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How to buy Ethereum, Ether, ETH?

Ethereum’s Ether (ETH) is the new rock star of digital currencies (also called cryptocurrency). Thus Ethereum is the second largest cryptocurrency – measured in terms of

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Ethereum’s Ether (ETH) is the new rock star of digital currencies (also called cryptocurrency). Thus Ethereum is the second largest cryptocurrency – measured in terms of capitalization – after BitcoinLearn in this article everything about how you can buy Ethereum fast and secure.

A detailed introduction what Ethereum is about can be found here:
What’s Ethereum? – An introduction

Quick-Start Guide to buy Ethereum

For the impatient, below you can find the four main steps how to quickly and safely buy Ethereum ether (ETH) :

  1. Step:
    First download and install an Ethereum Wallet software, such as the  “official” Ethereum Wallet   or sign-up at an online wallet service such as Coinbase¹.
  2. Step:
    After you have installed the software or signed up, you need to create a wallet (which is similar to a bank account). Each wallet has a globally unique Ethereum address (similar to a bank account number).
  3. Step:
    Now select an online provider like Coinbase¹  Bitpanda¹, AnyCoinDirect¹ or any other service of your choice. There you can purchase the desired amount of ether (ETH). The ether you’ve bought there can be sent directly to the Ethereum wallet address you previously created  (this Ethereum wallet adress can be specified during the buy process).
  4. Step:
    Usually after purchased it will take only a few minutes until the transaction has been successfully completed. To view the current state of the transaction, you can use this service https://etherchain.org for free. Just type in your Ethereum wallet address and the service will list you all the incoming and outgoing transactions for your “Account”. Here you should see your previous purchase as incoming transaction then. Finished.

Trade Ethereum without a wallet

For those people who don’t want to create a wallet, but still want to participate on the price development of Ethereum, we found the service provider Plus500². This service provider is offering CFDs (Contract for Difference) based on Ethereum. So you can buy Ethereum CFDs online using USD, which is then developing like the underlying Ethereum price.

The CFD broker provides a very clear platform and there are no commissions for trading CFDs. Financing takes place via the spread, the difference between the purchase price and the selling price of the contracts.

» Trade Ethereum now at Plus500²

²Affiliate link. 80.5 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Plus500UK Ltd authorized & regulated by the FCA (#509909). CFDs are complex instruments and are associated with the high risk of losing money quickly due to the leverage effect. Between 74 % and 89 % of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Introduction

Cryptocurrencies have been around for a relatively long time, but Ethereum combines three very interesting things together:

It can therefore be used as a digital currency, where no central office, such as a bank, monitors how much money is deposited or deducted from an account. Instead, this is “monitored” decentrally by all participants of the Ethereum network. The technology used for this is called “blockchain”. This does not differ significantly from Bitcoin, which also uses Blockchain for this purpose.

Smart Contract

What makes Ethereum even more exciting are the so-called “Smart Contracts”. These are “programmed” contracts that everyone can create and share with others. For example, it is conceivable that future rental contracts will no longer be concluded in writing but by “Smart Contract”. The landlord sends this Smart Contract to the tenant via the Ethereum network. The latter agrees to the conditions set out therein. Based on the acceptance the contract is “confirmed” by the Ethereum network as a whole. That means the members of the network are, so to speak, the witnesses to the treaty.

That alone is a great thing. But what makes it even more convenient is that the contract not only defines the payment modalities, but also implements them at the same time. As soon as the contract has been accepted, the hirer’s Ethereum account will regularly pay the rent in the agreed instalments. Without paperwork, standing orders, account opening, etc.

The possibilities are enormous. Just think of the coming flood of IoT devices. Many of these devices will provide chargeable, recurring services that depend on various factors. These have to be invoiced flexibly but simply and comprehensibly. Smart contracts are perfect for this purpose.

