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Wednesday Watch: Pounding on Resistance

A little over two weeks left and we bid this year goodbye.

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Good morning. It’s the middle of the week. Wait, what? It’s also the middle of December 2020. A little over two weeks left and we bid this year goodbye.

Welcome to Wednesday Watch, part of our new series: BitPinas Daily. We will look at the price of Bitcoin, Ethereum and the major cryptocurrencies. Crypto is global, but sometimes news that matters happens while we sleep. So we bring to you what’s happening in our space here and abroad. 

Market Price as of December 16, 2020:

Bitcoin $19,431 1.1%
Ethereum $589.05 0.6%
XRP $0.469 (-5.8%)
Tether $0.99 0.0%
Litecoin $81.39 -1.1%
SLP $0.034 7.1%

Bitcoin closed December 15, 2020, at $19,431 per BTC. We’re up 0.8% in the last 7 days and 171% since the year began. This is also 2.0% below the previous all-time high of $19,832 on December 1, 2020.

Bitcoin’s market capitalization stands today at $360,907,329,145 which is 62.4% of the entire cryptocurrency market. 

Table of Contents.

Philippines: #CryptoPH

Last Bloomcast episode

Bloomcast is a weekly show on Facebook Live about Bitcoin, DeFi, crypto and everything else Axie. Hosted by BloomX’s Luis Buenaventura, it’s a staple in crypto Philippines and a must-watch. They invite local crypto enthusiasts and crypto company owners, crypto and fintech professionals, blockchain gamers, people you might have read here on BitPinas or on Twitter. You should be on Twitter.

Yesterday was its last show for the year. Prizes were given away. Not just Bitcoin, but a full Axie team so the winner could start their play-to-earn journey. Yield Guild Games’ Gabby Dizon was also there to discuss his new startup. We briefly wrote about it here. Otherwise, check an introductory article about Yield Guild here.

Watch Bloomcast’s final 2020 episode here.

Bitcoin

More billion-dollar firms buying Bitcoin

First, there was MicroStrategy, then there was Square. PayPal soon followed. Days ago, a 169-year old insurance firm MassMutual put $100 million in Bitcoin. It’s a tiny drop out of its $235 billion war chest, but the move could influence other older institutions to consider Bitcoin.

And so today,  we’ve read that London-based asset manager, Ruffer Investment announced that it allocated 2.5% of one of its funds to Bitcoin. This company manages $20.3 billion in assets, so 2.5% of that is also a drip. Still, it speaks volumes when it comes to the increasing interest of traditional financial institutions into Bitcoin. (Decrypt)

Stablecoins

Stablecoin issuers “must come out of the shadows”

A stablecoin is a cryptocurrency whose value is pegged to another instrument. In the case of Tether (USDT), its value is “tethered” to the U.S. dollar, so $1 is USDT 1. Stablecoins are a hot topic. With Central Banks very likely to issue their own “central bank digital currency” in the future, what will be the use of stablecoins? If it competes with sovereign currencies, won’t the government stop them from proliferating?

Those are questions still without answers right now. The G20 was firm: “no so-called ‘global stablecoins’ should commence operation until all relevant legal, regulatory and oversight requirements are addressed.

The Office of the Comptroller of the Currency (OCC), which is the U.S. banking regulator said in a recent paper that fintech banks and stablecoin issuers are “encouraged to reach their full potential by coming out of the shadows and joining the chartered banking system.” (Decrypt

Locally, the BSP did approve UnionBank’s PHX stablecoin, only used within the bank’s system. Check out our interview with UB’s Arvie de Vera here.

What Else is Happening?

