Cryptocurrency Wallet 101 For White label Crypto Exchange

Before I go any further a Crypto Wallet brief, I want you to consider how you store your real-world cash. You don’t walk around in your pocket with this, do you? Instead, you’d most probably store it with a leather wallet or purse, or maybe even a piggy bank!

Anyway it’s smart to store your money where it’s safe. A wallet follows the same basic concepts of crypto-currency.

Nevertheless, by accessing a crypto wallet you would be able to send and obtain Bit coin and other crypto currencies (more than 1,500! already exist!).

So, now that you have a good understanding of what is being used for a crypto currency wallet, I’ll explain how it works in greater detail.

How does a wallet work in the Crypto currency?

In the section above, I used the example of a real-world leather wallet, assuming as your cash is physically in the pocket. However things are somewhat different in the digital world of crypto currency and block chain technology.

Coins are not usually kept in a physical wallet, since there is no physical presence of crypto currencies. Alternatively, the block chain consists of transactional records recording which private and public key governs the funds. I would quickly explain the role of a wallet address, as well as a private and public key, because they are linked to each other, to ensure that you have complete understanding.

An address on a wallet is like a number on a bank account. There is no harm in giving someone else your bank account number, because if they want to transfer their money, they will use it. It may be so that your employer can pay you your wage, so that a client can pay your invoice or so that your family and friends can give you some money for birthday!

In the world of crypto currency, if anyone wants to transfer their coins, you simply give them your wallet address. No two wallet addresses are always the same, which means there is no risk that someone else can get your money.

Using as you can see the upper- and lower-case combinations of numbers and letters. Since most block chains are clear, the amount of money a certain crypto currency wallet has, as well as the previous transactions that the owner has made, is simple to find out.

However, a crypto currency wallet address doesn’t reveal the real-world identity of its owner, which is why the block chain is called “pseudonymous.” How do private and public keys connect to an address in the Wallet?

So, now that you know that a wallet address is really close to a bank account number, I’m going to clarify how the power of the funds is being given. A public key is assumed by many to be the same as a public wallet password, but that’s not valid.

Essentially, each individual Crypto currency wallet address (remember, no two addresses can be the same) has a unique private and public key. The private key lets you get access to funds linked to the crypto wallet code.

To give you a true-world example, when you want to transfer money from your bank account to someone else’s bank account you may need to enter your private password. No-one else has access to the password, not even the ATM.

A private key does almost the same thing except it’s linked directly to the crypto wallet’s actual address. What, instead, is a public key?

Mathematically, your wallet address is connected to a public key! However, it is a “hashed version” which I will clarify below.

A hash function allows a sequence of letters and/or numbers (called an “input”) to be encrypted into a new set of letters and/or numbers (called an “output”). It offers an extra security shield, which ensures that you can not reach your wallet.

Now, I know what you think: Are these two key sets completely different? And, indeed software technology knows to the human eye that the two keys are directly connected to each other! That means that you are the owner of the coin and that helps you to transfer funds whenever you wish!

The main thing to note is that everything that I’ve been talking about here is highly technical. Nevertheless, the app does everything you need when using a crypto currency wallet.

You don’t even have to understand the code running in the background, the likes of Gmail and Hotmail are doing all about emails for you— like a crypto currency wallet for crypto-transactions!

And you have stated clearly that the coins are not contained in Crypto Wallets?

If you’ve read my guide so far, you’ll already have a good understanding of what a crypto currency wallet is, and how public and private keys are linked to a shared wallet address. You can recall earlier that I said not always the coins are deposited in the wallet? It is valid! Let me get it worked out.

Since Bit coin and other crypto currencies aren’t physical currency, they are digitally stored in the block chain. The block chain is like a giant accounting ledger that records every single transaction ever happening inside the network, as well as each public address’s total account balance.

The software is directly connected inside the crypto currency wallet to the block chain, so you can send transactions to the ledger. However, the crypto-wallet is the protocol which generates both public and private keys. For that you won’t be able to access your savings in the real world.

To get a clearer view of the relationship, think of walking into a shop and paying for things using a debit or credit card. There is no exchange of physical cash between you and the stores. Nonetheless, by entering your private pin number, you check that you own the funds and then they can transfer the money from your account to your store account.

It’s the same as a Crypto currencies wallet. Through entering your private key, you can verify whether you own the coins, and then pass them to someone else. It’s the only way the coins can pass from person A to person B. So, now that you know the function of a cryptocurrency wallet, let’s take a look at the different styles available and what every white label cryptocurrency exchange should consider while providing the wallet option based on their business practices.

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Corona Virus Effects On Crypto Market

The COVID-19 outbreak has seen increasing disruption in the financial markets as well as on the political front globally. Be it fiat currency or virtual currency, all of it has taken a toll. The article shares the effects of coronavirus on the global economy. It highlights the effect of the pandemic on major crypto currencies – Bitcoin, Etherium and Ripple. Several initiatives are taken by the crypto community which should be discussed about. And the question which every investor is wondering – Is it the right time to buy crypto? 

If you are a trader, crypto enthusiast or an crypto exchange platform owner, this article is your food for thought. The article shares insights on all the above mentioned ideas. Initially, let us understand the impact of coronavirus on global economy.

Coronavirus Impact On Global Economy

Before understanding the effect of coronavirus on crypto market, let us see how it has affected the global economy. 

Downgrades in economic forecasts

The Institute of International Finance (IIF) said that the global uptick in gross domestic product could be as low as 1% this year. Various institutions have downgraded their global forecasts over the last few days. The global economy was expected to grow by 2.4% in 2020, whereas the projected value was of 2.9%.

Slowdown in manufacturing activity

The Caixin/Markit Manufacturing Purchasing Manager’s Index showed that China’s factory activity has taken a hit in February. It has come at a record low of 40.3. This kind of a slowdown will affect the countries with close economic tie-ups to China.

Declining oil prices

The oil prices have declined due to the slowing down of economic activity. China, which is the origin of the coronavirus outbreak, is the world’s largest crude oil importer. The reduction in demand of the oil has led to the fall in oil prices.

The virus have lowered the confidence and hurt the sentiments of the investors. It has brought down the stock prices in major markets.

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All About Cryptocurrency Derivatives Trading

Introduction

Cryptocurrency trading has blossomed from a small market to a billion-dollar international industry. Amidst all this, the cryptocurrency derivatives market has gained enough traction. The article highlights all the details you need to know about cryptocurrency derivatives trading. 

What are cryptocurrency derivatives?

Mathematics and financial markets walk on similar paths when derivatives come into the picture. The concept of derivatives was introduced in Mathematics. It referred to a value or a variable which has been derived from another variable. Similarly in financial markets, the derivative is an instrument that is derived out of some market products. Its price is dependent on the value of the underlying asset from which it is derived. The underlying asset can range from stocks, currencies, commodities, indices, etc.

When the underlying asset is a cryptocurrency, the derivative is referred to as cryptocurrency derivatives. It is a financial contract between two or more parties based on the future price of the cryptocurrency.

What are forms of derivatives?

Cryptocurrency derivatives trading platforms provide various forms of derivatives for trading. The derivatives can be categorized into the following main types

1. FORWARDS – Forward contracts are the agreement between the two parties to buy and sell the crypto asset at a pre-determined time and pre-determined price. Both parties are obliged to respect the agreement. 

         Ex – Bitcoin Forwards

2. FUTURES – Futures contracts are the agreement between two parties to buy and sell the crypto asset at a pre-determined date and pre-determined price. They are just like forwards with the only difference that futures are traded on exchanges and hence are standardized unlike forwards. Forwards give you the option to customize your contract. Since futures are traded over the exchange, it eliminates the counterparty risks which are present while trading forwards. 

         Ex – Bitcoin Futures

3. OPTIONS – Unlike forwards and futures where the buyer is obliged to purchase an asset and seller is obliged to sell an asset, options provide the right to the buyer to choose whether to perform an agreement on a specified date or not. Meanwhile, the seller of the option has the obligation to execute the transaction if the buyer exercises his option. Hence the name “Options”

         Ex- Bitcoin/Etherium Options

4. SWAPS – A swap is a form of derivative in which one party exchanges or swaps the values or cash flows of one asset (financial instrument) for another. In this cash flow, one value is fixed and the other is variable. The variable value is based on the index price, interest rate or currency exchange rate. Most popularly used swaps are interest rate swaps.

         Ex. Bitcoin Perpetual Swap

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The Complete Dynamics Of 2FA In White label Crypto Exchanges

Volatility is not the biggest threat to your cryptocurrency investment, but security of your invested funds is. Many of us still keep our funds on exchanges although, large part of fast learners have shifted to hardware wallets like Ledger Nano.

As it’s next to impossible to set up your own individual wallets, the most suitable option is as above, though it is definitely not one of the best practices.

The  biggest threat here compared to shutting down these top cryptocurrencies exchanges is getting hacked as a result of bad security systems and personal negligence.

Cyber criminals have conducted stealing of more than $225 million worth of Etherum in 2017 only by the use of Website Phishing according to Chainanlysis. This spoof website looks similar to the original website.

There’s a 1 in 10 chance that you’ll end up being the victim of the above kind of theft while being involved in ICOs ,according to Bloomberg’s  stunning revelation.

So it’s very important that we all are very attentive and careful while we are investing in crypto and cybersecurity should be made our first priority.

One of the most powerful ways in cybersecurity is 2FA(Two Factor Authentication) which we have all been negligent of, should be carried out.

Significance and uses of 2FA and ways to set it up

2FA enhances the security level of your trading account. It scares us all to know how  easy it is for the cyber criminals to get to know your account’s User ID and password with the wide use of standard security methods used all around the internet. By 2FA authentication, the cybercriminals are unable to log into your account, although they may have access to your account’s credentials.

How is it possible ? Let’s see in the below listed factors, usually used along with your credentials. It might be a mix of passwords, security questions and answers, pin code, smart card, a pass , physical hardware or an email code. It may also involve biometrics, namely  your fingerprints, voice or heart beat etc.

Example of 2FA

Different types of white label cryptocurrency exchanges implement 2FA in different ways. Explanation will be done  on how exactly to use 2FA in your crypto set up, to make your account on these exchanges very secure, safe and less prone to hijaking.

Traditional example of 2FA is as follows

A combination of two keys are needed: one customer’s and one the bank’s in which you hold a security locker to keep all your valuables safe. This is called 2FA-Two Factor Authentication. Your debit card and ATM pin number are also examples of 2FA: As you cannot withdraw money just by the use of one factor.

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