Buying Ethereum = opportunity and risk

These are reasons enough to consider Ethereum as an “investment object”. At this point, however, a clear warning: Ethereum is very young. That’s opportunity and risk at the same time. It is not yet possible to predict whether the system will be technically capable of processing millions, perhaps even billions, of Smart Contracts. Many legal questions have also not yet been clarified, as this is such an unusual form of exchange of goods and services that has not yet existed and that many jurists are simply overtaxed. In addition, Ethereum is technologically complex. And it is so complex that even experienced technologists need some time to get through it. This complexity makes it more vulnerable to attacks.

Hope for the best, expect the worst

So you should only invest the money in Ethereum, which you are willing to lose in its worst case. However, if the Ethereum price rises, you can make good profits. Bitcoin, for example, had a high of 1100 USD in 2013. So, whoever bought 1000 Bitcoins (BTC) in 2010 at a price of 1 USD was a millionaire three years later. After that, however, the share price has collapsed and since then has moved around the 400 – 500 USD mark. Still not bad, for someone who got in for 1 USD per bitcoin. It remains to be seen whether Ethereum will have a similar development. As of October 2016, the price is already around 14 USD per Ether (ETH), which is the unit in the Ethereum network.

Update [24th of May 2017]: Meanwhile, the price for Bitcoin is at 2700 USD and the price for Ethereum (ETH) is now 204 USD!

Update [7th of September 2017]: Meanwhile, the price for Bitcoin is at 4500 USD and the price for Ethereum (ETH) is now 333 USD!

Ether price chart
Ether Price Chart, 1 year.
Bitcoin price chart
Bitcoin Price Chart, 1 year.

To buy Ethereum – step by step

Whoever has gotten a taste for Ether and wants to buy it, just has to read on. I will explain step by step how to get the digital gold.

Step 1: Create your Ether Wallet

As with Bitcoin, Ether requires a so-called “wallet” for Ether. This digital wallet is literally the key to buying and selling Ether. More concretely, by creating a wallet you create a wallet that only you have access to via your password.

Which Wallet is right for me?

There are basically four different types of wallets, all of which have their advantages and disadvantages:

Wallet Type Description Advantages Disadvantages
Offline-Wallet Locally installed Wallet Software. Very safe. Keys and data in your own hands. Execution of Smart Contracts possible. Hard disk broken -> money gone. That’s why backup! Software must be installed and updated regularly.
Online-Wallet Wallet hosted by an online service provider (in the browser). Very easy to handle. Supplier takes care of the backup. Susceptible to phishing attacks. Private key sometimes cannot be exported. Then the rule is: If the provider goes bankrupt, money probably also goes away.
Hardware-Wallet Wallet, e. g. located on a USB stick. Extremely safe variant. External device must always be at hand. Device lost or broken, money gone. The device initially costs from 30 Euro upwards.
Paper-Wallet Wallet is printed on paper, similar to the TAN procedure for online banking. Very safe variant. Very complex to handle. Lose the note, lose the money.

In this tutorial I would like to go into more detail about the two most common and simplest variants of wallets: Online and Offline Wallets.

An offline wallet is a software that is installed locally. You have full access to both the keys that protect the wallet and all other data of the wallet. This variant is extremely secure, as long as you make regular backups and protect yourself sufficiently against virus attacks and the like. The disadvantage of this variant is, however, that if no backup has been made and the hard disk is broken, your money is gone. In addition, the software must be installed and updated regularly.

An online wallet, on the other hand, is much more convenient and simple. It is provided by an online service provider. You just need to log in and have a fully functional wallet available immediately. The provider also takes care of the backup. The disadvantage of this variant, however, is that suppliers often do not offer the keys for export. This means that you are bound to the provider with your wallet. In addition, increased caution is required to avoid becoming the victim of a phishing attack by external parties, as is often the case with online banking.

Create an online wallet at Coinbase

As a first step, we create an online wallet at Coinbase¹. This provider is one of the largest in the world and has a very good reputation in the crypto community. If you don’t want an online wallet you don’t need to use it, but you should still create an account here, because we will need it later in the tutorial to buy Ether.

So change to Coinbase¹ and register there. This link¹ also gives you $10 free startup money when you buy Bitcoin or Ether for $100 or more. Not a bad deal, right?

ETH buy - coinbase.com
Buy ETH – register via this link at coinbase.com and get paid $ 10 starting balance!

Congratulations. Once you have successfully set up your Coinbase account, you can already buy Ethereum and sell Ethereum via the online Wallet. If you would like to install the more secure – but somewhat more complex – offline wallet, then just read on.

Installing the Offline Wallet

An important warning: If you delete your offline wallet, you will also delete your money! The same applies if you forget your unlock password. Then you just can’t get your money anymore. So, remember two important principles:

  • Backup offline wallet regularly!
  • Never forget your wallet password!

While it was only possible at first to create and edit an offline wallet using the command line tool GETH, the “official” graphical tool for this has been available for some time now: Ethereum Wallet . This makes it much easier for technically less experienced users in particular.

Now go to the download area for the Ethereum Wallet software and scroll down to the “Downloads” section of the latest version and download the zip file for your operating system. For Mac, for example, the file with a name like “Ethereum-Wallet-macosx-X-Y-Z. zip”. Similar for Windows or Linux. Unzip the downloaded zip file and start the wallet. On Windows, for example, by executing the file “Ethereum-Wallet.exe”.

Again a warning: Ethereum Wallet is still under development. In other words, you will have to expect mistakes when using it, in the worst case you will lose your money. Therefore: Backup, backup, backup! Usually the current version should work without major problems.

Select the Ethereum Network

After the first start of the wallet software a dialog appears. After a while you can see on this dialog below, that the download of the so called “Blockchain” is started immediately in the background. This can be considered as a kind of “account book”, in which all transactions ever made in the Ethereum network are recorded. This is necessary so that you can understand who has made how many transactions. Remember: There is no central authority, such as a bank that could know that. Therefore, every participant has to download this blockchain by himself. And “download” means that other participants from the network offer you this blockchain for download peer to peer.

In the example below, these are currently 9 peers (participants). The blockchain is currently around 4 GB in size and is constantly growing. So make sure that you have enough storage space available. In addition, the complete download may take several hours.

Greenshot image editor - _2016-05-23_11-03-13_blocks

Since the download of the blockchain is done in the background, we can continue with the setup of the wallet directly and don’t have to wait. Click on “USE THE MAIN NETWORK”.

Importing a pre-sale file

You can skip the next question “Do you have a wallet file?” with “SKIP”. This is only relevant if you pre-ordered Ether before the official release.

Assigning a Wallet Password and Creating a Wallet

Now it’s getting very important: In the next dialog box, “Protect your account” you are asked to choose a secure password to encrypt your wallet. Take this dialogue seriously and think about a really secure, long password. If someone else can guess this password, he can steal all your ethers in its worst case. In addition, this password cannot be reset. Once forgotten = money gone. I recommend that you only write down this password in handwritten form somewhere and then keep it in a safe place, similar to TANs in online banking.

Your wallet will then be created. Congratulations!

Account and Address

Each wallet also has at least one account, the “Main Account”. An account can best be compared to a bank account. It has a globally unique “account number”, the “address” and can be used to make “Ether transfers”.

Hint: If you want to remain anonymous, keep this address as private as possible. Because anyone who knows this address can use the blockchain to find out which transactions you have made in the past. As long as the address cannot be assigned to a real person, this is no problem. For example, the https://etherchain.org website can be used to see which transactions were carried out via a specific Ether address. Here is an example for the address: 0x7ed1e469fcb3ee19c0366d829e291451be638e59. I don’t know who owns it, but the owner is definitely wealthy!

After you have entered your password and your wallet has been generated, you will see a dialog like this:

_2016-05-23_11-32-23

There you will see for the first time your “account number”, i. e. the Ether address assigned to your main account. If you want to make transfers in the future, you must always specify this long text.

