DigixDAO cryptocurrency guide advises where to buy and how to buy DigixDAO. 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 DigixDAO as well its status in the world of cryptocurrencies.
- 1 What Is DigixDAO?
- 2 Beginner's Guide to DigixDAO
- 3 Where and How to Buy DigixDAO?
- 4 DigixDAO Markets
- 5 Where to Spend or Use DigixDAO?
- 6 How Does DigixDAO Work?
- 7 DigixDAO Regulation
- 8 Is DigixDAO Secure?
- 9 History of DigixDAO
- 10 DigixDAO Videos and Tutorials
- 11 See Also
What Is DigixDAO?
Cryptocurrencies are the future of the society. Since 2009 when the first cryptocurrency debuted, many people are coming to accept that the blockchain technology has solutions even for issues such as Big Data that had proven extra difficult to address. Take a closer look at the top cryptocurrency will have something unique to offer.
New cryptocurrencies such as DigixDAO (Digix Decentralized Autonomous Organization) have made the concept of blockchain technology even more enthralling by taking the original ideology a step higher. The pioneer cryptocurrencies mainly targeted helping users send value from point to another. Now, DikgixDAO has created digital gold. Yes, digital gold. Every DigixDAO token in the market is equal to the market value of one gram of physical gold. This digital gold can be exchanged, traded for DigixDAO tokens or physically redeemed through mail/physically.
Because of its association to physical Gold, DigixDAO has set itself apart from others in demonstrating extra stability. As a result of this extra stability, DigixDAO was the only currency that kept growing in value around January of 2018 when most of the other currencies were taking a downward trend. This has won a lot of trust from the community which is largely driven by the focus on profitability and prospects. Here is a closer look at this unique cryptocurrency on the Ethereum network.
Beginner's Guide to DigixDAO
Have you been searching for a cryptocurrency network to join? The best option should be a network that guarantees the highest possible ROI (Return on Investment). With most cryptocurrencies turning out to be highly volatile, Digix came up with a unique crypto asset, DigixDAO, for guaranteeing users faster transaction speeds and higher scalability. However, the most outstanding thing about the cryptocurrency is its stability.
In the month of January in 2018, DigixDAO was the only cryptocurrency that reported positive growth as others such as Bitcoin plummeted. This gesture is being used by the cryptocurrency community to demonstrate the extra stability in the network and sign of what the future looks like. It appears like the perfect cryptocurrency to jump to for assurance of higher returns.
However, what exactly is DigixDAO? This is a decentralized token based on the Ethereum platform that aims to tokenize gold trading. The cryptocurrency’s stability closely mimics the actual gold in the market. Therefore, should you join the cryptocurrency? You need to carry a comprehensive review of this cryptocurrency and make the right decision. This is why this guide has been developed.
It is a comprehensive evaluation of the DigixDAO cryptocurrency to demonstrate everything that you need to know. It starts by digging into what DigixDAO is, how to buy, where to buy, and the main types of wallets. It extends to evaluate the markets, value, and profitability. The guide does not stop there.
It extends to how the cryptocurrency works to explore the main types of tokens and how they are derived from real gold. Whether you want to know the advantages, risks, regulations and the complex topic of taxes, everything is captured in this guide.
The guide closes by looking at the security, anonymity, trust from the community and history. No matter the question you might be having about the DigixDAO, be sure to get answers and all clarifications here. Welcome to explore and make the right decision about the network.
Where and How to Buy DigixDAO?
What investment can give you over 1500% in less than two years? One of the investments that have demonstrated the capacity for such massive growth is DigixDAO. This is a cryptocurrency asset that combines cryptocurrencies and real assets using a unique algorithm referred as Proof-of-Asset. For most people with a keen eye on getting the highest ROI (Return on Investment), the first thing that crosses their minds when they hear about DigixDAO is how they can buy the native tokens. Here is an account of where and how to buy the tokens.
DigixDAO, like other digital assets, can be bought from a number of platforms that list them for trade. Here are the main platforms and how to buy DigixDAO from them.
- Buy from cryptocurrency exchanges. These are the main trading platforms that list crypto assets such as DigixDAO and Bitcoin for buyers. The exchanges require users to register for trading accounts the same way it happens with the forex markets. Great examples of exchanges include Binance, CEX.io, Coinbase, and Poloniex.
- Buy from cryptocurrency brokers. These are platforms established specifically for clients who want to buy cryptocurrencies. Though the prices at the brokerages closely follow that of the main exchanges, they are adjusted upwards to cater for the brokers’ fee. In some cases, the brokerage platforms may require users to create trading accounts. Some great examples of crypto brokers include Bitpanda and Coinmama.
- Buy directly from those who already have DigixDAO. In the past, it was impossible to imagine people walking into ATMs and buying the cryptocurrencies of choice. Now, this is possible. In cities that have huge cryptocurrency populations, cryptocurrency ATMs are gaining a lot of popularity. Note that most ATMs that were available in the market by early 2018 were mainly selling Bitcoins. This means that you need to start by purchasing BTC and converting to DigixDAO tokens in appropriate exchanges.
- Purchase from people who already have DigixDAO coins. Cryptocurrency groups have been mushrooming progressively in top cities such as Seoul, New York, Tokyo, and London. These groups have formed clubs that are now facilitating faster and easier trading of cryptocurrencies such as DigixDAO. One great example is the LocalBitcoins.com. You only need to join the group and shout you need to buy DigixDAO to get a seller. Though the process is directly and devoid of many restrictions like those in the exchanges, it can be lengthy.
