Robinhood, founded in 2013, is a commission-free online discount brokerage that makes trading in the stock market easy. It has made it possible for small retail investors to enter the crypto market and try their skills and luck. Robinhood is a fintech pioneer that provides desktop and mobile apps for stocks, ETFs, options, and cryptocurrency trading.
Read on to learn everything you need to know about the Robinhood platform and how to buy cryptocurrency on Robinhood.
Let’s dive in!
What Is Robinhood
Robinhood was founded in 2013 as a mobile app by Vladimir Tenev and Baiju Bhatt and is currently headquartered in Menlo Park, California. It was given the name Robinhood because the idea behind it was to revolutionize the markets and build products that would provide everyone with easy access to the financial markets, not just the wealthy.
Robinhood was the first major brokerage platform to eliminate commissions on stock and options trading. It has become one of the most popular brokerages in the U.S. due to its easy-to-use trading app with no account minimum or monthly fee. Its intuitive interface makes it easy to buy and sell stocks, ETFs, and cryptocurrencies.
However, Robinhood has faced regulatory fines, public scrutiny, and lawsuits in recent years. Additionally, it lacks educational resources and trading tools suited for advanced traders and offers poor customer service. Moreover, Robinhood doesn’t provide individual retirement accounts (IRAs), which provide tax advantages for those saving for retirement.
Let’s look into some of the key features and services Robinhood offers:
Stock Trading
Robinhood supports stocks trading on Nasdaq and New York Stock Exchange and doesn’t support trading OTC stocks (over-the-counter). It doesn’t support retirement funds, mutual funds, and trading in bonds. It supports investing in Initial Public Offers (IPOs), Options and Margin Trade, etc. Robinhood charges no commission for trading stocks or Options.
Exchange-Traded Funds
Similar to stocks, Robinhood supports ETFs trading on Nasdaq and New York Stock Exchange. Stocks and ETFs were the first services offered by Robinhood. Robinhood charges no commission for trading ETFs.
Cryptocurrency
While most crypto users prefer to trade on crypto exchanges, the number of Robinhood users has grown vastly over the past couple of years. This is thanks largely to commission-free trading, in contrast to major cryptocurrency exchanges that charge a fee for buying crypto.
The number of cryptocurrency tokens available on Robinhood is small, but it has been announced by its CEO Vladamir Tenev that more coins will be listed in the future. Currently, Robinhood only supports Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Dogecoin (DOGE), Ethereum (ETH), Ethereum Classic (ETC), and Litecoin (LTC).
Cash Card
Robinhood has opened the waitlist for its Cash Card, which is like a debit card issued by Sutton Bank. According to the company, their cash card “will allow consumers to choose to round up what they pay for goods and services to the near dollar and invest the difference between that amount and the actual price in whatever assets they choose.” Users can also use this debit card to withdraw cash from an in-network ATM.
In addition to the services mentioned above, Robinhood is also in the works to add other services to its basket in the coming years.
Robinhood is so popular amongst users thanks to the ease with which one can buy crypto or other assets. All one needs is a computer or a device to download the Robinhood app.
The steps for buying crypto on the Robinhood app are as follows:
Create an Account
Download the Robinhood app on your device from the App Store or the Google Play Store. You can also use the desktop website to create an account on Robinhood. Once you’ve downloaded the app, it’ll ask you to enter some personal information, such as your name, address, email, and social security number, to set up an account.
Transfer Money From Your Bank Account to Robinhood
Once you’ve successfully entered the information, your Robinhood account should be created. You can start trading and buying crypto on Robinhood instantaneously. All you’ll need to do is transfer money to your Robinhood account using your bank account and routing number.
Initially, you can transfer USD 1000 instantaneously from your bank account and begin buying crypto. Users can also opt for a Robinhood Gold account to trade higher amounts of money and benefit from margin trading or other services. New users can also use referral and promotional codes they got while setting up their accounts to avail themselves of discounts or get free stocks. These features and incentives make Robinhood one of the most popular cryptocurrency apps in the USA.
Buy Crypto of Your Choice
After you’ve deposited money into your Robinhood account, you can search for your favorite cryptocurrency tokens and place a market order to buy them at the current market price. You can also set a limit price to purchase your favorite tokens for the price you are comfortable with. Suppose you wish to buy Bitcoin, but the price is too high, so you can set your limit price to buy it when the price reaches your desired level. The limit price can be used for both buying and selling tokens automatically by simply placing an order beforehand and is beneficial for purchasing crypto at your desired price range without having to check prices every few hours.
Selling your tokens whenever you think you’ve made enough profits and want to take your money out of the market and into your bank account is just as easy as buying crypto on Robinhood.
Storing Your Crypto
Once you’ve completed your purchase, the next step is to select a crypto wallet to store your coins securely. While Robinhood stores the crypto that people buy in a mix of cold and hot storage, it’s highly recommended to create a private wallet with your own set of keys. Depending on your investing preferences, you might choose between software wallets such as CoinStats Wallet, Trust Wallet, etc., or hardware wallets like Ledger, Trezor, etc.
You can link your crypto wallets to your Robinhood Crypto account to easily track your portfolio, move supported coins into your Robinhood account so you can trade those coins commission-free, etc. To enable crypto wallets, you’d need to verify your identity and enable two-factor authentication. Once you’ve completed this, it’ll take up to 5 business days to review your information and activate your crypto wallets.
Robinhood Shortcomings
While Robinhood remains one of the most popular apps to buy and trade stocks, cryptocurrencies, etc., there are still some shortcomings associated with it. Some of the most common ones are:
Limited Number of Cryptocurrencies: One of the major drawbacks associated with Robinhood is the very small basket of supported cryptocurrency tokens. While the available ones are very popular and have already built up their market share in the crypto world, they are no longer lucrative investments for traders. Most of the profit-making is done through the altcoins available on other cryptocurrency exchanges such as Binance, Coinbase, etc.
Lack of Mutual Funds or Bonds: The lack of mutual funds and bonds may make it difficult to build a truly diversified portfolio.
Limited Customer Support.
Limited Education and Research Tools.
Untimely Outages: Robinhood has received criticism for untimely outages and trade restrictions amid market volatility. Due to these outages and other issues, Robinhood had to pay USD 70 million as a penalty to Financial Industry Regulatory Authority (FINRA) in 2021. This was one of the largest financial penalties paid to FINRA.
Conclusion
While Robinhood has its fair share of issues and shortcomings, it remains one of the most popular apps for trading cryptocurrencies in the U.S. Its ease of use and policy of charging no trading or commission fees, no account minimums, or account maintenance fees attract a large number of users.
If you don’t wish to trade in small market cap altcoins and are only interested in buying or selling the blue-chip cryptocurrency tokens such as Bitcoin, Ethereum, or popular meme coins such as Dogecoin, then Robinhood is the perfect place for you.
Following strong gains towards the end of yesterday’s session, BTC consolidated today, as markets prepare for Easter weekend. Bitcoin’s price surged late on Wednesday, hitting a key resistance point in the process. ETH also hit a ceiling during the session.
Bitcoin
Following a late surge towards a key resistance level of $41,500 on Wednesday, BTC was marginally lower, as traders prepared for the long Easter weekend.
BTC/USD rose to an intraday high of $41,451.48 late on Wednesday, however this resistance point held firm, sending prices lower today.
Earlier today, BTC fell to an intraday low of $39,714.69, however it has since climbed, and is currently trading around $41,031.26, which is up roughly 3% from the previous bottom.
BTC has dropped by almost $10,000 from its peak of $48,220 only two weeks ago, which was its highest level in over four months.
However, after weeks of declines, it appears as though we may have found a stable floor, which was at $39,300, with bulls now looking to once again send prices higher.
Price strength still trends towards the direction of uncertainty however, as it continues to hover below its ceiling of 43.
Once this level is finally breached, we could see more bulls re-enter.
Ethereum
Thursday also saw ETH hover below its own resistance level, as prices continued to move away from a recent floor of $2,950.
ETH/USD was trading close to its ceiling of $3,145 during today’s session, as there appears to be a gradual build-up of bullish pressure.
This momentum saw ETH hit an intraday high of $3,139.93, which is its highest point since the start of the week.
As a result of this rally, the 14-day RSI is now near its resistance of 49.6, while tracking at 47.5, and unless we see this threshold broken, we may see price fall back below $3,000.
This is especially the case due to the moving average crossover which has recently occurred, which is a signal of further bearish pressure.
Do you expect to see any notable moves this Easter weekend? Leave your thoughts in the comments below.
Eliman Dambell
Eliman brings a diversified point of view to market analysis, having worked as a brokerage director, retail trading educator, and market commentator in Crypto, Stocks and FX.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
How to Buy Land in the Metaverse | Where, How and Why
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Interest in the Metaverse, the next-generation digital world where we can have a digital twin to play, socialize, learn, keep connected with friends, etc., has skyrocketed recently. Mattew Ball has famously described the Metaverse as a “massively scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users.”
Investing in Metaverse property is the next big thing after the NFT market, where digital artwork can be bought as non-fungible tokens or NFTs, digital representations of real-world items. Virtual real estate now sells for hundreds of thousands of dollars, and Snoop Dogg, JP Morgan, HSBC, and other crypto enthusiasts have already invested in Metaverse real estate by acquiring plots of virtual land.
Finance in the Metaverse is powered by the blockchain, so you need cryptocurrency for purchasing land, a virtual house, or other NFT in the Metaverse. Otherwise, you might be shocked to learn that the virtual real estate market has a lot in common with its real-world equivalent, particularly when it comes to pricing aspects.
Read on for our in-depth guide to learn everything you need to know about the Metaverse properties and buying land in the Metaverse.
Let’s jump right in!
What Is Metaverse Real Estate
The Metaverse is a three-dimensional, immersive virtual platform where users can interact with each other, digital objects, and AI-powered avatars in a very realistic and natural manner. It’s also interoperable, allowing virtual games and collaboration spaces to coexist on a single platform. Users can move between virtual worlds, and multiple platforms can cohabit in the same environment.
The Metaverse has also been democratized, with no one organization, person, or entity owning it. Anyone can invest in it and make use of the available space, technology, and settings. The Metaverse relies on technologies such as virtual, augmented, and mixed reality (VR/AR/MR), as well as blockchain, artificial intelligence (AI), 5G, and cloud computing.
The Metaverse has the potential to become a virtual replica of our real world, allowing its users to monetize goods and services and generate income through virtual settings. One common method is to acquire land in the Metaverse, where buyers or renters can develop monetized properties.
Individual Metaverse, real estate plots, are so-called virtual ‘parcels,’ which are 3D space blocks where developers can superimpose objects, design VR worlds, overlay experiences, build interactions, etc.
A Metaverse often features a democratized governance body that decides how new parcels are generated, allocated, and made available for investment to real estate investors.
The majority of virtual land purchases presently take place on 4 Metaverse platforms: The Sandbox, Decentraland, Cryptovoxels, and Somnium. The parcel exists as a non-fungible token, also known as an NFT, which is a non-transferable digital asset stored on the blockchain.
The buyer will ‘own’ full rights to the land once ownership of the NFT is transferred to them, just like in real life, and will be able to resell it, create a virtual property on it, rent it out, etc.
Why Buy Virtual Land in The Metaverse
There are 2 main reasons for buying virtual real estate: Bragging rights and ROI (Return on investment). The idea is similar to purchasing an NFT: you possess this digital asset, and anybody can check its authenticity because it exists on the blockchain. You can later sell your virtual land if it grows in value, or you can rent it out for parties or special events.
You can even build a virtual house on it and rent it out or put up a digital art gallery and allow aspiring artists to showcase their work.
Where to Buy Land in the Metaverse
Virtual real estate can be purchased in a variety of Metaverse games. Most of them ran out of land a long time ago, so you’ll almost certainly have to buy a parcel or a house on the secondary market. But, before you rush out to get a deal, here’s a rundown of some of the most popular spots to buy property. While several of these platforms allow users to buy tokens that may be used to make in-game purchases, we’ll outline each floor’s pricing in ETH.
The Sandbox
Sandbox homepage
The Sandbox is a virtual world where players can create, own, and monetize gaming experiences. The Sandbox blockchain gaming platform comprises three interconnected products: VoxEdit, which allows users to design and animate 3D objects, Marketplace, which will enable users to upload, publish, and sell their NFT works; and Game Maker, which allows anyone to create incredible 3D games for free. Players can purchase LAND and populate it with their favorite games, digital assets, and interactive experiences.
Somnium Space
Somnium Space homepage
Somnium Space is an open virtual reality universe with its own currency and economy. Users can create fully personalized avatars, properties, and experiences on Somnium Space. The game includes a complete VR marketplace and can be played on a PC or mobile device, although it is best enjoyed with a VR headset.
Decentraland
Decentraland homepage
Decentraland is a 3D virtual world where users can explore and purchase virtual plots of land. The game can be played with or without a crypto wallet, although one is required to buy Metaverse wearables. After acquiring land, users can develop it using the Decentraland editor or by importing 3D models from external software.
Worldwide Webb
Worldwide Webb homepage
Worldwide Webb is a pixel art MMORPG Metaverse game that adds functionality to popular NFT projects. NFTs are utilized for in-game avatars, pets, virtual real estate, goods, and missions. Users own and govern virtual lands in Worldwide Webb and can use them to host social gatherings, pets, avatars, and games. They can even allow users to include custom smart contracts and sell their own artwork.
Cryptovoxels
Testing Cryptovexels
Cryptovoxels is a virtual environment that consists of “Origin City. Streets in the city are owned by “The Corporation,” whereas parcels are held by individual users. Parcel owners can add and delete blocks and features as they see fit. Owners can also designate their parcel as a “sandbox parcel,” which allows anyone to build on it.
How to Buy Virtual Land in the Metaverse
There are 3 options to consider if you want to buy digital land in the Metaverse:
1. Contact Metaverse Real Estate Brokers
The Metaverse is a huge digital environment with a lot of potential for real estate. It has a customized real estate market that includes mortgage providers, agents, and brokers specializing in virtual real estate. Many brokers have found their niche in the digital real estate business, which is still in its early stages.
You can work with Metaverse real estate agents and brokers to find and invest in the best Metaverse virtual properties.
2. Explore Cost-Efficient Metaverse Mortgages
The Metaverse mortgage can provide an affordable way for average buyers to get Metaverse land parcels. The concept of Metaverse mortgages is relatively new, and only a few companies offer them. Terra Zero, for example, provides Metaverse mortgages for vacant parcels of virtual land on major Metaverse platforms.
3. Purchase Metaverse Land Outright Using Cryptocurrency
This is the simplest way to buy virtual real estate in the Metaverse, and it’s best for small and low-cost transactions. Follow these steps to make your purchase:
The first step is to visit the property marketplace of your choice on the Metaverse platform. This will be similar to app markets for software platforms.
Sign in, assess the land’s location and design, compare prices, and create a shortlist.
Set up a digital wallet compatible with the Metaverse real estate you’ve chosen to buy and store your cryptocurrency. For example, in Decentraland, land can only be acquired using a currency called MANA, and you must have a wallet that supports the transaction.
Connect your digital wallet to your Metaverse account and ensure it has the crypto you need.
Click on the buy or purchase button to exchange the crypto amount for the real estate NFT.
Lastly, you can work with a company like Metaverse Properties to manage and develop your virtual real estate so that you can make better profits.
If you choose a mortgage option, the steps are similar; the only difference is that the mortgage provider will retain full ownership rights to the land NFT until you have paid it off, but you can manage and develop the property during this time.
How to Sell Land in The Metaverse
When it comes to selling your NFT Land, you usually have two alternatives. You can sell it through the Marketplace of the Metaverse project or a secondary marketplace. Only third-party marketplaces can currently be used for The Sandbox, but landowners will be able to sell directly through The Sandbox in the future for a 5% transaction fee in SAND.
Simply go to your profile and click the [Sell] button on your NFT to sell your land on OpenSea. After that, you’ll be able to set up a fixed-price or timed auction.
Tips Before Buying NFT Virtual Land
When investing in NFT land, you should always follow best practices, just as you would with any other investment. Make sure to use the official project link or a reliable third-party marketplace for buying virtual land.
Before making a purchase, thoroughly investigate the platform you intend to invest in and examine its basics. Don’t forget that owning isn’t your only option; you can also rent some land in the future if you need it for a specific reason.
Closing Thoughts
The digital real estate ecosystem has exploded in popularity in the cryptocurrency realm. As you can see, purchasing and selling digital land is an easy process. However, current pricing sometimes makes it more expensive than a real-world real estate investment. If you do decide to buy NFT metaverse land, keep in mind the risks and adhere to safe crypto procedures.
Hopefully, this CoinStats article was helpful and answered some of your questions concerning virtual world real estate and how to buy and sell land in the Metaverse. Make sure to visit our CoinStats blog to learn more about wallets, cryptocurrency exchanges, portfolio trackers, tokens, etc., and explore our in-depth buying guides on how to buy various cryptocurrencies, such as How to buy Ethereum Classic, What Is DeFi, How to Buy cryptocurrency, etc.
Investment Advice Disclaimer: The information contained on this website is provided to you solely for informational purposes and does not constitute a recommendation by CoinStats to buy, sell, or hold any securities, financial product, or instrument mentioned in the content, nor does it constitute investment advice, financial advice, trading advice, or any other type of advice.
Investments are subject to market risk, including the possible loss of principal. Cryptocurrency is a highly volatile market and sensitive to secondary activity, do your independent research, obtain your own advice, and only invest what you can afford to lose. There are significant risks involved in trading CFDs, stocks, and cryptocurrencies. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider your circumstances and obtain your advice before making any investment. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant regulators’ websites before making any decision.
Tesla’s Elon Musk Offers to Buy Twitter for $41 Billion, Says He Wants to Make It a Private Company – Bitcoin News
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Tesla billionaire Elon Musk has offered to purchase Twitter for $41.4 billion, according to a Securities and Exchange Commission (SEC) filing published on Thursday. Musk also explained in his note that he believes Twitter should be a private company and he decided he wants “to acquire the company and take it private.”
Elon Musk Offers to Purchase Twitter — Musk Believes ‘Free Speech Is a Societal Imperative’
During the first week of April, Bitcoin.com News reported on Tesla’s Elon Musk acquiring a stake in Twitter and at the time, analysts said it could lead to a buyout. Following the acquisition of a 9.2% stake in Twitter Inc., Musk promised he would push for significant improvements on the social media platform. The billionaire also pondered integrating dogecoin (DOGE) payments into Twitter so it can be a payment option for the Twitter Blue subscription service.
Now, ten days later, Musk is offering to purchase Twitter Inc. for $41.4 billion in a recently filed SEC filing published on Thursday. The letter is directed to Bret Taylor, Twitter’s chairman of the board and Musk stressed that he believes he can unlock the social media platform’s potential.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in his letter. “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form.”
The Tesla executive continued:
Twitter needs to be transformed [into] a private company. As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter, and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder. Twitter has extraordinary potential. I will unlock it.
Musk’s Offer to Buy Twitter Is His ‘Best and Final’ Offer
In addition to the letter, Musk left a voice text about the possibility of purchasing Twitter to the company as well. He said he spent several days thinking about it and he decided he “wants to acquire the company and take it private.” Musk also asked if Bret Taylor was “available to chat” and said that the offer was his “Best and Final.”
“I am not playing the back-and-forth game,” Musk added. “I have moved straight to the end. It’s a high price and your shareholders will love it. If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder. This is not a threat, it’s simply not a good investment without the changes that need to be made. And those changes won’t happen without taking the company private. My advisors and my team are available after you get the letter to answer any questions.”
Vice UK author David Gilbert decided to call Elon Musk’s offer a “hostile takeover” in his most recent editorial.
Of course, Democrats did not like Musk’s offer at all, and some of them even called the offer a “threat.” The left-leaning Greg Sargent said: “Now that Musk is threatening to take over Twitter, don’t forget that he relied on government to get his dreams off the ground but then sank into the worst sort of anti-government demagoguery when Dems wanted to tax billionaires and help millions of others.” The Democrat Lindsey Boylan remarked: “It alarms me how few people know that Elon Musk is funded by the same government he belittles and undermines.”
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What do you think about Elon Musk looking to purchase Twitter for $41.4 billion? Let us know what you think about this subject in the comments section below.
Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Ethereum’s Merge will no longer happen in June, new date unknown
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Ethereum’s highly anticipated transition to a Proof of Stake (PoS) consensus that is anticipated to be live in June is set to be shifted to an unknown date, this was revealed by Tim Beiko, one of the lead developers on the project.
Ethereum’s transition to PoS postponed from June
According to a tweet from Beiko, Ethereum’s Merge will not happen in June but it is likely going to happen “in a few months after.”
