Cryptocurrency 101
What is Bitcoin?
Bitcoin is a digital currency for peer-to-peer transactions. It is often referred to as "trustless" because a bitcoin transaction does not require a bank or payment company to vouch for the other party and "decentralized" because it is not controlled by any central authority. Bitcoin transactions are recorded in a database spread across thousands of computers that communicate with each other and reach consensus on exactly who owns each bitcoin (or part of a bitcoin) every ten minutes. This database is called the bitcoin "blockchain."
What is Blockchain?
The blockchain is the record of all bitcoin transactions. Every ten minutes, thousands of computers across the globe reach consensus on which bitcoins have been exchanged and record a "block" of transactions for that time period. Each block has a link to the previous block. This linking of each block to prior blocks creates a chain that makes efforts to reach back in time and alter or tamper with prior records virtually impossible. Any change to earlier blocks destroys the links that hold all blocks together. This makes the blockchain "immutable" or at least "tamper-evident" and creates a currency that freely moves digitally but has the uniqueness of cash. Blockchain technology was first developed for Bitcoin to allow people to make transactions without needing a third party (like a bank) to make sure the transaction was trustworthy. Blockchain has since evolved to be used for many applications, including other money and banking services, land titling, and voting.
How many Bitcoins are there?
Bitcoin is governed by computer code and is not operated or controlled by any one person or institution. The number of bitcoins was limited from the beginning, with a total of only 21 million to be issued, the last of which will be in 2140. Bitcoins are issued to the computers which calculate and agree on bitcoin transactions (often called Miners) as a reward for doing that work.
What is Cryptocurrency?
Cryptocurrency is a name for any token, like Bitcoin, which uses cryptography to create a uniquely identifiable asset in cyberspace. Each bitcoin or other cryptocurrency will only change possession when a user signs a transaction with a cryptographic key that proves the bitcoin belongs to them.
What is a Wallet?
A cryptocurrency wallet, like tZERO Crypto, is a software program or other method of storing cryptographic keys. These keys are required to transact with bitcoins or other cryptocurrencies. That means that keeping keys secure is of the utmost importance. Losing a key is like dropping cash on the ground or in a pond. This is why tZERO Crypto developed the Key Recovery system. It can help you get your money back if you lose your cryptographic keys.
What is Mining?
Bitcoin is not managed by any central authority. Because of this, there is not a company or government to pay the costs of verifying and storing transaction data. A "Miner" is someone who has a computer that processes transactions. In exchange for this they can directly receive coins, or get transaction fees. These fees go directly to the Miners and are not associated with or controlled by tZERO Crypto.
What cryptocurrencies can I buy on tZERO?
tZERO Crypto supports bitcoin and ethereum purchases and intends to add support and infrastructure to allow you to purchase additional cryptocurrencies in the near future.
What are Keys?
Cryptographic keys to a bitcoin address are what proves that a specific person should have access to those funds. Each "address" can be viewed by anyone using blockchain explorers such as Blockchain.info. However, the funds in that account can only be moved by someone who has the "private key" to that address. Cryptographic keys in their raw form are a long string of letters and numbers but tZERO Crypto lets you move funds using a simple image of a key if you prefer.
What is Ethereum?
Ethereum is a global, decentralized platform for money and new kinds of applications. On Ethereum, you can write code that controls money, and build applications accessible anywhere in the world that can not be manipulated or changed.
What is the difference between Bitcoin and Ethereum?
Like Bitcoin, Ethereum is a distributed public blockchain network. Bitcoin was a pioneer in the blockchain revolution by establishing a public, permissionless, distributed ledger system to validate, store, and replicate transaction data on computers all over the world. Ethereum expands these concepts by harnessing that same block chain capability for computer code. While Bitcoin offers one particular application of block chain technology, a peer-to-peer electronic cash system, Ethereum allows for scripts of code to be run as a global computational network. Ethereum can be used for a wide variety of potential applications and smart contracts such as voting, global supply chains, medical records, the financial system. The execution of smart contracts requires computational resources that must be paid for in some way: this is where Ether comes in.
What is Ether?
Ether is the crypto-fuel allowing smart contracts to run. It provides the incentive for nodes to validate blocks on the Ethereum blockchain, which contains the smart contract code.
What is a smart contract?
A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties.
What is ERC-20?
ERC-20 is the technical standard used for all smart contracts on the Ethereum blockchain for token implementation. The ERC-20 standard defines a common list of rules that all Ethereum tokens must adhere to. Consequently, this particular token empowers developers of all types to accurately predict how new tokens will function within the larger Ethereum system.
What is Ravencoin (RVN)?
Ravencoin is an open-source project specifically developed to allow the peer-to-peer transfer of tradable assets on a blockchain. It is a fork of the Bitcoin blockchain with a unique algorithm called X16R, which is resistant to ASIC mining.
What is the difference between Ravencoin and other digital-currencies, like Bitcoin or Ethereum?
RVN can be bought, sold and transferred in the app, just like BTC and ETH. The tZERO Crypto app supports RVN as a currency and does not currently support assets created on the Ravencoin platform. For more information about the Ravencoin platform and its assets, check out: https://raven.wiki/wiki/Using_Ravencoin
Can I store Ravencoin assets in the tZERO Crypto app?
No, the current version of the wallet does not allow for the use or storage of Ravencoin assets.
What is the X16R Algorithm?
The X16R Algorithm is a combination of 16 hashing algorithms that randomly reorder, based on the previous hash, to resist the development of ASIC mining. To add, the developers can easily alter any of the 16 algorithms that make up X16R if an ASIC is detected.
Security
Is tZERO Crypto secure?
tZERO Crypto provides security in a number of ways.
- Biometrics. Access to your wallet is protected with biometric data using your face and your fingerprint, ensuring that no one but you can access the wallet and the cryptocurrency stored on it.
- Transaction Verification. For every transaction, users are asked to take a picture of themselves so that we can verify the rightful owner of the account is the one authorizing the transactions. This picture is compared to the picture used in enrollment to verify that you are the person who owns your account. While no system is completely foolproof, this makes the security of the tZERO Crypto far stronger than other cryptocurrency wallets.
- Responsible Data Storage. To make sure we comply with state and federal laws, all new users will submit personal identifying information for analysis and approval. The personal identifying information collected by tZERO is not saved, so it cannot be stolen from tZERO. tZERO only keeps your name, picture, state and email address.
- Direct Delivery and Ownership. tZERO does not hold your cryptocurrency. When you purchase a Bitcoin from tZERO, it is sent from the point of purchase directly to your private wallet. Unlike many sites and exchanges, this means that no one can hack tZERO to steal your Bitcoin because we never have access to it.
- Disaster Recovery. Even if you lose your phone, tZERO has a unique, patentable way to recover your funds that no other service offers. While we hope this doesn't happen, you can have peace of mind that even in an unfortunate event such as this, your money is still safe.
Why does tZERO need certain information?
- Email Address: This is your account username. You will need this to restore your account if you lose your phone. We will only use your email address to send you important updates about your account.
- Name, Address, Birthday: tZERO Crypto is required to collect this information to comply with US anti-money laundering laws and the Bank Secrecy Act. By providing this information, tZERO Crypto can help ensure that its users are not engaged or engaging in criminal activity. This helps safeguard the funds of all tZERO Crypto users. tZERO Crypto does not keep this information after it has performed its duty under the law
- Face: tZERO Crypto uses this photo to make sure that transactions sent through the tZERO Crypto app are being performed by the user. This protects you from theft – even if another person has your phone, they will not be able to spend your funds. We chose to keep this information because it is one of the least private and most unique things about you.
- Government-Issued ID: ID information is collected to protect our users from identity theft, comply with government regulations, and keep our user's funds safe. tZERO Crypto does not keep this information.
