bitcoin, dex, трейдинг

more relevant in view of the strengthening of external control and a number of restrictions, including sanctions. Regular hacks of the largest trading platforms only exacerbate the situation. But, is it possible to trade outside a centralized exchange or minimize risks when using it? There is a simple and old scheme that has been tested for years. And there are relatively new technologies, the emergence of which can be compared in importance to the invention of Bitcoin itself.



It doesn’t even matter what specific services you will be to use – the main thing, the principle itself. Therefore, I will try not to mention certain services and applications, and to focus on the general approach to the organization of trade. The weakest point is always the point of entry and exit from crypto to fiat. Here you need to show common sense and correlate possible risks with the level of security.

If you are already trading on the exchange and everything suits you, there is no need to change anything. But, nevertheless, think about it – under what circumstances can your money on an exchange account cease to be yours? And what do you risk in case of force majeure? This includes exchange failure (short or long term), exchange robbery, exit scam, denial of service under any pretext (withdrawal of funds, in particular), sanctions against your state, etc. How much are you risking? Are you ready to lose your money on the stock exchange tomorrow?

Is KYC our future?

No, KYC is our present. Today, the procedure “know your customer” has become a widespread and mandatory practice. And this is understandable in relation to fiat money, where it is impossible to anonymously own a bank account. And what’s worse – you don’t own your money at all in this case. You are allowed to use them. At any time, you can be denied service if there is a good reason. And he will be found – if necessary.

Under the pretext of fighting crime – each person is on a short leash. At any time, he can be deprived of welfare.

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Binance has blocked users from Nigeria

At one time, as a response to banking arbitrariness, various cryptocurrencies began to develop intensively, primarily Bitcoin. In particular, he provided people with relative anonymity, i.e. no one could know how much money you had, and, moreover, take it away. And here we will put an end to it and will not mention how many people use cryptocurrencies for criminal purposes. Over the decades of the development of traditional online banking with the mandatory identification of the account holder, no one has destroyed this crime. Think about it.

Soon, cryptocurrencies were literally overlaid with rules and restrictions on all sides. You can not buy and sell – without obtaining permission. I am obliged to provide the exchange with all information about myself. And at the first request of the competent authorities, the exchange will extradite me with giblets. And it doesn’t matter if I break laws or not.

I’ll assume that the data of users of exchanges has long been are automatically flocked to one data center and no requests from the exchange are required. In any case, this applies to large trading floors.

But trading outside the exchange is almost impossible. There are no places where there is enough liquidity. And this despite the fact that there are already ready-made solutions. They lack only one important element – you, the people. Where are you? On Binance, Bitfinex, Kraken? Why did you come to crypto? For a profit? It seems that cryptocurrencies have become just a modern alternative for those who raised a pretty penny on Forex in the 2000s. In this case, this article is not for them.

But those who really want to change something in this world should read on. Because cryptocurrency and regulation are incompatible things. I have always been in favor of the widespread adoption of cryptocurrencies, but I have always been against external control. And I’m not alone in my opinion. No one should decide how much wealth a person can own. Do you think it’s impossible? Do you think that the widespread use of cryptocurrency depends solely on the decision of the state? No, it depends on your choice. And if, at the same time, they start severely punishing the use of cryptocurrency, you will once again understand what your freedom is worth and what role in this system is assigned to an ordinary person.

Custodial and non-custodial wallets

Don’t let this crooked word scare you – custodial just means that you have access to your money not only you, but also the one with whom you keep them. Imagine that you put the money in the nightstand – and left the key for yourself and the tax inspector. Well, or they decided to keep the money in the neighbor’s bedside table – he honestly promised not to take anything. And he keeps his word. Only the fact remains – the safety of your money depends on someone else’s will. All fiat wallets are custodial. You were not given any other option. He can’t be

. The bank will never deprive itself of the opportunity to limit you in terms of disposing of your own funds. Even if it were technically possible. Thus, all the money belongs to the banking system, and you just use it. As long as it’s allowed. By the way, land and property are also rather conditional property. But that’s not what we’re talking about.

In the world of cryptocurrencies, the rules are slightly different. Wallets can be non-custodial. Those. only you will know how much money you have and only you will have the right to dispose of it. All cryptocurrencies work with two keys – public and private. The public key is your billing address, the private key is a secret that gives you the ability to manage the amount in your account. All public keys (addresses) are generated from the private key. Owning a private key is equivalent to owning money. In crypto, the original principle “Not your key – not your money” has not been canceled.

So, there are two types of cryptocurrency wallets: those who simply allow you to use your money, t .e. private keys belong to them, and they just give you an address to use, and those who allow you to independently generate a private key, seed (mnemonic phrase) and own money, as if it were your personal wallet.

Choose. Difficult choice? Creating such a wallet is not a problem. You do not need an email address, and even more so, you do not need to provide any information about yourself. There are no limits or rules other than those built into the blockchain itself. No one can so easily stick their hairy paw into your handful of coins. Question: why do you create wallets in online services? What for!? Is it difficult for you to download a wallet like Electrum and throw it on a flash drive? In this case, the chance that someone will steal this money is almost zero. But, you still put your money in someone else’s uncle’s pocket.

What to do?

Yes, you can own your money, but the bitter truth is that you can’t really spend it. You don’t want to pay each other with cryptocurrencies. Yes, let it not even be bitcoins. There is th, less decentralized, but faster coins. Not the crux of the matter. Incidentally, the transaction time in the Bitcoin network, as a rule, does not exceed a reasonable framework, no matter what they say. Yes, and you do not need to wait for all the confirmations – the main thing is to make sure that the transaction was made. The chance that someone will try to withdraw it back is minimal, especially if this person is familiar to you.

In general, in order to spend your cryptocurrency, you need to convert it into “normal money”. But, believe me, cryptocurrency is the most normal money, as it should be in our time. cryptocurrency without providing a passport. I understand when a passport is required at the border and, in general, I support the existence of a passport as such. But, if I cannot buy and sell without a passport (today only paper currency leaves this option) – this, to put it mildly, is annoying. I will explain why.

As long as paper currency exists, I am relatively free. No one can just one click on the keyboard to leave me without a livelihood. I can sell property for cash. Now imagine 2021: paper money was abolished due to impracticality. All people use exclusively online banking. It’s really not through 30 years, but literally tomorrow. Now think about what happens if the banking system suddenly refuses to serve you for any reason? You can’t buy food (you’ve been used to buying it for a long time), you can’t pay rent (there isn’t another by that time), you can’t pay other bills. You are a typical cyber-bum from the world of cyberpunk. Could this be true, or is this my sick fantasy? It’s up to you to decide.

Even if you don’t run ahead of the horse into the worlds of Neil Stevenson – think, what is already fraught with such frankly intimate financial relations with the banking system today? Do you really want someone to know about all your monetary transactions and the status of your accounts not only in fiat, but also in cryptocurrency? I think that cryptocurrency should be kept from someone else’s eyes, because in 2050 g it will definitely come in handy.

In general, we will return to the discussion of problems with KYC below.

TOPIC INFORMATION:

ECB: No need to deanonymize small crypto payments

Simple scheme

Immediately it is necessary to indicate: absolutely anonymous trading is practically impossible today. Except for one option: your fiat entry or exit point is a person or office that is ready to work with you without the need for you to provide documents. Perhaps this is some modest service that does not flicker on the leading crypto media.

Now imagine that your funds are kept exclusively in offline wallets. Each crypto has its own or multi-currency option. There are various applications for monitoring and analyzing courses. Additionally, the news background is monitored, general sentiments are evaluated.

It is important that the cryptocurrency is not on the exchange account. No one can freeze my account. No one can steal my money if I follow basic security rules. All mine is with me. I can “prove what I own” at any time.

Yes, but I need to quickly change the crypt to fiat or to another crypt. In this case, there is a choice.

In particular, you can still create one or more exchange accounts and send funds there exclusively for exchange. Even if you trade within one day, this will not cause you serious inconvenience. Roughly speaking, they brought in in the morning and took them out in the evening. But, nevertheless, this option is more suitable for long-term strategies. In other words, today you buy bitcoins, hold them for two years, do not pay attention to the movements of the exchange rate, and then enter the exchange and pull out ten X’s. Believe me, many have done this many times already – just analyze the course over the past ten years. Question: did they have to keep money on the stock exchange for all these two years, risking a deposit? Just think how much you could earn if you bought bitcoins at g. only for 15$?

Robbing and scamming don’t concern you – you are in a submarine. If you don’t withdraw funds at least once on the exchange, you no longer work with it. Therefore, always split large operations into smaller transactions. They lost it, didn’t give it back – they changed the exchange, spat on her trail. Well-known and large exchanges, as a rule, do not do this because they value their reputation. Especially if the one-time tranche does not exceed the psychological threshold. There are limits on all exchanges.

But, the method has a serious drawback – personal identification. Although, many do not care at all. And the question is not that a person does not want to pay taxes or is engaged in criminal activities. Think for yourself – you trust your personal data to God knows who. You look at those people who are behind the foundation of this or that large exchange. Their deeds are more than dark, like the past. What can they do with your documents? For example, the same Bitfinex issued bank accounts for traders without their participation and consent. Yes, this was done in the interests of not only the exchange, but also the trader. But, then what is the point of KYC if someone you trust can conduct financial transactions on your behalf? As a result, they will ask you, but you won’t find the ends because you threw your documents at + exchanges and + wallets. Which of them exactly abused their official position?

The next aspect: even if the exchange honestly protects your personal data and does not use it for its own purposes, there is no guarantee that the database for all traders is not will be stolen. What then? How will the buyer deal with this information? Does he use digital identities for drop farming on any exchange? Or simply select the largest ordinary traders with a deposit of 1 $+ and press them in order? Remember the methods of the competent authorities in some countries? What did they sometimes do with the miners and traders who came into their field of vision?

In general, it is quite understandable why KYC carries potential risks for your security. On the other hand, the absence of KYC today is a rare case. And even suspicious. But, if there is a relatively reliable option without KYC, it is better to choose it.

Until a certain time, this was the case with the service LocalBitcoins, which allowed you to exchange bitcoins for any other cryptocurrency or fiat, simply acting as an intermediary guarantor between users. Everything was simple – started, exchanged. Nobody asked for documents. Everyone trusted LocalBitcoins. No one keeps large sums there, there is no evidence that someone stole money from there. There simply aren’t many of them. But, a couple of years ago, they began to demand a typical set of documents for full-fledged work. KYC allows you to store the entire history of your transactions linked to an individual. Thus, it is always possible to find out how much someone Ivanov bargained for 2021 through their service. Do you need it? Although, if you work with relatively small amounts, LocalBitcoins is still preferable to the exchange due to a softer verification policy. But, keep in mind that, accordingly, LocalBitcoins works exclusively with bitcoins.

So, we have a bunch of several wallets + LocalBitcoins. There are two types of wallets: cryptocurrency and fiat. Compare with the exchange option “all in one”. This is already a good example of an adequate approach, when all the eggs do not go into one basket.

As already noted at the very beginning, instead of LocalBitcoins, there can be any service or person who is ready to quickly buy from you certain crypto in sufficient quantities.

About mail

Separate question regarding e-mail addresses. Even if you use only your own documents everywhere, do not tie everything together with one postal address. Because, in this way, you provide the owners of the mail service with the opportunity to associate your identity with the services that you use. In general, for example, Yandex may know that you Ivan Ivanov (you gave them your phone number, linked a card to view Kinopoisk HD or verified Yandex.Wallet) registered accounts on five exchanges and in three payment systems + regularly receive notifications of transactions . Do you need it? Were you not interested in the peculiarities of the national policy at Yandex?

Therefore, use services that are more respectful of your privacy, for example, Proton Mail. He will not save you from Big and Little Brother – we all walk under the same sky, but they will not ask you for a passport there, as well as a phone number. They do not have any additional services that would require your identification. Only mail, and nothing more. In general, take an interest in how the e-mail protocol works, and why, contrary to common sense, we still use combine aggregators like Google, Yandex or Mail.ru.

So, wallets +LocalBitcoins+Proton Mail. Or wallets + exchanges + Proton Mail. Which fiat wallets and which exchanges are your choice, I won’t undertake to recommend. It all depends on individual circumstances. Regarding cryptocurrency wallets, this resource has a huge amount of information that will help you make the right choice.

bitcoin, атомарные свопы, AtomicDEXAbout the browser

Apart from mobile browsers, a reliable, portable browser (Windows) is most preferred on a PC. There are Appimage builds on Linux, which also allows you not to scatter parts of the browser on disk and store it on external media.

If you seriously decide to earn money by trading, immediately define a separate browser for this. Do not mix work with leisure. Plus, it’s more secure. In a separate browser, which is not registered in any way in your OS, you can store passwords and site addresses without much fear that a certain virus will gain access to them. Do not use this browser to visit other non-trading websites.

You can choose any browser, but make sure it is stable enough and works flawlessly with the websites you need. I will not undertake to recommend any – all browsers have strengths and weaknesses and, moreover, have similar functionality. Although, Chromium-based builds are most preferred. Pay attention to Brave – it is specially designed for working with cryptocurrencies. For greater security, it makes sense to keep the browser in an encrypted container. Thus, not a single virus will harm its content, and not a single malicious third party will gain access to your accounts.

The advantages of a browser over any application are obvious: you can work with several trading sites, as well as use additional services for monitoring in one window.

In order not to be unfounded – I will give an example the work of a certain Trader X during a period of brisk growth of cryptocurrencies.

The principle is simple: “Buy low – sell high.” The easiest way to do this is when even a stick stuck in the snow grows in the crypt. Such periods usually occur a year after the next Bitcoin halving or when a new feature like ICO or NFT appears.

Tip: be sure to study the historical chart of various cryptocurrencies and compare periods of growth and decline with specific events and times

Trader X did not want to trade on typical exchanges and simply began to buy various cryptocurrencies for bitcoins and store it in native offline wallets. When it came time to sell, he used decentralized exchanges to convert the coins back into bitcoins and sold them through LocalBitcoins for fiat with a withdrawal to a regular electronic wallet. He did not chase small profits – so the commissions did not bother him much.

So he never took risks – his money was always under his control and distributed over several wallets. Trader X may be paranoid, but he has proven that it is possible to trade relatively anonymously. He simply received transfers to his electronic wallet from various persons, nothing more. Nothing indicated that he traded cryptocurrencies at all.

Today, the situation with KYC has escalated significantly and Trader X’s method has cracked, but the general principle is quite clear.

RELATED INFO:

ShapeShift Enforces Strict KYC Rules Due to Regulatory Pressure

Conclusion: you need to directly purchase bitcoins for a reasonable and affordable amount for you (this is real) and find a service that will allow you to exchange bitcoins for another cryptocurrency (and back) without providing documents from your side. There are such services, however, as a rule, they do not work with fiat. But, as already noted, you must have a reliable point of entry and exit into the common currency, which will be your net profit.

I cannot, for obvious reasons, recommend any either centralized services or, moreover, specific people. You have to find them yourself.

This scheme involves methodical (meditative) Zen trading, eliminating the risk of momentary, impulsive decisions, requiring a series of conscious actions and a deliberate decision before buying and selling. Here you are your own boss, and not part of the exchange plankton.

But, if you do not talk about working with fiat – are there options that allow you to trade bitcoins and other cryptocurrencies completely anonymously? Yes, of course, but not everything is as simple as it could be.

Everyone knows DEX exchanges that allow, for example, trading ETH and its derivatives without any personal identification. Naturally, to buy and sell cryptocurrency for fiat, you still need to look for third-party options. In addition, such platforms do not work with bitcoins for a technical reason.

atomic swaps, which allows you to trade with other people directly without the need for trust.

These exchanges lack one thing – a sufficient number of users. But, you can change that.

Atomic swaps are our future?

No, this is our present, which we do not notice. Let’s briefly outline what these same atomic swaps are and how they work.

Quote:

Atomic swaps are based on the so-called HTLC (Hash-Time Locked Contract). This contract can be conditionally translated into human language in this way:

bitcoin, атомарные свопы, AtomicDEXIf time has passed less than T, then transfer N coins to address A, provided that a secret is provided, the hash of which is equal to H. If time has passed more than T, and during this time the secret has not been provided, then transfer (return) the money to address B. bitcoin, атомарные свопы, Atomic Wallet

In other words, a transaction output specified as HTLC can only be spent by the recipient if the sender will tell him the secret, and only for a certain time fixed in the transaction (for example, hours). If this does not happen within the specified period of time, then the money will be withdrawn to the return address of the sender.

Source: Atomic Swaps: Blockchain Shrugged / Habr

Moreover, the exchange is possible between different blockchains that support HTLC transactions.

Obviously, such a direct exchange implies some serious drawbacks – it is necessary to wait for the confirmation of transactions in blockchains, and, most importantly, a peer who will buy or sell you the desired cryptocurrency. But, with a sufficient number of interested users, there will definitely be liquidity.

Which applications should I choose?

bitcoin, атомарные свопы, Atomic Wallet

Here, I again deviate from the main rule of the article – do not designate specific services once again, because. the mention of these applications in specialized media is extremely important for their development. The specified software has versions for various operating systems and open source code, which is important.

Three atomic pillars

Let’s start with the most (in my opinion) developed option:

Atomic Wallet

It is important that Atomic Wallet has a huge selection of cryptocurrencies and even fiat payment aggregators are screwed . Naturally, to work with ordinary currency, personal identification is required. Cryptocurrency exchange is completely anonymous. Versions for all platforms.

The next option has no less number of cryptocurrencies and even a typical exchange terminal. Again, the problem is liquidity. There is no exchange for fiat. The project is in the beta testing stage. Version for Windows only.

I present to your attention:

AtomicDEX

bitcoin, атомарные свопы, AtomicDEX

The next application is much simpler than the previous two, has a limited set of cryptocurrencies and a rather ascetic interface:

Atomex

bitcoin, атомарные свопы, AtomicDEX

On this, I think it’s worth drawing a line – after all, now you have enough food for thought.

Completion

You yourself understand that everything you have today you have created yourself. You want more freedom, but, roughly speaking, you are selling yourself to centralized exchanges. And you can understand – after all, convenience and functionality are extremely important aspects. A serious trader will always prefer to go through identification once on a serious stock exchange and will never pay attention to some leftist schemes. But what if you think in other categories? What if it is critical for you not to depend on other people’s decisions? If the free market is not an empty word for you and you see a world without anyone’s centralized power? Can people interact with each other without looking at the overseer? Yes! But, for this you need to make a conscious choice and take one more step towards a decentralized, free world.

Author: Ne-Standard

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