Tess Rinearson, who has led engineering teams at cryptocurrency startups such as Interchains, Chain, and Tendermint, has been brought in by Twitter to lead the effort. Rinearson will report to Twitter CTO Parag Agrawal, who will help set the direction of the newly-formed team which will explore three primary areas of interest. Firstly, the team will look at how Twitter can continue to support cryptocurrencies as a payment form for creators. Secondly, the team will explore how blockchain technologies can create a new way for creators to earn a living. And, lastly, they will lead Twitter’s efforts to decentralise social media with the support of Bluesky.

“There’s massive and growing interest among creators to use decentralized apps to manage virtual goods and currencies,” Twitter said. “Tess will focus here, with a long term goal of exploring how ideas from crypto can help us push the boundaries of what’s possible with identity, community and more.”

Africa

The vision of Satoshi Nakamoto for Bitcoin to promote financial inclusivity has more likely been met considering the boom of the crypto market in third world countries such as those in Africa. It is noteworthy that the daddy of all cryptocurrencies was created so that there would be a chance for outsiders to gain access to an informal financial system with a digital platform. No wonder it has opened investment opportunities on trading platforms such as the BitiQ website for the African people renowned for using cryptocurrencies.

A report has recently claimed that Africa has become the global leader in terms of cryptocurrency adoption. Despite attempts of the government to restrict operations by mandating banking institutions to cut ties with crypto exchanges, the market was able to survive with a shift into a platform that no longer needs local banks as intermediaries. And the crypto market has flourished since then, away from state regulations. It appears that the free market is working at the advantage of African investors. 

East Asia

While Africa is still in the phase of adopting cryptocurrencies, perhaps it would be fair to say that Asia has already been immersed in this market. A study conducted last year claimed that over 30% of crypto transactions took place in East Asia, which includes China, Japan and South Korea. The trend is expected to carry on as countries in other parts of Asia are being drawn into the market. It would buffer the impact of China now shutting its doors to foreign cryptocurrencies.

Moreover, Japan has been among the most progressive countries in Asia to embrace opportunities brought about by crypto trading. It has managed to strengthen laws to protect the local crypto market from cybercrimes in the likes of hacking and money laundering. There has also been a regulation of crypto exchanges through documentary requirements that would prove legitimacy. More likely, this will be an additional layer of protection taken as a preventive measure to deter cyber crypto heists. 

Latin America 

It can be recalled that the founder of this cryptocurrency originally intended the use of virtual money as a medium of exchange. Following the historic move of El Salvador declaring Bitcoin as an official legal tender in the country, there is so much expectation hanging over its shoulders. The government anticipates economic growth brought about by overseas remittances in the form of Bitcoin. Besides, it is a practical approach for a developing country with people devoid of access to the financial system.  

Paraguay is set to follow in the footsteps of its neighbour with the intention recently made known by one of its lawmakers. A bill has been submitted in Congress to legitimise the use of Bitcoin as an official legal tender. The legislation intends to bank on the financial opportunities drawn by the crypto market. Like El Salvador, the nation is poised to become the next crypto hub in the region. 

United States of America

America has been the ultimate hub of cryptocurrencies, with Bitcoin finding its roots in San Diego, California.  From paying for some Papa John’s pizza, there is no doubt that the father of all cryptocurrencies has come a long way. It is considered the market leader after gaining a huge number of followers still on board. The United States is now facing challenges on how to best regulate the crypto market to protect investors. As the SEC Chairperson has put it, he is neutral in terms of technology but not in terms of consumer protection. 

Consequently, the Chairman of the Federal Reserve has already expressed his intention to promote crypto regulations. He is advocating for the possibility of digital banknotes and stable coins to compete with cryptocurrencies. These virtual currencies would be backed by the government’s financial system to draw the interest of investors, given the relatively low risks. 

Conclusion

This is how the crypto market has taken the world one region after another all through the years from the United States, Latin America, East Asia, and Africa.

According to Yoshiko Nagano of Cambridge University Press, the ancient civilisations took advantage of their country's natural resources, such as gold, quartz, jade, and wood, by trading these items for food, water, and other essentials with other countries. This method is what they call the Barter System, and this was carried out for years on end before the standardisation of coinage and paper bills.

The Bretton Woods Agreement established the Gold Exchange Standard at the end of World War II. As a result, countries fixed their national currency exchange rates to the US dollars convertible to gold at a fixed rate. Not only that, but it did now allow convertibility to be available to individuals and companies, only to central banks. However, when the US dollar convertibility to gold was terminated, the Bretton Woods System ended in 1971.

How does a paper hold any value if it has no support from anything? Well, that is where concepts like Legal Tender come in. The Fiat System, which we still use today, has an assigned value to a currency declared at a Legal Tender. It means the government decides if a medium of payment should be recognised for a financial transaction, trade settlement, or commerce in a country or jurisdiction. Some Fiat currencies, like the US dollars and the Euro, are internationally accepted. People use them for international trade because the world's most credible governments and largest economies support them. A Fiat currency has value because it is enforced by the government and because exchanging parties agree on its value.

Let's talk about digital currency, on the other hand. Based on the statistics of CoinMarketCap, Bitcoin is still the number one cryptocurrency in the world, with a market cap of $930,151,472,692 as of August 2021. Bitcoin is a digitally created asset held electronically, similar to a digital photograph or document, and does not deteriorate over time. The traders attentively guard the value of bitcoin on how it fluctuates from time to time. Cryptocurrencies vary in features and objectives, as subsets aim to solve some of the perceived challenges of Fiat currency and aspire to become a form of money to make payments or store value. 

Inspired by the revolution started by Bitcoin, many organisations formed their digital currency. Most of these currencies circulate intrusted crypto trading platforms, such as the Pattern Trader website. People worldwide have already been exchanging bitcoin for goods and services, speculating that bitcoin will have a determined value. Citizens, however, understand that Bitcoins can not replace government-issued currencies like the US dollar as they need to pay for their taxes and other government fees using the official currency. It is the upgraded way of buying and paying for things that we would like to have. Bitcoin has way more buying power compared to before. In 2010, Laszlo Hanyecz, a Florida resident, spent 10,000 BTC on two pizzas at Papa John's Pizza. The transaction was the first time someone used BTC for a business transaction with a real company. Nowadays, a bitcoin is worth 49,597.10 US dollars, so technically, it was the most expensive pizza ever sold. Another essential of this digital coin is that it is divisible and portable. You can send any quantity of bitcoin a lot quicker than shipping or sending cows or bars of gold to purchase something.

Most beginners opt to start investing with cryptocurrencies, learning methodologies and practising trading on crypto platforms; although, technical traders always remind the public that crypto trading is risky. Despite that, others take the challenge and see market volatility as an advantage. Nowadays, crypto enthusiasts are more courageous in investing since many mentors or coaches hold their hands along the way. 

The emergence of bitcoin private in the industry has expanded the opportunities among many traders. They are able to have multiple investment options depending on their goals and priorities. But deciding which crypto asset to take is not always an easy choice. There has to be a proper assessment of the pros and cons, taking into account the market stability and potential growth. A good choice for your trading and investment journey is the Bitcoin Evolution app.

As of January 2021, there are more than 4,000 cryptocurrencies in existence. Each one has its own unique advantages from the developer’s perspective. But the truth is, standing in the market would distinguish profitable crypto from a losing one. For investors, it is very crucial to exercise prudence when making such a decision. It’s like any other business venture, and you have to be certain that the risks are manageable and the gains are high. 

Why Can Bitcoin Private Be A Good Choice? 

Essentially, bitcoin private was born out of community-driven initiatives way back in March 2018 from the existing bitcoin and Zclassic hard fork. The developer’s main goal for introducing this new crypto in the market is to combine the inherent privacy features of the Zclassic crypto with the security, flexibility, and popularity of bitcoin. These combined features enhance the network by having transparent and shielded transactions. For instance, the sources and destinations of all funds and amount values are transparently and securely stored on the blockchain. On the other hand, the shielded transactions keep the data into a special section of a block, allowing verification among users but very difficult to decode for any third party. 

For users who value privacy and anonymity, bitcoin private can be the best choice. It has specific technology that guarantees better security and quicker processing than other cryptos like bitcoin. Despite this tight protection, the coin’s database remains open-source, allowing viewing and verification among participants. There are also no intermediaries during transactions between users, given the decentralised system where it operates. 

What Makes Bitcoin Private Different? 

Enhanced security and privacy is what bitcoin private offers among crypto traders. It gained much prominence in the middle of the 2010s, but eventually, some technical issues led to the decline of transactions. Problems on speed, cost, and energy consumption have arisen as higher transaction volume resulted in backlogs. Some analysts have considered this dilemma as evidence that bitcoin cannot still stand to become a unit of exchange in its current state. Like bitcoin, the total coin supply for bitcoin private is also set at 21 million. While its platform maintains anonymity, all transactions can still be traced in actual scenarios. Likewise, despite keeping all the data private, it is possible to identify users with their public keys. To address this matter, bitcoin private worked on merging bitcoin’s protocol with the privacy features of Zclassic. Presently, users can generate either public or private addresses, allowing redemption of transactions to either address type. 

Examining The Status Of Bitcoin Private

During its initial year in the industry, bitcoin private was widely welcomed due to its privacy and security features. It ranked 46th when it was launched and had a market share of around $550 million. Eventually, it struggled to make progress for several factors, such as pre-mining of 96.6% of its total amount of tokens with only 3.4% remaining for miners. 

The present status of bitcoin private on smaller exchanges is not as good as it was then. In fact, just a year after its launching, it already faced struggles to survive in the industry. According to recent reports, the crypto was given an “F” rating on the industry’s asset score. However, it confronts uncertainty with several delistings from its remaining exchanges. 

Important Note

Bitcoin private is one of the thousands of cryptocurrencies in circulation today. Like other virtual assets, it confronts issues affecting its stability and growth in the market. Investors have to acknowledge that the crypto industry is highly speculative and unpredictable. Meaning that the value of digital currencies may spike or plunge over time depending on several factors. Exercising prudence in crypto investment is always a good idea.

Robinhood’s third quarter revenue jumped 35% to $364.9 million compared with $270 million in the third quarter of 2020. However, the trading platform still missed Wall Street estimates of $423.9 million. 

Average Revenues Per User (ARPU) was down 36% to $65, compared with $102 in the third quarter of 2020. Robinhood’s annual revenue forecast of almost $1.8 billion missed Wall Street estimates of $2.03 billion. Following the results, Robinhood shares sank by around 8%. 

The company says crypto activity "declined from record highs in the prior quarter, leading to considerably fewer new funded accounts, a slight decline in Net Cumulative Funded Accounts, and lower revenue in the third quarter of 2021 compared with the second quarter of 2021."

Robinhood had been previously warned of “season headwinds” as the industry moved into the second half of the year, which could lead to lower revenues and significantly fewer new funded accounts.

On Friday morning, bitcoin was up 2.5% to trade at $58,884. The cryptocurrency’s all-time high currently stands at around $62,000, which it reached back in April of this year. The world’s second largest crypto by market cap, ethereum, was up by around 4% to trade at $3,753.

While the SEC is yet to make any comment, there has been widespread speculation on the SEC approving bitcoin ETFs, prompted by a tweet posted by the SEC’s investor education office on Thursday. The tweet said, “before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.”

Meanwhile, Bloomberg reported that the SEC “is poised to allow the first US bitcoin futures exchange-traded fund to begin trading in a watershed moment for the cryptocurrency industry”, with the article citing people familiar with the matter.

How to secure your pension using cryptocurrency?

The idea of retirement is changing quickly. People are no longer content with working for the same company for decades and then living on a modest pension. Many invest their money, so they can retire early and ensure their retirement funds are much more substantial. If you are up for this, you need to have a good understanding of how to get good returns, and why cryptocurrency as a type of investment is becoming popular. 

Inflation is a silent killer

Bank savings accounts don't work anymore. Interest rates around the world are approaching 0% as banks try to stimulate the economy. That means you earn almost nothing for placing money on deposit. It gets much worse than that. The financial crisis in 2008 and the coronavirus pandemic are only some of the events that make governments print more money than ever. 40% of US dollars in existence were printed in just 18 months in 2020/2021, which inevitably leads to inflation. Prices of goods and services will increase over time, effectively making your money decrease in value. 

The combination of 0% interest rates and huge money printing means that the old retirement playbook no longer works. If you want to grow your wealth with compound interest over time, you need to invest in other assets. One asset that is immune to inflation is cryptocurrency. 

Benefits of cryptocurrencies as an asset

Cryptocurrency has caught the attention of retirees because of its immense returns over the last few years. Investing $1,000 in Bitcoin in October 2016 would have got you a 1.57 BTC, which now amounts to almost $79,000. If you invested the same amount in Ethereum in 2016, it would now be worth about $300,000. These returns on investment are ridiculous. It's why there are so many Bitcoin millionaires in the world. So, what is driving such insane growth in the value of cryptocurrencies? The first reason is the growth of the crypto market. It is expanding quickly, and those that invest early reap the rewards. Crypto still likely has a long way to go in this regard, as the technology has not made it to the mass adoption point yet. 

However, there's something else going on. Bitcoin and many other cryptocurrencies have a tightly controlled supply. There are only 21 million BTC that can ever exist. This is written into the Bitcoin protocol and will never be changed. Because of this limited supply, the coin is immune to inflation from money printing as we discussed earlier. In fact, Bitcoin is deflationary in nature, meaning when you hold it, prices will seem to deflate relatively to your currency. This is a great thing for you as an investor. 

Another benefit of investing in cryptocurrency is that crypto assets are weakly correlated with other traditional assets. Price changes in the stock market or currency markets don’t automatically bring cryptocurrency prices with them. This means cryptocurrency is a great way to diversify your investment portfolio. It works as a defensive asset to hedge against crashes in other areas of the economy. 

Your retirement plan

If you want to add digital assets to your retirement investment portfolio, you’ll need a plan to do it successfully. The first step is to get started. Cryptocurrency is still growing in value quickly, and the earlier you can get in, the better. The market may go up and down after you buy, but remember: this is a long-term investment. Try not to get too caught up in the ups and downs of the market. 

If you're new to cryptocurrency, you'll also need to educate yourself. Investing in crypto is a little different from other assets. There are some technological and legal hurdles to overcome. These may be very easy or difficult, depending on where you live. You can follow many crypto influencers to learn more about cryptocurrency. Or, you can also take some of the many online courses to get familiar with specific cryptocurrencies. 

The most important thing when investing for retirement is to diversify. When you're going for the long term, anything can happen in the markets. Having all your eggs in one basket is a terrible idea when looking for good returns over decades. So, don't put all of your pension in Bitcoin. This means diversifying beyond crypto (have traditional assets like stocks, gold, etc. in your portfolio) and also diversifying within crypto (having multiple cryptocurrencies in your crypto portfolio). 

Risks of long-term investments in cryptocurrencies

Keep in mind that cryptocurrency is a risky asset. Many people have made a ton of money in cryptocurrency, but just as many have lost considerable sums of crypto, too. Cryptocurrency is volatile and can suddenly crash in value. This happened many times in the past. Cryptocurrency is also vulnerable to hacks and theft if you don't look after it properly. Then, there's a simple risk you might 'lose' your cryptocurrency by losing your “keys” (like your crypto password). If this happens, it's gone forever. Many governments haven't yet officially decided on the legal status of cryptocurrency, so the legal risk also exists. If you want to invest in crypto for retirement, you're going to be a pioneer. No generation has done this before. The risks are real, but the rewards can be very large. 

Cryptocurrencies on a retirement account

In some countries like the USA, you can already save cryptocurrency on your self-directed Individual Retirement Account (IRA). They work just like regular IRAs, except a self-directed IRA allows you to hold alternative asset classes like cryptocurrency and real estate.

One of the biggest advantages of having crypto as a retirement investment is the diversification of your portfolio. The more diverse it is, the more protected your account will be in case of any market downturns. With the crypto market growing in popularity each year, there is also a high chance that it will bring you large financial benefits if you invest in it now. Amongst the main disadvantage of having cryptocurrency as your retirement investment is its high price volatility. Take Bitcoin as an example: in December 2017, its price dropped to $14,000. Although the price increased and reached new heights in 2021, many might pick a more stable alternative to crypto.

Conclusion

Investing for retirement is getting trickier with time. Gone are the days when you can just leave your savings in a bank account and earn high interest from the bank. Now, inflation is silently eating away at the savings of those that aren't aware of it. Cryptocurrencies are a new inflation-proof asset class that provides extremely high returns for long-term investors. Just be prepared for a wilder investment ride than other long-term assets. 

In July, the European Central Bank (ECB) announced its plans to launch a digital currency. In response to a rise in online payments and the potential threat that could come from others issuing a digital means of payment, the ECB has decided to press ahead with its own digital currency. This aims to help protect its monetary sovereignty by attempting to limit the use of rival means of payment.

This will not be a quick process. The next two years will be spent on design and tests, followed by a launch three years later. However, the announcement highlights that traditional fiat currency won’t be the sole payments method in years to come. Of course, this move does not mean the same will happen for the UK, but with Rishi Sunak and the Bank of England making warm noises about digital currencies, it’s unlikely the UK won’t follow suit.

Will Digital Currencies Work as Cash Replacements?

Of course, there are many questions swirling around digital currencies – namely if they’ll be a digital version of cash, if they will eventually replace cash or just simplify cross-border payments – but the fact of the matter is cash appears to be becoming digital, meaning banks need to get ready, even if the day-to-day reality could be years away.

Taking a step back from this new development, it’s fair to say financial services was already in flux, with the pandemic turbo-charging many of these shifts. Previously, banks, building societies, pension providers and wealth management had defined roles within the market, and whilst there was some interaction between the providers, people had their pots of money and tended not to move them around. In short, loyalty mattered. But this, like many other aspects of financial services has now changed. New entrants are flooding the market and offering platforms that bring vendors together thanks to Open Banking enablement. Therefore, consumers are flooded with choice. It’s now simple to amalgamate pensions or to transfer ISAs to get a better rate. Plus, with digitalisation, self-service is now positively encouraged. One clear example being online brokerages disrupting the investment space and allowing consumers to own snippets of companies, instead of requiring payment for full shares. Consumers are used to a digital financial life – so why not extend this to currency?

The world is moving towards a more digitised way of life – and banking, payments, savings and investments are certainly part of this shift.

No matter where a company sits within financial services, it’s clear that if digital currencies become reality, firms will need to accept them, which throws up multiple issues. Integration with fiat currency is perhaps the most pressing.  However, the growth of cryptocurrencies over the last five to ten years and their recent acceptance by large institutions, shows there’s a clear trend. Financial portfolios should no longer be cash, bonds or equities – a small exposure can be digital. For me, this coupled with the concept of digital Pounds, Euros, Dollars or Yen, signals it’s time for banks to start thinking at the very least what measures should be put in place to lay the foundations for adoption. Surely commercial entities could benefit from showing customers they’re ready to take action, and providing an alternative to investment platforms as a source and store of these assets?

But what’s required? Here are five key aspects which can help determine a starter strategy.

1. System resilience

Like any fiat system, digital currencies would need to be considered critical national infrastructure – meaning uptime and defence are impenetrable 24/7, 365 days per year. Aside from this requirement, the new system would need to be protected from cyberattacks, whilst also handling high volumes of transactions. Systems should be able to process transactions immediately (or as instantaneously as possible) along with having strong privacy protections.

For banks looking to support and facilitate a lot of this traffic, leveraging blockchain seems the most logical choice, as the roles they will play in these transactions will be different to a normal transfer. Whilst money may well flow from one account to another, banks will also likely be responsible for updating the record of who owns which Central Bank Digital Currency (CBDC) balance. Of course, technicalities are still to be worked out as to how money will move around, but it’s likely the CBDC itself would be a cash-like claim on the central bank. This way, the central bank avoids the operational tasks of opening accounts and administering payments. Banks can continue to perform retail payment services, meaning there are no balance sheet concerns with private sector intermediaries. This in turn helps boost operational resilience, as this architecture allows the central bank to operate backup systems in case the private sector runs into technical outages.

2. IT infrastructure

The potential introduction of digital currencies will be a testing experience for many – especially while we don’t know if it will come to fruition, or how it will work. Inevitably that will lead to a lot of speculation. One thing is for sure though, it may well require an overhaul of technology to integrate it, which will have repercussions for the IT stack. Unfortunately, technology to support such initiatives are likely to be considered ‘new’ to the majority of existing financial service organisations.

It’s well known that many banks struggle with legacy technology. They are not alone in that and big names across other industries have the same problem. The problem the banks have is that they’ll be the ones facilitating most of the transactions, whereas other players (retailers, for example) will mostly be receiving them. Whilst I don’t believe integration won’t be a problem for newer neobanks, they are in a far stronger position than their older rivals. Now is the time to get on the front foot and start thinking about what transformation will be required to help set the traditional banks on the right path. This includes safeguards which have been a criticism of cryptocurrencies – how to implement anti-money laundering protections, so the same due diligence a traditional banking service provides is applicable to its digital twin.

3. Centralised vs decentralised finance

The whole concept of digital currency is an interesting one, based on the fact they add an element of decentralised finance to the country’s monetary policy. Of course, they will need to comply with current protocols, but they’ll also challenge how these protocols work.

To enable peer-to-peer transactions, digital currencies will need to make use of centralised governance frameworks that are authoritarian in nature — i.e., controlled by a single body. However, centralised blockchains are slower. Decentralised solutions like distributed ledger technology could make transactions quicker and more streamlined. To achieve widespread adoption, transaction speeds need to be efficient (much like an online bank transfer) otherwise consumers will not want to switch.

Decentralisation would also enable individuals to own their own wallets (akin to cryptocurrencies) and have their own private keys to help bolster security. This can help avoid data breaches and reduces risk. If a hack were to occur, it would stop one, single large fund being stolen – just a single person’s funds. Whilst this is a terrible scenario, it would be catastrophic if one pot were accessed. It would undermine any faith in the system.

4. Payments

Simplifying cross border payments could provide benefits in terms of e-commerce, travel and the labour market. However, it will have significant requirements, such as aligning regulatory, supervisory and oversight frameworks, AML/CFT consistency, PvP adoption and payment system access. The eventual international adoption of digital currencies is also likely to proceed at different speeds in different jurisdictions, calling for interoperability with legacy payment arrangements. Whilst this sort of information will likely come from G20 discussions, banks need to start addressing how to facilitate this and how this can be achieved within the current stack.

5. Consumer adoption

Whilst not a technical point, banks will likely share responsibility with the Bank of England in communicating the launch of any digital currency and how it will work. Provision and service is a key differentiation. We also need to acknowledge that the recent volatility in cryptocurrencies may make consumers wary of adopting digital currencies, which impacts their adoption. Being able to clearly communicate how digital currencies will integrate with current offerings and the benefits of this early, will help with customer uptake and acquisition.

Although the adoption is still conceptual, thinking about potential customer provision and how it might be integrated into current platformification/product offerings can help with service design and ultimately, user experience.

The world is moving towards a more digitised way of life – and banking, payments, savings and investments are certainly part of this shift. Financial institutions have had to manage this evolution already, so in some ways, a digital currency is a logical next step. For it to survive, however, the necessary infrastructure must be present for it to thrive, which banks can provide if they put the necessary building blocks in place now. The change will not happen overnight, or potentially in the next five years, but to win the hearts and minds of customers, provision will need to be seamless – placing customers at the heart.

In the past weeks, Binance has come under pressure from regulators across the world due to concerns over the use of crypto in money laundering and the risks it poses to consumers. In June, the FCA banned Binance from conducting any regulated activity within the UK and placed numerous requirements on the platform. 

In a document dated June 25, the FCA explains: "Based upon the Firm’s engagement to date, the FCA considers that the Firm is not capable of being effectively supervised. This is of particular concern in the context of the Firm’s membership of a global Group which offers complex and high-risk financial products, which pose a significant risk to consumers.”

A spokesman for Binance said that the crypto exchange platform has fully complied with all the FCA’s requirements and that it will continue to engage with the watchdog to resolve any outstanding issues. In Wednesday’s document, the FCA confirmed that Binance’s UK arm was not currently carrying out any regulated activity within the country and had not done so for over 12 months.

However, the FCA also said that it sent two requests for information about Binance’s wider global business model and its stock tokens. In the document, the UK watchdog said: "The FCA considers that the firm's responses to some questions amounted to a refusal to supply information.”

As the popularity of Decentralised Finance (DeFi) proliferates, blockchain developers seek to provide new opportunities for investors using a novel structure of finance. Synthetic stocks, which grant users exposure to numerous assets while eliminating traditional barriers to entry, are among the latest forms of such innovation. In essence, synthetic assets refer to the tokenized clone of traditional financial assets. This ‘clone’ rests solely on a blockchain, however. Generally, synthetic assets can represent tech stocks, currencies, commodities, and even precious metals. Since they are blockchain-based, DeFi has become a home to these assets. In fact, the integration of blockchain technology which brings automation and removes the need for intermediaries is what makes synthetic assets so innovative. Courtesy of the blockchain, traders can enjoy exposure to traditional assets without the need to worry about the drawbacks a centralised platform brings. In addition, the decentralised nature of DeFi largely removes the troubles commonly emanated from regulatory bodies. Do Kwon, CEO and co-founder at Terraform Labs, the company behind Mirror Protocol, emphasised the nature of the quickly developing space:

“DeFi is so powerful in unlocking financial services for disenfranchised people around the world. It’s better to move fast and break things.Waiting for fragmented regulatory frameworks to crystallise before innovating is counterintuitive.”

How Synthetic Assets Work

Similar to derivatives in traditional finance, synthetic assets are digital assets with their price pegged to other real-world assets—such as TSLA or AAPL. Also referred to as “synths,” these assets track and provide the returns of traditional assets without requiring access to the real-world asset. 

Since synthetic stocks are derivatives, their value is derived from an underlying asset through smart contracts. Therefore, one can use these assets to trade the movement of price and value of traditional assets.Synthetic assets are typically created in the form of ERC-20 smart contracts that run on the Ethereum blockchain. They are different from options and other forms of traditional derivatives in that they tokenize the relationship between the derivative product and the underlying asset. 

On the other hand, traditional derivatives are financial contracts that create terms for an asset and its price. This allows DeFi users to leverage synthetic assets in the use of various trading strategies. For instance, hedging, which is a popular strategy in binary options trading, allows users to offset losses and manage risks by taking positions in derivatives. Such strategies are also used in DeFi's world of synthetic assets.

Advantages of Synthetic Assets

Synthetic assets carry a number of unique advantages. While there are no specific citizenship requirements to participate in the stock market, there are certain needs that investors must satisfy. Non-US persons must provide identification documents, pass Know Your Customer (KYC) screening, and comply with a number of laws that are intended to protect US interests. 

However, synthetic assets feasibly provide investors of any location or jurisdiction exposure to the price action of stocks, commodities, and currencies. To trade these tokens, users would hardly need any of the requirements to enter the US equities market. This makes synthetic assets a favourable alternative for foreign investors experiencing barriers to entry. Moreover, synthetic assets are openly tradeable and transferable, meaning anyone can send and receive them using standard crypto wallets. The only need is access to the internet and a bit of technical know-how. Since DeFi is always on, synthetic tokens can be traded 24/7. This is in great contrast to traditional markets, where trading is limited to specific days and specific hours.

In addition, with synthetic assets, there are no central party restrictions or risks. This is in stark contrast to the recent reddit-fueled GME drama when thousands of retail investors were unable to sell select securities due to restrictions imposed by stock brokers such as Robinhood. In such cases, these controlling parties can halt or even execute trades—keeping their primary interest in mind, without prioritising the trader.

Disadvantages of Synthetic Assets

Probably the most noticeable drawback of these tokens is that they never grant ownership of the underlying asset. A trader can earn profit and get exposure to the price of an asset, but this is merely a representation of the actual real-world asset. Therefore, synthetic assets holders do not obtain shareholder rights, votes, or access to dividends (if applicable).In addition, at times, scalability might also become an issue since DeFi is largely in an experimental phase. When minting synthetic assets, users should strive to choose the most suitable blockchain.

Despite being powerful, Ethereum is still prone to scaling issues and network congestion. Though they are typically much faster, transactions can take up to four hours to process via Ethereum, with average transaction fees breaching $20 throughout a number of days in early 2021. This is in stark contrast to the traditional payments world where credit card payments are facilitated seamlessly, showing the adolescent state that blockchain technology continues to remain in.

Lastly, DeFi is very vulnerable to hacks and exploits. Despite disrupting legacy finance, decentralised finance is still in the preliminary stages. In other words, no matter how cautious a project might be, a single breach can lead to the loss of all funds. One recent hacker stole more than $600 million in digital assets—though they were later returned as the “white hat” hacker prioritised the development of the network over his own riches.

Still, all of this is also true with synthetic stocks, which are—after all—a DeFi project.

Popular Synthetic Protocols

The most popular synthetic protocol in terms of total value locked is Synthetix, with over $1.8 billion in total value locked. Synthetix, which is the biggest derivatives protocol on the Ethereum blockchain, was the first project to introduce synthetic assets and bring this innovation to DeFi.

Synthetix reflects assets in the form of “sAssets” on the blockchain. As of now, the platform supports over 30 synths which range from cryptocurrencies, fiat currencies, indexes, and commodities like gold. The project also aims to add synthetic DeFi tokens for popular protocols like Aave, Uniswap, Polkadot, and Compound to its list of offerings.Following Synthetix, the second most popular synthetic asset protocol is Mirror, with over $1.7 billion in TVL. Mirror Protocol, which aims to grant everyone intuitive access to global markets, mirrors traditional assets in the form of “mAssets.”

These mAssets are a representation of the real-world asset that is pegged at a 1:1 ratio. Currently, the protocol reflects 14 real-world stocks on the blockchain. These tokenized assets include mTSLA, mTWTR, mNFLX, mAAPL, mAMZN, mGOOGL, mMSFT, and more. Other more prominent synthetic asset protocols include Uma, DAFI, and DEUS. Each of these projects offers a range of different synths, including stocks, currencies, commodities, and more. 

Conclusion

While there are many advantages to synthetic assets, there are also many downfalls and risks. Perhaps the most likely user of synthetic assets would include an individual who faces significant trouble when trying to access traditional securities through a broker such as Robinhood. For the investors who do not face such barriers to entry, it will likely take some time before the benefits of synthetic assets outweigh their risks—which are not entirely present in the traditional financial realm.

In simple words, Margin Trading or Leverage Trading refers to the usage of borrowed capital for investing in cryptocurrency. If you are interested in dealing with cryptocurrency, leverage trading is ideal for you. It helps you to borrow capital from brokers to raise your buying capacity and offer higher profits. If you want to learn more about leverage trading, how it works, the pros and cons associated with it, keep on reading. 

 What Is Leverage Trading In Crypto?

 Leverage Trading in Crypto denotes a tool that allows investors to make spot transactions (purchase and sale) with the help of borrowed capital from brokers. Usually, these funds exceed the account balance of the investors. Therefore, it is a perfect way of maximising profits by increasing purchasing ability. And the best part of this trading is that the investor can opt for this trading with a small amount of money. For general trading, you can't even imagine that! If you take an instance, a trader who enters a leverage trading with a $100 margin can trade up to 10 x margins, i.e., $10,000 margin size. However, you should note that Leverage Trading is subject to high risks, which can eventually lead to huge losses. That's why beginners are advised not to opt for this type of trading, as many experienced traders undergo big losses. However, experts in regular trading can invest in smaller amounts for margin trading in crypto.

Why Do Companies Invest In Margin Trading?

 Companies that pass through capital deficiency can use borrowed capital from brokers to use in production. This acts as a revenue booster. Although, the risk also increases in case the business is not getting as much return as expected. Thus, there's a huge chance of ending up receiving more liabilities than assets. By now, you may understand that Leverage Trading acts as a two-edged sword. Here, not only your investment amount strengthens, but also your risks! This is because leverage trading in Crypto can only be appreciated if the market condition flows as expected. If it flows in contrast, it's not intended at all.

Top Exchanges For Crypto Leverage Trading  

Here is a detailed list of the most familiar leverage trading cryptocurrency platforms used for buying and selling online assets using leverage. This assessment is based on several factors, including features, usage, leverage amount, fees, client assistance, and obscurity.

1. Binance 

Since its formation in 2017, this platform has undergone skyscraping development. Right now, it is the world's biggest digital currency exchange platform with 1.4 million transactions/second. A user can use Binance leverage trading in android or iOS mobile devices. The easy user interface and smooth functioning make it the most used trading app. The app will allow you to check profit and loss, along with getting information about trade history. To avail of the Binance leverage trading facility, you must complete the KYC, i.e., identity verification, and most importantly, your native country must be excluded from the blacklist of Binance. Just be aware that, recently, Binance has stopped providing margin on AUD, EUR and GBP.  

Features:

• Almost 200 different cryptocurrencies are used for trading
• Leading cryptocurrency exchange platform
• Facility to earn interest on cryptocurrency in the savings accounts of Binance 
• Competitive deposit and withdrawal rates 
• Able to Execute and manage orders
• Offers leverage up to 10 xs and 125 xs on spot transaction and derivatives trading, respectively. 

 2. ByBit

Established in 2018, this exchange platform ( both long and short coins) is specialised for derivatives trading. To access maximum liquidity for margin trading exchange platforms like Binance futures and Bybit are ideal. Moreover, beginners can easily use the ByBit mobile app for its smooth user interface and use its insurance funds to get over losses in case of bankruptcy. Based in Singapore, it has over 2 million active users. 

Features:

• Fastest developing a cryptocurrency exchange platform
• Offers 24/7 client support in multi-languages
• Allows leverage up to 100x
• Zero server downtime
• Guarantees return of the total cost of financial loss in case of system error or server down
• Facilitates with a risk management tool
• Processing ability 100,000 transactions/second 
• Stop loss and take profit order through a single click

 3. FTX

If you want a cutting-edge crypto exchange platform, FTX is the ultimate destination for you. Formed in mid-2019, this particular platform allows insurance funds and an exceptional amount of liquidity for its users. US residents need to use FTX.US as FTX is not applicable to residents of the USA. Featured with 3 tier liquidity rule, FTX allows numbers of marginal tokens. Keep yourself updated with all borrowing rates, as this usually alters every single hour. 

 Features: 

• Offers a large variety of leverage tokens
• Can access at first without identity verification or KYC 
• Facilitates withdrawal capacity up to $2,000 on day basis
• Pro-level user interface that is available both on mobile and desktop
• The facility of trading directly on index futures
• Available to both crypto and future trading

 By now, you can have a thorough idea of the world's best crypto leverage trading platforms. However, as these exchanges deal with a huge amount of money, the risk of money theft also increases. Therefore, be cautious on these platforms while dealing with any kind of leverage or day trading. On the other hand, the largest pros of using these above platforms are providing exceptional security features like 2-FA authentication.

Final Verdict

 In the ongoing phase of a worldwide pandemic, using Crypto Leverage Trading is the finest way of earning digital money. However, users need to be aware of hackers to protect their used crypto exchange platform from unwanted hacking. For ultimate security, keep your money at these exchange platforms for as short a duration as possible. To keep your money safe, get your profit withdrawal by using a renowned cryptocurrency hardware wallet. 

At the starting point, leverage trading seems a little bit daunting. But once you gain skills, you can be able to deal in a high yield market. Before opting for cryptocurrency trading, make sure to invest your valuable time to understand the unique features and risks associated with it. After immense research, you can learn the basic concepts of leverage trading from numerous sources, but invest your hard-earned money in the right platform. Investing smaller amounts in leverage trading would give you enough space to learn and reduce the risks of huge losses. 

Over time, and certainly in the past year, with the drastic increase in value, cryptocurrency has changed in many people’s minds from a salacious method of money laundering to becoming a serious contender for investment. More and more novice investors are dipping their toes in the metaphoric water and even large brands (Starbucks, Amazon, PayPal, to name a few) are starting to accept cryptocurrency as a form of payment. As more money is being converted into cryptocurrency, these types of assets are becoming more prevalent in insolvent estates. So, what does that mean for creditors of companies or bankrupts who have invested in cryptocurrency?

Because cryptocurrency is decentralised i.e., it’s not tied to a country’s currency, nor is it regulated — it is viewed as an easy method of defrauding people. However, that is not necessarily the case. All transactions are public knowledge, meaning ownership can be verified and traced. Because there isn’t one controlling body, everyone is accountable to everyone. This transparency is a security feature in itself as it is difficult to hide in plain sight, as it were.

There is, however, a hurdle of learning new terminologies and understanding a new process. As a result, many people shy away from dealing with it. This can seem daunting and is certainly a barrier to entry for some. However, it isn’t a reason to ignore what could potentially be an immensely fruitful asset pot. Professionals must now start to change their perspective on cryptocurrency, particularly in relation to company investments in insolvency estates, and adapt processes to enable us to deal with cryptocurrency more effectively. Gone are the days of solely dealing with traditional assets.

So, how should a cryptocurrency be dealt with in an insolvent estate?

First, how can we identify that the company has cryptocurrency? There are various indicators to look out for to help identify whether the estate may have a cryptocurrency, such as:

• Transfers to exchanges as indicated in the company bank statements
• Finding a USB key within the books and records of the company
• Running everyday keyword searches such as “crypto” or “bitcoin” against the electronic records
• Identifying seed phrases written down within the company records
• Asking the directors

Once it becomes apparent that the company holds cryptocurrency as an investment, the insolvency practitioner (IP) will need to take steps to secure and preserve their investment. Just like with any other asset, the IP will need to act quickly to ensure the cryptocurrency is secured correctly. Identifying and locating the key is a critical step, but the IP shouldn’t assume that someone else doesn’t have a copy of the key. A prudent IP should transfer the cryptocurrency into a secure wallet of their own (on behalf of the estate) or to an agent. Under the new FCA legislation, cryptocurrency held on someone else’s behalf must be held by an approved agent, who could secure the assets properly, holding the assets offline and obtaining appropriate insurance.

However, what if it's discovered that the company entered into a cryptocurrency transaction, but the asset isn't held within its wallet? Just with the dissipation of physical assets or cash, the transfer of cryptocurrency away from the estate could be considered an antecedent transaction. Further investigation would be required, as with any other claim, to review whether the IP can substantiate a claim to an evidential standard to be successful in clawing back the assets for the benefit of the estate.

How can cryptocurrency be realised once it has been successfully recovered?

It is important to note that much like fiat currency, all exchanges have their own conversion rate. Because there is no interbank offer rate, there is no standard for what that conversion rate is. As we have seen in the last year, the rate has fluctuated drastically, much to the investors’ delight. In order to mitigate any criticisms and ensure the best price is being achieved for the asset, it would be prudent to compare exchanges and conversion rates. Alternatively, another option would be to place the cryptocurrency into an auction, which has an element of protection for the IP from any potential criticism as the value is simply the highest bid, rather than an exchange.

Given the increase in use and popularity of cryptocurrency, it is likely we will continue to see a huge investment shift towards it, particularly now with the backing of so many blue-chip companies. It is not the fraudsters’ friend, as it can sometimes be thought, and is traceable if you have the skills and know-how in dealing with it. IPs need to embrace the move toward cryptocurrency as a more prevalent asset class and look to expand their training and understanding of the toolkits available to them, whether that is through normal recovery action of an asset or the tracing of assets leading to a claim for the benefit of the estate.