Hint: You should copy and paste the address here and save it somewhere in digital format so that you can quickly access it later on. If a copy & paste doesn’t work here, this is probably a bug again. As a workaround you can click on “DEPOSIT BITCOIN”. The address is listed there under Destination. Here the copying works.

Await complete Blockchain Download

Once you’ve arrived at this point, now you have three different options:

  1. You wait until the blockchain is completely downloaded. If this takes longer than one day, you should start over again and sync your system time with the internet (see above).
  2. You already transfer Ether in the form of Bitcoins, which you have already bought by clicking on “DEPOSIT BITCOIN”. As long as you haven’t downloaded the blockchain completely and you haven’t made a backup of your wallet yet, I don’t recommend this step.
  3. You quit the application and restart it and then click on “SKIP PEER SEARCH” to get to the graphical user interface. You need to close it, because the dialog does not offer such a possibility at this point. This is a small bug that will surely be fixed in future versions.

Mist_2016-05-23_11-35-04

I recommend you here step one to keep potential errors on a minimum.

Step 2: Start Offline Wallet Software

After you have downloaded the complete blockchain or restarted the application and clicked on “SKIP PEER SEARCH”, the actual graphical user interface “MIST” of the Ethereum Wallet will show up:

Ethereum Wallet_2016-05-23_14-05-37

This – in my opinion – very neatly designed interface provides the most important information at a glance. In the top-middle you can see the current status of the Blockchain download. At the top-right you can see your Ether Credit balance and at the left below the “Main Account” you can see the corresponding address, i. e. your “Account Number”, which you will need for all future transactions.

Hint: It’s a bit annoying that copy & paste of the address – at least for me – sometimes doesn’t work. I always click on “MAIN ACCOUNT” and then on “Add Ether with Bitcoin”. In the dialog box that then appears, you can copy the address (below destination).

Step 3: Backup, backup, backup

Before you continue, I strongly recommend that you make a backup of your wallet. To do so, simply click on Accounts -> Backup -> Accounts in the UI. A folder then opens. There is a folder with name “keystore” in it. This folder contains the so-called wallet file. It has a somewhat “shapeless” name and starts with UTC-. This file contains, among other things, the ETH address and the key with which your Ether is “encrypted”. It’s making sure you’re the only one who can get your ether. This key is encrypted with your Wallet password. That’s why it’s so important that your wallet password is strong enough.

To make a backup, copy this file to a safe place. There are two large fractions of opinions of where you best back up a wallet file. One is convinced that a local copy, e. g. to an external hard drive, is the safest and best way. Others say that it is better to back up the file in a cloud service such as Dropbox. The former has the disadvantage: Hard disk is broken, backup is broken. The second variant has the disadvantage that the file with the key is located in the cloud. However, since the key itself is encrypted with your Wallet password, this procedure is relatively secure.

Step 4: Buy Ethereum

Finally! Only after you have installed the wallet and made a backup of it, as well as your blockchain has been downloaded completely, you should do it and buy Ethereum. There are two main ways to buy Ether:

  1. You buy Ethereum directly from an online service provider and pay by credit card or bank account.
  2. You first buy Bitcoins from an online service provider and then “convert” these Bitcoins to your Ethereum address with the help of a service like Shapeshift.

If you are new to cryptocurrencies, I would recommend to  buy Ethereum directly from an online service provider and not using Bitcoin because then you would also need a wallet for Bitcoin. For this reason, I will only discuss the first way of direct purchase here.

Buy Ethereum via Coinbase

A good service I have been using for some time for my purchases of Ether is Coinbase¹. The American provider is one of the largest providers of its kind and enjoys an exceptionally good reputation in the crypto community. The main advantage of this supplier is that you can buy Ethereum and sell Ethereum there. You will also get a free online wallet if the installation of your offline wallet does not work or if it is too costly for you.

After you have created a free Coinbase account, you can finally buy Ethereum. To do so, first sign-in at Coinbase and then click on “Buy/Sell” in the upper bar. There you can buy Ethereum.

