## How to use PE, PS and PB ratios to evaluate stocks

In a previous article, I discussed the traditional and “improvised” method of valuing stocks, as well as several modifications to smooth out the inherent inequality of cash flow levels. In this article, we will look at another common way to value stocks using statistical multiples of a company’s financial metrics such as earnings, net assets and sales.

There are basically three statistical multiples that can be used in this type of analysis: price-to-sales ratio (P / S), price-to-book ratio (P / B) and cost-to-earnings (P / E) ratio. They are all used equally in evaluation, so let’s first describe the method and then discuss a bit if using three different multiples, and then consider an example.

Multiple method

Evaluating stocks in several ways is easy to understand, but requires some work to obtain parameters. In short, the task here is to come up with a reasonable “target multiple”, which, in your opinion, should be justified, given the growth prospects, competitive position and so on. To come up with this “target multiplier”, there are a few things to keep in mind:

1) What is the average historical multiple of the stock (P / E ratio, P / S ratio, etc.)? You should take a minimum of 5 years, preferably 10 years. This gives you an idea of ​​the multiplicity in both the bull and bear markets.

2) What are multiples for competitors? How wide is the variance regarding the stocks being investigated, and why?

3) Is the range of high and low values ​​very wide or very narrow?

4) What are the future prospects for stocks? If they are better than in the past, the “target multiple” could be set higher than historical norms. If they are not so good, the “target multiplicity” should be lower (sometimes significantly lower). Don’t forget to consider potential competition when thinking about future prospects!

Once you’ve come up with a clever “target multiple,” everything else is pretty easy. First, take an estimate of revenue and / or revenue for the current year and multiply the target multiplicity by them to obtain the target market capitalization. You then divide this by the number of shares, optionally adjusting it for dilution based on past trends and any announced share repurchase programs. This gives you a “reasonable price” estimate from which you want to buy 20% or more for a margin of safety.

If this is confusing, the example further in the article should help sort it out.

If you use different multiples

Each of the different multiples has its advantage in certain situations:

P / E ratio: P / E is probably the most common plural to use. However, I would like to adjust this to be the ratio of price to operating profit instead, where operating profit in this case is defined as profit before interest and taxes (EBIT – includes depreciation and amortization). The reason for this is the smoothing of one-time events that from time to time distort earnings per share. P / EBIT works well for profitable companies with a relatively stable level of sales and profitability. This * does * not work at all for unprofitable companies and works poorly for asset-based companies (banks, insurance companies) or heavy cyclical companies.

P / B ratio: The cost-to-book ratio is most useful for asset-based companies, especially banks and insurance companies. Revenues are often unpredictable due to interest rate spreads and are full of more assumptions than firms with basic products and services given such vague accounting elements as loan loss provisions. However, assets such as deposits and loans are relatively stable (except in 2008-2009), so the book value is usually what they are valued at. On the other hand, the book value is not of great importance for the “new economy” enterprises, such as software and service firms, where the main asset is the collective intelligence of employees.

P / S ratio: The price-to-sales ratio is a useful attitude towards everyone, but probably the most valuable for assessing currently unprofitable companies. These firms do not have earnings from which to use P / E, but comparing the P / S ratio with historical norms and competitors can help give an idea of ​​a reasonable share price.

A simple example

To illustrate let’s look at Lockheed Martin (LMT).

After doing some basic research, we know that Lockheed Martin is a well-known firm with an excellent competitive position in a relatively stable industry, defense contracts. In addition, Lockheed has a long track record of profitability. We also know that the company is obviously not based on assets, so we will use a P / EBIT ratio.

Looking at price and profit data for the last 5 years (which requires some work with tables), I determined that the average P / EBIT Lockheed ratio for this period was approximately 9.3. I now look at the circumstances of the last 5 years and see that Lockheed experienced several years of strong defense demand in 2006 and 2007, followed by significant political shifts and market downturns in 2008 and 2009 and then a market rebound, but problems with an important program The F-35 earlier this year. Given the Defense Department’s expected slow growth in the short term, I conservatively assume that 8.8 is probably a reasonable “target multiple” to use for this stock in the near future.

Once this is a multiple determined, finding a reasonable price is pretty easy:

The estimated profit in 2010 is \$ 46.95 billion, which will be 4% more than in 2009. Estimates of earnings per share are 7.27, which will be 6.5% less than in 2009, and is 6% of net margin. Based on these figures and empirical data, I estimate profit in 2010 at \$ 4.46 billion (operating margin of 9.5%).

