Bitcoin (BTC) and Ethereum (ETH) are the two largest cryptocurrencies on the market — BTC’s market cap surpassing $1 trillion and ETH’s surpassing $300 billion in the last month. But Bitcoin and Ethereum have very distinct goals: Bitcoin is a store of value akin to digital gold, while Ethereum is a development platform that’s been compared to digital gasoline or oil.
Bitcoin’s beauty comes from its simplicity while Ethereum has an endless range of possible projects that can be adapted to its platform.
Here’s a thought — what if you combined the functionality of Ethereum with the security of Bitcoin? You might come up with something like Qtum, the open-sourced blockchain that promotes itself as a modifiable, decentralized application platform with unique advantages that neither Bitcoin or Ethereum can claim.
What is Qtum?
Qtum is a decentralized application network that uses proof of stake (PoS) to enable smart contracts to be built on top of its blockchain. However, the core of the network is run similar to Bitcoin’s model for transactions. Think of Qtum as a multi-layered cake, with Bitcoin’s transaction prowess on the bottom and Ethereum’s virtual app-building playground on top.
Like Ethereum, any number of projects and systems can be built on top of the Qtum blockchain, for which miners are paid in Qtum for approving blocks. The supply of Qtum is finite like Bitcoin and the blockchain is more secure thanks to the dual-natured technology connected by the Abstract Account Layer (AAL).
Brief History of Qtum
The Qtum project began in 2016 as developers sought to build a platform that could incorporate the security and seamlessness of BTC transactions onto an Ethereum-type network without exorbitant power usage.
The result was Qtum, which is pronounced Quantum. Qtum basically broke down and rewrote Bitcoin’s code to enable the unspent transaction output (UTXO) system to function on a blockchain similar to Ethereum.
UTXO is how the network measures how much Bitcoin is in outstanding wallets. UTXOs are unique to each individual user. Qtum uses UTXOs as the base layer of its network, unlike Ethereum, which uses an account-based chain to keep a tally of its tokens.
Qtum claims the 3rd largest node network in the world behind Bitcoin and Ethereum with nodes on every continent except Antarctica. Qtum uses the abstract account layer (AAL) to link the underlying UTXO system with the Ethereum virtual machine (EVM) or x86 virtual machine. The AAL acts like a translator, enabling Qtum developers to utilize the best aspects of the networks behind both Bitcoin and Ethereum.
QTUM is readily available for purchase at several different exchanges, but the traditional U.S. ones like Coinbase and Gemini don’t have it available. You’ll need to use Crypto.com, Kraken, Binance or Bitfinex to purchase QTUM.
How to Buy Qtum (QTUM)
- Open an online account.
Opening an account with cryptocurrency brokers like Coinbase and Gemini is swift and easy, but unfortunately, you won’t find Qtum among their list of tradable assets. To trade QTUM, you’ll need to use an exchange that has it listed — Binance (Binance.US for U.S. users) and Crypto.com are the best choices for American traders.
However, while these exchanges are reputable and safe, they are headquartered outside of the U.S., which means the signup process is a little more invasive, and you could wind up paying international transaction fees on top of commissions and miner fees. Offshore exchanges do have benefits though, such as more available assets to trade and better staking rates.
- Buy a wallet (optional).
A wallet is a secure place to store your digital assets, such as cryptocurrencies and nonfungible tokens (NFTs). Wallets are separate from your brokerage or exchange account and less susceptible to hackers. You don’t need a wallet to buy and sell cryptocurrencies, but it is a convenient (and safe) way to keep your investments in one place. Crypto investors have two different types of wallets to choose from:
• Hot wallets: Desktop and mobile wallets can usually be downloaded from the Apple App Store or Google Play Store. These wallets are called “hot” because while more secure than a brokerage or exchange account, they’re still connected to internet-using devices like a smartphone or laptop, which means they aren’t impenetrable.
• Cold wallets: A cold wallet is an equivalent of burying your gold in your backyard. In this case, digital gold, but the same process applies. A cold wallet is a piece of hardware that can be disconnected from online devices and kept completely secure. With no internet access, no hacker, thief or online pirate can gain access to your funds when the wallet is disconnected, even with the most sophisticated tools. Of course, you’ll need to connect your cold wallet to make transactions.
- Make your purchase.
Once you’ve opened an account with an exchange where Qtum is available, you’ll need to fund your account and make your investment. When using exchanges like Kraken and Crypto.com, you’ll need to wait a little longer for your funds to be accessible and you’ll need to be wary of international fees. Make sure you understand all the extra costs so you can properly calculate your returns.
Best Crypto Exchanges
Best Crypto Wallets
Here are the best software and hardware wallets for Qtum.
Best hardware wallet: Ledger
The Ledger series of cold wallets is one of the most trusted names in the crypto industry. Ledger hardware wallets can be used by a large swath of different digital assets, including hard-to-locate coins like Qtum and Nano. The Ledger Nano X is the newest innovation from the company and the best if you’re looking for cold storage.
Best software wallet: Qtum Core or Trust Wallet
Qtum has its own software wallet that allows easy transfer of your tokens across mobile and desktop applications. Despite the simple interface, you’ll only be using it to store your QTUM. If you want a more diverse wallet, use Trust Wallet for iOS or Android, which can store cryptocurrency and NFTs.
Trade, Sell or Convert your QTUM
After buying QTUM, you’ll have three options: hold it, sell it, or convert it to a different cryptocurrency. Selling and converting QTUM will come with various fees and commissions. If you want to convert a different crypto like BTC or ETH into QTUM, make sure you understand any associated exchange fees.
Selling QTUM for U.S. dollars will create a taxable event, which could create complications if you’re using an international-based exchange. Yes, not only do you need to deal with international fees, but also international tax considerations.
Current Crypto Prices
The cryptocurrency market is a volatile and unpredictable one, plus it trades 24/7. You’ll need to keep a closer eye on your crypto investments than your typical stocks or bonds. Here are today’s crypto prices:
Is Qtum a Good Investment?
Qtum has potential because it combines some of the best elements from the two mainstay cryptocurrencies into a single digital platform. And it’s true that Qtum can perform some tasks that neither Bitcoin or Ethereum can match. But it’s still early in the game for Qtum, which is both exciting and nerve-wracking.
On one hand, this could be a ground-floor type opportunity for investors to get in early on the next big cryptocurrency. On the other hand, many promising coins have failed to grasp market attention and simply faded away into oblivion. Cautious optimism isn’t a bad mantra to take if you want to buy QTUM.
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