How to Earn Passive Income In the Cryptocurrency Industry: A Comprehensive Guide

Making money off cryptocurrency can be quite exciting. Many people have amassed huge profits from venturing into this relatively new sector. Today, there are several ways in which you can benefit or profit from the cryptocurrency sector. You just need to know what they are and how they work. This is where this guide comes in.

In this guide, you will be learning about 10 of the most famous ways to make money in the cryptocurrencies industry and how you could get involved with them. You will also discover which of these money-making methods suit you and what the requirements are. Let's get right into it.

10 Ways to Make Money in the Cryptocurrency Industry

1- Day Trading

Day trading is, without a doubt, the most common approach used in profiting in the cryptocurrency industry. As the name implies, day trading involves opening and holding several trade positions for nothing more than a day.

Cryptocurrency day trading is commonly advertised as a get-rich-quick scheme, however, nothing could be further from the truth. Day trading requires a level of understanding and consistency to succeed at it. This cryptocurrency profiting method is indeed the riskiest as it deals directly with the volatility of the cryptocurrency market. Many traders (beginners and experts alike) have lost huge sums and even entire trading capital day trading the crypto market.

To succeed as a day trader, you need to build yourself in knowledge and discipline. Day trading comes with a lot of pressure and in most cases, it takes experience and time to get accustomed to this pressure. However, beginner traders can start by paper trading or trying out a demo account. These trading aids do not require real money and can be a very effective way of growing as a beginner.

Day trading is a very profitable way to make money in the crypto industry, you just have to dedicate time to getting properly accustomed to it. As mentioned earlier, day trading is not for those looking for get-rich-quick ventures.

Effort Required: High
Profit Potential: High
Risk: High

2- Earn Crypto Dividends

Earning crypto dividends is an easy way of making profits just by holding crypto tokens. Some cryptocurrency providers reward their customers with a certain percentage when they hold their crypto-asset for an agreed period. Some of these crypto providers include KUCoin, Neo, BTMX, and Komodo.

Unlike the banks which give roughly 1-2% interest on your cash holdings, these crypto providers can deliver as much as 5-10% quarterly for holding your tokens. This means that you’ll be better off investing your money in these tokens than keeping it in the bank. However, make sure that you have carried out thorough research on the cryptocurrency you want to get involved with before investing.

Effort Required: Low
Profit Potential: Medium
Risk: Medium

3- Arbitrage Trading

Arbitrage involves buying goods or services at low prices to sell in another market at a higher price. Arbitrage is quite similar to retail trading. Cryptocurrencies are built on decentralized blockchain technology which means they have no central controlling entity which also means that they have no fixed price. The price of a cryptocurrency could differ across exchanges since there is no fixed price. This is what makes arbitrage trading very lucrative in this sector. Simply buy a cryptocurrency on one exchange and sell it on another with a different price. However, this price difference across exchanges can be difficult to find and don't last long. Thankfully, there is software that helps create an aggregate of prices across exchanges, making it easier to identify arbitrage opportunities.

Even with the most sophisticated software, arbitrage trading in the cryptocurrency sector still requires a good deal of money to realize worthwhile profits.

Effort Required: Low
Profit Potential: Medium
Risk: Medium

4- Cryptocurrency Mining

In its early days, cryptocurrency mining was almost every crypto enthusiast’s dream. Today, however, this crypto-rewarding method has become insanely competitive as more and more miners are flooding into the sector, and miners with strong financial backing are acquiring more sophisticated mining rigs to increase their chances of completing mining tasks in the market.

In its early days, the risk associated with mining used to be very low as the prices and use of cryptocurrencies were also low. This made mining very easy and profitable. As time went by, cryptocurrencies became widely used which caused price and mining difficulty to surge. Now, only those with deep pockets and sophisticated machinery can ‘afford’ the luxury of staying consistently profitable mining major cryptocurrencies.

However, cryptocurrencies that are not mainstream can be quite profitable to mine. Small cryptocurrencies would be an excellent place to start your mining career before moving on to the big guys (if you still desire to do so). Mining is still a profitable venture especially when it involves a small cryptocurrency.

Effort Required: High
Profit Potential: Medium
Risk: Medium

5- Staking

Staking is another decent approach to make passive cryptocurrency revenue. With the difficulty and competition of mining on a steady increase, many have been turning to crypto-staking which is a less demanding mining alternative.

For those who do not know, staking was first introduced in 2012 by Sunny King and is another technique used for verifying and adding blocks onto the blockchain. Staking is used in crypto networks that operate on the Proof-of-Stake (PoS) blockchain framework. Staking requires coin holders to place cryptocurrency in a dedicated wallet which is later used to verify several transactions and create new blocks. Staking is a more convenient alternative to mining as it does not require as many overhead expenses.

How to Earn Revenue from Staking

Crypto staking is quite similar to holding interest over a fixed bank deposit. In this case, your cryptocurrency is locked away in a designated wallet for a set period. After this holding period elapses, your wallet is credited with a certain amount of additional coins as a reward for holding. Consequently, the more coins you stake, the higher your reward. This is simply how staking works.

Advantages of Staking

1. Staking requires little or no overhead costs.
2. This method is a far less risky alternative to mining.
3. Staking requires less amount of energy (electricity).

Disadvantages of Staking

1. Your coins are inaccessible until the holding period elapses.
2. In an event where the value of your coins begins to drop, you will be unable to do anything to save yourself from that loss.

Staking is only available in cryptocurrencies that run on a Proof-of-Stake framework. Some of such crypto networks include Komodo, Neo, and Navcoin. With staking, you don’t have to worry about market actions which give you free time to engage in other activities.

Effort Required: Low
Profit Potential: Medium
Risk: Low

6- Micro Earnings (Faucets)

Micro earnings are, without a doubt, one of the easier ways to earn cryptocurrencies. However, this method is probably the most time-consuming method amongst all others listed in this guide. This method involves earning fractions of a cryptocurrency from micro earning websites for completing little tasks. Listed below are some of the popular micro-task website classes you can earn cryptos from:

1. Paid-To-Click Websites (PTC)

As the name implies, these are websites that pay you in cryptocurrency (mostly Bitcoin) for viewing, clicking, and visiting certain ads. One such website is BTC Clicks. The payment structure varies across websites, so it is advisable to do a little research on PTC websites to find the ones with the most worthwhile rewards.

2. BTC Faucets

These are websites that reward you with fractions of BTC when you partake in several surveys or enroll in a raffle which generates random numbers and rewards winners. The rewarding potential in faucets is quite small considering the time spent, however, it is the fastest and simplest way to earn crypto rewards. With faucets, you can earn $1-$5 daily and unless you can automate this process, it can be time-consuming and counterproductive.

3. Micro jobs

This involves completing quick and easy tasks for small amounts of cryptocurrencies. Micro job websites usually require you to test plugins, run tests to see if a website is compatible with a specific browser, retweet posts on Twitter, and carry out several other simple tasks.

Earning cryptos through micro-tasks can be very productive when you find a way to balance your time spent and tasks completed.

Effort Required: Low
Profit Potential: Low
Risk: Low

7- Airdrops

Airdrops are free coins that are awarded to certain clients for holding certain cryptocurrencies. Also, some cryptocurrency networks use airdrop as an advertisement strategy by crediting little amounts of crypto coins to users who take polls, share social media posts, etc. Airdrops are also given to clients randomly by some cryptocurrency networks.

However, be sure to always verify airdrop rewards and stay away from suspicious- looking rewards. There are several scam websites and crypto companies that defraud unsuspecting victims through fake airdrops. Use ‘Airdrop Alert’ to ensure that you’re not getting scammed. Airdrop Alerts are websites that automatically verify the source and authenticity of airdrop rewards you receive.

Effort Required: Low
Profit Potential: Low
Risk: Low

8- Crypto Writing

For those who are knowledgeable about cryptocurrencies and matters that relate to them and have passion for this sector, writing about the industry is a great way to earn crypto rewards. Although there are varying reward rates across the industry, writing on cryptocurrency is very lucrative especially when you’re good at it. Many cryptocurrency companies are ready to pay hundreds of dollars for articles, you just have to prove to them that you're worth the expense.

Listed below are some crypto companies you could begin writing for:
1. Steemit
2. Lunyr
3. Publish0x
4. Bravocoin

Effort Required: Medium
Profit Potential: Medium
Risk: Low

9- Affiliate Marketing

Affiliate marketing is one surefire way to earn passive income in practically every industry. Affiliate marketing is a simple act of earning monetary rewards for advertising other people’s businesses and products.

Amazon was one of the first companies to incorporate this marketing strategy on a large scale. Today, many companies pay their “affiliates” in cryptocurrency.
Companies engage in different forms of referral rewarding systems. Some companies offer a one-time referral reward while others promise a commission for every single time you bring in a customer.

Many cryptocurrency exchanges, trading platforms, trading bot providers, and other cryptocurrency-related businesses run affiliate programs. Some popular affiliate-rewarding cryptocurrency companies include Coinbase, BitStarz, Coinmama, Binance, and many others.

