ELI5: Babel and the gang Bitcoin Insider

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ELI5 - Why are the charts always the same- what is the mechanics that lead to price tracking Bitcoin?

ELI5 - Why are the charts always the same- what is the mechanics that lead to price tracking Bitcoin? submitted by curiousmoon to ethtrader [link] [comments]

[uncensored-r/Bitcoin] ELI5 GDAX Depth Chart

The following post by 3rdeyeopenwide1 is being replicated because the post has been silently greylisted.
The original post can be found(in censored form) at this link:
np.reddit.com/ Bitcoin/comments/7hb98m
The original post's content was as follows:
[removed]
submitted by censorship_notifier to noncensored_bitcoin [link] [comments]

12-03 18:32 - 'ELI5 GDAX Depth Chart' (self.Bitcoin) by /u/3rdeyeopenwide1 removed from /r/Bitcoin within 4-14min

'''
Please & thank you.
'''
ELI5 GDAX Depth Chart
Go1dfish undelete link
unreddit undelete link
Author: 3rdeyeopenwide1
submitted by removalbot to removalbot [link] [comments]

ELI5 GDAX Depth Chart /r/Bitcoin

ELI5 GDAX Depth Chart /Bitcoin submitted by BitcoinAllBot to BitcoinAll [link] [comments]

ELI5 everybody is saying bitcoin has crashed but the 6 month price chart says its up 200%? Why the discrepancy? /r/Bitcoin

ELI5 everybody is saying bitcoin has crashed but the 6 month price chart says its up 200%? Why the discrepancy? /Bitcoin submitted by BitcoinAllBot to BitcoinAll [link] [comments]

ELI5: How to read and analyze this chart /r/Bitcoin

ELI5: How to read and analyze this chart /Bitcoin submitted by BitcoinAllBot to BitcoinAll [link] [comments]

ELI5: Why does the price rise to $500 not appear on the Coinbase/Bitstamp charts? /r/Bitcoin

ELI5: Why does the price rise to $500 not appear on the Coinbase/Bitstamp charts? /Bitcoin submitted by BitcoinAllBot to BitcoinAll [link] [comments]

ELI5: The Bottom chart in Bitcoinity.org

I have read numerous explanations on it and still do not understand it.
submitted by MaidenBoots to Bitcoin [link] [comments]

Can someone ELI5 the bottom chart on Bitcoinity? Thanks

Can someone ELI5 the bottom chart on Bitcoinity? Thanks submitted by Abcdguy to BitcoinBeginners [link] [comments]

BTC reversal in progress - BREAKOUT

BTC reversal in progress... this might be the catalyst for a breakout. BTC formed a "Spinning Top" with a lower low on yesterday's daily candle. It closed above the 38.2% fib which is emboldening the bulls. If today's candle closes above the yesterday's ST high at 9850 that would indicate a trend reversal and make the breakout of the falling wedge likely. According to Bulkowski there is a break upward 68% of the time on falling wedges...
BTC Chart - spinning top/falling wedge
submitted by CryptoAho to CryptoCurrency [link] [comments]

/r/Bitcoin FAQ - Newcomers please read

Welcome to the /Bitcoin Sticky FAQ

You've probably been hearing a lot about Bitcoin recently and are wondering what's the big deal? Most of your questions should be answered by the resources below but if you have additional questions feel free to ask them in the comments.
Some great introductions for new users are My first bitcoin, Bitcoin explained and ELI5 Bitcoin. Also, the following videos are a good starting point for understanding how bitcoin works and a little about its long term potential:
Also have to give mention to Lopp.net, the Princeton crypto series and James D'Angelo's Bitcoin 101 Blackboard series. Some excellent writing on Bitcoin's value proposition and future can be found at the Satoshi Nakamoto Institute. Bitcoin statistics can be found here, here and here. Developer resources can be found here, here and here. Peer-reviewed research papers can be found here. Potential upcoming protocol improvements here. Scaling resources here. The number of times Bitcoin was declared dead by the media can be found here (LOL!), and of course Satoshi Nakamoto's whitepaper that started it all! :)
Key properties of bitcoin

Where can I buy bitcoins?

Bitcoin.org, BuyBitcoinWorldwide.com and Howtobuybitcoin.io are helpful sites for beginners. You can buy or sell any amount of bitcoin and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also, check out the bitcoinity exchange resources for a larger list of options for purchases.
Bank Transfer Credit / Debit card Cash
Gemini Bitstamp LocalBitcoins
Bitstamp Bitit Mycelium LocalTrader
BitFinex Cex.io LibertyX
Cex.io CoinMama WallofCoins
Xapo Spectrocoin BitcoinOTC
Kraken Luno BitQuick
itBit
HitBTC
Bitit
Bisq (decentralized)
Luno
Spectrocoin
Here is a listing of local ATMs. If you would like your paycheck automatically converted to bitcoin use Bitwage.
Note: Bitcoins are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year. Preev is a useful site that that shows how much various denominations of bitcoin are worth in different currencies. Alternatively you can just Google "1 bitcoin in (your local currency)".

Securing your bitcoins

With bitcoin you can "Be your own bank" and personally secure your bitcoins OR you can use third party companies aka "Bitcoin banks" which will hold the bitcoins for you.
Android iOs Desktop
Samouari BreadWallet Electrum
Another interesting use case for physical storage/transfer is the Opendime. Opendime is a small USB stick that allows you to spend Bitcoin by physically passing it along so it's anonymous and tangible like cash.
Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!
2FA requires a second confirmation code to access your account, usually from a text message or app, making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes.
Google Auth Authy
Android Android
iOS iOS

Where can I spend bitcoins?

Check out spendabit or bitcoin directory for some good options, some of the more commons ones are listed below.
Store Product
Gyft Gift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
Steam, HumbleBundle, Games Planet, itch.io, g2g and kinguin For when you need to get your game on
Microsoft Xbox games, phone apps and software
Spendabit, Overstock, The Bitcoin Directory and BazaarBay Retail shopping with millions of results
ShakePay Generate one time use Visa cards in seconds
NewEgg and Dell For all your electronics needs
Bitwa.la, Coinbills, Piixpay, Bitbill.eu, Bylls, Coins.ph, Bitrefill, LivingRoomofSatoshi, Hyphen.to, Coinsfer, More #1, #2 Bill payment
Menufy, Takeaway, Thuisbezorgd NL, Pizza For Coins Takeout delivered to your door!
Expedia, Cheapair, Lot, Destinia, BTCTrip, Abitsky, SkyTours, Fluege the Travel category on Gyft and 9flats For when you need to get away
BitHost VPS service
Cryptostorm, Mullvad, and PIA VPN services
Namecheap, Porkbun For new domain name registration
Stampnik Discounted USPS Priority, Express, First-Class mail postage
Reddit Gold Premium membership which can be gifted to others
Coinmap and AirBitz are helpful to find local businesses accepting bitcoins. A good resource for UK residents is at wheretospendbitcoins.co.uk.
There are also lots of charities which accept bitcoin donations, such as Wikipedia, United Way, ACLU and the EFF. You can find a longer list here.

Merchant Resources

There are several benefits to accepting bitcoin as a payment option if you are a merchant;
If you are interested in accepting bitcoin as a payment method, there are several options available;

Can I mine bitcoin?

Mining bitcoins can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read more here. Still have mining questions? The crew at /BitcoinMining would be happy to help you out.
If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node using this setup guide. Bitseed is an easy option for getting set up. You can view the global node distribution here.

Earning bitcoins

Just like any other form of money, you can also earn bitcoins by being paid to do a job.
Site Description
WorkingForBitcoins, Bitwage, XBTfreelancer, Cryptogrind, Bitlancerr, Coinality, Bitgigs, /Jobs4Bitcoins, Rein Project Freelancing
OpenBazaar, Purse.io, Bitify, /Bitmarket, 21 Market Marketplaces
Streamium.io, XOtika.tv NSFW, /GirlsGoneBitcoin NSFW Video Streaming
Bitasker, BitforTip Tasks
Supload.com, SatoshiBox, JoyStream, File Army File/Image Sharing
CoinAd, A-ads, Coinzilla.io Advertising
You can also earn bitcoins by participating as a market maker on JoinMarket by allowing users to perform CoinJoin transactions with your bitcoins for a small fee (requires you to already have some bitcoins)

Bitcoin Projects

The following is a short list of ongoing projects that might be worth taking a look at if you are interested in current development in the bitcoin space.
Project Description
Lightning Network, Amiko Pay, and Strawpay Payment channels for network scaling
Blockstream, Rootstock and Drivechain Sidechains
21, Inc. Open source library for the machine payable web
ShapeShift.io Trade between bitcoins and altcoins easily
Open Transactions, Counterparty, Omni, Open Assets, Symbiont and Chain Financial asset platforms
Hivemind and Augur Prediction markets
Mediachain Decentralized media library
Tierion and Factom Records & Titles on the blockchain
BitMarkets, DropZone, Beaver and Open Bazaar Decentralized markets
Samourai and Dark Wallet - abandoned Privacy-enhancing wallets
JoinMarket CoinJoin implementation (Increase privacy and/or Earn interest on bitcoin holdings)
Coinffeine and Bisq Decentralized bitcoin exchanges
Keybase and Bitrated Identity & Reputation management
Telehash Mesh networking
JoyStream BitTorrent client with paid seeding
MORPHiS Decentralized, encrypted internet
Storj and Sia Decentralized file storage
Streamium Pay in real time for on-demand services
Abra Global P2P money transmitter network
bitSIM PIN secure hardware token between SIM & Phone
Identifi Decentralized address book w/ ratings system
BitGo Multisig bitcoin API
Bitcore Open source Bitcoin javascript library
Insight Open source blockchain API
Leet Kill your friends and take their money ;)

Bitcoin Units

One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:
Unit Symbol Value Info
millibitcoin mBTC 1,000 per bitcoin SI unit for milli i.e. millilitre (mL) or millimetre (mm)
microbitcoin μBTC 1,000,000 per bitcoin SI unit for micro i.e microlitre (μL) or micrometre (μm)
bit bit 1,000,000 per bitcoin Colloquial "slang" term for microbitcoin
satoshi sat 100,000,000 per bitcoin Smallest unit in bitcoin, named after the inventor
For example, assuming an arbitrary exchange rate of $10000 for one Bitcoin, a $10 meal would equal:
For more information check out the Bitcoin units wiki.
Still have questions? Feel free to ask in the comments below or stick around for our weekly Mentor Monday thread. If you decide to post a question in /Bitcoin, please use the search bar to see if it has been answered before, and remember to follow the community rules outlined on the sidebar to receive a better response. The mods are busy helping manage our community so please do not message them unless you notice problems with the functionality of the subreddit. A complete list of bitcoin related subreddits can be found here
Note: This is a community created FAQ. If you notice anything missing from the FAQ or that requires clarification you can edit it here and it will be included in the next revision pending approval.
Welcome to the Bitcoin community and the new decentralized economy!
submitted by BinaryResult to Bitcoin [link] [comments]

25 Tools and Resources for Crypto Investors: Guide to how to create a winning strategy

Lots of people have PM'd me asking me the same questions on where to find information and how to put together their portfolio so I decided to put a guide for crypto investors, especially those who have only been in a few months and are still confused.
This is going to be Part 1 and will deal with research resources, risk and returns. In Part 2 I'll post a systematic approach to valuation and picking individual assets with derived price targets.

