Now You Can Pay For Your University Degree With Cryptocurrency

Now You Can Pay For Your University Degree With Cryptocurrency

Now You Can Pay For Your University Degree With Cryptocurrency

Cryptocurrency has taken the online e-currency market by storm in recent years. The likes of Bitcoin have gone all out and it’s currently the fastest growing e-currency in the world by a considerable margin. As of July 2017, Bitcoin has made investors billions and it’s currently worth more than $2,200 apiece. It’s uncertain how much further the value of Bitcoin is expected to grow, but as its market cap alone was valued at more than $40 billion in May 2017, it’s certainly a cryptocurrency worth implementing online.

That’s why many merchants and businesses and e-commerce stores have sided with cryptocurrencies such as Bitcoin. It seems they are the go-to e-currencies right now, along with the standard PayPal and Skrill payments.
 

THE E-COMMERCE INDUSTRY HAS SEEN A RISE IN MERCHANTS IMPLEMENTING BITCOIN

Popular domain registrar, Name Cheap, has been accepting Bitcoin for a while now and it’s businesses like that that have seen a rise in consumers because of the popularity of cryptocurrencies like Bitcoin.

Many web developers now use Bitcoin as a standard payment method for their web development resources such as domain registration, web hosting, and even as their primary method for their own web development businesses.

 

ONLINE BOOKMAKERS HAVE BEEN USING BITCOIN FOR YEARS

While many official bookmakers haven’t quite got to grips with cryptocurrency yet, there are still several online bookmakers that have implemented it as a deposit and withdrawal payment method. It looks set to grow in popularity with bookmakers in 2017 because it offers a fast and easy deposit method, much like the process PayPal and Neteller offers.

UNIVERSITY OUTLETS HAVE SEEN A RISE IN CRYPTOCURRENCY IMPLEMENTATION

Those studying for an online healthcare MBA using a healthcare MBA online program now have it easy when it comes to paying for their online courses. With cryptocurrency now available as a payment method, many more students have opted to obtain their degree using online courses provided by multiple universities around the United States.
 

POPULAR ONLINE MARKETPLACES NOW USE BITCOIN

While the likes of Amazon have still yet to implement Bitcoin as a payment method, there are still other stores that use it. For those with Shopify stores, for example, Bitcoin is a payment available to both you and your customers.
 

Shopify is one of the few stores and e-commerce set ups that have provided Bitcoin as a payment option for more than three years. Shopify announced in November 2013 that the cryptocurrency was available for all merchants to implement into their own set ups. It’s unclear whether any of the other big marketplaces will implement it anytime soon, but it’s not a matter of if they are going to implement it, it’s a matter of when.

Although Bitcoin holds the number one spot as the most popular cryptocurrency available, there are still other fast-growing currencies that are providing much bigger competition. It is clear Bitcoin is loved by many and it’s almost certain to be a popular payment method with bigger e-commerce stores in the future.
 

David Ogden
Entrepreneur.

David ogden Cryptocurrency entrepreneur

 

Author: Oliver Wood

 

Alan Zibluk – Markethive Founding Member

Delaware Governor Signs Blockchain Legislation Into Law

 

The governor of the US state best known as the home

to a majority of the country's incorporated businesses has officially signed a bill making it explicitly legal for those entities to use blockchain for stock trading and record-keeping. After weeks of anticipation, Delaware governor John C. Carney Jr. signed the bill on Friday, effectively bringing closure to an effort that began in May 2016 when his predecessor, Jack Markell, launched an initiative to promote blockchain efficiencies in government.

First publicized in March this year and introduced formally in May, the bill, which amends Delaware's General Corporation Law, saw a swift passage by state lawmakers. The move further comes weeks after it passed a key vote in the state legislature, a milestone advocates sought to label as "historic" given the state's history and the increase in experimentation that could result from legal certainty. Just how impactful could the law be? Industry analysts suggest that by giving the greenlight to experimentation, the law could make it possible for the custodianship, issuance, redemption and trading to take place on a distributed ledger.

