Stock Market Today: Stocks Stumble as Inflation Remains Red-Hot

It was a choppy day for stocks as investors unpacked the latest consumer price index (CPI). Data released by the Labor Department this morning showed that prices consumers paid for goods and services in April rose at an annual rate of 8.3% – down from March’s 8.5% pace to mark the first drop in inflation in eight months. While encouraging at first glimpse, there were concerning signs deeper inside the report.

For instance, the decline in CPI last month reflected a drop in gas prices, which have since rebounded. Food prices remained elevated, while airfare and restaurant bills increased ahead of the key summer travel season. And core CPI, which excludes the volatile energy and food categories, rose 0.6% on a sequential basis – double what it was in March.

“While this report appears to mark the first that shows some moderation from the ever-rising pace of inflation since September of last year, one data point does not necessarily make a trend; and the rise in core CPI should lead to some consideration that the moderation in inflation will not be quick,” says Jason Pride, chief investment officer of private wealth at wealth management firm Glenmede. 

With prices already high, Pride said, it should be harder for the CPI to continue to rise at the same pace, especially with the Federal Reserve also hiking interest rates to combat higher prices. “However, it will likely take multiple reports for such a trend [of moderating inflation] to clearly establish itself,” he says.

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This sentiment is echoed by Mike Loewengart, managing director of Investment Strategy at E*Trade. “Today’s read is a stark reminder that the journey to pre-pandemic levels of inflation will be a long one,” Loewengart says. “Although inflation slowed from March, the market’s reaction suggests that record high prices continue to weigh heavy on investors psyches. And with inflation persistently hot, the Fed has more fodder for increased rate hikes, which the market doesn’t often welcome with open arms.”

After bouncing between gains and losses in early trading, markets took a decisive turn lower this afternoon. At the close, the Nasdaq Composite was down 3.2% at 11,364, the S&P 500 Index was off 1.7% at 3,935 and the Dow Jones Industrial Average was 1.0% lower at 31,834. 

stock price chart 051122stock price chart 051122

Other news in the stock market today:

  • The small-cap Russell 2000 retreated 2.5% to 1,718.
  • U.S. crude futures surged 6% to end at $105.71 per barrel.
  • Gold futures gained 0.7% to settle at $1,853.70 an ounce.
  • Bitcoin slid below the $30,000 for the first time since July 2021, down 5.9% at $29,477.50. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
  • Roblox (RBLX) was down as much as 10% in after-hours trading Tuesday after the video game developer reported a first-quarter loss of 27 cents per share, wider than the 21 cents per share Wall Street was expecting. The company’s revenue of $631.2 million also fell short of the consensus estimate, as did bookings of 54.1 million. Still, the metaverse stock managed to finish today up 3.4% after Chief Financial Officer Michael Guthrie said on the company’s earnings call that year-over-year growth may have bottomed in March, sooner than anticipated. 
  • Coinbase Global (COIN) shares plunged 26.4% on Wednesday after delivering a pretty disappointing quarterly report. Q1 revenues were off 27% year-over-year to $1.17 billion, widely missing analysts’ expectations for $1.50 billion. Meanwhile, the company swung to a $430 million loss after earning $388 million in the year-ago period. Monthly users were down 19% YoY, too. Also raising eyebrows in the cryptocurrency community was an update to the Risk Factors section in its Form 10-Q, warning that users could potentially lose access to their assets in the event Coinbase ever had to go through bankruptcy proceedings.

Inflation Remains a Top Concern for Investors

Inflation remains top of mind for investors. This is according to the latest Charles Schwab Trader Sentiment Survey, which reviews the outlooks, expectations and trading patterns of 845 Charles Schwab and TDAmeritrade clients. Inflation was the main concern for those surveyed in the report (20% of respondents), followed by geopolitics (15%) and recession/domestic politics (12% apiece). And nearly half of participants (45%) do not believe inflation will begin to ease until 2023. 

“Overall, in the second quarter, market sentiment among traders is unquestionably skewing bearish,” says Barry Metzger, head of trading and education at Schwab. But market participants do see investing opportunities, the report notes.

Among the sectors survey respondents are most bullish on at the moment are energy (70%) and utilities (54%). The industries they are most upbeat toward include cybersecurity (71%) and agriculture (70%). 

And 70% of those surveyed are interested in seeking out opportunities in defense stocks. While Russia’s invasion of Ukraine has unsettled many parts of the stock market, it has also sparked an increase in global military spending, which could create a potential boon for the industry. Here, we’ve compiled a quick list of defense stocks that are poised to benefit from this spending build. The names featured include familiar names as well as some under-the-radar picks – and they all sport top ratings from Wall Street’s pros.

Source: kiplinger.com

Cryptocurrency Fees – How Much Does It Cost to Buy and Sell Crypto?

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Cryptocurrency has started to change how the world handles financial transactions. From the first Bitcoin purchase in 2009 to the release of over 10,000 cryptocurrencies globally, millions of people are using crypto daily.

Although crypto promises lightning fast transactions and low fees, how much does it actually cost to trade and use cryptocurrency?

We’ve reviewed a wide range of different cryptocurrency fees, how much you can expect to pay, what factors to consider when paying fees, and how to save money on crypto transaction fees.

How Much Are Cryptocurrency Fees?

Cryptocurrency fees depend on the type of transaction you’re executing, which platform you’re on, and which cryptocurrency you’re using. In general, cryptocurrency fees are a percentage of the overall transaction, and may include additional costs if you’re processing a transaction directly on the blockchain network.


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When you are trading cryptocurrency on an exchange, fees range anywhere from 0.00% up to 5% or more, depending on the size of the transaction.

When trading on a decentralized exchange (DEX), fees usually range from 0.05% to 1.0% for the transaction, but there are network fees paid for processing transactions as well. When the network is experiencing high volume, these network fees can end up being $100 or more, depending on the network being used.

Overall, cryptocurrency fees range from fairly reasonable to outrageously expensive, depending on a variety of factors. 


Types of Cryptocurrency Fees

Cryptocurrencies were originally designed as a peer-to-peer payment system, with the fees being paid going to those that operate the payment network. Fast-forward over a decade later, and there are many types of cryptocurrency fees, including exchange fees, network fees, and wallet fees. 

We’ll cover the details of the different types of crypto fees below, and how to avoid overpaying.

Exchange Fees

Cryptocurrency exchanges have become the most popular way to buy, sell, and trade crypto. While fees can vary by exchange, most follow a fee schedule based on the Maker-Taker model. 

Market makers place an order into the order book, and takers purchase the orders from the order book. Makers typically pay a smaller fee than takers, and most fee schedules offer discounts to users who trade a higher monthly volume.

