Cryptocurrency for Beginners

Jesse Lowe
Jesse Lowe
Last updated: 31/08/2018

“Look at Bitcoin’s history. The more severe the dip, the more extreme the bounce. This has happened dozens of times in the past. But look at Bitcoin’s year over year performance. Extrapolate, and you see that my prediction of $1 mil in 2020 is conservative”, the founder of software company John McAfee posted on his Twitter page.

We've all heard a lot about Bitcoin in 2018. From its incredible price rise, and recent crash, to the thousands of cryptocurrencies that have appeared.

According to CoinMarketCap website, as of February 2018 there are around 1513 cryptocurrencies. However, 901of them are not mineable, meaning that the number of these crypto coins will never increase.

According to CoinMarketCap website, the world knows about 1513 cryptocurrencies (February 2018).

Cryptocurrency was one of the most discussed topics in 2017, but not everyone understands what he or she reads about. Thus, it is high time to become better-informed about cryptocurrencies.

Bestvpnrating.com team broke down the information in order even a non-tech user could understand the nature of digital currency.

Read this cryptocurrency guide and get to know:

Well, let us start!

What is cryptocurrency?

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To begin with, let us find a plain and clear cryptocurrency definition.

The notion “cryptocurrency” came into the world in the year of 1998, when the developer of Crypto library Wei Dai introduced a new form of currency based on cryptography.

Cryptocurrency – decentralized digital financial assets that make its owners secure and anonymous while transactions.

2009 is the official year when Bitcoin started functioning.

What was the purpose to use cryptocurrency?

As digital assets appeared to be wide-spread, the number of cyber attacks increased. The financial sector became severely targeted in 2009.

The financial sector became severely targeted in 2009.

Just have a look at real facts:

 Citibank lost millions of dollars after cyber attacks in 2009.

  On July 4 NYSE website and Yahoo finance section underwent the cyber attack.

 Trading and financial transactions undergo the most frequent and severe attacks.

 IndianExpress reports that criminal activity in the cyberspace became the reason for more than 1/3 companies to lose revenue in 2016.

 The investigation conducted in 2009 by Semantic showed that 43% of 2100 companies surveyed lost about £1.2 million.

These and many other facts led to the necessity to work out the most secure method of payment. Cryptocurrency payment is considered to be the safest. Moreover, cryptocurrency allows conducting transactions anonymously.

Moreover, cryptocurrency allows conducting transactions anonymously.
 

Difference between cryptocurrency and fiat currency

When one reads or hears the word currency, a banknote comes to the mind. But in the period of digital technologies, the state of things is changed.

Fiat is a standard centralized currency like dollars, pounds, euros, etc.

It’s clear.

But what about cryptocurrency? What differs it from fiat money?

Here are the answers:

  • First and foremost, cryptocurrency exists electronically only!
  • Second, the cryptocurrency rate does NOT depend on the national economy of any country.
  • Third, this type of currency is anonymous. All information about cryptocurrency holders is a number of figures and characters.
  • Forth, direct transactions allow saving on commission fees.

How does cryptocurrency work?

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Just as we start talking about cryptocurrency, blockchain is the next thing that comes up.
 

But what is blockchain?

To put it simply, Blockchain is the database that contains information on transactions, trading, and contracts within the system introduced in cryptographic form.

The blockchain is the basis of any cryptocurrency. It contains the interconnected blocks of information. It is impossible to delete or change the data stored on these blocks, which is one of the main distinctive features of Blockchain technology.

Blockchain was worked out by Satoshi Nakamoto in 2009. However, nobody knows if Satoshi Nakamoto an individual human being or a group of people united by one goal – cryptocurrency development. But it is evident, that he or they spent thousands of hours to create Blockchain.

This decentralized database doesn’t possess a dedicated server or a computer hard drive to store information. It is divided into small pieces of information and kept by the participants of this network.

In simple words, all cryptocurrency holders store this information.

Important! It is impossible to change the single block notwithstanding the desire of its holder to crack it. The changes in Blockchain are possible only in case someone will manage to hack all the blocks in a chain, however, in practice is impossible.

The prefix “crypto” is determined as the encryption and cryptographic hash-function. In such a way, every cryptocurrency holder has both private and public key.

