best cryptocurrency exchanges

Edit: This list of cryptocurrency exchanges was updated on January 16, 2019 to include new developments.

Welcome to the most comprehensive and detailed guide to the best cryptocurrency exchanges in 2019. Choosing the best cryptocurrency exchange is an important part of your crypto journey. It might be the first place you ever buy bitcoin. Or if you’re a seasoned trader, you might use a bitcoin exchange to trade hundreds of altcoins.

But how do you differentiate between the options? CoinMarketCap lists at least 100 crypto exchanges all over the world, each tracking cryptocurrency prices and each with varying cryptocurrency exchange rates.

Block Explorer took on the challenge of narrowing down the options and compiling as much information as possible to help you decide. First…

What is a cryptocurrency exchange?

In its simplest form, a crypto exchange is a place to buy and sell cryptocurrencies. However, crypto exchanges are not all equal. Some are designed for beginners, while others have complex features for pro traders.

Some exchanges accept fiat currency like dollars and euros, while others only exchange between cryptocurrencies themselves.

Many are actually “brokers.” In other words, you’re buying directly from the exchange company itself. Others facilitate a real peer-to-peer exchange between crypto users.

best cryptocurrency exchanges

How to choose the best cryptocurrency exchange

We began this task with the aim of ranking the best cryptocurrency exchanges. But we quickly realized this wasn’t possible. There isn’t necessarily a “best exchange,” only the best option for you.

While Coinbase might be the top exchange for beginners, it’s not the best option for a pro trader or someone looking to trade lots of altcoins.

And while the Kraken exchange might be the best option for experts, it’s a poor choice for beginners.

Instead, Block Explorer gathered as much (useful) information as possible taking the following points into consideration:

Beginners or advanced? – We’ve split the entire list into two parts: beginner and advanced. The beginner group includes simple exchanges with easy-to-use functionality. There’s little jargon, and setup times are quick. The second group is for intermediates or advanced users. These exchanges are more powerful and have advanced features, but require some knowledge and experience with crypto.

Security – Crypto exchanges are the single biggest target for hackers. $1 billion was hacked and stolen from cryptocurrency exchanges in 2018 alone. We highlight security features like 2FA, cold storage, and encrypted email options.

Hacked? – We also highlight whether an exchange has been hacked and, if so, how they responded to the hack. Did keep it quiet or immediately inform users? This information is essential in deciding whether to trust your money to an exchange.

Number of trading pairs – We highlight the number of trading pairs available on each exchange. For beginners, a small handful of trading pairs is sufficient (to buy or sell bitcoin, for example). Advanced users, however, may wish to trade between various altcoins.

Volume – Volume is the measure of how much cryptocurrency is trading on the platform on a daily basis. It’s a relatively good indicator of reputation and liquidity.

Important note: Research suggests that some cryptocurrency exchanges fake their own volume in a bid to appear bigger. Where appropriate, we have highlighted the known offenders.

Fees – You should always understand the fee structure before trusting an exchange. How much will each trade cost and how are the fees calculated? We outline the fee structure for each exchange.

Without further ado, here are the best cryptocurrency exchanges in 2019 and beyond.

Please note: Block Explorer has no affiliation with the exchanges listed below.

Best Beginner Exchanges

Beginner exchanges are exchanges that offer a simple way to buy bitcoin and other cryptocurrencies, with as little confusing jargon and setup time as possible.

Coinbase

Coinbase

Trading Type Fiat / Crypto
Number of Trading Pairs 4
Hacked before? No
Available Countries 33
Security Features Two Factor Authentication
30d Volume (Fiat) $82,496,871.00
30d Volume (BTC) $82,496,871.00
Fees Flat 0.5% + a fee based on location and amount

Coinbase is the best-known cryptocurrency exchange in the US. It is the simplest and easiest on-ramp for crypto beginners.

The user interface is intuitive, and the design is clean and simple. You can link up your bank account or pay with a card. There’s also a deep library of guides and explainers for newcomers.

Coinbase has a limited choice of cryptocurrency options to keep things simple. However, they considering the addition of more altcoins.

As for security, Coinbase stores 98% of customer funds in cold storage, in safe deposit boxes and vaults around the world, making it relatively secure. The remaining 2% is insured in case of hacks. 

Lastly, there’s a handy mobile app to buy and sell cryptocurrency on the go.

Get started on Coinbase.

ShapeShift

ShapeShift crypto exchange

Trading Type Crypto / Crypto
Trading Pairs 940+ (Total unknown – each crypto can be traded with any other)
Hacked before? Yes, see below for transparency.
Available Countries Available to all countries
Security Features Two Factor Authentication
24h Volume (Fiat) No USD Trade
24h Volume (BTC) 34.12
Fees No fees applied, profit is made similar to how day trading is profitable.

Shapeshift is a crypto only exchange, which means you can’t buy cryptocurrency with dollars or euros. You can only trade between cryptocurrencies. However, due to its simplicity, we still recommend it for beginners. 

ShapeShift allows you to transfer currency between addresses of your choosing, rather than between accounts on its platform. It means ShapeShift doesn’t hold any customer deposits, making it relatively safe. 

