How to Protect Your Anonymity Against Crypto Dusting Attacks

Understanding the nature of dusting attacks and airdropping can help you determine the best way to protect yourself and your crypto holdings from hackers and scammers.

Since Bitcoin’s debut to the public more than a decade ago, supporters have praised the benefits of cryptocurrency transactions including decentralization, transparency and anonymity. While these benefits certainly have their advantages, crypto’s nature also opens you up to a level of risk that has been realized through activities like dusting attacks and airdrops that often go completely unnoticed if crypto holders don’t know what to look for. Fortunately there are steps you can take to protect yourself from malicious entities interested in deanonymizing you. Understanding the nature of dusting attacks and airdropping can help you determine the best way to protect yourself and your crypto holdings from hackers and scammers.

The blockchain: Not as anonymous as you might think

Many people mistakenly think bitcoin is private. It’s anonymous, yes, but not private. A transaction is made up of input(s) and output(s). When you spend, you are creating a transaction using your address as an input. When you receive, your address is given an amount of bitcoin, which becomes the output. All of this transaction information (including the addresses involved, amounts and times of the transactions) are recorded on the blockchain. As that ledger is 100% transparent and public, so are your transactions. Any uninvolved party (people who have not transacted with you directly) examining the blockchain can see the cryptocurrency being received or spent — they just won’t know it’s you spending or receiving it because the owners of the addresses are not revealed. If the person you’re transacting with knows who you are however, they may be able to associate your blockchain wallet (and future transactions) with you, as anonymity only applies when referring to non-involved parties. And even still, a non-involved party may not know who you are from the beginning, but by watching blockchain activity, they may be able to figure it out if your wallet is maliciously “dusted” and use this information to deanonymize you in the future.

Dusting: Revealing your identity, one satoshi at a time

When you use bitcoin to pay for something, one or more addresses (UTXOs) are selected that most closely match the amount due and you receive an output UTXO with your change. For example, if you were paying for something equal to $400 and you had three UTXOs in your wallet equal to $5,000, $5, and $399, you could use the UTXOs equal to $399 and $5 and would receive a UTXO back worth $4. All of this information is recorded on the public ledger.

With dusting, a hacker or scammer sends very small amounts of a cryptocurrency (dust) to a large number of addresses. If you receive dust, you will have a UTXO in your wallet with a very small value. As you spend from your wallet, the attacker watches to see when the dust UTXO is picked up. When it is, they take note of all the other UTXOs that go along with it as well as what addresses they go to. When these entities study transactional patterns long enough, they can eventually identify all the addresses linked to your wallet, which means they can figure out how much crypto you have. If your account is of interest (you have large sums), they can work on figuring out it belongs to you, which can make you a target for anything from scams and phishing campaigns to cyber-extortion threats.

One reason dusting is so insidious is that the amounts of crypto sent to accounts are so very small; they are smaller than the minimum transaction fee required to use cryptocurrency. Most times, the dusting amounts are calculated in units known as satoshis; one satoshi equaling 0.00000001 bitcoin. Given the minuscule size of dust, the chances are pretty good that many people won’t notice them as they casually scan their cryptocurrency total.

Airdropping: Free tokens, potential scams

Airdropping is similar to dusting in that it adds small amounts of crypto to your wallet. But airdropping’s purpose is far less ominous. Companies that airdrop want to use you to spread the word about their great new cryptocurrency. As such, they will send free coins or tokens to your address (found on the public blockchain). Sometimes they send them free and other times they ask for something in return (like a tweet about the company and its currency). You might also actively encourage airdrops to your wallet in hopes that the new cryptocurrency will ultimately have a large payout. There are hundreds of airdrop lists and websites, all eager for your interest.

While the purpose of airdrops is often benign, problems come up when hackers and scammers reach out for more than your public wallet address. If you aren’t careful, you could be at risk from the following:

  • Private key theft. Private key theft takes place when an airdrop entity asks for the private key to your wallet. You should never give out your private key. While more savvy crypto users can spot such a scam, those new to cryptocurrency trading could fall victim to it.
  • Trolling/information collecting. Sometimes nefarious airdrop websites are used, not to promote currencies, but to gather data — such as email, wallet addresses or even social media information — that can be sold to third parties or used for future phishing attempts.

Protect your crypto from malicious dusting and airdrop attacks

Because cryptocurrency transaction information is public knowledge, it’s important to protect yourself, your holdings and your anonymity. In addition to ensuring anti-spam and anti-viral protection for your wallet, consider the following steps.

If you think you’ve been dusted, don’t move the dust. Look for wallet apps that allow you to “mark” small, unknown deposits in your wallet to prevent them from being used for other transactions.

Monitor your balance — 100% of the time. If wayward satoshis suddenly show up in your cryptowallet, you might have been dusted. It’s a good idea to find a wallet app with a push notification, which tells you when you receive new funds.

Don’t give out private information — ever. If a website — or other airdrop entity — wants more than your wallet address in exchange for tokens or coins, it’s a red flag. Be as wary of handing out your cryptocurrency information as you would be of providing fiat bank account log-in data.

