Wikicoin Alex Morris

What Are Masternodes? Is It Still Profitable to Run One?

📚 Wikicoin
Masternodes explained: what is a masternode, and why is there so much fuss about it? Is running a masternode a good source of passive income?
What Are Masternodes? Is It Still Profitable to Run One?
Contents

A quick take

What is a masternode? Masternodes represent big servers that run on the decentralized network of the currency of your choice. Together with nodes, masternodes create a two-tier system. The modus operandi of masternodes is similar to that of Bitcoin full nodes, but they come with additional features that make them more powerful. Masternode cryptocurrencies represent a good way to earn a passive income while you sleep, but there are caveats.

A history throwback: getting started with Dash  

Initially, there were no masternodes in the Blockchain consensus mechanism. Darkcoin, which was later rebranded to Dash, became the very first cryptocurrency that adopted the masternode model. The full masternode implementation took place in May 2015, resulting in a big price spike. With Dash, masternodes started being utilized for such features as DirectSend and InstaSend.

Source: coinsauce.com

Generally, masternodes fulfill two functions: they help to accelerate the transaction verification and also help to vote on a certain project. Masternodes essentially help tackle on the problem that has been plaguing the Bitcoin network ever since it dipped its toes into the mainstream. Masternodes with higher hardware requirements are able to process more transactions, and it prompted the appearance of the aforementioned InstaSend feature. Bitcoin naysayers are quick to shred the flagship currencies because of its slow transactions (compared to VISA and other established decentralized payment services).

At the same time, the fact that you have to own a sizeable amount of coins proves that you have skin in the game (thus, you are able to have a say in the development of a certain project). That by no means results in a greater centralization - Dash, for instance, has a huge masternode ecosystem (more than 5,000). Subsequently, all these masternodes are able to vote on important matters. However, after cryptocurrencies started gaining popularity, it became much harder for newbies to get involved in that ecosystem.

Lastly, another advantage of masternode coins consists in their ability to be sent anonymously. This pertains to Dash with its ‘PrivateSent’ feature that uses coin mixing. There is a common belief that masternodes are typical coins that are based on the Proof-of-Stake consensus algorithm, but there are also mineable coins.

💼 Related Article
Flash, Flash, a Hundred-Yard Dash: Darkcoin's Rapid Makeover Revisited
🔥 Hot
1 month 1 week
256
Flash, Flash, a Hundred-Yard Dash: Darkcoin's Rapid Makeover Revisited

Going back to Bitcoin’s early days

Crypto influencer Brian Colwell, who was behind the #MasternodeMeBro18 tournament, claims than running a masternode is reminiscent of Bitcoin’s pre-peak days when individuals would still be able to profit off Bitcoin mining without being displaced by monopolistic mining companies.  

“I feel like it gives me more control on a daily basis to decide what I want to do with my coins.”

How much does it cost to obtain a masternode?

There is a widespread misconception that masternodes tend to be pricey. It’s true for such major coins as Dash. At the time of writing this article, you have to pay $95,890 in order to obtain a Dash masternode. Moreover, the annual return on investment (ROI) is sitting at 6.94 percent, which is definitely underwhelming. The price of one Dash masternode stands at 1,000 DASH, which means that it would set you back more than $1 mln at the peak of the cryptocurrency space (Dash masternode payouts, however, would still be huge). If you had invested in one particular masternode that was worth around $20,000 back in January 2017, you would get a six-figure yearly income.

Obviously, running your own masternode can be extremely profitable if you choose the right coin. Many coins offer a higher return with significantly less expensive nodes. Take a look at the 5 biggest coins by annual ROI. Numus (NMS) is in first place with an eye-popping 13,101 percent increase!

Coin

Annual ROI

NUMUS (NMS)

13,101.91%

ZIJACOIN (ZIJA)

7,231.46%

MAGNET (MAG)

4,820.43%

KICKSOCCER COIN (KSOC)

3,805.29%

BEACON (BECN)

1,743.81%

GOLD POKER (GPKR)

1,660.11%

Pay attention to the fact that the numbers that are shown on masternode.pro are not necessarily indicative of what coin deserves your investment. You have to perform an in-depth analysis of the whole project in order (the team behind it, its price history, etc.). If the price chart of a given coin reminds a roller coaster, you might not want to invest in this particular coin since even a 100 percent ROI won’t cover the losses. As a rule of thumb, new coins from the bottom of the barrel tend to have a much higher ROI but it will be dwarfed when the price goes up and the risk that is associated with a certain coin goes down – it’s very risky to invest in a coin that started less than a year ago. Other growing pains connected to the number of supported coins include tiny communities and poor technical support.  
  
What to do if you can’t afford a masternode? Despite the crypto rout, not every beginner-level investor is able to shell out $95k for a Dash masternode. Hence, you can purchase masternode shares but it comes with a big downside: you have to give your coins to a third party.

A brief overview of popular masternode coins

Name of coin

CMC rank

Price (at press time)

Number of coins required for running a masternode

DASH (DASH)  

14

$90.26

1000   

NEUTRON (NTRN)

911

$0.01

25,000

PIVX (PIVX)

91

$0.72

10,000

VITAE (VITAE)

198

$1.26

20,000

DIAMOND (DMD)

427

$1.34

10,000.

Should you invest in masternode coins?
U.Today is not here to give you investment advice, but you should be extra cautious when pouring money into master nodes. The truth is, the lion’s share of masternode coins are nothing more than Dash copycats with little to no utility (they are not being adopted in e-commerce, etc.).

Of course, these coins are not outright scams, and the concept of masternode remains promising, but they showed disastrous results during last year’s crypto winter with even the third best-performing currency appearing in the bloodbath. On the flip side, you can still earn top-dollar regardless of what specific coin you chose in case Bitcoin price shoots up, and the whole market appears in the green. Also, different altcoins are pumping from time to time, and you could take advantage of this volatility. To remain profitable, your masternode has to cover the computation expenses and the inflation rate.   

Generally, the yield from the masternode depends on the following factors:

  • the price of a specific coin when the exchange took place;

  • the frequency of payouts;

  • the cost of running a node (computational expenses and so on);

  • the cost of coins in the long run.  

How to run a DASH masternode?

Disclaimer! These steps presuppose that you’ve already installed Dash Core wallet and bought the required amount of Dash on a cryptocurrency exchange.

Source: docs.dash.org

  1. How to set up a masternode? The first thing that you have to do is to send exactly 1,000 DASH, subtracting the fee (such a hefty transaction may take up to a day in order to be confirmed, but you can speed up this process by using the InstaSend feature).

  2. Once your transaction has been confirmed, you are to grab your public key in order to locate your collateral ID and index.  
    NB! Make sure to use the ‘Coin Control’ option that gives you the ability to choose what input you can choose as your output.

  3. The most challenging thing about configuring your own masternode is getting it hosted. A masternode needs a server to process your transactions (having the required amount of DASH in your wallet is not enough). You can literally use your own server that will run 24/7 in your room, or you can set up a VPS, which requires time and some programming skills. Alternatively, you can use any service (for instance, Node40) for managing your own masternode, but it comes at a big price. For instance, Node40 has an annual fee of 19.2 Dash Digital Price is another service that will help you to set up a masternode in a snap.    

  4. When using Node40, all you have to do is to go through a quick registration process, and then you can use the Node40 setup wizard (it takes only several minutes in order to get your masternode running).

In case you deal with any other masternode coins (ION (ION), ChainCoin (CHC), etc.), the modus operandi will be pretty much the same if you do not want to get your hands dirty while setting up a server by yourself. Those who want to save money can install a VPS themselves. Here’s a detailed guide on Ubuntu VPS Setup. Before that, you have to choose a VPS provider such as Vultr or Digital Ocean.

Pros and cons of running a cryptocurrency masternode

Pros:

  1. The ability to earn passive income.

  2. You get regular payouts (the number of payouts depends on the coin of your choice);

  3. You improve the scalability of the network.

  4. Masternodes able to have a say in the future development of the network.

So, you set up a server and get paid. Sounds like a nice concept, right? However, everything has its ups-and-downs.

Cons:

  1. The sizeable amount of initial investment.

  2. Setting up your own VPS server can be tricky.

  3. Cryptocurrencies prices are rather volatile, and you may end up losing the majority of your investment.    

What the future holds for cryptocurrency masternodes?