ShapeShift has been hacked three times, which all occurred in the same month due to internal sabotage. The exchange was extremely transparent in what happened over the hack, with the CEO going so far as to write a blow-by-blow explanation of what exactly happened.

Get started on ShapeShift.

Gemini

Gemini bitcoin exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 9
Hacked before? No
Available Countries 15
Security Features Two Factor Authentication, withdrawal address whitelisting
30d Volume (Fiat) $19,134,737.00
30d Volume (BTC) 4,887.00
Fees Maker / Taker: Minimum 0.0% / 0.05%, Maximum 1.0% / 1.0%. Calculated on a 30-day rolling window

Gemini was founded by the Winklevoss Twins. It’s a US-based exchange noted for being a licensed platform (Regulated by NYSDFS). Gemini gained headlines earlier this year by announcing full insurance coverage for funds on its exchange and in custody.

Gemini and the Winklevoss Twins pride themselves on being fully compliant and working within existing regulations. As such, there’s a decent amount of safety from fraud and insurance coverage on this exchange. Of course, that comes at a cost: handing over a lot of personal information.

Gemini offers a decent chunk of volume, though few trading pairs compared to other exchanges. Security wise, aside from the standard 2FA, withdrawal address whitelisting is a welcome sight.

The Gemini app is also slick and easy-to-use for beginners.

Get started on Gemini.

Changelly

Changelly bitcoin exchange

Trading Type Both Crypto / Crypto and Crypto / Fiat
Trading Pairs 200+ (Total unknown)
Hacked before? No
Available Countries All countries accepted for Crypto / Crypto trades
Security Features Two Factor Authentication
30d Volume (Fiat) Not Published
30d Volume (BTC) Not Published
Fees Flat 0.5% fee

Changelly is a crypto exchange similar to ShapeShift. It is address-to-address so Changelly never holds your funds.

There’s a simple frontend for buying bitcoin and converting it to whatever cryptocurrency you would like. Much like ShapeShift, changelly transfers happen between addresses you own, rather than between accounts that the exchange controls.

It’s super fast and efficient. There’s a mobile app too for making transactions on the go.

Get started on Changelly.

Luno

Luno buy bitcoin exchange

Trading Type Fiat / Crypto
Trading Pairs 5
Hacked before? No
Available Countries 40
Security Features Two Factor Authentication
30d Volume (Fiat) $3,140,452.00
30d Volume (BTC) 805.06
Fees Maker / Taker. Makers are a flat 0% and takers range from 0.20% to 1.0%

Luno offers a great platform for African and European traders looking to get started. Alongside their exchange, Luno offers a wallet service with a companion mobile app. The exchange has been around since 2013 and has never been hacked, giving it a fairly solid reputation for security.

It’s designed to be as simple as possible, including an “instant buy” feature.

Get started on Luno.

Coinmama

Coinmama bitcoin exchange

Trading Type Fiat / Crypto
Trading Pairs 16
Hacked before? No
Available Countries 226
Security Features Two Factor Authentication
30d Volume (Fiat) Not Published
30d Volume (BTC) Not Published
Fees 5.9% flat fee with an additional 5% for credit card purchases

Coinmama is a good choice for those looking to buy crypto using a credit card or other fiat sources. Coinmama is a broker so you’re buying directly from the company itself which makes transactions fast.

However, there are some things to be aware of. Coinmama is “buy only” so you cannot sell cryptocurrencies on the platform. There is also no wallet feature on the exchange, so you need to withdraw directly to a wallet. This is no bad thing as keeping your funds on an exchange is risky, but you will need a wallet set up first.

Unfortunately, Coinmama’s simplicity is offset by the incredibly high fees charged for every transaction – 5.9% flat fee and an additional 5% for credit card purchases.

Get started on Coinmama.

Best Intermediate-Advanced Crypto Exchanges

Advanced exchanges offer a lot more information and power to the trader. Unlike simpler exchanges that give you a set price, advanced exchanges allow you to control your buy and sell orders. Meaning that you can choose to create orders at whatever price you want.

Some advanced crypto exchanges also offer pro features like margin and leveraged trading. Some allow you to bet against crypto prices by “shorting” an asset, and most have expert charting tools. Most allow you to trade between cryptocurrencies, where many of the beginner exchanges do not.

Binance

binance crypto exchange

Trading Type Crypto / Crypto
Trading Pairs 100+
Hacked before? No
Available Countries Any not on UN sanction lists
Security Features Two Factor Authentication, client-side account freezing
30d Volume (Fiat) $695,837,008.00
30d Volume (BTC) 180,701.00
Fees 0.1% flat fee

Launched in 2017, Binance quickly grew to become one of the largest cryptocurrency exchanges on the planet.

Binance offers hundreds of crypto trading pairs so it’s perfect if you’re looking to get into some of the more obscure altcoins out there. It is crypto-to-crypto only, so you’ll have to load up your account with bitcoin or ethereum to get started; there’s no fiat currency option.

Edit: On January 16th, Binance launched Binance Jersey – a fiat-to-crypto exchange which allows buyers in the UK and Europe to trade with pounds and euros. 

There’s a “basic” exchange mode and an “advanced” mode, although even the basic mode requires some understanding of trading screens and cryptocurrency. Originally based in China, Binance has relocated to Malta after crypto crackdowns in China and Japan.

The 0.1% flat fee makes Binance a very competitive option.

Get started on Binance.

Kraken

Kraken exchange

Trading Type Both Fiat / Crypto and Crypto / Crypto
Trading Pairs 72
Hacked before? No
Available Countries All but 7 countries
Security Features Two Factor Authentication, with the option for an additional recovery factor, PGP based email encryption and verification
30d Volume (Fiat) $92,208,762.00
30d Volume (BTC) 23,568.00
Fees Per currency Maker / Taker, low end around 0.0% / 0.25%

Based in the US and operating in Canada, Kraken is a large scale cryptocurrency exchange that serves almost the entire planet.

The Kraken exchange was recently crowned the most secure cryptocurrency exchange by cyber-security firm Group-IB. Kraken was the only exchange in the report’s top-tier group, essentially putting it in a security league of its own.

The report cited Kraken’s proof of reserves audits, private key storage, protection of customer data, and technical security details as key reasons for the ranking.

Among Kraken’s security features is the ability to have a second 2FA set up for account recovery, and the ability to use PGP to encrypt and verify email communication.

In terms of trading, Kraken offers 72 trading pairs and leveraged margin trading on bitcoin.

Get started on Kraken.

Coinbase Pro

CoinbasePro crypto exchange

Trading Type Both Fiat / Crypto and Crypto / Crypto
Trading Pairs 25
Hacked before? No
Available Countries 31
Security Features Two Factor Authentication
30d Volume (Fiat) $93,599,262.00
30d Volume (BTC) 23,904.00
Fees Maker / Taker based on the last 30 days in a rolling window. Maker fee is always 0%, taker goes from 0.30% to 0.10%

Coinbase Pro is Coinbase’s bigger (but younger) sibling. It was recently known as GDAX until it changed to Coinbase Pro. The platform offers some very competitive low-end fees, meaning that if you expect to move a lot of crypto they are a good choice.

It comes with all the reputational clout of Coinbase, with its FDIC insurance and regulatory checklist. Coinbase Pro also features additional trading pairs not currently available on the basic Coinbase platform.

Coins like Golem (GNT), Decentraland (MANA), 0x (ZRX), and Basic Attention Token (BAT) are all available on Coinbase Pro, but not Coinbase.

Get started on Coinbase Pro.

Poloniex

Poloniex cryptocurrency exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 116
Hacked before? Yes, see below
Available Countries All but three countries and a few US states
Security Features Two Factor Authentication
30d Volume (Fiat) $27,719,009.00
30d Volume (BTC) 7,764.00
Fees Maker / Taker. Minimum 0.0% / 0.1%, Maximum 0.1%, 0.2%

Poloniex is a relatively large cryptocurrency exchange based in the USA. Poloniex offers a pretty large amount of volume on its platform and backs it up with competitive fees. A good choice for any trader looking to move mid-to-large amounts of crypto.

Poloniex’s backend has been hacked once. After it happened the then-CEO was transparent, and promised that Poloniex would cover any losses, and discussed exactly how the hack took place.

The vast majority of funds are kept in “air-gapped cold storage” and suspicious activity is monitored closely.

As for trading, Poloniex offers one of the most advanced suite of trading tools and technical indicators. It was the first exchange to offer pre-fork trading on the two Bitcoin Cash protocols, providing a crucial gauge of investor support.

Get started on Poloniex.

Bittrex

Bittrex cryptocurrency exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 288
Hacked before? No
Available Countries Almost all
Security Features Two Factor Authentication, IP and cryptocurrency address whitelisting, and client-side account freezing
30d Volume (Fiat) $42,818,083.00
30d Volume (BTC) 11,080.00
Fees 0.25% flat fee on all trades

Bittrex is a crypto exchange with decent volume, a good number of trading pairs, and above average security options. Specifically, the ability to whitelist IPs that can access your account and addresses you can withdraw to is very handy.

The exchange has never been hacked, which is the least you should expect from an exchange founded by three cybersecurity engineers! The vast majority of funds are stored in safe cold storage wallets.

Bittrex is designed for experienced traders, built with a scalable trading engine which executes orders in seconds. The flat 0.25% fee means you always know where you stand, too.

Get started on Bittrex.

Bitfinex

Bitfinex cryptocurrency exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 100
Hacked before? Yes – Not that much response from Bitfinex
Security Features Almost all, none that are listed on UN sanctions
Available Security Two Factor Authentication or Universal Second Factor (Yubikey or similar), IP whitelist for accounts, PGP encrypted email
30d Volume (Fiat) 311
30d Volume (BTC) $311,032,908.00
Fees Maker / Taker based on your last 30 days volume. Maximum 0.1% / 0.2%, Minimum 0.0% / 0.055%

Bitfinex is a Hong Kong-based cryptocurrency exchange with expert-level features like spot trading and leveraged margin trading. You can leverage up to 3.3x (effectively borrowing money to increase your position). 

The charts on Bitfinex are particularly great, allowing to set your own patterns and set price alerts. The exchange also has high liquidity and large volume, meaning you can buy and sell without lag time.

Bitfinex was hacked in 2016 with $72 million worth of bitcoin stolen, but the exchange now has above-average security options. Specifically, the inclusion of U2F and PGP encryption for email is a welcome sight.

One thing we should note is that Bitfinex has been accused of artificially pumping bitcoin prices during the 2017 bull run.

Get started on Bitfinex.

Bitstamp

Bitstamp bitcoin exchange

Trading Type Both, though mostly Fiat / Crypto
Trading Pairs 14
Hacked before? Yes, employees’ credentials compromised. Bitstamp released an incident report, but it is no longer available.
Available Countries 56 for MasterCard transactions, no information otherwise.
Security Features Two Factor Authentication, a PGP key is offered for email encryption and email-based withdrawal confirmations.
30d Volume (Fiat) $93,538,791.00
30d Volume (BTC) 24,205.00
Fees Based on your last 30-day volume in USD. Ranges from 0.25% to 0.10%

Bitstamp started out in a garage, with $1,000 and two laptops in 2011. Fast forward to today, and it’s one of the largest cryptocurrency exchanges in the world.

Based in London, it’s an ideal option for British crypto traders. Bitstamp was one of the first fully-licensed digital cryptocurrency exchanges. That didn’t stop hackers in 2015 stealing $5 million from the exchange. The company did release an incident report to explain the situation, but it is no longer available.

Since then, it has implemented some strong security features. Namely, PGP encrypted communication and email based withdrawal confirmations stand out here. PGP is a must to verify the identity of who you are communicating with.

Get started on Bistamp.

Bithumb

bithumb cryptocurrency exchange

Trading Type Fiat / Crypto (specifically Korean won)
Trading Pairs 66
Hacked before? Yes
Available Countries All countries, though still only in KRW
Security Features Two Factor Authentication
30d Volume (Fiat) $1,419,838,544.00
30d Volume (BTC) 367.00
Fees Flat 0.15% fee

Caution: A recent report found evidence of wash trading on Bithumb – a manipulative practice to exaggerate its volume figures.

According to CoinMarketCap, Bithumb is the largest exchange by reported volume (at the time of writing). But there’s a catch – the only fiat option available is Korean won (KRW).  

Bithumb is open to all countries, but traders without a connection to South Korea will struggle to trade, as it is notoriously difficult to buy and sell KRW for other fiat currencies. Though this does leave an opening to buy KRW with crypto, assuming you have the crypto-side capital for it.

Bithumb has been hacked at least twice – first in June 2017 hitting 3% of all Bithumb users. And secondly, in June 2018, when $31 million was stolen from the exchange.

Get started on Bithumb.

CEX.io

Cex.io bitcoin exchange

Trading Type Both Crypto / Crypto and Crypto / Fiat
Trading Pairs 28
Hacked before? No
Available Countries All countries aside from 24 small countries and 27 States
Security Features Two Factor Authentication
30d Volume (Fiat) $7,056,167.00
30d Volume (BTC) 1,827.00
Fees Maker / Taker based on your last 30 days volume in BTC. Maximum fee of 0.16% / 0.25%, minimum fee of 0.0% / 0.1%

CEX.io is a UK based cryptocurrency exchange that sports a low but respectable volume and very competitive fees.

It offers an impressive dashboard for expert traders with margin trading, order-matching algorithms, and high-frequency trading for scalp traders.

It’s a good choice assuming what you are looking to trade is available in their somewhat small pool of trading pairs. 

Get started on CEX.io.

Bitpanda

bitpanda crypto exchange

Trading Type Fiat / Crypto
Trading Pairs 80
Hacked before? No
Available Countries All for buy / sell via Neteller, otherwise EU only
Security Features Two Factor Authentication, email confirmation for most account actions
30d Volume (Fiat) Not Reported
30d Volume (BTC) Not Reported
Fees Change often – Between 1% and 3%

Bitpanda is an Austrian cryptocurrency exchange and one of the most accessible options for traders in Europe. Bitpanda acts as a broker, meaning you’re purchasing the cryptocurrency from Bitpanda itself, rather than exchanging it with other users.

Bitpanda accepts euros, British pounds, Swiss francs, and US dollars and offers a decent array of cryptocurrencies. It has a slick user interface that is welcoming and relatively intuitive for users.

The only downside here is that their fees are somewhat high and they don’t report volume.

Get started on Bitpanda.

Coinsquare

Coinsquare crypto exchange

Trading Type Fiat / Crypto (Specifically CAD)
Trading Pairs 9
Hacked before? No
Available Countries 1 – Canada only
Security Features Two Factor Authentication
30d Volume (Fiat) $7,058,585.00
30d Volume (BTC) 1,804.00
Fees Flat fee for makers and takers, 0.10% and 0.20% respectively

Coinsquare is the largest cryptocurrency exchange in Canada, built to cater directly to Canadian traders, meaning that external traders will find themselves falling flat. Security, however, is a high priority. Coinsquare has never been hacked and 95% of all funds are held in cold storage. 

Its trading functionality is somewhat basic, so experts will probably look elsewhere for superior features. 

Get started on Coinsquare.

