feed2list wird zum 01.01.2019 seinen Dienst einstellen
Suchen und blättern in Finanzen · Geld
   Suchtreffer: 100
website Best Bitcoin Exchange
feed text Quick 4 top cryptocurrency picks for 2018
Wed, 27 Dec 2017 00:00:00 +0100



EOS is an ethereum-based project launched by Dan Larimer (BitShares, Steem, BitUSD).

From the EOS website: "is software that introduces a blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications." It is meant to be the solution for business dapps that cannot be launched on top of ETH or BTC platforms.

EOS is essentially an operating system with more user-friendly features - accounts instead of addresses, advanced account management and some technical features for more efficiency.


Cryptocurrency that uses tangle instead of blockchain. Tangle is a clever solution to scalability - if you want to broadcast transation you need to verify two more from someone else. This way, the more people (or machines) use IOT to transact the bigger is the scaling capacity of the network.

In reality there are many hiccups in this system, such as the need to reattach addresses, unconfirmed transactions and such. Dev team is very active though.



Non-blockchain cryptocurrency for fast and cheap transactions. Similar value proposition as with Iota but still in development.

Read on medium.com: IOTA vs RaiBlocks


With the ongoing development (ETH fork, sharding for bigger transaction throughput, anonymity) the fundamentals are strong for ETH in 2018.

Link to ETH Improvement Proposals on github

text Bitcoiner communities and chats
Fri, 13 Jan 2017 00:00:00 +0100

Bitcoin traders - Most known communities

Web / Tradingview

Web or apps / Reddit

  • The image: It’s like 4chan found a Bloomberg terminal wait no that’s actually /r/wallstreetbets sorry
  • The reality: Sound information in the daily discussion, healthy skepticism, mods distinguish between community bonding offtopic posts and fluff offtopic posts. No memes, no bots. FUD occasional but strong. Bonus: If you mention an exchange name two or three times in a comment someone from support will come over as they all have a mention monitoring API.
  • Good to read: Polycephal_Lee, YRuafraid, OracleSeven, chewtoy, jeanduluoz, yolotrades, Merlin560
  • Link: /r/bitcoinmarkets

Telegram / Whaleclub

  • The image: Crypto heavy but we trade the pulse of whatever is moving (BTC, Forex, Oil, SPX500, Equities)
  • The reality: Bunch of guys riding the ego trip.
  • Good to read: Theo Goodman, BTCVIX, MrJozza
  • Link: https://telegram.me/joinchat/BpTIDjwx_ayUl5zN84uQBw

List of these and all other communities


It’s mostly bitcoin communities but you’ll find altcoiners too, most notably a monero group. Most of the communities are on telegram.

The largest crypto trader groups:

Bonus: The first rule of /r/wallstreetbets is you don’t talk about bitcoin.

wallstreetbets and bitcoin - legacy investors feeling salty

text Profit-taking
Thu, 09 Jun 2016 00:00:00 +0200

So we find ourselves at the point where roughly half of the camp says nu paradyme or TLDR BTFD cuz ATH soon-ish.

Roughly the other half says down we go or the whales want to keep the price low it’s absolutely obvious.

Then there are few brave rational ones like MrJozza here who says we might be at the beginning of the next bubble which is cool but for fucks sake have some risk management so that you don’t end up selling too late.

Well by risk-management is meant some fiat profit taking.

With futures you will need to look at walking out of positions step by step to lock in profit, increasing margin so that effective leverage might be something like 5x, not 50x, for longer trades, so thatyou don’t get wrecked too fast. And if you are lucky, you should be withdrawing coins and not leaving them on the exchange - see cold storage or bitcoin wallets.

With spot trading risk management means actually cashing out, either for you to spend or to buy back (hopefully) later and cheaper.

Hassle free to receive fiat for Bitcoin?

For one reason or other, you might not want to use bank accounts. There’s plenty of faster and easier way to get the payout, and you can still decide later whether you want to cash out (and maybe use the bank after all) or if you are buying back in.

Prepaid cards that accept Bitcoin

Here’s the single best option - AdvCash.

Virtual or plastic debit card, low fees, tons of pay-in and pay-out options, generous limits and verification not mandatory. As for buying in, there are BTC payouts, or ewallet payouts that can in turn send money to BTC-e. You can also send the money to a debit card that is linked to a bank account, or you can use that debit card to buy BTC or ETH at Coinmama.

Sign up here More on Advcash

Another option is the well-known wallet provider Neteller.

Their Net+ card can be topped up from the Neteller account which accepts Bitcoin deposits currently with fee of 1%. The card is widely accepted, albeit prepaid. The first virtual card is free. Cons are the limits, verification will be probably demanded sooner or later. Also, buying back in is likely via the route of bank account withdrawal or localbitcoins.

Check the fees  More on Neteller

Possibly better option than Neteller would be Wirex.

The VCC is linked to a regular exchange which means you can switch between fiat and crypto absolutely on the fly and under one roof. Probably the most hassle free way ever if you think you will buy back in, while your fiat payout options are quite limited.


text What the hell is The DAO
Tue, 24 May 2016 00:00:00 +0200

So. Let’s get this over and done with.

DAO vs The DAO

There is a difference between DAO and The DAO: DAO is a general name for all these … things. It means Decentralized Autonomous Organization and it is supposed to be something like a commie startup that has no boss or CEO. There are just shareholders who can propose things. For each proposal there is a vote. There is also a limit - to keep the vote reasonable, some percentage of shareholders has to show up and vote.

The DAO is one particular "company" (for legal reasons called "Organization" instead of "Company"). There were already similar organizations dating back to 2013. This particular one was founded by Vitalik Buterin, the creator of Ethereum. It gained attention because it raised $100 million dollars worth of ETH in venture capital which, indeed, doesn’t say anything about the value or future of the project.

Voting in DAO

Because the organization is autonomous anyone can become a shareholder. In crypto space shareholders may be called token holders since the token is what you buy to be able to participate in the network of the organization.

Every organization has their own token. They have monetary value and might be tradable on some altcoin exchanges. That attracts speculators who might only want to trade the token and are not interested in the organization itself. On top of that, The DAO tokens (which can be bought for Ether) were on early-bird sale for some time. As people bought the tokens for The DAO they first had to buy Ether to do so which was probably behind the recent ETH price surge.

Voting and The DAO

This is a very good article writen by someone who took part in BitShares which operates pretty much on the DAO principle. (He calls DAO the DOA which is short for Dead On Arrival)

The author explains the biggest problem with BitShares were the people. It is ironical since the whole model of DAO is meant to remove human leadership and thus to remove the human factor from startup business. Yet it crops up anyway: BitShares token holders didn’t want to vote. Like, 90% of them didn’t want to. There wasn’t much difference for them either way and voting would take time, maybe reading something up etc. So nobody did that.

The DAO takes this problem even a step further: It is more convenient for token holders to NEVER vote. Once can buy the DAO tokens, watch for their price and then sell them ("reclaim" ETH, whatever value the token might have at the moment). However, one cannot do that once one have voted. If you vote in The DAO you cannot get Ether for your tokens.

Of course, anyone who is in only for the profit and not for the future glory of all mankind (which I hope is most people) will never vote. What happens if 80% of token holders will not vote? Not only proposals shall not pass but also, The DAO will earn a free profit on a fee that is collected for every proposal where 80% holders won’t place votes.

Seriously. The link once again. There is also some talk on the effects on the ETH price (pump during presale phases, dump at the profit taking).

Currently, the ETH dump is expected to start around 28 May. Let’s see.

The DAO and Slockit

There is a press release on The Merkle that explains how is slock.it related to The DAO. This relationship is the basis of what should bring The DAO revenue.

Problem is that slock.it is a bit out of the loop, as of yet at least. From my opinion it is absolutely idiotic - the world needs German blockchain startup so that people can stop thinking - but then that’s just me. See image above and make your own decisions. It’s related to the blog from the last link where he literally says that the solution to this situation is the whole world adopts electronic locks with blockchain access, not that he pulls his head out of his arse.

Unfortunately that is only to say it is far-fetched, not to say it has no future.

  • There is money in it. Someone "just gave it to them" but nonetheless, it is there. Bad idea backed by a lot of money might fly. Good idea backed by little money will probably not.

  • It is trying to remove the need to think. These things tend to be very successful in human society: Most people like to live within a structure of timetables, customs and rituals; not needing memory since it’s all in their iPhone; not needing to solve problems since it’s been solved by someone else and indexed by Google.

That means, this in my opinion idiotic idea definitely has the potential to actually happen one day. One day. Go figure yourself what’s the risk of this particular instance being a scam scheme designed to make the very few winners take it all and say "the world was not yet ready".

How Reddit’s Bitcoin Traders See DAO

  • Difficult to get any value out of that investment.
  • …If you leave out the initial fad/pump without reasons, that is.
  • Fundamentally, program of DAO that show up seem too future to be reasonable. It all looks a bit like a way to hypescam non-techie people.
  • Nobody seems to want DAO token other than people who bought them on sale and now will be looking to sell them for quick profit.

One example for all:

"…Where can I short it?"

Learn more

From Slockit Slack:

I’m thinking though the dynamics of DAO activities on the price of ETH. I don’t want to overthink it, but it seems to me the following forces would be at work regularly, presuming even a moderate level of success of proposals over time: 1. DAO funding of proposals leads to funded companies needing to convert ETH to fiat somewhere (DAO funds in ETH, co’s need fiat). This pressures ETH price down (without new ETH demand appearing). 2. If the DAO accepts a high number of proposals early, this force amplifies as numerous co’s must do the same thing. 3. Only later, as co’s return rewards to the DAO, they must convert that fiat back to ETH, resulting in upward pressure on ETH price. This could be dramatic, depending on ETH float available. 4. Over time, the rewards pressure that flows in grows and provides an increasing demand for ETH and therefore upward pricing pressure on ETH. In short: ETH price is under pressure for awhile, then recovers and grows meaningfully. Finally, one buffering effect (unknown) that could mitigate the price increases: That co’s funded currently own ETH and can pay rewards from that pool for some time. Thoughts on this (admittedly limited) analysis?

text Best Exchange to Trade with Leverage
Sat, 14 May 2016 00:00:00 +0200

Margin trading is getting popular from both sides: Some people run lending bots to earn passive income, other people borrow to trade with more money than they have in their trading account. In fact, the USD swap stats on Bitfinex show USD loans are near the all time high at the time of writing this article (31M USD, May 2016). It’s partially loans for Bitcoin long positions, but partially also loans to trade LTCUSD and ETHUSD now with the ETH roll related to the DAO project.

Why would someone borrow money to trade? Believe it or not, borrowing is not evil. To name one good reason for all, leverage lowers your exposure. You don’t have to send all money you have to an exchange that can go bust tomorrow for all you know. With the current lending rates it won’t even cost you an arm and leg to hold a leveraged position for a month or two.

Ways to borrow money to trade

Where do you borrow the money?

  • Some exchanges with margin trading offer "swaps". Other users, willing to lend out, provide the funding. You automatically get a loan below your specified maximum daily rate as you open a position in margin trading section of the exchange. Once it’s open you get to see your margin costs. By closing the position the borrowed money plus interest is automatically sent to the person who provided the funding without you knowing who that was.
  • Other exchanges don’t have margin swaps yet users can still margin trade. That is the case of Kraken. They have their own funds to lend out to users and don’t bother with the p2p lending system since it is more complicated to regulate.
  • Futures exchanges lend money free of charge (without interest). OKCoin in China has their own fund allegedly open to some chosen investors. From practical point of view it’s the money of the exchange. Cryptofacilities trade Bitcoin forward meaning the funding is from counterparty - the platform doesn’t invest in user margin.
  • Last but not least, people do borrow to trade on Localbitcoins or Bitstamp, none of which provides any form of margin trading. Traders need to borrow elsewhere and very often you will see trading loans on BTCJam. Rates are variable.

Available leverage

The most widely used leverage is ~3x. That is currently offered by Bitfinex. On Poloniex you get 2.5x.

However Bitcoin futures go higher

  • 10x and 20x leverage on OKCoin
  • 3x-50x on Cryptofacilities
  • up to 100x on BitMEX

While high leverage is certainly a way to earn money faster it is also an easy way to get rekt margin called and wipe out your whole account.

Some numbers

How much must the price move to get liquidated?

  • Leverage 3x

You are fairly safe with leverage of about 3%. On Bitfinex the maintenance margin is 15%, on Poloniex 20% but in both cases that is calculated from the total equity in your margin account. You can just transfer more BTC or altcoins from your exchange or lending accounts as long as you have some free money on there.


Open short ETHBTC

-10 ETH @ 0.02155 (=0.2155 BTC)
of total equity 0.16 BTC

Req 15% of 0.2155 ~ 0.04 BTC

Liq Price ETH ~ 0.028 BTC

You see that with 3x leverage the price would need to double to get you liquidated.

Moreover: You can place a stop order to limit your losses

  • On Bitfinex you place your limit long or short and after that a stop in opposite direction limiting how much you want to risk to lose. Other than that, placing another limit in opposite direction will get you "stopped" in profit. On Bitfinex you cannot have two positions in the same market in different directions, meaning they will cancel each other out. In the image above you have a margin short on ETHBTC. Once the ETH price sinks to 0.02019 BTC the waiting long limit order will get filled from the active short one resulting in no open position and profit.
  • There is STOP-LIMIT order on Poloniex though the interface is a bit dodgy so good luck with that.