Are you interested in joining the DigixDAO cryptocurrency network? The first step should be selecting an appropriate cryptocurrency wallet. This is the digital location that will hold your tokens after a successful purchase or mining. However, you need to appreciate that the wallet does not hold the DigixDAO tokens in reality because they are not printed like conventional notes. What the wallet stores are private keys that point at the tokens you hold in the network. The wallets also hold public keys that you should provide those who want to make payment to your wallet in DigixDAO network. Because DigixDAO is an Ethereum based token, the wallets you select should be ERC-20 compatible. Here are the top three options to consider.
1) Trezor (hardware wallet)
- Trezor is one of the leading hardware wallets in the market that have won praise for advanced security features. It is a small USB-connectible hardware that facilitates storage and transaction to and from the wallet. It is created with a special LCD screen that allows users to follow their transactions in the network.
- When you first use the wallet, it generates the private seed phrase and private keys that should be stored securely away from the main computer. Note that the DigixDAO tokens are stored offline all the time. Even when confirming transactions, the tokens do not leave the network. This means that it is very difficult even for hackers to gain access and steal your DigixDAO tokens or private keys.
2) MetaMask (web-based wallet)
- MetaMask is a special online based plug-in that allows users to access the main blockchain for sending or receiving DigixDAO. Because the wallet is web-based, it implies that you will not need to download the whole DigixDAO node to access the network.
- It is important to appreciate that when MetaMask is activated on the specific device, a new functionality is added to the browser. Therefore, the user should allow it to read and write any web page on that device. MetaMask is available for Chrome, Firefox, and Safari among other top browsers.
3) MyEtherWallet (desktop wallet)
- This is an open-source client-side interface that is designed to allow DigixDAO users to interact with the main network. Because MyEtherWallet is a desktop wallet, you are required to download it and install on a computer. Note that the wallet stores your private keys, seed phrase and public keys on the computer only. If the wallet gets damaged or the computer lost, your DigixDAO will also get lost. Therefore, you need to store them well and preferably away from the main computer.
Where to Buy DigixDAO with Credit Card?
Credit cards have become some of the most accepted methods of payments in the globe today. Because they are accepted both in conventional and online marketplaces, no one wants to live without a credit card. Now, you can also buy DigixDAO using credit cards. Here are the top locations where you can buy DigixDAO with credit cards. Note that most of the platforms require buying of alternative cryptocurrencies such as Bitcoin and exchanging them for DigixDAO.
Where to Buy DigixDAO with PayPal?
Every time that the term cashless society is mentioned, many people tend to associate it with PayPal and other online payments such as Skrill. However, this is a misconception because these payment services such as PayPal represent the actual cash you have in their accounts. By early 2018, it was impossible to buy DigixDAO with PayPal. Though PayPal management has indicated it is working towards facilitating payment even to cryptocurrency networks, the process is yet to be finalized. Therefore, DigixDAO buyers who have funds in the PayPal network have to offload to other channels such as credit cards or bank accounts.
How to Buy DigixDAO with Wire Transfer?
Banks are some of the most trusted institutions in the world today. People trust them because they go to great lengths in ensuring that users’ savings are secure and transactions are verified. Now, it is also possible to buy digital currencies such as DigixDAO with a wire transfer. Here is the procedure.
- Start by acquiring an appropriate digital wallet such as Ledger Nano S. This is the location that will hold the DigixDAO tokens when the buyout is completed.
- Select a good cryptocurrency exchange. Great examples include CEX.io, Changelly, and Binance.
- On the selected trading platform, create a user account and verify it with personal details such as phone number and proof of address. The requirement for verification might vary depending on the selected exchange.
- Go to the purchase tokens section and select DigixDAO. If you want to buy DigixDAO with fiat or credit cards, select an alternative crypto asset such as Bitcoin. Then, the selected asset can be exchanged for DigixDAO in another exchange such as Binance that trades the tokens.
- Once you identify the preferred token, select pay with wire transfer and complete the transaction. It will take a few days for the transaction to get completed.
NOTE: The DigixDAO tokens you have bought went to the cryptocurrency trading user account you created at the start of the process. Therefore, you will need to move them to your wallet where they are extra secure and under your control.
Where to Sell and Trade DigixDAO?
If you have been in the DigixDAO system for some time and got a number of tokens, you might be wondering what the best way to use them is. For people who want to make long-term investments, the best way to go about it is holding the tokens in the wallet and waiting for the value to grow. You could also use the tokens for direct shopping in the stores that accept them. However, the best method of making the highest value from DigixDAO is trading in the markets.
Trading cryptocurrencies is similar to that of fiat currencies in forex markets in many ways. However, the tradable assets, in this case, are cryptocurrencies as opposed to fiat currencies. It is important to note that you should be extra careful when trading on the exchanges because they are the most vulnerable points in the crypto trading cycle of cryptocurrencies. In December of 2017, a cryptocurrency exchange was hacked in South Korea and thousands of crypto assets stolen. The exchange had to file for bankruptcy while traders encountered huge losses. Now, you need to be very careful when selecting the DigixDAO selling and trading platforms to avoid the danger of loss. Here are some helpful tricks you should consider when selecting DigixDAO trading platforms.
- Only go for the cryptocurrency exchanges with a good reputation. This means the platforms with users who have used the platform and can report high satisfaction. One great example to point at this instance is CEX.io.
- Make sure to look for the trading platform with good management that is committed to the total protection of users' assets. This is crucial in keeping your assets secure all the time.
- The ideal trading platform should come with an easy to use platform that trader. This means that even new traders should be able to follow the instructions and start trading like pros in no time.
