The Spontaneous Guide to Cryptocurrency
Now that cryptocurrency has hit mainstream appeal with Bitcoins explosive growth, I’ve come out of the “Cryptocloset”. Ever since, I’ve been hit up by a ton of friends inquiring about Cryptocurrency. What started out as a “simple email”, quickly exploded with information. So here’s my collective thoughts and personal experiences with Bitcoin and the other currencies as well as “Cloud mining”. Tons of links are included for your pleasures.
Note: If I missed a favorite pool, hardware vendor, exchange or Altcoin it’s because I didn’t use, or have no experience with them. I try to only suggest things I have tried. Feel free to share your experiences in the comments section below.
Most promising coins I know:
I’ll cover Wallets and how to protect your assets in a later section.
There’s a ton of other coins, but these are the main ones I know of and or traded. but they’re good for trading. Digibyte reliably bounces between $0.0016 and $0.0010. in large quantity you can trade and make a roasting on it.
I personally do not encourage the purchase of coins themselves. Just like the Stock market, it is a fantastic way to lose money. Coin trading also requires constant attention despite being a 24×7 market. But with mining, you are “creating” your coins using Computational Power + Electricity. Once you have mined enough coins to cover the associated costs (average of 3-6+ months) it becomes continual growth money after that.
With mining, I reinvest into upgraded capacity for mining hardware or cloud mining for a distributed network. To be honest, this is the ultimate 401k plan.
Multipool. Possibly the best mining pool for the “I dunno what to mine” group is Multipool. I’ve used them on and off for a year or two. They keep your coins until a “payout” amount or you decide to cash out. As with anything, I always suggest incremental payouts.
Antpool. This is run by Bitmain, the *unethical* Chinese based creator of some of the *best*, but power hungry mining equipment. I have their Antminer S9 which is good for 0.024 bitcoin per day. I just redirected it to Multipool for some faster to mine Alt Coins.
Slushpool. One of the oldest and a personal favorite despite not using them all too often. They also do Zcash. That makes me happy.
The above are the big three for Bitcoin and a small subset of Alt Coins. I’ve used them all. I don’t like to recommend things I don’t have “skin in the game” with and thus if I didn’t mention a popular pool, it’s because I didn’t use it.
For Ethereum there’s Ethermine. I’m using this with my Sharkmining rig.
These are where you can trade and convert all the coins like a giant FOREX market of alt coins. Very overwhelming at first. Note: When using exchanges or places to purchase/sell cryptocurrency, get your funds in and converted funds out as soon as you can. I highly suggest keeping your wallets local and avoid web hosting wallets. That’s how you constantly read about a site being hacked and $19M bitcoins stolen.
I just used shapeshift to convert 6500 digibyte coins into Etherium. So I know it works.
Haven’t used. This is a massive Forex marketplace for trading coins.
I just used them today to move 30,000 Mazacoin because I wanted it in a viable currency. This exchange is massive and I really want to explore it more.
Cryptocurrency Mining Hardware
Bitmain: The mainstay of a huge majority of mining equipment. They’re China based and under constant scandal. Nowhere near as bad as US based Butterfly labs was.
InnoSilicon: A friend recommended Inno Silicon. Their hardware really piqued my interest as it’s fast and amazingly power efficient. Expensive buy in but it blows away anything BitMain has out there in wattage and Hash Rates*.
Shark Mining a Bizon spinoff sells GPU mining hardware. I personally prefer to build my own systems, but the price was about even and I value my time these days. Also the machine has ALL the correct power cables, PCIE riser boards and everything. Plus it came preloaded with Ubuntu that boots directly into mining without user intervention. These were all pluses. I called their sales, 1 guy, asked a few questions. Later that day put in the 0.6 bitcoins to buy with 3 day shipping and he called me back to say the order was received. I got the unit exactly when it was supposed to arrive. Of course Bitcoin doubled that week and I could have bought two machines had I waited 3 days ¯\_(ツ)_/¯
Here’s the rig at the bottom of the Rack. It’s so beautiful. Worst case is it becomes the ultimate Virtual Reality gaming rig in existence. The thing is ghost quiet too. Has an ASUS motherboard and 60 gig SSD. I’ve built my last 10 computers using ASUS. They’ve only been upgraded because I felt it was time.
Cloud and hosted Cryptocurrency Mining
Genesis Mining: I bought in on a 24 terrahash Bitcoin mining plan with Iceland based Genesis Mining about 6 months ago. They pay out daily and have been exceptional. Having received my initial 0.6 bitcoin investment, it’s all “free money” from here on out. At the time I bought in, they were under a boat load of crap and “scandal”. Turns out it was massive growing pains as they were under a massive demand. At the time of this writing they only have Monero plans.
Gigawatt: Giga-Wattt is a West coast hosting company bragging about $0.02kw/h and on site technicians to fix broken stuff. They’ve “partnered” with China based Gigawatt to ship Bitmain miners and custom GPU miners. I did buy in on a pre-order basis and at the time of this writing am awaiting my Dashminer to arrive there. If things go well, I’ll have more miners shipped there as I really hate how loud the S9 is.
Support does respond to email queries and informed me that their November shipments were delayed as the facilities are still being built up. This is a normal thing for Early adopters, so patience is needed on this case.
I just hit 1000 words and there’s still a ton more to go. I highly frown upon keeping your coins on web based wallets. It’s super convenient, but if you’re investing, you don’t need constant access to it. A lot of my wallets were 15 weeks behind the blockchain because the coins were in “cold storage”. If you have to, buy a 1TB USB drive to store your wallets and their respective blockchain data. Plan for 100 gigs per coin.
The steps for almost all coins are the same. Download the respective coin’s wallet (ex: https://bitcoin.org/en/download).Install it into a directory of your choosing, possibly “Cryptocurrency/bitcoin”. Remember to change to the coin name. Then after installing and running the program you will see a “wallet.dat” file in that directory. SAVE THAT FILE. Encrypt it first (Settings->Encrypt Wallet) with a password you’ll never forget. Then back it up to a USB Thumb drive and store that in a safe. If your hard drive crashes as they all do, you are safe.
This was pretty much as “Crash course” in Cryptocurrency.
While not the definitive guide, it should be enough to set you on the path. I cannot stress it enough, but DO NOT BUY cryptocurrency with long term investment on mind. It could skyrocket then crash hard in 1-2 years.
The future of Cryptocurrency is very unpredictable as they completely threaten the traditional banking model designed to screw over the consumer. It also makes transporting large sums of money easy. It cuts out the middle man in overseas money transfers (think sending your soldier son in Iraq Christmas money). The whole centrally controlled money model is destroyed with Cryptocurrency and that threatens a lot of people in power.
This is why I am pushing hard for the mining model of long term investments. Once you make your money back, you are “printing money”until the network difficulty gets too difficult and your current mining hashrate can’t compute shares profitably anymore. At this point you hopefully upgraded or cashed out.
Quick Note: Hashrates and Network Difficulty
Note: I’m going to explain this in as basic language as humanly possible. If someone wants to elaborate further, feel free in the comments.
Cryptocurrency mining is based on computing power. Each coin “Block” is heavily encrypted. You mine small portions of a large math problem in order to crack that block. Then all the coins pop out. These small portions are called “shares”. Your hashrate is how many computations you can do on each share to solve that portion of the problem. The higher the hashrate the more shares per block you can submit and the bigger chance of cracking that block, thus winning.
Most pools pay you a percentage based on how many shares you submit per cycle. Faster is better.
Over time the network difficulty (how hard it gets to crack the block) increases. Some coins (Dash) have a dynamic difficulty rating to prevent ASIC mining from stampeding the blocks and grabbing all the coins. Others like Bitcoin have a more predictable and scaled over time difficulty rating. This is what causes miners to show a diminishing return.
When buying a miner, or a cloud plan, make sure it is well overpowered so it will pay for itself and give you a nice ROI by the time it reaches end of life. The goal is to reinvest the initial cost in upgraded capacity, thus giving you an incrementally growing income.
Thank you for reading this.
A big thanks to the multitude of friends who messaged me over the past few weeks about Cryptocurrency. You’ve all inspired this guide. Thank you and please share.
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