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Way back when Bitcoin was invented, India was the first country to acknowledge it as an alternative monetary system. Though India started lauding Bitcoin without knowing the plethora of scams it could encourage, the political and economic conditions in the country were favorable for Bitcoin to thrive. However, the recent trends show that India is becoming the first country on the globe to regulate the cryptocurrency. The effects of demonetization When the Reserve Bank of India announced the demonetization of 500 and 1000 rupee currency notes on November 8, 2016, the Indian public started realizing that cash was unreliable. During that time, the scenario gave a great impetus for the young people in the country to turn to Bitcoin. In fact around this time, a sizeable chunk of the corporate world in the country was already using Bitcoin. Since the digital coin gave a safer system for the public to invest their money, a growing number of people started resorting to the use of Bitcoin. Does not need a bank account A large segment of the Indian population still does not have a bank account. Bitcoin enables such individual to make financial transactions quickly and securely without a bank account. Indian companies and Bitcoin More than 500 merchants in India and five large enterprises in the country including Dell accepted payments in cryptocurrency. This number is fast growing today. No doubt Bitcoin is still not that popular in India. A lot of Indians highly prefer paper money. However, as per the study of the emerging trends in the country, the frenzy for Bitcoin is fast spreading in the country. Indian government and Bitcoin Earlier in 2019, the Supreme Court of Indi came up with a four-week deadline urging the government to bring in some regulations of the cryptocurrencies in the country. The government has already taken a firm stand to deal with cryptocurrency in a strict way and looking forward to banning it. Consultations have already begun on the bill called "Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019". These moves by the country show us that the government of India is clear with its hostile stand against cryptocurrency. What can happen to Bitcoin in India Expert circles say that the country could be seen banning cryptocurrency under the Prevention of Money Laundering Act (PMLA). Meanwhile, the Ministry of corporate affairs has pointed out that those dealing with Bitcoins are falsely induced of massive returns. These schemes are not transparent and they never fall into any legal framework that are regulated. Many gullible investors are seen falling victims to a number of scams connected with Bitcoins. RBI has gone a step further to announce that it can never provide services to individuals and businesses that are dealing with Bitcoins or settling in virtual currencies. BP Kanungo, Deputy Governor, RBI has stated, “We have decided to ring-fence the RBI regulated entities from the risk of dealing with entities associated with virtual currencies. They are required to stop having a business relationship with the entities dealing with virtual currencies forthwith and unwind the existing relationship within a period of three months". Severe measures contemplated in India It appears that the "Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019" draft has also on its proposal 10-year prison sentence for those individuals found mining, generating, selling, holding, transferring, disposing of, dealing with or issuing cryptocurrencies. Hence we could possibly see a ban on Bitcoins in India in the near future.

Explained: What is Cryptocurrency in India

<ul class="summary-list"><li>Cash App users will be able to send <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> anywhere for free via the Lightning Network, the payment platform said.</li><li>The Lightning Network speeds up transactions across the bitcoin network, due to how it handles blocks.</li></ul>People using Cash App can now use the Lightning Network to transfer bitcoin, the Block-owned <keyword id="12346445" type="UNKNOWN" weightage="60" keywordseo="payments" source="Orion">payments</keyword> platform provider has said.This integration will enable customers to make bitcoin transfers faster than before, and at no cost, it said in a <a href="https://twitter.com/CashApp/status/1490767860750336004">post to Twitter</a> late Monday. "Lightning Network is now available on Cash App. It's the fastest, free way to pay anyone in bitcoin," it tweeted.To use the feature, Cash App customers need to scan a Lightning QR code using the camera on their phone, then confirm the payment details and hit "Pay." That will send bitcoin to a Lightning or on-chain address.Most US customers can use the new feature, except for those in New York, the app provider said. It didn't respond to tweets asking when Cash App users in other countries would get it."At this time, New York residents aren't eligible for Lightning," Cash App said on TwitterThe Lightning Network is a layer 2 for <keyword id="11902216" type="UNKNOWN" weightage="60" keywordseo="blockchain" source="Orion">blockchain</keyword> and <keyword id="11892695" type="UNKNOWN" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword>, meaning it operates on top of an existing blockchain network — bitcoin, in this case. <a href="https://dci.mit.edu/lightning-network">According to MIT's</a> Digital Currency Initiative, the Lightning Network allows for instant payments, micropayments and scalability.Bitcoin aggregates transactions into blocks every 10 minutes, and after six blocks, or about one hour, payments are considered secure. The Lightning Network doesn't need the confirmation of these six blocks, which makes it faster."On the Lightning Network, payments don't need block confirmations, and are instant and atomic," the MIT group said in a paper online.The Lightning Network, which has been operating since 2018, has been touted as a bridge to <a href="https://markets.businessinsider.com/news/currencies/the-lightning-network-is-driving-mainstream-bitcoin-adoption-2021-8">mainstream adoption of bitcoin</a> once people recognize the advantages of instant and free transactions on bitcoin. <keyword id="11893903" type="UNKNOWN" weightage="60" keywordseo="jack-dorsey" source="Orion">Jack Dorsey</keyword>, who stepped down as Twitter CEO to focus on leading Cash App's parent Block, has spoken in glowing terms about the technology. He has stepped up his company's involvement in bitcoin projects since resigning.<a href="https://twitter.com/saylor/status/1491064246394056709">Another fan</a> is MicroStrategy boss Michael Saylor, who covered Lightning in his company's <a href="https://www.youtube.com/watch?v=XdgP25UcHB0">bitcoin for corporations 2022 conference</a>.But other leading lights in technology have come out as skeptics, including Moxie Marlinspike, creator of encrypted messaging app Signal. He has <a href="https://markets.businessinsider.com/news/currencies/crypto-technology-critics-bitcoin-price-investors-signal-moxie-marlinspike-ubs-2022-1">criticized</a> much of <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword>'s so-called decentralization and security, arguing that it was far from this in reality.

