ponzi scheme?
Contributed by our forumer Enigmatic.
I had been spending the last couple of days breaking down Ponzi schemes by attributes, translating it to a mathematical model, in hopes of finding provable similarities with cryptocurrencies. After all, it looks like cryptocurrencies are fueled on the necessity of new purchases for price increases, hence the association of it in likeness with Ponzi schemes.
First of all, definition just for entirety’s sake: an “investment” generating returns for (older) investors using the revenue intake from new investors. Apart from fresh intake of funds from new investors, the “investment” may or may not have a business activity for revenue stream. Usually comes with an abnormally high promised return paid in a controlled manner over an agreed time period.
From this, we could make a very simple model of a Ponzi scheme as such, optimistically assuming there is a business activity providing a revenue stream to maintain the scheme for as long as possible:
Intake of new funds = Fr Payout of funds = Fp Time starting from 0 (t >= 0), so at any point of time we’d expect both intake and payout Business revenue = Fb Total liquidity = CL, where CL = Fr + Fb
From here we could already very quickly deduce if t(Fb) > t(Fp), then the business is making a profit hence sustainable and legitimate. If payouts from CL results in a negative t(CL - Fp) < 0, where Fb < Fp then this fully is a Ponzi scheme relying on new fund intake to survive.
From this model, if we could fit in the attributes of cryptocurrencies exchange-of-hands we could determine at what stage it would be a Ponzi scheme. However:
1. Intake of new funds. When new funds of a Ponzi scheme is being taken in, this adds to a pool of liquidity such that CL = Fr + Fb. On the other hand buy orders does not add to any pool and instead provides a difference which indicates the increase (or decrease) between previous price and new price. 2. Payout of funds. When a payout of a Ponzi scheme is initiated, this deducts on liquidity CL with Fp. Again, the same problem arises, sell orders does not add to any pool and this is derived as a difference instead. 3. Time is consistent between both models. 4. No liquidity of the same sense for cryptocurrencies – It’s a market supply-demand curve.
From here we can clearly make the differentiation that – As the attribute CL does not exist in a cryptocurrency market, it is not possible for it to fail the same way as a Ponzi scheme in which t(CL – Fp) < 0. There could be a huge negative difference between the previous and new price, but never to a point where the price is below 0. On the other hand price increases are fueled by speculative worth where the “greater fool theory” applies, so we could look objectively from this perspective to see if this could result in a crash/bubble, and what happens to the “last greatest fool”.
In summary, instead of showing attributes akin to a Ponzi scheme, cryptocurrencies show attributes closer to the stock market/penny stocks, driven by fundamentals (equivalent to investigating the industry, NAV, P/B of a company) and crowd speculations. I may expand more about bubbles and the greater fool theory in relation to the cryptocurrency market on a later date, but not now.
This post has been edited by kmarc: Jun 24 2017, 12:52 PM
For cryptocurrencies, there are many types of wallet: 1) Desktop wallet 2) Mobile wallet 3) Online wallet 4) Hardware wallet - Trezor, Ledger 5) Paper wallet
In general they all work on the same principle so I will be concentrating mainly on hardware wallet and I will use bitcoin as an example.
FAQs on hardware wallet:
1) It DOESN'T hold any bitcoins
2) It only holds the private key that enables one to manipulate the bitcoins on the blockchain. - without the private key to the address that holds the bitcoin, there is no way anybody can touch the bitcoins on a particular address
3) You can lose the physical hardware wallet but you won't lose your coins if you have the recovery seed to the private key. - If the wallet is lost or spoilt, you just have to get another hardware wallet, use the recovery seed to create back the private key, and you're good to go. - Note : Hardware wallet usually comes with PIN number so it is usually ok even if your lost hardware is found by someone else
4) Recovery seed is the MOST important thing in your whole bitcoin setup. - Remember that if you lose your hardware wallet, you can still recover your coins if you have the recovery seed - Remember that what you are recovering is the PRIVATE KEY that enables you to manipulate the coins on a particular address. Your recovery seed is not recovering any coins. - However, if you lose your hardware wallet and ALSO your recovery seed, you lose everything.
QUOTE
If you lose your hardware wallet and also the recovery seed, you lose everything. Your coins on that particular address can still be viewed on the internet but it will be floating there for all eternity.
5) If someone got hold of your recovery seed, they can steal your coins from right under your nose even if you kept your hardware wallet in the bank vault!
6) You can use your hardware wallet on the most virus-infected malware-infested computer and you are still safe - The good thing about hardware wallet is that the private key contained inside the hardware wallet cannot be extracted. No virus, trojan or malware can get access to the private keys. - This is in contrast to online or desktop wallets as hackers can gain access to the files that store your private keys.
