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Cryptocurrency FAQs

What is block chain and what is cryptocurrency? Is there a difference?

Blockchain is the enabling technology that underpins cryptocurrency. Cryptocurrency is money based on trust in cryptographic, mathematical proofs.

 

Why has block chain and cryptocurrency become so popular?

Crypto currencies are not inflationary. They are cheaper to transact and do not rely on third party involvement – it is straight peer to peer . Negative perceptions of future monetary trends have accelerated acceptance.

 

How many people are currently involved in cryptocurrency and will interest keep rising?

Approximately 16 million Bitcoin wallets and at least the same again in other crypto currencies. These figures are rising exponentially all the time. Interest will continue to rise as adoption and use continues to rise.

 

How safe is block chain?

Blockchain is based on incredibly complex cryptography. Mathematically it is safer than the chances of finding one specific grain of sand not just on earth but in the entire universe.

 

What is the difference between cryptocurrency and the money in my wallet?

The value of a crypto currency does not rely on issuance of money by governments or Central banks – hence no quantitative easing and falling value over time of your wallets content.

 

Will Cryptocurrency overtake money as we know it?

Indications are that it may eventually – growth will be exponential then explosive. Actual cash transactions are already disappearing fast.

 

What is an e-wallet?

A piece of software that allows you to transactyour crypto coins – it does NOT store them. A crypto wallet (e.g. freewallet.io) enables you to store and spend them.

 

Where can I spend my cryptocurrency?

Dell, Microsoft, Overstock, Expedia etc, all accept Bitcoin. Scotcoin will shortly be accepted in over 2000 places in UK. It was recently used to buy a flat.

 

How can I use my cryptocurrency?

With your crypto-wallet (e.g. freewallet.io)

 

Do I need to pay CGT on any gains made?

Yes HMRC treats any gains from any source in exactly the same way. Around 1000 people in the USA paid tax on their Bitcoin earnings last year.

 

Can I leave cryptocurrency in my Will?

Yes, make sure your beneficiaries get your pass phase(s) at the appropriate time. Lose the pass phrase and you lose the wallet and its contents. THERE IS NO RESET.

 

 

bitcoin vs scotcoin

Bitcoin versus Scotcoin

bitcoin vs scotcoinI’ve been busy recently with all the work going on in respect of our new private blockchain. Bitcoin of course has continued to rise (and may I say, I told you so every time it “crashed” it was going back up).

But the rise in Bitcoin has had a profound effect which is now changing the very nature of Bitcoin. The last two transactions I have wanted to do have resulted in a charge equivalent to nearly USD 5. That rules Bitcoin out as a currency, and certainly for any transaction less than around $1000. Your cup of coffee at $4 looks rather different when it becomes $9 by the time you pay for it.

Bitcoin transaction charges

How has this happened? It’s all a result of the continuing rise and success of Bitcoin. Not that long ago Bitcoin was way under $1000 – but let’s just take $1000 as the price. The other issue here is the sheer rise in the number of transactions over time – as Bitcoin has continued to soar in value, the absolute number of transactions has as well. The standard charge for a transaction in Bitcoin was (and is) 0.0005 Bitcoin. That equates to 0.50 cents per transaction at $1000 per Bitcoin. True you could pay a higher fee for a quicker transaction or a lower fee if you were not too bothered about when it was confirmed.

Now, with Bitcoin over $7000, although the standard charge is around $3.50, the problem is when you try to do this, the screen will tell you it will take 99 blocks to confirm. What? 99 blocks? That’s up to 17 hours – at least. Everyone wants it quicker so they pay 0.0006 or $4.20. That’s only 15 blocks. OK what about 0.0007, that’s $4.90, and should get you confirmed in 2 to 5 blocks. Great for Miners but absolute rubbish if you are a trader.

Beating Bitcoin charges – Scotcoin’s answer

Sadly, at the moment, Scotcoin has to suffer the same problem as we are part of the Counterparty protocol, running on the Bitcoin Blockchain. One of the reasons for changing to our own private blockchain is to get beyond this bottleneck. I’m not giving too much away to say we have tested transactions in mere seconds on our new blockchain and at a tiny fraction of the costs associated with Bitcoin. There’s still a long way to go to say that this will pertain at full scale capacity, but our transaction speed is already going to be a huge magnitude better than the 7 transactions per second on Bitcoin.

So please bear with us as we do our best to improve the world’s experience of digital currencies. We will get there and you will love it.

Your Scotcoin is now worth more!