Block's CashApp turns on bitcoin transfers via the Lightning Network for US customers

<ul class="summary-list"><li>Bitcoin could slide to $40,000 after falling below a key level, the CEO of Delta Exchange said.</li><li>The cryptocurrency has dropped below its 50-day moving average of around $56,000.</li><li>Investors are increasingly keen on other tokens such as <keyword id="6709758" type="UNKNOWN" weightage="60" keywordseo="Ether">ether</keyword> and <keyword id="1985091" type="PERSON" weightage="60" keywordseo="dogecoin">dogecoin</keyword>.</li></ul><a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin's</a> fall below a key technical level as investors pivot towards other <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies">cryptocurrencies</keyword> means it could be on track for a sharp slide to $40,000, according to the chief executive of crypto derivatives exchange Delta.Pankaj Balani told Insider bitcoin's fall was down to lower interest in the wake of crypto exchange <a href="https://markets.businessinsider.com/news/stocks/coinbase-stock-price-ipo-direct-listing-trading-debut-cryptocurrency-platform-2021-4-1030304997">Coinbase's direct listing</a>; investors chasing quick gains by piling into tokens such as <a href="https://markets.businessinsider.com/currencies/news/dogecoin-record-high-doge-elon-musk-snl-cryptocurrencies-2021-5-1030390457">dogecoin</a> and a broader <a href="https://www.businessinsider.com/stock-market-news-today-nasdaq-close-inflation-amzn-risk-outlook-2021-5">sell-off</a> in risky assets.He said bitcoin's fall below its 50-day moving average - which is <a href="https://www.barchart.com/crypto/quotes/%5EBTCUSD/technical-analysis">around $56,000</a> - could trigger a further decline. Bitcoin stood at $55,870 on Tuesday, around 14% off an all-time high of <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-record-high-coinbase-direct-listing-btc-crypto-2021-4-1030302632">near $65,000</a> touched in April.The 50-day moving average is a key psychological level that is closely watched by investors, Balani said. He said it is also used by some algorithmic traders as a point at which to sell.Balani said bitcoin could fall to as low as $40,000, which is another important psychological level at which investors should start buying back in."The short-term momentum has been lost. So it wouldn't be surprising to revisit the $40-$42,000 kind of zone. That is where we might find very strong support," Balani said."That is the level where Elon Musk came into bitcoin," Balani said, referring to <a href="https://markets.businessinsider.com/currencies/news/tesla-buys-bitcoin-elon-musk-stock-accept-form-of-payment-2021-2-1030055107">Tesla's purchase</a>. "And that's kind of become a base level." Balani said derivatives contracts - which allow people to bet on price rises without actually owning bitcoin - indicated there was strong support at this price.The Delta Exchange boss said the rotation into other tokens such as <a href="https://markets.businessinsider.com/currencies/eth-usd">ether</a> and <a href="https://markets.businessinsider.com/currencies/doge-usd">dogecoin</a> was a worrying sign for bitcoin and the cryptocurrency market as a whole."This is not sticky capital. This is people coming in and chasing quick gains," he said. Balani said a similar dynamic was seen during bitcoin's last peak in early 2018: "It's a blow-off top. And that typically happens at the short-term top of the market."Analysts at investment research firm Vanda <a href="https://markets.businessinsider.com/currencies/news/cryptocurrency-bitcoin-ether-ethereum-dogecoin-market-correction-elon-musk-2021-5-1030410820">made a similar point</a> on Monday. "When the rally started to look tired in November [2017], investors rotated to lesser-known altcoins like Ripple and Ethereum," Ben Onatibia, Vanda Research's head of <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword>, wrote."In the months that followed, cryptocurrencies cratered as retail investors rushed to the exit."

Bitcoin could slide to $40,000 after falling below a key technical level, crypto exchange boss says

<ul class="summary-list"><li>Santosh Rao, the head of research at Manhattan Venture Partners, believes a $100 billion valuation for <keyword id="1972612" type="PERSON" weightage="60" keywordseo="Coinbase">Coinbase</keyword> is reasonable.</li><li>Manhattan Venture Partners was an early investor in Coinbase, Palantir, Draft Kings, and more.</li><li>Based on estimated 2022 figures, Coinbase will trade at around 11x sales and 27x EBITDA with a $100 billion valuation.</li></ul>Coinbase is set to make its public trading debut on Wednesday and some market commentators are <a href="https://markets.businessinsider.com/news/stocks/coinbase-might-never-grow-into-its-valuation-1030300178">questioning</a> its lofty valuation. Manhattan Venture Partners, an early backer of the crypto exchange, believes the massive figure is justified. Santosh Rao, the head of research at the merchant bank, says a $100 billion valuation for Coinbase is "totally reasonable" given the disruptive nature of the crypto firm.Manhattan Venture Partners was an early investor in Coinbase as well as a number of other big-name tech companies like SpaceX, Palantir, and Draft Kings.Rao <a href="https://www.youtube.com/watch?v=jQvh7QPEFSs">sat down with CNBC</a> on Wednesday to discuss Coinbase's public debut and his firm's investments.The head of research highlighted the fact that based on estimated revenues and earnings for 2022, at a roughly $100 billion valuation, Coinbase will trade at just over 11x sales and 27x EBITDA.Those figures aren't outlandish for a company that has demonstrated consistent growth, according to Rao.Coinbase released <a href="https://investor.coinbase.com/news/news-details/2021/Coinbase-Announces-First-Quarter-2021-Estimated-Results-and-Full-Year-2021-Outlook/default.aspx">impressive first-quarter results</a> on April 6 that showed a 117% quarter-over-quarter increase in monthly transacting users. The company also <a href="https://www.businessinsider.com/coinbase-earned-more-revenue-in-q1-than-all-of-2020-2021-4">earned more revenue</a> in the first quarter of 2021 ($1.8 billion) than it did in all of 2020 ($1.3 billion).The rising revenue came amid a historic run for <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> that saw the cryptocurrency rise more than 300% in 2020, and an additional nearly 100% in the first quarter of 2021 alone.Some market commentators are predicting a further <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-outlook-decisive-breakout-sets-up-for-further-gain-2021-4-1030299595">10%+ breakout</a> moving forward as well.When asked whether crypto prices need to keep going higher in order for Coinbase to maintain its lofty valuation, Rao said it would help, but argued the company has a range of services on offer to offset any downfall in crypto prices."That's their core business at this point, but they have other services too. And they have a subscription product coming up, a whole range of services, the custody services, they have a number of other levers to pull as they go up," Rao said.Read more: <a href="https://www.businessinsider.com/bitcoin-contango-offers-risk-free-high-return-trade-opportunity-futures-2021-4" target="_blank" rel="noopener">Bitcoin is a headache to store, and that's created an investment opportunity that could theoretically pay determined traders big risk-free returns by December</a>The head of research added that, in his view, there's no reason why crypto prices should stop going up as investors are starting to realize the space will become "an integral part of the financial system going forward."Rao also noted that of the best features of Coinbase is that it's "agnostic" towards individual cryptocurrencies, meaning if bitcoin falls and other cryptocurrencies rise, Coinbase will still benefit.The head of research at Manhattan Venture Partners ended the interview by saying that Coinbase has the breadth, scale, and technology to keep competitors at bay over the long haul.

