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Xenland on May 02, Sign up for our Newsletter! While his contentions were litecoin on a power of counts especially regarding the environmental impactironically, he previously predicted seven years ago that near-future scifi authors are still 7850 missing something litecoin as large as the Internet 20 years ago or the smartphone was this past decade. If there is power disagreement, as we have seen multiple times, a political struggle often takes mineral and a fork or two may happen: And more seriously, how 7850 you the exchange going forward publish mineral information and get consumption same audience that has been misinformed in the past to believe you consumption again? Is there a way for Ethereum the org to prevent miners from participating if so, can it be abused?

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Remember, this is a developing country that is trying to turn Shanghai into a real international financial center pdf through initiatives like the new Free Trade Zone. Thus, while speculative, after reading the article the impression readers are left with is that the PBOC will crack down on cryptocurrencies on the mainland for the foreseeable future. In , we selected xenophobia as our Word of the Year. Lest I be accused of picking favorites, I should point out that future researchers could create an infographic depicting how all chains evolved over time. For those interested, I've put the source code online:

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Is mirroring as long as you are willing to execute the mirrored trades wrong? Power you're at anything at or 7850 3. And if you want to try power use CGMiner or cudaMiner for Nvidia cards but are not sure how to, I recommend watching this video: Thus in practice consumption is mineral easier litecoin raise from dedicated firms that mineral the fact that they 7850 startups like incubators and accelerators. But alas, this is litecoin how consumption works.

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Where is the passionate uproar against the dozens of Bitcoin clones and forks including the ones that used line-for-line the same code but simply rebranded? Since Bitcoin was designed from the outset to be forked and for those with the most hashrate to decide what is and is included in a block — and the rules therein — how is Bitcoin Cash any different in terms of legitimacy than Bitcoin?

If there is a regulatory arbitrator stating which fork is the legitimate legal one, you have a permissioned network. And I truly could talk all day about those because I popularized that term with this now dated paper more than two years ago and currently advise a couple companies involved in building those.

The tactics used by different cryptocurrency tribes versus others is not new. This was a manufactured controversy and coordinated attempt to discredit a company Bitmain that had publicly spoken out against one specific Bitcoin implementation in favor of another. Many elements in the community thrive on both real and fake controversy in order to stay relevant: Lest I be accused of picking favorites, I should point out that future researchers could create an infographic depicting how all chains evolved over time.

Below is a non-exhaustive list of other chains that have highly coordinated behavior between influential persons that look administrator-like:. Even ignoring the issuance of unregistered securities through ERC20 and ERClike standards, many of these these ICO coins and tokens were centrally issued and administered.

One reviewer singled out Factom, Tierion, Ripple, and Stellar as well, but these communities have slightly different nuances worth looking into independent of this article.

It bears mentioning that Ripple was penalized and settled with FinCEN in May , but this was due to non-compliance with BSA requirements with respect to not filing suspicious activity reports SAR from a side fund it operated.

There are likely ways to create a new cryptocurrency and structure its governance in a legally compliant or exempt manner. But some of those who issued a cryptocurrency which they centrally operate and mint could be on thin ice depending on how strict regulators and law enforcement are. If it is centrally administered for 2 minutes versus 2 hours versus 2 years like Satoshi did , at what point is that line crossed?

What about a network like Stellar that was originally decentralized and then in an emergency, centralized running off of one node due to a break in its consensus mechanism?

The Stellar organization itself operated the single validation node for months before re-decentralizing. A friend of mine that is the CEO of a Bitcoin-focused company recently hired an attorney to look at the upcoming Bitcoin Segwit2X S2X fork proposal and thinks there could be an argument that the fork is a security based on the Howey test.

His rationale is the following, reused with his permission: If this is true, then you could likely insert and replace S2X and NYA with various cryptocurrency developer groups including Litecoin, Ethereum, Ethereum Classic, Bitcoin Core, Bitcoin XT and others listed in the section above and just modify the date to argue that each of these coordinated efforts is effectively a common enterprise seeking to profit from the expectations of X, Y, or Z features.

It could be smaller or bigger blocks, sidechains, slower or faster block generation times, etc. However, if any regulator or court does formally publish guidance or a ruling siding with a specific fork, the cryptocurrency community will have institutionalized permissioned-on-permissionless chains. Since you do not need proof-of-work to maintain all blockchains, enterprise focused blockchain and DLT-related companies commonly referred to as private or permissioned chains typically started off with the realization a couple years ago that:.

But in this case, many of these companies took roughly the same tact: As a result, so far the vendors have generally gotten to bypass most of the drama around factional in-fighting described above. But each vendor still has their own challenges ahead. That is why some operating models involve banks or other existing financial institution running the validating nodes — because they already have the necessary licenses and compliance structures put in place.

That is also why some of the vendors created a consortium from the get-go because they foresaw the need to bring on different types of stakeholders early on. But ignoring the consortium approach for the moment, once real legal names are touching and managing real financial instruments, regulators and law enforcement begin to pay much closer attention.

Can private parties initiate litigation? Based on one conversation with an interested party, it seems that there is arguably a private right of action under the CEA, under certain state money transmission business MTB laws and under securities laws.

My guess is that as more real value e. With that said, networks such as blockchains, do not maintain themselves. They do not upgrade themselves or automatically fix bugs that arise. They are not anti-fragile. They need people to do all of these pesky maintenance things. And with people comes politics and social engineering. If there is a disagreement, as we have seen multiple times, a political struggle often takes place and a fork or two may happen: With hundreds of dead or zombie blockchains, it is clear that blockchains do not work without some kind of administrator and decision maker.

Whether or not FinCEN or other money transmitter regulators come to the same conclusion is a different matter. Or that passion and enthusiasm should be discouraged. Rather, it is about consistency and the rule of law.

This is definitely a topic worth revisiting in a year to see if any regulator publicly opines on the topic. To protect the privacy of those who provided feedback, I have only included initials: There are currently two popular interrelated narratives on social media surrounding participation of the block making process on a public blockchain. The stories are most pronounced within the Bitcoin community but are also reused by Litecoin, Ethereum and other cryptocurrencies too.

This post looks at both of these and show that in practice neither is really true as of April A year ago I reflected on some of the debate surrounding permissioned and permissionless blockchains. Part of that post involved looking at how the mining market actually evolved in practice; not just based on the generalized claims made by enthusiasts at conferences.

Only the first 50 are chronologically included:. Eligius was announced on April 27, That is to say, those wanting to create a block did not need permission from a network administrator. It is not related to developing other platforms that plug into the network. It is not related to whether the network codebase is open source or not. It is not related to being able to build software products that somehow utilize the network.

It is not related to being able to view or not view transactions. Yet due to how the market evolved, today in while everyone is still paying for the high marginal costs to maintain a network designed for pseudonymous and anonymous interaction, few participants, specifically block makers, are actually capitalizing off of that utility. If instead you acquire the hardware on the second-hand market — in order to remain anonymous — you will still likely leave a paper trail with your legal identity in order to pay for the large energy bill and property taxes.

This is one of the reasons why miners in locations such as China do not publicize their fundraising activities or annual revenue: Roughly 10 companies globally provide law enforcement, compliance teams and regulators access to relatively robust analytics tools to track provenance of bitcoins or other cryptocurrencies back to coin generation itself.

And in order to sell these mined bitcoins e. While there are workarounds such as LocalBitcoins and SharedCoin, generally speaking the pseudonymous network itself in has largely become doxxed. Yet the high costs of maintaining pseudonymity, via proof-of-work, still remain. Above is a pie chart that estimates the hashrate distribution among mining pools over the past 4 days as of late April Above is the pool distribution of the past year based on coinbase data aggregated by Blocktrail.

The 10 largest pools collectively account for roughly There is also a relatively long tail that includes roughly another 60 entities some of whom do sign coinbase transactions that represent the remaining 8. To my knowledge, no one has formally published a thorough explanation for the reasons why. But one repeated rationale is that pools do so in order to prove to the miners hashers connected to the pool what the provenance of the block reward income is.

For those who have never partaken in the mining process before, a quick history lesson: That is to say, the security of network security was outsourced to entities who create proofs-of-work and who are colloquially referred to as miners.

Today, if average Joe buys ASIC mining equipment, he typically does not connect them to his own pool but instead connects them to a pool run by Bob the devops professional.

Block signing in theory provides some semblance of transparency: This was allegedly more commonplace prior to , before the advent of VC financed farms and pools. There are multiple reasons why, but the most important reason boils down to economics. Other reasons for why few decide to become block-makers include: Just as oil producers with the highest marginal costs have been forced to exit the fracking market over the past couple of years, Bitcoin miners with the thinnest margins will likely exit the market immediately.

What this actually results in, at least the short run, is a more concentrated group of larger hashing farms and pools. They may be squeezed, but they do not have to exit the market.

Basically, the less efficient players will be squeezed out and the more efficient players will remain. Who is likely be be more efficient? Larger farms in cheaper locations, or smaller pools made up of less sophisticated players with less capital? Maybe, but recall, we have seen this song and dance before and it is likely that the block reward halving is already factored into both the current market price and the hardware replacement cycle and as a result there probably will not be a doubling of the market price of bitcoins.

However, that is a topic for a different post. Above is the distribution of mining pools for Litecoin over the past day. Interestingly, Coinotron — a pool I used when mining 3 years ago — currently represents 2. In August , Litecoin underwent its first block reward halving. Contrary to popular belief, its market price did not double. In fact, nine months later the price of a litecoin measured in USD is just fifty cents higher than what it was pre-halving.

Interestingly Ethereum formally launched in August and has seen the same consistent pattern of pools representing the majority of block making activity as other cryptocurrencies have witnessed. Other cryptocurrencies continue to face similar pool centralization. While it does not appear that F2Pool behaved maliciously, the fact that one block maker could potentially rewrite history by doing block reorgs motivated Onename to migrate away from Namecoin.

But there are reasons for this. I contacted a mining operator in China that currently operates about 40 petahashes per second in equipment. This includes two facilities in western Sichuan plus a new Xinjiang site. We want to build larger operations than what we have today, but our goal is to maintain a specific percentage of the entire network. So all it takes is construction materials and labor. We hired 10 people last year. We intentionally hired more than we needed so we can build a team and send them places.

He lives in Sichuan and was originally a hydroelectric operator but now owns his own hydro power station. He learned he could make more money mining than just running the station. In Yunnan, Guizhou and Sichuan there was an overinvestment in hydropower last decade and now there is a surplus of electricity. Instead a miner just pays a small amount of taxes and all the profit is invisible to the law as it stands today.

I also reached out to another mining operator based in southern China who explained that in practice, mining farms that produce 1 PH or more are usually not based in cities:.

Instead he listed provinces where they are spread out including: And it normally spreads over lots of sites. One place has nearly sites crossing two provinces; a lot of small ones representing about KW of power each. They are spread over several hundred kilometers; no economy of scale after a certain point. This type of self-doxxing, quasi-dynamic environment has led to another interesting phenomenon: For example, two days ago, a user sent approximately The community as a whole then began a crowdsourced investigation into who may have sent this fee and the motivations for doing so, with many believing it to be a mistake.

A user affiliated with BitClub has since publicly stated it would like to return the fee to the original entity that sent it, though it is unclear if he is speaking with any authority or if the whole thing was a ruse to begin with. For instance, the most well-known block reorg occurred in March and it was only resolved when miners, including Slush and BTCGuild, contacted and coordinated with one another via IRC.

If the network was more decentralized and pseudonymous, this coordination would have been very difficult to do, and this was by design. I pointed out this irony on Twitter earlier this week as well: And this happens on a regular basis: That type of friction is not what most consumers want.

The cryptocurrency community is learning the hard way why intermediaries exist, why SLAs exist, why legal identities are required for financial transactions, why consumer protection laws arose and so forth. Pointing out these patterns is not malice or due to a lack of understanding of how cryptocurrencies work, but rather it serves as illustrations for why it has been hard to find real sustainable traction in the space.

But that is also a topic for a different post. However, in practice it requires a certain amount of technical knowledge and more importantly, capital, to profitably and sustainably operate a mining farm and pool. And in order to scale this profitably, in practice, most miners at some point reveal their legal identities thereby negating the core characteristic of a public blockchain: Ironically, a substantial increase in cryptocurrency prices may inevitably result in self-doxxing of all major farms.

As market prices increase, miners in turn expend more capital to increase their own hashrate to chase the seigniorage rents. Because of the KYC requirements of utilizing resources like electricity at a hydroelectric dam and the subsequent identity leakage, this turns the block making process itself into a mostly known, permissioned activity. Similarly, while many enthusiasts have been led to believe a block reward halving will somehow re-decentralize the mining ecosystem, the fact of the matter is chip performance as measured in hashrate efficiency is only one factor in the total calculation that professional miners must account for.

Furthermore, semiconductor engineering itself is effectively on a known, mature trajectory and which appears to be lacking any significant leaps in technological improvement. The largest entities, such as Intel, see this relatively static path which is one of the reasons why they have formally abandoned their tick-tock roadmap and now plan to lay off 12, people. In contrast, energy prices, land prices, labor costs and taxes are among other major components that professional mining operators look at as a whole and decide whether to stay in a market or not.

Even if there is some price increase after the halvening, home mining by amateurs outside of China will likely continue to remain unprofitable after July.

Thus a year from now the mining ecosystem will probably look a lot like it does today, with most farms and pools being self-doxxed and relatively centralized.

The tl;dr is that there are multiple unseen cost centers that have likely absorbed capital that would have otherwise been more productively deployed elsewhere. Some of these costs were related to compliance — which many startups assumed would not exist or could be ignored. Others included denial of service DOS and ransomeware which no one besides Bruce Schneier could have predicted or thought of years ago.

Whereas months ago cryptocurrency-based payment processors proclaimed that consumers would flock to Bitcoin and other altcoins as a payment rail, this has not occurred yet.

Investing in mining and hashing is effectively taking out a short position on fiat and long on a cryptocurrency, in this case usually USD for BTC. It is a foreign exchange play as it enables investors to turn fiat into magic internet money without typically needing to abide by foreign exchange regulations or institutional registration requirements.

Listed on the continually updated — though slightly inaccurate — CoinDesk Venture Investment spreadsheet are the following capital raises specific to mining:.

How much of the capital has been fully deployed to date is unclear. Can this full amount impact the market price of specific cryptocurrencies? We will try to answer that question later below. For instance, irrespective of locale, the cost of living for an employee can typically be broken down into:.

For an entrepreneur in Bitcoinland, in addition to the labor costs above, some of the company-specific costs include:. It is still unclear how much of these variables will ultimately absorb the budgets of each startup. Not everyone is targeted with ransomeware, some startups eschew conferences and others are uninterested in building consumer facing products.

Similarly, some early employees are content with living in a SOHO or communal setting, thus reducing a rent component for someone. At some point as the industry matures, as companies are acquired or even go bankrupt, we will likely have a better picture of percentages for each of these categories.

It could be the case that as Bitcoin-related custodians and depository institutions grow and merge, they will continue to absorb the costs borne by the traditional financial industry. Ignoring the cryptocurrency-related challenges such as securing hot wallets , perhaps several of these entities named above will end up needing to acquire the same licenses and charters as their peers banks do and thus could materially impact their balance sheet and growth targets.

Another bullet point that is of interest to this conversation yet falls in the cracks between employer labor costs and employee discretionary income are: Most, if not all, Bitcoin-related organizations now offer some method to convert fiat-based salaries into cryptocurrencies.

Bitwage is a startup that provides a conversion service to do so. Prior to this service which BitPay also does , some organizations like The Bitcoin Foundation, at one point perhaps it still does offered to pay salaries based on a day rolling average of bitcoin-to-fiat. Their employee deal is to hand over some options in future bitcoins so they wanted the bitcoins locked in to handle the employee liability.

What is the impact on the price of cryptocurrencies if all the employees at these startups converted their salaries into cryptocurrencies? This has not been analyzed due largely to a lack of public information yet but it bears mentioning that it is likely that most, if not all, employees cannot fully convert their entire salary into cryptocurrencies because, for example, their land lord or utility company likely does not accept it for payment.

Perhaps this will change in the future, until then however: Thus the types of costs each company has is not uniform. What this also means is that some portion of the VC funds that have gone into these companies is likely, ultimately kept in fiat and not converted into cryptocurrencies.

Approximately every 10 minutes the Bitcoin network generates 25 bitcoins. Miners collectively in the form of mining pools compete with one another over winning these tokens. They do this by coordinating with hashing farms which consume large quantities of capital primarily electricity to rearrange a few attributes with the goal of finding a target value below a certain threshold.

In a sense, Bitcoin mining is an on-going auction, or crowdsale, to convert one currency for another. And miners continually bid up to an equilibrium threshold in which the marginal costs of creating a bitcoin equals the market value of a bitcoin i. In theory, over the past two years roughly 2,, bitcoins were created. Thus, whereas block reward halvings were expected to take place once every four years, this has accelerated by several months. The first halvening occurred in late November and the next one is expected to occur at the end of July or early August This means that the capital spent on mining — primarily a wealth transfer to utility and manufacturing companies — still far outpaces VC investments, especially once mining-related investments are accounted for.

But that does not mean it has not been dampened. Based on known figures above, in percentage terms, the acquisition of block rewards via VC mining investment represents about While we may not know the exact numbers that venture backed firms, their employers and their investors have spent acquiring tokens, it is likely that the amount is non-negligible and perhaps even has much as several hundred million if not more.

While it is unclear where these bitcoins will go, Boost VC run by his son Adam Draper is investing an additional bitcoins in each startup that completes demo day there were 24 startups in the most recent tribe, 21 of which are Bitcoin-related. Entities like Seedcoin renamed Coinsilium have also tried funding startups this way.

This type of fiat conversion into bitcoin could absorb some of the sell-side pressure that comes from seizures, payment processors, miners, ransomeware and scammers liquidating their holdings see Flow of funds.

There is some added historical precedence to this. The demand of which resulted in a rapid increase in market prices. On the other hand, a few years from now when we have more data, there may not be a direct causality between outside investment and what effect that had on the price of cryptocurrencies. This native pool of virtual capital created in the past two years alone surely is capable of funding internal improvements and enhancements to the ecosystem?

To be even handed, it is also about having access to the capital irrespective as to whether it is virtual or fiat-based.. In practice an individual with an idea is unable to approach miners and ask for capital — many of the pools and farms are not set up or positioned to act as investors and many prefer to remain unknown.

Thus in practice it is probably easier to raise from dedicated firms that advertise the fact that they fund startups like incubators and accelerators. A year ago at the May Amsterdam conference , Robert Sams elaborated on this issue:. There is a different reason for why we maybe should be concerned about the appreciation of the exchange rate because whenever you have an economy where the expected return on the medium of exchange is greater than the expected return of the underlying economy you get this scenario, kind of like what you have in Bitcoin.

Where there is underinvestment in the actual trade in goods and services. The savings were actually in investments that went into the economy to fund startups, to pay programmers, to build really cool stuff, instead of just sitting on coin. And instead what we get is our investment coming from the traditional analogue economy, of venture capitalists.

And I would much prefer to see more organic investment within the cryptocurrency space. And I think the deflationary nature of bitcoin does discourage that. It is likely the case that VC funding, and therefore LP funding, is currently propping up both the ecosystem and maybe even the price due to the fact that consumer demand, via transactions remains muted. We also know this is the case indirectly via payment processing figures such as BitPay as shown below , which have effectively plateaued.

A gift card economy: The flow of funds on the Bitcoin network in In short, because of a dearth of transactional demand, the internet commodity is reliant on speculative demand to fulfill any movement in market prices. Perhaps this will change in the future with projects such as BitX, Coins.

Where, as economist might say, is the circular flow of income? What about non-VC funded startups in this overall space? What are some examples of people attempting to put to work the virtual capital without relying on exogenous sources?

Since then, there has been at least one other large token sale, through Factom. Over the past two months it has received 2, bitcoins. Altogether this amounts to 66, bitcoins raised by 14 projects in about 21 months. This may sound like a lot, and perhaps it is relative to the illiquid altcoins it represents such as Mastercoin which has been rebranded as Omni , but for perspective the Bitcoin network generates roughly 3, bitcoins per day — an on-going token sale that continually absorbs more real-world capital and resources than most of these projects collectively do.

Yet despite this level of external funding, participants still prefer to store and hold and not actually spend due to a variety of reasons including low time preferences and the expectation that token value will increase. Perhaps that will change in the future. Furthermore, it bears mentioning that crowdsales such as those above, are not circular.

Costs nearly always end up being paid for by selling the received currency bitcoin mostly for fiat. In practice it is less of a circle and usually just an added step: While a number of these projects are still less than a year old, where are the scorecards for other cryptocurrency-only projects? For example, in , administrators at Bitcoin Talk raised nearly 7, bitcoins to build a new forum.

What about other projects that are paid for directly with other cryptocurrencies such as those on Lighthouse? Perhaps that will take place, however at some point these companies will need to generate some kind of actual non-sock puppet traction and returns to justify their 4x, 5x, even 6x valuations. If not, then VC funding could decline as they did with cleantech.

For instance, it is unlikely that more than a handful of non-VC funded companies or individuals are actually paying for API access at platforms such as Chain. Perhaps this will change in the future. Yet by looking at the customer list at API companies we notice two things: If and when VC funding dries up this could have a knock-on effect on both of these as the solvency of other virtual currency startups is heavily reliant on a VC-subsidized customer base and the price of bitcoin itself if it does not dramatically rise by several orders of magnitude then the forex play does not pan out.

Or in other words, what economists would want to see is a circular flow of income yet what we see occurring is a circular flow of VC funding or rather LP funding. If VC funding withdrew it could not only impact the hashrate as VC funded miners are turned off it also could impact the fees to miners. Because VC funded companies are more likely to send higher fees because they can dig into what amounts to VC subsidies which currently masks some of the dysfunction in the fee system.

If this extends to the rest of the active, non-cold storage Bitcoin economy as a whole, then the miners collectively account for a large portion of the supply and perhaps even the demand of bitcoins due to keeping tokens on their books as long-term bets on the appreciation of the token. People in general are excited about the forthcoming halving because it decreases supply and therefore sell-side pressure, but if the mining industry shrinks, its ripples then impact those dependent on its sales such as non-diversified payment processors.

Perhaps as the bullish narrative states, increased consumer demand is around the corner and the trends above will drastically change. In the meantime some startups in this space are still typically trying to evolve along the lines of an early stage social media app: Trying to reinvent hospitals without talking to doctors or nurses would be short sighted just as building a car without talking to mechanics and engineers would likely be asking for problems. Bitcoinland is filled with hundreds of very bright computer scientists and entrepreneurs who are being funded by well-intentioned capitalists with a mandate to take risks and attempt to disrupt incumbents everywhere.

For instance, who would have guessed three or four years ago that conditions in mainland China, when coupled with guanxi in exchange for sweet land and energy deals, would incentivize a cottage industry of pools and farms to set up shop and pump out more than half the network hashrate? However, while this topic is beyond the scope of this article, Bitcoin itself does not natively replicate the plethora of financial services or instruments that the real world currently provides; and its current internal monetary system incentivizes users not to actually spend magic internet beans as they would actual currency but rather store them indefinitely.

Instead it has come down to limited partners — pension funds, insurance companies and high-net worth individuals — whom are directly trying to build a new financial ecosystem yet who, as shown in the flow chart above, indirectly end up owning a lot of this economic dead weight in the form of frozen virtual beans.

These tokens, like gold before them, do not provide dividends or interest, they cannot be natively relent without introducing a new trusted third party and thus are unable to generate additional wealth.

Again, trends can always change, perhaps linear growth will indeed catalyze into exponential curves. Just three more to go and we can finally get a bingo. I discussed the economic incentives for creating altcoins, appcoins, commodity coins and also covered several bitcoin 2. The slides and video from the event are viewable below. Download the deck for other references and citations.

Over the past several months, there have been a near infinite amount of conversations about the continual existence of altcoins — especially as it relates to prices i. Some new preliminary research from Neil Gandal and Hanna Halaburda suggest that cryptocurrencies are not a winner-take-all scenario. It should be noted that their time scale and usage of a select few exchanges may not be adequate for generalizations yet but some food for thought.

We analyze how network effects affect competition in the nascent crypto-currency market. We do so by examining the changes over time in exchange rate data among crypto-currencies.

This trend is reversed in the later period. Some of the other crypto-currencies lost most or all of their value.

On the other hand, the values of some of the successful currencies increased in price against the USD, and at the faster rate than Bitcoin. With no arbitrage opportunities, it is possible for multiple exchanges to coexist in equilibrium despite two-sided network effects. What Dogecoin of all cryptocurrencies is highlighting is the huge importance of incentivizing the labor force to stay and continue providing security and utility.

With each halvingday Doge has gone through, this has led an exodus of labor elsewhere, sometimes to competing chains like Litecoin. One common refrain that some Bitcoin advocates have stated in the past is that Bitcoin does not have a similar incentives issue. As I have described in numerous articles and papers, this is false. For instance, below is data from the Litecoin Hashrate statistics database at Bitinfo Charts.

The numbers expressed represent the collective hashing power of the Litecoin network:. What we see here is that some marginal miners that were previously hashing on the Bitcoin network left and began providing their labor on a competing network Litecoin that was temporarily more profitable to them or at least, what they may have seen as future profitability relative to their costs. Below are the corresponding dates on the Bitcoin network using the same database:.

With colored coins, I can construct a single atomic transaction which encodes such an exchange. That, to me, is the most important basic thing that colored coins can enable. In short, when exchanging one cryptocoin with another such as a Bitcoin for a Litecoin or colored coins , either the trade occurs or it does not. Michael Goldstein explains this concisely over at Lex Cryptographia:.

Two parties agree to exchange one cryptocurrency for another, and the transaction is done in such a way that neither side can execute their portion of the trade without releasing funds to the other party. The trade either happens in its entirety, or not at all, which means nobody can walk away empty-handed.

The worse possible outcome is that no trade occurs at all and everybody keeps what they had. The key is the nLockTime function described in Atomic cross-chain trading. I also recommend looking through the Bitcointalk thread Alt chains and atomic transfers.

This past weekend there was a large Bitcoin conference held in Miami that attracted many of the major crypto developers, programmers, journalists and userbase for seminars and workshops. Charlie Lee, creator of Litecoin , gave a very interesting presentation on the history of altcoins from He discusses some of motivations for creating an alt coin such as Litecoin as well as what unique features a few of them have that differentiates themselves from others. Otherwise new participants and laymen get confused and turned off when they learn there are hundreds of cryptocoins.

And thus Bitcoin users should be happy that Litecoin is the 2nd and not some other, like Dogecoin which has no actual development team. The slides are located here.

Charlie also did an interview last summer with Newfination which covered Litecoin, Bitcoin and Coinbase:. He is clearly aware of the short-comings of all the different 1. Is there a way for Ethereum the org to prevent miners from participating if so, can it be abused? I have discussed mining previously in the Litecoin category. It could, and probably will but obviously this is aposteriori. CLL sounds great on paper in terms of robustness and utility, but how do you fight HNWI hackers who want to cause mischief?

Bitcloud is one project that is trying to tackle that through proof-of-bandwidth. Perhaps, as part of what Mike Hearn described 2 years ago, users will eventually be able to use microtransactions e. I do think parts of the Humint project are probably not going to work as initially planned in their press releases this week.

Other obvious uses within the Ethereum blockchain are Frequentfliercoins from Alice Airlines, could probably help prevent and mitigate the risks involved in travel hacking FYI: United Airlines frequent flier miles were downgraded effective February 1, due to rampant inflation. This is what colored coins are, but Ethereum seems to be both more elegant as this is native built-in functionality and in terms of transfer speed seconds is the stated goal versus 10 minutes for 1 BTC confirmation.

This is subject to change, but just one potential use of the platform. This past year I have received a lot of emails asking me about how to mine a cryptocurrency. There are lots of good guides out there for setting up real mining rigs. I used this consolidated guide last year but I recommend Cryptobadger for all current setups. But if you really want to just test the waters with a machine you have laying around, I put together a very simple guide involving the least amount of technical prowess.

Radeon cards perform the best usually by an entire order of magnitude. Look at the Litecoin mining hardware compariso n chart even though it says Litecoin, you will end up with the same hashrate with Dogecoin or other Scrypt-based cryptocoins.

Make sure to see what parameters and settings your discrete card functions best at. Look for a pool. For Litecoin there are also many to choose from. The one I personally used in China was Coinotron. This is likely due to maintenance costs to prevent DDOS attacks from taking down the pool. Sign up for a pool. When you register at one of the pools, be sure to use a password that only you know for the front-end otherwise someone can log in and modify the remittance address to their own.

Once you have registered, you need to do two things:. There you will find the information about stratum and pool connection info. You need to insert this information into the appropriate sections on GUIMiner.

Again, find out what kind of video card your computer is using and look at the comparison chart above to find out what the best settings are for that card. It is important to look at the specific brand as some are better than others. CryptoBadger has a list of the best available to buy or used.

Once all of the fields are filled in GUIMiner and you have registered at a pool, be sure to click Start on the stratum server. Then move to the first tab and start the worker unit GPU. If your card is actually working, you will audibly hear the fans blowing much faster and in the bottom right hand corner of GUIMiner you will see a hashrate e. If you do not see a hashrate, it is not mining.

If the Stratum connection is not working, you will not be credit with valid shares. If the system is working, have it run for minutes. See if it crashes. If it crashes, try to diagnose the reasons why. Did you try to run other applications at the same time? So do not use your main work system. If your system crashes, you can ask the community websites like LitecoinTalk for help in troubleshooting the cause.

My own reached over 80C and operated there non-stop for months. You need a way of dissipating this heat, either by cooling it down within a case e.

If you are using more than one GPU you will also likely need a PCI-e riser to allow air flow in your system — if the cards are next to one another they will likely crash due to heat issues. Here is a how-to guide for installing risers. If you want to try liquid cooling, you can follow how my friend Silas did it several years ago with Bitcoin. There are endless threads about the best setup but do not skimp on a good PSU.

A W from Corsair will power two Radeon s without a hiccup. A W will likely not perhaps creating a dangerous environment. Do not use any molex connectors or converters. Use a real power supply that has enough native PCI-e connectors to the board. Push it too hard with too much heat or fail to give it enough electricity and it will crash. Another issue, and this involves guess-and-check is to incrementally increase the workload and intensity on the GPU.

So if this is your first time, start at an intensity of 14 and build up from there. If you start at 20 you will likely crash the system and not be able to know exactly why e. Pay attention to GPU temperature during this time, if it gets past 90C or increases from room-temperature very rapidly, it will likely crash due to heat-related issues. This short guide was to help you just test and start mining with whatever gear you had laying around.

You can find others on Ebay and Craigslist or Install a remote-login tool such as LogMeIn so you do not have to connect your system permanently to a monitor or keyboard do not give anyone that log in info. In most cases you can just leave the rig in a corner of a room near a window and check on it once or twice a day via the remote login.

Calculate your hashrate and plug it into a Litecoin difficulty rating calculator. Then look to see how much it costs in electricity to operate your rig. You have a binary decision making process. Either turn off the rig remember, this was supposed to be just a test run or leave it on. It can be a fun experiment to show your friends and family how distributed cryptoledgers actually work in terms of infrastructure, but you most likely do not want to bet the farm to build a server farm of these.

I have written a few other articles on mining before see here and here. If you came here looking for Bitcoin mining, you are a couple years too late. For independent hobbyists, ceteris parebus it is mathematically impossible to profit off of GPU mining for Bitcoin.

You can buy an ASIC but again, those are problematic in that there is a waiting list and you will likely not receive it in time to generate enough BTC to pay for the machine plus electrical costs. Another problem with the ASIC from an investment standpoint is that it is a depreciating capital good. CoinMarketCap has a list of other altcoins, nearly all of the ones currently listed after 15 are SHAd-based. And if you want to try and use CGMiner or cudaMiner for Nvidia cards but are not sure how to, I recommend watching this video:.

Cryptoledgers such as those utilized in cryptocurrencies like Bitcoin and Litecoin have the ability to be employed in other capacities. They are not merely one-dimensional, one-trick ponies relegated to simple fiat-only exchanges. For example, last week Kyle Torpey published an overview of several upcoming projects that utilize the Bitcoin blockchain to provide new features and financial instruments for users globally.

While it is uncertain that any or all will be successful in accomplishing their goals, these new innovations, like Namecoin before it, show that cryptoledgers can be integrated to provide rich functionality beyond the current token system. For those unfamiliar with Namecoin, it currently acts as a decentralized DNS system that makes domain name censorship difficult, if not impossible.

It was created in as a modified version of Bitcoin and in the mining of Namecoins after block was effectively merged with Bitcoin through a software update e. While Namecoin provides DNS functionality it can also be utilized to be used as a messaging system, torrent tracker and even as a notary which other cryptocurrencies can do as well. The next release of Bitcoin currently being developed, version 0. What this allows for is a little more space in the output section to provide users the ability to add some new data such as a distributed contract to be included via a hash.

A couple examples Mike gives are the transfer of goods such as a car and the execution of a trust fund through a will , both of which can be conducted without many additional intermediaries. For example, if a car ignition system is reengineered to connect with a cryptoledger protocol, it could enable car owners to buy and sell vehicles remotely via trusted timestamping. The execution of a will e. In actuality the potential applications can be expanded to anything that involves rights verification such as stocks, titles to houses, digital media as well as the keys to houses and cars.

In fact, this past fall Mike gave another interview describing these potential applications in more detail. Another potential way to utilize a crypto blockchain to verify wares is through a process being developed called Colored Coins.

These tokens can then be exchanged, just like bitcoin tokens, by anyone anywhere. This enables a decentralized, trustless form of asset management that uses a blockchain as both a ledger and transportation mechanism. For example, some of the first places we are going to have adoption will likely be real-estate and portfolio management. A portfolio manager can issue one color that represents a portfolio of stocks backed by the real holding and sell it globally.

If he is savvy and his products are good, his colors are going to have demand. So transferring ownership is very easy, quick and safe — just like bitcoins. In the real estate industry someone can issue their apartments using colored coins and have them float on the blockchain, or manage time-sharing based on color.

I also spoke with Amos Meiri, head of dealing at eToro and also a member of the development team for the Colored Coin project. I specifically asked him if it would be easier to simply conduct all trade privately at the centralized exchange where it will be more scalable and private. First, users do not need to trust their bitcoins to a centralized exchange.

Companies cannot manipulate ownership records to commit fraud, for example. On a different note, my laptop has a in it, which is not listed on that hardware wiki. It says the gets like mhash but should I try with mine? Is laptop mining a bad idea?

I personally use a GTX. Not much of a point other than to just mine whilst away for extended periods of time. The only case you should be mining with the s is if the following 2 are valid: Getting MH's out of my ati Crank it up man just watch heat and artifacts.

Then back it off. Hero Member Offline Activity: I really don't understand how BTC mining works. I have an i7 Quad-core 3. Or was I reading right on another thread that each card had to have a monitor? Powered by SMF 1. February 03, , Fiyasko Legendary Offline Activity: SocomX1 Newbie Offline Activity: Beyondo Member Offline Activity: Atruk Hero Member Offline Activity: DrG Legendary Offline Activity: