Self Help

Bitcoin & Cryptocurrency Technologies Bitcoin Mining, Blockchain Basics And Cryptocurrency Trading & Investing For Beginners 7 Books In 1 - Weiser, Boris

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Matheus Puppe

· 87 min read

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Here is a summary of the 7 books included in the compilation:

Book 1 provides an introduction to Bitcoin and blockchain technology. It covers topics like how blockchain is connected to Bitcoin, the Bitcoin whitepaper, how Bitcoin mining works, the blockchain and how it secures transactions, and other core blockchain concepts.

Book 2 focuses on why Bitcoin was invented and the problems it aims to solve. It discusses Bitcoin fundamentals, mining, transactions, supply and demand, market manipulation and price predictions.

Book 3 examines attempts to identify the anonymous creator of Bitcoin, Satoshi Nakamoto. It discusses early timelines, writing styles, skills and potential candidates for who Satoshi could be.

Book 4 explains cryptocurrency wallets including hot wallets, paper wallets, desktop wallets, mobile wallets and cold wallets like hardware wallets. It provides guides on setting up various wallet options.

Book 5 profiles 17 privacy-based cryptocurrencies and how they aim to provide anonymity. It covers regulations and provides overviews of coins like Monero, Zcash, Dash and others.

Book 6 is about cryptocurrency trading and investing. It discusses tools, exchanges, taxes, technical analysis, market manipulation, options, leverage and strategies.

Book 7 focuses on margin trading using the dYdX platform, including lending, borrowing and utilizing trading bots. It provides step-by-step guides.

In summary, the collection aims to provide a comprehensive introduction to Bitcoin, blockchain, privacy coins and cryptocurrency trading for beginners.

Here are summaries of the specified chapters:

Chapter 6 Introduction to Trading Bots: Provides an overview of trading bots, what they are, how they work, and the benefits they provide for automating cryptocurrency trading.

Chapter 7-11 Trading Bots: Reviews several popular trading bots - TradeSanta, Shrimpy, Gunbot, Crypto Hopper, and 3Commas - describing their features, strategies, ease of use, costs, and overall pros and cons.

Chapter 12 Key metrics signals & Red flags: Discusses technical analysis metrics like volume, volatility, support/resistance levels, and other on-chain metrics that trading bots and traders can use as signals or red flags.

Chapter 13 Volume & Liquidity: Focuses specifically on the importance of trading volume and liquidity for successful trading.

Chapter 14 Project & Dev Activity: Explains how to analyze a cryptocurrency project based on its development activity levels.

Chapter 15 Comprehending the Project: Provides tips for thoroughly researching and understanding a crypto project before investing.

Chapter 16-25: Cover analyzing altcoins for 100x potential based on screening processes, metrics like volume/exchange activity, on-chain metrics, development activity, project uniqueness, and community adoption/support.

Chapter 26-30: Include trading tips focused on options strategies, analyzing parameters like moneyness, skew, and expiration dates.

Chapter 31-33: Cover bullish, bearish, and continuation candlestick patterns for technical analysis.

Chapter 34-47: Address trading psychology factors, step-by-step trading plans, order types, and checklists for successful trading.

  • Book 3 covers the evidence about Satoshi Nakamoto, the mysterious inventor of Bitcoin who implemented blockchain and deployed the first decentralized digital currency (cryptocurrency).

  • To succeed, Satoshi had to solve the double-spending problem through a consensus system eliminating trusted third parties.

  • Many companies claim to use blockchain without decentralization, which defeats the purpose. True cryptocurrencies like Bitcoin are decentralized and fairly distributed.

  • There is a large industry around Bitcoin including investing, trading, exchanges, wallets, news/media, but little focus is given to Satoshi. This book aims to shine a light on the mysterious architect behind Bitcoin.

  • Book 4 focuses mainly on cryptocurrency wallets - how to choose, create, and use various wallet types (online, desktop, mobile, hardware).

  • It covers buying cryptocurrencies from exchanges and transferring between hot and cold wallets.

  • The goal is to teach readers to confidently and securely manage their own wallets for investing, business payments, receiving wages, and more.

  • It compares pros/cons of different wallet types and teaches how to install, buy coins, exchange, and make transactions from each type of wallet.

In summary, Book 3 explores the evidence around Satoshi Nakamoto as Bitcoin’s inventor, while Book 4 provides a comprehensive guide to choosing and using various cryptocurrency wallet types.

  • Bitcoin is often confused as being the same thing as blockchain, but blockchain is the underlying technology that powers Bitcoin. Blockchain was first implemented for Bitcoin, but it is not limited to just Bitcoin.

  • Blockchain is a distributed database that is shared across a network of computers. It allows digital information to be recorded and shared in a way that makes it extremely difficult or impossible to change, hack, or cheat the system.

  • Blockchain works by grouping transactions together in blocks, and linking those blocks together in a chain. Each new block contains a cryptographic hash of the previous block, linking them together. This makes the blockchain very secure and unalterable.

  • Blockchain has the potential to disrupt and transform many industries in the same way the internet did. In the early 1990s, the internet seemed like an obscure technology but it eventually grew to become transformative. Blockchain may follow a similar trajectory as applications and uses are discovered.

  • While still early, blockchain offers improvements in transparency, access, and efficiency over traditional centralized systems due to its decentralized and distributed nature without a single point of failure or control. Its potential uses are still being explored and developed.

  • Chapter 2 provides a brief history of finance, from bartering with food as one of the earliest forms of currency, to precious metals like gold and silver, to the introduction of paper money. It outlines some of the flaws with different currencies over time like rotting food and devaluation of paper money.

  • Electronic payments like SWIFT and debit/credit cards emerged with the digital age, allowing fast international transfers. Third party digital payment platforms like PayPal further enabled secure online transactions.

  • Bitcoin was launched in 2008 as the first digital currency not controlled by any government or bank. It uses blockchain technology and is decentralized. Initially few were interested but it is now one of over 7600 cryptocurrencies.

  • Chapter 3 provides fundamentals about Bitcoin, noting it exists only in digital form on computer hard drives worldwide. It has fluctuated in value but steadily increased over time, reaching almost $20,000 in 2017. The total number of Bitcoins created follows a set production schedule that halves over time.

In summary, it traces the evolution of currencies and payments from a historical context leading up to the introduction of decentralized digital currencies like Bitcoin and blockchain technology.

  • Between 2020-2024, 6.25 Bitcoins will be created each time the block reward is halved, until the total hits 21 million Bitcoins. The exact dates of future halvings can be found at

  • The Dark Web allows for anonymous/untraceable transactions using Tor network. It has gained a bad reputation as some crimes are coordinated there and payment is often requested in Bitcoin. However, criminals are not the sole users of Bitcoin - it aims to benefit the billions without access to traditional banks.

  • Hackers have targeted individual Bitcoin wallets/accounts, as the value has grown substantially. Users must take precautions like enabling security features and backing up their wallets.

  • Some notable uses of Bitcoin include WikiLeaks continuing operations thanks to anonymous donations, and providing humanitarian aid across borders efficiently.

  • Popular online and brick-and-mortar retailers accepting Bitcoin are growing, including Microsoft, Expedia, Subway, shops in major cities. Gift cards also allow use on Amazon, Walmart and more.

  • Many people remain unaware or misinformed about Bitcoin due to lack of proper research. Initial impressions focused on crime rather than the technology itself. Understanding requires sustained effort to comprehend blockchain.

  • The 2008 financial crisis caused widespread economic problems around the world like falling property prices and high unemployment.

  • Most people got their news from mainstream media which some argue manipulates information to create fear and control public opinion/beliefs. Controlling media is seen as a way to influence large groups of people.

  • In October 2008 shortly after the crisis, a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was published online by someone using the pseudonym Satoshi Nakamoto. It proposed a new digital currency and blockchain technology.

  • As the technology was not covered in mainstream media, it went largely unnoticed at first. However, over time Bitcoin and blockchain grew in popularity and importance.

  • The true identity of Satoshi Nakamoto is still unknown. Various individuals have been speculated to possibly be Nakamoto but none have been confirmed. The mysterious origins of Bitcoin and its creator remain an area of ongoing interest and debate.

  • Craig Wright claimed to be Satoshi Nakamoto, the creator of Bitcoin, in 2016 but failed to provide convincing evidence. He posted apologies and then withdrew his claims.

  • Nick Szabo is considered a top candidate by some researchers. He had previously conceived of a digital currency called “Bit Gold” and his writings bear similarities to the Bitcoin whitepaper. However, little is known about his true identity.

  • Some believe Satoshi Nakamoto could refer to a group or team rather than one individual, given the complexity of creating Bitcoin. Craig Wright said he had help in developing it.

  • Most in the Bitcoin community remain skeptical of Wright and don’t believe any single person identified so far is Satoshi. The true identity remains unknown, with multiple theories but no proof supporting any one candidate. Debate continues around who or what group is responsible for Bitcoin’s creation.

  • Blockchain technology is highly complex and required clear thinking from those who developed it to fully understand every detail. It is unlikely the work of a single mind by mistake, but rather the result of a team working together intently.

  • Nick Szabo and others involved in early internet development may have had the background and skills to create blockchain, rather than other speculated individuals like an Australian businessman or Japanese man with no relevant experience.

  • Over a decade later, there is still no conclusive proof of the real identity of Satoshi Nakamoto, the anonymous creator(s) of Bitcoin and blockchain technology. Different theories remain possible depending on when one considers this question.

  • The distributed ledger system, like a family tree, records all cryptocurrency transactions and continually updates account balances. It is anonymous but public, holding power over funds but lacking centralized control vulnerable to seizure.

  • Miners play a crucial role in validating transactions by competing to solve blocks and add them to the verified blockchain, earning new bitcoins in the process. Large mining pools now dominate this work conduced worldwide on the decentralized network.

  • Miners group individual transactions received on the Bitcoin network into blocks. They validate transactions and add them to a new block.

  • Miners then “seal” the block by solving a complex mathematical puzzle. The first miner to solve the puzzle and seal the block is rewarded with newly created bitcoins.

  • Each sealed block is then added to the blockchain, the distributed public ledger of all transactions. By adding blocks in this way, the blockchain continues to grow in length.

  • When a miner seals a new block, it is added to the blockchain and the miner receives bitcoin as a reward. Originally the reward was 50 bitcoins per block, but it gets halved every few years. Currently the reward is 6.25 bitcoins per block.

  • This process of miners validating transactions, sealing blocks, and adding them to the blockchain is how new bitcoins are continuously created and distributed to miners, serving as an incentive for them to participate in validating transactions on the network.

The passage defines and discusses different types of geeks, including those who are obsessed with video games or new software/tools. It then talks about how blockchain technology is enabling new forms of online gaming where people can earn an in-house cryptocurrency by contributing computing power.

Blockchain is also enabling new platforms for music, movies, social networking, smart contracts and more. Decentralized applications are being developed for crowdfunding, healthcare, supply chains, and blogging.

Internet of Things combined with blockchain has potential at both small and large scales, allowing physical devices to securely share data. This could improve efficiency for things like smart homes and cities.

The current banking system is centralized and has issues like inflation, easy counterfeiting of paper money, and barriers to access. Blockchain-based currencies like Bitcoin offer an alternative that is decentralized, scarce, cannot be counterfeited, has near-zero transaction fees, and anyone can access simply by downloading a wallet app. This could benefit the 1.7 billion people currently unbanked.

While changes to the financial system may take decades to implement fully, the new technologies now exist to enable alternative payment methods beyond traditional banks and currencies.

The banks are realizing that blockchain and cryptocurrencies could significantly disrupt the existing financial system. As blockchain technology takes over more aspects of payments and transactions, the traditional roles of banks could be under threat.

In response, many banks are now exploring creating their own cryptocurrencies. The idea is that if blockchain becomes widely adopted, the banks want to be prepared and have their own crypto assets and payment networks in place. That way if people and businesses increasingly use cryptocurrencies instead of traditional money, the banks will still have a role in facilitating those transactions and currencies.

