Wikicoin Eduard Ezhov

5 Best Litecoin Mining Pools: Mine LTC with a maximal effectiveness

📚 Wikicoin
Many mining pools turned out scams last year. It is important to choose a stable and reliable service before starting mining.
5 Best Litecoin Mining Pools: Mine LTC with a maximal effectiveness
Contents

Litecoin has been a leading cryptocurrency since its foundation. It is probably the most successful and certainly the most popular fork of Bitcoin. In the last few years, it has become an independent project with its own technologies and philosophy.

Often, talking about Litecoin, crypto-journalists mention that it provides four times faster transactions than Bitcoin. Obviously, this is true because creating a new block in Litecoin network takes 2.5 minutes, while in Bitcoin it is at least 10 minutes. You might think this is an evident advantage, but things are quite more complicated in Blockchain-networks.

What makes Litecoin Different?

Unlike Bitcoin, Litecoin makes technical improvements really often, sometimes not paying enough attention to potential risks. Developers try to provide as fast transactions as possible, improving many sides of Blockchain-technology: for instance, different hashing protocol or SegWit in 2017. Such a risky policy obviously affects the stability of the network, but Litecoin still has been doing great. It worked relatively well, even in difficult times, when the network was overwhelmed, so the team of developers got their credit of trust.

Despite a different hashing algorithm, Bitcoin and Litecoin have a lot in common, and both support mining. It is meaningless to try to mine Litecoin with your computer now because ASICs for Scrypt algorithm have already been producing. There are much more acceptable coins for CPU/GPU mining in 2018.

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How to mine Litecoin

If you want to mine Litecoin, it will require investments in hardware, facility and many related things. Only that way you have a chance to get a good revenue. In addition, it is important to pay attention to mining pools.

Today you are going to need a pool for mining anyway. About 2-3 years ago, there were some coins mineable without pools. Unfortunately, after a big rising in the industry in 2017, such an approach became a waste of money.

You do not have many pools to choose from if you decided to mine Litecoin. Many popular services turned into a scam in 2018. If you prepared a hardware, found a facility and are ready to make the last step for mining Litecoin, here are 5 best Litecoin mining pools that still deserve attention.

Multipool

Multipool interface

The pool was launched in 2013. That was a perspective but quite risky business because nobody knew if Litecoin was going to be a stable project or it would crash next year. That time pools just started to become a popular way of mining, and Multipool was one of the first successful projects.

Today the pool has servers not only in the USA but also in the EU. The fees are 1.5%. This is a relatively good rate because most of the other pools take 2%-3%. The pool provides different reward systems depending on a cryptocurrency you mine. In the case with Litecoin, it is PPLNS. Unfortunately, Multipool does not have a proper support service. It will be a problem, especially for beginners.

ViaBTC

ViaBTC interface

ViaBTC is the second largest Litecoin pool now. There are many cryptocurrencies, in addition to Litecoin, available for mining here. With ViaBTC, you can mine:

  • Bitcoin

  • Bitcoin cash

  • Ethereum

  • Ethereum Classic

  • Dash

  • Zcash

Actually, it was originally a Bitcoin mining pool. Other coins were added later. Litecoin became available for mining on ViaBTC in 2017.

There are no fees for transactions in that pool, but miners need to pay a 4% fee for withdrawing. The reward system is PPS. If you have your own hardware, you just need to create an account and start mining. You can also try cloud mining, but it is quite less profitable.

Nicehash

Nicehash interface

If you are not familiar with Nicehash, you probably found out what mining is just yesterday. This is one of the most popular services for miners and crypto-traders. Nicehash is a multi-platform that supports almost all of the top algorithms, including Scrypt.

The main sense of Nicehash is that users can buy and sell computing power. Actually, this is not about Litecoin mining. You are getting paid in BTC. I decided to put Nicehash in this list because the Scrypt algorithm is available there. Hence, it does not matter what cryptocurrency is used to pay a reward. Anyway, it is always possible to exchange BTC for LTC in the Nicehash system.  

Nicehash does not require registration for miners. However, it is important to point out that some of older versions of ASICs firmware are not compatible with Nicehash. Before connecting to a server, make sure that you have the latest version of firmware. Full instruction is available on the official Nicehash website.

Payout level is 0.001 BTC. Fees depend on a balance and a wallet type. Full information about fees is provided in the table below:

Table 1 Nicehash fees

Wallet type

Balance

Fees

Eternal

Less than 0.1 BTC

5%

Eternal

More than 0.1 BTC

3%

Nicehash wallet

More than 0.001 BTC

2%

Coinotron

Coinotron interface

Coinotron is one of the oldest and stable mining pools. It was founded in 2011 and now provides nine cryptocurrencies to mine. A remarkable thing is that Bitcoin is not included in this list.

