How to deposit bitcoin on Cryptsy

The process to deposit or send money to my Cryptsy account wasn’t immediately apparent. Here are the steps to deposit bitcoin (or other currencies) in your Cryptsy account.

I recently started using Cryptsy to trade cryptocurrencies including litecoin, namecoin and peercoin amoung others. The process to deposit or send money to my Cryptsy account wasn’t immediately apparent, though, so I thought I’d write a quick how-to guide for others. Here are the steps to deposit bitcoin (or other currencies) in your Cryptsy account:

1) Navigate to your Account Balances page, and hover over the “Actions” button on the currency you’d like to deposit. In this case, we’ll be depositing bitcoin (BTC). In the hover menu, select “Deposit/Autosell BTC”:

3) You’ll then see a popup where you can click “Generate New Deposit Address”:

4) A deposit address will be generated and displayed in the popup. Copy down the deposit address.

5) Go to your digital wallet and send your bitcoin to the deposit address you just generated.

6) Within a few minutes, you should see your pending bitcoin deposit:

7) Once the deposit has four confirmations (which could take anywhere from 15 minutes to a couple hours), your bitcoin should move from “pending” to “available balance,” meaning its ready to trade.

Ready? Start trading on Cryptsy today!

The rarest digital currencies or coins to be mined by coin type

Scarcity is a major price driver for cryptocurrencies. Here’s a look at more than 30 alternative currencies and the total circulation that’s expected over the mining life of each currency.

UPDATE: I’m now maintaining a full list of cryptocurrencies on Crypt.la. It’s sortable and more up-to-date than the list below.

Scarcity is a major price driver for cryptocurrencies. Here’s a look at more than 30 alternative currencies and the total circulation that’s expected over the mining life of each currency. If you’re ready to start trading alternative currencies, check out the best exchange I’ve found: Cryptsy.com out of Delray Beach, Florida.

Coin Total expected circulation
Bitbar (BTB) Total Circulation: Currently 7,838 bitbar coins with growth of 1 BTB per 10 minutes and dropping
Cryptogenic Bullion (CGB) Total Circulation: 1,000,000 total number of cryptogenic bullion coins to be mined plus a maximum of 1.5 percent inflation
ProtoShares (PTS) Total Circulation: 2,000,000 total number of protoshares to be mined (and scheduled to be converted to BitShares, which will have a circulation of 20,000,000)
Anoncoin (ANC) Total Circulation: 4,200,000 total number of anoncoin to be mined
Mincoin (MNC) Total Circulation: 10,000,000 total number of mincoin to be mined
Frankocoin (FRK) Total Circulation: 11,235,813 total number of frankocoin to be mined
Bitcoin (BTC) Total Circulation: 21,000,000 total number of bitcoin to be mined
Bytecoin (BTE) Total Circulation: 21,000,000 total number of bytecoin to be mined
Namecoin (NMC) Total Circulation: 21,000,000 total number of namecoin to be mined
Ixcoin (IXC) Total Circulation: 21,000,000 total number of ixcoin to be mined
Copperlark (CLR) Total Circulation: 27,300,000 total number of copperlark coins to be mined
Emeraldcoin (EMD) Total Circulation: 31,499,000 total number of emeraldcoin (aka emeralds) to be mined
Megacoin (MEC) Total Circulation: 42,000,000 total number of megacoin to be mined
Terracoin (TRC) Total Circulation: 42,000,000 total number of terracoin to be mined
Litecoin (LTC) Total Circulation: 84,000,000 total number of litecoin to be mined
Craftcoin (CRC) Total Circulation: 100,000,000 total number of craftcoin to be mined
Freicoin (FRC) Total Circulation: 100,000,000 total number of freicoin to be mined (with a 5 percent demurrage fee, which encourages spending)
Tagcoin (TAG) Total Circulation: 100,000,000 total number of tagcoin to be mined in the first 30 years
Junkcoin (JKC) Total Circulation: Approximately 107,000,000 total number of junkcoin to be mined
Goldcoin (GLD) Total Circulation: 123,423,900 total number of goldcoin to be mined
Zetacoin (ZET) Total Circulation: 160,000,000 total number of zetacoin to be mined with a 1-million zetacoin annual inflation rate
Fastcoin (FST) Total Circulation: 165,888,000 total number of fastcoin to be mined
Phoenixcoin (PXC) Total Circulation: 168,000,000 total number of phoenixcoin to be mined
Digitalcoin (DGC) Total Circulation: 200,000,000 total number of digitalcoin to be mined
Quarkcoin (QRK) Total Circulation: 247,000,000 quarkcoin to be mined with 0.5 percent inflation
Luckycoin (LKY) Total Circulation: Approximately 200,000,000 total number of luckycoin to be mined
Worldcoin (WDC) Total Circulation: 265,000,000 total number of worldcoin to be mined
Feathercoin (FTC) Total Circulation: 336,000,000 total number of feathercoin to be mined
BBQCoin (BQC) Total Circulation: 4.2 billion+ total number of BBQcoin to be mined theoretically
Devcoin (DVC) Total Circulation: 5.7 billion+ total number of devcoin to be mined
Infinitecoin (IFC) Total Circulation: 90.6 billion+ total number of infinitecoin to be mined
Tickets (TIX) Total Circulation: 100 billion total number of ticketscoin to be mined
Peercoin (PPC) Total Circulation: Unlimited total number of peercoin to be mined with 1 percent inflation. Currently, 20,700,000 in circulation
Primecoin (XPM) Total Circulation: Unlimited total number of primecoin to be mined
Novacoin (NVC) Total Circulation: Unlimited total number of novacoin to be mined with a theoretical cap of 2 billion
Yacoin (YAC) Total Circulation: Unlimited total number of yacoin to be mined with a theoretical cap of 2 billion

If you’re ready to start trading alternative currencies, check out the best exchange I’ve found: Cryptsy.com out of Delray Beach, Florida.

Top 5 bitcoin alternatives

Here are the top 5 leading alternatives to bitcoin, some of which might be worth adding to your portfolio.

I’m a big supporter of bitcoin, but there are other alternative cryptocurrencies out there, and I thought I’d take a look at them to see if any are worth adding to your portfolio. Here are the top 5 I found:

1) Litecoin. Market cap: $243 million. The strongest digital currency outside of bitcoin, litecoin boasts that it can be mined on consumer-grade hardware rather than specialized digital rigs. It’s also got some high-power pedigree in its creator Charlie Lee, who’s now a software engineer at Coinbase Inc. (my favorite place to buy Bitcoin… See my post How to Buy Bitcoin). Litecoin can process transactions up to four times faster than bitcoin. As a trade-off, the mining process is slightly less efficient. “If bitcoin is like gold, litecoin is like silver,” Jinyoung Lee Englund, a spokeswoman for the Bitcoin Foundation, told the Wall Street Journal recently. Ultimately, there will be 84 million litecoin in existence compared to 21 million bitcoin. At the time of this writing, one litecoin is worth $9.36 USD.

2) Peercoin. Market cap: $36.6 million “Through use of an innovative minting algorithm, peercoin offers technological advances over Bitcoin that allow its network to consume far less energy and achieve a higher degree of security and decentralization,” peercoin boasts. The coin combines proof-of-stake (PoS)/proof-of-work system (PoW). That’s a long-winded way of saying that the currency provides a way of preventing someone from controlling the currency. “In other words, someone holding 1% of the currency will generate 1% of all proof-of-stake coin blocks,” the creator writes. Unlike bitcoin, peercoin doesn’t have a maximum number of coins that can be minted. It does however cap the currency’s “inflation rate” at 1 percent. As of this writing, one peercoin is worth $1.76.

3) Namecoin. Market cap: $19.9 million. Like bitcoin, there is an upper limit to the total number of namecoins that can be mined – specifically 21 million. Namecoin puts a very interesting spin on cryptocurrency, though, by adding a top-level domain feature that allows users to register domain names ending in .bit that’s outside of the purview of ICANN. That basically means you can register a .bit without having to go through all the rigmarole associated with registering a .com, .net, .org etc. This makes internet censorship much more difficult. That’s the currency’s primary goal – making content on the web anonymous – though as a side-effect, namecoin can be used as a digital currency. As of this writing, one namecoin is worth $2.77.

