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Mining may be Inefficient, but so is the Current System – Here’s why…
Cryptocurrency and specifically the hugely mined Bitcoin have long received floggings for their so-called environmental costs. Mentions of Bitcoin energy consumption stir up images of huge mining warehouses in smoggy Chinese capitals guzzling through city-sized amounts of energy.
It all sounds a little dramatic, but According to coincentral.com Bitcoin mining costs around 4.3 Billion annually- fair’s fair. The question then is how does it compare to our current system?
Crypto Outperforms Fiat in Yearly Upkeep Costs
Many cryptocurrencies have a healthy, small amount of built in yearly inflation. With fiat currencies more money is printed to increase supply until its in line with monetary policy objectives. It’s an altogether expensive process with a large carbon footprint. There’s a tremendous amount of resources wasted and converted to greenhouse gases in the production and transport of fiat annually.
Waste residues are another issue, and with many fiat currencies swapping over to polymer to avoid resource wastage the consumption gets way worse. Water usage increases exponentially when polymer is used. Contributing to water shortage solely for the sake of greed is pretty shitty.
The biodegradability of the polymer becomes an issue too. New machinery and labour costs to print the new, differently manufactured currencies. Often this fiat is printed in foreign nations- China is printing all the USA’s money today for example. It saves costs, and nations are happy to deal with niggling losses to corruption.
Fiat currency is in most cases more costly to create than the currency itself is worth. The current cost for the US to produce a 1 cent coin is 1.83 cents. This paradoxical mechanism is costing economies everywhere a lot of cash.
Fiat Currency Damages the Earth from Inception to Landfill. Don’t buy the FUD, buy Crypto!
A lot of fiat currencies use coins which must be physically mined, to huge environmental detriment. Most of these coins are set to be phased out within the next 20-40 years. For example a study in 2009showed that Western copper mines produced on average 2.45 tons of carbon dioxide per ton of copper produced.
Cryptocurrencies don’t have set lifetimes like fiat currency either. At certain points notes and eventually even coins must come out of circulation and be recycled/buried deep, deep underground. This further increases the carbon footprint of fiat cash. It is evident that cryptocurrency may not be perfectly green. It’s glaringly obvious too that it’s a great deal better than fiat.
It is clear that the idea of cryptocurrency being somehow detrimental to the environment is more FUD than it is traceably logical. Cryptocurrency has once again cut out the middle men- the global securities printing market- and saved a bunch of resources in the process. Don’t buy into the FUD, join the Crypto-club!
If you feel inspired to invest now you know that Crypto’s greener than the dollar, check out our guide on investing safely.
– One Pump Man
Cryptocurrency From the Eyes of Finance:
Cryptocurrency has long been tumbling down a steep hill. It’s only recently that the big corporations and the finance sector have begun opening up to cryptocurrencies.
This comes with good reason, crypto started as a utopian idea- a decentralised community built without a need for banks or middle man. It has slowly evolved into a different form.
Libertarian and anarchistic values are deeply enshrined in many early Bitcoiners. They saw that an anonnymous and decentralised currency was desirable. No middle men, a tough to tax system and truly international. This chimera is a synthesis of today’s capitalism and the people’s desire for greater individual freedoms.
This arguably irritated and scared off much of the financial sector from a) investing or b) talking about Bitcoin It was seen as a competitor.
It truly is, a dark horse in a world long run by groups of bankers and investors. Being somewhat antithetical to fiat currency, it’s still seen by many as something to be destroyed. The hope however, is that it will implode.
Cool. So How is it as an Investment?
From an economists eyes, an unregulated and unstable currency is the worst possible bet. It’s uncertain, manipulatable and tied to nothing that guarantees a value- Cryptocurrency could go from current price to zero in a moment without any impediments.
It was for a long while believed for example that Bitcoin would never reach below the 6 k resistance. The reasoning went that the price needed to mine a single coin was 6 k and for it to stay profitable the supports would have to hold up.
It did of course drop below months after Financial Futures and other industry had got a slice of the lie. The amount of delusion is high in the Cryptocurrency sector, and financial investors love taking advantage of the psychology of rookie investors. However, there is some positives to balance this negative view.
