If you’re considering cryptocurrency mining, it’s important to understand the concept of a mining algorithm as it directly impacts your potential profits.
When mining a cryptocurrency, you instruct your mining hardware to solve a mathematical algorithm. The first computer to successfully solve the algorithm, also known as the “problem,” receives a predetermined amount of coins as a reward.
Different cryptocurrencies utilize different algorithms. For example, Bitcoin relies on SHA-256, requiring specialized mining hardware specifically designed for solving SHA-256 problems. On the other hand, Ethereum mining involves hardware capable of solving Ethash algorithms.
Various coins employ their unique algorithms such as Zhash, Beam, and more. Hence, it’s crucial to ensure that your existing or planned mining hardware is compatible with the specific coins you intend to mine.
Keep in mind that certain algorithms may favor specific hardware. For instance, Bitcoin mining necessitates the use of custom ASIC hardware solely dedicated to mining Bitcoin and cannot be repurposed for other tasks. Conversely, Ethereum mining can be performed using GPUs in your computer, allowing you to utilize your computer for Ethereum mining when it’s not in use for other activities, provided you have a sufficiently powerful GPU.
Additionally, consider the power consumption of your mining hardware and compare it to its hashing power. This evaluation will help you determine whether the electricity costs are lower than the potential earnings from mining the coin, ultimately enabling you to assess profitability.
A Bitcoiner is an individual who understands, trades, and appreciates Bitcoin, and it’s a self-proclaimed title that anyone can assume. If you find yourself enjoying reading about Bitcoin, engaging in discussions, and staying updated on its developments, you might consider yourself a Bitcoiner.
Distinction should be made between a Bitcoiner and a Bitcoin Maximalist. A Bitcoin Maximalist firmly believes that Bitcoin is not only the dominant cryptocurrency but also predicts the eventual demise of all other cryptocurrencies, regardless of their popularity or usage.
While a Bitcoin Maximalist maintains a closed mindset, regarding Bitcoin as the ultimate cryptocurrency and dismissing all others, a Bitcoiner appreciates Bitcoin’s unique qualities while acknowledging its limitations, which can be addressed by other cryptocurrencies.
Bitcoin has its own set of limitations, including the absence of smart contracts, default privacy, relatively slow transactions, and the Proof of Work consensus mechanism, among others.
Interestingly, these limitations contribute to Bitcoin’s strengths. For example, the absence of smart contracts prevents the blockchain from being burdened by unnecessary code, allowing Bitcoin to stay true to its core function as a digital coin.
Although Bitcoin’s Proof of Work mechanism may be slower and resource-intensive compared to other cryptocurrencies, it provides the highest level of security.
While Bitcoin lacks default privacy, its public ledger ensures full transparency, a feature that privacy-focused coins may lack.
Continue learning to enhance your Bitcoiner journey and deepen your understanding of this fascinating digital asset.
A limit order is a trading instruction that outlines the intended price at which the trader is prepared to purchase or sell an asset. Only if the market price reaches the trader’s set limit price or provides a better result will the trade be carried out.
A digital wallet address is an alphanumeric combination that serves as a pseudonymous account number representing digital assets.
A coinbase transaction, often misunderstood as a trade on the Coinbase exchange, actually refers to a distinct type of bitcoin transaction.
Specifically, it is the very first transaction in a new block, created solely by the Bitcoin miner. Its purpose is to receive the newly minted bitcoins, as well as any associated mining fees.
Unlike regular transactions, a coinbase transaction does not have any inputs since the coins are generated by the Bitcoin protocol itself.
Miners have the flexibility to choose whether the block reward and fees will be sent to a single bitcoin address or distributed across multiple addresses.
Interestingly, the initial coinbase transaction from the genesis block cannot be spent, and the exact reason for this remains unknown. While it is visible in the blockchain, the bitcoins within it cannot be utilized.
To enter circulation, bitcoins from a coinbase transaction must accumulate 100 confirmations in the blockchain, which typically takes approximately 16 hours and 40 minutes.
If you are considering venturing into bitcoin mining, it is crucial to be aware of these aspects.
In the realm of cryptocurrencies, you may have heard of the idea of hard forks, even in the case of Bitcoin, the most popular digital money.
Understanding that cryptocurrencies, like Bitcoin, function on software that is updated by developers is crucial to understanding the idea of a hard fork. These programmers occasionally have to make substantial changes to the software, rendering earlier iterations useless.
A hard fork is a significant alteration to the protocol of a network. All nodes or users must update to the most recent version of the new software following this kind of fork in order to avoid utilising out-of-date or malfunctioning software.
During a hard fork, nodes operating on the latest version of the blockchain no longer accept the old version, leading to a permanent divergence from the previous protocol. This divergence is metaphorically referred to as a fork, drawing a parallel with different paths taken during mountain trekking. One path follows the upgraded blockchain, while the other continues along the old path, which eventually becomes obsolete if all nodes/users abandon it.
Hard forks can occur in any blockchain, which is why various digital currencies similar to Bitcoin have emerged, such as Bitcoin Cash, Bitcoin Gold, and others.
This situation poses a challenge for new cryptocurrency investors who may struggle to distinguish between these different cryptocurrencies, potentially leading them to invest in the wrong one. While some of these hard-forked currencies claim to be superior to Bitcoin or address critical security concerns, introduce new functionalities, or even reverse transactions, they often fail to deliver on these promises.
Therefore, it’s crucial to conduct thorough research before purchasing any coin to ensure you are aware of any past hard forks and which version aligns best with your requirements.
The practise of one central bank lending liquidity to another by exchanging their respective currencies is where the phrase “liquidity swap” first appeared.
In this process, the lending central bank buys the borrowing central bank’s liquid currency at the current market exchange rate using its own liquid currency. The lender then consents to sell back the borrower’s currency, along with any interest earned on the loan, at a later date. The currency of the borrower serves as security for the loan.
In the world of cryptocurrencies, some exchanges may engage in liquidity swaps by exchanging their reserves of liquid stablecoins from other exchanges for their reserves of stablecoins like USDT. The reserves of their own native token, such as Binance’s BNB, may also be exchanged for stablecoins or other coins offered by another exchange.
Users can also exchange stablecoins like USDT for other stablecoins like DAI to conduct liquidity swaps with one another. This kind of exchange might be driven by anticipations of various swings among the stablecoins or the requirement for a certain stablecoin for trading.
Smart media tokens were initially introduced by Steemit, a blockchain platform that enables users to create and publish posts while earning compensation through upvotes from Steemit readers.
These tokens provide a means for anyone to create their own cryptocurrency, featuring fast and feeless transfers that take only three seconds. Remarkably, you don’t even need to possess coding skills to create your own cryptocurrency using a smart media token.
Once you establish the characteristics and functionalities of your token, you transfer control to the Steem blockchain, which initiates an airdrop. This enables publishers, creators, and entrepreneurs to launch their custom tokens and monetize their digital content. By rewarding consumers who engage with their content through likes, votes, views, shares, and comments, content creators can foster a stronger connection with their audience.
The advantages of launching a smart media token include:
- Three-second block times
- Zero fees
- “Proof-of-Brain” algorithm, which autonomously distributes tokens to the most valuable community members
- Easy integration into existing websites, apps, or platforms
If you are already utilizing Steemit, you are already on the right track. If you haven’t explored Steemit yet, I encourage you to do so. It is a thriving community of individuals interested in the concept of free press, sharing diverse topics within the crypto space and beyond. Moreover, you can publish your own content on Steemit and earn Steem tokens in return.
Smart media tokens hold immense potential for the future of media. Given the option to support your favorite authors by simply upvoting their content rather than enduring advertisements, the choice becomes clear and favorable.
This term held greater significance in the years leading up to 2017 and continues to provoke heated debates even today.
The primary focus of these debates revolves around the Bitcoin blockchain, with two opposing sides: “big blockers” advocating for larger blocks on the Bitcoin blockchain to accommodate more information, and “small blockers” supporting smaller blocks.
Originally, Bitcoin’s block size was limited due to database locks, allowing a maximum of 10,000 blocks. This translated to approximately 500 to 750 kilobytes in terms of serialized bytes.
In 2010, Satoshi Nakamoto set an explicit block size limit of 1 megabyte, although it was considered a no-op due to the aforementioned limitation.
In March 2013, the 1 MB limit became the effective constraint on block size for various reasons that delve into the history of Bitcoin.
Changing this limit was believed to necessitate a disruptive hard fork and was thus postponed for several years. However, as Bitcoin adoption increased and transaction volumes surged, the limit started to contribute to exorbitant mining fees.
By 2015, contentious discussions emerged regarding the possibility of increasing block sizes to alleviate transaction fees. This speculation fueled debates about preventing a temporary or permanent split in Bitcoin, leading to the emergence of alternative altcoins that aimed to explore different block sizes.
Advocates for larger block sizes argued that it would facilitate more transactions per second and lower fees for users. On the other hand, proponents of smaller blocks contended that a lower block size limit incentivizes higher transaction fees, thereby promoting a more secure network through increased miner participation.
Small blockers also posited that a one-time increase in the maximum block size would establish a precedent for future increases, which would ultimately result in impractically large blocks for accommodating the world’s future transactions on the main blockchain.
Ultimately, technological advancements like Segregated Witness and the Lightning Network were developed as solutions to address these debates without necessitating an increase in block sizes on the Bitcoin blockchain.
The term “shitcoin” carries various meanings within the cryptocurrency community due to its colloquial nature.
Initially, the term referred to any coin other than Bitcoin. This was partly justified because, as Bitcoin gained popularity, the cryptocurrency market became flooded with alternative coins claiming to surpass Bitcoin in various ways.
Many of these coins failed to live up to their promises, leading to the widespread adoption of the term “shitcoin” to describe them. In more polite terms, these coins were often referred to as “altcoins,” short for alternative coins, by the cryptocurrency press, encompassing all coins besides Bitcoin.
However, as the cryptocurrency industry evolved, several alternative cryptocurrencies did deliver on their promises. Notable examples include Litecoin, which offers faster transaction speeds than Bitcoin, and Ethereum, a platform enabling smart contracts on its blockchain.
These cryptocurrencies, along with others, should not be labeled as “shitcoins” since they demonstrate genuine utility and distinct use cases that set them apart from Bitcoin.
Nonetheless, some Bitcoin maximalists, who advocate for Bitcoin as the sole surviving cryptocurrency, continue to use the term “shitcoins” to refer to all coins other than Bitcoin.
As you navigate the cryptocurrency space, it is important to reserve the term “shitcoin” for scams and fraudulent projects deserving of such a label. Otherwise, you risk developing bias against alternative cryptocurrencies that may indeed prove useful in the future.