Now I’m just applying my multiple of \$ 8.8 to \$ 4.6 billion to get a target market capitalization of \$ 40.5 billion.

Finally, we need to divide this by the stock in circulation to get the target stock price. Lockheed currently has 381.9 million shares outstanding, but typically repurchases 2-5% per annum. I will divide the difference by this and assume that the number of shares will fall by 2.5% this year, leaving 379.18 million at the end of the year.

Dividing \$ 40.5 billion by \$ 378.18 million gives me a target share price of about \$ 107. Interestingly, this is close to the discounted estimate of free cash flow of \$ 109. So in both cases, I used reasonable estimates and determined that the stocks looked undervalued. Using my minimum 20% “strength margin,” I would consider buying a Lockheed at a stock price of \$ 85 or less.

Wrap it up

Obviously, you can easily connect the price-to-sales ratio or the price to the book and, using appropriate financial values, make a similar estimate based on several. This kind of stock valuation makes a little more sense to most people and takes into account market factors such as different different ranges for different industries. However, when assessing the “target multiple” must be careful and consider how the future may differ from the past. Use your head and try to avoid using multiples that are much higher than historical market averages.

## What are the benefits of an indexed universal life policy (IUL)?

One of the most interesting things in the iul universal life insurance policy or index is that you can increase the cash portion of your insurance policy. The policy creates monetary value based on premium payments that exceed the cost of insurance and other expenses, as well as indicators of the underlying index.

One of the benefits of using iul is that it is tied to changes in the indexed account, which can allow you to enjoy market growth while enjoying protection against negative returns. This way, you can rise without sinking, in other words. The index account in iul usually has a gender and a limit

Sometimes you could reach a limit that can give you double-digit profits in a few years the market has a profit. Likewise, even though you will still have to pay for the policy and costs, you will not get a negative loan if the market is in decline. This means that if the market grows, your money can grow, but if the market shrinks, you are protected and your money cannot get negative credit due to the market downturn, but you will still have to pay for policies and costs.

This can be very useful in times of market turbulence. In years when the market is growing, so is your monetary value, and when the market is falling, this is where you get zero credit and you are protected from that loss. Your money is blocked so you don’t lose! However, you will have to pay fees and expenses for the policy.

Now why is it so important? Because inflation is one of the biggest threats to the growth of your money, and what if inflation is 3 to 5% or even higher depending on the government’s monetary policy? It is important that your money is ahead of inflation. If your money grows slower than inflation, you don’t grow your money – you actually reduce their value over time.

Iul can allow you to stay ahead of inflation by taking advantage of potential growth in years when the market is growing. The increase in the value of money in your indexed universal life policy is related to the S&P 500, but your money is not actually invested in the market. Your money is protected from any market loss because it is not directly in the market, but at the same time you benefit from the growth of the S&P 500 to the limit or limit.

Let’s say the maximum limit price is 12%. This may vary depending on the policy. This means that the growth of the monetary value will be limited to only 12%. Having a limit is actually a good thing because that’s what allows an insurance company to protect you from losses in years when the market is declining.

Now you can increase your money when the market grows, you can anticipate inflation with potential double-digit profits, and you will never have to worry about losing money when the market shrinks. What peace of mind would you let know that your money is protected from market volatility?

Thus, an index strategy makes sense for people who want to avoid market risk but at the same time want double-digit earning opportunities and all the other benefits that IUL can give them. By using this strategy, you can save more money without even changing your current lifestyle.

An increased index and strategy can allow you to:

Benefit from double-digit profits in recent years.

Help anticipate inflation.

Grow your money without taxes.

Provide cash flow for life.

## Invest in social media – sell it to fish or China so that the fish do not drown?

Over the past few months, several gentlemen at our local country club have been talking about their investments, private investments in Facebook stocks. As a non-Facebook user, it seems pretty childish to me, I don’t like the format, I don’t understand the appeal and, basically, it just doesn’t excite me. However, in terms of investment it makes sense to look at the numbers. So I read a little.

There are worthy books that you may wish to read are called; “The Casual Billionaire – The Founding of Facebook: A Story of Sex, Money, Genius and Betrayal”, Ben Mezrich, Anchor Books, New York, New York, (2009), 260 pages, ISBN: 978-0-7679- 3155-7 . By the way, this author also wrote another good book called “The Destruction of the House”, which was related to the global economic crisis. Anyway, after reading this book it doesn’t look like the company I would have invested in.