- Select the platform with advanced trading metrics that users can rely on to make the right trading decisions.
- Where possible, it is advisable to look for the platforms that store users’ assets in cold storage. This means that your assets will always be free from hackers who might want to steal them at the exchange level. For example, Coinbase moves over 70% of traders’ assets to cold storage and only leaves 30% to facilitate trading. More assets are only drawn from the cold storage on demand.
- Be extra careful only to use the platform that has low transaction fees. This will help you to keep the bulk of the profit as opposed to being taken by the platform. For example, Binance only charges 0.1% and gives clients option of lowering it to 0.05% if they pair DigixDAO with BNB (Binance Coin) and make payments in BNB.
Because of the fast-growing competition in the cryptocurrency industry, the number of trading platforms has been growing rapidly. Like the cryptocurrency networks, the trading platforms have been competing to introduce new features for users. Note that in some trading platforms, you will need to buy alternative cryptocurrency and exchange them for DigixDAO. Some of the top DigixDAO trading platforms include Binance, CEX.io, and Coinbase.
How Much Are the Transaction Fees of DigixDAO?
For many years, people operating through banks and other payment services such as credit cards were forced to pay very high fees to make transactions. Some services such as credit cards also penalize users heavily when they failed to follow the prescribed tough rules. But a reliable exit in the form of blockchain technology is now possible to help users pay a very small amount when transferring value.
If you want to send funds or value on the DigixDAO network, all which is required is having ample tokens and the public address of the payee. Because there is no profit-seeking centralized organization such as a bank, DigixDAO has managed to pull down the cost of transactions to an average of $0.5. This means that DigixDAO is among the cheapest networks out there.
Because it is cheaper than banks, credit cards, and even most other cryptocurrencies including Bitcoin, many people are opting for it to send transactions both locally and abroad. However, it is important to appreciate that the cost of transactions shifts in tandem with the value of the cryptocurrency. To keep the transactions charges as low as possible, it is important that it is reviewed downwards as the value shifts upwards.
Cryptocurrency markets are the meeting points between buyers and sellers of different digital assets. The markets have continued to diversify to increase cryptocurrency’s reach and encourage more people to use digital currencies. Here are the main DigixDAO markets.
- This is one of the leading cryptocurrency markets out there that was created to handle ERC-20 tokens. The exchange operates on the Ethereum blockchain and runs as one of the smart contracts to manage trading, deposits, withdrawals, and wallets integration.
- Unlike other trading exchanges that require users to create specific trading accounts and verify them, the EtherDelta is different. Since it operates as a smart contract, it means that users are already on the network and hold ERC-20 accepted wallets. This means that you only need to integrate the DigixDAO wallet with EtherDelta to start trading.
- The strongest selling point of the exchange is its low transaction charges. The cost of transactions at EtherDelta is 0.003%. This implies it one of the cheapest exchanges out there. The fee is used to pay miners who confirm transactions in the Ethereum blockchain. Remember that you can opt to pay more to get transactions completed even faster.
- Binance Exchange
- Binance exchange is one of the leading cryptocurrency markets today. It was established in mid-2017 by Changpeng Zhao and has grown very fast. Its rapid growth between creation and early 2018 is attributed to the native token, BNB (Binance Coin) that has demonstrated huge potential for growth.
- Many people prefer using the market because of its low transaction charges. Users are only required to pay 0.1% of the transaction volume at the market. However, they can still enjoy lower rates by trading DigixDAO against BNB and making payments on the exchange with BNB. If you pay with BNB at the exchange, a discount of 50% is provided. This means that your transaction cost will go down to 0.05%.
- The Binance market operates as a crypto-to-crypto market. This means that you cannot buy DigixDAO tokens with fiats such as USD or credit cards. Instead, you can only trade DGD using other cryptos such as Bitcoin and Ethereum. This means that people with cash or credit cards have to start from other exchanges such as CEX.io or Changelly that accept fiat currencies or credit cards.
- Most people developing an interest in cryptocurrencies want to have and an easy to use and reliable market. They want a platform that can assist them to start trading like pros in no time. CEX is one great example of such an exchange. It has grown progressively because of its wide reach and acceptability in most countries across the globe.
- Many traders who have used CEX.io commit to always come back because it makes it easy to pay or withdraw in cryptocurrencies, fiat currencies, and even credit cards. To acquire DigixDAO tokens, you need to start by opening a trading account at CEX.io and buying an alternative cryptocurrency such as Bitcoin or Ripple. Then use the cryptocurrency to buy the quantity of tokens you want from a different exchange.
- Other benefits of using CEX.io include offering automated borrowing and margins of up to 1:3 leverage. You will also have access to many tradable assets and direct access via multiple platforms such as WebSockets and mobile applications. This means that you can access the platform on many platforms including the mobile phone when on the go.
Value of DigixDAO
The surest way of telling the strength of a cryptocurrency and making the best decision to invest in it or not is by looking at its value shift over time. Following this trend can help users easily see where the cryptocurrency is headed and make the right decision based on its trend. When DigixDAO was launched, its value was about $30. However, it plummeted to less than $10 in May of 2016 and remained around that mark until March of 2017.
After March of 2017, the value has been on an upward trend that climaxed in one year later, on 1st March of 2018, when its value hit over $550. The market capitalization also crossed the $1 billion mark. This growth represented over 1500% growth. If DigixDAO can maintain this pace, the investors can expect to reap even more in the coming months and years. Note that after the sudden $550 peak in early March, the value of DGD suddenly dropped more than 50%, "back to normal" till end of March 2018.