Not being deterred by the bear market, masternodes are gradually becoming a new trend in the cryptocurrency world.   

It is quite possible that the current definition of masternodes will completely change by 2020. A startup called Eximchain has raised the bar for potential masternodes, requiring them to complete know-your-customer (KYC) and go through a voting process. Basically, this resembles full-fledged elections where members choose among eligible representatives.  

Source: financeandmarkets.com

Meanwhile, a new startup called Kalkulus actually lets users run a masternode without using computation power (Kalkulus will do the job by itself). Colwell explains that a bigger number of nodes translated into a bigger social following.

Wikicoin
views
👓 Recommended articles
Wikicoin Darryn Pollock

Bitcoin Buckles to New Year Low — Here’s What’s Caused it

📚 Wikicoin
Bitcoin has dropped down to $3,400 a coin — a new low for 2018 — and there are a few reasons why
Bitcoin Buckles to New Year Low — Here’s What’s Caused it
Contents

The downturn in the Bitcoin market — looking back from it's all time high which was just short of a year ago on December 17, 2017, at around $20,000 — has continued towards the back end of 2018. The price of the cryptocurrency reached a new low for 2018 as it dropped to $3,400 a coin.

It has been a long a steady road of decline through most of 2018 with a few key moments and distances pushing the entire cryptocurrency market downwards. Overall, there has been increased regulatory scrutiny, the speculators market has bubbled and popped, and there has been a fall in general interest as such.

But there have been some more direct and noticeable catalysts for the downturn in the markets. In fact, the most recent fall which took Bitcoin away from a strong $6,200 resistance was partly down to a Bitcoin Cash hardfork.

Because of the bear market, or even the cryptocurrency winter as some are labelling it, there has been hardly any instances of good news being able to prop up the flagging market, rather seeing it respond to negative news with much more vigour.

Losing hype

To understand why the Bitcoin market is flagging like it is, it is important to know why it reached a stage of mass hysteria and hype almost exactly a year ago. Bitcoin and the resulting cryptocurrency boom, which was also fueled by an ICO explosion, was due to spectators and hopeful market chasers.

Bitcoin came into the general market offering ease of access and total inclusion to all who wanted a piece, as well as crazy volatility, which at that stage was almost always going up. This meant that anyone could enter the game, put money into it, and get quick returns.

There was a boom of get-rich-quick hopefuls which propped up the market based purely on speculation. This maret was also unregulated, so it moved at incredible speed — speed that was never sustainable.

Regulators catch up

Soon though, the regulators and governments started cottoning onto the cryptocurrency market and looked to stamp out some of the more troubling aspects of it. Many, like the entirety of China and the SEC in the USA, stamped down hard on things like ICOs, making many investors double take as they realized they could be in some trouble here.

Exchanges, companies, and other aspects of the cryptocurrency market were then taken under regulatory scrutiny, and this scared off a lot of speculative investors who started to wain as the market plateaued and dropped.

No favours

These reactionary moves from investors saw the market shrink and slowly deflate, but there have also been instances where the cryptocurrency market has not helped itself in the popping of a bubble.

The recent Bitcoin Cash hard fork has turned into an ill-advised and nasty battle which has painted the entire ecosystem with a bad brush. Its battle between the two forked chains has led to a hash war and has sullied the little reputation Bitcoin Cash had.

These moves have seen the price of Bitcoin go tumbling, and this latest example shows the price of Bitcoin nearly halving from before the fork and the resulting drop.

Wikicoin
views
👓 Recommended articles
Wikicoin George Shnurenko

5 Ways to Earn Bitcoin Without Mining & Investing

📚 Wikicoin
Let’s look at five schemes of earning BTC that can be used by almost anyone
5 Ways to Earn Bitcoin Without Mining & Investing
Contents

Is it possible to earn free Bitcoins without investing in GPU and mining rigs? Yes! You just need a bit of time and dedication. Let’s observe five schemes of earning BTC that truly work and can be used by almost anyone.

Back to 2009, when Bitcoin only appeared, we could have mined it on our PCs without problems- that’s what most modern Bitcoin millionaires did. But things have changed since then- now, mining has become a way more complicated process.

In order to earn BTC, your devices need to perform sophisticated calculating operations, and there’s no guarantee that the electricity and cooling power consumed will pay off– there are always guys with stronger graphics cards who can outperform you and snatch the precious coins from under your nose.

💼 Related Article
WikiCoin: How to Join a Mining Pool
🔥 Hot
9 months
256
WikiCoin: How to Join a Mining Pool

But it doesn’t mean you can’t become a proud owner of the world’s most famous cryptocurrency. How to earn Bitcoin without mining? Here are five simple but brilliant ideas.

Accept Bitcoin as a means of payments

Say, you’re a digital entrepreneur and have enough time and resources for establishing your own eCommerce website. Why not adding Bitcoin transfer as a payment method? This is what modern online stores and even restaurants do.

In 2010, developer Laszlo Hanyecz ordered two pizzas for 10,000 Bitcoins that weren’t widely known back then. Today, 10,000 Bitcoins are worth over $20 mln! Who knows, maybe the clothes or cups of latte you sell today will pay off 100-fold in the future. Bitcoin price is expected to grow, so you can regard Bitcoin payments as long-run investments.

What kind of business can you establish to earn Bitcoin for free? In fact, any kind! However, think of the target audience: these should be people who possess crypto wallet and are ready to spend their tokens. Here are the real examples of companies that accept Bitcoin.

Company

Sphere

What can you buy for BTC?

Overstock.com

Online retail

The service allows paying for anything from furniture to laptops with BTC. Today, it accepts several major cryptocurrencies.

Expedia

CheapAir

Traveling

Expedia- hotel bookings only (but may be expanded to flights, excursions, etc).

CheapAir– flights.

eGifter

Gyft

eCommerce

You can buy gift cards for the stores that don’t accept BTC directly.

Microsoft

Software

Deposit funds to your account to pay for apps, movies and games.

Newegg

Gadget sale

You can order gadgets directly from this retailer.

Dish

Satellite TVand Internet services

Subscriptions

Reeds Jewelers (brick-and-mortar stores only)

Jewelry

Jewelry, watches and loose diamonds.

Roadway

Moving services

You can pay for transportation, but hot wallet payments are accepted only.

PizzaForCoins

Foods

You can buy pizza from different restaurants (Pizza Hut, Papa John’s, Dominos) paying with several major cryptocurrencies.

As you can see, the choice is wide! It’s the most evident and the most efficient way to earn Bitcoin without mining. However, it’s not free. But how to get Bitcoin without mining?

Completing tasks

Not that this way to earn free Bitcoin easily– it will take your time, if you want to make a decent sum. Some websites allow you to get BTC by performing different tasks like visiting websites, doing simple analytics, watching videos and advertisements. As soon as you get used to completing these tasks, you’ll start earning faster. Here are some websites that allow for it:

  • BitcoinGet. Watch videos, complete tasks, and some special offers. Minimum payout is 60 µBTC.

  • FreeBitco.in. You can get BTC by typing captcha. There’s an interesting gambling option: you can try luck and double your winnings. Minimum payout is 0.00005460 BTC once a week. Extra BTC is given for referring friends.

  • Bitvisitor. It gives Bitcoin without investing for simply visiting websites (it can actually be left running in the background), but you’ll need to type captcha when switching from website to website. Minimum payout is 550 uBTC, which isn’t a low number.

  • QoinPro. This is the way to go for those who are good at making referrals. Just register, and you’ll automatically get 0.00000250 BTC and a bit of another crypto. A small number of coins will be transferred on your account automatically on a daily basis. The amount multiplies depending on the referrals you make– the system of referrals is  seven levels deep. Minimum payout is 0.00005500 BTC.

Give BTC loans

How to earn free Bitcoin online if you already possess some amount of it? Start loaning it to other Internet users for profit – the return can be generous. In order to flourish in this field, you need to have a well-established reputation and trust. There are two ways you can do it: either lend BTC to someone you know or use peer-to-peer platforms. In order to start this kind of business, you need to exploit a Bitcoin banking model and make a deposit on a website that pays at a fixed interest rate. If the website fails to do its job and a loaner disappears with your crypto-money, you can simply lose the investment. However, in such cases, websites usually grant a full return.

