What are cryptocurrencies
Cryptocurrency — digital counting units, the accounting of which is decentralized. The functioning of these systems occurs using a distributed computer network. However, information about transactions is usually not encrypted and is available in clear text. To ensure the immutability of the base of the transaction block chain, cryptographic elements are used (digital signature based on a public key system, sequential hashing).
A key feature of cryptocurrencies is the absence of any internal or external administrator. Therefore, banks, tax, judicial and other public or private authorities cannot influence the transactions of any participants in the payment system. The transfer of cryptocurrencies is irreversible - it cannot be canceled, blocked, disputed or forced (without a special private key) to complete a transaction.
What cryptocurrencies exist
Income from cryptocurrency mining is not a constant value. The first thing that determines it is the type of cryptocurrency, and, accordingly, its rate. Now the real choice of an ordinary user is limited to the following currencies:
Bitcoin
The very first, unique cryptocurrency. It was originally intended as a replacement for real means of payment, and was actually developed since 1983, but received real expression only in 2010.
It has a limited capacity - in total in the world you can “mine”, that is, extract, calculate - no more than 21 million bitcoins. This means a constant increase in the complexity of production, minimizing the risks associated with market overflow - everything as it should be for real money. Only in the role of support is distribution in the community and the expended computing power.
Ethereum
Unlike other cryptocurrencies, the authors do not limit the role of ether to payments, but offer it, for example, as a medium of exchange resources or registering transactions with assets using smart contracts, in particular, the authors called ether “crypto fuel” for the execution of smart contracts. Ether is sold on exchange services, and the capitalization of the total amount of ether has exceeded thirty billion dollars.
LiteCoin
LiteCoin was launched by Charles Lee in 2011 as an alternative, and possibly replacement, to Bitcoin. The currency gained its popularity in 2013, along with a rise in interest in cryptocurrencies in general.
First of all, LiteCoin is distinguished by a different algorithm for finding a hash to confirm the completion of work. Scrypt uses SHA256 as a subroutine, when the Bitcoin network uses SHA256 directly for this.
The block generation speed of LiteCoin is 4 times faster than Bitcoin and is approximately 2.5 minutes. This means faster receipt of funds to your wallet (about 15 minutes).
It follows from this that the number of coins, as you might have guessed, is also 4 times greater (84 million versus 21 for bitcoins) - as well as blocks in general. Consequently, the rate of emission and reward will be identical to Bitcoin.
42coin
42coin is an alternative currency to LiteCoin, and it differs in that a total of 42 coins can be generated. Hence the cost relative to bitcoins; the total number of bitcoins can be 21,000,000. The first 420 blocks have no reward, and the next one has 0.00042 42coin inside, and then again 420 “empty” blocks, etc.
The creator states that this currency will be revolutionary due to the speed of block generation (42 seconds, who would have thought!) and its rarity.
DogeCoin
Dogecoin, introduced in 2013, has a completely copied LiteCoin algorithm with minor changes. The famous dog meme became its symbol. Initially, 100 billion coins could be generated, and the number of coins in one block was set randomly. In March 2014, the behavior of the currency was changed. The reward became fixed and the issue unlimited.
The developer wanted to make a cryptocurrency and move away from the “black history” of bitcoins. The DogeCoin community has repeatedly raised funds for charity. In January 2014, they raised $50,000 for the Jamaican bobsled team, and on March 25 of the same year, users raised another $55,000 for NASCAR driver Josh Wise.
Dash
DASH, formerly DarkCoin, is a cryptosystem based on the X11 algorithm. This is a system with the official DarkSend transaction mixer, which allows almost complete elimination of sender tracking. At the user's request, you can not use DarkSend and conduct transactions directly. In total, it is possible to generate 22,000,000 DASH in the system. Block generation time is 2.5 minutes.
Darksend is a feature that allows Dash users to remain completely private when making money transfers. This is an improved and expanded version of CoinJoin technology.
In addition to the basic concept of CoinJoin, they have introduced a number of improvements - such as decentralization, increased anonymity (due to new methods of chain anonymization), denomination mechanism, background pre-mixing procedure mode.
BlackCoin
BlackCoin is based on the “proof of stake” principle. Proof-of-Stake/PoS) and is an open source system. BlackCoin was created by Russian developer Rat4 (Pavel Vasin) to demonstrate that moving away from proof-of-work. Proof-of-Work / PoW) is not critical for the stability and security of the cryptocurrency.
The BlackCoin multipool combines the hardware hashing capabilities of members of the BlackCoin community for the purpose of mining other digital currencies. These altcoins are then exchanged for Bitcoin, and Bitcoin is used to purchase BlackCoin to pay out to participants. BlackCoin itself cannot be generated through mining, as it is based on the “proof of stake” principle.
Ripple
XRP/USD: - There is a mathematically based currency called XRP (called ripple) which is the native currency of the ripple network. Similar to Bitcoin on Blockchain, XRP initially exists on the Ripple network as a currency without a counterparty. Since XRP is an asset, as opposed to a redeemable balance, users do not have to trust any specific financial institution for the purpose of trading or exchanging the currency.
Users of the Ripple network are not required to use XRP as a medium of exchange or store of value. The Ripple network is not tied to any specific currency. Users can use their preferred currency, be it USD, BTC, XRP or something else.
Ways to obtain cryptocurrencies - mining and exchanges
There are two ways to get cryptocurrency (actually, three):
- cryptocurrency calculation - mining;
- maintaining a computing pool for the operation of the payment system;
- trading on the stock exchange.
The first two are combined for major cryptocurrencies: the mining process allows you to maintain a pool and receive rewards for trading through the computing power of the miner’s owner.
The only reasonable way to deal with Bitcoin is to trade on an exchange. The thing is that the initially free distributed algorithm for creating cryptocurrency turned out to be the authorities of Chinese monopolists producing special devices for mining bitcoins in industrial scale.
The boxes contain a set of hardware intended only for cue ball mining and other ways to do it quickly, profitably and pay off no longer - this is due to the high complexity of Bitcoin mining and the low potential of conventional components compared to specialized.
Why is Ether the best way to make money?
After the Japanese authorities officially allowed the use of Bitcoin in payment transactions throughout the country on April 1, 2017, the value of cryptocurrencies increased incredibly.
Thanks to this, the real annualized profitability of the “cryptocurrency” from June 2016 to June 2017 amounted to 1500% per annum!
Thus, the rate of the most popular “cue ball” increased from 500 to 2,800 dollars per unit. The growth of Etherium turned out to be even higher - the cost of this currency jumped 8 times, to $250. Unlike industrially mined Bitcoin, “ether” can only be counted using video cards, so it is available to everyone.
“Ether” is a fairly young currency, so its entry threshold is quite low. High scalability allows you to efficiently perform calculations on any available capacity, up to a single card. That is, even an ordinary game config can act as a tiny farm in its free time, paying off its own cost in 1.5-2 months at the current complexity and currency value.
Properly selected video cards and the use of gaming motherboards with multiple PCI-E outputs x16 (mining does not require combining cards in Crossfire/SLI) allows you to increase production in multiples of kart.
Also, for computing on video cards, you can use “razers” - adapters for installing several video cards into one PCI-E x16 slot. This does not affect the processing (mining) speed, since most cryptocurrency calculation algorithms on the GPU are not critical to the data bus from the video card to the processor.
What equipment is required?
Each currency requires its own selection of equipment. As stated above, Bitcoin, due to the high complexity of computational mining algorithms at the moment, does not make much sense to mine at home with simple components. Ether provides more income.
Ethereum is mined exclusively using a video card. HDD speed does not matter; buying fast solid-state SSD drives is an unjustified luxury. Almost any more or less modern dual-core “stone” will be required as a processor.
Intel Core i3 2-3 generations will be sufficient, or an analogue from AMD. The amount of memory plays an important role - it should be enough for the uninterrupted operation of the system and the miner program, so at least 4 GB is recommended.
So, what is needed to mine “ether”? A good motherboard with several PCI-E x16 outputs for video cards, a powerful power supply of 750 W or higher (depending on the type of video cards used and their number - it is better to have a reserve and block of 1000-1500 W).
Mining profitability
The profitability of mining on GPUs (video processors) is determined by the following components:
- initial cost of equipment;
- cost of a computing hour (consumption of electricity and other paid utilities);
- computing power in hashes;
- current rate of the calculated currency..
On average, the following figures are relevant for June 2017:
- GTX 1050 Ti brings its owner $5/day;
- GTX 1060 (3 GB) - $7/day;
- GTX 1060 (3 GB) - $9/day;
- GTX 1070 - $15/day;
- GTX 1080 - $30/day.
Shortage: where to get video cards and blocks?
Cards with Nvidia Maxvell chips have become an incredible shortage - they are not available in any store in Russia. It is planned to go on sale no earlier than mid-July. Moreover, their cost has already exceeded reasonable limits, having almost doubled since the end of May.
Mining on AMD solutions with the Polaris 20 chip can not be considered - these cards are not even on order for many months in advance. Even on eBay.
After lengthy negotiations with various suppliers, extremely unfavorable trends emerged. Most game card manufacturers do not have chips to produce cards whose production cycle reaches 6-7 months - it takes six months to release a chip, and another couple of months to assemble the finished product products.
Colorful remains the only active manufacturer of Nvidia Maxwell architecture cards in China with replenishing stocks of original processors. Maxsun/Teclast, Onda and other serious players in the local market (which is much more developed than the European one) refuse to comment on the timing of the resumption of production and immediate deliveries.
The following cards can be purchased in large quantities:
- Colorful iGame1060 U-6GD5 - 6 GB memory, $339.99 with coupon "GBC1060";
- Colorful iGame1070 U-8GD5 - 8GB Memory, $499.99 with coupon "GBC1070".
- Colorful iGame 1050Ti - 4 GB memory, $240.99
Coming soon:
- Onda GTX1050Ti 4 GB – $176
- Onda GTX1060 3 GB – $247
- Onda GTX1060 6 GB – $341
Compared to Russian prices for analogues, this turns out to be a very good solution with a one-year warranty.
Here you can also get powerful power supplies of 700 watts or more.
To mine or not?
Mine of course! Too much money has been invested in the market by investors, component companies, and ordinary users. The idea is simple: the more and more actively the cryptocurrency is mined, the greater the interest in it, the higher the rate.
The only limitation may be the gradual complication of the computational algorithms inherent in the very essence of cryptocurrency. These artificial restrictions are introduced in order to avoid inflation.
For Bitcoin, the required threshold for participation, when a small farm can generate significant income, passed several years ago. But for “ether” everything is ahead.
In addition, card manufacturers plan to improve mining by releasing special drivers. And special cards with a limited warranty period.
