Author: Nazim Khan

You would be a millionaire if invested $1,000 in this cryptocurrency in February

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shiba Inu reached an all-time high (ATH) Tuesday, with prices rising by 50 over in the past two days. The significant price appreciation for the self-proclaimed “dogecoin killer” is attributed to the surge seen from October 15.

At 16:35, the coin was trading nearly 15 percent higher at Rs 0.0033, rising over 55 percent in the past seven days.

Shiba Inu’s moment of reckoning came last month when Tesla CEO Elon Musk tweeted the arrival of a new Shiba Inu, Floki, along with a picture. On September 12, he tweeted, “Floki has arrived.”

Musk’s tweet helped Floki Inu rise 1000 percent in less than 72 hours. The tweet also pushed other dog-themed coins such as Shiba Inu, Baby Floki Inu, Floki Shiba Inu, and Floki Pup Inu higher.

Also Read | Ethereum: The transformation that could see it overtake bitcoin

In an interview with CNBC earlier this month, Chief Investment Officer (CIO) of $325-billion Guggenheim Investments, Scott Minerd, said he was surprised by the surge Shiba Inu has seen in its price since the beginning of this year.

Making his point clear by an example, he said that a $1,000 investment in SHIB in February 2021 had become $2.1 million by mid-October 2021. He said he wished he had invested in the meme-coin. The token jumped 40 percent, and by October 8, it had risen 350 percent, claiming the 11th slot among the most significant coins, just one position below Dogecoin.

It was an enormous performance for a meme-coin created in August 2020. In the week that followed, the coin first dropped 40 percent and later gained over 30 percent.

However, an upward trend saw the coin creating a resistance at $0.000028 and touching its ATH of $0.00003941 on October 24. This jump of nearly 50 percent complimented the coin gain (approximately 400 percent) since Elon Musk’s famous ‘Floki’ tweet on September 12.

Also Read | Did Paypal’s Peter Thiel just crack the mystery of Satoshi Nakamoto?

Many believed it was due to an unknown investor buying 6.3 trillion Shiba Inu coins that week. Incidentally, the Shiba Inu token has the largest circulating supply of 350 trillion coins.

Some might have thought that Musk was the mysterious buyer; however, another tweet from Musk brought the coin down. Replying to one of his 69 million followers on Twitter, Musk stirred clear the air of being an active buyer of the coin.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin smashes through past $64,000 record: Is $100,000 in sight?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bitcoin raced past the previous record high of $64,000, creating expectations that the world’s leading cryptocurrency is poised for further gains. Overnight, it was trading at about $66,000 before giving back some gains but was still trading above the high it reached in May.

The asset class, which has trumped virtually every other by a mile, started life a little over 10 years ago in cents. But having increased by leaps and bounds, it now begs the question: what’s next?

Could it take out $100,000, $200,000 or $500,000? If yes, by when? Or is it possible that bitcoin, like many other asset classes in the past, is a fad, a mania that will fizzle out over time and then crash to zero?

Also Read | Cryptocurrency updates: BTC at lifetime high after validating moment; Baby Bitcoin surges 300%

Momentum is bitcoin’s frenemy

Whether bitcoin will go up or down over the long term remains to be seen, but one thing is for certain. It is a highly volatile asset class. This volatility imparts a lot of momentum to bitcoin, whether on the upside or downside. Consider this: in May, bitcoin rose to $64,000 for the first time a breath-taking one-year rally that saw it go up 10 times.

But a combination of news — including the fact that Elon Musk, one of the world’s most vocal and visible backers of cryptocurrencies was walking back in his support of bitcoin — saw in a crash to $28,000 in a matter of months. Just as soon, it went past $64,000 again, swelled by a slew of positive news, including the launch of the world’s first Bitcoin Futures ETF.

It is this momentum that could possibly take bitcoin to higher levels, given that the cryptocurrency has seen a spate of good news, including its ever-increasing integration with financial systems.

The technical view

Analysts have looked at a series of technical indicators to gauge bitcoin’s price level in light of its charts and price momentum. For instance, its relative strength index, which is considered a bogey for momentum, is currently at 73. A reading above 50 indicates positive momentum, while a reading above 80 indicates overbought territory.