The private key underlies the transactions and provides cryptocurrency delivery from one person to another.  In its turn, the public key is used to verify the transactions of other Blockchain peers.

How to use cryptocurrency?

It is difficult to overestimate cryptocurrency value, but not everyone understands how to use it.

We’ll describe how to use cryptocurrency in a matter of minutes!

It is required to use e-wallet to use cryptocurrency like Bitcoin, Ethereum, Ripple and other. There are 2 variants to create cryptocurrency wallets:

  • Download the client to the hard drive of the device.
  • Online cryptocurrency wallet.

One of the most popular Bitcoin wallets one will find on www.blockchain.info. The registration takes no more than a couple of seconds.

One of the most popular Bitcoin wallets one will find on www.blockchain.info.
 

But what are the reasons to invest in cryptocurrency?

The reasons to use cryptocurrency are diverse: from making purchases to keeping the money. Let us enumerate the reasons for cryptocurrency use:

Reason #1

Payments. Cryptocurrency allows accomplishing anonymous and quick transactions between individuals or making purchases on the Internet.

Reason #2

Money keeping. It is 99% impossible to hack cryptocurrency wallet. Thus, your virtual currency is under the protection of up-to-date technologies.

Reason #3

Investment. Bitcoin and other well-known types of cryptocurrency allow making money by means of fluctuations in the rate of exchange.

Reason #4

Business. Starting a business from scratch many companies raise the finances by means of ICO (crowdfunding). For example, ICO project “Filecoin” raised $52 million in the presale.


Top 10 cryptocurrencies of 2018

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It is well-known that cryptocurrency has shown tremendous uplift in prices in 2017. At the same time, the complexity of mining reached its peak.

It is well-known that cryptocurrency has showed tremendous uplift in prices in 2017.

Mining difficulty chart↑

As BitInfoChart reports, Ethereum mining process is the most difficult. Bitcoin and Bitcoin Cash take the 2nd and the 3rd positions accordingly. At the same time, the cryptocurrency market capitalization has broken through $325 billion in February 2018.

At the same time, the cryptocurrency market capitalization has broken through $325 billion in February 2018.

Cryptocurrency market capitalization

There are hundreds of cryptocurrencies today, but let’s have a closer look at the most prominent:
 

Bitcoin

Bitcoin

Bitcoin (BTC) history dates back to the year 2009 when Satoshi Nakamoto introduced it to the world. Being the first decentralized payment network, Bitcoin capitalization is over $140 billion today.

The ways to get Bitcoin:

  •  as payment for the goods or services rendered;
  •  buy Bitcoin in Bitcoin exchange;
  •  Bitcoin mining;
  •  Bitcoin faucet;
  •  find Bitcoin local dealer.

Bitcoin advantages

Bitcoin disadvantages

No limits for payment

Not all people and countries accept Bitcoin as currency

Facility to choose interchange rate

Currency movement

Reduction of risks for entrepreneurs

There are functions that need further modification

Only users control their transactions

 

Payments from every corner of the world, at any time

 

High level of confidentiality for transactions

 

Bitcoin may be compared with credit cards and online banking networks. Thus, Bitcoins are used to pay for services, make purchases in online shops and what not. Besides, it is possible to trade Bitcoins for Casascius coins.


Ethereum

Ethereum

Being described in 2013 by Vitalik Buterin, Ethereum was introduced in 2016. Ethereum is both a cryptocurrency and decentralized environment that changed IT sphere. ETH obtained the status of the 2nd most popular after Bitcoin.

Ethereum advantages

Ethereum disadvantages

Support of various programming languages and algorithms that makes it universal

It possesses the elements of centralization

The platform undergoes regular modifications and updates

Vulnerability is observed

Ethereum is an open platform

Lack of documentation complicates the platform interaction


Ripple

Being described in 2013 by Vitalik Buterin, Ethereum was introduced in 2016.

Ripple positions itself as a cross-border payment system for banks. Transaction speed is 4 seconds (compare: 3-5 days for the SWIFT system). The developers claim that it is possible to conduct up to 1500 transactions per 1 second, which allows comparing it with Visa. 

Ripple advantages

Ripple disadvantages

No commission

Ripple Labs owns 67.75% tokens, which may lead to the devaluation

Makes banking system more efficient

The decrease of traded value

Super-high-speed of transactions

 

It’s possible to buy Ripple on 14 cryptocurrency exchanges

 


Bitcoin Cash

Bitcoin Cash

Bitcoin Cash appeared in August 2017 as a result of Bitcoin hard fork. BTC holders with private keys got Bitcoin Cash free.

Bitcoin Cash advantages

Bitcoin Cash disadvantages

The improved 8 MB technology increases the speed

It doesn’t solve the problem of transaction malleability

It is positive towards hard forks, useful for protocol updates

Commission of $0.05 – $0.10

Bitcoin Cash is supported by Bitcoin.com, CEOs, Juhan Wo and Roger Ver

 


Cardano

Cardano

Cardano project was initiated in 2017 by a group of cryptocurrency enthusiasts, investors, and entrepreneurs from Asia.

Currently, Cardano is a blockchain that functions like cryptocurrency and platform for smart contracts. Cardano is based on one of the most secure programming languages – Haskell.

Cardano advantages

Cardano disadvantages

The blockchain is divided into 2 layers: for coins distribution and for smart contracts

7 transactions per second

The most secure programming language is used

 

ADA is an official means of payment

 

The revenue depends on the miner’s account balance and the number of conducted transaction

 

The project attracts new investors, so the increase in rate is expected

 


Litecoin

Litecoin

Litecoin appeared as Bitcoin fork. At the same time, Litecoin is known as a P2P electronic payment system that uses homonymic cryptocurrency.

As for February 7, 2018, 1 Litecoin costs $138.34. This cryptocurrency may be:

  • exchanged into Bitcoin or fiat currency,
  • used to pay for services and goods on the Internet.

Litecoin advantages

Litecoin disadvantages

The block is generated within 2.5 minutes

Fluctuating currency rate

The process of mining is simplified and requires less energy

Litecoin is not accepted in the majority of countries

Used “lightning network” protocol serves to increase transactions scalability

In case of e-wallet loss, it’s impossible to get LTC back

Total anonymity of transactions

 

The system is decentralized

 


NEO

NEO

NEO is known as a non-commercial blockchain project that combines blockchain technology and digital identification system. It was founded in the year of 2014 as Antshares project but renamed three years later as NEO.

NEO advantages

NEO disadvantages

Great functionality – 10 000 transactions per second

Lack of anonymity and decentralization

DBFT protocols protect the system against cyber attacks

 

No commissions

 

Miner’s capacity does NOT influence mining

 


Stellar

Stellar

Stellar is the technology that allows conducting transactions between individuals, companies and financial institutions. It is dead easy therefore people get access to the financial business, therefore people get access to a financial business. 

Stellar advantages

Stellar disadvantages

It supports thousands of transactions per second

Withdrawal fee

Decentralized distributed database

Minimum balance of 0 Lumens is required

Facility to create a big number of micropayments

 


NEM

NEM

NEM stands for New Economy Movement. This cryptocurrency is based on Java and JavaScript. NEM is compatible with Linux, macOS, and Windows. NEM blockchain is realized through an open blockchain network Mainnet and commercial blockchain network Mijin tested by financial institutions and Japanese private companies.

NEM advantages

NEM disadvantages

The changes of cryptocurrency rate are not expected, as emissions are  not planned

NEM is still under development

The blockchain technology is multifunctional

 

Reliable protection against hackers

 

A flash-like speed of transactions

 


EOS

EOS

EOS project reminds Ethereum, as it is the platform for smart contracts hosting. EOS is the platform used for decentralized projects development. Token holders can invest coins into apps development inside the platform network.

EOS advantages

EOS disadvantages

EOS algorithm provides a stable asynchronous connection

EOS is new, thus insufficiently explored

Facility to conduct a huge amount of transactions in record-breaking time

 

The beginning of 2018 is marked by cryptocurrency market recovery, after top 20 cryptocurrencies lost their price on December 22, 2017. In general, the cryptocurrency market capitalization reached $325 billion. Ripple and Ethereum are at the head of the market stabilization and growth, while Bitcoin loses its positions.


Top 10 cryptocurrencies of 2018 in figures:

Cryptocurrency

Year

Algorithm

The maximum number of coins

Bitcoin

2009

SHA-256

21 000 000 BTC

Ethereum

2016

Ethash

103 862 556 ETH

Ripple

2012

RPCA

100 000 000 000 XRP

Bitcoin Cash

2017

SHA-256

21 000 000 BCH

Cardano

2015

Ouroboros

45 000 000 000 ADA

Litecoin

2011

Scrypt

84 000 000 LTC

NEO

2014

DBFT

100 000 000 NEO

Stellar

2015

Scrypt

103 669 352 049 XLM

NEM

2015

POI

8 999 999 999 XEM

EOS

2017

POI

1 000 000 000 EOS


How to buy cryptocurrency and how much does it cost?

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However that may be, cryptocurrency is a tool that may be both sold and bought. Volatility in this sphere is considerable therefore there is a chance to make a decent buck and lose everything.

From this fact one may conclude that it is necessary to find out about the risks of cryptocurrency purchasing:

  • Cryptocurrency market is NOT regulated, so in case of any troubles there no one to lay claims.
  • Cryptocurrency price may vary frequently. For instance, Litecoin cost about $3 in March 2017, now the price is $144, and it is impossible to predict its price tomorrow.

What cryptocurrency to buy?

When we think about cryptocurrency, Bitcoin comes to the mind first. But apart from Bitcoin, there are over 1500 cryptocurrencies.

At the same time, it is unknown what cryptocurrency will acquire popularity next month. Thus, many individuals buy less popular coins to grow rich.

Top 10 most expensive cryptocurrencies

Top 10 cheapest cryptocurrencies

Bitcoin

$7 725

Kin

$0.000291

Bitcoin Cash

$944

Dentacoin

$0.000992

Maker

$910

Bytecoin

$0.004170

Ethereum

$782

Dogecoin

$0.004290

Dash

$532

ReddCoin

$0.006086

Byteball Bytes

$430

Siacoin

$0.021871

Zcash

$360

Dent

$0.024526

Veritaseum

$278

DigiByte

$0.031846

DigixDAO

$216

IOStoken

$0.034358

Monero

$210

TRON

$0.034992

It is obvious that Bitcoin is in a great request today, as its market capitalization is over $139 billion.

It is obvious that Bitcoin is in great request today, as its market capitalization is over $139 billion.

To that end, many people tend to invest in Bitcoin cryptocurrency.


How to buy cryptocurrency?

There are numerous cryptocurrency exchanges. They are different in the interface language, identification requirements, traded value, financial quote and what not.

Among the leading exchange websites are:

  •  OKEx
  •  Bitfinex
  •  Bithumb
  •  Huobi
  •  Kraken
  •  Bittrex
  •  Hitbtc
  •  Bitstamp
  •  ZB.COM
  •  bitFlyer

Now when you know what websites to use to buy cryptocurrencies, you are to follow several steps to become a cherished coin.

Here they are:

1) Register on the cryptocurrency exchange website.

2) Load the account.

3) Find the cryptocurrency you are going to buy.

4) Leave an application for cryptocurrency purchasing.

5) Move out the coins to the e-wallet.

Now when you know how to buy Bitcoin and other cryptocurrencies, it is high time to investigate the subject in detail!


Historical Bitcoin price

Being the oldest and most popular cryptocurrency, both now and always, Bitcoin price history deserves to be studied religiously.

In the course of 3 years (from 2013 to 2016), Bitcoin value was relatively stable with insignificant ups and downs. Thus, the first sudden change of Bitcoin price was observed in November 2013, when 1 Bitcoin cost $1031.

The second in importance period for Bitcoin fell on April 2017, when Bitcoin was accepted as a legal payment method in Japan.

The second in importance period for Bitcoin fell in April 2017, when Bitcoin was accepted as a legal payment method in Japan.

Summer of 2017 was also meaningful for Bitcoin holders, as the sudden changes were observed in August, at that time Bitcoin price achieved a dominant position in the market and reached its maximum on the 17th of December 2017$20 074 per 1 coin.

Notwithstanding Bitcoin is in demand, the beginning of 2018 is marked by a sharp decline of Bitcoin price.

Date

BTC to USD

January 1

$ 13 412

January 8

$ 14 950

January 15

$ 13 585

January 22

$ 10 772

January 29

$ 11 158

February 5

$ 6 914

February 12

$ 8 891

Bitcoin to USD

In spite of the fact that Bitcoin loses its positions on the market, some analysts DO believe that Bitcoin price will reach $100 000 this year.


What is the cryptocurrency exchange rate?

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To begin with, let us investigate what is exchange”. This notion stands for the digital platforms used for selling and purchasing cryptocurrencies by means of fiat money or other cryptocurrencies.

The prices are changing all the time, sometimes 1 second may become decisive.

As for February 9, 2018 cryptocurrency exchange rate looked in the following way:

As for February 9, 2018 cryptocurrency exchange rate looked in the following way:


What is cryptocurrency mining and how profitable is Bitcoin mining?

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The term “mining” was first introduced in ancient times when people started extracting mineral resources. But nowadays, the word acquired one more meaning thanks to the blockchain technologies.

Mining – the activity aimed at distributed platform supporting and new blocks developing with the facility to be remunerated.

Thus, cryptocurrency mining became a widespread activity, as about $2000 – $5000 is required to start mining even at home. What is more alluring the investment is justified within 4-6 months!

Being the most popular cryptocurrency, Bitcoin is №1 cryptocurrency for miners.
 

But what a future Bitcoin miner is to take into account?

It is impossible to mine Bitcoin without special equipment. As a rule, it is a network of computers supplied with video processor cards and drivers for mining. AMD RADEON RX 470 and NVIDIA GTX 1060 video processor cards are the most popular.

Such Bitcoin farms require a lot of energy, so significant heat emission is observed. In this connection, Bitcoin miners prefer conducting such activity outside their homes. Special premises are rented.

Slow down if you are about to start mining without having read this article till the end! There is something you should know before launching this process.

The advantages of Bitcoin farms:

  • it is dead easy to start mining because of the equipment availability;
  • farms will be in demand in the near future, so it’ll be easy to sell them;
  • a small farm is ok for a home;
  • it is possible to mine different cryptocurrencies by means of 1 video processor cards.

The disadvantages of Bitcoin farms:

  • the experience is №1 thing to launch a farm;
  • farms usually require a lot of space.

What about cloud mining?

It becomes more and more difficult to withstand big mining farms. In its turn, it led to the cloud mining. To cut a long story short, cloud mining is the process of cryptocurrency mining by dint of a remote data processing center.

The advantages of cloud mining:

  • the electric energy costs are minimal;
  • limited period of computer functioning;
  • lack of necessity to update the equipment;
  • the cooling system is unnecessary.

The disadvantages of cloud mining;

  • the risk of hacking attacks;
  • payback period is longer;
  • the income is less;
  • external dependence.

Important! In case you opt into a cloud mining, it is strongly recommended to subscribe for one of the best VPNs for Bitcoin.
 

How to get Bitcoin without mining?

Bitcoin farms require a lot of time and energy. Thus, if one plans to get Bitcoins free, the following option will attract this person.

There are websites that give people an opportunity to get Bitcoins free. Such websites are known under the name Bitcoin faucets. The websites allow getting Satoshi to redeem them for Bitcoin.

By the way, this process may seem to be too time-consuming, as 1 BTC equals 108 Satoshi. Usually, it is possible to get 1 satoshi per 5, 10, 30 or 60 minutes. Luckily, there are Bitcoin faucets that offer 10 000 Satoshi an hour.

All in all, it’s up to you to decide whether it is worth spending all days and nights long to get cherished Bitcoin or not.


Most striking cryptocurrency news in 2017

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The year of 2017 went down in history owing to significant changes in the sphere of cryptocurrency, ICO projects and Bitcoin price! The words “blockchain”, “mining” and “faucet” are embedded into the thinking of billions of people around the world.

The words “blockchain”, “mining” and “faucet” are embedded into the thinking of billions of people around the world.
 

Thus, let’s remind the most remarkable events of 2017!

January 2017

The government of Israel proposed to impose taxes on purchases assisted by Bitcoin. In such a way, BTC meets the definition of one of the property types. The statement was introduced on the 11th of January by the Israeli taxing authority.

February 2017

A new US bill to forbid buying weeds with Bitcoin was placed for consideration at the end of January. However, in February it was rejected in view of lack of Ann Rivers support. The senator stopped seconding the bill when the positive sides of the cryptocurrency were introduced.

March 2017

Wrexham Glyndwr University was the first to introduce the course dedicated to the financial technology. The full name of the course sounds like “Financial Technology Management”. 3 years of study presuppose financial design making, introduction to management accounting, financial technologies and what not.

April 2017

Since April 2017 Bitcoin is regarded to be a legal method of payment in the Land of the Rising Sun. It led to a set of fundamental requirements to cybersecurity are imposed. This event is momentous for virtual currency.

May 2017

For the first ever BTC price reached $2000 in May of 2017 and kept on holding a stable position on the market. At the same time, Bitcoin gained popularity in gambling.

June 2017

An 18-years millionaire was presented to the world. His name is Erick Finmand. When he was, 12 his granny gave him $1000, and a boy decided to invest in Bitcoin. It was the right decision, as in 2 years he possessed 100 times more. He gave up school and became a businessman. Now he is the owner of 403 Bitcoin.

July 2017

Many people tend to believe that criminals are those who use cryptocurrency most frequently. But in reality, it is NOT true. European Commission disproved it. The experts explain this fact by lack of experience in this sphere.

August 2017

As Cointelegraph reported, 20-years old British model Chloe Ayling was kidnapped by “Black Death Group”. The kidnappers wanted to sell her at the value of $ 350 000 in Bitcoin. Fiat money was not interesting for the adversaries. Luckily, the model was let go.

September 2017

The Chinese government jumped right into the thick of tokens trading. ICO projects are considered to be illegal. In its turn, this announcement led to the decrease in the sale of cryptocurrency – 25%.

October 2017

The Dubai government solemnly declared about the idea to create a digital cryptocurrency under the name emCash. The cryptocurrency will be used to pay for governmental and nongovernmental services.

November 2017

One of the episodes of “The Big Bang Theory” was devoted to Bitcoin. However, the residents of China could watch it because of severe censorship dominated in the country. The most resourceful internet users preferred using VPN services in China to bypass local restrictions.

December 2017

The last month of 2017 became important in the history of cryptocurrency. Bitcoin price reached its maximum on the 17th of December – $20 000. The analysts said that this cryptocurrency could reach the price of $100 000. But the current state of affairs shows the converse.

In the whole, the year of 2017 appeared to be decisive for cryptocurrency in general and Bitcoin in particular. Numerous ICO projects became successful and attracted billions of dollars, new cryptocurrencies blew in, while Bitcoin broke all records. Still, it is difficult to predict the future of this sphere.

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What cryptocurrency news to expect in 2018

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Cryptocurrencies became popular among people, as they may be a great means of investment. Undoubtedly, it is the most advantageous and easy way to have it coming.
 

What do you need to earn with the help of cryptocurrency?

Just spend a bit and wait. You are to wait until the cryptocurrency you have chosen to invest in to increase in price. But when could it happen? In a week, a month, a year or never…

In this regard, the interest in cryptocurrency news increases.
 

But what to expect in 2018? 

⇒ Bitcoin holders are looking forward to the next rise in the price of this cryptocurrency. Why not? A year ago the Bitcoin price was about $1000, but in November 2017 it increased by 2000%. Analyst of Saxo Bank K. Van-Petersen stated that Bitcoin could reach the price of $100 000.

 ICO projects gained its popularity in the year gone by. A vast diversity of new ICO projects is expected this year.

 The governments of some countries are about to legalize cryptocurrency. Among them, one could find Turkey, Hong-Kong, Switzerland, Spain, France, Columbia, etc.


Cryptocurrency status in different countries

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“Bitcoin at this time plays a very small role in the payment system. It is not a stable source of value, and it does not constitute legal tender.”

J. Yellen, chair of the Federal Reserve

The legal status of cryptocurrencies varies in different places around the globe. There are the countries where cryptocurrency transactions are authorized. In other countries, Bitcoin transactions are not allowed for the banks but may be conducted by individuals.

In other countries Bitcoin transactions are not allowed for the banks, but may be conducted by individuals.

Let us study in detail the legal status of cryptocurrencies worldwide.

Cryptocurrency in Australia

Cryptocurrency transactions are defined as barter transactions in Australia. The companies dealing with digital currency are obliged to keep tabs on such transactions. Tokens are consigned to be an ordinary income and are estimated at Australian dollars.

