Bitcoin is known as the very first decentralized digital currency, they’re basically coins that can send through the Internet. 2009 was the year where bitcoin was born. The creator’s name is unknown, however the alias Satoshi Nakamoto was given to this person. Bitcoin accounts cannot be frozen, prerequisites to open them don’t exist, same for limits on bitcoin price usd .
Advantages of Bitcoin
Bitcoin transactions are made directly from person to person trough the internet. There’s no need of a bank or clearinghouse to act as the middle man. Thanks to that, the transaction fees are way too much lower, they can be used in all the countries around the world. Every day more merchants are starting to accept them. You can buy anything you want with them. How Bitcoin works. You should explore bitcoin mining. It’s possible to exchange dollars, euros or other currencies to bitcoin. You can buy and sell as it were any other country currency. In order to keep your bitcoins, you have to store them in something called wallets. These wallet are located in your pc, mobile device or in third party websites. Sending bitcoins is very simple. It’s as simple as sending an email. Invest in bitcoin to get great returns.
You can purchase practically anything with bitcoins.Bitcoin Anonymity.When doing a bitcoin transaction, there’s no need to provide the real name of the person. Each one of the bitcoin transactions are recorded is what is known as a public log. This log contains only wallet IDs and not people’s names. so basically each transaction is private. People can buy and sell things without being tracked.
Bitcoin innovation. Bitcoin established a whole new way of innovation. The bitcoin software is all open source, this means anyone can review it. A nowadays fact is that bitcoin is transforming world’s finances similar to how web changed everything about publishing. The concept is brilliant. When everyone has access to the whole bitcoin global market, new ideas appear. Transaction fees reductions is a fact of bitcoin. Accepting bitcoins cost anything, also they’re very easy to setup. Charge backs don’t exist. The bitcoin community will generate additional businesses of all kinds.
What Makes bitcoin price usd So Interesting?
It begins with a text message from Verizon
Oh boy. Within seconds, I call the number and get this.“Hello, welcome to Verizon. Our offices are now closed. Our hours are between 8 and 11pm on the weekdays...”
I call again and repeatedly tap zero to try and get an operator. No dice. A minute later I get a duplicate text message.
I screenshot and tweet to Verizon Support.
Incredibly anxious minutes go by as I attempt to reach Verizon. I google “Verizon fraud prevention line” searching for a number to call and get nothing.NO PHONE NUMBER ANYWHERE TO BE FOUND
11:41 PM — Gmail signs out.
I’m completely in the dark.
11:42 PM—Coinbase password resets
My session cookie doesn’t kick me out yet so I watch this in real time.
11:34 PM—Coinbase New Device Confirmation
11:44 PM—1.18 BTC sent
11:45 PM—70.96 LTC sent
11:46 PM—16.03 ETH sent
Adios hopes and dreams fund 💸 —$8,000+ is gone in 15 minutes.The hacker deleted these emails but google recovered them
How on earth was I so blindsided?
Before we begin, its worth mentioning that yes, yesssssssssssssssssssss, I did not have enough protection around my Gmail account. I’ve used Google Authenticator before, for my personal account and for various work emails, but I stopped using it at a certain point out of convenience. I deeply regret doing so and you can certainly say, “HA, YOU HAD THIS COMING TO YOU DUDE, MY BITCOIN IS ON AN ENCRYPTED THUMBDRIVE IN A SECRET UNDERGROUND LOCKBOX COLD STORAGE FACILITY.” But there are many coin spectators out there with a similar vulnerability and, as more novices join, this vulnerability will only become more of a problem.
Of all the things that went down in the factors that lead to this hack, Verizon Wireless is what I was massively unprepared for. After talking at length with customer service reps, I learned that the hacker did not need to give them my pin number or my social security number and was able to get approval to takeover my cell phone number with simple billing information. This blew my mind and seemed negligent beyond all possible reason but it’s what they do. The main thing that struck me by the hack was the extraction speed possible in the current cryptocurrency ecosystem. $8,000 in 15 minutes is faster and more lucrative than robbing a suburban bank.