Coinbase's eye-popping $100 billion valuation is reasonable for a disruptive, cutting-edge crypto firm, an early backer says

<ul class="summary-list"><li>Financial planning has traditionally been reserved for people with over $100,000 who have portfolios.</li><li>However, many young CFPs realize this leaves many poorer millennials and zoomers in the dust.</li></ul>The economic situation of millennials and Generation Z is very different from the economy that previous generations have enjoyed.<a href="https://www.businessinsider.com/millennials-versus-boomers-wealth-gap-2020-10" target="_blank" rel="noopener">One study from 2020</a> indicated that even though millennials make up the majority of the workforce, they are still ten times poorer than the Baby Boomer generation. This is even despite the fact <a href="https://www.businessinsider.com/millennials-highest-earning-generation-less-wealthy-boomers-2021-9" target="_blank" rel="noopener">that some data suggests</a> that millennials actually earn more at their age, but still hold significantly less wealth because this rise in income cannot keep up with the pace of increased costs of living.This departure from previous norms has led to a gap in the utilization of financial services. With less income, there is less reason for younger generations to hire a financial planner. The certified financial planning board has acknowledged this, and<a href="https://www.cfp.net/knowledge/industry-insights/2022/04/what-financial-planners-should-know-about-millennial-and-gen-z-clients" target="_blank" rel="noopener"> in recent years has dedicated more space to discuss</a> what to do in order to fill this gap.While "financial advisor'' can serve as a more generic term for any professional who helps clients with their assets and investments, a financial planner is a specific title that <a href="https://www.cfp.net/get-certified/certification-process" target="_blank" rel="noopener">comes with a certification</a> that requires the planner to undergo a certain amount of working hours and have a certain amount of financial education before they can take on the title. Many financial planners often focus on simply growing a clients' investment portfolio, and oftentimes firms will require a potential client to already have a net worth of several hundred thousand dollars before they will take them on, making financial planning prohibitively expensive for people in a country where about <a href="https://www.businessinsider.com/1-in-4-americans-no-emergency-savings-survey-2021-7" target="_blank" rel="noopener">25% of people don't even have any emergency fund savings</a>.In response to this, there has been an explosion in popularity for a field known as financial coaching. This is not the same thing as financial planning, or even really "financial advising" — financial coaching is a more holistic approach to helping clients grow their wealth.While a financial planner or advisor might be more focused on the returns that your retirement account is getting and what its asset allocation is, a<a href="https://www.businessinsider.com/differences-between-a-financial-planner-and-a-financial-coach-2020-7" target="_blank" rel="noopener"> financial coach is there to help you work through your emotional hang ups about money</a>, set a budget, formulate goals for your savings, and help you reach those goals. However, financial coaching is a largely unregulated industry, and doesn't really require much in the way of credentials in order to become one. This field is also often closely linked to the growth in <a href="https://www.businessinsider.com/top-female-women-finance-influencers-creators-tiktok-youtube-instagram-2022-2" target="_blank" rel="noopener">personal finance influencers</a>, who talk about making and reaching savings goals and growing your net worth. That said, it's still a very popular service despite the lack of regulation and formal expertise of many financial coaches — <a href="https://www.businessinsider.com/how-i-grew-money-coaching-business-4-figures-month-2022-1" target="_blank" rel="noopener">some of whom have grown very lucrative businesses offering this service</a>.Younger financial planners are discovering this as they've entered the field, and as a result, many of them are rethinking what it is that they have to offer their peers as a financial planner. Insider spoke to three certified financial planners over the last few months, and they all shared insights about their field, and how it's affected the way that they approach their practice. <div type="image" title="Colin Overweg holding up bike on top of mountain" height="1080" width="1440" msid="94648938" hostid="261" sizebytes="357096"></div><h2><a href="https://www.businessinsider.com/best-robo-advisors-out-there-cfp-2022-9">Investment management is so easy 'a robot can do it'</a></h2>Colin Overweg, 29, is a financial planner from California who has an all-virtual practice called Advize Wealth, where he chooses to help clients focus more holistically on their finances instead of just managing their investments. In fact, Overweg suggests openly that most people should think twice about hiring a financial planner who is only monitoring their portfolio, stating that this task is "so easy a robot could do it."There is definitely a different type of need in services for younger demographics," Overweg said. "The investment management tools and resources out there now are so much better than they've ever been." <a href="https://www.businessinsider.com/best-robo-advisors-out-there-cfp-2022-9" target="_blank" rel="noopener">He is a big fan of robo-advisor platforms</a> as a low-cost, simple way for people to start investing and encourages most people to take advantage of these new tools that cost a fraction of what a portfolio advisor's fee would be. In fact, Overweg said that things have improved so much that he believes that the average person has more powerful tools at their disposal than "the wealthiest of the wealthy had 10, 15, or 20 years ago.""But most people just don't know how to apply these tools to their specific situation," Overweg added. "And that is really the gap that I'm trying to fill — the advice-only space." Overweg said that instead of focusing on managing a portfolio, he will steer clients toward utilizing a robo-platform, and then focus on other issues, like whether or not the client should be focusing more on investing or more on paying down their debts, or helping them navigate a step-by-step plan for achieving their goal of buying their first home.<div type="image" title="Brittney Castro" height="1894" width="2525" msid="94648940" hostid="261" sizebytes="106966"></div><h2><a href="https://www.businessinsider.com/financial-advice-education-social-media-brittney-castro">Coaching and consulting is where planners can add value</a></h2>According to certified financial planner Brittney Castro, 38, these kinds of services are where financial planners can actually provide value-add to their clients' financial lives. Castro began her career as a financial advisor and then certified planner over 15 years ago, but hasn't been seeing clients in recent years, as she pivots her attention toward <a href="https://www.brittneycastro.com/" target="_blank" rel="noopener">financial education content on social media</a>. She said that she loves doing content creation and likes the freedom and flexibility that this career shift gives her, adding that she believes this material is also educational and helpful and that her certification and past experience with clients adds to her credibility."Our value is in educating and helping clients with strategy," Castro said. "I think that coaching model is more popular because it's more holistic. Especially with this younger generation, that's what we want — someone who's helping us think about money and our decisions every day — as well as telling us how to allocate our portfolio."Castro also believes that this coaching model creates an ongoing relationship between the planner and client that can last for decades, and mutually benefit both parties. "There's never some final destination, because once you get to whatever goal you have, there will be a new goal, or challenge," Castro said. "This is an ongoing relationship, and things change all the time." She then said that emerging technologies like Venmo, Zelle, robo investing, and cryptocurrency means that financial planners need to remain educated and flexible, in order for their advice to clients to remain relevant."No matter if you have a negative balance in your account or $20 million, there's always something to learn to manage, to improve on," she added.<div type="image" title="Nate Hoskin headshot" height="5301" width="7068" msid="94648941" hostid="261" sizebytes="1745014"></div><h2><a href="https://www.businessinsider.com/traditional-retirement-planning-option-gen-z-workers-2022-8">Financial services are gate kept from general public and it makes income inequality worse</a></h2>Nate Hoskin, 24, is one of the youngest financial planners in the United States. He has his own growing firm, Hoskin Capital, and focuses a lot of his attention on the needs of millennial and Generation Z clients.This includes new developments in the ability to save for retirement and achieve financial stability in the face of multiple recessions, economic impacts from climate change, and the changes to what employers offer their workers in terms of benefits and retirement accounts. Hoskin has said that Gen Z needs to <a href="https://www.businessinsider.com/traditional-retirement-planning-option-gen-z-workers-2022-8" target="_blank" rel="noopener">radically rethink how they're going to retire in the face of this new economy</a>, and strongly suggests taking time to develop multiple streams of income that can continue to serve you as you attempt to move farther away from holding a traditional 9-to-5 job. He doesn't just dispense this advice — he also lives it. In addition to his firm, Hoskin also has a 9-to-5 where <a href="https://www.businessinsider.com/managing-money-paycheck-to-paycheck-2022-8" target="_blank" rel="noopener">he counsels clients who are in some of the lowest tax brackets in this country</a>, and helps them get from crisis to crisis when it comes to feeding kids and keeping a roof over their heads. "I am here to help people who don't traditionally get access to financial advice because I saw how simple it was because of my previous jobs," Hoskin said, who has worked for hedge funds in the past. "We were working with multimillionaires, and I saw the systems that they were using and what was available to them." Hoskin said that these resources can potentially be available to everyone, but are often "gate kept" because it's not as profitable to work for clients that have lower incomes. Hoskin said that with his own firm, he's less interested in maximizing his own income as much as possible, and wants to focus on providing services that have never existed before for the populations that he caters to. "Inevitably it's going to make me some money," Hoskin said. We're going to be charging subscriptions and managing people's money — and that money is going to grow — but I have no interest in trying to sell this company for $100 million or anything like that."

The field of financial planning is evolving. These Gen Z and Millennial CFPs are helping lead the industry to the future and share their thoughts on the biggest pitfalls and opportunities that investors face today.

<ul class="summary-list"><li><keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">Bitcoin</keyword> mining involves confirming transactions and adding them to the blockchain. </li><li>As a reward for this work, miners receive newly issued bitcoins. </li><li>The cost of the hardware and energy involved can make profiting from Bitcoin mining difficult. </li></ul>Bitcoin mining is a crucial part of the <keyword id="11892695" type="UNKNOWN" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword>'s underlying technology through which transactions are verified and added to the digital ledger known as <a href="https://www.businessinsider.com/what-is-blockchain" target="_blank" rel="noopener">blockchain</a>. The owners and operators of the computer systems that make up the decentralized Bitcoin network, called miners, receive newly created bitcoins as a reward for this work.In this process, miners compete to solve highly complex mathematical equations. The first to figure it out receives the reward. <h2>How does Bitcoin mining work? </h2><a href="https://www.businessinsider.com/what-is-bitcoin" target="_blank" rel="noopener">Bitcoin</a> is a cryptocurrency, meaning that it is a currency that leverages cryptography. It can be used to make payments without financial institutions or the government involved. The digital currency, which has managed to attract significant interest from investors, trades on numerous exchanges. The <a href="https://www.businessinsider.com/what-is-cryptocurrency" target="_blank" rel="noopener">cryptocurrency</a> relies on a process called mining to confirm transactions and add them to the blockchain. In addition to verifying transactions, mining secures the network. It also prevents double spending, which is where someone uses the same funds twice. The Bitcoin network was designed to allow interested parties to <a href="https://bitcoin.org/bitcoin.pdf" target="_blank" rel="noopener">make transactions</a> without going through intermediaries like banks. As a result, there must be some mechanism in place to determine which transactions occur. Bitcoin solves this by leveraging a consensus mechanism, an algorithm that determines which transactions take place on the network. More specifically, Bitcoin uses a mechanism called proof-of-work.Here are the basic steps involved in the mining process:<ol><li>Computers on the network gather transactions that took place in the last 10 minutes into a block and then compete to solve a complex math problem. The answer, known as hash, contains 64 characters.</li><li>The miner or mining pool that solves the equation before everyone else shares the result with the other systems in the broader network. If the others verify that the solution is valid, the block is added to the blockchain. </li><li>The winning miner then receives something called a mining reward, which as of November 2021 was 6.25 bitcoins. This incentive, which was originally 50 bitcoins, is reduced by 50% every four years during events that are referred to as halvings. Bitcoin has undergone these <a href="https://www.businessinsider.com/bitcoin-halving">halving</a> events in 2012, 2016, and 2020. </li></ol>The race to solve these increasingly difficult cryptographic puzzles requires significant amounts of energy. But this cost is intentional, since the bitcoins created can be very lucrative.Note: Bitcoin's proof-of-work mechanism is a key part of keeping transactions using the cryptocurrency secure.<h2>Is Bitcoin mining profitable? </h2>Bitcoin mining can be profitable, but there are several variables to consider, and miners can certainly face challenges. "The profitability of Bitcoin mining depends on a multitude of factors, such as the cost of electricity, the mining equipment you're using, and the number of other people who are also mining Bitcoin," says Nick Spanos, co-founder of <a href="https://www.zap.org/" target="_blank" rel="noopener">Zap Protocol</a>, which provides infrastructure for decentralized applications.Miners are paid in bitcoin every time they add a block to the blockchain. The price of bitcoin is highly volatile, so the value of this mining incentive can vary significantly. For instance, in late November 2021, Bitcoin's price was $56,500, according to data from <a href="https://markets.businessinsider.com/currencies/btc-usd" target="_blank" rel="noopener">Markets Insider</a>, which would make the mining incentive approximately $350,000. However, at the start of the year, the digital currency had a price of $29,300, which would make the mining reward about $183,000. Further, the amount of bitcoin a miner receives from completing a block is cut in half every four years. In addition, it is becoming harder to mine the digital currency, as the mining difficulty, a measure of how tough it is to mine a block, has increased significantly over time. Since proof-of-work involves hardware that requires a lot of electricity, energy costs are a major factor in profitability. This year, many miners have come to the US, as the nation has a wealth of renewable energy sources, and certain states benefit from some of the lowest energy prices around. Another major consideration is hardware. An ASIC — a specialized computer used to mine bitcoin— can cost more than $10,000. Further, once energy expenses are included, mining a single bitcoin can cost thousands of dollars or tens of thousands of dollars, depending on the hardware used to do it."For most people living in the US and Western Europe, where per-unit electricity costs are high, it is difficult to turn a profit mining Bitcoin, but not impossible," says Spanos."People living in Asia have access to much cheaper electricity, but they are less likely to be able to afford the upfront cost of getting into Bitcoin mining."Another key consideration is that generating a block could potentially take months or even years, depending on the level of computing power that is committed to it. In order to hedge risks like this, individual computers can participate in mining pools, which are groups of miners that work together to increase the odds that they will be able to successfully solve the needed mathematical problems and therefore mine blocks.Note: The mining incentive, or reward provided for mining a block, is reduced by 50% every four years. It stood at 6.25 bitcoins as of November 2021.<h2>What are the risks of Bitcoin mining? </h2>There are several risks involved in mining bitcoin. The total expenses, including the cost of hardware and energy, can be significant. And there is no guarantee that an individual running a system on the network will see a return on their investment. Further, governments can quickly change the equation, meaning that they can affect profitability very easily. A perfect example is mining bans. China, for example, banned bitcoin mining in 2021, which caused the nation's share of global mining to drop to almost zero. Other countries, such as Nepal and Algeria, have also banned bitcoin mining by prohibiting all activity related to cryptocurrencies. Nepal outlawed mining in 2019 when it passed the Foreign Exchange Act. Algeria did the same thing the year before. Bitcoin mining has also created some controversy due to concerns about how it affects the environment. Some industry observers have estimated that this activity has a <a href="https://digiconomist.net/bitcoin-energy-consumption#assumptions" target="_blank" rel="noopener">carbon footprint</a> similar to that of a small country. This year, Swedish government officials wrote an open letter requesting that the European Union ban Bitcoin mining, emphasizing that this activity is reducing the chances that Sweden will be able to meet the goals it agreed to by the Paris Climate Agreement. <h2>Is Bitcoin mining legal?</h2>Bitcoin mining is legal in most countries, but several jurisdictions have banned this practice. China, one of the world's largest economies, has outlawed bitcoin mining.The nation's government has also prohibited all cryptocurrency transactions. When explaining this aggressive action, analysts have said that China's authorities believe cryptocurrencies could interfere with the nation's plans to roll out a central bank digital currency, something it has been testing. Algerian legislators reportedly started considering a total ban on digital currencies in 2017, stating that criminals might use cryptocurrencies for illegal activities such as money laundering, drug trafficking and tax evasion. <h2>The financial takeaway</h2>Bitcoin mining, which involves confirming transactions, can potentially be profitable. However, the extent to which this activity is profitable depends on several variables, including hardware costs, the expenses associated with energy and the price of Bitcoin. It's not really feasible for many individuals to get involved with bitcoin mining, as doing so could involve investing thousands, or even tens of thousands, of dollars into a venture where there is no guaranteed return. Instead, investors who are interested in getting involved in Bitcoin might want to purchase bitcoins from exchange, or shares of crypto-mining stocks, which grant exposure to publicly traded mining companies.

Bitcoin mining powers the system that oversees transactions and creates new bitcoins

<ul class="summary-list"><li><keyword id="6361805" type="UNKNOWN" weightage="60" keywordseo="NBA">NBA</keyword> Top Shot is taking the internet by storm. </li><li>The blockchain-based platform lets users trade virtual collectibles called "moments."</li><li>It has seen over $100 million in sales over the last week, with some moments raking in over $100,000.</li></ul>As bitcoin surges to new highs, there's another digital-trading boom that's taking over the internet - and it's not just another <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency">cryptocurrency</keyword>. Basketball fans and even opportunistic, sports-indifferent investors are piling into a new online marketplace from the NBA called Top Shot. The site, which lets users buy and sell virtual trading cards, has exploded in popularity in recent weeks as people look to make a buck on the still nascent platform. Whether it's a bubble that's about to pop or the next big thing in <keyword id="6356028" type="UNKNOWN" weightage="60" keywordseo="sports">sports</keyword> collectibles, there's serious money pouring in. Millions of dollars worth of cards are changing hands each day, and some ultra-rare collectibles have been valued at over $200,000. Here's what to know about NBA Top Shot: <h2>What is NBA Top Shot?</h2>Top Shot is an online marketplace that lets users trade and collect official NBA-licensed video highlights called "moments." The platform was created by a tech company called Dapper Labs in collaboration with the NBA and the National Basketball Players Association. It was first opened to the public in October and is still in beta. It has rapidly picked up steam in recent days, with <a href="https://cryptoslam.io/">well over $100 million</a> <a href="https://twitter.com/WindhorstESPN/status/1363961976276279297"></a>in transactions completed over the last week. <h2>What are moments and how do you buy them?</h2>Moments are video-based trading cards that each show a short clip of an NBA star making a play. For instance, a highlight of the Miami Heat's Jimmy Butler <a href="https://www.nbatopshot.com/listings/p2p/7b797690-5b53-45a7-b972-bd2d5152654a+813e4469-c150-4ded-b60f-02380ec71bc5">slamming a dunk</a> will currently run you around $600, while a clip of the Detroit Pistons' Derrick Rose <a href="https://www.nbatopshot.com/listings/p2p/12a8288a-addc-4e5c-8af7-b3ba6e5161d4+ef100f9e-ed36-442d-bd6b-f1fa857decd1">sinking a buzzer-beating jump shot</a> costs $2,600 and up. <div type="image" title="NBA Top Shot_Press Collectibles_" height="1080" width="1920" msid="81212943" hostid="261"></div>Users can get their hands on moments by buying them on the marketplace from individual sellers or by participating in "pack drops." Every so often, Top Shot puts a limited number of packs - collections of rare and common moments - up for sale for $9 and up, but they sell out quickly.<h2>Why are moments worth anything?</h2>Anyone can go to YouTube and watch every basketball highlight that has ever been recorded for free, so what makes moments valuable? For one, the collectibles are based in <a href="https://www.businessinsider.com/what-is-blockchain-how-does-it-work-explainer-2017-11">blockchain</a> - the same technology that underpins bitcoin and other cryptocurrencies - meaning that all transactions are recorded and each moment is impossible to forge. Moments aren't cryptocurrency, but rather a form of non-fungible token (NFT).Plus, Top Shot is only releasing a limited supply of each moment, so scarcity drives up prices as well. There are three classes of moments: "common" ones with a supply of 1,000 or more, "rare" ones with between 150 and 999 examples in circulation, and "legendary" moments, which are limited to 99 examples or less. There's also an even rarer "ultimate" tier that Top Shot says is on the way. <div type="image" title="Screen Shot 2021 02 23 at 1.05.53 PM" height="881" width="1249" msid="81212944" hostid="261"></div>Not surprisingly, the rarer the moment, the more it's worth. There are several legendary-tier moments currently <a href="https://www.nbatopshot.com/search?orderBy=PRICE_USD_DESC">listed for sale for $200,000 and up</a> - and yes, some people are actually paying that much. On Monday, a LeBron James dunk <a href="https://twitter.com/nba_topshot/status/1363969592779890690">set the record</a> for the priciest moment sold to date at $208,000. <h2>How are people making money on NBA Top Shot?</h2>Users can theoretically make money by purchasing undervalued moments from collectors, waiting for their value to go up, and selling them at a profit. They can also score valuable moments from pack drops and make money that way. For example, if you buy a limited-edition pack for $230 and it contains a "legendary" moment worth, say, $5,000, you're automatically in the black. It's possible, hypothetically, to buy a pack for a couple hundred dollars and end up with an ultra-desirable <a href="https://www.nbatopshot.com/listings/p2p/a494c64e-9e93-418c-8934-f331ee47a39b+768166e3-f4bb-4395-9b48-4c545aebc95c">LeBron James</a> or <a href="https://www.nbatopshot.com/listings/p2p/814c5183-596f-41d7-9135-c6b29faa9c6d+d012e87f-7aec-4f5d-969b-2af03890ab4f">Zion Williamson</a> moment that people are willing to shell out six figures for. That promise of dizzying gains has brought a huge amount of new users to the platform - the number of users has multiplied 19 times since December 31, and 93,900 customers have bought moments to date, a Dapper Labs spokesperson told Insider on Tuesday. Not to mention, the amount of money those users are spending is growing by the day. Top Shot has seen $204 million in all-time sales through its peer-to-peer marketplace since launch, the spokesperson said. As of Wednesday afternoon, more than $146 million of that occurred in the last seven days, according to <a href="https://cryptoslam.io/">Crypto Slam</a>, an NFT marketplace and data tracker. And in one 24 hour period ending on February 22, Top Shot saw a record $47.5 million worth of sales on its marketplace, the spokesperson said. Top Shot has made $11 million from pack sales, according to the spokesperson. It pockets a <a href="https://support.meetdapper.com/hc/en-us/articles/360046584054-What-are-the-service-fees-">5% fee</a> from each transaction on the marketplace. <h2>What else can you do on the site?