  • Mt. Gox Creditors’ Wait Nearly Over as Trustee Announces Draft Rehabilitation Plan (Coindesk)
  • China is testing its digital currency in Suzhou. Here’s an early look at the user experience (The Block)
  • DeFi’s new rally (Cointelegraph)
  • JPMorgan Says MassMutual’s Bitcoin Foray Signals Widening Demand (Bloomberg)

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Blockchain

iCashRewards Leaving Ethereum To Explore the Use of DigitalBits Blockchain

Huobi-powered Exchange to Migrate Token on the DigitalBits Network Vancouver, BC and Singapore – September 25, 2019 – iBank Digital Asset L.P. (“iBank Digital”, “iBank Exchange”) and iCashRewards (“iCash”) announced today that it is exploring the use of the DigitalBits blockchain to tokenize iCashRewards loyalty points. Brands are increasingly taking an interest in blockchain technology … Continued

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Huobi-powered Exchange to Migrate Token on the DigitalBits Network

iCashRewards-Banner

Vancouver, BC and Singapore – September 25, 2019 – iBank Digital Asset L.P. (“iBank Digital”, “iBank Exchange”) and iCashRewards (“iCash”) announced today that it is exploring the use of the DigitalBits blockchain to tokenize iCashRewards loyalty points.

Brands are increasingly taking an interest in blockchain technology that extends far past accepting digital assets as payment. iCashRewards’ recipients will be able to use the iCash loyalty token as a form of payment on iBankEx and iCash Ecosystem, allowing users to benefit from faster transactions, reduced exchange and transaction fees.

“We are excited to be collaborating with the DigitalBits blockchain,” stated Min Kuang, Founder of the Digital One Asset Foundation. ” Initially we focused on tokenizing the iCashRewards loyalty token on the Ethereum network, however, in addition to the added technical benefits, our vision is also aligned with DigitalBits’ focus on supporting brand currencies. This also strategically aligns with iCash being integrated with PundiX to provide fiat to crypto processing services and point-of-sale solutions with merchants.”  

Encompassing Bitcoin, Ethereum and other digital assets on iBankEx, as a new addition to the DigitalBits ecosystem, iCash will be able to interact with other brand currencies that will reside on the DigitalBits network. Brand currencies have existed prior to the birth of blockchain technology — assets such as points and rewards have been issued by brands to transact with consumers for decades. DigitbalBits and iBank Digital plan to enhance this experience.

The DigitalBits network’s native token XDB first became listed on cryptocurrency exchanges commencing in August 2019 and has already seen other exchanges also add the token, including Bilaxy, CoinExchange, Vinex and Sistemkoin.  With DigitalBits continuing to gain traction, it’s likely that other exchanges will also take notice and embrace XDB.

“We are excited to see iBank Digital and iCash join the DigitalBits ecosystem,” stated Al Burgio, Founder of DigitalBits.  “Our vision has been focused on designing DigitalBits as a network layer blockchain for brand currencies, including assets such as loyalty and rewards points, making it perfectly suited for iBank’s endeavour into the points economy.”

iCashRewards loyalty tokens will be able to leverage protocol characteristics including low latency and dynamic quorum based consensus not currently possible on the Ethereum network due to significant delays between blocks. Having said that, DigitalBits blockchain is ready and capable to port millions of users who already know how to earn digital assets while providing additional benefits to consumers with their multi-hop technology and on-chain trading.


About iCashRewards – A Trusted Partner in Blockchain Loyalty

The iCashRewards Loyalty Program (“iCash” or “iCashRewards”) is supported by a powerful infrastructure for tokenization development and traditional loyalty rewards. It promotes the application and evolution of blockchain loyalty to decentralized finance (DeFi) projects and global tokenized industry. The iCashRewards Loyalty Program is governed by Digital One Asset Foundation, which is an independent, not-for-profit membership organization incorporated in Singapore. www.icashrewards.io 


About iBank Digital:

iBank Digital Asset L.P. (iBank Digital), based in Vancouver, Canada, is a leading provider of crypto trading platforms, supported by Huobi Cloud, and lending through the world’s first decentralized global network.  Connecting financial institutions to high net worth individuals, iBank Digital provides convenient, secure, and fast trading interfaces, systems and intuitive and efficient new trading platforms.  iBank Digital’s services assume a number of different vectors, including crypto trading, crypto retail solutions, crypto lending, iBank XPass (wallet and payment solutions), advisory services, and facilitating Bitcoin purchases via credit card.  For more information, visit www.ibankdigital.io


About DigitalBits:

DigitalBits is a blockchain protocol and network layer designed for consumer digital assets, specifically branded currencies. DigitalBits is focused on supporting innovators with driving enterprise adoption of cryptocurrency and its use in enhancing the consumer experience and corporate social responsibility initiatives. For more information, please visit www.digitalbits.io.