If you still get close to the maintenance margin your position will be completely liquidated (you are not getting noticed and all of your position closes at market price).

  • Leverage 10x

The 10x leverage is about the healthy limit for positions that you intend to hold longer without babysitting them at all times.

You can get 10x leverage on OKCoin futures. A price movement of about 10% will get you liquidated which in these days on BTCUSD market doesn’t really happen often.

  • Leverage 20x

With 20x leverage you are turning into a gambler. Movement of 5% will liquidate you and you should know that 5% is the usual size of a big pump/dump that occurs just about every other week. Such an event usually slays most of heavily leveraged trades so don’t forget to set your alarms with enough reserve - these things happen very fast.

If you are in the situation where the market moves against you like this and your liquidation level is getting close, here’s what you do on Okcoin:

  • Press the + button next to your margin numbers
  • Increase margin. That will transfer some more money from your futures account into that position, moving your liquidation level further. If the market returns back to your direction soon enough you will be able to withdraw that added margin back and carry on holding that position until (hopefully) green numbers.

  • Leverage 50x

Ultra-high leverage like this is a new feature on Cryptofacilities. Users now get standard account and TURBO account. Standard one offers 3x leverage, the TURBO up to 50x.

The advantage on Cryptofacilities is that if you are getting close to maintenance margin you still have 24 hours to top up your account with more Bitcoin and avoid getting liquidated.

If you fail to do so, your position still doesn’t necessarily get liquidated completely: The system only liquidates the minimum to restore your maintenance margin.

This way, if you are low on money or simply not at the screen but the price dips or spikes shortly before moving in your direction, you might still end the trade in profit.

By the look at the table below you see why a redditor called CF just another casino: A movement of 0.5% already triggers partial liquidation. On BTCUSD pair it is roughly a movement of 2.25 $ which is borderline noise. You cannot possibly predict that exactly enough which means the risk is absolutely outsized. I reckon 50x leverage and more is good for well tested algos and bots though.

The cost of getting rekt

The sad truth is that when you don’t close your losers in time or when the market moves to rapidly you get to lose a lot.

Let’s see some numbers on "OKCasino" OKCoin

Open 20x ~ 20 BTC
long @ 464$ on futures market
on OKCasino futures
-> 19.9 BTC worth of contracts
 = 92 contracts
 = 100/464 = 0.216 per cont

Liq level:
~439$ on futures market
 = ~5% movement against you
 = 100/439 = 0.228 per cont
-> you lose ~5*20 ~ 1 BTC

If you set to risk 0.2 BTC max
= stop at ~1% movement (~5$ from 464$)

  • Know how much you want to risk
  • Set either a stop or a price alarm. You get price alarm with free Android apps like TabTrader or BitcoinParanoid, although not for futures. For that it is better to use cryptowat.ch - the alarm is so scary it will wake you up, guaranteed. You can set it up simply by clicking the price axis (a yellow tick appears, see picture above).
  • Always have a way to get to your account in an instant if you have open positions!

People from the US

If you are American, you probably already know most exchanges won’t let you trade on high margin - futures exchanges have pretty much all that limitation.

OKCoin, BitMEX or Cryptofacilities - all of them are closed for people from the US. That is, in theory. In reality, OKCoin doesn’t need you to provide any documents to get verified meaning you can get away with VPN. Other platforms need full verification and you probably don’t want to fake that.

Another good point is that traders are (righly) afraid OkCoin might pick them out based on DNS leak or whatever, asking them to prove they are not American and seizing their funds if they fail to do so.

If you are American and want high margin you can still go to BTCC. They offer 25x leverage and don’t have restrictions against American people. It is a Chinese exchange so you will get good liquidity, BTCCNY is anyway the place where the volume is made now.

text High Frequency Trading in Bitcoin?
Tue, 12 Apr 2016 00:00:00 +0200

HFT and market manipulation

Discussion about HFT started as people noticed recurring patterns in the BTC charts. It looked a little like automated HFT patterns to some.

What is HFT

So what is high frequency trading? In the original sense of the word it’s automated trading done by organizations that gain faster access to market information than anyone else. It’s about detecting that someone placed a big limit order and then jumping ahead the queue.

It cannot be done by human at all, it needs to be servers with the fastest possible data link to the exchange.

Does this happen on Bitcoin markets? To some extent.

Here you have a fine explanation from Reddit:

One possible (shady) way happens when you are offered a third party service that has a relationship with the exchange that brags you will get your coins cheaper than any maximum you set. In reality, you will always get your coins just a little bit cheaper than your maximum was but you would be able to get them way cheaper if you had access to the same sell offers as the service that buys the coins for you. (oversimplified, read the original comment)

The title image on this article comes from this order book visualization. They explain the patterns are not what one should call HFT. These are trading bots and automated strategies and people who are making the market. It’s not something that occurs in microseconds. So far it’s probably not feasible yet to even attempt HFT. The market is not deep enough, it wouldn’t work smoothly.

But indeed, it’s a different thing if you are partnered with an exchange. If you buy 1 bottle of beer it might cost 1 quid but buying 100 will have either much lower cost per bottle because wholesale or much higher because more demand than supply.

If you Google HFT in Bitcoin…

…One of the first results will be an old Quora thread that talks about HFT being impossible in Bitcoin because a Bitcoin transaction last long. That’s clearly bullshit since within a single exchange you don’t get "normal" transactions. There are no coins transfered, not even when trading on margin - these days most exchanges implemented more secure and faster internal solutions and there is only a symbolic transfer of ownership (keys).

Another argument was liquidity. That is true on some exchanges for scalping algorithms. Scalping is a very short term trading, often against the trend or sideways - when you are shorting local tops for pennies of profit, etc. Bots must be configured particularly for this, and some traders only turn them on for the time the close to ideal conditions last - when there are no abrupt changes. Another very important thing when scalping is zero or very low fees, because you need to make a lot of trades. And indeed, someone who will take the other side of your coin.

On Chinese exchanges none of this is an issue: trades tend to be free or very cheap and volume is largely artificial thanks to volume bots that run on behalf of the house.

See below the volume of Huobi - when volume bots took a break.

Whales and frontrunning is another matter. Every trader knows the hopeless feeling when all the TA was absolutely clear, until the whale came:


As WSJ reports, some of the U.S.’s biggest proprietary HFT traders say they see potential for big profits in trading bitcoin. Translation: unprecedented volatility, which essentially crushed all interest in Bitcoin after its peak in late 2013, is about to come back with a vengeances as such conventional HFT market rigging techniques as frontrunning, momentum ignition, quote stuffing, spoofing, subpennying and everything else in the vacuum tube arsenal is about to be unleashed on the world’s geekiest traders. (Zerohedge in April 2015)

Most awkward things tend to happen when new quarterly futures open, for instance, or even on the weekly settlement. The dangerous thing really is to follow logic and reason, at least if you trade with high leverage.

