Tag Archive : Cryptocurrency

/ Cryptocurrency

More and more individuals are taking out consumer loans as they could be very helpful and useful, especially now that there are more lending companies and options which are alternatives to traditional loans taken from banks. For example, the American Pride Legal Funding provides automobile accident settlement loans which could be issued quickly after approval. Such loans make it easier for individuals to settle any unforeseen expenditures.

Most consumer loans are secured, which means that a collateral is needed to acquire a loan. Collaterals depend on the type and amount of loan you are getting. With the increase and progress of online lending as well as technology itself, cryptocurrency could now be used as collateral to obtain a loan.

Known as crypto-backed loans, these loans are secured or insured by crypto or digital currency assets, meaning fiat money are lent or loaned in exchange for cryptocurrency such as Bitcoin, Ether, or Litecoin as security or guarantee for payment. Many crypto holders take put crypto-back loans since the loan process is uncomplicated and the fiat money is directly transmitted into the bank account or digital wallets of the borrower.

Crypto holders may find crypto-backed loans to be a very cost-effective means for managing the digital currency as necessitating access to the fiat money (typically US dollars). So how can crypto-backed loans be used? Here are some:

  1. Compensate for travel expenditures like vacation trips
  2. Purchasing a home or investing in real estate
  3. Financing a business startup or business undertakings and operating costs
  4. Consolidating or settling debts
  5. For other personal purchases or products and services

How Crypto-backed Loans Benefit Borrowers?

Lenders don’t usually do credit history checks as well ask for evidence of payment capability. This could be regarded as a major likelihood of credit risk.

  1. Loans could be easily and directly transferred to your bank account or digital wallet and could be withdrawn via any bank card ore bank transfer.
  2. Lenders of crypto-backed loans could offer a borrower a lending term and condition that is flexible which could be made better for both the borrower and the lender.
  3. Crypto holders could use various digital currencies, such as Bitcoin and Litecoin, as collateral.
  4. Crypto assets could be preserved or kept as no requirements are needed to sell them for fiat money.

How Crypto-backed Loans Benefit Lenders?

  1. There is a minimized risk since the total repayment or settlement of the loan as well as the interest is guaranteed and without deferments.
  2. The system or method is fundamentally automated; moreover the exchange directly transpires in the bank account thus making it simpler to keep an eye on and track fund usage.
  3. The range is stretched to audience of borrowers across the globe causing decentralized peer-to-peer crypto lending to be perimeter agnostic, hence loans could be extended in whichever currency that is available.
  4. Complete legal status is given and the strong setup guarantees security of the funds.
  5. Barriers are not present with regards to the least possible requirements for a lender. Any legally recognized entity or individual could be a lender.

Why do many buy, sell, or exchange cryptocurrencies like bitcoins? When the bitcoin’s worth touched $20,000 on Dec. 17, 2017, a lot of individuals, even those unfamiliar with bitcoins, started asking the question “when to buy bitcoin” in the hopes of hitting it big.

One does not need to have a degree in accounting or economics to realize that individuals who made investments in bitcoin some years ago are now reaping the fruits of their investments.

Cryptocurrencies or digital currencies were designed and developed to offer individuals financial freedom. Although it may take time, cryptocurrencies, if adopted fully, could altogether eliminate banks or intermediaries. For the time being, digital currencies are being utilized worldwide for numerous purposes, whether utilized as an alternative to weakening fiat currencies, or as a replacement to financial institutions like banks and credit companies, cryptocurrencies are generating a type of financial freedom that, for the longest time, individuals across the globe badly need.

Financial institutions like banks charge fees that are utterly high, dictate which part of the globe where funds can and can’t be transferred or sent, as well as limit the opportunities of consumers to attain financial freedom. Moreover, there are financial institutions that have caused numerous individuals to lose their livelihoods, jobs, and homes.

Achieving Financial Freedom

The outlook of the general public states that during phases of instability, typical systems for banking every so often miss the mark to address the people’s needs. But, during such phase, the framework of blockchain and cryptocurrency could still thrive. Not only could crypto holders rely on their assets for daily transactions or payments, but could as well utilize them to yield more wealth. Here are a few approaches wherein you could attain financial freedom with cryptocurrencies:

Staking

Rather than mining, which could be painstaking, expensive since a particular hardware is required, as well as intermittently rewarding, several cryptocurrencies have taken on the idea of staking for transactions to be verified. As a reward or incentive for the securing of the system, the method permits crypto holders to generate and earn interest on their token. Typically, the method entails locking up in a live wallet a specified quantity of tokens. The more tokens you stake, the greater the incentive or reward.

Purchasing and Holding

Since the release of bitcoin in 2009, the value of numerous cryptocurrencies has quickly escalated. Although the short-term concern remains to be about volatility, the value of digital currencies has increased for the demands of the market to be met, causing cryptocurrencies like bitcoin to have billions in capitalizations in the market. In 2011, bitcoin was exchanging between 1 and 2 US dollars. Currently, its value is on the 10,000 US dollar mark.

For individuals new to cryptocurrnecy, a workable strategy is to have a little amount of these digital currencies as well as holding it for some months. On condition that you have a device to connect and access the internet, you could immediately install, create, and access a wallet.

Day Trading

Digital currencies are traded on exchanges, similar to how those found in worldwide equity markets function. If you are experienced in technical analysis and are positive that your capabilities match the market on cryptocurrencies, this method could be greatly profitable. But, day trading could be a risky venture since every so often some tokens could go through short-term phases of high volatility.

Cryptocurrencies as medium of payments, investments or borrowings can only transpire by way of blockchain technology. It is important therefore to have a thorough understanding how one becomes a cryptocurrency owner in order to take part in transactions using digital currency as medium.

First off, bitcoin is only one of numerous cryptocurrencies used to transact business outside of the conventional financial institutions. Digital currencies other than bitcoin are collectively called altcoins, which is short for alternative coins. Some examples of popular altcoins are Litecoins, Ethereum, Ripple, ZCash, and Cardano; there are several more available as an alternative to bitcoin.

Secondly, cryptocurrency transactions require the use of a blockchain platform or application in order to connect to other cryptocurrency users, to third party digital currency brokers, to traders or digital currency-wallet providers.

Thirdly, there are two ways by which an individual can acquire a particular cryptocurrency. One is by buying a preferred type of digital money from a broker or from an e-wallet provider using actual cash. The other method is by earning a unit of cryptocurrency for solving every set of related cryptocurrency transactions recorded in a blockchain open ledger. Solving and linking encryptions used in the blockchain ledger is a method of confirming the validity of a transaction that made use of bitcoin or a type of altcoin as payment or exchange mode.

How Does the Blockchain Technology Record and Validate Bitcoin Transactions?

The reason why this cryptocurrency technology is called a block chain is because several digital currency transactions occurring via a blockchain platform will be linked. The purpose of which is to tell a story of how one bitcoin or altcoin user came to own his or her cryptocurrency, and of how he made use of that particular virtual money.

A block refers to the time-stamped cryptogram code used in recording each related transaction in the blockchain ledger. Every block contains the cryptogram code containing the public key generated by the blockchain platform and the private key supplied by the cryptocurrency sender or payer.

Difference Between a Blockchain Public Key and Private Key

A public key is an encryption that identifies the kind of transaction that the blockchain will record. Let us say BitUser A buys $50 worth of bitcoin from BitTrader B. The public key generated by the blockchain platform will refer to this transaction. In order to complete a block, BitTrader B as sender must provide the private key to validate his authorization for issuing the bitcoin.

A private key therefore validates a cryptocurrency user’s ownership of the digital money being transferred to another. An owner receives a private key every time he receives digital currency as part of a chain of transactions. If the private key is invalid or missing, the transaction will not go through since it remains unconfirmed or unvalidated.

In our example, bitcoin recipient BitUser A received a private key, which serves as his authority to use or transfer the digital money to another recipient. In the same way, the new recipient will also receive a private key that will allow him to transact his own virtual currency deal. Miners will then solve and link all blocks of cryptogram codes connected to the bitcoin purchased by BitUser A. Doing so provides full authentication that all virtual currency used in the series of transactions came from legitimate owners.

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