Related Articles You May Like: Welcome to The New Era of Blockchain & Digital Assets

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Disclaimer: CryptoCanucks.com is not intended to provide tax, legal or investment advice, and nothing on CryptoCanucks.com should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by CryptoCanucks.com or any third party. You alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptocanucks.com/icashrewards-leaving-ethereum-to-explore-the-use-of-digitalbits-blockchain/

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Blockchain

iCashRewards Leaving Ethereum To Explore the Use of DigitalBits Blockchain

Huobi-powered Exchange to Migrate Token on the DigitalBits Network Vancouver, BC and Singapore – September 25, 2019 – iBank Digital Asset L.P. (“iBank Digital”, “iBank Exchange”) and iCashRewards (“iCash”) announced today that it is exploring the use of the DigitalBits blockchain to tokenize iCashRewards loyalty points. Brands are increasingly taking an interest in blockchain technology … Continued

The post iCashRewards Leaving Ethereum To Explore the Use of DigitalBits Blockchain appeared first on CryptoCanucks.

Avatar

Published

on

Huobi-powered Exchange to Migrate Token on the DigitalBits Network

iCashRewards-Banner

Vancouver, BC and Singapore – September 25, 2019 – iBank Digital Asset L.P. (“iBank Digital”, “iBank Exchange”) and iCashRewards (“iCash”) announced today that it is exploring the use of the DigitalBits blockchain to tokenize iCashRewards loyalty points.

Brands are increasingly taking an interest in blockchain technology that extends far past accepting digital assets as payment. iCashRewards’ recipients will be able to use the iCash loyalty token as a form of payment on iBankEx and iCash Ecosystem, allowing users to benefit from faster transactions, reduced exchange and transaction fees.

“We are excited to be collaborating with the DigitalBits blockchain,” stated Min Kuang, Founder of the Digital One Asset Foundation. ” Initially we focused on tokenizing the iCashRewards loyalty token on the Ethereum network, however, in addition to the added technical benefits, our vision is also aligned with DigitalBits’ focus on supporting brand currencies. This also strategically aligns with iCash being integrated with PundiX to provide fiat to crypto processing services and point-of-sale solutions with merchants.”  

Encompassing Bitcoin, Ethereum and other digital assets on iBankEx, as a new addition to the DigitalBits ecosystem, iCash will be able to interact with other brand currencies that will reside on the DigitalBits network. Brand currencies have existed prior to the birth of blockchain technology — assets such as points and rewards have been issued by brands to transact with consumers for decades. DigitbalBits and iBank Digital plan to enhance this experience.

The DigitalBits network’s native token XDB first became listed on cryptocurrency exchanges commencing in August 2019 and has already seen other exchanges also add the token, including Bilaxy, CoinExchange, Vinex and Sistemkoin.  With DigitalBits continuing to gain traction, it’s likely that other exchanges will also take notice and embrace XDB.

“We are excited to see iBank Digital and iCash join the DigitalBits ecosystem,” stated Al Burgio, Founder of DigitalBits.  “Our vision has been focused on designing DigitalBits as a network layer blockchain for brand currencies, including assets such as loyalty and rewards points, making it perfectly suited for iBank’s endeavour into the points economy.”

iCashRewards loyalty tokens will be able to leverage protocol characteristics including low latency and dynamic quorum based consensus not currently possible on the Ethereum network due to significant delays between blocks. Having said that, DigitalBits blockchain is ready and capable to port millions of users who already know how to earn digital assets while providing additional benefits to consumers with their multi-hop technology and on-chain trading.


About iCashRewards – A Trusted Partner in Blockchain Loyalty

The iCashRewards Loyalty Program (“iCash” or “iCashRewards”) is supported by a powerful infrastructure for tokenization development and traditional loyalty rewards. It promotes the application and evolution of blockchain loyalty to decentralized finance (DeFi) projects and global tokenized industry. The iCashRewards Loyalty Program is governed by Digital One Asset Foundation, which is an independent, not-for-profit membership organization incorporated in Singapore. www.icashrewards.io 