Here’s an example of the Coinbase Advanced fee schedule:

30-Day Volume (USD) Maker fee Taker fee
<$10K 0.40% 0.60%
$10K to $50K 0.25% 0.40%
$50K to $100K 0.15% 0.25%
$100K to $1M 0.10% 0.20%
$1M to $20M 0.08% 0.18%
$20M to $100M 0.05% 0.15%
$100M to $300M 0.02% 0.10%
$300M to $500M 0.00% 0.08%
$500M+ 0.00% 0.05%

In this example, traders who execute less than $10,000 in monthly trading volume pay the highest fees, and there are discounted fees for traders with higher volumes. Market makers are encouraged to trade by paying lower fees, as they increase the liquidity of the exchange.

Here’s another example from crypto exchange Kraken, which offers lower trading fees to users of its “Pro” platform:

30-Day Volume (USD) Maker fee Taker fee
$0 to $50,000 0.16% 0.26%
$50,001 to $100,000 0.14% 0.24%
$100,001 to $250,000 0.12% 0.22%
$250,001 to $500,000 0.10% 0.20%
$500,001 to $1,000,000 0.08% 0.18%
$1,000,001 to $2,500,000 0.06% 0.16%
$2,500,001 to $5,000,000 0.04% 0.14%
$5,000,001 to $10,000,000 0.02% 0.12%
$10,000,000+ 0.00% 0.10%

In addition to Maker-Taker trade fees, crypto exchanges may offer a simple order form to buy cryptocurrency directly, but charge higher fees for this service. Coinbase, for example, allows users to buy or sell crypto with fiat currency (such as U.S. dollars), and charges an average 1.49% fee for transactions. 

In addition to transaction fees, exchanges may add a surcharge to transactions that use a debit or credit card to purchase crypto. This can be up to 3.99% or more, depending on the exchange. This surcharge is added to cover the processing fees from the credit card companies, and can cause overall transaction fees to cost 5% or more.

Finally, some crypto exchanges charge deposit and withdrawal fees. These fees are paid in the cryptocurrency you’re depositing or withdrawing, and typically have a minimum transaction requirement. Exchanges typically waive deposit fees because they want to encourage users to transfer funds onto the platform. But many exchanges charge withdrawal fees to move crypto off the platform.

Network Fees

Although most of the trading volume for cryptocurrency happens on centralized exchanges (such as Coinbase), many transactions happen directly on the blockchain network. These transactions may be direct payments, interactions with a crypto-based application, or simply trading on a decentralized exchange.

Users of the network pay network fees — also known as “gas fees” — to the network operators. Because most blockchain networks consist of independent nodes (servers) that run the blockchain software, these node operators are paid a fee to process transactions on the network. 

Network fees are paid in the native cryptocurrency of the blockchain being used, such as solana (SOL), ethereum (ETH), or avalanche (AVAX).

Fees can vary by network, as some blockchains charge much less than others. For example, Ethereum fees are typically more than $10 per transaction, while fees on the Solana network currently are less than $0.01 per transaction. 

When there is a significant amount of traffic on the network, processing transactions requires more resources, increasing the fee price. This is especially true on the Ethereum network, which hosts a large volume of transactions compared to other blockchains, and fees have been known to eclipse $100 per transaction.

Overall, network fees vary wildly, and are dependent on the network you are using to transact. Most blockchain networks list the fees before processing your transaction, so you can evaluate whether you are willing to pay the network fee.

Wallet Fees

Cryptocurrency wallets are used to store crypto, transact on crypto networks, and interact with decentralized applications. Although most of the fees associated with trading crypto happen on exchanges or via network fees, there are some wallet fees to be aware of.

When depositing funds into a cryptocurrency exchange from your digital wallet, you may incur a 

fee from the exchange you are depositing to. There may also be a fee for withdrawing cryptocurrency from an exchange directly to your digital wallet. These fees vary by exchange, but are typically paid in the cryptocurrency being transferred.

For example, when withdrawing bitcoin from the crypto exchange Kraken to your digital wallet, you are charged a 0.00002 BTC withdrawal fee. If the bitcoin price was $40,000 at that time, this equates to a $0.80 fee, or a 0.0002% fee.

Digital wallets are also used to pay for network fees when using your wallet on a crypto application, or when trading on a decentralized exchange. These network fees require using the native blockchain cryptocurrency to pay, such as ETH on the Ethereum network.


How to Avoid or Reduce Cryptocurrency Fees

Although paying cryptocurrency fees is required to trade or use your crypto, there are ways to lower your fees or avoid them altogether. Here are a few ways to save on crypto fees:

  • Pay Using the Native Exchange Token. When trading on a crypto exchange, you may be able to save on fees by owning a certain amount of the native exchange token. For example, when trading on Binance, using the Binance Coin (BNB) to pay for transaction fees will net you a discount.
  • Don’t Buy Crypto With a Credit Card. Many exchanges allow users to purchase crypto with a credit card or debit card, there is typically a massive surcharge on these transactions. Some charge up to 4% for buying crypto with a credit card!
  • Avoid Trading During Volatility. When there is high volatility in the cryptocurrency market, network fees increase substantially. To avoid paying higher fees, don’t trade when there is massive network congestion.
  • Buy and Hold. Crypto exchanges collect fees on every transaction, whether you are buying or selling. The most transactions you place, the more fees you will pay. To save on fees, you can simply buy and hold your cryptocurrency.
  • Choose a Low-Fee Exchange. Exchange fees vary by quite a margin, and finding a high-quality cryptocurrency exchange that offers low fees can save you a bundle. 

Although transaction fees cannot usually be avoided, these strategies can help you lower your overall costs when trading or using your cryptocurrency.


Final Word

Cryptocurrency was designed to create a direct payment network across the globe. Although paying fees helps incentivize crypto networks to grow, cryptocurrency has expanded into an entirely new asset class, and there are more fees than ever.

Exchange fees can cost a bundle, but there are several ways to lower your costs. Understanding what costs are involved in trading crypto can help you compare crypto exchanges to find one that fits your needs.

When trading crypto on a decentralized exchange or using a crypto application, network fees can quickly become expensive. Avoiding times of volatility and using blockchains that offer lower fees can help you save money.

Overall, fees are required to trade and use cryptocurrency, but you don’t have to overpay if you know where to look.

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Kraken Review – 110+ Cryptocurrencies and Low Crypto Trading Fees

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Kraken is a cryptocurrency exchange based in the U.S. that allows users to buy, sell, and trade crypto, as well as stake crypto to earn interest. Kraken also allows certain users to trade futures, as well as trade on margin with up to 5x leverage. Institutional investors can also access Kraken’s over-the-counter (OTC) services for larger transactions with high-touch service.

Kraken was founded by Jesse Powell in 2011 to help displaced customers from the massive Mt. Gox exchange hack. Kraken officially launched in 2013 and offered Bitcoin, Litecoin, and a few other cryptocurrencies for trading. It has expanded to offer over 100 crypto on the platform, as well as leveraged trading. Kraken is available in over 200 countries around the globe, including 48 U.S. states (not available in Washington state and New York).


Key Features of Kraken

Kraken is foremost a trading platform for active traders, but also caters to beginners and institutional investors. With a focus on security, as well as 24/7 live chat support, Kraken is one of the more popular U.S.-based exchanges. Here are some of the features that make Kraken stand out as a cryptocurrency exchange:

Kraken Trading Platform

Kraken offers both a simple and advanced order form, as well as an advanced trading interface, designed for users with varying levels of crypto expertise. The order forms allow users to quickly place trades, including market and limit orders on the simple interface, and the addition of stop loss, take profit, and settle position orders on the advanced interface.

The trading platform is designed for advanced crypto traders, with live order books, candlestick charting with built-in indicators, and a customizable interface. Advanced traders can build customer orders, track trading volume and order activity, as well as trade with up to 5x leverage (for qualifying users). 

Overall, Kraken offers a wide range of order and trading capabilities for crypto investors of all levels.

Margin and Futures Trading

Kraken is one of the few U.S.-based crypto exchanges that offer access to margin and futures trading. Margin trading is available with up to 5x leverage, although U.S. residents will need to meet certain criteria to be eligible, such as having $10 million in investable assets. Users can borrow margin from Kraken to place larger trades, and fees are charged on a rollover basis (every 4 hours for open positions).

Kraken also offers trading crypto futures with up to 50x leverage on a few select cryptocurrencies, including Bitcoin and Ethereum. However, futures trading is not available to U.S. residents.

24/7 Customer Support

Kraken offers 24/7 live chat support to users, which is rare for a cryptocurrency exchange. Users can get help with account issues or have other questions answered via chat, or submit a ticket. Most crypto exchanges offer email support via a contact form, and very fw offer chat support. Kraken stands out with this level of support, and gives customers peace of mind when dealing with issues.

In addition, Kraken offers phone support from 6am to 6pm Eastern in the U.S.

Institutional Services

Kraken offers a wide range of customizable services for institutional clients, aimed at corporations, brokers, and family offices. This includes access to the Kraken OTC trading desk, spot trading with high margin limits, and fiat funding available in seven global currencies. 

Kraken also offers access to custom tools through REST and WebSocket APIs for custom trading applications and bespoke solutions. Kraken supports institutions with 24/7 support staff available by email, live chat, phone, or encrypted private messaging. 

Kraken Staking

Kraken allows users to earn rewards by staking eligible cryptocurrencies on its platform. Kraken’s selection is quite large compared to other crypto exchanges, offering staking rewards on 15 crypto assets. Staking is when a user locks up their cryptocurrency on the platform, helping secure the blockchain network, and paying out rewards in the token that was staked. Payouts are sent twice per week into your Kraken account.


Advantages of Kraken for Crypto Trading

Kraken is a popular crypto exchange that offers world-class trading tools, access to leverage, and industry-leading customer support. Kraken is ideal for active traders who want low trading fees and a customizable trading platform. Here are a few advantages to using Kraken:

  • Access to Leverage. Most U.S.-based exchanges do not offer access to margin trading, especially to U.S. residents where regulatory hurdles are high. Although Kraken has strict eligibility requirements for margin trading, users can access up to 5x leverage on regular trades. Futures trading offers up to 50x leverage, but is not available to U.S. residents.
  • Customer Support. Crypto exchanges are notorious for having poor customer service, with slow response times and users losing access to their accounts or funds for weeks at a time. Kraken offers 24/7 live chat support to all customers, helping quickly resolve issues and answer questions in real-time. This is a massive advantage for users who are frustrated with opening tickets online and waiting days for a response from an exchange. 
  • Low Trading Fees. Kraken offers competitive fees on its trading platform, with fees as low as 0.00% for high-volume traders. Kraken fees range from 0.00% to 0.26%, which is in line with most large crypto exchanges. Although Kraken’s Instant Buy option charges high fees, active traders can save some serious money using the standard and Pro trading platforms.

Disadvantages of Kraken for Crypto Trading

Although Kraken offers a decent trading experience, it may not be the best fit for everyone. The high fees for basic transactions, limited crypto selection, and complicated trading interface may turn beginners away. Here are a few reasons not to use Kraken:

  • High Fees on Instant Buy. While Kraken offers low fees to customers who deposit funds and use the “Trade” feature to buy or sell crypto, beginners who use the Instant Buy” feature will be hit with very high fees. Kraken charges 0.9% for stablecoin purchases and 1.5% for all other crypto purchases. Although this may seem low, consider that Binance only charges 0.1% for all transactions, and even the Kraken trading platform only charges up to 0.26% for trades. These high fees can get expensive on larger purchases.
  • Limited Selection of Cryptocurrencies. Although 100+ available cryptocurrencies may seem like a lot, there are over 10,000 types of cryptocurrency in circulation. Most exchanges focus on high-quality projects with a high market capitalization, and most of the larger exchanges offer at least 150 crypto, with some offering more than 500 types to choose from. If you want the largest selection of crypto, you will not find this on Kraken.
  • Complicated Trading Platform: Although the “Instant Buy” option gives users a simple way to buy and sell crypto, the fees are high. To save on fees, users may want to use the standard trading platform, but beginners could feel overwhelmed by all the options. 

How Kraken Stacks Up

Kraken is a solid option for advanced traders that want access to more trading tools, as well as access to leveraged trading. It also offers low fees for traders, and great security for user accounts. That being said, instant buy fees are sky-high, and the crypto selection is somewhat limited compared to other exchanges.

Coinbase is one of the largest crypto exchanges in the world, offering a fantastic user experience, and access to a wide range of popular cryptocurrencies. Coinbase also offers unique educational content, and an intuitive mobile app for trading on the go. Coinbase does come with higher fees than most exchanges, and does not offer a lot of trading tools for advanced users. 

Here’s how Kraken and Coinbase compare:

Kraken Coinbase
Fees Instant Buy: 0.9% to 1.49%Trading fees: 0.00% to 0.26% Standard trading: 1.49% to 3.99%Advanced trading: 0.00% to 0.50%
Number of Cryptocurrencies 110+ 160+
Trading Features Simple and advanced charting, margin trading, futures trading, mobile trading, recurring purchases Simple and advanced charting, simple order form, mobile trading, recurring purchases
Security Features Cold storage, two-factor authentication, 24/7 server surveillance, whitelisting, bug bounty program Cold storage, two-factor authentication, FDIC insurance, crime insurance, AES-256 encryption

Final Word

Kraken is a high-quality crypto exchange that offers a secure way to buy Bitcoin and other top cryptocurrencies. With simple and advanced order forms, advanced trading tools, and access to margin and futures trading, Kraken is ideal for active traders. 

Kraken also caters to institutional traders with a 24/7 OTC trading desk, high-touch support teams, and high margin limits for qualified traders. Kraken also lets institutions customize their trading experience with access to APIs to connect third-party applications.

Beginners may feel overwhelmed using Kraken to trade crypto, and will end up paying higher fees if they use the Instant Buy feature instead of the trading platform. Those who are new to crypto may benefit from finding a simpler cryptocurrency exchange to fit their needs.

Overall, Kraken is a good choice for those that want access to a low-fee trading platform with leveraged trading capabilities.

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Since 2017, Masterworks has successfully sold three paintings, each realizing a net anualized gain of +30% per work. (This is not an indication of Masterworks’ overall performance and past performance is not indicative of future results.)

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The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Source: moneycrashers.com

Cardano (ADA) Overview – Will It Be the King of Cryptocurrency?

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For all the excitement around cryptocurrencies, the original and best-known networks today have a few dirty little secrets. 

First, their transaction speeds limit how scalable and efficient they are as their network load increases. Second, they rely on a proof-of-work mining model that incentivizes miners to consume vast amounts of energy to run computer hardware in the pursuit of new coins. 

The newest generation of cryptocurrencies has tried several approaches to resolving these issues. One of the biggest and most successful of these altcoins is Cardano. 


What Is Cardano (ADA) Cryptocurrency?

Cardano is a blockchain and smart contract platform created in 2015 by Charles Hoskinson, the co-founder of Ethereum. It’s a third-generation blockchain platform that incorporated peer-reviewed research into its development in the hopes of avoiding the pitfalls and limitations of earlier blockchain networks like Bitcoin and Ethereum. 


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The Cardano network’s internal cryptocurrency, ADA, is the sixth most popular cryptocurrency by market cap at more than $30 billion. 

History of Cardano

Hoskinson began developing the Cardano blockchain platform in 2015 and finally released it in September 2017. 

The Cardano network takes its name from Italian Renaissance mathematician Gerolamo Cardano. Its native token is named for 19-century English mathematician Ada Lovelace, who created an early digital computer prototype and is considered the world’s first computer programmer.

The Cardano Foundation, a nonprofit based in Zug, Switzerland, oversees and supervises the Cardano network and brand. 

The foundation has partnerships with prominent blockchain developers and engineering companies — like Hoskinson’s IOHK (Input Output Hong Kong) and EMURGO — to help ensure the technology is being developed and promoted as a secure, transparent, and accountable system. It also works with regulators to inform blockchain legislation and commercial standards.

The Cardano development roadmap consists of five phases (eras) named for famous computer scientists and philosophers:

  • Phase 1 (Byron) — Foundation: This era began in 2017 when the first version of Cardano launched.
  • Phase 2 (Shelley) — Decentralization: This era involved the growth and development of the network to include more nodes, ensuring network participants increasingly ran it.
  • Phase 3 (Goguen) — Smart Contracts: This era adds smart contract functionality, introducing the ability to build decentralized applications (dApps) on the Cardano platform. 
  • Phase 4 (Basho) — Scalability: This era focuses on optimizing the network’s performance for widespread adoption, allowing support for growth and applications with high transaction volume. A major feature of this era is the introduction of sidechains, which are separate blockchains that run in parallel and are interoperable with the main Cardano chain. Sidechains can be used to offload work from the main chain to vastly improve the network’s capacity.
  • Phase 5 (Voltaire) — Governance: The final phase of development will introduce systems that make the network self-sustaining, including decentralized voting and treasury systems. Once these systems are in place, Cardano will no longer be managed or supervised because the community will possess the voting rights to determine the future of the network.

The platform’s development is currently at Phase 3, having launched smart contract capability in September 2021.

How Cardano Works

Cardano is the largest cryptocurrency by market capitalization that uses a proof-of-stake (PoS) consensus mechanism called Ouroboros to mine new tokens. Compared to Bitcoin and Ethereum’s proof-of-work (PoW) protocols, which require intensive computing power that consumes massive amounts of energy, Cardano is a greener alternative. 

Cardano’s proof-of-stake mining system involves pools of participants staking an amount of ADA, locking up their currency for a period of time. By holding and staking the tokens, users support the basic function of the network and earn rewards — in the form of ADA — in the process.

The Cardano protocol divides time into time slots, which are currently one second apiece. A lottery selects a participant with staked ADA in each time slot to validate transactions, create transaction blocks, and add new blocks to the Cardano blockchain. The more ADA a user has staked, the greater the odds of being chosen in the lottery and receiving the rewards. 

Cardano and its Ouroboros algorithm are touted as being based on scientific philosophy and peer review. Cardano’s open-source blockchain has undergone the academic peer-review process, whereby scientists and programmers at academic institutions have formally evaluated it. Scholarly research has also informed its development since its inception. 


Pros and Cons of Cardano

Cardano is one of several blockchain networks billed as so-called “Ethereum killers,” designed to outcompete the world’s leading blockchain platform for developers. Unlike many other networks that claim this ambition, Cardano is large enough and has enough developer support to give Ethereum a real run for its money — but it isn’t the king of the hill just yet.

Pros of Cardano

There’s a lot Cardano developers and investors like about the platform, including. 

  1. Fast Transactions (and Scalable). The Bitcoin network processes around seven transactions per second, and the Ethereum network can process around 30 per second, which places some constraints on how scalable these networks are. Cardano can process more than 250 transactions per second today. The sidechains that accompany Phase 4 of Cardano’s development could allow the network to process 1 million transactions per second or more in the future. 
  2. Low Fees. Cardano fees are currently 0.16 ADA per transaction, or about $1 as of this writing. The transaction fees for Bitcoin and Ethereum are often five to 50 times greater, depending on the spot prices of these coins.
  3. Better for the Environment. Cardano’s proof-of-stake protocol requires far less computing power. Thus, it consumes vastly less energy than traditional proof-of-work models other cryptocurrencies employ. 
  4. Strong Development Team. The team developing and building on Cardano is well respected in crypto circles, including its founder, Hoskinson. Having this talented team will be key to launching the succession of promising upgrades that are in the works. 

Cons of Cardano

Despite all its advantages, there are some speed bumps on the road to widespread adoption of the Cardano network and the growth in value of ADA tokens. Consider these primary cons before investing:

  1. Less Name Recognition. Although among the top 10 cryptocurrencies by market cap, and its popularity among developers and cryptocurrency enthusiasts, it lacks the mainstream name recognition of more established coins like Bitcoin and Ethereum. 
  2. Still Under Development. The Cardano protocol is still a work in progress. It remains to be seen how quickly (or whether) its team will be able to develop the platform to its full potential. Some critics say the network was late to get into smart contracts, only releasing this functionality in September 2021. By contrast, this use case was supported by Ethereum upon its launch in 2015.  
  3. Growth Potential Limited by Adoption. Developers must build dApps using this platform over other alternatives like Ethereum for the ecosystem to blossom. Because Ethereum came first, there are many times more projects and dApps currently built on the Ethereum network than there are using Cardano. 

Where Can You Buy and Sell Cardano?

Most large cryptocurrency exchanges support buying and selling ADA tokens, including Binance, Coinbase, and Kraken. But notably, the popular trading platform Robinhood doesn’t yet let users buy Cardano on the platform. 

Not every cryptocurrency exchange is available in the U.S., and availability can even vary by state, so ensure the exchange you’re considering is licensed in the U.S. and available where you live before you sign up. 

When choosing a platform or brokerage, pay special attention to the transaction fees you pay. These vary widely by platform and can really add up.

Depending on whether you want to trade other cryptocurrencies for ADA or exchange fiat currency for the tokens, you’ll want to choose a platform that offers a wide selection of other coins and makes it easy to deposit and withdraw funds.

Finally, if you want to move your Cardano into a secure crypto wallet, choose a platform that allows you to move your crypto holdings offsite (take possession). Many platforms force you to liquidate your crypto holdings before withdrawing your funds.    


Final Word

Cardano is already one of the largest crypto projects around, and it has a bright future as a growing blockchain ecosystem. Its use cases include a host of smart contracts, dApps, and an NFT marketplace that can credibly compete with Ethereum. 

The fact that Cardano is easier on the environment and based on academic peer-reviewed ideas may prove to be the differentiators that allow it to be a more sustainable solution in the long run. With more and more features and expanded interoperability on the horizon, this is one cryptocurrency you don’t want to sleep on. 

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Source: moneycrashers.com

Why Your Tax Refund Could Be Bigger This Year

At a time when many Americans are paying more for everything from gas to ground beef, tax refunds will provide much-needed cash for many families. And this year, those refunds could be particularly generous.

Through the March 4, the average federal tax refund was $3,401, up 13.7% from the same period last year, according to the IRS. In 2021, the average refund was $2,815.

People who expect a big refund tend to file early, so the average for the 2022 tax season may be lower. Still, there are several reasons many taxpayers could get a larger refund this year. Taxpayers who were eligible for a third Economic Impact Payment and didn’t receive a check, or received less than the full amount, will have the opportunity to claim the recovery rebate credit when they file their 2021 tax return. The credit is worth up to $1,400. Likewise, taxpayers who were eligible for the expanded child tax credit, worth up to $3,600 in 2021, will have an opportunity to claim it when they file their 2021 tax return.

The IRS sent out advance child tax credits in six monthly payments last year, but not everyone who was eligible for the payments received them. If you had a newborn last year, for example, you didn’t receive the advance credits because the IRS didn’t have a record of the addition to your family. But when you file your 2021 tax return, you’ll be able to claim the credit.

Young adults may also receive a larger-than-expected refund this year because of a provision in the American Rescue Plan that expanded the earned income tax credit, which is designed to help low- and moderate-income workers. The legislation expanded eligibility for the credit to include workers between age 19 and 24 who don’t have children.

Investing Your Tax Refund

Nearly 60% of taxpayers expect to receive a refund this year. If you’re interested in investing all or part of your money, many brokerage firms will allow you to open an account for less than $500, and some have no minimum requirements. Coinbase, an online platform for cryptocurrency investors, says taxpayers who file their returns using TurboTax can have their refunds converted into Bitcoin, Ethereum or one of the other cryptocurrencies the company supports.

Cryptocurrencies are extremely volatile. Risk-averse investors may want to invest their refunds in Series I bonds. I bonds issued from November 2021 through April 2022 yield a composite rate of 7.12%. You can buy up to $10,000 each year in electronic I bonds and apply your tax refund to purchase up to $5,000 in paper bonds.

Finally, although it’s nice to get a check from the IRS, there are more-effective ways to use your money than giving the government an interest-free loan. The IRS offers a tool on its website that you can use to adjust your withholding.

Source: kiplinger.com

What Is Solana (SOL) and Should You Invest in This Cryptocurrency?

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Solana has become one of the most popular cryptocurrencies in the market, with a massive influx of retail and institutional investors over the past year. Solana provides much faster transactions than both the Bitcoin and Ethereum networks, as well as an entire ecosystem for building decentralized applications and creating non-fungible tokens (NFTs), making it a formidable competitor to Ethereum.

Although Solana is not the only Ethereum competitor, it has become one of the favorite platforms for users due to its high transaction speed and low fees. This has created a massive demand for the Solana native token (SOL), and a huge jump in price over the past few years.

In the article, we’ll be covering what Solana is, how it works, why it has become a major competitor in the cryptocurrency space, and how to invest in Solana.

What Is Solana (SOL)?

Solana is a blockchain-based platform that operates on a decentralized network and powers a wide range of decentralized applications (dapps). Its native token, SOL, is a cryptocurrency that powers the Solana blockchain, and is used to pay for transactions, secure the network and earn rewards through staking, as well as trade or make purchases.


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Solana is built on a decentralized network of computer nodes (servers) that process the transactions and maintain the Solana blockchain. Solana offers much faster transaction speeds than either the Bitcoin or Ethereum networks, with the ability to process up to 710,000 transactions per second. With Ethereum only averaging 15 transactions per second, and even payment processor Vias only able to handle 60,000 transactions per second, Solana far exceeds today’s standards for transaction processing.

Solana is an open-source project run by the Solana Foundation. The nonprofit foundation maintains the project and also manages a grant program for funding efforts to improve Solana’s censorship resistance. 


History of Solana

The idea for Solana came from Anatoly Yakovenko in 2017 when he published a white paper and introduced a concept called “proof of history.” The idea was to create a way for a decentralized network of computers to stay in sync with each other, allowing for a much faster way to process transactions than existing blockchains such as Ethereum and Bitcoin.

Yakovenko partnered with Greg Fitzgerald, a programmer who had previously worked with him at Qualcomm, and in 2018, released the first version of Solana, originally called Loom. On the test network, Fitzgerald demonstrated that Solana was capable of processing and validating 10,000 transactions in under one second.

Shortly after this demonstration, another of Yakovenko’s colleagues from Qualcomm, Stephen Akridge, showed how Solana’s speed could be improved by using graphics processors to provide signature verifications on transactions. All of this cultivated in Solana launching on cloud-based networks in mid-2018 with the ability to process up to 250,000 transactions per second (in short bursts), making it the fastest blockchain available.

The Solana token (SOL) launched in early 2020, and is used to pay for transactions on the Solana network. There are 511 million tokens in total supply, and currently just over 310 million in circulation.

Solana has become one of the premiere crypto platforms for developers, with over 1,000 projects built on top of the Solana network. The native SOL token has also become one of the most valuable, with over $30 billion in market cap value as of 2022 and the value of each token going from just under $1 to over $100 in 2021 alone.


How Solana Differs From Bitcoin and Other Cryptocurrencies

The key to Solana’s success is its ability to use “proof of history” to sync all the transactions across its decentralized network. This idea was proposed in a whitepaper written by Solana’s founder, and fully-realized by developer Greg Fitzgerald when Solana launched in 2018.

Proof of history gives every transaction on the Solana network a unique timestamp, which allows the blockchain to function faster because every node on the network stays in sync. With this improved speed, Solana payments and transfers happen at a speed over 10,000 times faster than most competitors (notably Bitcoin and Ethereum).

Solana transactions are also built to process with very low fees, typically less than $0.01 per transaction. In comparison, Ethereum’s fees can be as high as $100 for a single transaction, sometimes much higher. This massive difference in fees makes Solana an attractive platform for developers and end users alike.

Finally, Solana offers multiple NFT marketplaces, which have grown in popularity. Although NFTs are still mostly launched on the Ethereum blockchain, Solana has over 800 NFT projects, a total that is growing weekly.


Should You Invest in Solana?

Solana saw explosive growth in 2021, with its SOL token rising in value over 10,000%, making it one of the hottest projects of the year. With its proven ecosystem, massive adoption by developers, and expanding offerings (such as NFTs), Solana is gaining more mainstream attention, as well as institutional investor interest. 

But should you invest in Solana? Is it too late?

Although Solana has seen a massive increase in adoption and a huge valuation increase, it also still has room to grow. From a purely market capitalization standpoint, Solana is still only 1/10th the size of Ethereum, its main competitor. With over 1,000 new projects, and the competitive advantage of much higher transaction speeds, Solana may see more future growth.

That being said, for anyone considering investing in Solana — or cryptocurrencies in general — it is considered a speculative investment. While Solana could see massive growth, it could also see a massive downside swing, as the entire crypto market is naturally more volatile than most other investments. If you choose to invest in Solana, make sure to understand the risks involved, and consult with an investment professional if desired.


Where to Buy Solana

Solana (SOL) tokens can be purchased on most major exchanges, including Coinbase Binance, and FTX. Solana is also available for trading on decentralized exchanges like Raydium.

Buying from a decentralized exchange may be preferable if you want to keep your crypto holdings in your own digital wallet. You can connect a Solana wallet to the Raydium platform, for example, and exchange crypto in your wallet (such as Bitcoin) for SOL tokens.

Buying from a centralized exchange comes with more protections, such as secure storage of assets, identity verification to prevent fraud, and account security protections like two-factor authentication. Some exchanges may also allow you to earn interest on your Solana holdings.

Solana can also earn interest via staking directly on the Solana platform. This allows Solana investors to earn rewards by locking up their SOL tokens for a period of time, similar to a certificate of deposit. To do this, a user must transfer SOL tokens to their own Solana digital wallet, and then stake some of their SOL tokens on the platform.


Final Word

Solana is an increasingly-popular cryptocurrency that offers extremely fast transactions for a fraction of the cost of other crypto networks. With a growing list of applications and a budding NFT marketplace, Solana is continuing to take market share from competitors such as Ethereum and Cardano.

While Solana offers many improvements over other blockchain-based projects, it is still one of the newer ecosystems, and is continuing to grow and improve its offerings. The Solana NFT marketplace is perhaps one of the fastest growing pieces of the platform, and contributes to the bulk of the projects on Solana currently. There are also hundreds of decentralized finance applications in progress, furthering Solana’s reach as a financial platform.

Overall, Solana is one of the most promising projects in the cryptocurrency space today, but time will tell if it continues its rapid growth into the future.

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Source: moneycrashers.com

Comparing Cardano (ADA) vs Ethereum (ETH)

Cardano (ADA) and Ethereum (ETH) are two different types of crypto that are actually quite similar.

Cardano and Ethereum both provide the same functionality — developers use both platforms to create smart contracts and decentralized applications (dApps). But while the use cases are the same, the approach and philosophy behind each platform is different. Notably, Cardano considers itself an improvement over Ethereum.

Ethereum Explained

Ethereum is a smart contract platform that can be used for the development of dApps. Ethereum was the first platform to launch smart contracts — programmatic agreements that can function like legal contracts and can be executed automatically once specific conditions have been met. The Ethereum white paper was published in 2013 and the project first launched in 2015. In 2016, ETH became the second token to ever be listed on Coinbase.

How Does Ethereum Work?

Ethereum possesses the same characteristics of other blockchains, such as being an immutable public ledger of transactions, being censorship-resistant due to a decentralized consensus mechanism, and providing a secure network through proof-of-work hashing.

On Ethereum, users can send financial transactions by using the network’s native token, Ether (ETH). They can also participate in any number of dApps built on the network, including decentralized finance (DeFi) platforms, non-fungible token (NFT) marketplaces, and blockchain-based games.

Ethereum was the first network to allow for the use of smart contracts, resulting in the potential for developing dApps. Programmers can code specific conditions into smart contracts, giving them a variety of functionality. For example, a contract for a decentralized marketplace might be programmed to execute trades automatically when a buyer and seller both want to trade at a certain price.

Performing the functions of a smart contract requires a small fee known as Gas. Ethereum gas is measured in gwei, the smallest unit of ETH. Even though the fee for a single smart contract function can be very small, performing complex actions often involves numerous functions within multiple smart contracts, and the fees a user ends up paying can add up quickly.

Cardano Explained

Cardano aims to make its native ADA token suitable for transactions of all kinds. Academic and scientific research drives the development of Cardano, and it’s thought by some that the Cardano network will see increasing adoption based on the fact that its code is verified mathematically.

How Does Cardano Work?

Like Ethereum, with Cardano developers can program smart contracts and create decentralized applications.

But whereas Ethereum tackles problems with its development as they arise, Cardano tries to plan for contingencies beforehand. It does this by performing scientific studies about proposed changes to the Cardano network.

On Cardano, users can also send financial transactions with the network’s native token, ADA.

Key Differences Between Cardano and Ethereum

Most of the differences between Cardano vs. Ethereum have to do with their approach to building a blockchain network and the philosophies of their creators.

Ethereum, for example:

•   Was created by Vitalik Buterin in 2015 in an attempt to do things Bitcoin couldn’t, specifically smart contracts

•   Takes more of a “build first, fix problems later” approach

Cardano, on the other hand:

•   Was created by Charles Hoskinson in 2017 as an improvement over Ethereum

•   Tries to use academic research to bolster its development beforehand

Another difference between the two networks is the number of dApps currently running on either platform. The vast majority of blockchain-based video games, NFT marketplaces, and DeFi protocols run on Ethereum or a layer-2 Ethereum network like Polygon.

There are at least 100 DeFi services running on Cardano, in addition to some other unique, disruptive projects.

Cardano’s naitve token is ADA vs. ETH for Ethereum. Both can be used to send financial transactions, although the fees and confirmation times may vary, with ADA usually having lower fees.

Market Cap

As of January 20, 2022, Ethereum’s market cap was about $287 billion, while Cardano’s was about $36 billion.

While these numbers are constantly changing, ETH has held its spot as the #2 crypto by market cap for a number of years. ADA has had a place among the top ten for the last year or two.

Proof of Work vs Proof of Stake

An important aspect of any blockchain network is its consensus mechanism. This refers to how all the nodes on a given network agree as to which transactions are valid and which are not (how they achieve consensus). Without consensus, there’s no blockchain, as an accurate distributed ledger couldn’t be maintained.

There are different potential ways of achieving consensus. Proof-of-work (PoW) and proof-of-stake (PoS) are currently the two most popular methods.

Ethereum currently utilizes PoW while Cardano makes use of PoS. Ethereum plans to transition to proof-of-stake consensus with the upgrade of ETH 2.0, which has been delayed many times.

PoW involves solving complex math problems to secure the network and validate transactions, which requires a lot of energy. This is the original consensus mechanism, first used on the Bitcoin network. While it has been criticized for being inefficient, it has also proven to be very secure, provided the network has a high enough hashrate.

PoS relies on the locking up or “staking” of network tokens to accomplish the same, which takes less computing power. Rather than relying on excessive amounts of computing power, this consensus mechanism relies on the total value of a network’s native token for security.

Monetary Policy

Another important difference between Cardano vs. Ethereum is each network’s monetary policy governing their respective tokens.

The distribution of both ADA tokens on the Cardano network and ETH on the Ethereum network are similar: the tokens get mined with every block and distributed in return for verifying transactions (in the case of ADA) and distributed to minders (in the case of ADA).

But when it comes to the supply limit placed on the issuance of new tokens, the two cryptos diverge significantly.

There is no limit placed on how many ETH can be minted. The supply of ETH tokens is programmed to increase at a rate of 4.5% annually. The supply of ADA tokens, on the other hand, is limited. According to Cardano’s code, there will only ever be 45 million ADA. As of early February 2022, there were 33.5 billion ADA in circulation.

Operational Philosophies

Ethereum takes more of a “build first, tackle problems later as they arise” approach. A good example of this would be the proposed upgrade to ETH 2.0 and transition to proof-of-stake. The need for this upgrade stems from Ethereum’s lack of ability to scale. Cardano proponents might argue that this should have been considered earlier and been dealt with in a scientific manner.

Cardano prefers to conduct rigorous scientific research before implementing changes to their protocol. The idea is to make sure all contingencies are planned for ahead of time so there will be fewer problems down the road.

Transaction Details

Cardano can currently process about 250 transactions per second (TPS) as opposed to 100 TPS for Ethereum. Cardano’s proposed Ouroborus Hydra upgrade could see the network’s possible TPS soar to as high as 2.5 million.

At the same time, Ethereum’s ETH 2.0 upgrade aims for an increase to 100,000 TPS. It could be said that Cardano is more ambitious, or that Ethereum is more realistic. A lot of these matters come down to the opinions of developers and users.

Energy Consumption

The proof-of-work consensus, which Ethereum uses, is a more energy intensive process than proof-of-stake, which powers the Cardano network. So, for now, Ethereum uses more energy than Cardano.

Ethereum uses about 14.81 terawatts to validate its transactions. In contrast, Cardano requires about 0.00052 terawatts.

If and when Ethereum does upgrade to ETH 2.0 and switch to the proof-of-stake consensus mechanism, then its energy usage will decline. But even then, it will use more energy than Cardano simply due to being a larger network that processes more transactions.

Summary of Differences Between Ethereum and Cardano

Ethereum Cardano
Created to do things Bitcoin couldn’t, specifically smart contracts Created as an improvement over Ethereum
Takes more of a “build first, fix problems later” approach Tries to use academic research to bolster its development beforehand
More than 3,000 dApps run on the platform More than 100 DeFi services run on Cardano
Native token is ETH Native token is ADA
Market cap approximately $287 billion Market cap approximately $36 billion
Uses proof-of-work consensus Uses proof-of-stake consensus
Unlimited ETH minting ADA capped at 45 million
Can currently process about 100 TPS Can currently process about 250 TPS
Requires about 14.81 terawatts to validate transactions Requires about 0.00052 terawatts to validate transactions

Similarities Between Cardano and Ethereum

There are many similarities between Cardano and Ethereum. Both networks are trying to achieve the same thing — they just want to go about it differently. Some commonalities between the two cryptocurrencies include:

•   Both platforms provide smart contract functionality

•   Both can be used to develop dApps

•   Both can be used for sending financial transactions via the network’s native token

•   Once Ethereum upgrades to ETH 2.0, both will be proof-of-stake networks

Smart Contracts

With smart contracts, the rules are enforced by code, and the terms of the agreement can be executed automatically when the agreed-upon conditions have been met. This has opened up a new world of possibilities in terms of new applications that can be decentralized.

Smart contracts solve a number of problems that have plagued traditional contracts, specifically the potential for fraud, censorship, or third-party interference. These programmatic contracts are what made Ethereum unique and led it to becoming the second-largest cryptocurrency.

Over time, a number of competing networks that hope to improve upon Ethereum’s design have sprung up. Cardano is currently the largest Ethereum competitor by market cap.

The Takeaway

Cardano and Ethereum are both platforms with smart contract functionality that can be used to develop dApps. But the two have significant differences as well, from their market caps to the consensus they use (proof-of-stake vs. proof-of-work, respectively).

One attribute they have in common is that both can be traded on most popular crypto exchanges. In fact, they are among the more than two dozen cryptocurrencies that interested inventors can trade on SoFi invest — along with Bitcoin, Chainlink, Dogecoin, Solana, Litecoin, and Enjin Coin, among others.

Get started trading crypto with SoFi Invest.

FAQ

Does Cardano or Ethereum have a higher market cap?

Ethereum has a higher market cap than Cardano. As of February 2, 2022, Ethereum’s market cap was about $319.8 billion, while Cardano’s was about $35.3 billion.

Ethereum has been the #2 cryptocurrency by market cap for a number of years now. Cardano is currently the 6th largest crypto by market cap.

Is Cardano a threat to Ethereum?

The answer to this question is mostly subjective. Cardano is among a group of different platforms that have been described as “Ethereum killers.” Solana, Binance Smart Chain, Tron, and many others fall into the same category.

The outcome will depend upon both how many people begin building on and using these “Ethereum killers,” and how Ethereum manages to solve the issues it currently faces. It’s possible for Ethereum to scale in a way that makes other platforms unnecessary. Or, Ethereum could fail during its transition to proof-of-stake, leading Cardano and others to succeed.

How is Cardano’s platform different from Ethereum’s?

For the most part, it’s not. Both networks provide the same essential functionality in terms of financial transactions and development of smart contract-powered dApps. The only real difference lies in Cardano’s emphasis on academic research and attempting to enable cheaper and faster transactions, allowing for ADA to be more effectively used as a medium of exchange.


Photo credit: iStock/JLco – Julia Amaral

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com

What is BitClout and How Does It Work?

Reputation is, in some sense, the ultimate asset — it’s associated with an individual person, it can be degraded quickly and it’s hard to build up, but once it’s established, can be converted into all sorts of value.

This is where BitClout steps in. BitClout, also known as DeSo (which stands for “Decentralized Social”), is a combination social network and cryptocurrency exchange, where individuals can create accounts that have their own coin associated with them, and users of the exchange can buy and sell those coins to express their opinion about the individuals who issue them. BitClout also has its own cryptocurrency called $CLOUT, which is used to buy those coins.

How Does BitCloud Work?

BitClout aims to use cryptocurrency and blockchain technology to create a kind of digital permanence. Each BitClout profile is intended to be associated with one person, giving them the ability to mint and profit from “creator coins.”

These creator coins are meant to be non-fungible tokens (NFTs) — digital images that are on the blockchain and thus have a fixed, non-replicable physical identity — giving people the ability to profit from their creation and trading. But these coins aren’t necessarily created by the account associated with them, which is one of the more intriguing (or controversial) aspects of BitClout.

Who Has a BitClout Profile?

When BitClout launched in March, 2021, there were already 15,000 accounts pre-loaded onto the site without any involvement by their supposed users. In less than a month, over $200 million worth of Bitcoin was deposited onto the platform despite little indication that many of the celebrity “users” of the service would ever opt into it.

As it turns out, some of BitClout’s “users” have since opted in. According to BitCloutPulse, as of January 7, 2022, the most popular profile on BitClout is Elon Musk. Several high-profile technology and cryptocurrency influencers and businesspeople rank highly on the network, including some who have actually verified their accounts, including venture capitalist Chamath Palihapitiya, entrepreneur and former CTO of Coinbase Balaji Srinivasan, and Coinbase founder and chief executive Brian Armstrong.

Who Is Behind BitClout?

Many users claimed their BitClout profile by tweeting something along the lines “Just setting up my BitClout,” with the hands and diamond emoji following.

This was a reference to two things: the first the notion of having “diamond hands” as the holder of a speculative or volatile asset like a cryptocurrency or memestock refusing to sell (the idea being that diamonds are very hard and thus someone with “diamond hands” wouldn’t “fold”). It’s also a reference to BitClout’s mysterious CEO. While the leader of the company has done several interviews with reporters, they have yet to reveal their identity.

But BitClout’s investors are quite well known and identifiable. They include Coinbase Ventures and the Winklevoss twins, two of the biggest names in crypto, as well as Andreessen Horowitz and Sequoia, two of high-profile Silicon Valley venture capital firms.

That there would be anonymity associated with BitClout is not surprising. BitClout is both inspired by and deeply enmeshed with the world of Bitcoin, whose creator Satashoi Nakamoto remains anonymous to this day.

How Can Someone Make Money on BitClout?

While BitClout claims to avoid some of the more negative aspects of mainstream social media networks, the idea is that money can be made by driving engagement or tracking those who do. Here’s a breakdown of the different ways a person could potentially make money on BitCloud.

1.    Through rewards on your “creator coins”. According to BitClout, these tokens “allow users to support their favorite creators by buying their coin, a little like a combination of AngelList and Patreon.” Like NFTs and ERC-20 tokens, creator coins are built on top of a different cryptocurrency product and are connected to a mainstream crypto, in this case Bitcoin.

Every user has creator coins and they can be bought and sold with $CLOUT, the BitCloud cryptocurrency. With your own creator coins, you can make money through rewards that flow specifically to you. These are called “founder rewards,” and the default is 10% — meaning you would get one tenth of every purchase of your coins. On the other hand, this makes the coins more expensive for others to buy and may discourage users from buying them.

2.    By holding on to your own creator coins. The idea is that the community would reward the content you create or whatever you do off the platform by bidding up the price of your creator coins, thus increasing the value of your holdings.

3.    Buying other creator coins and then waiting for the price to go up. This can be done by buying some of the more expensive coins and hoping the price shoots up after the individual has real world success that makes them more popular.

While it may seem that these money-making opportunities are more for boldface names than for regular people, there have been reports of users buying up very cheap coins or making money from selling their own coins even if there’s no association with celebrities. That said, these money-making opportunities come with a fair share of risk — it’s entirely possible that a person wouldn’t make any money, or might even lose money.

What Can You Do With $CLOUT?

One of the major complaints about BitClout when the service launched was that there wasn’t a way to turn your $CLOUT back into Bitcoin, let alone dollars. A workaround emerged — a service called BitSwap that allows for exchange from $CLOUT to Bitcoin and Ethereum. $CLOUT is also listed on Blockchain.com .

How Much Is $CLOUT Worth?

As of January 7, 2022, the price for $CLOUT is around $76 and the overall $CLOUT market cap is just under $824 million. In theory the value of $CLOUT, which is necessary to navigate BitClout and buy creator coins, is a good indicator of the overall health and use of the BitClout ecosystem.

The Takeaway

BitClout is a combo social media and cryptocurrency platform that allows users to create their own creator tokens and trade the tokens of other users, thus indicating the popularity of a given user and driving up (or down) the price of the tokens.

For investors interested in trading crypto, SoFi Invest® offers members the opportunity to buy and sell crypto from dozens of coins including Bitcoin, Ethereum, Dogecoin, Solana, Litecoin, Cardano, and Enjin Coin.

Find out how to get started with SoFi Invest.

Photo credit: iStock/Luke Chan


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Source: sofi.com