7) Make sure your hardware wallet 24-word recovery seed is inaccessible - Remember that the 24-word recovery seed is the most important piece in your whole hardware wallet setup - Below are a few tips: ----- a) Keep the recovery seed in a safe place e.g. safe deposit box ----- b) Instead of just writing down the 24-word in sequence, you can rearrange them so that they are out of sequence. Of course, if you do that, you have to remember the rearrangements! Example would be like switching word 1 and word 2. ----- c) Divide the 24-word in different sections and hide it at different places - Those are just some examples. How you make the 24-word recovery inaccessible is entirely up to your creative imagination. Just make sure you remember how to unscramble your genius creativity!!!
8) Ensure you really secure your hardware wallet by activating passphrase. - Remember that the 24-word recovery seed is the most important thing. If somebody stole it, they can just use a hardware wallet together with the recovery seed to gain access to your coins EVEN IF your hardware wallet is in a bank vault! - Besides physically hiding the recovery seed all over the place, another easier method is to activate passphrase for your wallet - With passphrase, even if somebody stole your 24-word recovery seed, they won't know or can't see the hidden wallet - Refer the scenario below
Total coin cap for both NEO and GAS is 100,000,000. Half of the NEO cap are locked for the dev team, which they'll withdraw 15% each year for marketing, development, and partnerships. The rest has already been distributed for ICO investors. You cannot mine these coins.
NEO can only exist in round numbers and can't be divided, while GAS can be divisible.
By holding NEO in your own wallet, you get to claim GAS at every block generated, which occurs once every 15 secs.
NEO represents ownership of the entire network, it's used to elect bookkeeping nodes to validate transactions, vote on governance proposals and the right to claim GAS at each block.
GAS is very similar to ETH, which is used for transactions and contract execution on the network.
Here's what you can expect to claim on the first year if you presently hold 1000 NEO, note that the GAS reward will reduce each year, from 8 in first year, to 7 in second year and so on.
1000/100,000,000 = 0.00001 x 8 GAS per block x 5760 (blocks a day) = 0.4608 GAS a day
Ethereum
Brief Introduction
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At a very high level, Ethereum is a network of computers that supports the execution of programs and transmission of data. The key difference between this system and how the internet works today is that while apps and web pages are hosted on a single server (or small cluster of servers), everything on the Ethereum network is distributed. Any machine in the network can process calculations to determine the result of a transaction or piece of code in an app, and all the machines involved eventually reach a consensus on what the correct result should be. In practice, this means that apps cannot “go down” because of some single point of failure. As long as there are enough machines contributing to the network, everything built on Ethereum will persist and the network will ensure the validity of the blockchain.
Where does cryptocurrency come into the picture? Ether (ETH) fuels the execution of these distributed apps (DApps). In order for a DApp to execute a task, or for you to send some message across the blockchain, there needs to be a small amount of Ether spent, which is proportional to how large or computationally complex the task is. It can also be involved in the way an application works, such as a site that charges for a service, or a site where users transfer funds between each other for selling items, gambling, etc. These apps can even create their own currency for use within their ecosystem. A huge advantage of currency exchange via Ether on the Ethereum network is that these transactions are extremely fast, taking no longer than 15 seconds (new block creation time) plus the time to reach consensus. At the time of writing this, the median wait time is 35 seconds. This time will decrease further in the next iterations of Ethereum.
Aside from being able to fuel applications, Ether also functions as any other cryptocurrency does. It is used as an anonymous* ways to make purchases from an Ethereum wallet. If you’re familiar with how Bitcoin works, Ether can be used the same way. Spend it directly at any online storefront that accepts it or sell it on an exchange for cash, another currency, or anything else available.
Smart Contracts: What are they?
Smart contracts are scripts, which are typically written in Solidity. These scripts are built to autonomously carry out work on the Ethereum blockchain. They are fully self executing, self enforcing and self governed. You can think of them as autonomous, transparent, open source businesses which are available on the blockchain, and as such, are fully distributed. These distributed contracts take away the need for middlemen in most use cases. Along with their ridiculous fees, restrictive business hours, and long processing times.
ERC20 Token Standard
The ERC20 token standard is the Ethereum network’s formal definition of a token. This definition allows the developers of said tokens to write smart contracts which directly interface with the Ethereum network, and allow for these tokens to be recognized as valid currencies on the Ethereum network. As such, they are visible by Ethereum wallets, and easily transferred via the same channels as Ethereum.
How to best participate in ICOs (with parity node)
Here in this video, the example shown is referring to the past Aragon token sale, however the format are all similar for future token sales.
