Aeternity cryptocurrency guide advises where to buy and how to buy Aeternity. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about Aeternity as well its status in the world of cryptocurrencies.
Aeternity, Thursday, 2018-05-31
- 1 What Is Aeternity?
- 2 Beginner's Guide to Aeternity
- 3 Where and How to Buy Aeternity?
- 4 Aeternity Markets
- 5 Where to Spend or Use Aeternity?
- 6 How Does Aeternity Work?
- 7 Aeternity Regulation
- 8 Is Aeternity Secure?
- 9 History of Aeternity
- 10 Aeternity Videos and Tutorials
- 11 See Also
What Is Aeternity?
Aeternity is an open-source blockchain-based platform and digital asset platform designed for decentralized applications. The project is designed with special focus on enhancing the scalability of decentralized applications and smart contracts. It employs Proof-of-Work and Proof-of-Stake consensus models and further includes the Cuckoo Cycle that helps combine scalable memory with instant verifiability.
The Aeternity network employs decentralized oracles that help to raise the efficiency because there is no layering of consensus mechanism. Instead, the network employs state channels to provide lines of communication between parties involved in smart contracts. Because the smart contracts are implemented off-chain, the main blockchain can handle more transactions. It only comes in to help address conflicts that might arise in the smart contracts.
Beginner's Guide to Aeternity
Aeternity is among the latest cryptocurrency networks thought to have huge potential to redefine the crypto niche. It introduces a new way of implementing smart contracts and has promised to make mining with smartphones possible. That is right; mining with a smartphone. Its architecture and features have been instrumental in its recent admirable performance in the markets.
Therefore, should join this high potential network? While all the signs are green, it is important to hold back and ensure to understand it well. You need to explore the blockchain design, the application of the scalable smart contracts, and the associated benefits among others factors. This is why this guide was created.
The guide takes a comprehensive look at Aeternity to help answer all the questions you have about the network and clear every doubt. Take a walk through the crypto network to understand its position and the expected performance in the coming days. Welcome.
Where and How to Buy Aeternity?
In September 2017, the price of Aeternity coin was $0.55. This price grew more than 800% to reach the highest peak of $5.0 in early May 2018. When people hear of this admirable growth, the first question is how to buy Aeternity. However, till end of May the price has dropped for around $3.0. Here is an account of where and how to buy Aeternity native coins, AE.
The first step is selecting an appropriate wallet. This is the digital location that will hold your coins after a successful purchase. The wallet is also important in holding the coins for speculation or trading at the markets. There are two main ways of buying AE.
- Buy from cryptocurrency exchanges: Cryptocurrency exchanges are the main platforms that bring together buyers and sellers of cryptocurrencies. The price of the AE on the exchanges is driven by demand and supply. Note that you will need to open a trading account in the exchanges to be able to buy AE from them. Some of the top exchanges to buy AE from include Binance, HitBTC, Gate.io, and BigONE.
- Purchase from those who already have AE: The fast-growing popularity of cryptocurrencies, communities have started forming crypto groups to help discuss crypto related news. They not only meet to speculate on the coming assets, but also look at more things affecting the fintech industry such as regulations. Now, these groups and clubs have also become important points for people who have cryptocurrencies such as Aeternity to sell them. Some common cryptocurrency clubs include Bitcoin G+ and Avatar X.
- The good thing about cryptocurrency clubs is that buyers are not bound by any regulations such as opening trading accounts. However, they are problematic in that it is very difficult to get a person who wants to sell the same quantities of AE that you want to buy.
Are you planning to join the cryptocurrency industry, one must have thing is a cryptocurrency wallet. This is a digital location for holding the keys that point at your AE stored in the Aeternity network. Note that though wallets are at times referred to as digital locations for storing your crypto assets, the definition is indeed a misnomer. The digital assets such as AE do not leave their networks. Therefore, they can never exist outside.
Cryptocurrency wallets store private keys, public keys, and the seed. The private keys are used to point at the AE you hold in the Aeternity network. Like the name suggests, they are private and should never be shared with third parties. The public keys, like the name suggests, are public and can be shared on the network. You should give them to the people wants to pay you in AE, provide him with the public keys that point at your wallet.
The last code generated by the wallet is the seed. This is a special code that is used to regenerate the private keys in the case of a loss. It is important to store the private keys and seed away from the main computer to avoid the danger of loss. As an ERC-20 token, the following are the main wallets that support Aeternity.
Where to Buy Aeternity with Credit Card?
Credit cards have become one of the most accepted methods of payment because people do not have to walk around carrying cash. In addition to being the primary means of payment for both online and conventional places, you can also use a credit card to purchase crypto assets such as Aeternity from exchanges such as Mercatox and Gate.io.