The value could even grow to higher levels and surpass bigger cryptos including Bitcoin because of the demonstrated overall stability. DigixDAO value rose with about 60% early in 2018 when most cryptocurrencies were on a downward decline. For example Bitcoin market capitalization plummeted by more than $44 billion while Ethereum lost about $20 billion. Ripple was also on the list with its value going down by more than 50%.
Is It Profitable to Invest in DigixDAO?
DigixDAO is one of the most profitable cryptocurrencies today. Between inception and early 2018, the value of DigixDAO grew by more than 1500%. This makes it one of the most profitable ventures. If you are planning to join the cryptocurrency niche, this is one of the most profitable options to consider. Here are the main indicators that DigixDAO will be one of the most profitable options out there.
- Users can associate with actual gold stored in a secure and recoverable vault.
- The cryptocurrency has been gaining a lot of following, and its community is rapidly growing.
- Experts have been very vocal that DigixDAO is better than most cryptocurrencies in-terms of stability, speed, and stability.
- Because the value of DigixDAO is attached to real Bullions, the cryptocurrency is thought to be one of the options that can withstand very harsh environments including looming regulations. Bullion is gold, silver, or other precious metals in the form of bars or ingots.
- It is the only cryptocurrency that has demonstrated the capacity to defy market forces to remain profitable. Its stability closely mimics that of actual gold in the market.
Where to Spend or Use DigixDAO?
All the cryptocurrencies out there are targeting to become major payment networks. This can be assessed by the number of stores that accept the native cryptocurrency asset for payment. On this front, DigixDAO is lagging behind other networks such as Bitcoin and Ethereum. Though the DigixDAO team has been working hard to get the native assets accepted in more stores, it needs to work even harder to beat the fast growing competition from top cryptos.
While no store has come out to indicate that it accepts DigixDAO, it does not mean that you cannot make a purchase where other cryptocurrencies are accepted. You only need to change DigixDAO for the accepted crypto in top exchanges such as Binance.
Can DigixDAO Grow to Become a Major Payment Network?
Yes, DigixDAO can grow into a major payment network. Since the establishment of DigixDAO in 2016, the cryptocurrency has helped users to operate without going through centralized organizations such as banks or credit cards. Here are additional indicators that DigixDAO can become a major payment network.
- The cost of sending cash on the network is very low.
- The community around the cryptocurrency is growing rapidly.
- More corporates are coming out to demonstrate their trust in the cryptocurrency.
- The cryptocurrency has demonstrated the capability to remain stable as others get carried away by turbulence in financial, regulatory, and administrative realms.
While the growing value of DigixDAO is attracting a lot of following, the development team needs to work harder to win more stores and partnerships, especially from payment services providers. DigixDAO development team should particularly look for partnerships especially with payment networks such as Visa and banks.
How Does DigixDAO Work?
DigixDAO is a cryptocurrency network that works as a smart contract in the Ethereum blockchain. It allows users to own tokens that are issued against gold bars. Once a gold bar is owned by Digix, it gets registered as a digital asset and a corresponding gold asset card generated. This asset card is taken through a minting software and Proof-of-Asset algorithm that generates DigixDAO (DGD) tokens. This means that one DGD is equal to one bar of gold. The tokens are issued to users who are buying and selling DGD in the different exchanges.
Every token issued in the Digix network can be divided up to one-thousandth part and can be redeemed against the gold bullions. DigixDAO is providing active solutions to address centralization and volatility issues in other cryptocurrencies. This has been demonstrated through the token’s capability to withstand the recent downward surge in cryptocurrencies in January and February of 2018.
DigixDAO operates in two that have complementary roles on each other. The main tokens on the DigixDAO network are the DGX. These tokens are created using smart contracts that get Proof-of-Asset cards. Every 100 grams of Proof-of-Asset card sent to the smart contract creates 100 DGX.
The second type of tokens in the DigixDAO network are theDGD (they were released during the ICO). DGDs are special tokens used to build consensus about funds allocation and issues in the DigixDAO network. They are involved in making active managerial decisions to all proposals submitted to the DigixDAO. The token is also used to help increase the adoption of DGX use in the real world. Only two million DGD that were issued during the ICO will ever exist in the DigixDAO network.
Does DigixDAO Use Blockchain Technology?
The DigixDAO network operates as a token on the Ethereum blockchain. This means that all transactions are captured on the Ethereum public ledger. When you initiate a transaction, it has to go through the Ethereum network and captured in its public ledger. This means that nodes spread in the Ethereum blockchain confirm all transactions and add the details to the Ethereum blockchain. Part of the transaction charges goes to motivate the miners who confirm and add the details to the public ledger.
DigixDAO cannot be mined because it uses the Proof-of-Asset consensus model. Since it operates as a smart contract in the Ethereum blockchain, it means that only miners in the Ethereum network can confirm the transactions. However, this does not imply that you cannot earn directly for working on the DigixDAO network. You only need to buy DGD tokens to become part of the nodes in the network that help with voting on various issues in the network. All those who participate in voting receive rebates or DGX discounts.
What Are the Advantages of DigixDAO?
Every person entering the cryptocurrency world wants to know about the benefits he/she will get. All decentralized cryptocurrencies including DigixDAO provide users with a peer2peer operation that helps to remove centralized and profit-seeking enterprises such as banks. Here are additional benefits of joining the DigixDAO network and investing there.
- The cryptocurrency presents one of the best options for investment because of its stability
- Just like the value of gold is known to be highly stable, so is the DigixDAO that is associated with it. This means that you can invest and rest assured of enjoying huge returns over time. This is a great way to evade high volatility that characterizes most crypto assets.
