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What are Bitcoin Mining Pools?
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...
What is a commodity pool?
Commodity pools are like the REITs of the commodity world, and some of them can be categorized as hedge funds or managed futures accounts (MFAs). Accredited investors, who meet qualifying requirements regarding income and total net worth, pool their money to be managed by a commodity pool operator (CPO) or commodity trading advisor (CTA) for the purpose of investing in commodities and commodity derivative instruments. Continue reading...
How Do You Calculate Mining Profitability?
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...
How Does Cloud Mining Bitcoin Work?
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...
What are “Dark Pools” of Money?
Large institutional investors sometimes trade on “Electronic Trading Crossing Networks," which allow them to conduct trades without publicly exposing them. They are used by financial institutions to move large blocks of shares without public investors even knowing about such transactions. Such examples of networks are “Liquidnet,” “Pipeline,” “SIGMA X,” and many others. It might be difficult to fathom the size of the transactions conducted over these networks, but the ownership of dark pools involves almost every institutional trading house. This is a huge business and regulators are carefully looking into their activities. Continue reading...
How Do You Set Up a Bitcoin Miner?
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...
How to Mine Litecoin and other Altcoins?
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...
How Do You Mine Ethereum?
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...
How Does Ethereum Mining Work?
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...
How does Bitcoin Mining Work?
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...
What is a Life Annuity?
Annuities are primarily designed to pay a substantially similar sum at regular intervals until the annuitant dies. Life insurance companies write these contracts since they are designed as a kind of longevity insurance. A lifetime income annuity, sometimes called a life annuity, is a stream of guaranteed payments for the duration of the annuitant’s life, based on the sum used to purchase the lifetime income and the age of the annuitant at the time of purchase. Life annuities can also be joint-life, meaning the contract will pay an amount to either of two people as long as one is alive. Continue reading...
What is an Income Annuity?
Income annuities are used by people in retirement to give them a steady, dependable stream of income until they die. It is a financial product sold by a life insurance company, which serves as a kind of longevity insurance, so that people cannot outlive their money. People often roll lump sums from 401(k)s into these plans. Though inflexible, the income payout rate is designed to be appealing when compared to most retirement investments. Continue reading...
What is a support line?
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...
What is a resistance line?
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...
Who is a commodity trading advisor (CTA)?
A Commodity Trading Advisor (CTA) is registered with the National Futures Association (NFA) to manage client funds in a managed futures account (MFA) or other pooled investment such as a hedge fund or commodity pool in which the primary instruments being used are commodity futures, swaps, and other commodities derivatives. CTAs are a particular type of money manager specializing in commodities. Commodities Trading Advisors (CTAs) are licensed to manage commodity pools, managed futures accounts, and commodity-based hedge funds on behalf of clients. Continue reading...
What is an Investment Manager?
An investment manager’s job is to adhere to the guidelines set forth in a prospectus while directing the decision-making process for a pooled investment company such as a mutual fund. He must remain accountable to the shareholders and observe SEC regulations while attempting to generate the best returns possible. Investment managers direct the flow of assets and trading in an investment account, usually a pooled investment using the funds of various numbers of investors, while seeking to serve the best interests of the investors whom he serves. Continue reading...
What is Bitcoin lending?
The cryptocurrency community has opened up creative options for making money in the form of lending platforms. A few forms of lending exist for cryptocurrencies at the time of this writing. One way to do it is to make your funds available in a lending market facilitated by an exchange, such as Poloniex, where you can name your interest rate and allow other traders to use your funds for trading on margin. Continue reading...
Can I Get Exposure to Virtual Currency Through ETFs, Mutual funds, or Stocks?
While there aren’t that many ways to use institutional-level, regulated vehicles to get exposure to bitcoin and other cryptocurrencies, there are some, and the market will likely expand. Money managers are finding ways to offer managed investments that offer exposure to cryptocurrencies, despite the hurdles presented by regulators and skepticism from large financial companies. On the over-the-counter market OTCQX, you can buy shares of the Bitcoin Investment Trust from Grayscale (Nasdaq: GBTC). This fund has seen massive gains recently but does come with a 2% fee. The Chicago Mercantile Exchange (CME) has stated that it would like to start trading cryptocurrency futures, but it may be a little time before this becomes a reality, due to significant red tape and guidance needed regarding cryptocurrencies. Continue reading...
What are REITs?
REITs are pooled investments similar to mutual funds, but, like mutual funds, they can take many shapes. They invest in different kinds of real estate and real estate-oriented assets, depending on the REIT, and sell ownership shares to investors. REIT is an acronym for Real Estate Investment Trust. REITs are similar to mutual funds, except that they only invest in real estate properties and related companies and assets such as mortgages. REITs will define the scope of their investments and strategies in their prospectus, which may read something like “We invest only in commercial Real Estate” or “Only in residential houses in Las Vegas” while other REITs are very general. Continue reading...
What is commodity pice risk?
Agricultural and mining businesses are exposed to commodity price risk, which is the possibility that the price of the commodity will change unfavorably by the time the commodity is ready to be delivered. They avoid unnecessary risk by using futures contracts, forward contracts, and possibly other derivative instruments. Commodity price risk means that an agricultural or mining business might not be able to predict the revenue that they can generate from the production or extraction of commodities. Continue reading...