Analysts also look at bitcoin’s price in view of its quadrennial halving cycle, as part of which mining rewards are halved. When looked at from the standpoint of the halving cycle, since bitcoin crossed $20,000 in December 2017, a valuation pegs bitcoin at $200,000 in the near future.

According to a Twitter user, TechDev, who writes frequently on the cryptocurrency, bitcoin going past $200,000 “looks almost too programmed”.

There is another valuation method used by bitcoin analysts: stock-to-flow model (S2F). To determine and forecast BTC price, it takes into account the number of coins in circulation and the inflow of newly minted coins.

As per the S2F model, Bitcoin could touch the $100,000 mark by December 2021. This model of technical analysis had suggested BTC should be around $88,000 in July this year. But several factors including China’s crackdown on bitcoin mining brought the market down. However, analysts believe that BTC has emerged stronger from China’s anti-crypto measures.

The fundamental factor

Bitcoin has seen a series of positive news. From being adopted as legal tender by El Salvador to the recent launch of Bitcoin futures ETF, the cryptocurrency world believes that bitcoin’s acceptance as an asset class, or even potential medium of exchange or store of value, is highly likely.

The other thing investors must look at is acceptance of not just cryptocurrencies, but also other solutions made possible by blockchain technology, as an indicator of sentiment. Over the past few years, the emergence of decentralised finance, underpinned by blockchain has given rise to a number of solutions, such as non-fungible tokens (NFTs) etc.

The bear case

While momentum and news flow seem to be in favour of Bitcoin, investors should remember it has inherently a highly volatile class, meaning it could be subject to swift crashes even if it goes up in the long term. This means investors – which often tend to act in a herd – could come in at the top lured by recent gains, and exit in panic following a crash, depriving themselves of gains.

The other thing to remember is bitcoin is a fundamentally new asset class and has zero cash flows, unlike stocks. This means its value largely stems from the perceived store of value. In other words, people may be buying bitcoin because they believe it will go up, which causes prices to go up. Such perceptions can change quickly, especially when prices go down. And over the long term, its true value will emerge only if bitcoin has truly been able to demonstrate its utility not just as a speculative asset class but also as a technology that has vast use cases in society. Absent this, its price could go down as swiftly as it has risen.

What should investors do?

Investors should not ignore cryptocurrencies as an asset class and bitcoin can become a small part of their portfolios. But it is important to not go overboard. Invest only as much money as you can afford to lose.

Also Read | 5 things to consider while investing in cryptocurrency

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

D-Street Diary: Fake portfolio screenshot scam on Twitter, Telegram; what SEBI, brokers can do to curb it

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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‘Behind every great fortune lies a great crime’ Balzac famously said. A stock market adaption of that quote could be: ‘In every great bull market flourishes a big con game.’ Brokers siphoning off bank funds is passé, promoters manipulating their own stocks is by now par for the course, as is window dressing of accounts to boost earnings.

Self-proclaimed market gurus sharing (fake) portfolios/ trading positions on social media platforms to sell subscription services or technical analysis/derivative trading workshops to gullible investors is the side game of this bull market; a game that has been going on for a while now. The target audience is the growing tribe of individual investors stampeding into the stock market, mesmerised by the near-one-sided rally in share prices over the last 18 months.

The retail frenzy in the market is evident from the steep rise in the number of Demat accounts, trading accounts at broking firms, mutual fund folios and the money coming in through systematic investment plans (SIPs) every month.

The problem of fake screenshots is most common on Twitter and Telegram, the two platforms that have become a hub for stock-trading discussions.

Most of these investors are first-timers, having little or no knowledge about how the stock market works. These so-called gurus, or fraudsters, for want of a better word, pose as veteran traders and post screenshots of purporting to be their current or recent stock portfolio/positions on social media platforms.

The screenshots are typically edited in Photoshop to show bogus profits the trader never made in the first place.

The bait is used to trap gullible first-time traders who are asked to pony up a subscription fee to join private WhatsApp or Telegram groups where they will receive stock recommendations. The fees range from a few thousand a months to tens of thousands for a year’s service. Many such private groups have thousands of paying members.

Alternatively, the newcomers will be persuaded to sign up for workshops that promise to make them experts in technical analysis or options trading in a matter of few days or a few weeks. These workshops too charge anywhere between a few thousand to few tens of thousands.