Unless you trade algorithmically, your bot is fast enough (if in nothing else then in data fetching and canceling orders) and get an instantaneous data feed. (In which 3rd party apps like cryptowatch or bitcoinwisdom tend to suck and go laggy when things get wild.)

Server locations

One thing that you will need to figure out for a successful HFT setup is where are the servers of the exchanges. When you just look at the apparent IP it will be different depending on your location because of load balancing and anti-DDOS systems.

What you need to do is to find out the location and provider of the actual server and get a VPS in the same datacenter. Not all exchanges will get you faster connect this way though. Ideally you also figure out their ISP (carrier) and also use that carrier. That should result in faster connect times.

The find-out can be as simple as asking on reddit. Or elsewhere.

If you know the IP address of the servers though you can easily tell which carrier they’re on. Put your servers on the same carrier should get you on faster connect to them.

You can actually tell the carrier NOC techs when you’re purchasing the connect that you want to be as close as possible to their public IP. A lot of times they’ll build you custom routes, just takes a phone call.

Also, if you’re ballsy call up the data center and make friends with the engineers. You’d be shocked how much you can get done with a phone call or a case of beer shipped to the break room.

When a carrier applies for a block of IP addresses, a group called ARIN hands them out. There is a publicly searchable resource to determine who owns those blocks. For a candidate IP you simply search it and likely you’ll see WHOIS data showing you the owner. Example: http://mxtoolbox.com/ARIN.aspx Let’s you punch in the IP you’re searching for. In this case I’ll use the Public IP "". The tool returns Google as the owner.

A carrier is the long distance company that sells you or a data center an internet connection. It’s just like your local cable company selling you a wire for you to connect your cable modem to, only typically a much faster wire.

If you’d like to get a competitive advantage for your bots via fast/stable API access you might just put on a white hat and call up bitfinex and ask if they have a problem with you putting your trade bots in the same data center. They’ll likely sell you premium access for a fee and make your life a lot easier. They’re not Disney villains, just dudes trying to make a dollar for their families. They make money when you make money. A rising tide raises all boats etc.

Barring that, hire a network engineer for a short term contract. /r/networkengineering crawling with sharp dudes.


BitMEX server location

They are hosted at AWS Ireland.


Bitfinex server location

It appears they have a datacenter in Italy.


Bitstamp server location

AWS us-east-1


Websockets - the API for HFT

The reason websockets are so fast is that it’s a single connection (ideally with a test for interruptions) and that it goes in both directions within the single connection. There still is some delay, but lower than with traditional REST API which uses separate POST vs GET requests.

Websockets are used quite a lot in the Bitcoin space:

Some exchanges only have REST APIs but gradually most platforms are getting to set up a websockets server.

Users can set up websockets clients and get info in both directions as fast as possible. On most exchanges you get WS normally, on CEX you need to ask for it, but it is also otherwise available in mainstream trading bots.

More Reading on HFT in Bitcoin

Actual code:

Bitfinex Referral Code 5egV78YtlC

HFT on stock markets

VPro Backlight on High Frequency Trading

There is a couple of documentaries by vpro on high frequency trading on YouTube. This one is a basic one, explaining how big stock trading has moved to data centers.

Here you get some more information if you are interested.

In case you really have a lot of time and want to watch even more, this video features real quants that were around the subprime mortgage crash in the US. It explains the CDO derivative a little bit better than The Big Short movie: The issues with the mathematical model was that it didn’t count with different borrowers defaulting could be correlated events.

What does it mean for the little guy?

It looks like everyone is running a bot in the Bitcoin space already. There’s a great trust in anything automated, described also in this fintech article - if there’s no human there’s no one to screw you. But it’s BS if you think whenever it’s computed it cannot work against you.

That’s why we read scripts before we run them (or at least we should). Scripts are faster ad smarter than people but they were written by people, these people either might have had some intentions or they might have also been careless.

Take a look at Poloniex lending right now. A month ago the daily rates were above 0.5%, now it’s 0.02% and dropping. Why? Look at the order book: Because everyone is running the bot that sets your order a tiny bit below the market so that it gets executed as soon as possible. As everyone is doing that now (look at the order sizes, it’s the chunks that a bot makes) the rates keep dropping.

So what are you to do with that now, as the little guy?

Go with the flow.

Margin trade, it’s cheap now.

The same goes for sudden dips, parabolic spikes and pump&dump scheme that comes with large volume transaction. Just trade it.

text Investing & Locking the Value of BTC
Wed, 09 Mar 2016 00:00:00 +0100
  • Buying gold with Bitcoin
    • BitGold - Questionable reputation, no BTC payouts.
    • Vaultoro - BTC/GOLD exchange, probably a good option
    • JMBullion - BTC payments but not payouts
  • Buying fiat - If you don’t want to hold a position in Bitcoin or in any other commodity you might find it better to get fiat.

  • Bitcoin Futures - If you don’t want to mess with fiat you can hedge Bitcoin with low-leveraged futures.

The first thing that a trader comes up with when looking for a solution to Bitcoin volatility is diversification. That’s easy, you don’t have to hold Bitcoins. Stick some in altcoins that are dipping of before the rise but remember it’s a blatant gamble since altcoin markets are too small to be predictable.

The second thing one naturally comes up with is probably gold or some other commodity that is (incorrectly) perceived as of a stable value. That said, gold is probably not a bad investment but be prepared you need to a/ trust a third party to keep your gold, b/ trust your gold exchange that there actually is some gold and c/ probably not being able to sell back for Bitcoin. Thus far, only Vaultoro is real BTC/GOLD market in both directions.

If none of this looks like what you are looking for, you might want to sell BTC for fiat (which with Bitcoin VCC can be somewhat "reversible") or to hedge Bitcoin USD value with futures.

Buying Gold with BTC

If you are a Bitcoin trader and not only want to invest Bitcoin but will also want to make profit on that investment in Bitcoin, be careful here. Selling gold is a service like any other and while some providers will let you buy gold with Bitcoin, they might not let you sell it for Bitcoin.

The only pure Bitcoin-gold market right now, standing completely outside the banking system, is Vaultoro.


BitGold has a reputation of a suspicious place.

There were discussions on Reddit whether BitGold is scam or not but failed to reach other point that the BitGold staff Emily who showed up on Reddit avoided answering questions she was asked:

It looks shady and kind of raises the question if all of the gold in third-party storage actually exists. I have not ventured into this to find out, to be honest.

BitGold requires full AML/KYC for their customers. First step is to verify your phone number which then determines the country of your address.

The important part, and the biggest disadvantage, is that while you can use Bitcoin as a fast way to deposit money, you cannot possible sell gold back to Bitcoin:


Vaultoro Gold Exchange is the only network where you only operate in gold vs. Bitcoins. They have public audits to prove their holdings, as explained on Reddit.

What’s the public audit? Well, as you register you get your public account ID. That ID (a random string) is published at audit.vaultoro.com along with your Bitcoin and gold holdings. Everyone can check their own holdings, users don’t have to be logged in.

From cointelegraph.com:

Joshua Scigala is reported to have lost a chunk of change in Mt. Gox’s collapse, and he went on to found Vaultoro as a "glass books" bitcoin-gold exchange.

The exchange uses three types of bitcoin wallets. They include "a hot wallet that is hosted online and used for daily trades, a warm wallet for auditing purpose that holds an amount of BitcoinCT r: 8 slightly above the amount in the hot wallet, and finally, mutisignature cold wallets, which hold the majority of users’ funds."

Vaultoro’s vaults are located in Switzerland, and are audited bi-annually by BDO International. No government papers are required to purchase through Vaultoro unless the user buys more than US$5000 worth of gold per day. Services are not offered to anyone from Iran, Syria or North Korea.

Your gold is stilled stored and insured somewhere and redeeming it is not so easy. Vaultoro owns mass of gold so you need to pay the expense of cutting off your slice and sending it to you. The costs of this will be individual.

On Vaultoro you don’t need to verify yourself, you just cannot sign up from those three forbidden countries mentioned above.

  • Unverified accounts are limited to 5000 USD.
  • Unverified users cannot redeem physical gold.
  • Verification takes an ID and a proof of residency not older than 3 months.

But finally, because Vaultoro is a bitcoin-gold exchange, you can sell gold for Bitcoin too. You even can use Coinigy, the Bloomberg-style trading platform, to trade BTC/GOLD.

Sign up here!


JMBullion is a respected provider of not only gold but all precious metals. They are reputable so naturally it was good news for many traders that JMBullion started accepting Bitcoin too. However, they are no bitcoin-gold exchange like Vaultoro.

Bitcoin into fiat

If you don’t want to invest in gold or ony other commodity, you might find it better to just sel Bitcoin for cash.

One stop shops

If you just want to pay out with no intention to use that money for trading again, you can either withdraw the money to your bank account or to PayPal. BitcoinLTD and other places are recommended in this article.

Reversible exchange


If you want to get fiat but you still want to keep that backdoor of switching back to Bitcoin easily, you need Wirex card (formerly E-Coin). Their prepaid card has this option. Keep in mind the exchange rate will be different for each exchange (to and from fiat) since the market price will probably have changed.

Sign up with this link to get 25% discount.


Another option is PerfectMoney. It is a centralized eWallet similar to PayPal or Skrill but payments are not reversible. With PerfectMoney you cannot do chargeback.

That makes PerfectMoney more Bitcoin-friendly as selling BTC for PM money is not as risky as for PayPal or Skrill money. People on LBC won’t charge so much above market and generally the transfer will be a lot easier.

BTC to PerfectMoney and back - Your options

Bitcoin Futures

Using Bitcoin futures to hedge the Bitcoin dollar value is the most advanced way to do this. It is probably of some use for you only if you plan to accept BTC in your business or if you plan an expense in BTC in, say, three months time.

So, if you rent a VPS or two with quarterly payments, if you also pay your VPN subscription around that time or if you hire people for Bitcoin, hedging with futures could help you quite some with your finance management. At least if the price for those services is pegged to USD.

##The gist of hedging Bitoin dollar value:

You are expecting to get certain amount of Bitcoin on certain date and you will need to use those coins to cover other expenses as soon as you get them. The expenses are all pegged to a fiat currency.

You want them to have certain dollar value, possibly the one they would have today. That means you sell a future contract that will be mildly leveraged.

By selling the contract you open a short position and by leveraging it (say, 3x) you don’t need to put in the full amount of hedged Bitcoins (since you probably don’t even have them yet).

##The day you receive your Bitcoin comes:

  • If their dollar value is higher than you needed you are fine. Your future contract is in red numbers but the profit from increased value should compensate it.

  • If the dollar value of BTC is lower than you need, you use the profit from your future contract to add the rest of the dollar value you need.

If you want to learn more about futures try

As for hedging, the best platform is definitely CryptoFacilities but sadly, not available for US identities.

text Bitcoin Exchanges: Official locations
Tue, 23 Feb 2016 00:00:00 +0100

Bitfinex CEO JL van der Velde speaks to #Taipei #bitcoin association about Blockchain Alliiance at @eigerlaw office



JL van der Velde, iFinex Inc. (On the featured picture)

Domain name:

Registrant Name: - Jean-Louis
Registrant Organization: iFinex Inc.
Registrant Street: NA
Registrant City: Road Town
Registrant State/Province:
Registrant Postal Code: 00000
Registrant Country: VG
Registrant Phone: +62.9963419

Bitfinex is owned by the HongKong company iFinex founded in 2012.



Company headquarters in Beijing, China.


Registrant Name: mingxing xu
Registrant Organization: Lekuda
Registrant Street: Room 464,Tower 7,
Huihuang building,Haidian District
Registrant City: BeiJing
Registrant State/Province: BeiJing
Registrant Postal Code: 100085
Registrant Country: CN
Registrant Phone: +1.18611869680



Jesse Powell, Payward Inc.

548 Market Street
Suite 39656
San Francisco, CA 94104-5401
United States



Their website footer: Poloniex Inc. Wilmington, DE, USA

Domain: Tristan D’Agosta, Poloniex LLC
121 Wisconsin Ave Ste 101
Whitefish, Montana
59937 US



Bittrex LLC
6077 S. Ft. Apache Rd
Suite 100
Las Vegas, NV 89148




Nejc Kodic, Bitstamp Ltd.

Weingerlova 8a
Sencur 4208



Domain Owner:

Alex Luts
Owner  : CEX.IO LTD
Owner  : LONDON
Owner  : GB


CryptoFacilities (Futures)

Crypto Facilities Ltd

Company number: 9172128

50 Cambridge Road,
Barking IG11 8FG,
United Kingdom

Crypto Facilities Ltd (FRN 630784) is an Appointed Representative (AR) of Met Facilities LLP, a company incorporated in England with registered number OC373244 and registered address at 40 - 44 Newman Street, London W1T 1QD, United Kingdom. Met Facilities LLP is Authorised and Regulated by the Financial Conduct Authority (FRN 587084). This AR relationship covers our regulated services only.



Website is operated by Hit Techs Limited, UK. It is a UK company founded in 2013:

Hit Techs Limited
Kemp House
192 City Road
London, EC1V 2NX
United Kingdom

Hit Techs Limited (hereinafter "The Provider" or "HitBTC") provides exchange services related to virtual currencies under the registered trademark "HitBTC" (domain name: http://www.hitbtc.com) as a business service provider. The Exchange Platform and business providing tools (hereinafter "The Platform") are leased under a PaaS model from Hit Techs Limited.

The client compliance and risk management and cyber-security services are provided independently by Hit Techs Limited by partnership agreement with the Provider; these services are not the integral part of the Platform.



BitMEX (Futures)

Arthur Hayes, BitMEX - Bitcoin Mercantile Exchange owned by HDR Global Trading Ltd.
Republic of Seychelles corporation

BitMEX has headquarters in Hong Kong.

The domain name bitmex.com is owned by Samuel Reed who is also co-owner of HDR Global Trading Ltd. The domain was bought on behalf of HDR Global Consulting.

Registrant Name: Samuel Reed
Registrant Organization: HDR Global Consulting
Registrant Street: 2nd Floor, Capital City,
Independence Avenue P.O. Box 1008
Registrant City: Victoria, Mahe

BitMEX (You’ll get 10% off fees for 6 months with this link)

Nobody knows


The only available info is historical domain registration address:

Svetleichi Dmitri
13a, Sobachkina str.
Pushkino 854785


text All About Bitcoin Lending
Sat, 13 Feb 2016 00:00:00 +0100

Risk involved

If you lend money in any way: Yes it is risky.

Margin Trading

If you lend Bitcoin on trade exchanges, your money goes on margin trading.

Risk of lending to margin traders

If a trader borrowed to trade but the market moves against them, at some point the position will be force-closed by the system.

But it can happen that the market will move too fast for the system to close the position in time. In that (unlikely) case the trader would get a negative balance. The borrowed funds would not be repaid which means the lender loses too.

BTCUSD market is typically not so volatile. Altcoin trading can pump and dump tragically though.

Preventing this risk?

There is no way to prevent this risk. On top of that, on trade exchanges all lending is processed by lending bots. You cannot choose whom you lend the money:

  • A trader places margin trade order with a maximum interest rate above which they don’t want to go.

  • The system funds this order from available margin loan offers. It chooses the cheapest way to fund the trade.

  • The position is either closed by the trader with profit/loss or force-closed by the system. If nothing goes wrong in the system the position is closed at the point where available funds still cover the trade expenses.

The only way to minimize the risk is to split your money and lend different currencies on different places.

Peer-to-peer Bitcoin Loans

Even low risk plans count on defaults: There will always be someone who doesn’t pay back.

That’s why autoinvest bots split your deposit into very small chunks and lends these.

You need to do a very high amount of contracts to get the statistical effect and reach the expected value.

Bitfinex Margin Funding

If you open a trading account on Bitfinex you automatically have access to exchange trading, margin trading and margin funding.

The latter are indeed Bitcoin loans to other traders.

On Bitfinex you can lend out USD, BTC or LTC. You can choose the section on the Margin Lending tab, see picture above.

It makes sense, people borrow to go long (USD) or short (BTC) and there are a few altcoin traders too. (Though on Bitfinex, if you are used to the BTCUSD market, you should know the altcoin volumes are lower.)

How to lend money on Bitfinex

By default you get three different types of wallets on Bitfinex:

exchange, trading, deposit:

  • To lend money you need to move the currency you want to lend to your deposit wallet. Transfer between your own wallets is free and instant.

  • Then go to Margin Funding > [currency]. Check out the common interest in the order books in lower section of the page and set your rate to something reasonable. You want your money to actually get borrowed.

  • The listed rates are already in percentage per day.

    • The percentage changes, sometimes it’s too peaceful around and people want to borrow cheap. Sometimes Bitcoin is rallying and people are willing to pay more to get a loan, expecting a thick profit anyway.

You can either choose to lend your money at once and get them back once the contract is over, or you can choose to autorenew. This way your money will be offered for loans again as soon it is available.

Your interest will be auto-offered too. That means your profit should grow since you will be offering more and more money over time.

Autorenew on Bitfinex:

  • The autorenew option doesn’t guarantee your money will be in a loan at all times though. Sometimes interest rates drop and your pre-set rate will get too high for the market situation.

Funds in loans are blocked

During the time your funds are borrowed they are blocked. You will not be able to stop the loan if you get to need the money.

The funds will be still shown in your total balance in deposit wallet but not as available balance.

  • If you want to lend out some money without caring about it too much you can set fixed rate (something average) and autorenew.

  • When you decide it’s good time to stop doing that, turn that autorenew off and wait for remaining contracts to finish.

What are hidden offers

If you have a lot of money that you want to chuck in Bitfinex lending you can opt for hidden offer.

  • Hidden offers are still regarded by the system but are not listed in the order book. That prevents other people from setting a rate a tad lower than yours and picking offers before you.

  • The fee on hidden offers is higher (18% instead of standard 15% fee in interest earnings that is charget by Bitfinex.)

Bitfinex margin lending interests

By and large on Bitfinex you are quite well off if you lend out USD. To lend out BTC or LTC, you will find the interest rate is typically very low.

Interest rates for lending out USD are fairly high.
You can expect somewhere between 0.1% and 0.5% per day.
The rates for lending out BTC and LTC are,
on the other hand, usually very low.
Around 0.005% per day is "normal".

(Bitfinex Wiki)

Bitfinex Lending Bots

There is a PHP bot for lending management making sure your money is out at the high possible rate. Since the script is in PHP you can easily run it from a web server if it’s secure enough. Download from GitHub.

If you don’t like PHP, there is another lending bot written in Go. Download here.

Check your payouts

There have been rumors on Reddit that Bitfinex underpays margin funding earnings. It occurred repeatedly, the most recent post is from January 2016.

As you know, what is on Reddit is always true /s.

Nonetheless it is a good idea to check your earnings in any case.

Since there are records of all your transactions you don’t need to check your interest earnings very often like every week. There will always be an opportunity to contact the support.

How to check Bitcoin interest earnings on Bitfinex

  • Click on your username. In the dropdown menu, choose History and Reports.

  • It will get you to a site with links to the web versions of reports. There are all your exchange trades, margin trading, used margin funding and offered margin funding. To check interest earnings you want offered margin funding reports.

  • Your offered funding is divided into used and unused loans. You are supposed to be earning interest on all money that has ever been borrowed by a user. If the user actually traded the money makes no difference.

  • On the right hand side of each report is an icon that will export your data into CSV so that you can manually recalculate the rates.

  • Remember that the rate is already a percentage per day. Bitfinex takes a fee of 15% on your interest earning (or 18% if the loan offer was hidden). If you signed up with a referral code this fee will be lower by 10%.

  • If you calculated your expected return beforehand with correct interest rate and all fees but your expected return is still lower, check if your money was used all the time through. Chances are there were days your money was just sitting there not getting borrowed.

Bitfinex: Dummy numbers

Started with: $5000

Offer funding for 2-30 days max, autorenew, fixed rate 0.1% daily.

  • Part of your funding gets borrowed by someone who requested $4000 for 30 days. The money sits somewhere reserved for 30 days, earning your interest.

  • Rest goes into smaller loans and is not borrowed at all times.

Your interest is 4000*(0.001*30-0.001*30*0.15)=$102 after fees. Plus some change from the $1000 on smaller loans.

Earned: ~2% monthly profit (Not bad.)

Started with: 5BTC

Offer funding for 2-30 days max, autorenew, fixed rate 0.005% daily.

  • Your bitcoin gets into smaller contracts, borrowed for 20 days in total.

Your interest is 5*(0.00005*20-0.00005*20*0.15)=0.00425 BTC after fees.

Earned: ~0.09% monthly profit (Not much.)

Poloniex lending

You might have several reasons to want to lend out Bitcoin and not USD.

  • In some countries, Bitcoin earnings are non-taxable

  • You are a long term Bitcoin holder

  • You don’t want to pay out via bank from an exchange. By converting coin into fiat you are taking a position (hoping you will be able to buy Bitcoin back as cheap as originally one day in the future)

For those of you who want to work with cryptocurrencies only Poloniex will be the best choice.

Poloniex is an estabilished exchange for altcoin trading.

Many markets over there, and a lot of money to be made or also lost.

Altcoins might be riskier since altcoin markets are at time very volatile.

How to start lending on Poloniex

Your Poloniex account comes with three sets of wallets for all currently listed coins:

exchange, margin trading and lending

  • To start lending, transfer some Bitcoin into your lending wallet.

  • Transfers between your own wallets are executed immediately (no waiting for confirmations) and have no fee.

Switch to the lending tab, you should already see your balance there.

If you check out the interest rates, you see they are not bad.

  • Either lend all at once or segment the amount into blocks of different interests rates.

  • The latter might help your offers get filled as rates fluctuate.

  • Choose if the loan offer should autorenew or not.

That’s it. The loan system is automatic, you cannot choose whom you lend.

  • A trader places margin trade order with a maximum interest rate above which they don’t want to go.

  • The system funds this order from available margin loan offers. It chooses the cheapest way to fund the trade.

  • The position is either closed by the trader with profit/loss or force-closed by the system. If nothing goes wrong in the system the position is closed at the point where available funds still cover the trade expenses.

Interest rates on Poloniex

To lend out Bitcoin you will be OK with a rate of 0.1% - 0.6%. See

Yes, that’s what you get for lending fiat on Bitfinex.

Remember that on Poloniex, Bitcoin is the fiat. Poloniex only handles cryptocurrencies and Bitcoin is the base currency of majority of the trades.

Why high interests won’t always earn you more

So you might get lucky and get a loan offer filled that has a daily rate of 0.88% and contracts for 60 days. Good on you, but to count on this is not very wise.

Usually the daily interest rates will oscillate, depends how lively the altcoin trading is. It has been more lively recently but the rates still oscillate. Also, most traders are after quick profit. They will borrow for 2 days, after that the lending system looks for a new trader that would borrow your funds.

In an ideal world your earnings would simply grew with the interest rate you offer. Your loan offers would get filled every day, your money would never stop earning, you could dictate the interest rate and there would always be a borrower.

Chart 1: Ideal lending earnings.

In the real world though your money will never be earning at all times. If you set your interest rate low, like 0.12%, you have a fair chance you will hit full 30 days activity. The inactivity is higher if your suggested interest rate is higher.

Chart 2: Lending earnings that are a bit closer to reality. You see that doubling the rate will not earn you twice as much because the offer will be unfilled for more days than a cheaper offer.

So, in any situation there will be an interest rate that will give you best returns over the timeframe, and it will not be the highest possible interest rate. You can imagine it similar to Chart 3, but note that this is just an example. The curve shows what your monthly earnings would be if the number of days where your loans are active depends on the interest rate by a simple linear relationship. With the dummy numbers used here, your maximum earnings would be with an interest rate of 0.5% daily.

Chart 3: Dummy numbers in action.

In some situation it might be better to stick with an average interest rate and just keep it open with autofill, but you might as well differentiate and always keep some money to lend at high rates. In case of a spike these offers will get filled but for the most part the money will sit there doing nothing.

Dummy numbers once again - What kind of returns are to see?

These are real returns after one month of lending without any lending bot. The account was simply checked once in the morning and once in the evening. All money went into lending, none was traded.

Initial balance: 5 BTC
Final balance: 5.1271266 BTC
Monthly earning: 2.54%
Average daily interest: 0.08%

You see that this could possibly be the worst lending result ever - the daily interest was on average far below where the coins were lent. That means most of the time the money was sitting there, not provided in a loan. Good news is that since interest rates on Poloniex rarely drop below 0.1% you will see results better than this with help of a lending bot.

Poloniex lending bots

As ideal as it gets.

While it is not feasible to check the current interest rates all the time you can have a bot that will do that for you. It is a python code that will try to spread your money in your lending wallet across the lending book offers. It doesn’t guarantee you will always get the highest possible rate but it will help to spread your money so that you will pick up the spikes.

The bot was posted on Reddit, code is available for free on GitHub.

The Poloniex lending bot in action:

On the first run it will ask you to edit a config file, filling in your API key and secret.

You can also change the default minimum and maximum acceptable interest rate and the amount of single offers to split your lending equity into. Do change the minimum, at the very least, the defult value is some 0.06% which with the boom of altcoin trading now is far too cheap.

The bot keeps waiting and calling the exchange every 60 seconds. If there is some money returned to your lending wallet it will attempt to lend them. As it makes a lot of offers that are to high to be immediately filled you have to wait a few minutes.

The lending book updates every minute, to be honest the bot gives you better chance to hit the spikes. Placing a high offer first when you see it in the web book is often already too late.

This is the result - all offers taken, rates are fine (1.498%, right?!). The default 2 day length of loan was changed by the bot to 60 days.

You can kill the bot once your money is borrowed, it only places the orders and it is not necessary to keep the bot running to have the orders active. But with the bot off you might miss returned money that could be lent again right away. It is certainly better to keep the bot running.

This is one of the ways that is as close to Bitcoin passive income as it gets. Do the math though, if you (realistically) earn 5% netto per month, you still only earn 0.5 BTC on each 10 BTC you lend.

Check your payouts

There have been no rumors about Poloniex on Reddit. Still, it is a good practice to check if you are getting paid what you earned.

On Poloniex you can indeed view your full trading history. Your lending reports are part of it:

  • Click on Orders in the upper right corner and choose to see Trading History.

  • Be default your exchange trading history will show up. Use the dropdown to select Loan Earnings.

  • Export it into CSV (Export complete trade history)

Poloniex: Dummy numbers

Started with: 5BTC

Offer funding for 2-30 days max, autorenew, fixed rate 0.13% daily.

  • Your bitcoin is borrowed at all times. (In the real world it might not be.)

Your interest is 5*(0.0013*30-0.0013*30*0.15)= 0.16575 BTC after fees.

Earned: ~3% monthly profit (Fine, isn’t it?)

Bitcoin P2P Lending

Ok, there are some people out there who don’t like the fact that Poloniex needs no verification and that Bitfinex is a Hong Kong company with servers in Milan, Italy. To some people, these things are just dodgy.

It is true that apart from borrower defaulting on payback you are also exposed to the risk that the exchange will exit scam, get hacked, go titsup and so on.

(BTW. The danger of your account getting hacked is low enough if you use 2FA. Either way, people wouldn’t be able to steal anything that is tied in a loan from your account.)

So, there are a few reasons to keep some of your money in other institutions as well.

If you want to diversify and offer loans outside of trade exchanges and make sure some of your money will not be used for speculations, you can try places like BTCJam.

To invest Bitcoin you don’t need to get verified.

  • You can either choose your borrowers one by one or opt for autoinvest.
    • Autolending will split your deposit into 100-150 chunks and lend one by one.
    • You get to choose the plan based on the risk involved - people are grouped A-D based on their risk level.
    • Some people will always default so you don’t really want to put all your money on one person.
    • Even with autoinvest plans you can still choose preferred length of loans. Shorter loans might get you to cycle your capital more. It is a time-domain layer of diversification.
  • Most people go for the moderate risk plan that should get you about 10% return.
    • Have you checked the risk levels? Basically people get labeled less risky if they sent in some ID. That’s why even low risk plan calculates with quite a high number of people who will never pay back.
  • Your money will not be earning at all times.
    • On BTCJam you don’t set your own interest rate, you are autoinvesting tiny amounts of money into everything that sent in an ID (That is, with moderate risk plan. With high risk plan you give some money to everything that asks).
    • But each loan request has a time window where it either gets enough funding or not.
    • Since people usually invest small amount of money into each person, many loan requests will not be filled.
    • Unfilled requests are canceled.
    • Your money is just sitting there, not earning an interest.

Update 3 April ‘16

Historical data of coinmarketcap. Ethereum collapsed as everybody stopped believeing in the bubble, now it is only doing small movements. Much like MaidSafeCoin or Factom, for that matter.

Snapshot mil. USD price USD
February 28, 2016 495 6.4
March 06, 2016 880 11.4
March 13, 2016 1104 14.2
March 20, 2016 821 10.5
March 27, 2016 858 10.9
April 03, 2016 915 11.6

So what more does it say than that the market cap and price are correlated?

Well, that no one is trading!

All altcoin volumes dropped and Bitcoin has been boring lately anyway. Where do you think all the coins went? Not to Bitcoin markets indeed.

Large part went to lending, where else. Interest rates on Poloniex dropped roughly one decimal place.

People, I know it’s a drag but someone will have to do the hard work of actually trading.

Have some inspiration about value of altcoins.

text Cure for Wallet Explorer
Wed, 27 Jan 2016 00:00:00 +0100

If you have enough bad luck to have been at the epicenter of political debates concerning censorship in North Korea chances are you have spotted a post uncovering transactions made from a Bitcoin wallet designated for marketing expenses.

From the point of a practical user who is not naive enough to be surprised by cheating, unfair behavior or manipulation this situation is very unsettling. It looks like linking your wallets to Bitcoin exchanges, gambling sites and Darknet is surprisingly easy with a tool called Wallet Explorer. Basically, once you tell someone your Bitcoin address (if you have a steady single address) you are potentially exposing yourself to dox for any time in the future.

Even if you think you have nothing to hide: It is better to avoid this machinery in case you have some reputation in the community. Misinterpreting information right before everyone’s eyes is not as difficult as tender-hearted geeks tend to imagine.

Luckily services are emerging out there to help you keep a little more anonymous.


Samourai is the Bitcoin wallet for the streets.

The "About" section states: We are privacy activists who have dedicated our lives to creating the software that Silicon Valley will never build, the regulators will never allow, and the VC’s will never invest in. We build the software that Bitcoin deserves.

That pretty much sums up the positives of Samourai wallet. The negatives being only the fact that the app is still being tested.

  • With Samourai you hold your own keys, you have a secure pin access and your activity is encrypted using AES-256.

  • Your wallet doesn’t have a single given address. It reuses addresses transaction after transaction.

  • In addition, Samourai will randomize the number of change outputs for each send. It also has a few other policies to make sure figuring out the wallet address metadata gets difficult.

  • There are three obfuscation levels available for each transaction, the highest one making the transaction look like a CoinJoin payment on the blockchain (that is, well mixed)
    • From Bitcoin Wiki: "A coinjoin transaction is one where multiple people have agreed to form a single transaction where some of the the outputs have the same value. A casual observer of the blockchain cannot tell which output is of interest to each sender."
  • Samourai wallet only can hold Bitcoin but offers instant conversion into Dash and other altcoins.

  • You can restore or wipe out or destroy the wallet remotely by sending a text message
Jan/Feb 16: Samourai wallet is not ready to go public yet but you can sign up as a alpha tester and download the Android app on GooglePlay.

Side note: Sentinel

Since this article will probably be of use mostly for people who care about security, it might be good to mention one more product made by the creators of Samourai wallet. It is called Sentinel and it comes handy if you have an offline wallet.

You might be using Armory offline wallet (or other wallet) for cold storage. If you have it in offline mode, it can receive transactions that you can monitor from an online device with check-only wallet. Sending transactions is a little more tedious.

Sentinel is an app that makes it possible to gather all your offline wallets and check them in one place.

It never asks for your private keys so you don’t even take a leap of faith to use Sentinel.

Here is the Sentinel Android app on GooglePlay


Another option is getting a wallet on Xapo, you have to confirm your identity to use it though. However the company is based in Switzerland. A country with good tradition in keeping private things private.

What Xapo does is it not only creates addresses dynamically. The reason is, once someone knows the address your wallet can be looked up anyway, even if you will not use the address again. Because of that Xapo does a step two as well.

Xapo: The second step involves pooling your wallet funds. As soon as funds arrive to your bitcoin wallet address, we move those funds to a common pool. This prevents anyone from going to the blockchain and seeing the amount of BTC in your addresses or discovering where your are transferring them from. Since the funds are pooled amongst other individuals funds, it is extremely difficult for someone to identify specifically where the original funds that you received were sent from.

Xapo Wallet&Vault is available as a web app or for Android and iPhone.