Mainnet madness... turning your VEN to VET

A number of currencies have recently undergone "mainnet swaps" - where they move from one underlying infrastructure to another.

VeChain has recently moved from running on the Ethereum blockchain (a.k.a. a ERC-20 token) to its own blockchain called VeChainThor.

This means that any VEN tokens bought from us prior to 25 July will need to be converted to VET or they will become completely worthless.

Here's how to do that:

OPTION 1 (available now)

  1. Get your VEN in to a hot wallet. If your VEN is in an Easy Crypto Portfolio file, you will need to import it in to a hot wallet like MyEtherWallet
  2. Create an account with LBank
  3. Send your VEN (a.k.a. VET-ERC20) to your LBank account - remember you will need some ETH in your MyEtherWallet to be able to send the transaction
  4. Request LBank to convert your VET-ERC20 to VET (for a step-by-step see the instructions here under "Performing token swap")
  5. Sorted! You can now move your VET to a paper wallet, a hardware wallet, or to the official VeChainThor Wallet, where you will be able to earn VTHO

If you wish to do this route, we recommend doing the swap promptly, as there is no guarantee how long LBank will continue offering conversion of VEN tokens.

OPTION 2 (available from 10 August)

  1. Download the official VeChainThor Wallet
  2. Follow the instructions provided here, under "Method B"
  3. Under step 4, you will need to first move your VEN from your Easy Crypto Portfolio to a hot wallet like MyEtherWallet (MEW). Once you have imported your VEN to MEW, you can send from MEW to your VeChainThor Wallet.  Remember you will need some ETH in MEW to be able to send the transaction

 


Ripple 101 - understanding XRP and the Ripple network

Ripple (XRP) is a centralised cryptocurrency, that aims to make it faster and cheaper to send money around the world. While most cryptocurrencies try to get far far away from governments, banks, any form of central control, Ripple is the opposite. Ripple is trying to work with the old school banking system to change the way international payments work.

What's good about Ripple?

  • Fast - 4sec (compared to 2min for etherum, 10min+ for Bitcoin, and 1-5 days for traditional cross-border payments)
  • Scalable - can (theoretically) scale to handle same volumes as the Visa network 
  • Cheap - currently it costs 0.00001 XRP (just fractions of a cent) to send a payment on the network

What is Ripple?

The structure around Ripple is more complicated than most cryptocurrencies, and "Ripple" can actually mean a few different things: 

  1. First there's Ripple the currency, or XRP as its known for trading
  2. Then there’s the privately held company behind the currency, known as Ripple Labs
  3. Finally there are the Ripple networks, or the infrastructure and systems created by Ripple Labs. These are known as XCurrent, XVia and XRapid and they all do different things.

So when we talk about buying “Ripple” what do we actually mean? We’re talking about buying XRP. It’s interesting to note that Ripple Labs holds 60% of all XRP, and the founders of Ripple own 20%. So only 20% of XRP is actually out there on the market.

What does it mean to be "centralised"?

Ripple is built on blockchain technology, just like Bitcoin. Unlike Bitcoin, however, Ripple is centralised. This means that only a limited number of users/computers (known as "nodes") can validate the transactions on the network. The Ripple network has 55 nodes, and these nodes are appointed by Ripple Labs. For comparison, there are no limits on the number of nodes on the Bitcoin network, and anyone can opt-in to be a Bitcoin node.

What's the outlook for Ripple?

Ripple has had a wild ride, going from an all-time high of USD$3.29 in January 2018 to just USD$0.45 in April 2018 and the future outlook for Ripple is anyone's guess. The size of the international payments pie is enormous, and due to network effects, the blockchain solution that gets there first would be capturing a large and valuable market. So the potential for Ripple is significant.

However, for XRP to sky-rocket again, Ripple Labs will need to gain traction with the banks, ward off competitors such as  Stellar Lumens and SWIFT, and clarify exactly how XRP forms part of its payment solution.

It's definitely an interesting cryptocurrency, and one that sparks significant debate between Ripple's fans and detractors. And of course, if you do want to buy Ripple, Stellar or other cryptocurrencies, you can do that right here.