About iBank Digital:

iBank Digital Asset L.P. (iBank Digital), based in Vancouver, Canada, is a leading provider of crypto trading platforms, supported by Huobi Cloud, and lending through the world’s first decentralized global network.  Connecting financial institutions to high net worth individuals, iBank Digital provides convenient, secure, and fast trading interfaces, systems and intuitive and efficient new trading platforms.  iBank Digital’s services assume a number of different vectors, including crypto trading, crypto retail solutions, crypto lending, iBank XPass (wallet and payment solutions), advisory services, and facilitating Bitcoin purchases via credit card.  For more information, visit www.ibankdigital.io


About DigitalBits:

DigitalBits is a blockchain protocol and network layer designed for consumer digital assets, specifically branded currencies. DigitalBits is focused on supporting innovators with driving enterprise adoption of cryptocurrency and its use in enhancing the consumer experience and corporate social responsibility initiatives. For more information, please visit www.digitalbits.io.


Related Articles You May Like: Welcome to The New Era of Blockchain & Digital Assets

Sharing is Caring

Disclaimer: CryptoCanucks.com is not intended to provide tax, legal or investment advice, and nothing on CryptoCanucks.com should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by CryptoCanucks.com or any third party. You alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptocanucks.com/icashrewards-leaving-ethereum-to-explore-the-use-of-digitalbits-blockchain/

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Blockchain

Mining Bitcoin: How to Mine Bitcoin

Introduction to Bitcoin Mining Mid-19th century California gold miners were called “forty-niners” after the year 1849, but this rush actually spanned from 1848-1853; it took five years for a quarter-million people to flood the state in search of “free wealth”. Satoshi Nakamoto first published the white paper on cryptocurrency back in 2008, and Bitcoin was … Continued

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Introduction to Bitcoin Mining

Mid-19th century California gold miners were called “forty-niners” after the year 1849, but this rush actually spanned from 1848-1853; it took five years for a quarter-million people to flood the state in search of “free wealth”. Satoshi Nakamoto first published the white paper on cryptocurrency back in 2008, and Bitcoin was launched in 2009. Today, in 2019, there are at least a million bitcoin miners around the world. A single bitcoin (or “1 BTC”) is worth almost $10,000, give or take a few hundred dollars, and there are around 1,800 new bitcoins mined every day, meaning there’s a whopping $18,000,000 being ‘created’ every day.

Not bad for ten years. No wonder everyone wants to learn how to mine bitcoin.

A Brief History on Money

Cryptocurrency is math that can be used as money.

Money is, fundamentally, an accounting of debt; you owe someone for a good or service, and giving them money erases that debt. Banks are giant ledgers, accounting for every transaction – when you paid for your coffee, this “ledger” sees that you lost $2 and the coffee shop gained $2.

Paper dollar bills do not record this specific transaction – who lost and who gained those $2 – but they act as evidence of a transaction having taken place at some point. In fiat currency, a state is the ultimate arbiter or holder of all the debts – and the one that mints, or makes, the currency in the first place. They account for how much currency they put out, and approximately how much is present now; the only road bump being that they do not know every transaction in between.

In cryptocurrency, no one person or entity controls a central ledger, because this “ledger” is effectively on every computer connected to the network of that currency; everyone has it. Since each unit of the cryptocurrency is composed of math, as opposed to physical substances like paper or gold, this math effectively records every transaction

So Where Does it Come From?

Fiat currencies are “made” (or rather, minted) by states, and accounted for by banks, but these currencies are often directly or indirectly made from precious metals that are mined from the Earth – which is why so many people flooded California in the mid-19th century. Minting is a middle step between the mining and the currency.

Cryptocurrency cuts out that middle step; bitcoin is “minted” and made from BTC mining.

If bitcoin is commercialized math, then mining is the process of solving all its equations. A common, yet accurate, joke explanation is, “imagine if you could solve puzzles, then use those solved puzzles as money”. Bitcoin is that, but on a much larger and astronomically more complex scale; bitcoin mining is both the process of solving puzzles, and the process of verifying other solves puzzles.

That said, these “puzzles” (called “blocks” in BTC mining) are operating on a very complicated scale. BTC mining is basically the process of racing to correctly the correct number out of 115,792,090,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 possible options – and doing so hundreds, thousands, maybe even millions of times a day. This takes some pretty hefty computing power.

How to Mine Bitcoin

Despite a lot of chatter about bitcoin mining software, it is really a matter of hardware; software is just the most accessible way to access this hardware.

“Winning” or solving – and receiving payout for – is a combination of computational power and a bit of luck. If you accomplish this, you can get about 12.5 bitcoins, though starting in 2020, that will become 6.25. The number of bitcoins you receive for solving a block cuts in half every 210,000 blocks – which is roughly every four years, since the blocks get more and more complicated over time. This will keep going until 21 million bitcoins have been mined, a cap built into the system. There are currently only 3.17 million bitcoin left to be mined.

How to Mine Bitcoin in the Hard(ware) Way

There are two types of “miners” you can buy: application-specific integrated circuit (ASIC) or graphics processing unit (GPU). These are not only very expensive to buy, but they also take up a lot of electricity and require a powerful network connection. This is why mining calculators exist – these are various apps and sites into which you can input details on your miner, your power cost, and your network cost, to figure out how much profit (if any, even) you will turn.

It is usually pretty low, and these days, mining with your own hardware is only really advised for people who already happen to have lots of hardware and great network on hand, and would not need to go out of their way to get those.

That just leaves…

How to Mine Bitcoin With Bitcoin Mining Software

At 12.5 BTC per block, when bitcoins are worth $10,000 each, that’s $1,250,000 on the line every time you are competing with other miners to “guess the right number” first. This takes far more computer power than most people can afford on their own.

As such, the most common way to get in on BTC mining is to join a collective of miners and “rent” the mining tools – known predominantly as cloud mining.

The biggest advantage is that there is a much lower barrier to entry when you cloud mine bitcoins. The biggest disadvantage is that instead of getting the reward all to yourself, you are splitting those bitcoins with other people, and typically a lot of them. Winning a million dollars doesn’t mean as much when you’re splitting it with a million people.

Step 1: Choose Your Wallet

Before you start working for a job, you want to know how you will be getting your pay. By the same token, before you start mining for bitcoins, you should know where you will keep your bitcoins once you earn them.

Online wallets are typically the most convenient, and easiest to use. They are also typically the most efficient for actually using your bitcoins to purchase goods and services, and you will have your bitcoins even if you lose all your devices. That said, this does put you in a similar position with a bank. If the host is experiencing heavy traffic or DDOS attacks, you may not be able to access your funds, and if they are hacked, you can lose your bitcoins entirely.

Hardware wallets are the opposite extreme. As physical objects, are completely offline, and thus cannot be hacked or otherwise remotely attacked. As long as you have your hardware wallet and a device to access it with, you will be able to access your funds. But what you gain in remote security is lost in personal security; if you lose your device or it’s physically stolen from you, you lose your bitcoins.
The middle-ground between these is “software wallets” or “desktop wallets” (though these can also be mobile apps). These are on your local device, so even if exchanges go down or are attacked, you still have your bitcoins, and the only way you can lose them to remote exploitation is if you, the specific individual, are targeted and hacked, which is very unlikely. But, it can still be used to conduct transactions and otherwise go online as necessary. That said, this is also vulnerable to loss if you lose your physical device (i.e. if someone steals your computer).

Step 2: Find Your Cloud

Mining companies are the computing clouds or collectives of miners. While joining such a company might be couched in terms of renting the hardware, another way to look at it might be that you are investing.

The amount you invest, or the rate at which you rent, is known as a “mining package”, which you pick once you join a mining company. You can also invest ahead of time in new technology that will be coming out at a later date. That said, investing in something that doesn’t exist yet is always a heavy risk.

There are many sites in which you can find comparisons between companies, including user ratings and reviews. Be careful with the
reviews – while they can be insightful, many are also full of people attempting to get new ‘recruits’ specifically with referral codes, which will net the refer-er a small bonus or profit.

Step 3: Pick Your Pool

A “pool” is basically the team of miners that you choose to join up with, and contribute your invest or computing power. If you are just starting out mining bitcoins, you should start by joining an “older” (or rather, more established and vouched-for) pool, and perhaps one with lower fees. The payout or profit from these will usually be on the low side, but they are also less risky.

As you get the hang of bitcoin mining and learn how pools work, you can start venturing out to other pools that aren’t as established and carry higher risks, but also higher rewards.

Buy Bitcoin, Ethereum, XRP, and other cryptocurrencies on Coinsquare, the world’s home for cryptocurrency.


Coinsquare

Source: Coinsquare: Mining Bitcoin: How to Mine Bitcoin

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Disclaimer: CryptoCanucks.com is not intended to provide tax, legal or investment advice, and nothing on CryptoCanucks.com should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by CryptoCanucks.com or any third party. You alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.

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Source: https://cryptocanucks.com/mining-bitcoin-how-to-mine-bitcoin/

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Blockchain

Mining Bitcoin: How to Mine Bitcoin

Introduction to Bitcoin Mining Mid-19th century California gold miners were called “forty-niners” after the year 1849, but this rush actually spanned from 1848-1853; it took five years for a quarter-million people to flood the state in search of “free wealth”. Satoshi Nakamoto first published the white paper on cryptocurrency back in 2008, and Bitcoin was … Continued

The post Mining Bitcoin: How to Mine Bitcoin appeared first on CryptoCanucks.

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Introduction to Bitcoin Mining

Mid-19th century California gold miners were called “forty-niners” after the year 1849, but this rush actually spanned from 1848-1853; it took five years for a quarter-million people to flood the state in search of “free wealth”. Satoshi Nakamoto first published the white paper on cryptocurrency back in 2008, and Bitcoin was launched in 2009. Today, in 2019, there are at least a million bitcoin miners around the world. A single bitcoin (or “1 BTC”) is worth almost $10,000, give or take a few hundred dollars, and there are around 1,800 new bitcoins mined every day, meaning there’s a whopping $18,000,000 being ‘created’ every day.

Not bad for ten years. No wonder everyone wants to learn how to mine bitcoin.

A Brief History on Money

Cryptocurrency is math that can be used as money.

Money is, fundamentally, an accounting of debt; you owe someone for a good or service, and giving them money erases that debt. Banks are giant ledgers, accounting for every transaction – when you paid for your coffee, this “ledger” sees that you lost $2 and the coffee shop gained $2.

Paper dollar bills do not record this specific transaction – who lost and who gained those $2 – but they act as evidence of a transaction having taken place at some point. In fiat currency, a state is the ultimate arbiter or holder of all the debts – and the one that mints, or makes, the currency in the first place. They account for how much currency they put out, and approximately how much is present now; the only road bump being that they do not know every transaction in between.

In cryptocurrency, no one person or entity controls a central ledger, because this “ledger” is effectively on every computer connected to the network of that currency; everyone has it. Since each unit of the cryptocurrency is composed of math, as opposed to physical substances like paper or gold, this math effectively records every transaction

So Where Does it Come From?

Fiat currencies are “made” (or rather, minted) by states, and accounted for by banks, but these currencies are often directly or indirectly made from precious metals that are mined from the Earth – which is why so many people flooded California in the mid-19th century. Minting is a middle step between the mining and the currency.

Cryptocurrency cuts out that middle step; bitcoin is “minted” and made from BTC mining.

If bitcoin is commercialized math, then mining is the process of solving all its equations. A common, yet accurate, joke explanation is, “imagine if you could solve puzzles, then use those solved puzzles as money”. Bitcoin is that, but on a much larger and astronomically more complex scale; bitcoin mining is both the process of solving puzzles, and the process of verifying other solves puzzles.

That said, these “puzzles” (called “blocks” in BTC mining) are operating on a very complicated scale. BTC mining is basically the process of racing to correctly the correct number out of 115,792,090,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 possible options – and doing so hundreds, thousands, maybe even millions of times a day. This takes some pretty hefty computing power.

How to Mine Bitcoin

Despite a lot of chatter about bitcoin mining software, it is really a matter of hardware; software is just the most accessible way to access this hardware.

“Winning” or solving – and receiving payout for – is a combination of computational power and a bit of luck. If you accomplish this, you can get about 12.5 bitcoins, though starting in 2020, that will become 6.25. The number of bitcoins you receive for solving a block cuts in half every 210,000 blocks – which is roughly every four years, since the blocks get more and more complicated over time. This will keep going until 21 million bitcoins have been mined, a cap built into the system. There are currently only 3.17 million bitcoin left to be mined.

How to Mine Bitcoin in the Hard(ware) Way

There are two types of “miners” you can buy: application-specific integrated circuit (ASIC) or graphics processing unit (GPU). These are not only very expensive to buy, but they also take up a lot of electricity and require a powerful network connection. This is why mining calculators exist – these are various apps and sites into which you can input details on your miner, your power cost, and your network cost, to figure out how much profit (if any, even) you will turn.

It is usually pretty low, and these days, mining with your own hardware is only really advised for people who already happen to have lots of hardware and great network on hand, and would not need to go out of their way to get those.

That just leaves…

How to Mine Bitcoin With Bitcoin Mining Software

At 12.5 BTC per block, when bitcoins are worth $10,000 each, that’s $1,250,000 on the line every time you are competing with other miners to “guess the right number” first. This takes far more computer power than most people can afford on their own.

As such, the most common way to get in on BTC mining is to join a collective of miners and “rent” the mining tools – known predominantly as cloud mining.

The biggest advantage is that there is a much lower barrier to entry when you cloud mine bitcoins. The biggest disadvantage is that instead of getting the reward all to yourself, you are splitting those bitcoins with other people, and typically a lot of them. Winning a million dollars doesn’t mean as much when you’re splitting it with a million people.

Step 1: Choose Your Wallet

Before you start working for a job, you want to know how you will be getting your pay. By the same token, before you start mining for bitcoins, you should know where you will keep your bitcoins once you earn them.

Online wallets are typically the most convenient, and easiest to use. They are also typically the most efficient for actually using your bitcoins to purchase goods and services, and you will have your bitcoins even if you lose all your devices. That said, this does put you in a similar position with a bank. If the host is experiencing heavy traffic or DDOS attacks, you may not be able to access your funds, and if they are hacked, you can lose your bitcoins entirely.

Hardware wallets are the opposite extreme. As physical objects, are completely offline, and thus cannot be hacked or otherwise remotely attacked. As long as you have your hardware wallet and a device to access it with, you will be able to access your funds. But what you gain in remote security is lost in personal security; if you lose your device or it’s physically stolen from you, you lose your bitcoins.
The middle-ground between these is “software wallets” or “desktop wallets” (though these can also be mobile apps). These are on your local device, so even if exchanges go down or are attacked, you still have your bitcoins, and the only way you can lose them to remote exploitation is if you, the specific individual, are targeted and hacked, which is very unlikely. But, it can still be used to conduct transactions and otherwise go online as necessary. That said, this is also vulnerable to loss if you lose your physical device (i.e. if someone steals your computer).

Step 2: Find Your Cloud

Mining companies are the computing clouds or collectives of miners. While joining such a company might be couched in terms of renting the hardware, another way to look at it might be that you are investing.

The amount you invest, or the rate at which you rent, is known as a “mining package”, which you pick once you join a mining company. You can also invest ahead of time in new technology that will be coming out at a later date. That said, investing in something that doesn’t exist yet is always a heavy risk.

There are many sites in which you can find comparisons between companies, including user ratings and reviews. Be careful with the
reviews – while they can be insightful, many are also full of people attempting to get new ‘recruits’ specifically with referral codes, which will net the refer-er a small bonus or profit.

Step 3: Pick Your Pool

A “pool” is basically the team of miners that you choose to join up with, and contribute your invest or computing power. If you are just starting out mining bitcoins, you should start by joining an “older” (or rather, more established and vouched-for) pool, and perhaps one with lower fees. The payout or profit from these will usually be on the low side, but they are also less risky.

As you get the hang of bitcoin mining and learn how pools work, you can start venturing out to other pools that aren’t as established and carry higher risks, but also higher rewards.

Buy Bitcoin, Ethereum, XRP, and other cryptocurrencies on Coinsquare, the world’s home for cryptocurrency.


Coinsquare

Source: Coinsquare: Mining Bitcoin: How to Mine Bitcoin

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Disclaimer: CryptoCanucks.com is not intended to provide tax, legal or investment advice, and nothing on CryptoCanucks.com should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by CryptoCanucks.com or any third party. You alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptocanucks.com/mining-bitcoin-how-to-mine-bitcoin/

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