How to make money mining bitcoin and other cryptocurrencies without knowing anything about it

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How to make money mining bitcoin and other cryptocurrencies without knowing anything about it

FILE PHOTO – Representation of the Bitcoin virtual currency standing on the PC motherboard is seen in this illustration pictureThomson Reuters Cryptocurrency mining isn’t for everyone, and it might seem daunting even if you are interested. You might think you need an extreme know-how of computers to do any kind of crypto mining, that it couldn’t possibly be done by the average person. Turns out, it’s absurdly easy. You just need computer parts that are powerful enough to make mining profitable, and a handy piece of software called Nicehash. You literally press a green button on Nicehash to start mining. I’ve been experimenting with crypto mining on Nicehash myself, and it’s been a fun little project. I’m not raking in a huge amount of cash, as my mining rig is small enough that it’s more like looking for change on a sidewalk. Bigger mining organizations have warehouses full of powerful computer parts that can generate a ton of cryptocurrencies. And at the end of the day, I’d only really suggest it if you already have a gaming PC with an appropriately powerful graphics card – the key component for mining. And you need to make sure your electricity costs aren’t too high, as mining can suck up a ton of energy. Check out how to get started in mining: View As: One Page Slides

Bitcoin: Buy The Dip? – 2 Out Of 3 Crypto Crashes Like The Current One Ended Up Being A Multi-Year Bear Market

Prices of cryptocurrencies seem to recover after a huge sell-off. But if Bitcoin price history proves anything, it is that this price slump might be far from over. Governments cracking down on cryptocurrency, exchanges having problems, the problems for Bitcoin seem to be a never ending story but seemed unable to stop its price development in the past. The quickly eroding dominance of Bitcoin is one of its biggest risks. If you insist on buying the dip, go ahead, but not do so before reading this article. The recent crypto crash has people wondering if and when to buy the dip. There are even people publicly recommending to buy this dip in Bitcoin (COIN) or related investments like the Bitcoin Investment Trust (OTCQX:GBTC). In this article I will explain why I am very skeptical of buying the dip in cryptocurrency at this stage. Source: Steemit A short price history of the Bitcoin crash Looking at the price history of Bitcoin of the last year, the price graph looks like this: Source: At first glance, you could say that the bottom might be in, since the extreme price increases since November have disappeared, and it looks healthy for prices to start increasing again at the moment. That is, from a pure technical perspective. But this understates the heavy price increases which occurred before November, and which are much less clear from this graph. I rather use a logarithmic graph for these purposes, since it is usually a much more fair way to comparing exponential increases in price. Source: This logarithmic graph looks a whole lot different, though it is one depicting exactly the same thing: Bitcoin’s price development during the last year. It underscores that the price of Bitcoin has truly behaved in an exponential way in 2017. In this graph, it also looks much less like Bitcoin could have reached a point from where it could start recovering again. Let me be clear: I am not a technical investor or trader. But since too many people look at the ‘normal’ price graph and draw conclusions from this, I felt obliged to show how different your conclusions can be when you look at a different type of graph. In my opinion there are many reasons why the logarithmic graph is better suited for Bitcoin price depiction, the most important being that exponential price increases can not be shown correctly on a normal graph. A longer and fairer comparison with history Now let us take a look at a longer-term logarithmic graph of price development of Bitcoin to learn from the past. How was Bitcoin’s price development in comparable circumstances? Source: Two things are quickly obvious when glancing over this graph: Price increase was most exponential until the end of 2013, after this it slowed down. We can identify two major crashes of Bitcoin in the past: the end of 2013 and the summer of 2011. At both times the price slump lasted several years until it recovered. I can only identify one other dip which was as big as the current one and didn’t end up in a multi-year slump: the one happening from April 2013 until July 2013. If we extrapolate the first finding, we can conclude that because the market capitalization of Bitcoin only increased since 2013, we can safely assume that the price development of the cryptocurrency will remain to behave in a less exponential way than in the past. From the second finding we can conclude that the crash of cryptocurrency can also turn out to be a huge bear market instead of just a crash. It could last much longer than investors are expecting. In this case, buying the dip would not be such a good idea. From the third point we can conclude that it does not always have to be the case that a crash as big as the current one leads to a multi-year bear market. The crash in April 2013 was sparked by the first big media coverage for Bitcoin leading up to a price of $237 per coin. After a huge price increase, it crashed quickly and badly, also aggravated by a long outage of the then-still-active MtGox. In a way, one could argue that the circumstances of April 2013 are comparable to today’s environment: there is a huge mainstream media coverage and many people who didn’t hear about cryptocurrency before are investing in it. Current problems Of course, Bitcoin and other cryptocurrency continues to have its fair share of problems, including but not limited to: Huge energy use Governments cracking down on it even more than before Tether problems Transaction costs Exchange problems And many, many more These types of problems have always been there in the past, and always seemed like they were an existential threat. But they have not prevented the price of Bitcoin to increase in the past, as illustrated by this nice picture: Source: Let me be clear: I do not dismiss these problems as being irrelevant. I am just saying that these types of problems have not prevented the price surge of Bitcoin in the past, and I am not sure they will prevent this in the future. But there is some reason to believe that these problems might be more relevant today than a couple of years ago: The market capitalization of Bitcoin and cryptocurrency is much higher now than in the past, many more people have invested in it and the media are completely on top of it. This would suggest that problems can reach a broader coverage by different sources and reach a more differentiated group of investors. Most of these investors have not been invested in Bitcoin since the beginning so they are sometimes no ‘believers’, and might know little of the cryptocurrency. Also, old long term investors might have cashed out, which has happened in the past. Other cryptocurrencies There is a problem which I do feel can be very relevant for the future of Bitcoin, and it can be summed up in a single graph: Source: coinmarketcap What this graph shows is that the dominance of Bitcoin is quickly declining. In July 2017 it briefly seemed that Ethereum was about to overtake Bitcoin as the world’s largest cryptocurrency, an event which was nicknamed ‘the flippening’. As you can see in the graph, the flippening never happened and Bitcoin retained its position as the largest cryptocurrency, but it is down from almost 100% in 2013 to about 35% today. A decreasing dominance does not have to be a problem if market capitalization of cryptocurrency keeps on increasing indefinitely, but on the long term, this is just not going to happen, or at least not at the degree to which it has in the past couple of years. Add to this the fact that Bitcoin is technologically inferior to many other cryptocurrencies, and it does not look impossible that Bitcoin prices could remain stable or even decrease on the longer term from here, even if other crypto’s would thrive. To sum it all up My biggest aim with this article is to make people think twice before buying the dip in Bitcoin. If the article achieved this, I am already a happy writer. Please be aware of the history of price development of Bitcoin and other cryptocurrencies and know that it is entirely possible for this dip to end up being a longer term bear market. The past has shown that this can happen, and in fact is has happened two times out of three. Also be aware of all the problems surrounding cryptocurrency and Bitcoin, but do not let them blind you: in the past these problems have not prevented a huge upsurge in prices, though the situation is somewhat different today. I am not providing any advice about whether to buy the cryptocurrency dip or not. I just want you to be conscious of the choice you are making. Thank you for reading! If you have any ideas about Bitcoin or other cryptocurrencies, please let me know in the comment section below! If you liked this article and would like to read more of my work in the future, please click the Follow button next to my name. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Energy riches fuel bitcoin craze for speculation-shy Iceland

Iceland is expected to use more energy “mining” bitcoins and other virtual currencies this year than it uses to power its homes. With massive amounts of electricity needed to run the computers that create bitcoins, large virtual currency companies have established a base in the North Atlantic island nation blessed with an abundance of renewable energy. The new industry’s relatively sudden growth prompted lawmaker Smari McCarthy of Iceland’s Pirate Party to suggest taxing the profits of bitcoin mines. The initiative is likely to be well received by Icelanders, who are skeptical of speculative financial ventures after the country’s catastrophic 2008 banking crash. “Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” McCarthy told The Associated Press. “These companies are not doing that, and we might want to ask ourselves whether they should.” The energy demand has developed because of the soaring cost of producing and collecting virtual currencies. Computers are used to make the complex calculations that verify a running ledger of all the transactions in virtual currencies around the world. In return, the miners claim a fraction of a coin not yet in circulation. In the case of bitcoin, a total of 21 million can be mined, leaving about 4.2 million left to create. As more bitcoin enter circulation, more powerful computers are needed to keep up with the calculations — and that means more energy. The serene coastal town of Keflavik on Iceland’s desolate southern peninsula has over the past months boomed as an international hub for mining bitcoins and other virtual currencies. Local fishermen, chatting over steaming cups of coffee at the harbor gas station, are puzzled by the phenomenon, which has spawned oversize construction sites on the outskirts of town. Among the main attractions of setting up bitcoin mines at the edge of the Arctic Circle is the natural cooling for computer servers and the competitive prices for Iceland’s abundance of renewable energy from geothermal and hydroelectric power plants. Johann Snorri Sigurbergsson, a business development manager at the energy company Hitaveita Sudurnesja, said he expected Iceland’s virtual currency mining to double its energy consumption to about 100 megawatts this year. That is more than households use on the island nation of 340,000, according to Iceland’s National Energy Authority. “Four months ago, I could not have predicted this trend — but then bitcoin skyrocketed and we got a lot more emails,” he said at the Svartsengi geothermal energy plant, which powers the southwestern peninsula where the mining takes place. “Just today, I came from a meeting with a mining company seeking to buy 18 megawatts,” he said. At the largest of three bitcoin “farms” currently operating within Keflavik — called “Mjolnir” after the hammer of Thor, the Norse god of thunder — high metal fences surround 50 meter-long (164 foot) warehouse buildings stacked with computer rigs. The data centers here are specially designed to utilize the constant wind on the bare peninsula. Walls are only partial on each side, allowing a draft of cold air to cool down the equipment. “What we are doing here is like gold mining,” said Helmut Rauth, who manages operations for Genesis Mining, a major bitcoin mining company. “We are mining on a large scale and getting the gold out to the people.” Genesis Mining, founded in Germany, moved to Iceland in 2014 when the price of bitcoin fluctuated from $350 to $1000. Today, one bitcoin is valued at about $8,000, according to tracking site Coindesk, after peaking at almost $19,500 in December. The currency took a hit in January when China announced it would move to wipe out its bitcoin mining industry, following concerns of excessive electricity consumption. Rauth said bitcoin should not be singled out as environmentally taxing. Computing power always demands energy, he argues. “How much energy is needed for credit card transactions and internet research? Cryptocurrencies have the same global impact,” he said. In the capital, Reykjavik, some are more skeptical about bitcoin. The last time Iceland was an international hub for finance, the venture ended with a giant bank crash, making the country one of the symbols of the 2008 global financial crisis. The political turmoil following the crash swept the upstart Pirate Party into Iceland’s parliament, where it currently holds 10 percent of seats. Pirate Party legislator McCarthy has questioned the value of bitcoin mining for Icelandic society, saying residents should consider regulating and taxing the emerging industry. “We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation,” he said. “That can’t be good.”

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