Komodo cryptocurrency guide advises where to buy and how to buy Komodo. 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 Komodo as well its status in the world of cryptocurrencies.
Komodo, Thursday, 2018-10-25
- 1 What Is Komodo?
- 2 Beginner's Guide to Komodo
- 3 Where and How to Buy Komodo?
- 4 Komodo Markets
- 5 Where to Spend or Use Komodo?
- 6 How Does Komodo Work?
- 7 Komodo Regulation
- 8 Is Komodo Secure?
- 9 History of Komodo
- 10 Komodo Videos and Tutorials
- 11 See Also
What Is Komodo?
Komodo is a decentralized, open-source cryptocurrency and platform designed to provide users with advanced security and anonymity. The Komodo blockchain was forked from the Zcash network, and it is part of the SuperNET network founded by an anonymous crypto community referred to only as JL77. The community is a team of developers that target to address the challenges of the blockchain network to help advance and make it better.
As the efficiency of blockchain networks to guarantee users of optimal privacy and security come under sharp focus, the focus in the industry has shifted to seeking better methods that can be used to advance the original idea held by Satoshi Nakamoto. This is the approach that the Komodo founders took to create a platform that provides total anonymity and privacy.
The Komodo cryptocurrency (KMD) is used to facilitate transactions that are transparent, anonymous and fungible. To make the platform more secure, the development team opted to use the delayed proof of work (DPoW) that makes it possible to implement new blockchains as layers on top of other consensus protocols. In the case of Komodo, the DPoW is implemented on top of the Bitcoin proof of work protocol.
As the blockchain niche keeps evolving, Komodo is growing from being a cryptocurrency for sending value only into a complete ecosystem. They have improved the network to make it a one-stop point for launching ICOs and anonymizing other tokens using Jumblr. The platform is also in the process of introducing arterDEX that will allow users to exchange and trade different tokens without using the decentralized exchanges.
Though the price of Komodo has not grown as fast as many would have anticipated, the platform is considered one of the high potential options in the industry today. It will be interesting to check how the performance will be in the coming years.
Beginner's Guide to Komodo
Have you been looking for a high potential cryptocurrency network to join? One of the top options available today is Komodo. The cryptocurrency and its native network have provided a reliable solution to run completely anonymous transactions. With a highly aggressive development team working hard to introduce great features, this could be the cryptocurrency of the future. Before making the big decision to join the network, it is advisable to comprehensively review it and its features. This is why this guide was created.
The guide explores the Komodo network to determine how it is designed to guarantee users the privacy and security. It also explores other aspects of Komodo to establish where to buy, where to sell and trade, consumer protection, and regulations. The guide answers all the questions and clears all the doubts you might have about Komodo. Welcome.
Where and How to Buy Komodo?
Komodo has been one of the desirable cryptocurrencies in the market because of its interesting performance. Between early 2017 and mid-September 2018, the value of Komodo grew with more than 600%. To take advantage of this growth, the best thing is acquiring the native Komodo coins. Though you can mine the tokens, the easier, direct, and prompt method is buying. Here are the two main methods that can be used to buy Komodo coins.
- Buy Komodo tokens from the exchanges: These are the primary markets for selling and buying cryptocurrencies. They operate like forex markets but deal with cryptocurrencies.
- To buy the tokens from an exchange, you are required to identify the exchange that lists Komodo and registering for a trading account. Because the exchanges are centralized and operate in line with local laws, you will be required to verify the account using personal information such as date of birth, proof of address, and phone number. Note that the verification information might differ depending on the exchange. Some of the exchanges that list KMD include Bittrex and Binance.
- Buy Komodo from those who already have the tokens: For those who do not want to go through the process of registering for trading accounts, there is an alternative of buying directly from those who already have the tokens. If you can identify a person who bought the Komodo tokens when they went on sale during the ICO or has already bought from the exchanges, it is possible to make a direct transaction.
- To get people who already have the tokens, you should consider joining cryptocurrency clubs such as the Cryptocurrency Club of London. These are groups of cryptocurrency enthusiasts that target bringing people together to discuss issues related to cryptocurrencies. However, they have also become important selling points for cryptocurrencies.
- The biggest problem of using these clubs is that they are not explicitly designed for selling and trading the tokens. This implies that they lack regulatory, features and monitoring systems that are installed in many exchanges. Therefore, you should be very careful to avoid falling into the hands of scammers.
When you decide to join the Komodo network to send funds, mine the coins, or hold the tokens, one must have thing is a digital wallet. This is a digital location (facility) to hold your tokens. The wallet is also crucial in helping you to manage the tokens effectively. However, it is important to note that the term wallet is indeed a misnomer.
In reality, a digital wallet does not store the coins because they do not exist in a physical form. Rather, it stores and operates using a set of codes that link to the coins you have in the Komodo network. The most important code generated by the wallet is the private key. This is the code that points at your tokens in the network. Every time that you want to run a transaction, this code will be required. Note that this key is private and should never be shared with third parties.
The second code generated by the wallet is the public key. This key acts as the address to your wallet. If someone wants to send you Komodo tokens, you should provide the public key.
