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Dienstag, 21. März 2017

Mining of Cryptocurrencies - Development and Status Quo

Mining is the complex computing process that creates cryptocoins like Bitcoin. [Bitcoin is the first and most important cryptocurrency, but there are many alternative currencies like Ether, Dash or Litecoin.] Mining enables the integrity of the so-called blockchain by cryptologically verifying each transaction and establishing a public transaction directory.
At the beginning of the Bitcoin era it was profitable to mine bitcoins with a PC. Since the energy required to produce a single coin is increasing steadily [see difficulty] it is no longer reasonable to use a PC and / or graphics cards cause the electricity costs are much higher. Even if you team up with other miners and form a so-called mining pool, it is difficult to be profitable. This only works if you have the latest devices designed specifically for mining [so-called ASICs] and if the costs for electricity and cooling are also low. In addition, the mining distributions are halved within foreseeable cycles [see halving] since there can only be a finite number of coins. [In case of Bitcoin 21 million units].
For these reasons the so-called cloud mining has developed over the past two years. In order to be able to make profits companies were founded that moved the mining to places where the electricity fees are low and the conditions for cooling are ideal [e.g. Iceland]. There were then ASIC mining devices installed, on a large scale of course, so that one can speak of a mining farm.
Cloud mining is being financed by the customers who "rent" computing power [hashpower]. This enables more flexibility for investors since no complete device has to be purchased. Even small amounts of hashpower can be purchased. This also makes diversification pretty easy cause parallel mining of different cryptocurrencies is possible.
The leading suppliers use the latest technologies and they can also buy the required devices cheaper. It makes a difference whether one buys thousand ASIC devices or just one. Therefore cloud mining revenues are usually higher than those from home mining attempts. They could be still higher, but a part of the money is retained by the provider of course. However, given a positive market development it is a win-win situation. In addition, as a cloud miner you do not have to worry about electricity, maintenance or hardware updates. This is all done by the provider.

Btw: If a mining provider holds more than 50% of the total hash power of a given currency, the situation could become risky. Then a manipulation of the blockchain would no longer be impossible. This scenario is actually an important topic for the developers.

Two more sentences on Ethereum: The Ethereum platform is, in a sense, the first "world computer". Realized as a decentralized network, the platform can be used by everyone to run applications without the possibility of downtime, censorship or fraud.
Ether, the systemic currency of Ethereum, is next to Bitcoin the fastest growing cryptocurrency. Ethereum is still at the beginning. How important the platform will become is not foreseeable yet. Optimists already speak of Web 3.0.
So if you are willing to make an interesting investment, then you should speculate in Ether. The chances of investing in a lucrative future project are not bad. However, total loss can not be ruled out. This applies for known reasons [hackers, potential security gaps, regulation or prohibition by authorities, internet failure] to all cryptocurrencies.

For all of those who would like to invest in cloud mining, I recommend Genesis Mining. I have made good experiences with this provider. Here is a promo code with which you save 3% on every purchase: Y9FsAk
Happy Mining! bbc