Equity Markets on a Blockchain: Delaware's Potential Impact

Noelle Acheson is a 10-year veteran of company analysis and the author of CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to CoinDesk subscribers.Last week, Delaware passed amendments to state legislation that, once signed into law by the end of July, will give corporations registered in the state the right to issue and trade shares on a blockchain platform.While this may on the surface sound like a small modification, it is a big deal. Companies and exchanges around the world have been investigating how distributed ledgers could help with issuance, execution and settlement (some have even issued shares on a blockchain). However, they have been doing so under a cloud of regulatory uncertainty, unsure of whether the stakeholders – including the relevant governing bodies – would allow the innovations to take hold.

For the first time, businesses will be able to experiment with new processes knowing they have the protection of the law. This is likely to pave the way for the entire life cycle of a share – the issuance, custodianship, trading, shareholder communication and redemption – to be enacted on a blockchain. The result could be a reframing of the global securities network, one of the cornerstones of our modern capitalist economy. The equity infrastructure used in most markets today evolved around paper-based issuance, and essentially has the same conceptual backbone as in the 17th century. Processes are complex, involving several steps, each with fees. Centralized clearing creates systemic risk by presenting a single point of failure, and since in most jurisdictions legal ownership rests with the transfer agents, true ownership can be obfuscated – in turn, this can violate rules that limit shareholdings. Furthermore, a paper-based system – even a digitized one – is vulnerable to fraud, and centralized databases can suffer security breaches.

Settle for less

With a blockchain system, investors and issuers can interact directly with each other, in theory cutting out brokers, custodians and clearing houses, thus reducing transaction costs. Settlement can happen within hours instead of days, releasing funds and lowering carrying fees. Legal ownership would be restored to investors and companies, and would be more transparent. Dividends and stock splits could be automated, reducing cost and error.

Also, a distributed ledger platform would remove the single point of failure risk, help make proxy voting more transparent and accurate and make it easier to manage cap tables as well as collateralisation. There are disadvantages. Transparency, for one: not all investors want their positions to be visible. Error resolution is another: mistakes happen, and on an immutable ledger, how do you fix them? What’s more, counterparty risk doesn’t go away, it just shifts. But as work on services and solutions picks up in the light of regulatory approval, so will the development of solutions.

Share the benefits

That this milestone was reached in Delaware is significant. The state is 49th in the nation in terms of size and 45th in population, but it boasts two-thirds of US listed companies and 85% of IPOs. It has more registered legal entities than it has residents. This is due to its relatively flexible business legislation and tax framework, and to its reputation for being a standards bearer in corporate law. What’s more, the recent amendment is part of a larger initiative to streamline corporate and governmental processes. The Delaware Blockchain Initiative, launched over a year ago, commits the state’s government to incorporating blockchain technology in the handling of official documents such as land titles, birth and death certificates, professional licenses, collateral claims and company filings.

So, here we have the US state with the largest concentration of registered corporations, and a reputation for supporting innovation, offering businesses the chance to test a new form of financing and governance. While adoption will probably be slow, at least at first, the pace is likely to pick up as the benefits become even more apparent. Other jurisdictions could follow suit to avoid losing a chunk of their domiciled businesses. And the structure of financial markets could start to gradually, but fundamentally, change. While the Delaware amendment won’t create a market revolution overnight, it does raise a question which highlights the systemic importance of the move: Will traditional equity markets still exist 10 years from now?

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to Learn more about -Bitcoin.

Alan Zibluk – Markethive Founding Member

Ripple has risen by almost 3,000% this year

Ripple has risen by almost 3,000% this year

Ripple has risen by almost 3,000% this year

It’s not just Bitcoin and Ethereum posting astonishing gains. Ripple, a cryptocurrency based out of San Francisco, has risen in value by almost 3,000% this year.

 

One Ripple token, known as XRP, is currently valued at just below US20 cents. XRP started the year at the fractional value 0.0065, but experienced rapid growth in the June quarter as transaction volumes increased.

 

According to a report by CNBC, that growth was primarily driven by plans to set up a platform for the sale of XRP tokens.

 

XRP tokens differ from Bitcoin and Ethereum in that most of them are owned by the Ripple network itself and can’t be mined.

 

Ripple rose as high as US26 cents in June taking its annual gain to almost 4,000%, before falling back in July.

Ripple’s total value of $US7.6 billion makes it the third biggest cryptocurrency in the world by market capitalisation.

 

Bitcoin has a market cap of $US44.8 billion, while Ethereum is valued at around $US21 billion.

 

Ripple’s head of XRP markets, Miguel Vias, told CNBC that Ripple had a specific strategy focused on international payments and had already partnered with large global banks.