The last code generated by the wallet is the seed phrase. Unlike the private and public keys that are used regularly, the seed phrase only comes into play when you lose the private keys. Therefore, you should store the seed phrase carefully because it might be the only way to recover lost tokens.
To store Komodo tokens, you can opt for the desktop wallet, cold storage, web-based wallets, or paper wallets. Some of the top options include Ledger Nano S, Command Line Client (CLI) wallet, Agama Wallet, and Komodo wallet.
Where to Buy Komodo with Credit Card?
Many people have developed special attachments to credit cards because they are cashless and can be used in both online and conventional markets. To buy Komodo with credit cards, the process will involve two stages.
First, you will need to buy an alternative coin such as Bitcoin or Ethereum from an exchange such as CEX.io that accepts credit cards. Second, you can use the tokens bought in the first step to buy Komodo coins from an exchange that lists KMD such as Binance of Bittrex.
Where to Buy Komodo with PayPal?
No direct method can be used to buy Komodo tokens with PayPal. This implies that those with funds in their PayPal accounts have to follow a longer route or withdrawing into a bank account or credit cards before purchasing the Komodo tokens.
How to Buy Komodo with Wire Transfer?
Banks are some of the most trusted institutions in the world today. Their professional approach and focus on strictly following the law have made people believe them for fiscal advice, wage processing, and savings. Now, the banks have also become a reliable option for purchasing cryptocurrencies such as Komodo.
There are two methods that can be used to buy Komodo using wire transfer. If you identify an exchange that allows users to make deposits using fiat such as Cryptopia, the process is direct. You only need to open an account, make the fiat deposit, and specify the quality of KMD to buy.
The second method is relatively long. However, you have to use it if the exchange of interest does not support fiat. Here are the main steps to follow in such a situation.
- Acquire an appropriate Komodo cryptocurrency wallet.
- Buy an alternative coin such as Bitcoin from an exchange that accepts wire transfer such as CEX.io.
- Visit an exchange that lists Komodo such as Bittrex and open a trading account.
- On the user interface, select purchase Komodo coins and then pay with Bitcoins that you bought in the second step.
- Note that the Komodo tokens will go to the selected exchange’s account. Therefore, you will need one last step of downloading to your wallet which is considered safer than the exchanges.
Where to Sell and Trade Komodo?
If you have been in the Komodo network and acquired some coins, you might be wondering about the best method to optimize profitability. While you can opt to hold the coins awaiting the price to go up, the best method is trading in the markets.
Trading Komodo and other cryptocurrencies takes place in the exchanges such as Cryptopia and Bittrex. These are the markets that help to link both buyers and sellers to ensure that prices of the digital coins are controlled by the market forces. At this point, it is important to note that the selling and trading platforms are the riskiest points when dealing with cryptocurrencies.
In the history of cryptocurrencies, every large attack and loss of digital tokens is likely to have happed on the exchanges. One of the latest attacks was the hacking of a Japanese exchange referred to as Coincheck. The attackers made away with $520 million worth of digital coins. This brings about one important question; “How can one pick the right cryptocurrency exchange to trade Komodo?”
- Look for the exchange that puts a lot of effort on security. Check for features such as two-factor authentication and use of cold storage.
- Select the exchange with low transaction fee to avoid all the profit going to the exchange.
- Only use the trading platform that has good customer support so that any issue is addressed promptly.
- Consider only using the exchange that lists many digital assets. This will guarantee you of a profitable pair to jump to if the current one prove less desirable.
Because of the high risks involved when using the centralized exchanges, Komodo is working on a new decentralized exchange referred to as BaterDEX. This platform will help users to trade Komodo and other tokens directly from their wallets. The platform will be used to extend the strict adherence to privacy to ensure that no one can easily pull out user details whether from the network or during transactions.
How Much Are the Transaction Fees of Komodo?
Komodo does not give a specific figure or percentage that users have to pay for when sending transactions. The only fee that the network specifies is 0.3% charged to users who want to use Jumblr anonymizer to enhance the privacy of the coins using ZK-SNARKS. Note that this is an optional service.
Starting from 2009 when Bitcoin debuted, the crypto markets have continued to grow at a steady rate to cater for the more than 1600 cryptocurrencies and the fast-rising demand. The following are the top Komodo markets you should know today.
Binance is a Chinese based cryptocurrency exchange started by Changpeng Zhao and Yi He in July 2017. The founders were concerned that trading cryptocurrencies were becoming overly complex and expensive. By July 2018 when Binance was celebrating one year in operation, it had over 143 tokens including Komodo.
The most notable thing about Binance is its low transaction fee. Every transaction on the platform is charged a flat fee of 0.1%. However, you can pull down this transaction cost by 25% if you pay the fee using its native coin referred to as BNB. In the first year of operation, between July 2017 and July 2018, Binance was cutting the transaction fee by 50%. This means that you could trade any volume but only pay 0.05%.
Binance has cut a name in the industry for its long list of tradable digital assets and commitment to bringing users early opportunities using ICOs. When new tokens are released, Binance makes every effort to ensure that its clients get the opportunity for investment before the price goes up.
The main challenge of using Binance is that it is a cryptocurrency only exchange. This implies that those with fiat currencies, credit cards, and wire transfers cannot use the exchange for deposits, withdrawals or trading. To address the challenge, Binance relocated its headquarters from China to Malta. The platform management has promised to start supporting fiat currencies in the coming months.
Bittrex is a Settle, USA, based cryptocurrency exchange that was started in 2014 by Bill Sahara and a group of cryptocurrency trading enthusiasts. The founders were motivated by the growing level of insecurity that resulted in numerous losses. By July 2018, the exchange had grown steadily to hit a daily trading volume of just under $300 million. The management considers the exchange to be the next generation platform that will help to make the transactions more secure, fast and highly reliable.
It is important to note that as other exchanges focus on crafting measures to help their traders operate anonymously, Bittrex remains fully committed to operating within the laws. They strictly follow Know Your Customer (KYC) and Anti-Money Laundering (AML) programs in line with the US Securities and Exchanges (SEC) requirements.
The transaction fee at Bittrex is 0.25% of the traded volume. This is considered relatively high compared to other top exchanges such as HitBTC that charge only 0.1% and offer many options for pulling down the cost with special discounts.
To guarantee users of optimal security when trading in the platform, Bittrex utilizes an elastic multi-stage wallet model that involves storing 80-90% tokens in a cold storage offline. It also employs two-factor authentication to reduce the risk of attackers gaining access to your account.
To help protect users from scammers, Bittrex comprehensively analyzes all the tokens before listing them on its platform. The exchange is especially hesitant to list new forks until they are proven stable. Some tokens that Bittrex was hesitant to list included Bitcoin Gold and Bitcoin Private.
The main challenge of using Bittrex is that it does not allow fiat trading or deposit using fiat. This implies that people with fiat currencies who want to use Bittrex have to start from other exchanges such as CEX.io or LocalBitcoins.com. The extended chain will also be required when withdrawing the tokens.
HitBTC is a digital currency exchange started by Dave Merill in 2013 with the primary goal of making crypto trading easy and secure. It was developed at a time when attacks on the exchanges such as the Mt. Gox hacking of 2011 had become the order of the day. When Merill started HitBTC, it was only used for trading Bitcoins. However, it grew over time to include other major cryptocurrencies such as Litecoin, Ripple, and Ethereum.
Like Binance, HitBTC has a very small operation fee of only 0.1%. However, the platform charges both the maker and the taker. Makers are charged 0.01% because they are considered to be adding liquidity while takers pay 0.1%. However, the funds are still considered to be within the industry range.
To make Komodo traders find greater value when trading the token in the platform, HitBTC has an Application Programming Interface (API) that makes it easy to plug custom software. Users can, therefore, extend the utility of the platform using APIs such as RESTful API and Streaming API.
If you want to trade large volumes of Komodo, HitBTC provides the option of over the counter trading. This is a type of transaction where large volume movers are allowed to bypass the public order books by dealing directly with counterparties. Over the counter Komodo trading is facilitated by Trusted Volumes.
To make trading easier and more predictable, HitBTC provides users with a large number of trading orders. These allow users to maintain greater control and avoid losses. Some of these order types include the limit orders, stop order and stop-lit order.
The biggest challenge for Komodo traders is that HitBTC interface is relatively complex to use. Besides, a lot of people have been complaining that withdrawals have been taking too long to effect.
Cryptopia is one of the fastest growing exchanges in the industry today. The exchange was started in 2014 by Rob Dawson and Adam Clark who were concerned that many exchanges were not doing enough to promote the direct use of digital coins in conventional markets. They also wanted to help smaller coins to get listed and find their way into the industry.
The transaction fee at Cryptopia is 0.2%. Though the management indicates that this charge is within the industry range, many users feel that the exchange should consider lowering it to the level of other top competitors especially Binance and Bittrex that charge 0.1%. Remember that an additional fee will be required when withdrawing your coins.
To help traders use the coins directly, Cryptopia also runs a digital marketplace where users can buy various goods and services. Once you select the item of interest, billing is done using listed cryptocurrencies. Another crucial feature in the exchange is the Cryptopia arbitrage. This feature helps users to see the price of the listed coins in various exchanges.
Cryptopia stands out from its peers in the industry because it allows traders to use fiat currencies. This has made it act like the entry point for people with fiat currencies. However, the only currency allowed is USD and New Zealand Dollars.
Value of Komodo
The value of Komodo has grown steadily to become one of the top platforms in the globe today. By 22nd September 2018, the value of Komodo had grown to reach $127,887,797 at a price of $1.16. This places the token on position 51 on Coinmarketcap which is well ahead of other more popular tokens such as Rchain with a market cap of $121.2 million and Nebulas with $65.6 million. As the Komodo development team continues working on new and more innovative features, the community is expecting the value to continue growing.
Is It Profitable to Invest in Komodo?
Many traders prefer Komodo cryptocurrency not just because of its enhanced anonymity, but also because of its profitability. A person who invested in Komodo tokens in early 2017 and held the tokens to mid-September 2018 enjoyed over 600% ROI (return on investment). However, those who traded their tokens when the price went above the $13 mark in December 2017 enjoyed a higher return on investment of more than 11,000%.
As Komodo introduces its highly effective features such as BarterDEX, the price of the native tokens is expected to grow even higher. It has even been referred as to have the potential of becoming the next Bitcoin because of the enhanced anonymity.
Where to Spend or Use Komodo?
Komodo, like other cryptocurrencies, is on the race to getting accepted in many stores. Today, Komodo can be used to pay for transaction fee when sending funds in the Komodo network. This fee is paid to miners who confirm transactions using delayed proof of work (DPoW) consensus. You can also use the coin in the following places.
- Paying for the trading fee in the exchanges.
- Paying for Jumblr anonymization services.
- Purchasing products from stores that accept KMD. You can also easily convert KMD to another coin to pay using a different cryptocurrency.
Can Komodo Grow to Become a Major Payment Network?
Yes, Komodo can grow to become a major payment network. Most cryptocurrencies out there are indeed in a race to win a larger market and get accepted in more stores. On this front, Komodo will have to work harder to beat other more established networks especially Bitcoin, Ripple, and Ethereum. Here are some of the things that could help Komodo to become a major payment network
- Its decentralized fiat currencies make it easy to convert more fiat currencies to Komodo and vice versa.
- The transaction fee is relatively low compared to other top networks such as Bitcoin Cash in the market.
- The Komodo transactions are faster and secure compared to those at Bitcoin and Ethereum.
- The network allows users to operate in total anonymity.
How Does Komodo Work?
Komodo is a blockchain platform that utilizes its native open-source cryptocurrency to guarantee users of transparent, private and fungible transactions. Komodo system is more of a cryptocurrency ecosystem than an individual crypto network. Indeed, they have four white papers that bring out the different sections of the ecosystem.
While many cryptocurrency systems ensure that their networks are encrypted to enhance anonymity, traders still get exposed when trading in the exchanges because they are centralized. To address this problem, the Komodo BarterDEX is a system that allows users to exchange KMD and other tokens without relying on the centralized exchanges.
BarterDEX is an atomic-swap powered decentralized exchange that helps to pull down counterparty risks. Because decentralized exchanges do not hold users' coins, they tend to have a problem of low liquidity. BarterDEX addresses the issue by utilizing Liquidity Provider Nodes (LP Nodes) for stabilizing the market prices.
Note that BarterDEX is not a Komodo only trading platform. It supports trading of any coin as long as the developer plugs it with the right protocol. People feel that this decentralized exchange has come at the right time because many administrations have been emphasizing on countering anonymity for fear of tax evasion.
This is an open-source and decentralized crypto anonymizer designed to help users on the Komodo platform operate in total privacy. The anonymizer takes the KMD tokens from the non-private addressed and relays them via multiple ZK-SNARK. The untraceable addresses help to clear any trail that could be used to identify you.
After sending the tokens to ZK-SNARKS, they are relayed to the address of the user's choice. There is a 0.3% fee paid to Jumblr for enhancing this anonymity. Note that Jumblr is also plugged into the BaterDEX so that users can also enhance anonymity of other tokens they are trading there.
- Delayed proof or work (dPoW)
To make Komodo more secure and reliable, the development team adopted the Delayed Proof of Work (DPoW) consensus algorithm. Interestingly, DPoW is run on top of other consensus algorithms such as Proof of Work or Proof of Stake among others with no limitations.
The Komodo development team opted to use the Bitcoin Proof of Work (PoW) algorithm because of its high hashrate. The higher the hashrate a network has, the higher the security.
The Komodo DPoW uses two main types of nodes, the notary and normal nodes. The Notary nodes are elected by the nodes and are used to notarize the blocks from the DPoW chain onto the Bitcoin blockchain. Note that though the notary nodes add a new layer of security, the Komodo platform can still operate without them. In such a case, the transactions (without notaries) would not be published on the consensus chain though normal nodes can still read and validate them.
- Decentralized fiat currencies (DFCs)
DCFs are digital coins that are created to help address high price volatility. The technology uses atomic-cross chain swaps, the DPoW, BarterDEX, and European Central Bank to reach a consensus on currencies price. This system utilizes price points such as KMD-BTC, BTC-CNY, and USD-BTC to arrive at the conversion of rates of any currency to Komodo coin.
The role of recording the DFC prices on the Komodo blockchain is bestowed on the notary nodes. The system also utilizes the delayed Proof of Work consensus algorithm for additional security.
- Decentralized Coin Offerings (ICOs)
The Komodo platform has also been improved to act as a platform for launching new blockchains and even ICOs. If you opt to use Komodo, it has additional marketing channels to users, support consultants, and technology. These features are aimed at helping to make your ICO more successful. Note that Komodo only hosts one decentralized ICO at any time.
Does Komodo Use Blockchain Technology?
Yes, Komodo uses blockchain technology. The main goal was creating a platform that can help users to operate on a peer2peer basis without using centralized parties. Komodo is a forked blockchain network derived from Zcash. Remember that Zcash was forked from Bitcoin.
Komodo blockchain utilizes two layers; the Komodo blockchain and the Bitcoin core. The Komodo blockchain uses delayed proof of work (DPoW) consensus run by the notarized nodes. This layer is run on top of the Bitcoin’s proof of work (PoW) core for enhanced security. The unique blockchain arrangement has made it possible to implement the advanced features such as the Jumblr anonymizer and BarterDEX.
Komodo cryptocurrency employed an improved consensus model that pools together the anonymity of Zcash and advanced security of Bitcoin. On mining, the Komodo development team wanted to adopt a system that would help decentralize mining by making it ASIC resistant. Therefore, they settled for Equihash-based PoW protocol.
To mine Komodo, you can opt to use the CPU or GPU method. You can also opt to mine KMD using mining pools. The pools combine individual users’ hashing power to raise the chances of confirming more transactions. However, the returns from such pools are shared among all the contributing members.
What Are the Advantages of Komodo?
Komodo has become one of the most sought-after cryptocurrencies in the market because of its emphasis on user privacy. Recently, many people have held a lot of fear that their cryptocurrency operations might one day get discovered by third-party entities such as government departments and even courts of law. However, Komodo system assures that all user details and transactions remain as anonymous through the use of Jumblr anonymizer. Here are other benefits to expect after joining Komodo.
- Komodo is one of the truly anonymous networks in the market today. Unlike Bitcoin or other cryptocurrency networks that have become very easy to pull out individual users’ details, Komodo uses multiple methods to keep users’ info, transactions, and tokens private. Now, you can send funds without worrying someone will know about the details.
- It allows users to operate without worrying about third-party seizures. When you decide to save funds in the Komodo network, the enhanced privacy is very helpful in operating without worrying about third-party seizures. Even if a court battle hauls itself to your doorstep, there is no way that people can tell about your investment in Komodo.
- It is a cheaper, faster, and more reliable method of sending funds across the globe. Unlike the centralized organizations that take a lot of time verifying user and recipient info, Komodo transactions are near instant because they are peer2peer. Besides, they are cheaper because all the profit-seeking organizations such as banks have been bypassed.
- Komodo provides users with the freedom to use the network any time of the day or night. If you have a bank account, there are limitations on the amount you can send and the time of operations. However, Komodo allows users to join the network and operate in absolute freedom. It does not matter whether it is at night, weekend, or public holidays, all that a user needs is ample funds to send anywhere across the globe.
- The Komodo platform has created a way of working with many institutions including the EU Central bank to ensure that conversions are correct and done promptly. Such relationships are considered crucial in helping to shape the views of different administrations about cryptocurrencies.
What Are the Risks of Komodo?
When you decide to join the Komodo network, do not just look at it from the positive side. Rather, you should compare the pros to the risks and conclude whether to join or not. Here are the main risks associated with Komodo.
- Many administrations have threatened to pass harsh regulations to limit the fast growth of cryptocurrencies. The view that cryptocurrencies such as Komodo are completely decentralized and helping transactions bypass licensed operators is likely to make governments pass even harsher regulations. If laws such as the digital financial assets bill proposed by the finance ministry in Russia are passed, cryptocurrencies are likely to get into a recession.
- Most cryptocurrencies including Komodo are highly volatile. The price responds to every force in the market such as regulation, competition, and new technology with extreme swings. For example, towards December 2017 and January 2018, the price of Komodo rose to hit $13 because of heightened demand. But this price shot down to less than $1.5 by September 2018. This volatility makes it very difficult for investors to make the right prediction.
- The main reason for Komodo introduction was to improve the existing networks by enhancing their anonymity. It improved the Zcash network and Bitcoin core to craft a better system and win a bigger market share. Now, Komodo faces a similar threat as more advanced and appealing networks line up to take its place.
- The platform is relatively new having entered the market in late 2016. This implies that most of the features are still being developed and tested. For example, the BarterDEX system is still being tested, and it will take some time before the stability can be ascertained. Crypto investors consider a network to be stable after taking about five years in the market.
- While the Komodo network comes with features that promise a lot of changes in the cryptocurrency industry, some are seeing it to be too ambitious. For example, concerns have been raised about the Komodo decentralized fiat currencies that are designed to operate together with the EU Central Bank. It is unclear how EU Central bank, an institution that has voiced strong dislike for cryptocurrencies, will support the arrangements.
- The danger of getting attacked. Like other cryptocurrencies, Komodo is still faced by the risk of getting attacked. Users can be attacked at the Komodo network level, the wallets, or even the exchanges. This requires users to exercise greater caution when using Komodo to avoid falling into the hand of scammers.
What Happens if Komodo Gets Lost?
When you join the cryptocurrency network, it is not uncommon to hear people indicating that they have lost their tokens. Komodo token losses can happen in the main network, at the exchanges, or the wallets. To avoid these losses, it is important to understand what happens when the tokens get lost.
- Loss through sending the tokens to the wrong address: In this type of loss, the Komodo tokens are still in the network but under a different person.
- Loss via damage to the wallet or forgetting the private keys: This type of a loss means that your Komodo tokens are still in the network but still under your signature. If you can regenerate the private keys or restore the wallet, the tokens will be activated.
- Loss through hacking: When Komodo tokens are lost through hacking, it is considered to be a completed transaction. The tokens now belong to a new owner and the transaction cannot be reversed.
Since 2009 when Satoshi Nakamoto released the Bitcoin protocol, many governments have not been sitting pretty. They feel that the decentralized networks are out to make their work extra difficult and even outdo them. In China, the administration has been very aggressive in blocking most cryptocurrency related operations such as ICOs and trading. But China is not alone. The US Securities and Exchange Commission (SEC) recently created a parody website demonstrating how fake ICOs are created. There is a consensus among many administrations that cryptocurrencies need to be ‘tamed.'
At this point, one might ask; “What exactly are these threats posed by the cryptocurrencies to governments?? Because the cryptocurrency networks are decentralized, they work on a peer2peer basis which implies that centralized and taxpaying institutions such as banks are bypassed. For example, Komodo based payments are done directly to cut on transfer cost and make the transactions near instant.
In the EU, the concerns have mainly been about consumer protection. Unlike the fiat currency or securities that are generated under strict scrutiny and consumers are protected using multiple laws, cryptocurrencies are considered wild. From the ICOs to the number of coins released into the market, everything largely follows the founder/s’ discretion.
In the US, the Federal Bureau of Investigation (FBI) has all along been concerned that cryptocurrencies such as Komodo could easily become the funding points and conduits for criminals. The encryption used in the system and Jumblr helps to hide users so that even terrorists can easily raise funds on the networks and send funds across the globe without worrying about getting caught.
While the threats that come with cryptocurrencies such as Komodo are clear to many governments, they appear uncommitted or unable to pass the required regulations. Here are some of the main causes of lack of regulation or obstacles standing on the path.
- The blockchain niche is unfolding very fast, and most administrations are forced to play catch-up.
- Cryptocurrencies are not owned by any single individual. As decentralized networks, there is no clear outline of the person or entity to implement the new regulations.
- The cryptocurrencies have arisen as part of the governments’ efforts to grow the fintech sector. Many administrations are now torn between halting the platforms they partly initiated and allowing them to progress. For example, Hong Kong had a fintech facilitation office that has been promoting the growth of financial technologies.
- The blockchain platforms have proven they are capable of addressing some serious problems that had refused to go away such as big data and the high cost of sending value across the globe.
As the concept of blockchain application and cryptocurrencies such as Komodo become clearer, a lot of governments appear unsure of the route to follow. Though the overly negative approach earlier taken by some administrations has subsided, the truth is that cryptocurrency laws are on the way. Indeed, some administrations have already crafted draft bills on cryptocurrencies. Take a look at the next section to see where different jurisdictions have reached with cryptocurrency regulations.
Is Komodo Legal?
The legal status of cryptocurrencies such as Komodo depends on respective jurisdiction under consideration. Here is a closer look at several of these jurisdictions to establish the legal status of Komodo.
(1) The United States
Komodo is legal in the US. Though the United States was the first to note the threats that come with cryptocurrencies, it was yet to install a legal framework by the third quarter of 2018. The United States appears unclear of the route to follow about cryptocurrency regulation.
First, the definition of cryptocurrencies is contested. The Securities and Exchange Commission (SEC) has indicated that the tokens should be considered securities and need to be guided by the securities trading laws. The SEC's stand is that cryptocurrencies are high-risk ventures and people should be careful to avoid incurring total losses. However, the stand taken by SEC has become contested by the Commodities Futures and Trading Commission (CFTC) that indicates cryptocurrencies should be considered properties.
Early in 2018, the United States appeared to take an international approach to cryptocurrency regulation. The Treasury Secretary, Steve Mnuchin, told the Economic Club in Washington that cryptocurrencies could become the next "Swiss account." He proposed for an urgent global approach to contain the serious threat.
While addressing the press in Japan after meeting financial experts in China and South Korea, Sigal Mandelker called for a global approach to regulating cryptocurrencies. Sigal heaped praise to the Asian giants especially China for keeping a check on cryptocurrencies. With the federal administration not giving a distinct direction to the nation, individual states have started crafting some local legal arrangements to deal with cryptocurrencies.
In March 2018, Arizona passed HB 1091 that legalizes paying taxes with cryptocurrencies. This was made to help the Arizona government increase the taxes especially from the fast-rising numbers of cryptocurrency users. Like Arizona, other states such as Georgia are now planning to pass similar legislation.
Komodo is legal in Russia. Russia is one jurisdiction that has demonstrated the commitment to forge ahead with cryptocurrency regulations even as others slump. Before January 2018, Russia had opted for a hands-off approach to cryptocurrencies. The central bank regularly warned people to be cautious with cryptocurrencies because of associated risks.
Early in 2018, the finance ministry indicated that it was impossible to tell whether traders who accepted payment in cryptocurrencies were committing a crime. Therefore, the ministry worked on a draft Digital Financial Assets bill and sent it to the State Duma by the close of January.
Under the draft cryptocurrency law, digital assets can be categorized as tokens and cryptocurrencies. Besides, they are considered properties. This implies that they are not legal tenders and cannot be used for payments.
If the draft law is passed, projects and businesses planning to release cryptocurrencies are required to be legal entities. Besides, even miners are considered to be involved in a production process which requires licensing.
To provide the government with greater control over cryptocurrencies, the draft bill requires a comprehensive evaluation of all digital assets before ICOs can be issued. The tokens are taken through a rigorous process to evaluate the issuing business model, pricing system, and quantities to be issued. This process closely mimics the evaluation procedures followed before a company can run an Initial Public Offering.
On trading the digital assets such as Komodo, the draft bill proposes that all the exchanges are registered in the country with the relevant departments. The exchanges are also required to strictly implement know your customer (KYC) strategies to prevent trading anonymously.
(3) The EU
Komodo is legal in the EU. European Union, like the US, appears undecided on the route to follow when it comes to cryptocurrency regulations. Different institutions of the EU appear to pull in different directions. The EU Central Bank has been cautioning EU citizens about the dangers of using cryptocurrencies. However, the EU Parliament has indicated the need to first study the blockchain and digital currencies before any legal framework can be installed.
The EU Commission (the executive arm of the EU) has stepped in to help guide the legislation process by outlining the threats that come with cryptocurrencies. Valdis Dombrovskis, the Vice President of the commission, was categorical about the threats that come from cryptocurrencies such as Komodo.
- High price volatility.
- Risk of total investment loss.
- Danger of operational failures.
- Security failures.
- Market manipulation.
- Liability gaps.
Many countries in the EU have come out to support the commission's standby creating local working groups. Germany, France, and the UK have all initiated some local mechanisms to address the risks associated with cryptocurrencies. It will be interesting to see the direction that the EU will take about cryptocurrency regulation.
Komodo is legal in Venezuela. As many countries insist that cryptocurrencies have numerous risks, Venezuela is seeing none of them. That is right. The country has gone right ahead to create its blockchain and released its native token referred to as petro cryptocurrency. This approach by a country whose currency and global status does not tick much in the global area has made crypto enthusiasts start wondering about the underlying motive.
For years, Venezuela has become the face of human rights abuses in the world. This has resulted in numerous sanctions from the United States and other international communities. The country under the leadership of President Nicholas Maduro resulted to cryptocurrencies as a convenient option for circumventing the sanctions.
Now, Venezuela has decided to increase the use of petro cryptocurrency by insisting that the national tokens be used alongside the national fiat currency. In April 2018, President Maduro issued a decree that all government departments should adopt the petro cryptocurrency in effecting payments at all levels.
While other countries have vowed to pass harsh regulations about cryptocurrencies, Switzerland is working to pass supportive laws. The country's administration has indicated that a lot of efforts have gone into molding the blockchain niche and the technology cannot be watered down. The government indicated that it wants to become a crypto nation.
While speaking to the press in January, Johann Schneider-Ammann, the country’s economic minister said that they would not spare any effort to make the blockchain technology in the country a success. He indicated that they would start with passing supportive regulations aimed at guiding ICOs in the country. He created an ICO working group and tasked it to crafting recommendations and draft proposal for regulating ICOs and supporting the niche.
Komodo and Taxes
One of the reasons why many governments have expressed reservations for supporting cryptocurrencies such as Komodo is because of their association with tax evasion. Most people feel that because Komodo and other cryptocurrencies are designed to enhance privacy, they can live without paying taxes. In the United States, only a few people who are in cryptocurrencies pay taxes. But the US is not alone.
In the EU, the commission indicated that it was necessary to pass urgent cryptocurrency regulation to streamline tax collection. China, Canada, and India have also been crying foul because of tax avoidance by people in cryptocurrencies. Even as many Komodo and other cryptocurrency holders indicate the thrill of living tax-free lifestyle, experts have a different option.
Tax experts emphasize that the primary reason for the creation of cryptocurrencies was not to help people evade paying taxes. They also caution people that though cryptocurrencies are anonymous and provide the cover from third-party seizures, all the details are stored in permanent blockchains. This means that when the right technology is discovered in the future, those who evaded paying taxes are likely to get discovered and lawsuits filed against them.
Take the case of Bitcoin. When it was launched in 2009, many people believed that they had finally found the place to hide because of its advanced encryption. When new technology was discovered years after Bitcoin launch, it became clear that transactions were no longer anonymous. Today, it is possible to pull out personal data from the Bitcoin system.
Tax experts argue that instead of avoiding paying taxes, it is possible to enjoy all the benefits associated to Komodo without breaking the law. Here are some of the suggestions.
- Make sure that income you generate when trading Komodo is considered taxable revenue.
- Capture the details of your trading when filing returns with your country’s tax authorities.
- If you are a trader accepting payment in Komodo, consider redesigning the balance sheet to factor the revenue from Komodo.
Note the price of Komodo tokens when trading to ensure that only the right status is reflected when filing returns.
Does Komodo Have a Consumer Protection?
Komodo does not have consumer protection. When Komodo was created and the core code released by the founders, it ceased being a one-party network. The network is completely decentralized, and the nodes spread in the network make all the decisions. This implies that when you join Komodo, you are on your own. In the case of a complaint, there is nowhere to take the complaint to. In fact, you cannot even complain in a court of law because cryptocurrencies are not regulated. To operate safely on the network, here are a number of measures to help you.
- Make sure to always be on the latest Komodo client.
- Keep the Komodo wallet and your computer up-to-date.
- Consider designating one computer for Komodo operations only.
- Store the Komodo private key and seed phrase securely and away from the main computer.
- If you want to multi-task the computer used for Komodo transactions, try to avoid visiting risky websites.
- Train yourself how to avoid phishing attacks. For example, you should avoid opening emails and attachments whose authenticity is contested.
Illegal Activities with Komodo
Cryptocurrencies have become the new target for criminals because of the fast-rising demand in the market. They feel that the anonymous operations provide ample cover to shield them from third parties including tax authorities and other government institutions. Despite this, no illegal activity had been reported with Komodo by the third quarter of 2018.
Is Komodo Secure?
Komodo is a highly secure cryptocurrency network. When Komodo was created, the developers wanted to make it the most secure network for users to operate without worrying of attacks and loss of their funds. Therefore, they included the following features to make the network secure.
- The system uses delayed proof of work (DPoW) consensus algorithm on the Bitcoin core to make the network immutable.
- The mining system is based on Equihash algorithm which is ASICs resistant. By allowing users to mine with CPU and GPU, the coins are evenly distributed to avoid the risk of 51% attack.
- The network utilizes advanced cryptography and ZK-SNARKS to enhance privacy and make it more difficult for attackers to break down.
Is Komodo Anonymous?
The Komodo network was created as a fork of Zcash system to help advance the anonymity of users. The developers wanted to make the Bitcoin system more secure and completely anonymous. To deliver this anonymity, Komodo uses Jumblr anonymizer that passes the Komodo tokens through multiple ZK-SNARK to clear the trails that can be used to track your details.
The Komodo system also allows users to run decentralized transactions using the BarterDEX. All the transactions in decentralized exchanges are run from the wallets without signing for trading accounts the way it happens in other exchanges. Once implemented, BarterDEX will remove the danger of your details getting accessed using the exchanges.
Has Komodo Ever Been Hacked?
Komodo has never been hacked. Since inception, the Komodo development team has been improving the network progressively to keep it more secure. They release updates progressively to seal gaps and cure vulnerabilities that are identified on the system. Note that saying the network has never been hacked should not be construed to mean that there are no hacking attempts. They note hacking attempts regularly but respond in every case promptly before hacking can become successful.
How Can I Restore Komodo?
Have you lost Komodo tokens? It might be possible to restore them depending on how they were lost. Komodo coins, like other digital tokens only reside in the native network. This implies that depending on the nature of loss; it might be possible to restore the tokens. Here are some of the methods that can be used to restore tokens.
- Loss through forgetting private keys: You can only restore the tokens by regenerating the private keys using the seed phrase.
- Loss through damage to the Komodo wallet: In this case, the tokens can only be by reinstalling the wallet from a backup.
Note that if you lost the tokens through sending to the wrong address or hacking, no method can be used to recover them. They are considered to have changed hands and, therefore, belong to different persons.
Why Do People Trust Komodo?
The large number of cryptocurrencies in the market today has made people become critical about the platforms they need to join. The competition has made people start considering trust as opposed to picking any cryptocurrency when investing in cryptos. The following are the top reasons why people trust Komodo.
- The Komodo network has some of the most progressive features in the industry. From BarterDEX to decentralized fiat currencies, many people now believe that they will be able to enjoy higher value from the network.
- The Komodo network is marketed as the better option in the market. The notion that it is an improvement of the Bitcoin and Zcash systems has made people believe that it is the ultimate network that will take the cryptocurrency niche where Satoshi anticipated it to be.
- The development team is very aggressive. The team is progressively working on new updates to keep the network safer and introduce newer features.
- A lot of corporate organizations have expressed their intention of working with Komodo. It is also pursuing cooperation with the EU Central Bank to effect the decentralized fiat currencies.
- The cryptocurrency is one of the truly anonymous networks in the market today. This commitment has won it praise and trust because users can now operate without worrying about third-party seizures or details getting discovered.
History of Komodo
The history of Komodo can be traced back to the third quarter of 2016 when the development team decided to fork the Zcash blockchain and create a more secure system. To make the system more secure, they decided to implement it as a layer on top of the Bitcoin blockchain. Other components of the Komodo history include;
- Between October 2016 and November, Komodo held its ICO where it sold pre-mined 100 million tokens. The ICO raised $1.9 million from 100 million tokens while the remaining 100 million are mined progressively in the network.
- In the third quarter of 2018, Komodo plans to implement the BarterDEX that will help users in the network to trade KMD without using the centralized exchanges.
- The history of Komodo price has been relatively good. Between February and May 2017, the price of Komodo remained well below $1.0 before increasing steadily to hit $13 in mid-December. Then, it took a steady decline to reach slightly less than $3.0 in March 2018. In April 2018 it gained marginally before taking another decline to $1.2 in mid-September 2018.
Who Created Komodo?
To live to its mantra of making the network completely anonymous, the founders and development team have maintained their identity private. The founder is a group of developers only known by the code JL777. Other members of the Komodo development team include CA33 (general manager) and Fededreamz, Mihail “Kolo” Fedorov, Pbca26, Rick, Deceker, and Satinder.
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