SCOTCOIN INCREASES IN VALUE: Following a hike in the value of Bitcoin, Scotcoin too is enjoying an uplift in value… But how do it actually work?  With respected financial journalists such as Ed Conway of The Times writing headlines such as “Bitcoin could turn capitalism on its head“, economists now predict that cryptocurrency has the potential to bypass governments and the digital media giants to become the new power behind big decisions not just in financial markets but in many different areas of life.

How is cryptocurrency valued?

Simply put, cryptocurrencies are worth what someone is willing to pay for them – just as any other asset is valued, such as house prices or stocks or traditional currencies.

In the case of cryptocurrencies the value is usually derived from exchanges (very similar to traditional stock exchanges) where bids are placed for buying and selling an asset and an average value is therefore established for that stock.

As a Bitcoin backed asset that uses the Bitcoin blockchain via Counterparty, the rising prices of BTC and XCP thus increases the value of Scotcoin.  So with 1 BTC now costing over £2,000, the price of Scotcoin being based on BTC has gone up.  Effectively your Scotcoin is now worth more!

What sort of an investment is Scotcoin?

So if you bought just £100 of Scotcoin just 2 years ago, it’s now worth over £20,000.  The Scotcoin Project CIC as a non-profit company, will continue to spread the word about Scotcoin, increase the users, find new merchants willing to accept Scotcoin as a trade, and promote the use of cryptocurrencies in Scotland generally.

Where can I buy Scotcoin?

When The Scotcoin Project first launched, one of the main questions we got asked was: “How can I buy Scotcoin?”  People didn’t necessarily want to set up trading accounts and buy Bitcoin then transfer it into Scotcoin, so we set up a very simple £ to SCOT exchange.  You can access it here and buy directly from £ to SCOT:

https://exchange.scotcoinproject.com/

The EU Referendum and Your Money

Today Britain will vote in the EU Referendum. The outcome of the vote will decide whether or not we remain as part of the European Union. In the lead up to the vote, the pound sterling has become extremely volatile. The currency exchange rates, driven by the huge level of trade uncertainty have fluctuated wildly in the last few weeks. With such an uncertain future lying ahead for the pound, many are looking to find safer homes for their savings. Cryptocurrency has the potential to be the perfect safe haven.

Fluctuation of the Pound

Since the beginning of the referendum debates, the pound has steadily fallen against other currencies. It has fallen 12.5pc against the Euro, 6.8pc against the US Dollar and 11.4 against the Australian. Much of this drop can be attributed to the fear of a possible Brexit. If Britain vote to leave the EU, our trade deals will have to be renegotiated. This applies not only to EU trade deals but also to those with other countries, which we rely on EU deals to reach. Paving the way for a post-EU Britain will take time. In the meantime, many may opt to sell off their sterling to mitigate the risks posed by the uncertainty.

Buyer Behaviour

Currency outlets throughout the UK have reported a surge in exchanges since the weekend. The Post Office Travel Money has reported that sales of foreign currency have risen by 48.8%. Online purchases have surged, with a 381% rise. The majority of buyers are exchanging their pound sterling for the Euro and American dollar. Some experts have suggested that the pound could even fall to parity with the Euro.

Cryptocurrency as a Safe Haven

Given the instability that we’ve listed above, cryptocurrency is becoming a far more favourable currency option. The main reason for this is that digital currencies such as Scotcoin are not strongly correlated with either the stock market or national currencies. The same cannot be said for the pound sterling. Therefore, now would be a perfect time to hold funds in a digital currency.

Scotcoin vs Traditional Safe Havens

In times of global financial strain, people look for safe havens. Traditionally this has meant stable valuables. Basically, items which traditionally appreciate in value regardless of the global financial climate.  However, these often have many drawbacks. The most obvious problem with holding cash in fixed assets is their lack of portability. Cryptocurrency has no such barriers. It can be moved anywhere quickly and with little effort. As Scotcoin is a peer to peer system, no banks are involved. Therefore, no operating hours are imposed. You can make payments whenever you need to.

In short, your money is protected from outside political factors affecting its value. You can also use the funds as and when you need to. Digital currency such as Scotcoin offers liquidity. At present, they are also not subject to many tax impositions.

To sum up, the EU Referendum is sure to have far-reaching impacts on the UK economy. The pound sterling has already taken a hit which will only be compounded- at least in the short-term- should Britain chose to leave the EU. For those looking for a safe haven which also offers liquidity, Scotcoin presents a perfect solution.