Brands: Luno

Part 6: A beginner’s guide to crypto for S’poreans: 10 free tools you can use in your crypto journey

For those of you who’ve been following along our beginner’s guide to crypto, you should feel fairly confident by now. We’ve gone over all the fundamentals – from how blockchain technology works, to the different types of cryptocurrencies, stablecoins, NFTs and DeFi. 

In partnership with Luno, we’ve also stressed the importance of doing research the right way so that you can always be equipped to make informed decisions. While this space offers a lot of opportunities, there’s also a lot of risks and misinformation out there. Fraudulent projects and scams have become prevalent in the crypto space and learning how to spot red flags is essential. 

At this stage, you’ve probably realised that investing in crypto can be a time-consuming process – even more so than in traditional finance, which is heavily regulated – and the responsibility to protect your assets remains primarily with yourself. 

In the final edition of our series, we’ll look at 10 free tools which can help make life easier and guide you along this ever-changing world of crypto. These cover a wide range of uses including charting, price analysis, and portfolio tracking. 

Price-tracking and portfolio management

When deciding to buy a crypto coin, you’ll want to check the price at which it’s trading and find a good entry point. CoinMarketCap and CoinGecko are two of the most widely-used websites for this purpose. The former tracks over 20,000 different coins, while the latter tracks around 12,000. Both websites list new coins on a daily basis. 

Price information is free to access for all users with no sign-up required. It’s possible to look at the historical prices of coins, often dating back years or to whenever the coin was first introduced. 

Along with this, both websites also report statistics such as the highest and lowest price which a coin has traded for in a given time period. This can be helpful in gauging the prevalent sentiment around a coin which you’re looking to invest in.

By creating a free account on either website, users can also access their respective portfolio trackers. These allow you to manually enter the coins which you’ve invested in – the quantity and price of purchase – and track their value over time. 

For those who invest in equity markets as well, Delta is an all-in-one portfolio tracker to consider using. The app allows you to track your investments on-the-go – crypto, NFTs, and stocks – using the same interface. Delta is free to download on Google Play and the App Store, and it is only available for use on phones and tablets. 

Analytics

One step beyond price-tracking is analytics. This involves using the wide range of information available on the blockchain – price movements, number of active wallets, transaction fees – to give you a sense about future performance. 

Most crypto analytics platforms only offer real-time data analytics as part of their paid subscription plans. However, they may also have free plans which usually provide sufficient insights for retail investors. 

Glassnode is a beginner-friendly platform, which provides access to fundamental metrics such as market cap, transaction rate, and transfer volume for free. There are descriptions which explain the purpose of each metric, and users are able to compare different metrics on the same graph as well.

Using quantitative data is an important part of researching a cryptocurrency as it can help provide an objective view. 

For example, if you see someone praising a crypto coin’s potential on Twitter, it’s tough to tell whether their insights are legitimate or if they are simply promoting the projects because they are invested in it and want to build hype. 

The latter is a popular form of crypto promotion known as shilling. Communities try to draw attention to their project on social media, using information which may not always be true or positioned to optimise clicks, also known as clickbait. 

People might even use fake accounts to make it seem like a project has more followers than it actually does. Through data analytics, you can check the number of wallets which actually hold said project’s cryptocurrency and make judgement by yourself. This can help prove whether or not the community is legitimate. 

Santiment is another popular analytics tool which offers a free plan. Users can create their own personalised watchlists, and access up to two years’ worth of historical data, albeit with a 30-day lag.

Charting

If you’re looking to engage in your own technical analysis, TradingView is the ideal platform to read charts, draw indicators, and test strategies. The platform has long been popular among equity traders and over the years, it has introduced cryptocurrencies as well. 

TradingView offers free access to a wide range of indicators, although users will have to look elsewhere to learn how to make sense of them. Those already familiar can get started immediately and begin plotting their investment strategy. 

The platform allows the community to create and share their own scripts well. These are lines of code, which can interpret price information and prove useful in identifying future trends. Using these scripts, users are free to test out their theories about market movements and gauge how well their strategies would perform based on historical data. 

Education

While this beginner’s guide gives you all you need to get started in crypto, there’ll always be a need to continue building your knowledge and learning about new trends, and even read back if things get a little fuzzy. The crypto space is ever-changing and to ensure you’re making the right investments, it’s important to stay informed. 

Luno takes crypto education to the next level with Luno Discover. It offers daily crypto updates, weekly round-ups, development news, as well as a variety of guided content for both beginner and advanced crypto enthusiasts. The content is written to be easily digestible and jargon-free. 

If you like to read on-the-go, Luno Discover is also available within the Luno app which is free to download. Even if you only have a minute to spare, there’s plenty which Luno Discover can teach you in that time.

For smaller on-the-go doses of crypto knowledge, it’s also worth subscribing to Luno’s Telegram channel and following them at @luno_sg on Instagram. It’s a way to stay up-to-date on all the headlines of the day and if any of them catch your attention, there’s always a link to read on and learn more. Challenge what you’ve learnt with their weekly pop quiz – if you get it wrong, don’t worry because explainers are always available.

NFT trackers

Finally, for those looking to invest in NFTs, knowing historical floor prices – the lowest price at which an NFT from a collection is listed for sale – can be helpful in making a buying decision. It also helps to know how many sales a collection sees per day. This can inform you of the demand for a particular NFT collection.

Different blockchains tend to have their own apps built for tracking NFT prices. NFT Price Floor and Solsniper are two popular trackers for the Ethereum and Solana blockchains respectively. 

Since NFTs can be listed on different marketplaces, these trackers can help ensure that you’re getting the best deal. 

For example, the floor price for an NFT collection might be 20SOL on the Magic Eden marketplace, but 18SOL on OpenSea. Solsniper can save you the trouble of checking each marketplace individually and instead, let you know the lowest price for which you can buy an NFT. 

Solsniper has TradingView’s charting tools built-in on its website, allowing users to carry out technical analysis on NFT price movements as well. The website also tracks the unique holders of each NFT collection, and the number of NFTs held by the top 50 holders. 

If the supply of an NFT collection is concentrated among a few holders, there’s always the risk that they can dump their holdings and sway the price significantly. This is an important data point to consider when looking at NFTs. Just like with crypto, quantitative data can help you make better investing decisions here as well. 

With that being said, we’ve come to the end of our beginner’s guide to crypto. You should now have everything you need to take your first steps into this exciting realm. 

This guide was created as part of Luno’s ongoing mission to encourage responsible crypto participation. In this ever-growing space, it’s important to make education a priority and ensure that users – both new and experienced – are well-aware of making the right investment decisions. If you feel the need for a refresher, revisit the other parts of the guide linked down below.

This article is part of a six-part series to a no-hype beginner’s guide to crypto. You can check out the other articles here: 

– Part 1: Blockchain and cryptocurrencies
– Part 2: Types of coins and its risks
– Part 3: NFTs, DeFi and metaverse 
– Part 4: Stablecoins
– Part 5: How to ‘DYOR’

This article is written in collaboration with Luno.

This partnership between Vulcan Post and Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in Luno’s Risk Warning.

Featured Image Credit: CoinGecko / Luno / Delta / Art Haus

Also Read: Part 5: A beginner’s guide to crypto for S’poreans: How to actually ‘DYOR’

Part 5: A beginner’s guide to crypto for S’poreans: How to actually ‘DYOR’

‘Do your own research’ or ‘DYOR’ has emerged as one of the commandments of the crypto space, and for good reason. It’s a sentiment echoed across Discord communities and Telegram groups. 

With hundreds of projects — some legitimate, others not so much — trying to gain attention and attract investments, all crypto users have the responsibility to protect their funds and ensure they are well-positioned to make informed decisions. 

This is easier said than done, especially when you don’t know where to start. 

Since 2021, over US$575 million worth of cryptocurrency have been lost as a result of fake investment scams. People are often lured in by projects promising high returns and fail to look into the actual value being offered. 

While there’s risk involved with any crypto investment, it’s possible to mitigate this by being aware of red flags and knowing whether or not to believe what you read. 

Beyond knowing the facts, it’s also important to diversify investments and build a portfolio which matches your risk profile. From earning interest on stablecoins to speculating on NFTs, there are a number of ways to gain exposure to the crypto space. It’s important to consider the risks and rewards associated with these different options and find the right balance. 

In this edition of our beginner’s guide to crypto in partnership with Luno, we’ll look into the idea of ‘DYOR’ and lay down what it actually means to properly research a crypto project. After all, it always puts you in an advantage to know what you are investing in.

Why does the crypto project exist?

This is the first question which you need answered. 

Most crypto projects release a whitepaper outlining their purpose, vision, and roadmap. This document is specifically created for prospective investors and can usually be found on a project’s official website. 

A whitepaper is meant to be clear and easily understandable. If you find yourself reading one and can’t make sense of it, that can be a potential red flag. That being said, it is key to also bulk up your fundamentals to better understand and connect the dots – our six-part crypto beginner’s guide is a great start.

Fraudulent projects might put together a whitepaper full of buzzwords – such as Web3, metaverse, and DeFi – without actually explaining what the project does. They rely on unsuspecting investors to buy their cryptocurrency without understanding its underlying value. 

Along with the contents, it’s also important to look at the branding and design of the document. If the whitepaper closely resembles a middle schooler’s PowerPoint presentation, it’s probably best to be extra cautious. 

This applies to the project’s website as well. If there are grammatical errors or low-quality visuals, that tells you something about the project founders’ competence and attention to detail. 

Once you’ve gone over the whitepaper and website, you should understand a project well enough to be able to explain it to a friend. After this, it’s time to move to the next question.

Why is the cryptocurrency valuable?

You’ve established that the project you’re looking into has a purpose. Now, if you were to buy its cryptocurrency, how much potential does it have? 

Take Ether (ETH), for example. It is primarily used to facilitate transactions on the Ethereum blockchain. Anyone buying NFTs, developing apps, or playing games on this blockchain needs to pay transaction fees using ETH. 