Why I was targeted
The best working theory for why I was targeted was this tweet I made last week about Coinbase.com. A friend of a friend was hacked on Coinbase and he had not heard back from anyone on Coinbases’s support team for multiple days. As a plea for help, he asked people to help get the word out on Twitter. I did, it got RTed a bunch, and to my incredible naiveté, I had no idea I was essentially attaching a “Rob me too” sign to my back.
And now, here I am. I tried to help someone get the attention of Coinbase for fraud, I got screwed, and now I’m trying to get the attention of Coinbase.com for fraud. The official Coinbase Support twitter has responded once, then a bot emailed, with a disclosure that it could be weeks before I get a single response to my question.
I have never lost money at anywhere near this scale before. I grew up in a family that is especially conservative when it comes to money and this hits on an emotional level that is hard to shake. Like many, I know that there are plenty of risks when it comes to cryptocurrency, it’s a gamble, but the one thing you don’t expect to happen is to be robbed in seconds on a site with a cleaner user interface design than Chase Bank.
I have no idea if I’ll be able to recover any of this money but I figure the one thing I can do with this feeling of rage/sadness is try and unpack the vulnerabilities so others get less screwed.
Things Verizon Wireless can do
- Add additional layers of scrutiny to any person calling in and requesting to ‘swap phones’. General billing information was sufficient to transfer my number and I was floored by this. It is insane that Verizon, and other wireless companies, haven’t made real efforts to counter this hack and even more crazy that they haven’t been sued for gross negligence.
- Make urgent text alerts actionable through SMS. If I received the original alert and was able to text a reply stopping it, or even delaying it, this entire hack would have stopped in its tracks. Instead I was told to ‘immediately’ call a number for Verizon that no one was there to answer.
- Make the Verizon Fraud Hotline accessible and visible to your customers. It took 45minutes of irate Twitter DMing before I was able to get the number I needed to contact a real person at Verizon. For anyone searching for this in the future, the number is 1-(888) 483–7200.
- Tell your customer what happened with their account. I spent a few hours with Verizon support being bounced from the Fraud Department to the Legal Department to the Consumer Support department. I got very little from anyone, they would not release details of the call unless I hired a lawyer to represent me.
Things Coinbase.com can do
Dear God Coinbase. Where do we even begin.
- Make enabling Google Authenticator a *requirement* for storing any coins on Coinbase.com. SMS 2FA is broken but deceptively secure, especially to new comers.
- Make a 24–7 fraud hotline available to your customers. Twitter and email are broken mechanisms for response when speed is of the essence.
- Significantly limit the number of new users you accept on your exchange until you have the support resources to cover them. You gained 400,000 users in 30 days, FOUR HUNDRED THOUSAND, and many of these users are extremely new to security.
- Put basic fraud protections in place when someone logs into an account on a new device then attempts to liquidate an account. A one hour delay could have stopped this hack in its tracks.
- Make the default modes for transferring coin significantly more paternalistic for new users.
- Create an insurance policy for personal accounts. Yes, this policy would be extremely vulnerable to fraud but this is your core competency, find a way.
Things you can do to secure your coins
In the wake of the attack, I reached out to friends with lots of experience in cryptocurrency and these are their tips.
- Don’t talk about Bitcoin Club. Don’t talk publicly online, with your real identity, about your trades or the exchanges. I know it’s too late for some (certainly for me!), and it shouldn’t be like this, but this makes you less of a target. Even if your coins are properly secured.
- If you are going to post on reddit, twitter, etc about cryptocurrency, use a far removed pseudonym.
- Use a separate, secret email for your coin accounts and do not forward the alerts to your personal email account.
- Use 2FA — SMS doesn’t count. I had no idea how easy Verizon and others make it for people to swipe your phone with basic information within minutes. Make sure you use GAuth or Authy or something else supporting TOTP tokens; consider a FIDO U2F device as well for your gmail account.
- If you insist on leaving your money on coinbase.com, then store it in their “vault”. This will give you a buffer of a couple days before any of your stuff can be touched, at least it won’t be gone immediately.
- Call your cellphone company and tell them you are likely to be targeted for social engineering. Request more scrutiny for making requests.
- Store your coins on a physical wallet. Technically, any money you have in an exchange isn’t yours — you simply have an IOU from the counter party. Best practice for keeping your coins safe is with a hardware wallet like the Ledger Nano S. This is only $60 or so and means that someone will need to physically enter a pin and confirm a transaction or steal your backup seed to access your funds.
I’m not giving up on crypto
I joined Coinbase.com in 2015, have had various positions of BTC over the years and have seen hype come and go. I think we’re nearing a real inflection point with adoption but we’re in a dangerous place as the cost of BTC/ETH skyrockets and noobs hit the market.
Four-hundred-thousand people have joined Coinbase.com in the last thirty days. This group has vastly different security needs and expectations than the original 400,000 who joined Coinbase in 2012. If this new group isn’t protected in aggregate, lawsuits will fly, financial lives will be ruined, and the dream that bitcoin will eventually hit $50,000 will become a dim fantasy. Check out the Coinbase reddit if you want an additional taste of what’s happening.
Despite this, I’m willing to bet that Coinbase, or someone else, will significantly evolve and eventually figure it out. Many of the problems that lead to my hack on Coinbase are addressable with more paternalistic software, fraud detection and an adept support team reachable 24–7. The beauty of the blockchain is that you can create a consumer offering on top of it that operates much more like a bank and it can exist next to an exchange suited for someone buying and selling huge, risky amounts each day.
It’s hard to understand how brutal it is to start over with this level of rapid financial loss unless you’ve been there yourself. The BTC I had in my Coinbase was collected over years and the ETH and LTC position were more recent. I blame myself for not doing enough security research and I also know that these openings are incredibly common for others. Unless huge changes happen, so many others are likely to get robbed and the reputation of cryptocurrencies, in general, will degrade. The only thing that’s really around to protect these newcomers is the cryptocurrency community itself. Please let my ample misery be a raw warning sign. Inform your friends. Don’t trust Coinbase defaults. Don’t think it won’t happen to you. Stop reading this and secure your coins right now.
Legal. Many have encouraged me to find a lawyer to work through some options in action against Verizon and Coinbase. If you know of a lawer or firm who might be good, please shoot me a DM (my DMs are open). I don’t have many resources to pursue this so any general advice would be helpful.
Class action lawsuit against Verizon and/or CoinBase.com. Apparently there is already a lawsuit in motion (am learning more about it). If you have also been affected by a similar situation at CoinBase, message me, so we can share stories.
Donations. Wow. Some very generous people in the bitcoin community have asked about donating to a tip jar or helping fund a lawsuit. This is awesome of you and massively appreciated.
LTC: LbZnJ8QWc581bm6iu6STpbKVq9RDv1Yqbd (currently at ~$250 USD)
BTC: 188itMZTQx1PcbuCdpjBkdBLUKjJRcdPoj (currently at ~$280 USD)
Hugggge thanks to @BTCXBTDEV.
Online Bitcoin Trading: Discover The Keys To Earning A Formidable Income Trading Bitcoin
#News 12 September 2017: The Smart Token Exchange pre-sale is live. They plan to aggregate exchanges’ liquidity reducing liquidity cost (also known as slippage) to traders. The key is fast API execution, in which they are world-class with their KeyCaptcha business. This project is under the radar but will gain traction. I have invested in the STEX Pre-Sale. (The terms are much better than in the ICO that will follow.)
#News 10 September 2017: I just published Are you in the Bitcoin 1% ?
#News 9 September 2017: PreSearch is a decentralized Google. This will happen. ICO is live.
#News 26 August 2017: This essay is top of the Google Search for crypos. Please clap for this essay if you are passionate about crypto. I tweet about crypto trading: BambouClub .
#News 26 August 2017: I keep a crypto trading diary that I regularly update with trading recommendations.
The Ten Rules
15 September 2017: Performance of my Portfolio:
Since Entry June 2014: Portfolio is x12.4, i.e. has increased 1,140%. My average Bitcoin buy price (June 2014 to December 2015) was $540. Bitcoin (at its current $3,709) is x6.86, increase of 586%.
Year to Date (YTD) 2017: My portfolio is x5.8, i.e. has increased 480%. Global Cryptomarket is x6.89, increase of 589%. (From $17.7 billion to $122 billion.) The main successes in my portfolio have been $BTC, $ETH, $EOS (ICO), $XTZ (Tezos ICO), $ZRX (0X ICO), $NEO and $BNB (Binance Coin). These calculations apply to my trading portfolio, and exclude my pension which has been fully invested in a Bitcoin fund since June 2017.
These notes are mainly for my own benefit so I can refer back to them and improve them. I will update it from time to time.
- Build the Portfolio on Bitcoin
- ‘When you See it, Bet Big.’ George Soros
- Index Track the Top 10 Cryptoassets
- Scale Out (Take some Profits)
- The Honeybadger Trade: Buy the Dip
- Do not Over-Trade. Lock up Coins
- Let Profits Run. Cut Losses. Watch 7d Price Change not 24h or 1h
- ICOs are a Great Opportunity. Do Your Own Research.
- Research Micro-Caps that might rise by Orders of Magnitude. (I like EquiTrader $EQT, only available at CoinExchange.)
- Leveraging has a Role. Buy (and Sell) Bitcoin Futures at Bitmex Exchange. Use Futures if you want greater, faster returns (at a higher risk).
Rule 1: Build the Portfolio on Bitcoin
Bitcoin is the mother lode. It has been good to me and will always form the main part of my crypto portfolio.
Those (mainly low-income copy & paste journalists) claiming Bitcoin is in a bubble are too lazy and/or stupid to become informed. There is no Bitcoin bubble for these reasons.
Bitcoin has had phenomenal growth in its price and MCap since inception. If we exclude other cryptoassets, Bitcoin has been the best performing asset in the world every year since 2009 through to June 2017 with the exception of 2014. It has beaten all global currencies, equities, commodities, bonds, ETFs, real estate throughout that period. Bubbles are by definition short-lived, they do not keep bubbling for eight years.
As a result it has achieved a MCap of $56 billion and this place in a global table of iconic assets.
Volumes indicate the liquidity of an asset. The greater the liquidity the easier it is to buy and sell, even when there is turmoil, and the lower the Bid-Offer spread and therefore the cost of trading. You want to avoid assets with tiny liquidity as when the shit hits the fan it will be costly to exit. Bitcoin has world-class liquidity. I run a crypoasset analysis site named Blocklink.info. Here is a screen-grab of the most liquid assets in the world.
Source: Blocklink.info. Volumes for cryptoassets are fetched from the Coinmarketcap API using the CRYPTOFINANCE Google Sheets Add-On. Volumes for stocks come from Google Finance. You can check the US stocks volume at the NASDAQ site.
Bitcoin’s trading volume is up there with the great iconic American stocks.
Bitcoin’s price will continue to be volatile, but Bitcoin is travelling along a secular bull trend road, and that spectacular volume is not going to evaporate overnight.
Every month fees are ever higher which is watertight evidence of ever greater demand to use Bitcoin. That is, people want to send transactions across the blockchain, not just trade on the exchanges.
Tx fees time-series data is maintained at Blockchair.com
Bitcoin and My Portfolio
Bitcoin holds a dominant place in my cryptoasset portfolio. As a result of recent changes in UK regulations I have allocated my entire personal pension (like a US 401k or retirement account) into Bitcoin via the XBTProvider ETN.
Be more cautious about investing your 401k into Barry Silbert’s Bitcoin Investment Trust $GBTC. The (European) XBT Provider ETN is an open-ended fund which means it maintains a premium to the NAV close to 0% at all times. The Bitcoin Investment Trust is an inferior investment vehicle because it is a closed-end fund (it does not increase its holdings of the underlying asset when demand for the product increases) which means it is subject to wild swings in its premium, which has been as high as 150%. So you could make the mistake of buying when the premium is high and suffer swingeing losses even when the Bitcoin price is stable.
Rule 2: “When you See it, Bet Big.” George Soros.
Something extraordinary is happening. The cypto space in June 2017 is like the Internet space in 1995. It is a great opportunity.
Stanley Druckenmiller has written about his dealings with George Soros whom he quotes as saying ‘When you see it, bet big’. The funny thing is, I was mocked by a Hedge Funder on Twitter named Sarah Cone (@impcapital ) when I revealed that I had seen it and I had bet big. I bet big with my entire fucking pension.
George Soros: When you see it, bet big.
Here is Charlie Munger expressing a similar though:
Rule 3: Index Track the Top 10 Cryptoassets
Until 18 May 2017 I held very little Ethereum and zero Ripple in my portfolio.
I made a great mistake in not buying Ethereum and Ripple in 2017 until 18 May. My mistake was Bitcoin Maximilism. I refused to have anything to do with Ethereum and Ripple because I didn’t like them. As a result I missed these returns.
I came to my senses on 18 May, 2017 when I underwent an epiphany. I then made a new (self-imposed) rule : broadly track the Top 10 cryptoassets in my portfolio, regardless of my opinion about their individual merits.
I have applied a flexible, discretionary form of index-tracking since then.
I execute index-tracking manually off this Google Sheet:
At the time of writing, 20 June 2017, the results of index-tracking have been pleasing.
YTD 2017 returns for Cryptocurrencies, 18 May 2017:
My portfolio was up 106% YTD.
YTD 2017 returns for Cryptocurrencies, 20 June 2017:
My portfolio was up 281%. So in one month (18 May to 20 June) it has raced past Bitcoin, $GBTC, and Monero, and has made good ground in catching up with Global Cryptocurrencies.
I ruled myself free to apply discretion in my index-tracking. It was very clear early on that Ripple was in a secular bear market against Bitcoin from 18 May and I quickly became and stayed underweight in Ripple.
I also went underweight in Ethereum in mid-June at $350 — $360.
Is Ethereum in a bubble?
I don’t know. Applying the same metrics used above to $ETH it does pretty well, but not as well as Bitcoin. But there are clear risks and as a result I am underweight in Ethereum compared to its share of the global Cryptoasset Market Cap.
Growth (Price & MCap): Ethereum has outstanding growth in its short life, but it was only created in August 2015 so it lacks the 8-year track record of Bitcoin. This is significant. Ethereum’s explosive performance in 2017 could indeed fit into the time-frame of a bubble.
Trading Volumes & Volume/MCap Ratio: Great. Similar to Bitcoin.
Transaction Fees: All good. They are rising quickly indicating true demand for this cryptoasset.
Metrics aside, Spencer Bogart makes great sense in this thread where he describes the regulatory risk and other risks that might bring the Ethereum house of cards down. It is possible that the SEC will rule that the ICOs are illegal sale of securities. People might go to prison. It is for these reasons that I am under-allocated.
Note: If Governments decide to put a stop to the cryptoasset economy, there is a crucial distinction between Bitcoin and Ethereum. Bitcoin is truly decentralised. It has honeybadger, even cockroach qualities and is resistant to such measures. Ethereum is a registered commercial legal entity in Switzerland and can be shut down overnight.
Rule 4: Scale Out (Take Some Profits)
Anyone who has lived through a bubble knows the value of this.
I have experienced several bubbles, namely London housing 1984–1988, DotCom in 1998–2000, London housing again 2002–2008, the Bulgarian property market (seaside apartments and ski apartments) 2004–2008.
It’s human nature to be cautious at first and then progressively relaxed, even reckless. My observations suggest that it is best to behave in the opposite, counter-intuitive way: commit yourself to the market with reckless abandon in the early days, and then start the scaling out process, applying the brakes and get the hell out when it appears to be the later stages.
In all those bubbles I made great paper profits that disappeared in a matter of months. The paper profits were more than 2 million Euros in the Bulgarian property market. In none of them did I take profit off the table in the run-up. Christ did I regret that. I am taking profit off the table in the cryptoasset market.
Finally, at the end, you must scale out completely. Jesse Livermore’s advice for a bull market:
It is not my opinion that we are near the last eighth:
Rule 5: The Honeybadger Trade: Buy the Dip.
Lots of influential actors — Governments, banks, regulators — fear Bitcoin and try to kill it on a regular basis. Bitcoin takes massive hit after massive hit, but it has always rode the punches and bounced back. Experienced traders have noted this and the advice is to buy the dip. This is the Honeybadger Trade.
I like the idea of BTFD, as I truly believe in Bitcoin. BTFD! people on Twitter yell. But it has puzzled me for a while.
There is a solution. Buy on margin at the dips. The beauty of this is that you do not need to add funds to your account, you merely avail yourself of the leverage already available. Use Bitmex Exchange.
I permit myself to use margin in the specific case of BTFD.
You need to get the timing of BTFD right. Beetcoin on Twitter provided this great analysis (thread) demonstrating that you should stay out for the first 48 hours of a dip and then BTFD.
Do NOT Sell the Dip
You need to be clear, is this a dip or is it a secular bear market? I BTFDd relentlessly in the DOTCOM unravelling in 2000 and lost every penny in the end.
If it is an established, secular bear market then face the music and STFD.
Rule 6: Don’t Overtrade. Lock up Coins
I over-trade stupidly at at tiny whims when I am bored or drunk. A solution I have found is to lock coins away out of reach.
One way is to keep Bitcoins and others in your hardware wallet. I use Trezor. It can store Bitcoin, Ethereum (+ all ERC-20 tokens), Ethereum Classic, ZCash, Litecoin, and Dash.
Another way is to lock them into terms deposits at Cryptopia (applies only to Dotcoin). This gives you the added benefit of earning interest on coins at interest rates that just do not exist outside crypto (about 18% p.a.).
Rule 7: Let Profits Run. Cut Losses.
This guy turned $10,000 into $6 million by letting his profits run during the Ethereum run-up in the first half of 2017.
Run profits Cut Losses is hard to do exactly. In my P&L Sheet I focus on the 7d (Price Change over 7 days) to decide whether to re-allocate my portfolio according to this rule. I largely ignore 1 h and even 24 h .
Rule 8. Treat ICOs and other Examples of Herd Mentality with Care
In general you are better off holding Ethereum than going through the mad, greedy, FOMO process of buying ICOs.
But ICOs or coins newly released on the exchanges can be great investments. Beetcoin played the IOTA new release on Bitfinex like a master. He turned 10 Bitcoin into more than 200 Bitcoin. He bought the $IOT Over the Counter (OTC) some time before Bitfinex listed it. He was ahead of the herd.
Rule 9 Do Your Own Research. Examine Micro-Caps.
I respect this strategy.
I bought Elastic $XEL at the obscure Heat exchange. It was rather difficult discovering how to buy it because I was in this case ahead of the herd where the path was not well defined. In the end I bought it at a high price (average 31,367 Satoshis, should have got them at 25,000 Sats) as I got scammed over at Heat by a predator (Arsonic @Ars0nic on Twitter) playing the order book. We’ll see how that plays out. I think the excessive price I paid will not matter too much.
Rule 10 Be Careful as Hell with Leveraging
Obviously leveraging can work, as with the guy referenced above who has made $6 million relentless buy Ethereum on leverage since December 2016.
I take out the rare leveraged position at Bitmex Exchange.
It can also go horribly wrong when margin calls occur across the mass market.
That said, those who lost everything were not the brightest traders. They could have avoided that by using judiciously set Stop-Limit orders, rather than plain Stop orders.
So that is the Ten Rules.
I keep a crypto trading diary that I regularly update with trading recommendations.
If you liked this please click on the Green Heart and follow me on Twitter: @ BambouClub