Keep your anonymity in place

None of the above is meant to suggest that cryptocurrency trading or usage is dangerous. It is, however, a reminder that while transactions can be anonymous (when actually conducting a transaction you may potentially be revealing information about who you are to complete it, which can then be associated with your wallets), they aren’t private. Unfortunately, scammers and hackers are taking advantage of the very public blockchain technology to determine the identities of those behind cryptocurrency transactions.

The good news is that knowledge is power. You can protect yourself from malicious entities and preserve your anonymity by being aware of attacks like dusting and taking preventative action. Doing so will better protect you and your holdings while helping to ensure you don’t become victim to phishing or cyberextortion threats.

SALT Stabilization: How it Works

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I’ve Been Stabilized. What’s Next?

When your Loan-to-Value ratio (LTV) exceeds 90.91%, we stabilize your loan by converting all of your volatile assets into stablecoin (USDC).

At this point, you will notice that your USDC wallet reflects the total US Dollar value of your combined portfolio. Each collateral wallet balance will show $0. Don’t panic!

How Do I Convert Back to My Original Assets?

To get your original assets back, you will need to manage your LTV and restore the health of your loan to a safe state (83.33% LTV or lower). To do this, follow these steps.

  1. Navigate to the Loan Status page or click “Manage LTV” in the notification module on the dashboard.
Image for post 2. Manage your LTV by either depositing more crypto or making a one-time payment in the Manage LTV Module. Image for post

3. We recommend curing your LTV to a healthy state (<70%), but as long as you have managed it to 83.3% or below, you will be eligible to convert.

4. Navigate back to the Loan Status Page. You will see that your LTV has dropped, but you are still being held in Stabilization Mode.

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5. In the Manage LTV module, you will notice that you are now eligible to convert. Click “Convert Now” to convert back to your original assets or to a mix of any assets we accept as collateral.

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6. The convert tool will default to the percentages of your original collateral mix. You may edit this and convert back to a different collateral mix if you’d like.

7. Click “Next” to review the details of your conversion and then click “Convert Now” to confirm. Once confirmed, you will have successfully reverted back to your asset mix of choice.

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Still have questions about stabilization?

Please call our support team at +1 (720) 575–2272.

How to Grow Your Business Capital Through Cryptocurrency

By Annabelle Pollack

Disclaimer: Buying cryptocurrency is risky. This article is for informational and educational purposes only and does not constitute investment or financial advice.

Cryptocurrency is reshaping the finance and business worlds. Not only has it challenged conventional thinking, but it has provided new avenues for entrepreneurs and business owners to start and grow their businesses in these uncertain times. Many of them have turned to crypto as a way to raise initial capital or to fund ongoing operational costs. If you’re seeking creative ways to grow your business capital through cryptocurrency, there are a few ways to go about it — the most important thing when it comes to getting involved with crypto is doing your research to identify the best avenue for achieving your business goals.

Choose the right cryptocurrency for your business

When it comes to determining which cryptocurrency is the ideal fit for your business, you have several options from which to choose. At the moment, there are already more than 1,000 unique cryptocurrencies in which you can transact. But just as there are blue-chip stocks, a guide to cryptocurrencies by FXCM details how some digital currencies are considered the “gold standard” of the industry. At the top is Bitcoin, which is regarded as the first incarnation of cryptocurrency and is projected to have a market capitalization of $1 trillion in the near future. Next is Ethereum, whose $83 billion market capitalization is poised to expand in the coming years due to its growth potential in the online sphere. Then, there is Litecoin, and its surging market cap of over $18 billion. Bitcoin, Ethereum, and Litecoin are seen as the strongest investments, with Yahoo! Finance noting how a high market cap is indicative of high investor activity. All three are extremely liquid, too, which means they can be easily sold at the market price. Each cryptocurrency is different and may boast specific features that others do not. Some factors to consider as you’re choosing a cryptoasset for your business are security, privacy, transaction speed, block times, market cap, liquidity, and the blockchain upon which the cryptocurrency is built. Once you identify which factors are most important to you, you can narrow down your options and choose the crypto(s) best suited for your business.

Buy and Trade Crypto

Once you’ve done your research, identified your cryptocurrency of choice, and learned the ins and outs of the industry, you can evaluate whether you’re confident enough in your knowledge to move forward with buying and trading digital currencies. That being said, it’s essential to prioritize safety and security regardless of whether you’re trading frequently or buying for the long term. A good way to do that is to find a reputable online cryptocurrency trading platform that can help you buy and trade crypto, as well as help protect your investments. Some trading platforms even offer crypto CFDs (not available in the United States) that don’t require a special wallet or exchange account, but will ask you to speculate on the direction of their price movements instead. You can also invest in several coins at the same time, as doing so may help you mitigate the risk that comes with putting all your eggs in one basket. This way, you’re more likely to see your business capital increase.