- The value of DigixDAO has been shifting upwards progressively
- Between launching and early 2018, the value of DigixDAO grew by more than 1500%. This is a huge upward shift in the value of the cryptocurrency. The highest growth was reported between March of 2017 and March of 2018 when the value shot from under $10 to more than $550. If this trend is maintained, the cryptocurrency could become one of the most valuable in the market in the next couple of years. Note that after a sudden $550 high peak on early March in 2018, the DGD value decreased more than 50% back to average growth during the same month.
- DigixDAO provides a perfect avenue for users who want to trade in gold but are afraid because of the risk involved
- The mention of the term gold is ample to make people turn. Even the mere sight of gold watches, rings, and earrings always make people develop a lot of interest. However, now you are sure of owning all the gold you can anticipate without worrying about storage because it is housed in the safest place you can ever think of. If you want to get the actual gold, you can redeem it from the DigixDAO tokens and get it shipped to your location.
- The supply of DigixDAO is very limited
- Unlike many cryptocurrencies that are releasing new tokens every year or others that have a lot of coins, the total number of DigixDAO coins that will ever exist is only two million. This is only 10% of the total Bitcoins. This means that the demand for the coins will always be high and the value will keep growing over time. Therefore, if you have interest in DigixDAO, the best time to buy is now because it is likely to keep growing over time and surpassing even the levels reached by Bitcoin.
- The DigixDAO network allows and provides users with the absolute freedom to send value within the network
- Like other cryptocurrencies, the DigixDAO network allows users to operate without restrictions. This means that you can use the network any time of the day or night. You can also use it over the weekend and public holidays. All that a user need is ample tokens to transfer and the target public address.
- It is a perfect way to invest without worrying of third-party seizures
- DigixDAO is an anonymous cryptocurrency that guarantees users on the network of utmost security. As an investment, you are sure that no third party in the form of courts or even political administration will ever know about the investment. Indeed, even the DGD token owners who help with consensus and Ethereum miners who confirm transactions can only confirm the authenticity of the account details and not the identity of the owners.
What Are the Risks of DigixDAO?
Though many people are fast to pick the positives of most cryptocurrencies before joining them, it is important also to note the associated negatives. Here are the risks that come with joining or using the DigixDAO network.
- The looming regulations
- Every country in the globe has threatened to pass harsh regulations that will limit the fast growth of cryptocurrencies. Most countries feel that the cryptocurrencies are out to limit their smooth progress and bring confusion. In some cases such as China and Bolivia, the focus has been to ban everything crypto. If the states pass harsh regulations as they promise, the chances are that DigixDAO and other crypto assets are likely to get serious limitations, fall in value, and even collapse.
- The threat of newer and more appealing crypto assets
- Every time that a new cryptocurrency enters the market, the main aim is providing a better framework, more advanced features, and new systems compared to what others have to offer. Though DigixDAO is highly attractive at the moment, the danger of losing its appeal when more advanced cryptos emerge in the future is very high.
- The risk of losing the DigixDAO coins by sending to the wrong address
- The DigixDAO system uses the Ethereum public ledger which means that all transactions are added into blockchains are irreversible. This means that once a transaction is confirmed, it is permanent and cannot be reversed. Therefore, if you send DGX to the wrong address, they are lost forever.
- The danger of getting attacked
- While the focus of the DigixDAO team has been to use every available avenue and resource to provide better security to clients, no crypto network is 100% safe from hackers. Indeed, the DAO Child attack in the Ethereum network resulted to the splitting of the cryptocurrency to Ethereum and Ethereum Classic. The danger of attacks should prompt you to take these three actions to remain safe in the DigixDAO network. One, spread the risk across various cryptocurrencies. Two, only invest what you are ready to lose. Three, take every precaution when trading in the DigixDAO network to lower the danger of attack.
- DigixDAO has a very complicated procedure
- When you compare the design and operation of Bitcoin and DigixDAO, there is no doubt that the former is highly simplified. The main aim of Bitcoin is to facilitate the transfer of value. This simplicity is what has made a lot of people accept, join, use, and own it over time. However, the complex design of DigixDAO has made many people to hold back their effort to join or use the network.
- The DigixDAO network operates on another blockchain network
- Because DigixDAO runs as a smart contract on the Ethereum token, it implies that it is not independent. The two networks are intertwined. If something negative happens on the Ethereum system, it will also negatively affect the DigixDAO system. For example; if Ethereum implements a fork, the fate of tokens attached to the main network is likely to get affected negatively.
What Happens if DigixDAO Gets Lost?
When you join the cryptocurrency industry, it is important to appreciate the fact that your digital assets can easily get lost. It is not uncommon to hear people giving accounts of how they lost their tokens either at the network, wallet, or exchange levels. However, have you ever thought of what happens when the digital assets such as DigixDAO gets lost?
One thing you need to appreciate is that DigixDAO only resides in its native network. This means that whether you have the tokens or they have been stolen and are now under another person; they will always be in the network. Here is an account of what happens when DigixDAO gets lost.
- Loss through sending to the wrong address: If you send DigixDAO to the wrong address, it is the ownership that changes. However, the tokens will still be in the main network but under the new owner.
- Loss of DigixDAO through hacking: If you lose the tokens through hacking at the wallet, native network, or even exchange, they have simply changed hands. They have a new owner. Despite this, the process cannot be reversed because the transaction is considered complete and already added to the public ledger.
- Loss through damage to the DigixDAO wallet: If you installed a desktop wallet, it can easily get lost when the hard drive is formatted, or the computer gets attacked by malware. In such a case, the tokens will still be in the network under your name but in a dormant state.
- Forgetting the private keys: The private keys are the link to your access and ability to use stored digital tokens. If you lose the keys, consider the tokens to be lost also. The good thing about it is that you can easily restore the tokens by regenerating the private keys.
The entry of cryptocurrencies into the market was perhaps one of the most complicated things for many governments. The cryptocurrencies came in and threatened to take away many roles and government capabilities by simplifying a lot of procedures. For example, sending the value through a cryptocurrency network such as DigixDAO is direct, cheap, and has no restrictions. Because the transactions are completed on a peer2peer basis, the centralized organizations are bypassed. This implies that the cost involved is very low.
Despite the fact that many governments noted these cryptocurrencies early enough, none of them had passed a legal framework by early 2018. Instead, some of them preferred to use direct orders to restrict the growth of the cryptocurrencies. A good example is China. When China noted that cryptocurrencies such as DigixDAO and other digital networks were compromising its ability to collect taxes, effort to curb capital outflow, and fraud, it issued direct gagging orders. It started with banning ICOs and then froze accounts of miners and cryptocurrency exchanges.
However, many people have been asking why it is taking too long for administrations to pass cryptocurrency regulations. For example, the United States was the first to note when cryptocurrencies debuted in 2009. However, it is yet to install a legal framework to guide crypto applications. Experts in cryptocurrencies, finance, and tax matters appear in agreement that passing cryptocurrency regulations is no walk in the park. Here are some of the things that are making passing of cryptocurrency regulation extra difficult. Some administrations are even referring to focus of regulations as near-impossible.
- Most governments are playing catch-up when it comes to crypto related regulations.
- The cryptocurrencies are promising many solutions to problems that have harassed governments for many years.
- The cryptocurrency technology has been molting very fast. Even before the community has fully reviewed one cryptocurrency technology, a new one will already have entered the market.
- The cryptocurrencies are effected on a very wide scale. This means that even limiting their use in one country cannot have a significant impact. It can only work when many countries across the globe take a common stand.
While it is true that no country had established a cryptocurrency regulation by early 2018, the commitment means that these laws are coming. Whether you have been in the cryptocurrency niche for some time or plan to join it right away, rest assured that it is a matter of time before the laws finally herald and start shaping the crypto space.
Is DigixDAO Legal?
Yes, DigixDAO is legal. Since DigixDAO was launched, no country has installed a legal framework to regulate it. Indeed, even before the DigixDAO was created, most administrations were coming to terms with cryptocurrencies but had not installed legal frameworks. Most states only expressed the desire to pass legal frameworks but had not done so by early 2018. Here is a closer look at the DigixDAO legal status in different jurisdictions.
- DigixDAO is legal in Canada. While the Canadian Financial Consumer Agency clarified that DigixDAO and other cryptocurrencies are allowed, it insisted that they are not legal tenders. The agency went ahead and cautioned Canadians to use cryptocurrencies with a lot of caution because of high volatility. Unlike other states such as Bolivia and China that have expressed a lot of hostility to cryptocurrencies, the reception in Canada is positive.
- The government has indicated it is working on a draft law that will set the framework for cryptocurrencies operations. At different levels, the administration has been holding public hearings to ensure that the upcoming draft law will be inclusive. Indeed, Canada had earlier passed the Bill C-31 in 2014 that targeted to regulate cryptocurrencies. However, it failed to get hold of the fast molting cryptocurrencies and their burgeoning nature. A new framework was necessary.
- Early in 2018, the Canadian Securities Administrators expressed their consideration of using the securities laws to regulate DigixDAO and other cryptocurrencies trading in different exchanges. Unlike in the United States where cryptocurrencies are considered as commodities, Canada wants to pass laws that will take them as securities. The Canadian Central Bank insisted that cryptocurrencies would not be considered as currencies. “Cryptocurrencies such as DigixDAO are more crypto that currencies,’’ the Central Bank Posited.
- DigixDAO is legal in China. Despite this status, the Chinese administration has been very harsh towards cryptocurrencies. It argues that the cryptocurrencies are out to cripple its ability to curb cash outflow and fraud. It also sees the cryptocurrencies as entities that are out to bring lawlessness and distort the conventional focus on investment. Note that even with these worries; the Chinese administration was yet to pass a legal framework by early 2018.
- To show its strong dislike for DigixDAO and other cryptocurrencies, the country has not hesitated banning cryptocurrency related activities such as ICOs (initial coin offering) and mining. It also froze bank accounts of cryptocurrency exchanges that facilitated trading the digital assets in 2017.
- Despite the harsh onslaught on cryptocurrencies in China, it is interesting to note that a lot of crypto activities have been taking place in the jurisdiction. By early 2018, China had the highest number of cryptocurrency miners and traders around the globe. When the Chinese administration finally crafts a cryptocurrency regulation, the chances are that the laws will be very harsh.
- Russia is one entity that has demonstrated its commitment to regulate cryptocurrencies operations. The focus demonstrates a serious shift from the earlier stand that Russia would not regulate cryptocurrencies. Between 2009 and close of 2017, Russian administration discouraged people from using the cryptocurrencies though it did not outlaw them. It even told traders that accepting payment in cryptocurrencies could be considered illegal.
- In January of 2018, Russia Central Bank and ministry of finance were irked by the fast-growing popularity of digital assets especially in the investment niche. The ministry indicated that the digital assets were distorting the investment landscape and threatening to destabilize the country.
