5 Easy Steps to Invest in Litecoin

5 Easy Steps to Invest in Litecoin

When anyone mentions crypto, the first name that usually comes to mind is Bitcoin. However, there are hundreds more cryptocurrencies that have been around nearly as long as the first cryptocurrency but at a fraction of the price, such as Litecoin.

If Bitcoin is digital gold, then Litecoin is digital silver; it is faster and more abundant. (N.B.: Both are risky investments.) Casual investors can invest in this virtual coin in just a few steps.

Understanding the Litecoin Basics

Litecoin (LTC) is a peer-to-peer cryptocurrency and open-source software project like Bitcoin, designed for cheap and fast transactions. It was created in 2011 through a soft fork of the Bitcoin blockchain and was one of the first Bitcoin spinoffs or “altcoins.”

One of Litecoin’s lead premises was to provide faster transactions by confirming a new block on the Litecoin Network every 2.5 minutes as opposed to Bitcoin’s 10 minutes. Like Bitcoin, Litecoin can be purchased and sold through online platforms such as digital currency exchanges and alternatively, be mined with specialized computer hardware through a version similar to Bitcoin’s Proof of Work mechanism.

Litecoin’s price is generally correlated to Bitcoin’s price movements, rising when Bitcoin rallies and falling when Bitcoin declines. Due to Litecoin’s faster transaction speeds and lower fees, some merchants, vendors, and blockchain applications have introduced Litecoin payment processors.

This demand has also contributed to many major global cryptocurrency exchanges to list Litecoin, making buying cryptocurrency more accessible around the world.

Buy Litecoin in 5 Steps

1. Get a Litecoin Wallet

The first step to buying Litecoin is having somewhere to store it. There are several ways to store Litecoin depending on convenience or security needs. Though cryptocurrency exchanges and investing platforms offer custody services to hold cryptocurrency, investors typically only use exchanges and investing platforms to purchase Litecoin and then withdraw the coins to a Litecoin wallet.

The first step is to determine which type of cryptocurrency wallet better fits investing needs, of which there are two distinctly different types.

Hot Wallet

A “hot wallet” is an easy and free way to store Litecoin through a service connected to the internet. Hot wallets are popular and typically accessed through websites, browser extensions, or desktop applications.

Hot wallets are also convenient for users because they are always online and can be accessed from a different device if an old device becomes inoperable. However, it’s because hot wallets are connected to the internet that they can be more vulnerable to hacks and theft. When creating a wallet, the user is provided with three important components to be safely stored for future use:

•  Public Key Address: The wallet’s public address that is shared with others in order to receive Litecoin. This will need to be readily accessible to withdraw funds to the wallet.
•  Private Key: Private password consisting of an arbitrary string of letters and numbers required to access the wallet’s funds.
•  Seed Recovery Phrase: A backup login method in case the private key gets lost, which consists of a list of random words in a sequential order. Some wallet providers may offer different length seed phrases but typically contain 12, 18, or 24 random words.

Coinbase, the largest U.S. cryptocurrency exchange, also provides hot wallet services. Mycelium, Exodus and Electrum are other examples of some hot wallet providers.

Cold Wallet

Another option for investors concerned about online safety is a “cold wallet,” a physical device that must be purchased and is only ever connected to a computer to send or receive cryptocurrency as needed. Otherwise, it is safely stored by the individual owner where it remains offline and disconnected from any computer or internet connection.

This security measure creates an “air gap” between potential malicious parties and any form of online or local area network (LAN) access to Litecoin in storage. While individual cryptocurrency owners tend to self-custody and store cold wallets at home, it is not unheard of for investors to take further measures and store a cold wallet in a bank-protected vault. Trezor and Ledger are examples of cold wallet makers.

2. Create Account on Cryptocurrency Exchange

The safest method for buying cryptocurrency is through a reputable digital currency exchange, an investing platform exclusively for buying and selling digital currencies.

Coinbase is the largest cryptocurrency exchange in the U.S. by crypto volume. Binance, Gemini, Kraken, Cash App and Bisq are other well-known, popular markets.