Note that if you want to trade AE at the top exchanges such as Binance that do not accept fiat currencies, you need to buy alternative tokens from other platforms and use them to buy AE.
Where to Buy Aeternity with PayPal?
There is no way to directly buy AE with PayPal. For years, PayPal looked at cryptocurrencies as a direct competitor. Therefore, its administration opted to ban payments to such networks. In fact, people who made payments to cryptocurrency networks were penalized by PayPal.
Though the administration has indicated it will start allowing payments even to crypto networks, it is not until such policy changes are effected that direct payments will be possible. This implies that people with funds in their PayPal accounts have to follow the longer route of withdrawing funds either to credit cards or bank accounts before buying AE.
How to Buy Aeternity with Wire Transfer?
Banks are probably the most trusted institutions in the globe today. People trust banks to process their salaries, get financial advice and even credit for development because they are run by experts. Now, you can also use banks’ wire transfers to buy Aeternity or other cryptocurrencies. Here is the procedure.
- Start by opening a cryptocurrency wallet. This is the location that will hold your AE after the purchase process is over. Some great options include TREZOR and MyEtherWallet.
- Select a trading exchange that lists AE and open a trading account. Then, you will need to verify the account using government recognized details such as mobile phone number and proof of location. Note that the verification details might differ depending on the cryptocurrency exchange of choice.
- Select the quantity of AE that you need to buy and complete the process by hitting pay with a wire transfer. You will be prompted to include the bank details so that the exchange can make a claim from your bank. The entire process before the AE you have bought hits the exchange will take about 2-3 days depending on the exchange location, local laws, and the respective bank policies.
- Once the purchase process is completed, the AE that you just bought will go to the trading account. Move them to the Aeternity wallet of choice for extra safety.
NOTE: If you want to buy from cryptocurrencies that do not accept wire transfers, the process will have to start from a different platform that accepts them. For example, you can buy Bitcoins at Coinbase using wire transfer, and then use the BTC to buy AE at Binance.
Where to Sell and Trade Aeternity?
After taking some time in the Aeternity network and accumulating some native coins; what is the best way to get the highest value from them? While you can hold them waiting for the value to go up, a better method of getting higher ROI (Return on Investment) is trading in the markets. The selling and trading platforms are used to bring together people who want to join the network.
As you focus on joining the trading and selling platforms, it is important to appreciate that they are the easiest targets for hackers. In January 2018, Coincheck, a cryptocurrency exchange in Japan was hacked and hundreds of crypto coins stolen. Other exchanges that have been hacked and users’ assets stolen include YouBit, Mt. Gox and Poloniex, Bitfinex and Bitcoinica.
Because of the underlying risks, the market you select to trade and sell AE should be carefully evaluated. Here are some useful tips you can use to select the best cryptocurrency exchanges to trade and sell Aeternity.
- Only use the cryptocurrency exchange that puts a lot of effort into securing cryptocurrency assets. The exchange should have top security features such as 2-factor authentication and moving clients' assets to cold storage.
- Select a trading platform that allows users to move their AE to their wallet immediately after trading in the platform.
- Best platforms should have a low transaction fee. This means you are sure of keeping the bulk of the profits after trading in the exchanges.
- Good exchanges should list many cryptocurrency assets to provide users with many trading opportunities. If one trading pair is not working, it will be easy to shift to another.
- Select the exchange that allows users from your geolocation. For example, UpBit was designed mainly for traders in South Korea. If you are outside the jurisdiction, it will be very difficult to trade.
Note that trading AE in the exchanges requires users to open trading accounts. Because most exchanges are operated under the local laws, you will also be required to verify the trading account using personal info recognized by the government. Remember that the verification details might differ based on the selected exchange, the quantity of AE to be traded, and location. Some of the main cryptocurrency exchanges to trade Aeternity include Poloniex, CoinBene, LATOKEN, and BigONE.
How Much Are the Transaction Fees of Aeternity?
Though the Aeternity team does not give a specific figure about the transaction cost, it is lower than other top networks such as Bitcoin and Bitcoin Cash. The transaction fee varies depending on the nature of the transition. Note that the transactions do not simply mean sending funds. It also entails running smart contracts and even decentralized applications.
The fast rising popularity of cryptocurrencies has given to the fast growth of associated markets. The markets have become the new face of cryptocurrencies because they are the entry points of people who want join cryptocurrencies and authorities use them to maintain a grip on the crypto industry. To trade in most markets, you are required to have an appropriate cryptocurrency wallet and a trading account. Here are some of the top Aeternity markets.
- Binance is among the leading cryptocurrency exchanges out there today. It is a Hong Kong-based cryptocurrency exchange started by Changpeng Zhao in mid-2017. Zhao felt that cryptocurrency trading was overly complex, expensive and took so long. Therefore, he opened the exchange and also released a native token referred to as BNB (Binance Coin).