A similar way is Bitcoin trading: you also need to have some initial sum to start. However, this method is optimal for finance-savvy people who can predict currency fluctuations, have a good intuition and enough patience not to exit the game too soon.

💼 Related Article
30 Best Bitcoin Memes Ever
🔥 Hot
6 months 3 weeks
256
30 Best Bitcoin Memes Ever

Get Bitcoin as tips or salary

How to make money with Bitcoin without investing by doing what you love? Turn your hobby into a job. There are two ways to realize this idea. Some platforms incentify their users with BTC, for instance, Steemit: you write articles and people who read and like them can make donations in the form of Steem tokens that can be converted to any crypto coin. The scheme is simple:

1. Register an account at https://steemit.com/.  You will only need your email address and a phone number.

2. Make an account at https://bittrex.com/.

3. Create an account at https://www.coinbase.com/signin.

How to earn free Bitcoin then? Start publishing posts, and if readers like them, they’re likely to donate. Don’t forget to check your Steemit wallet. Don’t forget to add your Coinbase wallet to the account. Bittrex is used for coin conversion.

Alternatively, you can earn Bitcoin free by working in companies that pay salary in BTC. Yes, such enterprises exist! Most people who get BTC this way are programmers and specialists. However, the borders are expanding, and there are more and more individuals seeking for a Bitcoin-rewarded job. Taking into account the fact that Bitcoin price is expected to rise, this can be a smart investment for the future.

Gambling & betting

How to earn Bitcoin without investing anything but your time? Gambling seems to be the easiest way, especially if compared with the above-mentioned processes.

Yes, there are websites that offer Bitcoin payments, one of the most reliable ones is mBit. However, it involves a high risk – in gambling, you can’t rely on anything but your luck.

All these strategies of playing slots may simply not work. And who knows that this or that online casino doesn’t cheat? Anyway, online Bitcoin casinos are considered to be the gambling of the future, so if you have experience of making money on virtual slots, try your luck.

How to earn Bitcoin for free if you’re good at sports analytics? Try sports betting. Predict the game results, and you’ll get rewarded with Bitcoins. In this case, you need to analyze and be a savvy sports fan – a perfect opportunity for amateurs. The most popular gambling and betting websites include:

  • BetChain

  • BitStarz

  • Fortune Jack

  • Oshi Casino

  • Nitrogen sports

  • Cloudbet

  • BetOnline Sports

  • 5Dimes Sportsbook.

💼 Related Article
Hot Wallet vs. Cold Wallet: What the Different Storage Methods Do
🔥 Hot
7 months 2 weeks
256
Hot Wallet vs. Cold Wallet: What the Different Storage Methods Do

Bottom line

As you see, Bitcoin mining without investment is possible: there’s a myriad of opportunities to make a virtual fortune without making bank-breaking investments and building mining rigs. So, how to decide what is a suitable method for you?

First, consider your starting budget and the time you’re ready to dedicate. If you have a pretty good capital, you can either establish an online store that accepts Bitcoins (that means you need to run your own business, which is a serious step), or try loaning Bitcoins (this initiative implies less effort, but pays off less).

Don’t have much to invest? Then you need to make money from scratch. Again, here you need to estimate the amount of effort you’re ready to sacrifice. If you’re talented in writing, translating, programming, or any other sphere, opt for writing a blog or even finding a job where the salary is paid in Bitcoins. If that’s too much for you, websites with small tasks will be the thing. Gambling and sports betting implies the minimal amount of effort, but doesn’t guarantee you stable revenue– you stay at the mercy of the chance.

Even though Bitcoin mining is rarely worth spending time and money now, it doesn’t mean you cannot get the coins. With the above-mentioned ways of earning you can get the precious currency even operating on a shoestring budget.

💼 Related Article
Top 10 ICOs by Funds Raised, From Filecoin to TRON
🔥 Hot
6 months 4 weeks
256
Top 10 ICOs by Funds Raised, From Filecoin to TRON

Wikicoin
views
👓 Recommended articles
Wikicoin Eric Eissler

20 Best Bitcoin Cloud Mining Sites in 2018

📚 Wikicoin
Cloud mining offers many advantages over physical mining rigs
20 Best Bitcoin Cloud Mining Sites in 2018
Contents

You have been thinking about mining Bitcoin or cryptocurrency for awhile, but you are not sure about spending thousands of dollars on a mining rig nor the massive quantity of electricity that would be required to mine. Electricity costs vary country to country, region to region. Now, that you have thought this over, it might not be a very profitable venture due to these high start-up costs. That is where cloud mining comes into play. This article will dive into the details about the best cloud mining sites, the best cloud mining services.

The nuts and bolts of mining

Where does cryptocurrency come from? While paper money is printed and distributed by the government, Bitcoin and altcoins are generated in a different way. Miners use special equipment and software to solve mathematical problems and approve transactions – in other words, they sustain faultless functioning of the Blockchain by providing the computing power. Thus, the currency is issued by the miners for incentives.

During the mining process, a hash of a transaction block is created: it’s impossible to forge, which protects the integrity of blockchain and eliminates the need of a centralized system. As a rule, mining is done on a personal computer with a fast and strong CPU. However, considering the complexity of computations, one PC isn’t enough already – a mining rig can provide the optimal computing power.

Why mining at the low speed isn’t an option? Here we tackle the competitive issue: say, several miners are generating a transaction block. The reward will be sent only to the miner who generates it first. Therefore, powerful equipment is essential for staying ahead of competitors and reaping benefits.

Hardware vs cloud mining

The principal difference between traditional and cloud mining lies in whom the mining facilities belong to. Hardware mining presupposes buying all the components for a mining rig, installing it at your place and paying for electricity bills on your own. With cloud mining, you just need to find a suitable package and make an agreement with the provider. The company that provides its mining cloud servers charges some certain fee (as a rule, about 3% from reward + withdrawal fees).

Let’s observe the pros and cons of each solution:

 

Pros

Cons

Hardware mining

- The hardware belongs to you, you are free to configure and adjust it

- Traditional mining is the only way to develop your IT skills and become more tech-savvy

- The hardware is expensive, while minor investment isn’t always paid off

- The hardware is up and running on a 24/7 basis, which results in enormously expensive electricity bills and a lot of heat

Cloud mining

- Absence, or low maintenance cost

- You don’t have to wait for the hardware to be available – mining starts as soon as you purchase service

- No hash rate fluctuations

- No maintenance, no physical space is required

- Daily payouts

- The initial cost compared to purchase of your own hardware can still be high enough, though it’s paid off

- Some mining companies are scams

- You don’t educate yourself on mining and don’t experience such excitement as usual miners do

Benefits of best cloud Bitcoin mining

  • You don’t have electricity costs, besides using your own computer to go to the cloud mining site. Cavet: you might have an electricity fee from the cloud mining company. Many companies have data centers in Georgia or Iceland where electricity is cheap.

  • You can participate in the best Bitcoin cloud mining without maintaining the hardware on your own.

  • No investment in mining equipment necessary, your personal computer will get you started in most cases.

  • No ventilation problems with hot equipment--Some hardcore miners use the heat from their mining rigs to heat their homes during the winter! Yes, mining rigs get that hot.

  • Start mining with even just one gigahash.

More on this topic: Math Teacher Solves Cryptocurrency Mining Energy Crisis

The basics of Mining

To get started with cloud mining, you must enter into a mining contract. This contract will specify the hash rate and length of time. A higher hashrate will lead to more coins being mined and electricity consumed. You can expect to pay about $170  for a 1000GH/s hash rate. A cloud mining contract’s length can range from six to 36 months or more. Make sure to check into and understand these rates on offer by the cloud mining company. When it comes to making money with cloud mining, your return on investment will be determined by a number of factors:

  • Bitcoin price  

  • Exchange rate of Bitcoin into local fiat currency

  • Electricity  

  • Contract price from cloud mining company (You must pay to play!)

  • Any maintenance fees set forth by the mining company

💼 Related Article
10 Best and Biggest Bitcoin Mining Pools
🔥 Hot
7 months 3 weeks
256
10 Best and Biggest Bitcoin Mining Pools

Categories of cloud mining

  • Hosted Mining: Leasing a machine that is provided by the cloud mining provider. You will have physical equipment.

  • Virtual Hosted Mining: Your own virtual private server with mining software installed.

  • Leased hashing power: Lease a portion of the company’s hashing power, without the need for a physical or virtual machine. (This is the most popular method of cloud mining).

Avoid scams

The cryptocurrency sphere is filled with scammers. Almost every day, the headlines flash the latest ICO fraud, where a scammer used an ICO as a front to raise money for a fake company and then make off with all the money. The case is no different for mining, mining pools and cloud-based mining. If you have to pay money, pay attention to where it is going before you invest. The following are some tips to avoid being scammed.

  • Data center photos:

It’s important to see the machines you are going to be mining on. You would not buy a car without seeing it first, right? The same applies to cloud mining. If a company is running a legitimate cloud mining business, then there should be photos of its datacenter available to view. If not, then suspicions can arise.

  • Mining address:

A mining company that does not have and address or signed mined block could be the warning sign of a front. Usually, companies can be verified through its address on the Blockchain. Also, the company should sign the blocks that it mines to confirm ownership.

  • Avoid claims of limitless processing power:

“As much as you want for one low price.” Really? No. Any mining business will be constricted by how many hashes it is able to rent out to its customers. If a company claims that there is no limit to its hashing power, or does not provide this information, then the firm should be avoided.

  • Inability to withdraw balance:

If you can put money in, but can’t take it out, then chances are high it is a scam.

  • Hidden domain contact details:

Normal businesses go to great lengths to prove that they are trustworthy. Contact information should be readily available and provided without hesitation if requested. Private domain registration is a scam indicator. Beware!

Looking at the downsides, it is important that you conduct your own due diligence when it comes to cloud mining. Remember to read though contracts thoroughly to understand what you are setting yourself up for. If you don’t understand something or the legal speak is too convoluted, there is a good chance something dubious is trying to be hidden.

However, this not to say that every company in the mining space is illegitimate. Although the cloud hashing business is filled with scams, there are some reputable companies out there, and they could provide you with a profit under the right conditions. Now on to investments and profits, is cloud mining worth the risks?

More on this topic: 10 Best Bitcoin Mining Software 2018

5 Notorious Cloud Mining Scams

Beware of the websites below! They ceased making payoffs and lost credibility.

Fleex

This project was established in July 2017. It allowed mining Bitcoin, Dogecoin, and Litecoin offering 2-3% daily revenue. Fleex offered a 100 Gh/s registration gift and two-level partnership program. There was no withdrawal and deposit fee, and the opportunity to rent computing power for an unlimited period of time. Unfortunately, the website closed in August 2018.

Rapidminers  

This project promised 3-7% daily income and welcomed newcomers with a 100 GH/s bonus. It allowed mining for BTC, LTC, DOGE and – surprise – USD! Rapidminers leveraged a level system – the more you pay, the more is your income. The scheme seems to be crystal-clear, however, Rapidminers soon proved to be nothing more but a scam. The website was profitable for less than a month.  

Cryptomonitor

It is worth noting that Cryptomonitor has been existing for a comparatively long time – it operated almost 1000 days before being shut. It specialized in BTC mining and accepted BTC and USD. The website also provided an exchange platform, blog and referral programs. Cryptomonitor promised daily income from 0.1 to 2.0%, and it used to be profitable until July 2018.

Micro-BTC

Being launched in 2015, Micro-BTC offered lifetime 30 GH/s computing power for the newly registered users. It accepted BTC payments and didn’t charge for deposit and withdrawal. The website provided datacenters in Europe and the USA. Since October 2017, it ceased making payments.

HashPerium

The project was launched in March 2018 for mining Bitcoin and provided 3 datacenters in Iceland, Russia, and China. HashPerium offered 135Gh/s bonus and up to 11% daily profit, which is too generous for a trustworthy project. Another sign of a scam is the fact that there was no information about who’s in charge of HashPerium. Crypto experts also claimed it to be just another Ponzi scheme and were right. In fact, the project existed for two weeks only!

💼 Related Article
10 Cryptocurrency Security Tips How to Keep Your Cryptocurrency Safe
🔥 Hot
8 months
256
10 Cryptocurrency Security Tips How to Keep Your Cryptocurrency Safe

Worth the investment?

While many reminisce over the early days of Bitcoin mining, when you could use your desktop or laptop to mine and the rewards were much higher, the matter of fact is that it is still a risk. This is because you must make an initial investment to join a cloud mining service and pay overhead costs, which eat into your profits. The more hashing power you lease, the more bitcoin you can mine, but again it comes with higher costs. In other words, it is spend money to make money.

More on this topic: 5 Ways to Earn Passive Income with Cryptocurrency

Another factor to keep in mind is the price volatility. This is akin to gambling because if the price of Bitcoin or another cryptocurrency decreases, you are then losing more of your profit to price volatility. On the flip side of the digital coin, there is the chance the price will increase and you will maximize your earnings. On the contrary, all mining options aside, the simplest investment is to buy a currency from an exchange and hold it until you can sell it for your target price. This way avoids the contracts, the fees, and everything that complicates the direct path to a cryptocurrency profit.   

Top 20 best Cloud Mining services

Take some time to browse though these sites to determine the best cloud mining ROI, the best cloud mining Litecoin, the best Ethereum cloud mining, how much the plans are, the fees etc, before you commit. Some contracts can be as long as two years! So you will want to be sure you committed to the right plan that gets you the best earning potential.

1. Hashflare

Being established in 2015, Hashflare service has quickly gained a stable position on the cryptocurrency mining market. It provides computing power for BTC, ETH, LTC, and other essential altcoins. Hashflare is an independent service that has extended its mining facilities thanks to a partnership with Bitmain, Bitfury, and Inno3d. Hashflare service is easy for starters to use, that’s why it’s exploited by over 2.5 mln clients. In July 2018, Hashflare canceled the contracts and ceased its activity not being able to put up with maintenance expenses. However, there’s still a chance that it can be restored.

2. Genesis Mining

It’s one of the biggest cloud mining services that started providing the facilities since 2014. Genesis Mining works with Bitcoin, Litecoin, Dash, Dogecoin, and Monero. It operates three mining centers (Island, Canada, and Bosnia) and is used by 2 mln miners.

3. Hashing24

This Bitcoin mining service has been around since 2015. Hashing24 offers top-notch data centers in Georgia and Iceland. The website is simple and intuitive, the interface is present in 9 languages. The company partners with leading mining providers, including BitFury, and ensures a decent level of service and customer support. The pricing policy is quite agreeable: the cost of contracts varies from $19 to $68 for 100 Tb/s.

4. Bit Miner

This is not a website that provides Bitcoin cloud mining facilities – Bit Miner is rather a browser extension that promises to bring you 60,000 satoshi every day with $0.04 daily investment only. At first glance, the website looks professional and serious. However, the vast majority of customer reviews prove that Bit Miner is just a scam – as soon as you start withdrawing more or less worthy money, the service fails. It can be used to mine for a few days only. Besides, keeping your browser opened even half a day is inconvenient.  

5. OxBtc

At first glance, this cloud mining service can look confusing because it’s a Chinese website (there’s an English version, too). OxBTC is a reliable platform that not only offers cloud mining contracts but allows users for renting their own computing power. OxBtc has a pretty sweet concept of loyalty programs, referral programs, discounts, and free computing power giveaways. A nice choice for starters.

More on this topic: Bitcoin Cloud Mining Profitability- Is It Worth It?

6. The EOBot  

This is one of the oldest cryptocurrency cloud mining platforms: it was launched in 2013 and is still among the top cloud mining websites. The EObot allows mining large variety of crypto coins, including Bitcoin, Ethereum, Monero, Ripple, and Litecoin. Users consider Cloud SHA-256 4.0 5 Year Rental the most profitable option. What makes it a good choice?

  • The website is present in many languages, navigation is a no-brainer.

  • 8 mining algorithms and a comprehensive choice of packages.

  • Low minimum withdrawal threshold.

7. BTCsweet

BTCsweet is one of Top-10 cloud mining websites according to netbusinessrating.com. It supports several payment methods and allows mining Bitcoin only. New users get 5GH/s registration bonus, and there’s a profitable referral program (5-10%). The website has a bare-bones design, but it’s quite user-friendly and convenient. However, customer support leaves a lot to be desired: only tickets and phone calls for VIP members. The absence of maintenance fees is somewhat confusing – it is a typical scammers’ trick, though BTCsweet doesn’t seem to be a fraud yet.

8. Hash Gains

At first glance, the website looks professional and reliable. There’s a wide choice of tariffs – the more you invest, the higher is the revenue percentage. It was founded in 2016 and quickly gained the audience. Hash Gains uses advanced and reliable GPUs sustaining optimal speed and reliability of cloud mining. Hash Gains seems to be a reliable project until you take a closer look to its details: it offers 200% profitability, which is unrealistic.

9. Plan - C

This is a Georgian-based project: the team behind it uses eco-friendly mining facilities that sustain the optimal speed and power. At the moment, Plan – C can be used to mine Ethereum, Dash and Bitcoin, but other coins will be added soon. The website offers 1.5-10% income, which sounds reasonable.  Please, note that Plan – C leveraged a so-called ‘Cryptomix’ scheme – it’s a combination of mining and trading. It has a well-established affiliate program, but it only puts the project lifespan under question.

10. JSECOIN

JSEcoin is a browser plugin for mining JSE proprietary coin. The software is easy in use: it’s installed in the browser, and as soon as the user selects the level of loading (from 1 to 9) and activates it, the mining process is started. The process of mining can be controlled. The coins you earn can either be stored on the website, or sent to your Ethereum-compatible wallet. The main advantage of JSEcoin is the fact that no investments are required (unless you bought some coins during ICO), but don’t expect any serious reward: at the moment, 1 JSE = $0,001707.

11. NanoMiner

NanoMiner can be a bit confusing name because it actually allows for mining Monero which can be converted to Nano further on. This website doesn’t charge for transactions, so it’s perfect for handling small payouts. The service is very easy to use: this is a browser mining solution: you install it in your browser and leave up and running. For some users, small payouts may be not worth leaving their browser opened, but this option is pretty good for beginners.

12. MyCoinCloud

This Bulgarian-based project has been around for almost 3 years. Although MyCoinCloud cannot boast a large variety of coins for mining (only five coins are supported), it proves to be reliable and trustworthy. There’s a very large variety of contracts: started can get their feet wet using a 37.1 XMR mining contract and make a normal profit within 3 years, while $2995 contract for Bitcoin will be paid off within 2 years. The contracts are lifetime ones. Maintenance fee is $0.10 per KW/h, no referral system provided. Generally, the website is easy to use, and it offers adequate fees.

13. Bitcointrain

The Bitcointrain website provides a lot of crypto-related services, and cloud mining is just one of them. The minimum contract duration is 1 year, and you can start with any deposit amount, even a couple Satoshi. Average profitability is 0.5% daily. Bitcointrain promises that you can use the equipment for as long as you want – sounds too good to be true, but no one complained yet. There’s an interesting affiliate program that allows earning 50% from the faucet, 5% from the purchase of a cloud contract, and 0.5% from browser mining.

14. Hashnest

Present in the Net since 2014, Hashnest (BitMain’s project) allows mining Bitcoin and Litecoin and ordering a miner transferred into hash rate (Antminer models are available). It is one of the biggest cloud mining platforms: in 2015, Hashnest already counted over 43,000 users. The most outstanding feature of Hashnest is Payout Accelerated Cloud Mining Contract (PACMiC): such approach reduces risks and helps users to return the initial investments in case of non-profitability.

15. Elysium

The company was founded in 2016 in Hong Kong, and it offers a decent choice of contracts starting from 0.03 BTC starter package and finishing by 5 BTC VIP package. It should be noted that Elysium puts a heavy focus on the referral program, which is why some suspect it’s a Ponzi scheme. Anyway, the platform allows making regular payouts using various payment platforms and is quite easy in use. There are no withdrawal or exchange limits.

16. IQMining

This is a Russian project that was launched in 2016. The main benefit of IQMining is the fact it allows for mining over 100-150 different altcoins, and there’s a myriad of contracts available (most are 5-year contracts, lifetime contracts have been introduced recently). Such profitability as 50%/month is too good to be true, but the website still functions and makes fair payments. It has data centers in Europe and Asia and ensures 99.5% uptime. If you’re a patient investor, trying this project makes sense.

17. CCG Mining

The website was established in 2017 and allows mining six major cryptocurrencies: Bitcoin, Ethereum, ZCash, Monero, Litecoin and Bitcoin Cash. CCG Mining offers three tariffs – not much to choose from. The maintenance fee is 0.00034$ per 1 GH/s for Mini package, 0,136$ for Starter and 8.5$ for Pro. There’s a profit calculator available, but it’s a bit illogical: it shows 247-day payoff period for all tariffs, and doesn’t consider the maintenance fee. Therefore, you should make your homework before signing a contract with CCG Mining – it’s not a scam, but still can be an unjustified investment.

18. Just-Mining

Number 3 mining website according to netbusinessrating.com, Just-Mining supports cloud mining of 4 coins: BTC, ETH, ETC, and ZEC.  The vast majority of reviews are positive, and users claim that payouts are made on a regular basis. Unfortunately, the website is present in French language only, so navigation can be pretty challenging. But if you’re ready to deal with such inconvenience, this is a great chance to rise a bit of cryptocurrency, or EURO – as you choose.

19. Suanlitou

Suanlitous is a Chinese project that was founded in 2017. It offers Bitcoin cloud mining and hash rate trade market. What users like is adequate fees: 0.071USD/kW·h electricity costs and 6% of daily revenue. There are two types of contracts available, but they can be adjusted: the online price calculator will help you to choose an optimal hash rate and contract duration. Just like other Chinese cloud mining websites, Suanlitou uses Antminer devices (S9 in this case). Users are free to sell their hash rate to BTC anytime. There are no signs of scam – use without hesitations.

20. ViaBTC

The world witnesses a true burst of Chinese cloud mining platforms, and ViaBTC is one of them. Being based in 2016, it allows for mining BTC, BCH, and LTC. Just like the previous provider, ViaBTC works with S9 Antminer and offers unlimited contracts. The cost of services is $199 - 1 TH/s for Bitcoin, and $5.90 - 1 MH/s for Litecoin. One interesting function is auto switch option: you can switch from mining Bitcoin to Bitcoin cash depending on what’s more profitable. Payouts are made on a daily basis. The website is available in different languages, so you aren’t likely to face any troubles when navigating it.

 

Established

Headquarters

Currencies

Contract cost

Number of users

Traffic*(last 6 months)

Countries*

Hashflare

2015

Estonia

BTC, LTC, ETH, Dash, ZCash

Bitcoin — $0.8 per 10 GH/s

Liteсoin — $1.8 per 1 MH/s

Ethereum — $1.8 per 100 KH/s Zcash — $1.4 per 1 H/s

DASH  — $3.2 per 1 MH/s



 

2.5 mln

?

Russia, Ukraine, Brazil, USA, Germany

Genesis Mining

2010

Hong-Kong

Bitcoin, Litecoin, Dash, Dogecoin, Monero

5-year contracts:

$285 - 1 TH/s

$1,400 - 5 TH/s

$6,875 - 25 TH/s

2 mln

?

USA, China, Russia, EU

Hashing 24

2015

Scotland, Thailand, and Ukraine

Bitcoin

$ 68.5 per 100 Gh/s

+ $0,00033 daily maintenance fee

?

352.98K

USA, UK, Russia, Spain, China, Thailand, Indonesia

Bit Miner

2016

USA

Bitcoin

15% reward fee

?

?

Europe, China, USA, Iran

OXBTC

2014

China

Ethereum

ETH HOST01 (91% annual profit) - $16 per 1 MH/s

GHS HOST01 (177% annual profit) -  $0.099 per 1 GH/s.

Over 80,000

90.57K

USA, Germany, China, South Korea, Russia, Austria, Indonesia

The EObot

2013

The USA, Brazil

BTC, ETH, LTC, Bitcoin Cash, Doge, Ripple, Dash, Golem, Cardano, CureCoin, NEM, Monero, Zcash, Factom, Bytecoin, STEEM, Lisk, EOS, Gridcoin, and Ethereum Classic

From $0.00117/GHS/Day to $0.00021/GHS/Day

Over 2,148,047

10.18M

Brazil, Russia, Ukraine, Venezuela, India

BTCsweet

2017

USA

Bitcoin

0.18$ per 1 GH/s

0% maintenance fee

?

157K

Morocco, Algeria, Nigeria, Saudi Arabia, Indonesia.

Hash Gains

2016

USA

Bitcoin

$350 – 1 TH/s

$1,750 – 5 TH/s

$3,500 – 10 TH/s

$5,250 – 15 TH/s

10,000

70.80K

20.32%

USA, Germany, Turkey, Indonesia, India

Plan - C

2017

Georgia

Bitcoin, Ethereum, Dash

Bronze Package ($250) – one share

Silver Package ($1000) – five shares

Gold Package ($5000)

?

?

Georgia

JSECoin

2017

UK

JSE

No contracts

118,000

650.91K

Brazil, USA, Ukraine, Russia, Germany

NanoMiner

2017

Germany

Monero

No contracts

?

43.5K

Brazil, USA

MyCoinCloud

2015

Bulgaria

BTC, ETC, ETH, XMR, ZEC

Starting from S37.1 for 50 H/s (XMR) and finishing by $5990 for 30 TH/s (BTC)

Over 1,000

50.92K

Bulgaria, Germany, Switzerland, Italy, Poland

Bitcointrain

2017

Germany

BTC

$20 per 10 sol/s

?

68.63K

Germany, Ukraine, Russia, Brazil, Indonesia

Hashnest

2014

China

BTC, LTC

$ 1699 for Antminer hash rate with maintenance fee $0.21/TH/Day

?

224.05K

Brazil, Russia, Poland, Slovenia, USA

Elysium

2016

Hong Kong

BTC

From 0.03 BTC to 5 BTC (annual contracts)

106,470

72.01K

Russia, Ukraine, Kazakhstan, Canada, Turkey

IQ Mining

2016

Scotland/Russia

>150 coins

SHA-256:

$ 300 per 3000 GH/s

Scrypt:

$ 600 per 300 MH/s

53,326

302.64K

Russia, Brazil, Ukraine, UK, USA

CCG Mining

2017

Poland/UK

Bitcoin, Ethereum, ZCash, Monero, Litecoin and Bitcoin Cash

Mini — 9.89$ / 100 GH/s,

Starter —  32.99$ / 400 GH/s

Pro — 1849.99$ / 25000 GH/s

Up to 10,000

378.61K

Ukraine, Russia, Armenia, Moldova, Georgia

Just-Mining

2017

France

BTC, ETH, ETC, ZEC

1.99EUR inc VAT / H / s

Reversive: 23.90EUR TTC for 9.5 H / s or 1 MH / s

Etherum: 14.99EUR TTC for 1 MH / s

16,000

83.07K

France, Belgium, Vietnam, USA

Suanlitou

2017

China

BTC

6% management fee, and electricity cost 0.071 USD/kW·h

Over 2,000

?

China, USA, Canada

ViaBTC

2016

China

BTC, BCH, LTC

$199 - 1 TH/s S9 bitcoin miner share

$5.90 - 1 MH/s L3+ litecoin miner share

Over 462,374 miners on BTC only (up to 750,000 overall)

575.35K

Russia, China, Germany, Venezuela, Vietnam

* data obtained from similarweb.com

These 20 cloud mining services are worth consideration: they make regular payouts and provide decent customers support. But before being harnessed by contract bonds, evaluate your budget, read the fine print and calculate profitability – not all projects are equally beneficial.    

💼 Related Article
10 Cryptocurrency Security Tips How to Keep Your Cryptocurrency Safe
🔥 Hot
8 months
256
10 Cryptocurrency Security Tips How to Keep Your Cryptocurrency Safe

Wikicoin
views
👓 Recommended articles
Wikicoin Vera Thornpike

Is Mining Ethereum Worth It in the End of 2018?

📚 Wikicoin
Is mining Ethereum worth it? Find out what ETH mining profitability is, and what the best cryptocurrency alternatives to Ethereum mining are.
Is Mining Ethereum Worth It in the End of 2018?
Contents

Mining is still considered to be one of the fastest and cheapest ways to become a proud owner of cryptocurrency riches. It seems to be easy-breezy: you install a mining rig, maintain its 24/7 functioning, and reap the profit.

However, not all cryptocurrencies are equally simple in mining. Is Ethereum worth hunting for at the end of 2018? It’s time to debug the myths.

What is Ethereum mining?

The process of Ethereum mining is pretty much the same a Bitcoin’s. For every block of the transaction, miners their computational power to solve mathematical puzzles until one of them wins. The first miner to process the data is rewarded with coins.

As explained by BTC manager:

“For the uninitiated, mining involves running the computer continuously as all the systems on a network compete among each other to solve complex numerical problems. The first system to crack the problem earns a set amount of ether or Bitcoin.”

Technically, miners run the block’s unique metadata (such as timestamp and software version) through a hash function and change the ‘nonce value’ that influences the hash value. If one miner finds the hash, other miners stop working on the current block and are automatically redirected to process the next block. This approach is called ‘proof of work’. In the nearest future, Ethereum team plans to make the switch to ‘proof of stake’ protocol.

image

Typically, a miner finds a block every 12-15 seconds. If miners start solving the puzzle too quickly or too slowly, the algorithm automatically changes the difficulty of the problem so that miners would get back to the 12-second solution period.

Does it mean that the chance to get a block depends on luck?

Both yes and no. With Ethereum mining, luck and the amount of devoted computing power are important.

ETH mining profitability: What it depends on?

Every crypto enthusiast should decide for oneself whether mining Ethereum worth it in their personal case. There are a few factors you should consider before buying hardware or a cloud mining contract.

  • Hash rate. This is the rate at which a mathematical problem is being solved to verify a transaction. The higher the hash rate, the better will be Ethereum mining power.

  • Difficulty level. As we’ve mentioned, Ethereum algorithm adjusts the difficulty of mathematical puzzles according to the speed miners resolve them to keep the 12-second mining time. Therefore, the more miners join the game, the higher will be the difficulty level.

  • Electricity consumption. Buying mining hardware isn’t enough: you have to keep it running by providing a continuous power source and cooling. That means enormous electricity bills. Is it worth to mine Ethereum when your earnings don’t cover electricity expenses? Definitely, not.

Add to that the cost of mining hardware, and you will understand that mining for Ethereum is a bit more complicated than most people think.

Look at the picture: the recent price falling has caused recession of users, and, consequently, lower difficulty. However, it is still enormous compared to other cryptocurrencies and initial condition.

image

Cloud vs hardware mining

If you don’t want to spend thousands of bucks on mining equipment, there’s always a chance to buy a contract for cloud mining – in this case, you won’t have to do anything at all. However, the most profitable contracts are typically concluded for at least a year or two. The hash rate stays the same while the difficulty level continues growing. That means that the contract that was once profitable may become totally useless within a few months.

Besides, it’s highly important to find a reliable cloud mining website – there’s a huge amount of scams and frauds.

Is mining Ethereum worth it?

Let’s face the truth: the biggest profits have already been gained. During 2017-2018, Ethereum raised in price considerably, and that attracted a lot of people. Millions of miners became suddenly interested in this way of making profit, so the difficulty of mining has risen enormously.

To top it off, the current situation on the market has made things only worse: Ethereum fell in price from $1,300 to $88. That totally devalues the process of mining.

image

What do experts say?

According to the recent report from CNBC, cryptocurrency market will soon be filed as a history – this activity is no longer profitable.

A recent study by Susquehanna proves that it’s not worth mining Ethereum anymore: the profits per month have fallen from $150/month in summer 2017 to almost zero today.

This situation mostly takes place due to Ethereum price nosedive: it has caused a domino effect on the entire mining industry. The process becomes unattractive to miners and that affects the hardware producers. For example, Nvidia GPU and chip manufacturer has lost about $100 mln because of that.

Here’s what the company’s representative said:

“We estimate very little revenue from crypto-related GPU sales in the quarter, consistent with management’s prior commentary that they were including no contribution from crypto in their C3Q18 outlook.”

Such mining giants as Bitmain have managed to create a monopoly in the digital mining market: recently, Bitmain’s hashrate already exceeded 40% on the Bitcoin network, and it is going to reach the threshold of 50%. But with Ethereum, things are different.

What’s the trick?

Here’s another hidden pitfall: the specific proof-of-work algorithm used by Ethereum (it’s called ‘ethlash’) is made so that mining would be harder with expensive ASICs – special mining chips.

That means that dedicated ASICs aren’t suitable for mining Ethereum. Besides, since Ethereum will move from proof-of-work to proof-of-stake protocol, buying an ASIC might be a bad idea because it won’t serve long.

Is Ethereum worth mining with a PC or a smartphone? Again, not – they won’t provide enough calculating power. Before you select any hardware or cloud mining plan, make thorough calculations – it will give you the understanding of perspectives and risks.

image

So, I stand no chance?

If you build a mining rig in hope for Ethereum difficulty to decrease with the number of miners subsiding, that won’t make any sense. However, you can switch to another cryptocurrency – this might be a great chance to compensate for hardware and electricity expenses.

The worthiest cryptocurrencies with optimal difficulty are:

  1. Monero. This is a digital currency for anonymous transactions. Its network was specifically tailored to resist implementation of Monero ASICs, that’s why this coin can be mined on your home computer. The mining process is simple: download a wallet to store coins (the official Monero GUI is recommended). Now download the software that supports Monero, for instance, guiminer or MultiMiner. Once you install it, the software will use the processing power to generate profit for you. If you want to get maximum coins, use AMD graphic cards – they’re in short supply, but you can still find some. For example, Nvidia graphic cards are still available.

  2. Dogecoin. Opposite to Bitcoin, Dogecoin cryptocurrency was made to add new coins annually. That’s added incentive for all miners participating in the process. The process of mining is the same: create a wallet, use your personal computer to install mining software. AMD and Nvidia cards can be used to boost the process. If you choose GPU mining, then install cudaminer or the cgminer software. Note that mining Dogecoin doesn’t impact your device because the process is running on the background.

  3. Vertcoin was created specifically for minor mining operations: it uses proof-of-work consensus, but is protected against mining by ASICs. Therefore, huge mining operations cannot dominate the Vertcoin Blockchain as it happened to Bitcoin. Implementing its philosophy of developing “the people’s coin’, the team created a special miner for generating VTC. This software can be downloaded for free from the official website, and supports CPU and GPU mining. Once you install and download the software, you will need to select a mining pool depending on the amount of available computing power. At the moment, Vertcoin can be mined with AMD and Nvidia graphic cards.

  4. Bytecoin. This is another cryptocurrency that can be mined on a home computer. Bytecoin puts an emphasis on solo mining – it’s designed to be an easy process for Bytecoin users. They only need to download a wallet and run software on their computer: when the program synchronizes with Bytecoin’s Blockchain, the wallet should be specified. To boost earnings, it’s better to join a mining pool that supports CPU mining. bytecoin.party is a good case in point – it doesn’t charge fees. Alternatively, you can download compatible mining software, for example, xmrig. GPU mining is also available.

If you doubt whether Ethereum mining worth it, try altcoins – there are still many decent variants around. Considering the volatility of coins, you can still benefit from price fluctuations. There’s no need to own a huge mining rig – even your PC can generate you a small income. Just keep an eye on electricity costs.

Bottom Line

So if you still ask yourself “Should I mine Ethereum?’’, change your mind. The difficulty is too high to handle it. The cruel truth is that mining cryptocurrency is not a ‘get-rich-quick’ scheme anymore. This is a business in which people invest a lot of money and time before they enjoy a substantial passive income.

While mining solo is still available, it’s highly recommended to join a mining pool because you will reap benefits from a larger supply of processing power and speed which will result in better returns. MultiPool, CoinEx are among the most well-established mining pools.

Wikicoin
views
👓 Recommended articles
Wikicoin Alex Morris

Unconfirmed Bitcoin Transactions: Why They Happen, and What You Can Do About Them

📚 Wikicoin
Baffled by an unconfirmed Bitcoin transaction? Learn what unconfirmed Bitcoin transactions are and how unconfirmed Bitcoin transactions can be dealt with
Unconfirmed Bitcoin Transactions: Why They Happen, and What You Can Do About Them
Contents

200k unconfirmed transactions

The issue of unconfirmed transactions came to a head in December 2017 during the peak of the cryptocurrency craze. Due to the double whammy of overloaded exchanges and constant DDoS attacks, a whopping number of 200,000 Bitcoin transactions remained unconfirmed for over a day.
image
Notably, the Ethereum network had similar problems after CryptoKitties caused havoc with its Mempool. Although, as it later turned out, this was an extremely frontloaded success, and the killer dApp is yet to appear on the horizon.

A more recent example of a rapid increase in the level of network congestion was related to the Bithumb hack in June. Most probably, the delays and the increased fees were connected to the South Korea-based exchange cleaning out its wallets.    

The reasons behind ‘stuck’ transactions

Bitcoin is a cryptocurrency that is based on the Proof-of-Work (PoW) algorithm. All Bitcoin transactions are conducted with the help of cryptocurrency mining.

Once you press that ‘Send’ button in any wallet application, the transaction is going to a memory pool (or simply ‘mempool’ before being recorded on a public ledger — only miners are capable of doing this).   

However, for a given payment to be processed successfully, it has to be confirmed by a miner who gets a block reward for each confirmation. One block represents a set of data pertaining to transactions that are cherry-picked by miners (or ‘nodes’). Until confirmed, it remains in the mempool.

Here’s the catch — blocks contain only a limited number of transactions. The transaction throughput of the Bitcoin network remains one of the most controversial issues in the crypto space, and that was one of the main reason why ‘Bitcoin Jesus’ Roger Ver eventually jumped ship and became an ardent proponent of Bitcoin Cash. Earlier, Ver claimed that those who called for an increased blocksize simply didn’t have a say in the Bitcoin community. Ethereum, on the other hand, had this issue resolved by adjusting the blocksize to the network volume. That is why the Ethereum network was able to handle a three-times-bigger transaction volume back in February.    

As of now, the blocksize is limited to 1 MB (this limit was introduced by none other than Satoshi Nakamoto).
image
However, there was also a place for an anomaly in the form of a 2 MB block.

💼 Related Article
Bitcoin Drops to Support. Bullish Pressure Increases
🔥 Hot
1 month
256
Bitcoin Drops to Support. Bullish Pressure Increases
   

Helping you understand mempool

As mentioned above, mempool is a shortening which stands for a ‘memory pool’. Long story short, this is the place where all unconfirmed transactions remain in limbo. The pool unites all the computers that are connected to the Bitcoin Network with the help of Bitcoin mining software. All payments that are yet to be confirmed are stored in the RAM of a given device. If the mempool size is inching closer to occupying the whole RAM capacity, the node is able to automatically discard all pending requests with lower fees.

It is worth pointing out that the mempool is not a queue — different nodes have their own set of transactions that to be confirmed, and they are clearly incentivized to pick transactions that have the highest mining fees.     

The more popular BTC gets, the bigger is the size of the mempool. Subsequently, it drives the fees through the roof since it’s getting increasingly difficult for miners to handle everything.

Would a better hardware make a difference? No. The modus operandi of the Bitcoin network presupposes that each block is mined every ten minutes (or nearly so), and the same timeframe would remain in place even if every miner had a chance to be equipped with super powerful hardware.

In order to get all the insights into the current state of the mempool, one simply has to visit the website of a German software engineer Jochen Hoenicke: it displays all current Bitcoin fees along with the current mempool size.
image
The most obvious way to get to the top of the mempool and get your money transfer confirmed is to pay a higher fee. During the Bitcoin boom in December, some users would have to pay a jaw-dropping 40 percent fee in order to send a single payment. This sparked a huge debate in the Bitcoin community, with some miners popping bottles of champagne (their revenue skyrocketed along with the fees), but others were deeply concerned that high fees may take a toll on Bitcoin’s acceptance in retail or online stores.   

  1. Compressing multiple payments in a single transaction (thus reducing their size)

  2. Do not send your payments during the time of day when the Bitcoin network usually experiences the highest level of congestion

  3. Join the Roger Ver crowd, and switch to any other altcoin. Litcoin, Bitcoin Cash, and other top 10 entire have faster payments and lower fees, but there is a roadblock in the form of poor merchant adoption

On the right, you can see the delay in minutes that shows how long you have to wait to get your transaction processed. Subsequently, if you don’t pay any fees, your payment will take an infinite amount of time in order to be confirmed (well, let’s be honest — it will never be confirmed). If you can see the ‘Confirmed’ label, it clearly means that the transaction was processed successfully (and it becomes irreversible).    

How many confirmations do you need?

It actually depends on the size of your payment. Here’s a table which clearly illustrates that:

The size of payment

The number of confirmations  

<$1,000

One single confirmation will seal the deal

$1,000-$10,000

Such a sum of payment usually requires about three confirmations

$10,000 - $1,000,000

A transaction that is this hefty will need to be confirmed at least six times before funds are deposited to the recipient’s wallet.

> $1,000,000

Crypto bulls will have to go through a whopping number of 50-60 confirmations before getting their millions, which is fair enough.   


NB! The particular number of confirmations also depends on the exchange of your choice. For instance, Coinbase, the most popular fiat-to-crypto exchange in the world, requires three confirmations before any payment is completed.   

On top of that, there is a direct link between confirmations and the digital asset of your choice. Speaking of Coinbase, all transactions conducted in ETH, ETC, as well as recently added ZRX and USDC, need 50 confirmations.     

Dealing with transactions that remain unconfirmed: our ultimate guide  

Before taking any further steps, you have to check whether your transaction is confirmed or not. Once your Bitcoins have been successfully sent to a recipient’s wallet, a transaction ID will be generated.     

Pick any Blockchain explorer (for instance, Blockchain.info) in order to see all the relevant information pertaining to your transaction.

If your transaction remains in limbo for a prolonged period of time, there are three ways to find a way out of this predicament:

  1. Continue waiting for your confirmation (it may up to a week for your transaction to get confirmed).

  2. Alternatively, you can simply sit and wait until your transaction expires after being dropped from the mempool.

  3. Lastly, one can also replace an already existing transaction through Replace-By-Fee.    

Replace-By-Fee (RBF) is the process of creating the same transaction with a higher fee if your previous one didn’t get confirmed. Notably, Satoshi was the one who came up with this idea buy later he decided to shelve the fee replacement feature. Later, it made a comeback with Bitcoin Core 0.12+.

Still, this practice gets constantly slammed by the BTC community due to the fact that allegedly destroys trust in transactions that remain in the mempool. The thing is, one can use this feature voluntarily: the sender can easily disable it, so there is no need to be concerned about trust issues. It’s a convenient way to keep the fees at bay if you are not in a hurry to receive your crypto.

NB! Uninitiated Bitcoin users should refrain from canceling unconfirmed Bitcoin payments in such a way!

💼 Related Article
BTC vs. XBT: What’s the Difference Between Bitcoin Symbols?
🔥 Hot
1 month
256
BTC vs. XBT: What’s the Difference Between Bitcoin Symbols?

Cancelling an unconfirmed Bitcoin transaction

One should keep in mind that all BTC transactions are irreversible (that why you should check all transaction information extra carefully). With that being said, it is impossible to cancel your Bitcoin transaction since there is no single centralized authority that presides over them.

Double spending is yet another viable option, but keep in mining that the lion’s share of cryptocurrency wallet has an inbuilt mechanism to prevent it. In fact, BTC is supposed to be the very first digital currency that has managed to solve the double spending problem. Forged money is a huge problem worldwide with $600 bln in U.S. currency being fake! The Bitcoin network prevents this with the help of cryptographic techniques. When it comes to unconfirmed transfers, however, there is a loophole for those who want to double spend. The revelation was made by Reddit user Peter Todd who proved that unconfirmed Bitcoin transactions are not safe due to some differences in mining software.    

Coinbase exchange embraces CPFP

Child-Pays-for-Parent (something that reminds of a welfare program) is actually an example of one of the solutions to the great Bitcoin scalability problem.

Even crypto behemoth Coinbase recently made an announcement about using the CPFP protocol to ‘rescue’ transactions that get stuck unconfirmed in the mempool due to fluctuating transaction fees.

CPFP allows a receiver to broadcast the same transaction but with a different fee, thus propelling low-fee transactions to the top of the mempool. At Coinbase, all stuck payments are carried out with the help of the CPFP protocol, effectively tackling one of the most debatable issues on the Bitcoin network.
image
The difference between RBF and CPFP presupposed that in the latter case miners — as the name of the protocol implies — confirm a parent transaction. Rational-thinking miners have to confirm a cheaper transaction in order to include a hefty one in their block.     

The bottom line is that RBF is a viable option for those who want to confirm their transaction faster by increasing the amount of the fee. Meanwhile, CPFP is more suitable for a sender who fails to persuade the miner to pay a transaction fee instead of him.

Things are getting better for BTC transactions

Compared to December 2017, when the number of unconfirmed Bitcoin transactions was blown out of proportion, crypto enthusiasts do not have to deal with tedious delays anymore. While the actual number of Bitcoin keeps increasing, the network itself is less clogged with the relatively low number of unconfirmed transactions. In fact, last peak on the Bitcoin network was recorded on Oct. 5 with a total of 26k pending payments hovering in the mempool (mostly due to rather low fees).    
 
Notably, the decrease in strain on the network coincided with the release of Bitcoin Core 0.17.0. However, the update is not related to the issue of unconfirmed BTC transactions despite the actual announcement mentioning certain changes pertaining to transaction handling.

One of the solutions to increasing Bitcoin’s scalability is considered to be the Lightning Network (LN). LN, launched on On 26 December 2017, has already gained widespread adoption. The modus operandi of LN consists in transferring Bitcoin off-chain, which is supposed to solve the slowness of the Bitcoin network — the transaction is conducted on a separate channel that is created by two traders.
image
The launch of LN conveniently coincided with a sharp drop in transaction fees (almost 50 percent), but there is not enough data to determine the exact effect of LN. Most likely, the aforementioned drop in fees was caused by the dramatic crypto rout that started in January. As of Nov. 18, the total capacity of LN is worth more than $1.64 bln with 4,073 nodes currently running on LN.  

SegWit (segregated witness) posed as a solution for unclogging the Bitcoin network. It’s a software fork that catered to the needs of Bitcoin enthusiasts who wanted a bigger blocksize. The technology has been already adopted by major cryptocurrency exchanges such as Coinbase and Bitfinex. Nevertheless, SegWit still accounts for only 0.1 percent of all Bitcoin transactions.

The growing support for zero confirmation

Since Bitcoin evangelists strive to achieve the mainstream adoption of the world’s most popular digital currency, there have been numerous discussions about zero confirmation. Imagine that Bob wants to buy a PS4 in a store with Bitcoin, but at the same time, he doesn’t want to wait up to 40 minutes for his transaction to be confirmed. Hence, it would be logical for retailers to adopt zero confirmation transactions and off-chain transactions to accelerate the purchasing process despite the risks of double-spending. As mentioned above, the main purpose behind confirmation is to avoid the much-feared double spending.

Meanwhile, the Bitcoin Cash community is already mulling over accepting zero confirmation BCH transactions in order to give a competitive advantage to the network. All the payments could be conducted instantaneously, and the fact that BCH has a block size of 8 MB (compared to Bitcoin’s 1 MB) makes it a perfect choice for conducting instantaneous transfers. Back in May, Bitcoin’s offspring successfully completed an upgrade, increasing the size of one block to 32 MB.

“The current path that the small blockers are taking has the wrong economic code and will likely end in failure if Bitcoin isn’t allowed to scale soon.” Roger Ver  

Speaking of further innovations, a recent Forbes article suggests that Bitcoin needs a better consensus algorithm that is superior to the current Proof-of-Work (PoW). For example, IOTA, the 12th biggest cryptocurrency by market cap, is using a Markov Chain Monte Carlo (MCMC) technique — every two transactions that have to be verified are confirmed in a random fashion. The system requires a miniscule amount of Proof-of-Work.

The bottom line

The scalability issue continues haunting Bitcoin. While the number of unconfirmed transactions remains fairly modest compared to Bitcoin’s peak, the great block size debate continues. Whether it’s the Lighting Network, SegWit, or CPFP protocol, it’s clear that this issue has to be resolved in order for the king of crypto not to cede ground to altcoins that offer much faster transactions.

Wikicoin
views
👓 Recommended articles