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Cryptocurrency Trading – What is it and how does it work?

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Cryptocurrency Trading – What is it and how does it work?

Cryptocurrency Trading – What is it and how does it work?

Are you interested in cryptocurrency trading but don’t know where to start? You’re not alone. Since the launch of Bitcoin in 2009, the cryptocurrency market has exploded – and many want a piece of the pie. But the crypto world can be a confusing place if you’re brand new.

Cryptoholics covers everything in cryptocurrency trading for beginners. We have everything you need to know about investing in cryptocurrencies, interacting with the market and building smart investment strategies.

What is cryptocurrency trading?

Cryptocurrency trading means that you buy and sell cryptocurrency on an exchange. The idea behind cryptocurrency is to speculate on price movements, thus making money from short-term fluctuations.

You can either trade one type of cryptocurrency for another – for example, by converting Bitcoin (BTC) to Ethereum (ETH) – or you can trade cryptocurrency with so-called fiat money (government-issued currencies without a intrinsic value, such as SEK). Most national currencies are fiat money, such as GBP, USD and EUR.

Buy and sell cryptocurrencies via a crypto exchange

Unlike CFD trading, you must own the underlying asset if you want to trade cryptocurrency through a crypto exchange. There are more than 6000 cryptocurrencies, and not all of them are available on all exchanges. Fortunately, big names like Binance and eToro a wide range of different cryptocurrencies.

You can buy your chosen currency from the exchange itself and store them in your digital wallet, where you can hold them until you choose to sell (unless you have diamond hands, then you never sell).

Using a cryptocurrency trading platform is not for everyone. Transaction fees can be high and many platforms can seem confusing at first.

If you are a beginner, consider looking for an exchange that offers a cryptocurrency trading simulator. This serves as a mini-introduction to cryptocurrency trading to help you understand how it all works, without winning or losing any “real” money or cryptocurrencies.

CFD trading with cryptocurrencies

Another popular form of cryptocurrency trading in Sweden is so-called. CFDs (contract for difference). This leveraged financial product allows you to speculate on price movements without owning the underlying asset.

Let’s say you noticed that the price of Bitcoin Cash (BCH) has increased rapidly in recent days. You want to invest in BCH but you don’t have Bitcoin Cash tokens.

The solution? Cryptocurrency CFD trading.

When you buy a CFD, you enter into an agreement between a buyer (you) and a seller (the CFD provider). The agreement states that you will pay the seller the difference between the current value of the asset and its value at a fixed point in the future.

If the difference is negative, it means that the value of the asset has decreased and you will lose money. If the value of the asset has increased, however, the seller must pay you the difference.

You have two options when buying a CFD. You can either “go long” if you think a currency will rise in value or “go short” if you think it will lose value.

How do cryptocurrency markets work?

For many, one of the most attractive aspects of the cryptocurrency market is that it is decentralized. It is not under the direct control of a central body, such as a government or bank.

Decentralised Finance (known as DeFi) is becoming increasingly popular. Some people have grown weary of centralized financial services and markets because of the unnecessarily high fees and the risk of being taken advantage of.

Crypto markets are not connected to a specific country, so there are no fees when doing crypto transactions between different countries. The market is 100% digital and consists of a network of wallets and exchanges.

New transactions on the market are stored in a blockchain – a virtual registry that securely logs and encrypts sensitive data.

What makes cryptocurrency markets increase or decrease in value?

The cryptocurrency market is known for its volatility. 2017 saw the first market-wide bull run (a so-called “bull run”), which increased the prices of many assets, in some cases by over 30,000%. This kind of fluctuation almost never happens in the stock market. So, what makes cryptocurrency markets fluctuate?

– Access

The relationship between supply and demand is the most important factor affecting crypto markets (and any market, for that matter).

Let’s use Bitcoin as an example. The total number of bitcoin has been capped at 21 million and there are currently around 19 million in circulation. As the supply/supply decreases, the demand for the cryptocurrency is likely to increase and thus the price of BTC increases.

– Market value

A cryptocurrency’s market capitalization, commonly known as “market cap”, is a practical way to measure the popularity of an asset. The market cap is a number that tells you how much fiat money (usually in dollars) has been invested in each cryptocurrency.

You can calculate the market capitalization by multiplying the price of a token by the total number of tokens in circulation. For example, let’s say the price of an altcoin is SEK 500 and there are 20 million tokens in circulation. We then multiply 500 by 20 million, which gives us a market value of SEK 10,000,000,000.

– News

Many look to the media for tips on buying cryptocurrencies, and the portrayal of different cryptocurrencies in the media plays a big role in the movements of cryptocurrency markets.

The influence comes from traditional media and social media – such as when Elon Musk got DOGE to shoot in the height of a single Tweet.

– Integration

The most popular cryptocurrencies usually integrate well with existing technology, such as crypto exchanges and wallets. When PayPal reported that it would start supporting Bitcoin, Litecoin, Ethereum and Bitcoin Cash, it had a noticeable effect on the price of all four cryptocurrencies.

– Events

Events such as new blockchain or cryptocurrency updates, legislation, security holes and the coronavirus pandemic can also affect crypto markets, just like any other market.

How does cryptocurrency trading work?

Cryptocurrency trading works by allowing you to speculate on price movements. You must open an account with a regulated broker or crypto exchange to start trading cryptocurrency.

What does “Spread” mean in cryptocurrency trading?

Spread refers to the difference between the purchase and sale price of an asset, which is also called the bid-ask spread, or bid-offer spread.

When you initiate an order, it is called opening a position. Each time you do this, both of these prices will be listed. You can choose which of these you want to trade on, depending on whether you want to open a long position (trade above the market price) or a short one (below the market price).

Like CFD trading, spread betting is a way to speculate on whether the price of a currency will rise or fall.

What is a “Lot” in cryptocurrency trading?

Since the value of different cryptocurrencies can vary enormously, it is common to trade in batches. These are smaller parts of cryptocurrencies that are used to standardize the size of each trade.

What is leverage in cryptocurrency trading?

Leverage is a way to take advantage of price movements while gaining greater exposure to the cryptocurrency market. You can make a deposit (margin) representing a fraction of your entire order while your supplier lends you the shortfall.

When the order is closed, your potential profit or loss is calculated based on the entire order placement. This means that you can earn back more than you bet – but you can also lose more than you can afford.

What is “Margin” in cryptocurrency trading?

“Margin” is another word for deposit. The amount of money you invest in a leveraged position is expressed as a percentage of the entire deal.

What is Pip in cryptocurrency trading?

Pip stands for Price Interest Point, which means price interest point. It refers to the smallest possible price movement, usually quoted as 1/100 of 1% (eg $0.0001).

What is KYC / AML?

KYC stands for Know Your Customer and AML stands for Anti-Money Laundering or anti-money laundering. You will probably see these abbreviations on your chosen trading platform. They refer to laws and regulations that require financial companies to inform, verify and to some extent also monitor their customers.

Cryptocurrency Trading Strategies

A cryptocurrency trading strategy is designed to maximize your chance of making a profit. Examples of trading strategies include:

  • Daytrading is when an investor buys and sells a cryptocurrency within the same trading session (usually within a day)
  • Scalping, when an investor opens and closes a series of very short-term positions (usually every 1: e to 15th minute)
  • Position trading, a long-term trading strategy that involves holding positions for weeks or months
  • Swing trading, a strategy based on taking advantage of price changes (swings)

Cryptocurrency Trading Guide

Step 1: Create an account on a crypto exchange or online broker

To start trading with cryptocurrency, you need to open an account on a good crypto exchange, e.g. eToro Sweden. If you want to trade a specific asset (for example Ethereum), check that your chosen platform offers this before opening your account.

Before you can buy cryptocurrency, you must enter your personal details and verify your identity to create your account online.

Step 2: Deposit money into your account

Once you have created your account on your chosen cryptocurrency trading platform, you need to deposit funds into your digital account. You can do this by connecting your bank account and transferring funds. You can also in most cases use a VISA card, Mastercard or PayPal.

Step 3: Choose which cryptocurrencies to invest in

The next step is to decide which assets you want to invest in. Well-known cryptocurrencies like Bitcoin and Ethereum are always popular choices, but many altcoins can prove to be profitable investments.

Step 4: Determine your investment strategy

The right strategy for investing in cryptocurrency depends on several different factors, such as your level of experience, your risk appetite and how much time you can devote to trading cryptocurrencies.

Step 5: Keep your cryptocurrency safe

Step 6

Buy cryptocurrency that you can then play at a casino from any country. Cryptocasinos are a new phenomenon and if you live in Sweden, you can look for information on casinos without a Swedish license to learn all about casino utan svensk licens and where you can play with cryptocurrency.

The Bitcoin price’s super weekend – has risen over 15 percent since Friday

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The Bitcoin price’s super weekend – has risen over 15 percent since Friday

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Even the world’s second largest cryptocurrency, ethereum, has increased in price over the weekend.

Bitcoin price has had a strong weekend. It gained momentum already during Friday when it was around $19,400.

Since then, it has continued upward throughout the weekend, reaching a level of $21,814 on Saturday.

During the night to Monday, the price made another rush, reaching as high as $22,350, according to figures from Bitstamp.

Compared to Friday’s level, this is a total increase of 15.2 percent.

Investors await “the Merge”

Even the world’s second largest cryptocurrency, ethereum, has increased in price over the weekend.

From around $1,640 on Friday to a high of $1,789 on Sunday evening – an increase of nine percent.

Many investors are now anxiously waiting for ethereum’s big update “the Merge”, when the cryptocurrency will go from “proof of work” to “proof of stake”, which is scheduled to happen in the middle of this week.

New inflation figures


This week there is also a lot of focus on inflation as several countries will present their latest inflation figures.

On Tuesday it is the USA’s turn and on Wednesday it is the turn of both Great Britain and Sweden to report the August figures.

“The most important for the financial markets is of course the United States where, according to our forecast, inflation has peaked and lower oil prices provide support for further falls in the future”

Bitcoin price again above 20,000 dollars – may be due to weakened dollar

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Bitcoin price again above 20,000 dollars – may be due to weakened dollar

That the bitcoin price has recovered a little is explained by some analysts because the dollar has weakened this week.

Bitcoin price has had a weak week, almost falling to the previous low of the year. On Friday morning, however, the course made a leap of joy.

From hovering around $19,395, the price of the world’s largest cryptocurrency began to soar at 5:30 a.m.

It crossed the $20,000 mark and reached as high as $20,796 three hours later, according to figures from Bitstamp.

This corresponds to an increase of 7.2 percent.

Crypto market again over 1,000 billion dollars


The price of the world’s second largest cryptocurrency ethereum also rose during Friday morning – from 1,642 to 1,717 dollars. This corresponds to an increase of 4.5 percent.

The other day, the total value of all cryptocurrencies fell below $1 trillion, but this latest price rally has pushed the value back above that mark, according to figures from Coinmarketcap – albeit by a fairly small margin.

May be due to weakened dollar


That the bitcoin price has recovered a little is explained by some analysts because the dollar has weakened this week.

Earlier this week, the dollar hit a 20-year high, but lower interest rates on government bonds and a larger-than-expected rate hike from the European Central Bank caused the dollar to lose power, Investing.com writes.

During a press conference yesterday, ECB President Christine Lagarde also said that more major interest rate hikes, between two and four, will take place because the bank is still far from its goals.

“The ECB will therefore continue to raise interest rates at a rapid pace and we expect two more 50-point increases in October and December, which will raise the deposit rate to 1.75 percent towards the end of the year,” writes SEB in a morning letter.

The Fed also intends to continue raising


Even the head of the Federal Reserve, Jerome Powell, emphasized yesterday that the central bank must continue with interest rate increases until inflation has fallen back significantly.

“The message is in line with speeches from earlier this week when the Fed’s Brainard expressed that the central bank needs several months of low monthly inflation figures to be sure that inflation is moving down towards the target,”

Read our courses: learn the basics of Cryptocurrency, economics, finance, investments and fintech with our simple courses

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Read our courses: learn the basics of Cryptocurrency, economics, finance, investments and fintech with our simple courses

It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.

By the end of the year, coffee lovers will be paying up to $7 for a regular cup as cafes nationwide struggle to absorb growing overhead costs warned David Parnham, president of the Café Owners and Baristas Association of Australia.

“What’s happening globally is there are shortages obviously from catastrophes that are happening in places like Brazil with frosts, and certain growing conditions in some of the coffee growing areas,” Mr Parnham said.

“The cost of shipping has become just ridiculous.”

Key points:

  • Prepare to be paying up to $7 a cup by the end of the year
  • Shipping costs and natural disasters in coffee regions are being blamed for the price increase
  • Australians consume one billion cups of coffee annually, but cafe owners say an increase in price won’t change that

It’s nearly five times the container prices of two years ago due to global shortages of containers and ships to be able to take things around the world.

Frosts in Brazil have impacted supply.(Supplied: Melbourne Coffee Merchants)

The pain will be felt from the cities to the outback, but Mr Parnham said the increase was well overdue, with the average $4 price for a standard latte, cappuccino and flat white remaining stable for years.

“The reality is it should be $6-7. It’s just that cafés are holding back on passing that pricing on per cup to the consumer,” he said.

But roaster Raoul Hauri said it hadn’t made a dent in sales, with more than 300 customers still coming through the doors for their daily fix. “No one really batted an eyelid,” he said. “We thought we would get more pushback, but I think at the moment people understand.

“It is overdue and unfortunately it can’t be sustained, and at some point the consumer has to bear that.”

Paving the way for Australian producers

While coffee drinkers will be feeling the pinch, Australian producers like Candy MacLaughlin from Skybury Roasters hopes the increasing cost of imports will pave the way for growth in the local industry, allowing it to compete in the market.

“[In the ] overall cost of business, we haven’t been able to drop our prices to be competitive, so we’ve really worked on that niche base,” Ms MacLaughlin said.

“All those things will help us to grow our coffee plantation once more.”

Candy and her husband Marion produce 40 tonnes of coffee annually but they are prepared to scale up operations(Supplied)

She said the industry could eventually emulate the gin industry, with boutique operations cropping up across the country.

“I think the demand for Australian coffee at the moment is an ever-changing landscape and more and more Aussies are starting to question where their food comes from, who is growing it”

“What you will get is all these kinds of niche coffee plantations who develop a very unique flavour profile and then market in funky packaging and appeal to certain markets,” she said.

“That’s where I see the next stage of the Australian coffee industry going.”

How can I optimize my tax for cryptocurrency?

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How can I optimize my tax for cryptocurrency?

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Do you have to pay tax on your winnings from a Bitcoin Robot?​

Many who trade bitcoin online realize when they start making big profits and high returns that they will have to withdraw the money from the platform and more often than not, it is not the case that the assets you actually put into the market are stored in crypto, but you trade instead with contracts whose underlying value is bitcoin or other cryptocurrencies.

This also means that profits are paid out in fiat currency and not cryptocurrency, which presents the problem for many that you are then obliged to declare the profit and thus pay tax according to the new 70% rule.

Profits from trading with bitcoin are therefore not taxed like other investments such as funds or shares.

Most brokers, however, have licenses to conduct their trade that are not issued in Sweden or by Swedish regulatory authorities, but often European ones from Cyprus, or Australia, which means that the tax authorities do not automatically have any insight into how your capital is managed, and thus they cannot request out control data with the aim of uprating you.

It is only when you withdraw the money from the broker’s platform to an account in Sweden that you are partly obliged to declare your profit.

We advise against any type of criminal activity or intent and we recommend that you always follow the rules and laws that apply in the country where you are registered or reside and have your economic domicile.

How can I optimize my tax for Bitcoin?

Instead of avoiding tax, there are legal ways to optimize the tax, this does not mean tax evasion as long as it is done according to the law.

For example, you can create a company in Dubai that holds your Bitcoins and manages your capital. A limited liability company or an LLC company, as it is called abroad, is infinitely responsible for its resources, unlike a Swedish limited liability company. You therefore do not own the assets in a limited liability company, the company itself does, you only own shares in the company.

Dubai is zero percent tax for cryptocurrencies and if you want to use the budget option in the neighboring emirate, it is Ras al Kheimah that applies. The tax picture does not change and you can spend with the company’s money even in Sweden. It goes without saying that the assets belong to the company even when you spend, but in many cases it can be safer than owning them as an individual in Sweden.

You can set up a foundation in Panama
Foundation in Panama works just like a British Trust except that you have more insight and better control over the assets without them being in your own name, so you don’t own the assets just like in Dubai. Under your foundation is an LLC company that enters into agreements with real estate companies or stock brokers so that you can once again invest and minimize your tax in Sweden.

You can set up an offshore company for the management of your Bitcoins

An offshore company does not have to cost a lot, it can be enough with EUR 1500 who owns your account on Binance for example, now it is the company that has a tax obligation and not you as a private person.

A company in St. Vincent & the Grenadines has no accounting duty or tax liability for assets earned outside the country. There will therefore be no extra work to have an offshore company and no costs for bookkeeping.
You pay a premium per year that you have the company to keep it active and the assets no longer belong to you so you are not hiding any assets.

You can combine a Panama foundation with a company in St Vincents & Grenadines and in this way you will not become the UBO (Ultimate beneficial owner) for the capital against which a future wealth tax can be applied.
The trust’s “beneficiaries” can easily be changed to your children without the capital leaving the trust and they can borrow from the trust for new investments and pay interest back to the trust from future returns.

It is one hundred percent legal to give away a gift in a gift deed to, for example, a foundation, which means that you do not pay tax on your Bitcoin gift at all, neither now nor in the future. Neither you nor your family should have to be taxed because you took a risk in life and became very rich, but do it in a smart and legal way.

Cryptocurrencies still a “tax haven”

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Cryptocurrencies still a “tax haven”

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Although tax authorities around Europe tax cryptocurrencies as assets, there is no reporting obligation for the trading places to provide information about the customers’ trades. Tax authorities believe that there is a large dark population of people who have not declared their crypto profits. But change may be on the way via additions to EU directives.

During the spring, the global cryptocurrency market passed two trillion dollars in value, or approximately SEK 16.5 trillion.

Tax authorities consider cryptocurrencies as assets rather than currencies, with varying tax rates for different countries. In Sweden, all profit from trading in cryptocurrencies must be taxed with 30 percent capital gains tax, for example.

But it is uncertain what percentage of European cryptocurrency traders tax any profits.

“The trading venues have no obligation to notify us of trading in cryptocurrencies”

One of Europe’s first crypto exchanges BTCX, owned by the company Goobit Group, announces on its website that it has had over 200,000 customers since its inception in 2012. At the same time, only 3,000 people declared trading in cryptocurrencies in 2018, which was also a considerable increase compared to previous years.

– The trading venues have no obligation to notify us of trading in cryptocurrencies. For now, we have to rely on people declaring their trade themselves and doing our own checks. But there can of course be changes to that, says Henrik Kisterud, control coordinator at the Swedish Tax Agency.

Average total sales amount in the declarations is around 40,000 euros per person who declared cryptocurrency trading, and most declare a profit – the distribution is approximately 80-20, according to Henrik Kisterud.

But he also believes that there is a large number of dark people around Europe who have not declared crypto trading.

– It is clear that there is a dark figure, and it is probably not just twice as high but many times higher than those who have declared, he says.

EU wants to regulate cryptocurrencies

But regulation of cryptocurrency trading that would reduce the risk of fraud may be on the way at the EU level.

In the autumn of 2020, the EU Commission submitted a proposal for a new regulation concerning crypto-assets, which should also cover cryptocurrencies that are not part of financial instruments. The regulation is called Markets in Crypto Assets (MiCA) and is part of the EU’s digitization strategy for the financial market.

– The regulation is currently being discussed in the council working group within the EU and those negotiations have not been completed yet. It is the Ministry of Finance that participates on behalf of Sweden in those negotiations. Depending on how the negotiations go, the regulation may be completed by the end of this year and likely come into force between 12 and 18 months later, says Per Nordkvist.

He says that the regulation broadly means that issuers and issuers of crypto assets end up under supervision.

– How extensive the authorization process will be depends on the type of crypto-asset in question, which also governs the scope of supervision.

Here’s Britain’s new prime minister – and how she feels about bitcoin

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Here’s Britain’s new prime minister – and how she feels about bitcoin

This week, former foreign secretary Liz Truss took over the baton from Boris Johnson to lead Britain as the country’s new prime minister. But what does she really think about bitcoin and cryptocurrencies?

After a series of scandals, the British Prime Minister Boris Johnson resigned from his office earlier this week.

Taking over the baton to lead the country is his former foreign secretary Liz Truss, who in a vote defeated former finance minister Rishi Sunak in the race to take over as leader of the Conservative Party.

But what does Britain’s new prime minister really think about bitcoin and cryptocurrencies?

“We should welcome cryptocurrencies”
When Liz Truss was Chancellor of the Exchequer in 2018, she advocated, among other things, caution regarding the regulation of digital assets.

“We should welcome cryptocurrencies in a way that does not limit their potential. Unleash free enterprise zones by removing regulations that limit prosperity,” she wrote on Twitter at the time.

We should welcome #cryptocurrencies in a way that doesn’t constrain their potential. Liberate free enterprise areas by removing regulations that restrict prosperity. #PolicyExchange #futureoffreedom #shakeup

— Liz Truss (@trussliz) January 30, 2018

As foreign minister, she also launched a digital trade network in 2020, which, among other things, was intended to promote fintech companies.

Want to lower taxes
So while she may have more pressing issues to deal with at the moment, such as inflation and rising electricity prices, she has nonetheless profiled herself as strongly pro-business and privatisation.

In addition, she has promised tax cuts for companies to cope with the economic situation. For example, she has said that she has “a bold plan” to lower taxes and promote the country’s economy.

The UK is also looking at new laws that will regulate stablecoins and the crypto market in the country at large, writes Cointelegraph.

Europe looks for alternate gas solutions but could it be left in cold?

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Europe looks for alternate gas solutions but could it be left in cold?

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It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.

By the end of the year, coffee lovers will be paying up to $7 for a regular cup as cafes nationwide struggle to absorb growing overhead costs warned David Parnham, president of the Café Owners and Baristas Association of Australia.

“What’s happening globally is there are shortages obviously from catastrophes that are happening in places like Brazil with frosts, and certain growing conditions in some of the coffee growing areas,” Mr Parnham said.

“The cost of shipping has become just ridiculous.”

Key points:

  • Prepare to be paying up to $7 a cup by the end of the year
  • Shipping costs and natural disasters in coffee regions are being blamed for the price increase
  • Australians consume one billion cups of coffee annually, but cafe owners say an increase in price won’t change that

It’s nearly five times the container prices of two years ago due to global shortages of containers and ships to be able to take things around the world.

Frosts in Brazil have impacted supply.(Supplied: Melbourne Coffee Merchants)

The pain will be felt from the cities to the outback, but Mr Parnham said the increase was well overdue, with the average $4 price for a standard latte, cappuccino and flat white remaining stable for years.

“The reality is it should be $6-7. It’s just that cafés are holding back on passing that pricing on per cup to the consumer,” he said.

But roaster Raoul Hauri said it hadn’t made a dent in sales, with more than 300 customers still coming through the doors for their daily fix. “No one really batted an eyelid,” he said. “We thought we would get more pushback, but I think at the moment people understand.

“It is overdue and unfortunately it can’t be sustained, and at some point the consumer has to bear that.”

Paving the way for Australian producers

While coffee drinkers will be feeling the pinch, Australian producers like Candy MacLaughlin from Skybury Roasters hopes the increasing cost of imports will pave the way for growth in the local industry, allowing it to compete in the market.

“[In the ] overall cost of business, we haven’t been able to drop our prices to be competitive, so we’ve really worked on that niche base,” Ms MacLaughlin said.

“All those things will help us to grow our coffee plantation once more.”

Candy and her husband Marion produce 40 tonnes of coffee annually but they are prepared to scale up operations(Supplied)

She said the industry could eventually emulate the gin industry, with boutique operations cropping up across the country.

“I think the demand for Australian coffee at the moment is an ever-changing landscape and more and more Aussies are starting to question where their food comes from, who is growing it”

“What you will get is all these kinds of niche coffee plantations who develop a very unique flavour profile and then market in funky packaging and appeal to certain markets,” she said.

“That’s where I see the next stage of the Australian coffee industry going.”

More people in need of charity in Europe since COVID-19, NGO says

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More people in need of charity in Europe since COVID-19, NGO says

It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.

By the end of the year, coffee lovers will be paying up to $7 for a regular cup as cafes nationwide struggle to absorb growing overhead costs warned David Parnham, president of the Café Owners and Baristas Association of Australia.

“What’s happening globally is there are shortages obviously from catastrophes that are happening in places like Brazil with frosts, and certain growing conditions in some of the coffee growing areas,” Mr Parnham said.

“The cost of shipping has become just ridiculous.”

Key points:

  • Prepare to be paying up to $7 a cup by the end of the year
  • Shipping costs and natural disasters in coffee regions are being blamed for the price increase
  • Australians consume one billion cups of coffee annually, but cafe owners say an increase in price won’t change that

It’s nearly five times the container prices of two years ago due to global shortages of containers and ships to be able to take things around the world.

Frosts in Brazil have impacted supply.(Supplied: Melbourne Coffee Merchants)

The pain will be felt from the cities to the outback, but Mr Parnham said the increase was well overdue, with the average $4 price for a standard latte, cappuccino and flat white remaining stable for years.

“The reality is it should be $6-7. It’s just that cafés are holding back on passing that pricing on per cup to the consumer,” he said.

But roaster Raoul Hauri said it hadn’t made a dent in sales, with more than 300 customers still coming through the doors for their daily fix. “No one really batted an eyelid,” he said. “We thought we would get more pushback, but I think at the moment people understand.

“It is overdue and unfortunately it can’t be sustained, and at some point the consumer has to bear that.”

Paving the way for Australian producers

While coffee drinkers will be feeling the pinch, Australian producers like Candy MacLaughlin from Skybury Roasters hopes the increasing cost of imports will pave the way for growth in the local industry, allowing it to compete in the market.

“[In the ] overall cost of business, we haven’t been able to drop our prices to be competitive, so we’ve really worked on that niche base,” Ms MacLaughlin said.

“All those things will help us to grow our coffee plantation once more.”

Candy and her husband Marion produce 40 tonnes of coffee annually but they are prepared to scale up operations(Supplied)

She said the industry could eventually emulate the gin industry, with boutique operations cropping up across the country.

“I think the demand for Australian coffee at the moment is an ever-changing landscape and more and more Aussies are starting to question where their food comes from, who is growing it”

“What you will get is all these kinds of niche coffee plantations who develop a very unique flavour profile and then market in funky packaging and appeal to certain markets,” she said.

“That’s where I see the next stage of the Australian coffee industry going.”

LEARN THE BASICS – The importance of Blockchain Technology to Cryptocurrencies

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LEARN THE BASICS – The importance of Blockchain Technology to Cryptocurrencies

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“Blockchain” technology provides the underlying technical base for all cryptocurrencies. A blockchain is an eternal, continuous list that records every single transaction between users of a cryptocurrency. Individual segments of the continuous blockchain records are called “blocks” and usually refer to a complete list of transactions. Every time a user sells or transfers a “coin” (an individual unit of cryptocurrency), the blockchain logs and records that transaction. Thus, the blockchain contains the payment and transaction history of every single coin in circulation and every user who once owned a coin.

The blockchain acts as a bank ledger for cryptocurrencies. However, blockchain technology differs from a bank ledger because no central authority monitors and verifies each transaction. Instead of an authorized bank or government agency monitoring transactions, the blockchain makes accounting publicly available. The blockchain is instantly replicated and stored on thousands of computers (“nodes”) around the world as cryptocurrency transactions occur. At any time, any user around the world can access and view the entire blockchain ledger.

In addition to recording every transaction, the blockchain also verifies and records every transaction between cryptocurrency users. When users buy or sell cryptocurrencies, the blockchain verifies the transaction and records the transaction in a block. Once the block is complete, the transaction data is “hashed” (encrypted) into a series of letters and numbers by a predetermined mathematical function. This deterministic function will produce the same result every time the same input (eg transaction data) is used. Even the smallest change, a single digit, would result in the function producing a completely different hash. When a block of transactions is completed, the next block begins with the hash formula created by the previous block. Thus, the blockchain creates a link between each part of the ledger. This ensures that users cannot change the record of past transactions.

Due to the mathematical connection between each part of the blockchain, users cannot retroactively apply transaction information without changing the record of blockchain transactions stored on every node around the world. If a previous transaction is changed – even by a single digit – it would not only change the hash produced by that block but trickle down through every block that follows the changed transaction. If a single transaction changes, the underlying mathematical formula would produce a new result that would permanently change every future block in the blockchain. Since every node around the world simultaneously updates and stores the blockchain ledger, users would notice any retroactive changes to a specific block. The mathematical
the formula allows blockchain technology to act as its own insurance against theft or fraudulent transactions.

Blockchain technology’s decentralized network allows cryptocurrency users to build trust with other users even though they may not know each other. Any user who buys or sells a cryptocurrency can verify the legitimacy of the coin because no single user can manipulate the past transaction history of each coin. As a result, cryptocurrencies create value for users because users can verify that the coins they bought or sold have value and legitimacy.

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