Tag: bitcoin mining

How Does Cloud Bitcoin Mining Work? And How To Earn 1 BTC

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If you want to invest in bitcoin mining without the hassle of managing your own hardware, there is an alternative. You can use the cloud to earn your coins.

Put very simply, cloud mining means using (generally) shared processing power run from remote data centres. One only needs a home computer for communications, optional local bitcoin wallets and so on.

However, there are certain risks associated with cloud mining that investors need to understand prior to purchase.

Pros

Here’s why you might want to consider cloud mining:

  • A quiet, cooler home – no constantly humming fans
  • No added electricity costs
  • No equipment to sell when mining ceases to be profitable
  • No ventilation problems with hot equipment
  • Reduced chance of being let down by mining equipment suppliers.

Cons

Here’s why you might not want to consider cloud mining:

  • Opaque mining operations
  • Less fun (if you’re a geek who likes system building!)
  • Lower profits – the operators have to cover their costs after all
  • Contractual warnings that mining operations may cease depending on the price of bitcoin
  • Lack of control and flexibility.
  • Types of cloud mining
  • In general, there are three forms of remote mining available at the moment:

Hosted mining

  • Lease a mining machine that is hosted by the provider.
    Virtual hosted mining
  • Create a (general purpose) virtual private server and install your own mining software.
  • Leased hashing power
  • Lease an amount of hashing power, without having a dedicated physical or virtual computer. (This is, by far, the most popular method of cloud mining.)

How to determine profitability

We have previously covered ways to calculate mining profitability. However, the web services offered are designed to work with your hardware parameters, not cloud-mining parameters.

Even so, you can still use these calculators by thinking clearly about the costs involved. Profitability calculators (for example, The Genesis Block) often ask for your electricity costs, and sometimes the initial investment in hardware. Effectively, you are being asked for your ongoing costs and your one-off investments.

Therefore, since the provider, not you, is paying the electricity bills, you can enter the monthly mining bill in place of the electricity cost.

The conversion process isn’t completely straightforward, though. In the case of hardware miners, you can work out the monthly running cost by multiplying your electricity charge (ie: $ per KWh) by the power consumption of the unit and by a conversion factor of 0.744 (the ratio of seconds per month to joules of energy per KWh).

But, for cloud mining calculations, you need to do the opposite, because the provider gives you an (effective) monthly running cost. Hence, you need to calculate an equivalent cost per kilowatt hour to feed into the mining calculator. This is done by dividing (not multiplying) the monthly running cost by the 0.744 conversion factor mentioned above.

Risk vs reward

When engaging in any type of cryptocurrency mining there are risks, but profitability is possible if you make the right choices. In this article, we’ve given you some pointers on how to decide which way to go.

In your test calculations, you will likely see that some cloud mining services will be profitable for a few months, but, as the difficulty level of bitcoin increases, you would probably start to make a loss in four to six months and beyond.

A possible remedy to this situation is to reinvest what you have made into maintaining a competitive hashing rate, but this is highly speculative.

As mentioned above, the risk of fraud and mismanagement is all too common in the cloud mining space. Investors should only invest in cloud mining if they are comfortable with these risks – as the saying goes, never invest more than you are willing to lose.

Investigate social media channels, speak with former customers and ask pointed questions of operators prior to investing. Ultimately, you should practice the same kind of due diligence that you would for any investment.

Disclaimer: This article should not be viewed as an endorsement of any of the services mentioned. Please do your own research before considering investing any funds via these services.

Why Satoshi Nakamoto Deserves a Nobel Prize

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Alfred Nobel died with regrets. After making a fortune off of explosives, he indicated in his will that his fortune should be used to make a prize awarded each year to those who “conferred the greatest benefit to humankind.” By all accounts, his namesake award has been a success — winners are curing cancer, ending wars and discovering exotic bosons. Only a handful of humanity has won a Nobel Prize — be it in medicine, physics, chemistry, literature, economics or peace — all of them distinguished for their exceptional work.

Yet the 123-year-old institution has grown increasingly moribund, devolving into a system in which a council of predominantly old men dole out their honors to other old men, often remarkable for their work but relatively unknown outside the small circle of their community. As a result, the prize has grown almost entirely insulated inside academia, separate from more widespread advancements being made in the wider world. So in an attempt to reconnect with the public, the Swedish Royal Academy of Sciences has begun to recognize more controversial figures. When the committee wanted to revitalize the prize for literature, they awarded Bob Dylan. So who could they choose to do the same for the economics prize?

Satoshi Nakamoto, the anonymous creator of Bitcoin.

This would be no stunt: Satoshi Nakamoto deserves a Nobel Prize. For the first time in human history, Nakamoto devised a way to remove trust from financial interactions. The creation of Bitcoin is a concrete, irreversible event that today affects the lives of hundreds of thousands of people. It created the foundation for technology that would produce the blockchain, smart contracts and the economic theory of asset tokenization. Most people on the street have heard of Bitcoin. The same cannot be said for Contract Theory or Behavioral Economics — the fields of study that garnered the prize for the most recent laureates. That’s not to cheapen their work — it takes a brilliant mind to advance an entire academic discipline — but cryptocurrency has perhaps had a more public impact on modern economics. It deserves recognition.

Some distinguished academics have even acknowledged this milestone. Dr. Bhagwan Chowdhry, Professor of Finance at UCLA, was asked in 2016 by the Nobel Committee to nominate someone for the prize, and he chose Nakamoto. The committee, unfortunately, rejected this out of hand, due to Nakamoto’s infamous anonymity. The press officer of the Swedish Royal Academy of Sciences said in a statement after the rejection that “the prize, as in this instance, the Sveriges Riksbank Prize in Economic Science in Memory of Alfred Nobel, is never awarded anonymously nor posthumously.”

Dr. Chowdry had a response ready for this critique. As a fix, he proposed accepting the prize on his nominee’s behalf after giving a speech written by the winner, with the prize money being converted into bitcoin and sent to Nakamoto’s most likely digital address. This makes laughable the idea of Nakamoto being an inaccessible hermit. All that would be missing from a ceremony would be the winner’s physical body. In the digital age, where words can be sent instantaneously across the globe, physical presence becomes insignificant and makes Nakamoto’s anonymity immaterial to their presence in the room.

If the committee’s obstinance stems instead from a belief that winners must suborn themselves before the Royal Swedish Academy of Sciences, then perhaps they should ask themselves what is more important: the pride of the institution or the achievement of the honoree. Nakamoto would be a challenging winner, for sure: his lack of institutional credit flies in the face of the steady pedigrees that hold up the credibility of the Nobel Prize. But sometimes, subversion infuses an old system with new vigor. The world needs doctors to understand and appraise its systems, but it also needs hackers, disruptors and other such malcontents to, at times, redefine these systems at their core. These actions form the life cycle of any economy, but thus far only the former have received any formal accolade.

At a time of tremendous technological and social transition, the committee would show prescience by elevating the work of one of the world’s most dedicated disruptors. The creation of Bitcoin and cryptocurrency marks the most drastic innovation in the economic sphere since game theory, and should be directly honored as such. As the originator of the technology’s philosophy, Nakamoto deserves to be honored for their contribution to the economic thought of the 21st century: a decentralized medium of exchange, self-guaranteed by technology in a way that was not possible at any previous time in human history.

Given Nakamoto’s anonymity, this honor would be a symbolic one (although the cash prize would not), but an anonymous award perhaps suits cryptocurrency best. Bitcoin came about through collaboration and continues to expand and improve through the efforts of a dedicated community of cryptocurrency experts. To give any one of them a Nobel Prize would belittle the contributions of the rest. Satoshi Nakamoto, as an unknown representative of the entire field, can become a symbol for the whole of cryptocurrency, which deserves the world’s attention regardless of those involved.

If the committee’s only grounds for denying Nakamoto’s nomination are that he won’t present himself, then the Nobel Prize could stand a little decentralization. Alfred Nobel established a prize in his name to foster the ideas and attitudes he wanted to see in the world. The Nobel Prize has never, at its core, cared about those who won it over the reasons why they won. They helped improve the world, and if someone else had done it better, they would have won instead. On the subject of Nakamoto’s nomination, on which the committee is caught between tradition and spirit, the moribund institution of the prize needs revitalization. A dash of controversy keeps things fresh. Let crypto start the next conversation.

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Bitcoin Mining Hack Trick Only This Bitcoin Trick Will Earn You 1 Bitcoin Through Mining

Published / by Jonathan / 1 Comment on Bitcoin Mining Hack Trick Only This Bitcoin Trick Will Earn You 1 Bitcoin Through Mining

In the Bitcoin system, the production of all the new money is done on a stable base. This money is equally paid to those who operate the Bitcoin network by doing Bitcoin mining.

Making money with your computer

So yes, Bitcoin mining allows to make money by letting a computer work. However! Bitcoin mining is a free and open market. It is not a easy way to make money out of thin air.

Gains with Bitcoin mining are proportional to the power of computer hardware to solve the mathematical calculations. The whole network is powered by these calculations, which rewards you for your services. To be profitable, Bitcoin mining have to generate profits despite the cost of equipment and the electrical cost to operate at full capacity. That may be difficult.

Technologies used for Bitcoin mining

At the dawn of Bitcoin, classic computers were enough to run the network. However, competition has intensified gradually as the use Bitcoin increased as a dynamic market. In order of effectiveness, CPU processors, ATI graphics cards and FPGA chips succeeded to each other. Today, all these technologies are outdated and are no longer profitable.

Due to strong competition, ASIC is the only technology that can now offer potential income. An ASIC chip is a chip specialized to perform specific calculations. Some companies such as Avalon and ButterflyLabs faced the challenge of producing ASICs for Bitcoin network. ASIC chips can produce up to 40 times more calculations per second than a graphic card for the same price with a much lower power consumption. However, unlike graphics cards, ASICs have no resale value outside of a use with Bitcoin.

Pool have more stable incomes

When starting with Bitcoin mining, it is important to understand that a computer has very little chance of solving a mathematical problem aired by Bitcoin. It is a matter of chance. The more powerful is the equipment used, the more it can make attempts per second, increasing the chances of success. However, without buying a fleet of very expensive ATI cards, Bitcoin mining alone can take weeks, months or years before touching any gain.

The pools are small cooperation of bitcoins miners who wish to combine their strength in order to share Bitcoins earned fairly. Being part of a pool is the best way to raise Bitcoins stably when you don’t wish to invest heavily in computer parts. Many free open pools exists, such as bitminter.

the evolution of incomes with Bitcoin mining over time
Bitcoin mining is not a guaranteed investment. Indeed, the income can be earned with Bitcoin mining depend on several things. The value of the BTC (Bitcoin) is the first of all, because the value of Bitcoin fluctuates according to supply and demand. Since the creation of new BTC is stable and limited, an increase in demand for Bitcoin also means an increase in its value, and vice versa.

Competition and the difficulty are also important factors. The more there is people mining, the more the mathematical difficulty factor to generate Bitcoins increases, because the network Bitcoin is designed so that the same amount of money is created each month, regardless of the number of people working to generate this amount. This way, Bitcoin mining is a perfect market. If Bitcoin mining is too profitable, new investors arrives and dilute earnings. When Bitcoin mining is not profitable enough, some investors abandon, increasing the gains of subborn investors.

It is also interesting to note that the creation of new BTC is designed to gradually stop. Deprived of this source of income in the coming years, then Bitcoin miners will increasingly perceive optional transaction fees. Since transactions with fees are likely to be processed more quickly by the Bitcoin miners, banks and network users will be likely to add a tiny fee like a fraction of a cent for certain transactions.

How to start Bitcoin mining

The bitminter pool probably offers the easiest way to start without having computer knowledge. You can simply register with bitminter and click to start their software. The software immediately displays the calculation speed your computer gets to reach and earnings are displayed consistently and rapidly inside the bitminter account. It is then possible to transfer the obtained Bitcoins Bitcoin to an address that belongs to you.

In contrast, if you want to make Bitcoin mining alone, the procedure is generally more complicated. It requires to install the bitcoin software on a computer and change its configuration to start in server mode. Then, it requires to use a specialized command line software such as poclbm or cgminer on each computer used to generate Bitcoins. This software must connect to the server to receive Bitcoin calculations to be done and transmit the results.

There is also a possibility to avoid centralized pools and take good sides of both world with p2pool, which is a decentralized pool. It is still more complicate to setup than just using bitminter. However, you don’t rely on a pool that is vulnerable to DDoS attacks or dishonnest pool owners practises and you get paid directly on your Bitcoin wallet without intermediate.

Participating on the Bitcoin network operations

Bitcoin mining is a way to participate in the Bitcoin network operation. Some only sees Bitcoin mining as an investment since it is designed to be an open and competitive market. Still, some people involved in Bitcoin mining also do it for the interest of helping the network to function. Each computer used for Bitcoin mining allows the system to verify the validity of each transaction and protects the network from any form of attack.

Bitcoin mining giant Bitmain reveals IPO plan

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One of the cryptocurrency world’s most powerful, controversial and secretive companies just opened its books for the first time. Bitmain Technologies, the virtual currency mining firm co-founded by billionaires Jihan Wu and Micree Zhan, released its first public financial statements in a Hong Kong regulatory filing late Wednesday. The disclosure, which also confirmed Bitmain’s intention to pursue an initial public offering, follows months of speculation about the company’s listing plans and its potential vulnerability to a more than $600 billion rout in digital assets since January.

Here are some highlights from Bitmain’s filing:

Profit rose almost ninefold to $742.7 million in the first half from a year earlier Revenue rose about 10-fold to $2.8 billion in same period Adjusted return on equity of 58.9% Bitmain held $886.9 million of cryptocurrency assets at the end of June, or about 28% of total assets Company recorded an impairment loss of $102.7 million on crypto assets in the first half; impairment provision on inventory of $252.7 million Inventories swelled to $887 million from $558 million at end 2017 Volatile markets may require “significant provisions” on inventories and crypto holdings Mining hardware sales make up 94.3% of revenue; mining pools 1.5%; mining farms 0.8%; proprietary mining 3.3%; others 0.1% Company has adopted a dual-class share structure, giving co-founders Wu and Zhan control China International Capital Corp. is the IPO sponsor

Founded in 2013, Bitmain is one of the biggest companies to emerge from the boom in digital assets that propelled Bitcoin to a 15-fold gain last year. As both the largest operator of Bitcoin mining collectives and the dominant supplier of virtual currency mining machines, the firm has enormous influence over the global crypto ecosystem—a role that has troubled members of the community who disdain anything resembling a centralization of power.

Yet questions over the sustainability of Bitmain’s meteoric rise have been multiplying in recent months. The 2018 tumble in virtual currency prices threatens both the profitability of Bitmain’s mining operations and demand for the custom chips it sells to other miners. Meanwhile, competition in the mining-gear business has grown more intense.

Two of Bitmain’s biggest rivals—Canaan Inc. and Ebang International Holdings Inc.—are also pursuing IPOs in Hong Kong as they seek funding for a technological arms race. Bitmain risks losing its competitive edge, Sanford C. Bernstein & Co. analysts wrote in a report last month.

For now though, Bitmain is still the industry bellwether, with a market share in crypto mining gear estimated by Frost & Sullivan at nearly 75%. If the company proceeds with the IPO, it will represent a major test of whether investors view virtual currencies as a temporary fad or an innovation with staying power. A Bitmain listing—with its myriad public disclosure requirements—may also help reduce the opacity of an industry that skeptics say is under-regulated and prone to misbehaviour.

“From the initial numbers I saw, it’s quite encouraging,” said Jehan Chu, managing partner at blockchain investment and advisory company Kenetic Capital. The firm invested in Bitmain during an earlier round of funding, Chu said. “It’s great to have actual clarity, validated documents to shed some light on the company’s actual status and actual performance.”

The company has yet to disclose a target valuation or say how much it wants to raise from its IPO. People familiar with Bitmain’s plans told Bloomberg last month that the share sale may raise as much as $3 billion. The company has repeatedly declined to comment when asked for details of its listing plans.

Bitmain’s main product is called the Antminer, a server-sized box that sells for a few hundred to a few thousand dollars. Instead of the various parts that make up a traditional PC, Antminers are filled with dozens or hundreds of high-powered chips, known as ASICs, that perform the brute-force number crunching needed to verify virtual currency transactions. Customers are mostly large mining operators in places with cheap electricity.

While Bitmain gets most of its revenue from mining equipment sales, the company also runs some of the world’s biggest mining collectives, in which members combine their processing capacity and split the rewards.

Wu has said he wants Bitmain to branch out into non-crypto fields such as artificial intelligence, where ASICs also play an important role. In an interview earlier this year, he estimated that as much as 40 percent of Bitmain’s revenue will come from AI chips within five years. But skeptics, including Sanford C. Bernstein analyst Mark Li, have said a successful push into AI is far from certain.

There’s also no guarantee that investors will flock to Bitmain’s IPO, especially given the recent weakness in Hong Kong’s stock market.

The city’s benchmark Hang Seng Index has dropped 16% from this year’s high in January, one of the biggest declines among major markets worldwide.

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