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Ways to store cryptocurrencies

Cryptocurrencies are an excellent way to provide for yourself financially and build an honest financial system. But what's the right way to save them? There are two ways to store cryptocurrency: 

- Hot storage. Hot storage means that you put cryptocurrency in special wallets that let you withdraw and use the funds you need at any time. These wallets are continuously connected to the Internet, so you can access them anywhere with Internet coverage. And almost everywhere civilization has reached has Internet coverage. This type of storage is like storing fiat money in an account with a debit card and online banking abilities. 

- Cold storage. Cold storage means storing cryptocurrency in wallets that are not connected to the Internet, i.e. offline wallets.  The wallet's private key is also stored offline, on a hardware device or paper. Cold storage is generally used for saving cryptocurrency - for large and very large amounts. It can be compared to storing valuables in a safety deposit box. 

You choose which storage method to use. But you should know that cold storage is safer: your keys are completely safe, because they are not stored on the Internet. Your coins are not vulnerable to hackers or thieves. 

The best option is a combination of hot and cold storage. Use hot storage to store the amount that you want to be constantly available. Use cold storage for large sums, i.e. your savings. 

In a subsequent article, we will provide a detailed description of the types of wallets used to store cryptocurrency.

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What is a Softfork for Cryptocurrency?

A softfork aims to improve the existing cryptocurrency network. It happens without users noticing the very moment of interference — they just take its consequences for granted.

Incomplete update

A softfork does not require a major interference with the cryptocurrency's master code, and all changes are backward-compatible. This is the main difference between a softfork and a hardfork, with the latter, roughly speaking, generating a new coin. A softfork happens within the existing network, and its objective is improving network operations without making significant changes.

It's a sort of regular software update we all have to make by uploading updated versions of old software, e. g. word processing or image editing apps. Old versions accumulate too many non-critical mistakes, or users request some improvements to be made. It leads to the need for an update; in case of cryptocurrency — for a softfork.

How it happens

In the Bitcoin network, a softfork happens as follows: the system is “rolled back” in time, and new blocks replace the old blocks while the chain of blocks remains unchanged. New blocks are identical to the old blocks in terms of structure. After the softfork, “old” blocks are validated along with the new blocks. All transactions before and after the softfork remain equivalent in value.

A softfork is usually administered by a team of developers after they discuss the idea with the user community. Since, however, cryptocurrency has an open source code, a useful change may be implemented by any user if they approach the community with an idea and the community approves of it.

The most well-known softfork in the Bitcoin network is SegWit that was successfully implemented without a hardfork.

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Jaxx Wallet: What It Is and How It Works

The Jaxx wallet is seen as one of the most popular wallets among cryptocurrency users.  This wallet is used for “cold” storage of coins; it has a mobile, web-based and desktop versions (the latter is a portable version you can store on and launch from a USB drive). It has no particularly unique features that would make it stand out among other wallets. Let's have a closer look at it.

Security

Many users think that Jaxx is one of the leading wallets in terms of security. Its set of features allows you to make backups and restore wallets on other devices, use the payment PIN code feature and obtain a private key.

What it can do
 - Jaxx is integrated with the ShapeShift cryptocurrency exchange allowing users to exchange coins within the wallet, even though for a fee.
 - You can use Jaxx to store BTC and ETH or some new coins growing in popularity. In total, it supports several dozens of coins.
 - The wallet can be used with Windows, Linux, OS X, Android and iOS. Additionally, you can set up the Jaxx extension by Google Chrome for your browser. You can also synchronize all wallet types on various devices.

How it works

You're recommended to download the Jaxx installation file via the official web-site jaxx.io. Select the suitable version of the program, download the installation file and install the wallet. In the process, you will be prompted to accept the Terms of Use.

You're recommended to select the coins you're confident you will use — don't overload the wallet.

Naturally, the most important recommendation is making a backup copy and saving the secret phrase which includes 12 words for this wallet.

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The dollar is used for illicit trade far more often than cryptocurrencies

Governments and central banks of many countries have repeatedly accused bitcoin and other cryptocurrencies of complicity in illicit trade and money laundering. They say that bitcoin is used to finance terrorists, sell weapons and drugs, etc.

We disagree with this view. To justify our position, we would like to cite the recent statement by the US Treasury Department, which personally refuted this torrent of negativity. The agency's representatives directly stated that fiat money, especially the dollar, is used for criminal purposes far more than bitcoin.

Criminals prefer fiat money

So, no matter what people say, officials indicate that criminals prefer dollars. Moreover, most trade happens through banks and various payment services that position themselves as law-abiding businesses.

According to the UN, illicit trade brings criminals an annual income of about $2 trillion. By comparison, cryptocurrency-based revenues from such activities are a drop in the bucket.

This statement by the US Treasury is an excellent response to all cryptocurrency detractors, who occasionally call for banning bitcoin because it is frequently used by criminals for illicit trade. Logically, the dollar should also be banned, since it is used for these purposes much more often. But nobody is demanding this.

This statement can also be regarded as a positive signal for cryptocurrencies' further development and legalization.

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Analysis of News Context for the Crypto Market

The crypto market is strongly dependent on the news. Traders — both bulls and bears that are basically in a real “war” — benefit from it. The “warfare” is also joined in by manipulators and conmen who try to make a stir and make money from random actions by traders.

Implications of the news context

The price of conventional assets, such as company shares, is based on capitalization, financial statements, and observable factors available for analysis. However, it's still unclear what the cryptocurrency market responds to as this market is very young, and a lot of factors remain to be identified and described.

At the same time, most traders acknowledge that news have a strong impact on the crypto market. Both bulls and bears leverage the news context to shift the cryptocurrency price in their favor. They arrange publications with a negative or positive market assessment or actively support the published articles in the mass media. The conventional asset market would view this behavior as a manipulation attempt that would possibly be punishable, but the cryptocurrency market is still underregulated.

Conmen also contribute to the news context, but more often they try to make a stir around a lesser known coin that is allegedly unique and about to “score a big win”, with its price rising and all those who have been able to buy it making profit. This is the so-called “pump hyping”. The new “promising” coin scores no “big wins” while the investors pay into the pockets of the conmen with real-value coins.

How news should be analyzed

To analyze the news context, select a few reliable sources that have been publishing news regularly, seamlessly and for a long time, at least a few years. There are web-sites that aggregate news from hundreds of sources, but you would have to prioritize them on your own.

A very useful source of news is the social networks and resources for experts.

However reliable a source is, you have to check each piece of news against multiple sources, especially if it's hyped-up news. No editions or specialized resources, not even the most reliable ones, are insured against fake news.

Below is a list of information types that could affect the price of cryptocurrencies:

- Any changes in legislation related to cryptocurrencies, ICO and blockchain. News about the coin being listed by a well-known crypto exchange.
- News about the coin partnering with a big player at the conventional market, such as a bank or a big corporation in the real sector.
 News about a top-class specialist from the real sector joining the team.
- Significant progress in developing the coin: release of new important software, a new stage in the development process, etc.

However, experience has proven that it's impossible to precisely tell that a particular piece of news is going to affect the market and how it's going to affect it. You just need to remain vigilant.

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What is a Node in a Cryptocurrency Network?

A node is, in essence, any computer connected to the blockchain network and using the P2P protocol. Nodes use this protocol to communicate with each other distributing information about transactions and blocks across the network. Strictly speaking, nodes are the key component of the blockchain network.

Nodes may be lightweight and full

A full node is any computer that is fully synced with the blockchain network. Each full node has a copy of all blockchain data — starting from the genesis block and ending with the last generated block — on its hard drive. After each new block is created, information is updated, i. e. it's always up-to-date.

A light node is also fully synced with the network, but it does not store all the information from the blockchain on its hard drive — it only services the network. Most nodes in the network are lightweight; however, full nodes form the backbone of the network.

What are nodes for?

All nodes support network operations: they automatically validate transactions and generate new blocks while protecting the network from fraudulent activities. In many networks, node owners (miners) are rewarded with new coins that are generated with new blocks.

[Metanoia]

Very interesting information but I didn't understand how to develop my own skills in blockchain technology. And how long will it take?

[Jaymes B]

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