Effort Required: High
Income: Low-High (varies according to the traffic you pull)
Risk: Low

10- HODL

HODL is a common abbreviation for ‘Holding On for Dear Life’ in the cryptocurrency industry. This crypto trading method is a very popular way of earning cryptos and involves buying and holding cryptocurrency for extended periods.

This trading strategy has been tested time and again and has created hundreds of overnight millionaires in the cryptocurrency industry. HODLing is an excellent way to make money in any financial market especially for those with little or no trading experience.

HODLing is a great way to gather passive income in the crypto sector and it doesn’t require huge sums to get involved with. Any amount you have will do. However, when HODLing, never go on the FOMO (Fear Of Missing Out) impulse. Always wait for the price to bottom out before getting involved with an instrument. This way, you know you're getting the best deal possible and not shortchanging yourself.

Effort Required: Low
Profit Potential: High
Risk: Medium

Final Note

At this point, you should have gained extensive insight into the several ways with which you can earn cryptocurrency in the ever-growing cryptocurrency industry. If you decide to get involved with any of the methods listed in this guide, be sure to carry out additional research to make sure you understand all that is at stake.

One parting advice you should take from here is to never invest or risk money you’re not comfortable or ready to lose. For example, do not get involved with the cryptocurrency market with your retirement fund or your life savings, that is just being financially irresponsible. Also, always exercise patience in all your cryptocurrency endeavors. Good things take time and the cryptocurrency industry is no exception.

Top 10 Cryptocurrencies To Watch Out For In 2020

Cryptocurrencies are indeed the future of money. However, finding a good cryptocurrency to invest in can be tough as there are over 2,000 tradable
cryptocurrencies available today. Traders and investors, especially beginners, find it challenging to select a good cryptocurrency to invest in as the markets are always changing and every cryptocurrency moves for different reasons.

This article aims at imparting the readers with a general overview of what has been happening in the cryptocurrency market in 2020, how they can be beneficial to you, and what to look out for when choosing a cryptocurrency to trade or invest in. This article also discusses the top 10 cryptocurrencies to get involved with this year and beyond, while explaining their current fundamental and technical standing.

A Quick Overview of the Cryptocurrency Market

2020 has been nothing short of eventful for the cryptocurrency sector and the financial space in general. Starting with the coronavirus outbreak to the oil industry crash, the current global events have had a tremendous impact on the financial and economic space across the globe.

The market is also acting in anticipation of the Bitcoin halving expected to occur in May. This event is expected to have a very strong positive impact on the price of cryptocurrencies. The expected Bitcoin halving has bolstered the adoption of cryptocurrencies across the globe.

In other news, the Supreme Court in India ordered the Reserve Bank of India (RBI) to lift the ban it placed on cryptocurrency trading in 2018. This new development means that millions of cryptocurrency enthusiasts in India can now freely trade cryptocurrencies, further improving the global adoption of cryptos.

Another interesting development is the growing interest of apex banks across the globe to release central bank-Issued digital currencies. Countries like China, the United States, Japan, Russia, the UK, Sweden, and many others have all entered a race to release the world’s first CBDC.

Also, stablecoin projects like Facebook’s Libra and Telegram’s GRAM, are still hashing out legal and regulatory matters with regulatory bodies. It is still uncertain what the future of these projects will be.

Favorable Factors To Look Out for Before Choosing a Cryptocurrency

When deciding to get involved with a cryptocurrency, the key metrics to evaluate in the crypto before committing to it include:

1- The adoption rate of the cryptocurrency.
2- The market capitalization of the cryptocurrency.
3- Prospects for future growth and advancement of the cryptocurrency.
4- Security and anonymity features of the cryptocurrency.
5- Industry utility of the cryptocurrency.
6- Available exchange support.

Why You Should Invest in the Cryptocurrency Market in 2020

Cryptocurrencies are believed to be on the verge of witnessing the biggest transferof wealth ever seen in history. Crypto experts believe that 2020 could be a record- breaking year for the cryptocurrency industry as crypto-assets like Bitcoin, Ethereum, and many more are expected to top their all-time highs this year.

The crypto industry is undoubtedly one of the largest and fastest-growing industries in recent years. Early Bitcoin investors saw their holdings grow from as
low as $1 to about $20,000 per coin in 2017. Such a return on investment is unheard of in the investment space. What’s interesting is this kind of ROI is expected to occur again in the crypto space soon.

That said, let’s move on to some of the best cryptocurrencies to invest in this year.

Top 10 Cryptocurrencies to Watch Out for In 2020

Listed below are the top 10 cryptocurrencies for 2020 that are expected to return huge yields:

1- Bitcoin (BTC)

Bitcoin is, without a doubt, the best cryptocurrency to invest in today. This cryptocurrency giant dominates about 63% of the crypto market share. Bitcoin is so relevant that whatever actions it exhibits is replicated across the entire crypto market.

Bitcoin is regarded as the best investment option for both beginner and expert crypto investors. This cryptocurrency has been tested over the years and has
become an investment force to be reckoned with. There are expectations andprojections that the next Bitcoin halving event in May will likely send the price of this crypto to $100,000 in a year.

BTC has an all-time high of $20,000, a 2019 high of $13,790, and a 2019 low of $3,460. At press time, Bitcoin is valued at $129,299,742,500 and is trading at $7,061.

2- Ethereum (ETH)

Ethereum is the second-largest cryptocurrency based on market cap. This cryptgiant was released in late 2015 and has since risen to prominence in the crypto space over the years.

The differentiating factor between Ethereum and Bitcoin is that the former utilizes a system that is designed to support decentralized apps built on its blockchain. Through the utilization of dApps, Ethereum offers its users many exciting features like smart contracts and decentralized governance.

Ethereum also has one of the most active developer communities in the world today. Many cryptocurrency and financial experts believe that Ethereum is set to achieve greater heights in 2020.

ETH has an all-time high of $1,396, a 2019 high of $345, and a 2019 low of $103. At press time, Ethereum is valued at $16,071,233,964 and is trading at $145.

3- Ripple (XRP)

The next cryptocurrency on our list is Ripple. Aside from being tradable on exchanges, Ripple tokens (XRP) are also used as a payment system for carrying out transactions on the Ripple ecosystem. This means that Ripple also functions as a private financial services platform that provides its users with numerous products. Some of these products include RippleNET, XRapid, and xCurrent.

Ripple’s products are being used heavily across the globe by several financial institutions like Standard Chartered and Calix. These products are widely used because they provide borderless transactions in a smooth and hitch-free manner.

At the moment, Ripple is the third-largest cryptocurrency based on market cap. Experts believe that the increasing use of its products and its current market valuation makes XRP one of the best buys for 2020.

XRP has an all-time high of $3.1, a 2019 high of $0.49, and a 2019 low of $0.24. At press time, Ripple is valued at $8,024,424,609 and is trading at $0.182.

4- Bitcoin Cash (BCH)

Bitcoin Cash, currently the fourth-largest crypto based on market cap, was released in 2017 after several prominent workers of Bitcoin defected to form their preferred
Bitcoin derivative. Today, while Bitcoin is regarded as a good Store of Value, Bitcoin Cash is regarded as an everyday payment solution. In 2018, BCH went through a hard fork which led to the creation of BCH ABC and BSV.

BCH has an all-time high of $3,765, a 2019 high of $509, and a 2019 low of $118.6. At press time, Bitcoin Cash is valued at $4,435,672,913 and is trading at $241.

5- Litecoin (LTC)

Litecoin, released in early 2013, was designed to be a “lighter” version of Bitcoin. This is why Litecoin’s core fundamentals are quite identical to Bitcoin’s. However, Litecoin differs from Bitcoin in some areas like block mining time and total supply.

In 2018, the founder of Litecoin, Charlie Lee sold all of his LTC token which triggered a selloff amongst LTC holders who feared that the crypto could become worthless. However, this decline was short-lived and Litecoin has continued to wax stronger over the years. Market analysts believe that Litecoin will grow stronger in 2020 considering the overall expected performance for the crypto market this year.

LTC has an all-time high of $364, a 2019 high of $142, and a 2019 low of $31. At press time, Litecoin is valued at $2,672,244,819 and is trading at $41.

6- Binance Coin (BNB)

Binance Coin is regarded as the best-performing token owned by a cryptocurrency exchange. BNB has been trading well above a strong support for a while now. This crypto seemed to be unaffected by the bearish bias that ravaged the market in 2019. Analysts believe that BNB possesses significant value and will likely continue on its upward trajectory in 2020 and beyond.

Another reason for Binance Coin’s impressive bullishness is its extensive use on the Binance exchange. Millions of users of this exchange utilize the BNB token for payment of several exchange services like tx and gas fees.

BNB has an all-time high of $39.11, a 2019 high of $39.08, and a 2019 low of $6. At press time, Binance coin has a valuation of $2,102,444,623 and is trading at $13.

7- DigiByte (DGB)

Although this digital currency is not popular amongst many crypto enthusiasts, it has been lauded as one of the cryptocurrencies with the best financial prospects for 2020.

DigiByte was released in 2014 and runs on a unique and decentralized blockchain. This crypto provides tx speeds not seen in many other cryptos. For example, DigiByte is about 40 times faster than Bitcoin and Ethereum which can only process 7 and 15 transactions per second respectively.

DigiByte’s blockchain was the first to be implemented with a Segregated Witness (SegWit) protocol. This protocol helps the host blockchain to execute transactions at lightning speeds without having to comprise any bit of its security. The developers of DigiByte aim at making this crypto a globally accepted payment solution.

DGB has an all-time high of $0.127, a 2019 high of $0.016, and a 2019 low of $0.005. At press time, DigiByte is valued at $64,936,601 and is trading at $0.004999.

8- Maker (MKR)

The 8th buy-worthy cryptocurrency on our list is the Maker (MKR) which is mostly used as a payment solution within the Maker ecosystem. One outstanding feature of this crypto is that it has a limited supply of just 1 million tokens. This makes it even more valuable.

Maker also doubles as a smart contract platform that supports the value of the stablecoin DAI. MKR makes use of niche concepts like autonomous feedback mechanisms, incentivized external actors, and collateralized debt positions.

Asides from being used as a payment solution on the Maker ecosystem, it also confers its users with voting rights to sustain the blockchain.

MKR has an all-time high of $1,688, a 2019 high of $785, and a 2019 low of $366. At press time, Maker is valued at $315,448,765 and is trading at $313.

9- Stellar (XLM)

Stellar (XLM), released in late 2014, is regarded by experts across the globe as a worthy buy because of the speedy cross-border payment solution it provides as well as for its transparent nature. Since its inception in 2014 till now, XLM has exhibited strong potential for steady growth. Although the competition faced by this crypto keeps growing, experts believe that the Stellar ecosystem has what it takes to thrive in 2020 and beyond in the ever-growing sector.

XLM has an all-time high of $0.95, a 2019 high of $0.15, and a 2019 low of $0.04. At press time, Stellar is valued at $860,124,154 and is trading at $0.042.

10- Cardano (ADA)

Cardano (ADA) was founded in 2015 by Charles Hoskinson, the co-founder of Ethereum. This is why, on paper, Cardano shares a lot of similarities with Ethereum. For example, this crypto provides the facility for its users to create dApps and smart contracts.

Cardano was designed to be efficient in resolving many of the interoperability and scalability issues that the crypto sector has been facing for quite a while. The developers behind this project are dedicated to providing a more efficient cross- border payment solution by drastically reducing transaction time and fees.

ADA has an all-time high of $1.27, a 2019 high of $1.01, and a 2019 low of $0.04. At press time, Cardano has a market valuation of $854,736,465 and is trading at $0.032.

Final Note

Although the market is currently being hammered by the coronavirus (COVID-19) outbreak, it still has a very strong bullish perspective for the year. The upcoming Bitcoin halving will likely set the stage for a dramatic bull run as seen in the past. Many market analysts believe that all of the ten listed cryptocurrencies are expected to witness higher record highs after the event.

The Ultimate Cryptocurrency Mining Guide

Cryptocurrency mining is a procedure that satisfies two primary needs of any Proof of Work blockchain network. These needs include the adding of new verified blocks to the blockchain ledger and the creation of new coins.

Every time a transaction is executed on a crypto network, miners go into a contest to secure and verify the transaction. To do this, miners will have to solve a complex mathematical problem that regulates its difficulty to maintain a steady issuance rate. Once a miner finds a hash that is lesser than the mark specified by the blockchain protocol, that miner is entitled to receive a reward embedded in the block. This reward is usually in the denomination of the cryptocurrency being mined.

As more and more miners join a crypto network, the mining difficulty is automatically adjusted by the algorithm, making it even harder to be a miner. This rise in difficulty makes mining more time and energy-intensive. As a result, miners are always on one lookout for cheaper electricity rates and more sophisticated mining equipment.

What’s In Mining for You?

Cryptocurrency mining provides 3 primary benefits which include the crypto reward, transactional freedom, and the explicit functionalities of the cryptocurrency being mined.

1- Crypto reward

Mining provides miners with the possibility of obtaining crypto rewards when they devote time and hashing power towards the crypto’s blockchain. As with other financial assets, the crypto rewards are valuable in the open market. Also, cryptocurrencies that have achieved widespread adoption can be used as a mode of payment.

2- Transactional freedom

Cryptocurrency mining provides transactional autonomy as it removes the need for middlemen or intermediaries. By default, blockchain technology gives cryptocurrencies a decentralized attribute as it is governed by the participants and not an external body, government, or financial authority.

3- Explicit functionalities of the cryptocurrency being mined

Miners can enjoy the unique attributes of the cryptocurrency they are mining. For example, Monero has a discrete currency feature which hides your account balances and activity footprints. Another example is LBRY which allows a content sharing and publishing platform that is controlled by its user instead of a third party.

Costs Involved in Mining

While mining has numerous benefits, it does come with some trade-offs including electricity and hardware costs as well as diseconomies of scale.

Cryptocurrency mining requires a serious amount of electricity as a result of the intensive amount of computational tasks being carried out. Although electricity costs vary across countries, researchers found that miners who situate their mining hardware in low-cost areas like Venezuela or Eastern Europe are significantly more profitable compared to miners in other areas. However, finding mining farms in the mentioned areas can be tasking.

Aside from that, the upfront cost of purchasing hardware is quite hefty. On average, the cost of setting up a top-notch cryptocurrency mining rig costs as much as $5,000. This amount could take months to break-even depending on the network’s hashing power, prevailing market prices, and electricity costs.

Lastly, miners are faced with diseconomies of scale. As more miners come aboard a cryptocurrency network, the limited amount of remaining blocks reduces thereby causing the normal payout per volume of hash power spent to decrease significantly. Also, increasing demand for electricity due to the growing influx of mining activities will undoubtedly cause electricity costs to soar which will cause the profit margins for miners to decrease even further.

Cryptocurrency Mining Hardware

In cryptocurrency mining, there are two basic types of mining hardware currently in existence. They include Graphics Processing Units (GPUs) and Application Specific Integrated Circuits (ASICs).

GPU Miners

When mining a coin, the miner needs to use an algorithm that matches the uniqueness of that coin. The level of mining efficiency that GPUs exhibit when mining certain algorithms are dependent on the GPUs’ specifications. That said, miners who use GPUs should select their hardware while considering the type of algorithm they would want to mine with.

Subsequently, miners can choose hardware based on the level of brand trustworthiness, power or electricity requirements, and price. Let’s take an example, AMDs are considered as the best options when mining with cryptonight or cryptonight-heavy algorithms for coins like Monero and Loki, while NVIDIA is best suited with Equihash and Ethash algorithms used for coins like Zcash and Ethereum.

GPU Rig Options

GPU mining rigs can either be custom made or bought whole. For those who’d like to build a customized GPU rig, the components to consider include graphics processing unit(s), a power supply unit, a motherboard, risers, and a rig frame.

However, for those who may not have the time or knowledge to build a GPU rig, there’s the option of purchasing a pre-assembled rig. Several pre-assembled mining rig producers give as much as a year’s warranty on their products. Pre-assembled rigs are more expensive than custom made rigs, however, it is worth the convenience and ease.

ASIC Miners

An ASIC is a machine developed to mine specific cryptocurrencies and algorithms. There are numerous ASICs in existence today and the options vary according to the demand for a particular coin. Bitmain is regarded as the largest producer of ASIC hardware, however, competitors like Innosilicon and Halong are starting to put up a good fight for market share by releasing updated models.

Define Your Objectives

When selecting an ASIC, you have to ensure your objectives have been premeditated. Your objective could either be to acquire/amass a specific coin or to purchase machines to take advantage of insanely high profits in the mining space.

If your objective for using ASIC is to amass holding in a specific coin, you would need to first choose the coin and then identify the underlying algorithm used in mining the coin. That said, if a coin’s algorithm is not supported by an ASIC producer, the only other option would be to mine using a GPU.

Forewarning for Prospective ASIC Users

Before purchasing an ASIC, it is advisable to first carry out a quick survey on available ASICs so you know you’re getting the best deal. Firstly, you’ll need to outline every ASIC available to mine the coin of your choosing. The key metrics for this comparison include hash rate (revenue capability) relative to electricity requirements (variable cost), initial equipment purchase cost, and the delivery date of the hardware.

Some miners acquire ASICs to realize substantial profit which is usually obtained by early purchasers of new ASICs. New ASICs are the most profitable machines and have the shortest breakeven timespan considering that they can out-hash top- notch GPUs.

Other miners observe a rather opportunistic approach by scooping up used or old machines at huge discounts. If such acquisition is done in a bear market where many miners are finding it unproductive to mine so they sell and the market rebounds, the new owners can realize massive returns regardless of the ASIC’s worn-out state or low hash rate-to-electricity cost.

Whatever your reason behind purchasing an ASIC might be, always be cautious of probable sticking points. One of such is the projected break-even time frame based on the hash rate relative to electricity cost. Another example is the probability of an ASIC producer releasing a new machine to mine a similar coin as yours in the near term. A newer version release could impede the profitability of your current ASIC as a result of an increase in the networ’s difficulty.

Differences Between GPU and ASIC Machines

Listed below are the key differentiating factors between GPU miners and ASIC miners:

1- Ability to mine multiple coins

GPUs were developed to mine multiple coins and algorithms, while ASICs can only mine a designated coin or algo. What this means is that GPUs can be adapted to mine whatever coin may be most profitable at any given time, while ASICs can become liabilities in a situation where its designated coin is underperforming.

2- Risk-reward preference

The added flexibility in GPUs causes it to have a lower risk attribute which automatically translates to lower yields in return. ASICs, on the other hand, have a higher yield considering it mines the same coin under the same market conditions.

3- Resale value

GPUs have a high resale value as they can be used in mining several coins. Also, GPU components can subsequently be reused for other computational reasons not relating to mining cryptos. ASICs, however, have a higher depreciation rate as their profitability wanes in just short periods.

4- Ease of use

When choosing between GPU and ASIC miners, another crucial factor to consider is the ease of use. Can these machines be used in your homes or offices? How portable are they? GPUs can be set up at homes or office spaces and are considered to be very portable. An ASIC, however, is very intrusive devices in private or small spaces as they require large amounts of power, create loud noises, emit a great deal of heat, and require proper ventilation.

Mining Pools

Simply put, mining is the process of using computational power (hash power) to solve blocks on a blockchain. Whenever a block is mined, the miner is entitled to the block reward and the underlying transaction fees in some cases. The more attempts (hashes) you can perform in a second the better your chances of solving a block and receiving the reward.

Many miners do not have enough hash power to compete for rewards in the ever- growing mining space, so they create mining networks in a bid to pool mining resources and power thereby increasing their chances of solving blocks. These networks are known as “mining pools.”

The reward is split amongst miners in a pool based on the miner’s contribution to solving a block. Pool operators usually charge a small fee for the service being rendered.

Features to Look Out For In a Quality Mining Pool

If you decide to join a pool, here are the key things to look out for to ensure you mine efficiently:

1- Payout structure preference

Mining pools pay out rewards to their miners based on two primary methods which include Pay-Per-Share or Pay-Per-Last-N-Share. Both methods have their different advantages and disadvantages so do well to evaluate which suits your style. Also, make sure you’re choosing a pool that offers a low minimum payout.

2- Pool trustworthiness and team reliability

Considering the decentralized nature and relatively new state of the cryptocurrency industry, it is open to abuse by service providers. This risk makes it even more necessary to choose credible and trustworthy pools with ethical teams.

3- Added features

Another marker that can be used to identify quality pools is the added features they offer. Some of the added features include upgraded UI and UX design which equips users with functionalities that help them evaluate their performance.

4- Fees

A mining pool’s service fees usually range from 1-3% of every reward realized by a miner to pay for overhead and the pool’s operating expenses. That said, the lesser a pool’s mining fee, the better for you.

Selling Hashing Power: A Pool Mining Alternative

In mining pools, miners make use of their hashing power. Rewards obtained from solving blocks are deposited directly into the crypto wallet of their choosing, where it can then be traded, spent, or held on to. However, an increasing number of people are choosing to sell their hashing power as opposed to using them to mine on pools. Such transitions can be facilitated over hash exchanges like NiceHash and Genesis Mining. Both platforms are exchanges that create a medium for people to buy and sell hashing power while charging a service fee. In return for selling hashing power, sellers are paid in BTC or with any other agreed currency.

Selling hashing power makes sense for those who do not have certain necessary cryptocurrency mining hardware.

Setting Up Your Mining Machine

As a prospective miner, after purchasing your ASIC or GPU miner and choosing whether you want to dedicate your hashing power to a pool or an exchange, the next step would be to set-up your miner. Listed below are the easy steps involved in setting-up:

1- Plug your miner into a power outlet to begin.
2- Connect your miner to the Internet using an ethernet cable.
3- Locate your miner IP using your router or an IP scanning software.
4- Input these necessary parameters:

Your mining pool address (if you are on one).
Wallet address (you should have gotten one by this point).
Password.
That’s it. You can now begin mining and, hopefully, start turning a profit.

Some Popular Profitable Mining Concepts

Colocation

ASIC mining is known to be very intrusive and incompatible with small or personal spaces, which can hamper productivity and profitability. A suitable method of hosting your ASIC is by doing so at a colocation regardless of how many machines you have. Colocations or “mining farms” are designated mining accommodations cited at low-cost electricity areas that offer conducive conditions for running your mining rig(s) profitably.

Cloud Mining

Cloud mining involves buying hashing power from hash power providers instead of purchasing real mining hardware. Cloud mining is similar to those buyers on NiceHash. Purchasing and maintaining a mining rig can be very expensive, cloud mining is a good way to offset that cost while still enjoying the benefits of mining.

This method is more stress-free and involves less risk. However, cloud mining poses as a limiting factor for those looking to mine on a large scale.

Tips To Improve Your Profitability in the Industry

As the cryptocurrency mining industry continues to grow and as the competition increases, it can get pretty difficult to be profitable as a miner. To avoid becoming a victim of obsolescence, here are some practices you could uphold to help you sustain a profitable mining career:

1- Try out colocation

Hosting your mining rig at a colocation (mining farm) can save you a lot on electricity bills and other overhead, thereby helping you improve your operating margin. An example of a colocation provider is Minery.

2- Maximize your “up-time”

In mining cryptocurrencies, up-time is one of the most important factors. Every minute your mining rig remains out-of-service translates to wasted electricity and several missed opportunities. Make sure to set up your rig using standard equipment to avoid scenarios where your rig crashes or goes offline. It is also advisable to have a backup plan if such scenarios were to play out.

3- Always be at alert

Make sure to always monitor your rig in case of damages or blackouts. Consider using software like AwesomeMiner to monitor your mining rig. Software like this alerts you when your rig is experiencing a fault or is down so you could carry out necessary remedies as soon as possible.

4- Thermodynamic efficacy

Always choose locations and conditions that ensure that your rig is cool and not overheated at all times.

5- Keep an eye out for discounted hardware

Look out for fairly used GPUs or ASICs to save on costs.

Final Note

Mining for several cryptocurrency assets will not last forever as some cryptocurrencies have limited supplies and others are moving to other operating systems that do not require mining. That said, it is best to get into the market as soon as possible. However, make sure to carry out thorough research before delving into this venture.

A Complete Guide to Ethereum and How to Trade It

To fully understand Ethereum, what it entails and its effect in our society today, we first need to grasp what its core fundamentals are and how they differ from other approaches.

Firstly, Ethereum runs by a decentralized system, meaning that it has complete autonomy from any governing body. A good number of online services and businesses are operated using a centralized governing system. While this approach has, for hundreds of years, proven repeatedly to be flawed and inefficient, it’s application is necessary when the involved parties have a distrust for each other.

A centralized model of operation translates to a single-body control, which also translates as a single point of failure. This is why it is quite risky for apps and online-servers using this system as they are more exposed to cyberattacks and even power failure. Furthermore, most social networks mandate users to provide some form of identification and sensitive information, which is stored on their servers. This invariably means that the data is open to theft by external or even internal bad actors.

Ethereum, which is a decentralized system, has full independence and has no central point of failure. This is because the system is operated from several thousand volunteers’ computers across the globe meaning that it is very unlikely to witness issues like data theft, power failure, or any other downsides associated with centralized systems.

Secondly, it is imperative to know that even though they have been frequently compared with one another, Ethereum and Bitcoin are two entirely distinct projects with different goals and objectives. Bitcoin is regarded as the first-ever cryptocurrency and payment solution, built on a distributed ledger technology known as ‘Blockchain.’

Ethereum took advantage of the technology and idea behind Bitcoin, built on it and made it even better. Ethereum is a whole ecosystem with its internet browser, coding language, and payment system. One explicit feature of Ethereum is that it allows developers to build decentralized applications (dApps) on its blockchain.

The dApp can either be completely novel ideas or decentralized modifications of pre-existing concepts. This attribute essentially eliminates the need for a middleman including all the costs attributed to involving a third-party. For example, profits generated through the ‘liking’ and ‘sharing’ of celebrities’ posts on Facebook are gotten from the advertisements placed on their pages and it goes straight to Facebook. In an Ethereum-based edition of such social networks, both the celebrities and the people liking and sharing would receive rewards for constructive communication and support. Also, in a decentralized edition of ‘Kickstarter,’ instead of just receiving some artifacts for their efforts towards the firm, participants will be rewarded with profits generated in the future by the firm.

As we’ve established, Ethereum is a decentralized system meaning that it adopts a peer-to-peer protocol. All interactions only occur between the parties involved in it. There is no interference or supervision by any controlling body whatsoever.

The whole of Ethereum’s network is supported by a multinational network of “Nodes.” Nodes are volunteers who download the whole of Ethereum’s blockchain (usually worth gigabytes) to their computers and wholly implement all consensus rules of the system, thereby ensuring complete honesty in the network and receive rewards for their services.

The aforementioned consensus rules, including several areas of the network, are directed by “smart contracts.”

Smart Contracts

Smart contracts are developed to automatically execute transactions and other distinct activities within the network between parties who may not ordinarily have trusted each other. The conditions for both parties to meet are pre-programmed into the contract. The fulfillment of these conditions triggers a specific action.

It is believed that smart contracts are the future and will displace traditional contractual agreements as smart contracts provide superior security compared to its predecessors, cuts down transaction costs, and fosters trust between the involved parties.

Furthermore, the Ethereum ecosystem also provides its users with a feature called the Ethereum Virtual Machine, which functions as a test environment for Ethereum-based smart contracts. It allows its users to securely launch an untrusted code while ensuring that there is no interference between programs. The EVM is separated from the main Ethereum network, making it an excellent sandbox for examining and enhancing smart contracts.

The network also comes with a native cryptocurrency known as “Ether.”

History of Ethereum

In 2013, a young lad by the name Vitalik Buterin penned down his idea, after which he made several copies and dispersed them to a few of his friends. Soon enough, about 30 people contacted Vitalik to discuss the idea. Vitalik expected criticism and for several mistakes to be pointed out in his idea, but none of that happened instead, he received praises and commendations from tech enthusiasts. Fast forward to 2014 when the project was officially launched and consisted of Vitalik and 5 others as members of the executive. Vitalik went on and introduced Ethereum at a Bitcoin conference in Miami, and just a few months later the team launched a crowd sale of Ether, the native token of the network, to raise capital for the development.

Uses of Ethereum

Most importantly, Ethereum enables developers to create and deploy dApps. Also, any centralized service can become decentralized through the utilization of the Ethereum platform. Quite frankly, Ethereum’s platform creates immense possibilities for developers and is limited to nothing but the creativity of the developer.

DApps are revolutionizing the relationship between service providers and customers. Today, many services charge commissions for simply providing an escrow service and a platform for users to carry out transactions. Ethereum’s blockchain, however, can allow customers to track the origin of the products they are purchasing, while the utilization of smart contracts can guarantee secure and speedy transactions between involved parties without the need for an intermediary.

In essence, the Ethereum blockchain can instill its core principles (transparency, efficiency, and security) into any business or industry.

Ethereum is also used to develop Decentralized Autonomous Organizations (DAOs), which are entities that carry out transparent operations completely independent of any form of singular control. DAOs are operated by codes and several smart contracts written on the blockchain. It is designed in such a way that it does not require any form of centralized control whatsoever.

DAOs are held by individuals or groups who buy their tokens. However, these tokens do not necessarily equate to equity or ownership in the entity offering the DAO. Rather, the tokens are a form of contribution which gives the purchasers certain powers like voting rights.

Advantages of Ethereum

The Ethereum platform expresses all the positive attributes of the blockchain technology which it operates on. It is impenetrable by third-party interference, meaning that all dApps and DAOs executed within the network functions free from the control of any sort.

All blockchain networks are created on a foundation of consensus, meaning that every node within the network must agree before any change can be carried out within it. This eradicates every possibility of fraudulent practices and corruption thereby making the network tamper-proof.

The entire system is decentralized, meaning that there are no feasible points of failure. This makes it rather impossible for apps on the network to experience downtime or power failure. Also, the decentralized nature of cryptographic security already predisposes the Ethereum network to protection from probable cyberattacks and illicit practices.

Disadvantages of Ethereum

Even though smart contracts are supposed to make a network flawless, they are, in reality, just as good as the developers writing the code for them. Because humans (the developers) are imperfect, there is always the possibility of error in the code, which if discovered by bad actors could be exploited. In such a scenario, there would be no way to prevent an attack except if a consensus is reached on rewriting the underlying code. Consequently, this defeats the purpose of the blockchain, which is supposed to be an unalterable ledger.

An example of such a scenario happened in 2016 where the 'DAO’ was attacked by hackers who exploited a ‘recursive call bug’ in the system and made away with about 3.5 million Ether tokens. Consequently, users lost trust in the whole Ethereum network which caused the value of the Ether to drop drastically.

How to Acquire Ether

There are two basic methods for acquiring Ether: by purchasing it and by mining it.

Purchasing Ethereum

The simplest and most common method for procuring Ether is by purchasing it through an exchange. Ether is the second most prominent cryptocurrency after Bitcoin, so finding an exchange to buy it shouldn’t be a problem at all.

Firstly, you will be required to register with an exchange. However, make sure that the exchange you chose operates in your jurisdiction and accepts the currency denomination you wish to trade-in. Most registration procedures require you to send in some personal information. Subsequently, full identity checks will be mandated when it is time to make deposits or withdrawals. To pass these checks, proof of address and photo identification will be required. All these are done per the KYC and AML regulations.

After successfully passing these checks, the next thing to do is to choose your preferred deposit method. Different exchanges accept different methods of payments including wire transfer, credit and debit card payments, or Paypal transfers. Depending on what payment method you're using, there is usually a small fee attached.

Mining Ethereum

Simply put, crypto mining is the process of solving complicated mathematical problems and in return, receiving a set amount of tokens as a reward. Miners, without a doubt, are the backbone of any crypto network as they use their time and computing power to solve math problems, delivering a ‘proof of work’ for the network, which verifies transactions. Ethereum miners receive Ether token as rewards whenever they verify a transaction which means that miners are also responsible for the creation of new Ether tokens.

Mining has become a big deal in today’s crypto industry, consequently, the influx of new miners is at a steady increase. Accordingly, the math problems have become more complicated, this means that more time and computing power is required to verify transactions. Also, the number of Ether being rewarded is

becoming smaller as time goes by, however, Ether keeps increasing in value making the rewards still relevant and substantial. Mining is also seen as a good incentive for supporting the network.

More On Ethereum Mining

For every block of a transaction, miners use their computing power to solve mathematical puzzles. Specifically, miners obtain the block’s distinct header metadata, which consists of a timestamp and software version, through a hash function, which creates a length of case-sensitive random numbers and alphabets.

This ‘string’ is known as a hash. When miners find hashes that match the current mark, the block will be regarded as mined and will be broadcasted to the entire network for modes to validate the transaction and update their blockchain copy.

Ethereum Mining Hardware

To become a miner, you need to select dedicated hardware to assemble a computer for full-time mining. There are two primary selections: Central Processing Unit, which involves using your computer processor and Graphic Processing Unit, which demands the purchase of a graphics card.

It is worth mentioning that using CPU to mine Ether is very inefficient and not beneficial, as even lower grade GPUs are hundreds of times faster than CPUs for mining activities. However, before purchasing a graphics card, you need to put into consideration the cost of the purchase itself and the amount of energy it consumes. More importantly, you need to put the hash rate performance into consideration, which involves how fast a math problem can be solved.

Additionally, you might consider assembling a mining rig, which is a system that comprises many GPUs, to boost your hash rate thereby increasing your chance of mining successfully.

Ethereum Mining Software

After choosing, purchasing, and assembling your hardware, the next thing to do would be to install the software. Firstly, you have to get drivers for your graphics card.

Next, you have to piece your node together and link it to the network. This means you’ll have to download the whole Ethereum blockchain, which is about 21 gigabytes and growing.

Once all this is set, your node gets linked to every other node and the network itself. Subsequently, you can begin mining as well as deploy smart contracts and develop dApps.

Receiving Mining Rewards

Whenever a block is successfully mined, the miner is bestowed with 3 ETH tokens. The miner is also rewarded with the fees linked to the transaction. These fees serve as an incentive for miners as transactions with larger fees are prioritized. The rewards get instantaneously sent to the wallet linked to the miner.

How to Sell Ether

After accumulating some Ether, either from purchasing or mining, a time would come when you'll want to sell. Indeed, Ether can be used as a payment option as many businesses accept cryptocurrencies as a mode of payment today.

So, if you don’t plan on using Ether as a payment solution, instead you bought or acquired to offload it in the future after its value has probably surged to realize a profit, here are some ways you can accomplish that.

How to Sell Ether on Exchanges

The procedure to sell Ether on exchanges is quite similar to buying it. First, you’ll have to select an Ether-compatible exchange that operates in your jurisdiction. Set up your account by identifying and providing the necessary information about yourself per the KYC and AML requirements.

After this, you’ll have to decide if you want to sell your Ether for fiat currencies or another cryptocurrency.

When you sign up for an exchange, a crypto wallet is addressed to you. Deposit the amount of Ether you want to sell from your external wallet to the exchanges. This transfer occurs almost instantaneously.

Next, you get to select how much Ether you want to sell and in what currency you’d like to trade it for. On most exchanges, this is executed by placing a sell order in anticipation that someone will accept it, or you could look out for an already placed order to fill. The exchange rate is usually determined by the current market rate, volatility, and size of your order.

Peer-to-Peer Trading

Alternatively, there is another option for selling (or buying) Ether for those looking to bypass the trouble of registering on an exchange and providing sensitive information. This option is popularly known as the peer-to-peer exchange.

Unlike exchange trading, this method is purely decentralized. Escrow services and arbitrage are accomplished through the undertaking of smart contracts.

There are some recognized P-2-P platforms like Localethereum where users can publish offers or respond to one. This platform usually charges a meager 0.25% fee per transaction. It also comes with an in-built instant messaging service, where users can arrange in-person meetings to exchange Ether for cash. There are also platforms like MeetUp which helps users locate crypto-related meeting spots or environments, where they can sell their tokens safely.

However, worth mentioning is the fact that the P-2-P option is completely unregulated and you’ll be dealing with individuals in most cases and not corporate bodies, meaning that a lot could go wrong easily. Always carry out adequate precautionary measures before meeting strangers off the internet for your safety.

Ether Trading Strategies

Holding

The buy-and-hold trading strategy (popularly known as HODLing in the crypto community) is the easiest and most common trading approach adopted by investors. It involves buying and holding cryptocurrencies for an extended period (usually several years) and then selling them to realize substantial profits.

HODLers, as they are called, usually go for the more stable and reliable cryptocurrency stocks and hold it notwithstanding what the market conditions may be at that time. For the preferred crypto stocks, investors tend to flock towards Bitcoin and Ethereum as they are regarded to be more stable than others and have far lesser chances of crashing anytime soon. Several hundreds of early Bitcoin and Ethereum investors are reaping huge returns today as their trading strategy paid off. This number is steadily increasing as more and more HODLers join their ranks.

The most beneficial advantage of HODLing is how much time and energy it saves. All you need to do as a HODLer is to purchase your desired amount of Ether and lock it up in safe holding equipment. HODLers do not need to carry out regular fundamental analysis and market conditions in general. Also, HODLing does not require any technical analysis to make decisions. Choosing this trading strategy translates to lower portfolio maintenance, lower psychological tension, and lower transaction fees compared to active traders.

Active Trading

Active trading is where the real art of investing in cryptocurrencies is. It involves a more immersive approach into the crypto market and requires more knowledge, skill, and experience than HODLing. There are countless known active trading strategies, however, because of the nature of cryptocurrencies, a lot of those strategies won’t work effectively.

Active trading involves the speculation of the price of Ether, meaning that you’ll be required to observe technical and fundamental analysis regularly.

The ‘golden rule’ behind active trading is “buy low, sell high.” Essentially, traders wait for Either to drop in price, as the cryptocurrencies are known to be very volatile witnessing drops and spikes occasionally as the price continues on its overall trajectory, so they can buy at low prices and sell when the price spikes up again.

Price action can be monitored using charts, indicators, and several other technical tools (technical analysis). This brings us to the different types of active traders there are and which suits your personality. They include scalping, day trading, and swing trading.

1- Scalping or High-Frequency Trading involves the practice of executing and holding multiple trades for a very short period. High-Frequency Traders generally stay in trades for 1-5 minutes at most. HFT is based on the precept of scraping off tiny profits from price movements to realize a substantial amount at the end of the day. HF traders usually use the 1-5 minute charts to monitor price movement and identify trading opportunities.

HFT is quite risky and requires considerable expertise to pull off.

2- Day Trading, as the name implies, is an active trading method that involves the execution and holding of trades for a few hours to a day at most. Day traders usually focus on the 30 minutes – 1 hour charts to monitor price movements. Day traders also focus on news headlines (fundamental analysis) on Ether to make trading decisions. Although day trading is not as risky as HFT, it requires a consistent presence in the market to stay in-tune with happenings in the market.

Day trading requires a substantial amount of screen-time meaning that this method requires a more immersive approach.

3- Swing Trading is a fine blend between day trading and long-term trading. It involves the execution and holding of trades for a few days to a few weeks. Swing traders usually look for fairly long-term trades that could generate substantial profits at maturation. Swing traders also focus heavily on fundamental analysis and use the 4-hour – daily charts to monitor price movements.

This method has a passive approach to it and can be practiced as a side activity or in leisure time.

Technical vs. Fundamental Analysis

Experienced traders apply both technical and fundamental analysis in making trading decisions. Both markets analyzing methods have their unique functionalities and information sources making it inharmonious to switch one for the other (except in HODLing, where just fundamental analysis would do).

Fundamental analysis is focused on evaluating the asset’s underlying value (in this case Ethereum) and is very efficient for determining long-term actions, while technical analysis is focused on predicting the future movement of price based on historic trading activities and market sentiments.

Ether Wallets

It is always advisable to gain insight into wallet software and how Ethereum works. There are numerous Ether wallets out there, all under different categories. There are desktop wallets, mobile wallets, offline wallets, as well as an exchange provided wallet.

The exchange provided wallets are probably the easiest to use, however, using this type of wallet to store your funds is the riskiest. Exchanges are always targeted by hackers hence it is unsafe to leave your funds lying around on an exchange. There’s also no guarantee that you will be refunded if such a case were to occur.

The most secure method is by storing your funds on an offline or hardware wallet. This kind of wallet is not connected to the internet and as such is immune to hacking.

Every wallet category requires that you set a passcode, commonly known as private keys, to secure your funds.

You need to secure your private keys adequately lest it falls into the wrong hands which could lead to loss of funds. You also need to guard against forgetting your private key as, without it, your funds will become inaccessible permanently. Setting a two-factor authentication protocol for your wallet is an advisable practice.

Future of Ethereum

Ethereum, just like Bitcoin, has been in existence for many years but is just beginning to gain mainstream media attention. Many crypto enthusiasts believe that this disruptive innovation is not only going to upgrade payment methods but is also going to revolutionize business and industrial systems thought to be the standard for hundreds of years.

Altogether, the overall outlook and expectation for Ethereum are positive and optimistic. However, regardless of Ethereum’s strides and obvious successes, some “old-school” financial specialists still feel it’s a risky endeavor and sooner or later, will come crashing down.

An Insightful Beginners’ Guide to Ethereum Mining

Ethereum is an open software “ecosystem” that is based on a decentralized technology that allows developers to create and execute decentralized applications (dApps). Ethereum Is the 2nd largest cryptocurrency after Bitcoin, based on market capitalization.

Ethereum has sustained steady growth in price over the years and has achieved a whopping 7,759% increase in ROI since its inception in 2015.

This steady growth has given Ethereum a significant increase in demand and has caused Ethereum mining to be more ‘difficult’ as well. So what exactly is Ethereum mining?

This article breaks down what Ethereum mining is, how to get involved with it, and how it can be beneficial for you and Ethereum’s ecosystem at large.

A Brief Introduction to Mining Ethereum

Fundamentally, Ethereum operates much like Bitcoin. It is a decentralized ledger that is authenticated and updated by players of the Ethereum network.

Like Bitcoin, Ethereum also requires mining. The primary method to update a new block of Ethereum transactions is by mining that block.

However, while they both share many similarities, they both have their distinctive attributes. One such difference is that new Ethereum blocks are mined every 15 seconds while new Bitcoin blocks are mined every 10 minutes.

As a reward, Ethereum miners get 2 ETH and all transaction fees (popularly known as ‘gas’) embedded in the block. They also get bonuses for any “uncles” found on the block.

Another difference between Ethereum and Bitcoin is seen in their mining algorithms. Ethereum utilizes a hashing algo known as Ethash while Bitcoin utilizes the hashcash. Ethash is unsuitable for use with the special hashing hardware (ASICs) created for Bitcoin mining. Also, it is a memory-hard algo meaning that it was built to prevent the development of Ethereum-mining ASICs.

Ethash, however, was intentionally created to be compatible with GPU-mining only.

Hashrate, Difficulty, and Price

It has been observed that the amount of hardware devoted to mining Ethereum is on the rise, why then are blocks not being mined at an even faster rate? Why is it that the average 15 seconds block time is unchanging? The answer is Difficulty.

In mining, the difficulty is automatically adjusted to stay in tandem with hash rates. This is how Ethereum manages to maintain the 15 seconds hash rate interval.

You might be wondering what then drives the change noticed in hash rate and difficulty? The simple answer is Price.

Historical ETH charts clearly show how the hash rate has been consistent with price movement over time.

However, it has been announced in the past that Ethereum is planning to switch between the Proof of Work system, which requires mining, to a Proof of Stake system which does not need mining thereby rendering mining useless. It is still unknown when this move is set to happen.

Why Should I Mine Ethereum?

You may be wondering if mining Ethereum is profitable, here are some reasons to consider:

1- Mining can serve as a good way to finance the purchase of a new or more sophisticated GPU(s).

2- Ethereum is considered to be easily tradable for BTC, this makes mining a less expensive way to gradually grow a holding in Bitcoin.

3- ETH also has widespread acceptance and can easily be traded across several exchanges.

4- Mining is a good way to break into the Ethereum markets which are highly sought after by crypto traders because of its volatility and liquidity. If you have decent trading abilities, you could use your acquired ETH to make substantial profits.

5- Gathering a substantial holding in ETH now, which is still in the Proof of Work phase, could guarantee substantial interests on your funds when Ethereum moves over to Proof of Stake.

6- If you're a strong believer of Ethereum, you can support your beliefs and gain a voice through mining.

3 General Ethereum Mining Methods

Now that we’ve gotten a fair idea of mining and what’s in it for us, let's dive straight into how we can start mining Ethereum.

There are 3 basic ways to mine Ethereum. They include:

1. Pool Mining
2. Solo Mining
3. Cloud Mining

Pool Mining

Joining a mining pool is the quickest and simplest way to begin mining Ethereum. It involves working with other miners in a network to collectively mine cryptos and share whatever rewards are achieved. The size of the pool is a strong determinant of how much rewards the pool can achieve. However, not all pools have the same approach.

That said, here are some factors to look out for before joining a pool:

1- Pool size

This factor is important as it increases the chances of receiving rewards. The more miners there are in a pool, the better the chances.

However, as more people join a pool, the wider achieved rewards have to be spread.

It is advisable to try out several pools so you can find the one that works best for you, however, joining a large pool is always a safer bet. You might be getting little rewards per block, but you will always be sure to make something every day.

2- Minimum payout

When choosing a mining pool, another thing to consider is the minimum payout. A minimum payout is the least amount of ETH you have to mine before the reward gets sent to your wallet. The higher the minimum payout, the longer you have to wait or stay in a pool to get your crypto reward.

Pools with huge minimum payouts are not advisable options. You need a pool with a low minimum payout so you don't have to stay committed to exchange longer than you’d want to. Flexibility between mining pools is quite important and you wouldn’t want to stifle your flexibility.

3- Pool fees

The next factor to look out for is the pool’s fee. Every pool has its associated charges. This charge is to allow you to secure your position and pay for services you’re being rendered in the pool. The charge is usually percentage based and is deducted from your reward automatically. Mining charges usually cost anything from 1-3%. That said, the lesser the mining fee, the better for you.

Solo Mining

Solo mining might seem like a wonderful idea at first. You do not share the proceeds of your rewards. You could just stay wherever you want with your computer and begin making money, right? Wrong.

When you mine alone, you’re competing against tons of other miners and mining pools. Mining rewards are only awarded to miners who solve the block first. Competing with individuals or companies that might be using more sophisticated mining equipment than you leave you to the mercy of “luck.”

Solo mining can only be profitable when you have hundreds of graphics cards. However, having this amount of equipment has its disadvantages. Some issues you have to worry about include:

1- Overheating issues.

2- Ventilation.

3- Excessive noise.

4- Electricity requirements and costs.

5- Space.

Cloud Mining

Cloud mining involves paying somebody else to mine for you. How this works is, you rent mining time from someone and in return, they deliver all the rewards to you.

Cloud mining at first glance seems counterintuitive. Why would someone mine for you when they could just mine for themselves? Why pay someone when you could invest that money into setting up your mining rig? Or better yet, why don’t you just buy the cryptocurrency directly instead of paying to have it mined?

All these are valid questions in cloud mining and to answer them, we need to look at some advantages as well as downsides of cloud mining.

Advantages

1. You are not accountable for any equipment should anyone get damaged. In cloud mining, all you're doing is buying the miners time and as such, you’re not responsible for whatever befalls the equipment.  However, make sure to read and understand the terms being presented by the cloud
   mining company as some of them make it mandatory for you to handle electricity
   and repair expenses.
2. You don’t get to be burdened with the excessive noise, heat, and overall hassle of running a mining rig in your home or assigned space.

Downsides

1. Payment is done upfront. This means that your funds are irretrievable should the price of Ethereum begin to drop.
2. You are stuck with whatever hardware or software the cloud mining provider uses.

Now that we’ve understood the different mining methods, let’s look at the necessities involved in mining Ethereum.

Setting Up Your Mining Hardware

The fundamental requirement for mining Ethereum is an everyday computer with a CPU, RAM, huge storage, Power Supply Unit (PSU), and cooling fan. However, to operate efficiently and profitably, you will need an auxiliary processing site (a GPU or ASIC circuit). Most times, beginners start with a gaming graphics card like NVIDIA GeForce GTX 1080, however, more recent versions keep dropping frequently.

To maximize profit, make sure you get the up-to-date software drivers for your hardware and acquire a productive PSU to power it. A productive PSU not only reduces the cost of mining but allows you “overclock” your graphics card which means you get better performance from it.

The goal here is to extract the best performance possible for the lowest power requirement. This, in turn, will help maximize your profit.

Setting Up Your Ethereum Wallet

Before mining begins, you should have created a crypto wallet. Although some Ethereum mining software will come with wallet features, you still need to get
your wallet as it is the most secure method of storing or holding your crypto funds. One highly recommended Ethereum wallet is the MyEtherWallet (MEW). This wallet is free to use, very convenient to use, and delivers top-notch security features. MEW can either be downloaded as software into your system or can be accessed via a browser. Not just any browser, but the wallet provider’s Metamask- powered browser extension for added security.

Setting Up Your Mining Software

In selecting mining software, there are two 2 core software types to choose from which includes the “command-line” miner which is quite complex but is very customizable and the “GUIMiner” which is easier to set up but not as flexible as the former.

The Command-Line

This option involves a manual approach. There are 3 main selections for manual mining, and they include:

1- Claymore’s Dual Ethereum Miner

Claymore is the most preferred mining software by Ethereum miners. It is known for its proficiency, stability, simple configuration nature, and its ability to support and mine more than one coin.

2- Phoenix Miner

Phoenix Miner is a close rival to Claymore. Many feel that this mining software offers more stability compared to Claymore.

3- EthMiner

EthMiner is also an easy-to-configure miner and can mine other Ethereum derivatives like Ethereum Classic. However, it demands more work and thorough knowledge to operate.

Note: All 3 require that the user set up and edit configuration files, meaning that the user must have some knowledge on the command-line interface.

They all have their different community of users and have several descriptive guides to install which can be easily found. Make sure you carry out proper research on these miners to find out which suits your preferences best.

Going for the GUIMiner Option

Also known as the Cudo Miner, this mining option is recommended for those looking for an easy mining experience. The GUIMiner offers a user-friendly interface for people looking to dedicate their GPU, and CPU resources to mining.

GUI miner is available for installation in simple packages for Windows, Mac OS, and Linux. This mining option doesn’t require any expertise or knowledge in the command-line to operate. You don’t even need to have a wallet at this point. It’s probably the best place to learn and hone your mining skills.

GUIMining is a wonderful way to try out your mining prowess while making a few bucks out of it.

Is Ethereum Mining Still a Valid Venture?

In mining most cryptos, mining difficulty and expenses are on a steady rise. It appears to be that the more miners join the network, the more difficult and expensive it is to mine a block. However, as Ethereum continues to grow in value by the day, it makes mining worthwhile in the long run. Regardless, Ethereum’s network is set to experience drastic changes. As mentioned previously, the network intends on switching from its Proof of Work algorithm to a Proof of Stake system. Once this switch is actualized, miners will have no place in the network as their duties will now be fulfilled by token holders. New tokens will be created by the holders randomly. Miners will only be left with transaction fees as a reward.

The switch will happen after a hard fork which will yet again split the network into two. Those who would still be interested in mining Ethereum will only be able to do so on the old version.

The date or period when this switch is set to occur is still unknown making it impossible to say for sure that mining Ethereum is worth it as the hard fork could occur anytime.

Frequently Asked Questions (FAQs)

Which mining pool is the best?

In truth, there is no “best” mining pool as different pools have different fundamental attributes. However, Dwarfpool and Nanopool offer great services for small miners thanks to their minimum payout while Ethpool and Ethermine are more adequate for large-scale miners.

Can the pool fee be avoided?

No. This is only possible if you start your pool. However, you could look for smaller pools that demand lower fees, but higher-ranked pools give you a higher payout frequency.

What is the hash rate?

Simply put, the hash rate is the speed at which your mining rig can mine. Here’s how the units work for better understanding.

1 kH/s equals one thousand hashes per second
1 MH/s equals one million hashes per second.
1 GH/s equals one billion hashes per second.
1 TH/s equals one trillion hashes per second.
1 PH/s equals one quadrillion hashes per second.
1 EH/s equals one quintillion hashes per second.
1 ZH/s equals one sextillion hashes per second.

Should I go for a mining pool with a higher hashing rate?

Yes and no. Mining pools give rewards according to the amount of work you accomplish in comparison to every other miner in the pool. If the pool you work with has a high hash rate, you’re likely to find more unsolved blocks and rewarded more frequently. However, the higher the hash rate, the higher the number of miners to share a reward with meaning your rewards may be small.

A medium hash rate pool, however, realizes a fair amount of rewards, with higher payouts.

What makes Ethereum mining different from Bitcoin mining?

While both of them share many similarities, there are some fundamental distinctions. Firstly, Bitcoin makes use of the SHA256 algorithm to secure its network, meanwhile, Ethereum uses Ethash.

Final Note

At this point, after getting detailed information on Ethereum mining and what it entails, I believe you've gotten enough insight to go into the mining world and test your new-found knowledge.

Litecoin Mining: The Complete Beginners’ Guide

Litecoin is undoubtedly one of the fastest-growing cryptocurrencies in the industry. Since its inception in 2013 to date, this crypto asset has grown from about $1.2 billion in market capitalization to about $240 billion. In just 7 years, Litecoin has witnessed substantial rises and falls and billions of dollars in fortunes have been made and lost.

Asides from market capitalization, Litecoin has also grown exponentially in its mining regard.

This article gives you, the reader, insight into Litecoin mining, what it's all about, how it bears significant importance to Litecoin, and how it can be beneficial to you.

Litecoin’s Blockchain

Litecoin runs on a decentralized public ledger that requires external support to verify and complete transactions. This technical support is required by every cryptocurrency that is run on a blockchain that utilizes the ‘Proof of Work’ system.

To gain this support, cryptocurrencies (Litecoin inclusive) create rewarding systems to encourage the public to join their network and complete transactions while simultaneously sustaining the integrity of the blockchain. People who solve blocks or complete transactions on a crypto network are called “miners.” This rewarding system is the major reason why cryptocurrency mining is growing exponentially across the globe.

Litecoin mining, unlike many mining ads you might have come across, is not an easy endeavor. Mining goes beyond just having a desire or a knack for it. It requires skill, experience, and efficient mining equipment.

As the years go by and as the market grows, more and more miners join in on mining platforms which automatically causes mining difficulty to soar. While mining is still a profitable and worthwhile venture, prospective miners need to follow the best mining practices to better guarantee that their entry into the mining space is profitable and worthwhile.

As mentioned previously, this article gives the reader insight into Litecoin mining and provides other relevant information to ensure success in their mining endeavors.

A Brief History of Litecoin

Before we go into a detailed description of Litecoin mining, let’s take a quick look at the broad overview of Litecoin. Firstly, Litecoin is the 7th-largest cryptocurrency based on market capitalization
and is identified in the market with the ticker LTC. It was created in 2011 by Charlie Lee, a former Google and Coinbase worker. Litecoin was created to be an open-source platform run on a public decentralized ledger. This gives users the means to facilitate peer-to-peer transactions almost immediately without restrictions or supervision from governments or financial regulators. The concept behind this cryptocurrency was primarily inspired by Bitcoin.

Mining Litecoin

To bring this payment solution concept into reality, the project was designed based on the Bitcoin client using the Scrypt algorithm. Just like Bitcoin, Litecoin makes use of the Proof of Work system to secure its network and an incentive-based participatory system through tokenized rewarding.

Litecoin has witnessed exponential growth in value over the years. In December 2017, the price of LTC peaked at $375. That said, Litecoin’s valuation is a key determinant of the affairs of its mining. We'll get into the details of this in a bit.

What Is Cryptocurrency Mining?

To understand why Litecoin needs to be mined, it is important to gain a contextual knowledge of what cryptocurrency mining is.

Firstly, mining is a process involved in the Proof of Work system which secures and sustains the operations of a blockchain network. There are several other blockchain security protocols including Proof of Stake, pre-mined tokens, consensus validation, and many more. All these methods all have a similar purpose; to bind the network’s security to the value of the token while providing a rewarding system for external participation in the platform.

By binding the network’s security to the value of the token, ill-intentioned participants will think twice before causing damage to the system as that would devalue their holdings. This gives participants a kind of responsibility for the security of the network and their funds.

Secondly, mining encourages people to take part in running the network. Aside from electrical and computational assistance, crypto networks also need assistance in translation, marketing, bug finding, and many more. These supports are rewarded with certain amounts of LTC.

So, it can be observed that the prospect of getting rewarded in tokens is a driving force for contributors of resources in a network.

Now that we’ve gotten a good idea of what mining is and the rationale behind it, let’s move on to a more detailed explanation of mining Litecoin.

Evolution of Litecoin Mining

In mining, miners must have a mix of top-notch hardware and software to solve math problems in the contest to solve a block of transactions that will be added to the network’s blockchain. Successfully mining a block is a competition against thousands of miners across the globe, all working towards the same goal. That said, there are no reward guarantees in mining regardless of what resources have been spent by the miner.

Initially, mining Litecoin was easy compared to today as the mining industry was less crowded and the mining difficulty was less complicated. As the crypto market grew, more and more prospective miners came on board causing a tougher competition which automatically led the network’s algorithm to adjust its difficulty accordingly. This was done to make the process tougher for miners while simultaneously maintaining the same time frame for resolving blocks.

As an effect, miners began using more sophisticated mining equipment, started forming larger mining pools, and started creating larger mining farms with significant upgrades.

The steady growth of Litecoin’s value has caused mining rewards to decrease significantly. However, as mentioned previously, Litecoin mining is still a profitable venture even though it is significantly more complicated and expensive.

At press time, Litecoin’s network adds a new block every 2.5 minutes and has a reward allotment of 12.5LTC per block. There's currently just 25% of Litecoin’s total supply left to mine. The maximum supply is capped at 84 million LTC.

Mining hardware

Mining is an automatic activity and can be done using either a Central Processing Unit (CPU), which is a program that is in-built into our everyday computer, or with Graphics Processing Units (GPU). While mining using CPU is possible, it is not an advisable option of use. Mining with CPU, in the long run, is unprofitable and inefficient which defeats the primary purpose of mining.

Cryptocurrency mining is an intensive process and subjects the equipment being used to wear and obsolescence. However, there are mechanisms for preserving your mining hardware like efficient cooling systems and general supervision of hardware performance.

Litecoin mining is quite exhaustive on the hardware being used as the network uses a Scrypt Proof of Work hashing algorithm instead of the general SHA-256.

Mining Software

An efficient alternative would be to use dedicated hardware like a powerful graphics card to deal with the arduous computational task involved in mining. However, for those looking to test the waters of mining, going all out on mining equipment might not be necessary.

Depending on the style of mining, the software requirements might vary. For prospective miners who use CPUs, there is a software called CPU miner available for download from SourceForge. Likewise, prospective miners who use GPU will need a software called CGminer.

Simple Steps to Begin Mining Litecoin

1. Create a Litecoin wallet: Before you begin to mine, it is necessary to set up a personal wallet where your funds or mining rewards can be securely stored.
2. Select your preferred hardware: Make a quick research on the available Litecoin mining hardware options and choose the one that suits your style. You could either choose to set up a mining rig with multiple graphics cards or you could invest in an ASIC miner. Remember to always put the cost of power, space, and ventilation into consideration when setting up your mining rig.
3. Install your software: If you choose the ASIC miner option, there wouldn’t be any need to go through any hassle of installing any software as the ASIC hardware comes with pre-installed mining software. If you’re using a graphics card, however, you’ll be required to download and install adequate mining software. Always make sure to only download your software from trusted websites.
4. Start mining: All you’ll have to do now is to follow the instructions in your mining software package and begin making a profit.

Mining Pool

At this point, you now know how to set up your mining rig, install your software, and begin mining. However, there's one crucial element that needs to be looked into.

To succeed as a miner, you simply have to successfully solve a block before the next person. To do this, you need to be efficiently equipped with top-notch mining hardware and software.

That said, in the mining space, there are networks known as “mining pools” which consist of several miners, all working towards the same goal; to successfully solve blocks. Mining pools are made up of miners who pool computation power and other resources to increase their chances of securing mining rewards. This makes the mining competition even more difficult.

That said, to better improve your chances of succeeding in the mining space, it is advisable to join a mining pool. In mining pools, however, rewards are shared amongst every miner that participated in solving a block, meaning that the reward obtained from mining a single block in a pool is significantly lesser compared to when you're mining alone (solo mining). Although, this issue is offset by the ability of pools to solve multiple blocks at the same time a solo miner would solve one, giving you an almost certain steady influx of reward. The larger the pool, the better.

However, you need to carry out proper research before joining a mining pool lest you become a victim of a scam or unfair pool terms and conditions.

Mining Profitability

Evaluating the profitability of your mining activities relies on some crucial factors including hashing rate, mining pool fees, electricity costs, cost of acquiring equipment, and the price of Litecoin. There are some mining profitability calculators available on the internet today which makes it easier to calculate your mining profitability.

Final Note

Hopefully, this guide has given you better insight into the concepts involved in mining Litecoin, how to get involved with it, and what the requirements are. You’ve probably garnered enough knowledge to go out there and test this knowledge. However, if you have more questions relating to your pool, hardware, software, or wallet do well to scour the internet to get more information on those topics.

Frequently Asked Questions (FAQs)

How many unmined Litecoin tokens are there?

The total number of Litecoin in circulation at press time is 62,983,450. If the maximum supply is 84,000,000, that would leave the total unmined tokens at 21,016,550.

What is the time frame for mining one Litecoin?

The average block generation time for one Litecoin is 2.5 minutes.

Is Litecoin easier to mine than Bitcoin?

Yes. Mining Litecoin is considerably easier than mining Bitcoin. It is also cheaper and less equipment-intensive to mine Litecoin than Bitcoin.

What is the best Litecoin miner?

ASICs are regarded as the best available Litecoin miner.

How do I start mining Litecoin?

You can go through this article to understand the step-by-step procedure as well as the necessary hardware and software involved.

What is the hash rate?

Simply put, the hash rate is the speed at which your mining rig can mine. Here’s how the units work for better understanding.

1 kH/s equals one thousand hashes per second
1 MH/s equals one million hashes per second.
1 GH/s equals one billion hashes per second.
1 TH/s equals one trillion hashes per second.
1 PH/s equals one quadrillion hashes per second.
1 EH/s equals one quintillion hashes per second.
1 ZH/s equals one sextillion hashes per second.

What is a Litecoin mining rig?

A Litecoin mining rig is the setup of several complex hardware units. Rigs are used to create higher hash rates and block generation. Mining rigs can be built from scratch or can be purchased from various online vendors.