Rather than resisting blockchain, the banks see an opportunity to adapt to the new technology and potentially stay relevant if it does become the dominant financial infrastructure of the future. By launching their own cryptocurrencies now, the banks aim to participate in and help shape the emerging blockchain economy in case it takes off on a large scale.

A digital signature uses cryptography to authenticate a document and provide integrity, authentication, and non-repudiation. It works by hashing the document data and then encrypting the hash with the sender’s private key. This encrypted hash is the digital signature. When receiving the document, the recipient decrypts the digital signature with the public key to obtain the original hash. They then hash the received document and compare the hashes. If they match, it verifies that the document came from the purported sender and was not altered in transit, fulfilling the properties of a digital signature. Digital signatures provide a more secure alternative to handwritten signatures, as they cannot be easily forged and allow signing documents electronically to speed up processes like contracts. They have been widely adopted for paperless signing of documents via email and mobile apps with digital identities.

Elliptic curve cryptography is a form of public-key cryptography based on the algebraic structure of elliptic curves over finite fields. It can provide stronger security than non-elliptic curve algorithms for the same key size.

The security of elliptic curve cryptography comes from the difficulty of solving the elliptic curve discrete logarithm problem. This is harder than integer factorization or discrete logarithms in finite groups.

To perform operations like point addition and doubling on an elliptic curve, geometrical concepts are used. Addition of two points involves drawing a line through them to find the third point of intersection with the curve. Doubling a point involves drawing a tangent line through that point.

This allows performing scalar point multiplication, which is the basis for public-key encryption and digital signatures. Repeated point doubling and addition corresponds to repeated exponentiation in normal number systems.

The difficulty of solving the elliptic curve discrete logarithm problem, even with quantum computers, means elliptic curve crypto is expected to provide strong security even as computer power increases, with smaller key sizes than equivalent non-elliptic curve algorithms. This makes it an important cryptosystem.

  • A vanity address is a Bitcoin address that has a custom prefix or suffix chosen by the owner for branding or recognition purposes.

  • It can take a long time (hours or days) to generate an address with a vanity string of 4+ characters due to the cryptographic difficulty. Shorter strings (1-3 characters) are faster.

  • Vanity addresses only customize the public key/address, not the private key, which remains randomly generated.

  • Some services allow generating vanity addresses, but they should use a split-key technique where the service only knows the public key portion, to avoid private key theft risks.

  • Vanity addresses could be used for branding businesses, donation addresses, or services, but there is a risk of hackers generating addresses to mislead or scam users if not used carefully. Overall generation of vanity addresses is meant more for recognition than security purposes.

  • The double spending problem refers to the issue in digital currencies of being able to duplicate and spend the same funds multiple times. This is avoided in blockchain through the distributed ledger system.

  • Early electronic cash systems from the 80s tried to solve double spending through a centralized third party that would verify transactions. But this had disadvantages like fees, censorship risk, and lack of accessibility.

  • Blockchain solved double spending without third parties by using a distributed peer-to-peer network where every node has a copy of the transaction ledger. Through cryptographic proofs and consensus algorithms like proof-of-work, the network can agree on the valid transaction history without central control.

  • In blockchain, transactions are grouped into blocks which are chained together. Each block contains a hash referring to the previous block, maintaining the chain. Blocks are added through mining by solving cryptographic puzzles. This process validates transactions and adds new blocks to the distributed ledger across the network.

  • Forks can occasionally occur when different chains are produced simultaneously by miners. The longest valid chain is considered the main blockchain while shorter forks are orphaned. Block height refers to the number of blocks in the chain from the genesis block.

  • Blockchains regularly experience temporary forks when multiple miners solve the hash puzzle nearly simultaneously, creating competing blockchains (forks). The longest fork becomes the main chain as it has the most computational work behind it.

  • Miners should always work to extend the longest chain. In the example given, 70% of miners worked on fork A, making it the main chain. Miners who solved puzzles on the shorter fork B saw their blocks become orphaned - they do not receive block rewards or transaction fees.

  • Testnets like Bitcoin testnet are separate blockchains miners can use to experiment without risking real cryptocurrency. Testnet coins have no value. Developers can also obtain small amounts of testnet coins from faucet websites.

  • Segregated Witness (SegWit) was proposed to address Bitcoin’s 1MB block size limit by removing signature data (witness) from transactions. This creates more block space and allows more transactions per block.

  • Although signatures are removed, they are still needed for validation. SegWit stores them in an extended block to avoid changing the blockchain protocol. This simultaneously addresses transaction malleability issues.

  • Transaction malleability is where unauthorized changes can be made to transactions, changing the transaction ID, which causes issues for things like payment channels and lightning networks. SegWit fixes this by basing transaction IDs only on non-signature transaction data.

  • The Lightning Network is a layer 2 scaling solution for Bitcoin that allows for millions to billions of transactions per second using smart contracts.

  • It aims to enable near-instant, low-cost payments even smaller than a penny without having to wait for blockchain confirmations that take 10 minutes on average.

  • It works by setting up payment channels between two parties where funds can be transferred instantly many times without hitting the underlying blockchain until the channel is closed.

  • This bends the rules of Bitcoin since normally each transaction needs to be broadcast, included in a block, and confirmed, which takes time. Lightning allows instant off-chain transfers.

  • It promises no transaction fees, unlike on-chain Bitcoin transactions which often have growing fees as usage increases.

  • Its goal is to make microtransactions feasible and allow payments that update in real-time like getting paid every second instead of weekly or monthly as an example.

  • It could benefit both users and businesses by enabling more flexible and lower-cost payment systems on top of cryptocurrencies like Bitcoin.

In summary, the Lightning Network aims to massively scale cryptocurrency payments by allowing instant, low-fee transactions through off-chain payment channels and smart contracts.

  • Money has existed as long as human civilization, starting with bartering of goods like food and eventually transitioning to rare objects as a medium of exchange. Precious metals like gold became widely used as commodity money.

  • Gold had issues as money due to its physical properties - it is heavy, difficult to validate, divide and transport. Paper money backed by gold emerged but evolved into unbacked fiat currency issued by central banks.

  • Fiat money has problems like inflation from continued printing and difficulty transferring physical bills. This led to the emergence of digital payment systems like SWIFT in the 1970s, which processes international bank transfers via electronic messages. Visa, debit/credit cards, ATMs allow for faster digital currency transactions compared to physical cash.

  • Cryptocurrencies like Bitcoin emerged as an alternative form of digital currency that uses cryptography instead of central authorities to validate transactions on a decentralized network, avoiding issues with fiat money and retaining advantages of digital currency speed. This was a major technological innovation combining finance and cryptography.

So in summary, the history shows a progression from bartering to commodity money to government-backed currency to modern centralized digital payments, with cryptocurrency introducing a new decentralized digital model using cryptography.

  • Trusted third parties like banks and payment processors are centralized entities that charge fees and can restrict access to funds or deny transactions. This is problematic as seen during financial crises when banks failed and restricted withdrawals.

  • Quantitative easing is when central banks like the Federal Reserve print more money to inject into the system, usually during economic downturns. However, excessive money printing can lead to high inflation.

  • The double spending problem refers to the ability to duplicate and spend digital files or currency more than once. This is only possible with digital/cryptocurrencies without validation.

  • Early digital cash systems like DigiCash and E-gold tried to solve this but ultimately failed or were centralized. Cryptographer Nick Szabo also proposed a system called Bit gold.

  • In 2008, Satoshi Nakamoto introduced Bitcoin, the first decentralized cryptocurrency based on blockchain technology. This solved the double spending problem through proof-of-work validation without centralized third parties.

  • Bitcoin sparked interest in cryptocurrencies but many subsequent coins are still centralized under certain authorities, unlike Bitcoin which remains the most decentralized network.

  • Centralization means giving authority to a single entity, while decentralization means no single point of control through distributed networks like blockchain.

  • The passage discusses the origins of centralized and decentralized networks. Centralized networks have top-down control, with managers making decisions. Decentralized networks like Bitcoin allow anyone to participate freely.

  • Centralized entities like banks each have their own private ledgers, so a third party is needed for transactions between banks. In contrast, Bitcoin uses a shared, public distributed ledger (blockchain) where all nodes validate transactions.

  • While Bitcoin is peer-to-peer, it still relies on centralized internet service providers (ISPs) for network infrastructure. However, there are many ISPs worldwide, so shutting down the whole system would be difficult.

  • The development of decentralized digital currencies like Bitcoin was inspired by the cypherpunk movement of the 1990s. Cypherpunks advocated for privacy-enhancing technologies and using cryptography to defend privacy.

  • Important early cypherpunk projects included PGP encryption, BitTorrent, TOR anonymity network, and Nick Szabo’s proposal for digital scarcity called Bit Gold, which influenced Bitcoin.

  • Satoshi Nakamoto is the pseudonym of the person or group who invented Bitcoin and built the first blockchain system, solving issues like the double-spend problem. However, Satoshi’s true identity remains unknown.

  • The passage then transitions to discuss blockchain basics and transaction validation in decentralized networks like Bitcoin.

  • Bitcoin uses a decentralized distributed ledger called the blockchain to record all transactions. This ledger is maintained by a network of nodes rather than a centralized authority.

  • Anyone can view the blockchain but only those with private keys can access specific wallet addresses and funds. This allows users to be their own bank without a central intermediary.

  • New bitcoins enter the system through the process of bitcoin mining. Miners use specialized computer hardware to validate transactions and add them to blocks.

  • Miners compete to validate blocks by solving complex cryptographic puzzles. The first miner to solve a puzzle gets to add the block to the chain and receive a reward of newly minted bitcoins.

  • This process occurs approximately every 10 minutes and the difficulty is adjusted every 2016 blocks to aim for a 10 minute block time. As more mining power joins, the puzzles get harder.

  • The block reward started at 50 BTC per block and halves approximately every 4 years. This implements a fixed supply schedule of 21 million total bitcoins.

  • If two miners solve a block simultaneously, they must continue competing to solve the next block puzzle. The chances of multiple simultaneous solutions decreases exponentially with each attempt.

  • Miners play a key role in validating transactions, adding blocks, and securing the network in exchange for block rewards and transaction fees. This incentives decentralized participation without a centralized authority.

  • Bitcoin transactions are near-instant but take about 60 minutes on average to be validated with 6 confirmations due to the mining competition and chance of two miners solving blocks at the same time.

  • Bank transfers can also appear instantly in your balance but international transfers and between different banks can take 3-5 days or even longer for full confirmation as banks settle with each other.

  • The Bitcoin block reward that miners receive gets halved approximately every 4 years until all 21 million Bitcoin have been mined, around the year 2140.

  • As the block reward decreases, transaction fees will provide income for miners to continue processing transactions and keeping the network secure.

  • The price of Bitcoin is determined by supply and demand - the supply is fixed at 21 million Bitcoin but demand has been growing over time, pushing the price up as supply decreases with each halving event.

  • Network effects also contribute to increasing demand and price as more people hear about and adopt Bitcoin over time, driving further adoption and interest in the cryptocurrency.

  • ATMs and other devices that enable easier access to Bitcoin can also help grow the user base and overall network effects.

In summary, it describes the mining and validation process, factors influencing Bitcoin’s price, and how network effects play a role in its adoption over time.

Here are a few key points about when is the best time to buy Bitcoin:

  • There is no definitive “best” time, as Bitcoin prices are volatile and unpredictable in the short term. Prices could go up or down after purchasing.

  • In the long run, cryptocurrency experts argue that buying Bitcoin when prices are low compared to where they ultimately go has generally been a good investment strategy. However, past performance is not a guarantee of future results.

  • Dollar cost averaging, or buying a set amount regularly over time, can help average out the price and reduce risk compared to trying to time the market’s ups and downs.

  • Bear markets when prices may have further to fall can seem risky to buy, but also represent an opportunity to accumulate at lower prices than bull markets. No one can predict the bottom.

  • Factors like adoption rates, technology improvements, and perceived value and utility of Bitcoin over time ultimately drive long term price appreciation, not short term volatility.

  • For most average investors, focusing on holding Bitcoin for several years rather than short term trading is a safer strategy to benefit from potential long term gains if adoption continues.