In order to start mining, you need to create an account on the Coinotron website and follow the instructions. The site, by the way, provides statistics of the most powerful miners and the latest confirmed blocks for every available to mine cryptocurrency.

The pool uses PPLNS, RBPPS and PPS reward systems. So, the fees are various from 1% to 3%. The minimum payout level is different for every coin. For Litecoin it is 0.02 LTC.

The main disadvantage of the pool is that it also does not really have an actual support service. If you have any questions, you can only search for an answer on a help-page.

Litecoinpool.org

Litecoinpool.org interface

Finally, litecoinpool.org. It is definitely the best Litecoin mining pool in 2018. Previous services are mostly multiple and support many cryptocurrencies. litecoinpool.org is incomparably better for Litecoin miners.

The pool has a pure PPS reward system. You are getting paid for every valid share you submit. Actually, the pool provides merged mining, which means that you can mine several altcoins, based on Scrypt algorithm, but get a reward in LTC. In addition, there are no fees for transactions.

litecoinpool.org is one of the largest pools, so it has servers all over the world. It is very convenient because it is always better to connect to the nearest server.

One time litecoinpool.org had to close registration because it accumulated too much computing power. The pool users controlled 40% of the network, and it could cause distrust of the other part of the Litecoin community. Now the registration is open again.

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5 Most Secure Bitcoin and Cryptocurrency Wallets 2018

📚 Wikicoin
Where to store your crypto assets without risks?
5 Most Secure Bitcoin and Cryptocurrency Wallets 2018
Contents

Although Blockchain is a pretty safe and failure-proof technology, it doesn’t mean hackers cannot find security breaches. This is a never-ending war in proactive mode: websites introduce new protection features, hackers find new ways to break into. Therefore, if you want to sleep soundly knowing that your cryptocurrency is in safe hands, you need to find the most secure online Bitcoin wallet.

Selecting a suitable service can be pretty challenging, but we have compiled the list of the most reliable and secure Bitcoin wallet solutions.

What to consider?

Before we start reviewing the most secure Bitcoin wallet options, let’s take a quick look at the key types of wallets and salient features. There are the following Bitcoin secure wallet kinds:

  • The hot wallet is connected to the Internet directly and supposed to be used online only.

  • The desktop wallet is installed on your system as software and allows for offline Bitcoin handling.

  • The mobile wallet is installed on your smartphone. You can use Bitcoins by connecting to the Internet.

  • Hardware wallet is a portable device where you store Bitcoins protected by strong encryption.

  • The cold wallet is a 100 percent offline wallet that can only receive Bitcoin. It is considered to be the most secure cryptocurrency wallet, but it is only suitable for long-term coin storage.

Most typically, users choose online Bitcoin wallets with a large number of functions. How to secure your Bitcoin wallet? Just pick up the solution that comes with essential protection features.

First, choose a wallet that allows you to own and control your private keys. It should also have features for backup and security, such as pin codes. Secondly, the wallet you’re going to use should be compatible with different operating systems (iOS, Android, Windows, Mac). Do not forget that convenience of the interface is also crucial– you should be able to understand what is what easily: intuitive navigation is a must.

Lastly, check out how the wallet is maintained, and whether the community is participating in development and helping each other. Having 24/7 access to assistance and guidelines is more important than you think.

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Now when the stage is set, let’s observe the 5 most secure wallets for cryptocurrency.

1. Jaxx

This is a software wallet that allows you to have instant access to cryptocurrency anywhere and anytime. Jaxx is the first mobile wallet solution that supports iOS, Android, and browser. The main technology underlying Jaxx is a mnemonic seed that can be used to backup your wallet or transfer funds to a different device. Other great features include:

  • Receiving funds,

  • QR code scanning,

  • shapeshift integration,

  • wallet linkage in different platforms,

  • viewing of your crypto assets.

Jaxx was called the most secure Bitcoin wallet 2016, and is still widely used by cryptocurrency owners. The only drawback is somewhat sophisticated interface and navigation: it might require some training to understand how this platform should be exploited. Besides, with some new integrations, the app features may be unstable.

Jaxx interface
Jaxx interface

2. Electrum

In fact, this is one of the oldest Bitcoin wallets. The users need to generate a private encryption key using a seed of 12-24 words. That makes up for key privacy between 128-bits and 254-bits, which is very hard to crack.

Don’t like memorizing passwords? Then you can exploit the seed phrase as a recovery tool and bring your content back. Besides, the private key encryption type is AES-256-CBC– it’s super-strong. To top it off, Electrum leverages multi-signature support, two-factor authentication, offline cold storage, USB drive installation and server decentralization (it makes downtime impossible). So if you need the best secure Bitcoin wallet, Electrum might be the most agreeable choice.