It won’t be June, but likely in the few months after. No firm date yet, but we’re definitely in the final chapter of PoW on Ethereum
— Tim Beiko | timbeiko.eth 🔥🧱 (@TimBeiko) April 12, 2022
The statement was made in response to a question from an Ethereum miner on whether the mining community will have more time or the plug would be pulled for Proof of Work (PoW) miners in June.
Beiko went on to advise miners not to invest in more mining equipment as the transition is just a few months away.
I would _strongly_ suggest not investing more in mining equipment at this point.
— Tim Beiko | timbeiko.eth 🔥🧱 (@TimBeiko) April 12, 2022
Ethereum’s final transition to a PoS network will mark the end of mining on the blockchain, this is something that the Ethereum foundation has promised for years.
With the new consensus mechanism, miners would give way to validators who would become responsible for confirming transactions on the network. This move is expected to help Ethereum become more scalable and at the same time cut down on its energy use.
When will the Merge actually happen?
But the new postponement of the Merge has raised other questions. Many speculate that the transition might be delayed for more than just a few months. This plays into the trope of the past promises about the switch.
A mining pool operator on the Reddit forum for Ethereum miners wrote that they’ve been “reviewing the code and running nodes on the merge testnets, (and it doesn’t look like) they will be ready until 2023.”
On the cryptocurrency subreddit, another user added that “It’s kind of a running theme in the ETH mining community how proof of stake has been ‘almost here’ for years now, but this time it’s true we are nearing the end.”
Others also share this same belief, including Canada based mining firm, Hut 8. Its Vice President of Corporate Development and Investor Relations, Sue Ennis, said in February that the firm is close to the Ethereum developer community and information reaching them is that PoS is still far off.
If The Merge doesn’t happen as scheduled, it would be a huge disappointment to the community considering the amount of delays the transition has witnessed in the past. Plus, the delay would also give other smart contract -enabled blockchain networks an opportunity to rival Ethereum’s dominance of DeFi and NFT.
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How to Buy Dash (DASH) | Where, How, and Why
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Dash (DASH), originally known as Xcoin and Darkcoin, was launched as a fork of Litecoin, which is a fork of the Bitcoin protocol. As one of the first altcoins in the market, the token distinguishes itself with innovative techniques used to address Bitcoin’s laws with transaction times and privacy
The platform has integrated with 1700+ stores and services, including established e-commerce providers like Shopify and WooCommerce. It also falls within the top 100 largest cryptocurrencies by market capitalization on CoinMarketCap, standing at #78 as of April 2022. If you’ve been wondering how to buy DASH, you’ve come to the right place!
Read on to learn everything you need to know about DASH, its key features, how it works, why it’s unique, and how to buy DASH tokens to diversify your crypto investment portfolio.
What Is Dash
Dash is an open-source cryptocurrency and blockchain designed to offer fast and affordable global payments without the need for the traditional financial system. It aims to provide a user-friendly experience by providing high-speed anonymous transactions.
Dash was created by Evan Duffield and launched in January 2014 as a fork of Litecoin (LTC), a fork of the Bitcoin protocol. It was initially known as XCoin but was later renamed Darkcoin, a name derived from its privacy features. In 2015, it was rebranded to Dash, which is short for Digital Cash.
Dash is one of the earliest altcoins to copy and modify the Bitcoin code. According to the project’s white paper, Dash aims to improve upon Bitcoin (BTC) by ensuring more robust privacy and faster transactions. The intention was to deliver a lot more capabilities and gain more market traction.
Dash has built a scalable digital payments system and has grown to become one of the most popular networks in crypto markets. It aims to become a digital currency that can be used for daily transactions such as cash, credit card, or via PayPal.
How Dash Differs From Bitcoin
Dash vs Bitcoin
Dash is designed to be much more efficient than Bitcoin.
The two platforms have different mining algorithms (rules for the computational work used in mining a cryptocurrency). Dash operates with X11, a newer mining algorithm and a modification of the Proof-of-Stake (PoS) algorithm that demands less processing power in contrast to Bitcoin’s Proof-of-Work (PoW) algorithm. It also uses CoinJoin mixing to make private transactions possible on its blockchain.
Since it went live, Dash has expanded to include features such as a two-tier network with incentivized nodes like “MasterNodes” and decentralized project governance; InstantSend, which allows for instantly settled payments; PrivateSend, which delivers additional optional privacy for transactions; and ChainLocks, which makes the Dash blockchain instantly immutable.
Dash’s InstantSend feature enables transactions to be processed in seconds by allowing users to transfer DASH without waiting for transactions to be confirmed on the DASH blockchain. Since Dash 0.14 was released, all transactions have effectively been InstantSend transactions. On the other hand, BTC transactions take considerably more time.
The transaction fees on Dash are also much lower and are usually between $0.01 and $0.02. In contrast, BTC transaction fees start at $1 and can reach even more than $30.
MasterNodes
The Dash project is run by MasterNodes, which act as servers backed by collateral held in Dash. The MasterNodes are designed to securely deliver advanced services such as simplifying the verification and validation of transactions through governance using Dash’s proposal system. All MasterNodes need 1,000 DASH in their systems to get started. They add a second layer service to the network and enable functions such as InstantSend, PrivateSend, and ChainLocks.
InstantSend
InstantSend allows users to transfer DASH tokens without having to wait for transactions to be confirmed on the Dash blockchain first. Users can then send the crypto to Masternodes, which lock funds before recording them in the next block.
PrivateSend
PrivateSend enables users to send transactions through a mixing service, where DASH tokens are sent to Masternodes. The Masternodes then mix these tokens with those of other users. As such, the trail is obscured, making it difficult to trace DASH transactions.
Experimental Features
Dash further implements more experimental features that allow anyone who owns a certain amount of DASH tokens to participate in blockchain operations.
Dash operates on a modification of the Proof-of-Stake (PoS) consensus mechanism, a layer powered by miners who use hardware to solve cryptographic puzzles and create new blocks to secure the blockchain. Miners can, therefore, preserve the blockchain’s transaction history and prevent double-spending. While Dash is based on Bitcoin’s code, it’s different from Bitcoin as the block time is only 2.5 minutes on Dash compared to 10 minutes for Bitcoin. Dash miners receive 45% of the DASH tokens mined in each block compared to Bitcoin miners, who take 100% of the BTC they mine.
Dash MasterNodes have various functionalities like facilitating instantaneous private transactions, rejecting improperly formed blocks from miners, and storing a complete copy of the blockchain ledger. 45% of the block rewards go to MasterNodes, and 10% – go to funding future proposals. Once miners have finished with a specific validation, they can vote on how the 10% should be allocated.
Anyone can propose a new feature or suggest a change in the network; however, the final decisions are only made by the MasterNodes. A new feature is implemented if the “yes” votes exceed the “no” votes by more than 10%.
What Makes Dash Unique
The MasterNodes system, which includes a special server with a complete copy of the Dash blockchain, is Dash’s unique feature. MasterNodes power Dash features like InstantSend, which enables fully confirmed transactions in two seconds, and CoinJoin, which runs a sequence of transactions and makes them harder to trace. Users receive a part of the block rewards from Dash mining in exchange for running MasterNodes.
Most merchants don’t accept many types of cryptocurrencies; however, Dash has had quite a lot of success in this area.
On 27th July 2021, Dash launched DashDirect, a retail savings app that allows you to make retail purchases using DASH tokens on more than 125 websites and 155,000 stores. It also comes with discounts depending on the retailer.
Dash’s other noteworthy aspect is its user-friendly design. The Dash website has a clear explanation of how Dash works and where you can buy DASH tokens.
The DASH Token
DASH is the native cryptocurrency for the Dash platform.
DASH is an inflationary asset with a supply cap of 18.9 million tokens. The Dash reward rate for mining decreases at the rate of 7% every year. The last DASH block is predicted to be mined around 2254.
The price history of DASH follows a pattern similar to that of BTC due to the basic correlation between the two. However, there are some differences between Dash and Bitcoin.
The price of DASH doubled in a single week at the beginning of March 2017, reaching a high price of nearly $60. The all-time low of DASH was recorded to be $0.2139 in February 2014, shortly after the coin’s launch. The token reached its all-time high of $1,642.22 by December 2017.
Why Investors Buy DASH
Many users find DASH an exciting cryptocurrency for making private, quick, and secure transactions.
Investors should consider adding the token to their portfolio only if they believe that someday the market will favor protocols designed to enable efficient and convenient online payments.
The DASH token’s limited supply and deflationary nature may also attract new investors who believe DASH is a beneficial store of value.
What to Consider When Buying DASH
Cryptocurrencies are inherently complicated and highly volatile, so you must be fully aware of the market risk involved before purchasing or holding any type of cryptocurrency. If you’re considering DASH as a potential addition to your portfolio, you must first consider the following factors:
Availability: DASH is listed on a range of global crypto exchanges making it easily accessible for traders and increasing the coin’s credibility.
Supply: Due to its limited supply, DASH is predicted to reach its maximum supply by the year 2300, after which the price may increase.
Market Competition: DASH encounters strong competition from various popular cryptocurrencies like Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC), Ripple (XRP), and privacy coins like PIVX (PIVX) and Monero (XMR). DASH’s popularity and adoption relative to these competing coins will affect and determine its market value.
Emission Rate: DASH’s variable block reward is decreasing at a rate of 7.1% each year. The Dash whitepaper mentions that Dash will keep emitting coins for around 192 years before a full year of mining creates less than 1 DASH. Only 14 more DASH will be created after 2209, and it will take 231 years to generate the last DASH, starting in 2246 and ending in 2477 when emission completely stops.
Decentralized Governance: Dash has a decentralized governance and voting system, according to which any member of the community has the right to submit a proposal for a new feature or change to the Dash network. These proposals are then voted on by MasterNodes.
Buying DASH
Follow these simple steps for buying DASH coins:
Step #1: Pick a Cryptocurrency Exchange
You must compare the popular cryptocurrency exchanges’ features before choosing the one that suits your investment needs best. Some of the factors to consider are supported deposit methods, trading fees, customer support, ease of use, and local requirements.
This information can be found by clicking on the exchange name (like KuCoin Cryptocurrency Exchange or eToro USA LLC Cryptocurrency Trading, etc.) in the table, which will take you to its review page.
You can buy DASH using fiat currencies like euros, pounds, dollars, etc., on an exchange service like Binance, Binance Futures, HitBTC, HuobiGlobal, OKEx, Yobit, ZBCom, etc.
Step #2: Create an Account
After you’ve decided on a reliable crypto exchange, the next step is to open a trading account to buy or sell DASH. The requirements differ depending on the trading platforms. Personal information such as your name, contact number, email address, home address, social security number, and a copy of your driver’s license, passport, or government-issued ID will be required by most exchanges.
You may have to prove your address by uploading a bank statement, a credit card statement, or a utility bill. You might also need to identify yourself through a webcam or smartphone in compliance with Know Your Customer (KYC) rules if you plan to deposit fiat currency from your bank account to purchase cryptocurrency.
Some exchanges allow users to trade DASH without passing KYC. However, they won’t allow you to transfer local currency from your bank account; therefore, if you plan to purchase DASH with US dollars, you will need to pass the KYC requirements.
After verifying your ID, you may want to enable the two-factor authentication system (2FA) to add an extra layer of security to your account.
Step #3: Deposit Funds
After setting up your account, the next step would involve depositing funds to purchase DASH and other cryptocurrencies. You can use your bank account, debit/credit card, or crypto coins from a different crypto wallet. The payment method you use will be determined by the trading platform, location, and preferences.
Bank Account: While a bank or wire transfer from a local bank account is typically free, you must double-check with the DASH exchange you choose before you deposit funds.
Credit or Debit Card: You can conveniently link a card to your account to top it up. Once linked, you can use your card to make an instant purchase or set up a recurring purchase. However, you must be aware that using your cards for buying crypto may attract an additional fee.
Cryptocurrency: Usually, you can buy DASH by trading it for other cryptocurrencies like BTC or a stablecoin. Since this varies between exchanges, you will need to search for DASH on the spot market to check the cryptocurrencies for which it can be traded.
Step #4: Get a DASH Wallet
If you already have a DASH wallet, you can buy DASH directly from CoinStats by checking the coin’s current price and performance and directly swapping your existing coins for DASH tokens.
You may choose to store your newly purchased DASH coins on the exchange or move it to a more secure personal wallet that supports DASH. Many users prefer using their private wallets to ensure full ownership over their crypto assets or use them with other DeFi apps.
A hardware wallet, also known as cold storage, is a physical device, much like an HDD or an SSD. Hardware wallets are usually considered the most secure wallets to store your digital assets as they offer offline storage, thereby significantly reducing the risk of hacks.
You can also choose a software or digital wallet if you plan to trade your DASH tokens frequently. Whichever wallet you choose, always remember to keep your private keys safe and never share them with anyone.
For a complete list of crypto wallets that support Dash, visit the official Dash site.
Step #5: Buy Dash
After successfully completing the above steps, you can start buying DASH. The easiest way is to use the ‘instant buy’ option to purchase DASH for a set price (if the cryptocurrency exchange you have chosen offers this feature). Select Dash from the list of assets or search for Dash by typing “Dash” into the search bar. When you see Dash show up in the results, tap it to open the purchase screen and enter the amount you want to buy.
You can also open a trade in the spot market to set your own price—the most common way to buy cryptocurrency. The instant buy feature is straightforward but may be more expensive than the spot market option.
Before completing your purchase, you should also check the performance of your existing portfolio using a crypto portfolio tracker and monitor the DASH current price to decide if it’s the right time to buy.
You can also cash out your DASH with the same exchange by placing a sell order.
Dash price page on CoinStats
Investability of the DASH Token
According to walletinvestor.com, DASH is predicted to be an excellent long-term (1-year) investment based on the token’s price and performance as of April 2022. Based on the site’s technical forecasts, you can expect the DASH price to increase to $323.966 by 2027. Therefore, your $100 investment may reach $265.75 in 2027.
That said, the opinions expressed in this article should not be considered direct investment advice.
Closing Thoughts
The growing popularity of the Dash platform has motivated plenty of users to buy DASH coins and start actively trading them. The past performance of DASH, as well as analytical predictions about its future, indicate that the DASH coin may be a great long-term investment.
Even after you have purchased your DASH coins, you must continue to monitor the protocol’s performance and adjust your trading plan accordingly to keep your crypto investments safe. Also, remember to use a secure software or hardware wallet to store your tokens and keep the private key to your DASH wallet extra safe.
Platforms like CoinStats make it easy to purchase DASH using fiat currency, credit or debit card, a bank transfer, or other crypto coins. You can also benefit from our CoinStats blog to learn more about DeFi and use the CoinStats portfolio tracker to keep track of your crypto investment portfolio or store your DASH coins securely in the CoinStats Wallet.
Investment Advice Disclaimer: The information contained on this website is provided to you solely for informational purposes and does not constitute a recommendation by CoinStats to buy, sell, or hold any securities, financial product, or instrument mentioned in the content, nor does it constitute investment advice, financial advice, trading advice, or any other type of advice. Our information is based on independent research and may differ from what you see from a financial institution or service provider.
Investments are subject to market risk, including the possible loss of principal. Cryptocurrency is a highly volatile market and sensitive to secondary activity, do your independent research, obtain your own advice, and be sure never to invest more money than you can afford to lose. There are significant risks involved in trading CFDs, stocks, and cryptocurrencies. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider your circumstances and obtain your advice before making any investment. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant regulators’ websites before making any decision.
From Bitcoin 2022 To The Rest Of The Plebs: Why I’m Riding A Harley Across The U.S. Meeting Bitcoiners
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Starting from Bitcoin 2022, my motorcycle tour will travel 10,000 highway miles to meet Bitcoiners across the U.S.
Starting from Bitcoin 2022, my motorcycle tour will travel 10,000 highway miles to meet Bitcoiners across the U.S.
To me, Bitcoin represents the opportunity for the common person to take back sovereignty in a time of vanishing freedoms and increasing dependence. However, that understanding took many years of exploring and curiosity to find. I approached Bitcoin from technical and financial perspectives, dug into the history of money, and read bundles of arcane economics papers that all contributed to this idea of Bitcoin and its impact.
Bitcoin grew faster and further than I ever imagined. Given how long it took for it to “click” for me personally, I want to find out what is bringing people to Bitcoin and how this movement is growing organically. In addition, I want to share these stories with you and your friends and family, because I believe these perspectives have the potential to resonate with others earlier in their Bitcoin journey. These stories are best told and heard in person, after a handshake.
How will I hear these stories? By going on tour.
What Is The Bitcoin Tour?
To hear how people are falling down the rabbit hole, I will visit Bitcoin meetups across the U.S. this year, starting from Bitcoin 2022 in Miami. I am riding the ultimate freedom machine — a Harley Davidson motorcycle — to see the country from the ground.
The motorcycle I’ll be riding across the U.S. this year, parked in front of Bitcoin 2022.
As I visit the many Bitcoin meetups sprouting up across the country, I will hear about and share the myriad ways all of us come to appreciate Bitcoin. My goal is for your friends and family to see these stories and find just one that resonates with them, that shows them how Bitcoin might help solve a problem they care about. Swan Bitcoin will host these stories on its YouTube channel, and I will share them on Twitter.
If you want to share your story, let me know where you attend your local Bitcoin meetup and I will try to make it there. If you organize a regular Bitcoin meetup in your area, definitely direct message me on Twitter. You can see the rough plan for my route around the U.S. in this article below.
Why This Tour Exists
This tour is ostensibly about sharing how people come to find and appreciate Bitcoin — but my motivation runs much deeper. Let me attempt to share why:
Risk makes life interesting.
We marvel at Evel Knievel, revere mountain climbers, follow entrepreneurs in part because all of these people take big risks. They put careers, reputations, limbs and even life on the line to explore the uncharted and make the map for all of us. All of our great stories track the arc of a hero reckoning with obstacles both within and without, not the humdrum of daily life. On some level, we are attracted to and amazed by taking big risks to explore the unknown.
My motivation behind this tour is deeply rooted in an exploration of risk and the unknown. I love riding motorcycles partially because the risk brings a rush that cannot be captured on a page. I want to visit meetups and learn from Bitcoiners because I have truly very little idea of what I will learn or how, but I know I will find a way to hear and share incredible stories. I quit a stable job to go on this tour because I wanted to see what the risk of taking a few months to travel across the U.S. could reveal in my life.
Taking on sponsors for the tour also introduces a risk that I could let those sponsors down. I decided early on to only work with companies that I respect and people who I like. I would rather ride completely on my own dime than sell that freedom to someone I loathe working with. Working with teams I respect, however, pushes this tour to places it would never go if it was just me and a motorcycle. I owe a huge thanks to those sponsors for believing in my tour and this vision: Swan Bitcoin, Bitcoin Magazine, Unchained Capital and Upstream Data.
Risk And Reward
Risk also comes with reward for those who navigate successfully. Facing the unknown and knowing it one step at a time is at the root of why I set out on this Bitcoin Tour. I live for these experiences.
I believe most everyone finds joy in these kinds of experiences, but it is also easy to avoid them altogether. Our societies today — especially in the “developed” world — don’t help. We are driven to work harder and longer for less, then soothe ourselves with menus of on-demand entertainment, food, pre-packaged “experiences” and all other manner of predictable dopamine releases. Risk and exploring the unknown is discouraged from many angles, even though it invigorates us and drives healthy, happy societies. I hope my tour can inspire others to take the risks they’ve been mulling.
Risk And Freedom
Risk also comes hand in hand with freedom. Life is inherently a risky business, requiring personal responsibility to survive and thrive. Throughout history, societies have used controls and regulations to change how their citizens view and interact with risks. However strong the rule of human law, however, we cannot eliminate the risks inherent to natural law. Often when we attempt to eliminate a risk arising from the natural world, we only kick it off into the future.
Risk And Bitcoin
Our current financial and monetary system does not eliminate the risks of a credit-based currency with bailouts and regulations, but instead pushes them off — allowing them to fester and grow. This constant kicking of the can down the road is the “fiat mentality.” Looked at through this lens, other “crypto coins” are simply a continuation of the existing system: a repackaging of fiat mentality in fancy world salads and shiny JPEGs.
The incentives of Bitcoin’s system point to a different era, one where risks and rewards are more evenly distributed to those who choose to take them on. The military aggression, controls and taxation systems are no longer necessary for the purpose of backstopping the legitimacy of currencies, and the great power managing a currency gives a government. Neither will the norm continue to be endless inflation in a time of staggering productivity gains from technology.
It is no surprise that many label Bitcoin as risky, because Bitcoin is changing our relationship to risk. Bitcoin will force an end to a system that incentivizes policy makers and the public to put off and bottle up risks until they explode catastrophically.
In my view, Bitcoiners sharply understand risk and its relationship to freedom, to personal responsibility and to living out a rewarding life. This tour will help me test this idea, to learn more about how those who support Bitcoin understand these relationships and share that knowledge in a relatable way.
The Bitcoin Tour Route
Now that the weighty stuff is over, it’s down to where the rubber meets the road: the route.
After departing from Miami, I plan to ride up and around the U.S. for three months, logging over 10,000 miles in the saddle. The first leg of the trip will cover Texas and the South up to the Eastern Seaboard, and those dates are more or less set. The second leg of the trip will take the tour across the Northeast and through the Midwest, ending up in Colorado in late June. The final leg goes down to the Southwest, then up through the Rockies and along the Pacific coast to end in Los Angeles.
Here’s what this route looks like all mapped out (keep in mind, this is not set in stone):
If you’d like to share your story, join me for a ride or just learn what I’m learning as I cross the U.S., follow me on Twitter @CaptainSiddH and join the tour’s Telegram. If you’d like to support the tour financially, you can donate sats via this Tallycoin fundraiser.
Whoever you are, dear reader, I am psyched to meet you at your local Bitcoin meetup. Keep stacking and I’ll see you soon. You might just snag one of the 21 hats I’ll be giving out at stops along the way.
This is a guest post by Captain Sidd. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Belarusian crypto exchange stops trading for Russians over war in Ukraine
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Announced in a blog post published on Tuesday, April 12, the Belarusian crypto exchange Currency.com says it will restrict its services for Russian users following Vladimir Putin’s invasion of Ukraine earlier this year.
“The Russian invasion of Ukraine brought violence and disorder to the people of Ukraine. We condemn the Russian aggression in the strongest possible terms. We stand with Ukraine and everyone who denounces this terrible war. In these circumstances, we can no longer continue to serve our clients from Russia,” the post from Currency.com reads.
📢 halts operations for residents of the Russian Federation (Russia). Clients from other countries and regions will not be impacted by this decision.
As reported by Market Insider, Currency.com was established and registered in the Belarusian capital Minsk in 2018, and it is primarily focused on serving the Eastern European markets. Since then, though, the company has moved its headquarters to Gibraltar, but it still has an office in Minsk, as well as in Warsaw, Poland, and in New York in the U.S.
Many accuse Belarus of helping Russia
Following Russia’s invasion of Ukraine, most nations around the globe have imposed strict sanctions on Russia, as well as on Belarus. In the Russian case, even assets belonging to the Russian central bank have been frozen or confiscated. The two neighboring countries are close allies, as are their leaders, and many accuse Belarus of helping Russia by allowing them to use Belarusian territory to attack Ukraine.
Until now, most crypto exchanges have been anything but keen to ban Russian users as long as they are private individuals. U.S. authorities have warned crypto firms against helping Russia as a country and those individuals under sanctions.
As reported by CryptoSlate, anyone who seeks to help Russia bypass economic sanctions will be held accountable by the US government, said Deputy U.S. Treasury Secretary Wally Adeyemo.
Clear message to crypto exchanges
“What we want to make very clear to crypto exchanges, to financial institutions, to individuals, to anyone who may be in a position to help Russia take advantage and evade our sanctions: We will hold you accountable,” Adeyemo said.
However, sanctions do not apply to ordinary Russians not listed on any sanctions lists. Some Russians are using crypto as a lifeline as the ruble has collapsed and millions of people have lost their life savings.
“Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too,” Coinbase’s CEO Brian Armstrong said in a series of tweets last month. This stance has also been repeated by Kraken’s CEO Jesse Powell and Binance’s Changpeng Zhao, two of the other major crypto exchanges.
Western leaders have increasingly focused on the use of cryptocurrencies such as bitcoin (BTC) and ether (ETH) to evade sanctions, however, this fear has also been refuted by several analysts and observers, not the least by an extensive report by Chainalysis.
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On April 8th, the ground began to shake: CoinStats was hit by The ⚡Big ⚡Big Spark, a live event introducing an avalanche of revolutionary updates that are about to change your trading experience forever. The CoinStats team members walking you through the new features enjoyed the enthusiasm with which our community welcomed the updates.
CoinStats BigBig Spark live event recap
We would like to thank you guys for turning up, asking thoughtful questions, and of course, cheering us on. That being said, you have seen nothing yet: The 100 exclusive NFTs sent to our users opened a new era of amazing rewards and massive rehauls.
Now let’s go over the key updates revealed at The ⚡Big ⚡Big Spark.
CoinStats Rewards
Since CoinStats is evolving at a high pace, sometimes the members of our community miss out on useful features and communication channels. The launch of CoinStats Rewards means you’ll get rewards for discovering CoinStats in its full glory.
How does it work? You complete quests listed in our CoinStats Rewards program. It can be anything: Swapping via our DeFi Wallet, referring a friend, visiting CoinStats every day or joining our Discord channel. The completion of quests will earn you ⚡Sparks that you can later exchange for a myriad of terrific rewards. For example, you may choose CoinStats Premium, a CoinTickr tracking device or a custom NFT. So you get rewarded for exploring CoinStats – it’s a win-win in our book!
Homepage Overhaul
The ⚡Big ⚡Big Spark also transformed our homepage! From now on, you can find all your favorite coins and major crypto news right on the CoinStats homepage. You never know, maybe your next big investment will come from just opening CoinStats.
CoinStats Stories
Next up we have the launch of CoinStats Stories. Who doesn’t love a Pepe meme or an informative news article about the latest hype? Now you’ll have daily news, crypto memes, and so much more right at your fingertips.
Swapping 2.0
And finally, The ⚡Big ⚡Big Spark brought us Swapping 2.0: Now you can trade on CoinStats with zero extra fees right where you do your research. Enjoy a smooth and convenient user experience as you trade and invest into the coins that will take you there.
So, what are you waiting for? Go ahead and try out all these exciting changes that The ⚡Big ⚡Big Spark brought about. And make sure to tune in next time we’re hit with something equally transformative, word on the street is it’s coming very soon.
Bitcoin Songsheet: Airline Miles Are The Original Altcoins
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Airline miles are the original altcoin, allowing zombie companies to issue value for nothing while encouraging people to be “Miles Chasers.”
Airline miles are the original altcoin, allowing zombie companies to issue value for nothing while encouraging people to be “Miles Chasers.”
In 1999, a civil engineer by the name of David Phillips managed to earn 1.2 million miles by taking advantage of a promotion by Healthy Choice. He did this by mailing in UPC labels from their pudding cups and henceforth became known as The Pudding Guy. This became an early internet meme, like “All your base are belong to us” and the Hampster Dance.
Airline miles have a weird place in American culture. Everyone knows their uses are very limited, they have no transferability and oftentimes expire. Yet they’re seen as a way to beat the system, of getting something for free, of saving some money. We look at The Pudding Guy with envy and admiration. Here’s someone who found a loophole in the system and used it for air travel! He bent the system to his will, and got the benefits that only rich people are entitled to!
There are now many websites and forums that discuss how you can get deals on miles and get hacks on travel. These people are called Miles Chasers and they accumulate miles on the cheap. They apply for several credit cards, spend time on surveys to earn miles and spend weeks traveling to get to the next status tier. They don’t realize that they’ve bought themselves a job, not even a particularly interesting one at that, and it’s entirely rent-seeking.
Confessions of a Miles Chaser
I used to be one of those Miles Chasers. I’d spend an hour looking for a way to earn miles so I could get the equivalent of $8 in miles. Somehow, it never registered that I was giving myself a job at $8/hr. The sadder thing is that the work didn’t really benefit anybody or build anything. It was as productive as doomscrolling through Facebook. Unfortunately, Miles Chasing is a hard habit to break because of the scarcity mentality that’s so common to fiat money: You can take the miles from my cold, dead hands.
Miles have the illusion that you can get something for nothing. I wanted to beat the system and bend it to my will, like The Pudding Guy did. I signed up for lots of credit cards, got their miles and kept track of the required spending for the sign-up bonus for both me and my wife. Only later did I understand that I was rent-seeking.
How Miles Work
Miles look like a normal loyalty program, much like getting a sixth sub free at Subway if you purchase five. And indeed, that’s how it all started back in 1981 when both American and United started their mileage loyalty programs. Both airlines saw that business travel was their big profit center and by rewarding their customers, they could get some more of that business travel money. These customers weren’t as price sensitive to the flights since the companies would foot the bill, but they did care about the benefit: the airline miles. Miles are a subtle kickback to the flyers who were traveling on the company dime.
Soon, other airlines and hotels and car rental companies followed suit. They, too, had a lot of business travelers, and they wanted to incentivize business travelers with company funds to purchase from them. Of course, it sucks having lots of different loyalty programs to manage, so many of the hotels and car rental companies partnered with existing airline miles programs. Miles became the default kickback currency to traveling employees everywhere.
Airlines sell miles to partners at around $0.01/mile. What started as a way for loyalty programs to consolidate became a huge revenue source for airlines. Not only do hotels and car rental companies buy them, but also credit card companies, survey firms and even consumers. Credit cards, in particular, have become huge buyers of miles, as they use their 3% merchant fees to fund the kickback to the user.
Miles are a form of debt; they are redeemable for future flights. Airlines can bank revenue now for flights that haven’t occurred yet! Unlike normal debt, however, miles can be debased by repricing redemptions, reducing redemption availability or expiring them after a period of time.
The availability of this special form of debt, as we will see, has fundamentally changed the nature of the businesses, from travel to debt issuance. It turns out that the ability to print your own debt is a curse.
Airlines are Difficult Businesses
Airlines are very difficult to run. They require tremendous amounts of capital expenditures, high ongoing costs like fuel and labor and complicated logistical infrastructures. There’s also regulation, competition and weather to deal with. It’s no surprise, then, that they often get into financial trouble.
Because governments view airlines as a display of national prestige, there’s a tendency to bail them out of their troubles. The three major U.S. airlines (Delta, American and United) have gone through at least one bankruptcy in the last 20 years. The bankruptcy proceedings usually result in a merger or some new company that’s injected with government funds. Even airlines that might go bankrupt are bailed out by the government such as during the travel shutdowns of the pandemic. The result is that airlines are now zombie companies that repeatedly get revived through government intervention.
Zombie companies typically don’t do that well in the marketplace. It’s no coincidence that air travel times are slower now than in the ‘70s. Planes might be more fuel efficient, but they’re not really faster or more convenient. The way these zombies have survived, besides government intervention, is through the financialization of their miles programs.
Whenever airlines are in a pinch, they sell miles to their partners for cash. They are acting as central banks, except instead of dollars they issue new miles. What’s more, they also control the redemption side of the equation. If they want less redemptions they’ll put more restrictions on redemption flights and if they want more, they’ll put less restrictions. Depending on the inventory of seats they have and the cost of certain flights, they can optimize for discharging the outstanding miles whenever it is least costly. They’re the neighbor that borrows your snowblower in October and returns it in May.
Miles are debt on an airline balance sheet, with a particular form of redemption that airlines control. The initial issuance of the miles and control of the redemption process makes them very much like an altcoin. Altcoins are created at no cost and can only be redeemed for a particular purpose. ICOs were predicated on this, for example. Coin X entitled you to some service, which may or may not be available depending on what the central committee decided.
Mileage Program Valuation
The complete control of the creation and redemption processes makes airline miles programs very valuable. During the pandemic, we got a glance at their valuations because these airlines took out loans against their miles programs. MilesPlus, United Airlines’ program, was valued at $22 billion in 2020. This is in contrast to their current market cap, which is $15B. United Airlines wholly owns MilesPlus, so it’s like finding out that a house costing $500,000 has a kitchen worth $800,000. The rest of United Airlines is worth -$7 billion! Meaning that United is more a bank that uses flights to discharge accumulated mileage debt than an airline that uses mileage programs for loyalty.
The other two major carriers in the U.S., American and Delta, have similar valuations on their miles programs.
These companies are zombies, only kept alive by their ability to print new miles and borrow against future revenue. They’ve become financialized to the point that their business model is mostly in selling miles. They are the original altcoins.
Zombies Everywhere
Airlines are surviving on borrowed revenue. They don’t really operate air travel at a profit, but instead use air travel to discharge miles that they print. By selling miles, they’re banking revenue now for a redeemable liability later. The air travel part of their business is a loss-leader and the part that’s only necessary because it’s the main way in which miles get redeemed. The airlines are zombies living on borrowed time.
The perception of miles is that people are getting something for nothing. In reality, Miles programs are rent-seeking jobs in a money-printing system. The Cantillionaires of airline miles are the people with premium status, who get benefits that cost more for other people. The cost of airline seats are higher because of the subsidies paid to the high-status people. The people are zombies that go after miles.
All this is to say that altcoins aren’t really new. The main difference between altcoins and airline miles is that airlines have been forced to keep a useful service around, which altcoins don’t. In a sense, altcoins are a new level of zombification, with no useful redemption mechanism. If airlines someday only operated the miles programs, they would be altcoins.
Altcoin users, then, are the equivalent of Miles Chasers. They’ve bought themselves jobs of finding the best deals. They buy random coins not based on utility but based on discount. A life seeking deals like this is a good way to end up with a lot of flea-market junk, which not coincidentally is what their portfolios look like.
And that’s the real trouble. It’s easy to get caught up in the lifestyle and fritter your life away on a rent-seeking activity. The Pudding Guy has probably devoted 10,000+ hours to Miles Chasing and altcoiners have probably spent similar amounts of time looking for coin bargains. Such devotion to “free” stuff would be funny if it weren’t so sad.
Plebs stack sats and buy bitcoin by working on what they’re good at, that the market wants. Altcoiners are like The Pudding Guy, rent-seeking and selling their souls in jobs they bought for themselves.
We are not the same.
This is a guest post by Jimmy Song. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
