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BEHIND THE DIGITAL CURRENCY
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CURRENCY EXCHANGE
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TRADING PLATFORMS
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Crypto Loans: What You Need to Know

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Cryptocurrencies

 

Cryptocurrencies are currently establishing themselves as an asset class in their own right. As with any other asset class, various organizations are gradually developing many financial products for cryptocurrencies, including the so-called crypto loans.

1. What are crypto loans?

Crypto loans are secured loans where a certain amount of an asset (cryptocurrency), often kept in cold storage, must be deposited as collateral to obtain a loan. As a rule, the applicant must perform an identity check and if accepted, the merchant can deposit crypto and get a loan. If the recipient of the crypto loan is unable to repay the stated amount on time, the lender could liquidate the cryptocurrency that the recipient used as collateral.

From a business point of view, crypto loans have two sides: one side is the granting of the loan to a customer on the agreed terms and the other side is the financing of this process. There are platforms that offer crypto loans and provide liquidity with income products such as rental, staking or savings accounts. As a rule, customers invest money for a certain period of time in order to achieve interest and passive income.

2. What are the advantages of crypto loans?

Apart from the fact that they are much easier and faster to get than a traditional loan, crypto loans are so popular because a loan against cryptocurrencies means that you can keep your digital assets in case the price rises.

With a crypto loan, you can HODLen and at the same time ensure that you have new funds. Such a loan can be considered if you are convinced that the coin will hold its value, but need a certain amount of liquidity and available funds to pay for everyday expenses, rent, bills, and other things.

Crypto loans are based on a blockchain. That is, they are immutable because transactions cannot be changed. This makes them more trustworthy. In addition, it often takes only one day to get a loan, as the identity check is often minimal. However, this varies from platform to platform. The only requirement is usually an official identification document (since there is no need to carry out a credit check unlike in bank loans where you need to improve your credit score by getting a Net 30 account from companies like FairFigure).

3. What are the risks of crypto loans?

The first and biggest risk is that companies that make such loans may become insolvent, as in the case of the crypto platform Celsius, which recently filed for bankruptcy.

Another risk is the way the cryptocurrencies or collateral are stored. There are two types of crypto exchanges. On the one hand, centralized exchanges such as Coinbase or Nebeus, where control is largely in the hands of a third party. In addition, there are also decentralized exchanges where the private keys (and thus access to your digital assets) are stored only by the owner of the account and not by a third party. Both types of exchanges have their advantages and risks.

Another risk to consider is the volatility of cryptocurrencies. If a user takes out an entire Ethereum (ETH) as a loan at a price of 4,000 US dollars and the price drops significantly, the value of the security is lower and there could be a demand for additional margins. That’s a risk that comes with the volatility of cryptocurrencies in general and isn’t necessarily related to loans. But this risk must be taken into account in any case.

In addition, there are tax and regulatory risks associated with decentralized platforms, as many of these companies do not adhere to regulatory protocols such as identity checks or anti-money laundering measures. Decentralized lending is therefore accompanied by a certain degree of uncertainty. Centralized platforms, on the other hand, comply with such regulations. Therefore, the above risk does not exist with these and consequently, they are safe.

 

ALSO READ: How Online Gaming Are Influenced By Cryptocurrency

 

4. How to take out crypto loans?

To borrow money, you have to choose the right platform. There are many platforms that offer crypto loans, but not all of them are safe and compliant.

Before you apply for a loan, you should definitely make sure that the platform is secure. It is always advisable to carefully review the Platform and consider the Platform’s registrations, licenses, trusted partners, and security measures, such as the approach to asset retention and insurance.

When looking for the right platform, you also have to choose the right provider for your own needs, because not everywhere the same assets are accepted as collateral or the same credit conditions are offered. For example, you cannot get a loan in $MATIC on all platforms.

When applying for a crypto loan, the amount of the loan depends on the amount of collateral that an investor can deposit. A common measure is a loan-to-value ratio, which refers to the amount of the loan and the value of the collateral. Crypto loans usually have very low loan-to-value ratios due to the volatility of the crypto market, but that depends on the particular platform.

One of the platforms that enable crypto loans is Nebeus. This uses cold storage, which means that the private keys or access to your cryptocurrency are kept offline where hackers can’t reach them. Through Nebeus you can get a quick loan with 0 percent interest for 3 months.

Loans can be obtained immediately. The only thing that is needed is an identity check, crypto collateral, and the acceptance of the loan agreement. This entire process is handled almost immediately via the app or desktop platform.

Nebeus also offers flexible loans that have a loan-to-value ratio of up to 80 percent. More than 9 coins are accepted as collateral. Nebeus also offers the ability to buy or sell cryptocurrencies and stablecoins at the market rate with a fixed fee of 0.5 percent per trade.

5. How can you lend or borrow your cryptocurrency?

With this business model with crypto loans, the question arises as to how the platforms finance the loans offered.

Several platforms use profitable products such as crypto renting or staking, where a client blocks their digital assets for a certain period of time and receives rewards for this, which they can use for the purpose of liquidity. Here, the platforms use the money that has been blocked for a certain period of time to provide liquidity for the loans.

If you want to borrow your cryptocurrency, you need to find a good platform for it. Here you have two options. With a fixed interest rate, the exchange rate is set by a control center, such as the platform used. A flexible exchange rate depends on the level of supply and demand at the time of a transaction.

When lending cryptocurrencies, it is important how long the assets are locked and unavailable for trading, as this varies depending on the platform and they are subject to market fluctuations. However, lending stablecoins, which are usually not affected by the volatility of the market, is worthwhile if the user does not want to use them in the short term.

Some platforms specialize in only one crypto financial solution (such as granting crypto loans), while others offer multiple services. For example, Nebeus also offers four crypto loan programs where you can borrow over 20 coins: two allow you to borrow cryptocurrencies that offer up to 6.5 percent return per year, and the other two allow you to borrow stablecoins that offer up to 12.85 percent return per year. In addition, there is the peculiarity that you can borrow one coin and be rewarded with another.

What You Need Before You Go On Crypto?

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You’ll be hard-pressed to find a more volatile market than cryptocurrency. It’s an incredibly exciting space, but one that can also be incredibly risky. If you don’t take the necessary precautions before diving in, you could end up losing your money. Probably, this is the least thing you want to happen. After all, who wants to lose their hard-earned cash?

Thankfully, there are ways to minimize your risk and increase your chances of success when it comes to investing in cryptocurrency. 

Educate Yourself

Before you make a decision to buy any coins, you’ll want to make sure you’re as informed as possible. If you’re new to cryptocurrency, you’ll want to spend some time learning about the different types of coins and their underlying technology. This will help put you in a better position to make informed decisions about which coins to invest in.

You’ll want to take the time to explore the different types of coins out there and understand what they’re trying to do.

If a token is trying to solve a problem that you’re interested in, it might be worth taking a closer look.

Only Use Money You Can Afford to Lose

As we’ve mentioned before, crypto is incredibly risky. The vast majority of people lose money when they invest in crypto. If you’re going to get involved in crypto, you need to be prepared for the fact that you might lose your money.

It’s important that you only invest money that you can afford to lose. The last thing you want to do is get yourself into debt because of crypto. If you do decide to invest in crypto, it’s important to only use money that you can afford to lose. You don’t want to invest money that is intended for something else.

Make Sure You Have Life Insurance

This may sound morbid, but make sure you have life insurance, especially if you’re in Canada. This is especially important if you have a family that depends on you financially

If something were to happen to you, they would receive a substantial amount of money that could help them get through tough times. That’s why it is important to have Life Insurance for Estate Planning in Canada.

It’s possible your crypto investments could make you a millionaire, but they could also completely wipe you out. Make sure you have something to fall back on in case the worst happens.

The Markets Of Foreign Exchange And Cryptocurrency

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On a daily basis, the Foreign Exchange market has a trading volume of 4 to 5 trillion USD making it the biggest as well as the most liquid (how easily assets could be converted to cash) financial market in the globe. But there isn’t any central market for Forex trading, hence each trader should select a broker or brokerage firm on their own.

Choosing The Right Broker

Conveniently, there are numerous brokerage firms and brokers in the market like. The right broker will provide Forex brokers various possibilities, services and opportunities to make your trading activities and experience a great one. To make certain you succeed in the Forex market, it is crucial to work with a competent and experienced broker, however choosing the right one who can match your needs can be tricky. So, to narrow down your search, check out.

The Foreign Exchange Market

The market of Foreign Exchange involves the trade of international currencies issued by governments. It is also available 24 hours, open for 5 days, and comprises of over-the-counter decentralized trading. As mentioned, it is the largest financial market in the globe and composes a multiplicity of financial institutions, businesses, banks as well as retail investors who exchange or trade national currencies in order to do business or as a way to earn profits.

The Foreign Exchange market is known to be relatively volatile and can move quickly, making the marketplace very appealing to traders. This kind of volatility provides the opportunity for traders to make profits. It is frequently derived from the political and economic status of a nation as well as international relationships. Because of this, Forex traders regularly update themselves with news and reports that heavily influence the Forex market.

The Cryptocurrency Market

While the Forex market provides traders with so much opportunities, there is another market that pulls in new kinds of traders – the Cryptocurrency market. The marketplace is relatively new and only deals with cryptocurrencies or digital currencies such as Bitcoin. Similar to the Forex market, it is available 24 hours a day, but is open 7 days a week unlike the Forex market which is only open for 5, and although over-the-counter trading do exist in the crypto market, a great volume of it is routed via exchanges.

The cryptocurrency market is extremely volatile as well as susceptible to manipulation. But, just like the Foreign Exchange market, this volatility is considered to be advantageous to some. Generally, although it is open to scams and industry news, the crypto markets aren’t that much affected by conventional financial markets or global events. Hence, cryptocurrency traders scan headlines less but do focus on charts as well as technical analysis.

Bottom Line

Both Forex and Crypto market have its own sets of benefits. But, regardless of which financial market you decide to enter and engage in, it is vital that you do your in-depth research as well as have the right platform and tools to ensure successful and profitable trades.

Making Purchases And Payments With Cryptocurrency Credit Cards And Debit Cards

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Making use of a credit card is truly an excellent way to make cashless purchases and payments. When utilized responsibly and wisely, credit cards could be very useful and beneficial to users. Check out americanexpress.com/confirmcard to confirm your American Express card and start

Credit Cards – A Convenient Way To Make Payments and Purchases

A credit card is a cashless way to make purchases or payments for goods and services. These cards which are made of either plastic or metal allow users to access a certain amount of credit limit by the issuing company or institution.

Basically, through the credit card, you borrow money from your credit card issuer and may use the maximum amount of credit given to you at a given span of time. You then are allotted until the end of each month to make the necessary payments you. After you have settled your dent, you are again allowed to make use of your credit card. So, rather than the company or intuition handing you cash every month, you are given the card to access your loan.

Cryptocurrency Credit Cards and Debit Cards

With the increase use of digital currencies, several companies have developed a way to make it more accessible for holders as well as for more ways to make use of it. Hence, some companies have or are making an attempt to make cryptocurrencies available to a wider population and businesses. For instance, the cryptocurrency exchange, MedeTrade, has innovated and made available the use of Dash with its Visa cryptocurrency credit card and debit card.

The visa card by MedeTrade functions as a debit card that allows users and holder of the digital currency Dash to more easily spend their money worldwide. The card also functions as a credit card providing users who are verified with a line of credit with a certain limit, similar to traditional credit cards. The cryptocurrency credit card provides users more flexibility when it comes to converting their digital currencies to fiat currencies for purchase and payments.

The Benefits

To understand more about cryptocurrency credit card and debit card, let’s have a look at three of its major benefits:

  • Making Payments and Purchases. Similar to traditional credit and debit cards, cryptocurrency credit cards and debit cards, such as those by MedeTrade, allow users of cryptocurrencies to make purchases as well as payments for daily activities like paying bills and even shopping.
  • Making Money Transfers. One of the major benefits of using cryptocurrency cards is for users to make money transfers anytime as well as anywhere in the globe without delay.
  • Hold Various Currencies. With a cryptocurrency card, holders are able to hold various currencies in a single card, such as USD, EURO, and many more.

The innovation of cryptocurrency credit cards and debit cards is yet another milestone for the digital currency, and may one day become mainstream, making it another accessible and convenient way of making payments and purchases.

https://youtu.be/MB7gIZ1COR0

Augment Finances Through Loans From Accredit Licensed Money Lender Or Invest In Cryptocurrency

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There will be circumstances in our lives wherein we might require additional money and one way to be able to do so is to get a personal loan. Because of technology and modernization, the loan application process of many lenders or credit company has become very simple, easy and quick.

Personal Loans – An Option To Augment Finances

In Singapore, for instance, accredit licensed money lender offers accessibility that is beyond compare. Just how? Well, with accredit licensed money lender, you can securely apply for a personal loan even as you are on the go. This means you could safely apply for a personal loan online, get a quick loan approval and receive your loan. If all goes well, you could even apply, get approved, and receive your personal loan all in the same day with any hidden charges!

Moreover, as accredit licensed money lender is certified by the government as well as other proper agencies, you are certain that you’re legally transacting with a licensed lending company and that they are operating in accordance to the law. Hence, choosing a licensed lender is something that any borrower should consider as it will make you feel more at ease.

Apart from the ones mentioned above, transacting with a licensed lender like accredit licensed money lender has its numerous benefits such as receiving low rates of loan interest, your personal information is safe and protected, and you avoid being harassed by unlicensed lenders

Investing On Cryptocurrency – Another Way To Augment Finances

Beside technology and modernization making the process of loaning more hassle-free, it has also provided a way for people to make money and have that extra financial boost they need. One way is to invest in cryptocurrency.

Cryptocurrencies have a lot of potentials. But just like looking for a licensed money lender and getting the right loan that meets your requirements and budget, you also need carry out your own careful research to make certain your investment and efforts won’t go to waste.

Below are a few tips to make informed choices as well as to safely invest on digital currencies:

  • Learn About Crypto Exchanges. Prior to investing, even a single dollar, on cryptocurrency, you have to be familiar with crypto exchanges. The platforms provide a way to both buy and sell cryptocurrencies, however, as per bitcoin.com, there are 500 exchanges to select from. This could confuse you and complicate things if you don’t do your research. Check out reviews, blogs, forums, videos especially from experiences crypto investors for valuable info.
  • Know Where and How to Store Your Crypto.  When you buy crypto, you should have a place to store it. You have the option to store it on an exchange or in your own digital wallet. There are various types of digital wallets and have their individual features, benefits, technical requirements as well as security. Again, so your research to make an excellent informed choice.
  • Consider a Diversified Investment. A diversified investment is an excellent strategy, and this strategy also works well when investing in digital currencies. There are thousands of cryptocurrencies to choose from that have their own potentials. Hence, it is best to spread your investment. But again, make sure you have done your research to choose the right crypto to invest on.

Investing in cryptocurrency has its many benefits but is also accompanied by its own sets of challenges and risks. Hence, do your research, come up with a plan and strategy, and be prepared for the worst and the best.

Applications for Cryptocurrency

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In layman’s term, cryptocurrency is a form of digital currency. It’s not centralized or in other words, there’s no government or financial authority controlling or regulating its circulation. These coins rely on encrypted codes in verifying transactions. An extremely popular cryptocurrency is Bitcoin. Since the time it becomes mainstream, there are more than 700 kinds of cryptocurrency that’s been introduced.

Uses of Your Crypto

To make use of crypto, you have to buy from online exchange or get your personal tradelines packages link and then, select a digital wallet where you can store your coins. The coins can be used much like paper money. It can be used for transactions like:

  • Paying for services and;
  • Buying goods

Your Path for Getting and Investing in Your First Coin

After getting through the initial steps, your next course of action is deciding what type of crypto to get. As mentioned, there are over 700 kinds of it today and finding what’s right for you will depend on the things you like to do with it. However, let me inform you that newly introduced cryptocurrencies are more volatile and few may accept it as payment for services and goods.

When all is set and done, now’s the time to pick your cryptocurrency exchange. Different exchanges are offering different cryptocurrency, has different fees and varying payment methods. It’s under your discretion what to choose. Your best bet is to do thorough research on your prospective exchange. The only way you can make exchange on your chosen platform is by making a trading account. Much like when creating accounts for other platforms, you have to verify your identity and other info required by the exchange.

Rest assured that you have a valid ID for swift and smooth verification.

Once you’re verified, you should connect your desired payment method. If this is the first time buying crypto, you’ll have to use fiat currency. This is a national currency like Euro or Dollar.

As soon as everything settled, you have to place your very first order for crypto. Most of the time, you will have to specify the currency you like and also, the amount of coins you’d like to buy. You may be given the option of specifying the money you wish to spend. As for the amount of cryptocurrency you acquire for the money you spent, it will largely depend on the cryptocurrency’s value.

Quick Overview of Cryptocurrency

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What is Cryptocurrency?

Etymologically, cryptocurrency is composed of two words, namely crypto which refers to cryptography or a coding language in the computer world and currency that refers to the value of a currency. From the definition can be drawn that cryptocurrency is a digital currency mechanism that can be used to transact virtually or via the internet protected by complex computer coding.

So what distinguishes it from currencies that are currently commonly used, such as the Dollars, which has also been widely used for digital transactions? Cryptocurrency is decentralized. What is a decentralized system of transaction? Read further below.

The following explanation of the differences between the two properties in a case study.

Centralized Transaction

The centralized nature is exemplified in the transaction model that has often been used by the community. For example, in this case, the parents who want to send money to their children overseas are exemplified, so what they do is use banking services (ATM, Mobile Banking, or come directly to the relevant bank) and then transfer some money to the child’s account number. The transaction is basically done through a bank intermediary and a trusted service.

So the process is that the money transferred is actually entered into the bank first, then forwarded to the recipient. The process is real-time so the displacement is not felt. However, what is felt is precise because the process is through an intermediary, there are rewards that must be paid, namely in the form of administrative costs, both incurred immediately (if sending to a different bank account) or in administration fees charged every month.

Decentralized Transaction

While the decentralized nature means that no one is an intermediary or special party is the intermediary. Transactions are carried out peer-to-peer from sender to recipient. All transactions are recorded on a computer in the network, worldwide, or called a miner (miners who help secure and record transactions on the network). The miner himself will get a commission with the virtual money used, but not everyone can become a miner because it requires special expertise with complex computational processing to solve the cryptography used. This is one of the reasons why cryptocurrency miners generally use high-specification and special computers.

The nature of decentralization is the DNA of the Blockchain system. Basically Blockchain is a platform that allows cryptocurrency digital currencies to be used for transactions.

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