A Beginners Guide To Bitcoin and Blockchain

You have probably heard the terms Bitcoin and Blockchain but maybe you don’t understand what they mean. The post below and accompanying infographic provides a beginners guide to Bitcoin and Blockchain.

Bitcoin is the first ever decentralized cryptocurrency which can be even termed as the digital or virtual currency, says cryptosuper.market. Bitcoin is fungible, portable, divisible and irreversible.

The Bitcoin was invented by the name SATOSHI NAKAMOTO in the year 2008 and it was later published as open source in the year 2009. But the person or group behind the invention have no traces of identity as the bitcoin was published by an unknown person or group using the alias Satoshi Nakamoto.

After the invention of Bitcoins many cryptocurrencies emerged, where some used the same system and structure of bitcoin and others implemented the structure and made better digital form of currency. Though there are many forms, bitcoin stands first-1st among them. As the rest of the forms are derived from the bitcoins they are often termed as ALTCOINS which means Alternate coins of bitcoin.

At first Litecoin was taken as an altcoin which later lead to various Altcoins as Dogecoin, Ethereum, Monero and etc. Each and every altcoin has its own specifications where some of them even beat the functioning of bitcoin in some aspects as some of the Altcoins stand as the best by offering greater anonymity than bitcoin.

A Beginners Guide To Bitcoin and Blockchain – What is Blockchain?

To record all the transactions of the bitcoins a public ledger called BLOCKCHAIN has been invented where the blockchain stood as undeniably an ingenious or a creative invention. The blockchain plays an important role, the whole bitcoin network completely relies on the blockchain.

Blockchain is further classified as three types namely public, private and consortium blockchain. Generally blockchain follows a state of consensus where the transactions takes place between the users and are usually confirmed within 10 minutes of Block Time by the network, through a process called Mining.

Block time is often defined as the time taken by the network to generate an extra block in the blockchain. The Block Time differs for each and every Cryptocurrency form, the Block time for Ethereum is 20 seconds.

A chronological order is enforced in the blockchain system by mining. Mining allows different computers to agree on the state of system and it protects the neutrality of the network.

The first ever international blockchain transaction was completed on October 24, 2016. Brokered by the Commonwealth Bank of Australia and Wells Fargo & Co (WFC).

Now there comes the question of storage of bitcoins, bitcoins are generally stored in the bitcoin wallet or crypto wallet. Cryptocurrency is not actually or directly stored in a crypto wallet.

Instead, a private key is stored that generally shows ownership of a public key. So in general a crypto wallet stores both private and public keys and allows to receive and send coins.

If a person loses his / her wallet due to the corruption of the wallet file or hard disk or the data disruption the lost bitcoins that are present in the wallet can’t be retrieved back and they are to be considered that they are lost forever. There are many offline and hardware wallets available.

The Bitcoins use peer to peer (P2P) networking system which doesn’t involve any third party interference in the transaction process. The success rate of the trade increases with the P2P networking system.

P2P networking system became first popular in 1999 with the introduction of Napster application, it is a file system which generally has a set of central servers that’s used to link people who had files with those requested files.

Since the transactions directly take place between the users without the interference of any third party, the transactions are irreversible.  But at one point it is possible to refund if and only if the receiver agrees to cancel the transaction.

Generally people often get confused about owning a cryptocurrency, the major point that concerns them which coin to select. Though bitcoin stands first it even has some drawbacks which are recovered in its altcoins. People now-a-days are interested in bitcoins because of its speed of transaction and very low transaction fee offered.

Bitcoin is the world’s most widely used cryptocurrency and thus bitcoin is increasingly viewed as a morganatic or legitimate means of exchange. But there is even a point to be concerned as the price of bitcoin is volatile, price of bitcoin can unpredictably decrease or increase over a short period of time due to its novel nature, young economy and illiquid markets.

It isn’t a tough task to own a bitcoin as there are 4 basic ways through which a person can own a bitcoin, a person can buy them form bitcoin exchange sources or can buy bitcoins from any of their friends or relatives or near by trader or by Accepting Bitcoins as payment for goods and services they provide or by mining the bitcoins.

All the three ways are simple and easy but care must be taken while dealing with unknown people or traders whereas mining isn’t that easy as it seems to be as it’s a process which involves in usage of special software to solve mathematical algorithms in exchange of bitcoins and it isn’t possible as it once was.

If a person wants to begin a transaction and he knows nothing regarding the process then that’s totally futile. We can conclude the information regarding beginning transaction process or steps of the transaction process in few steps as : a transaction can be termed a general transfer of value between the Bitcoin wallets that are involved in the blockchain.

Bitcoin wallets have private key which is generally used to sign transactions by providing a proof (mathematical proof) that the request have come from the owner of the wallet. The signature also prevents transaction being altered by others once it has been issued or started.

All transactions are between the users and are usually confirmed within 10 minutes of block time by the network through mining.

Nowadays for the convenience of the bitcoin users many Bitcoin ATMs have been installed and there are about 3164 ATM machines through out the world. Bitcoin kiosks (Look like traditional ATMs) are generally the machines which are connected to internet and allow the insertion of cash in exchange for bitcoins. As per the study, bitcoin ATM charges about 7% on transaction and 50$ as exchange rate.

Is Bitcoin legal?

There are many countries which legalized the usage of bitcoins and whereas there are many countries which have banned the usage of bitcoins and declared bitcoins illegal. In short we can say that the bitcoin isn’t legalized all over the world.

Countries or Nations like Ecuador, Bolivia, Bangladesh, Kyrgyzstan and Saudi Arabia banned the usage of bitcoins and declared bitcoins illegal whereas, countries like United States, Canada, Australia and European Union accept the usage of bitcoin declaring it legal.

In cryptocurrency we usually have a fork which is given as change in protocol, the forks are classified into hard forks and soft forks. The first Bitcoin fork was NAMECOIN published or generated in the year 2010 and a hard fork published in the year 2017 was Bitcoin Gold.

The most common fork used is the SegWit which is a soft fork, SegWit (Short for Segregated Witness) and SegWit is a protocol upgrade that changes the way data is stored.

The total dollar market value is generally determined by Market Cap value or Market Capitalization value. The market cap value is mathematically calculated using MC=N x P, where MC is the market capitalization, P is closing price per share and N is number of shares outstanding.

Bitcoins are even helpful in the payment sector. For the first time University Of Nicosia, Cyprus accepted fees in the form of bitcoins. Bitcoins are even used in shopping, online transactions and payment.

There are many payment service providers (PSP) offering online services dealing with cryptocurrencies. There are many payment service providers where Bitpay and Coinbase are internationally top ranking exchange providers for bitcoins. The basic work of the payment service provider is to accept bitcoin on behalf of the merchant and convert it to the local or Fiat currency.

Lightning network effectively creates a layer on top of bitcoin and it helps in fast and cheap transactions which can net settle to the blockchain. Lightning Network is pretty complicated and is an extremely promising as a cryptocurrency game-changer.

DAO tokens came into existence in the year 2016, the main usage of the DAO tokens was that the were to receive DAO tokens and then vote for a project to fund. But the concept didn’t work successfully as many people didn’t want the system to be present.

ICO (Initial Coin Offering) refers to the creation and sale of digital tokens. The first sale was held in the year 2014, it’s a project that came into existence to create some certain amount of a digital tokens and sell it to the people usually in exchange of their cryptocurrencies such as Ethereum or Bitcoin.

We hope you have enjoyed this beginners guide to Bitcoin and the Blockchain, if you did please comment and share.

The infographic below helps explain further – courtesy of Bitcoinfy.net

A Beginners Guide To Bitcoin and Blockchain - bitcoin infographic

6 Smart Ways To Invest For Your Children’s Future

Regardless of how untroubled about future some people are, it all changes once they become parents. The moment the baby arrives everything changes, especially our nonchalance toward money and savings. Only, this time is not just about rainy days that may come, but also the bright, shiny days when our kids are no longer drooling toddlers, but almost adults with their big dreams and life goals that they plan to achieve. Aside from unconditional love and proper upbringing, it is the parent’s main responsibility to make sure that their kids will have a good starting point in life once they leave the nest.  Saving money and investing in their future is a long-term project, so read on to find out more about it.

investing for your children's future - family finance image

 

Take care of yourself first

Although this may seem absurd, rest assured that it is one clever way to ensure a brighter future for your kids. Before starting to make plans about investments and children’s saving accounts, make sure to start saving for your retirement.  In addition to that, consider getting a term life insurance, as it doesn’t cost a fortune, yet it does leave you at ease. Also, filing a will is a smart move, even if it seems too early. All of these measures are nothing else but caring for your little ones as you wish to release them of responsibility to financially take care of you in your old age.

Saving accounts

Saving money this way is traditional and perhaps the safest way to put away some serious money for your kids. Even though interest rates are low and taxed as income, keep in mind that bank saving accounts, unlike some of the investments, are completely risk-free. There is plenty of ways to set up a children saving account as well as saving options for children. For instance, in the UK, you can set up a saving account on behalf of children, and when they turn seven, they can start managing their account. Great lesson in money handling as well as adopting saving habits.

Investing in steady growth

Considering low rates, having a saving account may not be the best opportunity out there. There are plenty of financial products and saving plans that will allow you to achieve your goals with much higher interest and substantial return over time. It is a combination of investment strategies and savings that fits your planning horizon and risk tolerance. For instance, couples in Singapore save money for children’s future by investing in unit trusts and education endowments, which are quite flexible and risk managed option, as well as great opportunities for long-term growth. However, these types of investments do require a reliable financial advisor.

A specific education savings plan

Having a well-educated kid costs arm and leg, so start putting money aside timely. There are saving plans that ensure that all the money, including interest, is directed to cover qualified education expenses. These are tax efficient and relatively safe saving plans that hold parents as account owners and children as beneficiaries. In Canada, this is RESP (Registered Education Savings Plan) and in the US is 529 plan (or College plan). Still, aside from the investment risk, there is a possibility that your child will not wish to go to college. In that case, you can change the beneficiary and still spend money on education. Spending money on unqualified expenses will result in penalties.

Try investing in commodities

Investing in commodities is a smart way to make money for the future, but not every commodity can stand the test of time and fluctuation on the market. Instead of investing your money in energy or agriculture, stick to the rarest and most valuable commodity of all – diamonds. It is not for the rich people only, since you probably have one already, on your engagement ring. Safe investing in diamonds involves learning the basics on how to properly diversify your investment portfolio. Also, monitoring the diamond market can be of great use, since lately, there is a big demand for naturally colored diamonds.  Look for rare pieces and rest assured that their value will increase over time.

More ways to save money

Find the way to create passive income, or in other words, way to make money while you do other things. For example, if you have additional space, rent it out via AirBnB. Also, keep in mind that all of your current possessions are frozen money at the moment, so sell things that you don’t need and earn. You can sell outgrown clothes and old toys, cribs, strollers, sports gear, etc.

Conclusion

The world is an expensive place and future is costly. Still, with some planning and logic, it is possible to ensure a good life for your little ones.

Linking Insurance with Investment: Everything You Need to Know About ULIPs Explained in 5 Simple Steps

We all know how simple the insurance market used to be several years ago. They were simply ruled by endowment plans and terms, and everything was relatively to understand. However, this all changed when Unit Linked Plans (ULIPs) came into the life insurance sector.

Linking Insurance with Investment ULIPs explained - life insurance image

While ULIPs add protection to your life, they can also be used to help you accumulate wealth, which means they are an investment opportunity. If this is something you’re unfamiliar with, never fear. Today, we’re going to explore five important things you need to know when it comes to ULIPs.

#1 – The Costs

This is perhaps one of the most important things you’ll need to know about when investing in a ULIP. There are several expenses that come with ULIPs, which include administration fees, fund management charges, mortality charges and more, depending on which one you invest in.

Whatever the case, make sure you’re aware of the charges that come with a ULIP since they will occur on all of them. Some costs won’t be fixed, and many will start high but will reduce after three years. You’ll need to bear all this in mind when it comes to your investment plan.

#2 – Paying for Premium

In addition to the costs involved, you also want to be aware that you have three payment options available when taking out a ULIP. With regular payments, you’ll be able to pay the entire term of your policy for the duration of your policy.

A limited payment means you can choose the number of years you want to pay for your policy, whereas a single payment means you can make the entire policy in one go. There are various benefits and savings to each, but this will depend on your provider.

#3 – Tax Benefits

While we might have been putting you off with all the costs, it’s worth noting that you can expect tax benefits when you’ve invested in a ULIP, thanks to Section 80C. But, the condition that the premium paid needs to be less than 10% of the sum assured.

However, this value is subject to change along the duration of your policy and can become a much higher value as your premium ages.

#4 – ULIPs are Flexible

When you’re taking out a ULIP, you’ll have the ability to choose how you want your funds to be allocated when necessary. However, as time goes on, your priorities can change, and you may want these allocations changed.