The con started small, Twitter handles and Telegram groups started by posting fake MTM screenshots to establish their credentials in stock trading. They also made claims about their accuracy (typically 100 percent) and how their paying subscribers have benefited from their calls. The fraudsters then graduated from fake screenshots to making videos to promote their claims. The videos depicting fake profits are edited in either a video-editing software or simply through changing the values of an HTML-based portfolio window of a broker’s page, as can be seen below.

The people who run subscription products based on such claims are not registered with SEBI as registered investment analysts (RIA). Occasionally, market regulator SEBI bans individuals and firms for making stock recommendations on the Internet despite not being registered as RIAs. But with such groups mushrooming by the thousands, it is not clear if the regulator has the manpower to tackle the problem.

A potential fix for fake MTM screenshots

Since the fraud relies on the rather simple trick of manipulating values on the holdings page, brokers can consider introducing an optional QR code on such pages. The QR code will contain an embedded link to a page hosted on the broker’s website, which will show the actual stored values when the portfolio page (along with the QR code) was first loaded. Brokers can cache a copy of the user’s portfolio/holdings page every time they serve it to them through the website/app. Scanning the QR code will thus allow anyone to corroborate values that are being claimed to exist on the page.

Users must be notified that by sharing screenshots, they have themselves given up the right to the privacy of their portfolio data. And that the QR code simply serves as a verification tool.

Besides, if turning on the QR code is kept an optional feature, users who wish to show off their genuine profits will be incentivized to turn it on while those that don’t may have something to hide!

Nazim Khan is Business Director – Digital Content and Strategy at Quantent. A former journalist, he still keeps an eagle eye on the developments in the stock market and technology space.

For previous editions of D-Street Diary, click here 

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin vs Gold: Why buy digital coins this festive season?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The debate over Bitcoin vs Gold is becoming livelier by the day. Many investors with impressive track records endorse Bitcoin for its value and hedge against inflation among the available options, including gold.

But the most potent endorsement for Bitcoin as an anti-fiat asset that’s immune to inflation comes from Apple co-founder Steve Wozniak. Realising the cryptocurrency’s potential, Wozniak termed Bitcoin as the most “amazing mathematical miracle” better than gold.

Let’s have a look at why buying Bitcoin makes more sense this festival season than buying gold:

• You can buy and sell Bitcoin online from the comfort of your home.
• It is considered as a future currency, and early adopters stand to benefit.
• It is peer-2-peer, transparent, and safe with little chance of theft, unlike .
• Bitcoin’s limited availability – only 21 million tokens will ever be mined – will ensure that it serves as a hedge against inflation

Also Read | A complete guide to Bitcoin

Furthermore, over the last year, Bitcoin appreciated about 400 percent compared to gold’s 31 percent. You can directly buy Bitcoin with Indian Rupees on WazirX, India’s leading cryptocurrency exchange.

How has the crypto world fared in the past year?

During the Covid-19 pandemic, cryptocurrencies, including Bitcoin, were in business and effectively served populations that remained out of the formal banking system. Bitcoin can also work as a medium of payment and remittances.

Also Read | | From the US to India: How major countries are looking at Bitcoin from regulatory perspective

In many parts of the world where economic and political instability has sent inflation through the roof, cryptocurrencies have offered a more stable and dependable medium of payment.

What more should you know about Bitcoin?

Currently, Bitcoin is all the rage and for all good reasons. However, there are a few things to know about Bitcoin before you invest in it.

• Like all investments, Bitcoin investment is not immune to risks.
• While cryptocurrencies are not illegal, there is currently a lack of regulation surrounding virtual coins such as Bitcoin.
• Many governments maintain a hawkish attitude toward crypto-assets.
• Buying and selling Bitcoins require a degree of computer literacy.

It is observed that Indians spend more during the festive season. Additionally, a separate budget is set for investments in assets such as gold.

Globally, cryptocurrencies – such as Bitcoin and Ether – have garnered more attention from investors than gold. The trend is likely to catch up in India, where interest in cryptocurrencies has been growing steadily.

Looking at the handsome returns even new crypto coins are delivering, many Indians have already started investing in crypto assets rather than mutual funds, equities, or gold. When crypto assets are again soaring this festival season, with Bitcoin breaking $50,000 again, many shoppers will consider buying Bitcoins rather than gold.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin price hits $50,000 after Elon Musk’s Shiba Inu tweet lifts cryptocurrencies

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bitcoin has reclaimed $50,000 for the first time since early September, piercing through the level that was seen by many analysts as a strong resistance.

The cryptocurrency last went past $50,000 after El Salvador accepted it as legal tender, even as glitches with Bitcoin following the announcement led to a sharp 20 percent decline.

The surge in Bitcoin was accompanied by a surge in other cryptocurrencies. The rise was led by Shiba Inu, a meme currency promoted by Elon Musk, after the maverick billionaire put out a tweet.

Floki Frunkpuppy pic.twitter.com/xAr8T0Jfdf

— Elon Musk (@elonmusk) October 4, 2021

Shiba Inu is up 95 percent over the past 24 hours and 180 percent over the past one week.

Other popular crypto tokens were more of a mixed bag. Ethereum’s price had a small hike, trading at $3,393.3 whereas Cardano’s price dipped by 1 percent to $2.20. Dogecoin rose 8 percent, trading at $0.24.

Bitcoin’s price rise has surprised some experts who had expected some volatility as China has enacted its latest ban on bitcoin trading and mining.

Also Read | India leaves United States, China behind in cryptocurrency adoption: Chainalysis

While it was predicted that China’s ban on the world’s most popular crypto would cause volatility in the price, there have been a few bright spots for Bitcoin. Continued support from regions like El Salvador and Miami has encouraged investors to invest in bitcoin and other cryptos.

Tesla CEO Musk has continued his effort of speaking out for bitcoin and other cryptocurrencies. Last week, Musk said, “that while the advancement of cryptocurrencies can be slowed down, these digital assets cannot be destroyed now.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

‘Dogefather’ Elon Musk tweets Floki Inu to new heights: All you need to know about crypto world’s new sensation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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When the cryptocurrency was in the midst of a fiery bull market in March 2021, Tesla CEO Elon Musk added a tinder when he announced: “I’m getting a Shiba Inu.” By June 25, when he posted another tweet, this time saying, “My Shiba Inu will be named Floki,” the cryptocurrency market had shed hundreds of billions of dollars. But the recent turmoil was no problem when on September 12, he posted “Floki has arrived” along with an image of a cute pooch sleeping on the rug. By September 15, Floki Inu (FLOKI) had appreciated 1000 percent. The crypto world saw the unbelievable drama unfolding in front of their eyes and their wallets swelling 10-folds within a matter of 72 hours. Elon Musk had done it again.  

Shiba Inu is a breed of Dogecoin, a memecoin at its basic, and Floki Inu is the new star of this breed.    

When Musk posted his tweet announcing the arrival of Floki on September 12, the meme coin was trading at $0.00001831. Eagled-eyed crypto enthusiasts rushed to the laptops, tablets, and smartphones. In about 75 minutes, Floki was trading at $0.00004037, up nearly 120 percent. It meant every dollar invested before Musk’s tweet had become $2.20. It came from a coin that was not even among the top 2000 coins. In the next 20 minutes, the coin saw a correction of about 35 percent, punishing the latecomers. Not just Floki Inu, but other Floki themed coins such as Shiba Inu, FlokiPup Inu, Baby Floki Inu, and Floki Shiba Inu also saw significant appreciation post-Musk tweet.  

A bit about Floki Inu 

Floki Inu is a new digital coin that came into being in June 2021 and has a definite link with Elon Musk. The Floki Inu website says, “Floki Inu is Elon Musk’s very own Shiba Inu, and he’s hungry for outer-space treats!”. At present, the coin has about 100,000 holders and expects the market cap to be $5 billion by November 2021.  

How Elon Musk used a different way to move markets this time 

For a long time, Musk carried the moniker of Dogefather in the crypto world. Now, with the launch of Floki Inu, he has officially fathered a digital coin. It’s his coin built on his tech-intensive promises of spacewalks, space travels and space living. With Floki Inu, Musk has once again displayed his ability to shake up the crypto market.  

Earlier this year, he made the coins berserk on the exchanges with his strategic purchase of bitcoins worth $1.5 billion and some cryptic tweets. Bitcoin made impressive gains in subsequent months, leading to an all-time high of $65,000. 