4) ProtoShares. Market cap: $7 million. Similar to namecoin, protoshares give users a pricing mechanism to start mining currencies that are still under development. Wow. That’s kind of confusing. What it boils down to is this: You can mine protoshares with that promise that you’ll be able to convert them into BitShares. “ProtoShares is not a currency play but a speculation play on the future value of BitShares and BitShares should be fully developed and deployed within 6 months to 1 year,” Invictus Innovations says. As of this writing, one protoshare is worth $7.54.

5) Feathercoin. Market cap: $6.1 million. Feathercoin won’t have a supply as limited as bitcoin’s 21 million. In fact, there will ultimately be 336 million feathercoins in existence (if the currency survives that long). Feathercoin’s main advantage over bitcoin (although some would view it as a disadvantage) is the fact that it’s centralized meaning that it’s somewhat insulated from 51 percent attacks that have been attempted on other cryptocurrencies including bitcoin and litecoin. Feathercoin therefore touts security as its biggest benefit. As of this writing, one feather coin is worth $0.26.

Interested in the future of bitcoin? Check out my post The case for bitcoin at $100000.

The case for bitcoin at $100,000

If bitcoin really is Gold 2.0, the digital currency could push gold prices down to $300 an ounce and bitcoin could rocket up to $100K.

The Winklevoss twins went on the record on Nov. 12 saying they believe bitcoin could hit a market cap of $400 billion. At the moment, there are nearly 12 million bitcoins in circulation, that would make them each worth $33,333. And that’s the Winklevoss’s “conservative” estimate.

“The small bull case scenario is a $400 billion market cap. So the market cap is around $4 billion right now,” Tyler Winklevoss said in an interview at the DealBook conference that aired on CNBC’s “Squawk Box.”

Their “small bull case” is $400 billion. What’s their “big bull case?” The Winklevoss’s don’t say, but they do argue that bitcoin shares a lot of similarities with precious metals.

“Some people definitely view it as Gold 2.0,” Tyler says. “As a store of value, it definitely has the properties of gold and people are viewing it that way.”

So, let’s take a peek at the investment markets in gold and silver to see if we can get a sense of just how big the bitcoin market could grow. According to the World Gold Council, the total investment market for gold stood around $1.2 trillion in 2010.

The gold council also shows that investment demand for gold GREW by roughly 1,483 tonnes between 2008 and 2012. With gold averaging $1,100 an ounce over that period, we can say the investment market for the yellow metal grew by $52.2 billion or just over $10 billion a year. That means that by now, the gold market’s worth $1.5 trillion at 2010’s much-lower prices.

I can’t find great numbers on the total size of the silver investment market, but I’ve seen rough estimates that say the silver market is about 1/60th the size of the gold market. That would put it around $25 billion. So, the combined gold and silver investment markets are worth somewhere around $1.75 trillion. If 25 percent of that cash moved into bitcoin, we’d see that “small bull case” the Winklevoss brothers talked about. On top of that, gold would be trading around $970 an ounce (a price we last saw early in 2010).

Let’s say bitcoin really is Gold 2.0 and prices for gold tumble back to $300 an ounce – a level where the metal languished for some 20 years from the mid-1980s to the early 2000s. In that case, $1.3 trillion would flow into bitcoin. If that happened today (and there were only 12 million bitcoin in circulation), each bitcoin would be worth $108,000.

Of course, things get even more interesting when you consider the fact that if bitcoin truly is here to stay, everyone’s going to want some to make purchases and payments, so the market could get even larger. There you have it; the case for bitcoin at $100,000+. Please note that this is NOT a price prediction or forecast for bitcoin. It’s just a hypothetical “what if.”

Interested in learning more? Check out my post on How to buy bitcoin.

Bitcoin inflation hedge: The new gold and silver

Here are 4 reasons why I believe bitcoin will serve as a better hedge against than gold or silver in the years to come.

Here are 4 reasons why I believe bitcoin will serve as a better hedge against inflation than gold or silver in the years to come:

1) Limited supply. We know exactly how many bitcoin will ever be mined. As of this writing, there are 11,956,400 bitcoins in existence. New bitcoins will continue to be “mined” until we reach 21,000,000. Once we hit that number that’s it. No more bitcoin. Nada. Zilch. That, of course, stands in stark contact to gold, silver and fiat currencies.

2) Simplicity. Buying bitcoin is as easy as transferring money between say your checking and savings accounts (check out my guide on How to buy bitcoin). Buying gold or silver requires some knowledge. You’ve either got to buy physical coins or bullion, mining stocks, ETFs, a stake in a trust or you need to pay someone else to buy and hold gold or silver for you. With bitcoin, you’re responsible for keeping your private security keys safe. That’s it.

3) Liquidity. There is no practical limit to how much or how little bitcoin you can buy. Want to buy $0.25 worth? Go for it. Want to buy $1,000,000? You can do that, too. Think of it like going to the currency exchange counter after flying to Mexico. You hand someone some dollars, they give you pesos. If you’re trying to sell an ounce of gold that’s worth $1,300 on the other hand, you might have to search quite a bit to find a buyer near you.

4) Speed. We’ve already seen how quickly the price of bitcoin can move. That’s particularly true in the midst of a crisis of confidence or currency problem. Take the example of Cyprus. Earlier this year, the tiny island country announced it was confiscating a portion of the funds foreigners held in the country’s bank accounts as part of a bailout package. In a rush to withdraw their cash from Cypriot banks, investors poured their money into bitcoin pushing the price of the digital currency up twofold in a week. Similar currency problems in other countries could accelerate bitcoin’s phenomenal growth.

How high could bitcoin go? Check out our post: The case for bitcoin at $100,000.

The Winklevoss Bitcoin ETF: How it works

The Winklevoss Bitcoin Trust will issue Winklevoss Bitcoin Shares, which represent fractional ownership in the trust and therefore part-ownership in the trust’s bitcoins. Under the current plan, each share will represent 0.2 bitcoins.

The Winklevoss Bitcoin Trust issues Winklevoss Bitcoin Shares, which represent fractional ownership in the trust. The trust itself owns bitcoins and will try to match the ETF’s market cap with an equivalent fractional holding in bitcoin. Per the revised prospectus in October, each share in the initial baskets will represent 0.2 bitcoins (BTC). That means each basket of 50,000 shares will hold 10,000 bitcoins. That’s subject to change.

Security is a major concern for the trust, and the plan is to store the trust’s digital wallet private keys in segregated vaults. I presume that means a few private keys per vault spread across the U.S. to lower the risk of loss, damage or theft of all of the private keys at once.

The trust’s net asset value (NAV) will be published on the trust’s website at the conclusion of each trading day. Fees for managing the fund haven’t been published yet. In the event that the trust were ever shut down, the trust’s liabilities would be paid and cash proceeds would be distributed to shareholders.

Top 10 risks of investing in the Winklevoss Bitcoin Trust:

1) The trust could lose it’s private keys (and therefore lose access to its bitcoin).

2) Governmental regulation.

3) Bitcoin could get shut down or usurped by another virtual currency.

4) Bitcoin speculation can lead to wild price swings that could impact the trust’s share price.

5) The source code for the Bitcoin Network could get amended, changed or “forked” by the bitcoin community.

6) Bitcoins could get manipulated.

7) Miners could stop mining bitcoin (particularly if it doesn’t make economic sense to do so).

8) Bitcoin miners could start charging higher transaction fees, which would make bitcoin less attractive.

9) If the trust grows too large it could impact the global market for bitcoin.

10) The trust’s bitcoin could get stolen.

As of August 31, 2013, approximately 11,636,000 bitcoins have been created. The plan is to create no more than 21,000,000 bitcoins, so more than half of the world’s global supply is already on the market.

Here’s a copy of the full amended Winklevoss S-1 filing from October:

If there’s anything that could create a true bitcoin mania, I think it will be the launch of the Winklevoss ETF. There are just too many “cool” factors going for it:

1) The intrigue around the Winklevoss twins themselves.

2) General excitement over bitcoin.

3) The use of bitcoin as an inflation hedge (one that works even better than gold or silver).

On top of that, daytraders won’t care about the underlying commodity. They’ll pile into both up and down trades, which will make bitcoin even more headline-worthy. That’s part of the reason I’m hoping this ETF doesn’t come to market anytime soon. I’d like to see everyday Americans using bitcoin before it becomes the trade-of-the-day for wall street bankers and bots.

Is there a bitcoin ETF?

The famed Winklevoss twins are hard at work trying to debut the world’s first bitcoin exchange-traded fund or ETF. In the meantime, there’s a pretty close alternative in “BIT.”

The famed Winklevoss twins are hard at work trying to debut the world’s first bitcoin exchange-traded fund or ETF. They filed an amended S-1 in October (see the Winklevoss Bitcoin Trust at SEC.gov). They’d like to sell 1 million shares in the trust at $20.09 per share (an amount that’s definitely going to change if they can ever launch their ETF).

In the meantime, there’s a pretty close alternative: the BitCoin Investment Trust, which is offered by SecondMarket. They call it “BIT,” and according to their documentation, the trust was “modeled on the popular SPDR Gold ETF, but functionally similar to a private fund.” It works by giving buyers a vehicle to buy, hold and store large quantities of bitcoin. A few notes on the BIT:

  • You have to be an accredited investor to get involved (i.e. have a net worth of $1 million or more – or an annual income of $200,000+ over the past two years).
  • The minimum investment is $25,000.
  • The fund has a “front-end” fee of 1.5 percent and a “back-end” fee of 1.5 percent as well as an annual “administrative and safekeeping fee” of 2 percent.
  • The fund holds 34,700 BTC ($14.4 million)

Investor reception for the bitcoin trust has been huge. Managers hoped to raise $10 million by the end of the year, and they’ve already raised $18 million since September. I’m convinced news around the trust is helping to drive up the price of Bitcoin even faster than it would have otherwise risen. And, if the Winklevoss brothers are ever able to bring a publicly-traded ETF to market, expect bitcoin to surge even further and a whole lot faster.

I actually hope that the Winklevoss ETF doesn’t come to market soon so that bitcoin can further establish itself as an actual medium of exchange. If the price goes up too far, too fast, all the actual bitcoin in the world could get locked up in investments. Then, the virtual currency loses some of its effectiveness. Liquidity is a requirement for any widespread medium of exchange, and that’s exactly what I hope bitcoin becomes.

How to buy a bitcoin ATM

There are at least three companies around the world selling Bitcoin ATMs at the moment with prices ranging from $2,000 to $18,500+.

buy-a-bitcoin-atm

There’s a popular saying when it comes gold rushes: the ones who get rich are the people selling the spades. Why get your hands dirty, when you can make money off the speculators themselves? That’s the appeal of a bitcoin ATM. When the first bitcoin ATM in the world opened in Vancouver two weeks ago, the machine did $100,000 CDN worth of transactions in a week (source). Take a 2 or 3 percent operating fee, and you’re doing pretty well.

There are three companies that I know of offering Bitcoin ATMs to buy at the moment:

1) Lamassu Bitcoin Ventures. Lamassu, which I believe is based in New Hampshire, says they’re working on their next batch of ATMs for shipment “early” in 2014. The price? $5,000 USD for one unit. $4,500 for 5-9 units. $4,000 for 10 units or more. Price does not include freight.

2) Robocoin. A company based in Nevada that produced the Vancouver bitcoin ATM. The site’s got an application form, but doesn’t list prices here. According to one news source, the Vancouver ATM cost $18,500.

3) BitcoinKiosk. Click the “info” link at the bottom of the site, and you’ll see a message from an ATM manufacturer who claims to have built a bitcoin ATM that weighs 25 pounds and will retail for around $2,000. There’s contact information on the site.

A forth company called BitcoinATM has been trying to get a bitcoin ATM off the ground in the U.S. for more than a year (source), but they haven’t had any success yet. Apparently, the governmental hoops required are onerous – including the requirement that ATM operators have a $25 million “insurance bond” since they’re deemed “money transmitters” in the US. I suspect we’ll soon have some entrepreneurs who jump through all the hoops to open an ATM in the U.S., but look for more to open in foreign countries first. The Land of the Free’s gotten bogged down by regulation!

Bitcoin price predictions

From $0 to $1 million, here’s a look at some of the current Bitcoin price predictions out there and the logic behind them.

When you look at a chart showing Bitcoin prices, it’s hard to argue that the crytocurrency isn’t in a bubble:

Over the past year, the value of Bitcoin has risen from $10.95 to more than $340. That’s more than 3,000 percent! A gain like that screams bubble. Unless, of course, Bitcoin is here to stay… That’s when charting the future value of the currency becomes a lot more difficult. It’s akin to guessing how the internet would evolve in 1990. You just can’t do it reliably. But that doesn’t mean we can’t try.

Here’s a look at some of the current Bitcoin price predictions out there (and be sure to check out my post on How to buy Bitcoin):

  • $0: Let’s take on the bear case first. The single biggest threat to Bitcoin is regulation. While the currency doesn’t rely on a centralized authority to operate, it does rely on Americans and other investors around the world who convert their dollars, euros and yuan in and out of Bitcoin. Should governments around the world move to ban or restrict commerce in cryptocurrencies, then Bitcoin’s value could easily plummet. Economist Simon Johnson from MIT argues that’s exactly what’s going to happen since governments would lose some control over their own currencies if they don’t regulate Bitcoin.
  • $1 million: Over at Business Insider, Henry Blodget writes that “There is no limit to the price that Bitcoin could attain. There is no theoretical difference between a price of $1 per Bitcoin and $1 million per Bitcoin.” He also believes that Bitcoin is in a bubble and that it won’t ever be widely accepted. His underlying thesis is that there’s nothing backing Bitcoin. I disagree since the supply is finite and will always be finite. That’s an advantage Bitcoin has over dollars, euros and yuan.
  • $1,820 by 2020: Radoslav Albrecht, co-founder of peer-to-peer Bitcoin lending platform Bitbond.net, offers up a balanced look at the Bitcoin supply, and tries to extrapolate a future price based on those numbers. He bases his prediction of $1,820 on the fact that there will be 18 million Bitcoins in circulation in 2020, and on two main assumptions: 1) that electronic Bitcoin transaction volumes catch up with PayPal volumes, and 2) that Bitcoin investments capture 1 percent of gold investments. Albrecht’s careful to say he’s naming a “potential price,” not making a prediction.

Unbiased Coinbase.com review on buying Bitcoin (BTC)

My guess is that Bitinstant is furiously trying to catch up with Coinbase.com’s streamlined process. Coinbase has proven that buying Bitcoin via MoneyGram will soon be a thing of the past.

Coinbase is a breath of fresh air. It’s by far easiest of the Bitcoin-buying platforms I’ve tried so far. Here’s how it works:

1) Create an account by entering your email address and a password.

2) Link a bank account with your Coinbase account.

3) Place a buy order:

4) Confirm the buy order:

4) Wait four days for your Bitcoin to be deposited in your account.

There are two options for linking a bank account with your Coinbase account:

1) You can electronically sign into your bank account through Coinbase’s website (which is what I did).

2) You can let Coinbase deposit money into your account, then you must confirm the amounts of those deposits. This approach, of course, takes a few days. By electronically verifying my account, I was able to buy Bitcoin online in minutes. Keep in mind that no matter what approach you use, you’ll need to have your bank’s account and routing number:

Another great aspect to Coinbase is the fact that you can enable two-step security authentication on your account. That means you sign in with your email address and password, then you’re prompted to enter a text message code that gets sent to your phone while you’re logging in. They really have covered all the bases:

I recently wrote a post on how to buy Bitcoin (BTC), and I stumbled upon Coinbase.com as part of that process. In the past, I’d used Bitinstant (which is undergoing a site upgrade) to buy Bitcoin, and it definitely wasn’t an easy process. It required printing a voucher and sending cash to California via MoneyGram at my local CVS.

My guess is that Bitinstant is furiously trying to catch up with Coinbase.com’s streamlined process. Hopefully, buying Bitcoin via MoneyGram will soon be a thing of the past. As I’ve written elsewhere, I think we’re nearing the tipping point where transactions done via Bitcoin will become just as easy as using cold hard greenbacks. When that day comes, look for Bitcoin’s popularity to grow exponentially. If you like this post, and you’re considering Coinbase, please use my Coinbase.com link to throw me a kickback! Otherwise, be sure to check out my post on how to buy Bitcoin (BTC) for other ways to buy BTC.

UPDATE: When you first sign up for a Coinbase account, your account will be limited to buying or selling 10 BTC per day. Shortly after I verified my bank account with Coinbase, the company increased the number of BTC I could sell in a day to 50:

All in all, I’ve had a terrific experience with Coinbase, and I plan to check out their developer tools next.