Coinbase

The purchased amount of Ether will be credited to your online wallet. If you want to transfer it to your offline wallet (and want to manage it yourself) you can transfer the purchased Ether by clicking on “Send” in the upper bar.

In the dialog box that then appears, enter the ETH address of your offline wallet in Recipient, select the “ETH Wallet” as source and specify the number of ethers that you want to transfer. After you click on “Send funds” it takes a while until the amount of your offline wallet has been credited. This can take up to one hour. You can check the progress of the transaction on etherchain.org by typing in your Ether Address at the top right:

ETH buy - Check in etherchain.org

After a while you will see in the MIST-UI that the Ether has been credited to you. Congratulations on your Ether purchase!

Ethereum Wallet_2016-05-23_14-46-13

Alternatives to Coinbase

Until recently I still recommended Bitpanda as an alternative. However, I think the service is so overpriced lately that I can’t recommend it here with a clear conscience. Instead, I found another service that is comparatively simple and trustworthy and now I recommend this service: Cex.io¹. Simply log-in there, top up from your credit card or bank account and then transfer Ether to your wallet address. After a while you will be credited with the Ether amount purchased in your offline wallet.

¹Affiliate link
Note: The content on ethblog.de is for information purposes only and does not constitute investment advice or any other recommendation within the meaning of the Securities Trading Act.

²Affiliate link. 80.5 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Plus500UK Ltd authorized & regulated by the FCA (#509909). CFDs are complex instruments and are associated with the high risk of losing money quickly due to the leverage effect. Between 74 % and 89 % of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Der Beitrag How to buy Ethereum, Ether, ETH? erschien zuerst auf ETHBLOG.

Source: https://ethblog.de/en/how-to-buy-ethereum-ether-eth/

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The FATF, Cryptocurrencies, and the Philippines

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In an earlier article on BitPinas, we briefly looked at the Financial Action Task Force (FATF), the international body tasked to promote measures against money laundering and terrorist financing. With 200+ member countries, the FATF recommends what the countries must do with regards to money laundering and terrorist financing. By the way, these are not just recommendations. It simply must be complied, otherwise there will be consequences. In this article, we’ll expand more on the FATF.

The FATF’s Power

Table of Contents

Consider the year 2000, when the FATF blacklisted the Philippines for failing to address money laundering issues. At that time, the FATF said the country lacked basic anti-money laundering regulations and specific legislation to criminalize the activity. When the FATF blacklisted a country, apart of course from the spectacle of being shamed in the international community of countries, any financial transaction going into the country would be scrutinized more by banks, thus foreign companies might be discouraged from doing business here, while companies here would find it hard to do business transactions with foreign partners.

Nevermind that at that time, the country was about to force a president out of office and was in a transitory phase. The peso-dollar exchange rate would eventually rise up to around Php 56.56 four years later. Not to mention that in 2001, after the September 11 attacks in the U.S., global efforts to AML reporting intensified to combat financing of terrorism as well (CFT). It was also in that year when the Philippines passed the Anti-Money Laundering Act of 2001 (AMLA).

So what I’m saying is that the FATF is pretty powerful. And their recommendations have consequences if a country did not comply. Case in point, the Philippines barely escaped being blacklisted again in 2017. However, in more recent news, it appears the country is on the verge of being blacklisted again if certain amendments to the AMLA are not passed.

The FATF Recommendations

First published in 1990, the 40 Recommendations are the primary policies of the FATF it tasked its member countries to act upon, through ways like legislation and of course implementation. These recommendations are the global standards in anti-money laundering and they are continually updated to keep up with the changing techniques of criminals and simply to keep up with the times.

In 2018, the FATF updated the recommendations to include cryptocurrencies and cryptocurrency companies within its scope, effectively integrating the entire industry into the global financial system, at least on paper. The countries then have to create their legislation in order to enforce these rules to cryptocurrency companies, or virtual asset service providers (VASPs), a very broad term that includes cryptocurrency exchanges and platforms except non-custodial platforms.