HitBTC

HitBTC cryptocurrency exchange

Trading Type Crypto / Crypto
Trading Pairs 803
Hacked before? No
Available Countries Almost all
Security Features Two Factor Authentication
30d Volume (Fiat) $222,941,259.00
30d Volume (BTC) 57,732.00
Fees Flat Maker / Taker fee structure: -0.01% / 0.1%

Caution: A recent report found some evidence of wash trading on HitBTC – a manipulative practice to exaggerate its volume figures. If correct, only 25% of reported trading volume on HitBTC is real.

HitBTC is a Chile-based cryptocurrency exchange that calls itself “the most advanced bitcoin exchange.” HitBTC offers incredibly competitive fees, a high amount of volume, and a good number of trading pairs. 

Unlike most other cryptocurrency exchanges, HitBTC offers a rebate for makers in their fee structure, meaning that makers receive 0.01% of the trade amount as a credit when a trade is made.

In terms of security, HitBTC offers 2-factor authentication, encryption technology, and cold storage. A 24-hour support team is also a nice touch.

However, the reports of manipulative wash trading should be taken into account before trading here.

Get started on HitBTC.

OKEx

OXEx crypto exchange

Trading Type Crypto / Crypto
Trading Pairs 412
Hacked before? No
Available Countries Accepts all countries
Security Features Two Factor Authentication
30d Volume (Fiat) $567,722,732.00
30d Volume (BTC) 146,920.00
Fees Complex Maker / Taker scheme

Caution: A recent report found evidence of wash trading on OKEx – a manipulative practice to exaggerate its volume figures. If correct, only 11% of reported trading volume on OXEx is real.

OKEx is a Hong Kong-based cryptocurrency exchange that offers a massive number of trading pairs with an equally large amount of liquidity to back it up.

OKEx was rated Crypto Exchange of the Year at last year’s Malta Blockchain Awards.

However, in a recent investigation, OKEx was considered “completely uninsurable” and ranked in the lowest bracket for security. Additionally, OKEx was singled out for manipulating its volume. A recent report found evidence of wash trading on at least 30 of its trading pairs.

Another downside here is a complex fee structure.

Get started on OKEx.

Conclusion

There are lots of factors to consider when picking the right crypto exchange: ease of use, security features, reputation, trading pairs and trading tools. Remember, when signing up to an exchange, you are trusting them with your funds. Always do your due diligence before you transfer any money.

Learned something new? Subscribe to the Block Explorer newsletter to get exclusive crypto insights before they appear on the site.

bitcoin tax losses

2018 was a bruising year for bitcoin with the cryptocurrency falling 72%. A lot of traders and investors are in the red and may have sold their bitcoin at a loss. If that sounds like a familiar story, there is a small silver lining: bitcoin losses are tax deductible. You can claim bitcoin losses on tax under certain circumstances.

CreditKarma recently reported that American investors lost $1.7 billion by selling bitcoin last year. But only half plan to report those losses to the tax man.

Many Americans may not realize they could save money by deducting their bitcoin losses. More than that, failing to report those losses “could lead to an audit and having to pay penalties and interest” according to CreditKarma.

So, let’s run through everything you need to know about reporting bitcoin losses.

Note: this bitcoin tax guide is written for US taxpayers. For those in other jurisdictions, please contact a tax expert in your area.

Do you have to report bitcoin on taxes?

First, let’s go back to the beginning: bitcoin is subject to tax. Not a lot of people realize this, as evidenced by the fact that only 800 taxpayers per year stated their bitcoin gains between 2013 to 2015.

So, yes, you do have to report bitcoin gains and losses on your tax files.

How is bitcoin taxed?

The Internal Revenue Service (IRS) taxes bitcoin in the same way as property. So you pay tax on gains and losses, like you would for real estate, stocks, or bonds.

It’s a confusing system considering bitcoin is a form of currency, but that’s how it works.

Firstly, tax only comes into play if you’ve realized a gain or loss. In other words, if you’ve sold, traded, or spent your bitcoin.

For example, if you bought bitcoin at $100 and sold it at $1,000, you owe tax on the $900 gain.

But if you’re a die-hard hodler who bought bitcoin and never sold it, you can leave this page. There’s no tax for you until you sell it.

The tricky (and ridiculous) thing about this system is that you owe tax if you spend bitcoin. Even if you buy a coffee with bitcoin, you need to record that transaction and figure out if there was a loss or gain.

Note: There are software platforms that will track your trades and spending to figure this all out for you. 

How much tax do you pay on bitcoin?

That depends on your tax bracket and how long you’ve held the cryptocurrency.

Bitcoin is subject to short-term and long-term capital gains.

Short-term gains – if you’ve held bitcoin for less than a year at the time of selling, the tax falls under ordinary income, in your particular income bracket.

Long-term gains – if you’ve held bitcoin for longer than a year, it falls under the long-term capital gains rate. It’s a lower tax rate, but still dependent on your income bracket.

By the way, we went deep into the topic of bitcoin taxes in this article if you’d like more information. 

Bitcoin losses are tax deductible

Because bitcoin is subject to capital gains, you can also deduct any losses. 

Let’s say you bought one bitcoin at $10,000. You sold a few months later at $7,000, incuring a $3,000 loss. You can claim that bitcoin loss on your tax forms and it will lower your tax obligation.

You can also include transaction fees in your calculations.

In this case, because you held for less than a year, it falls under short-term losses. You can deduct that against any other short-term gains that year. If you have no short-term gains at all, you can still deduct the loss.