Get a crypto-backed loan

In an instance where you need cash but are unwilling to part with your crypto entirely, consider taking out a crypto-backed business loan. As the name suggests, this type of loan is secured by cryptocurrency, offering a way for you to get cash or stablecoin without having to sell your cryptoassets. The amount of cryptoassets you’ll be required to put up as collateral is contingent on a few factors including your loan amount, loan duration, and Loan-to-Value ratio (LTV). If this option appeals to you, a SALT loan might be just what you’re looking for. SALT accepts a dozen coins as collateral including Bitcoin, Ether, and Litecoin, and you can choose one or more of the offered collateral types to secure your loan. SALT also offers flexible loan terms, allowing you to choose your desired loan-to-value ratio from 30%-70% (amount borrowed divided by the value of your crypto), the duration of your loan (3–12 months), and whether you’d like to receive your loan proceeds in fiat or stablecoin. Interest rates are competitive, too. By taking out a crypto-backed loan, you can secure the funds to start a new business or operate and improve an existing one without selling your crypto.

Accept cryptocurrency payments

Another way that a business can generate further capital is to accept payments via cryptocurrency. For instance, Business2Community claims that businesses can lower the transaction fees involved during payment transactions due to the high number of peer-to-peer processing networks accepting popular coins. Compared to traditional methods like wire transfers and check payments, cryptocurrency can be a lot faster and more efficient. In addition, cryptocurrency transactions can be conducted directly between the business and the customer on the blockchain, which avoids the potential for third-party scams and external payment disputes. By accepting cryptocurrency payments, businesses can simultaneously grow their capital and streamline payment processes.

While there are significant risks that accompany cryptocurrency investments, doing your research and being diligent can help you significantly grow your business capital and fund new developments. Exploring different payment options and looking into specific coins can help you become more knowledgeable when it comes to determining the best way for you to start or operate your business.

 

SALT announces first-ever distributed custody model for securely storing collateral assets, onboards Fireblocks as first partner

This new model will allow SALT to distribute risk, enhance security, reduce interest rates, fund loans more swiftly, and focus on expanding its suite of wealth preservation products

We’re excited to announce Fireblocks, a platform that secures digital assets in transit, as our first partner for securely storing and transferring customers’ collateral assets. The partnership with Fireblocks marks a shift in SALT’s business model from self-custody to a more distributed custody approach that will allow us to onboard additional partners in the future and add greater flexibility for capital providers. This new approach also enables us to distribute risk, fund loans and conduct transactions more quickly, and provide customers with enhanced security for their cryptoassets, as well as lower interest rates on crypto-backed loans.

“When SALT was founded in 2016, custody wasn’t where it is now, so we built a proprietary custody solution to keep our customers’ collateral assets safe,” said Justin English, CEO of SALT. “Now that the industry has matured and companies like Fireblocks have come to the forefront, we’re excited to work with them to streamline our operations and expose their networks to our suite of wealth preservation products. They have a proven ability to safely and securely store and transfer collateral assets and to do so swiftly, which will inevitably allow us to provide faster service to our customers and focus more on product development.”

The move toward third-party custody solutions will also enable SALT to provide greater security and flexibility to capital providers that may prefer to work with a specific custodian, provided the custodian meets our rigorous security standards.

“MPC has quickly become the industry standard among the largest and most trusted institutions in the digital asset space,” said Michael Shaulov, CEO and co-founder of Fireblocks. “We’re proud to partner with the SALT team to help them strengthen security, reduce costs and expand operations as they move into the next stage of their growth.”

Fireblocks meets these security standards by combining multi-party computation (MPC) with Intel SGX technology to create a proprietary, defense in-depth approach to digital asset security — this allows organizations to accelerate operations without relying on physical hardware or slow, manual processes.

“Security is our top priority as we make this shift to be commensurate with our growth and distribute risk among trusted custodians,” said Dirk Anderson, chief technology officer at SALT. “The primary reason we’ve chosen Fireblocks as our first partner is because of their approach to MPC technology. Not only does it meet our security standards, but it will grant us more flexibility and increase the speed at which we can conduct transactions. This means we can fund stablecoin loans much faster and reduce the turnaround time for returning customers’ collateral assets once their loan has matured.”

From a customer standpoint, the biggest and most exciting changes to note are increased security, faster services, and the offering of lower interest rates. Aside from these changes, the customer experience will largely remain the same. Just as they do now, borrowers will still be able to make deposits and withdrawals, and will be able to continue tracking the health of their loan via our Loan-to-Value monitoring and real-time notification systems.

“We believe working with Fireblocks and other custody partners in the future is in the best interest of both the business and our customers,” said English. “Not only will we be able to offer more competitive interest rates, but we will have the time and resources to focus on expanding our offerings to include products that are designed to help our customers build and preserve their wealth.”

To apply for a loan or learn more about our suite of wealth preservation products, visit https://saltlending.com/getaloan/ or contact [email protected]. For questions contact [email protected].

About SALT

SALT, the pioneer of crypto-backed lending, offers a way for individuals and businesses to use their cryptoassets as collateral to secure a fiat or stablecoin loan without having to worry about credit checks. SALT offers flexible loan terms and accepts multiple cryptoassets as collateral including cryptocurrencies, stablecoins, and tokenized gold. SALT also offers competitive interest rates and does not charge origination or prepayment fees. As cryptocurrency becomes more widely adopted and additional real-world assets become tokenized, SALT’s mission is to offer solutions that make it possible for people to securely hold, manage, and borrow against their cryptoassets. Founded in 2016, SALT is headquartered in Denver, Colorado. For more information, visit www.saltlending.com or follow us on Twitter, Facebook and Medium.