Luckily, thanks to the nature ULIPs, this is easy to do so, although you may have a limited number of changes per year, or there may be a small switching cost.

#5 – The Risk Factor

As with any kind of investment, there’s always going to be risk factor, and this will depend on the nature of your investor. You may have someone who is aggressively investing in equities or perhaps a more conservative investor who invest in money and debt markets.

When taking out your ULIP, it’s important for you to pay attention to the type of investor you’re using, so you can find the one that works best for you.

Summary

If you’re planning on investing in a ULIP policy, these five points are important considerations when it comes to what you need to know. Make sure you’re not rushing the decision when it comes to choosing the right investment/insurance plan for you, and you’ll be able to benefit greatly in the long-term.

About AEGON Life

AEGON Life Insurance Company Limited launched its pan-India operations in July 2008 with a vision to be the most recommended new age life insurance Company. AEGON is one of the world’s leading financial services organizations (providing life insurance, pension plans, and asset management) and Bennett, Coleman & Company (India’s leading media conglomerate) have come together to launch AEGON Life Insurance. This joint venture adopts a local approach with the power of global expertise to facilitate a direct to customer approach, leveraging digital platforms to bring transparent solutions to customers and to prioritize their needs.

 

Welcome to the Future: 7 Aspects of How Bitcoin Has Impacted the Global Economy

Bitcoin is one of the most popular type of cryptocurrencies to date, allowing two parties to share currency transactions digitally outside of the central banking system. Already, you may start to think of how and why Bitcoin can be beneficial on a general level; however, do you know just how influential it has been on the global economy? You can be the judge and decide for yourself if the following points are generally positive or negative.

Welcome to the Future: 7 Aspects of How Bitcoin Has Impacted the Global Economy - bitcoin coin photo image

Photo by David McBee from Pexels

Potential for a stock market crash

Bitcoin’s worth is currently over $100 billion. For now, investors are interested in the idea of investing in Bitcoin. However, word is going around that all things – even Bitcoin – must come down with time. If and when something happens to Bitcoin, some believe it could impact the stock market so severely enough to cause a major crash.

The latter point seems like a complete exaggeration, but the thing is, Bitcoin and other cryptocurrencies have been gaining popularity at a rapid rate – especially within this past year. That said, the larger it grows, the greater it can fall, making more significant of an effect on the market.

Replacement of fiat currency

Bitcoin is still in the growing process and is nowhere near as powerful and popular as fiat currency. Still, with Bitcoin being seen an alternative to fiat currency, it has, many times, replaced such. But to say that Bitcoin is or will completely replace traditional currency is an overstatement at this rate.

For some, the idea of replacing fiat currency is viewed as a benefit as cryptocurrencies aren’t federally-operated. As a result, some believe Bitcoin has the power to essentially overtake central banking facilities’ control over the economy and ability to issue money – which may be a pro or a con depending on where you stand.

Bitcoin could also be a considered a benefit in that Bitcoins can be viewed as a national currency as different forms of cash can be exchanged.

An entry to the Dark Web

Because Bitcoin transactions are virtually anonymous and ambiguous, money can be transferred secretly. In turn, there can be a plethora of illegal transactions and trading of different currencies from country to country quickly and effortlessly.

But using the Dark Web for monetary exchange can also be a great in the sense that many countries around the world have distrustful central banking systems, leaving Bitcoin the more trustworthy and safer option in some cases, especially when it comes to corruption.

Easier avoidance of income tax

Because Bitcoin does not display the names of parties making transactions via its system, this means Bitcoin will surely attract dishonest individuals who refuse to file annual income taxes on money obtained through the platform. Plenty of financial secrets can be kept due to the anonymous structure of Bitcoin.

Making it even easier to avoid the responsibility of filing income tax, Bitcoin holders can receive their money online and quickly buy other things online (which is common as Bitcoin valuation rates fluctuate drastically), making it seem as if there is no need to report such income as it can be easy come, easy go.

Additionally, the confusion with how to report Bitcoins as income tax alone is stopping many from paying their taxes, even though there are many resources online instructing one how to file Bitcoin taxes or even accounting services for such.

Sales of illegal items

Here we are again with the ambiguity of Bitcoin. Not only are names kept private as we discussed, but what people sell or trade with others in exchange for Bitcoins can also be secretive. This means items can be illegally bartered from firearms to underaged or illegal sales of drugs.

For illegal products or services sold with Bitcoins, people can get away easier than if they paid with fiat currency due to the secrecy tied to Bitcoin.