- The ministry announced that it had finished working on a draft Digital Finance Assets Draft bill that will guide every component of cryptocurrency trading. The law aims at regulating ICOs, the cryptocurrency trading, mining, and development. Though a lot of opposition has been voiced against the bill, the government appears committed to making it law to contain the fast proliferation of cryptocurrencies in the country.
- While China, Bolivia, and Russia have been working extra hard to limit the progress of cryptocurrencies, Switzerland is working on supporting them. The jurisdiction has indicated that the blockchain technology is an idea whose time has come and should, therefore, not be limited in any way. In January of 2018, Switzerland economic minister explained that they were putting up an infrastructure that will make Switzerland a crypto nation. The government stated that it would start with setting up a clear framework for the operation of ICOs in the nation.
- With the positive approach from Switzerland, many cryptocurrencies have opted to take their operational bases there. For example, the jurisdiction holds the largest number of cryptocurrency foundations than any other country. No matter the approach taken by other states, cryptocurrency developers, and creators can rest assured that Switzerland will always be home.
DigixDAO and Taxes
The allure of living a tax-free lifestyle appears irresistible to many people. In the past, many people preferred to stash their cash in tax havens where their governments could not discover them. However, it became different after OECD members passed the CRS (Common Reporting Standards) that requires all members to share financial information of all foreign reportable accounts. Following the threat from global recessions such as the one that befell the globe in 2009/2008, even non-OECD members have come aboard to support the CRS framework. The next option, according to many people is the cryptocurrencies such as DigixDAO.
Because transactions are done on a peer2peer basis and details of investment encrypted from the public and authorities, some people argue that this the best opportunity to operate without paying taxes. However, this approach is what has been motivating governments to regulate cryptocurrencies. In Israel, the government indicated that no matter the activities people are involved in within its jurisdiction, all revenues must be taxed. This includes income from trading DigixDAO and other cryptocurrencies.
In the United States, the government through the Commodities Futures Trading Commission (CFTC) clarified that all cryptocurrencies should be treated as communities. This puts them in the same category with shares and real estates. Now, income generated from trading DigixDAO and other cryptocurrencies has to be taxed.
The tax experts are, however, sharply differing with investors and traders in DigixDAO and other cryptocurrencies when it comes to taxes. They hold the view that though the operations might be hidden completely when working with cryptocurrencies, the same status is likely to change in the coming days when more advanced technologies get discovered. However, you do not have to worry because it is possible to enjoy the optimal benefits of DigixDAO without breaking tax related or other laws. Here are some useful tips to apply.
- Make sure to consider all revenue from DigixDAO taxable.
- Capture the status of trading (profitable or a loss) in your tax reports.
- For businesses using the DigixDAO for payment, it is important to ensure that the transactions are articulately captured in the balance sheet.
- Ensure that the value of DigixDAO and corresponding fiat such as USD are captured at the point of trade.
- Do not hesitate to work with tax experts if you find it difficult to operate within the precincts of the tax laws.
Does DigixDAO Have a Consumer Protection?
DigixDAO does not have consumer protection. DigixDAO is a cryptocurrency network that belongs to the users and nodes spread in its network. This means that all the decisions on the network are not under control of any one individual or party. If something happens in the network, the action can only be taken after the community DGD holders vote and agree on it. What this means is that users are actually on their own when working in the DigixDAO network. To be sure of operating securely, here are some useful tips to consider.
- Always triple check the public address when sending value on the network.
- Make sure to keep the private keys away from the main computer and third parties.
- Only use exchanges that have the full commitment to protecting their clients.
- Always store the DigixDAO token offline (preferably in hardware wallets) when not trading them. Even after trading, make sure to shift the tokens to your wallet as opposed to leaving them on the highly vulnerable exchange accounts.
- Only use one computer to access the DigixDAO network. This computer should always be updated to reduce the risk of getting attacked.
Illegal Activities with DigixDAO
Since 2009 when cryptocurrencies entered the market, many criminals have seen them as a haven for illegal activities. The main reason for this is that the networks are anonymous and transactions are irreversible. Therefore, from Ponzi schemes to selling of fake products, the cryptocurrency networks provide an emerging popular network. Despite this, the DigixDAO network operates with a lot of checks that have helped to keep the criminals away from the network. Since inception, no illegal activity has been reported in its network.
Is DigixDAO Secure?
The best cryptocurrency network that you should consider joining should guarantee total security of the digital assets for clients. Because of the fast-growing popularity and demand for digital assets, many cryptocurrency development teams are including additional layers of security to their networks to maintain trust with the community and keep growing their value. The main methods used to secure the DigixDAO network include the following;
- Advanced encryption of user accounts and details of every transaction.
- Progressive review and update of the DigixDAO network.
- Operation on the Ethereum network means that DigixDAO enjoys all the security components offered in the host network.
- The DigixDAO is led by a highly advanced team of experts who are highly committed to enhancing the security of the crypto network.
Is DigixDAO Anonymous?
One of the methods used by cryptocurrency communities to assess a great network is looking at the anonymity. DigixDAO is one of the anonymous cryptocurrencies that guarantees users extra privacy when operating in the network. The main method used to enhance privacy in the network is advanced encryption. When you initiate a transaction in the DigixDAO, it is encrypted immediately before being taken over by nodes for verification. Because of advanced encryption, even the nodes spread in the Ethereum network cannot know the identity of individual users. They can only pick the public address and confirm whether there are enough DigixDAO tokens.
Has DigixDAO Ever Been Hacked?
Yes, DigixDAO has ever suffered an attack. DigixDAO was created after numerous hacking on crypto networks between 2011 and 2014. While the main focus was linking the cryptocurrency to physical assets, the development team also strengthened their focus on security to guarantee users of extra security. Even with these efforts, the network was still hacked in July of 2017 and more than 4000 DGD stolen. The attackers utilized a vulnerability in crowdsale smart contract to gain entry. However, the bug was later fixed, and the stolen tokens returned to the owners.
How Can I Restore DigixDAO?
One of the most distressful things in the cryptocurrency industry is waking up one day and finding that your DigixDAO coins have been lost. Think of a person who had invested so much in the tokens and aiming to recover them and profits after five years. Then, he wakes up one day and gets the wallet has been siphoned off. Notably, reports of people losing their cryptocurrency coins have become a common thing. However, all might not be lost. Depending on the nature of loss, it might be possible to restore DigixDAO. Here are some of the top methods that you can use to restore DigixDAO.
- Loss of DigixDAO tokens through forgetting the private keys: The private keys are the gateway to your token in the network. Therefore, losing them means that your coins are also lost. To restore the tokens, you need to have been prepared right from the beginning. The first time you used a digital wallet, it generated the private keys seed phrase. This is the code you should use to regenerate the private keys for restoring the tokens.
- Loss of DigixDAO tokens through damage of the cryptocurrency wallet: In such a situation, you can restore the wallet from the backup. You will only need to activate the wallet and use the private keys to reconcile it with the DigixDAO network. You could also get another ERC-20 compatible wallet and use the private keys seed to reconcile it with the main network.
- Loss of DigixDAO tokens through hacking or sending to the wrong address. If you lost the tokens through these two methods, there is no method that can be used to restore them. This means that the tokens have changed hands and now have a new owner.
The secret to a successful recovery of DigixDAO is being prepared before the loss strikes. This means ensuring that your wallet is backed up appropriately and the seed phrase is carefully kept away from the main computer. It is also important to carefully store the private keys and avoid access by third parties.
Why Do People Trust DigixDAO?
The cryptocurrency niche is becoming very competitive. Between 2009 and 2018, more than 1500 cryptocurrencies entered the market. The focus has now shifted from simply crafting networks for sending value to demonstrating that a crypto network guarantees highest returns on investment. It is all about winning the trust of users. Here are the main reasons why people trust DigixDAO.
- The cryptocurrency’s value has been growing steadily especially in the last six months of 2017 and early 2018.
- It is marketed as the best option out there. After DigixDAO defied the January 2018 trend and took an upward trend when others were falling, many people are coming to accept that it is indeed one of the best networks out there.
- It is one of the cryptocurrencies that is associated with real assets. By ensuring that users can feel and associate with actual gold, they get special sense of attachment and security. There is general calmness among the users that nothing can go wrong. Even the looming regulations do not appear to perturb DigixDAO holders because of low volatility.
- Though DigixDAO was attacked and some native DGD stolen, the development team was quick to fix the issue and enhance the overall security. When this is applied on top of the Ethereum blockchain, the community is convinced that its assets are extra secure.
- The network has solved most issues experienced in previous blockchains including speed of transactions and security. This means that users can expect better performance and increasing value over time.
- The system of DigixDAO employs Multiparty Trust Mechanism that guarantees a high level of transparency. Unlike some cryptocurrencies that do not clearly outline the flow of value, the transparency of the DigixDAO is admirable. For example, users easily understand the storage, valuation, and conversion process of gold to tokens.
- It employs one of the latest technologies in the network including Proof-of-Asset Verification, Minter Smart Contracts, and Generic I/O contracts among others.
Note that the trust that the community has in the DigixDAO can only last as far as its performance at the market remains good and security top notch. The development team must, therefore, continue working extra hard to guarantee users of better features and value from the network.
History of DigixDAO
The history of DigixDAO can be traced back to 2016 when Digix decided to tokenize gold trading. The company wanted to simplify the process of acquiring bullions and allowing anyone to access and invest without worrying of volatility reported in other cryptocurrencies and even fiats.
- In March of 2016, Digix held its ICO that raised $5.5 million. It was the first ever successful DAO in the Ethereum network.
- Immediately after the ICO of March, the value of DigixDAO fell from around $30 to less than $10 by close of April 2016. It was not until May of 2017 that the price rose back to above the $30 mark.
- In July of 2017, more than 4000 DGD were stolen because of a vulnerability in the crowdsale smart contract.
- The price of DigixDAO grew progressively from May of 2017 to 1st March of 2018 when it reached the highest ever mark of $553 on 1st March of 2018. After this peak DGD value dropped back to average growth.
- In March of 2018, DigixDAO announced the partnership with Traceto Partner for KYC services. Traceto Partner is a company that specializes in Know Your Customer solutions through the fusion of artificial intelligence and smart contracts. The aim of this partnership is bridging the real and virtual world KYC procedures.
- The company is led by a highly committed team. Unlike other cryptos such as Bitcoin, the development team comprises of tech-savvy members with a keen eye for scaling the heights of the industry. They have excited the crypto community by introducing the first ever model of linking cryptocurrencies to real assets. These innovations are expected to keep growing the appeal, value, and success of DigixDAO.
Who Created DigixDAO?
DigixDAO was created by Digix Company that is run by Teo Hye, Anthony Eufemio, and Kai C. Chng. Digix is a company that has its main focus on gold trading. It is registered in Singapore where it also maintains physical gold in safe houses for traders in the blockchain network. The main focus of the company is ensuring that everyone can join the gold trade and enjoy its proven stability and progressive ROI. Now, securing bullion is only a click away using the Digix tokens.
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