All SALT loans are subject to KYC, AML, and other Terms, Conditions, and Restrictions. Please see saltlending.com/terms and FAQ for additional information. Loan options and terms may not be available in your jurisdiction, for your loan amount, and/or collateral type. SALT Loans are subject to jurisdictional limitations and other restrictions. SALT may not be able to offer a loan to all borrowers. SALT loans are originated by Salt Lending LLC. NMLS #1711910. NMLS Consumer Access (https://www.nmlsconsumeraccess.org/).

About Fireblocks

Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. They have secured the transfer of over $70 billion in digital assets and have a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

Media Contacts

SALT

Kendra Staggs, [email protected]

Fireblocks

Yelena Osin, [email protected]

June Update from SALT

In case you’re not a subscriber to our newsletter, we want to share some of our favorite highlights from June right here on our blog to help keep you up to date on all things SALT. Image for post

New Platform Feature

We’ve recently updated our platform to include a new feature that allows users to view all of their accounts in one place. If you have multiple accounts with SALT, you will be able to see this new feature after logging in and can navigate back to this display via the drop-down menu in the top left-hand corner. Please reach out to [email protected] with any questions.

Login to your account here


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How to Protect Yourself from Phishing and SIM Attacks

Did you know phishing & SIM swapping are two of the most common cyberattacks targeting crypto holders? Our blog post explains how you can protect against both types of attacks.

Read the full blog post here


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We Want to Hear From You!

We have recently added an option to our “What’s New” feature that lets you share your feedback on our content. You can share your thoughts by rating our content and/or leaving a comment.

Share your feedback here


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SALT, Wherever You Go

Monitor your loan-to-value ratio and loan collateral details on the go with the SALT mobile app.

Download on Google Play or the App Store


Black Lives Matter

At SALT, it is not lost on us, as a company nor as individuals, that Black Americans continue to fight for racial justice and many of the day-to-day freedoms a lot of us take for granted. We are committed to hearing, learning from, and supporting our Black customers & communities in this fight for a more inclusive world.

Want to stay up-to-date on all things SALT? Signup for our monthly newsletter herehttps://cdn.forms-content.sg-form.com/76a45090-a050-11ea-8926-5efcf9d8f941

Questions about our products and offerings? Contact [email protected]

 

Halve you heard? Your Guide to Bitcoin Halving Events

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While the world’s fiat currencies suffer from inflation as governments print more money to manage the COVID-19 crisis, Bitcoin, by design, is becoming more deflationary with each block confirmation. This is because Bitcoin creator Satoshi Nakamoto intended for Bitcoin to be the antithesis of government-controlled fiat currencies: “The root problem with conventional currency is all the trust that’s required to make it work,” wrote Satoshi in a post on the P2P Foundation Forum, “The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” In the post, dated February 11, 2009, Satoshi announces the creation of Bitcoin (along with a link to the earlier published white paper) and details its characteristics that make it anything but conventional. Among these characteristics is the fact that “everything is based on crypto proof instead of trust.”

In creating Bitcoin as a decentralized, trustless system, Satoshi ensured that it could not fall victim to the “breaches of trust” and inflation experienced throughout the history of fiat currencies. Unlike fiat currencies that are controlled and manipulated by governments and central authorities, Bitcoin follows a strict set of rules that have been embedded into its codebase or “monetary policy” since its inception. These rules include a hard supply limit of 21 million coins, the last of which will be mined around the year 2140. Currently, more than 87 percent of the 21 million bitcoin have been mined, meaning there are approximately 3 million remaining coins to be mined over the course of the next 120 years. The speed at which new bitcoin is mined and distributed is controlled by 30 precoded “halving” or “halvening” events (our Twitter followers prefer “halving”, so we’ll go with that from now on) that will take place every 210,000 blocks or about every four years until the last bitcoin is mined. In 2008 the block reward for miners was 50 newly minted bitcoin for each validated block. Following the first halving event in 2012, the block reward reduced by 50 percent to 25 bitcoin per validated block and then reduced by another 50 percent to 12.5 bitcoin following the second halving event in 2016. 2020 marks the year for the third halving event in which the block reward will be reduced to 6.25 bitcoin per validated block.

While we don’t know the exact date of the halving event (more on this below), we know it is fast approaching and is set to occur sometime this month. There’s been a lot of anticipatory chatter about the halving as people question and speculate on how it will (or will not) impact everything from the price of bitcoin to profitability and participation of miners in the network.

We’ve compiled what we consider to be the best available resources for understanding the Bitcoin 2020 Halving event and answering some of the most common questions around it.

When will the halving occur?

The answer to this question is contingent on the speed at which new blocks are created. Given the average block time is around 10 minutes and a halving event takes place every 210,000 blocks, the halving is estimated to occur on or around May 11. While there are various countdown resources that estimate within a day of one another, our favorites are the Bitcoin Halving Countdown from CoinMarketCap and the Bitcoin Clock, which “uses data from BTC.com to get the average block time for the past two months. It then uses this block time (currently 10.3125 minutes between blocks as of March 25, 2020) to estimate the halving date.”

