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Knowledge base

There is various information at BestCoinExchange.com regarding Bitcoin, Litecoin, cypto-currency mining, wallets, purchase, sellings, etc. The knowledge base comes handy if you want to be introduced into this exciting world of cyber-currency or find more information about the tools you are interested in.

Index

Introduction

➲ Bitcoin exchange
➲ Litecoin exchange
➲ Bitcoin mining
➲ Litecoin mining
➲ Calculators
➲ Chart‘s reading
➲ Peer-2-peer transactions
➲ Acceptance of crypto currencies
➲ Risks involved
➲ Government regulations map
➲ Investment funds
➲ VPN
➲ Proxy
➲ Proxy usages
➲ Types of a proxy
➲ Tor network
➲ Silk Road

Exchange

It is an online system used to exchange one crypto-currency for FIAT or another crypto currency. There is no central exchange in this market due to the fact that it is a network of computers and it connects traders together. Online cyber currency exchanges are fundamentally forex brokers that allow supply of the traded currencies.

Bitcoin exchange

It is an exchange that allows you to buy or/and sell Bitcoins.

Litecoin exchange

It is an exchange that allows you to buy or/and sell Litecoins.

Tools

Bitcoin mining

Anyone can become a bitcoin miner simply by running a software with specialized hardware. This software listens for transaction broadcast through peer-to-peer network and executes appropriate tasks to perform and verify these transactions. Miners perform this action so that they would earn transaction fees paid by the users for a quicker transaction processing and freshly created bitcoins issued in existence in accordance to a fixed formula.

For a transaction to be confirmed, it needs to be included in a block in conjunction with a mathematical proof of work. These proofs are very difficult to generate as there is no way to create them but to try billions of calculations per second. It requires miners to complete these calculations before blocks are accepted by the bitcoin network to ensure the average block finding time is equal to ten minutes. Therefore, mining is a competitive business and no individual miner can manage what is inserted in the block chain.

Proof of work is designed to depend on the last block to force a chronologic order in the block chain. It makes exponentially hard to reverse last transactions as it requires the recalculations of the proofs or work on all subsequent blocks. Whenever two blocks are found simultaneously, users mine the first block they receive and then switch to the long chain of blocks when the next block is found. It allows mining to maintain and secure a global agreement based on processing power.

Miners of bitcoin are not able cheating neither by increasing their reward nor processing fraudulent transactions that might corrupt Bitcoin network, as all Bitcoin nodes rejects any block containing invalid data regarding the rules of Bitcoin protocol. Therefore, the network remains secure even though not every bitcoin miner can be trusted.

Litecoin mining

First thing to know about mining Litecoin is that doing it alone is a near pointless game. At its’ basic level, earning Litecoin is performed by leveraging your GPU to compute transactions across the network of Litecoin. By doing that, you promote your processing power to solve blocks. Intentionally, the difficulty in finding these blocks increases over time, so it makes a perfect sense to group up with other miners to speed up the mining.

Litecoin is similar to Bitcoin, except blocks are solved every two and a half minutes, rather man ten minutes for bitcoin. The network difficulty accommodates quicker than bitcoin due to this fact. Another difference is that Litecoin network has a scheduled limit of 84 million units, which is four times more than bitcoin. In addition, Litecoin uses script instead of SHA-256 for the proof-of-work algorithm. It makes it more suitable for GPU and CPU mining.

Calculators

Diverse calculators allow you hassle free and quick price check between the crypto and FIAT currencies. You do not need to examine tens of different prices.

Chart‘s reading

The cyber-currency price chart is very important to its’ seller. Your understanding of price will help shaping your opinions of trends. It becomes utterly critical to know what you are seeing on the price chart. Just like Forex charts, cyber-currency charts are associated with candlestick charts that differs greatly from more traditional bar charts or renko charts. Remarkably after learning analyzing candlesticks, virtual currency traders often find that it is quicker to identify various types of of price action with that chart type rather than the others.

To start with, traders need to know exactly how to analyze candlesticks before inserting them into existing trading strategy.

candle

The picture above represents a design of a typical candlestick. Three specific points (wicks, open, close) are used to create a price candle. To start, we need to consider the open and close prices of a candle. These points show where the price began and ended for a selected period which will construct the body of a candle. When you check a daily chart for example, these points will refer to daily open and close price. Note the color of the candlestick as red means down while blue means up. Candlestick bar can help you quickly identify is the market trading lower or higher for a selected time frame.

Then we have the candlestick wick also called as a candle shadow. These points show the extremes in pricing for a selected charting period. Wicks are easy to identify as they are thinner that the candle body. This is the biggest advantage of that type chart. Candlesticks assist you on market momentum.

Transactions

An agreement of a seller and a buyer to trade litecoins, bitcoins for anything and including FIAT currencies as well.

Peer-2-peer transactions

The transactions made with no interchange involved. It is risky to buy or sell your bitcoins without an exchange involvement. A high trust level is necessary.

Acceptance of crypto currencies

Crypto-currencies become widely accepted on both web and physical commerce. Recently several sales of deluxe cars including McLaren and Lamborghini were announced. Many innovative and modern businesses are starting to accept crypto-currencies around the world.

Crypto community

There are many crypt-currency related communities around the Internet. Discussion boards, forums are full of information about mining, security, trading and other crypto related issues. It is a very good starting point if you are interested in cyber currency business.

Risks involved

Crypto-currencies are relatively new occurrence in the market so it has some risk like: lack of regulation from the governments, high price uncertainty, volatility, fraud and scam. You should measure all risks before trading crypto-currencies.

Government regulations map

BitCoin Legal Map (Bitlegal)

Investment funds

A hedge fund is fundamentally a fancy name for an investiture partnership. It is like a marriage of fund manager, often called as the general partner, and investors, also called limited partners. They contribute money and the general partner uses it in accordance to the fund strategy. The main purpose of hedge fund is to eliminate risk and maximize investor returns. If these objectives looks like the objectives of mutual funds, that is where the similarities end. The crypto-currencies are also included.

Anonymity

Browsing the WWW and hiding your IP address is called anonymous web browsing. There are many ways to accomplish anonymous web browsing. Proxy servers can do the trick, Tor, which sends data through a network of routers in order to conceal the destination of information. However, the anonymous browsing is not fully anonymous in some cases. There are traffic analysis and programs to counter tools like Tor and proxies. You need to choose your proxy or VPN provider very carefully and to check if they store your Internet activity or not.

VPN

A Virtual Private Network is a network technology that protects network connection over the public network such as the Internet or a private network. Educational institutions, large corporations and government agencies use VPN technology to assure users securely connect to the private network.

Virtual Private Network can connect multiplex pages over a long distance just like WAN (Wide Area Network). VPN is frequently used to broaden intranets worldwide to unfold information and news to a wide user base. Universities use VPN to associate campuses that might be spread across the state or around the globe.

To access the private network, user must be authenticated by a peculiar ID and password. The authentication token is mainly used to enter a private network through a PIN (Personal ID number). The PIN is a unique code which changes according to the particular frequency around every thirty seconds.

Proxy

In computer networks proxy servers act as intermediary for requests from internet users pursuing resources from other servers. The user  joins the proxy server, while requesting some service such as connection, file webpage or other resource that is available from other server and then the proxy server evaluates the request as a way to simplify and control its’ complexity. At present, most proxy server lightens the access to the World Wide Web content.

Proxy usages

Proxy server has a lot of potential purposes that include:

-Keep the machines anonymous for security;

-Increase the access speed to the internet content via caching. Web proxies are mainly used to cache webpages from a web server;

-Blocks the download attempt of the same content multiple times due to the bandwidth saving;

-Audit and log Internet usage;

-Scan transmitted data for malware before downloading;

-Scan uploaded data in order to prevent the loss of data;

-Bypass website restrictions at work;

-Access enhancement/restriction;

-Apply access rules to network services or content;

-Access websites banned or filtered by government or your ISP;

-Bypass security and parental controls;

-Allow website to make requests to outside hosted resources such as images, movie files, music files, etc. when cross-domain restrictions blockade the website from connecting to the outside domains directly;

-Allow browser to commit network requests to outside hosted content in the name of a website as cross-domain restrictions block the Internet browser from directly admission to the external domains.

Types of a proxy

-Proxy server may function on the user’s local computer or between destination servers on the WWW and user’s computer;

-Proxy server that lets the unmodified requests and responses through is usually called a tunneling gateway or proxy;

-Forward proxy is an Internet facing proxy that retrieves from a great range of sources, mainly everywhere on the Internet.

-Reverse proxy normally is an Internet facing proxy that is used as a front-end to preserve and control access to the server on a private network, mainly performing tasks such as authetification, decryption, load-balancing or caching.

Tor network

The onion router, also known as The Onion Router is a free software that provides online censorship resistance and anonymity. The Onion Router directs Internet traffic through a worldwide free volunteer network that consists over five thousand exit nodes to hide origin user’s location or usage from anybody conducting traffic analysis or network surveillance. When you are using Tor, it is more difficult to track your Internet activity, that includes instant messages, online posts, visits to Web sites and other communication forms and to relate it to the user. It also protects the privacy of users, as well as user’s freedom and the ability to manage confidential business by preserving their Internet activity from being monitored. NSA characterized Tor as the king of low latency, high secure Internet anonymity with no contestant waiting for the throne.

The term onion routing specifies to layers of encryption nested likewise the layers of an onion used for anonymized communication. Onion router encrypts the original data multiple times and transmits it through a cyber circuit involving randomly selected successive Tor nodes. Every node decrypts a layer of encryption to disclose only the next mode in the circuit in order that the remaining data would be passed on to it. The final node decrypts the inmost layer of encryption and transmits the original data to its’ destination without disclosing or even knowing the outset IP address. Thereafter the communication routing is partly concealed at each node in the Tor network and this method eliminates any point at which the communication may be de-anonymized via network surveillance which relies upon recognizing its’ source and destination.

Silk Road

The online black market – Silk Road operated as a hidden Tor service because users could browse securely and anonymously without potential monitoring. It launched in February 2011 before being developed for six months. Silk Road was an underground website at times called “ebay for drugs” or the “amazon.com of illegal drugs”.

Originally, buyers could make a free registration, but there was a limit of new seller accounts. New sellers had to buy an account on an auction. Later on, a fixed fee for every new seller was selected to reduce the possibility of malevolent individuals distributing rotten goods.

On 2 October 2013 FBI shut down the Silk Road. Ross William Ulbricht was arrested on narcotics trafficking violation and alleged murder-for-hire charges and was identified as the founder and chief manager “Dread Pirate Roberts”. A month later Vice and Forbes made a report that Silk Road 2.0 was active and being run by past administrators or Silk Road an a different user was using “Dread Pirate Roberts” name now.

Described as idealist, humanitarian and criminal, suspected mastermind and founder Ross William Ulbricht was plead not guilty to charges of computer hacking, running continuing conspiracy, drug trafficking and money laundering in a Manhattan court on 7 February 2014.