</h2>Aside from buying and selling moments, users can create public "showcases" of 1-10 moments they want to show off to the world. Top Shot also hosts "challenges," which require users to collect several specific moments within a particular time frame. Users can also work to boost their "baller status," a score that reflects their overall accomplishments, including their collection and community participation.<h2>Is NBA Top Shot a bubble?</h2>Top Shot has evidently created something extremely popular by giving sports fans their own cryptocurrency-adjacent phenomenon to speculate on. But it's difficult to say what the market for moments will look like long term. Right now, users who can get in on a pack drop can essentially print money, because even the cheapest moments are worth more than the cost of a low-tier pack. It's hard to imagine that sort of market can continue for too long without a correction. But for the moment, Top Shot is all the rage, with basketball players themselves even <a href="https://twitter.com/ivicazubac">getting in on the action</a>. The bigger question may be whether or not Top Shot can handle all the new attention - in recent days, the platform has <a href="https://status.nbatopshot.com/">halted trading and new sign-ups</a> due to high traffic as it scrambles to keep up with demand.

Collectors are spending millions of dollars every day on virtual NBA highlights. Here's what to know about NBA Top Shot.

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Viktor Korotayev/Reuters</div></div></div><ul><li>Despite <a href="http://markets.businessinsider.com/currencies/BTC-USD">bitcoin's</a> wild price moves, it's still not considered a risk to the financial system. </li><li>But it could start to matter a lot more to the coal market, according to Jordan Rochester, an FX strategist at Nomura. </li><li>China is the world's largest producer and consumer of coal, and hosts more than half of the world's bitcoin mining pools. </li></ul> On a normal day, <a href="http://markets.businessinsider.com/currencies/BTC-USD">bitcoin</a> can shed or gain several thousand dollars of its value with double-digit percentage moves. While experts debate bitcoin's role in a world still dominated by fiat currencies, the real risk is how the cryptocurrency starts to impact other markets, according to Jordan Rochester, an FX strategist at Nomura. In a note on Monday, Rochester forecast that bitcoin would have a growing impact on energy markets, particularly <a href="http://markets.businessinsider.com/commodities/coal-price">coal</a>. Bitcoin mining requires a lot of electricity. And China, the world's largest coal producer and consumer, hosts about 71% of the cryptocurrency's mining pools, Rochester said. "Estimates were made in March 2016 expecting Bitcoin's energy consumption to match that of Denmark by 2020," Rochester said."Today bitcoin already has matched that, three years ahead of schedule. So if it's not risk-off inspired price action from bitcoin that moves other markets how about higher energy costs?"Bitcoin's energy consumption stems partly from the fact that it's a proof-of-work cryptocurrency, meaning that miners are rewarded for solving mathematical puzzles on the blockchain, and for helping to prevent attacks on the bitcoin network. As the calculations get more complicated, more energy is required."For as long as POW is the most common form of cryptocurrency, this could start to have an economic and environmental cost," said Rochester, who disclosed that he "holds a personal interest in bitcoin and <a href="http://markets.businessinsider.com/currencies/eth-usd">ethereum</a>."Bitcoin, with a market value of nearly $300 billion, already impacts other asset classes. Chipmakers like <a href="http://markets.businessinsider.com/stock/nvda-Quote">Nvidia</a> and <a href="http://markets.businessinsider.com/stock/amd-Quote">AMD</a> have been supported by demand for their products to mine bitcoin. In more baffling moves, some <a href="https://www.bloomberg.com/news/articles/2017-10-04/from-biotech-to-bitcoin-bioptix-shifts-focus-to-blockchain">stocks have surged</a> right after the companies announced they were adding the word "blockchain" to their names."It may be too early for Bitcoin to have a global impact on other asset markets at this stage," Rochester said."Instead, we need to look where investors are most exposed on a regional basis for where this cross-market correlation could bite. With <a href="http://www.businessinsider.com/bitcoin-trading-driven-by-japanese-men-yen-2017-12">Japan accounting for nearly half of global trade in bitcoin</a> compared with just 25% in the US, it could be in Asia where Mrs. Watanabe pulls back."<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source="Markets Insider" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/5a37da36b0bcd5e3178b5696-960/screen shot 2017-12-18 at 100926 am.png"></a><a href="http://markets.businessinsider.com/currencies/BTC-USD">Markets Insider</a></div></div></div>Get the latest Bitcoin price <a href="http://markets.businessinsider.com/currencies/BTC-USD">here.&gt;&gt;</a> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/tech-finance-coinbase-buy-sell-trade-bitcoin-app-coinbase-2017-1">How to buy and sell bitcoin using one of the most popular cryptocurrency apps on the iPhone</a></h3> <div> </div> </div>