If more and more people were to start using the Ethereum blockchain, the demand for ETH would increase, and so would its price. Adoption of that particular blockchain is an important metric too. 

In this case, you could choose to invest in ETH right now and hope to sell it in the future for a profit. There’s no guarantee that this would happen, however, at least there’s clarity around what ETH’s value is.

On the other hand, if you look at Dogecoin (DOGE) – a coin which was created as a joke – it’s tougher to justify an investment. There’s no inherent value to it, and this makes it a lot tougher to gauge how DOGE might perform in the long term. 

After you’re satisfied with a cryptocurrency and the value which it offers, dig deeper to ensure its legitimacy.

Start with the socials

What’s the first thing you’d do after meeting someone on a dating app? Stalk their social media for red flags. Naturally, you’d try to make sure they’re the same person as whom they claim to be on their profile. This would apply doubly so if the person in question seems too good to be true.

Crypto investments need to be approached the same way – with scepticism and doubt, until you’re convinced otherwise. There’s a lot that can be learnt by going through a project’s different social media accounts. 

On Twitter, looking at the engagement is a good place to start. If a project has hundreds of thousands of followers, but its posts barely get any likes and comments, you might wonder if these followers are even real. 

To a similar effect, if all the comments seem to be spam or irrelevant, chances are that they were paid for. Community has always played a big role in the crypto space, and it can be a good gauge of a project’s strength. 

Joining a project’s Discord or Telegram group can be a good way to interact with members of the community and the team. Often, projects might host ask-me-anything (AMA) sessions or Twitter Spaces where users can ask questions about current and future developments. 

It can also be helpful to join third-party communities, such as Luno’s Telegram channel, to stay updated on developments and news on the project you’re interested in. 

Beyond the project’s social media channels, also consider looking into the backgrounds and credentials of the founders. It’s worth finding out whether they have prior experience running such a venture and what their track record looks like in the business world. LinkedIn is a good place to start as users often display references from other professionals in the space. 

As a rule of thumb, a project with an anonymous team is something to stay wary of. Even though this was once a staple of the crypto space – the identity of the Bitcoin founder is still unknown – the prevalence of scams in recent times has turned anonymity into a red flag. 

With a team that’s publicly known, there’s no guarantee that the project will succeed, but at least there’s someone to hold accountable in case of negligence and fraud. It also means that the founders are putting their reputation on the line and are likely to be more invested in the project.

Reference against competitors

Finally, after identifying a crypto project to invest in and completing your series of background checks, spend some time looking at how it fares against its competitors.

For example, if ETH is the cryptocurrency you were looking into, you’d find that Solana (SOL) is a close competitor. It serves a purpose similar to ETH on its own blockchain and its market cap is around US$14 billion as compared to ETH’s US$208 billion. 

As it stands, Ethereum has a larger user base and supports more projects, however, Solana outperforms it in other areas. 

Transaction fees on Solana are usually a fraction of a cent, whereas on Ethereum, they’ve shot up to over US$100 in the past. The difference in fees is determined by the number of transactions which each blockchain can handle. Solana is capable of handling thousands of transactions per second (TPS), while Ethereum only supports around 15 TPS. 

Some other criteria worth noting are transaction latency – how long it takes each blockchain to process transactions – and the number of validator nodes. A validator is someone who verifies the legitimacy of a blockchain transaction. Having more validators makes a blockchain more decentralised and secure.

There’s no clear winner here as both blockchains have their pros and cons. Some might think an investment in ETH seems safer as it’s the second biggest cryptocurrency and relatively less volatile. On the other hand, others may perceive SOL to have more room for growth and could potentially offer higher returns. 

You might go even further down the list and find NEAR Protocol (NEAR), which only has a market cap of US$3 billion. Unlike ETH and SOL, it has a limited supply – there’ll never be more than one billion NEAR coins in circulation. Although NEAR’s transaction fees are even lower than Solana, its transaction times are about five times slower.

After identifying these factors, it’s up to you to weigh them accordingly and make a decision based on your investment strategy, risk tolerance, and desired outcome. 

If you find a competing cryptocurrency to be more appealing, make sure to repeat your due diligence just as you did the first time around. This might seem like a time-taking process, but that’s what separates investing from gambling. It’s essential to know exactly what you’re buying into, in order to have a well-balanced portfolio that meets your investing needs. 

To learn more, stay tuned for our final edition where we’ll look into 10 free tools which can better guide you along your crypto journey. In the meantime, you can also head over to Luno Discover for daily crypto updates, and follow Luno’s Telegram channel and Instagram for small doses of blockchain news and knowledge. 

This article is part of a six-part series to a no-hype beginner’s guide to crypto. You can check out the other articles here: 

– Part 1: Blockchain and cryptocurrencies
– Part 2: Types of coins and its risks
– Part 3: NFTs, DeFi and metaverse 
– Part 4: Stablecoins
– Part 6: Free crypto tools

This article is written in collaboration with Luno.

This partnership between Vulcan Post and Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in Luno’s Risk Warning.

Featured Image Credit: The Fintech Times

Also Read: Part 4: A beginner’s guide to crypto for S’poreans: The massive world of stablecoins

Part 4: A beginner’s guide to crypto for S’poreans: The massive world of stablecoins

Cryptocurrencies have long been characterised by volatility. As far back as 2013 – when Bitcoin rallied from US$550 to US$1,200, and back down to US$800 in a matter of weeks – it became apparent that there was a need for a more stable form of cryptocurrencies in the crypto space.

In traditional finance, they vary from commodities such as gold and silver, to fiat currencies like the US dollar. Investors use these assets to hedge and manage their risk exposure during times of uncertainty. 

As with any investment, it is key to know what you are investing in – so far in our beginner’s guide to crypto, we’ve talked about the relationship between blockchain and cryptocurrencies, gone over a range of different blockchain applications such as NFTs and DeFi – from blue chips such as Bitcoin and Ethereum, to higher-risk meme coins like Shiba Inu, as well as explored why people are paying extraordinary amounts for NFTs.

In partnership with Luno’s education hub, Luno Discover, let’s now take a look at stablecoins – another vital segment of the crypto space. 

What are stablecoins and how is it used? 

A stablecoin is a cryptocurrency which, as the name suggests, is designed to maintain a relatively constant price. This is usually achieved by pegging the value of the coin to another asset class such as gold, or currency such as the US dollar. 

Stablecoins are often used to interact with assets that are more prone to sharp price movements. Just like the name suggests, the stability of the stablecoins help to minimise volatility and provides more certainty to the value of the respective portfolio. 

They are also used to facilitate trades on crypto exchanges – most often thought of like a “bridge” between fiat currency and cryptocurrency. Instead of buying cryptocurrency with fiat currency which requires more steps, time and/or costs, traders exchange fiat for a stablecoin and perform trades.

Especially in countries that experience politico-economic crises where local currencies lose extreme value, stablecoins are borderless, easily transferable and maintain value wherever you are in the world. Due to that, its application for payments and remittances is also another good use case. 

How and what are stablecoins pegged to?

Stablecoins can be classified into one of four different categories:

1. Fiat-backed stablecoins

These are the most widely used variety of stablecoins, usually backed 1:1 by fiat currency. 

For example, Tether (USDT) – which was one of the first stablecoins to be launched back in 2014 – is backed by the US dollar. All issued units of USDT are matched by an equivalent amount of US dollars stored in Tether’s reserves. This ensures that holders are able to redeem 1 USDT for US$1, and vice versa. 

As of now, USDT has the highest market cap among all stablecoins and is the third largest cryptocurrency, behind Bitcoin and Ethereum. 

USD Coin (USDC) is next in the rankings and is also fiat-backed. 80 per cent of the total stablecoin supply is shared between these two coins. 

It’s worth noting that the reserves of fiat-backed stablecoins aren’t always made up of cash. They may also contain cash equivalents such as treasuries and bonds. These reserves are a good indicator of how secure the peg between a stablecoin and its underlying currency is.

As a rule of thumb, the more liquid the reserves, the more stable the peg. Imagine a situation of panic where thousands of investors want to convert their stablecoins back to fiat currency. If the stablecoin has all-cash reserves, it will have no problem fulfilling this demand and maintaining its peg. 

However, say the reserves are partially made up of bonds which can only be converted to cash in a few months’ time. In this case, the reserves wouldn’t have enough liquidity to meet the sellers’ demands. This could cause the stablecoin to de-peg and lose its value. 

For Singaporeans, XSGD is a choice of SGD-backed stablecoin. The issuing company, Xfers, is licensed by the Monetary Authority of Singapore (MAS) under the e-money issuance framework. As part of this framework, XSGD is required to be backed 1:1 by Singapore dollars stored in a local bank. 

Xfers also publishes an attestation report – prepared by an independent accountant every month – detailing the number of XSGD tokens in circulation and the amount of Singapore Dollars held in the company’s reserves. 

2. Commodity-backed stablecoins

There are also stablecoins backed by assets such as precious metals or oil, which share the same volatility as their underlying assets. They allow investors to gain access to real-world commodities without having to exit the crypto space. 

PAX Gold (PAXG) is one of the most well-established stablecoins in this category, and ranks among the top 100 cryptocurrencies by market cap. Each unit of PAXG represents one troy ounce of a gold bar stored in a professional vault. 

This is a convenient way to gain exposure to gold as the minimum investment required is as low as US$20, and there is no additional storage expenditure. Investors who’d be priced out from buying commodities in traditional markets can gain access to them using stablecoins. 

PAXG can be redeemed for physical gold bars and US dollars, or traded in exchange for other cryptocurrencies. As a result, it provides investors with a lot more liquidity than other forms of gold investments.

Tether Gold (XAUT) is another popular gold-backed stablecoin, issued by the same company that launched USDT. 

3. Crypto-backed stablecoins

These stablecoins have their value pegged to a fiat currency or commodity, but they are backed using crypto assets instead. 

For example, Dai (DAI) tracks the US dollar and is only issued in exchange for crypto-based collateral. 

In order to receive 10 DAI (worth US$10), a user might have to deposit over US$15 worth of Ethereum or another cryptocurrency. This is to safeguard against crypto volatility. Even if the value of the deposit were to fall up to 33 per cent, it would still be worth enough to account for the issued DAI. 

If the value of the collateral fell even further below, it would get liquidated via an automated process. For example, a platform might require that the collateral’s value must always be 1.2 times the value of the loan. In this case, if the value of the user’s Ethereum deposit fell below US$12, it would get liquidated and they would lose the entire amount. 

Despite these safeguards, crypto-backed stablecoins tend to be riskier than their fiat counterparts. When investing in such coins, it’s important to gauge the strength of their peg by checking how much excess collateral is held in the reserves, and which choice of cryptocurrencies are accepted as collateral. 

4. Algorithmic stablecoins

Finally, there are algorithmic stablecoins, which also rely on other cryptocurrencies, but not for collateral. 

The most well-known stablecoin in this category is one which no longer exists. In fact, its downfall was a major catalyst leading to the 2022 crypto downturn. 

TerraUSD (UST) used to be the official stablecoin of the Terra blockchain. It maintained its peg to the US dollar through an algorithmic relationship with its sister cryptocurrency Terra (LUNA). 

If the value of UST ever went above US$1 (due to high demand), LUNA holders could exchange US$1 worth of LUNA for 1 UST. Similarly, if the value of UST went below US$1 (due to lack of demand), UST holders could exchange 1 UST for US$1 worth of LUNA.

This arbitrage opportunity was meant to ensure that any deviations in UST’s price would correct themselves and its value would always return to US$1. However, in May this year, a different reality panned out. 

Upon experiencing an extremely high volume of sell-offs, UST’s price began to decrease. Immediately, users began converting UST to LUNA to make use of the arbitrage opportunity. 

Unfortunately, the algorithm couldn’t produce LUNA coins fast enough to restore UST’s peg. This caused further panic and accelerated the UST sell-off. At the same time, users began to also sell LUNA coins due to the rapidly increasing supply. 

Both LUNA and UST lost almost all of their value in the span of a few days due to its interconnected nature, causing what they call a “death spiral”. This is not to say that all algorithmic stablecoins are doomed for failure, but they do indeed come with risks which might not be readily apparent. 

Since they are not backed by any collateral, these stablecoins are only as strong as their underlying smart contracts. Any weaknesses in their algorithms can be exploited by users or inadvertently triggered by market volatility. 

The Terra incident has surfaced the importance of having and practising common investment habits – knowing what you are investing in, only investing what you can lose, especially for assets with higher volatility like cryptocurrencies. 

The future of stablecoins

After wiping out over US$17 billion in value, the LUNA/UST crash brought stablecoins to the attention of regulators around the world. 

In June, Japan passed a key legislation under which only licensed companies will be allowed to issue stablecoins in the country. It’ll be necessary for the stablecoins to be linked to the Japanese Yen or another legal tender, and companies will also need to provide a guarantee of full redemption. 

The UK is planning on regulating certain stablecoins under its payments framework. The aim is to make these cryptocurrencies safe and stable enough for consumer use. 

In Singapore, the MAS believes that most stablecoins don’t meet the criteria to be classified as e-money. Even fiat-backed coins – although more stable than their algorithmic counterparts – record price fluctuations when trading on different exchanges. 

Nevertheless, as seen with Xfers’ XSGD token, the MAS recognises the potential for stablecoins to serve as e-money upon meeting the designated criteria. 

As countries come up with their own regulatory frameworks, it remains to be seen how stablecoins will play a role in shaping the future of cross-border transactions. 

It is key to always know what you are investing in; it is one of the many ways to reduce your risk. To learn more about stablecoins, head over to one-stop crypto education hub Luno Discover, and subscribe to Luno’s Telegram channel and follow @luno_sg on Instagram for bite-sized crypto updates.

This article is part of a six-part series to a no-hype beginner’s guide to crypto. You can check out the other articles here: 

– Part 1: Blockchain and cryptocurrencies
– Part 2: Types of coins and its risks 
– Part 3: NFTs, DeFi and metaverse
– Part 5: How to DYOR
– Part 6: Free crypto tools

This article is written in collaboration with Luno.

This partnership between Vulcan Post and Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in Luno’s Risk Warning.

Featured Image Credit: PYMNTS

Also Read: Part 3: A beginner’s guide to crypto for S’poreans: NFTs, play-to-earn games, DeFi

Part 3: A beginner’s guide to crypto for S’poreans: NFTs, play-to-earn games, DeFi

So far in our beginner’s guide, we’ve approached blockchain technology with a bird’s eye view. For those who have been following along, you should now be reasonably familiar with what blockchain is, how to find opportunities, and how to start investing in the space. 

Now, it’s time to dive deeper into slightly more advanced, but essential concepts within the blockchain realm – as it turns out, there’s more to do in this world than buying crypto coins and waiting for profits. 

As with any investment, it is key to know what you are investing in. In partnership with Luno’s education hub, Luno Discover, here’s a read to help you understand why people have been paying extraordinary amounts for these NFTs, why they are not just “jpegs” or “pngs”, and how that all ties into play-to-earn games, the metaverse and DeFi. 

Unique identity in the digital world

Let’s start off with an idea that took the world by storm in 2021: non-fungible tokens, otherwise known as NFTs. Chances are, you’ve heard about them, or at least seen one before. 

Perhaps, it was the cartoon apes – from the Bored Ape Yacht Club collection – that are worth hundreds of thousands of dollars today; or the Everydays collage by Beeple, which was purchased by a Singapore-based investor for US$69.3 million – the highest price ever paid for an NFT. 

The original Starry Night painting hangs at the Museum of Modern Art in New York. People are free to buy copies of it online and have them framed, however, these aren’t worth nearly as much. Collectors value the original at over US$100 million, while prints can be obtained for as little as US$10. 

With digital art, the process of valuation and verification isn’t quite as simple. If you look at the two images below, there’s no way to tell which one is the original Super Mario artwork. Both of them look exactly the same.

For the longest time, this made it difficult for digital artists to monetise their work. Why would someone pay for art when they could just as easily download it and make a copy? 

This is where NFTs come in. Before that, it is important for you to know what a token is. 

The blockchain application of tokens and NFTs

Crypto tokens refer to assets which operate on top of an existing blockchain. 

Take the Ethereum blockchain, for example. Although it uses Ether (ETH) as its native cryptocurrency, the chain also supports other crypto assets which can be classified in one of two categories.

First, there are cryptocurrencies such as Polygon (MATIC) and Loopring (LRC), which operate on top of the Ethereum blockchain. These are referred to as fungible tokens, since they are non-unique and interchangeable – i.e. 1 MATIC token can be replaced with another MATIC token. All tokens built on the Ethereum blockchain are also called ERC-20 tokens.

Next, there are non-fungible tokens (NFTs). An NFT refers to a unique asset which can’t be replicated or interchanged for another. Blockchain technology allows any file to be associated with a unique digital signature and stored as an NFT. In this case, NFTs cannot replace one another in any circumstance due to its uniqueness.

A digital file is converted to an NFT through a process known as minting. Once minted, the file becomes wholly unique and original. 

Anyone can verify its legitimacy – tracking the original creator and the hands it passed through – by looking at the transaction history recorded on the blockchain. If someone were to make a copy of an NFT, you’d be able to distinguish it from the original, even though both look the same. 

Where to find NFTs?

Dedicated online marketplaces have emerged for users to buy and sell NFTs, and different blockchains have their own NFT ecosystems and marketplaces.

Currently, Ethereum is the most popular blockchain for NFTs, followed by Solana.

OpenSea leads the way as the most used trading platform, with over US$600 million in trading volume in June. Although it started off as a marketplace for NFTs hosted on the Ethereum blockchain only, OpenSea has since introduced support for other blockchains as well – Solana, being one of them. Other popular marketplaces include Solana’s Magic Eden.

Investors will notice that the NFT landscape differs from blockchain to blockchain. Projects launched on Ethereum tend to be more expensive, partially due to the ‘gas’ fees – this is charged any time an NFT is bought or sold.

The gas fees can range from US$20 to over US$100, and in comparison, gas fees on Solana are only a fraction of a dollar.

Being the first blockchain to support NFTs, Ethereum also houses some of the most well-established projects. 

In fact, the top 10 NFT collections by market cap are all Ethereum-based, including projects such as Bored Ape Yacht Club, CryptoPunks and Moonbirds.

NFTs beyond art

Beyond their utility in digital art, NFTs have now expanded to other fields as well – serving its purpose of proving ownership of a unique and non-replicable asset. After all, any file can be converted to an NFT – not just an image. 

Some universities have begun issuing NFTs instead of paper-based degrees. In the digital world, gaming and metaverse projects have begun using NFTs for the sale of virtual land and other assets. 

Decentraland and The Sandbox are two of the most popular metaverses, each with plots of land selling for thousands of dollars. This land can be used by creators and companies to set up three dimensional spaces, such as Capitaland’s CapitaVerse.

Clothing brands such as Charles & Keith and Tommy Hilfiger, created virtual stores in Decentraland for this year’s Metaverse Fashion Week. They were able to use their land to showcase and sell items, both in virtual and physical form. Upon buying items, customers would receive the actual garment as well as an NFT version for their avatar to wear. 

DeFi games and how fungible and non-fungible tokens play a part

Decentralised finance games, what some may call ‘gamefi’, are games that work without a central authority. These games have found a similar use for NFTs too. 

Usually built on a play-to-earn model, in-game assets such as weapons, cosmetics, and characters are NFTs that can now be traded by users on marketplaces like OpenSea or their in-game marketplace, where all transactions get logged into the blockchain.

DeFi games can also have their own native tokens, where these tokens become their in-game currency to buy and sell in-game items, and can also be taken out to the “real world” to sell for real money (e.g. fiat). 

These tokens can also be deposited for a fixed interval for profit via interest – known as staking. In the DeFi world, players are incentivised by not just a passion for the game, but also monetary gain in exchange for their play time – something that was not seen in the traditional gaming industry. 

In Axie Infinity, their native token – Smooth Love Potion (SLP) – can be earned as a prize while playing the game. It can then be used to breed axies and buy in-game items. SLP is an example of a fungible token, while the axies all exist as individual NFTs. 

Crypto tokens such as SLP are able to sustain their value as new users join the Axie Infinity ecosystem and the demand for axies goes up. 

Zooming out to DeFi

Over the past few years, DeFi games has become a notable part of the DeFi space, and serves as a testament to how DeFi is expanding and providing utility to a variety of industries. 

Imagine if you have the ability to bypass traditional financial institutions such as brokerages, banks and insurance companies, to get access to things like loans, savings, insurance, trading, payments and much more for everything you can ever think of. 

In the real world, banks determine whether or not to issue loans based on factors such as the applicant’s credit score, income, expenses, and employment history. They use customer deposits to fund these loans, and generate revenue by charging interest on them. The entire process of getting a loan can often take weeks. 

On the other hand, DeFi apps like Compound and Aave, allow anyone to obtain a loan instantly as long as they have sufficient collateral – it is almost instant. 

Unlike bank customers who deposit funds with banks which ultimately fund mortgages and loans, crypto holders can choose whether or not they want their assets to be used to fund such loans. If they wish to lend their assets, they can deposit them in liquidity pools, which usually award much higher interest rates than banks do – and of course, a higher level of risk exposure as well.  

The demand for DeFi primarily hinges on its freedom from intermediaries and using the blockchain to serve your objective in a crowdsourcing manner. It’s a way to eliminate our reliance on financial institutions, such as banks, while still enjoying the services that they provide in a transparent (and most often, cheaper and faster) way. Plus, DeFi is accessible to anyone with an internet connection.

Here is another common use case – DeFi offers similar benefits through exchange protocols as well. Fiat currencies such as SGD and USD can only be exchanged through banks, currency exchanges or money changers. These institutions make a profit by charging a commission and/or applying a spread to the exchange rate. 

In the DeFi world, these profits get distributed among crypto holders instead. As the holders add their holdings into a “pool”, they are increasing the availability of funds for transactions to take place without affecting the market price (read: liquidity).

A user can deposit an equal amount of two cryptocurrencies – say, Ethereum (ETH) and Tether (USDT) – on a platform like Uniswap. Any time someone swaps between these two currencies using Uniswap, the user would earn a percentage of the exchange fees. 

As the DeFi space develops, more and more utilities are emerging, whereby services can be offered through smart contracts on the blockchain rather than institutional intermediaries. This is paving the way to make finance more accessible for all. 

It is key to always know what you are investing in, be it crypto or other assets. To learn even more, stay tuned for our next edition where we’ll look into the massive world of stablecoins. In the meantime, you can also head over to Luno Discover for daily crypto updates, and subscribe to Luno’s Telegram channel as well as follow @luno_sg on Instagram for timely headlines and small doses of blockchain knowledge.

This article is part of a six-part series to a no-hype beginner’s guide to crypto. You can check out the other articles here: 

– Part 1: Blockchain and cryptocurrencies
– Part 2: Types of coins and its risks
– Part 4: Stablecoins
– Part 5: How to ‘DYOR’
– Part 6: Free crypto tools

This article is written in collaboration with Luno.

This partnership between Vulcan Post and Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in Luno’s Risk Warning.

Featured Image Credit: Getty Images

Also Read: Part 2: A no-hype beginner’s guide to crypto: Types of coins, its risks and how to actually DYOR

Part 2: A no-hype beginner’s guide to crypto: Types of coins, its risks and how to actually DYOR

In the first edition of our beginner’s guide to blockchain and cryptocurrency, we laid down the basics of this emerging technology. Now, it’s time to get you ready to enter the space. 

Cryptocurrency has emerged as an appealing asset class over the past few years. “Blue chip” coins such as Bitcoin and Ethereum showed their resilience through the pandemic, coupled with the ability to bounce back after sharp falls. In 2020, Bitcoin outperformed stock market indices such as the Dow Jones as well as safe haven assets like gold.

More recently, crypto has demonstrated its utility during times of crisis. In March 2022, Ukraine raised almost US$100 million in cryptocurrency to help combat the Russian invasion. Although it had become extremely difficult and time-consuming to send fiat currency in and out of the country, transacting in crypto remained simple as ever. 

Given these utilities, there are a number of reasons why you might choose to buy crypto today: for easy cross-border transfers, to diversify your portfolio, hedge against inflation, or even speculate on market upturns and downturns. 

However, before creating a wallet and signing up with any crypto platform, it’s important to first understand how the market works. 

As the recent market crash has shown us – with the downfall of projects such as Celsius and Terra – crypto products aren’t as well-regulated as traditional financial instruments. Losses can arise not just from market movements, but also mismanaged investment platforms. 

To prevent retail investors from falling victim, the Monetary Authority of Singapore (MAS) is being very selective when issuing licences for companies to offer crypto services in Singapore.

While such regulations will help make the crypto space safer, consumers still have the ultimate responsibility to protect their investments.

In partnership with Luno’s education hub, Luno Discover, here’s our humble, no-hype guide for the ultimate beginner on how you can keep your funds secure and minimise risk when entering the world of cryptocurrency:

Developing the right mindset

There’s a fine line between gambling and investing, and it mostly comes down to your decision-making process.

With crypto, it’s easy to be lured in by the hype. Every other day, it seems there are coins that have doubled or tripled their value. That being said, it’s important to remember that they can crash just as easily. Earlier in January, the overall crypto market cap fell by US$205 billion in a span of just 24 hours. 

Since there’s no way to tell which coin Elon Musk will tweet about next, buying in with such hopes isn’t a valid investment strategy.

How to actually DYOR

Rather than assessing a cryptocurrency’s potential to go viral, investors should research fundamentals instead, starting with a project’s whitepaper which can be found on its official websites.

• What purpose does this coin serve?
• Who are the people behind this project?
• What does the business model look like and is it sustainable?
• What does the project roadmap look like?

While doing this research, it’s important to consult a variety of sources to get the full picture. Anyone can make a website with a promising roadmap, but these claims shouldn’t be taken at face value. It is wise to cross reference and get a multi-faceted perspective before investing your hard-earned money.

Investors should look at credible information sources – such as Luno Discover – to find out more about the cryptocurrencies which they’re interested in. 

Along with this, it’s a good idea to look out for ask-me-anything (AMA) sessions or Twitter Spaces hosted by project teams. Asking questions and hearing the team speak about their ideas can help gauge their legitimacy.

Finally, joining communities dedicated to cryptocurrency, like Luno’s Telegram channel, can be another way to interact with other like-minded investors, keep updated on the latest news and  learn about different projects in the space. 

Doing research will help minimise investment risk, but it won’t eliminate it altogether. For example, with the LUNA crash, we saw a well-established crypto project – one of the top 10 by market cap – lose almost all of its value within a matter of days.

These cases can be tough to predict and even experienced investors can get caught out by them. Similar to stocks, you should only invest an amount which you are willing to lose in crypto.

Now that we have you in the right mindspace of always knowing what you are investing in, it’s time to look into the different investment options available in the crypto market.

Which cryptocurrencies should you buy?

Although the first cryptocurrency, Bitcoin, was created for the transfer of value, cryptocurrencies have since evolved to have a number of other utilities as well. 

Among the top five coins by market cap (as of this June) – often classified as ‘blue chips’ – there’s Ether (ETH), which was designed to facilitate smart contracts. Developers are free to build their apps on the Ethereum blockchain, while using Ether to pay transaction fees.

Then, we have Binance Coin (BNB), which entitles users to discounts on trading fees when using the Binance crypto exchange.

There’s also USD Coin (USDC), a stablecoin that has its value pegged to the US dollar. Since the value of one USDC always remains close to US$1, holders are exposed to much less price volatility than with other crypto coins. Converting to USDC can help users lessen their exposure to crypto risk without forcing them to exit the space altogether.

“Blue chips” are well-established coins which tend to be less volatile than emerging crypto projects. They generally have a large pool of buyers and sellers, meaning any action taken by a single investor isn’t likely to have much effect on the price of the coin. While this minimises downside risk, it also reduces the potential for exponential gains.

Those with a higher risk tolerance might consider cryptocurrencies with a lower market cap. These could include reputable projects such as Solana or Cardano, both of which have positioned themselves as competitors to Ethereum’s smart contract ecosystem.

The apps built on top of these blockchains often have their own cryptocurrencies – referred to as crypto tokens – which users can also invest in. For example, Uniswap is a decentralised crypto exchange built on the Ethereum blockchain. It has its own token, UNI, which gives holders the right to vote on future updates to the app. 

There are a number of such apps which operate on blockchain technology, offering a range of utilities in areas including decentralised finance (DeFi), blockchain gaming, and the metaverse.

Finally, those looking to make extremely risky plays can go off in search of even smaller cryptocurrencies. These tend to be newly launched and not yet listed on popular crypto exchanges. Such coins have a lot of room for growth given their low market cap; however, this comes paired with a lack of liquidity. Since the coins aren’t well known, the buyer pool is small and the coins can be tough to offload.

Some small cap projects offer real utility while others might simply be based on internet memes or viral trends. Either way, these are some of the riskiest investments to be made in crypto, and they often don’t pay off. Since the inception of cryptocurrency, almost 2,500 coins have failed out of an estimated 10,000 which have been in existence.   

Much like you’d divide your traditional investing portfolio between assets such as stocks, bonds, and real estate – all of which come with varying levels of risk – the same can apply to crypto. Ultimately, your risk tolerance and investment strategy will go a long way in deciding which coins you choose to buy.

Choosing the right platform

After completing your research and creating an investment strategy, the final step is to actually choose a crypto platform. There are a number of platforms available for users in Singapore, but the choice must be made carefully.

Hacking is a prevalent issue in the crypto space, with over US$1.2 billion stolen in the first quarter of 2022. Crypto exchanges have often been targeted by hackers as they store a large amount of funds in their respective wallets. 

Apart from hacks, there have also been cases where exchanges have mismanaged funds and blocked withdrawals, due to their lack of liquidity.

Many try to look for the cheapest fees when searching for a platform, but the cheapest may not mean the best. To avoid taking on additional risks that aren’t readily apparent, new investors should look into the platforms’ security track records – their security measures, history of hacks, and methods of storing funds – before opening an account.

Currently, several platforms are operating under exemption from the Payment Services Act (PSA), while the MAS stringently reviews their application to be licensed in the country. To have an extra layer of confidence, consumers should choose an exchange that has either received a licence, or obtained an in-principle approval for one.

For users looking to buy crypto using fiat (i.e. domestic or foreign currency), such as USD or SGD, it’s worthwhile to check up on exchange rates or look for a platform that allows you to deposit your preferred currency directly.

One of the most underrated considerations, in our opinion, is the user experience. Responsive customer service can save you a lot of stress when investing. There are times when blockchain transactions can fail or take longer than usual to process, leaving you questioning where your money went. Such instances are made easier when you’re able to reach out to your crypto exchange quickly and find out what’s going on with your trades.

User experience is also determined by the interface. It is generally a choice between two – functional and daunting, or simple and easy. Some people may want a no-fuss app which can be accessed using a mobile phone in a matter of seconds and a few taps. Others might prefer a platform which offers advanced trading charts and historical data about different cryptocurrencies.

Last but not least, transaction fees. These can range from anywhere between 0.1 per cent to upwards of three per cent. Some platforms entice users by charging zero transaction fees for a limited amount of time and introducing them afterwards. Do also look out for hidden fees such as credit card fees and large spreads. It’s best to be aware of this before signing up.

At the end of the day, there is no right or wrong answer here – as long as you find one that suits your needs and investment strategies.

With that said, you now have everything you need to start investing in cryptocurrency. To learn even more, stay tuned for our next edition where we’ll look into NFTs, DeFi, and more. In the meantime, you can also head over to Luno Discover for daily crypto updates, and subscribe to Luno’s Telegram channel as well as follow @luno_sg on Instagram for small doses of blockchain knowledge. 

This article is part of a six-part series to a no-hype beginner’s guide to crypto. You can check out the other articles here:

– Part 1: Blockchain and cryptocurrencies
– Part 3: NFTs, GameFi, DeFi
– Part 4: Stablecoins
– Part 5: How to ‘DYOR’
– Part 6: Free crypto tools

This article is written in collaboration with Luno.

This partnership between Vulcan Post and Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in Luno’s Risk Warning.

Featured Image Credit: Golden Capitalist

Also Read: Part 1: Market crash or discount deals? Why now’s the time to learn about blockchain and crypto

Part 1: Market crash or discount deals? Why now’s the time to learn about blockchain and crypto

Over the past few years, there has been an exponential increase in the users of blockchain technology. Since 2016, the number of people holding crypto assets on exchanges and wallets has shot up from five million to over 200 million.

There is, however, a huge disparity between those who have adopted blockchain technology and those who understand it. If you’re reading this, you’re still early and there’s plenty of time to get ahead on your crypto knowledge. There’s even evidence to prove it. 

Studies suggest that as many as 98 per cent of crypto users don’t understand basic crypto concepts. When surveyed, a majority of users have asserted that ‘blockchain’ and ‘Bitcoin’ are synonymous terms or admitted to being unaware. And yes, they are absolutely two different things.

This becomes particularly apparent during times of market downturn, like what we’re witnessing now. For those constantly chasing the hype around the latest memecoins, the bear market may have  little to offer. On the other hand, some may realise time off the market may be the prime time to educate and finally actually understand what they are investing in. 

Learning about the blockchain can indeed seem intimidating for a beginner. There’s a lot of technical jargon floating around, and it’s tough to separate the significant details from the fluff. 

This is why we’ve put together this explainer with Luno’s crypto education hub – Luno Discover, which breaks down everything you need to know about blockchain and its relationship with the crypto ecosystem, in simple terms, to aid your understanding. 

The birth of blockchain

Before getting into what blockchain is, it’s important to set some context around why it came to be.

Between 2008 and 2010, the great financial crisis led to the failure of over 300 banks. This caused consumers to lose trust in the banking industry’s ability to manage money. 

It became apparent that banks had significant power to mismanage funds and could do so without the knowledge of their investors.

During this time, the blockchain technology – although theorised in the 1990s – saw its first practical use as a system to facilitate transactions without the need for an intermediary (i.e. a bank). This way, people could keep control of their funds at all times and still be able to transact with ease.

Bitcoin was the first form of electronic cash, also known as digital currency, to make use of the blockchain technology. With Bitcoin, people would be able to directly exchange value with each other over the internet, without the need for a ‘middleman’.

How does blockchain technology work?

A blockchain maintains a record of transactions, much like a bank would, but it eliminates any risk of deviation or human error. This is because each transaction is verified by multiple nodes (read: computers) as opposed to one intermediary. 

For example, in the case of Bitcoin, it is estimated that there are over 40,000 Bitcoin nodes in existence today.

Transactions are only recorded on the blockchain if a majority of these nodes accept that they are legitimate. This ensures that the record can’t be falsified. 

Once a transaction has been recorded on a blockchain, it can’t be altered or deleted. It’s also impossible to make a crypto transaction without it being recorded on a blockchain. 

So for every Bitcoin that exists, there is a record of all the transactions which it has been used in. This record is publicly available and can’t be manipulated by any individual. 

This blockchain technology is also used as the foundation to create other cryptocurrencies that you might know such as Ethereum.

Why is this a big deal?

By ensuring that transactions are irreversible once recorded, blockchain technology removes the need for mediating any disputes and ensures transparency in monetary operations 

Banks have to deal with problems such as chargeback claims and accounting errors, sometimes due to human error, which lead to an increase in operational costs. Ultimately, these costs also flow to consumers in the form of fees, which can get extremely high – especially when sending money across borders. 

With blockchain technology, users enjoy consistently low transaction fees and much faster processing times too. While international bank transfers can take up to five days, crypto transactions can usually be processed within minutes. 

Crypto apps today allow the seamless transfer of funds, and some have even introduced debit cards which can be used to make real-world purchases around the globe.

For businesses, accepting crypto payments means providing a cheaper payment alternative to avoiding credit card processing fees, which can be as high as five per cent per transaction. In Singapore, restaurants and bars such as Maison Ikkoku and Joo Bar now allow customers to pay using crypto. 

Blockchain beyond finance

Although it’s primarily known for its financial utilities, blockchain technology offers a lot more than that. 

Any form of transaction can be recorded on a blockchain, not only monetary ones. This opens up a whole realm of possibilities in areas such as collectibles, supply chain management, and voting systems.

With non-fungible tokens (NFTs), blockchain technology is used to verify the authenticity of digital files and its historical transactions – who created them, who were its past owners, to who currently owns them. These can range from artwork and videos, to graduation certificates and medical prescriptions. 

As NFT art has become popular, scammers have attempted to sell fake copies of popular works. It’s up to buyers to do their own research and ensure that their purchases are legitimate. They can do so by tracing historical transactions all the way back to the wallet of the NFT creator.

Blockchain technology can prove useful in the management of complex supply chains as well. 

For example, Walmart sends out thousands of shipments a day while working with a number of different transport providers. 

Typically, the company would have to manually keep track of shipments and process payments. This process was not only expensive and time-consuming, but it would also lead to delays. Using blockchain technology, Walmart is able to synchronise all its logistics and implement an automated payment system instead. 

Finally, using the blockchain for voting is another use case that has been gaining popularity. 

From reality TV shows to global elections, rigged voting scandals come up all the time. Blockchain can help avoid this by ensuring transparency. Each vote gets recorded as a transaction and can be viewed and verified by all. 

The rise of Web3

All of these use cases, when put together, are contributing to the emergence of Web3. While crypto is changing the world of finance, Web3 is using blockchain technology to do the same to the internet. 

Currently, in the Web2 world, websites are hosted on a single server. The owners of these servers have access to user data and get to control which users are allowed to use their services. 

In contrast, Web3 involves storing data across a network of computers (think nodes in the case of Bitcoin). No individual has the power to restrict access to these apps. 

Take social media, for example. While Instagram and Twitter are able to moderate the content posted on their platforms, there would be no such censorship controlled by a centralised authority in the Web3 world. 

It remains to be seen whether Web3 is here to replace Web2, or if the two will coexist in harmony. However, one thing’s for sure: the internet will never be the same again. 

This is only the beginning of a six-part series which will help you navigate the world of crypto, NFTs, and blockchain with ease. While you wait for the next edition, head over to Luno Discover for some no-jargon learning and should you like bite-sized education pieces, subscribing to Luno’s Telegram channel and following them at @luno_sg on Instagram might suit your needs better.

This article is part of a six-part series to a no-hype beginner’s guide to crypto. You can check out the other articles here:

– Part 2: Types of coins and its risks
– Part 3: NFTs, GameFi, DeFi
– Part 4: Stablecoins
– Part 5: How to ‘DYOR’
– Part 6: Free crypto tools

This article is written in collaboration with Luno.

This partnership between Vulcan Post and Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the MAS under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in  Luno’s Risk Warning.

Featured Image Credit: Deloitte via Quartz

Also Read: Just got started on crypto? Here are the top 5 mistakes made by S’porean beginners

Are you a beginner in crypto? Here are 6 notable Bitcoin price predictions you need to know

13 years have passed since Bitcoin was first created. Back then, the only people who were interested in Bitcoin were coders and scholars. Today, there are more beginners in crypto than ever. 

However, the Bitcoin we know today is vastly different from when it first started. More crypto beginners have at least heard of the term “Bitcoin” and are exposed to terms like “NFT” on social media. 

In reality, it is tough to predict the price of Bitcoin since it is so volatile. However, it has not stopped people from predicting its price. 

Let’s take a look at some famous Bitcoin predictions that were made in the past, and see if they hold water.

1. Hal Finney, first recipient of Bitcoin from Satoshi
Prediction: US$10 million per coin

While it is easy to buy Bitcoin on crypto exchanges these days, it was difficult back when Bitcoin first started. 

In 2009, the first-ever Bitcoin transaction took place, with Hal Finney receiving Bitcoins directly from its creator Satoshi Nakamoto. With his knowledge of computer science, he was able to understand the significance of Bitcoin. 

To reach Finney’s US$10 million prediction, Bitcoin has to become the world’s dominant payment system. 

With this huge demand for Bitcoin, there will not be enough Bitcoins as there is a limit of 21 million Bitcoins in circulation. The price of Bitcoin will then explode and reach US$1 million. 

While his prediction sounds reasonable, his biggest assumption was that all the cash in the world will be replaced by Bitcoin. No more cash, just Bitcoin. 

No one knows if this will take place. Yet, we see more countries adopting Bitcoin recently. For example, El Salvador has adopted Bitcoin as an official currency. Other countries like Malaysia and Switzerland are also following suit. 

Perhaps, his assumption is not far off after all. 

2. ARK Invest’s bold Bitcoin prediction in 2022
Prediction: More than US$1 million by 2030

What do famous institutional investors like Cathie Wood think about Bitcoin’s price? 

According to Ark Invest’s latest report, Bitcoin could exceed US$1 million in less than 10 years.

ARK Invest usually conducts its research using data and industry trends based on their yearly report.

Their reason for this prediction is that investors are “HODL-ing”, which is to buy and hold on to a coin for a long time. ARK Invest’s data shows that investors are more focused on Bitcoin’s long-term value. 

Bitcoin’s long-term applications include providing a remittance network or acting as a reserve currency. Companies like Tesla have already been holding their reserves in Bitcoin. 

By analysing the market size of these use cases, it gives us a more systematic estimate of Bitcoin’s potential price. 

3. John McAfee: Iconic prediction with an unusual bet
Prediction: US$1 million per coin by 2020

When talking about Bitcoin price predictions, we have to mention John McAfee’s wild predictions. You may know his name from the anti-virus programme McAfee. 

McAfee is certainly eccentric. According to Ethereum creator Vitalik Butalik, John McAfee’s claim was the worst bull prediction. As we laugh at overconfident predictions that went horribly wrong, we can deter people from making ridiculous claims like McAfee’s.

In 2017, McAfee made a big bet that Bitcoin’s price would hit US$1 million by the end of 2020 – if not, he would consume his genitals on TV. 

When 2020 rolled in, he backtracked on his prediction, not expecting anyone to believe such an absurd claim. Rather than feeling betrayed, many investors were amused instead.

Regardless, he has become quite an icon among crypto fans.

4. “Bitcoin is dead” – A common claim since 2011

While optimistic predictions are fun to explore, skepticism is vital for the success of any revolutionary technology. 

When the Internet was first introduced, it was met with much denial. In today’s world, the Internet has become essential. Bitcoin is no exception, especially to those who are unfamiliar with it.

“Bitcoin is Dead” was created to tell Bitcoin’s story and progress through the lenses of its most notable critics. To tell the story of Bitcoin, we need to include both critics and supporters.

When Bitcoin was worth about US$17 in 2011, a Forbes article predicted that it was the end for Bitcoin.

When Bitcoin was worth about US$4,000 in 2019, the most popular prediction was that Bitcoin is going to hit zero.

Despite its critics, Bitcoin is still in favour by many institutional investors today. Since the peak of negative news in 2017, there have been lesser of such news reported. In addition, with more unique addresses and higher adoption, Bitcoin is still thriving. 

5. Shark Tank’s “Mr Wonderful” Kevin O’Leary
Prediction: “A giant nothing-burger”

Not everyone is optimistic about Bitcoin. One of the investors on Shark Tank, Kevin O’Leary, thought Bitcoin was a “nothing burger”. Even back in 2019, he didn’t believe that there is any value in Bitcoin. 

Despite his past pessimism toward Bitcoin, he actively invested in crypto in 2021. In fact, close to 3 per cent of his entire portfolio is in crypto. He revealed that he has a large portion of Ethereum, while owning other coins such as Bitcoin. 

When investors reconsider their outlook on Bitcoin, they may decide to invest as well.

6. Apple co-founder Steve Wozniak chips in on Bitcoin’s price
Prediction: US$100,000

Apple’s legendary co-founder, Steve Wozniak, has expressed his opinion on Bitcoin’s future price. Based on the growing interest in crypto and his intuition, he expects Bitcoin price to eventually hit US$100,000.

To him, Bitcoin is unique because it is designed with mathematics in mind. No one controls Bitcoin – not by a known creator or by a company. It runs purely on mathematics. 

It’s impossible to predict Bitcoin’s price

With the extreme volatility in Bitcoin, it is almost impossible to predict its prices. Not even famous investors, esteemed engineers, or Bitcoin enthusiasts can accurately pinpoint its prices.

Regardless, it is still interesting to look back at the iconic price predictions and see how far we have come.

When US$1,000 was the all-time high Bitcoin price in 2013, the price of US$10,000 seemed absurd. As such, Bitcoin reaching its new all-time high of US$69,000 just last year seemed like a miracle.

Despite all the doubt that surrounded Bitcoin over the decade, Bitcoin is still thriving today. Perhaps the US$100,000, or even the million-dollar predictions, are not so crazy after all.

Considering that Bitcoin still has the potential to grow, it is not too late to learn more as a beginner in crypto.

If you are looking for more crypto beginner tips, Luno has a beginner-friendly learning portal where you can get all your crypto 101 questions answered. You can learn more about the origins of Bitcoins and the difference between Bitcoin and Ethereum – all packed in bite-sized videos for your easy viewing.

Featured Image Credit: The Facts Genie

Also Read: Just got started on crypto? Here are the top 5 mistakes made by S’porean beginners

Just got started on crypto? Here are the top 5 mistakes made by S’porean beginners

According to a survey by Finder.com, the cryptocurrency adoption rate in Singapore increased by 0.2 per cent in just two months. As a whole, close to 16 per cent of Singaporean adults own cryptocurrencies, while the adoption rate in the USA is only at 10.5 per cent. 

Globally, 55 per cent of all Bitcoin investors got started just last year, according to Grayscale’s research. 

If you have bought Ethereum recently, perhaps you are contributing to the fact that Singapore has the highest adoption rate of Ethereum in the world, ranking first among 27 countries.

But what do all these numbers mean? 

With a higher cryptocurrency adoption, it means that Singapore now has more crypto beginners. 

Crypto is still relatively new, and many beginners tend to make mistakes. However, regardless if you are a new or seasoned crypto trader, we can always benefit from some tips. 

Here are five common rookie mistakes when it comes to crypto trading:  

#1: “I’m investing because I heard about it from someone.”

This is a common strategy when getting started. Most beginners get introduced to crypto through friends and family. They tend to buy coins based on others’ recommendations, without doing prior research on the coins and companies. 

What’s wrong with investing without research? Without a solid understanding of the network and coins, it is easy to fall prey to scams. 

In fact, there is a popular term in crypto called ‘DYOR’, which means Do Your Own Research. Doing due diligence before investing in any crypto coin is the best solution to avoid scams.

You need to take note of these following factors when conducting your crypto research:

• Management team – Actively avoid any company with an anonymous CEO. Find the founders on LinkedIn, and look out for their past experience.
• Whitepaper – Admittedly, some whitepapers are too technical for a beginner to understand such as the Bitcoin whitepaper, but it is still important to read. Essentially, you should understand the coin’s main use case and the value it can bring. If the academic papers make your head spin, there are many online resources to help you understand basic concepts.
• Buzzwords – Web 3.0, AI, Metaverse, and other buzzwords are usually used loosely. If the company has all these generic buzzwords without a concrete plan, it likely is a bad project.
• Community – Most coins rely on their community to support the project. Go through the social media channels of the coins. Do they have an active and healthy community on platforms like Telegram?

#2: “Why was the transaction fee so high?!”

Hidden charges can be frustrating. It is dizzying to deal with all the fine prints about extra fees, especially for a beginner. 

Buying with your debit card? There are extra deposit fees. Staking your crypto on the platform? There is an agent fee. Withdrawing your coins to another platform? There are withdrawal fees, on top of gas fees.

There are different types of transaction fees on different platforms, so here is a breakdown of the most common fees on crypto platforms.

The first is transaction fees, which could be a flat fee or percentage fee. 

For the flat fee model, you pay a fixed fee for any amount you buy or sell. This is good if you are transacting a big amount of crypto. For the percentage fee model, you pay based on the size of your trade. Sometimes, this is reduced by using the native token of the platform.

The second type is spread, which can be difficult to distinguish as a beginner. The spread refers to the difference between the maximum amount a buyer is willing to pay and the minimum amount a seller is willing to let go of the same asset. 
Depending on the liquidity of your crypto, the percentage spread can range anywhere from 0.1 per cent to over 10 per cent. The higher the daily volume and number of transactions on the platform, the lower the cost of spread.

Last but not least is withdrawal fees. Whether it is selling cash or transferring your coins, it is important to find out how much it costs to withdraw when choosing a platform. Usually platforms have a one-off fee for withdrawal – it may be a flat fee or a percentage of your withdrawal.

