what is margin trading & what is buying on margin

Margin Trade

With margin trading, you can buy a big lot of shares despite not having enough funds to afford the same by borrowing the funds from your broker. This can be done by paying a margin, which is a small part of the total value of the shares bought.

This margin can be settled later when you square off the position. If your profit is higher than the margin, then you make a profit on the trade else you lose money.

The amount of margin paid and the repayment duration varies for different stock brokers. But for margin trading, you need to first open a margin account with your broker.

To open a margin account, you need to place a request with your broker and might require you to pay an amount beforehand. This amount paid to open a margin account is called minimum margin. You have to maintain this minimum margin throughout in your margin account.

In case you fail to maintain the minimum margin in the account, the trade automatically gets squared off. Squaring off is mandatory after each session.

If you are looking forward to making a delivery order by converting the trade, then you need to keep the cash ready. This would be equivalent to the value of shares you bought plus brokerage fee and additional charges.

In cases where you fail to do so, your shares in trade will not be converted into a delivery order; instead, the position would be squared off.
While margin trading is the easiest way to earn money without investing a huge amount, it comes with its own set of rules, which must be heeded without fail.

Buying Stocks on Margin

Similar to the concept of margin trading, you can also buy stocks on margin. In this case, the stocks or securities which you buy act as the collateral. Here, too, you need to pay the margin amount, which is a percentage of the total value of the order and the minimum margin while opening the margin account.

Based on the credit repayability, the minimum margin and maintenance margin values are decided. When the value of stocks falls below a minimum margin, the broker would ask you to maintain the minimum balance of your margin account. You could do this by depositing additional cash or by selling the securities to compensate the amount.

Hard Fork vs. Soft Fork

Bitcoin’s software is open source, which means that the code is free and available for all to view and utilize. However, for those wishing to participate in the Bitcoin network as a miner, node operator, or wallet administrator, updating and maintaining current version of the Bitcoin software code ranges from important to absolutely necessary.

A “Fork” in programming terms, is an open source code modification. Usually the forked code is similar to the original, but with important modifications, and the two “prongs” comfortably co-exist. Sometimes a fork is used to test a process, but with cryptocurrencies, it is more often used to implement a fundamental change, or to create new assets with similar characteristics.

One thing to bear in mind with forks is that they have a “shared history”. The record of transactions on each of the chains is identical prior to the split.

Soft fork and hard fork

Soft fork and hard fork differ to temporary forks in that they represent a permanent change in the underlying rules of the protocol. Reasons for effecting such a change can occur for various reasons, including:

· Adding extra functionality to the network in the form of upgrades

· Changing a core rule in the protocol, such as increasing the network block size

Soft forks and hard forks differ to temporary forks because changes that are made are permanent, and thus , requires changes at the protocol layers

Soft Fork

Soft forks are a backward compatible method of upgrading a blockchain. In other words, a soft fork is software upgrade that is backward compatible with previous versions of the software. Soft fork do not require nodes on the network to upgrade to maintain consensus, because all blocks on the soft- forked blockchain follow the old- set of consensus rules as well as the new ones. However, blocks produced by nodes conforming to the old set of consensus rules will violate the new set of consensus rules, and the end results, will likely be made stale by the upgrading mining majority. This is because for a soft fork to work, a majority of miners need to recognize and enforce the new set of consensus rules. If this majority is reached, then the older network will fall into disuse, with the never blockchain gaining recognition as the true blockchain.

An example of a soft fork would be the implementation of a new rule changing the network block size from 1MB to 500KB. Nodes that have not upgraded will continue to see incoming transactions as valid, as these nodes follow the old set of consensus rules as well as the new. However, mining nodes that have not upgraded and attempt to mine new blocks will have these blocks rejected, as it does not conform to the new set of consensus rules. Thus, the blockchain with 1 MB sized blocks is likely to fall into disuse as miners enforces the new consensus rule of 500KB

Is Blockchain same as Database

As more and more firms incorporate the blockchain technology into their corporations and traditional database losing their significance? A blockchain is actually a database it is a digital ledger that stores information in data structure called blocks. A database likewise stores information in data structure called tables. However, blockchain is a database but database is not blockchain. There is also a difference in purpose between the two of them.

Decentralized Aspects

A Database is appropriate for organisations and companies where every user trusts the other user and does not intend to keep any duplicate record of the same data. In Centralised database, anybody with sufficient access to that system can destroy or corrupt the data. This makes user dependent on the administrators.

However when it comes to the blockchain technology, transaction that takes place are verified by consensus from other nodes that are presents on the same blockchain. Blockchain allows different parties that do not trust each other to share information without requiring a central administrator. Transaction are processed by a network of users acting as a consensus mechanism so that everyone is creating the same shared system of record simultaneously.

Structural Difference

A database often uses client- server network architecture. There are database administrators who may make changes to any part of the data and its structure at any given point in time, administrators are the central authority that maintains controls of the database and they’re the ones who decide who else gets access and permission. The update version of the database is the one that is accessible.

Blockchain itself is a database in the form of digital ledger. It combines the internet and cryptography to cater information registration and distribution, thus, eliminating the need for trusted party such as bank in case of monetary transaction. Records are arranged in blocks of data and each block is connected to the previous one by using hashing function. It forms a chain of blocks that cannot be changed.

Performance

While blockchain can be used systems of record and are ideal as transaction platforms, the nature of blockchain technology requires that some speed be sacrificed. The way distributed networks are employed in blockchain technology means they do not share and compound processing power, they each independently service the network.

Database, on other hand, have been around for decades, and have seen their performance increase in lock-step with a formula that has come to define innovation in the digital era.

Blockchain Vs Database — Which one is Right for you

The right choice out of the two would depend on your business use case and preference. If you want to do something within your network with your data and with computers that you control then database are more suitable. On the other hand, if you need a setup where the data is highly available but you are not the only one paying for it, would not need to modify past data, need it to be immutable and publicly accessible then blockchain is a better choice. It will also provide more transparency and reliability.

Types of Crypto Wallet one needs to know | Paroexchange

Before owning any Bitcoin, you need somewhere to store them. That place is called a “wallet”. A “wallet” is basically the equivalent of a bank account. It allows you to receive Bitcoins and other coins, store them and the send them to others.

Types of Bitcoin & Crypto Wallets

Hardware Wallets

A Hardware wallet is a physical electronic device, built for the sole purpose of securing Crypto coins. Hardware wallets are a good choice if you’re serious about security of your Bitcoin and Crypto Storage.

Hardware wallets keep private keys separate from internet connected devices. Your important private keys are maintained in a secure offline environment on the hardware wallet.

Generating and storing private keys offline using hardware wallets ensures that hackers have no way to reach your coins

Major advantages over standard hardware wallets:

1. Private keys aren’t exposed to your computer

2.· Hardware wallets cannot receive computer viruses or malware

3.· You must have the hardware to confirm a transaction, preventing remote hacking

4.Most hardware wallets are encrypted with a PIN or other security feature

5.If you lose your hardware wallet, you can still recover your coins

Paper Wallets

A Paper wallet is essentially a document which contains a public address that can be used to receive Bitcoins and private key, which allows you to spend or transfer bitcoins stored at that address. Those are often printed in a form of QR codes so that you can quickly scan them and add to your software wallet to make transactions.

Major advantages of paper wallet :

1. Paper wallet is that key which are not stored digitally anywhere, which makes it completely immune to hacker attacks.

2. Before generating a paper wallet you need to make sure that no one is watching you do it. To rule out the risk of any spyware monitoring your activities, it is recommended to use a clean operating system.

3. The keys are printed in the form of QR codes which you can scan in the future for all your transactions.

Mobile Wallet

Mobile wallets run on an app on your phone and are useful because they can be used anywhere including retail stores. Some wallets have additional features such as QR code scanning or the use of near-field communication technology. Despite being a convenient on-the-go solution for Bitcoin storage, mobile wallets are very prone to hacker attacks. Moreover, you can lose control of your wallet if someone simply gains access to your mobile device. There’s a big variety of Bitcoin wallet apps for devices running on Android. Apple banned Bitcoin wallets from the AppStore in February 2014, but reversed its decision several months later.

1. Your wallet could be hacked, especially if your phone is consistently connected to the internet

2. If someone steals your phone, they could access your wallet

3. Regular back-ups are required to prevent the above from occurring

4. Mobile wallets are usually much smaller and simpler than desktop wallets because of the limited space available on a mobile.

Desktop Wallet

Desktop wallets are downloaded and installed on a PC or Laptop. They are only accessible from the single computer in which they are downloaded. Desktop wallet is more secure than online and mobile wallet. They don’t rely on third parties for their data and are harder to steal. They are still connected to the internet, which makes them inherently insecure. However, desktop wallets are a great solution for those trading small amount of Bitcoin from their computers.

1. Desktops wallets offer one of the highest levels of security however if your computer is hacked or gets a virus there is the possibility that you may lose all your funds

2. Easy to install and maintain , most are available for Windows, Linux and Mac, although there are some limited to a particular OS.

Hardware Wallets: Keep your Coins Safe| Paroexchange

Hardware wallets aren’t free. But the price can be worth it if you own a significant amount of coins. A hardware wallet will protect a few hundred in Bitcoin/ crypto just as effectively as a few million. Hardware wallet keeps private keys separate from vulnerable, inter connected devices. Your all-important keys are maintained in a secure offline environment on the hardware wallet, fully protected even should the device be plugged into a malware- infected computer. Generating and storing private keys offline using a hardware wallet ensures that hackers have no way to reach your coins.

Hackers would have to steal the hardware wallet itself, but even then, it can be protected with a pin code.

Best Bitcoin Hardware Wallet

1. Ledger Nano X

Source : inverse.com

The Ledger Nano X is Ledger’s newest hardware wallet. The main idea behind the device is that it is the easiest way to secure your Bitcoin and other Cryptocurrencies as well. The main benefit is that it has Bluetooth, making it the first hardware wallet that connects with IOS devices. Its more secure than using just an app on your phone, because all transactions are signed with the NANO X. The Ledger Nano X supports an extensive list of cryptocurrencies, including popular assets like Bitcoin, Ethereum, XRP, Litecoin and more. Ledger is constantly expanding its crypto asset coverage with both apps developed by Ledger and apps developed by the community and extensively tested by Ledger.

2. Ledger Nano S

Source: World Wide Wallets

The Nano S has a sleek design, intuitive user interface and a wide support of altcoins. At the moment the Nano S sells for $69 making it an affordable hardware wallet although somewhat more expensive than the competition. While many hardware wallets on the market feature a “simple” chip, all Ledger hardware wallets are equipped with a “smart card chip”, that include a secure element. This kind of chip is used for highly secure applications, such as protecting bio metric data on passports or credit card information. Secure element chips are extremely difficult and costly to hack, while “simple” chips, even with software protection, require much less effort. The Ledger Nano S can simultaneously run up to 18 device applications. Even if you uninstall a device application, the private keys to access your crypto assets remain secure. You’ll always be able to manage your assets by simply re-installing the application on your Ledger device.

3. Trezor one

Source: Bitcoin Wiki

Trezor launched in August 2014 as the first Bitcoin hardware wallet, offering secure Bitcoin storage plus the ability to spend with the convenience of a hot wallet .Trezor is a small, thumb-sized device which connects to your computer with USB cable. It stores your Bitcoin and cryptocurrency private keys offline and sign transactions. It can be safely used on a malware infected computer. Trezor provides top-notch security for bitcoin, protecting against both physical and virtual theft. Trezor is an HD wallet where you control the private keys, so an entire wallet can be backed up with the 24 words generated on setup. A pin code is required on setup, and required for spending. TREZOR and the Ledger Nano S are often compared. The main difference is that TREZOR is more like a mini computer, while the Ledger Nano S uses a secure chip.

4. KeepKey

Source : NewsBTC

KeepKey was released in September 2015 and was the second hardware Bitcoin wallet to offer a screen. The KeepKey’s larger screen gives it some extra security features that the Nano S and Trezor lack. Costs $129 and can be purchased on Amazon. High price tag is due to its digital screen, metal body, and high level of security. KeepKey’s pin code and number randomization makes sure that 1) your wallet is secure from physical theft and 2) that a hacker couldn’t steal bitcoins from your wallet with malware. KeepKey is an HD wallet, meaning your entire wallet can be backed up with the 12 words generated on setup. 12 words is the default setting, although KeepKey supports seed lengths of 18 and 24.

One thing you’ll probably hear from every bitcoin expert is that your bitcoins are as safe as you make them. Before you start using and getting bitcoins, invest some time to decide on your wallet as the security of your money entirely depends on it. Some factors to look at while deciding would be theamount you want to deal with and the frequency of usage. For instance, if you’re going to be using the bitcoin frequently then a more convenient option can be considered like mobile or desktop wallets.

What is ICO- Initial Coin Offering| Paroexchange

An initial coin offering is a type of funding using cryptocurrencies. Mostly the process is done by crowd funding but private ICO’s are becoming more common. A quantity of cryptocurrency is sold in the form of tokens to investors , in exchange of other cryptocurrencies such as bitcoin or Ethereum . the token sold are promoted as future functional unit of currency or when the goal of ICO crowd funding meets the project launch.

An ICO can be source of capital for startup companies. The ICO have been truly revolutionary and have managed to accomplish many amazing tasks. Anyone can invest in a project they are interested in by purchasing the token of that particular company and become the part of that project themselves.

Since 2013 ICO’s are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchange if there is demand for them.

Source: Hacker Noon

Why will a startup company prefer ICO?

The concept is relatively new and it is quite safe. Some benefits of ICO are:

1. You are not sharing your company with an investor that is huge difference; you will get money but still control your business.

2. Before companies needed to go door to door to find investors, with ICO you can immediately rise money from anybody in any country worldwide

3. Another huge reason why companies are choosing ICO is to reserve shares. By selling tokens, companies choose ICO to save shares for future rounds.

ICO allows an easier entry for startups to raise funds for their ideas. Raising funds from capitalist and banks can be challenging process and many attempts can be rejected. Even if you project is to innovative or can change lives. However through ICO anyone who believes in your venture can buy tokens to support. Unlike traditional way of funding, you don’t have to be depend on capitalist or any bank. ICO are not determined by banks. It gives the company complete freedom to grow, express creativity and expand how much ever it wants.

High risk

In the world of internet, information is easily accessible. Almost everybody knows of the high risk in ICO. You see all this companies coming up with whitepapers and promises. After raising funds, some turn out to be scams, Although you have to do a lot to prove that your project is not scam. You have to accept that not everybody will back your ICO. Keep focusing on proofing your project.

China has banned ICO due to many scams going around. China will not be only one country if the number of scams keeps increasing. Whether you choose to ICO or stay on the safe of capitalist funds, important factor to take note is that your product has to work.

A BEGINNER’S GUIDE TO MINING ETHEREUM — WHAT YOU SHOULD KNOW!| Paro Exchange

Ethereum (ETH) is the second most valuable virtual currency in the market right after Bitcoin. In order to process transactions and verify that everything woks properly in the network, miners need to provide their power to the network. After it, miners receive compensation in ETH for their work. In this way it is possible to keep the network secure and smoothly.

To put it simply, crypto-currency mining is a process of solving complex mathematical problems. Miners are essentially the cornerstone of any crypto-currency network as they spend their time and computing power to solve those problems, providing a so-called “proof of work” for the network, which verifies ether transactions. Besides that, miners are responsible for creating a new Ether tokens through this process, as they receive rewards in Ether for successfully completing a proof of word task.

As more and more miners join in, the problem automatically become more difficult to solve, which means more time and computational power is required to solve them and the rewards become smaller. Many people see mining as an ideological incentive, a mean of directly supporting the network.

How to Mine Ethereum?

In order to start mining Ethereum it will be necessary to have a special computer hardware that will be dedicated full time to mine ETH. It is possible to use GPU and start processing transactions. It is not easy to set up one of these devices, and is not so straightforward to decide which miner to use.

The best thing to do is to set up a mining rig, that will give you the best hash rate at the lowest possible price. Buying a mining rig means that you will have multiple GPU’s working together to extract as many coins as possible.

If you want to know the profits you will have, you can enter the hash rate and the price you pay for electricity. The calculator will later show you the amount of Ether you will receive per hours/day/month/year.

One of the most important programs is known as “GETH” that runs an Ethereum node that is written using the programming language knows as Go. If everything is installed properly, you will be connected to the network and you will have an interface for deploying smart contracts and sending transactions.

source: Coin Revolution

Joining a mining pool

As a miner, you’re unlikely to be able to mine ether on your own.

That’s why miners pool together their computational power into “mining pool”, to improve their chance of solving the cryptographic puzzles and earning ether. Then, they split the profits proportional to how much power each miner contributed.

There are many factors involved in joining a mining pool. Each pool might not be around forever, and the computational power of each pool is constantly changing, so there are a number of factors that go into deciding which to join. One point to keep in mind is that mining pool have different pay-out structures.

Mining pools will have some sort of a signup process on the website so that miner’s can connect to the pool and begin mining.