 

This article is not financial advice. It is purely for information only and is based on the author’s understanding and research, but we cannot guarantee the accuracy of any statements made. We strongly recommend that you do your own due diligence before purchasing any cryptocurrencies, and make sure that you are fully aware of the risks involved. 


Tax and cryptocurrencies

There's been a lot of uncertainty around how cryptocurrencies should be treated for tax purposes - cryptocurrencies and blockchain technology were not even conceived when our current tax legislation was written, and they don't neatly fit any of the categories. This uncertainty has improved recently when IRD published guidance to explain how New Zealand's existing tax laws should be applied to bitcoin and other cyrptocurrencies.

The key message is that cryptocurrency should be treated like property for tax purposes. The impacts of this are that:

  1. GST applies on cryptocurrency transactions
  2. Income tax will normally apply to any sale of cryptocurrency - whether sold for NZD/USD or traded for another cryptocurrency

GST on cryptocurrency

Under the GST Act, there are only three categories of things that can be bought or sold - goods, services, and money. While there is no GST applicable on the sale of money (kinda obvious!) cryptocurrency is not the legal tender of any country and therefore cannot be classed as money. Cryptocurrencies also don't meet any of the current classifications of GST exempt goods or services, so by default GST is payable on bitcoin and other cryptocurrency.

Q: Do I need to pay GST on cryptocurrency I purchase?

A: It depends. Usually, the onus is on the seller to collect and pay GST on the transaction. But if you are buying from someone overseas then you are responsible for declaring GST on the value of imported goods. Given the non-physical nature of cryptocurrencies though, it is potentially unclear as to whether this provision would apply.

For someone who is trading cryptocurrency it's a little more complicated. We understand that the IRD is reviewing the GST status of cryptocurrencies at the moment, and we hope they will advise on this shortly.

When you buy through Easy Crypto we act as your agent. We buy from suppliers on your behalf, and for tax purposes it is as if you were buying from them directly.

Income tax on cryptocurrency

Just like any other activity that you do to make profit (running a business, trading stocks, setting up a lemonade stand) you need to pay income tax on the profits you make. Or, if you make a loss, this can be offset against tax you have paid in other areas (say the PAYE you pay on your salary).

Q. What if I haven't sold my bitcoin?

A. If you haven't sold your cryptocurrency, then no tax applies. However if you've moved your cryptocurrency from one coin to another, eg BTC to ETH, then that move is taxable. You will need to work out what the NZD value of the BTC was when you bought it, and then work out what the NZD value of the ETH was when you made the trade. The difference between those two NZD amounts is taxable.

Q. What if I made a loss on my trades?

A. That's unfortunate! But on the bright side, it means you can offset that loss against income you made from other sources. You do this at the end of the tax year, when you file your tax return.

Q. How do I actually do my taxes on cryptocurrency?

A. After the end of the tax year (31 March) you need to file an IR 3. In this you include all of the income you have made in the year from all sources (including wages, dividends, cryptocurrencies etc) and all of the tax you paid. The form then helps you calculate if you have paid too much tax, or not enough.

Need more help?

You may wish to talk to an accountant to help you sort out the tax you owe, or are owed on your cryptocurrency activities. We can recommend Tim Boyle, he knows a thing or two about cryptos and tax.


ERC20 tokens and your Easy Crypto portfolio

What is an ERC20 token?

An ERC20 token is any cryptocurrency or token that uses the Ethereum blockchain. There are quite a lot of them!

Ethereum was designed as a platform, that other cryptocurrencies could build on. There are now hundreds of different cryptocurrencies or blockchain projects that are run on the Ethereum blockchain. And you could build your own, if you wanted to!

Easy Crypto sells a range of ERC20 tokens including OmiseGo, Ziliqa and Icon.

Can I store ERC20 tokens in my Easy Crypto Portfolio?

Absolutely! Because ERC20 tokens use the Ethereum network, any ERC20 token can be safely stored in your Easy Crypto portfolio, just like Ethereum itself.

However, there is one catch....

...It's called Gas.

The Ethereum network has a fee (called "gas") for every transaction made on the network. These fees are only charged if you are sending your cryptocurrency to a new address. If you are simply holding your cryptocurrency there is no fee.