The first step to invest in Litecoin is to create an account on a digital currency exchange or investing platform that sells Litecoin. This starts by registering a username, complex password, and storing them in a safe place offline.

Next, new users will be required to verify their identity by providing basic personal information such as date of birth, address, nationality, and providing a form of personal identification such as a valid government-issued driver’s license or passport.

Financial companies are required to comply with SEC-mandated Know Your Customer and Anti-Money Laundering (KYC/AML) cryptocurrency regulations to prevent fraud and provide an assurance of customer due diligence. This process is subject to approval and may take a couple days before being approved to continue funding the account and using it to trade.

3. Deposit Funds Into Cryptocurrency Account

Once the account is created, a funding method must be linked to the account to transfer money into the account. Bank accounts are typically used to fund accounts but some platforms may also allow other third party payment providers or wire transfers.

The user may be asked to provide the bank account number and routing number in order to link a bank account, after which a series of microtransactions may be initiated to confirm a successful connection.

After an account is successfully connected, funds may be transferred from the funding account to the investing account, which can then be used to buy Litecoin. Funds may be deposited up to a certain dollar amount and will then be available to trade. Prices of Litecoin have soared since the end of 2019, rising more than 300% to $174.48 near the beginning of February 2021.

4. Submit Buy Order

Once the account is funded, it’s time to buy Litecoin. It may be possible to pick from two options: a market order or limit order.

After a buy order executes, the required funds will be debited from the account’s balance and the purchased coins will appear in the account. The newly-purchased Litecoin is immediately available for spending, trading, or transfer.

Market Order

Market orders are more common for even simple investing platforms. A market order simply buys the designated amount of Litecoin at the current market price. This can result in some price slippage especially during volatility, but guarantees that a buy order is executed immediately.

Limit Order

Limit orders allow for some flexibility and precision in buying only at certain prices. An investor can determine at what price they want to buy and nothing higher. If the price is never met, the trade doesn’t execute. A limit order can be set for the day or in some cases for a couple months.

5. Withdraw Litecoin

After purchasing Litecoin, the next step is to withdraw it from the investing platform and send it to a private and secure wallet. This process is completed as follows:

•  Initiate a withdrawal request
•  Input the desired token withdrawal amount
•  Copy and paste the newly created wallet’s public address
•  Submit the withdrawal request

The request should initiate immediately and place the withdrawal order into a queue on the Litecoin network. Because Litecoin’s transaction speed is multiple times as fast as Bitcoin’s, it should only be a matter of minutes before the requested withdrawal amount appears in the designated wallet’s balance.

Is Litecoin a Good Investment?

Litecoin is one of the oldest cryptocurrencies having been around since 2011. It has maintained its position as one of the most popular cryptos, consistently being a top-five cryptocurrency based on token price and market cap.

While there are many different types of cryptocurrency, some of which are not yet actively functioning or as time-tested, Litecoin’s network has been among the fastest transaction speeds in cryptocurrency for years. Litecoin is easily accessible on many global digital currency exchanges and investing platforms, providing the token with high liquidity and global market penetration.

After initially trading for a few cents in late 2011, Litecoin has seen exponential growth over time. Litecoin also has a total maximum supply of 84 million compared with Bitcoin’s maximum supply of 21 million, making Litecoin four times as abundant as Bitcoin but more scarce than many other large cryptocurrencies such as Ripple and Ethereum.

The Takeaway

Proponents of cryptocurrencies say the market is here to stay and disrupt the traditional financial sector. Retail investors have immediate access to investing in disruptive cryptocurrency projects like Litecoin alongside accredited investors.

As the cryptocurrency asset class transitions from one market cycle to another, some investors argue that it can continue to provide outsized investment opportunities.

In addition to Bitcoin, investors have other investment options in cryptocurrency including Litecoin. With the option of buying whole or fractional coins, Litecoin is a user-friendly investment option that allows users to buy as much or as little Litecoin as desired and transfer it quickly.


Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOIN21003

Read more
Bitcoins on blue and pink background

What is Binance (BNB) Crypto? BNB Price & How to Buy BNB

Binance (BNB) is a cryptocurrency token that was created to be used as a medium of exchange on Binance, one of the world’s largest cryptocurrency exchanges.

Traders who hold BNB tokens get discounts when using BNB to pay for trading fees on Binance. As of 2020, BNB users received a 6.25% rebate on trading fees. Binance Coin also serves as the native token for Binance’s decentralized exchange (DEX).

What Is Binance?

Binance is one of the world’s biggest cryptocurrency exchanges. Based in Malta, the exchange was founded in 2017 and follows all standard cryptocurrency regulations. Binance offers a variety of features, including:

•  Crypto-to-crypto trading of many different currency pairs (over 150)
•  Fiat-to-crypto trading
•  The ability to buy crypto with a credit card
•  Futures and leveraged trading for advanced traders
•  The option to choose between a basic interface for beginners or an advanced interface for experienced traders

Binance has one the highest liquidity of any crypto exchange in the world, according to data from CoinMarketCap. That means more crypto can trade hands on the exchange than anywhere else during a given period of time, making Binance a desirable place for day traders who thrive on liquid assets, which makes it easier and faster to execute trades. The exchange also has low fees, so users can make more trades for less cost.

Binance derives its name from a combination of the words “finance” and “binary.” The exchange claims to have high levels of security and is capable of processing about 1.4 million orders each second.

Eleven days before Binance went live, BNB was created through an initial coin offering. While the coin was first issued as an ERC-20 token running on the Ethereum network, these same coins were later swapped with BEP2 BNB coins in April 2019 when the Binance Chain mainnet launched (Binance’s own blockchain network). BNB can be used as “gas” payments–fees paid for computing power–to fuel transactions on the DEX.

Is Binance Coin Worth Buying?

This question might not have a single, objective answer. It depends on the individual. Someone who wants to use Binance’s decentralized exchange (DEX) might think BNB crypto is worth buying. The Binance DEX first went live in April 2019.

Traders who make a lot of trades on Binance on a regular basis might benefit from the discounts that BNB provides. They could wind up saving them a lot of money.

And finally, some cryptocurrency traders might speculate, as opposed to invest, that BNB has a promising future. These people might see BNB as a good coin to hold for some time, in hopes that the price will continue to rise. BNB crypto has risen over 34,000% since inception and over 41,000% since its all-time low.

What is Binance Coin Used For?

As far as different types of cryptocurrencies go, Binance Coin might be one of the most unique. As mentioned, BNB serves two main purposes:

•  To provide discounts to traders who use BNB on Binance, and
•  To function as “gas” for transactions on Binance’s decentralized exchange (DEX).

When someone places a trade on Binance, they are charged a 0.5% trading fee. This fee can either be paid in the form of the cryptocurrency being traded at the time or in the form of Binance Coin. When paid using BNB, a discount is applied.

Beyond that, altcoins like Binance Coin are also used for speculative purposes. Traders buy coins at a low price with the hopes of selling them later at a higher price to make a profit.

How to Buy BNB

Binance Coin can be purchased on the Binance crypto exchange. There are three primary trading pairs:

•  BNB/USDT (Binance-Tether stablecoin)
•  BNB/BTC (Binance-Bitcoin)
•  BNB/BUSD (Binance-U.S. dollar)

While BNB crypto was created by and for Binance, traders can buy BNB tokens on other exchanges as well. As of the time of writing, BNB can be traded on dozens of different exchanges.

Users who already hold some Bitcoin might find it easiest to deposit Bitcoin to an exchange that trades the BNB/BTC pair and then trade their bitcoin for BNB. Those who don’t hold Bitcoin could consider creating an account on Binance and funding it using either a stablecoin like Tether or U.S. dollars directly.

Binance Coin Price

At the time of writing, the BNB price was $40.39 or 0.001076 Bitcoin.

In July 2017, when the coin was first created, the price was closer to $0.10, with the all-time low being $0.096. The all-time high, as of January 2021, was $45.16, reached on Jan. 10, 2021.

BNB is currently ranked as the eleventh largest cryptocurrency, according to CoinMarketCap data, with a market cap of over $5.7 billion. The 24-hour trading volume on Jan. 14, 2021 was $548.3 million.

BNB crypto has a circulating supply of 142,406,561 BNB and a maximum supply of 174,152,673 coins.

Is Binance Better Than Coinbase?

Some users might compare Binance to other prominent exchanges, including Coinbase. The comparison is, however, largely subjective. For those new to crypto seeking ease-of-use and simplicity, Coinbase might be a good option. They allow for purchases and sales of many of the top cryptocurrencies.

Coinbase also has a cold storage, multi-signature feature called “vaults.” Vaults provide a more secure way to hold crypto for the long-term. To access funds held in a vault, a user must verify a withdrawal request from two different email addresses and wait through a 48-hour processing period.

On the other hand, for more active traders seeking a wider variety of tokens to choose from and higher liquidity, Binance could be preferable. At Binance, investors and traders also have the option to use a more advanced interface with detailed charts.

Is Crypto Safe On Binance?

The answer to this question depends on an individual’s definition of “safe” and how much money is in question.

Generally speaking, it might be safe to keep small amounts of crypto on a secure exchange like Binance for a short period of time. Binance boasts some of the strongest security in the industry. For larger balances to be held over longer time-frames, however, holding coins on any exchange is widely regarded as not being very secure.

Over the years, many exchanges have been hacked. This creates the most obvious security risk involved with “hot wallets,” or cryptocurrency wallets that are actively online at all times. Another risk that comes from exchanges is theft. Employees of the company could conspire to steal user funds and blame the event on outside malicious actors.

The Takeaway

Binance (BNB) coins were created to be used on the Binance cryptocurrency exchange. BNB users on BNB can get trading discounts. However, BNB has become more popular in recent years, experiencing a tremendous increase in price, and now, cryptocurrency traders and investors can find it on many other exchanges.

With SoFi Invest®, investors can buy cryptocurrencies like Bitcoin, Ethereum and Litecoin, while following the prices of others like XRP and BNB. They can also invest in stocks or exchange-traded funds (ETFs).

Get started today.



Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOIN21017

Read more
man with phone and notebook mobile

What is Store of Value?

A store of value is any asset that retains its value over time. The ideal store of value would be one that has little risk and can be trusted to stay valuable well into the future.

One of the reasons that it’s important to understand the idea of a store of value is that cash always depreciates. Due to inflation, which central banks often try to keep at or around 2% per year, money loses purchasing power constantly. To see this in action, look at official Consumer Price Index (CPI ) numbers.

Store of Value Definition

A store of value will most appeal to those who have a low tolerance for risk. Store of value assets are defined as those that have a history of maintaining their value throughout time.

Speculative assets can produce tremendous returns but tend to be volatile and often come with high risk. Stores of value, on the other hand, tend to have lower volatility and lower risk, while often producing lower returns.

Store of value assets have a lot in common with safe haven assets, and sometimes the two are interchangeable. There are times when certain “safe-haven” assets can outperform many other sectors of the market, such as during times of volatility in the market when investors are fearful and seeking shelter.

Examples of Poor Stores of Value

A store of value definition wouldn’t be complete without considering what doesn’t work when it comes to retaining value.

Cash

As mentioned, fiat currency (national currencies created by central banks like the Federal Reserve) does not retain its value. Every year, the price of many goods and services rises relative to the dollar and other fiat currencies. Cash loses purchasing power steadily.

Bonds

For most of history, low-risk bonds like U.S. Treasuries have been considered the holy grail of safe havens. There was a time not too long ago when government bonds were one of the best stores of value available.

But recently, something unprecedented has been going on in bond markets all over the world: negative interest rates. Japan, Germany and several other countries, many of which are in the European Union, have had negative interest rates for years now.

Never before in recorded history has there even been a discussion of interest rates going negative. What does it mean to have a negative interest rate?

It means that investors are 100% guaranteed to lose money. Why would anyone agree to this?

There are a number of theories. Investors might want to take a small guaranteed loss as opposed to having to deal with the uncertainty of a potentially much bigger loss. Or they might believe that at some point in the future interest rates and yields will have to rise.

One logical explanation could be that investors don’t plan on holding the bonds at all, but instead are buying them with the intention of selling them for a higher price at a later date (a bond’s price is the inverse of its yield, so if yields are going down, that means bond prices are going up).

Speculative Stocks

Speculative stocks like penny stocks (stocks trading under $5 a share) are generally not considered to be good stores of value.

The value of a penny stock can rise or fall by a large amount very quickly and suddenly. Many even see their values drop to zero when a company goes bankrupt, causing shareholders to usually lose everything they had invested.

Shares of these stocks also tend to be highly volatile because of their low market caps, making it less certain whether they will hold their value during stormy periods in the equity market.

Commodities

Most commodities don’t make for practical stores of value, even though some might remain valuable for a time.

In the past, during periods of scarcity, oil was considered by some as a good store of value. But crude oil’s value is really derived by supply and demand forces. It’s price can actually be quite volatile. For instance, during periods of economic uncertainty, investors anticipate demand for oil will dip as fewer people need to drive cars or send goods, driving down the price of crude.

More recently, fracking in the U.S. has also led to much more supply of oil, which has further pressured prices–making oil not a good store of value.

Agricultural commodities like corn, wheat, or soy are impractical for similar reasons. Commodity prices in general can be volatile depending on weather and what’s happening in the world.

Examples of Potential Stores of Value

There are several assets that can serve as a store of value. Which asset class serves this purpose best is a matter of constant debate within the investment community. Much of it comes down to an investor’s individual preference, as well as the market dynamics at the time.

Gold

Gold is perhaps the most tried-and-true store of value, with a history going back thousands of years. The yellow metal has a long track record of retaining its value against other forms of money. Throughout much of modern and ancient civilization, gold served as a universal form of money and was used as both a store of value and a currency.

Today, gold is generally considered a commodity, an inflation hedge, and a safe haven asset. During times of uncertainty, gold tends to perform well. During the coronavirus crisis of 2020, for example, gold reached a record in August amid unprecedented stimulus programs across the globe, negative real rates in the bond market and a falling U.S. dollar.

Silver and platinum are other precious metals that investors have turned to as a store of value.

Gemstones

Gemstones can serve as a store of value in much the same way that gold does. Some ultra-high net worth individuals might prefer stones like diamonds, rubies, emeralds, sapphires and others to gold because they might consider these rarer and easier to transport.

For instance, a million dollars’ worth of gold might require storing several large, heavy bars of metal. The same amount of money held in diamonds might fit in a small pouch.

Bitcoin

Once considered a purely speculative asset, investing in bitcoin has increasingly been considered by some investors as a store of value (despite constant price fluctuations). Some investors consider Bitcoin to be a scarce commodity, because its supply is capped at 21 million BTC. Bitcoin’s limited supply is thought to be one reason behind Bitcoin’s rise in value since it launched in 2009. In late 2021, Bitcoin prices hit a peak of over $65,000, compared with $200 just five years earlier — and about $16,000 a year later.

Bitcoin is also relatively liquid because cryptocurrency markets trade 24/7, and there is steady demand for BTC. Also, a growing number of merchants have begun accepting Bitcoin as a form of direct payment, although widespread adoption of BTC as payment has yet to occur.

Index Funds/ETFs

Index funds and exchange-traded funds (ETFs) provide an easy way for investors to gain exposure to equity markets while getting automatic diversification.

Index funds in particular can be good stores of value because they attempt to track the performance of a market index over time. Historically, over longer time periods, financial markets have almost always gone up.

The Takeaway

In short, a store of value is something that tends to maintain or increase its price over time. The law of supply and demand very much applies here, and in itself can be used to determine whether or not something might be a good store of value.

SoFi Invest® offers investors multiple ways to participate in the markets, whether they’re looking for short-term speculative gains or long-term stores of value.

Get started with SoFi Invest today.


SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

SOIN20292

Read more
close-up keyboard delete key

What Is Cryptojacking? How to Detect Mining Malware

Cryptojacking is a type of cybercrime that occurs when hackers hijack the processing power of unsuspecting internet users in order to generate new cryptocurrencies.

Rising Bitcoin prices often lead people to get into “mining”–the process of using specialized computer hardware to create units of digital currencies. The energy-intensive nature of mining increases the number of individuals looking to steal computing power. Some of the most private cryptocurrencies–Monero and Zcash–are involved in many cryptojacking cases.

Cryptojacking attackers work surreptitiously. Affected users are usually unaware when crypto mining malware runs complex calculations on their computers, sucking up vast amounts of power. People may notice their computers overheating or working much more slowly. But in general, cryptojacking goes undetected much more often than other cybercrimes.

Here’s a guide to how cryptojacking works and what internet users can do to prevent mining malware from infecting their computers.

How Cryptojacking Works

There are three ways that crypto mining malware can become embedded on a victim’s computer:

1. Phishing Scam: People fall prey by clicking a link in a phishing e-mail, unintentionally loading crypto mining malware onto their computers.
2. Infected Website: Attackers inject a malicious code or “script” onto a website. The script mines new cryptocurrencies on any computers that visit the website.
3. Worms: There have also been cases of cryptojacking worms–malware that can replicate itself onto other computers, devices or servers. Such scripts are also more difficult to detect and remove.

Once placed, the malware runs in the background of victims’ computers while the unknowing victim goes about their business on the device. After the crypto mining script solves complex mathematical problems, the results are sent to the hacker, who then pockets them in what is their cryptocurrency wallet.

Some experts say that streaming and gaming websites tend to be popular venues for cryptojacking codes to lurk. Data has found a single crypto mining malware on more than 35,000 websites.

Risks of Cryptojacking

Cryptojacking is popular because the risk of being caught is so much lower than with other forms of cybercrime like ransomware, which requires that victims pay up in order to be successful.

Those impacted by cryptojacking may see their computer systems slow down dramatically and their electricity bills skyrocket. Because that’s how Bitcoin mining works: the costs of computer hardware and electricity are often the biggest drags on the profits of cryptominers.

Meanwhile, even bigger risks exist: once a hacker has infiltrated a victim’s computer, they may be able to jump to other areas of the network and steal data or intellectual property.

Famous Cryptojacking Incidents

Crypto mining malware has been known to be around since at least 2011, but cryptojacking ramped up in late 2017 as more people started investing in cryptocurrencies. The more valuable a cryptocurrency, the greater the incentive to mine it.

Cryptojacking became so prevalent that in April 2018, Google announced it would stop listing extensions for its Chrome browser that mines cryptocurrency. The internet giant found that 90% of such software on its webstore violated policies.

Several media outlets have reported that a number of companies and organizations have been victims of cryptojacking. In February 2018, security firm Redlock spotted that electric carmaker Tesla’s cloud was infected by cryptojacking malware.

Other cases have included code-collaboration website Github, said security company Avast in March 2018, U.K. insurer Aviva Plc and Britain’s National Health Service, according to an April 2018 article by the Financial Times. Meanwhile, the Harvard Crimson reported back in 2014 that the university’s research network was used for mining Dogecoin.

Coinhive, which made software that allowed websites to use visitor’s computers to mine anonymous cryptocurrencies, shuttered in 2019. While some users were legitimate and upfront to their visitors about using Coinhive, its software was also popular among hackers.

A dramatic decline in Monero prices prompted Coinhive’s closure. However, a July 2020 cyber threat report found that even after Coinhive ceased operations, its software was still found to be working. Meanwhile, some cryptojacking activity had shifted to other mining providers.

How to Detect Cryptojacking

Cyber security experts say that it can be difficult to detect cryptojacking because such malware operates differently from other types of malware. That’s why surreptitious mining can go undetected on an internet user’s computer, even if they have anti-virus software installed.

People can try to detect cryptojacking by paying attention to their computer’s performance. Signs of cryptojacking could include the device’s fan making noise, a spike in the computer’s Central Processing Unit (CPU), as well as overheating.

Cyberjacking has been known to be more prevalent on movie-streaming and gaming websites, where the code can mine for an hour or more uninterrupted, while the victim is unaware.

Tips to Prevent Crypto Mining Malware

1. Avoid certain websites. Browser extensions can help with avoiding websites that host the crypto mining code.
2. Monitor computer performance and look for signs of overheating. Pay attention to the behavior of the computer’s CPU.
3. Take training on how not to fall prey to phishing attempts. This step is particularly important to corporations looking to prevent employees from clicking on phishing e-mails.
4. Update devices with the latest patches that help prevent attackers from taking advantage of vulnerabilities in computer systems.
5. Frequently change computer and device credentials, making them less likely to see unauthorized access.
6. Lastly, it’s important that investors familiarize themselves with cryptocurrency rules and regulations to keep abreast on the latest trends and practices of hackers.

The Takeaway

Cryptojacking is a relatively new form of cybercrime that has exploded as more people learn what is Bitcoin. Cryptojacking involves embedding malware onto an internet user’s device and stealing computing power in order to mine new digital currencies.

It’s an example of how as more investors buy cryptocurrencies, new forms of criminal activity have also cropped up, as perpetrators gravitate toward the anonymous nature of digital currency transactions. Anyone can be a victim of cryptojacking. Those affected have included everyday individuals, government organizations and mega-corporations.

Internet users can take steps to protect themselves from cryptojacking by being wary of phishing attempts and installing anti-crypto-mining web extensions. They should also monitor for any overheating or decrease in performance by their computer.


SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOIN21042

Read more
woman on smartphone

A Beginner’s Guide to DeFi

The future is here, and while the flying cars that were promised haven’t arrived yet, the finance world is speeding full-force into the future with everything from wireless payment apps on our phones to entirely decentralized finance systems.

Decentralized finance, known as DeFi for short, is a fundamentally new financial system that moves monetary control away from centralized banks and towards public blockchains.

Put more simply, DeFi has the potential to change the underlying mechanics of financing and banking, as well as how people access financial services, by using the internet and smart devices instead of going through a centralized bank.

What Is Centralized Finance?

In order to understand DeFi, it is helpful to understand how the traditional financial system works. In general, the current US financial system is largely controlled by central authorities.

For example, some aspects of the financial system are controlled by the Federal Reserve (sometimes referred to as “The Fed”). The Federal Reserve, which serves as the nation’s central bank, was created in 1913 after several financial panics caused people to withdraw their money from decentralized banks. Mass withdrawals of money caused banks to fail and incited more financial crises.

In response to these crises, the US government created the Federal Reserve, which acts as a centralized banking system and attempts to stabilize the economy through means such as managing national monetary policy and regulating banks. Banks, which are regulated by the Fed, also have their own controls and regulations on how finances are conducted.

For example, a bank might require a driver’s license to open a checking account or a certain credit score to take out a loan.

Simply stated, whether buying groceries with a debit card or saving for retirement, most of our financial transactions go through a bank, lender, investment company, or financial institution that is highly regulated.

Why DeFi?

While centralized banking was created in order to foster economic stability, it has come with restrictions on how people can access financial options, and with criticisms that putting financial control in the hands of a central body can create more risk if that central body gets it wrong. For example, what if the Fed decides to print too much money and inflation explodes or interest rates shut out people from accessing credit lines?

Or what about credit rates in general—if people take financing out of regulated contexts, could consumers see higher interest rates on their investments?

For example, as discussed above, most financial transactions take place through intermediaries: A bank account is required in order to use a debit card. An account at a financial institution is required in order to earn interest on money.

A broker is required in order to invest in the stock market. Each of these intermediaries is a product of the centralization of the nation’s financial system—and each intermediary potentially minimizes consumers’ financial earnings.

In the most elemental way, when money is deposited in a savings account, it earns interest. The interest that money earns is funded by the financial institution where the account is located. That financial institution earns money by lending depositors’ money to borrowers, who pay interest to the financial institution.

But the interest rate earned on a savings account is not the same as the interest rate the financial institution charges the borrower. Because it is acting as an intermediary between saver and borrower, the financial institution controls both interest rates.

But would both savers and borrowers get a better deal if it was possible to make secure financial transactions without an intermediary like a bank or other financial institution?

These are some of the questions about centralized finance that supporters of decentralized finance think that DeFi can answer without necessarily losing the stability created by a centralized bank.

What Is Decentralized Finance?

At its most basic, the idea behind decentralized finance is that it would truly put money in an individual’s control. While it might seem like there is individual control over money though robust banking options, checking and savings accounts, financial management apps, and ATM access, each of those things actually requires turning over that money to an institution and trusting that intermediary to manage it. The underlying goal of DeFi is to give actual control by using blockchain technology and open source coding to do the same types of transactions that currently take place largely through financial institutions.

Blockchain technology is a term commonly used in relation to cryptocurrency. At its most basic, blockchain can be thought of as a secure logbook that records transactions but is not controlled by a centralized institution. Rather, accountability in the blockchain is ensured because the “chain” is not editable and is stored in many places instead of in one centralized institution.

If this sounds familiar, it may be because blockchain serves as the “building blocks” of cryptocurrency like bitcoin. To understand DeFi, however, it is only important to understand that blockchain is secure, automatically generated, and able to be examined and tracked, just like a physical ledger. And unlike banks, blockchain is stored on users’ computers, which means that it’s not controlled by a central authority like the Fed.

In order for cryptocurrency like bitcoin to exist, it needs a secure ledger to track it—that’s blockchain. So is DeFi just a synonym for bitcoin and other cryptocurrencies? Not exactly. While cryptocurrencies are decentralized when it comes to issuance, transfer, and storage, they are still centralized when it comes to access and management.

Specifically, you still need to access cryptocurrencies through centralized exchanges, and many cryptocurrency projects are managed through companies which functionally act as that intermediary that DeFi seeks to eliminate. Some cryptocurrencies even tie their worth to physical currencies like the US dollar to attempt to provide stability.

DeFi takes crypto to the next level by attempting to give the benefits of cryptocurrency without the need to tie access and management through centralized access points or companies, which can obscure the open nature of these transfers and potentially lead to abuse of the system.

DeFi is a network of open-source apps based on blockchain that allow users to engage in financial acts in an entirely peer-created, peer-reviewed, open-source world, which is all based on the security of blockchain.

Because everything within the DeFi crypto universe is open source, users theoretically have the control to engage in a wide variety of financial transactions with the assurance provided by the underlying blockchain technology.

How Can Decentralized Finance Be Used?

There are many ways that DeFi crypto is and could be used. One popular way that it is being used currently is with open lending protocols. While the name sounds complicated, open lending protocols essentially seek to eliminate the centralized middleman between lenders and borrowers.

For example, instead of one person putting their savings in a bank and another person applying for a loan from that bank, two people could use a DeFi open lending protocol to lend and borrow money with open-sourced, agreed-upon contracts created by the DeFi system and stored in unalterable public blockchains.

DeFi can also be used for things like international and peer-to-peer payments. Currently, if one person wants to send money to another person, options may be limited to a third-party service or a bank in order to transfer the funds. Currently, these services take time—it may be hours or even days between when a sender transfers money and when someone else receives it.

Additionally, these services can be expensive. Whether paying a fee to a bank for a money transfer or paying to use wire services, sending money from place to place can add up.

DeFi is one possible answer to routing money from person to person because it allows individual people to transfer money to each other securely and instantly without relying on centralized third-party providers.

Getting Started With DeFi and Cryptocurrencies

DeFi is starting to take off, but it remains to be seen whether it will truly become an alternative to traditional banking. One sure thing, however, is that cryptocurrencies are becoming cemented in the financial system. An easy way to buy cryptocurrencies without needing to be a financial expert is with SoFi Invest®.

SoFi Invest® empowers members to trade stocks, ETFs, and even cryptocurrency. SoFi’s crypto offerings currently include Bitcoin, Etherium, and Litecoin, and can be accessed directly in the SoFi app.

Easily add cryptocurrencies to your savings plan with SoFi Invest® along with traditional investments like stocks and ETFs. A separate cryptocurrency wallet, or even cryptocurrency experience, is not necessary before getting started.

Learn more about getting started with crypto using SoFi Invest®.


SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOIN20061

Read more
TLS 1.2 Encrypted
Equal Housing Lender