Cryptocurrencies’ anatomy: How to Make Money from Them 330

Cryptocurrencies’ anatomy: How to Make Money from Them

Today as cryptocurrency rates continue to increase, many potential investors go all-in on digital assets. However, they do not actually consider their nature. The Coin Shark will try to explain these complex issues, make it clear what cryptocurrency is and how you can make money out of it.

History

Back in 1992 former Intel employee Timothy May suggested the idea of a virtual currency that will serve as an anonymous payment tool and will enable people to make financial operations without state control. A bit later, in 1998, another group of enthusiasts proposed to create a chargeless and tax-free monetary system. However all these issues remained unsolved until an unknown stranger called Satoshi Nakamoto suggested the concept of Bitcoin in 2008. He decided to build a chain of information about transactions.

What is cryptocurrency?

This is actually electronic money or digital assets that are created by private computer systems using particular cryptoalgorithms. State authorities and banks can not control such systems.

Such a system has no single secure nod which actions are guaranteed or which can confirm accuracy of other operations. The technology of building a chain of transaction blocks (blockchain) is used in order to solve this problem. Blockchain is the basis for Bitcoin and some other cryptocurrencies’ operation. Separate boxes with stored data are called blocks. All the blocks are connected. So, there is a chain of blocks which explains the name Blockchain. The connection is made by recording a hash-sum of the previous block in new blocks. It is almost impossible to change a separate block because then you will have to hack every block in the chain.

Every participant has their own private (closed) key and a public (open) key. The private key is used for signing a “letter for transfer of property”. This key is the cornerstone of every transaction and it guarantees transaction of cryptocurrency from one participant to the other. The public key is used for confirming blockchain transactions of other participants.

Cryptocurrencies’ anatomy: How to Make Money from Them

How are transactions made?

Special users (miners) help providing transactions. They receive random transactions and distribute them in the chain. After the transaction was confirmed by a miner, every node should add it to its database. Miners are rewarded with Bitcoin or other virtual currency for providing the system with the capacity of their computers.   

How to make money from cryptocurrency?

There are several main ways of making money from cryptocurrency: mining, investments, trade.

Mining is a process of gaining coins for solving the chain of hash blocks. Miners’ capacity or capacity of a computer are used for the process of decryption. Either personal computer or special mining equipment can be used for this.

In order to invest in cryptocurrency, first of all, you should buy it at an exchange and then wait until its rate grows. In this case the most beneficial currencies are developing currencies because their growth is the most rapid. However the risks are also higher.   

The Coin Shark has already published an article about promising cryptocurrencies that can be worth your attention. Besides, we have already given the instructions on how to choose a cryptocurrency exchange.

The other strategy is to invest in popular cryptocurrencies when their rate fall. They have high volatility and can rapidly restore the previous rate.

Previous ArticleNext Article

Leave a Reply

Your email address will not be published. Required fields are marked *

Popular Cryptocurrency Mining Pools in 2018 413

Popular Cryptocurrency Mining Pools in 2018

Mining – rest in peace? Well, many cryptocommunity members have such reasonable fears. The Coin Shark has already written about the possible future of mining industry, however, today mining is still an important and necessary part of cryptocurrency market, and hundreds of thousands of users find the opportunity to gain money out of it. Today The Coin Shark will tell about the most popular pools for Bitcoin mining.

What is a pool?

Mining pools are groups of miners who combine efforts to generate blocks in a blockchain of a particular virtual currency. As the complexity of mining (the amount of computational power, necessary to find hash) increased, solo miners had less and less chances to receive rewards. The more miners are there in the system, the more difficult it is to mine cryptocurrency for each particular miner, therefore, users began to unite in pools. In a pool each miner in fact “digs” only a part of the rock with their “digital pickaxe”, and thus the chances of the whole “brigade” to find hash increase significantly. The reward is then divided proportionally to the processing power provided by each miner. Pools are organized similarly to companies, where every member invests some property to form the capital and then receives profit in proportion to their share. Pools are good examples of parallel computing, where a large number of participants independently (and without duplication of tasks) perform separate parallel computational operations, which makes it possible to find the necessary algorithm easily.

What do pools mine?

We say – pools, we mean – Bitcoin. Yes, those days when individual users were successfully mining Bitcoin seem to be something like an ancient “golden age”. Even though some special mining equipment like ASIC-miners appeared, an individual user is still unlikely to successfully mine BTC on their own. So, mining pools became rather attractive for those who decided to earn bitcoin instead of buying it.

Today miners also unite to “extract” other popular coins. For example there are many pools for Ethereum, Dash, Litecoin, Monero, Dogecoin, Bitcoin Gold, Zcash, etc., even though many of them can be successfully mined by individual users with graphic cards or even processors.

Popular pools for Bitcoin mining

1.Slush Pool

Chinese pools have always been leaders of the mining industry, however, the first pool ever is the Czech Slush Pool. It was founded in December 2010 and became the first bitcoin mining pool. Since then, Slush Pool miners have mined more than a million BTC and the service itself has become one of the most popular pools all over the world. Slush Pool has many secure servers in different countries, and user accounts are protected with two-factor authentication. Users of this pool can also mine Zcash. Slush Pool is indeed rather popular and has a very good reputation, however, its market share is smaller, compared to Chinese services.

2. Antpool

Antpool is a large Chinese pool and one of the top mining pools on the market. In addition to bitcoin, users can also mine Ethereum, Ethereum Classic, Zcash, Litecoin, Bitcoin Cash, Bytom, Monero, Siacoin and Dash. This pool pays daily rewards and is rather stable. Antpool also offers cloud mining with its HashNest service. The pool is owned by a Chinese company Bitmain – one of the largest and leading manufacturers of mining equipment. In addition, the company is also engaged in artificial intelligence development.

3. F2Pool

F2Pool is a popular Chinese service, operating since 2013. This pool supports a large number of coins – except for bitcoin, users have an opportunity to mine 14 more altcoins (including such popular cryptocurrencies, as Ethereum, Monero, Litecoin, Zcash, etc.). The service also enables its clients to mine several virtual currencies at the same time. F2Pool was a market leader in terms of hash rate for a long time, and today remains one of the top cryptocurrency pools.

4. BTC.com

BTC.com is an another large Chinese pool that currently leads the market. This one of the largest and most popular mining platforms was launched in 2016 and is also owned by the company Bitmain. In late April 2018, BTC.com reported to have mined 17-millionth bitcoin. So there are only 4 million coins more to come. Although the pool does not publish statistics on the number of users, Alejandro de la Torre, BTC.com vice president for development, told Coinlife that there are more than a million people using the service.

5. Viabtc

Viabtc is a true “Asian tiger”, founded in 2016, that became one of the mining industry leaders less than in one year. Like many other pools, it was initially “specialized” in bitcoin mining but introduced some other popular altcoins throughout its operation. Today its users can also mine Ethereum, Ethereum Classic, Zcash, Litecoin, Bitcoin Cash and Dash. Moreover, the pool offers cloud mining services. What is interesting about Viabtc is that it often has different loyalty programs to attract new users and strengthen relationships with “regular customers.”

Subscribe to The Coin Shark news in Twitter: https://twitter.com/the_coinshark

 

NEO: History of Creation and Prospects 415

NEO: History of Creation and Prospects

” I’m trying to free your mind, Neo. But I can only show you the door. You’re the one that has to walk through it.”

Today The Coin Shark will talk about NEO, not Mr. Anderson, but a chinese cryptocurrency that is currently one of the most popular altcoins and is ranked #11 by market capitalization (May 2018).

How it all started

In 2014, Da Hongfei founded the OnChain blockchain company in Shanghai and launched the AntShares (ANS) cryptocurrency project. AntShares used smart contracts,and as the new virtual currency gained popularity, one even called it the “Chinese Ethereum.” In 2016, the company made a full rebranding. It changed from its technical documentation and website, the platform and its blockchain. The project and the cryptocurrency was called NEO.

After this rebranding, the rates increased from 1 to 7 USD, and soon reached 30-40 USD. In August 2017, NEO`s market capitalization was already 2 billion dollars. However, in September 2017, the project was affected by chinese crypto restrictions, in particular, the ban on Initial coin offerings. The company was holding its ICO but had to return investments. A serious outflow of capital led to the price fall below 10 dollars.

Anyway, the developers managed to go through and we can clearly observe it now, as NEO has its place among top digital coins on the market.

What is the NEO platform and how does it work?

NEO is a blockchain platform and cryptocurrency, designed to build a scalable network of decentralized apps. The main asset of the platform is the digital currency NEO that also generates GAS, which can be used to pay commission fees in the system.

The project developers aimed to create a new model of economic relations, which they called smart economy. The concept includes three key elements – a platform for smart contract operation, digital assets and digital identity. NEO can be used to “digitize” and then exchange any asset, like gold, fiat money, cryptocurrency, real estate, etc. Smart contracts will help make commercial deals to exchange these assets without lawyers, banks, payment systems, etc. Digital identity is used to connect real and digital assets.

Developers issued 100 million NEO coins. The current circulating supply is 65 million. It is not possible to mine this cryptocurrency, however, if you have a certain number of NEO on your account, you are automatically credited with GAS – platform internal currency that is used to pay commission fees.

Advantages and drawbacks of NEO

NEO network capacity is significantly better than such strong altcoins as Ethereum and Ripple have. Moreover, the platform is rather secure as an advanced dBFT protocol implemented in NEO protects the system from almost any cyber attacks.  What is also important, it is quite simple to write smart contracts. Unlike Etherium itself, that has a special and complicated Solidity programming language, “Chinese Ethereum” supports Java, F#, C#, Kotlin, VB.Net, Microsoft.net, Go and Python. What is more, although the system has commissions for transactions, users are credited with GAS tcoins automatically if they have a certain number of NEO on their accounts.

However, users often criticize NEO for its lack of anonymity and centralization. OnChain company controls most of NEO blockchain nodes, can see transaction history of users and track transactions on the platform. The company is looking for cooperation with the traditional financial and banking sector, as well as with the government, which means users probably are not to expect increasing anonymity and decentralization.

What can happen in the future

NEO is already rather successful. The project is focused on cooperation with large companies such as Microsoft, Alibaba, HyperLedger, etc., and also tries to adapt to the tough crypto environment in China, that nevertheless remains one of the largest cryptocurrency markets. NEO uses and develops the technology of smart contracts, which is considered to be one of the most important and promising implementations of blockchain. Today, the cryptocurrency costs about $60, however its rate used to exceed $150 and can potentially “come back”. Anyway, it’s difficult to say what will happen to NEO in the long term but if you decided to invest in digital assets, you can certainly include some NEO coins in your portfolio.

Subscribe to The Coin Shark news in Twitter: https://twitter.com/the_coinshark