If you want to move your ERC20 token from your Easy Crypto portfolio to another address, you will need to have enough Ethereum at your address to cover the "gas" for the transaction. The price of gas varies, but is a very small amount, e.g. 0.0005 Ethereum.

How do I move ERC20 tokens out of my Easy Crypto Portfolio?

If there is an official wallet for your coin, then you should be able to "sweep" your private key into that wallet without requiring any gas. No gas is required because you are not moving your coins from one address to another, you're just using that wallet to access the coins at the address they are already at.

Alternatively, you can use MyEtherWallet. Again, you don't need gas to access your coins using MyEtherWallet.

However, you will need ETH for gas if you wish to send your coins to a new wallet address or to an exchange.


How to send more currency to your existing Portfolio

To make another order and send to your existing Portfolio, all you'll need is the coin's public address from inside your Portfolio.

Important: You can only send coins to an address of the same type of coin. Bitcoin can only go to a Bitcoin address. Only Ripple can go to a Ripple address, etc.

Here is an example using Bitcoin, but the same process applies to any of our coins.

1. Open your Portfolio, and copy the public address ("Your address") from your previous Bitcoin order:

2. Make a new order and choose the "My existing address" option:

3. Select Bitcoin as the coin you want to purchase, and enter a NZD amount.

4. Click Buy Now.

5. Paste in the Bitcoin address from Step 1:

6. Complete the order, and the funds will arrive into your same Portfolio address!

Please note: Your existing Portfolio file will not automatically update the balance shown when you open it. To check that you have received the funds, you'll need to click the link to "Check live balance":

Think of the Portfolio as a letter that we've sent you, where we've told you that we transferred $100 to your bank account (your public address). It also contains the password to your bank account (your private key).

Now imagine that a month later we send you another $500 to your bank account. The letter you have would still only talk about the $100 that we originally sent you, because the letter doesn't actually know anything about your bank account - it was just an informative one-time thing.

Well that's exactly how our Portfolio works! It's just a highly secure way to send you some information. But it isn't able to know what the true balance of your account is, because only you have access to your account.

Now your next question might be to say "Well in that case, why don't you just send me a new letter with the updated balances?"

Unfortunately we can't do that either, because we have no way of knowing whether you have spent money from your account between letters. Only you have access to your true balances.

To verify your own balance, just click the link to check your live balance.

The address for each of your coins is inside your Portfolio, and it you can put your address into an online balance checker without any risk. Just take care: Do NOT put the private key into any online checker!! The key is what gives people full access to your money.


Using NanoWallet

NanoWallet is a very easy to use web wallet for Nano. You can import your private key (the Nano 'seed') directly into it to create an account.

Go to https://nanowallet.io/, and click Sign Up.

Choose Import your wallet with you seed:

Paste your private key into the box where it says "Enter your seed":

Import the key, write down the details that it gives you, and log in.


Using Electrum LTC wallet for Litecoin

Download Electrum-LTC from their official site: https://electrum-ltc.org/

When you load it the first time, it will ask you to create a default wallet:

Click Next then choose import from private key:

Copy and paste your private key from your Portfolio:

Click Next, and give it a minute or two to sync to the Litecoin network. Once it's done, you should see your transaction, and your balance in the bottom-left:


Stellar Lumens 101 - everything you need to know

Firstly, a bit of clarification on what we're actually talking about. "Stellar" is an open source network protocol for the exchange of "lumens" (the currency of Stellar). The technology is based on the Ripple protocol, but after years of development has mainly developed its own code.

The best things about Stellar (the network) are:

  • speed - average of 2-5 seconds per transaction
  • cross currency payments - Stellar's platform enables payments to be sent around the world, between any different currencies
  • social conscience - Stellar is a non-profit business and sets aside funding for initiatives that promote financial inclusion
How does the Stellar network operate?

Stellar is a platform that connects banks, payment systems, and people. External companies can integrate with their protocol to move money quickly, reliably and at a very small cost.

So what makes Stellar unique?