Bitcoin's wild volatility could soon start shaping other markets

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="https://static-ssl.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/category/chart-of-the-day"></a></td><td><a href="http://www.businessinsider.com/gop-tax-bill-american-companies-to-use-repatriation-to-pay-down-debt-2017-12"></a></td></tr></tbody></table></div><div class="KonaFilter image-container display-table"><div><div class="image on-image">Viktor Korotayev/Reuters</div></div></div><ul><li>Despite <a href="http://markets.businessinsider.com/currencies/BTC-USD">bitcoin's</a> wild price moves, it's still not considered a risk to the financial system.</li><li>But it could start to matter a lot more to the coal market, according to Jordan Rochester, an FX strategist at Nomura.</li><li>China is the world's largest producer and consumer of coal, and it hosts more than half of the world's bitcoin-mining pools.</li></ul> On a normal day, <a href="http://markets.businessinsider.com/currencies/BTC-USD">bitcoin</a> can shed or gain several thousand dollars of its value with double-digit percentage moves.While experts debate bitcoin's role in a world still dominated by fiat currencies, the real risk is how the cryptocurrency starts to affect other markets, according to Jordan Rochester, a foreign-exchange strategist at Nomura.In a note on Monday, Rochester forecast that bitcoin would have a growing impact on energy markets, particularly <a href="http://markets.businessinsider.com/commodities/coal-price">coal</a>.Uncovering new bitcoins for use, a process known as mining, requires a lot of electricity. And China, the world's largest coal producer and consumer, hosts about 71% of the cryptocurrency's mining pools, Rochester said."Estimates were made in March 2016 expecting Bitcoin's energy consumption to match that of Denmark by 2020," Rochester said."Today bitcoin already has matched that, three years ahead of schedule. So if it's not risk-off inspired price action from bitcoin that moves other markets how about higher energy costs?"Bitcoin's energy consumption stems partly from the fact that it's a proof-of-work cryptocurrency, meaning miners are rewarded for solving mathematical puzzles on the blockchain and for helping to prevent attacks on the bitcoin network. As the calculations get more complicated, more energy is required."For as long as POW is the most common form of cryptocurrency, this could start to have an economic and environmental cost," said Rochester, who disclosed that he "holds a personal interest in bitcoin and <a href="http://markets.businessinsider.com/currencies/eth-usd">ethereum</a>."Bitcoin, with a market value of nearly $300 billion, already affects other asset classes. Chipmakers like <a href="http://markets.businessinsider.com/stock/nvda-Quote">Nvidia</a> and <a href="http://markets.businessinsider.com/stock/amd-Quote">AMD</a> have been supported by demand for their products to mine bitcoin. In more baffling moves, some <a href="https://www.bloomberg.com/news/articles/2017-10-04/from-biotech-to-bitcoin-bioptix-shifts-focus-to-blockchain">stocks have surged</a> right after the companies announced they were adding the word "blockchain" to their names."It may be too early for Bitcoin to have a global impact on other asset markets at this stage," Rochester said."Instead, we need to look where investors are most exposed on a regional basis for where this cross-market correlation could bite. With <a href="http://www.businessinsider.com/bitcoin-trading-driven-by-japanese-men-yen-2017-12">Japan accounting for nearly half of global trade in bitcoin</a> compared with just 25% in the US, it could be in Asia where Mrs. Watanabe pulls back."Sign up <a href="http://e.businessinsider.com/join/crypto-insider">here for Crypto Insider</a>, BI's roundup of all the bitcoin and cryptocurrency news you need to know today.<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="http://markets.businessinsider.com/currencies/BTC-USD">Markets Insider</a></div></div></div>Get the latest Bitcoin price <a href="http://markets.businessinsider.com/currencies/BTC-USD">here.&gt;&gt;</a> <div id="categorypromo" style="border:1px solid silver; min-height:90px; padding:10px;vertical-align:top;"><a href="http://read.bi/bitcoin-101-free"></a>EXCLUSIVE FREE REPORT: The Bitcoin 101 Report by the BI Intelligence Research Team. <a href="http://read.bi/bitcoin-101-free">Get the Report Now »</a></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/qdoba-deal-chipotle-assessing-the-future-2017-12">How the sale of Qdoba will impact Chipotle's future</a></h3> <div> </div> </div>

Bitcoin's wild volatility could soon start creeping into other markets

<div class="KonaFilter image-container display-table"><div><div class="image on-image"></div></div></div><ul><li><a href="http://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> is trading down 4.5% Wednesday following a split&#xa0;in the cryptocurrency's blockchain&#xa0;network.&#xa0;</li><li>Bitcoin gold, the new digital coin&#xa0;formed by the split&#xa0;Tuesday morning, follows the bitcoin-bitcoin cash fork&#xa0;in August.&#xa0;</li><li>The project website for bitcoin gold is down following a DDoS attack, according to cryptocurrency watcher CoinDesk.&#xa0;</li><li>The bitcoin community is split over whether&#xa0;forks&#xa0;are good or bad for bitcoin.&#xa0;</li></ul>Bitcoin, the red-hot digital currency up more than 400% this year, was trading down 4.42% Wednesday morning after the blockchain network underpinning the coin split again.&#xa0;As reported by cryptocurrency watcher CoinDesk, <a href="https://www.coindesk.com/bitcoin-gold-website-following-massive-ddos-attack/">bitcoin gold officially split from the bitcoin network</a> Wednesday morning. The new cryptocurrency is a clone of the original bitcoin blockchain, but it will play by different rules than the&#xa0;original digital currency."Instead of scaling bitcoin to support more users, <a href="http://bitcoingpu.org/">bitcoin gold</a> tweaks bitcoin in an effort to 'make bitcoin decentralized again,'" CoinDesk reported. "This, proponents argue, will make the network, designed to offer an egalitarian way to send payments digitally around the globe, more accessible to users."<a href="http://www.businessinsider.com/bitcoin-price-fork-happens-2017-8">Bitcoin cash separated from bitcoin</a> earlier this year following mounting disagreements amongst the coin's power brokers over how to scale the cryptocurrency. Since bitcoin is open-source, folks can freely update its underpinning software.&#xa0;Twenty exchanges will back the new cryptocurrency, meaning folks who own bitcoin on certain exchanges will now hold one bitcoin gold for every bitcoin. Bitcoin owners should not expect, however, to see the value of their holdings double.Separately, it appears bitcoin gold's website is down following a DDoS attack, a type of cybersecurity attack. Here's a tweet from the cryptocurrency's developers:CoinDesk <a href="https://www.coindesk.com/bitcoin-gold-website-following-massive-ddos-attack/">first reported the news</a>.&#xa0;The cryptocurrency community appears divided over whether splits are good for the future of bitcoin.&#xa0;Bob Summerwill, a chief blockchain developer at Sweetbridge, a cryptocurrency liquidity provider, said in a note emailed to Business Insider that "there is no such thing as a 'bad fork.'&#xa0;"Splits happen periodically in all open-source communities," he wrote. "Having everyone collaborating in a single project is ideal, but sometimes there are genuine differences of opinion, and network effects are not enough to keep everybody together, so a group secedes."Others are less bullish on splits. For instance, Sol Lederer, a blockchain director at LOOMIA, said&#xa0;he is worried&#xa0;about trivial disagreements disrupting the upward march of bitcoin.&#xa0;"What's deeply troublesome is that these spinoffs sprung from a relatively minor squabble in the bitcoin community on how to handle the block size limit," Lederer wrote. "Instead of coming to agreement, the community, developers, and code are fracturing into different groups."Another fork is possibly on the horizon. The second part of SegWit2x, which would increase the size of blocks that underpin bitcoin's network, is set to go into effect next month and not everyone is on board with the proposed change.&#xa0;Get the latest Bitcoin price<a href="http://markets.businessinsider.com/currencies/BTC-USD"> here.</a><div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/richard-turnill-blackrock-cio-says-bitcoin-is-bubble-2017-10">$6 TRILLION INVESTMENT CHIEF: Bitcoin is a bubble</a></h3> <div> </div> </div>

Bitcoin is sliding after bitcoin gold goes live

Ari Paul, CIO of cryptocurrency hedge fund <a href="https://blocktower.com/" target="_blank" rel="noopener noreferrer">BlockTower Capital</a>, talks with Business Insider editor-at-large Sara Silverstein about the three main risks with investing in cryptocurrencies. Following is a transcript of the video.Ari Paul: I'm Ari Paul, CIO of Blocktower Capital. These are the three main risks of investing in cryptocurrency.Sara Silverstein: And when you look at cryptocurrencies in general what do you think the biggest risks are in investing? Paul: So it's a broad variety. So you have the investment risk, these are hyper volatile assets. As with equities or bonds, any particular equity can go to zero, right? Any particular company, any stock, and the same is true of cryptocurrency. So any particular cryptocurrency can definitely go to zero. And even if it ultimately wins, bitcoin on its path from 10 cents to $7,000, it's fallen 80% five separate times. So that's incredible volatility, right? Then you have - you have operational risk. So how do you store these cryptocurrencies securely? And then you have regulatory risk. So the US is only about a quarter of the world market. So the US government is not an existential threat to cryptocurrency, but as a US investor it could certainly be a threat. If I'm an endowment and I invest in cryptocurrency, I am exposed to regulatory changes.Silverstein: And what's the operational risk? What does that mean - does it mean that how I'm holding my bitcoin is at risk?Paul: Yes, yes. So if someone wants to steal assets that are stored in equity or cash, it's hard. So they can maybe wire money out of a bank account. It's traceable, they're probably going to get caught, wires are reversible. With cryptocurrency transactions are irreversible, and can potentially be made truly anonymous. And so the thief is more likely to get away with it. So it's a tremendous target for hackers, it's a target for thieves, including insiders, and in a large operation, and there's potentially no recourse. So you have to be really, really careful that you're storing cryptocurrency securely. And that's a serious concern.Silverstein: And for people who are just individuals and who use a program like Coinbase or a wallet like that, what are the concerns there?Paul: So, having your assets with Coinbase is a little bit like having a lot of money with a bank. So FDIC insurance will cover you a little bit, but if you have $20 million with JPMorgan - what you have is an IOU. You actually don't - legally you don't own the money, JPMorgan does - you have an IOU, you are a creditor of JPMorgan. So similarly if you have bitcoin sitting on Coinbase, you are a creditor of Coinbase. If they go under, it's unlikely you ever get your bitcoin. So if they get hacked or bankrupted for some reason. So to actually really own your bitcoin or cryptocurrency, in a way that is secure, you need to have physical control over it. Now what does physical control mean, right? We're talking about zeros and ones. So what that means is - to own cryptocurrency means you know, basically a password, it's called a private key. The best way to store it securely for most people, is to used what's called a hardware wallet. So there's something called the Treasure or Ledger are two leading companies that make a very secure - kind of looks like a USB stick, and it's the best security solution today. Where you can store it yourself, securely, in a way that probably is not hackable.Get the latest Bitcoin price <a href="http://markets.businessinsider.com/currencies/BTC-USD">here.&gt;&gt;</a> <div id="categorypromo" style="border:1px solid silver; min-height:90px; padding:10px;vertical-align:top;"><a href="http://read.bi/bitcoin-101-free"></a>EXCLUSIVE FREE REPORT: The Bitcoin 101 Report by the BI Intelligence Research Team. <a href="http://read.bi/bitcoin-101-free">Get the Report Now »</a></div>

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