Then, Dogecoin saw a ludicrous rise of over 15,000 percent in a year, primarily thanks to Musk’s interest in the coin through tweets in the first few months of 2021. Then, he made bitcoin look more legitimate and attractive by accepting it as a medium of payment for his Tesla cars. It was the beginning of a bullish run on the exchange where most coins appreciated.  

But Musk ditched both Dogecoin and Bitcoin weeks afterwards, making the market melt and lose roughly $300 billion. At a time when meme coin doge had risen to become the 4th largest coin, Musk dropped a tweet saying, “I’m getting a Shiba Inu.” Soon, he also announced that Tesla would not accept bitcoin as payment because the coin is not eco-friendly. 

 Shiba Inu is a dog belonging to a breed of Japanese hunter dogs. Dogecoin is also a coin with a dog as the theme. And there are quite a few other digital coins with Shiba Inu as the theme, with Dogecoin leading the pack in popularity and valuation. All these coins are meme coins meaning they don’t offer any of the values and applications that the Ethereum network, for example, offers. Now, Ethereum is not alone as a host of other networks such as Cardano, Polkadot, and Solana offer more value and functionality on their networks. 

So, what is it that fuels the rise of meme coins with Shiba Inu as the theme? It’s the enigma of Elon Musk as the champion of futuristic technologies that makes his choices of digital coins go through the roof. For example, when he accepted bitcoin for payments for Tesla cars, he was seen as lending his weight behind a currency that could become the future of global finance. It shot up the value of bitcoin and all other coins. But when he dropped bitcoin as a payment partner on the grounds that the network consumes a lot of energy, he again sounded logical as he makes his billions by selling electric cars and running a space technology centre that promises commercial flights to space within a few years. However, his companies’ financial reports suggest that he profit $100 million in 2020-21. 

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

What is a decentralized exchange (DEX)?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A decentralized exchange is yet another use case of blockchain technology. It offers Peer-to-Peer (P2P) trading of crypto assets. The most important advantage of a decentralized exchange is that it can offer a trading facility in virtually all the coins available. There are more than 5000 coins in circulation right now. Many of these coins are in infancy and they don’t have high trading volume – an important consideration for centralized exchanges to choose an asset to list for trading.

A decentralized exchange is a crypto exchange that offers almost all and similar trading services that a centralized exchange can offer. However, it is different from centralized exchanges and is considered by some to be the trading exchange of the future. At the moment, decentralized exchanges account for about 5 percent of the crypto trade.

Unlike centralized exchanges, DEXs are based on smart contracts that make most of the processes follow automatically. Among the major advantages of this system is that it can interact with products and services such as the DeFi based on smart contracts.

What DEX is not?

DEX is not the custodian of your funds or the private keys.

How is DEX a better choice?

A centralized exchange is a complex system where all the buyers and sellers come together to buy and sell their digital assets. All of them maintain their respective crypto wallets offered by the exchange and use them to carry out transactions. It not only brings sensitive information to one place and makes them vulnerable to hacking and stealing but also creates a monolithic structure.

In contrast, a DEX makes things easy for everyone. It can accommodate all possible coins even those that have little trading volume without adding to its cost of operations. DEXs work on blockchain networks which are mostly open source. New blockchain networks such as Cardano and Solana offer much higher capacity, speed, and scalability at low transaction costs. These new realities make DEX a highly attractive trading platform.

Here are a few other advantages of DEX:

You remain in control of your money

In a traditional stock exchange, you need a ‘trading account’ to store the funds for buying the stocks or to receive the funds when you sell the stocks. In centralized crypto exchanges, the trading account is an e-wallet offered by the exchange. Given the cyber-security risks, holding an e-wallet on a centralized exchange is full of counterparty risks.

A decentralized exchange is distinguished by the absence of an e-wallet offered by the exchange to facilitate the transactions.

A DEX doesn’t ask you to transfer your funds to a wallet or trading account to carry out trading transactions. In this case, you stay in control of your funds and it’s an important feature for a crypto platform, which is vulnerable to hacking and thefts.

It’s safe and secure

A centralized exchange gathers important and sensitive information as part of its routine operation. For example, you use a private key to operate your e-wallet for every transaction. The details of your private key get registered and stored on the exchange’s servers.

A decentralized exchange allows you to use an external wallet to carry out the trading. Here, the details of your private key are not registered on the exchange’s servers giving you full control over your wallet and funds.

It’s cheaper

Usually, a decentralized exchange is cheaper than a centralized exchange that has to bear additional costs in setting up and maintaining infrastructure to offer dedicated and secure wallet services to the customers. The use of smart contracts makes many of the complicated processes on the exchange automated and self-regulated.

A decentralized exchange leverages the network on which it operates to offer cost-efficient services. Now, new blockchain networks have come up with higher efficiency, capacity, and price competitiveness. Decentralized exchanges using these networks may offer much-reduced transaction cost to their customers.

Summing up

The most defining feature of blockchain technology is the idea of distributed and decentralized decision-making. A transaction of a crypto asset is peer to peer (P2P) and requires confirmation of other members on the network. So, in the space of blockchain technology, decentralized exchanges (DEXs) are something very natural and have a huge potential.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Key myths on cryptocurrencies, debunked

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The world of cryptocurrencies has exploded these past few years, thanks to the mindboggling returns the asset has produced. But their rise, led by Bitcoin, has led to a bunch of beliefs that may or may not be true.

Here are some common myths about cryptocurrencies.

Crypto is used to fund criminal, terror, drug activities

Like with cash and the banking system, it is true that cryptocurrencies can be used for nefarious purposes. But the myth pertains to the belief that cryptocurrencies are a den where illicit activity hides. In fact, according to a Chainalysis report, illicit activities amounted to $10 billion or 1 percent of all crypto transactions last year, down from over $20 billion or 2 percent in 2019.

It is also a myth that cryptocurrency transactions are completely anonymous. Not only are all transactions visible on the blockchain network, government agencies usually have the sophistication to lift the veil of anonymity of identity afforded by cryptocurrency transactions.

Also Read: How young Indians are achieving financial freedom by investing in crypto assets, building crypto solutions 

Chainalysis and Coinfirm, for example, offer crypto forensics services to governments and private companies. Besides, strengthening KYC norms in all countries ushered in by tightening regulations is expected to reduce illicit activities in crypto further.

Government can ban and stop cryptocurrencies

While governments can ask financial institutions to stop dealing with cryptocurrencies or any entities dealing with them, it is nearly impossible to ban cryptocurrencies outright. Crypto transactions are nothing more than sending an email and anyone with access to the Internet can deal with it.

Governments have been wary of the risks associated with crypto, simply they would like to exercise greater control over anything that can be considered as a potential currency. But increasingly, a lot of governments have shown the willingness to look at cryptocurrencies with an open mind.

Also Read: Bitcoin will surge to $400k by March 2022; Ether to hit $20k, Raoul Pal predicts

Cryptocurrencies are complicated to deal with

The underlying technology of digital currencies may be complex but an ordinary crypto user does not have to deal with it. Making a crypto transaction can be as easy as making a banking transaction with the banking app on your smartphone.

Blockchain has only one demonstrable use case: cryptocurrencies

A lot has been talked about the use cases of blockchain, the technology that underpins cryptocurrencies such as bitcoin. A view shared by some experts is that blockchain has failed to demonstrate any use case, and bitcoin is probably the only instrument that has enjoyed a degree of success.

Also Read: Bitcoin is ‘millennial gold’ now, says Aswath Damodaran

The truth is innovations in the blockchain sphere are taking place at a rapid pace. For example, smart contracts on blockchain can store the contract such as between a lender and a home loan beneficiary. It can make loan repayment completely automated from the beneficiary’s crypto account to the lender’s account.

There are immense possibilities and use cases of blockchain technology from DeFi to NFT.

Cryptocurrencies waste energy

This is partially true so we would qualify it as a half myth. The truth is mining cryptocurrencies can be an energy-intensive exercise. But the other half of the truth is cryptocurrency developers have worked hard, and achieved success, in bringing down energy costs associated with the settlement of transactions. Besides, with global governments’ thrust on pursuing renewables as a source of energy, cryptocurrency mining’s energy consumption may start to become less and less of a concern.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Five ways in which crypto offers freedom to do things that you previously couldn’t 

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The value of top cryptocurrencies like Bitcoin and Ethereum has gone through the roof, crashed, and surged again. However, intense scrutiny by governments and regulators is keeping them in a tight spot. If this is not enough, the occasional hacking and heist turn the spotlight onto them. Despite all the criticism and loopholes, cryptocurrencies offer some unique benefits. In this post, we are going to discuss a few.

•  Low-cost and easy money transfers 

Money transfers across borders are difficult and expensive. However, cryptocurrencies can be easy and economical. The transactions are instant in many cases — though Bitcoin transfers can take up to 10 minutes.

With crypto transfers, you don’t have to pay the high transaction fees that international money transfers involve. A recent Litecoin (LTC) transfer worth $99 million took just a few minutes and a transaction fee of $0.40. Some cryptocurrencies such as Litecoin (LTC) and Bitcoin cash (BCH) have used low transaction fees as their most defining feature.

•  Decentralized finance (DeFi)

One of the most talked-about use cases of blockchain, on which cryptocurrencies are based, is decentralized finance (DeFi).

Unlike traditional finance, where an intermediary is at the centre of all transactions, “DeFi aims to create an open-source, permissionless, participatory and transparent financial ecosystem that operates without any central authority,” according to a post on WazirX’s blog.

“The users always control ownership of their assets and interaction with the ecosystem happens through the peer-to-peer process and decentralized applications (DAPPs). DeFi smart contracts are publicly auditable and thus provide immense transparency,” the post adds.

For instance, WazirX is planning to launch a decentralized cryptocurrency exchange where transactions between peer-to-peer trades will take place based on smart contracts

•  ICO and asset tokenization 

The idea of cryptocurrency, a virtual coin, can be used to make your physical assets work as a currency. How? You can choose a blockchain network and list your physical asset such as a piece of real estate. You will have to upload other relevant information such as the ownership and the basic set of rules as in case of any Initial Coin Offering (ICO).

If the value of your asset is worth $10 million, you can issue 1 million tokens of $10 each. Crypto investors would buy your coins and you will be able to generate funds on behalf of your physical asset. It is the fractionalization of the physical asset that makes the value stored in it more liquid.

The same idea can be used to raise funds for your startup. For example, you have a great business idea and you want to raise some funds to get started. You can use the blockchain to list your business idea and issue an ICO, which is your own digital coin linked to your business.

•  NFT art and gaming 

Non-Fungible Tokens are digital assets such as a piece of art or a unique character in a game available exclusively on a blockchain network. They are not exactly cryptocurrencies but you can think of them as a derivative of cryptocurrency.

Art creators can use a blockchain network to store their works. The benefit includes the strong encryption technology that ensures no one can steal or copy them. They can sell the artworks on the network but anyone can trace the source and sequence of the purchases. As we said earlier, these works can also be tokenized.

The same idea works in gaming assets on the blockchain. Anyone who wants to use these assets will have to buy them from the creators. For example, crypto kitties, or virtual cats, is a game on the Ethereum network where players can buy, sell, breed, and collect these virtual cats created by the Canadian studio Dapper Labs. This is an early and popular example of NFT in gaming.

WazirX recently launched its NFT platform. Interestingly, this is the first one in India. On this platform, over 300 creators have put up their artwork.

•  Blockchain solutions

Last but not the least, blockchain, the underlying technology that pins cryptocurrency, has several real-life applications, and it will not be long that it will become part of your life.

Here’s one use case: Land records in India and most parts of the world work on the principle of presumptive land-titling. In this, when you sign an agreement to purchase a property, the registration documents are mere records of the agreement, and your new claim to the land can be challenged in court.

As part of its land record digitization programme, the government is considering a conclusive land titling record system on a pilot basis, where once a land record is verified, its title will be guaranteed by the government. Experts have proposed putting this system on a blockchain where land transfers create verifiable, immutable entries on the distributed ledger, and you will be able to sell your land like how you sell a stock – within minutes – and without the buyer having to worry about the title or the success of the transfer.

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How young Indians are achieving financial freedom by investing in crypto assets, building crypto solutions 

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Bitcoin phenomenon has taken the world by storm, and for many young Indians, the cryptocurrency space has presented an opportunity not just to learn more about the system that has wide applications in the real world but also to achieve financial freedom through it. 

Bitcoin’s phenomenal price rise has attracted a vast horde of traders and investors who think of it as a quick-rich scheme, with many failing to do even the basic research into its fundamentals and promise. Sure enough, you will find media reports talking about young traders huddling together in WhatsApp or Telegram groups, egging each other on, and ‘hodling’ crypto assets. 

Any asset that has grown as fast as Bitcoin is sure to attract massive speculative interest, including from those who do not bother to understand even its basics. 

But there are others who have taken pains to research the space well, and have either invested in a crypto asset or are building solutions for it. 

Also Read | Bitcoin is ‘millennial gold’ now, says Aswath Damodaran

A good example is Kashif Raza, who in 2017, made some money by investing in Bitcoin. Bitten by the bug, the then salaried Raza decided to take a large personal loan and invested in what he thought was a Bitcoin offering. The app, however, turned out to be a Ponzi scheme, and Raza lost money. 

“I realized it wasn’t Bitcoin that had cheated me,” Raza said, and together with a friend, he started Crypto Kanoon, a Twitter and YouTube platform with the aim of creating awareness about the crypto space. Today, Crypto Kanoon has over 100,000 subscribers, where Raza makes an effort to help people educate users about cryptocurrencies. 

One of the biggest success stories to come out from India is the Polygon network (previously called Matic), built by Sandeep Naiwal, Jaynti Kanani and Anurag Arjun. Today, the Polygon cryptocurrency is among the world’s biggest, having a market cap of nearly $10 billion. 

Kanani, an engineer who started off with a salary of Rs 6,000, says he first heard of Bitcoin in 2016. 

“I soon realized the potential of this transformative technology and the vast opportunity it presented for tech builders like myself to start up on their own and get a headstart to develop their own products in the crypto space. I started investing in Bitcoin and experimenting with my ideas on what I could do more to make a mark in the crypto space,” he said in a recent interview he did as part of WazirX’s Humans of Crypto campaign. 

“As luck would have it the crypto market boomed in the year 2017, which changed everything for me. I had an idea to solve Ethereum’s increasing scalability issue that could help improve its overall efficiency level. The idea was pitched to by now business partners and together we found Matic in the year 2018,” Kanani says. 

Over the past few years, the crypto space has expanded far beyond just cryptocurrencies, with concepts like non-fungible tokens (NFTs) aiming to revolutionise art by allowing artists to host their works on a verifiable token that guarantees originality. 

On July 4, thirteen-year-old Laya Mathikshara put up a 2-minute short film called ‘Gratitude’, thanking COVID warriors on WazirX’s NFT platform. The film was sold for $423, or about Rs 32,000 within an hour of its launch, and also made it to the 9th All American High School Film Festival, considered the Oscar for teens. 

Also Read | Explained: What’s this craze for ‘NFTs’ all about, anyway

Arijit Das, an ex-Creative Consultant at an MNC, is an avid NFT collector.  

He says he expects the NFT market to go through the roof, and says new NFT collectors should look to invest in original art that has originality, something that represents the taste of the artist and represents the uniqueness of what he or she is trying to represent. 

But while interest in cryptocurrencies and NFT assets has spiked, successful investors also have a word of caution of others looking at the space to achieve financial freedom. 

“Cryptocurrencies are inherently volatile,” says Naimish Sanghvi, an engineer who quit his corporate job in 2016 to start vlogging. 

Sanghvi then discovered dabbling in the cryptocurrency space but when interest in Bitcoin spiked in the 2017 rally, he started Coin Crunch India to create more awareness about the space. 

“I started to learn about so many new projects and innovation that are happening as we speak, in the tech space,” Sanghvi says. 

His advice to young investors: “If you are eager to learn, I would recommend you start by polishing your basic understanding of subjects like economics, statistics, global monetary reform policies before studying the basic classifications of cryptos. Investors need to carefully evaluate their rewards versus risks before investing in crypto.” 

That last bit of advice is prudent, and after Bitcoin’s explosive rally over the past one year, Sanghvi’s phone keeps ringing, with long-lost friends wanting to know if they should invest in it. 

Here’s what he has to say: “All crypto traders need to understand that cryptocurrencies have cycles and it’s a volatile market. For example, the valuation of cryptos can go up to 600-700 percent in a year and come down 90% in a few months depending on the demand and supply. It’s a high-risk investment, so people should only invest what they can afford to keep for a long term, thinking they might even lose everything in play.” 

Also Read | From biggest to worst, here are some of global crypto thefts

For more stories on cryptocurrencies, click here

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow