FAQ2022-01-04T17:10:26+00:00

We know the whole world of cryptocurrency is mind blowing and no matter if you were an early adopter who can call themselves an expert in Blockchain or if you’re totally new to it all, we all have questions (including us!!). With that in mind, we’ve tried to add all the questions we’ve come across or been asked so that we can share knowledge.

If you have a question you’d like answering that’s not already one of the below, please complete the question request form at the bottom of the page and we’ll endeavour to answer it, either ourselves or by reaching out to experts we learn from ourselves. We’ll also post your question on this page to share with others.

Now we must state that we haven’t answered all these questions (as we asked most of them) and therefore please only take the given answers as a guide and these are in no way financial or market advice.

Which Crypto should I mine?2022-01-05T15:35:53+00:00

Sadly we can’t answer this one as there are so many factors you need to consider before picking a single coin to mine. The cost of the mining hardware and the energy needed to power it, as well as the return each miner delivers are the main factors to take into consideration. But it’s also worth considering the future value of a coin, for example if it costs you £100 to mine £100 worth of crypto in a single year, but that coin doubles in value then your return is potentially £1 = £2. However if a coin costs £100 to mine £150 worth of crypto in a year, but this coin is stable in price then your return would be £1 = £1.50.

A website we’ve used in the past to help compare mining tools is https://whattomine.com/ Please note this is for personal reference only and as we always say, do your research fully before investing your money.

What is the difference between “Circulating Supply”, “Total Supply”, and “Max Supply”?2022-01-05T14:22:42+00:00

Circulating Supply is the best guess of the number of coins that are circulating in the market and in the general public’s hands.
Total Supply is the total amount of coins in existence right now (minus any coins that have been verifiably burned).
Max Supply is the maximum amount of coins that will ever exist in the lifetime of the cryptocurrency.

What is “Market Capitalization” and how is it calculated?2022-01-05T14:19:46+00:00

Market Capitalization is one way to rank the relative size of a cryptocurrency. It’s calculated by multiplying the Price by the Circulating Supply.
Market Cap = Price X Circulating Supply.

What if someone buys all the existing Bitcoins?2022-01-04T16:24:41+00:00

The price of Bitcoin is determined by the supply and the demand of the market. Therefore it stands to reason that should someone want to buy all the Bitcoins available, the price per Bitcoin would increase astronomically.

Other arguments suggest that, should someone attempt to manipulate the Bitcoin market by hypothetically purchasing all the Bitcoins, the huge fluctuation in price would cause the currency to collapse and the price to crash. In this case, that person would lose all their money, so there’s not much point.

Why should I use Cryptocurrency?2022-01-04T16:23:53+00:00

For some people in some countries, using Bitcoin and crypto has become more of a necessity than a desire, as a way of protecting themselves from the hyperinflation of their local currencies. Bitcoin is a deflationary asset, meaning it can purchase more as the value increases.

It’s widely known and reported that due to the problems in Afghanistan, locals have been switching from their fiat currency to crypto in huge numbers as a way of protecting their wealth from hyperinflation and the new government. More HERE

If you’re on board with cryptocurrencies and can see the potential they have to make the world a better place, the only way we can grow this space is to use, buy and spend crypto, to keep the crypto economy circulating and expanding.

Why do people trust Bitcoin?2022-01-04T16:22:52+00:00

Some people trust Bitcoin for its decentralized, open-source transparency of financial transactions. Some find the immutability of transactional information appealing. Others favour the strength of the network of nodes mathematically verifying transactions, completely removing the element of trust or human error in transactions. The truth is everyone will have their own views and reasons for trusting and indeed not trusting Bitcoin.

Can I make money with Bitcoin?2022-01-04T16:22:20+00:00

It’s no secret that Bitcoin has made a few of the early-adopters in the industry incredibly wealthy people. The price of Bitcoin has increased more than 10 million percent in just over 10 years, with some analysts predicting that Bitcoin will one day reach 6 or even 7 figures!

Nobody knows for certain, and there is always a chance it could go to 0. Bitcoin’s price can be very volatile, but for the skilled market traders out there who know how to time the market, it can be very profitable. However for most, just holding tight is likely to be more profitable long-term.

As way of an example, if you bought £10 worth of Bitcoin on the 1st of January 2012, you’d have 2.56BTC. That 2.56BTC was worth £90,176 on the 1st of January 2022.

How is Bitcoin broken down?2022-01-04T16:21:30+00:00

Just as the pound can be broken down into 100 pennies, there are 100 million satoshis to 1 Bitcoin (BTC).

How does Bitcoin make money?2022-01-04T16:21:02+00:00

In short, it doesn’t. Bitcoin as an entity does not make money. By design it can’t otherwise it would go against its own principles. However… individuals can and do make money thanks to Bitcoin. To explain; gold doesn’t make money, those selling it make the money and Bitcoin is the same.

How are Bitcoins created?2022-01-04T16:20:24+00:00

Bitcoins are created through a process called mining. Supercomputers in the network called mining nodes are competing to solve an incredibly complex mathematical equation. The equation is so difficult to achieve, the ‘logical’ way of solving it is through guessing hundreds of different numbers (or nonces) a second. Unable to solve the equation in any other way, it takes approximately 10 minutes for the network of over 1 million computers to guess the correct answer. The miner who guesses the correct answer is rewarded in Bitcoin.

How does Bitcoin work?2022-01-04T16:19:14+00:00

Bitcoin is powered by blockchain technology, a revolutionary, decentralized, electronic database or distributed ledger that stores all transaction details within the Bitcoin Network. This network consists of over a million computers called nodes.

Each node mathematically verifies each transaction, which is then stored in a block. When a block becomes full of transactions it gets appended to the blockchain, an infinitely-long history of all previous transactions.

How old is Bitcoin?2022-01-04T16:18:36+00:00

The whitepaper for Bitcoin was first released in 2008, with the protocol going live on the 3rd of January 2009. On the 22nd of May 2010, Laszlo Hanyecz became the first person to complete a Bitcoin transaction, buying 2 pizzas for 10,000 BTC (worth over £350,000,000 today) from his local Papa Johns takeaway.

How Is Cryptocurrency different from fiat currency?2022-01-04T16:18:00+00:00

Cryptocurrency is largely borderless and free from censorship by governments and countries. It can be used by anyone in the world with an internet connection. Fiat currency is issued by a government to be used within a particular geographical location and can be printed in unlimited amounts, whereas cryptocurrencies like Bitcoin are decentralized and have a capped supply.

Is Bitcoin real money?2022-01-04T16:17:22+00:00

To answer this question correctly, we first need to define exactly what is ‘real’ money. Real money is like gold; durable, divisible, portable, fungible, a medium of exchange, and crucially, a store of wealth over a long period of time. Some people confuse ‘real money’ with ‘fiat money’. Fiat money is paper money or currency that’s in your purse or wallet, it does not hold intrinsic value but individuals and institutions are willing to use for purchases and investments because it is issued by the government. Bitcoin shares the same properties as gold and is considered by many to be real money due to the properties it possesses.

Is Bitcoin safe?2022-01-04T16:16:41+00:00

Bitcoin as a protocol itself cannot be hacked (well, theoretically it’s possible but it would take over 100 years to crack it) and cannot be controlled or manipulated by any single-point-of-failure. If you own Bitcoin, you are your own bank, and it is your responsibility to keep your coins safe.

Is Bitcoin legal?2022-01-04T16:16:12+00:00

In most countries, it is legal to buy, hold, trade and sell Bitcoin. However, the increase in people turning to cryptocurrency intimidates some banks and governments, as they believe it threatens their local currency and economy. In turn, some countries have tried to ‘ban’ Bitcoin, but this is very difficult as it is a piece of code. A country could make code illegal be it would be practically impossible to enforce, however China is trying and in made all Cryptocurrency illegal in 2021… Some say it was due to the lack of control the state had over it. Other countries have embraced Crypto. El Salvador not only made Bitcoin legal tender but also is an openly active buyer and holder of the currency. In the UK it is legal to buy, hold, trade and sell Bitcoin.

Is Bitcoin a Ponzi scheme?2022-01-04T16:15:44+00:00

No, Bitcoin is not a Ponzi scheme. Bitcoin is a piece of code that cannot be copied or double-spent, can be used as payment with transactions as well as ‘staked’ (held in an account) as a store of wealth. There is no ladder or profit pyramid, the only person who benefits from a sale of a Bitcoin is the seller.

That said, we are aware of schemes which look like to pyramid and/or Ponzi schemes using crypto as a tool. We can’t name and shame any, but please be wary where you invest your money.

Is Bitcoin a fad or bubble?2022-01-04T16:15:04+00:00

Some financial analysts think that a 10 million percent increase in the value of an asset in 10 years is a rather excessive and therefore Bitcoin must be a bubble that will soon burst. While others believe that Bitcoin’s price fluctuates with supply and demand, following a cycle in which the amount of Bitcoin produced is halved approximately every 4 years, thus allows Bitcoin’s price to increase healthily as the technology is adopted by more users around the world and therefore is not a bubble.

Who controls Bitcoin?2022-01-04T16:06:19+00:00

One of the unique things about Bitcoin and all crypto is that it is decentralized. This means it cannot be censored or controlled or manipulated by any single governing or centralized party, and all transactions are mathematically verified by a network of thousands of computers.

Who created Bitcoin?2022-01-04T16:05:52+00:00

Satoshi Nakomoto is the name of a pseudonymous developer or group of developers, who released the Bitcoin white paper in 2008 and released the Bitcoin protocol on the 3rd of January 2009. Satoshi Nakomoto disappeared a few years after the launch of Bitcoin, and his identity is unknown to this day.

Who created Cryptocurrency?2022-01-04T16:04:16+00:00

Over the years there have been several failed attempts at creating a digital currency or cryptocurrency. It started in the late 1980s when an unknown computer scientist wanted to help reduce the amount of late-night robberies at gas stations, and so trialled ‘smartcards‘ in which truck drivers could pre-pay their card and not have to carry any cash. This proved a success!

In 1990 we saw Digicash, however, due to over-rapid expansion, the company filed bankruptcy in 1998, the same year that PayPal was launched as the first digital currency peer-to-peer online payment company. PayPal has since gone from strength to strength.

What are the challenges for blockchain technology?2022-01-04T16:03:41+00:00

There are still many hurdles to overcome with blockchain tech, but here are my top 5 challenges:

  1. Lack of adoption – Blockchains are ecosystems that require broad adoption to work effectively. Without widespread adoption, the effectiveness and scalability of blockchains will remain limited.
  2. Lack of scalability – One major technology challenge of blockchain is related to the technical scalability of the network which can put a strain on the adoption process, especially for public blockchains.
  3. Lack of standardisation – Another main challenge is the lack of interoperability between the large number of blockchain networks. Over 6,500 projects are leveraging a variety of – mostly standalone – blockchain platforms and solutions with different protocols, coding languages, consensus mechanisms, and privacy measures.
  4. Lack of blockchain developers – While the demand for qualified blockchain staff is increasing dramatically, the blockchain landscape suffers an acute shortage of an adequately trained and skilled /qualified people  for developing and managing the complexity of peer-to-peer networks. Blockchain technology however demands additional qualification and know-how.
  5. Blockchain has an environmental cost – And finally but not least important the huge energy consumption is another blockchain adoption challenge. The majority of blockchains present in the market consume a high amount of energy.
How do I make money by trading cryptocurrencies?2022-01-04T16:01:53+00:00

There are three things to be aware of when you’re ready to sell your crypto assets and make a profit on your investment. Like all investments, trading in crypto has additional expenses to keep in mind.

The first thing to bare in mind is the exchange transaction fees that apply to selling your investment.

Next is unexpected movements in price could mean holding onto crypto for longer than initially expected due to the supply / demand mechanism. Also be aware that sometimes you can hit sell at a price and any delay may see you selling for less than you thought, transversely the price could also go up meaning a greater profit. Using a trading tool with as smaller delay as possible will give you more confidence in the sale value.

The third (and often the most painful) is taxation. In the UK, HMRC view Crypto as an asset and as such is subject to Capital Gains Tax. For the latest information, please visit HMRCs Crypto page HERE. It’s not all bad news… In the financial year 21/22, a UK individual has a total Capital Gains Tax allowance of £12,300, please click HERE for the latest info from HMRC. If in any doubt what so ever, please discuss this with your accountant or tax advisor.

What questions should I be asking about crypto?2022-01-04T15:59:18+00:00
  1. Which currency to buy? The biggest one, Bitcoin, would be a good starting point to begin investing right away and you may be able to start your Bitcoin journey for FREE, click HERE to see if you qualify. You can later branch into other coins and tokens as you learn more and gain confidence. As with stocks, researching the cryptocurrency of choice is always helpful.
  2. Which safe trading method should I adopt? A simple ‘buy and hold’ may be the best option for you to start with. Long term investors could carry over the ‘Pound cost averaging’ (PCA) low-risk strategy from the stock market. An example of PCA would be setting a budget of £10 a month and buying crypto for exactly that much regularly each month, regardless of price dips or peaks. After gaining confidence, many more strategies could be used.
  3. Which crypto exchange should I use? Picking a well-known exchange backed by big names internationally, one that is likely to still be growing 2-3 years later could allow peace of mind that one’s investment is safe. Coinbase, Crypto.com and Luno are both good starting points for British investors. After gaining confidence, you can compare exchanges on factors such as transaction costs, ease of transaction, security, leverage availability, futures, NFT purchases, earnings from DeFi lending, and so on. There are loads of wallets and most are genuine, but please be aware of bogus ones.
How to trade in cryptocurrencies in a safe way?2022-01-04T15:56:44+00:00

For beginners in the crypto market, experts advise investing only as much money as you’re willing to lose. Why? Because crypto trading combines the ‘irrational exuberance potential’ of a conventional stock market to the regulatory uncertainty of crypto.

Also, hackers have shown that anything financially valuable on the internet is a juicy target. However, crypto exchanges that hold user wallets try to stay safe by employing armies of security experts and paying ‘bug bounties’ to external consultants who identify vulnerabilities.

How to start trading in cryptocurrencies?2022-01-04T15:55:56+00:00

Basically, a seller sells their currency to gain cash and a buyer buys expecting to hold the currency until its value increases relative to their native fiat currency.

As of the 1st of January 2022, the total market value of all cryptocurrency exceeded £2.5 trillion, with Bitcoin alone making up 40% of that.

People with a lot of faith in the future of cryptocurrencies subscribe to a ‘HODL’ mind set, meaning ‘hold on for dear life’ to the roller-coaster they expect to ride. They buy and do not intend to sell anytime soon, even claiming that the value of one Bitcoin could rise from £35,000 (as of 01/01/22) to over £250,000 in the next 3 years.

Others choose the day trading route; buy a currency, target a profit percentage as low as 2% and sell as soon as that target is reached, sometimes within hours. The crypto market is a great market to trade in this way due to its volatile nature. But please remember, you can make a fortune in days… but you can also lose a fortune in days too!

How does supply and demand work in the cryptocurrency market?2022-01-04T15:55:14+00:00

Some cryptocurrencies like Bitcoin and Ethereum are designed to have a limited supply. By comparison, real-world currencies like the Pound do not have a hard limit on supply. When demand increases, the value of a supply-limited item is expected to increase.

That difference in supply, a high demand for crypto and new ways to profit from rising crypto, have led to a self-perpetuating cycle that drives up the exchange value of major cryptocurrencies.

In contrast, in the UK, The Bank of England actively use tools such as quantitative easing (QE) to purchase longer-term securities from the open market in order to increase the money supply therefore making the currency stable.

Is cryptocurrency used for illegal activities?2022-01-04T15:54:24+00:00

Initially with no government control, crypto became a useful tool to escape political censors and repressive regimes, which was an admirable goal. However, crypto eventually became known as a method of transacting for illegal substances or items on the dark web.

Governments discourage such behaviour and now make use of crypto’s built-in ledger to pursue criminals. With the extent of tracking that is now possible, it is safe to say that it is difficult to use cryptocurrency for crime. Bitcoin for instance, sees over 300,000 transactions daily on average, with crypto exchange trades accounting for over half of them in the last two years.

What is the purpose of cryptocurrency?2022-01-04T15:53:45+00:00

As described by the term ‘currency’, they are intended to be used in the same way as Pounds and Dollars are; as a means of payment between people for products and services.

Consider store reward cards, an alternative physical payment method that is denominated in their own units, and not in national currency. Similarly, cryptocurrency with its own units was meant to enable easy digital transactions online, at lower costs than what conventional banks charged.

How is crypto stored?2022-01-04T15:51:59+00:00

Let’s look at a fiat currency like the Pound Sterling. It can be deposited in your name at a bank, or privately hidden under a mattress at home away from anyone’s eyes.

Similarly, a cryptocurrency can be held on your behalf by a company, usually in your wallet at a crypto exchange online. You could also hold it in without being affiliated to anybody, in a private cryptocurrency wallet. What’s the best option? Well that’s for you to decide… Both have pro’s and con’s. But do you recall the story about James Howells??? In 2013 he accidentally put his hard drive containing Bitcoin in the bin and now somewhere in a Newport rubbish dump there is a hard drive worth over £340million. Read More HERE

What is Cryptocurrency?2022-01-04T15:49:47+00:00

Cryptocurrency as a term refers to a digital currency, secured with cryptography to enable trusted transactions. Blockchain is the underlying technology, functioning as a ‘ledger’ or record of transactions made.

It’s estimated that, as of the 1st of January 2022, there is over 2,000 cryptocurrencies in circulation, each usually designed by a single individual or a small team designed to run as a decentralised system so that no single entity can control it.

Cryptocurrency units are usually generated on the basis of an algorithm announced to everyone in advance, by ‘miners’ using powerful computers. Having expended a lot of time and electricity on ‘mining’, these miners can hold on to the units or sell to others.

What are the most popular Cryptocurrencies?2022-01-04T15:47:02+00:00

Bitcoin is by far the largest by value and market share as well as the most popular cryptocurrency, followed by other cryptocurrencies such as Ethereum, Binance Coin, Tether and Solana (these are the top 5 in order of size).

Can you generate Cryptocurrency?2022-01-04T15:41:14+00:00

Yes, Cryptocurrencies are generated by mining. For example, Bitcoin is generated using Bitcoin mining. The process involves downloading software that contains a partial or full history of transactions that have occurred in its network. While anyone with a computer and an internet connection can mine cryptocurrency, the energy- and resource-intensive nature of mining means that the industry is dominated by large firms.

However there is an increasing number of mining firms who allow you to buy or rent machines (with or without maintenance and support) and offer an entry into mining. One example is Cyberian Mine who operate mining facilities in Siberia where you can buy machines to mine crypto. There is also a number of apps for your phone / tablet which allow you to mine using your phone, examples include Pi and Ember.

What’s the point of Cryptocurrency?2022-01-04T15:40:24+00:00

Cryptocurrencies are a new paradigm for money. They promise to streamline existing financial architecture to make it faster and cheaper. The technology and architecture is decentralize, making it possible for parties to exchange value and money without the use of intermediary institutions like banks.

How do you get Cryptocurrency?2022-01-04T15:25:57+00:00

Anyone can purchase crypto from exchanges like Coinbase or Crypto.com, apps like Luno app, or through brokers. A recently new option is to buy crypto Trusts and ETFs. Shares in these funds can be purchased in the same way shares in publicly traded companies through brokers like Hargreaves Lansdown or Freetrade.

What is Cryptocurrency in one sentence?2022-01-04T15:13:00+00:00

Cryptocurrencies are digitals assets and decentralized systems that allow for secure online payments.

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