3. Exodus

This is a desktop-only wallet that’s compatible with Mac, Linux and Windows and allows you to store multiple cryptocurrencies. The creators put a heavy focus on user convenience.

First, there are no hosted logs or servers. Secondly, no identity verification is required for using Exodus, but you should make a backup of the seed key (you’ll be asked for your email ID to send you one-click link recovery feature). If you want to spend your funds, you will need to set up a password.

You can recover Exodus account using the seed key and password, but it’s only possible if you have some balance on your wallet! To get help with wallet management, you can contact the customer support service via email.

Graphic charts on Exodus platform
Graphic charts on Exodus platform

4. Coinbase

This is an online-based hot wallet for making GDAX exchange instantly and without a fee. Using the same interface, you are free to purchase items with fiat currency. Besides, all crypto holdings on Coinbase are insured!

How to secure Bitcoin wallet on Coinbase? Activate 2-Step Verification and Google Authenticator, and there’s even a vault available for extra security. Please, note that Coinbase supports Bitcoin and Ethereum only.

5. Trezor

This little device from SatoshiLabs is the world’s first Bitcoin hardware wallet. Trezor is connected to your phone or computer via a USB, and stores your private keys and sign transactions. To start working with it, you will need to enter the same 9-digit pin code on your PC screen as on its OLED screen. This code is generated randomly every time you connect your Trezor device. After that, you will need to type your 24-word recovery seed. Keep the recovery key safe– this is the only way to restore access to your Bitcoins.

All in all, Trezor is similar to the Nano S device in use. Although it’s pretty costly, this is a very efficient way to secure your crypto assets. Today, you can buy this secure cryptocurrency wallet in both official online store and many other places– it costs around $110.

Trezor devices
Trezor devices

Which wallet is what?

Now when you understand what kind of wallet you need, let’s divide the most popular solutions into categories for your convenience:

Hardware Wallets

Software Wallets

Desktop and online wallets

Trezor, Ledger Nano S, KeepKey

Jaxx, Mycellium, Electrum, GreenBits, Blockchain

Exodus, Coinbase, MyEtherWallet

Although a hardware wallet is the safest way of keeping your Bitcoin earnings, this is a costly solution (hardware wallets come for $100 on average) and requires some manipulations to access your assets. From the convenience standpoint, software wallets seem to be the easiest to use, but they are more prone to hacking and errors.

Bottom line

The solutions we have reviewed are among leaders in the sphere of cryptocurrency storage: trust your assets to these platforms, and you won’t be disappointed. But remember that a free wallet is not always the best wallet– be ready to invest in your privacy and security. Store your Bitcoin earnings away from exchange platforms. Otherwise, you risk losing your virtual money.

With a secure wallet, Bitcoin is stored safely and efficiently. You can get access to your precious assets anytime and anywhere without being afraid of hacking. Remember: although most wallets leverage a wide range of security features, you bear responsibility for the safety of your private keys and the key seed– do not disclose this information and keep it away from other people.

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5 Reasons to Invest in Ripple: How to Invest in XRP Most Profitable

📚 Wikicoin
Being one of the Top-10 world cryptocurrencies, Ripple attracts both individual and corporate investors. Here are five reasons for you to become the next XRP owner
5 Reasons to Invest in Ripple: How to Invest in XRP Most Profitable
Contents

Cryptocurrencies used to be one of the most promising investments last year, and both well-established and new assets are on demand now. Although you’re not likely to make 1000% profits like the first investors, you can still turn a dollar by making the right bet.

While Bitcoin, Ethereum and some other coins alike have become too expensive, Ripple is a smart investment under $1. Why do we recommend investing in XRP, and what makes this cryptocurrency special?

What is Ripple?

The answer “Oh, it’s just a Bitcoin analog” is absolutely wrong. Calling it an equivalent means underestimating its value. Ripple is a payment platform that was created primarily for banks and financial institutions. It uses the proprietary XRP cryptocurrency. The network was established by for-profit company Ripple Labs in 2012 and started growing actively when banks and other financial institutions have taken their interest in it at the beginning of 2017.

Despite the fact that Ripple’s Blockchain ledger reminds of Bitcoin’s, it has a few principal technical differences that make up for faster transaction processing. Some accuse Ripple of being highly centralized: while Bitcoin and altcoin transactions are made possible thanks to distributed computing nodes, Ripple transactions are partially managed by Ripple Labs.

What are the advantages of Ripple?

  1. Ripple processes a transaction within 4 seconds. That’s much faster compared to some other cryptocurrencies. Overall capacity is 1,500 TPS (transactions per second).

  2. Ripple-driven transactions have a low fee — such way of payments is more beneficial than ordinary transfers.

  3. Ripple enables international financial transactions and can be used to send and receive payments in both fiat and cryptocurrency.

  4. Payments are available worldwide, and financial transfers are instant. That’s why Ripple is a better option than Western Union or international bank transfers.

Thanks to abundant Ripple investment flowing from over 100 banks, this platform is evolving quickly, and it may soon revolutionize the way we process payments.

Ripple TPS rate is growing
The number of TPS processed by Ripple is growing constantly

5 reasons to invest in Ripple

Now, when you have a better understanding of how it works, it’s time to find out why to buy Ripple.

1. Advanced transaction protocol

We all can agree that the current financial system leaves a lot to be desired. Sending money to people who aren’t clients of your bank is a long, tiresome process. Sending money abroad is even a bigger pain in the neck.

This is where Ripple comes into play. Thanks to the Ripple Transaction Protocol, we can transfer digital currencies, fiat currencies, and even information in a jiffy. No third-party agents are required — Ripple makes the process incredibly simple by sending the money via a digital channel safely and quickly.

Yet, both participants of the exchange process have access to a secure channel, which eliminates possible risks and threats. Therefore, XRP is equally useful for banks and individuals. “Should I buy Ripple for making minor transactions and transfers?” — you can ask. The answer is a resounding ‘Yes!’

Ripple is a great alternative to banking transfers
Ripple is superior for quick and safe transactions: it saves both money and time

2. Ripple will improve the banking system instead of erasing it

Of course, the vast majority of crypto enthusiasts share Peter Diamandis’ utopian opinion:

“At its core, Bitcoin is a smart currency, designed by very forward-thinking engineers. It eliminates the need for banks, gets rid of credit card fees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things.”

But thinking that banking systems will fall into oblivion is naive. Digital currency will stay here, but we are more likely to witness its integration into everyday life with the help of giants of the financial world — large banks.

With this point in mind, we can assume that Ripple Labs took a smarter approach: instead of opposing itself to banks, Ripple offers a mutually beneficial partnership. At the moment, over 100 banks have become Ripple investors and initialized the process of XRP integration. Those include:

  • Cambridge Global Payments

  • Star One Credit Union

  • BBVA

  • SEB

  • SBI Remit

  • eZforex

It is said that Ripple can successfully replace SWIFT payments, though its TPS is still on the substandard level. So, is Ripple a good investment for banks? Like any other for-profit institute, banks want money and cost-efficient ways of performing operations. Using Ripple saves a bank $3.76 per payment, which sums up to saving $564,000 every year.

3. XRP is backed up by a brilliant team

Let’s not forget that the ICO success depends on who’s behind the project. Many digital currencies don’t even hit the market because their incompetent creators don’t know the right methods. In 2015, the Ripple team managed to gather venture capital worth $55 mln in one funding round — apparently, these guys knew how to cast their project in the best light. Money continues to flow as major banking sphere players take their interest in this cryptocurrency.

Major corporate Ripple investors
The impressing list of major Ripple investors

 

There’s one particular investor to support Ripple: Google. In fact, the corporation was among the first contributors because it saw the potential to facilitate and protect payment. Google can’t make mistakes, right? Aside from Google and Apple, Ripple invest is made by Airbnb, Asana, BuzzFeed, Coinbase, Facebook, Twitter, and Snap.

4. XRP price predictions are promising

Is Ripple worth buying? One of the main aspects to consider is XRP price prediction. Although we are witnessing a minor price fall, Ripple is expected to overcome $1 threshold by the end of 2018, or even go back to $3.5.

According to the current predictions, many Ripple experts agree that its price can increase to $200–300 in 10 years. If Ripple becomes a de facto payment asset for banks, it can reach the price of $20 very soon. Besides, since the company continues heating up investors’ interest, XRP can become less volatile.

Here are the forecasts present on WalletInvestor:

XRP forecasts differ
Ripple forecasts 2019–2025 from different sources

 

5. Ripple is cheap and available

Ripple is still one of the cryptocurrencies under $1, so investment won’t take a burden on your budget. The coins can be bought on any popular crypto exchange — finding a suitable sum isn’t a problem. The average daily Ripple turnover on major exchange website is about $1–6 mln, which proves the currency is highly desirable.

How to invest in Ripple?

Now, when the plethora of XRP advantages is described and you know why to invest in Ripple, let’s find out how it can be done.

  1. Create a Ripple account. There’s a myriad of reliable XRP exchanges that allow keeping Ripple right on your account. Bitsane, Bitfinex, Poloniex, and Kraken are among leaders. Alternatively, you can use a special Ripple wallet. No matter which exchange website you choose, the process of buying XRP is the same.

  2. Buy Bitcoin or Ethereum on Coinbase. As soon as you have Ripple account created, you need the currency to buy it. Buying crypto in Coinbase is very simple: create an account and proceed to the Buy/Sell page to submit your request.

  3. Transfer your ETH or BTC to your Bitsane account. Open your Bitsane account, proceed to Balances → Wallets, and check the coins you hold on your account. Click on Bitcoin (or Ethereum), and you will see a wallet address generated. Go back to Coinbase, select ‘Accounts’ and ‘Send.’ The window for sending Bitcoin will be opened: here you should paste the address generated in Bitsane.

  4. Now you can finally buy Ripple. For executing Bitcoin-Ripple transactions on a regular basis, you can save the pair as a pattern and keep it pinned to the top of Bitsane homepage.

If you want to reap maximum benefit from your investments, be patient: it may take Ripple a few years to maturate and start thriving. However, the profits are definitely worth waiting. By the way, if you prefer cold storage and want a reliable XRP storage solution, consider a hardware cryptocurrency wallet. It will keep your XRP safe and secure, and you won’t be tempted to panic sell the currency in case of serious fluctuations.

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Bottom Line

“Should I invest in Ripple?” — you wonder. More likely yes than no. Like any other cryptocurrency, Ripple is volatile, and investment isn’t devoid of risks. However, considering the low price and low entry barrier coupled with optimistic XRP predictions, buying some XRP is a smart decision. Your humble investment can come to quite a sum in a few years.

You never know when Ripple will skyrocket — the crypto market seems to be in a never-ending fever. But XRP is one of the most technically advanced digital currencies with a strong team and rich investors backing it up. The guys from Ripple Labs are tight-lipped about the project, and they will surely take new steps in the direction of ultimate superiority on the crypto market.

So, hurry up while Ripple is still cheaper than $1 — don’t let your golden opportunities slip by!

*** Please note that every investment and trading move involves risk, you should conduct your own research when making a decision.

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What is CryptoNight? CryptoNote vs CryptoNight

📚 Wikicoin
Learn about CryptoNight, the new exciting technology in the crypto market that promises to usurp Bitcoin
What is CryptoNight? CryptoNote vs CryptoNight
Contents

CryptoNote is the technology or application or framework behind Monero, Bytecoin, AEON, and other aforementioned currencies. The hashing algorithm which this CryptoNote employs is known as CryptoNight, although AEON makes use of a modified algorithm, the CryptoNight-Light. The technology improves the state of privacy and anonymity as it doesn’t allow transactions to be traced on the Blockchain network.

What is CryptoNote?

This is defined as an application layer protocol that underpins a lot of decentralized digital currencies which emphasize the need for privacy and anonymity. It was developed with the aim of dethroning already established currencies like Bitcoin and Ethereum as it is imbued with a number of superior features.

CryptoNote currencies rely on a distributed ledger which serves to record all the balances and transactions carried out on the network. This is strikingly similar to the way Bitcoin operates but there’s just one major difference. The transactions on CryptoNote cannot be audited or traced back to the Blockchain to uncover the source of the transaction.

In this arrangement, the only people who have access to the complete details of the transaction are the sender, the recipient, and any other person who has one or all of the secret keys. Every other person who tries to get information about the transaction can only see the approximate amount that was sent in the transaction.

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What is CryptoNight?

CryptoNight is a proof-of-work algorithm which was designed to be compatible with the CPU of a conventional PC. This is the technology behind CryptoNote and its mode of operation is considerably different when compared to that of Bitcoin and Ethereum.

One major feature of the CryptoNight is that it is more difficult to boost the mining power using ASIC devices. For a while now, this is the challenge miners face and it is envisaged that this arrangement will help in keeping the mining distributed, rather than the almost-centralized system in place.

The CryptoNote technology utilizing the CryptoNight hashing algorithm also helps in preventing double spending. It also ensures that the parameters are adaptive and Blockchain analysis resistance. In essence, the aim of CryptoNight is to develop the next generation of cryptocurrencies that are even more ‘crypto’ and ‘cryptic’ than the existing ones.

Currencies using the CryptoNote technology

Several cryptocurrencies exist nowadays which use the CryptoNote technology, albeit the technology is still deemed young. One of the most popular cryptocurrencies you must have come across is Monero and it is supported by the technology. The popular technology has a market capitalization of $2,306,827,776 and one XMR currently sells for $142.93 as at July 25, 2018.

Similarly, another cryptocurrency currently doing averagely well is Bytecoin. Bytecoin has a market capitalization estimated to be $570,779,504. As at the time of this writing, one Bytecoin currently sells for $0.003104.

Truly these values are inconsequential when you consider giants like Bitcoin and Ethereum with market caps exceeding billions. However, one thing CryptoNote currencies have in their favor is the advanced level of privacy and anonymity. It is envisaged that in the next few years, there will be a heightened demand for currencies with these features and this will cause the value to skyrocket.

Apart from these two mentioned coins that use the CryptoNote technology, there’s a myriad of other coins in the market. They are listed below.

  1. DigitalNote

  2. DarkNetCoin

  3. Pebblecoin

  4. Quazarcoin

  5. AEON

  6. Karbo

  7. Boolberry

  8. Dashcoin

  9. Fantomcoin

Principles of CryptoNight

It is well known that CryptoNight relies on the random access memory (RAM) and this is the reason for increased dependency on latency. Before a new block is added to the network, every other previous block is considered. It has also been observed that the algorithm demands two Mb per instance.

Modern ASICs do not accept one megabyte of internal memory.

Even though GPUs are capable of running hundreds of concurrent instances, they are proven inadequate in a number of ways. For example, the GDDR5 memory is considerably slower compared to the CPU L3 cache. Although the bandwidth is commendable, the speed of the RAM makes it effete.

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What is CryptoNight mining?

CryptoNight mining simply entails how CryptoNight coins are mined. Because there are different variants of the CryptoNight algorithm, the methods of mining them differ. For instance, Bytecoin was introduced in 2012 and it uses the CryptoNight algorithm while AEON makes use of an altered CryptoNight technology- the CryptoNight-Lite.

The CryptoNight-Lite is considered less resource-demanding and it is more compatible with mobile devices. The CryptoNight-Heavy, as the name implies, is unlike the Lite version. As it was mentioned above, some of these variants were launched just to deter mining with specialized hardware.

In essence, you have four options by which you can mine CryptoNight coins.

  1. Mining with CPU

This involves you mining the coins using your CPU or even your mobile phone. It is accessible to everyone and easy for beginners to use. However, there’s hardly any profit to this method of mining.

  1. GPU mining

This involves purchasing a graphics card for mining. While the cost of maintenance and the initial cost of purchase might be off-putting, it has a very good efficiency and can even be profitable for miners.

  1. ASIC mining

This is a specialized software that is dedicated to mining alone. It is one of the most efficient methods but it is also one of the most expensive. In addition, it is applicable to CryptoNight classic alone.

  1. Cloud mining

Here, you purchase a subscription from companies who invested in large-scale mining equipment and you mine via the cloud. It is hardly profitable and there are manifold cases of scam.

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Bitcoin Price Volatility Explained

Trading Guide
Blockchain network effects cause Bitcoin price volatility
Bitcoin Price Volatility Explained
Contents

The network effect

In recent months a host of factors such as regulatory uncertainties, lack of oversight, custodial issues and bad press have been cited as causes of Bitcoin’s precipitous downfall.

While these factors do impact the price fluctuations of the cryptocurrency, economists say Bitcoin’s higher volatility compared to fiat currencies or stocks is caused by a characteristic known as the “network effect.”

The network effect is central to understanding Bitcoin’s valuation because it and other digital currencies run on a Blockchain ledger, which essentially a network.

The value of Bitcoin and other cryptocurrencies is based on Metcalfe’s law, which states that the measure of a network’s value is proportional to the square of the number of people who use it.

This basic equation is the foundation for Bitcoin valuation tools.  

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Metcalfe’s law

Expert analysts like Tom Lee and others use this fundamental law to determine Bitcoin’s future price. Tom Lee told Business Insider in an interview:

“94 percent of Bitcoin movements over the past four years is explained by Metcalfe’s equation.”  

Lee likened the exponential growth of Bitcoin to other networks like Facebook, Alibaba and Google, which have also increased exponentially in line with Metcalfe’s equation.

Essentially, what this means is that a network’s value grows exponentially, not linearly like other assets such as securities and commodities, says Navroop Sahdev, economist and blockchain expert:

“Networks gain and lose strength exponentially and a few actors leaving or joining the network can have a massive  impact.”

Sahdev, a fellow at MIT, says it is this characteristic that makes digital currencies like Bitcoin so unstable.  

In the example of Mt. Gox ‘s recent sell-off of 8,200 Bitcoin, which sent the currency reeling downward by 30 percent, the impact was much more significant than it would have been if the same number of shares were sold in a company.

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Why traditional economics fail

Part of the reason we don’t hear about how digital currencies are valued is that traditional economics fail to predict their behavior, says Sahdev.

In a cryptocurrency network, nodes process transactions, but the strength of the system is hard to evaluate because the “effect” of two or multiple transactions interacting with one another is not a characteristic of the transactions or nodes themselves. Instead, they become a property of the entire network. Sahdev clarifies:

“One plus one is not two. The link between the nodes is not the property of any one node. The system is more than the sum of its parts.”

Even the best models cannot predict the impact of “interaction effect” because they can only be determined after it takes place. While it’s tough to predict what will happen, it’s possible to identify trends, Sahdev says.

Small sparks make big movements

Research conducted by Spencer Wheatley and his colleagues at ETH Zurich in Switzerland found that when markets become overvalued, even a small event or incident can result in a significant correction.

Wheatley and Co looked at four occasions when Bitcoin price had drastically swung and found Bitcoin price drops occurred when the price was nearly four times higher than what it should be using Metcalfe’s law.   

Spencer Wheatley at ETH Zurich says:

“Our Metcalfe-based analysis indicates current support levels for the Bitcoin market in the range of $22 to $44 bln USD, at least four times less than the current level.”

As Bitcoin price becomes overvalued, any small event can induce a market correction.

So, it’s possible, that the sell-off 8,200 BTC by Mt. Gox, which amounts to less than the total number Bitcoin traded within a 10-minute time frame, was able to cause a massive price drop.

Wheatley uses the analogy of a forest fire to describe Bitcoin’s network effect.  When all the branches are very dry, even the smallest spark can create a raging forest fire. The events resulting in the bust of a bubble are often insignificant but have a huge impact.

Impact of Bitcoin futures

A report published by the San Francisco Federal Reserve found that there was a correlation between Bitcoin price drops and futures contracts, which placed downward pricing pressure on Bitcoin and other altcoins. With falling prices, pessimists started to make money on their bets, fueling further short selling and exacerbating the price drop, the report says.

Given that Bitcoin is susceptible to a small number of members exiting or entering the network, the adoption of futures contracts could have had a more significant impact on the cryptocurrency when compared with other commodities, especially if it was already overvalued.

Bitcoin’s bubble-like behavior

Joost van der Burgt of the San Francisco Reserve explains that Bitcoin price developments mimic Hyman Minsky’s financial instability hypothesis which explained the bubble in the global financial crisis of 2007.

Minsky’s model explains that there are five stages in a credit cycle: displacement, boom, euphoria, profit taking and panic.

The displacement phase occurs when investors get enamored by a new paradigm- in Bitcoin’s case, between 2009-2013 when the price came close to $1,000.

Next, the boom phase is characterized by prices rising slowly at first, but then gaining momentum as participants enter the market due to fear of missing out. Van der Burgt says this is what we started to see in 2015 when Bitcoin price rose to $300 and then to $1,000.

Bitcoin is now in the third, euphoric phase, which emerged in the second half of 2017 when the price skyrocketed past the $2,500 mark, all the way to nearly $20,000 in December 2017.

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Euphoria phase

The euphoria phase is characterized by people extensively borrowing funds to finance their investments, much like the real estate market bubble in 2007.  Nearly 18 percent of active Bitcoin investors have financed their investments by credit card, and 22 percent of this group indicated that they have not yet paid off their credit card balance, according to the report.  

Further, in 2017 several Bitcoin exchanges started to offer margin trading. Japan-based BitFlyer indicated in December that some investors leverage their cash deposits up to 15 times to finance their Bitcoin investments.

If Bitcoin is a bubble, then the next phase is profit-taking, in which investors will cash out before the bubble bursts.

Van der Burgt says we might have already entered this phase with the recent drop that cut Bitcoin price by more than 60 percent early this year.

Future of Bitcoin remains uncertain

While Van der Burgt says that Bitcoin is likely to be overpriced, he also believes that it is different from anything we have seen before. It’s possible that a decade from now Bitcoin’s market capitalization will be sky-high as it attains the status of a new global currency.

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5 Best Litecoin Mining Pools: Mine LTC with a maximal effectiveness

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Many mining pools turned out scams last year. It is important to choose a stable and reliable service before starting mining.
5 Best Litecoin Mining Pools: Mine LTC with a maximal effectiveness
Contents

Litecoin has been a leading cryptocurrency since its foundation. It is probably the most successful and certainly the most popular fork of Bitcoin. In the last few years, it has become an independent project with its own technologies and philosophy.

Often, talking about Litecoin, crypto-journalists mention that it provides four times faster transactions than Bitcoin. Obviously, this is true because creating a new block in Litecoin network takes 2.5 minutes, while in Bitcoin it is at least 10 minutes. You might think this is an evident advantage, but things are quite more complicated in Blockchain-networks.

What makes Litecoin Different?

Unlike Bitcoin, Litecoin makes technical improvements really often, sometimes not paying enough attention to potential risks. Developers try to provide as fast transactions as possible, improving many sides of Blockchain-technology: for instance, different hashing protocol or SegWit in 2017. Such a risky policy obviously affects the stability of the network, but Litecoin still has been doing great. It worked relatively well, even in difficult times, when the network was overwhelmed, so the team of developers got their credit of trust.

Despite a different hashing algorithm, Bitcoin and Litecoin have a lot in common, and both support mining. It is meaningless to try to mine Litecoin with your computer now because ASICs for Scrypt algorithm have already been producing. There are much more acceptable coins for CPU/GPU mining in 2018.

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How to mine Litecoin

If you want to mine Litecoin, it will require investments in hardware, facility and many related things. Only that way you have a chance to get a good revenue. In addition, it is important to pay attention to mining pools.

Today you are going to need a pool for mining anyway. About 2-3 years ago, there were some coins mineable without pools. Unfortunately, after a big rising in the industry in 2017, such an approach became a waste of money.

You do not have many pools to choose from if you decided to mine Litecoin. Many popular services turned into a scam in 2018. If you prepared a hardware, found a facility and are ready to make the last step for mining Litecoin, here are 5 best Litecoin mining pools that still deserve attention.

Multipool

Multipool interface

The pool was launched in 2013. That was a perspective but quite risky business because nobody knew if Litecoin was going to be a stable project or it would crash next year. That time pools just started to become a popular way of mining, and Multipool was one of the first successful projects.

Today the pool has servers not only in the USA but also in the EU. The fees are 1.5%. This is a relatively good rate because most of the other pools take 2%-3%. The pool provides different reward systems depending on a cryptocurrency you mine. In the case with Litecoin, it is PPLNS. Unfortunately, Multipool does not have a proper support service. It will be a problem, especially for beginners.

ViaBTC

ViaBTC interface

ViaBTC is the second largest Litecoin pool now. There are many cryptocurrencies, in addition to Litecoin, available for mining here. With ViaBTC, you can mine:

  • Bitcoin

  • Bitcoin cash

  • Ethereum

  • Ethereum Classic

  • Dash

  • Zcash

Actually, it was originally a Bitcoin mining pool. Other coins were added later. Litecoin became available for mining on ViaBTC in 2017.

There are no fees for transactions in that pool, but miners need to pay a 4% fee for withdrawing. The reward system is PPS. If you have your own hardware, you just need to create an account and start mining. You can also try cloud mining, but it is quite less profitable.

Nicehash

Nicehash interface

If you are not familiar with Nicehash, you probably found out what mining is just yesterday. This is one of the most popular services for miners and crypto-traders. Nicehash is a multi-platform that supports almost all of the top algorithms, including Scrypt.

The main sense of Nicehash is that users can buy and sell computing power. Actually, this is not about Litecoin mining. You are getting paid in BTC. I decided to put Nicehash in this list because the Scrypt algorithm is available there. Hence, it does not matter what cryptocurrency is used to pay a reward. Anyway, it is always possible to exchange BTC for LTC in the Nicehash system.  

Nicehash does not require registration for miners. However, it is important to point out that some of older versions of ASICs firmware are not compatible with Nicehash. Before connecting to a server, make sure that you have the latest version of firmware. Full instruction is available on the official Nicehash website.

Payout level is 0.001 BTC. Fees depend on a balance and a wallet type. Full information about fees is provided in the table below:

Table 1 Nicehash fees

Wallet type

Balance

Fees

Eternal

Less than 0.1 BTC

5%

Eternal

More than 0.1 BTC

3%

Nicehash wallet

More than 0.001 BTC

2%

Coinotron

Coinotron interface

Coinotron is one of the oldest and stable mining pools. It was founded in 2011 and now provides nine cryptocurrencies to mine. A remarkable thing is that Bitcoin is not included in this list.

In order to start mining, you need to create an account on the Coinotron website and follow the instructions. The site, by the way, provides statistics of the most powerful miners and the latest confirmed blocks for every available to mine cryptocurrency.

The pool uses PPLNS, RBPPS and PPS reward systems. So, the fees are various from 1% to 3%. The minimum payout level is different for every coin. For Litecoin it is 0.02 LTC.

The main disadvantage of the pool is that it also does not really have an actual support service. If you have any questions, you can only search for an answer on a help-page.

Litecoinpool.org

Litecoinpool.org interface

Finally, litecoinpool.org. It is definitely the best Litecoin mining pool in 2018. Previous services are mostly multiple and support many cryptocurrencies. litecoinpool.org is incomparably better for Litecoin miners.

The pool has a pure PPS reward system. You are getting paid for every valid share you submit. Actually, the pool provides merged mining, which means that you can mine several altcoins, based on Scrypt algorithm, but get a reward in LTC. In addition, there are no fees for transactions.

litecoinpool.org is one of the largest pools, so it has servers all over the world. It is very convenient because it is always better to connect to the nearest server.

One time litecoinpool.org had to close registration because it accumulated too much computing power. The pool users controlled 40% of the network, and it could cause distrust of the other part of the Litecoin community. Now the registration is open again.

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