Stellar was developed as an alternative to what the Ripple network was trying to achieve. Ripple was focussing on the existing financial services industry and signing up companies (banks) as partners. Stellar is aiming more towards the developing world and use from the general population. However; Stellar can claim to have IBM as one of its partners.

The Stellar Development Foundation

In keeping with its objectives, the Stellar team created the Stellar Development Foundation. Through this Foundation an interesting initiative has been implemented aptly named the Stellar Partnership Grant Program. This program offers 2 million USD worth of lumens to an organisation that facilitates the improvement of the global financial landscape and promotes financial inclusion.

What are the main advantages of Stellar Lumens?

Lumens are transacted very quickly across the Stellar network. The speed of a transaction averages from 2 to 5 seconds to complete. This is achieved due to the process in which the transaction is verified. All the Stellar servers are in sync with each other and all have a copy of the Stellar ledger. When a transaction is sent these servers quickly work to verify and come to consensus (known as the Stellar Consensus Protocol) prior to delivering the lumens to the destination address. Due to having this protocol Stellar doesn't require miners like bitcoin, giving it an advantage in speed.

An interesting piece of history

Stellar Lumens was co-founded by the original owner (Jed McCaleb) of the first ever bitcoin exchange; Mt Gox. 

How do I buy Stellar Lumens (XLM)?

Easy Crypto have you covered. We assist you in buying lumens from start to finish. All you have to do is choose your amount and the lumens will be delivered straight into your portfolio. Click here to start buying now.

Want to know more?

If you would like to know more about Stellar Lumens have a look at their page here. To see more articles on cryptocurrency, take a look at our series on cryptocurrencies.


Dash 101 - what is Dash?

Dash is a popular digital currency that differs from Bitcoin in several ways. Launched in April 2014 the development team created the currency with maximum speed and low fees in mind. Dash is also known as 'Digital Cash'.

The best things about Dash are:

  • Strong governance, which makes it easier for Dash to innovate and adapt
  • Innovative features, like InstantSend and PrivateSend
  • Fast and cheap transactions

So what makes Dash different from Bitcoin?

The process in which Dash handles transactions differs from Bitcoin due to the introduction of 'masternodes'. Masternodes are an additional function of the Dash system that perform some interesting tasks such as allowing anonymous transactions and enabling voting on project funding ideas. To create a masternode a person requires 1000 Dash 'locked' in a wallet.

At the time of writing it is approximately $800,000 New Zealand Dollars to be able to run a node. This is to ensure that those involved with the Dash network have a vested interest and are incentivised to make the best decisions for the network.

What about mining?

Dash has traditional miners just like Bitcoin and they receive 45% of the reward for facilitating transactions on the Dash blockchain. Masternodes receive the other 45% reward for assisting with the network.

So who receives the last 10% of the reward?

Everytime a new coin is minted; 10% of the rewards are put into a Dash fund to allow the developers to fund new projects related to the coin. For example Dash could plan to set up its own ATMs using the rewards, which will help drive its mainstream push.

All development ideas must be voted on by masternode users. This creates a democratic process around the spending of rewards and the direction and innovation of the Dash network.

What are the main advantages of Dash?

As mentioned earlier, Dash has very fast transaction rates and low fees. The average transaction takes less than 5 seconds to complete. The average fee is around $0.50 NZD.

Plus there's cool features! While Dash transactions aren't automatically anonymous, you can select to make an anonymous transaction on Dash through a process is known as PrivateSend. While anonymity might not seem like an important consideration for your standard payment, remember that the blockchain record of transactions is fully open and transparent. This means that if you pay me, I can see where you got that money from, and what address it received funds from, etc etc. Anonymity allows us to have privacy around our financial transactions.

Dash has also InstantSend which allows payments to be confirmed in around one second. Compared to Bitcoin where confirmations can take around an hour, this makes Dash a much better currency for real world situations like retail stores, cafes and restaurants.

How do I buy Dash?

Here at Easy Crypto we make it easy for anyone to buy Dash from start to finish - just tell us how much you want, and we do the rest. 

Want to know more?

If you would like to know more about Dash check out the official site here.  Or check our their YouTube channel.

For more articles about your favourite (or soon to be favourite!) cryptocurrency click here for the rest of our cyrptocurrency 101 series.