Bitcoin

Ethereum

Decentralised finance, or DeFi, is one of the fastest growing areas in cryptocurrency.

While Bitcoin challenged the idea of electronic currency, DeFi looks to reimagine our broader financial infrastructure.

Investment in DeFi services has flourished in 2020. At the start of the year, DeFi’s total locked-in value was $US662.5 million. Today, that value is $US11.19 billion.

DeFi is an umbrella term for decentralised financial services. The sector develops new platforms for banking, trading, and insurance without intermediaries or paperwork. Therefore, service fees are lower than traditional providers. This is attractive for many people.

In that context, ‘decentralised’ refers to the distributed nature of the network. These networks are made up of many connected computers in numerous locations.

This differs from a centralised network such as those used by banks, which run their services through a single, central computer system.

DeFi’s rise to prominence is thanks to the 

Why Ethereum? Firstly, it is programmable: anyone can create decentralised applications (dApps) that run on the Ethereum blockchain network. Consequently, the vast majority of DeFi projects are Ethereum based.

Secondly, its network is active: Ethereum has one of the largest communities of participating programmers, developers, and users.

Thirdly, its network supports smart contracts: a fundamental part of DeFi.

Cryptocurrency explained: What is decentralised finance?

The popularity of cryptocurrency hit the mainstream in 2021, and with Bitcoin’s explosive price ascension came unprecedented demand from both new and seasoned investors to get in on the crypto train. But regardless of how new or experienced you are with investing, cryptocurrency trading works differently, in that once you purchase your Bitcoin, Ethereum or other cryptos, you then need to have a place to store it. The best way to store your Bitcoin is to weigh up the pros and cons of the various wallet storage options, before implementing some cybersecurity best practices to ensure you have done as much as possible to store your Bitcoins safely.

To begin with, there are three main wallet types to consider when storing bitcoin and other cryptocurrencies.

A hot wallet is a digital wallet that is hosted online. This can include your crypto exchange of choice (such as BTC Markets), a mobile app, or a dedicated online platform that will hold and store your various cryptocurrencies. The advantages of a hot wallet are that you can access them anytime, anywhere, so long as you have an internet connection. The disadvantages are that because they require an internet connection, it means they can, in theory, be hacked (just like any other account you have online, such as email, social media, or eCommerce platforms).

Often, people trading cryptocurrency will transfer their holdings from a hot wallet to a cold wallet if they plan on holding onto their coins for a long period of time. Conversely, many people choose to keep their holdings in a hot wallet if they’re trading daily, weekly, or even monthly, since it gives them quick and easy access at the whim of a market bear or bull run.

The second type of wallet is called a cold wallet. A cold wallet is a piece of hardware (usually similar in size to a USB drive), that connects to an online wallet (such as an exchange or other platform) where your cryptocurrency is stored. All you have to do is connect the hardware to your computer and transfer your cryptocurrency onto it, unplug, and store it in a safe place! The advantages of a cold wallet are that they are more secure, in that in order for them to be hacked, somebody needs physical access to the hardware. The disadvantages are that if you misplace the cold wallet, then you’ve misplaced your cryptocurrency and cannot retrieve it!

If you’re planning on storing your Bitcoins or other cryptocurrencies, and you want to use a cold wallet, we recommend storing it in an actual safe to ensure that it always stays safe and free from damage.

The third and final type of wallet is known as a paper wallet. A paper wallet is a type of cold wallet in that it is stored offline, and as the name suggests, your key access is printed on a piece of paper by a certain website. The advantages of this method are the same as those for any other cold wallet, however, the disadvantages are that since your access code is printed on a piece of paper, if you lose that piece of paper or it becomes destroyed or accidentally thrown in the trash, then all of your cryptocurrency is lost along with it!

For this reason, BTC Markets recommends that you store your Bitcoins and other cryptocurrencies in either a secure hot wallet or a cold wallet that is stored somewhere safe. Once you have chosen your preferred storage method, the next course of action we recommend you take it to check up on your computer’s security health by running a deep and extensive virus scan, deleting any unused or unfamiliar apps and browser extensions, and avoiding websites that are usually known for having malware, spyware, or other virus risks (such as online casinos, adult websites, and peer-to-peer file-sharing networks).

Security precautions to undertake when storing your Bitcoins

There are several recommendations that BTC Markets makes for those wanting to safely store their Bitcoin and other cryptocurrencies. In addition to knowing where to store Bitcoin (such as cold wallet, hot wallet, or the old school paper wallet), there are cybersecurity procedures you can undertake to reinforce and protect your holdings from hackers. These procedures don’t just apply to cryptocurrency trading, of course—more broadly, they apply to anything you do online that requires an account that stores private information, such as your name, address, and debit or credit card details.

Run a check for data breaches linked to your email account

It is highly advisable that before entering a password for your account, that you run an email data breach check at ‘Have I Been Pwned’, to ensure that the password you are using has not turned up in a data breach elsewhere on the internet. Most people don’t realise that their email accounts have likely been compromised at some point, whether it be through online shopping, a mobile app, or through social media websites. Breaches often occur when in places that you least expect: it could be from a website where you made a one-off purchase, or even a much larger retailer (the results may surprise you).

Use ‘Have I Been Pwned’ to see if the email you are using for your account has previously been breached, and then make sure that you don’t use the same password that you did for the breached site in question—and of course, make sure you change all of your passwords regularly to help future-proof your accounts!

Whether it’s your Windows or Mac software that needs updating, your antivirus software, or browser, updates come out regularly that have everything from bug fixes to security updates. It’s important to always have the latest software updates as technology changes all the time, as do discoveries of inefficiencies, bugs, and even malware attacks. Malware, spyware, and viruses can enter your computer from a range of sources (such as file downloads or clicking unsuspecting links) and can install everything from keylogger programs that record your password entries to Remote Access Tool (RAT) programs that can give a hacker visibility and control over your computer.

Updating your software is one way to ensure you have taken that extra step when it comes to cybersecurity, and by extension, this also means that whenever you are trading crypto online, you have that extra layer of protection.

Two-Factor Authentication adds an extra layer of security when logging into your cryptocurrency exchange account. Also known as 2FA, this method of data protection strengthens the security of your account by requiring two forms of identification to gain access to your account, instead of just one (i.e. a password). Most commonly, aside from the password required to access your account, you can set up your security so that a code needs to be sent to your mobile phone as a second step to gain access. Another method for 2FA is to use a fingerprint (depending on whether or not your smartphone or computer has a biometric security setup).

2FA is a great way to protect your account, as it requires physical access to your smartphone so, in the unlikely event that someone gained access to your password, they still would not be able to gain access to your account.

Backup your public and private keys to an external hard drive

There are two types of keys that every cryptocurrency holder can generate: public keys and private keys. Both are strings of alphanumeric characters that are identifiable to the account holder in question, but the main difference between them is that a public key is strong of characters that are shared with others in order to receive cryptocurrency, while a private key is used to trade or spend cryptocurrency.

It’s advisable that you back up each of these keys to a file and then store them on an external hard drive or USB, to be kept somewhere safe. This way, you never have to worry about losing access since virtually nobody can memorise these complicated and long strings of characters.

When it comes to the question of how to store cryptocurrency (Bitcoin or otherwise), these are some of the most important factors to take into account. To recap, make sure that you really do your research and find a reputable exchange to start trading (such as BTC Markets), choose your method of wallet storage depending on how often you will be trading, and do a clean sweep of your computer to ensure it is clean and free from viruses, before checking your email account for data breaches (being conscious to avoid using a password for your account that may have previously been exposed).

Remember: you can never be too safe online, whether you’re doing online shopping, trading stocks and crypto, or even scrolling through social media. The safest way to store Bitcoin and other cryptocurrencies, and to have peace of mind, is to take the right precautions before executing a trade. If you are interested in learning more, you can download the 

How to Store Your Bitcoin

 was first revealed to the public in a 2008 

. That whitepaper outlined the potential of a digital currency and how transactions could be verified without needing to resort to a central, third-party authority while still retaining user anonymity. That solution was the Blockchain, a central ledger powered by the collective input of computers all over the globe. It was an obvious yet genius solution to a problem that stalled potential cryptocurrency for decades previously. If money only existed as a digital product, how did you exert control over it and avoid fraud?

Other attempts to create a cryptocurrency had failed, either because they relied too heavily on existing banking systems (negating the point of a cryptocurrency) or because they simply didn’t have an effective way of addressing the issue of fraud. Blockchain avoided all of these issues. The whitepaper itself also factored in the steady release of this theoretical currency, theoretically avoiding issues such as supply and inflation in the process. The potential was immediately obvious, and it garnered considerable attention in cryptography circles.

The author of that paper? One Satoshi Nakamoto.

Questions immediately started to follow in the wake of the whitepaper’s publication. “Satoshi Nakamoto'' was an unknown name in the tight-knit cryptography community, and even cursory online searches quickly revealed that it was likely a pseudonym. Nakamoto did nothing to clear up the mystery, refusing to answer any questions about himself and solely commenting on the nature of his technology. A number of people claim to have had contact with him via email, though it was reportedly erratic in nature and did nothing to confirm Satoshi Nakamoto’s identity.

Interest began to spike further in January 2009 when the first real Bitcoins became available to the public. It was proof of Nakamoto’s concept in action; one can presumably speculate that the technology was at least in development, if not completely ready to go before the initial whitepaper was launched. It would ramp up further in 2010, once the first real-world purchases with Bitcoin began to be made. But the Bitcoin creator was not forthcoming in the wake of this new interest from the press and the public. Indeed, he ceased all correspondence in December 2010, simply stating that he had moved on to other things. Nothing has been knowingly heard from him since, with Bitcoin seemingly being left to be steered without his input. Within certain circles, it’s still common for people to query “Where is Satoshi Nakamoto?” within certain circles, though his return looks increasingly unlikely after more than a decade.

Of course, Nakamoto’s disappearance was arguably always going to occur. With the currency released in the wake of a GFC that rivalled the Great Depression in its impact, Bitcoin represented a potential alternative to the government and back-banked currencies which had so recently floundered. Retaining an overseer would have been contrary to the goals outlined in Satoshi Nakamoto’s whitepaper.

Additionally, Nakamoto probably had — or has — several compelling reasons to keep his identity secret. One of cryptocurrency’s initial selling points was anonymity around transactions, so it makes sense that its founder would want to retain some of that ambiguity for themselves. Not to mention that although the question of “How many bitcoins does Satoshi Nakamoto have?” is estimated to be around the 1 million mark — that’s a lot of potential money in 2021, and it’s entirely likely that unwanted attention would soon follow from would-be hackers or other bad actors looking to get a slice of that pie.

Yet none of this has stopped people from coming out of the woodwork to claim that they are Nakamoto. Considerable ink has been spilled by journalists attempting to identify likely candidates. Dorian Nakamoto was the first major name identified by the press, though he denies any association. In contrast, Australian computer scientist (and noted eccentric) Craig Wright also maintains that he is Nakamoto despite considerable evidence to the contrary.

One of the more promising candidates, Hal Finney — who was the recipient of the first Bitcoin transaction from Nakamoto — died in 2014, so it’s entirely possible that Satoshi Nakamoto is dead. But it’s just as likely that he is still enjoying his anonymity quietly and enjoying the fruits of his creation.

For newcomers to the world of cryptocurrency, it’s understandable to ask questions like “Is Satoshi Nakamoto real?” Perhaps not, in the sense of being an individual. The possibility of Nakamoto being a collective rather than an individual has also been floated, and it’s one of the more compelling options. The work poured into both the whitepaper and Satoshi Nakamoto’s Blockchain would suggest the work of multiple parties rather than an individual, though it should be noted that similar concepts had existed in theory before its publication.

One thing that must be admired is Nakamoto’s consistent ability to avoid detection, particularly in a digital environment where all of us are so heavily connected. Even today, the internet becomes abuzz with speculation whenever Nakamoto is believed to have moved coins around from one of his (admittedly still unknown) accounts. It can have real-world implications, including drops in Bitcoin pricing or press speculation about whether an identity reveal is about to occur.

But nonetheless, Nakamoto’s identity is arguably a moot point at this juncture. Whoever he, she or they may be, Bitcoin is a creation that has grown far beyond its initial theoretical origins and grown into a currency and investment that has wowed the world. It’s set the template for countless other cryptocurrencies in its wake and helped introduce new ideas into a stagnant financial system. Perhaps it’s these facets that we should be focusing on, rather than looking to identify specific people — who, after all, created the currency with privacy in mind.

Discover more about Bitcoin today with BTC Markets

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Who Is Satoshi Nakamoto?

Algorand

BTC Markets is excited to announce that we will be extending our 0% Algorand (ALGO) staking fee offer for a further 3 months from 15th July 2021.

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As the first cryptocurrency to hit the mainstream, Bitcoin has attracted a huge amount of media and investor attention since launching in 2009. But there are still many misconceptions around how Bitcoin is actually created and maintains its security. Mining is integral to this process, but unfortunately, it’s often poorly understood by the general public.


Today, we’ll look at how Bitcoin mining works and its implications for investing in Bitcoin. It’s worth noting up front that the process is fairly similar across cryptocurrencies in general. Though each has its quirks, this guide can be seen as a broad primer for those pondering questions like “How does cryptocurrency mining work?”

To understand mining for Bitcoins, you first need to understand Blockchain. Blockchain is essentially a large-scale logbook, which stores all of the information about all of the Bitcoin transactions which have ever taken place. It’s also what prevents fraudulent transactions from taking place; before a new transaction can occur, Blockchain must verify the authenticity of the Bitcoin.

These transactions are encrypted in complex equations, which must then be decrypted and recorded on the Blockchain for the transaction to be complete. The difficulty of these equations is also artificially heightened as a fraud deterrent via a technique called “hashing”.

So, how are bitcoins mined? Well, as the Blockchain for Bitcoin isn’t “stored” in any one central database, this is a very demanding task, both in terms of computing power and electricity required. So the Bitcoin mining process is relatively simple to understand, if not always a simple process to execute. This is where miners come in — essentially, they lend their computing power to the Blockchain so that these transactions can take place. How does mining work? You need a powerful computer and a knack for tech.

The reasons people mine are complex. Some do it out of the goodness of their hearts because they’re interested in new technology, or they subscribe to an ideological position that has grown out of the popularity of cryptocurrency. But most are simply Bitcoin harvesting. When a transaction’s hash is solved, Bitcoins are handed out as a reward — either as a tip from the person carrying out the transaction or from new Bitcoins effectively being “unlocked”. The process is similar across most other cryptocurrencies, so this also illustrates how cryptocurrency mining can be explained.

Ultimately, the purpose of Bitcoin mining is twofold:

1. Solving the complex equations involved in verifying transactions, which in turn ensures the integrity of the Blockchain.

2. “Unlocking” new Bitcoins, which are then passed into wider circulation.

But these rewards aren’t distributed evenly — rather, they’re sent to the individual miner or miner collective that was the first to solve the hash. As you might imagine, this breeds quite a bit of competition in the mining community.

Bitcoin mining hasn’t fundamentally changed in concept since 2009, but the scope of it has. Solving more complex problems at an increasingly rapid rate is the name of the game — and that means investment in increasingly powerful computers. The prevalence of Bitcoin mining has led to occasional shortages of common PC parts, like graphics cards worldwide, as miners seek to give themselves additional power.

The mining process isn’t carried out by people sitting at their computers, waiting for transactions to pop up for them to process, either. Though there were undoubtedly operators like this back in the early days of cryptocurrency, that would be far too time-consuming today. Rather, most miners use some kind of automated software or bots to process day-to-day transactions. Similarly, very few miners operate in isolation. Many belong to loose or formal co-operatives who pool their computing power and split the rewards.

It’s a demanding and expensive process for those involved — high-end computer parts and electricity bills both attract sky-high costs. But many feel the rewards can be worthwhile, particularly if you’re working with a team of people that you trust. Cryptocurrency is still a frontier environment in many ways — for keen-minded entrepreneurs, there’s always a way to make that work to their advantage.

Bitcoin mining has an interesting future ahead of it. There’s an intense pool of competitors already undertaking mining, competing for a limited pool of resources — and as the Blockchain grows, the processing power required to solve hashes will continue to grow too.

There’s also the added wrinkle of Bitcoin undergoing “halving” periodically. Around every four years, the amount of new Bitcoins unlocked (and in turn, the potential financial reward) has halved to stagger the release of new currency. Nonetheless, many remain committed to the cause, and as Bitcoin has arguably established the most media and investor-friendly reputation, there’s likely to be ongoing interest for years to come.

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Mining Bitcoin has nothing to do with real-world mining or equipment — rather, the term “mining” has been adopted to refer to the process of solving the complex algorithms attached to bitcoin transactions. As all Bitcoin transactions are stored in a single, decentralised ledger — known as the Blockchain — a great deal of computing power is required to maintain the integrity of transactions carried out via Bitcoin. Miners essentially provide their computing power to help solve these algorithms and maintain the Blockchain. Additionally, this process enables new Bitcoins to be unlocked and then circulated into the crypto community.

Though there’s a component of the mining community that’s driven by altruism and excitement about new technologies, it would be fair to say that the bulk of miners are looking to make a profit from Bitcoins. When you contribute to the mining process, there’s also the possibility that you’ll be rewarded with Bitcoins — either in the form of a tip from those carrying out Bitcoin transactions or from unlocking new coins. However, competition is very fierce.

From an investor’s perspective, buying cryptocurrencies directly has tended to prove more profitable than navigating the murkier waters of mining. But that’s not to say people haven’t had success with it — particularly in the early days of Bitcoin. It was easy enough then to carry out mining without a dedicated bank of computers. Today in crypto investor circles, it’s often viewed as rather akin to the Gold Rushes of the past; the initial investment tends to be steep and risky, but the payoff can be spectacular.

More Bitcoins are periodically unlocked at a decreasing rate as more transactions take place and miners solve the relevant hashes involved: once certain targets are hit, new Bitcoins are placed into circulation. Only a finite amount is ever planned to exist — around 21 million. At the time of writing, there are close to 19 million already in circulation.

How Does Bitcoin Mining Work?

To make a bank deposit or withdrawal to/from your account you must be verified. Becoming verified is usually a quick process but in some cases can take a few days to complete. Once logged in, click "Account" then "ID Verification" and you will be redirected to Green ID. The easiest and quickest way to verify is to use your passport or driver's license. If you have any issues, feel free to 

 who will be able to resolve any issues.


BTC Markets is a registered Digital Currency Exchange with AUSTRAC. BTC Markets remains compliant by following AML and CTF guidelines. More details can be found in our 

. We ask our users to verify their accounts as part of our KYC (Know Your Customer) policy. We may also ask for additional documentation to confirm your identity.


How do I enable additional security to help protect my account?

We recommend all users add two-factor authentication (2FA) to both their BTC Markets account and email accounts for additional security. To enable 2FA on your account, please follow our 

Two-Factor Authentication (2FA) Set-up Guide

. If you any help, check out our troubleshooting guide: 

Two-Factor Authentication (2FA) Troubleshooting

How do I change the name listed in my account profile?

If you have legally changed your name, please 

 and upload a copy of your name change or marriage certificate. Once your support request has been received, a member of our support team will get in touch as soon as possible to complete the process.

You can change your password by using the 

How do I change my email address or username?

To change your primary email address or username, please see our help article: 

My Two-Factor Authentication (2FA) code has stopped working and I can't log in

The two-factor code is very time-sensitive. Even if it is out by a few seconds it may prevent you from accessing your account. If you are having issues with your 2FA codes, check out our troubleshooting guide: 

I have lost my phone/two-factor authentication (2FA) code and cannot log into my account

During the 2FA setup process, the system provides backup codes/secret keys which will allow you to add your BTC Markets account to a new app.

Install Google Authenticator on a new device and add your linked 2FA codes, which is done by using your backup QR code or secret key. Once set up on your device, this should allow you to log in.

If you have retained the same mobile number, it is possible to disable two-factor authentication via SMS. You can access this feature 

If you are still having issues logging in to your account, please 

Should I store my blockchain assets on your site?

Our clients can be confident in entrusting us with the safe and secure storage of their cryptocurrency. However, our recommendation is that clients should manage and safely secure their own funds. This philosophy is inherent to the nature of peer-to-peer cryptocurrencies. We believe cryptocurrency storage reserves should not be reliant upon a single entity, such as a bank, exchange or third party wallet management system.

Security and privacy of our clients' accounts and data is our top priority. We run regular reconciliations of all our funds (a minimum of once every 30 minutes) to ensure we have a full reserve. We also apply security best practices and are continually developing and enhancing our security measures.

We use a cold wallet and hot wallet system to secure and manage our clients' cryptocurrency reserves. We maintain a full reserve and process reconciliations regularly. This gives us and our clients confidence that the funds shown in their accounts match with what is really in our bank and cold wallets. Our encrypted cold wallet storage is kept off-site in multiple locations. Each location is both physically secure and physically diverse.

BTC Markets Blog

Cryptocurrency explained: What is decentralised finance?

How to Store Your Bitcoin

Who Is Satoshi Nakamoto?

0% Staking Fee Offer Extended

How Does Bitcoin Mining Work?

Account Security on BTC Markets

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How to Store Your Bitcoin

Who Is Satoshi Nakamoto?

0% Staking Fee Offer Extended

How Does Bitcoin Mining Work?

Account Security on BTC Markets

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Cryptocurrency explained: What is decentralised finance?