Getting started: Tools and resources

You don't have to be a programmer or techie to invest in crypto, but you should first learn the basics of how it functions. I find that this video by 3Blue1Brown is the best introduction to what a blockchain actually is and how it functions, because it explains it clearly and simply with visuals while not dumbing it down too much. If you want a more ELI5 version with cute cartoons, then Upfolio has a nice beginner's intro to the blockchain concept and quick descriptions of top 100 cryptocurrencies. I also recommend simply going to Wikipedia and reading the blockchain and cryptocurrency page and clicking onto a few links in, read about POS vs POW...etc. Later on you'll need this information to understand why a specific use case may or may not benefit from a blockchain structure. Here is a quick summary of the common terms you should know.
Next you should arm yourself with some informational resources. I compiled a convenient list of useful tools and sites that I've used and find to be worthy of bookmarking:
Market information
Analysis tools
Portfolio Tracking
Youtube
I generally don't follow much on Youtube because it's dominated by idiocy like Trevon James and CryptoNick, but there are some that I think are worthy of following:

Constructing a Investment Strategy

I can't stress enough how important it is to construct an actual investment strategy. Organize what your goals are, what your risk tolerance is and how you plan to construct a portfolio to achieve those goals rather than just chasing the flavor of the week.
Why? Because it will force you to slow down and make decisions based on rational thinking rather than emotion, and will also inevitably lead you to think long term.

Setting ROI targets

Bluntly put, a lot of young investors who are in crypto have really unrealistic expectations about returns and risk.
A lot of them have never invested in any other type of financial asset, and hence many seem to consider a 10% ROI in a month to be unexciting, even though that is roughly what they should be aiming for.
I see a ton of people now on this sub and on other sites making their decisions with the expectation to double their money every month. This has lead a worrying amount of newbies putting in way too much money way too quickly into anything on the front page of CoinMarketCap with a low dollar value per coin hoping that crypto get them out of their debt or a life of drudgery in a cubicle. And all in the next year or two!
But its important to temper your hype about returns and realize why we had this exponential growth in the last year. Its not because we are seeing any mass increase in adoption, if anything adoption among eCommerce sites is decreasing. The only reason we saw so much upward price action is because of fiat monetary base expansion from people FOMO-ing in due to media coverage of previous price action. People are hoping to ride the bubble and sell to a greater fool in a few months, it is classic Greater Fool Theory. That's it. We passed the $1,000 psychological marker again for Bitcoin which we hadn't seen since right before the Mt.Gox disaster, and it just snowballed the positivity as headline after headline came out about the price growth. However those unexciting returns of 10% a month are not only the norm, but much more healthy for an alternative investment class. Here are the annual returns for Bitcoin for the last few years:
Year BTC Return
2017 1,300%
2016 120%
2015 35%
2014 -60%
2013 5300%
2012 150 %
Keep in mind that a 10% monthly increase when compounded equals a 313% annual return, or over 3x your money. That may not sound exciting to those who entered recently and saw their money go 20x in a month on something like Tron before it crashed back down, but that 3X annual return is better than Bitcoin's return every year except the year right before the last market meltdown and 2017. I have been saying for a while now that we are due for a major correction and every investor now should be planning for that possibility through proper allocation and setting return expectations that are reasonable.

Risk Management

Quanitifying risk in crypto is surprisingly difficult because the historical returns aren't normally distributed, meaning that tools like Sharpe Ratio and other risk metrics can't really be used as intended. Instead you'll have to think of your own risk tolerance and qualitatively evaluate how risky each crypto is based on the team, the use case prospects, the amount of competition and the general market risk.
You can think of each crypto having a risk factor that is the summation of the general crypto market risk (Rm) as ultimately everything is tied to how Bitcoin does, but also its own inherent risk specific to its own goals (Ri).
Rt = Rm +Ri
The market risk is something you cannot avoid, if some China FUD comes out about regulations on Bitcoin then your investment in solid altcoin picks will go down too along with Bitcoin. This (Rm) return is essentially what risk you undertake to have a market ROI of 385% I talked about above. What you can minimize though is the Ri, the aset specific risks with the team, the likelihood they will actually deliver, the likelihood that their solution will be adopted. Unfortunately there is no one way to do this, you simply have to take the time to research and form your own opinion on how risky it really is before allocating a certain percentage to it. Consider the individual risk of each crypto and start looking for red flags:
  • guaranteed promises of large returns (protip: that's a Ponzi)
  • float allocations that give way too much to the founder
  • vague whitepapers
  • vague timelines
  • no clear use case
  • Github with no useful code and sparse activity
  • a team that is difficult to find information on or even worse anonymous
While all cryptocurrencies are a risky investments but generally you can break down cryptos into "low" risk core, medium risk speculative and high risk speculative
  • Low Risk Core - This is the exchange pairing cryptos and those that are well established. These are almost sure to be around in 5 years, and will recover after any bear market. Bitcoin, Litecoin and Ethereum are in this class of risk, and I would also argue Monero.
  • Medium Risk Speculative - These would be cryptos which generally have at least some product and are reasonably established, but higher risk than Core. Things like ZCash, Ripple, NEO..etc.
  • High Risk Speculative - This is anything created within the last few months, low caps, shillcoins, ICOs...etc. Most cryptos are in this category, most of them will be essentially worthless in 5 years.
How much risk should you take on? That depends on your own life situation but also it should be proportional to how much expertise you have in both financial analysis and technology. If you're a newbie who doesn't understand the tech and has no idea how to value assets, your risk tolerance should be lower than a programmer who understand the tech or a financial analyst who is experienced in valuation metrics.
Right now the trio of BTC-ETH-LTC account for 55% of the market cap, so between 50-70% of your portfolio in low Risk Core for newbies is a great starting point. Then you can go down to 25-30% as you gain confidence and experience. But always try to keep about 1/3rd in safe core positions. Don't go all in on speculative picks.
Core principles to minimize risk
  • Have the majority of your holdings in things you feel good holding for at least 2 years. Don't use the majority of your investment for day trading or short term investing.
  • Consider using dollar cost averaging to enter a position. This generally means investing a X amount over several periods, instead of at once. You can also use downward biased dollar cost averaging to mitigate against downward risk. For example instead of investing $1000 at once in a position at market price, you can buy $500 at the market price today then set several limit orders at slightly lower intervals (for example $250 at 5% lower than market price, $250 at 10% lower than market price). This way your average cost of acquisition will be lower if the crypto happens to decline over the short term.
  • Never chase a pump. Its simply too risky as its such an inefficient and unregulated market. If you continue to do it, most of your money losing decisions will be because you emotionally FOMO-ed into gambling on a symbol.
  • Invest what you can afford to lose. Don't have more than 5-10% of your net worth in crypto.
  • Consider what level of loss you can't accept in a position with a high risk factor, and use stop-limit orders to hedge against sudden crashes. Set you stop price at about 5-10% above your lowest limit. Stop-limit orders aren't perfect but they're better than having no hedging strategy for a risky microcap in case of some meltdown. Only you can determine what bags you are unwilling to hold.
  • Diversify across sectors and rebalance your allocations periodically. Keep about 1/3rd in low risk core holdings.
  • Have some fiat in reserve at a FDIC-insured exchange (ex. Gemini), and be ready to add to your winning positions on a pullback.
  • Remember you didn't actually make any money until you take some profits, so take do some profits when everyone else is at peak FOMO-ing bubble mode. You will also sleep much more comfortably once you take out the equivalent of your principal.

Portfolio Allocation

Along with thinking about your portfolio in terms of risk categories described above, I really find it helpful to think about the segments you are in. OnChainFX has some segment categorization to think about:
  • Currency
  • General Purpose Platform
  • Advertising
  • Crowdfunding Platform
  • Lending Platform
  • Privacy
  • Distributed Computing/Storage
  • Prediction Markets
  • IOT (Internet of Things)
  • Asset Management
  • Content Creation
  • Exchange Platform
I generally like to simplify these down to these 7 segments:
  • Core holdings - essentially the Low Risk Core segment
  • Platform segment
  • Privacy segment
  • Finance/Bank settlement segment
  • Enterprise Blockchain solutions segment
  • Promising/Innovative Tech segment
This is merely what I use, but I'm sure you can think of your own. The key point I have is to try to invest your medium and high risk picks in a segment you understand well, and in which you can relatively accurately judge risk. If you don't understand anything about how banking works or SWIFT or international settlement layers, don't invest in Stellar. If you have no idea how a supply chain functions, avoid investing in VeChain (even if it's being shilled to death on Reddit at the moment just like XRB was last month). Buffet calls this "circle of competence", he invests in sectors he understands and avoids those he doesn't like tech. I think doing the same thing in crypto is a wise move.
What's interesting is that often we see like-coin movement, for example when a coin from one segment pumps we will frequently see another similar coin in the same segment go up (think Stellar following after Ripple).
Consider the historic correlations between your holdings. Generally when Bitcoin pumps, altcoins dump but at what rate depends on the coin. When Bitcoin goes sideways we tend to see pumping in altcoins, while when Bitcoin goes down, everything goes down.
You should set price targets for each of your holdings, which is a whole separate discussion I'll go in Part 2 of the guide.

Summing it up

This was meant to get you think about what return targets you should set for your portfolio and how much risk you are willing to take and what strategies you can follow to mitigate that risk.
Returns around 385% (average crypto market CAGR over the last 3 years) would be a good target to aim for while remaining realistic, you can tweak it a bit based on your own risk tolerance. What category of risk your individual crypto picks should be will be determined by how much more greed you have for above average market return. A portfolio of 50% core holdings, 30% medium risk in a sector you understand well and 20% in high risk speculative is probably what the average portfolio should look like, with newbies going more towards 70% core and only 5% high risk speculative.
Just by thinking about these things you'll likely do better than most crypto investors, because most don't think about this stuff, to their own detriment.
submitted by arsonbunny to CryptoCurrency [link] [comments]

Crypto Investing Guide: Useful resources and tools, and how to create an investment strategy

Lots of people have PM'd me asking me the same questions on where to find information and how to put together their portfolio so I decided to put a guide for crypto investors, especially those who have only been in a few months and are still confused.
Many people entered recently at a time when the market was rewarding the very worst type of investment behavior. Unfortunately there aren't many guides and a lot of people end up looking at things like Twitter or the trending Youtube crypto videos, which is dominated by "How to make $1,00,000 by daytrading crypto" and influencers like CryptoNick.
So I'll try to put together a guide from what I've learned and some tips, on how to invest in this asset class. This is going to be Part 1, in another post later I'll post a systematic approach to valuation and picking individual assets.

Getting started: Tools and resources

You don't have to be a programmer or techie to invest in crypto, but you should first learn the basics of how it functions. I find that this video by 3Blue1Brown is the best introduction to what a blockchain actually is and how it functions, because it explains it clearly and simply with visuals while not dumbing it down too much. If you want a more ELI5 version with cute cartoons, then Upfolio has a nice beginner's intro to the blockchain concept and quick descriptions of top 100 cryptocurrencies. I also recommend simply going to Wikipedia and reading the blockchain and cryptocurrency page and clicking onto a few links in, read about POS vs POW...etc. Later on you'll need this information to understand why a specific use case may or may not benefit from a blockchain structure. Here is a quick summary of the common terms you should know.
Next you should arm yourself with some informational resources. I compiled a convenient list of useful tools and sites that I've used and find to be worthy of bookmarking:
Market information
Analysis tools
Portfolio Tracking
Youtube
I generally don't follow much on Youtube because it's dominated by idiocy like Trevon James and CryptoNick, but there are some that I think are worthy of following:

Constructing a Investment Strategy

I can't stress enough how important it is to construct an actual investment strategy. Organize what your goals are, what your risk tolerance is and how you plan to construct a portfolio to achieve those goals rather than just chasing the flavor of the week.
Why? Because it will force you to slow down and make decisions based on rational thinking rather than emotion, and will also inevitably lead you to think long term.

Setting ROI targets

Bluntly put, a lot of young investors who are in crypto have really unrealistic expectations about returns and risk.
A lot of them have never invested in any other type of financial asset, and hence many seem to consider a 10% ROI in a month to be unexciting, even though that is roughly what they should be aiming for.
I see a ton of people now on this sub and on other sites making their decisions with the expectation to double their money every month. This has lead a worrying amount of newbies putting in way too much money way too quickly into anything on the front page of CoinMarketCap with a low dollar value per coin hoping that crypto get them out of their debt or a life of drudgery in a cubicle. And all in the next year or two!
But its important to temper your hype about returns and realize why we had this exponential growth in the last year. The only reason we saw so much upward price action is because of fiat monetary base expansion from people FOMO-ing in due to media coverage. People are hoping to ride the bubble and sell to a greater fool in a few months, it is classic Greater Fool Theory. That's it. Its not because we are seeing any mass increase in adoption or actual widespread utility with cryptocurrency. We passed the $1,000 psychological marker again for Bitcoin which we hadn't seen since right before the Mt.Gox disaster, and it just snowballed the positivity as headline after headline came out about the price growth. However those unexciting returns of 10% a month are not only the norm, but much more healthy for an alternative investment class. Here are the annual returns for Bitcoin for the last few years:
Year BTC Return
2017 1,300%
2016 120%
2015 35%
2014 -60%
2013 5300%
2012 150 %
Keep in mind that a 10% monthly increase when compounded equals a 313% annual return, or over 3x your money. That may not sound exciting to those who entered recently and saw their money go 20x in a month on something like Tron before it crashed back down, but that 3X annual return is better than Bitcoin's return every year except the year right before the last market meltdown and 2017. I have been saying for a while now that we are due for a major correction and every investor now should be planning for that possibility through proper allocation and setting return expectations that are reasonable.
How to set a realistic ROI target
How do I set my own personal return target?
Basically I aim to achieve a portfolio return of roughly 385% annually (3.85X increase per year) or about 11.89% monthly return when compounded. How did I come up with that target? I base it on the average compounded annual growth return (CAGR) over the last 3 years on the entire market:
Year Total Crypto Market Cap
Jan 1, 2014: $10.73 billion
Jan 1, 2017: $615 billion
Compounded annual growth return (CAGR): (615/10.73)1/3 = 385%
My personal strategy is to sell my portfolio every December then buy back into the market at around the beginning of February and I intend to hold on average for 3 years, so this works for me but you may choose to do it a different way for your own reasons. I think this is a good average to aim for as a general guideline because it includes both the good years (2017) and the bad (2014). Once you have a target you can construct your risk profile (low risk vs. high risk category coins) in your portfolio. If you want to try for a higher CAGR than about 385% then you will likely need to go into more highly speculative picks. I can't tell you what return target you should set for yourself, but just make sure its not depended on you needing to achieve continual near vertical parabolic price action in small cap shillcoins because that isn't sustainable.
As the recent January dip showed while the core cryptos like Bitcoin and Ethereum would dip an X percentage, the altcoins would often drop double or triple that amount. Its a very fragile market, and the type of dumb behavior that people were engaging in that was profitable in a bull market (chasing pumps, going all in on a microcap shillcoin, having an attention span of a squirrel...etc) will lead to consequences. Just like they jumped on the crypto bandwagon without thinking about risk adjusted returns, they will just as quickly jump on whatever bandwagon will be used to blame for the deflation of the bubble, whether the blame is assigned to Wall Steet and Bitcoin futures or Asians or some government.
Nobody who pumped money into garbage without any use case or utility will accept that they themselves and their own unreasonable expectations for returns were the reason for the gross mispricing of most cryptocurrencies.

Risk Management

Quanitifying risk in crypto is surprisingly difficult because the historical returns aren't normally distributed, meaning that tools like Sharpe Ratio and other risk metrics can't really be used as intended. Instead you'll have to think of your own risk tolerance and qualitatively evaluate how risky each crypto is based on the team, the use case prospects, the amount of competition and the general market risk.
You can think of each crypto having a risk factor that is the summation of the general crypto market risk (Rm) as ultimately everything is tied to how Bitcoin does, but also its own inherent risk specific to its own goals (Ri).
Rt = Rm +Ri
The market risk is something you cannot avoid, if some China FUD comes out about regulations on Bitcoin then your investment in solid altcoin picks will go down too along with Bitcoin. This (Rm) return is essentially what risk you undertake to have a market ROI of 385% I talked about above. What you can minimize though is the Ri, the aset specific risks with the team, the likelihood they will actually deliver, the likelihood that their solution will be adopted. Unfortunately there is no one way to do this, you simply have to take the time to research and form your own opinion on how risky it really is before allocating a certain percentage to it. Consider the individual risk of each crypto and start looking for red flags:
  • guaranteed promises of large returns (protip: that's a Ponzi)
  • float allocations that give way too much to the founder
  • vague whitepapers
  • vague timelines
  • no clear use case
  • Github with no useful code and sparse activity
  • a team that is difficult to find information on or even worse anonymous
While all cryptocurrencies are a risky investments but generally you can break down cryptos into "low" risk core, medium risk speculative and high risk speculative
  • Low Risk Core - This is the exchange pairing cryptos and those that are well established. These are almost sure to be around in 5 years, and will recover after any bear market. Bitcoin, Litecoin and Ethereum are in this class of risk, and I would also argue Monero.
  • Medium Risk Speculative - These would be cryptos which generally have at least some product and are reasonably established, but higher risk than Core. Things like ZCash, Ripple, NEO..etc.
  • High Risk Speculative - This is anything created within the last few months, low caps, shillcoins, ICOs...etc. Most cryptos are in this category, most of them will be essentially worthless in 5 years.
How much risk should you take on? That depends on your own life situation but also it should be proportional to how much expertise you have in both financial analysis and technology. If you're a newbie who doesn't understand the tech and has no idea how to value assets, your risk tolerance should be lower than a programmer who understand the tech or a financial analyst who is experienced in valuation metrics.
Right now the trio of BTC-ETH-LTC account for 55% of the market cap, so between 50-70% of your portfolio in low Risk Core for newbies is a great starting point. Then you can go down to 25-30% as you gain confidence and experience. But always try to keep about 1/3rd in safe core positions. Don't go all in on speculative picks.
Core principles to minimize risk
  • Have the majority of your holdings in things you feel good holding for at least 2 years. Don't use the majority of your investment for day trading or short term investing.
  • Consider using dollar cost averaging to enter a position. This generally means investing a X amount over several periods, instead of at once. You can also use downward biased dollar cost averaging to mitigate against downward risk. For example instead of investing $1000 at once in a position at market price, you can buy $500 at the market price today then set several limit orders at slightly lower intervals (for example $250 at 5% lower than market price, $250 at 10% lower than market price). This way your average cost of acquisition will be lower if the crypto happens to decline over the short term.
  • Never chase a pump. Its simply too risky as its such an inefficient and unregulated market. If you continue to do it, most of your money losing decisions will be because you emotionally FOMO-ed into gambling on a symbol.
  • Invest what you can afford to lose. Don't have more than 5-10% of your net worth in crypto.
  • Consider what level of loss you can't accept in a position with a high risk factor, and use stop-limit orders to hedge against sudden crashes. Set you stop price at about 5-10% above your lowest limit. Stop-limit orders aren't perfect but they're better than having no hedging strategy for a risky microcap in case of some meltdown. Only you can determine what bags you are unwilling to hold.
  • Diversify across sectors and rebalance your allocations periodically. Keep about 1/3rd in low risk core holdings.
  • Have some fiat in reserve at a FDIC-insured exchange (ex. Gemini), and be ready to add to your winning positions on a pullback.
  • Remember you didn't actually make any money until you take some profits, so take do some profits when everyone else is at peak FOMO-ing bubble mode. You will also sleep much more comfortably once you take out the equivalent of your principal.

Portfolio Allocation

Along with thinking about your portfolio in terms of risk categories described above, I really find it helpful to think about the segments you are in. OnChainFX has some segment categorization but I generally like to bring it down to:
  • Core holdings - essentially the Low Risk Core segment
  • Platform segment
  • Privacy segment
  • Finance/Bank settlement segment
  • Enterprise Blockchain solutions segment
  • Promising/Innovative Tech segment
This is merely what I use, but I'm sure you can think of your own. The key point I have is to try to invest your medium and high risk picks in a segment you understand well, and in which you can relatively accurately judge risk. If you don't understand anything about how banking works or SWIFT or international settlement layers, don't invest in Stellar. If you have no idea how a supply chain functions, avoid investing in VeChain (even if it's being shilled to death on Reddit at the moment just like XRB was last month).
What's interesting is that often we see like-coin movement, for example when a coin from one segment pumps we will frequently see another similar coin in the same segment go up (think Stellar following after Ripple).
Consider the historic correlations between your holdings. Generally when Bitcoin pumps, altcoins dump but at what rate depends on the coin. When Bitcoin goes sideways we tend to see pumping in altcoins, while when Bitcoin goes down, everything goes down.
You should set price targets for each of your holdings, which is a whole separate discussion I'll go in Part 2 of the guide.

Summing it up

This was meant to get you think about what return targets you should set for your portfolio and how much risk you are willing to take and what strategies you can follow to mitigate that risk.
Returns around 385% (average crypto market CAGR over the last 3 years) would be a good target to aim for while remaining realistic, you can tweak it a bit based on your own risk tolerance. What category of risk your individual crypto picks should be will be determined by how much more greed you have for above average market return. A portfolio of 50% core holdings, 30% medium risk in a sector you understand well and 20% in high risk speculative is probably what the average portfolio should look like, with newbies going more towards 70% core and only 5% high risk speculative.
Just by thinking about these things you'll likely do better than most crypto investors, because most don't think about this stuff, to their own detriment.
submitted by arsonbunny to CryptoMarkets [link] [comments]

Bitcoin Madness: How to Simulate Bitcoin Prices in Google Sheets

Original Medium post can be found here: https://medium.com/@spreadstreet/bitcoin-madness-how-to-simulate-bitcoin-prices-in-google-sheets-c61cb42f26ed
You know the scenario...
Bitcoin had another huge increase, but you missed the opportunity. You wanted to get in, but your gut instinct told you no. And rightfully so...no one knows where the price is going to go. What if you invested, and it had another 20% loss? These sort of price movements are common in the volatile world of cryptocurrencies.
Seriously...how far can this Bitcoin price really go?

BITCOIN IS A VOLATILE BEAST

Risk analysis must be a part of every decision you make.
You are constantly faced with uncertainty, ambiguity, and variability. Variability, in the case of Bitcoin, unlike anything we have ever seen before. And even though we have unprecedented access to information, we can’t accurately predict the future.
Luckily, we have methods that enable you to see all the possible outcomes of your decisions, and assess the impact of risk.

WHERE TO START?

Running simulations can prepare us for the worst.
Monte Carlo simulation (also known as the Monte Carlo Method) allows for better decision making under uncertainty.
One of the most common ways to estimate risk is the use of a Monte Carlo simulation (MCS). From Investopedia:
For example, to calculate the value at risk (VaR) of a portfolio, we can run a Monte Carlo simulation that attempts to predict the worst likely loss for a portfolio given a confidence interval over a specified time horizon - we always need to specify two conditions for VaR: confidence and horizon. (For related reading, see The Uses And Limits Of Volatility and Introduction To Value At Risk (VAR) - Part 1 and Part 2.)
A MCS can be run with many different models. Our own process will be:
  1. Specify a model (for here, we will use geometric Brownian motion)
  2. Get historical daily bitcoin prices
  3. Calculate daily returns
  4. Name the daily return range
  5. Summary statistics
  6. Simulate a year
  7. Simulate a year many times
  8. Multi-year summary statistics
  9. Quick analysis of results

STEP 1. WTF IS GEOMETRIC BROWNIAN MOTION?

The geometric Brownian motion (GBM) is a statistical method that is used heavily in the forecasting of stock prices. The reason the process is so attractive for this is because of the following:
The GBM is technically a Markov process, which is a fancy way of saying "A random process whose future probabilities are determined by its most recent values." Said another way, past price information is already incorporated and the next price movement is "conditionally independent" of past price movements.
Math geeks have a habit of making things infinitely more complicated than they have to be. I will do my best to make this as simple as possible.
The formula for GBM is as follows:
gBm formula
Where:
This formula can be broken down into two very important terms: "drift" and "shock".
For each time period, our model assumes the price will "drift" up by the expected return. But the drift will be shocked (added or subtracted) by a random shock. The random shock will be the standard deviation "s" multiplied by a random number "e". This is simply a way of scaling the standard deviation.

STEP 1A. THE THUNDER GOD ELI5

The ELI5 version: The thunder god Zeus is a great god. A just god.
But Zeus is subject to wild mood swings.
Every day Zeus can shoot his magic lightning into the price of Bitcoin, and cause it to go up or down.
Some days he is in such a good mood, that he shocks the price up by a random amount. On other days, he is in such a poor mood that he shocks the price down for opposing him.
Zeus Striking Down the Price
And thus, we have the essence of GBM: a series of steps with an expected upward drift, where each step is hit with a plus/minus shock (which is a function of the stock's standard deviation).

STEP 2. HISTORICAL DAILY BITCOIN PRICES

Copy the raw data scores from coinmarketcap. Paste the data into your own spreadsheet.
For this exercise, your columns will be: Time, Open, Close, High, Low, Volume.
Columns Setup OHLCV
Want to automatically pull in Bitcoin prices? Use the Spreadstreet Google Sheets Add-in.

STEP 3. CALCULATE DAILY RETURNS

Calculate daily returns from the "Close" price. in H2 put the formula:
=LN(C2/B2) 
Drag it all the way down to the end of the prices to fill the entire Returns column
Calculate Daily Returns

STEP 4. NAME THE DAILY RETURNS RANGE

Create a named range from the returns column, called returns, to make our life easier. Highlight all the data in column H, i.e. cells H1:H1000, then click on the menu Data > Named ranges… and call the range returns:
Name the range returns

STEP 5. SUMMARY STATISTICS

Set up a small summary table with the close, daily volatility, annual volatility, daily drift, annual drift, and mean drift of our population. The formulas are:
In K1, enter:
=C2 
and name it close.
In K2, enter:
=STDEV(returns) 
and name it dailyVolatility
In K3, enter:
=dailyVolatility*SQRT(365) 
and name it annualVolatility
In K4, enter:
=AVERAGE(returns) 
and name it dailyDrift
In K5, enter:
=dailyDrift*365 
and name it annualDrift
In K6, enter:
=dailyDrift-0.5*dailyVolatility^2 
and name it meanDrift
Create Summary Statistics Table

STEP 6. SIMULATE A YEAR

Setup the yearly simulation table with Time, Normdist, Log Return, and Simulated Price

Time

In J12 put 0, and in J13 put:
=J12+1 
Drag it all the way down to your preferred forecast timeframe. Here I simulated a year (365 days), so I copied down to J377
Time

Normdist

Let’s set up the normal distribution curve values.
Google Sheets has a formula NORMDIST which calculates the value of the normal distribution function for a given value, mean and standard deviation. Since we ascribe to the random walk theory, we want to use a mean of 0, and a standard deviation of 1.
In K13, put the formula:
=NORMINV(RAND(),0,1) 
Drag it all the way down to K377 to fill the whole Normdist column:
Normdist

Log Return

To get the percentage of daily stock movement, we will calculate log return.
In L13, put the formula:
=meanDrift+dailyVolatility*K13 
Copy the formula all the way down to L377:
Log Return

Simulated Price

Now to the real meat. Let's calculate the simulated Bitcoin price.
In M12 put the Close price, and in M13, put:
=M12*EXP(L13) 
Copy the formula all the way down to M377:
Simulated Price

Forecasted Bitcoin price for one year

Let's see what the pricing data looks like.
Select from M12 to M377, then Insert - Chart and select line chart:
Simulated Price for One Year
We have now successfully completed one simulation. And depending on your results, they could look normal...or downright crazy.

STEP 7. SIMULATE A YEAR MANY TIMES

We completed one simulation, but we want to run many different trials.
Create a scenario tab, setup a table to simulate 1,000 different one-year trials. In A3 to A1003, put the numbers 1 through 1000.
In B3, put the formula:
=Close*EXP((annualDrift-0.5*annualVolatility^2)+annualVolatility*norminv(rand(),0,1)) 
Copy the formula down all the way. Name this range "scores":
Simulate Bitcoin Prices for Many Years

STEP 8. MULTI-YEAR SUMMARY STATISTICS

Set up a small summary table with the mean, median, standard deviation, min, max, and range of our new population. The formulas are:
=AVERAGE(scores) =STDEVP(scores) =MIN(scores) =MAX(scores) =E6-E5 
Multiyear Summary Statistics

STEP 9. QUICK ANALYSIS OF RESULTS

My results will look different than yours (due to the random nature of NORMDIST and the time you pulled the Bitcoin prices). But let's take a look at the results:
Mean $27,147 Median $16,097 St. Dev $37,243 Min $556 Max $479,586 Range $479,029 3sd $1,486 2sd $3,005 1sd $5,850 Cur $16,098 1sd $43,896 2sd $81,998 3sd $190,129 
How to read: We can be 95% certain that the price of Bitcoin will fall between $3,005, and $81,998 in one year.
Wait really? Should I buy? No, this is not telling you to buy. This should be one tool of many to help you in your buying and risk decisions.
Lognormal Distribution of Bitcoin Prices

CONCLUSION

You now know how to complete a geometric Brownian motion analysis of Bitcoin prices. Congratulations!
Good statistical analysis methods can be scary, but they don't have to be. Here we covered off on a great method for estimating future Bitcoin prices, which can also be applied to other cryptocurrencies.
With this new tool in place, you can be confident in your risk analysis methods by seeing all the possible outcomes of your decisions, and assess the impact of risk.
Deliberate. Analytical. Intelligent.

WANT YOUR OWN COPY?

Simulate Bitcoin Prices Download

RELATED POSTS

High-Flyers and Shitcoins: What I Learned from Analyzing CoinMarketCap Data in Google Sheets
7 Smart Ethereum Price Prediction Methods for HODL’ers

About the Author

John Young is the founder of Spreadstreet, former financial analyst for a big-ass company, and runner-up in the 6th grade spelling bee. He would have invested in Google if he knew about it...and had any money.
He is the author of the Spreadstreet blog, which has over 3 readers (not a typo). He hopes to hit 10, but honestly writing is a lot of work.
submitted by 1kexperimentdotcom to BitcoinMarkets [link] [comments]

Start Here for Much Wallet WOW!

EDIT 2017-02-10: A word about Nodes

There is a discussion about nodes that came up today, where it seems I'm discouraging people from running the full QT/Core client. Yes and No. What I'm trying to make sure people understand is how things work, and that it is NOT mandatory to run a client in order to use Dogecoins (and yes, I realise that browser-based tools like coinb.in and wallet sweepers are 'clients' by strict definition).
That said, more nodes is absolutely a good thing for the network. Preferrably full nodes. How do you run a full node? Just run Core/QT and open up Port 22556 on your router so it can connect to more than 8 peers. What will it cost you? You need your machine to be on 24/7/365, you need enough storage for the full blockchain (currently about 20Gb. Bitcoin is over 120Gb) and enough bandwidth to keep it in sync and share blocks with peers. A couple of Gb a month, most likely. This is best done with a desktop on a wired broadband link. Or maybe a hosted VM in the cloud. :)

EDIT 2017-01-09: Wallets WITHOUT Clients

Since I started helping people on /BitcoinBeginners, I'm getting a lot of questions about how to use wallets without running clients or trusting third parties. So here are a couple of resources that will make that possible, and not just for Dogecoin:
Multi-Coin Wallet Generator Now supporting 129 currencies! Coinb.in Start by setting the currency, found in the gear wheel in the Broadcast tab. Dogecoin Wallet Sweeper Redeem 'paper' wallets containing up to about 100 UTXOs. Bitinfo Charts My favourite block explorer, handles a bunch of cryptos.
Using these resources, it is possible to hold, receive and spend coins in various currencies, without having to run QT or a 'lite' client. You can also download and run the pages on your own device.

EDIT 2016-11-23: SEMANTICS about MINING! :P

Even though there is already a section on mining below, it has been suggested given the huge number of posts on the subject that this needs to be made clearer. Since people get their panties in a twist over the word 'dead', lets change that...

MINING IS DEAD!

MINING DOGECOIN IS UNPROFITABLE!

Put simply, there is no way to mine Dogecoin and make a profit because of the massive hashpower provided by industrial-scale Litecoin miners. Mining Doge directly stopped being viable when our hashrate exploded with the introduction of AuxPoW. Mining with CPU's and GPU's died when ASICs were introduced. And mining with a laptop WILL kill your laptop and cost you a fortune to repair or replace. Mining Litecoin with an exchange that also mines Doge and others will earn less than the electricity consumed, and you won't recover your costs. Probably ever, but certainly not in any reasonable time.
Mining other currencies may be a thing, but that's beyond our scope here. This is /Dogecoin, not /GetRichMiningCryptos after all. If you want to mine the newest scamcoin for fun and profit, look elsewhere for advice. :/
Oh, and most important:

READ BEFORE YOU POST!

At any given time, there are half a dozen posts on the frontpage just like the one you're about to write, where the answers have already been given. Read them. Don't make people waste their time repeating themselves because you were too lazy to bother reading stuff. :P
So there I was, having a quiet Sundy arvo bludge, as you do, when 42points turned up on Facebook and asked me to write a new sticky post for /dogecoin. Why would he do this, when he should be having a bludge himself, I hear you ask? Well, seems he was doing exactly that, and wanted to fob off the work he’s too slack to do himself. ;) Ah well, being a sucker for punishment, I’ll grudgingly oblige I guess.
OK, first things first.

The Clients:

Dogecoin Core 1.10.0 2015-Nov-01
Bootstrap file for Core to save some download time.
Dogecoin Core Guide Wiki
MultiDoge v0.1.7 2016-Jan-31
Android Dogecoin Wallet 2.0.8 2016-Jan-18
Android Coinomi Wallet
Java Cate 0.14 alpha 2 Multicoin wallet 2016-Feb-14
Exodus multicoin wallet
iOS Doughwallet

Do you REALLY need a client?

Wallet ELI5
UTXO ELI5
Paper Wallet Generator
Sample HTML Wallet List
Dogetipbot subreddit and website
Dogechain Wallet
Block.io Wallet
Exchanges
BTC38
Poloniex
CoinSpot
ShapeShift - Not really an exchange, rather a currency trader.

Mining

Litecoinpool
Prohashing
Zpool

Explorers

BitInfoCharts - My favourite, has charts!
chain.so
dogechain.info
/dogecoindev where the devs hang out

More Info

Dogeducation
Technical Wiki
Preev currency value calculator

EDITS:

From peoplma
I was wondering if you could add just a couple things. A link to the coinomi android wallet, it's probably the best one out there. And a sentence somewhere along the lines of "if you need help with any dogecoin software you are welcome to make a post, but PLEASE include your OS, version number of the client, and any relevant transaction IDs that you are willing to share" if you can fit that in somewhere.
Also, if you want to link to Prohashing, I'm pretty sure it's the only Scrypt mining pool that will actually pay out in doge. The others I know of pay out in litecoin or bitcoin. And it's a profit switching multipool, so gives a better return than just mining ltc/doge.
And there's these two wiki articles I thought would be helpful to link /dogecoin/wiki/technical for those technically minded newbies or intermediate users who want to dig a little deeper. And maybe a link to /dogecoin/wiki/dogecoincoreguide next to the link for dogecoin core.
From pts2002
Finally a proper sticky post! Here's some other stuff you could add:
zpool.ca mining pool - You can get paid in pretty much any coin, and you can mine in multiple algos (currently mining lyra2v2 with my GPU). Doing about 500Ð/day
shapeshift.io exchange - My favourite exchange, quick and easy. No registration required!
Also, you should add some blockchain explorers!
chain.so - Support for bitcoin, litecoin and doge.
dogechain.info - Official blockchain explorer. Includes a wallet (already mentioned). Live update currently not working (?)
EDIT: Here's another thing I found!
preev.com currency value calculator - Easy way to check the value of your dogecoins (or bitcoins, or litecoins, or peercoins)!
submitted by Fulvio55 to dogecoin [link] [comments]

That One Privacy Guy's - Guide to Choosing the Best VPN (for you)

That One Privacy Guy's - Guide to Choosing the Best VPN (for you)
Disclaimer: The below guide is my opinion, which I will try to provide as many examples for and as much evidence as possible to support. I reference my VPN Comparison Chart throughout much of this post, not so much for shameless self promotion, but because I believe it to be a solid resource to determine if a VPN meets your criteria and to assist you in deciding which is best for you. If you just want an ELI5, read the bolded segments throughout the guide for the highlights. If you want to go down the rabbit hole on this topic, read on, and buckle up - this is going to be long.
TABLE OF CONTENTS
I. INTRODUCTION
II. A WORD ABOUT TRUST
III. A WORD ABOUT VPN AFFILIATES
IV. IF YOU'RE CONCERNED WITH PRIVACY
V. IF YOUR CONCERNED WITH SECURITY
VI. IF YOU'RE CONCERNED WITH UN-GEOBLOCKING
VII IF YOU'RE CONCERNED WITH BYPASSING RESTRICTIVE NETWORKS
VIII. CLEARING UP MISCONCEPTIONS
I. INTRODUCTION:
The following is intended to be a detailed guide to answer the question, "How do I choose the best VPN (for me)?" The reason this is a hard thing to help people with, is that their needs and level of technical knowledge vary greatly - there is no one perfect VPN, they all have at least some flaws and some will just flat out be better for different people.
I very well might have forgotten to add a section I intended to, said something that needs clarification, or was just sleepy when I wrote parts of this guide, so I intend to update and expand it as needed.
I'm assuming that if you're reading this far, you have at least SOME knowledge as to the basics of what a VPN is, so I won't cover that here. This will be heavily emphasizing the need of a VPN for privacy, but I will echo and expand on other use cases as well towards the end.
II. A WORD ABOUT TRUST
No matter what reason you want a VPN, you want to know that the service you choose is trustworthy and is not compromising your data. Even if you're only concerned with geo-unblocking or other non-privacy uses, keep reading. I'll get more into this in the "Privacy" section, but it's important for everyone to be exposed to it at least a little.
A preface regarding privacy and trust, from another thread I made a while back. This applies to every company, but I would suggest especially so for VPNs.
We live in a society where privacy is undervalued and under assault daily. Some people eventually notice this and discover that they do value their own. They set out on a pilgrimage of sorts to educate themselves and learn about tools to help them protect it (as I did when I started my project). Because we depend on each other for direction and others to write software and run services to help keep us secure - TRUST AND TRANSPARENCY - are paramount.
However, transparency comes before trust.
III. A WORD ABOUT VPN AFFILIATES
You may have started your search for a VPN by looking for "VPN Reviews" in your search engine of choice. if you had, you would have gotten page upon page of what seem to be harmless review sites, top 10 or blog style reviews of different VPN services. You may even be coming here for confirmation of what you were told on those sites. The sites making these recommendations are, in almost every case, paid by the services they review and recommend. They are beginning their business relationship with you, with what essentially amounts to a lie. The technical term for this kind of marketing is "native advertising" and it's abuse is a huge problem in the VPN industry.
I purposefully made a point to capture this kind of data on my VPN Comparison Chart. There you can find information on services that have affiliate programs, the specific policies they have for them and whether or not the affiliates act ethically, essentially what the services tolerate from those representing them, when it comes to persuading YOU to buy into the information they put out.
Note that not all affiliates have to be bad actors and simply having an affiliate program is not necessarily grounds for mistrust of a VPN, but rather when those services allow their resellers to generate referrals by hook or by crook. If you see a service appear over and over again on the kinds of sites mentioned above, there is a good chance they are making money from, and are perfectly okay with these kinds of deceptive practices as a part of their business model. They often will claim that it's just the affiliate doing this, and that they can't control what others do. This is false. Affiliates, like anyone entering into a business relationship with someone, agree to certain terms put forth by the service hiring them. If a company doesn't expect and enforce certain standards from their affiliates (not spamming, not breaking copyright, disclosing who they are, etc), they are approving these methods, and are not worthy of your trust. If they are willing to lie to you before you even buy into their service, the stage is set for them to be dishonest with you when you interact with them on a normal basis as a customer.
IV. IF YOU'RE CONCERNED WITH PRIVACY
  • a. More on Trust
As a lawyer represents your legal interests, a VPN service (among others) represents your privacy interests. If a lawyer does something to violate your trust or is not honest about some aspect of their representation that could affect you, you would discard them and you'd be right to do so. Likewise with a VPN service. There are many out there that are not worth your time or money. Unlike a lawyer, a VPN can be put together and promoted by anyone with access to a computer, the key difference being that you would never even see their face.
If you are looking for a VPN for privacy purposes, you already believe you cannot trust certain parties. Those parties might be companies whose websites you visit or maybe even an oppressive government whose mass surveillance is encroaching on your rights. You are being put in a position where you must rely on someone other than yourself for protection and the last thing you need is one more party that you can't trust.
This decision is an important one, and not just any VPN service is worthy of that trust. You're trusting them to know what they're doing - to be able to operate a competent service that will protect your privacy. You are trusting them to be responsive to new technical and geopolitical threats to their operation. You're trusting them to be honest with you in the way they do business so that when you are shopping and comparing, you are getting accurate information.
  • b. More on Affiliates
In the main section at the beginning of this guide, I talked about affiliate practices, so I will only briefly mention it here. If you choose a company with an affiliate program, choose one that expects and enforces good behavior from their reselling partners. You can usually read their affiliate terms on their site. If they are not publicly visible, they should respond with this information when asked. If not, or if they play games with you, look elsewhere. More information on affiliate policies and behavior can be found on my VPN Comparison Chart.
  • c. Jurisdiction
In the last few years, certain revelations have been made manifest regarding the mass surveillance programs of various countries around the globe. These countries are known as the five, nine, and fourteen eyes. These countries not only spy on their own citizens where they can get away with it, but they spy on each others, and swap notes to bypass governmental restrictions on power. If a service, or the people who run a service is based in one of these countries, it's not unreasonable to expect that they may be susceptible to unlawful searches and compromises made in the name of national security. That said, if your threat model includes protection from such actions, choosing a company incorporated outside of these jurisdictions probably would not be adequate to protect you - as such actors have vast resources, and if singled out, you would need to worry about more than your VPN (by relying on other tools such as Tor, Tails, paying very close attention to your opsec, etc). Where the servers you're connecting to and the people who operate / have control of them are located are more important than where a company is incorporated, to protect yourself from government overreach
Other countries are not part of the spy collaboration mentioned above, but still have issues with government limitations on internet freedom and free speech. Avoid countries with limited internet freedom. The degree of internet freedom a country has can also be found under "jurisdiction" on my sheet.
  • d. Logging
When you connect to a VPN service, you are essentially just adding one more stop along your route to the open internet. The VPN is a "man in the middle" who you are trusting with the traffic and connection data that is being generated in the background as you use the internet. Some VPN companies choose to log this data. There are many reasons for doing so, some more legitimate than others. Some services record this to protect themselves legally in the case they are approached by authorities. Some companies keep minimal connection logs to aid them in maintaining servers. Some will even sell your data to third parties as part of their business model. If your concern is privacy, you most likely do not want your browsing habits and connection data being recorded. Choose a service that specifically states that they do not keep logs, AND which types they do not keep. Make sure they do not keep ANY kind of activity or connection log Many services claim to not keep logs, but are vague, and upon closer inspection actually do keep certain types, so be wary of such promises until you've confirmed it for yourself in their respective terms and privacy policies.
  • e. Payments and Communication
Assuming privacy is your priority, when you go to pay for your VPN service, there are many methods available, but only a few worth consideration. Services that offer the ability to pay by Bitcoin, cash, or misc gift cards are the best way to ensure that you are kept as anonymous as possible. if these services require more personal information than an email address, look the other direction - this is information they're recording about you that may be used at best to sell to third parties, at worst to later identify you.
Some services offer a PGP key for additional privacy. This is a nice thing to have if you want to be able to communicate with them using encryption.
  • f. Protocols
There are many different kinds of VPN protocols that allow you to establish a tunnel with your service provider - some more secure than others. Certain protocols are documented to have been compromised. Others are free and open source, and as such are freely available for security experts to audit and improve. The free availability of the source code helps to ensure that vulnerabilities are patched quickly and that individuals so inclined can see exactly how their software is working. Choose a VPN that supports OpenVPN and use it to connect to your VPN server. Avoid using other protocols, specifically PPTP as its not suited for privacy.
  • g. DNS and IPv6 Leaks
Throughout the course of using the internet, your computer sends and receives a lot of data that isn't visible to you, the user. When you type in a web address, a request is sent to a server that is usually operated by your ISP. When you connect to the internet using a VPN, this responsibility is now on them. If they don't take certain actions, this request containing info for the site your want to visit is being sent to THEIR ISP instead. This may not be as bad as it going through yours, but as I mentioned logging above - if the company in question even keeps certain logs, there is a chance that the sites you try to visit can be correlated with the timestamps of when such a request is sent. As an alternative, some use public DNS servers, such as google's, which is not ideal for privacy. Choose a VPN service that maintains their own first party DNS server that won't leak - then TEST IT TO MAKE SURE.
When using the internet, you connect to IP addresses. Traditionally, IPv4 is used to accomplish this (you may have seen numbers in the past like 8.8.8.8 or 216.58.217.206, etc). There is another standard that will some day be more prevalent, called IPv6, but that is being used now during the time it transitions into normal configurations (vastly more IPv6 numbers exist than IPv4). When you connect and use the internet (unless you have specifically taken steps to disable it), you are sending and receiving IPv6 data. Again, normally, this data is sent and resolved through your ISP and their DNS servers, but unless properly configured, this information might not be securely passing through the VPN tunnel and could be leaking to the open internet. Given such routed global IPv6 addresses, it's easy for remote sites to identify user ISPs. And with requisite authority, account information could be obtained from those ISPs. Choose a VPN service that either blocks or provides new VPN-specific IPv6 address and provides an IPv6 DNS server that's reachable only through the VPN tunnel - then TEST IT TO MAKE SURE.
  • h. Encryption and other Features
Around 1440 AD, the Printing Press was invented. It created a method for the common person to quickly disperse information, technologically reinforcing the natural right to freely speak and share information. More recently the internet allows billions to freely and openly share ideas and advance humanity. This reaffirmed the common person's rights in such a way that was difficult for governments or organizations to stifle. Similarly, until the invention of firearms, only those physically capable could defend themselves from those that wished to encroach on their rights, thus this technological advancement reinforced the individual's right to self defense. This brings us to Computerized Encryption. As with the other technological advancements mentioned above, Encryption provides a simple-to-use method that the average user can take advantage of to reinforce their right to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.
Choose a VPN service that has strong data and handshake encryption. Make sure the protocol you choose has the level of advertised encryption available to it, as services typically provide more than one protocol with varying levels of encryption strength. The VPN Comparison Chart can help you determine what is considered strong by the color coding on these fields. Be sure that even if the service has the type of encryption you want available BY DEFAULT - some services will technically offer strong encryption, but it has to be manually configured (not user friendly).
Optionally, depending on your use case and threat model, you may be interested in making sure Authenticated SMTP (to send email) and P2P (to file share, download, use Bitcoin, etc) are not blocked on your VPN's servers
  • i. Websites and your Privacy
When you start to search for services and are browsing on their websites, there are some additional items you may want to consider. Speaking of trust and privacy - some companies will use tracking cookies to determine how to best serve you ads, which other sites you've been to, and some will even phone home with specific personal information. Best case, this is an abuse of power by companies stretching the limits of their ideas on how to gather this info, worst case, it can be used to intentionally violate your privacy and tie your device back to the site and activity performed on it. Choose a company that respects your privacy enough to use few if any persistent or external tracking cookies. If they are already violating your privacy the moment you visit their site, you have no assurance that they will take your privacy seriously after hiring them to represent your interests. Available for years, https allows websites to entirely encrypt all data sent and received with the user, effectively blocking out those that might try spying on such web traffic. Choose a service that encrypts their website with an SSL Certificate. Additionally, CloudFlare, Incapsula, and similar services have recently become popular with websites for their DDoS protection and dynamic bandwidth scaling. However, these services act as an additional man in the middle between your VPN's website and you. In the wrong hands, the information they collect and have access to about your VPN's website, and your interaction with it, could be compromised. Avoid VPNs that use CloudFlare, Incapsula, and other such services.
V. IF YOU'RE CONCERNED WITH SECURITY
Many of the points made above are relevant to security as well as privacy, and I will point some out below.
Jurisdiction, specifically Freedom Status is important to ensure an environment where laws are enforced and physical security that we take for granted in some parts of the world are applicable to the servers we communicate with. This also helps indicate that our service and the servers we connect to are located in places that respect internet freedom. This information can be found on the Comparison Chart and confirmed on Freedom House's website.
IPv6 should be specifically tunnelled or blocked outright the same as with the privacy scenario above.
First party DNS servers, as mentioned above, are ideal for preventing leaks of your data.
Both data and handshake encryption should be strong and available for the protocol you choose (which again, should not be PPTP). Other protocols are probably secure enough for daily use. Note that no protocol is bulletproof and exploits probably exist and are discoverable for each and every one of them. Such exploits are even more discoverable by governments with vast amounts of resources.
VI. IF YOU'RE CONCERNED WITH UN-GEOBLOCKING
If your only concern is escaping geoblocks, your needs are far less numerous. Being able to connect to an exit node in the country of your choice is really the only requirement. This doesn't mean necessarily however that you want to neglect the proper security measures discussed above, only that for things like Netflix, Hulu, certain TV online channels and sporting events, they are less important if un-geoblocking is ALL you're trying to do, almost anything will work, HOWEVER - if Privacy and Security are of any concern whatsoever, heed the advice above and know that un-geoblocking will virtually always come naturally when shopping for those needs (as long as required server availability is a feature of your chosen VPN)
VII. IF YOU'RE CONCERNED WITH BYPASSING RESTRICTIVE NETWORKS
Some parts of the world are resisting the ever-growing ability for their citizens to freely share information and as such have implemented roadblocks in their networking infrastructure to cripple such communication. For example, the "Great Firewall of China" has several layers of VPN detection and blocking built into it. Other networks belonging to large corporations or maybe even your Internet Service Provider may restrict you from using certain ports, limiting what you can use the internet for. However, there are ways to get around these restrictions by using the right VPN.
Features such as multihop, TCP port 443, Obfsproxy, SOCKS, SSL tunnels, SSH tunnels, and some other proprietary solutions (which may be built specifically by a given VPN company) can be useful in avoiding these restrictions. As for which are most effective, it's a matter of which restriction is being inflicted upon the user. Speak with your VPN service's support team to determine which might be effective in your case. The VPN Comparison Chart shows which services support which of these protocols and features in their configuration. Using TCP port 443 is usually a relatively common and user-friendly measure to bypass a restrictive/oppressive network.
VIII. CLEARING UP MISCONCEPTIONS
Kill switches - Many VPN services offer in their client a feature called a "Kill switch". The idea with a Kill Switch is that when the VPN loses its connection, it completely prevents the device from using internet, thus preventing accidental leaks of local connection data. Kill Switches are implemented very differently and will never be secure due to their design. The only 100% effective and secure configuration to accomplish prevention of leaks is a properly configured firewall. There are two main types of kill switches, those that shut down preconfigured apps in response to detecting the VPN connection has dropped and those that disable the network connection (or delete routes etc) if they detect a disconnection. In both of these cases the Kill Switch component is having to react to an event and very often leads to leaks - just a single packet is all it takes to compromise your privacy. The only way to be absolutely certain that packets cannot leak is for there to be an independent component (the Firewall) that blocks all packets unless destined for the VPN interface.
Warrant Canaries - Some VPN services maintain a document called a "Warrant Canary". This is a document put out and updated by them certifying that they have not been contacted by government agencies or coerced to compromise their user's data. In theory, if such an event occurred forcing them to compromise their principles, they would stop updating the canary, which in turn would indicate to users that their data is no longer private. Note that not all companies use effective warrant canaries. There is some debate as to the effectiveness of a warrant canary between experts to begin with - as force can be used by governments to coerce companies into maintaining them, thus nullifying their effectiveness. They are usually nothing more than marketing theater. If a company WAS operating a good canary, it would be almost impossible to tell. A warrant canary is almost a better feature to care about once you've found a trustworthy, capable service, rather than looking for a company that has one when shopping around.
I hope that this guide has been useful. I've been meaning to write one for some time, but as you can tell, it's pretty involved. Feel free to ask me if you have any questions - as usual you can contact me on reddit or using the contact info on my sheet.
Written by That One Privacy Guy
submitted by ThatOnePrivacyGuy to VPN [link] [comments]

On chain transactions are increasing but exchange volume is decreasing.

Looking at the on chain metrics at blockchain.com we can see that on chain transactions have been increasing for the last few months, along with the blocksize.
I thought batching would put more downward pressure on the on chain transactions but they are increasing....(its especially obvious when you look at the high and higher lows on the chart.)
Yet exchange volume is decreasing, and liquid should decrease on chain transactions further and more and more batching is taking place...All of this suggests that more people are using Bitcoin and specifically using Bitcoin in ways that’s not on an exchange. Which is very bullish.
Can someone elaborate on this, and help me understand these metrics with a bit more depth please? I was sure that Coinbase batching transactions together would decrease on chain transactions to the point it would take years to start coming back up, but we can see Bitcoin is moving around more and more all summer, inverses volume to exchanges which have low volumes these days.
ELI5 please?
submitted by _CryptoEnthusiast to Bitcoin [link] [comments]

That One Privacy Guy's - Guide to Choosing the Best VPN (for you)

Update: This can now be found on my website here.
That One Privacy Guy's - Guide to Choosing the Best VPN (for you)
Disclaimer: The below guide is my opinion, which I will try to provide as many examples for and as much evidence as possible to support. I reference my VPN Comparison Chart throughout much of this post, not so much for shameless self promotion, but because I believe it to be a solid resource to determine if a VPN meets your criteria and to assist you in deciding which is best for you. If you just want an ELI5, read the bolded segments throughout the guide for the highlights. If you want to go down the rabbit hole on this topic, read on, and buckle up - this is going to be long.
TABLE OF CONTENTS
I. INTRODUCTION
II. A WORD ABOUT TRUST
III. A WORD ABOUT VPN AFFILIATES
IV. IF YOU'RE CONCERNED WITH PRIVACY
V. IF YOUR CONCERNED WITH SECURITY
VI. IF YOU'RE CONCERNED WITH UN-GEOBLOCKING
VII IF YOU'RE CONCERNED WITH BYPASSING RESTRICTIVE NETWORKS
VIII. CLEARING UP MISCONCEPTIONS
I. INTRODUCTION:
The following is intended to be a detailed guide to answer the question, "How do I choose the best VPN (for me)?" The reason this is a hard thing to help people with, is that their needs and level of technical knowledge vary greatly - there is no one perfect VPN, they all have at least some flaws and some will just flat out be better for different people.
I very well might have forgotten to add a section I intended to, said something that needs clarification, or was just sleepy when I wrote parts of this guide, so I intend to update and expand it as needed.
I'm assuming that if you're reading this far, you have at least SOME knowledge as to the basics of what a VPN is, so I won't cover that here. This will be heavily emphasizing the need of a VPN for privacy, but I will echo and expand on other use cases as well towards the end.
II. A WORD ABOUT TRUST
No matter what reason you want a VPN, you want to know that the service you choose is trustworthy and is not compromising your data. Even if you're only concerned with geo-unblocking or other non-privacy uses, keep reading. I'll get more into this in the "Privacy" section, but it's important for everyone to be exposed to it at least a little.
A preface regarding privacy and trust, from another thread I made a while back. This applies to every company, but I would suggest especially so for VPNs.
We live in a society where privacy is undervalued and under assault daily. Some people eventually notice this and discover that they do value their own. They set out on a pilgrimage of sorts to educate themselves and learn about tools to help them protect it (as I did when I started my project). Because we depend on each other for direction and others to write software and run services to help keep us secure - TRUST AND TRANSPARENCY - are paramount.
However, transparency comes before trust.
III. A WORD ABOUT VPN AFFILIATES
You may have started your search for a VPN by looking for "VPN Reviews" in your search engine of choice. if you had, you would have gotten page upon page of what seem to be harmless review sites, top 10 or blog style reviews of different VPN services. You may even be coming here for confirmation of what you were told on those sites. The sites making these recommendations are, in almost every case, paid by the services they review and recommend. They are beginning their business relationship with you, with what essentially amounts to a lie. The technical term for this kind of marketing is "native advertising" and it's abuse is a huge problem in the VPN industry.
I purposefully made a point to capture this kind of data on my VPN Comparison Chart. There you can find information on services that have affiliate programs, the specific policies they have for them and whether or not the affiliates act ethically, essentially what the services tolerate from those representing them, when it comes to persuading YOU to buy into the information they put out.
Note that not all affiliates have to be bad actors and simply having an affiliate program is not necessarily grounds for mistrust of a VPN, but rather when those services allow their resellers to generate referrals by hook or by crook. If you see a service appear over and over again on the kinds of sites mentioned above, there is a good chance they are making money from, and are perfectly okay with these kinds of deceptive practices as a part of their business model. They often will claim that it's just the affiliate doing this, and that they can't control what others do. This is false. Affiliates, like anyone entering into a business relationship with someone, agree to certain terms put forth by the service hiring them. If a company doesn't expect and enforce certain standards from their affiliates (not spamming, not breaking copyright, disclosing who they are, etc), they are approving these methods, and are not worthy of your trust. If they are willing to lie to you before you even buy into their service, the stage is set for them to be dishonest with you when you interact with them on a normal basis as a customer.
IV. IF YOU'RE CONCERNED WITH PRIVACY
  • a. More on Trust
As a lawyer represents your legal interests, a VPN service (among others) represents your privacy interests. If a lawyer does something to violate your trust or is not honest about some aspect of their representation that could affect you, you would discard them and you'd be right to do so. Likewise with a VPN service. There are many out there that are not worth your time or money. Unlike a lawyer, a VPN can be put together and promoted by anyone with access to a computer, the key difference being that you would never even see their face.
If you are looking for a VPN for privacy purposes, you already believe you cannot trust certain parties. Those parties might be companies whose websites you visit or maybe even an oppressive government whose mass surveillance is encroaching on your rights. You are being put in a position where you must rely on someone other than yourself for protection and the last thing you need is one more party that you can't trust.
This decision is an important one, and not just any VPN service is worthy of that trust. You're trusting them to know what they're doing - to be able to operate a competent service that will protect your privacy. You are trusting them to be responsive to new technical and geopolitical threats to their operation. You're trusting them to be honest with you in the way they do business so that when you are shopping and comparing, you are getting accurate information.
  • b. More on Affiliates
In the main section at the beginning of this guide, I talked about affiliate practices, so I will only briefly mention it here. If you choose a company with an affiliate program, choose one that expects and enforces good behavior from their reselling partners. You can usually read their affiliate terms on their site. If they are not publicly visible, they should respond with this information when asked. If not, or if they play games with you, look elsewhere. More information on affiliate policies and behavior can be found on my VPN Comparison Chart.
  • c. Jurisdiction
In the last few years, certain revelations have been made manifest regarding the mass surveillance programs of various countries around the globe. These countries are known as the five, nine, and fourteen eyes. These countries not only spy on their own citizens where they can get away with it, but they spy on each others, and swap notes to bypass governmental restrictions on power. If a service, or the people who run a service is based in one of these countries, it's not unreasonable to expect that they may be susceptible to unlawful searches and compromises made in the name of national security. That said, if your threat model includes protection from such actions, choosing a company incorporated outside of these jurisdictions probably would not be adequate to protect you - as such actors have vast resources, and if singled out, you would need to worry about more than your VPN (by relying on other tools such as Tor, Tails, paying very close attention to your opsec, etc). Where the servers you're connecting to and the people who operate / have control of them are located are more important than where a company is incorporated, to protect yourself from government overreach
Other countries are not part of the spy collaboration mentioned above, but still have issues with government limitations on internet freedom and free speech. Avoid countries with limited internet freedom. The degree of internet freedom a country has can also be found under "jurisdiction" on my sheet.
  • d. Logging
When you connect to a VPN service, you are essentially just adding one more stop along your route to the open internet. The VPN is a "man in the middle" who you are trusting with the traffic and connection data that is being generated in the background as you use the internet. Some VPN companies choose to log this data. There are many reasons for doing so, some more legitimate than others. Some services record this to protect themselves legally in the case they are approached by authorities. Some companies keep minimal connection logs to aid them in maintaining servers. Some will even sell your data to third parties as part of their business model. If your concern is privacy, you most likely do not want your browsing habits and connection data being recorded. Choose a service that specifically states that they do not keep logs, AND which types they do not keep. Make sure they do not keep ANY kind of activity or connection log Many services claim to not keep logs, but are vague, and upon closer inspection actually do keep certain types, so be wary of such promises until you've confirmed it for yourself in their respective terms and privacy policies.
  • e. Payments and Communication
Assuming privacy is your priority, when you go to pay for your VPN service, there are many methods available, but only a few worth consideration. Services that offer the ability to pay by Bitcoin, cash, or misc gift cards are the best way to ensure that you are kept as anonymous as possible. if these services require more personal information than an email address, look the other direction - this is information they're recording about you that may be used at best to sell to third parties, at worst to later identify you.
Some services offer a PGP key for additional privacy. This is a nice thing to have if you want to be able to communicate with them using encryption.
  • f. Protocols
There are many different kinds of VPN protocols that allow you to establish a tunnel with your service provider - some more secure than others. Certain protocols are documented to have been compromised. Others are free and open source, and as such are freely available for security experts to audit and improve. The free availability of the source code helps to ensure that vulnerabilities are patched quickly and that individuals so inclined can see exactly how their software is working. Choose a VPN that supports OpenVPN and use it to connect to your VPN server. Avoid using other protocols, specifically PPTP as its not suited for privacy.
  • g. DNS and IPv6 Leaks
Throughout the course of using the internet, your computer sends and receives a lot of data that isn't visible to you, the user. When you type in a web address, a request is sent to a server that is usually operated by your ISP. When you connect to the internet using a VPN, this responsibility is now on them. If they don't take certain actions, this request containing info for the site your want to visit is being sent to THEIR ISP instead. This may not be as bad as it going through yours, but as I mentioned logging above - if the company in question even keeps certain logs, there is a chance that the sites you try to visit can be correlated with the timestamps of when such a request is sent. As an alternative, some use public DNS servers, such as google's, which is not ideal for privacy. Choose a VPN service that maintains their own first party DNS server that won't leak - then TEST IT TO MAKE SURE.
When using the internet, you connect to IP addresses. Traditionally, IPv4 is used to accomplish this (you may have seen numbers in the past like 8.8.8.8 or 216.58.217.206, etc). There is another standard that will some day be more prevalent, called IPv6, but that is being used now during the time it transitions into normal configurations (vastly more IPv6 numbers exist than IPv4). When you connect and use the internet (unless you have specifically taken steps to disable it), you are sending and receiving IPv6 data. Again, normally, this data is sent and resolved through your ISP and their DNS servers, but unless properly configured, this information might not be securely passing through the VPN tunnel and could be leaking to the open internet. Given such routed global IPv6 addresses, it's easy for remote sites to identify user ISPs. And with requisite authority, account information could be obtained from those ISPs. Choose a VPN service that either blocks or provides new VPN-specific IPv6 address and provides an IPv6 DNS server that's reachable only through the VPN tunnel - then TEST IT TO MAKE SURE.
  • h. Encryption and other Features
Around 1440 AD, the Printing Press was invented. It created a method for the common person to quickly disperse information, technologically reinforcing the natural right to freely speak and share information. More recently the internet allows billions to freely and openly share ideas and advance humanity. This reaffirmed the common person's rights in such a way that was difficult for governments or organizations to stifle. Similarly, until the invention of firearms, only those physically capable could defend themselves from those that wished to encroach on their rights, thus this technological advancement reinforced the individual's right to self defense. This brings us to Computerized Encryption. As with the other technological advancements mentioned above, Encryption provides a simple-to-use method that the average user can take advantage of to reinforce their right to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.
Choose a VPN service that has strong data and handshake encryption. Make sure the protocol you choose has the level of advertised encryption available to it, as services typically provide more than one protocol with varying levels of encryption strength. The VPN Comparison Chart can help you determine what is considered strong by the color coding on these fields. Be sure that even if the service has the type of encryption you want available BY DEFAULT - some services will technically offer strong encryption, but it has to be manually configured (not user friendly).
Optionally, depending on your use case and threat model, you may be interested in making sure Authenticated SMTP (to send email) and P2P (to file share, download, use Bitcoin, etc) are not blocked on your VPN's servers
  • i. Websites and your Privacy
When you start to search for services and are browsing on their websites, there are some additional items you may want to consider. Speaking of trust and privacy - some companies will use tracking cookies to determine how to best serve you ads, which other sites you've been to, and some will even phone home with specific personal information. Best case, this is an abuse of power by companies stretching the limits of their ideas on how to gather this info, worst case, it can be used to intentionally violate your privacy and tie your device back to the site and activity performed on it. Choose a company that respects your privacy enough to use few if any persistent or external tracking cookies. If they are already violating your privacy the moment you visit their site, you have no assurance that they will take your privacy seriously after hiring them to represent your interests. Available for years, https allows websites to entirely encrypt all data sent and received with the user, effectively blocking out those that might try spying on such web traffic. Choose a service that encrypts their website with an SSL Certificate. Additionally, CloudFlare, Incapsula, and similar services have recently become popular with websites for their DDoS protection and dynamic bandwidth scaling. However, these services act as an additional man in the middle between your VPN's website and you. In the wrong hands, the information they collect and have access to about your VPN's website, and your interaction with it, could be compromised. Avoid VPNs that use CloudFlare, Incapsula, and other such services.
V. IF YOU'RE CONCERNED WITH SECURITY
Many of the points made above are relevant to security as well as privacy, and I will point some out below.
Jurisdiction, specifically Freedom Status is important to ensure an environment where laws are enforced and physical security that we take for granted in some parts of the world are applicable to the servers we communicate with. This also helps indicate that our service and the servers we connect to are located in places that respect internet freedom. This information can be found on the Comparison Chart and confirmed on Freedom House's website.
IPv6 should be specifically tunnelled or blocked outright the same as with the privacy scenario above.
First party DNS servers, as mentioned above, are ideal for preventing leaks of your data.
Both data and handshake encryption should be strong and available for the protocol you choose (which again, should not be PPTP). Other protocols are probably secure enough for daily use. Note that no protocol is bulletproof and exploits probably exist and are discoverable for each and every one of them. Such exploits are even more discoverable by governments with vast amounts of resources.
VI. IF YOU'RE CONCERNED WITH UN-GEOBLOCKING
If your only concern is escaping geoblocks, your needs are far less numerous. Being able to connect to an exit node in the country of your choice is really the only requirement. This doesn't mean necessarily however that you want to neglect the proper security measures discussed above, only that for things like Netflix, Hulu, certain TV online channels and sporting events, they are less important if un-geoblocking is ALL you're trying to do, almost anything will work, HOWEVER - if Privacy and Security are of any concern whatsoever, heed the advice above and know that un-geoblocking will virtually always come naturally when shopping for those needs (as long as required server availability is a feature of your chosen VPN)
VII. IF YOU'RE CONCERNED WITH BYPASSING RESTRICTIVE NETWORKS
Some parts of the world are resisting the ever-growing ability for their citizens to freely share information and as such have implemented roadblocks in their networking infrastructure to cripple such communication. For example, the "Great Firewall of China" has several layers of VPN detection and blocking built into it. Other networks belonging to large corporations or maybe even your Internet Service Provider may restrict you from using certain ports, limiting what you can use the internet for. However, there are ways to get around these restrictions by using the right VPN.
Features such as multihop, TCP port 443, Obfsproxy, SOCKS, SSL tunnels, SSH tunnels, and some other proprietary solutions (which may be built specifically by a given VPN company) can be useful in avoiding these restrictions. As for which are most effective, it's a matter of which restriction is being inflicted upon the user. Speak with your VPN service's support team to determine which might be effective in your case. The VPN Comparison Chart shows which services support which of these protocols and features in their configuration. Using TCP port 443 is usually a relatively common and user-friendly measure to bypass a restrictive/oppressive network.
VIII. CLEARING UP MISCONCEPTIONS
Kill switches - Many VPN services offer in their client a feature called a "Kill switch". The idea with a Kill Switch is that when the VPN loses its connection, it completely prevents the device from using internet, thus preventing accidental leaks of local connection data. Kill Switches are implemented very differently and will never be secure due to their design. The only 100% effective and secure configuration to accomplish prevention of leaks is a properly configured firewall. There are two main types of kill switches, those that shut down preconfigured apps in response to detecting the VPN connection has dropped and those that disable the network connection (or delete routes etc) if they detect a disconnection. In both of these cases the Kill Switch component is having to react to an event and very often leads to leaks - just a single packet is all it takes to compromise your privacy. The only way to be absolutely certain that packets cannot leak is for there to be an independent component (the Firewall) that blocks all packets unless destined for the VPN interface.
Warrant Canaries - Some VPN services maintain a document called a "Warrant Canary". This is a document put out and updated by them certifying that they have not been contacted by government agencies or coerced to compromise their user's data. In theory, if such an event occurred forcing them to compromise their principles, they would stop updating the canary, which in turn would indicate to users that their data is no longer private. Note that not all companies use effective warrant canaries. There is some debate as to the effectiveness of a warrant canary between experts to begin with - as force can be used by governments to coerce companies into maintaining them, thus nullifying their effectiveness. They are usually nothing more than marketing theater. If a company WAS operating a good canary, it would be almost impossible to tell. A warrant canary is almost a better feature to care about once you've found a trustworthy, capable service, rather than looking for a company that has one when shopping around.
I hope that this guide has been useful. I've been meaning to write one for some time, but as you can tell, it's pretty involved. Feel free to ask me if you have any questions - as usual you can contact me on reddit or using the contact info on my sheet.
Written by That One Privacy Guy
submitted by ThatOnePrivacyGuy to privacytoolsIO [link] [comments]

Bitcoin Madness: How to Simulate Bitcoin Prices in Google Sheets

Original Medium post can be found here: https://medium.com/@spreadstreet/bitcoin-madness-how-to-simulate-bitcoin-prices-in-google-sheets-c61cb42f26ed
You know the scenario...
Bitcoin had another huge increase, but you missed the opportunity. You wanted to get in, but your gut instinct told you no. And rightfully so...no one knows where the price is going to go. What if you invested, and it had another 20% loss? These sort of price movements are common in the volatile world of cryptocurrencies.
Seriously...how far can this Bitcoin price really go?

BITCOIN IS A VOLATILE BEAST

Risk analysis must be a part of every decision you make.
You are constantly faced with uncertainty, ambiguity, and variability. Variability, in the case of Bitcoin, unlike anything we have ever seen before. And even though we have unprecedented access to information, we can’t accurately predict the future.
Luckily, we have methods that enable you to see all the possible outcomes of your decisions, and assess the impact of risk.

WHERE TO START?

Running simulations can prepare us for the worst.
Monte Carlo simulation (also known as the Monte Carlo Method) allows for better decision making under uncertainty.
One of the most common ways to estimate risk is the use of a Monte Carlo simulation (MCS). From Investopedia:
For example, to calculate the value at risk (VaR) of a portfolio, we can run a Monte Carlo simulation that attempts to predict the worst likely loss for a portfolio given a confidence interval over a specified time horizon - we always need to specify two conditions for VaR: confidence and horizon. (For related reading, see The Uses And Limits Of Volatility and Introduction To Value At Risk (VAR) - Part 1 and Part 2.)
A MCS can be run with many different models. Our own process will be:
  1. Specify a model (for here, we will use geometric Brownian motion)
  2. Get historical daily bitcoin prices
  3. Calculate daily returns
  4. Name the daily return range
  5. Summary statistics
  6. Simulate a year
  7. Simulate a year many times
  8. Multi-year summary statistics
  9. Quick analysis of results

STEP 1. WTF IS GEOMETRIC BROWNIAN MOTION?

The geometric Brownian motion (GBM) is a statistical method that is used heavily in the forecasting of stock prices. The reason the process is so attractive for this is because of the following:
The GBM is technically a Markov process, which is a fancy way of saying "A random process whose future probabilities are determined by its most recent values." Said another way, past price information is already incorporated and the next price movement is "conditionally independent" of past price movements.
Math geeks have a habit of making things infinitely more complicated than they have to be. I will do my best to make this as simple as possible.
The formula for GBM is as follows:
gBm formula
Where:
This formula can be broken down into two very important terms: "drift" and "shock".
For each time period, our model assumes the price will "drift" up by the expected return. But the drift will be shocked (added or subtracted) by a random shock. The random shock will be the standard deviation "s" multiplied by a random number "e". This is simply a way of scaling the standard deviation.

STEP 1A. THE THUNDER GOD ELI5

The ELI5 version: The thunder god Zeus is a great god. A just god.
But Zeus is subject to wild mood swings.
Every day Zeus can shoot his magic lightning into the price of Bitcoin, and cause it to go up or down.
Some days he is in such a good mood, that he shocks the price up by a random amount. On other days, he is in such a poor mood that he shocks the price down for opposing him.
Zeus Striking Down the Price
And thus, we have the essence of GBM: a series of steps with an expected upward drift, where each step is hit with a plus/minus shock (which is a function of the stock's standard deviation).

STEP 2. HISTORICAL DAILY BITCOIN PRICES

Copy the raw data scores from coinmarketcap. Paste the data into your own spreadsheet.
For this exercise, your columns will be: Time, Open, Close, High, Low, Volume.
Columns Setup OHLCV
Want to automatically pull in Bitcoin prices? Use the Spreadstreet Google Sheets Add-in.

STEP 3. CALCULATE DAILY RETURNS

Calculate daily returns from the "Close" price. in H2 put the formula:
=LN(C2/B2) 
Drag it all the way down to the end of the prices to fill the entire Returns column
Calculate Daily Returns

STEP 4. NAME THE DAILY RETURNS RANGE

Create a named range from the returns column, called returns, to make our life easier. Highlight all the data in column H, i.e. cells H1:H1000, then click on the menu Data > Named ranges… and call the range returns:
Name the range returns

STEP 5. SUMMARY STATISTICS

Set up a small summary table with the close, daily volatility, annual volatility, daily drift, annual drift, and mean drift of our population. The formulas are:
In K1, enter:
=C2 
and name it close.
In K2, enter:
=STDEV(returns) 
and name it dailyVolatility
In K3, enter:
=dailyVolatility*SQRT(365) 
and name it annualVolatility
In K4, enter:
=AVERAGE(returns) 
and name it dailyDrift
In K5, enter:
=dailyDrift*365 
and name it annualDrift
In K6, enter:
=dailyDrift-0.5*dailyVolatility^2 
and name it meanDrift
Create Summary Statistics Table

STEP 6. SIMULATE A YEAR

Setup the yearly simulation table with Time, Normdist, Log Return, and Simulated Price

Time

In J12 put 0, and in J13 put:
=J12+1 
Drag it all the way down to your preferred forecast timeframe. Here I simulated a year (365 days), so I copied down to J377
Time

Normdist

Let’s set up the normal distribution curve values.
Google Sheets has a formula NORMDIST which calculates the value of the normal distribution function for a given value, mean and standard deviation. Since we ascribe to the random walk theory, we want to use a mean of 0, and a standard deviation of 1.
In K13, put the formula:
=NORMINV(RAND(),0,1) 
Drag it all the way down to K377 to fill the whole Normdist column:
Normdist

Log Return

To get the percentage of daily stock movement, we will calculate log return.
In L13, put the formula:
=meanDrift+dailyVolatility*K13 
Copy the formula all the way down to L377:
Log Return

Simulated Price

Now to the real meat. Let's calculate the simulated Bitcoin price.
In M12 put the Close price, and in M13, put:
=M12*EXP(L13) 
Copy the formula all the way down to M377:
Simulated Price

Forecasted Bitcoin price for one year

Let's see what the pricing data looks like.
Select from M12 to M377, then Insert - Chart and select line chart:
Simulated Price for One Year
We have now successfully completed one simulation. And depending on your results, they could look normal...or downright crazy.

STEP 7. SIMULATE A YEAR MANY TIMES

We completed one simulation, but we want to run many different trials.
Create a scenario tab, setup a table to simulate 1,000 different one-year trials. In A3 to A1003, put the numbers 1 through 1000.
In B3, put the formula:
=Close*EXP((annualDrift-0.5*annualVolatility^2)+annualVolatility*norminv(rand(),0,1)) 
Copy the formula down all the way. Name this range "scores":
Simulate Bitcoin Prices for Many Years

STEP 8. MULTI-YEAR SUMMARY STATISTICS

Set up a small summary table with the mean, median, standard deviation, min, max, and range of our new population. The formulas are:
=AVERAGE(scores) =STDEVP(scores) =MIN(scores) =MAX(scores) =E6-E5 
Multiyear Summary Statistics

STEP 9. QUICK ANALYSIS OF RESULTS

My results will look different than yours (due to the random nature of NORMDIST and the time you pulled the Bitcoin prices). But let's take a look at the results:
Mean $27,147 Median $16,097 St. Dev $37,243 Min $556 Max $479,586 Range $479,029 3sd $1,486 2sd $3,005 1sd $5,850 Cur $16,098 1sd $43,896 2sd $81,998 3sd $190,129 
How to read: We can be 95% certain that the price of Bitcoin will fall between $3,005, and $81,998 in one year.
Wait really? Should I buy? No, this is not telling you to buy. This should be one tool of many to help you in your buying and risk decisions.
Lognormal Distribution of Bitcoin Prices

CONCLUSION

You now know how to complete a geometric Brownian motion analysis of Bitcoin prices. Congratulations!
Good statistical analysis methods can be scary, but they don't have to be. Here we covered off on a great method for estimating future Bitcoin prices, which can also be applied to other cryptocurrencies.
With this new tool in place, you can be confident in your risk analysis methods by seeing all the possible outcomes of your decisions, and assess the impact of risk.
Deliberate. Analytical. Intelligent.

WANT YOUR OWN COPY?

Simulate Bitcoin Prices Download

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About the Author

John Young is the founder of Spreadstreet, former financial analyst for a big-ass company, and runner-up in the 6th grade spelling bee. He would have invested in Google if he knew about it...and had any money.
He is the author of the Spreadstreet blog, which has over 3 readers (not a typo). He hopes to hit 10, but honestly writing is a lot of work.
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