Cryptocurrency Will be Safer than Fiat in Economic Crisis
When recent economic downturns and crisis in nations begun to destabilise their economies, a pattern emerged. People begun to turn to digital, international currencies such as Bitcoin to protect their capital against inflation.
Whilst it didn’t directly help with say, buying and selling of commodities in these nations (two recent examples are Zimbabwe and Venezuela) it did show that despite the fact, people were willing to put their hard earned savings in Cryptocurrency, and trade goods for them over inflated fiat.
Did Banking Really Come in So Late?
It may also be folly to believe that the banking sector invested so late. Many whales were active on the scene before the second boom in late 2017. It’s plausible that many of these were big banking corporations interested in Cryptocurrency.
From 2011-2013 the Silk Road was a bustling deep web market place for all sorts of untraceable mischief such as buying weed, or a set of skeleton keys.The founder Ross Ulbricht had one of the fullest wallets in the Crypto sphere. It was promptly seized by the Federal Reserve of the USA who are thought to have one of the largest Bitcoin wallets around.
Several electronic currency payment systems trailed before Bitcoin had failed due to reliance on institutional and governmental structures, but not Bitcoin. For that reason, this longevity and the fact that many large institutions own and have a lot of stake in Bitcoin leads me to believe that it will slowly be incorporated into day to day life.
Is it Worth Investing Today? Absolutely!
Public adoption has yet to come, and whilst some coins like Bitcoin and other top 10 companies are very bought up and excessively high, there is a lot of room for punting.
Initial Coin Offering’s or ICO’s have been reporting tremendous gains in this financial year. Whilst conversely, direct investment into crypto companies with released tech has been decreasing.
This indicates that whilst the markets don’t find the old tech worth getting excited about, the prospect of new generation projects mooning are still fuel enough for their fresh institutional investor veins.
So we say, go find some new build rockets and start pumping it with fuel, if you ask us. Record lows are the best times to stock up on Cryptocurrency. There’s a lot of new and undervalued projects, as well as exchange tokens that are on sale right now. Load up your bags Cryptoclubbers!
If you’re keen on investing into Cryptocurrency check out our article on investing in the cryptocurrency market whilst minimising entry risk.
Monero has long been the lost cousin of the top batters in Crypto, Bitcoin, Ethereum, Litecoin and Bitcoin Cash are all more popular to the layman. Monero is the mystery man, hiding beneath the shadows and always in constant trade.
A lot of negative PR has come Monero’s way, with fear uncertainty and doubt constantly being cast its way. The coin itself has a simple but incredibly difficult goal in mind: to become the most anonymous, untraceable currency out there.
It’s not surprising to hear that this goal alone has had it branded as a coin fit mainly for crime. Whilst it’s true that the criminal underworld online trades through virtual currencies, what’s also true is that most organised crime on earth actually uses cold hard cash to pay for services.
Monero is: Truly Private- and that’s Special
Monero is similar to Bitcoin and other Cryptocurrencies in that it sends funds from one wallet to another. However the Monero protocol will create a random wallet that is viewable to everyone. The only thing obscured is the amount in the wallet. Monero is stored in this new wallet, and marked with the recipients private key so that only he may open it.
As Monero users cannot be found on a wallet tracking website, their funds cannot be investigated. No other privacy coin team is as committed to tackling fundamental problems with private transactions nor has any come as far.
If you want to see the difference between a Bitcoin wallet and a Monero wallet, have a look for yourself. These are the two respective blockchains:
Worried about Verification?
Transactions come equipped with one time use transaction keys. This way individual transactions can be found. The key is used along with the recipients address and the transaction ID to verify who sent what.
Further Reasons for Monero
Monero has a fairly low total supply of around 16 million. The supply slowly increases by around 0.2% or 157788 XMR a year. It adds an aspect of steady, predictable inflation which is healthy for a Cryptocurrency.
As investors come into the Cryptocurrency game, they’ll look for more ways to store their capital in an anonymous and private kind of way. Anonnymity is paramount for many kinds of activities, not just criminal kinds. It has a keen, organised community and vocal development team.
The use cases for Monero are huge, and it is set to be a coin that keeps growing. As the world slowly embraces cryptocurrency it’s worth keeping a bag of Monero around, and being keenly aware of the law around Cryptocurrency earnings. If anyone reports you for mysterious earnings, you’ll be investigated. Although Monero is incredibly secure and private, we advise caution when investing seriously in any cryptocurrency.
If you’ve read our article and feel bullish on Monero, then we recommend heading over to Binance exchange. One of the most recognised and secure exchanges on the market. Buy some Monero after signing up here.
Or, if you’d rather mine it yourself then check out our build recipe and arguments for mining Monero here.
Is it worth mining Cryptocurrency?
Crypto mining can be a gamble in 2018. However, some solutions exist for managing risk- and If you’re a hobbyist then there’s nothing to lose. Inform yourself on the potential for mining cryptocurrencies today!
Mining Cryptocurrency Might be Worth it
Crypto mining can be a gamble in 2018. However, some solutions exist for managing risk- and If you’re a hobbyist then there’s nothing to lose.
Cryptocurrency mining for the layman is a touchy subject. Some schools of thought hold that over the long term, Cryptocurrency will continue to go up in value. In which case, it’s a win to mine during cold periods in the market.
If the historic bullish third and fourth quarter trend repeats in 2018 we can expect mining to make a huge return, and miners to make huge returns.
In previous historical examples of financial trouble, Crypto has shot up. Recently Bitcoin became very expensive in Zimbabwe after a political coup threw the nation’s financial status into uncertainty.
When such panic and fear grips, people will favour more reliable international currencies. Bitcoin has outperformed a few currencies globally this year even despite it’s poor performance. For example the Venezuelan Bolivar, another hot topic nation in unfortunate turmoil.
At the moment Cryptocurrencies are a sound bet for investment. Most of the financial sector has piled in at this point, and are in the process of opening or already are running crypto divisions. Crypocurrency is here to stay, and to invest in and run a miner may well be a great idea.
There are a number of exciting projects on offer everyday that can be mined. If you take a long term view that Crypto is only at it’s inception then mining is a worthwhile endeavour for you.
Crypto Mining can be a Risky Business
However, with this optimistic perspective must be weighted the current situation. Markets have been on a general down swing since January. The markets are showing little signs of recovery, and many of getting worse.
There doesn’t seem to be much sentiment for Cryptocurrency right now, and although some coins have faired better than others, the Cryptocurrency market is in chaos.
Companies like AMD are reporting considerably less sales of their Radeon & Ryzen GPU’s to miners. The market is clearly not hot on cryptocurrency currently. The flip side is that it’s a cheap time to buy a miner.
There are a number of exciting projects on offer everyday that can be mined. If you take a long term view that Crypto is only at it’s inception then mining is a worthwhile endeavour for you.
3 Reasons Against Mining:
The main practical problems with mining cryptocurrency in the current climate can be reduced to a few points.
- Electricity costs are at record highs, and miners are very energy intensive
- Buying the equipment, including casing, GPU’s/ASIC’s, fans, risers and motherboard is generally expensive for newer builds
- Cryptocurrencies are becoming less valuable whilst simultaneously becoming tougher to mine
The Flip Side?
Consequently mining crypto is often resigned to those with a load of disposable cash. When starting off it is recommended that you start off small, and with a lesser known coin that can be mined using GPU’s such as the ASIC-resistant security coin Monero.
The idea there is that many smaller coins are less likely to be flooded with the more expensive ASIC miners or have a large network mining them. In the future, some of these lesser known projects will probably moon.
Picking the right coin to mine can also be a weekly swap if your setup allows it. Many lesser coins can be profitably mined and sold. Some pundit sites even list the deal of the day!
If you’re looking to get started with mining, you should start off with a low key mining software on your computer, or with a USB miner.
Many profitable USB hobby miners exist. The intention to get to grips with software and run an active miner can be good fun. It also works to prepare for your future big boy ASIC or GPU miner.
Examples of a plug n’ play USB miner: the Scrypt FutureBit Moonlander
Or if you’re feeling creative and like to tinker with electronics then consider repurposing some old kit!
Ken Shirriff is a playful figure in the crypto community who likes to repurpose age old electronics into miners. Old PC’s and SNES gaming consoles are a couple of the items Shirriff has turned into miners!
Want a Big Boy Miner?
Unless you’re a rich oil salesman or have a nifty 10K tucked away, building a mining rig using ASICs is incredibly costly. Most ASIC miners on the market cost $1000+ and have some chance of becoming obsolete. For example if a coin decides to make its algorithm ASIC resistant.
Or worse, if the currency changes its encryption algorithm in any way- you’re totally out of luck. Yeah you guessed it, many ASIC miners are algorithm specific. To boot, the waiting times are awful and the customer service when anything ‘goes wrong’ is often horrendous, and a panicky experience.
It’s recommend instead to for coins that can be mined using top of the range GPU’s with high resale value should you decide to swap rigs. Monero is the aforementioned exception, which can be mined effectively with GPU miners and is going places.
Still set on Mining? Get your own Monero Rig with our Exclusive Build!
Monero is the coin we will cover for this affordable and effective beginner build. It has a lot of capabilities for expansion and will mine effectively. Monero’s ASIC resistant algorithm means that people are on a more equal footing using a GPU miner like the one featured.
To build a miner you need eight components. We’re going to show you an example build for mining Monero with the hugely effective Vega RX 56 GPU. Please be aware of the specifications required should you decide to use different components.
1. Frame – unless you want to fork out some serious cash, build your own! Old computer cases or other cheap metalic casings can be adapted to hold smaller rigs. Reddit has some creative examples of man made frames, including an old radiator casing frame.
2. Storage – you’ll need to buy some drive space to store your system files, mining software and so on. We recommend a reliable 120 gb solid state drive by Kingston which at £23 is a bargain.
3. RAM – we recommend going for at least 16 GB of RAM for the Vega RX — if you don’t want it to crash. Two sets of these Corsair desktop memory units work a treat and are pretty well priced.
4. CPU – just a cheap basic CPU will do, try the Intel Celeron G1840.
5. Motherboard – A punch little ASRock motherboard fits the bill perfectly and comes in at only £50.
6. Power Supply (PSU) – This 650 W PSU by Corsair will give your GPU plenty of juice to mine, and is quite economical at under £50. Mind, if you plan on getting another miner later you can double the power needed by buying a single higher power PSU.
7. Riser – Delivers power to your GPU.
8. GPU – The Vega RX 64 is a money printing machine, and has high resale value if you decide to upgrade.
Next, you have somewhat of an IKEA job on your hands. Luckily, numerous videos and articles are available on the fine tuning of a miner. After set up the next stage is joining a decent mining pool. Go forth, and mine!
What is ‘a Bitcoin’?
– A Cryptocurrency FAQ & Cryptionairy
What is Bitcoin?
A Bitcoin is an online currency that can be exchanged for goods and services across a number of platforms. The Bitcoin is said to be a crypto currency because the entire Bitcoin network is digitally encrypted using an algorithm.
This algorithm allows pockets of transactions, called ‘blocks’ to be completed over regular amounts of time. These ‘blocks’ contain the ledger information necessary for Bitcoin to act as a decentralised bank. The details included in a block consist of the transaction history, and the time and date that the block is completed.
How are New Bitcoins Issued?
Bitcoins are created through a process called ‘mining’. Computers on the bitcoin network are constantly attempting to solve an algorithm, in order to obtain a reward. This reward is given in the form of a variable bitcoin reward, that is adjusted over time. It started at 50 in 2008, and halving every 4 years since- it’s currently at 12.5 Bitcoins per block reward.
What decides the value of a Bitcoin?
The value of a Bitcoin is decided by the amount of value placed on it by the holders of the currency, as well as by the amount of miners on the network that mine Bitcoin. People value a decentralised, electronic, private and anonymous method of storing and sending money for obvious reasons.
As Bitcoin and other cryptocurrencies gain further attention for their uniquely useful their features value increases, and they become more scarce. This drives the markets to desire it more, much in the same way gold works. For this reason, it’s often unfairly branded a tulip bubble by lazy economists, and slanderers- the same Wall Street suits who buy up the manipulated crashes throughout the year.
Buy none of the disingenuous remarks, they ignore the nuance involved in a technological breakthrough such as the blockchain and resulting technologies. It also ignores the facts of blockchains continuing adoption and usage.
Note: This article is a running blog post. This means that our writers are constantly thinking of new entries to freshen up our first point of call for the crypto lay person.
Coindesk has been since it’s inception in May 2013 a reputable authority in the Cryptocurrency world. It boasts a readership of roughly 10 million individual users a month. It’s charts and articles are widely sourced all over the web.
It comes as no surprise then that each year after their famous ‘Consensus’ conferences, the prices of many new Cryptocurrencies sky rocket. Last year, we saw the rise of Ethereum amidst calls from its developing team lead by Vitalik Buterin to boycott the conference.
The sheer number of investors who attend the conference is staggering. This year boasts a number of company executives from over 70 countries. With over 2700 global attendees from diverse institutions such as national government agencies, finance, insurance, and healthcare to name a few, the conference promises to shine light on new contenders in the Crypto space.
This year expects to see attendance rise from 2700 to 4000+ atendees. The talks are being sponsored by giants in auditing Deloitte, as well as the successful Crypto company Ledger.
If we follow the trends for the past few years, then we can expect to see more impressive pumps following the talks this year than in previous years. The numbers of attendees has grown, and Crypto is at a historic downturn following the crashes since December.
There are many undervalued crypto companies looking to attract new investors. Some of these companies are undervalued compared to their January peak prices, whilst others are completely undervalued. Companies with working products that fall short of the top 100 should expect to see the largest increases in market cap.
We suggest you take care to look at some 3-6 month charts, and pay attention to releases during this May 14th-16th period. The lower ranked the coin, the less susceptible it is to pump & dump and sell the news type schemes.
Having Working Products Matters to Investors
A great indicator of when a cryptocurrency means business, and is hoping to be taken seriously by the world of investors is having a working product. When looking over a large list of companies, investors and fund managers are likelier to pick established companies that have released a working product over one that has zilch to show besides big promises and a shiny white paper.
It shows a lot of work has already gone into the company, and its development- most of all in the crowded Crypto space it shows that a company is ahead of the curve. If you have a product you can pitch to businesses, you are less likely to be usurped by a new competitor.
In the tech space, companies that come up with a technology and achieve brand recognition tend to stick around- it’s hard for a new company to compete in a sector with well established companies. For example, it’s highly unlikely that another company offering smart contracts can become as big as Ethereum unless it had some major economic or technological advantages over Ethereum.
Cryptocurrencies with Working Products
1. Ethereum – Smart Contracts
Ethereum focuses on running ‘smart contracts’. These are decentralised applications that cannot be interfered with in any way as they run on a custom Ethereum blockchain.
Use cases include a decentralised bank, ledgers for multiple industries, online games (see: Cryptokitties)
Factom – Harmony & dLoc
Factom Harmony organises data and files across a huge distributed network, validating and verifying the integrity of the files as it goes.
As with a contract, it can be used to support transfers of ownership, and detail complex transactions of for example company data. A potential use case is company mergers — Factom is largely aimed at large businesses.
Factom Dloc is a system developed with Linxens to secure files on the factom blockchain, through the use of a digital sticker which marks documents and is linked to the creators private key. A file viewer app is used to organise the marked documents.
SiaCoin – Cloud storage on the
The Sia blockchain is a marketplace for decentralised data storage. Sia has managed to create a more accessible, and cheaper version of traditional cloud storage systems.
The blockchain acts as the security underpinning the technology, allowing for a cheap, scalable solution to an eternal problem.
iEx.ec – RLC Token
Allows users to either help to host or directly use a decentralised computing network. The RLC token is used as the currency for this service.
The use cases for this potentially enormous network include big data, artificial intelligence, incorporation into the Internet of Things (IoT), graphic design as well as any other resource intensive field.
Braving the Wave
Traditionally investing has been a cautious game for someone at any level. At least for the cautious investor, a small amount of weekly or monthly earnings were diverted into a portfolio consisting mainly of safe stocks and bonds. The aim was to invest into a reasonably safe selection, likely to generate steady returns. You would hopefully be able to forget about them for a year, and by then you would have made some solid profits to reinvest- or re-evaluate.
However the cryptocurrency market seems to bring a lot of people into a somewhat delusional way of thinking. The logic seems to be that because someone else on the media, or (because of it’s now widespread popularity) someone you or your friends know, gained a tremendous amount investing in cryptocurrency, that you stand to gain just as much.
This is the case especially for investors on the ‘crypto-is-the-future’ bandwagon that is taking the world by storm. Whilst this may be part of the truth, it is risky to put all your eggs in one basket. However, it’s hard to deny that it is a profitable time in Cryptocurrency overall. With the huge potential of many companies and the relative earliness in the global adoption of Crypto, we believe that by using safe investment strategies you can achieve sizeable financial gain. This is easier to see in the long term. In the short term, there are some indicators and valuable principles to stick by. They hold less fast in choppy waters, however even in choppy waters, there are those who choose to brave the waves!
How Not to Invest
Some examples of investors drawn in by this way of thinking are on frequent showcase around the internet, people who invested more than they could ever afford- at times sadly even money that was not theirs.
Investing of this kind is usually done at the peak of the bulls. At this point, the media hype is at it’s peak, and even the fabled shoe shine boy knows about it. It’s at this point that the fear of missing out (FOMO) is at it’s most gripping.
New investors tend also to be the worst at spotting and getting out of bear markets, and spotting the signs of a crash. It can often be a grueling few months before market sentiment recovers in the crypto world. The average crypto investor tends to spend a disproportionate amount of time refreshing Blockfolio, checks for updates frequently on Twitter and Reddit – but worst of all, invests disproportionate amounts of his money into unsound coins.
Your average joe is also more likely to succumb to countless cryptocurrency schemes, ICO’s built on sand and investor scams. This is how many shill coins, scams and schemes make it to top 20 coins, just to be dumped leaving regular investors baffled and frustrated.
The logic seems to be that because someone gained a huge amount investing in cryptocurrency, and it is still ‘early days’ in crypto adoption, that you stand to gain just as much. Some examples of this are frequently shown by the new investor who buys in before a crash, at the peak of the FOMO (fear of missing out) market. By then the bulls are exhausted, and a crash or dip often follows.
In cryptocurrency investment as in everything, timing is half the magic. No-one can time the markets however, so the best you can do is protect yourself and pay attention to the obvious signals- if everyone or even the shoe shine boy as John Rothchild put it, is giving out free investment advice then alarm bells should be going off.
HOLDing- A Reliable Strategy for the Relaxed Investor
One safe strategy worth thinking about is the classic crypto meme strategy, or HODLing- (holding on for dear life). Although a meme, if you think about the basic principles underlying caution in volatile markets, they make perfect sense.
‘Being a bubble market, the most effective way to guarantee your returns, is to hold over a long period. Bitcoins price does experience a great deal of turbulence, but it over a period of 5 years it shows considerable increases.’
First off, decide how long you plan to hold. Is it a 3 year hold, a 5 year hold, or a one year hold? You need to try and stick to this, because given the volatility of the cryptocurrency market you’re sure to have some doubts on whether or not to sell during the dips.
In a bubble market with a lot of long term potential such as the Bitcoin and Alt-coin markets, the safest strategy over 5-10 years is to buy a small amount and hold onto it. So long as you think your companies are sound investments, this strategy makes a lot of sense. It doesn’t require much checking, as you can purchase your coins, send them to your hard wallet (We recommend the Ledger Nano S – Cryptocurrency hardware wallet, or something similar). Paper wallets are the next best thing, we like the free generator at https://walletgenerator.net. Once that’s done, store away your hard wallet or paper wallet and forget about it for the next few years.
When to buy?
Another sound strategy involves buying a small regular amount weekly. This spreads out your buys over a longer period, effectively meaning that you will purchase evenly throughout the peaks and troughs.
This is a great strategy for a new investor, looking to invest in projects that are long term near sure wins, for example Ethereum or Bitcoin. It ensures you never buy into the hype too brashly and always have some money left over to reinvest whether there is a market crash or a surge.
Where to buy?
Many exchanges offer the USD/GBP/Euro trading pairs in 2018. The most popular exchanges for buying cryptocurrency directly from the bank are ironically enough centralised exchanges that take fees, with the most prominent and popular being Coinbase (other exchanges are available). It has insurance for its users funds, something many exchanges do not commit to (ehem, Cryptograil pig). As well as many other features including Euro and GBP withdrawals and deposits, 2-factor authentication for its web wallet to list a few.