However, there’s a $3,000 limit on total losses. Any more than that and you can roll it over to the next year and deduct against any future gains.

If you held bitcoin for longer than a year, you can deduct the loss against any long-term capital gains. And, like before, if you have no long-term capital gains, you can simply deduct the loss. The same $3,000 limit and rollover rules apply.

Conclusion

Bitcoin taxes can be a tricky thing to get your head around. But you can claim bitcoin losses on your tax return which is a small benefit of the tax system.

Disclosure: I am not a tax advisor and you should contact a qualified tax attorney or account, preferably one knowledgable in cryptocurrencies. A list of such individuals is available here.

How-mobile-phones-are-transforming-Africa

When the pseudonymous person (or persons) by the name of Satoshi Nakamoto released Bitcoin’s whitepaper in 2008, the main idea behind it was to put power back into the hands of the people.

It read: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

Published during the 2008 global financial crisis, when trust in the banking sector was at an all-time low, bitcoin struck a chord with those in the know. Ten years later and bitcoin remains the number one digital currency despite an influx of altcoins entering the market during that time.

Not only that, but it’s providing a gateway to financial access for the world’s unbanked populations.

According to the Global Findex 2017 report from the World Bank, there are still 1.7 billion unbanked adults worldwide. Two-thirds of them, though, own a mobile phone. In an age where everything is becoming digital, it is these devices that are helping people without access to traditional finance gain the services they need. Additionally, it could help to expand on payment histories, boosting the chances of obtaining credit and insurance.

So, as the crypto market settles into what has been dubbed a “crypto winter,” what are the major projects helping to bank the unbanked?

Paxful

paxful

Founded in 2015 by Ray Youssef and Arthur Schaback, Paxful is a peer-to-peer bitcoin marketplace. 

Headquartered in Delaware, with offices in New York, Hong Kong, Tallinn, and Manila, Paxful’s mission is to connect buyers with sellers with more than 300 payment methods to choose from.

Formerly known as EasyBitz, Paxful removes the need for a user to own a bank account to use the site. Differentiating itself from its competitors, the P2P marketplace focuses on gift cards as one of the accepted payment methods on the site.

For the unbanked population in Africa, these are extremely valuable. So much so, that Africa is Paxful’s top market, which saw an average of 17,351 trades per day in 2018. Not only that, but gift cards were among the top three payment methods by traded volume last year.

In first place was iTunes gift cards making up $282 million, followed by Amazon gift cards at $166 million. Bank transfers were in third place, amounting to $49 million.

Notably, though, even though the price of bitcoin dropped last year by over 70%, African users weren’t deterred. In fact, trading volume rose on the platform to an average of $21 million a week compared to $8.5 million in 2017.

With Youssef having known what it’s like to be homeless during the early days of EasyBitz, before crypto helped him back on his feet, he knows what it’s like for people who struggle. That’s why they are refusing to leave the unbanked behind as they know bitcoin provides the ideal financial alternative and Paxful is helping them.

BitPesa

bitpesa

Founded in 2013 by Elizabeth Rossiello, who is also the company’s CEO, BitPesa is a digital foreign exchange and payment platform.

With its headquarters in Nairobi, Kenya, the platform is aiming to make it easier to send money into and out of Africa. It also has operations in the Democratic Republic of the Congo, Ghana, Nigeria, Senegal, Tanzania, and Uganda.

It’s also covered by more than 85 countries, has over 23,000 users, and has completed in excess of 560,000 transactions.

At the moment, traditional financial processes are required where money is converted from the local currency into U.S. dollars, passing through several banks before it’s converted back into its destination money.

Yet, BitPesa simply accepts the money from a person’s bank account, moving it directly to the destination account. No middleman, no conversion fees, and all done in a few steps. With its ability to send fast and easy payments across Africa, BitPesa is helping to change how business is done on the continent.

More recently, it set up a remittance corridor with Japan in partnership with SBI Remit, Japan’s biggest remittance service provider, and a subsidiary of SBI Group, a Japanese internet financial services company.

Humaniq

Humaniq Discover the Unbanked

Pitching itself as a “new generation financial services with its own cryptocurrency,” HMQ, Humaniq is aiming to remove poverty from millions of people living in emerging economies.

Founded in 2016 by Alex Fork, London-based Humaniq is working at delivering a new financial platform with a focus on financial inclusion. Based on the latest advancements in blockchain technology, mobile, AI, and biometrics, the platform is delivering economic empowerment and community building to the world’s unbanked population.

Through the use of a smartphone, all a person needs to be verified is their face and voice designed to reduce fraud. It also means that formal identification and an email isn’t required, two things many unbanked people lack.

According to its whitepaper, the smartphone is also needed to make and receive payments while the camera enables users to earn their first coins worth $20 in an e-wallet to be spent as the user sees fit.

Through the platform, Humaniq is working at reversing the trends where the difference in income is widening by bringing people out of poverty. It is doing this by giving its users simple tasks to complete, enabling them to earn tokens in the process. Some of these include inviting friends to join the platform, making transactions or sending chat messages. Each of these sees a user being paid for services, helping them to achieve milestones.

With more than 500,000 users having joined Humaniq since its founding in countries such as Albania, Belize, Botswana, Kenya, Mexico, Sudan, Uganda, Venezuela, and Zambia, to name a few, the platform is steadily opening up the doors of financial inclusion.

Nebeus

nebeus

London-based Nebeus is a crypto platform that has two goals: to provide a service for the world’s unbanked and to create a smart financial future for companies and individuals who are “disillusioned by traditional banking services,” according to its website.

Founded in 2014, with the P2P exchange platform launching at the end of 2017, Nebeus is working at delivering a significant impact on developing countries by creating a bridge that connects them to financial services.

It does this by offering a range of services: its Nebeus card, a wallet, a crypto vault, a crypto-collateral loan, and an over-the-counter (OTC) exchange. And in March last year, it announced that residents in Cameroon, Ghana, Kenya, Nigeria, Rwanda, South Africa, Tanzania, and Uganda now had access to its full suite of services.

According to the World Bank, worldwide, 55% of unbanked women are unlikely to have a bank account. Without access to a bank account they can’t save, apply for loans, buy a home or receive benefit payments from the government.

With Nebeus’ crypto-collateral loan it is aiming to change how people can access money with the use of crypto. The benefits, according to the platform, are that there are no credit checks, low-interest rates, and the person gets to keep their crypto.

Using the loan calculator, a person enters the amount of crypto they want to put down in bitcoin or ethereum and chooses the number of months they want to make repayments over. These can either be done in a one-month to 24-month period.

The amount they can borrow is provided in either British pounds, euros or US dollars. After the repayment of the loan has been completed, the amount of crypto pledged to begin with is returned to the user’s wallet.

Banking the Unbanked

These are just a few of the platforms available, but they show the steps and effort being taken to get many of the world’s unbanked population financially included.

Traditional finance is something that billions of people take advantage of every day. To not be able to open a bank account or put money into a savings account would seem strange. After all, where else would we put it?

Yet, for so many more this is a reality they have to live with. And it’s thanks to the platforms mentioned in this article that are changing how we access finance. It’s no longer a case of opening a bank account. Instead, there are now new ways of being financially independent, which are steadily becoming the norm.

Soon, it may be a case of: you still have a bank account?

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Every Friday, we take a light-hearted tour through the best memes, artwork, and oddities from the cryptoverse.  This week, Carty Sewill makes us all feel old with the “30-year-old boomer who traded crypto.”

“That 30-year-old boomer who trades crypto.” That sentence, and the viral meme that followed, made me feel like an old man talking about gold and silver every time I mentioned bitcoin. No meme has ever made me feel more self-conscious than the ’30-year-old boomer’.

crypto booomer
Figure 1. The 30-Year-Old Boomer

For those of you who don’t know a boomer, or baby boomer, is someone born between 1945 and 1965. Whether it be relatives or the old man at work listening to Sean Hannity, we all know a few. The arch-nemesis of millennials, boomers are owners of muscle cars and deniers of climate change. Boomers are the target audience of gold and silver shills alike. Much like millennials love crypto, boomers love their shiny rocks.

That’s the crux of the meme. We crypto-loving millennials are slowly finding ourselves out of touch. Relegated to the status of ‘old dude’ on 4Chan and Reddit. Especially considering the current downturn. Much like a boomer talking rocks, it seems talking cryptocurrency has become its own cliche. Imbued with the same stereotypes underlying millennials dislike of boomers: drinking Coors Light, driving muscle cars, listening to Rush, and mowing lawns; to name a few.

crypto boomer 2
Figure 2. The 30-Year-Old Boomer Washing His Challenger Enjoying a Monster.

First appearing on 4Chan channel /biz/ at the end of April in 2018, the 30-year-old boomer was met with disdain and copious amounts of coping. Posted with the sentence, “that 30-year-old boomer who trades crypto,” and a new balding wojak, the meme struck a chord. In no time, parodies where being drawn and memers began playing with their new toy.

Though posted first on /biz/ in reference to cryptocurrency, this meme in particular found itself in all corner of the internet rather quickly. Soon posted to 4Chan channel /v/ after its 2018 debut, almost immediately Facebook groups were created and in no time the internet echoed with the insult ‘boomer.’ Threads extolling the virtues of crypto exchange-traded funds (ETFs) were met with derogatory images of a balding wojak.

Like magic, the meme began pigeonholing me and all of my friends. This meme literally kept me off /biz/ for days. Protecting myself from the anxious cringe that was the 30-year-old boomer meme hitting the proverbial nail on my head. As the wojak began being portrayed smoking, drinking Monster energy drinks, driving Challengers, all the while talking Bitcoin and wearing Led Zeppelin tees. Like any good crypto-meme it was picked up and played out by Bizonacci, but the boomer meme reached its zenith with a post by Rick Steubens. Who, on this occasion, took meme videos to a whole new level.

Figure 4. Rick Steubens 30 Year Old Boomer Tribute Animation.

The meme still has legs but its slow dissipation from popular internet platforms has been, for me personally, a breath of fresh air. Because in the end, the boomer meme speaks to the hard truth that no matter how cool or new we think crypto is, it’s getting older. And the older bitcoin gets the more ‘uncool’ it becomes. I’m not looking for any reminders.

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MimbleWimble is a privacy-oriented blockchain protocol with mysterious origins. Much like other top privacy cryptocurrencies, MimbleWimble attempts to make transactions completely opaque, while still allowing for external verification. 

Additionally, MimbleWimble looks to keep its blockchain’s size on disk as small as possible while maintaining quick verification for all clients.

So far, two privacy cryptocurrencies have launched on top of MimbleWimble technology: Grin and BEAM. 

What is MimbleWimble?

The original MimbleWimble whitepaper was released on July 19, 2016, by an anonymous person that signed the whitepaper as “Tom Elvis Jedusor.”

Just a few months after the release of the original whitepaper, another anonymous person stated that they were working on an implementation of MimbleWimble, which would be known as Grin.

The name “MimbleWimble” and the signing name on the whitepaper are both references to JK Rowling’s Harry Potter novels. Where MimbleWimble is a spell that stops its target from being able to speak coherently. And the name  “Tom Elvis Jedusor” is an anagram for “Je suis Voldemort”, the name chosen by the antagonist in the French version of the novels.

MimbleWimble Goals

MimbleWimble has three goals that are outlined in its whitepaper:

Privacy

MimbleWimble is first and foremost a privacy blockchain protocol. Its designer had a very good understanding of the privacy technologies it is built upon. And using that understanding, MimbleWimble’s designer created a new and more secure strategy that increases transaction privacy to a whole new level. We’ll go into the technical details of this below.

Small Blockchain

Blockchain size on disk is a major issue for those looking to run full nodes for any cryptocurrency. Put simply, blockchains grow. This growth makes maintaining a large number of nodes more problematic over time.

MimbleWimble’s designer saw blockchain size as a major issue and pushed to make MimbleWimble blockchains as small as possible. The whitepaper states that the technique used could reduce the size of Bitcoin blockchains from a size of 80GB to a size of 30GB. An impressive change, especially given that MimbleWimble maintains user privacy through this size reduction.

Quick to Verify

The last goal MimbleWimble aims for is verification speed. Having a tiny blockchain is only good if the processing power required to verify it is equally tiny.

Cryptocurrency Grin launches on MimbleWimble technology

Cryptocurrency BEAM launches on MimbleWimble technology

How does MimbleWimble’s technology work?

MimbleWimble uses its own transaction and block schemes. They work together to hide transaction data as much as possible while still allowing verification to occur.

Put simply, both use zero-knowledge proofs, with blocks building on the math used in the transaction to further hide the information.

No Addresses

MimbleWimble has no concept of a blockchain address. Rather than tying all outputs to an address, outputs have no data regarding where they came from, and are spent via a private key.

This does mean that the wallets of the involved parties wallets have to talk to each other when making a transaction. But the method of communication and time taken is up to the user. One could, for example, negotiate a transaction using encrypted email.

Opaque Transactions

MimbleWimble’s transactions use zero-knowledge proofs (specifically a mixture of Confidential Transactions and CoinJoin) for security. Outside verifiers can independently prove that no cryptocurrency was created or destroyed over the transaction. This is somewhat similar to how Monero secures its transactions, but with added protection from CoinJoin and the total lack of addresses.

Putting together a MimbleWimble transaction requires communication between both parties as discussed above. The following steps are what happens during that communication:

1. The parties agree on the amount to be transferred.

2. The sender picks the inputs they want to use to create the amount to be transferred and adds together all the blinding factors for that transaction.

3. The sender sends the transaction data to the receiver. The receiver then picks the blinding factors for the outputs of the transactions, adds them together, and sends them back to the sender along with any additional required information.

Once the above steps are complete, the transaction can be sent to the network and confirmed.

In the above steps, I mention a blinding factor. The blinding factor makes up part of the zero-knowledge proof system used in Confidential Transactions. It is the ‘missing part’ or the private key for each input – if you know the blinding factor for a given output, you can spend it. By adding together all the blinding factors for every input in the transaction, you can prove you own all the inputs used in the transaction, but not share the private keys.

Reduced blockchain size and increased verification speed

MimbleWimble blocks are different from the blocks employed in other blockchains. Only unspent outputs and new currency generation are saved. The idea being that you don’t need to know about every transaction ever to verify a blockchain. All you need to know is where all the currency is now, and where it all came from.

Storing just that data increases fungibility, user privacy, and verification speed. Much like above, anyone looking to verify the blockchain simply needs to verify that the sum of the inputs subtracted from the sum of the outputs equal zero.

The downside of MimbleWimble

Unfortunately, with the security that MimbleWimble provides, you lose some of the tech Bitcoin has.

For example, in order for all transactions to be consolidated in blocks, they have to be very similar. And due to the requirement for said similarity, MimbleWimble does not have any sort of script system.

Otherwise, due to the consolidation of transactions, MimbleWimble has no transaction history. Meaning that an external auditor or similar would be unable to monitor transactions directly.

Conclusion

MimbleWimble is a fantastic step forward in privacy crypto. If the upcoming launch of its first implementation GRIN goes well, and no issues are found in the algorithm, MimbleWimble will be a serious competitor in the privacy coin market. My only concern is whether or not the inability for even the owners of the currency to audit where it came from using the blockchain itself will deter large scale users.

Sources and further reading:

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