Increase in scams, payment fraud, and identity theft

Also due to the subtle transactions able to be made with Bitcoin, it’s also clear to see that there would be an increase in scams from this source. Individuals can be harder to track down, making them believe they can get away with taking people’s money and running.

Even though individuals’ addresses are posted publicly when a Bitcoin transaction is made, there’s still significant privacy involved that make it significantly easier to scam and get away with it.

Considering that Bitcoin is apart of the Dark Web, a dangerous place, there is also potential for a greater risk of theft and fraud and no guarantee for protection.

New ways of purchasing products and services

With Bitcoins in the picture, some businesses have begun to accept them from customers as a form of payment, allowing for greater versatility in the market.

If those businesses report Bitcoin transactions as personal income tax, there would be a positive effect on the economy considering that with more types of currency accepted, the more consumers that can take part in putting more money back into the economy.

However, for the businesses that don’t report their Bitcoin earnings, this would clearly have a negative impact on the economy.

But considering that even larger retailers such as Overstock.com have jumped on the Bitcoin bandwagon, it’s believed that the opportunity to shop online more frequently with Bitcoin can do good things for the global economy.

Being a newer form of currency, Stanford does make a good point that one disadvantage to Bitcoin is that it is seldomly accepted among online merchants at this time – but it is making progress. As it gains further stability, security, and buyer protection, Bitcoin will even have greater potential.

Conclusion

Bitcoin has had an impact on the economy world-wide. It has benefits for many, but nevertheless, it isn’t without its cons. Bitcoin may not be replacing central banks anytime soon, but it has had considerable power in our world today despite only being around for since 2008. As it grows larger, we expect it to make an even larger impact on our world’s economy.

What to Consider Before Investing

Investing is a risky business in which people should only enter into once they are fully prepared for each potential outcome. As such, there are several key factors to consider before taking on a serious financial investment, including thoroughly assessing your finances, paying off debt and protecting yourself from the unthinkable.

What to Consider Before Investing - business calculations image

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Read more to understand each before deciding whether to part with your hard earned cash.

Examine your financial situation

Before making any investment decisions, it is advisable to take a candid look at your whole financial situation and decide whether now is the right time for you to invest. Carrying out a full examination of your ingoing and outgoing finances per month is a good place to state and will allow you to get a clear picture of what you’re at, whilst discovering areas in which savings could be made.

You can begin by listing all your income sources, such as salary, savings, benefits, pensions and any financial support you might receive regularly from family. Next up, work through your previous bank account statements and list all your regular expenditures, making sure to take note of any standing orders and direct debits that go out, particularly if they are old and you no longer use them.

Once you’ve done this, you can decide which outgoings are essential, and which you can make savings on by getting rid of or by switching suppliers. You’ll often be surprised at how much you spend on things you do not need or rarely make use of, and by ridding yourself of those added costs, you could be on the right path to investing.

Pay off major debts

Any financial adviser will warn against investing before your major debts are paid off, or at least under manageable control. This is crucial, because if you have a significant amount of outstanding debt they will likely outweigh any of the returns you can expect to gain from your investments. Paying off debts on personal loans and credit cards which have high interest rates is, therefore, a wise idea.

Protect yourself

Any smart investor will tell you to start a backup savings fund to protect yourself in the case of an unexpected turn of events, such as unemployment or falling ill. As a general rule, having between three to six months’ worth of income to fall back on via an emergency savings account is wise, and this should remain untouched and separate from your investment funds.

You should also think about getting yourself covered by life insurance or income replacement cover. If you are self-employed, you might want to consider income protection insurance.

Determine your risk tolerance

Investing in anything is always a risk and the old saying certainly rings true – you should only invest that which you can afford to lose. However, more risk often means better returns. That being said, not everyone can afford to take big risks with their capital, nor may they feel comfortable doing so. It is up to you to decide what your risk tolerance is and act accordingly.

Seek professional advice

For first-time investors, skilled advice from the beginning is a very smart move and may be more than enough to help you get the ball rolling. Financial advisers can help examine your situation and create a solid plan of action based on your goals. They will also help you understand the risks associated with any investment you might be considering.

Moreover, there are many enterprises out there which can help you decide where to invest and whether an investment is good enough, such as an investment fund research company.

Remember, investing is risky business and on many occasions, you may receive less than what you put in. If you are not sure whether to invest, seek expert advice!