 

“With respect to XRP, we are incredibly focused on international payments, I think we are probably the only digital asset that has a clear use case with respect to what we are trying to do with the asset,” Vias said.

 

Ripple has partnered with around 30 digital asset exchanges, and is positioning itself in the market as a faster faciliation network for international transactions.

 

CNBC reported that the Ripple network processed over $US11 billion worth of transactions in the June quarter.

 

The company’s CEO, Brad Garlinhouse, said Ripple has a processing speed of around 70,000 transactions per second.

 

That compares to Bitcoin’s current volume capacity of around 7 transactions per second. The Bitcoin developer community is in the process of setting up a new platform which is expected to double transaction speeds.

 

Last year, Ripple announced the setup of its first interbank global payments group, which included Westpac, Bank of America Merril Lynch and the Royal Bank of Canada.

 

“With respect to growth and outreach, we will continue to partner with digital asset exchanges for listings and mostly importantly … it is really all about payments and in this quarter, you will see some very interesting developments with respect to our partnership in payments, with respect to XRP in particular,” Vias told CNBC.

 

Time will tell whether the value of the XRP tokens traded on the Ripple network will continue to maintain their recent rate of growth.

 

David Ogden
Entrpreneur

cryptocurrency entrepreneuer

 

Author: Sam Jacobs

Alan Zibluk – Markethive Founding Member

The crypto-currency craze

The crypto-currency craze

The crypto-currency craze

 

In the late 1990s, as investors woke up to the promise of the internet, shares in any company with dot.com after its name soared to giddy heights.

Then the bubble burst.

Now there are warnings of another technology investment bubble – this time related to the fascination with crypto-currencies such as Bitcoin.

On the Tech Tent podcast this week, we examine the phenomenon of ICOs – Initial Coin Offerings – which have seen over $1bn raised so far this year from investors who get little more than a token and a vague promise of involvement in a new business.

The term ICO – designed to mirror the IPO that sees a firm issue shares and float on a stock exchange – seems to mean different things to different people. Early versions were simply ways of getting a new crypto-currency off the ground, but now many are promising to use the blockchain technology that underpins Bitcoin and similar currencies to create businesses.

Among the ICO projects listed by Smith + Crown, which researches the crypto-currency scene, is a business raising money to create the world's most lucrative lottery based on blockchain, and another that promises to rent out high-quality office space using digital tokens.

On Tech Tent, we talk to an entrepreneur who is boldly going into uncharted territory with this new investment technique. Pavlo Tanasyuk is the founder of Spacebit, which aims to create what he calls "a distributed space agency unshackled by state or national sponsorship".

Next month, he will invite investors to take a stake in this venture, which he describes as a crypto version of Elon Musk's Space X. He will only accept payment in Bitcoin, Ethereum or other crypto-currencies and in return backers will get tokens and a role in deciding how the business is run.

But the finance blogger Frances Coppola has compared ICOs to the tulip fever of the 16th Century and other investment bubbles.

"The enthusiasm for ICOs is coming off the back of the Bitcoin and Ethereum booms," she says.

She warns that such schemes are completely unregulated, and fears that many who invest in them simply won't understand what they're getting into.

"There will be scams in this – I'd be astonished if regulators aren't looking at this."

Even Pavlo Tanasyuk concedes there is plenty of risk attached to this kind of investment. "Ninety-five per cent won't deliver – but we will. It's important to set an example. We're doing something real and have a strong management team in place."

When the dot.com bubble burst, it became clear that many investors had not really understood what the firms they were backing actually did or the nature of the technological challenges they faced. Today, the world of crypto-currencies and the blockchain looks even more impenetrable.

Consider this description of one project, Neverdie, which has already raised more than $2m (£1.5m) in an ICO: "A virtual reality infrastructure platform that bridges virtual worlds with popular MMORPGs [massively multiplayer online role-playing games] on the Ethereum blockchain."

Doubtless those who have bought the coins that are meant to fund this vision have read the white paper describing the project, and the disclaimer at the end: "Neverdie Coins and Teleport Tokens do not represent ownership in any real-world companies. These tokens are designed to activate virtual utilities."

Real money is going into a virtual world and if it disappears in a puff of virtual smoke, no regulator will be there to cry foul. Let's hope those who back these kind of ventures are going into them with their eyes open.

 

David Ogden
Entrepreneur

David Ogden Cryptocurrency Entrepreneur

 

Author: Rory Cellan-Jones

Alan Zibluk – Markethive Founding Member

Thousands of Japanese Retailers, Restaurants May Halt Accepting Bitcoin

Thousands of Japanese Retailers, Restaurants May Halt Accepting Bitcoin

 

More than 5,000 retail stores and restaurants in Japan may stop accepting Bitcoin

as a form of payment starting Aug. 1, 2017. This possibility could push through if Bitcoin payment processors will halt their services.

Bitcoin payment processors plans

The retailers and restaurants accept Bitcoin through payment processors bitFlyer and Coincheck. The latter is also partnering with Recruit Lifestyle in order to expand its operation and accept more than 260,000 additional stores across Japan as clients. BitFlyer, however, has announced that it could stop Bitcoin deposits and withdrawals, along with its payment services from July 31 to Aug. 2. Coincheck has separately announced that it will temporarily halt Bitcoin deposit and withdrawal starting Aug. 1.

The company says:

“On Aug. 1, 2017, we may temporarily suspend Bitcoin deposit and withdrawal for Coincheck exchange and payment services to protect users assets…The resume date is unspecified, but we expect several hours to several days. Also, if we decide that a Bitcoin fork will not take place on Aug. 1, 2017, 12 am, the suspension of services will not happen.”

Japanese companies likely to be affected

The move by the government of Japan to recognize the cryptocurrency Bitcoin as a legal tender in the country has led to the increase in the number of stores and retailers which use it in their operations. Among them are restaurant chain Heichinrou, eyeglass retail chain Meganesuper and the electronics retail group Bic Camera.

Post-split

The plans by the payment processors and the various Japanese establishments were triggered by impending developments in Bitcoin platform. These include the planned scaling for Segregated Witness (SegWit) and the possible split of the platform. The plans to temporarily halt Bitcoin payments, however, are expected to have limited effects on the operations of the retailers and restaurants as their businesses are mainly transacted in cash or credit cards.

Tim Draper Acquires 10% of Anti-Email Spam Blockchain Project Credo

 

Bitcoin investor Tim Draper has purchased a 10 percent share of Credo,

a project that aims to eliminate spam emails. Draper invested ahead of Credo’s scheduled public initial coin offering (ICO). Credo is an initiative of the company BitBounce.

Draper’s credentials as an investor

Draper is widely-known in the cryptocurrency market as an aggressive investor in the leading digital currency Bitcoin. He has already bought a large amount of Bitcoins from different Silk Road auctions. He also actively participated in various ICO projects involving cryptocurrencies. The Bancor and Tezos ICOs were among the successful digital currency projects that were supported by Draper.

Draper’s decision to invest in digital currencies is mainly driven by his desire to diversify his portfolio of investments. Even though there are significant risks in investing in cryptocurrency ICOs, Draper has shown his willingness to take them as long as the projects’ proponents can successfully convince him on the feasibility of their proposals.

Operational concept

The concept of the Credo project is to use tokens as a payment method for an email service provided by BitBounce. The BitBounce email service allows users to send direct email messages to the leaders of various industries. The service also includes incentives to ensure that the recipients of the emails will answer them. This project appears to be a sound one as BitBounce already has more than 7,750 active users of its email service so far. The company also appears to be processing more than 42,000 emails per day.

On its way to yet another successful ICO?

It is not yet certain if the Credo project will be successfully launched, survive and turn profits in the near future. The support and endorsement of well-known investors like Draper, however, is a proof of its sound concept. Let us wait and see if Draper’s public support of Credo will result in the success of the project’s scheduled ICO.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to Learn more about -Bitcoin.

Alan Zibluk – Markethive Founding Member

Bitcoin is booming because a split in the cryptocurrency has been narrowly averted

Bitcoin is booming because a split in the cryptocurrency has been narrowly averted

Bitcoin is booming because a split in the cryptocurrency has been narrowly averted

 

Bitcoin has risen as much as 28% over the past 24 hours, driven by news that an imminent split in the cryptocurrency has been narrowly averted. The price of bitcoin nearly hit $3,000 late on July 20, within spitting distance of its all-time high, set last month.

The remarkable rally took place as bitcoin’s miners coalesced around one of several competing proposals that would increase the number of transactions that can be processed on the network. The issue has gained urgency in recent months, because one of the measures, known as Bitcoin Improvement Proposal 148 (BIP 148), would lead to a split in the cryptocurrency on Aug. 1 if implemented.

The price rallied as bitcoin’s miners began broadcasting their support for a less radical proposal, BIP 91, in increasing numbers yesterday. This proposal avoids the so-called “hard fork” by stopping short of altering the hard-coded limit on transaction capacities that is the bone of contention within the bitcoin world, while offering slightly enlarged transaction capacity.

The threshold for activating BIP 91 is 80% of all the processing power on the bitcoin network. That was achieved in the early hours of July 21. Currently 97% of the processing power on the network, which is largely controlled by miners, is voting in favor of BIP 91.

But it’s not settled yet. Although enough miners have signaled support for their preferred proposal—a process akin to broadcasting a preference over the network—enough of them must now run the software that implements this proposal within the next two and a half days. Failure to maintain a simple majority of the processing power, also called the hash rate, would mean BIP 91 does not activate. This would put the bitcoin world back at square one, with just a week to go before the potentially destabilizing hard fork on Aug. 1.

There are also still signs that the fundamental disagreement that led to this showdown—a “civil war,” as some call it—is far from resolved. The fight is between bitcoin’s miners and the influential programmers who contribute to bitcoin’s open-source code, known as the “core developers.” The core devs say bitcoin is at risk of being controlled by a cartel of miners who, by virtue of their huge investments in processing power, are able to dictate what changes are made to the code—anathema to bitcoin’s decentralized founding ethos. But the miners, and other heavy users, like payment processors, point out that the bitcoin network could be abandoned if it doesn’t enlarge its limited capacity soon.

The architect of BIP 91, James Hilliard, a miner himself, told industry publication CoinDesk: “This is where mining centralization makes things easier, because I can just message everybody on WeChat and help them if needed.” That may be so, but it won’t comfort the parts of the bitcoin world concerned with centralization of the cryptocurrency, even if the current fix to bitcoin’s problems goes according to plan.

 

David Ogden
Entreprener

cryptocurrency entrepreneur

 

Author:  Joon Ian Wong

Alan Zibluk – Markethive Founding Member

Utility Settlement Coin Creator to Open-Source Modular Blockchain Software

 

The company behind the Utility Settlement Coin project,

one of the first designed to enable central banks to utilize distributed ledger tech, is preparing a coming-out party of sorts. After working in almost complete secret on what founder and CEO Robert Sams calls "foundational technology," venture-backed blockchain startup Clearmatics will soon begin a rather unusual roll-out of new offerings for the open-source community. In a new exclusive interview, Sams said he plans to share the first of several waves of software with the financial sector before the year’s end.

He told CoinDesk:

"We view the technology – the actual source code – in a very modular way, and we think that not only is this a space that definitely, firmly belongs in the open-source domain, the approach to the development of the software needs to be more modular."

While little is being revealed about the technology itself, Sams contrasted his platform with bitcoin, which relies on an unspent-transaction model, and ethereum, which uses an account-based system. Instead, Sams said the yet-to-be named software will be "tightly coupled" implementations of various components, distributed consensus algorithms and networking stacks. He compared the modular architecture to the various components of the Linux operating system, saying the software would be coupled with standards for how users implement the solution. "You'll see over time less and less discussion about this or that platform," said Sams. "And more and more discussion … on how to put these components together to conform to a set of standardizations."

Twin projects

While Sams acknowledged that his work with the Utility Settlement Coin, his most well-known project, "informs" the soon-to-be-revealed open-source code, he made explicit that they are distinct from each other. Last year, Clearmatics unveiled a Utility Settlement Coin consortium comprised of BNY Mellon, Deutsche Bank, Santander and ICAP – since rebranded as NEX. Sams said the group recently completed the second phase of its work to help central banks and other financial infrastructure providers capitalize on blockchain, but that the results would remain proprietary.

While the Utility Settlement Coin project is largely focused on the business logic required to help legacy financial infrastructures increase efficiency using blockchain technology, Sams said the open-source work itself will largely consist of technology and an early version of related standards.

Sams concluded:

"The open-sourcing of Clearmatics is not the open-sourcing of Utility Settlement Coin."

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to Learn more about -Bitcoin.

Alan Zibluk – Markethive Founding Member

Bitcoin recovers from crash to surge above $2,500

Bitcoin recovers from crash to surge above $2,500

Bitcoin recovers from crash to surge above $2,500

 

BITCOIN'S price has continued to bounce back, and rocketed by around 40 per cent over the last three days as it recovers from lows seen at the start of the week.

The cryptocurrency jumped above $2,500 towards $2,600, after touching lows of $1,852 on July 17.
 

Traders were spooked by fears that Bitcoin could be split.

 

But the recovery has been helped after software has helped bridge the gap between bitcoin miners.

 

The cryptocurrency has previously reached record highs of $3,000 but some analysts have predicted the rally could go much further.

He believes bitcoin and other currencies underpinned by block chain technology are set to become more mainstream over the next decade.
 

In the shorter term Sheba Jafari, the head of technical strategy at Goldman Sachs could reach $3,691.

 

Japan recently helped bring Bitcoin into the mainstream by passing legislation that allows it to be accepted as a legal currency.

 

The currency has a limited supply of around 21 million, which has helped it reach safe haven status – like gold.

 

The supply is expected to be reached by 2140 – it's currently at around 16.3 million.

 

David Ogden
Entrepreneur

David Ogden Cryptocurrency Entrepreneur

 

Author: LANA CLEMENTS

Alan Zibluk – Markethive Founding Member

There’s a new way for sophisticated investors to get in on the cryptocurrency craze

There's a new way for sophisticated investors to get in on the
cryptocurrency craze

  • Coinlist, founded by Protocol Labs and AngelList, is a new exchange that standardizes the initial coin offering process.
  • Filecoin will be the first company to run its token sale through the Coinlist platform.
  • Coinlist offers a more streamlined ICO process that could potentially attract more sophisticated investors to the digital currency world.
    

Despite their surging popularity,

initial coin offerings for digital currency start-ups remain almost entirely unregulated, leaving many institutional investors on the sidelines waiting for more clarity. They're unsure if the cryptocurrencies should be treated as securities, which would subject them to heavier regulations and scrutiny from the SEC. Often the companies have no product to back, but just the promise of one.

Filecoin is seeking to attract sophisticated money managers with a new type of offering. The project, developed by start-up Protocol Labs, said on Wednesday that it will launch its ICO this month on Coinlist, a new platform it created with cooperation from AngelList, a service that connects startups and investors. "The SEC is very well aware of this whole market and I think they're going to appear at some point and will try to fix it," Juan Benet, the founder of Filecoin, told CNBC.

Rather than making crypto tokens available to anyone, Coinlist is open only to accredited investors — those making over $200,000 a year or have a net worth of over $1 million — gating out the less sophisticated investors who tend to drive more volatility. It also uses a new security protocol called SAFT (Simple Agreement for Future Tokens) that was designed to meet existing securities regulations.Filecoin's technology makes it easy for people to buy and sell unused storage space on their personal computers and uses blockchain technology to verify and track those transactions. The tokens being sold in the offering can be used to buy storage or they can be held as an investment. Filecoin plans to sell up to 10% of its tokens through this offering, though it did not disclose how much it's trying to raise.

Filecoin's ICO represents a new development in the digital currency space. ICOs have drawn huge attention, with more than $1.2 billion raised this year alone, according to Autonomous NEXT, but they've been riddled with problems. Just this week, the CoinDash ICO lost $7 million to hackers. Benet said Coinlist's platform could help broaden the accredited investor base by enabling more compliant offerings. It has a standardized profile page for each sale, and a unified payment structure that can be used across the platform. It could also help attract more U.S. investors who are often blocked out from directly investing ICOs. "It makes the whole experience more accessible," he said.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to Learn more about -Bitcoin.

Alan Zibluk – Markethive Founding Member

From Mining to Investing in Cryptocurrency

From Mining to Investing in Cryptocurrency

From Mining to Investing in Cryptocurrency
 

What Is Mining

Mining is the process by which transactions of crypto currencies are secured. For this purpose, the miners carry out mathematical computations for the network with their computer equipment. As a reward for their services, they collect the newly created coins, as well as the fees associated with the transactions they confirm. In this sense, miners are competing and their incomes are proportional to the computing power they deploy.

To better grasp the concept of mining, Andreas Antonopoulos, one of the most well-known and well-respected figures in the Bitcoin community, explains that “a good way to describe mining is like a giant competitive game of sudoku that resets every time someone finds a solution and whose difficulty automatically adjusts so that it takes approximately 10 minutes to find a solution. Imagine a giant sudoku puzzle, several thousand rows, and columns in size. If I show you a completed puzzle you can verify it quite quickly. However, if the puzzle has a few squares filled and the rest is empty, it takes a lot of work to solve! The difficulty of the sudoku can be adjusted by changing its size (more or fewer rows and columns), but it can still be verified quite easily even if it is very large.”

 

The Mining Equipment

In the beginning, mining with a processor (CPU) was the only way to mine bitcoins. Graphics cards (GPUs) eventually replaced CPUs due to their nature which allowed an increase of 50x to 100x in computing power, by using less power per megahash compared to a CPU.

The Bitcoin mining world is now dominated by Application Specific Integrated Circuit (ASIC). An ASIC is a chip designed specifically to accomplish a single task. Unlike FPGAs, an ASIC cannot be programmed to perform other tasks. An ASIC designed to mine bitcoins can and will not do anything else than mining bitcoins

The rigidity of an ASIC allows it to offer an increase in computing power of 100x while reducing power consumption compared to all other technologies by a factor of 7. Unlike the generations of technologies that preceded the ASIC, this last innovation is dubbed the “end of the line”, as there is nothing to replace ASICs today or soon.

Then came along Ethereum, a cryptocurrency that can be mined like Bitcoin – with an important difference. The Ethereum network was built to be resistant to ASIC hardware, making mining Ether with graphics cards viable. Ethereum is enjoying a Bitcoin-esque bubble of mammoth proportions right now, with the price of Ethereum skyrocketing.

This led to a shortage of graphic cards. Miners worldwide bought those Nvidia and Radeon cards that are best suited for mining – selling them out quickly. This is not the first time that graphics cards enjoyed a meteoric rise in price due to cryptocurrency. Bitcoin took GPU prices for a ride back in late 2013.
 

Innovation Meets Mining

Mining has nowadays become an activity that with an appetite for resources so enormous that it is bolstering the creativity of investors in this field, to always strive for the optimal solution. It is in this context that the concept of “cloud mining” was born. This means that the investor does not buy a physical mining rig, but rather rents computing power from a different company and gets paid according to how much power was bought. By doing so, investors get rid of the hassle of buying expensive equipment, storing it, cooling it, and maintaining it.

This industrialization of mining has led companies to seek out the lowest resource costs possible. While many areas of the globe offer competitive costs and infrastructure, polar areas offer unique mining conditions. Such was the idea of KnC Miner that announced the installation of computing power by the Arctic circle. This initiative, unfortunately, didn’t get enough time to reveal its true potential, as the company filed bankruptcy in 2016

Less in the north, in China, people have been puzzled by the fast growth of crypto-mining farms. Investors appeared on the scene with the wacky idea to mine Bitcoin using hydropower, thus benefiting from free water infinitely more profitable.

These innovative solutions have been of varying success. However, for the most profitable ones, it is still difficult to replicate and scale them up, as they require specific and unique geographic properties.

 

Is It Still Profitable?

The early days of Bitcoin mining are often described as a gold rush, but is it still the case in 2017?

Mining has grown from a handful of early enthusiasts into a specialized industrial-level venture. The easy money was scooped out a long time ago and what remains is buried under the cryptographic equivalent of tons of hard rock.

While mining is still technically possible for anyone, those with underpowered setups will find more money is spent on electricity than is generated by mining. In other words, mining won’t be profitable at a small scale unless you have access to free or really cheap electricity.

The good news is that mining is not limited to Bitcoin. New coins come up all the time with difficulties of mining that are vastly different from Bitcoin’s. Today, Ethereum is such a currency. When tomorrow Ethereum’s difficulty will make it less lucrative for mining, or when it’s moving to a different model altogether, other coins will be there that offer better returns.

If you want to go into mining yourself, the time you will spend educating yourself about the technology, the hardware, and the currencies, is significant. The setup costs for buying hardware are also considered when you want to mine at scale.
 

David Ogden
Entrepreneur

Cryptocurrency Entrepreneur

Alan Zibluk – Markethive Founding Member

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