So in summary, while no one can predict the perfect time, a consistent dollar cost averaging approach helps balance risk over investing a lump sum at any one price point. The long view is what really matters.

The passage discusses when is the worst time to invest in Bitcoin based on past experiences. It mentions that investing due to FOMO (fear of missing out) is usually not a good idea, as people tend to buy high during hype cycles and then panic sell low.

The author provides an example from 2017-2018 where they felt FOMO and tried to buy at $11k but couldn’t due to exchange issues, and then the price rose to $14k anyway. It then correction to $11k again and entered a long bear market.

They advise educating oneself on Bitcoin before investing instead of acting on hype or news. If one doesn’t have time or expertise to learn, hiring an advisor is recommended. Investing incrementally over time rather than lump sums is also presented as a strategy to average costs.

In summary, the key points are that investing due to FOMO during hype cycles typically leads to poorer entry prices, and taking time to understand Bitcoin before committing funds is advised over panic purchases driven by emotions or headlines.

Here are some key countries where Bitcoin is accepted as a legal payment method:

  • United States: Bitcoin is legal and accepted by many companies as a payment method. However, regulations vary by state.

  • Japan: Bitcoin is considered a legal payment method since 2017. Many large retailers accept Bitcoin payments.

  • Canada: Bitcoin is legal and some merchants accept Bitcoin as a payment method, but it is not uniformly regulated across provinces.

  • UK: Bitcoin is legal and allowed as a payment method, though not regulated uniformly across the UK. Some larger companies accept Bitcoin.

  • Switzerland: Bitcoin is legal and accepted by some merchants as a payment method. Zug became the first city to accept Bitcoin for tax payments.

  • Germany: Bitcoin is legal and accepted by some merchants, though faces some regulatory uncertainty at a national level.

  • Singapore: Bitcoin is generally allowed and accepted by some companies, though the law around Bitcoin is still evolving.

  • South Korea: Bitcoin is legal and some larger merchants accept it for payments, though regulations are still developing.

  • Australia: Bitcoin is legal and accepted by some merchants, but regulations vary by state. Overall viewed as a medium of exchange.

Here are the key points about Satoshi Nakamoto’s cryptography skills and expertise based on the information provided:

  • Satoshi had expertise in economics, monetary history, peer-to-peer and distributed computing, databases, and cryptography in addition to being a competent C++ programmer. This broad, multi-disciplinary knowledge was crucial for designing and implementing Bitcoin.

  • While not necessarily the best programmer, Satoshi was able to code effectively in C++ to create the initial Bitcoin software and blockchain. 80% of the early code has since been modified as the network has grown and scaled.

  • Cryptography was a particularly strong skill area for Satoshi. However, unlike some other cryptography experts who invented new systems, Satoshi built Bitcoin using existing, proven cryptographic techniques rather than trying to invent anything novel. This suggests he wanted to avoid potential failures by relying on cryptography that was already established to work securely.

  • Evidence indicates Satoshi used a PC for developing Bitcoin, rather than a Mac. This required additional work from others to make the software compatible with other operating systems beyond the early focus on PC.

In summary, Satoshi exhibited expertise across several technical fields necessary for Bitcoin, with a particular strength in cryptography, even if relying on established techniques over novel invention. Coding abilities were sufficient for the task, though others have since refined the code significantly.

  • Satoshi demonstrated strong communication skills through calm, precise responses on forums even to repeated questions. He was never proud or boastful.

  • Satoshi was not financially motivated at all, never selling over 1 million bitcoins he owned which would be worth billions today. He also never patented the Bitcoin software design.

  • The genesis block contained a headline about banks seeking another bailout, indicating Satoshi’s views on the financial system and money printing.

  • Satoshi provided a birthdate on a forum that aligned with key events around governments confiscating gold, suggesting affinity for bitcoin as digital, uncensorable gold.

  • The Bitcoin code was released under an open-source MIT license to spread it widely and allow unlimited modifications, indicating careful consideration of legal aspects.

  • Some argue Satoshi must have been a group given the diverse skills involved, though he occasionally used plural “we” in writings, fueling that theory. However, others argue a exceptionally gifted individual could gain expertise across those domains. The true identity remains unknown.

  • The passage discusses three potential candidates for being Satoshi Nakamoto, the mysterious creator of Bitcoin.

  • The first candidate is Dorian Nakamoto, who was identified by Newsweek in 2014. However, Dorian denied any involvement in Bitcoin and his writing style did not match Satoshi’s. Most agree he is not Satoshi.

  • The second candidate is Craig Wright, who publicly claimed to be Satoshi in 2016. However, he failed to conclusively prove his identity and his actions promoting Bitcoin Cash went against Satoshi’s vision. Most consider him a “fake Satoshi.”

  • The third candidate discussed is Adam Back, who some argue is a more credible potential match for Satoshi based on his technical background, disappearing in 2005 just before Bitcoin, and relation to early blockchain concepts like Hashcash. However, Adam has never claimed to be Satoshi and thinks it’s better the true identity remains unknown.

  • In summary, the passage explores some individuals who were proposed as possible candidates for being Satoshi Nakamoto, but ultimately concludes none have been proven and the real Satoshi’s identity remains uncertain and possibly anonymous by design.

The interviewee discusses Hal Finney as a possible candidate for being Satoshi Nakamoto, the mysterious founder of Bitcoin. Some key points:

  • Hal Finney was one of the earliest Cypherpunks involved in projects like PGP and a proof-of-work system called RPOW.

  • He corresponded frequently with Satoshi Nakamoto in 2008-2009 when Bitcoin was first being developed. Finney received the first ever bitcoin transaction.

  • Finney was an early adopter of Bitcoin and mined some blocks in 2009 before stopping due to noise from mining hardware.

  • Finney expressed admiration for Bitcoin and wanted to help Satoshi set up the network, but thought Satoshi was likely a young Japanese-American programmer.

  • Finney passed away in 2014 after publicly discussing his involvement in the early Bitcoin project, but maintaining he was not Satoshi.

  • His extensive early work in cryptocurrency and close ties to Satoshi make Finney a prominent figure in theories about the real identity of Bitcoin’s founder.

In summary, the interviewee presents Hal Finney as a key early Bitcoin developer and associate of Satoshi Nakamoto’s, but notes Finney denied being the mysterious founder himself.

Here are the key points about Hal Finney potentially being Satoshi Nakamoto:

  • Hal Finney was one of the earliest cryptocurrency pioneers, working on PGP encryption and being involved with the Cypherpunks movement.

  • He was in close contact with other early crypto thinkers like Wei Dai and Nick Szabo, whose work is seen as precursor to Bitcoin.

  • Hal was the first person other than Satoshi to run the Bitcoin software after it was released in 2009. He received the first ever Bitcoin transaction from Satoshi.

  • The timing lines up - Hal retired in early 2011 due to an ALS diagnosis, around the same time Satoshi stepped away from Bitcoin development.

  • Hal lived near Dorian Satoshi Nakamoto, the man wrongly identified by Newsweek as Satoshi. This could explain using that pseudonym.

  • Some theories suggest Hal and Nick Szabo collaborated as “Satoshi”, drawing on each of their past work, with Hal doing the coding.

  • Neither RPOW (Hal’s proof-of-work concept) nor Nick’s Bit Gold are cited in the Bitcoin whitepaper, possibly to hide their involvement.

So in summary, while not definitive, the evidence suggests Hal Finney is a strong Satoshi candidate, perhaps working together with Nick Szabo under the Satoshi pseudonym due to their shared interests and expertise in cryptocurrency. The timing of key events also aligns with this theory.

Here are a few key points about how and why Satoshi Nakamoto left the Bitcoin project based on the information provided:

  • Satoshi’s last forum post was on December 12, 2010, but he continued replying to emails until April 2011.

  • His last email to Gavin Andresen on April 26, 2011 mentioned that he had “moved on to other things” and would likely be unavailable going forward.

  • Some possible reasons for leaving include accomplishing his initial goals of getting Bitcoin off the ground with an active community and developers; preferring invention over supporting existing projects; avoiding weaknesses if unable to solve new problems; and potential legal/prosecution issues from agencies like the NSA.

  • Satoshi left abruptly without directly announcing his departure or providing clear reasons. He simply stopped communicating at a certain point, leaving the project in the hands of others to continue developing.

So in summary, while the specific motivations are unknown, Satoshi seems to have quietly disengaged from Bitcoin by April 2011 after the initial launch and growth period, potentially for personal reasons or to avoid scrutiny as the project gained more attention. His exit was sudden but left the increasingly self-sustaining community to carry Bitcoin forward.

  • The person is speculating on possible reasons for why Satoshi Nakamoto left the Bitcoin project and disappeared.

  • One idea is that as Bitcoin grew in popularity and value, Satoshi may have realized he could face legal troubles or jail time if his role was discovered, so he chose to remain anonymous. His consistent use of pseudonyms supports this.

  • Another scenario is that Satoshi was actually Hal Finney, a early Bitcoin developer who later got very ill. It’s possible Satoshi slowly transitioned out of the project as Finney’s health declined, without revealing his true identity.

  • Overall the disappearance allows for endless speculation but we may never know for sure who Satoshi really was or why he left. The decentralized nature of Bitcoin now means no single person can control it.

  • While his Satoshi’s identity remains a mystery, Bitcoin has grown far beyond what its origins and continues to operate successfully without its founder.

Here is a summary of the key points about different types of cryptocurrency wallets:

  • Cryptocurrency wallets provide access to your cryptocurrency funds, but the coins are not actually stored in the wallet. Rather, the wallet contains the private and public keys that allow you to access and transact coins stored on the blockchain.

  • There are different types of wallets categorized as hot wallets and cold wallets based on their level of security and connectivity.

  • Hot wallets are accessible via the internet and have higher risk of being hacked. They include software/mobile wallets and web-based wallets.

  • Cold wallets have no internet connectivity, providing the highest security. Common types are hardware wallets and paper wallets.

  • Each wallet contains a unique private/public key pair that is used to authorize transactions. The private key should be kept highly secure.

  • Some important factors to consider include transferability between wallets/devices, stability/durability over time, security against hacking or theft, and ability to serve as a long-term store of value.

  • Popular wallet brands include Exodus, Electrum, Ledger, and Trezor. Choosing the right type depends on one’s priorities around convenience, security, amount of funds, and intended use.

In summary, wallets provide access to cryptos but don’t store them directly. Different types have tradeoffs between security, connectivity and usability. Private keys should always be properly backed up and secured.

  • Online or “hot” wallets refer to cryptocurrency wallets that are connected to the internet. One example is a wallet, which allows storing and accessing bitcoins online for free on desktop or mobile.

  • Hot wallets are easy to set up but come with security risks, as the hosting platform like could potentially be hacked, exposing all wallets. Devices they are installed on are also vulnerable to hacking.

  • While is a trusted platform, any online service has security risks. For greater security, private keys should be backed up in case the hosting platform is compromised or devices are lost/stolen.

  • For beginners, a hot wallet like is recommended to first experience using a bitcoin wallet with small transactions. However, one should educate themselves on cryptocurrencies before investing significant funds. Offline “cold” wallets are more secure for larger amounts.

  • In summary, hot wallets provide easy access but lower security compared to offline wallets. Backing up keys mitigates risks, while educating oneself on crypto reduces chances of scams or losses. is a trusted starting point for beginners.

  • Paper wallets provide high security offline but come with risks if lost or stolen. They should not be used online for long term storage due to security and privacy concerns.

  • Desktop wallets are easy to use but not fully secure from hacking attempts. Viruses and malware could steal private keys. Not recommended for long term storage or large amounts.

  • Mobile wallets are convenient but also considered “hot” wallets. Not fully secure and private keys could be stolen remotely. Only small amounts recommended and not for long term storage.

  • Cold or hardware wallets are the most secure option as private keys are stored offline in the hardware device. Large amounts can be safely stored long term. Only downside is they need to be connected to internet to transact which takes more time than mobile wallets.

  • Software or USB stored wallets are not true hardware wallets as they don’t run the wallet software or allow transactions. Only store private keys but don’t provide full wallet functionality.

The overall recommendation is to use hot wallets like mobile only for small amounts needed for daily use, and store large holdings in a hardware wallet for maximum security long term. Paper, desktop and online/mobile wallets come with security risks not suited for significant crypto asset storage.

Here is a summary of the key points about choosing a cryptocurrency wallet:

  • Hardware wallets are the most secure option, but also have some downsides to be aware of. They require generating and securely storing private keys offline.

  • When setting up a hardware wallet, be careful not to expose your private keys while generating them. Don’t type or share them online. Keep backup recovery sheets in multiple secure offline locations.

  • Consider your loved ones’ ability to access funds in an emergency. Provide instructions but balance security and accessibility.

  • Determine if you need a wallet for multiple coins or just Bitcoin. Hardware wallets support a limited number of coins simultaneously.

  • Hot wallets are less secure but more convenient for frequent transactions. Cold storage is best for long-term hodling.

  • Consider your goals - trading, payments, long-term holding? Choose a wallet type accordingly. Hardware is best for large holdings you plan to store long-term.

  • Research coins thoroughly before investing. Start with top coins like Bitcoin to minimize risk while learning. Don’t invest in unknown low-cap coins.

The key is balancing security, accessibility and suiting the wallet to your intended cryptocurrency use and goals. Hardware storage is ideal for long-term holdings.

  • If you plan to run a business that accepts or pays out in cryptocurrencies, you will need multiple hot wallets to see transactions quickly and have backups in case one fails. This includes mobile wallets on multiple phones/tablets.

  • For daily trading of multiple cryptocurrencies, you will need hot wallets on multiple platforms and devices to have options when websites go down. You should register on several platforms during downtimes to complete KYC early.

  • Those just investing and holding long-term mainly need a hardware wallet for security and a mobile wallet. Regular small purchases over time can yield good returns.

  • The Blockchain hot wallet is recommended for beginners due to worldwide accessibility. You can install it online or on mobile after creating an account, uploading funds and pairing devices using a verification code.

  • The mobile app lets you view transactions, currencies, prices and details. You can send funds between paired wallets for payments or trades as needed. Multiple backups provide redundancy for businesses and traders.

Here is a summary of the key points about wallets described in the passages:

  • Coinbase is an online wallet that allows buying, selling and storing of Bitcoin, Ethereum, Litecoin and Bitcoin Cash. It has both a website wallet and mobile apps.

  • also has both a website wallet and mobile apps. It allows sending and receiving of Bitcoin only.

  • JAXX (now called Jaxx Liberty) is a multi-currency wallet supporting Bitcoin, Ethereum, Litecoin, DASH etc. It has desktop and mobile apps and allows sending/receiving between currencies.

  • Exodus is another multi-currency wallet supporting over 100 coins. It allows sending/receiving between supported coins and has a built-in exchange feature.

  • Trezor is a hardware wallet considered very secure for cold storage of cryptocurrencies like Bitcoin. It has a limited screen not connected to the internet.

  • The wallets described allow viewing prices, addresses, transaction history and backups. Mobile wallets are downloaded from app stores while desktop wallets are downloaded from the project websites. Registration is required for some but not all (like JAXX).

  • The Trezor is a hardware cryptocurrency wallet that stores private keys offline for high security. It has an easy to use interface and supports over 1600 coins and tokens as of 2020.

  • It costs around $58-179 depending on the model. Additional fees like shipping and taxes may apply depending on location. Delivery can take up to 6 weeks due to manufacturing delays.

  • Setup involves downloading a Chrome extension and following instructions on their website to create a pin and record the recovery phrase. Users should carefully read the documentation to understand how to properly use and secure the wallet.

  • The Trezor One and Model T are the main models. The Model T has upgrades like a touchscreen, USB-C, and microSD slot. It supports more coins but is more expensive. Both provide strong security through PIN codes, recovery phrases, and offline private key storage.

  • In summary, the Trezor is a highly recommended hardware wallet for cryptocurrency storage, but users should be aware of potential additional costs and delays when purchasing. Carefully setting up and understanding how to use it properly is important for maximum security.

  • Setting up the Trezor Model T wallet involves plugging it into the computer with the provided cable, visiting the Trezor website, and following the on-screen instructions.

  • The initial setup includes installing the latest firmware, creating a new wallet, and generating and writing down the 12-word recovery seed phrase. This seed phrase allows recovering the wallet if the device is lost or broken.

  • A PIN number is also set up during initial configuration for additional security when accessing the device.

  • Basic wallet functions like receiving cryptocurrencies are done by confirming the receive address matches on both the device screen and computer.

  • The Trezor can also serve as a password manager by encrypting passwords stored in services like Google Drive or Dropbox.

  • Key features include two-factor authentication for accounts and using the recovery seed to restore the wallet. Proper security measures like not taking digital photos of the seed are emphasized during setup.

In summary, the setup process guides the user to configure all necessary security features and correctly backup the recovery seed for maximum protection of cryptoassets stored on the Trezor hardware wallet.

The passage discusses two popular hardware wallets - the KeepKey and Ledger Nano.

For the KeepKey, it describes how to setup the device by updating the firmware, generating a recovery phrase, pairing it with the ShapeShift website, and creating a PIN. It supports Bitcoin, Ethereum and many other cryptocurrencies. It has a large screen and is cheaper than some other options.

For the Ledger Nano, it provides an overview of the supported cryptocurrencies and notes the detailed documentation and tutorials available on the Ledger website. It compares the Nano S and Nano X models and recommends the Nano S. It notes that delivery times can be long (2+ months) due to high demand. Setup involves configuring the device, sending/receiving cryptocurrencies, and restoring from a recovery phrase.

Both hardware wallets securely store private keys offline and require manual confirmation of transactions on the physical device, improving security over software/online wallets. The Ledger Nano is recommended for its durability, security, and wide cryptocurrency support for storing significant funds.

  • The Ledger Nano S is a good option for storing cryptocurrencies securely. It has a reasonable price compared to other hardware wallets like Trezor and Nano X.

  • To set up the Ledger Nano S, you download the Ledger Live app, create a PIN and recover your 24-word seed phrase securely.

  • You then install the apps for the cryptocurrencies you want to manage on the device. For each one, you add an account on Ledger Live to access it.

  • The process for setting up the newer Ledger Nano X is similar. The main differences are it has a larger screen, two buttons, and can store over 100 apps versus 3-6 on the Nano S due to more storage capacity.

  • For both devices, it’s important to purchase directly from Ledger and verify the authenticity when setting up to avoid scams. They provide secure hardware wallets to store private keys for cryptocurrency trading and investments.

Here is a summary of the key steps to upgrade the Ledger Nano firmware:

  • Open Ledger Live and check for updates. Click “Download now” if an update is available.

  • Once the update is downloaded, click “Install now” to begin the installation process.

  • The Ledger device will enter bootloader mode and prompt you to confirm an on-device code during installation. Do not disconnect the device.

  • Once complete, it will say “firmware updated - please reinstall apps”.

  • Unlock your Nano, enter your PIN and click “Install” for each app like Bitcoin that you had previously.

  • Go to “Manage Accounts” and “Add Account” to set them up again in the same way as originally setting up the device.

  • Always keep your recovery phrase backed up in a safe place. This is essential to restore access to your crypto assets if needed.

  • Be patient during the upgrade process and do not disconnect the device until it is fully completed to avoid issues.

The key things are to reinstall all apps and accounts after the firmware upgrade to maintain access to your crypto, and always keep your recovery phrase backed up securely.

  • The author has 11 wallets total but over 40 individual wallets when counting each address.

  • For beginners, they recommend a hot wallet and a Ledger Nano S hardware wallet initially. allows buying bitcoin easily.

  • Don’t store large amounts on a hot wallet, use a hardware wallet for storage.

  • When starting, just focus on learning about one cryptocurrency like Bitcoin first before diversifying too much.

  • You don’t need to buy a full bitcoin, you can purchase $100 worth for example.

  • Consider your needs - will you be receiving/sending payments, trading one or many coins, using for business/donations, etc. to pick the right wallets.

  • Having many hot wallets is fine but maintaining too many can be difficult to keep track of. The key is hardware storage for larger amounts.

In summary, the author advocates a balanced approach of using a hot wallet like for transactions alongside a hardware wallet like Ledger Nano S for long-term storage, and focusing on just one crypto initially for beginners.

  • It is important to own your private keys, not just have access to cryptocurrency wallets. Private keys allow you to control the funds in a wallet.

  • Hot wallets like online or mobile wallet applications are convenient but less secure, as private keys are stored online and the service could get hacked.

  • Cold storage hardware wallets like Ledger and Trezor are more secure as private keys are generated and stored securely offline on the hardware device. But they take more effort to set up.

  • Diversifying funds across multiple wallet types (hot and cold) and vendors provides better protection in case one gets compromised. For example, having some funds on an exchange wallet and transferring portions to hardware wallets from different companies.

  • Traders who need fast access may accept the risks of hot wallets, but it’s generally safer long-term to control private keys with a hardware wallet, even if less convenient. Losing the device is not a problem if the recovery seed is kept separately and safely.

  • Multicurrency hot wallets like Exodus can hold many coins conveniently but come with more security risks compared to hardware wallets. Owning private keys is important for security of funds long-term.

The passage discusses several major cryptocurrency exchange hacks where large amounts of digital assets like Bitcoin were stolen. Some of the major hacks mentioned include:

  • MtGox hack in 2011 where over 600,000 Bitcoin were stolen, contributing to MtGox’s bankruptcy.

  • Bitfinex hack in 2016 where 120,000 Bitcoin were stolen from customer accounts.

  • GateCoin hack in 2016 where 250 Bitcoin and 185,000 Ethereum were stolen.

  • Bithumb hacks in 2017 and 2019 totaling over $38 million stolen.

  • NiceHash hack in 2017 where over 4,700 Bitcoin were stolen worth $62 million.

  • CoinSecure hack in 2018 with 428 Bitcoin stolen worth $3.2 million.

  • Cryptopia hack in 2019 where at least 19,000 Ethereum were stolen.

  • MapleChange hack in 2019 where 913 Bitcoin were stolen worth $5.7 million.

The passage emphasizes that many of these large exchanges lacked adequate security for customer funds, which were often stored in “hot wallets” online rather than more secure “cold storage” hardware wallets. This helped facilitate many large-scale thefts over the years.

Here are the key best practices to guard against MITM attacks when using a hardware wallet:

  • Only use the laptop/computer to connect the hardware wallet, and for crypto purposes only. Don’t browse the internet or download unnecessary files. This limits exposure to malware.

  • Double check the recipient address on your hardware wallet display screen before sending funds. Verify the first and last few characters match what you intend to send to.

  • Disconnect the hardware wallet from the laptop as soon as the transaction is complete. Don’t leave it connected longer than needed.

  • Consider using the hardware wallet on a dedicated “crypto only” device that never connects to the internet, to eliminate any possibility of malware infection.

  • Be wary of malware that could replace the recipient address with the hacker’s address at the last moment. Carefully review the address displayed before confirming transactions.

  • Keep the operating system and browser on the laptop fully patched and up-to-date to limit vulnerabilities that could allow MITM attacks.

  • Use extreme caution when connecting hardware wallets to any public or shared devices, as they pose the highest risk of already being infected.

The key is limiting exposure of the hardware wallet to potential malware or hacker interception through safe computing practices, double checking addresses, and promptly disconnecting after each use.

  • Privacy-based cryptocurrencies, also known as privacy coins, aim to provide anonymity for transactions. They make it difficult or impossible to track transactions on the blockchain.

  • Bitcoin and most major cryptocurrencies do not actually provide full privacy, as all transactions are visible on the public blockchain. This lack of privacy has concerned some users.

  • Cash provides a good model of anonymity - when you pay someone with cash, there is no direct link to show where the money originally came from. Cryptocurrencies could potentially provide similar anonymity to cash.

  • Around 10% of the population is estimated to be interested in fully private and anonymous payments. While this may seem like a small percentage, it represents a large number of people (around 760 million) given the world population.

  • There are legitimate reasons why one may need or want to make an anonymous payment at some point, such as donating to charity anonymously. Privacy coins provide this option, unlike traditional banking systems which can trace and even deny payments.

  • In summary, privacy coins aim to provide the privacy and anonymity in transactions that traditional cryptocurrencies and banking systems do not, meeting a need for fully private digital payments.

  • Privacy-based cryptocurrencies aim to provide anonymous transactions through technologies like mixers, ring signatures, and obfuscated transaction histories. While they aim for privacy, some can still potentially be traced by experts.

  • Chapter 3 provides an overview of cryptocurrencies, defining them as digital currencies that use cryptography to validate transactions instead of centralized third parties. It distinguishes cryptocurrencies from centralized protocols like Ripple that don’t use cryptography for transaction validation.

  • Chapter 4 dives deeper into how privacy coins specifically work, discussing techniques like mixing, ring signatures, and hiding transaction histories to enhance anonymity compared to more traceable coins like Bitcoin.

  • Chapter 5 briefly explains ICOs (Initial Coin Offerings) where new projects raise funds by distributing tokens, but cautions that the vast majority (99% in 2017) turned out to be scams that disappeared with investors’ money. It warns readers to generally avoid ICOs due to the high risk of loss.

In summary, the chapters aim to educate readers on privacy coins and cryptocurrency basics, while warning of risks from unregulated ICO investments due to the overwhelming prevalence of scams. The focus is on understanding key privacy technologies rather than promoting any specific coins.

  • Bitconnect collapsed in early 2018 after operating as a Ponzi scheme that promised investors daily returns of over 1% from lending. It shut down and returned funds in its own worthless tokens.

  • Many investors lost their life savings, some even committed suicide, after Bitconnect’s value crashed from over $2.7 billion to just $200 million in a week.

  • Greed caused people to ignore warning signs and profit promises that were too good to be true. Crypto investing carries big risks.

  • To avoid scams, be wary of guaranteed high returns, unregistered tokens or exchanges, and unverified or anonymous teams. Do thorough research.

  • Pump and dump schemes involve coordinating to artificially boost prices then sell for profit. Groups promote coins online to create hype and liquidity before dumping.

  • Signs of a pump and dump include sudden irrational price spikes and coordinated promotion across social media. Get out as soon as the dumping begins to avoid losses.

  • Stay informed on regulations from SEC, CFTC that aim to curb fraudsters. But ultimately, investors need to take responsibility for carefully vetting projects before investing own funds.

  • Komodo is a blockchain platform that allows developers to build their own independent blockchains and launch ICOs using the Komodo toolkit and frameworks.

  • It uses a unique “delayed proof of work” consensus mechanism that ties the Komodo blockchain’s security to Bitcoin’s hash power through notary nodes. This provides extra security against 51% attacks.

  • Komodo offers privacy features like optional anonymity for transactions using zk-SNARK technology from Zcash. It also has an atomic decentralized exchange built-in.

  • The native cryptocurrency is called KMD, which pays holders annual interest of around 5% if they hold over 10,000 KMD.

  • Komodo had an ICO in early 2017, selling coins initially for $0.10 each. Prices rose to over $13 during the 2017 bull run but have since declined. However, KMD still trades above its ICO price.

  • The project is led by a team of around 30 people spanning development, marketing, and community roles. It has active development based on GitHub activity.

  • KMD has relatively strong liquidity through listings on major exchanges like Binance and Bittrex. Offline storage is through their native Komodo wallet.

  • Komodo provides a sophisticated ecosystem but faces competition from other blockchain platforms and privacy coins developing similar tech. Its success going forward will depend on adoption of its toolkit.

  • Firo, formerly known as Zcoin, is a privacy-focused cryptocurrency that focuses on achieving privacy and anonymity for users’ transactions.

  • It uses a hybrid consensus mechanism combining proof-of-work mining and proof-of-stake staking. Miners are rewarded and stakers can run masternodes to earn returns by staking coins.

  • It previously used the Zerocoin protocol but has switched to the new Sigma protocol to avoid vulnerabilities in Zerocoin. Sigma does not rely on a trusted setup.

  • Additional privacy features include Tor integration and the Dandelion protocol to mask users’ IP addresses and transaction activity on the network.

  • It has a max supply of 21 million coins and started trading around $0.04 per coin, reaching an all-time high of $169 before falling in the 2018 bear market.

  • The team includes experienced developers and investors like Roger Ver have backed the project since early stages.

  • The coin is traded on exchanges like Binance and CoinX and has reasonable liquidity. The official desktop wallet can be used for storage.

So in summary, Firo aims to provide privacy and anonymity through its technical protocols while maintaining an active development team and presence on exchanges.

  • The passage discusses potential challenges for Zcoin/Firo like it still being early days for their segment protocol, an increasingly saturated market for privacy coins, and the currently low Zcoin price impacting the value of holdings and returns for Znode operators.

  • It provides the historical price performance of Zcoin, noting it started around $0.40 and reached an all-time high of $169, representing a potential 320x return for early investors.

  • Additional details and links are provided for researching Zcoin/Firo on sites like CoinMarketCap.

  • Following sections discuss other privacy coins like Aeon, Bytecoin, Navcoin, and PIVX, outlining their technical features and historical price performance versus Bitcoin, with some representing potential 1000x returns for early investors.

  • Links are again provided for further research on each coin’s website, trading data, code, etc. on CoinMarketCap.

So in summary, the passage discusses challenges for Zcoin while providing an overview of its historical price performance compared to Bitcoin and additional privacy coin projects like Aeon, Bytecoin, Navcoin and PIVX. It aims to educate on these alternatives and their potential upside based on early adoption.

  • Dash was one of the early cryptocurrencies launched in 2014 and was once a top 5 coin by market cap, but has since fallen in the rankings.

  • It aimed to be digital cash for faster and cheaper payments than Bitcoin, with additional privacy features like PrivateSend. However, competition has surpassed it on transaction speeds, scalability, and privacy.

  • Dash struggles with regulatory issues due to its early focus on privacy. While PrivateSend is similar to CoinJoin and not truly anonymous, it is still lumped in with privacy coins by some regulators.

  • Actual PrivateSend usage is low, around 0.7% of transactions. Privacy is no longer considered its main focus.

  • Transaction speeds of 56 TPS are outmatched by platforms like Visa, Solana, and Ethereum Layer 2. Adoption has been relatively small outside Latin America.

  • intensifying competition, changing priorities around privacy, and inability to scale pose challenges to Dash remaining relevant against new blockchain projects. It has fallen in the rankings as the market has grown substantially.

Here is a summary of the key points about Zcash:

  • Zcash is a privacy-focused cryptocurrency that was launched in 2016 as a fork of the Bitcoin codebase. It aims to provide anonymous transactions.

  • Zcash uses zero-knowledge proofs called zk-SNARKs to allow users to shield their transaction amounts and addresses, providing full privacy. However, it also allows for transparency if users choose.

  • Consensus is achieved through proof-of-work mining using the Equihash algorithm, which is ASIC-resistant and favors GPU mining over specialized hardware like Bitcoin.

  • Total coin supply is capped at 21 million coins like Bitcoin. Transactions use z-addresses or stealth addresses to ensure anonymity for private transactions.

  • Zcash is well-regarded for its privacy features and having natively implemented cutting-edge zk-SNARK tech to validate private transactions on the blockchain. However, its anonymity also opens it to potential misuse if not properly regulated.

  • Key figures like Edward Snowden have voiced support for Zcash’s privacy technology as making it a noteworthy alternative to Bitcoin for those seeking more anonymity in transactions.

So in summary, Zcash is one of the leading privacy coins due to its use of zk-SNARKs to provide fully private transactions on a blockchain, while retaining some transparency options as well. Its technology and maximum supply give it similarities to Bitcoin.

Here is a summary of the key points about Monero:

  • Monero is a privacy-focused cryptocurrency that aims to make transactions untraceable and prevent linking transactions to individuals. It was created as an alternative to Bitcoin which has a transparent blockchain.

  • Monero uses ring signatures and stealth addresses to conceal transaction details like sender, recipient, and amounts. This provides a high level of anonymity and privacy not available in Bitcoin.

  • Transactions and balances are private by default, unlike some other privacy coins that only offer optional privacy. This helps protect everyone’s privacy on the network.

  • It uses a proof-of-work consensus algorithm originally called CryptoNote and now called RandomX. The algorithm is designed to resist ASIC mining and favors CPU mining, preventing centralization.

  • The native currency unit is called XMR. It has a circulating supply of over 17 million XMR and no fixed supply cap. New XMR will be emitted indefinitely to incentivize mining.

  • Monero is one of the largest and most established privacy cryptocurrencies, ranking in the top 20 by market cap. It has a strong community of developers focused on privacy and technological improvements.

In summary, Monero offers much stronger privacy and anonymity for transactions compared to Bitcoin through its technical design and optional features. This makes it popular for those seeking true financial privacy on the blockchain.

Here is a summary of the key points about Verge:

  • Verge is a privacy-focused cryptocurrency that aims to offer stronger privacy than Bitcoin through integrating TOR and ITP networks. This hides users’ IP addresses and makes transactions untraceable.

  • It was launched in 2014 as Dotcoin Dark and rebranded to Verge in 2016. The team wants to bring cryptocurrency to daily transactions through flexible payment options.

  • Verge ensures privacy by routing traffic through the TOR and ITP networks, making it difficult to monitor or locate users’ activity on the blockchain.

  • It offers 5 different proof-of-work mining algorithms to encourage wider participation and lower the risk of 51% attacks.

  • The team focuses on mobile wallet development to increase accessibility and usability. Recommended wallets like Electrum support TOR/ITP and offer multi-signature security.

  • Verge is completely community-driven with no ICO or pre-mined coins. The direction is decided solely by regular users.

  • The goal is for Verge to be usable for everyday purchases with fast, low-cost transactions and strong privacy protections.

  • Verge is a privacy-focused cryptocurrency that offers two anonymous transaction protocols - Wraith and Spectre.

  • Wraith allows users to choose between a private ledger, where transactions are hidden on the blockchain, and a public ledger for visible transactions. This gives users transparency and privacy options.

  • Spectre uses stealth addresses, one-time public keys, and ring signatures to anonymize transactions and protect sender/recipient identities.

  • Verge also leverages the RSK smart contract platform to improve scalability to over 400 transactions per second, compared to ~100 currently for Verge.

  • The Verge team consists of 13 people with experience in areas like security, networking, and marketing. The project aims to offer better privacy than alternatives like Monero, Dash and Zcash.

  • Purchasing Verge involves first buying Bitcoin or Ethereum, then exchanging for Verge. The project focuses on community involvement but must demonstrate consistent development progress.

  • Verge has seen massive price increases in the past, but privacy coins are technically complex with no guarantee of success. Ongoing development will determine if Verge can become a leading privacy coin.

In summary, Verge aims to be the most private cryptocurrency through its Wraith and Spectre protocols, while also leveraging technologies like RSK to improve scalability and usability. Success depends on the project execution and ability to advance privacy coin research.

  • Particl aims to build a decentralized economy with privacy, interoperability and security at its core.

  • It consists of the Particl platform, Part coin, and an open marketplace DApp.

  • The Particl platform allows developers to build private decentralized applications (DApps).

  • The Part coin is the utility token that powers transactions on the platform and can be used anonymously, staked for rewards, or used for voting.

  • The open marketplace is the first DApp, providing a decentralized and private marketplace where anything can be bought and sold using Part coins.

  • This marketplace aims to address issues with current e-commerce like lack of privacy, security risks from data breaches, censorship, and high transaction fees.

  • In summary, Particl aims to create a full decentralized private economy and services through its privacy-focused platform, coin, and applications like the open marketplace DApp.

Here is a summary of the key privacy coins discussed in the book chapters so far:

  • Monero (XMR) - Considered the most private and fungible cryptocurrency. Uses ring signatures and ring confidential transactions to obscure sender, recipient, and transaction amounts. Open-source with an active community.

  • Dash (DASH) - One of the earliest privacy coins, offers additional features like instant transactions and decentralized governance. Uses a mixing protocol called PrivateSend to blend transactions.

  • Zcash (ZEC) - Uses zero-knowledge proofs called zk-SNARKs to achieve privacy. Offers transparency options to selectively disclose transaction metadata. Controversy around its trusted setup ceremony.

  • Verge (XVG) - Uses Tor and I2P networks for anonymity along with ring signatures. Had some issues with 51% attacks in the past. Thinner trading volumes.

  • PIVX (PIVX) - A fork of Dash that focuses on privacy and blockchain governance. Uses zk-SNARKs inspired technology called zPIV for private transactions. Smaller market cap coin.

  • Horizen (ZEN) - Formerly known as ZenCash, a Zcash fork with additional privacy and enterprise focused tools. Rumors about potential backdoors in the Zcash code it derives from.

  • Particl (PART) - Focuses on privacy-centric decentralized applications and marketplaces. Cold staking allows earning rewards while keeping funds offline. Thinner trading volumes.

In conclusion, while privacy coins aim to offer financial privacy, there are also ongoing debates about potential misuse and regulatory issues surrounding anonymity. Independent research is recommended before investing in any cryptocurrency.

Based on the information provided, Monero is likely the safest privacy-focused cryptocurrency to invest in due to its strong technical foundations and network effects. Some key points:

  • Monero uses cutting-edge cryptography like ring signatures and ring confidential transactions to provide full privacy and fungibility by default, unlike some other privacy coins. This makes transactions truly untraceable.

  • It has survived intense regulatory scrutiny and bounty programs seeking to crack its privacy protections, indicating its core algorithms have held up well so far against determined adversaries.

  • Monero has an established user base and is available on major exchanges, providing liquidity. It has more mature network effects than newer privacy coins.

However, it’s important to note that all cryptocurrencies carry risk and there are no guarantees. Some additional advice:

  • Do thorough independent research on any coin’s technology, team, community and market factors before investing.

  • Expect continued regulatory uncertainty around privacy coins given their role in the underground economy. Be prepared for potential restrictions.

  • Privacy coins may be subject to greater volatility given their controversial nature. Only invest what you can afford to lose.

  • Avoid any coins or projects that promise guaranteed returns, as these are usually scams. True investment carries risk.

Overall Monero seems a reasonably prudent privacy coin investment based on its technical leadership position and history, but one should manage risks and not invest more than willing to potentially lose. Thorough research remains key.

  • Many large crypto exchanges have been hesitant to list Monero due to the regulatory risks associated with its privacy features. A few exchanges have even delisted Monero.

  • However, Monero developers have been working on atomic swaps that would allow users to swap Monero for Bitcoin without centralized exchanges. This could help address liquidity issues caused by lack of exchange listings.

  • Monero recently implemented a new consensus algorithm called RandomX that makes CPU mining more competitive, helping decentralize its network.

  • It has a tail emission after reaching its supply cap, which provides ongoing block rewards to incentivize mining long-term. This is aimed to ensure network security and affordable transaction fees.

  • Factors like its privacy-preserving features, growing adoption/transactions, unique tokenomics model, and developer community make Monero a compelling long-term investment despite current challenges around exchanges/liquidity. Atomic swaps could help address some of those challenges.

In summary, while Monero faces challenges, its developers are working on technical solutions and its fundamentals around privacy, decentralization and long-term incentives make it a project worth watching according to the passage. Atomic swaps may help further address current issues around exchange listings/liquidity.

Here is a summary of key points from the chapter:

  • Blockfolio is a popular portfolio management app for cryptocurrencies that allows users to easily track the performance and value of their crypto holdings.

  • It allows you to add coins with a few taps by linking exchanges or searching for coins directly. You can enter your transactions manually to build a portfolio.

  • The app automatically refreshes prices every few seconds so you always know the current value of your crypto portfolio.

  • Other features include integrated crypto news and analytics to track portfolio performance over time.

  • Setting up the portfolio in Blockfolio takes just a few clicks for each coin/transaction, making it a simple way to stay on top of your crypto investments in one place.

  • Being able to see real-time portfolio values is useful for those who want to closely monitor market movements and the performance of their holdings.

In summary, Blockfolio is highlighted as a top crypto portfolio management tool for easily building and tracking a portfolio of cryptocurrency holdings, with automatic price updates and additional features.

Here is a summary of the key points about crypto portfolio tracking tools discussed in the provided text:

  • Blockfolio is a popular mobile app that allows users to track their cryptocurrency portfolios and set price alerts. It also offers a news aggregator, signals section from crypto projects, and market data.

  • Messari is a tool for crypto data aggregation and research. It provides filters to sort coins by metrics like market cap, sector, exchanges, and on-chain data. This helps identify trending coins and evaluate projects.

  • Altpocket allows portfolio tracking like Blockfolio but also lets users follow top performing traders to copy their trades and holdings.

  • Delta is another mobile portfolio tracker similar to Blockfolio, connecting with wallets and exchanges. It offers a coin market page, news, and alerts.

  • Cointracking is described as a “one-stop shop” portfolio tool with both mobile and web versions. It supports over 7,000 coins/integrates exchanges/wallets. Unique features include automated wallet monitoring and tax reports.

In summary, these tools make it easier for crypto investors to manage portfolios, set alerts, research markets/projects, and keep up with industry news - all important capabilities for staying informed in this space. Blockfolio, Delta and Altpocket focus on portfolio tracking while Messari and Cointracking provide more comprehensive data and analytics.

Order book spoofing is a form of crypto market manipulation where large orders are placed without the intent of executing them. This is done to artificially influence the perception of supply and demand in the order books. Cryptocurrency whales place large buy or sell walls to mislead other traders into thinking there is strong support or resistance at a given price level. However, the whale then secretly accumulates or distributes coins while the fake order remains. Once their positions are ready, they swiftly cancel the spoof orders, allowing the price to move in their favor without resistance. By manipulating the order books in this way, whales can profit from the resulting volatility in both spot and derivatives markets like futures. Order book spoofing has been a common tactic used by major players to profit at the expense of other traders in the unregulated cryptocurrency exchanges.

Here is a summary of the key points about market manipulation tactics discussed in the passages:

  • Wash trading involves simultaneously buying and selling the same asset to create the illusion of volume and liquidity in that asset. It is done by projects, exchanges, and BOTs to pump the reported volume on sites like CoinMarketCap.

  • Stop loss hunting involves whales intentionally pushing the price of an asset down to trigger stop loss orders at key technical levels. They do this to acquire the asset at a lower price after other traders are forced out of their positions.

  • FUD (fear, uncertainty, and doubt) is spreading false or misleading negative news narratives about a project or asset to scare traders into selling. It is an effective psychological tactic since humans dislike losses more than they like gains. Fake FUD news can be propagated to manipulate prices.

  • Options trading introduces additional strategies compared to just spot trading or futures. Options confer the right but not obligation to buy or sell an asset later. This creates asymmetric risk-reward profiles where losses are limited compared to unlimited losses from futures positions. Understanding options theory is important for utilizing various option strategies.

In summary, it discusses several deceptive market manipulation tactics like wash trading, stop loss hunting and spreading FUD to influence prices, as well as how Bitcoin options can introduce new trading opportunities.

  • The passage discusses option theory, covering variables like strike price, spot price, time to maturity, implied volatility, and risk-free rate that impact an option’s value.

  • It explains concepts like being in the money, at the money, or out of the money based on the relationship between spot and strike price.

  • Various option strategies are introduced, like bull spreads, bear spreads, straddles, strangles, iron butterflies, and calendars spreads.

  • Deribit is highlighted as a popular crypto exchange for trading Bitcoin options, where traders can build option strategies by placing orders.

  • An example is given of building a bull spread strategy on Deribit over the next 3 months.

  • Broader potential for crypto option markets is discussed, like how listed options on exchanges provide more liquidity for institutional investors and miners to hedge risks compared to over-the-counter deals.

  • Growing option markets on platforms like Bakkt and CME are analyzed, which may help temper Bitcoin volatility over time as options introduce new hedging tools.

Here’s a summary of the key points about Bear.Tax crypto tax reporting tool:

  • It offers a quick and easy way to calculate and file crypto tax reports, similar to CryptoTrader.Tax.

  • Designed primarily for the US market but can be used in other countries as well.

  • Easy to import trades via API integration or CSV upload from exchanges.

  • Allows selecting FIFO or LIFO accounting methods to calculate gains/losses.

  • Generates necessary tax documents like the one needed for filing with the IRS.

  • Supports classifying a wider variety of crypto income sources like staking rewards, airdrops, forks, referrals, etc. whereas CryptoTrader focuses more on traditional trading.

  • Allows sharing reports with accountants for review more easily compared to manual calculations.

  • Aimed at both average consumers and financial advisors for crypto tax preparation needs.

  • Provides more flexibility than CryptoTrader.Tax in terms of supported income types if you’ve earned from lesser known sources.

In summary, Bear.Tax is a viable alternative to CryptoTrader.Tax for automated crypto tax reporting, especially if you need support for a wider range of income classifications from various crypto activities. Both tools simplify an otherwise complex tax filing process.

Here is a summary of the key points about Koinly as a crypto tax software tool:

  • Koinly has the best international support of any tax software, covering over 20 countries including the US, Canada, countries in Europe, Japan, South Korea, Singapore, Australia, and New Zealand.

  • It provides useful portfolio analysis tools to understand ROI on investments, fiat income, profits/losses, and capital gains.

  • Data import is automated through API connections or by adding wallet addresses, and it uses AI to detect transactions between personal wallets to avoid taxing self-transfers.

  • Margin trading, futures, staking, lending, and DeFi data can all be imported.

  • Tax reports like IRS forms are auto-generated for preview and export to TurboTax. International reports also available.

  • Supports over 350 exchanges, 50 wallets, 6,000 currencies, and services like BlockFi, Nexo, etc.

  • Offers a functional free plan for basic use, but paid tiers needed for full tax reports and export features.

  • Overall described as having the best support and compatibility of any crypto tax software, making it a top recommended option.

So in summary, Koinly stands out for its strong international tax coverage and wide-ranging data import/matching capabilities. The free tier provides basic use, but paid plans unlock more advanced tax reporting functionality.

Here are the key points from the chapters:

  • No trading plan or strategy is a major mistake. New traders often jump in without formulating a plan, which leads to poor results. A good plan defines goals, risk management, trading approach, etc.

  • Cutting losses is important. Traders should use stop losses to exit trades that are going against them, rather than hoping they recover. Failing to cut losses leads to greater risk.

  • Adding to losing positions, or “doubling down,” is a big mistake. It compounds losses by increasing risk on a trade that has already proven unprofitable.

  • Stop losses are essential risk management tools. They automatically exit losing trades to limit downside. Stops protect traders when they cannot monitor positions constantly.

  • Overtrading, or trading too many markets simultaneously, splits focus and attention. It’s better to specialize in a small number of markets one knows very well. Successful traders focus expertise in specific areas rather than trying to trade everything.

  • In summary, the key mistakes are lack of planning, failure to cut losses, doubling down on losers, absence of stops, and overtrading numerous markets without specialization. Risk management, position sizing, and focus are important principles for traders.

  • Overtrading refers to trading too frequently without proper analysis or reasons. It’s driven more by an itch to trade rather than finding high probability opportunities. This leads to unnecessary trading fees and commissions eating into profits.

  • Using too many indicators can lead to “analysis paralysis” where charts look overly complicated. It’s best to keep it simple and use a limited set of key indicators.

  • Never trade with money you cannot afford to lose. It leads to emotional decisions that hurt performance. Have a separate trading budget.

  • Leverage can enhance gains but also losses. Most traders don’t need high leverage levels of 20x or more. Keep it moderate to manage risks.

  • Do thorough research before choosing a brokerage to ensure they are reputable, have low fees, secure funds storage, and good execution reliability.

  • Be wary of advice from social media “gurus” claiming secret strategies. Most are just effective marketers not actually profitable traders.

  • Don’t get overconfident from success. Maintain discipline with analysis, position sizing, and risk controls to avoid reckless overtrading or poor decisions driven by overconfidence.

The passage discusses the importance of doing thorough research when investing in cryptocurrencies. It outlines a research process and provides tips.

The first step is to check if the cryptocurrency is economically active by looking at its trading volume and price history on exchanges. It’s important to ensure it has a real market.

Next, get an overview of the cryptocurrency by watching YouTube videos, checking profiles on Messari and Binance Research, and looking at ICO tracking sites. These provide background on the project history, tokenomics, team, etc. Take notes on any questions.

Interview videos of the team on YouTube are highlighted as very valuable, as they can help explain technical aspects and help assess the credibility of the individuals involved. Their LinkedIn profiles should also be checked.

Fact checking everything learned is recommended, as cryptocurrency websites often contain a lot of marketing claims. The cryptocurrency’s own YouTube channel may provide clearer technical explanations.

Overall, the passage emphasizes the importance of thorough primary and secondary research from multiple reputable sources when assessing investment opportunities in cryptocurrencies. A structured research process is advocated to help filter promising from questionable projects.

  • Understanding market cycles is crucial for developing an effective exit strategy for cryptocurrency investments.

  • Most financial markets like housing, stocks, etc. follow visible cycles that can be yearly, multi-year, or contain smaller cycles within longer cycles. These cycles may change and lengthen as markets mature.

  • The cryptocurrency market is very young and volatile since the true value is unknown. More established investors tend to be conservative, while younger investors are more prone to risk-taking in new technologies like crypto.

  • Due to its nascence, the crypto market cycle is believed to follow a 4-year cycle that mirrors Bitcoin’s halving events. Each cycle contains a bull market of gains andmania, followed by a longer bear market of consolidation and lower prices.

  • Paying attention to signs of market tops like parabolic price rises and extreme greed can help identify when to begin taking profits to avoid major losses in the following bear market. Metrics like Bitcoin’s price dominance can also provide clues on the macro cycle phase.

  • Developing an exit strategy before investing allows being ready to cash out gains at targeted levels during bull phases, rather than panic selling at the first signs of a downturn. Understanding the typical ebb and flow of crypto markets is key.

  • Cryptocurrency markets are very volatile due to many inexperienced investors participating without restrictions. Daily price movements can be chaotic.

  • Despite this, there is a clear market cycle that lasts around 4 years. It consists of a 2-3 year bull market followed by a 1-2 year bear market.

  • This cycle is driven by Bitcoin halvings, which cut Bitcoin’s block rewards in half every 4 years. This causes a supply decrease that leads to price spikes as demand stays the same. Altcoins then follow Bitcoin’s price movements.

  • The most recent halving was in May 2020, leading many to believe another bull run is underway or will happen soon. Smart money from institutions is now more involved in crypto than prior cycles.

  • Bitcoin dominance over the total crypto market cap is high. It will likely remain the largest, though the overall market cap still has potential to grow significantly compared to other markets like gold.

  • Altcoin prices highly depend on and correlate with Bitcoin price movements. When Bitcoin rises sharply, altcoins may lag behind initially as money flows to Bitcoin. Their best gains tend to come during gradual Bitcoin rises or sideways trading.

  • Understanding tokenomics like token allocation, total supply, and inflation rates is also important for planning altcoin exit strategies, as certain distributions can potentially lead to sudden sell-offs.

Here are the key points about Coinbase Pro:

  • It’s an advanced trading platform operated by major crypto exchange Coinbase. Coinbase has been around since 2013 and has a large user base of over 35 million.

  • Coinbase Pro is accessible in over 100 countries, including the US (except Hawaii). Signing up just requires creating a Coinbase account first.

  • The trading interface allows for placing market, limit, and stop orders. While this may seem intimidating, the process is straightforward.

  • Coinbase Pro offers leverage up to 3x, but leverage trading is not recommended for beginners due to increased risk.

  • Fees on Coinbase Pro are relatively low, ranging from 0.05-0.50% depending on trading volume over the past 30 days. Maker/taker fees apply.

  • Security and regulatory compliance are advantages as Coinbase is a well-established company. Funds are insured.

  • Wide availability of crypto assets to trade, including major coins like Bitcoin and Ethereum.

  • Downsides could include occasional site outages during high traffic periods and more fees than decentralized exchanges.

So in summary, Coinbase Pro is a good beginner-friendly option from a trusted brand, with low fees and access to many markets. But decentralized exchanges offer less fees in some cases.

Here is a summary of the key points about Binance crypto exchange:

  • Binance is the largest crypto exchange by volume, processing around $2 billion daily.

  • There are regional versions like Binance US, Binance Singapore, etc. but is the global exchange.

  • It offers the most extensive selection of cryptocurrencies for trading compared to other exchanges.

  • Advanced trading tools include margin trading, futures with up to 125x leverage, and 3x leverage on tokens.

  • Fees - Crypto deposits are free, withdrawal fees vary by crypto/fiat currency.

  • Other services include crypto savings/lending, a crypto debit card with cashback, initial exchange offerings.

  • Countries can generally use Binance except those under US sanctions or if restricted by a regional version.

  • Feature-rich with lots of options for both beginners and advanced traders, though interface can be complex.

  • One of the largest exchanges but also drew regulatory scrutiny in some regions due to its size and offerings.

So in summary, Binance is the dominant exchange by volume offering a huge range of coins, trading tools and services but does have some limitations and complexity due to its scale.

Here are the key points about leveraged trading basics:

  • Leveraged trading allows trading with more money than you actually have by using borrowed funds or margin. This amplifies both gains and losses.

  • Common leverage trading instruments include futures, swaps, CFDs (contracts for difference), and margin borrowing. Some allow short selling to profit from price declines.

  • Futures trading originated with farmers hedging commodity prices but evolved into speculative trading on exchanges like CME with 3-5x leverage typically for institutions.

  • Retail access to leveraged trading came through online brokers, with leverage limits now between 5-20x depending on the broker and asset class.

  • While leverage amplifies gains, it also greatly increases risks of losses beyond your margin if the trade moves against you. Proper risk management is critical with these instruments.

  • Leverage gave individual traders access to trade large positions but also exposed many to risks they could not handle, potentially “wrecking” traders who overleveraged positions.

The key takeaway is that leverage trading magnifies both opportunities and risks, so responsible use with risk management is important when utilizing these instruments. The benefits and dangers will be explored further.

Here is a summary of the key points about leverage trading on cryptocurrency futures exchanges from the given passages:

  • Early exchanges like BitMEX offered high levels of leverage (up to 100x) with little regulation, allowing both large and small traders to take on risky positions. However, whales often profited from liquidating small traders with reckless leverage.

  • Major regulated exchanges like CME and CBOE now offer Bitcoin futures with much lower leverage limits (around 2-3x), showing high leverage may not be necessary.

  • Exchanges profit from fees on each trade, as well as from liquidating positions of over-leveraged traders and contributing funds to their insurance pools. More leverage leads to more liquidations and fees.

  • Responsible leverage use involves only trading with funds you can afford to lose, using stop losses, avoiding over-leveraging beyond 10x, and gaining experience in spot trading first before using leverage.

  • Irresponsible leverage use, like gambling without risk management, enriches exchanges by acting as “food” for their highly efficient liquidation engines during market moves. It can also create unwarranted volatility.

  • Leverage can be used well for hedging and enhancing gains when handled responsibly, but easily enables reckless behavior and losses when misused or with inadequate experience. Regulation has aimed to curb the most risky leverage levels.

Here is a summary of the key points about developing a cryptocurrency trading strategy based on the passage:

  • Develop a fundamental or technical trading strategy based on price action or chart analysis. Know exactly how you will trade.

  • Have a separate money management strategy that defines how much you are willing to trade. This should be funds you can comfortably lose without financial hardship.

  • Choose an exchange to trade on based on functionality, coins available, and whether you prefer centralized or decentralized options. Popular choices mentioned are Bybit and dYdX.

  • Bybit offers high leverage up to 15x but leverage is risky if not used responsibly. dYdX offers lower max leverage of 5x which is safer for most traders.

  • Develop a system for risk management. Be aware of liquidation levels and risks of trading with leverage. Don’t treat it like gambling.

  • Responsible use of leverage trading with a clear strategy can optimize returns when markets are volatile, but beginners are most at risk of losses without experience. Start modestly with low leverage.

  • Consider both lending and borrowing features of exchanges like dYdX to generate interest income from deposits or access additional funds within liability limits.

So in summary, the key aspects are having a clear strategy, separate money management, choosing a suitable exchange, understanding leverage risks, and utilizing other features like lending/borrowing responsibly. Risk management is paramount, especially for inexperienced traders.

  • dYdX allows for margin trading, spot trading, and lending on their decentralized exchange platform.

  • For margin trading, users can go long or short crypto pairs with up to 5x leverage. Positions will be automatically liquidated if the collateralization ratio falls below the liquidation level due to price movements. This incurs a 5% liquidation fee.

  • Spot trading operates like standard DEXes, allowing market, limit, and stop orders. Trades impact margin positions and collateralization ratio.

  • Crypto deposited into dYdX is automatically placed in the lending pool to earn interest. Rates are annually but paid continuously. dYdX takes a 5% cut for an insurance fund.

  • Borrowing allows users to borrow crypto by depositing collateral. Interest is paid continuously at published rates.

  • Fees were recently introduced using a maker-taker model to cover gas costs, with zero fees for market makers and a few percentage points for takers.

  • The platform can be used to build automated trading bots, including liquidation bots that profit from closing undercollateralized positions.

Here is a summary of the key points about crypto trading bots from the passages:

  • Crypto trading bots are computer programs that trade cryptocurrencies automatically based on preset rules and criteria, allowing traders to trade 24/7 without missing opportunities.

  • Major pros of bots include enabling constant trading, removing emotions from decisions, allowing backtesting of strategies, and simplifying the trading process.

  • Major cons include that bots require ongoing monitoring and strategy tweaking, there are scam bots, and funds need to be kept on exchanges which pose hack risks.

  • TradeSanta is a cloud-based bot with over 45,000 users, offering various templates and indicators. It supports many exchanges but lacks some major ones. Plans range from $14-70/month. Best for active day traders.

  • Shrimpy is a social, portfolio management tool focused on long-term strategies like rebalancing rather than day trading. It offers many free features and is good for beginners and social/community aspects of trading.

So in summary, bots automate cryptocurrency trading but require strategy development and monitoring to be effective. TradeSanta and Shrimpy are two of the bots discussed in more detail.

  • Chapter 9 discusses the Gunbot crypto trading bot. Gunbot has inbuilt trading strategies, allows custom strategy creation, and supports many top exchanges. Licensing options range from 0.02 BTC for basic use to 0.075 BTC for pro features. Pros are the trading strategies, ease of use, and Coinbase Pro support. Cons are the one-time fee structure and relatively high prices.

  • Chapter 10 covers Crypto Hopper trading bot. It offers advanced features like market making and arbitrage. Users can subscribe to professional trader signals. Apps are available. Supported exchanges include Binance, Coinbase, KuCoin, etc. Pricing ranges from $16-83 per month. Pros are ease of use, prices, and marketplace. Potential con is lack of transparency about the operators.

  • Chapter 11 recommends 3commas as the top bot. It has intuitive analytics, smart trading tools, backtesting, signals marketplace, and mobile apps. Supported exchanges include major ones. Plans range $14.50-49.50 per month. Key pros are the interface, features, and signals marketplace. Potential con is complexity for new traders.

  • Chapter 12 previews examining key metrics, signals, and red flags to identify profitable cryptocurrencies and avoid “shitcoins”. Specific criteria will help determine if a coin is worth investing in or should be avoided.

  • The author examines various metrics and factors for screening out “bad apple” cryptocurrency projects, which they refer to as “shitcoins”.

  • Top-down signals like exchange listings and volume/liquidity are looked at first to filter out projects with little support. Low circulation or exchanges known for wash trading raise red flags.

  • Development activity on GitHub and social media engagement is assessed to see if the project is still actively developed. Stale repositories or sparse updates signify an inactive project.

  • The team’s credentials, background, and relevance to the project are vetted to ensure competency. Marketing-heavy teams without technical founders inspire less confidence.

  • The need for a token/coin is questioned - if the use case does not require a token, the project’s long term viability is doubted.

  • Real business development through meaningful partnerships and integrations, not just MOUs, demonstrate progress towards adoption of the token/coin’s intended use.

  • Overall the process aims to holistically examine a project across multiple criteria to identify dubious or underdeveloped initiatives labeled as “shitcoins” unworthy of investment. Due diligence on several levels is advocated to filter quality projects.

  • The app offers a multi-crypto and fiat wallet to store over 80 cryptocurrencies and support for 21 fiat currencies depending on location. Users can send/receive crypto and buy crypto with fiat.

  • There are withdrawal fees set at a flat rate (e.g. 0.0003 BTC) with no way to adjust transaction speed/fee. Banks may also charge $6-40 per withdrawal.

  • The “Crypto Earn” feature allows users to lend crypto on the app and earn interest, with rates as high as 18% annually. However, interest varies by crypto, term length, and whether the user has staked $2500+ worth of MCO tokens.

  • Staking MCO tokens provides an additional 2% interest bonus on fixed term deposits. Stablecoin interest is also typically higher than other cryptocurrencies.

  • Deposits and withdrawals using bank transfers have no fees charged by, but banks may charge international transfer fees.

  • Over 80 cryptocurrencies can be stored in the integrated wallet with the ability to send/receive and cryptocurrency purchases with fiat. But withdrawal fees and inability to adjust transaction parameters are downsides.

Here is a summary of the key points about the app:

  • You can earn interest on crypto holdings like CRO (up to 18%), BTC, ETH,etc. Interest rates vary depending on the crypto and length of staking/lock up period.

  • They offer a Visa debit card with different tiers that provide cashback rewards of 1-3% when spending. Higher tiers require staking more of their MCO/CRO tokens.

  • The app has an instant crypto credit feature that allows getting a loan by using crypto like BTC or ETH as collateral. Interest rates are 12-18% depending on staking amount.

  • They offer gift card purchases with crypto and cashback rewards of up to 10% when using CRO.

  • Other features include price tracking, alerts, mobile top ups with crypto, and basic trading functionality within the app.

  • The highest earning potential comes from staking their CRO tokens long term to get the best interest rates and card perks. But there is risk as it depends on the company’s success.

  • Overall it provides a simple way for users to earn rewards on crypto holdings, spend crypto via cards, and take loans while getting exposure to the native CRO token. But credit/loan features come with liquidation risks if prices fall sharply.

Here is a summary of the key points from the chapters:

  • The first step is to do an initial screening of coins by market cap to filter out the top 100 coins and focus on smaller altcoins with market caps below $10 million that have more room to grow significantly.

  • The next step is to look at trading volume and filter for coins where the 24-hour volume is 10-50% of the market cap, to identify coins with sufficient liquidity. Manual filtering in a spreadsheet is recommended.

  • Exchange listings are then examined to ensure the coin is trading on reputable exchanges like Binance with large user bases and deep liquidity, rather than smaller obscure exchanges. This will impact future trading potential.

  • On-chain metrics from sites like IntoTheBlock are analyzed, such as percentage of active addresses to total addresses, transaction time between transactions, and token distribution/centralization. Activity levels, growth, and decentralization are positives.

  • No individual network metric works for all coins, but together these screening steps provide an initial filtered list of altcoins to research more deeply through whitepapers, team information, roadmaps, etc. to identify the most promising lower market cap investment opportunities.

The key takeaways are using a systematic screening process focusing on market cap, liquidity, exchange listings, and on-chain metrics to narrow down a long list of altcoins to a shorter list worthy of deeper fundamental research for possible 100x return opportunities.

  • Option moneyness refers to whether an option is in-the-money, at-the-money, or out-of-the-money based on the relationship between the option’s strike price and the underlying asset price.

  • In-the-money means the strike price is below the asset price for a call option or above the asset price for a put option. This option has intrinsic value.

  • At-the-money means the strike price equals the asset price. This option has no intrinsic value and its value comes only from time value.

  • Out-of-the-money means the strike price is above the asset price for a call option or below the asset price for a put option. This option has no intrinsic value.

  • Tracking option moneyness can provide valuable insights into market expectations. A rising number of in-the-money calls could indicate bullish sentiment, while in-the-money puts may signal bearish sentiment.

  • Moneyness is a cheap and effective source of information that can help traders better understand market positioning and sentiment. Knowing market expectations could help traders gain an edge by being two steps ahead of price movements.

So in summary, option moneyness is a free data point that traders can monitor to gain insights into market sentiment and position themselves ahead of potential asset price moves. Understanding moneyness can provide an informational advantage.

  • The chapter provides an overview of options, including definitions of calls, puts, strikes, in/out of the money.

  • It then discusses key factors that influence option prices, called “Greeks” - delta (change in option price for $1 change in asset), implied volatility, time to expiry.

  • The put/call ratio is introduced as a measure of put vs call open interest/volume, which can indicate market sentiment. A ratio over 1 suggests more bearish sentiment.

  • Option skew measures the relative implied volatility of puts vs calls at the same delta. A positive skew means puts have higher implied vol and premium, suggesting more bearish sentiment.

  • Example skew data for Bitcoin is shown over 3 months, trending more positive recently which correlated with falling prices.

  • Using an options pricing model like Black-Scholes, market parameters like implied vol can be backcalculated to estimate the probability distribution of the asset price at expiry.

  • Example probability distributions for Bitcoin expiring in Dec 2020 and beyond are shown based on current option prices.

The key focus is on introducing option-derived metrics like put/call ratios, skew, and implied probabilities that can provide insights into market sentiment and future price expectations.

  • Candlestick charts display price movement information visually using candlesticks that represent daily price ranges. Candlestick colors and patterns can indicate market movements and signals.

  • Bullish patterns form after downtrends and signal potential upside reversals, prompting traders to take long positions.

  • Hammer and inverted hammer patterns show buying pressure overcame selling pressure, suggesting buyers will take control.

  • Bullish engulfing pattern has a large green candle completely engulfing a small red candle, an obvious win for buyers.

  • Piercing line has a significant gap up after a long red candle, indicating strong buying pushed price above mid-point.

  • Morning star pattern features a short candle between long red and green candles, signaling selling pressure subsiding and an impending bull market.

  • Three white soldiers shows three consecutive long green candles opening and closing progressively higher each day, a very strong bullish signal.

In summary, these candlestick patterns provide technical analysis signals for traders to identify potential bullish reversals and opportunities for opening long positions.

A candlestick pattern that signals a steady advance of buying pressure after a downtrend is the bullish engulfing pattern.

The key points are:

  • It occurs after an downtrend, as the passage states it forms after a period of falling prices.

  • It shows buying pressure, as the large green candlestick fully “engulfs” or encompasses the small red candlestick from the previous period, indicating buyers overpowered sellers.

  • It signals a steady advance, as the large green candlestick engulfing the red suggests buying pressure increased significantly and took control of the trend, potentially starting an uptrend.

So in summary, the bullish engulfing candlestick pattern fits the description of a signal that occurs after a downtrend and shows a steady advance of buying pressure. It meets all three criteria given in the summarized question.

Here is a summary of the key points about implied volatility rank:

  • Implied volatility rank compares the current implied volatility of an underlying asset to its historical implied volatility readings.

  • It is displayed as a percentile, with 100 being the highest IV rank and 0 being the lowest.

  • A high IV rank, like 90 or above, indicates the current implied volatility is much higher than usual. This suggests the market is expecting higher than normal volatility in the near future.

  • A low IV rank, under 30, means implied volatility is lower than its historical range. The market may be expecting lower volatility ahead.

  • Monitoring IV rank can help identify opportunities. A very high rank could mean implied volatility is “overcooked” presenting sell opportunities. A very low rank signals implied volatility may rise in the future.

  • IV rank provides important context about implied volatility that can’t be gleaned from the IV number alone. It shows how typical or atypical the current reading is historically.

  • Traders may use high or low IV ranks to help time their entries and exits when trading volatility. For example, establishing short positions when IV rank is very high.

So in summary, implied volatility rank puts the current IV in perspective by comparing it to historical levels, giving insights into what volatility the market may be pricing in. This additional context can help traders formulate volatility-related strategies.

  • Implied volatility alone can’t tell you if an asset’s IV is high or low relative to its own history. Asset XYZ having a higher IV than asset ABC doesn’t mean XYZ’s IV is higher relative to itself.

  • IV rank provides context by showing how an asset’s current IV compares to its IV over the past year. A rank of 100 means the highest IV in the past year, 0 the lowest.

  • IV rank is calculated by taking the current IV, subtracting the past year’s lowest IV, dividing by the difference between the past year’s highest and lowest IV, and multiplying by 100.

  • IV rank helps identify if an asset’s options are relatively expensive/cheap compared to its history, allowing you to determine if it may be a good time to sell or buy options on that asset.

  • Brokers often filter extreme past IV values so IV rank isn’t distorted. Brokers also make IV rank easy to see and use for screening assets.

So in summary, IV rank provides valuable context on an asset’s implied volatility by relating its current level to its historical range over the past year. This helps assess relative option pricing compared to the asset’s volatility tendencies.

  • The sunk cost fallacy refers to the tendency to continue an endeavor due to previously invested resources (time, money, etc.), rather than cutting losses. People cling to failing trades because they don’t want to accept the sunk costs as losses.

  • It’s best not to factor sunk costs into decisions about whether to continue or exit a trade. The only thing that should matter is whether you would open the position at its current levels, regardless of past investments.

  • One way to avoid this is having a clear exit plan before entering a trade, with defined exit points not dependent on sunk costs. This plan helps take emotions out of the exit decision.

  • Being aware of cognitive biases like this one is important, but not enough on its own. Preparing in advance with trade plans, using journals, and self-monitoring can help reduce reliance on biases when making time-sensitive decisions in trading. Avoiding decisions under pressure also limits the effect of biases.

So in summary, the sunk cost fallacy describes clinging to losing trades due to past investments, when the rational choice may be to cut losses - having predetermined plans can help traders avoid this irrational tendency.

  • The chapter emphasizes the importance of psychology and developing a winning mindset in trading. Trading confronts traders with uncertainty and emotionally demanding situations.

  • It outlines five fundamental truths about trading: 1) Anything can happen in the markets, 2) You don’t need to know what will happen to profit, 3) There is random distribution between wins and losses, 4) An edge just indicates higher probability, not guaranteed wins, 5) Every moment in the market is unique.

  • Based on these truths, it recommends having a concrete trading system and plan. The plan should define risk, entry/exit points, position size, and more. Trading small positions is also advised to manage risk.

  • Sticking tightly to the plan and trading mechanically is emphasized, such as using alerts and automated orders. This avoids emotional decisions.

  • The chapter argues developing the right psychology is key to profiting from an otherwise profitable system. Emotional control and accepting uncertainty are important mindsets.

So in summary, it discusses how to develop a winning mindset in trading by understanding market realities, having a strict trading plan, managing risk, and maintaining an optimal psychological approach focused on discipline and controlling emotions.

The checklist walks through key things to consider before placing a trade order:

  • Check for upcoming events like earnings, dividends that could impact the stock’s behavior. Avoid trading through these events.

  • Define risk parameters like maximum loss and profit targets. Calculate the risk-reward ratio.

  • Determine the time frame - day trade, swing trade, long term.

  • Develop an entry plan with price, position size, how to open the position.

  • Create an exit plan with possible adjustments, exit price triggers like price levels or timeframes. How to close the position.

  • Other optional notes like trade motivation, directional assumption, trade description.

Going through this checklist will ensure you never have a trade you don’t know what to do with. It’s important to create a written trading plan and review it, as well as keep a trading journal to continually improve. Writing down the plan prevents impulsive decisions and helps stay objective. Sticking to the plan and reviewing afterward leads to better trading over time.

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