What about hackers?
Hacking is a very serious concern when it comes to Bitcoin and cryptocurrency. While many companies store your Bitcoin in a centralized place–making them a tempting target for hackers – tZERO Crypto never touches or holds any of your Bitcoin. Every purchase or transaction is recorded on the blockchain, which creates an unalterable record of it. The Bitcoin is put directly into an account that only you have access to, making it impossible for hackers to access your Bitcoin through tZERO Crypto. tZERO Crypto does not keep personally identifying information except as noted above. For all other information and the limited personal data tZERO Crypto is required to keep, tZERO Crypto uses state of the art encryption and security practices to keep that data safe.
The tZERO Crypto Key Recovery System
If you lose your phone or it has been stolen or damaged, tZERO Crypto offers a unique Key Recovery System. Take the following steps:
- Download the tZERO Crypto App on your new device;
- Go to the Enrollment recovery page and indicate that you do NOT have an account recovery phrase;
- You will be asked to provide the following information directly to tZERO Crypto
- Name
- Email address
- Photo of front and back of ID compared to live Photo of Face
- Other documentation to help with recovery (i.e., death certificate and documents proving authority to settle the deceased’s estate)
- You will be asked to submit a non-refundable payment of $25 plus estimated blockchain recording fees.
- Adjudication - tZERO Crypto will confirm ownership of the public address using your ID:
- Account Restoration - If tZERO Crypto determines that it can restore access to the assets in your tZERO Crypto wallet, then it will:
- Create a new tZERO Crypto wallet for you and generate the tZERO Crypto key to your lost wallet.
- Request access on your behalf to a protected root key held by an independent third party for the purpose of generating a new key to the lost public address.
- Sweep all assets that remain in your previous tZERO Crypto Wallet under the lost public address, into a new tZERO Crypto Wallet for you.
- Notify you when the process has been completed and provide you with the new keys you will need to access your new tZERO Crypto Wallet.
Please note:
Only Assets that have not been transferred out of the public address in your previous tZERO Crypto Wallet (whether such a transfer was through theft, accident or otherwise) will be recoverable under this process.
Digital Financial Assets are very volatile and the value of your Assets could change dramatically during the recovery process. tZERO Crypto will not be responsible for price changes that occur during the long and manual adjudication or recovery process.
Account Setup
What if my bank isn't listed?
If your bank or credit union doesn't appear in the list of institutions available for immediate verification, you can still link an account! Near the bottom of the screen, find and select Link with account numbers. From there you will need to enter your bank routing number and account number to proceed. Once the information has been provided, you will receive two "micro-deposits" (deposits of a very small amount, typically less than $1) to the bank account you wish to link within 1 business day. You will need to monitor your account to recognize when the deposits take place. Note: the micro-deposits are for verification purposes only and will be automatically withdrawn back from your account following the deposit. When you see the deposits, open the tZERO Crypto app, click the verify button for the account you are trying to link, and enter the two deposit amounts in the space provided. This will verify that the account is yours and allow you to start purchasing via ACH transfer from the app.
What are my payment options?
Currently tZERO Crypto allows payments using valid US bank accounts and credit and debit cards. Some United States credit card issuers have limited use of their cards for purchase of cryptocurrency to reduce the risk of chargebacks but tZERO Crypto is willing to accept any valid credit card.
Why are there transaction limits?
Transaction limits help us comply with US law and minimize risk to our users. Limits will vary by user and purchase method, and your limit may change over time.
Buying Crypto
Is there a minimum?
tZERO Crypto will support transactions for amounts as small as 0.001 Bitcoin (which is approximately $10.00 at this writing).
What fees does tZERO charge?
The tZERO Crypto App will show the amount of each of the fees applicable to your transaction prior to your purchase. If you do not want to pay any of the fees shown, you can choose not to make the transaction without any penalty.
- tZERO Crypto charges a fee of 1% of the total transaction amount for its services.