To transfer your coins to another platform, the withdrawal fees for each coin are often different. Remember to check the rates before transferring. On top of that, there are network fees (such as gas fees) to consider when transferring coins out of a platform.

#3: “I only buy one coin.”

Fundamentally, there is nothing wrong with only buying one coin. However, putting all your eggs in one basket gets risky.

Between the safe and speculative cryptocurrencies, you should consider striking a healthy balance. 
Safe coins are usually identified as coins with high market capitalisation. For example, the top three coins at the moment are Bitcoin, Ethereum and Ripple. 

Speculative coins can be even more volatile since the price can be easily influenced by investors with deep pockets, commonly known as ‘whales’.

For reference, a typical Singaporean’s portfolio is a mix of mostly Bitcoin, Ethereum, Cardano and other coins. 

With the above list, you can explore different categories of crypto, understand more about each coin and diversify your holdings.

#4: “I just keep my coin in the wallet.”

Keeping the wallet is a safe choice, but you are not maximising the potential of your coins. Like cash sitting in your wallet, it does not gain interest.

Here are some lucrative ways to use your coin:

• Stake – By staking your coins, you gain passive income through the interest rates. Some platforms want you to lock up with coins for a certain period of time, usually one to three months on the platform. With bank rates falling after the pandemic, the interest rates on crypto staking is a good alternative.
• Buy digital assets – You can use your coins to buy digital assets. For example, Ethereum can be used to buy digital art in the form of non-fungible tokens (NFTs). You can also buy digital real estate. Prices in the metaverse have skyrocketed recently due to the growing media interest and a large number of new investors entering the space.
• Vote – Some projects allow you to have a say in the development of the network. For example, Polkadot allows token holders to vote for their logo rebranding.

#5: “I don’t know how to sell my crypto.”

Buying on a platform is usually the easiest part. Getting your money out into your bank account is the tough part because the process to withdraw your profits is rather unintuitive.

Here are some common methods to withdraw your crypto into fiat, such as SGD in Singapore:

• StraitsX: They make use of a stablecoin, XSGD that is backed by Singapore dollars. 1 XSGD on the blockchain represents 1 SGD in StraitX’s bank account.

  You can sell your crypto and convert it to XSGD, before transferring it into your StraitsX account. They will then transfer that money straight into your local bank account through FAST transfer. 

• Bank transfer: Without StraitsX, you can also send fiat into your bank account through bank transfers. Some platforms offer direct bank transfers, making it truly easy for anyone to withdraw money. These direct bank transfers are safe, easy, instant and have no fees.
• Crypto card: Some platforms offer cards that allow users to spend the crypto. Usually, you can convert your crypto to fiat in advance, or the system converts the crypto automatically as you pay. With the card, you can spend in stores like any Visa or Mastercard debit card.

Get more of your crypto questions answered

As a beginner, the world of crypto can be daunting. Navigating past buzzwords, hidden fees and unintuitive features, your crypto journey will be rewarding. 

In summary, you should keep in mind these top five mistakes:

• Blindly following others’ advice
• Not knowing the different types of fees 
• Only buying one type of coin
• Not diversifying the types of digital assets 
• Being clueless about withdrawal from your crypto account

The future of money is in crypto and many people are joining on board, and the best way to learn more is to try it out for yourself.

If you are looking for more crypto beginner tips, Luno has a beginner-friendly learning portal where you can get all your crypto 101 questions answered. For instance, you can learn about the origins of Bitcoins and the difference between Bitcoin and Ethereum, all in bite-sized videos for your easy viewing.

These tips should help any beginner be more comfortable with crypto, so all the best on your exploration of cryptocurrencies! 

Featured Image Credit: Shutterstock

Also Read: Cryptocurrency 101: Here’s a guide on how to easily buy and invest in Bitcoins

Year in review: Here are the key happenings in the crypto world for 2021

The end of 2021 is drawing near. As we wrap up the year, we figured it’s timely to look back at the cryptocurrency developments for the past year, which has undoubtedly seen a growing interest.

In fact, 2021 was a wild year for crypto. With many events happening in the crypto space, could this year possibly be the tipping point for cryptocurrencies?

Let’s start with the key statistics for 2021. Firstly, there was a rising search trend for crypto.

According to the top Google searches in the news category, “Dogecoin” and “Ethereum Price” were listed as the top 10 searches.

Elon Musk’s tweets on Dogecoin also had a role to play in this surge in interest for the “meme coin”. This means that more beginners are starting to get interested in cryptocurrencies.

Cryptocurrency is also a popular topic on Reddit, with about 6.6 million mentions on the website this year.

Secondly, Bitcoin’s pricing witnessed an all-time high in 2021.

In 2020, Bitcoin broke US$20,000 and had an all-time high of almost US$30,000. This year, Bitcoin surpassed expectations and had an all-time-high price of close to US$70,000.

Can Bitcoin pass the US$70,000 barrier next year? With the exponential growth of Bitcoin and its adoption, it is definitely exciting to observe the prices in 2022.

Now, let’s look back at the iconic moments throughout the year.

1. The year started with an NFT boom

In January, we started the year with a trending topic that would last the entire year: non-fungible tokens (NFTs).

NFTs are digital tokens that represent something unique and linked to the blockchain. NFTs have value as they are able to prove the authenticity of digital or physical items. Most importantly, the NFT cannot be altered or replicated.

The most expensive NFT in 2021 was Everydays By Beeple, which was sold for almost 40,000 Ether (equivalent to almost US$69 million).

Gaming with NFTs has also gained traction in 2021, and the best example is Axie Infinity.

Axie Infinity is an NFT-based game inspired by Pokemon and Tamagotchi. You can play-to-earn by trading, battling or even breeding new adorable characters called Axies. Each Axie is unique and represented by NFTs.

To play the game, players need to assemble a team of three unique Axies to take part in battles. These Axies can be bought on the Axie Marketplace with Ethereum (ETH).

As of October 2021, there were over two million monthly active users using the game, which led to an impressive 953 per cent monthly volume growth. Furthermore, the price of the AXS token skyrocketed in 2021, from US$6 at the end of June, to an all-time high of US$150 in November 2021.

The game is so profitable that some players are able to make more than an average worker’s wage in their country by playing the game.

NFTs are mainly used in the art and gaming scene. Recently, NFT characters are also making rounds on the internet. Have you seen these pixelated cartoon characters as profile pictures on social media?

These “cartoons” are actually part of the limited edition NFTs that are released. The most popular series are the Bored Ape Yacht Club, Crypto Punks and Crypto Kitties. 

For example, there are only 10,000 Bored Ape NFTs in circulation and no more of such NFTs are made on the blockchain. One of the rare Bored Ape Yacht Club NFT was even sold for US$3.4 million.

Usually, these NFTs are hosted on Ethereum networks. This means that you have to buy an Ethereum token (ETH) – which can be bought from a platform like Luno – to purchase NFTs on marketplaces like Opensea or Mintable. 

2. “I’m in” – More companies start to adopt crypto

With more attention dedicated to cryptocurrencies, companies are taking it more seriously. There are many ways that companies were involved.

For one, Tesla and Square both hold reserves in Bitcoin. Tesla announced in February that it bought US$1.5 billion worth of Bitcoin, holding them as reserves. Shortly after that, Square also bought US$170 million worth of Bitcoin as reserves. 

This is a breakthrough as it shows institutions and individuals that Bitcoin can be a form of reserve asset, similar to gold. Bitcoin is commonly known as digital gold, as it has a limited supply and it is impossible to counterfeit.

Additionally, Adidas and Nike have joined the metaverse sneaker wars. 

Adidas collaborated with Bored Ape Yacht Club for their “Into The Metaverse” project, allowing fans to buy limited edition Adidas merchandise as an NFT. Nike has also bought a company that makes virtual shoes and sneakers.

This might seem bizarre – afterall, why would we even need virtual shoes? Like a pair of Nike shoes in the real world, the limited edition shoes are a status symbol and a way to stand out from the crowd.

As more companies move towards the metaverse in the near future, these brands are making a move to establish themselves in the space.

3. Countries are getting involved with cryptocurrencies too

As we see more companies adopting cryptocurrencies, countries also want a slice of the action.

Of course, we cannot miss out on one of the biggest news of the year: El Salvador and its Bitcoin adoption.

In September, the government of El Salvador sent shockwaves throughout the world when they announced that they now accept Bitcoin as their national currency, making it the first-ever country to adopt Bitcoin as legal tender. 

The opinions on this move were divided. On one hand, the price of Bitcoin fluctuates more than normal fiat currency, which makes it risky to buy daily groceries with Bitcoin. 

On the other hand, we can see how it is possible to adopt Bitcoin as a payment system and national currency.

4. Development of Central Bank Digital Currencies (CBDC)

Talking about national currencies, we have to also mention the CBDCs. CBDC is a digital currency that is run on the blockchain developed by central banks.

Although there isn’t one currency that dominates the industry, the most notable project is the Digital Yuan in China. The central bank of China already had trials in several cities like Shanghai.

Since most Chinese are already using e-payment on a daily basis, the transit to a CBDC would be an interesting one.

Other notable CBDC projects are the Project Ubin in Singapore and the Digital Euro in Europe.

2021 has been a busy year for crypto

The search results have proved that there has been a growing attention on cryptocurrencies. Companies have started to use Bitcoin as a reserve, and countries are also experimenting with Bitcoin and other cryptocurrencies.

As consumers, governments and companies are all getting more involved in cryptocurrency this year, we might be witnessing the tipping point for cryptocurrency adoption in 2021.

It is clear that cryptocurrency will play a significant role in the coming years through the massive levels of adoption across all areas. As such, now’s the best time to learn some of the basics and get yourself started on crypto.

If you want to learn about crypto but don’t know how exactly to go about it, Luno has a beginner-friendly learning portal where you can get all your crypto 101 questions answered.

You can learn about the origins of Bitcoins, and the differences between Bitcoin and Ethereum through bite-sized videos. You can also learn about Bitcoin and other major coins through Luno’s education portal.

To get started, simply create an account with Luno, which offers free and fast deposits so you can quickly get your hands on some Bitcoins. 

You can buy Bitcoins at a low transaction fee of 0.75% and earn up to 4% interest on your BTC and ETH on the Luno savings wallet. To understand more about how to easily buy and invest in crypto, check out this guide here. 

Featured Image Credit: eamesBot via Shutterstock

Also Read: Cryptocurrency 101: Here’s a guide on how to easily buy and invest in Bitcoins

Cryptocurrency 101: Here’s a guide on how to easily buy and invest in Bitcoins

Interest in cryptocurrency, like the price of Bitcoin, has risen to new heights in recent times. With all the buzz surrounding cryptocurrencies lately, perhaps you’re wondering if it’s time for you to take notice of this booming industry. 

On the corporate end, an increasing number of companies are already making their way into the crypto scene.

Twitter has recently become the first major social network to allow its users to ask for tips in Bitcoin, while Paypal has introduced a function for users in the US to buy, sell and hold Bitcoin, Ethereum, Litecoin and Bitcoin Cash via the platform. 

Closer to home, Singapore has emerged as a key blockchain and crypto hub in Asia as many companies jump on the bandwagon. 

Local ride-hailing app Ryde, for instance, lets its customers pay for rides with Bitcoin, which can be converted to RydeCoin at zero transaction fee.

DBS Bank, Southeast Asia’s biggest bank, has launched a crypto exchange in December 2020, and OCBC recently expressed its interest to pursue the same move.

Needless to say, the growing level of adoption — both locally and globally — indicates that cryptocurrency is here to stay and it’s going to be impossible to ignore. 

How do I learn about cryptocurrencies?

For a first-timer, getting into cryptocurrencies can be rather intimidating. Even for experienced cryptocurrency investors, the space can feel like you’re swimming in a sea of information, with no idea on how to filter for accuracy or quality. 

Questions like “What is Bitcoin mining?”, “Why are there only 21 million Bitcoins”, “Can I buy half a Bitcoin?” and “What will happen when all the Bitcoins are mined?” are just some of the intuitive (and important questions) that will pop into your mind as you explore this space.

The good news is that Luno, a leading global cryptocurrency platform, has a few mediums where you can get access to bite-sized, digestible information on cryptocurrencies and key updates in the industry.

1. Luno Blog

Luno’s blog page is a great source of information that offers the latest news, events and research regarding the crypto industry. If you’re looking to catch up on the latest crypto happenings worldwide, this is an excellent place to start. 

2. Luno’s Learn Page

With articles and explainers ranging from “Where did Bitcoin come from?” to “What is the difference between Bitcoin and Ethereum?”, Luno’s Learn Page is a one-stop hub that seeks to address all your burning questions about cryptocurrency.

It also features a glossary of all the terms that you need to know in your cryptocurrency journey, from Altcoins to learning about token standards like ERC-20. 

3. Luno’s YouTube channel 

It’s common knowledge that YouTube is a veritable treasure trove of knowledge and information, and it’s no different when it comes to cryptocurrency.

Luno’s YouTube channel is an amazing source of information on all things crypto, from Bitcoin to smart contracts — all presented in a quick and interactive video format in bite-sized durations. 
Now that we’ve talked about how to learn about cryptocurrencies, the next step is, how do we get started on buying cryptocurrencies? 

Get started with Luno in three easy steps

One of the best beginner platforms to buy your first cryptocurrency is Luno.

Its beginner-friendly platform, intuitive user experience and easily available learning content have rocketed them into the forefront of public awareness when it comes to crypto investing. 

Using the Luno app, you can buy cryptocurrencies such as Bitcoin and Ethereum from as low as S$1, at a low fee of 0.75 per cent.

To illustrate how easy it is to buy crypto via Luno, even as a first-timer, here’s a step-by-step guide on using the platform. 

1. Deposit SGD via bank transfer or digital wallet

Depositing your money into Luno is easy. Once you are signed into the platform, click “deposit” and the platform will guide you on how to securely transfer your SGD.

Luno allows you to deposit your money quickly by doing a direct bank transfer using any SGD bank account, or a digital wallet like StraitsX.

2. Buy your favourite cryptocurrency directly on the main page

Now that you have some SGD in your account, all you have to do is select your favorite cryptocurrency to buy. You can choose from Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH) or USD Coin (USDC).

In addition to a once-off purchase, you can also set up recurring cryptocurrency purchases on a daily, weekly or even monthly basis, so you can consistently invest like a clockwork without lifting a finger. 

3. Create a savings wallet to get passive returns on your Bitcoin or Ethereum

Another cool feature of Luno is its Save feature. Just like earning interest on your cash with the bank, Luno’s Savings wallet lets you earn up to four per cent interest on any BTC or ETH stored in it.

Your earnings are then paid in Bitcoin or Ethereum directly into your Savings Wallet at the beginning of every month. You can then choose to withdraw your earnings, or leave them in your Savings Wallet to compound and grow exponentially. 

Now that you’ve had your first taste of cryptocurrencies, it’s time to sit back, relax and enjoy your well-deserved returns.

To learn more about the exciting features that Luno has to offer, you can check out their website here. 

Featured Image Credit: Reuters / Luno

Also Read: How these S’poreans built a fintech startup that now leads the payments, crypto space in SEA

We Dive Into The Regulated Cryptocurrency World With Just RM3 Through This App

The Luno app was recently re-launched in Malaysia and I took it as a sign that it’s time to dip my toes into cryptocurrency. 

Luno is the first cryptocurrency exchange in Malaysia to be fully approved by the Securities Commission (SC).

To put it in legalese, this means that they function as a Recognised Market Operator (RMO) that offers cryptocurrencies through a Digital Asset Exchange (DAX) that is legal, licensed, and regulated.

Getting On Board The Crypto Express

Registering on Luno is easy, but there were a few steps for me to go through before I could start buying crypto on the app.

Just like most e-wallet apps, I will have to verify that I am a real person by submitting identifying documents such as IC, Driver’s License, and a selfie to match it up. Registration could take up to two days and in my case, it did.

Then, all I had to do is to purchase Bitcoin (BTC) or Ethereum (ETH) and start investing.

All About The Right Investment

After being recognised as a real user, I could then buy BTC from the app. While the minimum deposit amount is RM1, I needed to have at least RM3 in the wallet to be able to purchase BTC.

That was my very first taste into the world of crypto. 

Right after, I tried to see if I could sell my RM3 investment for a quick profit as I saw the price going up, but it turns out I’ll need at least 0.0005 BTC in my account before I could sell (which equals to RM15.01 at the moment of writing).

If I wanted, I could also enable sending crypto to other users. But in order to reduce the chances of phishing or scamming, the Luno team advises users to turn it off when not used.

I also had to wait 24 hours before the feature was enabled. So, I tried sending my colleague who has a Luno account via his mobile number and it was instantaneous and free. Sending to a BTC address will incur charges though. 

This is just one of the many safety measures that Luno has in place. With their history with building cryptocurrency systems for banks, the team is confident of their bank-grade security systems. 

I could also activate two-factor authentication (2FA) to authenticate all my purchases, aside from the four-digit PIN that I created when registering on the app.

On Luno’s side, they have a security system comprising of two elements: 

• multi-signature deep-freeze storage
• multi-signature hot wallet 

Simply put, these solutions take parts of the user’s private keys, then stores it in different places—physically and digitally. In layman’s terms, hackers will have to go through multiple layers of security to obtain access to the wallet.

If I wanted to trade, I could place an order for the amount of BTC or ETH that I wanted to trade as well as the price that I want to trade it for. Then, it’s just a game of waiting to see if other users would meet me halfway and trade with me.

All The Comings And Goings

In my own experience, transferring from a bank to the wallet will take around an hour or two to get approved.

So, I decided to top up my Luno wallet with an additional RM27 and try to see if I could make some quick bucks investing into crypto.

The market was not in my favour that day—if I were to sell, I would lose a few cents (my total was RM30 invested).

Also, when depositing to Luno, they have a warning to not deposit the same amount within 24 hours. This is an industry-standard warning to prevent some common scamming tactics.

That said, the whole buying and selling process is super easy and hassle-free, but I’d wish to see the transaction process sped up. I could foresee someone wanting to jump into investing when it’s low, but by the time they are able to buy, the price shoots back up.

The Luno team mentioned that the process takes time because the team takes security very seriously and they want to ensure that there are no anomalies during the transfer. 

Transferring the monies from my Luno account to my bank account could also take up to two to three business days as well.

According to the team, they are only currently supporting BTC and ETH with Ripple (XRP) support coming in the near future.

Invest Now, Features Later

While Luno can’t be used as a credit card replacement, I could still use it to deposit and withdraw actual ringgits on the account then use the money to buy stuff from my bank.

Speaking to the Luno team, they mentioned cryptocurrency is still in its early stages and they’re fully focused on educating the public.

They believe crypto is currently an instrument for investment, similar to digital gold—for now. The team has plans to add more features in the future as the public increase their knowledge of cryptocurrencies.

Personally, I found Luno to be a newbie-friendly app to start a cryptocurrency adventure with. They also have some extensive guides on what to do if a user wants to learn more about crypto.

Even as a newbie, I was able to purchase and trade crypto without much outside help.

I did keep in mind, as per most investments, that it is not advisable to dump all your fortunes into a single entity. As the saying goes: “Don’t put all your eggs in one basket.”

• Find out more about Luno here.
• Use promo code 4TCSYM to get RM25 when you buy or sell RM250 worth of Bitcoin on the app. (You could also use this link.)

Also Read: The Education Industry Needs To Jump Onto The Entrepreneurial Bandwagon. Here’s How.