- The exchange is a crypto-to-crypto platform. This means that you can only trade AE with other cryptocurrencies such as Ethereum and Bitcoin. Therefore, those who have cash in their credit cards should first buy alternative coins from platforms such as Changelly and move them to Binance to trade AE.
- The most notable aspect of the Binance market is its low trading fees. Unlike other exchanges that charge as high as 0.25%, Binance charges only 0.1% of the transaction volume. This makes it one of the cheapest platforms to use. In fact, this is not all. You can cut the cost by 50% to 0.05% if you pay the transaction cost in the native coins, BNB.
- Like Binance, HitBTC is another cryptocurrency exchange that has been growing rather fast. Many AE traders prefer HitBTC because it provides them with a very large number of tradable assets. You will always have a profitable crypto asset to pair with AE at the exchange.
- To ensure that traders can keep the bulk of the trading profits, the transaction cost is very small. You will only be charged 0.1% of the volume you trade at the platform. This makes it one of the cheapest markets for AE and other crypto traders who want to keep the bulk of their profits.
- The main disadvantage of using the market is the hacking history. Though the exchange administration has done a lot to address the shortcomings that made hacking possible, a lot of people still shy away from the market when they hear it was hacked at some point. The other issue of using the market is that withdrawals take very long. This could expose users’ assets to great risk of getting attacked because the exchanges are very risky.
- Gate.io is one of the young exchanges in the market today. It was started in 2017 with the target of making trading faster and more efficient. The biggest selling point of Gate.io is its large number of cryptocurrencies available for trading. This implies that you will never miss a profitable option to pair with AE if the current one is not desirable.
- To draw more traders to the platform, the administration of the exchange provides users access even to the youngest assets in the market. Though this is a risky approach because some new assets could be scams, users are assured of picking great opportunities, especially during ICOs.
- The transaction fee at the Gate.io is 0.2%. Though it is relatively cheap compared to others that charge as high as 0.3%, the community believes that the Gate.io administration should lower the charges to less than 0.1%. Besides, there is an additional charge for withdrawing AE from the platform.
- One unique thing that makes Gate.io attract more traders is that it allows traders to deposit and withdraw in fiat currencies. This means that new traders or buyers who have cash in their banks or credit cards can use the account directly without using third-party platforms.
Value of Aeternity
Aeternity is one of the cryptocurrencies that have been doing very well in the recent past. On 12th May 2018, the market capitalization was $824,745,668 at a price of $3.54. This is well ahead of others such as Steem that had a market cap $671,404,918 and Siacoin with $667,354,147. The community is optimistic that the value of Aeternity will continue growing in the coming months.
Is It Profitable to Invest in Aeternity?
Will investing in Aeternity network bring high ROI? This is the question that most people targeting to join a new network always ask. Aeternity has demonstrated the capability to grow progressively. By the start of the third quarter of 2017, the price of AE was about $0.55. Then, it grew progressively to hit $5.0 in early May of 2018, a jump by more than 800%. Though the price took a downward trend after the peak during May 2018, the community is optimistic that it will recover and deliver high ROI.
Note that the profitability of Aeternity is dependent on very many factors including major developments in the fintech niche. It will also depend on things such as regulations, new cryptocurrencies, and security threats. The development team at Aeternity must work hard to ensure that the system is not hacked and the community keeps growing over time.
Where to Spend or Use Aeternity?
One of the methods used to gauge the acceptability of a cryptocurrency is the number of stores that accept it for payment. On this front, Aeternity is lagging behind. Though it could be a strategy to ensure that it demonstrates the value and potential of the network, there is no doubt that more need to be done to make payment with AE possible. To pay with Aeternity in a store that accepts another coin, you will need to change AE to the accepted coin.
Can Aeternity Grow to Become a Major Payment Network?
Yes, Aeternity can grow into a major payment network. Every cryptocurrency out there is in the race of becoming a major payment network. By addressing issues that have been major bottlenecks to other cryptos such as Bitcoin and Ethereum, Aeternity presents itself as a high potential payment network. Here are some indicators that point to the possibility of Aeternity becoming a major payment network.
- The Aeternity network supports smart contracts.
- The cost of sending value on the network is smaller compared to others such as Bitcoin and Bitcoin Cash.
- The cryptocurrency community has been growing progressively over time.
How Does Aeternity Work?
As more cryptocurrencies target implementing smart contracts, standing out in the industry is becoming very difficult. Aeternity positions itself by redefining its operations through smart contracts to deliver unmatched efficiency, global scalability, and transparent governance. This is achieved by application of smart contracts that can interface with real-world data.
- The state channels
- These are lines of communication between parties in a specific smart contract. They make it possible to execute the contracts off-chain. The only time that the main Aeternity blockchain swings into action is when there is a disagreement between the parties involved in the contract.
- The participants in the contract interact privately with each other in line with the details specified in smart contracts. This implies that a business using the state channels have their records off-chain, not in public. Besides, the participants enjoy near-instant transactions and can also handle cases requiring high transaction volumes.
- Scalable smart contracts
- Note that the smart contracts offered by the Aeternity only exist inside off-chains state channels. However, the Aeternity blockchain can also offer them if the need arises. The state channels are trustless solutions that help to exchange value with other parties across the globe.
- Unlike the smart contracts at Ethereum, the parties to the contract at Aeternity are responsible for maintaining the state program. The Aeternity smart contracts operate in a language referred as Chalang that is compliant to bytecode. Aeternity plans to create JS libraries and even JSON APIS.
- Decentralized oracles
- An oracle is a unique mechanism designed to gather facts and share them with the Aeternity system. They connect the public-real data to smart contracts. The development team at Aeternity believes that Oracles are better compared to the Turing-complete system used at Ethereum and other networks.
- In most smart contracts, implementation requires users to adherence to a lot of requirements. At Aeternity, the oracle gathers information on a wide range of things including weather, price, and even voting among others. In the event of a dispute, the oracle provides tamper-proof data to help with fast resolution. Because the oracles are decentralized, there is no single point of failure.
Does Aeternity Use Blockchain Technology?
Yes, Aeternity uses blockchain technology. The primary goal of decentralized blockchains such as Aeternity is helping users on the network to operate without involving third parties. The Aeternity network’s system uses two layers of blockchains that run on the basis of smart contracts.
The state channels operate off-chain from the main blockchain. This means they are completely independent and only turn to the main blockchain for dispute resolution. Even during such resolutions, the main blockchain makes a decision using details gathered through the oracles.
The main blockchain employs a hybrid of PoW and PoS. This means that miners are spread in the network and verify transactions the same way other PoW networks such as Bitcoin work. The miners pick the transactions, verify them, and add new blocks to the Aeternity public ledger. The only variation that Aeternity blockchain has with standard PoW systems is the inclusion of the Cuckoo Cycle, a new type of graphical theoretic proof-of-work algorithm that helps combine scalable memory with instant verifiability.
The governance at the Aeternity blockchain employs the PoS system which means that only those with some stake are involved in consensus building. All stakeholders including miners, token holders, and others with some stake in the tokens take place in consensus building through the delegated voting system.
When Malahov created Aeternity, he indicated that they wanted to make the process as decentralized as possible. He was categorical that the standard PoW model used at Bitcoin had centralized the mining process so much to the disadvantage of those who could not afford expensive ASIC equipment and cheap power bills. He pointed that they are working on facilitating smartphone mining to decentralize mining even further.
To mine AE in the Aeternity network today, you will need to have the right hardware such as advanced GPU (Graphics Processing Unit) and appropriate mining software. Note that Aeternity was still in its testnet stage by the close of the first quarter of 2018. It will not be until June 2018 that you will be able to mine the mainnet after it is released.
What Are the Advantages of Aeternity?
Cryptocurrencies are marketed as the ultimate solutions that will help companies, governments, and individuals address issues such as Big Data. Here are some of the benefits that come with joining Aeternity.
- Aeternity provides users with an opportunity to invest without worrying about third-party seizures
- If you save cash in a bank, it is only a step away from getting frozen by a court order if a lawsuit heads your way. However, all accounts and investments in Aeternity are encrypted so that no third party can know about your savings. Even if you have a case in court, no one will ever know about the investment or even freeze the account.
- Aeternity employs a hybrid of Proof-of-Stake and Proof-of-Work
- Unlike other crypto networks that use either PoW or PoS, Aeternity relies on both consensus models. The miners in the network verify transactions the same way they do in Bitcoin using PoW, but with modifications to enhance scalability. The adjustment employs the Cuckoo Cycle that combines scalable memory demands with prompt verifiability.
- It is a faster and cheaper way to send value across the globe
- As a peer2peer cryptocurrency platform, it means that users in the Aeternity network can make direct payments without involving centralized profit-seeking parties. Because the value of Aeternity is still low, the cost of sending value on the network is lower than most of the higher valued cryptos like Bitcoin and Ethereum.
- The value of Aeternity has been growing steadily
- Since its creation, the value of Aeternity has been growing steadily. This implies that investors on the network are sure of enjoying huge ROI over time. The steadily growing value has made many experts believe that AE could be the next great thing in the crypto industry.
- The community around Aeternity has been growing steadily as more people discover the gem in the network
- Though the growth of Aeternity has been relatively slow since its creation, the performance starting from December 2017 has been remarkable. The fast-growing community is an indication of the trust that people have in the cryptocurrency and its system. It is also seen as an indicator of good things to come.