Briefly, the 40 recommendations require the following:

  • Criminalize money laundering
  • Enable authorities to confiscate proceeds from money laundering
  • Establish a financial intelligence unit
  • Implement relevant international conventions
  • Implement customer due diligence
  • Implement record keeping
  • Implement suspicious transaction reporting
  • Coordinate with other countries when investigating and prosecuting money laundering

The FATF has also added 9 special recommendations in relation to terrorist financing. You can check the entire forty recommendations here.

What about the Cryptocurrency Industry?

As for much of the recommendations as well as other finance-related laws, at least here in the Philippines, locally-licensed virtual currency exchanges are following the guidelines from the Bangko Sentral ng Pilipinas (BSP). Circular No. 944 in 2017 established the guidelines for virtual currency exchanges, which include transactional requirements and strict following of the country’s anti-money laundering law. It’s the reason why your go-to local cryptocurrency platform has tiered limits and thresholds in how much you can transact depending on the amount of information about yourself that you submit to them.

Globally, of particular concern is the “Travel Rule”, which is no. 16 in the FATF recommendations. Simply put, it requires that when doing a cryptocurrency transfer, the sender’s personal information, such as his name, should “travel” along with the transaction. Meaning, if Sender from Exchange A sends bitcoin to Receiver in Wallet B, Exchange A must pass along personal information of Sender to Wallet B. More on the subject is explained here.

The problem is that the blockchain simply does not transfer personal information. If you are familiar with a bitcoin transaction, in the blockchain, you will only see the sender address, the amount, the fee, and the receiver address. That’s it. It does not need other information because every transaction completed on the blockchain is final.

So with the FATF instructing countries to commit to these recommendations and apply it to cryptocurrency companies within their jurisdictions, it falls upon the cryptocurrency companies to comply. Otherwise the countries, in order to not suffer consequences from the FATF, would force them out of their jurisdictions.

At the moment, there are companies working on solutions to address the travel rule for cryptocurrency companies. Examples include CipherTrace’s TRISA and openVASP. Another initiative, interVASP, looks into standardizing the payload instructions so that VASPs can better communicate with each other. Finally, solutions like Elliptic, help in making VASPs more compliant with existing anti-money laundering rules.

I recommend the article “What is the FATF Travel Rule” as next the reading material if you find this topic enjoyable. Up next, we will briefly look at the 2020 report from the FATF about potential red flag indicators.

This article is published on BitPinas: The FATF, Cryptocurrencies, and the Philippines


About BitPinas:

BitPinas is an independent blockchain, finance, and cryptocurrency news site covering the crypto and blockchain news and developments in the Philippines. We aim to be the website where you can find all information on blockchain and crypto in the Philippines. We are read by investors and enthusiasts alike, including crypto/blockchain company founders and government personnel. Contact [email protected] for more information, consulting advice, and partnerships. Follow us on Facebook and Twitter.

Contact and Subscribe to BitPinas:

  • Join BitPinas on Telegram
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  • Disclaimer: All articles on BitPinas must be treated as not an investment adviceReaders are encouraged to do their own research. This website is not responsible for any loss incurred by the reader, nor will it take credit for their gains.
  • For news tips, partnership discussions, or press release submissions, please send to [email protected]

Source: https://bitpinas.com/feature/the-fatf-cryptocurrencies-and-the-philippines/

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Ethereum Price Analysis: ETH Poised For Rebound To $360

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  • Ethereum price retests support at $310 twice in September.
  • A double-bottom pattern in the 4-hour range predicts recovery to $360 in the near term.

After trading highs of $489 at the beginning of September, the smart contract token has tested support at $310 twice. Recovery has been capped under $400 with Ether suffering rejection at $390 severally. The recent slump saw Ethereum dive below key support areas at $380, $360, and $340. The unstoppable declines continued to $310 before a reversal came into the picture.

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At the time of writing, Ethereum is trading at $323 even as bulls rush to take back control in a bid to stop losses from extending below the critical $310. Note that if ETH dips below $300, the price could explore lows towards $250 before a significant correction comes into the picture.

A double-bottom pattern has been spotted on the 4-hour chart. If the pattern is confirmed, Ethereum could be on the verge of a significant correction. Double-bottom patterns highlight areas of demand and are often used in technical analysis to predict reversal points and the extent to which the incoming bullish momentum will go. However, it is essential to realize that double-bottom patterns must be used with other technical indicators to validate the upward movement in the price.

Read also: Ethereum’s Accumulation Trend Remains Unfazed by Price Downturn

ETH/USD 4-hour chart

ETH/USD price chart
ETH/USD price chart by Tradingview

The ongoing bullish momentum is supported by the Relative Strength Index (RSI) as it recovers from the oversold region. Similarly, IntoTheBlock’s IOMAP shows a lack of a formidable supply area with the power to delay the price action to $360. However, the strongest seller congestion zone lies between $362 and $373. Here, near 700,000 addresses previously bought $10.50 million ETH.

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ETH IOMAP chart

ETH IOMAP chart
ETH IOMAP chart by IntoTheBlock

On the flip side, the most critical support holds in the range between $295 and $304. Around 850,000 addresses purchased 1.93 million ETH in the area. In this case, buyers have a task to hold Ethereum above $310 if not $320, and focus on recovery towards the toughest supply area.

Ethereum Intraday Levels

Spot rate: $323

Relative change: 2.93

Percentage change: 0.91%

Volatility: Low

Trend: Bullish

Read more: Ethereum Locked in DeFi Soars to a Fresh ATH


To get the daily price analysis, Follow us on TradingView

Author: John Isige




John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige

Source: https://coingape.com/ethereum-price-analysis-eth-poised-for-rebound-to-360/

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No Compensation for MakerDAO Vault Owners After Governance Vote

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MakerDAO vault holders who lost about $2.5 million during Black Thursday will not receive any compensation following a governance vote that ended on Tuesday. While decentralized finance (DeFi) continues to garner attention, issues like the type suffered by the MakerDAO project earlier in the year continue to plague the market as a whole.

MKR Holders Vote Against Compensating Affected Vault Owners

Following the conclusion of voting on the revised MakerDAO governance poll, vault owners affected during the Black Thursday crash of mid-March will not receive any compensation. This outcome is due to the fact that 65% of the participants voted against compensating the $2.5 million losses incurred by vault owners.

Some reactions to the news on social media say the decision to not compensate vault owners sets a not so ideal precedent. With Maker (MKR) token holders unaffected by the forced liquidations of March 12, 2020, it appears only vault owners were the real losers.

Amid the Black Thursday panic, the crypto arena saw a massive sell-off of tokens leading to a sharp decline in price across the market. The situation mirrored the events seen in the larger investment scene as fear over the coronavirus pandemic saw investors electing to liquidate their assets for cash.

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A Black Swan Event

For the MakerDAO project, Black Thursday turned out to be a ‘black swan’ event. As the price of Ethereum (ETH) fell on that fateful Thursday, the network suffered massive congestion which prevented price oracles from updating ETH/USD price in real-time.

With the price oracles failing, undercollateralized vault owners suffered forced liquidations. Some users took advantage of the situation to launch opportunistic profiteering attacks with zero bid and half bids. These rogue actors were able to liquidate ETH from vault owners with little or no DAI given in collateral.

MakerDAO lost $6.65 million in DAI stablecoin during the incident with $4 million of this shortfall being actual “bad debt” for the project. The DeFi lending project was able to service the bad debt via debt auction a few weeks later.

In the aftermath of the forced liquidations on Black Thursday, some affected vault owners sued the Maker Foundation for not providing adequate information about the risks involved in holding collateralized debt positions (CDP).

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Source: https://cryptopotato.com/no-compensation-for-makerdao-vault-owners-after-governance-vote/

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