But I guess it doesn’t matter, they don’t need my money, and now they’re selling private stocks in China as well. Clearly, those making the offer have come under close scrutiny by the SEC because of outside IPO-related legislation and the number of shareholders eligible before the company will be considered a public company and must adhere to different audit and reporting rules.

So, have you ever heard this famous Chinese quote; “Fish cannot be saved from drowning.” Well, on Wall Street, if investments don’t make sense to institutional investors or become too risky, investment banks will no longer offer them to their best clients. So there is another quote; “Chop and feed the fish.” That is to sell garbage to the general public that invests, yes, I also do not like this way of thinking, but I would like to point out here.

Okay, is Facebook’s alleged market capitalization out of control? Did the frenzy of feeding around Silicon Valley and Wall Street create another bubble, this time on social media? Facebook is looking for Chinese investment in an effort to sell a large chunk, as reported in the Wall Street Journal on July 9, 2011. Then the same day an article appears; “LivingSocial is looking for \$ 1 billion in IPOs” by Gina Chong and Stu Wu, and the article says that after the IPO they hope to surpass or catch up with Groupon within a year?

There was another interesting article about reading-writing-the web web called; “China wants to buy a piece of Facebook: this week’s online tyranny,” Kurt Hopkins said;

“There is news that a sovereign wealth fund representing the Chinese government wants to buy a significant number of Facebook shares. Is China’s interest in Facebook just a government-sponsored group of venture capitalists looking to get part of Facebook’s upcoming IPO or something behind the scenes?” more complicated? ”

However, there was another interesting article on July 14, 2011 in the Wall Street Journal entitled; “Facebook: is its campaign worth 100 billion” and I think my answer to that question, and reading everything I’ve read, I would say “no”, and maybe that’s why the SEC protects investors and considers it question, and perhaps this is the reason that those who sell stocks do not do so in China. Anyway, I find it all very exciting and I hope you please consider it all and think.

## Is the bull market early or the bear market?

For virtual currency investors, the more important question is whether this round of rising currency prices is a restart of the bullish market or a bearish trap.

Last night the price of bitcoin rose in just an hour. The price has risen from violence to about \$ 6,800 to a high of \$ 8,100. During the day it grew by almost 20%. Bitcoin-led other virtual currencies have also led to a strong rebound, with profits from a single currency even exceeding 50%. Faced with the collective warming of the virtual currency market, many investors have shouted that the “bull market is back”.

According to CoinMarketCap, the market value of bitcoin rose by almost \$ 20 billion during the day, and the entire virtual currency market also experienced overall market growth. There was no “search” effect. According to the daily volume of bitcoin transactions, which exceeds 9 billion US dollars, billions of additional funds should enter the market yesterday, not equity funds.

In fact, during the Bitcoin boom, Bitfinex, a digital currency trading platform, also recorded a number of major purchases. With the increase in bitcoin purchases, many shorts were forced to close their positions, which further broadened the growth trend of the market. Nick Kirk, director of Cypher Capital, also praised the phenomenon. At the same time, he also believes that this sharp rebound is likely to be a response to the removal of early regulatory pressure.

Pantera Capital Management, one of the world’s largest digital currency hedge funds, said bitcoin has hit rock bottom. \$ 6,500 is the lowest point for the bitcoin bear market. For most of this year, bitcoin will be above that price and may even exceed a record high of \$ 20,000 last year.

Fundstrat founder Tom Lee also expressed confidence in Bitcoin. He believes that the current Bitcoin P / B ratio and other figures are almost the same as in the bear market at the end of 2014, and has formed an important technical correction. Based on this, he said that the value of bitcoin could more than triple this year and rose to \$ 25,000 later this year.

Historical data show that bitcoin did grow in the second quarter of the calendar year. In the second quarter of 2011, bitcoin rose by as much as 1964%, 36.25% in 2012 … 61.98% in 2016 and 131% in 2017.

Of course, the volume of Bitcoin OTC is also showing signs of market recovery. Since March, bitcoin trading in Canada, Europe, Vietnam, Mexico and Vietnam has grown and reached record highs.

With the consistent admission of major financial institutions such as the hedge fund giant Soros and the leading financial group of the Rockefeller family, the financial size of the virtual money market will be further expanded.