- For credit/debit card purchases only, tZERO Crypto charges a credit/debit card fee of 4% to cover its costs of accepting credit/debit cards. This fee is not charged on other purchases (such as ACH payments).
- Recording your transaction to the blockchain requires a nominal network fee which the tZERO Crypto app will estimate for you prior to your decision to initiate a transaction. This is paid to the miners who maintain the blockchain and record all transactions and is called the
Network Transaction Fee
. It is generally less than a dollar but can be much higher in times of significant congestion on the network.
Is there a Fee to Withdraw Bitcoin from tZERO?
No. Most cryptocurrency exchanges (like Coinbase) charge you a fee of 1% to withdraw your bitcoin from their platform. tZERO Crypto doesn’t charge you twice. Once you buy from us, the bitcoin or other cryptocurrency is yours to spend – without any additional rules or fees. After all, it’s your money.
How does tZERO price its Bitcoin?
tZERO Crypto sells bitcoins to you out of its own inventory. It sets its price based on the cost it believes it will incur to purchase replacement bitcoins. Bitcoin prices can vary slightly between exchanges and tZERO Crypto will check prices on several exchanges when quoting its price. For these reasons, the price you pay for bitcoins on tZERO Crypto could be higher or lower than prices that you might be able to find elsewhere in the market.
Transactions
How do I send Bitcoin to another person?
On the Wallet tab tap enter the amount you want to send in United States Dollars and tap Send. Paste in the recipient's Public Address - they can find it in the app they are using under "Receive." You can also tap the camera to scan their QR code, which will enter their Public Address.
How long does it take to send cryptocurrency to another person?
The time it takes to send or receive bitcoin or other coins from another person depends on the coin being sent and the amount of transactions currently pending on that coin’s blockchain. Some coins are very quick to send, but others can take hours to process, depending on network traffic.
How do I receive Bitcoin from another person?
From the Wallet tab tap on Receive. On that page the sender can scan your QR code to get your Public Address. You can also copy your Public Address to your device's clipboard and paste it into another app, such as your email.
How long does it take to process a buy?
Your coins are purchased and secured immediately, at the price shown to you on the confirmation page. The coins get deposited in your wallet after 5 business days because it takes 5 days for the banks to let us know if a purchase was fraudulent. Please keep in mind that the time of the transaction and holidays also influence the processing time.
How long does it take to process a sell?
Your coins are sold and sent to us immediately, at the price shown to you on the confirmation page. Your money gets deposited in your bank after 2-3 business days because it takes the banks at least 2 days to make the transfer over ACH. Please keep in mind that the time of the transaction and holidays also influence the processing time.
Why is my transaction still pending?
When you initiate a transaction, it will immediately show in your history page. However, tZERO Crypto will not show a transaction as complete until it is certain that the transaction has been appropriately recorded on the blockchain and by your credit / debit card company or bank. This should take less than 30 minutes for a card transaction and up to five business days for a bank account. When a transaction shows as pending, the person receiving the funds will not be able to spend them until the transaction has been verified.
About tZERO Crypto
How is this different / better than other Cryptocurrency Exchanges like Coinbase?
The most important difference between tZERO and a service like Coinbase is that, with tZERO, your cryptocurrency is held in your personal wallet from the moment of purchase. This means only you have access to it and it cannot be hacked or stolen as long as you maintain control of your phone and password. Centralized exchanges hold the keys for you. This is convenient but can cause customers to lose their funds when hackers see large amounts of cryptocurrency in a single location or an exchange ceases to do business either temporarily or permanently. It also results in additional, hidden fees for the withdrawal of your cryptocurrency from the exchange. At Coinbase that is an additional 1% of your funds. Other exchange withdrawal costs vary.
Another important difference is tZERO’s Key Recovery System. Even if you lose your phone and password, tZERO will be able to help you restore your account and your funds. With any other decentralized wallet or service, if you lose your device and/or password, those funds are lost forever.