- The Cuckoo Cycle mining algorithm used in Aeternity improves on ASIC mining problem
- The technology is a great pillar in helping to decentralize mining because users can mine AE with GPUs and even phones. When Aeternity finally makes it possible to mine with smartphones, it will be a great way to take cryptocurrencies closer to the people.
What Are the Risks of Aeternity?
While many people coming to Aeternity are interested in enjoying advantages associated with being in the network, it is also very important to appreciate the risks that come with it. Before making the big investment, here are the main dangers you are likely to encounter.
- Threats from the looming regulations
- The fast-growing popularity of cryptocurrencies has been taken by administrations as a threat. They see cryptocurrencies such as Aeternity as stabling blocks to their regimes by altering the investment landscape and forming the brooding grounds for fraud. If they pass harsh regulations as they promise, there is a danger of the cryptocurrencies such as Aeternity shrinking and even fading off.
- The multi-party channels issue
- All the channels on the Aeternity network are only limited to two parties. Though it is possible to implement multi-party channels via hash-locking, the process is very expensive. It will not be until Aeternity implements support for n-party channels with a settlement mechanism such as m-of-n that more parties will be able to participate.
- The danger of newer technologies and cryptocurrencies
- Every cryptocurrency entering the market today is targeting to address an existing issue. They consolidate the existing technologies and promise to offer better performance, scalability, and affordability. This means that the Aeternity team cannot sit pretty because the cryptocurrency is at risk of being dislodged by later and more advanced cryptocurrencies.
- The danger of getting attacked
- Cryptocurrencies have become an irresistible attraction to criminals. Hackers are always working on ways to break into crypto networks and siphon away digital assets. Though hackers can break the main network or even the wallets, they mainly prefer to attack at the exchanges.
- The Aeternity is still young and most features are yet to be tested and proven stable
- Having entered the market only in 2017, Aeternity was one of the newest cryptocurrencies by the first quarter of 2018. Indeed, it is still in the testnet phase. This means that most of its features are still being tested and it will take time to ascertain their stability. Even after the mainnet is released, it will take about five years to ensure that all or most of the features are stable and delivering the expected results.
What Happens if Aeternity Gets Lost?
Recently, reports of people losing their cryptocurrencies have become way too common. You will hear people saying that they sent AE or other crypto assets to the wrong address or even forgot their private keys. The main question that they keep asking is; what happens when AE gets lost?
To understand what happens when cryptocurrencies get lost, it is important to appreciate that native cryptocurrencies such as AE do not leave the native networks. This means that even if your wallet was hacked and the coins stolen, they are still in the network. To appreciate what happens when AE gets lost, it is better to trace them via the channel of loss.
- Loss by sending AE to the wrong address: The coins remain and continue circulating in the Aeternity network but under a different person.
- Loss via damage to the Aeternity wallet: The AE coins remain in the Aeternity network under your name. However, they are in a dormant state until you retire the wallet.
- Loss through forgetting the private keys: Forgetting your private keys means that the AE coins are still in the network under your name. However, they are in a dormant state because you cannot call them to live to make payment or trade them.
- Loss via hacking: Like sending AE to the wrong address, losing AE through hacking is permanent. This means that the coins have changed hands and now belong to a different person. There is no method that can be used to restore them.
Cryptocurrency regulations have become the big thing in the market today. Most administrations feel threatened by the current fast growing cryptocurrencies. Immediately after Bitcoin was released, the FBI (Federal Bureau of Investigation) was the first to note the threats that came with blockchain applications. In a special communiqué with the federal administration, the FBI administration indicated that there was a serious risk of the anonymous networks becoming fields for illegal activities and even funding terror.
Many countries point out that the cryptocurrencies are out to compromise their operations. As anonymous networks, many Aeternity and other cryptocurrency users believe that they can hide in it and live without paying taxes. But this is not the only reason driving administrations to create crypto related laws. Here are additional reasons making governments target cryptocurrencies.
- The cryptocurrency assets have opened a new line of investment that is pulling people from conventional assets such as shares, bonds, and real estates.
- By creating a cheaper and faster way of sending value across the globe, many people now prefer not to use centralized financial institutions such as banks. This could ultimately translate to collapse of such as organizations and massive loss of employment.
- As an alternative type of cryptocurrency, the governments do not have control over some fiscal issues especially inflation. This is among the primary reasons why many administrations see this as the right point for hammering cryptocurrencies.
Despite these threats, it is important to note that no country had passed a cryptocurrency framework by close of the first quarter of 2018. Even those that have some sort of legal applications only applied direct orders to gag cryptocurrencies and their use. A good example is China. After realizing the danger the cryptocurrencies pose to it, the administration opted to ban ICOs and limit operations of associated trading platforms.
A closer look at the cryptocurrencies and their applications reveals that passing cryptocurrency regulations is never easy. Call it a new impossibility for some nations. Here are some of the things making crypto regulations a hard nut to crack.
- The blockchain technology is advancing so fast that most nations only end-up playing catch-up.
- While it is true that cryptocurrencies such as Aeternity have their own share of risks, they also come with good solutions for issues that have faced organizations and even governments. A good example is the problem of Big Data.
- The issue of cryptocurrency is slowly evolving into a complex subject. Indeed, it is threatening to get out of hand. Those perceived to go against the cryptocurrencies are considered to be against the popular will.
- The cryptographic solutions are considered the apex of the fintech advancement. Most governments expect to reap big from these technologies succeed.
- The cryptocurrencies such as Aeternity do not belong to any one party. Rather, they are owned by users, miners, and every person who has a stake. This makes it very difficult to implement. Even if a law is passed locally, it could have limited impact at the regional or even international levels.
While it is true that the laws have taken long to get installed, one thing that Aeternity investors should get is that the legal frameworks are coming. Therefore, it is important to invest with a lot of care to avoid impacts of after-shocks that could be generated by regulations. To understand the legality of Aeternity in individual states, take a look at the next section.
Is Aeternity Legal?
Yes, Aeternity is legal. By the close of the first quarter of 2018, there was no country that had installed a cryptocurrency legal framework. This implies that Aeternity is legal. Though this situation is playing out in most countries, it is important to appreciate that various countries are at various stages of passing legal frameworks. Here is a closer look at the legal status of Aeternity in individual jurisdictions.
1) The European Union
The European Union is one jurisdiction that appears not to have taken a common stand when it comes to cryptocurrency regulations. Both the institutions and leaders appear to pull in different directions. The EU Central Bank has called the citizens to exercise caution about cryptocurrencies. It indicated they could end up being bubbles that easily burst and bring huge losses.
Unlike the Central Bank, the EU Parliament pointed out that cryptocurrencies are the apex of fintech sector and cannot simply be wished away. The legislative arm pointed that though there is need to regulate cryptocurrencies, such an approach should only be pursued after comprehensive studying the blockchain networks. But it is not only the central bank and parliament that appear to push in different directions. Even the EU Commission is equally divided.
Piere Moscovici, one of the top EU commissioners indicated that the giant union was not looking forward to regulating cryptocurrencies. His sentiments, which are believed to represent a significant portion of the top EU top commissioners, were however negated by the Vice President of the commission, Valdis Dombrowski. Valdis explained that the commission would not sit down and watch as people drawn in the threats that come with cryptocurrencies such as Aeternity and Bitcoin. Some of the risks he cited include high volatility, security failures, liability gaps, operational risks, and danger of complete loss.
Individual leaders of the EU appear committed to working on a prompt solution that will help caution citizens from the threat of loss. France, Britain, Italy, and Germany have committed to help push for crypto regulations at both the EU level and back at home.
2) South Korea
South Korea, like the EU, is also unclear of the direction it is taking about cryptocurrency regulations. By the third quarter of 2017, South Korea had not shown any sign of regulating cryptocurrencies. It only pointed out that they are not legal tenders. However, things changed after YouBit, a cryptocurrency exchange in Seoul was hacked and forced to file for bankruptcy.
The government reaction was to immediately close all cryptocurrency exchanges. However, it changed its approach by pointing out that it would only target illegal cryptocurrency trading platforms. The Financial Services Commission banned the use of anonymous bank accounts and insisted that all the ICOs would be put under new scrutiny before being allowed to operate. By the close of the first quarter of 2018, the Seoul administration had not given a clear indication of the direction it would take with the regulation.
One country that has been very harsh on cryptocurrencies such as Aeternity is China. The Chinese administration was concerned that the fast proliferation of cryptocurrencies was distorting investment landscape and compromising its efforts to stem capital outflows. Instead of creating a legal framework, China opted for direct orders. The administration started with banning ICOs and banning mining. It also froze the bank accounts of cryptocurrency exchanges that supported ICOs and trading in the country. For example, one of the leading crypto exchanges, Binance, had to move its servers outside China to prevent seizure by authorities and interference.
At the beginning of the second quarter of 2018, the Chinese administration thought that it was not enough to only limit the operation of crypto exchanges in the country. The focus is now trained on limiting even the exchanges located outside the country from accessing the local market. This could easily affect the crypto industry because China has a very large market.
Aeternity is legal in Canada. Canada is one of the jurisdictions considered crypto friendly states. However, the administration insists that cryptocurrencies are not legal tenders. Indeed, Canada is considered to be the next in supporting the cryptocurrencies after the crypto-nation (Switzerland).
In 2014, Canada commenced the process of drafting a digital currencies law. The parliament passed Bill C-31 in mid-2014 which made it one of the first states to have digital assets legislation. However, it appears that the law did not arrest the situation appropriately. In 2017, the Canadian Securities Administrators indicated the possibilities of applying Bill C-31 to help guide cryptocurrencies.
The head of the Canadian Central Bank, Stephen Poloz, was quoted in January 2018 indicating that cryptocurrencies are more crypto than currencies. This stance has been taken to mean that the country is contemplating another legislation that will factor the emerging threats and evolving challenges from cryptocurrencies. For example, the country has joined the North American Securities Administrators Association (NASAA) that has called for a revitalized approach in addressing threats such as fraud.
Russia is one country that has taken a bold initiative of crafting a crypto framework for the country. Prior to 2018, Russia did not have a clear approach to cryptocurrencies. Indeed, the administration indicated it was not interested in regulating cryptocurrencies. However, the stand changed when the finance ministry pointed that it was impossible to tell whether traders who accepted payment in cryptocurrencies such as Aeternity were committing an offense. The ministry pointed that the legal gap would require a comprehensive framework in the country.
Though the finance ministry had hinted at the possibility of cracking down cryptocurrencies, the Central bank and top leadership came to the conclusion that a legal framework would be a better option. By the close of January, the central bank released the country's Digital Finance Assets draft bill that looked at the entire cryptocurrency landscape. The law helped to define digital assets, created ICO procedures, and outlined the legal regime for trading and mining. While this draft has become the point of reference for many countries, even before it has become law, it has also attracted a lot of criticism from the crypto community that indicated the risk of stifling fintech.
Aeternity and Taxes
While the topic of taxes is indeed complex, what has generated even more controversy in the community is the subject of taxes. Many cryptocurrency users hold the view that since the crypto networks are anonymous, they can live without paying taxes. However, the drive to operate without paying taxes is what has irked most administrations with some of them such as China banning most crypto related activities.
In the United States, only a very small portion pays taxes. In one of the reports by CNBC, Credit Karma Tax indicated that barely anyone is paying taxes from cryptocurrency related operations. Of the 250,000 federal tax returns, Credit Karma Tax reported that those who had captured returns from cryptocurrencies were less than 100. This is the case despite the Commodities Futures Trading Commission (CFTC) giving a clarification that cryptocurrencies such as Aeternity were commodities.
But it is not just the United States where people are not paying taxes. A closer look at other countries such as South Korea, Britain and Japan give the same impression. Despite this, tax experts and finance professionals are seeing the entire scenario from a different angle. After Bitcoin was released, the cryptocurrency community was very enthralled because the cryptography was considered waterproof.
The privacy even attracted criminals including the Wannacry ransomware group that insisted to get paid in Bitcoin. A number of years down the line, new technologies were discovered and people in the Bitcoin network can no longer enjoy the espoused privacy. Tax experts are now advising Aeternity users that newer technologies are likely to expose them at some point in future. When such technologies are finally discovered, those who lived without paying taxes are likely to be followed by tax related laws.
The main question at this point is whether it is possible to enjoy the benefits that come with Aeternity without breaking tax laws? It is possible. Here are some expert tips to help you enjoy all benefits of being in the Aeternity network.
- Treat income from Aeternity trading as taxable revenue.
- Make sure to capture the loss or profit incurred when trading Aeternity.
- Always capture the value of Aeternity in fiat at the point of transaction.
- For traders accepting payment in Aeternity, it is important to rethink the balance sheet design to capture transactions appropriately.
- Do not hesitate to work with a cryptocurrency tax expert if you think there is an issue with book keeping.
Does Aeternity Have a Consumer Protection?
Aeternity does not have consumer protection. The platform operates as an open-source and decentralized system that is owned by nodes, miners, and users spread across the globe. This implies that when people join the network, they are on their own. They have to be extra careful because there is nowhere to take complaints to. For example, if you send AE to the wrong address, you cannot complain to the network because decisions are made through consensus. Indeed, you cannot even go to a court of law because cryptocurrencies are not regulated. To operate safely on the Aeternity network, here are some tips to guide you.
- Never share the private keys.
- Always triple check the public address before sending funds.
- Select cryptocurrency exchanges with a lot of care to avoid the high-risk ones.
- Try to keep your AE in cold storage when not trading them in the exchanges.
- Keep the computer used for Aeternity related transactions updated and protected with appropriate anti-malware programs.
- Ensure to get Aeternity updates on time.
- If possible, consider designating one computer only for Aeternity related transactions.
Illegal Activities with Aeternity
Because cryptocurrencies are anonymous networks, they are considered perfect channels for illegal activities by criminals. The criminals opt for the networks because the authorities would not easily discover them. However, no illegal activity had been reported with Aeternity by the close of the first quarter of 2018. Remember that you need to be extra careful when using AE to prevent falling victim to scammers. For example, only buy products from stores with a great reputation. Besides, you should follow transactions that are guided by smart contracts to stay away from scammers.
Is Aeternity Secure?
To win greater affection and trust from the community, the Aeternity development team has been very aggressive in securing the network. Though the network is still at the testnet level, a lot of focus has been dedicated to securing the network. Here are some of the methods used to keep the Aeternity network secure.
- By employing PoW and PoS, Aeternity has decentralized mining and governance to reduce the danger of 51% attack.
- The development team progressively works on updates to fix issues such as bugs in the network.
- Use of smart contracts helps to draw terms and conditions that users in the network must meet before implementing various transactions. This method has helped to weed off many scammers and criminals.
Is Aeternity Anonymous?
Yes, Aeternity is anonymous. Privacy is one of the most important aspects of any cryptocurrency. People want to know that they can send value and run other transactions without the risk of getting unmasked by third parties. In Aeternity, anonymity is achieved through the following.
- The smart contracts are executed off-chain. This means they are not public, and only the two involved patries know about the transaction.
- All the transactions and nodes in the Aeternity network are encrypted to ensure that no third party can discover the users. Even miners who help confirm transactions cannot tell the parties involved in transactions.
Has Aeternity Ever Been Hacked?
One of the main worries by people joining cryptocurrency networks today is the risk of getting attacked. Because of the growing popularity and expected growth over time, hackers consider cryptocurrencies as cash cows. However, Aeternity has never been hacked. Though attempts to hack the network are made every other day, none of them has been successful.
How Can I Restore Aeternity?
Every other day, someone shouts that he has lost AE or other crypto assets on the community forums. It is devastating. In some cases, people have put a lot of investment in the digital assets and a loss is very distressing. However, there are cases when you can still restore AE.
If you lost Aeternity coins through forgetting the private keys, it is possible to restore them by regenerating the keys using the seed phrase. The seed phrase is one of the important codes that were generated when you first used the Aeternity wallet.
For users who lost their AE through damage to the wallet, restoration can only be possible in two ways. You can opt to reinstall the backup wallet or use another ERC-20 compatible wallet.
Note that AE lost through hacking or sending to the wrong address cannot be restored. The transactions are considered complete and are already included in the public ledger. The secret to preventing AE loss and successful recovery is ensuring that you are prepared before the loss takes place.
Why Do People Trust Aeternity?
The fast growth of cryptocurrencies has now shifted to trust. Before a person can join a crypto network, the main question that lingers in the mind is whether the network can be trusted. While it is true that many people might have taken longer to note Aeternity, the community and experts now agree that it could be the next big thing in the crypto industry.
- The main thing driving people’s trust in Aeternity is its hybrid version of PoW and PoS. The model has helped to make the network gain a competitive edge against current crypto networks including Bitcoin and Ethereum.
- Aeternity employs the latest technologies that are making it one of the most sought-after network. The technologies used in the network include Oracle, state channels, hybrid consensus model, and unique governance.
- The development of the Aeternity is very aggressive and has a clear timeline for progressive improvement. This development has made the community believe that the network and its value will keep growing over time.
- Aeternity helps to bridge the gap between smart contracts and real-world. This means that any real-world data can now be connected to the Aeternity blockchain and more users will have multiple ways of utilizing it.
History of Aeternity
The history of Aeternity can be traced early in 2017 when the first testnet was released for developers to download and test the features. After getting involved in other top cryptographic projects and assembling a development team, Yanislav Malahov wanted the testnet to act as a testing point, especially for developers. Here are other milestones that have defined Aeternity.
- The Aeternity ICO was held between April and June 2017. It raised a total of $28 million that will be directed at the network development and maintenance.
- In mid-December of 2017, the price of AE pushed above the one dollar mark and continued to grow to hit the highest point of $5.0 on 5th May 2018.
- The Aeternity mainnet will be released in June 2018. It is at this point that mining with smartphones will also be made possible.
Who Created Aeternity?
Aeternity was created by Yanislav Malahov who also serves as the network CEO. Malahov was one of the early minds in the cryptocurrency industry who helped to shape the niche since 2013. Early communication reports indicate that he was in constant communication with Vitalik Buterin (the Ethereum Founder) and assisted in some of its development. However, Malahov did not accomplish the task on his own. He brought in other top minds that had a lot of experience in the industry. These include Zack Hess who was formerly in Augur, Jack Pettersson who was previously involved with the Synereo project, and Marion Vogel.
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