Cryptocurrency in Canada

Bitcoin transactions became legal in Canada in September 2017 when BCSC in Canada listed a Bitcoin investment banking firm officially. Still, cryptocurrencies aren’t true forms of money in the country.

Cryptocurrency in China

Being the country with high economic advance, China plays an important role in the cryptocurrency sphere. According to Goldman Sachs report, 80% of Bitcoin traded value accrues to yuan. In spite of the fact that the People’s Bank of China banned payment with cryptocurrency (Alipay and Tencent are forbidden as well), substantial cryptocurrency growth is observed.

Cryptocurrency in the European Union

The legal status of cryptocurrency in the EU countries is determined by the Court of Justice of the European Union. As it is stated in the document “…bitcoin is a means of payment used in a similar way to legal means of payment and the transactions … be exempt from VAT”.

Cryptocurrency in Germany

Cryptocurrency status in Germany may be called neither legal nor illegal. In August 2017 the Federal Ministry of Finance of Germany claimed that cryptocurrency might be used for clearing transactions in the country.

Cryptocurrency in Japan

After Bitcoin and Ethereum were authorized in the country in April 2017, fiat money still dominates there. However, the specialists reckon that the country may influence the cryptocurrency market significantly.

Cryptocurrency in Israel

Since the beginning of 2017 Bitcoin is recognized as the property in Israel. It is determined by the currency regulations law, therefore cryptocurrency selling bares tax. Two types of taxes are presupposed: VAT and revenue-based levy.

Cryptocurrency in the United Kingdom

Nowadays, the UK is reckoned to be one of the leading financial centers in the world. Numerous blockchain and Bitcoin project are launched there. Furthermore, it is possible to settle the bill in some bars of London by dint of Bitcoin.

Cryptocurrency in the USA

According to the Federal Bureau of Investigation, Bitcoin is recognized to be virtual currency. Since March 2013 it is possible to exchange cryptocurrency for fiat money. However, the situation differs from state to state. Thus, it is possible to buy goods and pay for services by means of digital currency. What is more surprising the US Securities and Exchange Commission initiated the 1st cryptocurrency fraud case in autumn 2017.

As one could notice the legal status of cryptocurrency is different in various places around the world. Thus, virtual currency is banned in:

  • Iceland
  • Rumania
  • Kyrgyzstan
  • China
  • Bangladesh
  • Vietnam
  • Thailand
  • Indonesia
  • Bolivia

However, the situation may be changed at any time. This list may be enriched or vice versa. It depends on local laws and the economic situation of countries.


Cryptocurrency guide conclusion

Cryptocurrency is a new form of money that gains its popularity like an arrow from a bow. Its high level of protection attracts numerous individual as well as companies worldwide.

However, the resourceful hackers invent new methods to crack e-wallets and steal digital currency.

♦ Thus, hackers managed to steal $140 000 in Bitcoin by means of Trojan virus in October 2017.

 Ledger wallets (used to store virtual money) were disclosed of sending user data to adversaries. It led to cryptocurrency theft.

 A teenager was arrested for developing malicious software that allows stealing data of e-wallets.

 NiceHash underwent a serious cyber attack and lost $64 million in October 2017.

The arguments we have presented proof that it is necessary to think about cryptocurrency protection beforehand.

The reasons to use VPNs for cryptocurrencies:

Reason #1

VPN services are great in terms of data protection. Due to military-grade encryption (from 128-bit key up to 2048-bit key) certifies that your data will be almost impossible to steal.

Reason #2

Besides, VPN services make it possible to find out more about cryptocurrency and ICO projects. Let us find out why. The thing is that there is a list of countries where the access to some sources is blocked. VPNs serve to bypass such restrictions.

Reason #3

It is well-known that cryptocurrency is often used to pay for the services anonymously. But in case you use the combination “VPN + cryptocurrency” it is 100% impossible to identify you while conducting transactions on the Internet.

Are you interested in subscribing for a VPN? Read the article “Best VPNs for Bitcoin” and choose the VPN provider that meets your requirements.

In case you’re already using a VPN for cryptocurrency, share your experience in the comments, and if you’re new to this sphere, give us a shout in the comments to this cryptocurrency guide with a question!

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Update: 31/08/2018