Anyone with a computer connected to the internet can potentially be a bitcoin miner. Bitcoin’s blockchain technology requires that a large network of computers, running the same client software, be used to randomly succeed at validating blocks of encrypted transactions every 10 minutes or so. That’s where bitcoin mining comes in. Mining is the act of letting one’s computer run what’s known as the “hash function” over and over and over in an attempt to crack the codes on the blocks that need validation. The codes that need cracking are all similar and are only difficult enough to require an average of 10 minutes for a random mining computer to get the right answer. The code and the answers are only significant in that they take time to complete, and that they allow the transactions to be validated and added to the ledger of all bitcoin transactions. Continue reading...
Individuals who do not have the computing power to compete with large bitcoin mining operations can join a mining pool and split the rewards. Mining pools allow individuals with insufficient computing power to join a mining pool and split the rewards proportionally to the amount of computer power that they contributed. If a user contributes 3% of the computing power that it took for the pool to solve a block, that user will receive 3% of the reward. Continue reading...
It used to be that litecoin mining could only be done by GPU, but now ASIC machines are getting all the glory. For a time, new miners preferred to mine litecoin instead of bitcoin because ASIC miners had rendered old-fashioned GPU mining for Bitcoin unprofitable. During that time, when ASIC machines had not be designed for Litecoin Scrypt mining, anyone with a good enough GPU could profitably mine litecoin with the same computer they used at home, while they were off at work or asleep not using it. If you aren’t aware, GPUs (graphics cards) compute the kinds of functions necessary for mining at many times the speed that CPUs (core processors) alone would. Continue reading...
It is possible to participate in bitcoin mining indirectly, by partially funding a remote mining operation. Cloud mining is separate and distinct from pool mining, because instead of owning hardware and pooling resources with other miners to increase the likelihood of securing profits, cloud mining simply secures funding from investors, essentially, who have a contract to participate in profits of a mining pool in a remote locations based on the bandwidth of Gigahashes/s that they would like to fund (“buy”). Continue reading...
Similar to other cryptocurrencies, litecoin can be purchased through major cryptocurrency exchanges and wallet apps. Many reputable exchanges exist for buying and trading cryptocurrencies, and several of these will allow you to purchase litecoin with credit cards, wire transfers, and bank deposits. There may be issues with buying enough litecoins to suit your fancy if you aren’t willing to verify your identity, or if the exchange simply won’t allow you to exchange for a large balance of litecoin in single transactions. One option that may open more doors is to purchase bitcoin first, and then exchange those for litecoin. Many people search for good ways to buy litecoin or Bitcoin with Paypal, but it is probably more trouble than it’s worth. Paypal has a somewhat over-active reversible charge system, which favors some buyers or sellers over others by default and can be used by bad actors to reverse the payment owed to someone transacting business in cryptocurrencies. Continue reading...
The Lightning Network is a system that allows for extremely fast Bitcoin transactions off-chain. Lightning Network is a smart contract protocol that uses existing blockchains to mediate transactions off-chain to increase the speed at which they can be finalized. Such a technology is much sought-after in the Bitcoin community, where transactions can take hours to clear if the workflow for miners gets backed up. With the fast pace of business today, the emergence of many other options for faster settlement, such as Ethereum and Ripple, developers know that something like Lightning Network may be needed to keep Bitcoin relevant and make it more scalable. Continue reading...
Litecoin is very similar to bitcoin, but there are some distinct differences. Litecoin was designed with a blockchain protocol called Scrypt rather than SHA 256, which powers bitcoin. In Scrypt, blocks have solved an average of every 2.5 minutes rather than the 10 minutes that bitcoin requires. Let’s face it -- 10 minutes is a really long time in the digital world, and litecoin was created in an effort to get things moving a little faster. This means that each confirmation takes less work and energy for the network to confirm, which should translate into lower transaction costs. Continue reading...
Ripple does not have a mining rewards system like Bitcoin for releasing new coins into the market, so they’ve enacted a plan to put 55 billion XRP into escrow accounts. Prior to 2017, Ripple did not offer any guarantees to coin-holders concerning the rate at which Ripple would release XRP coins into the wild, and this made investors nervous. At any moment, Ripple theoretically could have dumped the approximately 60 billion remaining XRP into the market and washed out any value that the investors... Continue reading...
When mining on the Ethereum blockchain, you are rewarded in Ether, but you may need to do some calculations to find out it if will be profitable for you. Ethereum mining can still be done profitably, as of the time of this writing, by individuals on their home computers, as long as they have decent hardware. This is no longer the case for Bitcoin, Litecoin, and a few other coins, due to the development of ASIC (application-specific integrated circuits) mining rigs used by the nascent mining industry, which have rendered home computers obsolete and have begun to present a significant centralization threat on the decentralized blockchain. Continue reading...
Setting up a bitcoin miner can be as simple as downloading a mining client program, or as complicated as building a custom rig. Bitcoin mining used to be cheaper and easier to do than it is today, but it can still be relatively simple to execute. In the past, a computer with a CPU could crunch through enough hashes to solve a few blocks and turn a profit. Now, a good GPU, that is, a Graphics Processing Unit card connected to the motherboard of a computer, or a series of GPUs, is par for the course because they can perform many times as many hashes per second than a CPU can alone. This is the case even if the CPU has several cores, and it just has to do with the way that GPUs handle their work. Continue reading...
Ethereum mining is the process of solving blocks of encrypted blockchain data using a proof-of-work algorithm and occasionally being rewarded with Ether. Blockchain data is validated and added to the distributed ledger by computers on the network performing the task of “mining,” which is continually attempting to solve puzzles, basically, which each unlock a block of encrypted data containing information about transactions, and, on the Ethereum platform, information about distributed application functions and smart contracts. Once a block is unlocked, the data within is shared with the network and added to the distributed ledger. Continue reading...
Mining for cryptocurrency may or may not be profitable for you, but the good news is that you can easily run the numbers. Mining profitability is will primarily depend on the hashrate (mining speed) of your mining hardware, and the amount of energy it takes to run the hardware. Mining software usually comes with system monitors that will tell you with a fair degree of accuracy what the numbers are, and several online calculators exist to help as well. The cost of energy is the main concern, many miners will seek to be near the cheapest sources of energy, such as a hydroelectric plant in Sweden or countries with energy subsidies such as China. Continue reading...
The code for most cryptocurrencies is open-source, and the community operates by consensus, so sometimes newly modified code is released that is adopted by some, creating what’s called a fork. A Bitcoin Fork is when the blockchain, made up of interconnected computers holding a distributed and permanent record of all bitcoin transactions up to that point, is offered a modified currency protocol that is adopted by some of the Bitcoin community, which creates a “fork” in the previously longitudinal history of the ledger (i.e. “a fork in the road”), where one ledger continues to grow based on the changed protocol, and one ledger continues to grow with the old protocol still intact. Continue reading...
The pseudonymous inventor(s) of bitcoin and blockchain technology, Satoshi Nakamoto, likely walks among us today. Satoshi Nakamoto was the pen-name of the author(s) who anonymously gave the world the design and code for bitcoin and blockchain technology. Penning a white-paper entitled “Bitcoin: a Peer-to-Peer Electronic Cash System,” the author(s) described the need for a decentralized digital currency and proposed blockchain technology as the way to validate digital transactions with a distributed ledger. Continue reading...
Two words: blockchain technology. Transactions in bitcoin are encoded, packed into a block of other transactions, and all of these are sent out to thousands of computers running blockchain computations, known as hashes. All of these computers are running similar algorithms designed to force honest work and to take time for the computers to complete. The purpose of this step is merely forcing the blockchain to require time, energy, and effort, and to be randomized and decentralized when it is validating transactions. Whichever computer solves it first receives an incentive reward, and the entire blockchain, comprised of all computers running bitcoin client software, then updates the ledger to include the most recent validated transactions. Continue reading...
Bitcoin is a digital currency that is secured and maintained by a peer-to-peer network of millions of users online, making it a decentralized, fast, secure, cheap, and efficient as a digital currency. Bitcoin is a digital currency that can be acquired via traditional currency, trades, or work, and can be used for transactions in an ever-expanding network of users and merchants. It is legitimized and maintained by a peer-to-peer network of millions of users online, making it a decentralized, fast, secure, cheap, and efficient digital currency that exists independent of any centralized gatekeepers such as governments, regulated markets, or corporations. Continue reading...
The most common way to buy Bitcoin is through online services such as Coinbase, Bitpanda, Bitquick, Localbitcoins, and Spectrocoin, where customers can use credit cards, bank accounts, and various other payment methods to convert cash into coin. Transfers are based on frequently updated rates of exchange and may involve a combination of flat fees and percentages that go to the service. There are also some physical locations where you can perform these transactions, such as Bitcoin ATM machines and convenience stores that can help you transfer money through the same machines that add funds to prepaid phones. Each of these methods offers different advantages in terms of convenience, anonymity, and security. Continue reading...
With cryptocurrencies, there is always a question of how the blockchain will scale as technology changes and the currency grows in demand. Blockchains are meant to be immutable, meaning that once a change has been made to it, such as the data for a particular transaction, the record of the transaction cannot be changed or forgotten. This means that, for one thing, the distributed ledger that holds the record of all the transactions will inevitably get larger and larger, and any computer that wishes to be a node may have to download a potential cumbersome file with all that data. Continue reading...
A support line represents an estimation of where a price is likely to stop moving downwards, based on recent data and analysis methods. It is arrived at with different formulas for different indicator methods, but it is generally a line derived from moving averages and standard deviation which represents a lower level at which traders would expect a price to rebound back upwards. Several methods of technical and fundamental analysis plot a support line or two as part of a graphical representation of trends. Theoretically, a price will only deviate so far from its moving average before bouncing back toward the middle. Continue reading...
A resistance line is the inverse of a support line and represents the glass ceiling through which a security price has difficulty breaking through. Resistance lines are calculated as part of analysis methods which use moving averages and standard deviation, or similar calculations, to put a range of probability on the expected movement of a security price, with the resistance line representing the top of that range. Continue reading...