Tell me more about the halving. What is it exactly? What is the intention behind it?

Whether you’re new to crypto or you’ve been in the game for years, we can all use a bit of a refresher when it comes to the halving event. If you’re new to crypto, we recommend starting with this video from We Use Coins regarding the need for Bitcoin and this video from CryptoCasey, which provides a straightforward explanation of blockchain technology, mining, and the upcoming bitcoin halving event. For a more humorous take on the benefits of “the currency of the future,” check out this video from Cameralla Comedy.

Running short on time? Try this episode of the 4-Minute Crypto Show, which offers a speedy, yet thorough explanation of halving events.

If you’re already familiar with the crypto basics and want more detail on the halving, this article from CoinDesk is an excellent resource. Not only does it include an illustrative explainer video that breaks down and simplifies the process, but the article also dives into:

  • the economic reasoning behind Satoshi’s decision to build the halving events into Bitcoin’s code

For additional info on previous halving events and miners’ roles in the network, Michael Sweeney from The Block provides a solid explanation in his analysis, “The bitcoin halving: what it is and why it matters.”

Interested in learning more about the economics behind Bitcoin’s monetary policy? Take a look at this article from The Block’s Mike Orcutt or this guide from Block Geeks that provides a crash course on supply and demand, inflation, deflation, and market cap as it relates to bitcoin, as well as how incentivization for miners fits into the equation. Or if you really want to get into it, Bitcoin Magazine’s Peter C. Earle explains why the 2020 halving is particularly important. He calls out the difference between the old and modern definitions of inflation, noting that in the context of the modern definition which refers to “an increase in general price levels within an economy,” the fact that “with increasing value one bitcoin buys more over time, it is indisputably deflationary.”

“What’s noteworthy about this point, Earle writes, “is that, upon this particular halving, Bitcoin ‘inflating’ at a roughly 1.8 percent rate annually will nominally — and by then, quite possibly in real terms — be ‘inflating’ at a rate lower than both the Federal Reserve target of 2 percent per year and current, CPI-based estimates of real U.S. inflation of 1.9 percent annually.”

Tell me more about the miners. How will it impact who is currently mining and who will continue to profit? Will the halving result in mining eventually becoming monopolized?

Andreas Antonopoulos tackles these questions in this short video clip and notes that we don’t need to be concerned about the monopolization of mining because the amount of profit a miner generates is not contingent on the size of their mining facility but on the smoothness of their mining operation. So while there are multiple factors that play into whether a mining operation is profitable, larger operations do not necessarily have an advantage over smaller ones. Rather, it’s all about efficiency. “Halving will increase competition in mining,” he says, and in general it will be the least efficient miners that become less profitable.

Similarly, in an interview with Anthony Pompliano the CEO of Blockware Solutions Matt D’Souza states, “The efficient miner should not fear the halving, they should welcome it.” Why? D’Souza notes that “once we go through halving the miners’ revenue is going to get slashed in half” and we’re going to experience what he considers to be “a healthy cleanse of the network.” He predicts that if the bitcoin price is still at $8k or lower going into the halving, we may experience “extreme miner capitulation” where we may see up to 40 percent of the network shutting off due to high energy costs and reliance on outdated mining equipment. He notes that as these inefficient miners begin to pull out of the network following the halving, there will be an adjustment period from May to July as the network undergoes these changes. At that point, difficulty will kick in and margins will improve for those miners who are still in the game. “Mining is about survivability,” says D’Souza, “You just need to survive. If you survive, difficulty will adjust in the future and it’s going to improve your margins because the people that are inefficient… their bitcoin is going to go to you.”

What happens to miners once all of the bitcoin has been mined and there are no more block rewards?

After the final halving event takes place and the 21 millionth bitcoin is mined sometime in 2140 miners will no longer receive block rewards, but they will still collect transaction fees just as they do currently. While we don’t know for sure how miners will react once we reach this point, according to Adam Barone in his article published on Investopedia, “Even when the last bitcoin has been produced, miners will likely continue to actively and competitively participate and validate new transactions. The reason is that every bitcoin transaction has a small transaction fee attached to it. These fees, while today representing a few hundred dollars per block, could potentially rise to many thousands of dollars or more per block as the number of transactions on the blockchain grows and as the price of a bitcoin rises. Ultimately, it will function like a closed economy where transaction fees are assessed much like taxes.”

What about the bitcoin price? How will it be impacted by the halving event?

The short answer is that there is no shortage of predictions.*

To quote Antonopoulos regarding his thoughts on price predictions: “I think it’s mostly irresponsible to make predictions about price. It’s the same as astrology and reading tea leaves.” While we agree with him on this sentiment, many people in the cryptosphere have openly made predictions about what will happen to the price of bitcoin following the 2020 halving. So, if you’re one for speculation or you just find it fun to read about people’s theories and want to be aware of what some of the most well-known people in the industry are saying, here are a few links for you to check out:

How can I watch the halving event?

For the previous halvings, it was fairly common for people to throw watch parties to celebrate the halving event. Now with current social distancing measures in place, in-person parties are being replaced by live streams. Our pick for how to watch and celebrate the 2020 Halving is Bitcoin Magazine’s 21-hour Live Stream for which they’ll be sharing updates across their social channels regarding exact timing, but you can track their countdown here.

*This content is meant to educate and inform but should not be taken as financial or investment advice. Trading and investing in cryptocurrencies (also called digital or virtual currencies, cryptoassets, altcoins and so on) involves substantial risk of loss and is not suitable for every investor.

Neobanking and the Push Toward Better Customer Service in Banking…Finally

By Rob Odell

Article originally published on ValueWalk

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While neobanks initially emerged in response to the barriers presented by traditional banks, they have become viable businesses in their own right by offering products, services, and a level of convenience that traditional banks have been slow to adopt.

Traditional Banks Slow To Respond To Evolving Customer Preferences

Though most traditional banks have worked to add new features and services, overall they have been slow to respond to evolving customer preferences. Take mobile apps for example. Most major banks today offer a mobile app that enables customers to conduct some of their banking via their phones. But these platforms often act and feel like digital extensions of their monolithic physical branches, clumsily ported onto your phone, and unable to harness the immense power that smartphones and internet-connectivity offers.

As frustrating as it is, this lack of innovation on the part of traditional banks makes sense if you consider their history. For decades, the biggest banks in the world functioned within the structure of an oligopoly and it wasn’t until fairly recently that they ever needed to worry about new kinds of competition.

While this lack of innovation has reduced the appeal of big banks among customers and has created space for the emergence of neobanks, it is not the only contributing factor to this shift in customer perspective. Unethical behavior by banks has come to the forefront in the past decade as many of the world’s biggest traditional banks have embroiled themselves in scandals and the details of those scandals have been broadcast to the public.

To name just a few, Deutsche Bank has been linked to money laundering, Wells Fargo paid a $185 million fine for creating millions of accounts on behalf of customers without their knowledge, and the financial crisis of 2007–2008 reads like a murderer’s row of the biggest names in the global banking industry. Additionally, repeated regulatory attempts by world governments to rein in unethical banking practices have merely resulted in newer, more creative ways for banks to break the rules in pursuit of profits.

It’s safe to say that this shady behavior has not sat well with customers. According to a survey by The World Economic Forum, “45.3 percent of respondents said they ‘disagree’ with the statement that they trust banks to be fair and honest.” This lack of trust in banks has paved the way for neobanks to enter the finance space, opening customers’ minds to consider alternative banking options.

Now consider some of the advantages that neobanks such as PayPal, Square, Alipay, Monzo, Wealthfront, Robinhood and Simple offer.

It starts with greater convenience. By offering a way for customers to bank from the palm of their hand, neobanks are able to avoid incurring the real estate and operational costs associated with maintaining and operating physical branches. These cost savings can then be passed along to customers in the form of lower interest rates on loans.

Beyond offering lower rates, neobanks also focus on making loans more accessible. They bring with them far less bureaucracy than traditional banks offer, enabling customers to get faster loan approval. This has also been the narrow focus for my company SALT, where digital asset-backed lending has enabled us to provide our customers with access to cash and offer competitive interest rates without having to take their credit scores into account.

Unlike traditional banks, neobanks have boomed in the time of smartphones, building their platforms with a mobile-first approach. This completely digital environment produces a user-friendly interface, driven by cutting-edge APIs.

Neobanks’ systems tend to be both highly automated and scalable. They offer open infrastructures with the idea that other creative applications can be built on top of their basic banking platform to improve their offerings. This also means they can adapt quite rapidly to a fast-changing industry. It’s far more likely to see one of these newcomers start to offer cryptoasset services before any traditional institution.

While big banks seek to own as many pieces of a customer’s financial existence as possible, neobanks understand that choice is the future of finance. By offering customers the opportunity to choose from an array of creative banking solutions, neobanks are completely disrupting the banking industry. While some companies are offering microlending, others are offering commission-free stock trading, undercutting the costs of even the lowest-price discount brokers.

Combine these offerings with FDIC-insured savings accounts, checking accounts with debit cards, ATM access, credit cards, and mobile-first features such as mobile check deposits, and customers have nearly every banking service they need in one place.

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Source: McKinsey

Even with all of these advances, neobanks still constitute a small percentage of the overall banking and financial services space, leaving plenty of room for significant growth. How that growth manifests itself remains an open question.

That question is this: Will fintech companies overtake traditional banks, or just add competition?

The answer will likely depend largely on how quickly and extensively traditional banks evolve. Historically, they’ve been slow to change, and haven’t paid the price for that intransigence. That’s because over the years, most banking customers have been fairly inert, accepting higher interest rates on loans, recursively punitive overdraft fees, and monthly account maintenance fees because they haven’t found better alternatives that they can trust.

The current COVID-19 pandemic could force change, both among banking service consumers and the industry itself. Visits to physical bank branches were already an inconvenience to customers before the outbreak of COVID-19. Now that banks are inevitably having to focus on their digital service offerings, even traditional banking customers will get to experience fully digital banking. How well their bank performs in this aspect will determine whether a customer remains loyal to their bank following the crisis, or chooses to make the switch to a neobank that can better meet their needs.

As more customers seek better banking alternatives, the younger generation will be able to teach traditional banking customers about the benefits of neobanks. From there, it won’t take much due diligence before more people realize that neobanks offer smoother platforms, better interest rates, and more flexibility than traditional banks.

If that happens and traditional banks’ market share starts to erode at a faster pace, traditional banks will be faced with the classic build-or-buy dilemma. Will they hire the best, more forward-thinking engineers to catch up to neobanks’ superior technology and user interfaces? Will they seek to acquire leading fintech companies as a way to protect themselves? Or will they remain complacent, and let fintech upstarts pass them by?

Fintech companies’ ability to grab market share will entail overcoming significant challenges, beyond just traditional banks’ huge edge in brand recognition.

Stock-trading app Robinhood suffered multiple shutdowns as financial markets crashed in early March. Chime, a leading branchless U.S. bank, has experienced multiple outages over the past year, with the company’s five million users unable to see their balances and intermittently unable to use their debit cards. Above all other banking features, customers want to know that they can access their money when necessary, so these kinds of setbacks must subside if fintech contenders want to make serious headway.

Meanwhile, regulatory complexity within countries and across regions is contributing to “winner take most” outcomes for fintech disruptors. Neobanks need to invest more in regional compliance to gain traction, rather than trying to launch globally on day one.

The landscape is changing rapidly for neobanks, and it will keep changing. Venture capital-backed startups will try to grab a big piece of the consumer banking world, but they’ll face plenty of competition. We might also see fintech firms partner and bundle services in an effort to compete head-on with the big banks.

Ultimately, the future of banking could simply come down to consumer awareness. Take my brother-in-law for example. After recently receiving a check from his grandfather, he sent it home to his parents so they could deposit it into his bank account. Although he’s highly educated and technologically savvy, he had no idea that he could deposit the check in a matter of seconds with a mobile banking app. Instances like this demonstrate that there’s still ways to go in terms of shifting consumers’ mindsets to challenge traditional banking.

It’s something that people don’t really think about, unless they work in the industry, or need to get a mortgage or some other major service from their bank.

Just as disruption has changed consumer habits in so many other industries, it will eventually do so in banking. Neobanks are better positioned to integrate with top data transfer network providers like Plaid, as they think about service through a lens that is different from that of traditional banks. As consumers become more aware of alternative banking options, they will catch on to the advantages of neobanks and inevitably make the switch, choosing to abandon their traditional bank in the process.

For the banking industry, change is already here. And more change is coming.

About the Author

Rob Odell is Co-President & Chief Product Officer at SALT where he is responsible for developing the strategic direction of the company and managing the product and marketing teams. Rob has been a Bitcoin believer since 2013 after being introduced to it by a Bali-based coffee roaster selling his beans for Bitcoin. SALT allows borrowers to use their cryptoassets as collateral to secure cash or stablecoin loans.

How to protect your crypto-backed loan during global uncertainty

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We at SALT want to take a moment to address the market volatility and global uncertainty stemming from COVID-19. We understand this level of uncertainty can be stressful and want to reaffirm that we’re taking the necessary steps to keep our employees and your assets safe.

Even as SALT employees have been asked to work from home for the foreseeable future, our support team will remain available 24/7. We’ve implemented our contingency plan for instances like this to ensure there will be no lapses in our customer service.

While we cannot predict what the market will do, we want to ensure you’re aware of the actions you can take NOW to protect your loan:

  • Deposit additional collateral — by depositing additional collateral now, you can lower your loan-to-value ratio (LTV) so that your loan and your collateral are better positioned to withstand a large dip in the market.
  • Add a stable cryptoasset — by adding stable assets like USDC, TUSD, or PAX or by adding gold-backed PAXG as collateral, you can offset market volatility and make your loan less susceptible to downward trends.
  • Make an additional payment — by paying down an additional amount on your loan, you can bring your LTV down to help reduce risk of liquidation.
  • Turn on notifications — if you have not already done so, we strongly encourage you to log into your account, go to your notification settings and turn on all notifications. Then log into your account via our mobile app to activate push notifications. This will help you stay up to date on the health of your loan in real time so that you can take immediate action as needed.

Taking any of the above steps will help protect your loan against market volatility. However, in the event of a severe market downturn like the one that took place on March 12, 2020, we want you to know your options for quickly restoring the health of your loan. Our blog post on what to expect when your collateral is on the decline offers additional details on how to manage your loan during a market downturn.*

Should you run into any issues please contact [email protected] or [email protected] and one of our team members will assist you. We’re here for you and happy to help.

And remember, in the midst of this global pandemic, your own health and safety should be your top priority. Here are some tips from the Centers for Disease Control and Prevention (CDC) on:

  1. How to prevent: https://www.cdc.gov/coronavirus/2019-ncov/about/prevention.html
  2. What to do if you feel sick: https://www.cdc.gov/coronavirus/2019-ncov/about/steps-When-sick.html
  3. Prepare yourself: https://www.cdc.gov/coronavirus/2019-ncov/protect/prepare.html

*This content is meant to educate and inform but should not be taken as financial or investment advice. Trading and investing in cryptocurrencies (also called digital or virtual currencies, cryptoassets, altcoins and so on) involves substantial risk of loss and is not suitable for every investor.

Uphold and SALT Announce Platform Integration to Seamlessly Connect 1.65M Uphold Users to SALT’s Crypto-Backed Loans

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We’re excited to announce our partnership with Uphold — the leading digital money platform democratizing access to investments and payments using blockchain technology — to provide Uphold users with seamless cash or stablecoin loans using cryptocurrencies as collateral. Uphold users can now secure loans through SALT in as little as 24-hours against their holdings in Bitcoin, Ether, Litecoin, Bitcoin Cash, Dash, and as of today, XRP. The integration of the two platforms provides enhanced access to liquidity, enabling users to unlock additional value in their holdings.

In addition to bringing leading credit solutions to Uphold users, we’ve integrated Uphold wallets into our platform, allowing the company’s large and rapidly growing user base to access Uphold’s products through their dashboard. The integration streamlines the lending experience for shared users through seamless collateral transfers and loan proceed payouts.

“SALT has given its users the flexibility to access loans using their cryptocurrency holdings. Our integration with the SALT platform allows us to grow our service offering and provides another real-world use case for Uphold members,” said Robin O’Connell, Chief Revenue Officer, Uphold.

With a crypto-backed loan from SALT, Uphold users can unlock liquidity from their crypto assets without having to sell them. Unlike traditional financial institutions, we allow customers to use their crypto assets as collateral to secure a cash (USD) or stablecoin loan in as little as 24 hours, providing them with the opportunity to reach their personal financial goals including but not limited to funding a large purchase, consolidating debt, or accessing working capital to scale their business.

When applying for a loan through SALT, Uphold users can customize their loan by choosing their preferred loan type, loan amount, duration, and Loan-to-Value (LTV) ratio with options ranging from 30%-70%. There are no credit or income checks required and no origination or prepayment fees. With a crypto-backed loan from SALT, Uphold users can keep their crypto and get cash.

“Uphold has built an impressive platform that provides a seamless on-ramp into the digital economy and a simple method to transact across diverse asset classes. We’re excited to bring our leading crypto-credit products to Uphold’s global customer base and enhance our borrower experience through a direct integration with Uphold wallets on our platform,” added Jarrett Abraham, Director of Corporate Development, SALT. “Together, we’ll provide ultimate flexibility for crypto holders who need access to liquidity across a range of crypto assets and fiat currencies. This is an exciting strategic partnership for us that helps further our mission to accelerate the world’s ability to embrace crypto assets and participate in the token economy.”

About Uphold Uphold is a digital money platform democratizing access to investments and payments using blockchain technology. With more than 1.5 million users globally, Uphold has powered ~$5.3bn in transactions (9/30/19). Uphold provides both retail customers and businesses worldwide with easy access to fiat and digital currencies, as well as precious metals. The San Francisco based firm is opening up global access to financial services that are either ‘hard to reach’ or simply not available in certain regions. Available through the web, iOS, and Android, Uphold is the only financial platform to publish its reserve holdings in real time. The company also has offices in New York, Portugal and London. More information can be found at www.uphold.com, or follow us on Twitter, Facebook, and LinkedIn. Uphold is registered with Fincen in the United States and is an EMD agent of an FCA licensed e-money institution in Europe. Uphold is not a lender, loan broker, or loan arranger and is not offering anyone advice or assistance in obtaining a loan.

Rewriting the Rules

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This week Shannon Grinnell, host of the “Speaking of Crypto” podcast spoke with our COO Jenny Shaver for the first episode of her new series, “Women in Crypto.” The series will air each Wednesday and will highlight women in the crypto space who are making waves and challenging the status quo in a predominantly male industry.

In this episode Jenny and Shannon discuss Jenny’s experience at American Express, her thoughts on Libra, SALT’s ability to collateralize the Dash associated with a Dash masternode, and what it’s like to be a woman in a C-level role at a crypto startup. She describes how crypto is a mashup of two traditionally male-dominated cultures — Wall Street and Silicon Valley — and how she feels empowered by our opportunity to be radical — not only in terms of the technology we build, but in who builds it.

“We have the opportunity to break down old ways of thinking and being. That’s where it feels empowering to me. I feel a responsibility as a woman in the space to rewrite the rules, rewrite the narrative and the assumptions around women thriving — not just in the financial or tech industries but in a highly volatile, competitive, complex space where you traditionally don’t see women in these high-risk places. But here we are and we’re thriving.”

Jenny also shares the best piece of advice she’s ever received and how she applies it every day to her current role at SALT: “Don’t ever sit in the back, be present. When you’re at a meeting, sit at the table and make sure you speak. Make sure you’re heard and that you have a voice.”

Listen to the full interview below to learn more about Jenny’s experience and perspective on the future of crypto.

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https://podcasts.apple.com/ca/podcast/soc079-jenny-shaver-coo-at-salt-lending-on-crypto-backed/id1384228965?i=1000447481690

The first card that lets you use
your crypto for everyday purchases,
without selling any of it.

The first card that lets you use
your crypto for everyday purchases,
without selling any of it.