You'll need:
- the contract address from the official ICO site/email, (NEVER trust 3rd party links/addresses)
- the starting block number of the ICO, in our experience with the past BAT ICO, you can and should send it 1-2 blocks earlier to be among the very first to contribute in a frenzy sale.
- sufficient gas limit to participate, not to be confused with gas price. Be sure to confirm this on their slack channel/reddit/twitter if it isn't shown on their site
- if you wish, feel free to tweak the gas price higher depending on how kiasu you want to be in the ICO. higher fees means faster confirmations
For every ETH sent to an ICO contract, you'll receive equivalent amounts of tokens according to their exchange rates, most of the time it's instant, but that depends on how they structure the sale.
Ethereum Name Service
Hate copy and pasting addresses or scanning QR code? Wish you could send ETH and tokens just by typing in their names like Alice.eth? Well now you can!
A friendly reminder to take crypto security seriously
credit goes to /u/insomniasexx
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Eight months ago ETH was ~$13, phishing sites were everywhere, and too many people were losing ETH. Today ETH is ~$280, Bitcoin bloggers, low-entropy phrases, and Teamviewer hacks are (not quite) everywhere, but getting more popular, and too many people are losing ETH.
How can you protect yourself?
1. Get yourself a Ledger or Trezor Hardware wallet. They are less than 0.5 ETH now and a variety of wallets support them. There is really, really no excuse. https://www.ledgerwallet.com & https://shop.trezor.io/
2. If you don't want one of these nifty devices, use cold storage for a majority of your savings. Please. Pretty please.
3. Bookmark your crypto sites. Use those bookmarks and only those.
4. Turn on 2FA for everything. Go do it. Right now. Quit your excuses. Choose Google Authenticator over Authy. Don't use your phone number. Then, make sure your phone number is NOT tied to your Google account (look in privacy settings). Turns out, you and your BFF Mr. Hacker can "recover" access to your account via that number, completely destroying the point of 2FA. PS: Don't forget to cold-storage your backup words for these 2FA things. It's a huge pain when your phone goes for a swim and your entire life is 2FA'd. 😊
5. Do not use cloud storage (Dropbox, Drive, iCloud) for storing your keys :(Now your keys would only be protected by your cloud storage password. Also, see #4.
6. For Token Sales: do not trust any address except the one posted on the official site. Bookmark the URL before the sale, get the address from the URL from your bookmark at time of purchase. Do not trust any other source (especially a random bot on Slack). PS: When are token sales going to start using ENS names?
7. Double check the URL. Check it. Then, check it again right before entering any information. This is especially important for any sites that require usernames, passwords, email addresses, private keys, and any other personal information. SSL certs do not mean a site is trustworthy, just that they bought an SSL cert. Not sure about the correct URL? Cross reference Reddit, Twitter, Github, Slack and wherever else the project hangs out.
8. Triple check Github URLs. These are much easier to fake and much easier to miss. Instead of downloading from that random URL on reddit, seek out the URL on your own. Following the developers of these repos on Twitter, friending them on reddit (lol...but seriously it's nice because their name will be orange), or starring said repos on Github helps.
9. Always verify that the site you landed on is legit. Especially if you are about to entire your private key or download an application. What is legit? A service that people have used for a decent period of time with good results. If the URL has been registered in the last week or the site "just launched", err on the side of caution and avoid it for a while.
10. Google the service name + "scam" or "reviews". Scam sites rarely last long. Value real comments by real people over a random blog. Value a collection of information over a single source. Understand that legit services will likely have a mix of positive and negative reviews over a long period of time. Scam sites typically have no one talking about them, everyone yelling about how they got robbed, or the most perfect reviews ever. The latter one is just as red of a flag as the first one.
11. Don't ever run remote-access software (e.g. TeamViewer) ever...but especially not on a computer with keys on them. The number of security holes in these programs is atrocious. You 2FA your entire life, but then let a single string of characters give someone access to your entire computer & every account. 😱
12. Don’t click any link regarding anything crypto, money, banking, or a service like Dropbox / Google Drive / Gmail in any email ever. And if the scammy clickbait was simply too irresistible for you, don’t enter any information on the page.
13. Install an adblocker that actually turns off Google/Bing Ads. I recommend going with uBlock Orgin. If you are already using Adblock Plus, it does not hide Google Ads from you. Go into your Adblock Plus settings and uncheck the box that says “Allow some non-intrusive advertising”.
14. Don’t click on advertisements. With or without an adblocker, you should never, ever click on advertisements.
15. If you have accidentally visited or typed a malicious site, clean out your recent history and autocomplete. This will prevent you from typing kra… and having it autocomplete to the malicious krakken.com.
16. No one is giving you free or discounted ETH. Even for completing a survey.
17. The guys who just finish their token sale don't want to sell you tokens via Slack DM. Neither does that smokin' hot 125px x 125px avatar.
18. Lastly: use your brain. Think for a moment. Don't assume, ask. Don't blindly follow, question. If something doesn't seem right...if you feel like the luckiest fucker on Earth...or if you find yourself asking, "I wonder why I haven't seen this on reddit yet", there is likely a reason. 👍
A note about Ethereum Chamber scam
As some of you are aware, there was a scam site that was a clone of MyEtherWallet.com, but red. I was alerted to it via a Facebook message ~5am from a diligent user. That is one of 3 messages I received about it before our tweet went up at 1pm, not including the 5 from our internal team (thank goodness someone realizes our site isn't red!) Since that site has come to light, a number of folks have mentioned things like, "Oh yeah I saw it, I figured you guys were just rebranding" or "Oh weird. Yeah I figured it was a scam."
This site, which I thought was only a paid CoinTelgraph blurb at the time, was actually on a large number of Bitcoin blogs: podcasts, blogs, news sites, Twitter, the works.
How does this happen? How do a number of bloggers promote a direct (red) clone of MEW, people see it, and no one says anything? (The fact that all these bloggers & "news" organizations gleefully accepted money from a wallet site without Googling "ether wallet" or "Name of the Site" is a far too angry and long rant, but should not go unnoticed.)
Anyways! While the above post is all about the steps you should take to protect yourself, there is another one that is even more important:
Look out for one another Scammers thrive because they have victims -- because they know they can throw a stupid website out there and people will click it. Stop thinking, "Well, they shouldn't have clicked it" and start doing what you can to prevent people from making a mistake that will cost them their hard-earned coins.
• If you notice something looks like MEW, say "Hey, that looks like a clone of MEW! I wonder if they've seen it?"
• If you think that Github URL looks weird but you don't have the time to check, throw a "hey u sure thats rite url?" up there.
• If that reddit post is an unheard of wallet, leave a comment and report it with a "??????????" in the report reason.
• If the Token Sale you are participating it doesn't tell you explicitly when & where their address will be posted, ask them, in public, over and over again. If its not at least 24 hours before the Token Sale, question that choice, in public, over and over again.
• Remind people about best practices! If you've been visiting /r/ethereum for more than 3 months, you have 3 months on 25% of the people here. You are a bloody expert now. Time to put on your big boy pants:
• "@nooboob Remember the address will be posted on their website, NOT in this Slack."
• "It looks like this is an okay link, but it's not a good idea to click or install things from a random user on reddit. It could be malware."
There needs to be more due diligence everywhere, but this is easier diligence than most. It requires no advance knowledge or skills. You don't even have to be able to write good. Stay aware, trust your gut, ask more questions, trust the internet less, and google the fuck out of everything.
As I’ve mentioned before, I’m not covering hardware wallets, however I will say it’s pretty damn easy to move your newly bought funds to a hardware wallet. The best way to succeed with securing your funds into a Hardware Wallet is to simply follow the instructions from the manufacturer and reach out on reddit if you run into any issues. But follow the same overall guidelines and even if you are wanting to skip Paper Wallets for now, I recommend still reading through the following steps on creating a highly secure paper wallet...just so you can get the same principles to follow in dealing with your hardware wallet.
One of the most important things I stress with any new wallet is to always test everything with a very small amount, both ways (sending to and withdrawing from the wallet) and making sure the transactions all go through successfully before sending large amounts.
I’ve mentioned MyEtherWallet earlier and that is the method I’ll be walking you through to create your first Cold Storage Super Secure Wallet for your ETH stash. In some of the steps below, there is an alternative and easier approach, which is potentially less secure (depends on how vulnerable your computer and tech is or was). These alternate steps will be italicized and again, although easier do put your cryptocurrency at greater risk.
Now if you read the sections before, you’ll recall that a wallet consists not only of the public wallet address, where coins are sent...but also a private key that unlocks that address...allowing you to access the coins it holds. To generate a new wallet with the highest security requires a computer that has never seen the internet or any network before. Sure, you could generate a wallet on a computer that’s been online, etc...and maybe it’s secure and maybe you’ll be fine. But in the off chance that your computer is infected with some sort of virus or spyware, or in some way can make you vulnerable...why take the chance of putting thousands if not millions of dollars at risk? There’s no coming back from a cryptocurrency hack.
This is why we keep quiet about our stashes, why we use separate accounts for things, and why I encourage you...even if you use a hardware wallet...to create a paper/offline wallet following this part of the guide. It’s a little bit involved and may sound complicated, but it’s really not that hard and I hope I can simplify it and help you feel comfortable enough to do it. Part of this process involves creating a DVD that you can boot a computer from to do this work. I’m working on developing a bootable disk that will be prepackaged with everything you’d need to do this portion, that I could send to anyone who feels overwhelmed doing it themselves, but that will be in a few weeks at least until I’m able to get it created and ready to copy and mail to people. Let me know if it sounds like something you’d want and if enough people want it I’ll try to really prioritize that. Okay, now let’s get started! I hope I didn’t scare you away to thinking it’s too hard, it really isn’t just takes some patience to get things setup the first time, then it’s pretty easy after that.
Part 1 - Get an Offline Computer Setup
You don’t necessarily need a computer that has never been online to do this...as I just mentioned, I’ll show you how to create a bootable CD from which you can boot any computer, keeping it offline and running what’s called a “Live CD” version of Ubuntu (a linux-based operating system normally used to try out the Ubuntu OS before installing). What’s great about a Live Ubuntu CD is it will run a fully operational OS on pretty much any PC (sorry you will need access to a PC, not Mac) and from there you can open a saved copy of the myetherwallet website, to generate a new Ethereum wallet without ever going online. We’ll cover accessing this “offline” wallet later and how to transfer funds out of it...without it touching the web.
Step 1
Get your hardware ready, here’s what you need to have at your disposal:
- A PC - A writable DVD disc - A new, never used, USB Flashdrive (Any size is fine) - A USB Printer (you can also just write the public and private keys down, but it’s easier to print them and looks nicer for your records) - Packing tape or a laminator
Step 2 Visit Ubuntu.com and download and follow the instructions for creating/burning a bootable Ubuntu Live DVD. You can do this from a normal computer with a DVD burner, but preferably one that is definitely not infected! Maybe use a Mac and if you don’t have a mac, find a friend who will let you do this from theirs. Macs are just much less likely to be crawling with computer viruses! Ubuntu has a very easy to follow process for downloading an ISO (image file) that can then be used to burn a bootable DVD. This DVD will be used to boot your PC later.
Step 3 Visit myetherwallet’s git (this is where the latest build of their website software is securely updated to: https://github.com/kvhnuke/etherwallet/releases/latest At this page, under the "Downloads" section, click and download the file that name begins with "dist-" and ends in ".zip".
Step 4 Unzip the downloaded file to the new empty USB flash drive. It should just be a folder with an index.html file and other subfolders and files inside. The ZIP is about 20MB in size and inside is a folder called etherwallet-mercury or some other build name after the hyphen.
Step 5 Take your newly burned DVD and the USB thumbdrive containing the etherwallet folder, and keep them in a safe place. The USB drive will NEVER be connected to an online computer ever again! It should be solely dedicated to this use and only plugged into a computer booting off the new DVD you created. We’ll use these in just a moment to create your new secure wallet.
Part 2 - Creating your cold storage, offline, Ether wallet
Next you’ll generate your first official secure and offline ethereum wallet. To do this you’ll need the PC, new DVD and USB thumbdrive, and your printer or pen and paper.
Step 1 Disconnect any Ethernet cable plugged into the PC you will be booting to.
Step 2 Power off the PC, power it back on and insert the boot disk, then immediately reboot. DO NOT plug in the USB drive yet.
Step 3 Boot the PC using the bootable Ubuntu Live disk. Choose “Try Ubuntu” when it boots up...and you’ll be taken to a desktop with a menu bar. DO NOT connect an Ethernet cable or wifi, EVER during these Live boot sessions.
Step 4 After you’ve booted into the Live Ubuntu disk, and are sure it’s offline, plug in the USB flashdrive containing the web software from myetherwallet.
Step 5 It may not allow you access to the flashdrive, you may get an access denied message. That’s fine, simply press the key combination: CTRL ALT T, and a “Terminal” or “console” window will appear with a flashing command line prompt.
Step 6 Type the following and press Enter: sudo nautilus
Step 7 A new window should appear and on the left you’ll see drives listed...including a flash/USB drive, the one you plugged in….It’s important to point out, you should NOT have any other USB drives connected to the PC while doing this.
Step 8 Double click the drive and it will open this time, revealing the contents which should be the folder containing the website info from myetherwallet...of which there will be an “index.html” file.
Step 9 Double click the “index.html” file and it will launch in the browser of the live session and look, just like a regular webpage, as if you were online. It should, however, display an error that says something to the effect that you are not online...that it cannot communicate with a server, etc. This is fine, and expected.
Step 10 The page that displays by default is the Generate a new wallet page. So simply type in a long and unique sentence that you come up with. My recommendation is that you choose 9 words, rather than 9 characters and include spaces between each word. This is what we’ll call your Seed Phrase. If you are in a private and secure location, you can click the little “eyeball” to reveal the phrase you typed so you can copy it. Don’t click Generate yet!!!
Step 11 Create a new folder on your USB drive and call it “Wallet”.
Step 12 Back on the myetherwallet page, copy/paste your new Seed Phrase into a text file within that new “Wallet” folder on your USB drive...you can create a new text file by right clicking within the folder and clicking “New document > Empty document” then double click it and paste the phrase….rename the new document to “Seed Phrase”.
Step 13 Now click “Generate Wallet” back on the myetherwallet page and you’ll go through a few steps. Download the JSON file to the Wallet folder on your USB drive and then click the warning “I Understand. Continue.”
Step 14 Next it will display your Private Key and give you a Print button, so you can print your Paper Wallet.
Do two things: 1 - Copy your private key and paste into a new text file in your Wallet folder, name that file Private Key. Make sure it’s identical to the one you see on the web page!! 2 - Next, connect your USB printer to the computer and wait for it to be detected. If it’s not or you have issues with it, you can print to PDF and work on this later. Regardless, proceed by clicking Print. It will initiate a new tab in the browser and allow you to either print to your USB printer or to a PDF file and save that on your USB flashdrive in the Wallet folder. The printable Paper Wallet will have both the Address (public key) and Private Key, including QR codes for both.
Step 15 Back on the webpage, below the print section, click “Next: Save Your Address”
Step 16 You’ll be prompted to enter your Private Key or upload your json file to unlock your wallet. Because you’re offline, go ahead and copy/paste your private key from the text file you created in Step 14 and click “Unlock”. This will reveal your Wallet Address (Public Key) which was also visible on the Paper Wallet you printed.
Step 17 Store your paper wallet and the USB flashdrive in secure locations!!! That is your cold storage account!! But before you send large amounts of money to it, we need to test and make sure everything works and you have everything recorded correctly.
Part 3 - Test Send (Deposit)
To test your new wallet and make sure everything went as expected in the setup phase, you’ll need to actually send Ether to the wallet, check it’s balance and see the Ether arrive, and the send Ether from the new wallet out to your Coinbase account...and again check that the transaction goes through and that you have access to your new wallet. To perform this test, you’ll want to remain offline and you’ll be incorporating your smart phone for part of the test. But let me stress this: at no time will you need to connect the offline computer to the internet, ever, to send funds from it...it probably sounds weird and how is it possible to send money from an offline wallet. But the reason it works is the offline computer will generate a transaction ID that contains all the data the Internet needs to process a transaction...you’ll use your smartphone to send the transaction ID to the web, without having to enter your private key on your phone or on any online device. You enter the private key on the offline computer, unlock your wallet while offline, generate a transaction with the parameters you want (like the amount to send out) and it will generate a TX ID that your phone can then scan from a QR code and send to the blockchain, initiating a withdraw from your wallet! Pretty cool stuff. So here are the steps involved:
Step 1 First let’s send a small amount of ETH to the newly created offline wallet, go to your Coinbase account from your mobile device, preferably using the Coinbase app, and locate your ETH Wallet using the menu in the upper left of the screen. From your ETH wallet, either touch the little “paper airplane” looking icon in the top right of the screen, to initiate a Send.
Step 2 For this test, just send $2 worth of ETH. Enter the amount as USD and touch SEND. To make sure you are entering USD and not ETH amount, make sure the number on top is $0 when you arrive at the send screen...if it shows 0.00 ETH on top and $0 on the bottom, just touch the two arrows on the left and it will swap and put the $0 on top, where you can now enter $2. I point this out because 2ETH could be an expensive mistake if there were a problem during our test! Remember, anytime you send cryptocoin, use caution and make sure you entered things the way you expected to.
Step 3 The next screen is where you enter your newly created offline wallet address, so you can send this $2 test to that wallet. Rather than type in the wallet address, you can simply open the PDF you saved earlier or use the paper wallet you printed, and scan the “YOUR ADDRESS” QR code by touching the little QR looking icon in the To field on your smartphone. It will scan pretty quick and you’ll see the To field populate with the wallet address. Make sure it matches up to the printed “Your Address:” on the paper wallet. If part of it is cut off in the To field, just touch the To field and it will activate the text field so you can see the entire wallet address. After you confirm they match, on your mobile device select and copy the address in that To field and then paste it in your Notes or note taking app so if the test is successful, you have an easy to access way of copying and pasting that address in the future.
Step 4 When ready, simply touch “Send” in the upper right of the mobile device and it will prompt you for your PIN or fingerprint, etc. and send the ETH to your paper wallet.
Step 5 Sending/Receiving Ether can take a few minutes or seconds, depending on many factors, so the next step you’ll do is to check the progress of the funds reaching your new wallet on the blockchain...but you may need to keep checking for a few minutes before they arrive. To do this, from an online computer or the same online mobile device you’re using, open a browser and go to https://etherscan.io. Paste your new wallet Public Address (the same you just sent to) into the top search box and hit Enter or return.
A new page will display, showing the balance of that address, any transactions, etc. Near the bottom of the window you should see the new transaction you just placed processing or “pending”. After you see the transaction go through and no longer “pending”, you should see the balance on the etherscan page for your wallet reflect roughly what you sent to it. A very small amount of ETH is used in transactions as “gas” which is sort of like a tiny fee for doing a transfer...so that’s why it’s “roughly” what you sent. The amount of gas is very very small, we’re talking pennies basically. Not only can you look up your public wallet address on etherscan and see it’s current state, history of transactions, etc...you can also look up a specific transaction by transaction ID. We’ll talk a little about this when I cover sending from your offline/cold storage wallet. But suffice it to say, etherscan is an extremely useful site to keep tabs on things, balances, transactions and much more. You can also see the balance of anyone’s wallet using the same method and their transaction history. Remember, the blockchain is a public ledger.
Part 4 - Test send FROM your new offline wallet
Now that you have confirmed a successful send to your wallet, don’t send more just yet! First make sure you can withdraw from that wallet...while it remains offline of course. Again, we’ll be using a smart phone in tandem with this process to make it easier. This is also the same process by which you would do any future sends out of this Cold Storage wallet safely and securely without exposing the wallet’s private key to any network or prying eyes.
Step 1 On the Offline computer where you created your wallet, return to the browser that has the offline version of myetherwallet opened from earlier. In the future when you go to send out of this cold storage wallet, you’d boot from the disk like we did before, plug in the USB and open the index.html file to do this step. On that myetherwallet offline site, choose the menu item on the top that says “Send Offline”. Don’t fill in any fields yet.
Step 3 From your smartphone on that page, in the top field under Step 1: Generate Information, enter your cold storage offline wallet address...this is the address you just created on the offline computer and did your test send to. You should have copied and pasted that wallet address into your note app on your smart phone and you know it’s correct if the send test succeeded, so go ahead and copy and paste it into this Generate Information field in the browser of your smartphone. Then touch the “Generate Information” button.
Step 4 When you touch the Generate Information button, two new boxes appear below that button on the smartphone’s webpage. They are Gas Price and Nonce. You’ll need these exact values for the next step, so copy or write them down.
Step 5 Next you’ll need to know your balance in your offline cold storage wallet, so also paste that address into a new browser tab over at https://etherscan.io and then look for the ETH balance for the wallet. We’ll be sending half of this balance out back to Coinbase for this test, so write down approx half of the ETH balance number (not the USD equivalent)
Step 6 Now go to your Coinbase app to get your Coinbase ETH Wallet address. This is where you’ll be sending the test to from your offline wallet. To get this, open the app and navigate to your ETH Wallet. (make sure you are in the ETH Wallet, not the BTC) Then, in the upper right, next to the little “paper airplane” send icon, there’s a little QR looking icon. Tap it and you’ll see a QR scan screen open, at the top you’ll see an option called “My address”, tap it and you’ll see a large QR image and a link that reads “COPY ADDRESS” beneath it. Touch “COPY ADDRESS” and it will say “COPIED” when it has successfully copied it. Now paste this in your note app on your smartphone and make sure it’s not the same as your cold storage address...make sure it copied the new one. You can also write this down if it’s easier in the following steps to enter it on the offline computer, as you’ll have to enter it by hand on that computer.
Step 7 On the offline computer, you’ll go to the “Step 2: Generate Transaction” section of the offline myetherwallet page. Using the data you collected in the previous steps, fill out each field of “Step 2: Generate Transaction” except for “Gas Limit” and “Data”, these can be left alone for this test.
Step 8 You’ll then need to unlock using your private key...so open the text file you created earlier on the USB drive and copy and paste your private key in the field that appears when you select Private Key on the offline page....or upload the json file you downloaded earlier when setting up this offline wallet...and click Unlock.
Step 9 After unlocking, click the button “Generate Transaction” just below this unlock section of the page. A QR image will appear on the right which contains the Transaction ID (TXID).
Step 10 Using your smartphone, open a QR reader app (or download a free one and use it) and point your phone’s camera at the offline computer screen to read the QR TXID. The QR Reader App should provide the very long string of characters which constitutes the TXID. Copy it and return to your phone’s browser where you have the myetherwallet website open. On that same page, at the bottom, is a blank area to paste the TXID under “Step 3: Send / Publish Transaction”. Paste it there and touch “Send Transaction”.
Step 11 If all went well so far, the phone’s browser will produce a message that has a tracking link to track the transaction. You can touch that link to open the etherscan.io page where the transaction will show as processing or some similar message.
When it’s completed, it will show you the completed status and you’ll be able to check your Coinbase account and see an incoming deposit of the ETH to your Coinbase ETH wallet! Practice this a few times with small amounts, until you feel comfortable doing it with larger. And after I do a test send of a tiny amount, and it goes well, I do another of a slightly larger amount and make sure that goes well and THEN do the target amount. Get in the habit of always doing a couple tests before the real deal, to make sure you are not making some simple mistake that can cost you big. Also a note to reiterate on etherscan...some transactions take time, more than a few seconds and maybe more minutes than you feel comfortable with...so don’t panic until you are sure it’s not showing up. Usually it’s just delayed a bit if you don’t see it right away, especially when it comes to sending to an exchange.
FINAL STEP: Returning Online (IMPORTANT)
It’s important to do the following steps before you return online.
Step 1 Eject the USB thumbdrive, and store securely.
Step 2 Using a laminator or clear packing tape, laminate your printed wallet(s) and store securely.
Step 3 Eject the DVD and shut the computer down.
Noteworthy links to catch up on Ethereum news
https://www.reddit.com/r/ethereum/ - orange links are official releases from the core devs, also used to highlight important announcements. - mainly focus on the technology and adoption aspect of Ethereum, price discussions aren't allowed here. - core dev meetings are regularly held on the first and third Fridays of each month, there'll be livestream links and transcripts are provided a few days afterwards. - Pay attention to the upvote count for submissions, anything over 200 upvotes deserves a read.
https://www.reddit.com/r/ethtrader/ - Daily discussion threads are highly active and spammy, sort by top comments to filter out the noise and gain some cool and interesting insights from redditors. - Ignore the memes if you can, it's unavoidable when the price spikes to such level. - Pay attention to the upvote count for submissions/news links, anything over 200 upvotes deserves a read.
https://www.reddit.com/r/ethtraderpro/ - secondary subreddit by ETH veterans, handy to skip through junk comments as the place will be moderated. - all thread/comments deserves a read, ignore upvote counts.
http://www.weekinethereum.com/ - If you haven't subscribed to this weekly newsletter, do it now. - Covers almost everything that's related to Ethereum, and it's all free. - Spend some time going through all the interviews, they're all fascinating to read/watch.
https://www.smithandcrown.com/icos/ - ICO tracker, includes non-Ethereum ones as well - Please read, listen, and watch as much as you can, do tons of research before putting any money on these ventures, 9/10 of these WILL fail, but 1 of them will definitely make you rich. Tread carefully
https://www.meetup.com/Ethereum-Singapore/ Willing to travel to Singapore? You might get a chance to talk to Vitalik in person! Plenty of cool meetups are regularly held.
Crypto podcast links Read the show notes to pick your favorite topics if you find these overwhelming. Perfect to listen during daily commute
Love his accent, love his simple explanation on crypto stuffs, highly recommend to subscribe.
I'll add on a few points on why Ether (ETH) is valuable despite being permanently uncapped.
- Proof of Stake algorithm for public blockchain security. The more people use it, the more we need to secure it from malicious actors, thus ETH is being used to incentivize and to punish validators.
- autonomous programs and its exponential growth, the largest users of Ethereum will not be humans, and their wallets will be in the billions if we have unlimited scalability.
- Initial Coin Offering, ICOs bootstrapping the entire ecosystem by creating new opportunities and locking up ETH on its way.
- Prism exchange, each Prism created is backed by ETH, with more demand to speculate on the overall crypto market, expect more ETH gets locked up.
- Used as collateral for stablecoins and smart token platforms by Maker and Bancor respectively, same reason as above.
- Used to bid for Ethereum Name Service, if you want to obtain vanity names, you'll have to lock up ETH
- Will be used to incentivize data storage in SWARM, currently at PoC (proof of concept) 3, you'll be rewarded with tiny bits of ETH for hosting a full node and storing all of Ethereum's data.
Should I include such info into the guide? This gets repeated quite often
This post has been edited by WooTz: Jun 12 2017, 10:58 AM
Jun 10 2017, 12:08 AM, updated 5y ago
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I am not in the financial sector and am not a pro-trader. Just a normal guy and the following is only my opinion. You should do your own research and buy the coins which you think is good. Lose money don't blame me!
Before you stomp away upset, do note that the rates are quoted 
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