However, it should be noted that although bitcoin is currently experiencing strong growth, it is still in the downtrend channel and has not yet been effectively broken. It remains to be seen whether the virtual currency market has really changed. Investors should always be vigilant and pay attention to position management.

More importantly, major global Bitcoin markets, including the US, have sought to create a regulatory framework. Uncertainty of regulation will inevitably have a greater impact on the short-term development of the virtual currency market. In the long run an orderly, healthy market can go even further.

## Benefits of the Panaesha Capital Exchange (PCEX).

The cryptocurrency market boomed in 2017-2018; Last year, the total market capitalization of cryptocurrencies reached \$ 700 billion. With the huge market potential offered by cryptocurrencies, digital currency trading is booming, and several crypto exchanges have been launched during the year, and even more are under development. Crypto exchanges are platforms where traders can exchange cryptocurrencies for other cryptocurrencies or fiat money.

Panaesha Capital Exchange (PCEX) is a cryptocurrency trading platform that will be launched in the 3rd quarter of 2018. PCEX is secure, fast, provides high liquidity and uses a brokerage channel for added security. The platform is a universal trading solution; offering both cryptocurrency for cryptocurrency exchange and cryptocurrency in the fiat currency exchange.

Benefits of PCEX

Multifunctional sharing platform

Many cryptocurrencies, even well-known platforms, only support crypto-crypto-transactions, forcing traders to operate on multiple exchanges. Crypto traders first buy cryptocurrency for fiat money on a specific platform and then distribute currencies across multiple trading platforms to provide liquidity and profits. In order to convert digital currencies into fiat, traders have a choice of only a few platforms. PCEX is a comprehensive solution that offers high liquidity; crypto traders can conduct all their trades on one platform and will also be provided with significant profits.

High liquidity

To increase the liquidity of digital assets on PCEX the platform embodies all the key attributes of fast exchange;

Easy user interface to simplify the transaction process. PCEX built a similar format to the National Stock Exchange for reference.

Low commissions for transactions (PCEX insists on very small commissions for trading on the platform).

Sophisticated buying and selling procedure with the best matching mechanism. Trade orders will be quickly matched on the platform.

Coincidence of high caliber order

Users at PCEX are offered a limit trading procedure so that they can buy or sell assets at the price they set; The matching mechanism will try to increase sales by selecting users to trade at the best price for a limited time. The time limit will be set by traders, after which the trading order will be removed from the platform. PCEX has the ability to quickly match orders with the best order selection mechanism.

Fees are available

To trade on PCEX, crypto-traders will charge only two commissions: a transaction fee and a withdrawal fee. The transaction fee on PCEX is much lower than the fee on other platforms that offer similar services. Much of the transaction fees go to PCEX brokers and sub-brokers; the platform will get the smaller part of the cut.

Broker and sub-broker channels

Brokers and sub-brokers for crypto-trading are a unique feature of the PCEX trading platform. Traders on cryptocurrency platforms typically face poor customer support and slow response times. PCEX eliminates this shortcoming by using a fleet of brokers and sub-brokers to personally assist traders in each trade. Traders at PCEX will be assigned a single point of contact that they can contact at any time for assistance. No dark period of irresponsibility will ever be associated with PCEX.

Through a brokerage channel and exceptional services PCEX seeks to build long-term relationships with users. The broker channel also adds a level of security to the platform.

High security

By the way, PCEX has several layers of security. The platform has a Clark-Wilson security architecture model to ensure data integrity. The security system will check the acceptance of PCEX information so that data burglary can be prevented. Secure platform operations require auditors to cooperate; devices and IDs in place to protect the website. PCEX provides crypto-traders with an impenetrable level of security and protects the identity of traders and digital assets from hackers and accidental loss.

All users, brokers and sub-brokers on PCEX must complete the KYC / AML protocol; PCEX prepares in advance for any rules that may arise in the future. Traders can also be assured of legitimate behavior on the platform.

Conclusion

Cryptocurrency trading is an unstable atmosphere in which prices peak and fall almost daily. Price volatility depends on country or state regulations, security, acceptance of digital currencies by suppliers, major players, etc. Cryptocurrency trading provides a much higher return on investment than a traditional stock exchange; the first cryptocurrency investors earned millions in profits in 2017-2018.

To support the growing demand for digital currencies and platforms for digital currency trading, PCEX uses an advanced structure with a full range of services. Everything a crypto-trader needs for uninterrupted and easy trading is available on PCEX. In fact, PCEX goes the extra mile.

Check out the new and exclusive crypto exchange at http://www.pcex.io.

## Mom, where do bitcoins come from? Explanation of Bitcoin mining

“Mom, where do bitcoins come from?” Well, you see when a brilliant young Bitcoin catches the eye of an ambitious miner, and because they love each other very much …

Wait, this is obviously too difficult to solve here. Also, my whole goal is to keep things simple. Anyway, bitcoins are created by solving complex mathematical problems. This is done using a powerful machine created to solve these mathematical problems. This process is called mining. The people who own these machines to make money on bitcoin mining are called Miners. When a group of problems is solved, it becomes known as a block. Blocks are checked by other users, and after checking them they are added to what is called a chain of blocks. This chain continues to grow, adding a new block about every 10 minutes. This chain is just a major book that will continue to grow and never end.

Very powerful mining machines consume more power and increase Miner’s monthly utility bill. The reason why so much effort is required is the genius of the mathematics involved. This requires the mining machine to perform complex cryptographic algorithms. Once the machine solves a mathematical problem, a block of coins is born. Each time 210,000 blocks were created, the Miner Award is halved. It will take 4 years. So it’s kind of like the Bitcoin Olympics. Currently, the reward for the block is 12 bitcoins (June 23, 2020, the reward will be only 6 coins). These coins go to the miner, whose car at the time became the lucky winner of the lottery. Every 10 minutes there is a winner. There are also a lot of miners competing. Said Miner now has something valuable. Have enough coins and you pay your electricity bill and then a few.

There is another way of extraction. This is called cloud mining. With this type of mining you pay for using someone else’s network and it greatly reduces your profits. The positive advantages of this method is that it does not require the use of electricity or even the purchase of a machine.

Sounds good to me. I want to start mining now. Is this a good idea and can I earn passive income on a regular basis? Probably. Hold on for now and you can make that call later.

Let’s try to figure this out.

Returning to the original method of machine mining, you will need to start with the purchase of quality mining. It will cost you about \$ 2,000. Here is a picture of a good machine (Antminer S9 from Bitmain) capable of creating a high hashrate of 14 TH / s. 1 TH / s is 1,000,000,000,000 hashes per second. This machine does 14 times more. This is a great hashing power. A hash is just a very long number that a machine creates every time it tries to solve an algorithm. Again, if you use your lottery analogy, all of these cars haveh in the hopes of becoming the next winner.

Then your chances of winning become more difficult with increasing competition. Complicating the matter even more is the fact that every time a mathematical problem is solved, the next problem becomes more and more difficult to solve. The complexity of the Bitcoin network changes approximately every two weeks or 2016 blocks. The number of bitcoins that will ever be created is limited. That number is 21,000,000. Once we reach that number, bitcoin can never be mined again. However, the chain of blocks itself will continue to expand because it is used to verify every transaction or purchase.

Remember that pseudonym Satoshi Nakamoto, about whom I also wrote? Did you know that today’s math problems are more than 70,000 times more difficult to solve machines than we mined the first bitcoin back in 2009 ?! It is estimated that the final coin will be mined in 2140 because the system is halved every four years (210,000 blocks). 16,400,000 coins (78%) have already been mined, and much less will be mined from now on. Yes, you read that right. Basically 80% has been mined in the first 8 years, and the extraction of the last 20% will take more than 100 years. If any of my great, great, great-grandchildren read this, I hope you sit well with our family’s bitcoins, which are now valued at 220,000 per bitcoin. We can all dream right!

Buying a mining machine or purchasing a cloud mining contract is risky. While there are some great success stories, be sure to study them carefully before deciding if mining is right for you. For every person who makes money, there are many people who lose money.

By the way, Coin Market Cap is a great resource to see all cryptocurrencies, their common coins and market capitalization. You can see all 700 plus altcoins flying overnight. Altcoin is another way to tell any cryptocurrency coin that is not bitcoin. Now you probably know that bitcoin is like the Rose Bowl, the grandfather of all! I would really try to limit my attention and research to the top 10. Not that there are now no success stories from one of the almost insignificant. Just finding it is like choosing the right penny stock. A much safer game with well-known companies that are recognized by major analysts. The same goes for the stock market you use to buy, sell and trade. That’s why I use Coinbase to make trades as it is the most reliable, secure and convenient exchange. They also have the most thorough verification process when it comes to adding altcoins.

Here is a summary of the key points from this article:

-Bitcoins are created from mining

-Manufacturing is done with powerful machines that solve complex mathematical problems. You can also purchase contracts called cloud mining if you don’t want to buy a car.

-Problems intensify as coins are mined and production speeds slow

-As of May 2017, only 72 bitcoins were mined per hour (12 every 10 minutes)

-June 23, 2020 it will again be halved to just 6 created every 10 minutes

– Almost 80% of the final 21,000,000 Bitcoin coins have already been mined

-Competition among miners and increasingly complex mathematical problems complicate profit making

– The final coin is estimated to be mined in 2140

## What is Ripple and why has its value increased so quickly?

With a value increase of 35,000% in 2017 and a market capitalization of more than \$ 118 billion, Ripple has become a topic of discussion for both analysts and investors. But what is Ripple? Is it like other cryptocurrencies? Why has it been burning lately? Keep reading to get answers to these questions.

1. What is Ripple?

Ripple is a payment solution company founded by Chris Larsen and Jed McCaleb. Their Ripple Transaction Protocol (RTXP) contains the cryptocurrency XRP. Ripple claims to offer faster, more reliable and affordable transaction solutions for financial institutions. The company has created one hundred billion XRP, and now owns 61% of the coins. The current plan is to issue a billion coins a month.

2. Differences between Ripple and Bitcoin

Both Bitcoin and Ripple are cryptocurrencies that use blockchain technology. But there is a fundamental difference between them: unlike Bitcoin, Ripple cannot be mined. The currency is not set as the currency for mining, and its use is recorded in the Ripple network.

Both Bitcoin and Ripple use validation nodes to validate ledgers. Bitcoin has about 10,000 trusted nodes, while Ripple has only five. However, the company plans to add another 11 over the next 18 months. The five validation nodes are controlled by Ripple. XRP has received criticism for the lack of independent trusted validators. XRP Ledger is available to everyone, so anyone can download it and become a validator. Many companies manage their own nodes in the Ripple network.

3. Reasons for the recent rise in price of Ripple

The recent rise in XRP prices has a lot to do with the expected use of currency by financial institutions and the investment of investors who believed in the hype. Ripple has succeeded in attracting banks as customers for its other products. Financial institutions prefer xCurrent from Ripple because it offers real-time connectivity and quick fixes, thus reducing delays in banking transactions. The company plans to introduce a new product, xRapid, which includes XRP. They see the new product as an opportunity to get banks to use XRP. Investors see the potential of currency as a financial instrument used by banks around the world.

Ripple, or rather, XRP – is a growing cryptocurrency. It differs from the leading digital currency Bitcoin because its supply is controlled by the founding company. Ripple expects banks to accept it in the future. It can be assumed that the recent increase in the value of Ripple will push more debate about its viability as a cryptocurrency asset.

## Which cryptocurrencies are good to invest in?

This year, the value of bitcoin has risen, even exceeding one gold ounce. New cryptocurrencies are also appearing on the market, which is even more surprising: the value of cryptocurrencies is over one hundred billion. On the other hand, the long-term prospects of cryptocurrencies are somewhat blurred. Among its major developers are quarrels over lack of progress, making it less attractive both as a long-term investment and as a payment system.

bitcoin

Still the most popular, bitcoin is the cryptocurrency with which it all began. It currently has the largest market capitalization – about \$ 41 billion and has existed for the past 8 years. Bitcoin is widely used around the world, and so far it has not been easy to use the weakness of the method it works. Both as a payment system and as a stored value, bitcoin allows users to easily receive and send bitcoin. The blockchain concept is the foundation on which Bitcoin is based. You need to understand the concept of a blockchain to understand what cryptocurrencies are.

Simply put, a blockchain is a database distribution that stores each network transaction as a block of data called a “block.” Every user has copies of the blockchain, so when Alice sends 1 bitcoin to Mark, everyone on the network knows it.

Lightcoin

One of the alternatives to bitcoin, Litecoin is trying to solve many of the problems that are holding back bitcoin. It is not as sustainable as Ethereum, its value is mainly due to the acceptance of solid users. It should be noted that Charlie Lee, a former Google employee, leads Litecoin. He also practices transparency of what he does with Litecoin, and is quite active on Twitter.

Litecoin has been Bitcoin’s second violin for quite some time, but things started to change in early 2017. First, Litecoin was adopted by Coinbase along with Ethereum and Bitcoin. Litecoin further fixed the problem with bitcoins by adopting Segregated Witness technology. This gave him the opportunity to lower the transaction fee and do more. The deciding factor, however, was that Charlie Lee decided to focus exclusively on Litecoin and even left Coinbase, where he was the engineering director, only for Litecoin. Because of this, the price of Litecoin has risen over the last couple of months, with the strongest factor being that it could become a true alternative to Bitcoin.

Etherium

Vitalik Buterin, a superstar programmer, came up with Ethereum, which can do everything Bitcoin can do. However, its goal is primarily to be a platform for building decentralized applications. In blockchains there are differences between them. Basically, the Bitcoin blockchain records the type of contract that states whether funds have been transferred from one digital address to another. However, Ethereum has a significant extension as it has a more advanced language script and has a more complex and broad scope.

Projects began to sprout on top of Ethereum when developers began to notice its best qualities. With the help of crowd tokens some have even raised millions of dollars and this is still maintained to this day. The fact that you can create great things on the Ethereum platform makes it almost like the Internet itself. This has led to a rapid rise in prices, so if you purchased Ethereum for \$ 100 earlier this year, it won’t be priced at nearly \$ 3,000.

Money

Monero is committed to solving the problem of anonymous transactions. Even though this currency was perceived as a way of money laundering, Monero is trying to change that. In essence, the difference between Monero and Bitcoin is that Bitcoin has a transparent blockchain in which every transaction is open and recorded. With Bitcoin, everyone can see how and where money moved. However, there is some imperfect anonymity in bitcoins. In contrast, Monero has an opaque transaction method rather than a transparent one. No one sells this method, but since some people love privacy for any purpose, Monero is here to stay.

Zcash

Unlike Monero, Zcash also aims to solve the problems that exist in Bitcoin. The difference is that Monero is not completely transparent, but only partially public in its blockchain style. Zcash also aims to address the issue of anonymous transactions. After all, not everyone likes to show how much money they actually spent on memorabilia under Star Wars. Thus, it can be concluded that this type of cryptocurrency does have an audience and demand, although it is difficult to say which cryptocurrency that focuses on privacy will end up in the first place.

Bancor

Also known as the “smart token”, Bancor is a standard new generation cryptocurrency that can store more than one token in reserve. Basically, Bancor is trying to make it easier to trade, manage and create tokens by increasing their liquidity and allowing them an automated market value. At the moment, Bancor has a product on the interface that includes a wallet and a smart token creation. The community also has features such as statistics, profiles and discussions. In a nutshell, the Bancor protocol allows you to detect embedded account as well as liquidity mechanism for smart contract tokens through the innovation reserve mechanism. With a smart contract you can instantly eliminate or purchase any of the tokens in the Bancor reserve. With Bancor you can easily create new cryptocurrencies. Now who wouldn’t want that?

EOS

Another Ethereum competitor, EOS, promises to solve the problem of scaling Ethereum by providing a set of tools that are more reliable for running and building applications on the platform.

Theses

An alternative to Ethereum, Tezos can be upgraded by consent without much effort. This new blockchain is decentralized in the sense that it is self-governing through the creation of a digital true community. It facilitates a mathematical technique called formal verification, and has the features of enhancing the security of the most financially sound, sensitive smart contract. Definitely a big investment in the coming months.

Verdict

It is incredibly difficult to predict which bitcoin will be the next superstar on the list. However, user acceptance has always been a key success factor when it comes to cryptocurrencies. Both Ethereum and Bitcoin have this, and even if there is great support from the first users of each cryptocurrency on the list, some still need to prove their resilience. However, these are the ones that need to be invested in and monitored in the coming months.

## 5 tips to consider before investing in bitcoin

In 2017, bitcoin grew strongly and people made a lot of money in the process. Even today, bitcoin is one of the most lucrative markets. If you are just a beginner, you can do your homework before putting money into bitcoin. Here are 5 expert tips to help you avoid some common mistakes when trading bitcoin.

1. Learn the basics first

First of all, you can learn the basics to get a better idea of ​​how to buy and sell Bitcoin. Alternatively, you can read reviews of popular Bitcoin exchanges to find the best platform.

As with other types of financial investments, you can find ways to protect your investments. Make sure your assets are protected from scammers and cyberattacks. After all, security is the most important aspect of any type of investment.

2. Consider market capitalization

It is not good to make such a decision based only on the price of the coin. However, the value of cryptocurrency is valid only if you take into account the existing stock in circulation.

If you want to buy bitcoin, don’t focus too much on the existing value of the currency. Instead, you can take into account the aggregate market capitalization.

3. Invest in Bitcion instead of mining bitcoins

The bitcoin mining industry is growing in popularity at a rapid pace. At first, it wasn’t that hard to earn bitcoin by cracking cryptographic puzzles. Later, bitcoin could be mined only in special data centers.

These centers are full of machines designed to mine Bitcoin. Today, if you want to build a home mining center, you may have to spend millions. Therefore, it is better to invest in bitcoin.

4. Diversify your investments

New investors in bitcoin tend to be short-lived with cryptocurrency. In fact, with bitcoin you can diversify your investment risk. If you invest wisely in cryptocurrency, you can enjoy the same rewards as investing in Forex. All you need to do is put together a robust risk management strategy.

In other words, you can’t put all your eggs in one basket. This way, you can invest in other cryptocurrencies.

5. Set clear goals

Because bitcoin is a new market, it can be difficult for you to determine the right time to trade your bitcoin. The value of bitcoin is volatile, which means you need to have clear targets regarding profits and losses.

You may not want to make the mistake of making investment decisions based on your emotions. Smart steps can help you minimize losses and make good progress.

In short, if you are going to invest in bitcoin, we suggest you follow the tips given in this article. This will help you make wise decisions and at the same time be safe. Just make sure you avoid common mistakes when running this business.

## Practical tips on how to trade cryptocurrencies

For some time now, I have been closely monitoring the performance of cryptocurrencies to understand where the market is heading. The usual regimen taught to me by an elementary school teacher – when you wake up, pray, brush your teeth and have breakfast, a little switch to waking up, praying, and then online (starting with coinmarketcap) to know which crypto-assets are in the red.

The start of 2018 was not very pleasant for altcoins and related assets. Their performance has been crippled by frequent bankers ’speculations that the crypto-bubble is about to burst. However, avid cryptocurrency supporters are still “holding on,” and, truth be told, they are reaping the rewards.

Recently, bitcoin returned to nearly \$ 5,000; Bitcoin Cash has approached \$ 500, and Ethereum has found peace of mind at \$ 300. Virtually every coin received a hit, except for beginners who were still in the excitement stage. At the time of writing, bitcoin is back on track and is priced at \$ 8,900. Many other cryptocurrencies have doubled since the beginning of the uptrend, and the market capitalization is \$ 400 billion from the recent \$ 250 billion.

If you are slowly warming up to cryptocurrencies and want to become a successful trader, the tips below will help you with that.

Practical tips on how to trade cryptocurrencies

• Start modestly

You have heard that cryptocurrency prices are rising rapidly. You also probably got the news that this upward trend may not last long. Some skeptics, mostly respected bankers and economists, usually call them schemes of rapid enrichment without a stable basis.

Such news can make you rush to invest and not follow moderation. A little analysis of market trends and decent currencies that you can invest in can guarantee you a good return. Whatever you do, don’t invest all your hard-earned money in these assets.

• Understand how exchanges work

I recently saw a friend of mine posted a Facebook feed about one of his friends who continued to trade on the stock exchange, he had no idea how it worked. This is a dangerous step. Always review the site you are going to use before registering or at least before you start trading. If they represent a fictitious account that you can play with, take this opportunity to find out what the dashboard looks like.

• Don’t insist on trading everyone

There are over 1,400 cryptocurrencies to trade, but it is impossible to deal with all of them. Spreading your portfolio to a huge amount of crypto than you can effectively manage minimizes your profits. Just pick a few of them, read more about them and how to get their trading signals.

• Stay sober

Cryptocurrencies are unstable. This is both famous and good for them. As a trader, you need to understand that wild price fluctuations are inevitable. Uncertainty about when to take a step makes a person an ineffective trader. Use accurate data and other research methods to be sure when making a deal.

Successful traders belong to various online forums where cryptocurrency trends and signals are discussed. Sure, your knowledge may be enough, but you need to rely on other traders to get more relevant data.

• Diversify content

Virtually everyone will tell you to expand your portfolio, but no one will remind you to deal with real-world currencies. There are a few bad coins you can deal with for quick money, but it’s best to deal with cryptocurrencies that solve existing problems. Coins with actual use tend to be less volatile.

Don’t diversify sooner or later. And before you buy any crypto-asset, make sure you know its market capitalization, price changes and daily trading volumes. Maintaining a healthy portfolio is a way to get the most out of these digital assets.