Here you can register, protected by two-factor authentication which consists of an email, and phone code generator protection system. You provide banking details as you would on any other trading site such as Amazon, and receive in exchange for your cash a corresponding amount of Bitcoin, Bitcoin Cash, Litecoin, or Ethereum (take care to check prices on the day). A small commission is taken by Coinbase, which is worth taking note of.
Which coins to invest in?
Realistically nobody truly knows where the market is headed, and all shills are just that. There is principles for investing in coins that we will outline however, and it is up to you to spot which coins fulfil these criteria.
- Coins with reliable development teams
Check the main team members. A good indicator of whether or not a team is reliable, is when team members have been involved in successful and stable projects in the past. It suggests that the members are committed to making the enterprise work.
Check the ranks for any who have been involved in dubious projects, the Crypto world is laden with scammers even at the very high level. Entry scams and fake ICO’s have been known to occur, if infrequently and they tend to be missed by many.
This is a good indicator that the coin has a product that is being pitched, and is ready for adoption. Ethereum is a good example of a coin like this, it is often used by businesses on account of their smart contracts feature. The smart contracts hold potential for use within many sectors, from medical, to finance to insurance.
This is hugely appealing to new investors who wish for something tangible with real-world application as opposed to the potentially empty promises offered by newer companies. We’re not saying don’t put any small percentage of your stake into so called ‘Moon coins’.
These have in the past managed to create substantial gains for investors, Iota is one example with tech is being tested by banks. Whilst it’s progression through its white-paper is early stages, it has managed to accumulate considerable interest. Venture funds and regular Joe’s flocked to it over December 2017 and brought its price from 0.30 USD to 5.20 within the space of a week.
Will my Portfolio Moon if I Invest in Many Smaller Projects? Or are Safer More Known Bets Better?
Whilst moons like this are highly uncommon we should still expect to see them occasionally. Especially in this highly uncertain environment where interest, media coverage draw new investors all the time. We would advise that if you are committed to investing into some alt coins which a chance of winning you a lambo, that you devote only a small fraction of your total investments to this purpose. Spread well, you might just have some luck!
The majority of your Cryptocurrency investments should go into stable, and comparatively safe companies. To conclude, Cryptocurrency investment can be a lucrative business if you know what you are doing. By maintaining the majority of your investments in a high liquidity asset such as USDT, or GBP on exchanges that support it, you are better able to purchase Crypto steadily and with far less risk attached than one off, big splash decisions.
What is the Sha 256 Hashing Algorithm?
The Bitcoin blockchain is essentially a series of blocks with transactions, sender/receiver information, time stamps and an encrypted key that seals each block. The Sha-256 hashing algorithm works by comparing a computed hash, to an expected hash value. This value is decided by the bitcoin network.When the SHA-256 algorithm has been solved, it produces a string of 256, seemingly random characters, or a hash. A hash is a digital fingerprint of the inputed data, meaning that although it represents the data, it is very difficult to guess the inputted data from the hash alone.
This mathematical problem in-a-box is known as a proof of work calculation. These proof of work calculations are often carried out by stacks of GPU’s, or ASIC’s. Whilst CPU’s used to be the norm, eventually too many computers joined the bitcoin networks. As mining became more popular, the difficulty of solving blocks increased (see: scaling). As the difficulty increases, greater amounts of attempts per second were necessary to solve blocks, and GPU’s were found to do this far more capably than CPU’s. When building a miner, your GPU’s will generally need to be of a good standard but your CPU… less so.
Computers on the blockchain network are competing to solve the block, by guessing the correct hash signature. This signature can only be guessed by brute force. A brute force calculation is a task that involves trying all possible combinations, one by one. Solving this ‘block’ by guessing the correct signature is the proof of work.
Bitcoin uses the Sha-256 hashing algorithm, but many different cryptocurrencies adopt different kinds of hash, or altogether different techniques. For example ByteBall, an alt coin that uses a directed acrylic graph or DAG instead of a block chain. Byteball transactions are confirmed on the main chain without any need for a proof of work to be solved. This eliminates the need for miners, making it more energy efficient.
Check out this quick instructional video from the Federalist Society youtube channel to find out more about how the hashing algorithm works in Bitcoin: