June Katz 3 min read
How to Keep Your Recovery Seed Phrase Safe
A recovery seed phrase is a set of words that contains the necessary information about your cryptocurrency wallet. It is the only way to access your account because the digital wallet uses encrypted information in order to provide access to your money. Since anyone who knows your secret phrase can easily hack your account, it is necessary to store it in a secure manner to ensure the safety of your cryptocurrency. In this article, we are going to make a list and break down the dos and don'ts when it comes to storing a recovery seed phrase and provide the best methods for this matter.
Don't try to invent the recovery seed phrase yourselfQuite possibly, you might think that one way of outsmarting the system and tricking others is to invent the recovery seed phrase yourself. Unfortunately, statistical research proves this idea wrong. Theoretically, you can create and memorize a clever mnemonic phrase yourself, but it's not safe since it's proven the human brain does not cope well with random generation. The most effective way to protect your wallet is to make up your recovery seed phrase using a generator created for this very purpose. Some wallets even have their own, so make sure to use them.
Don't split your list of words into two parts and don't put irrelevant information into it eitherOnce the hacker gets a hold of the first half of the list and in case they are well-aware of the generator you have used stealing money, it is a no-brainer and this task will take them only a few moments. A similar thing applies to putting your own extra words into the phrase – it's relatively easy to deduce which particular words don't belong and exclude them from the equation. Some people write down only a few first letters and remember the rest of them, which is also ruled out as ineffective.
Keep your set of words on a physical holder of information rather than an electronic oneSpeaking not only about recovery seed phrases but any information, electronic devices are not much of a use. One reckless thing you can do is write down your list of words and have it stored in places like e-mail, Google docs, text messages, and such. Your accounts can get hacked in a blink of an eye and devices like flash drives get out of order in a span of 5-10 years. If you don't want to rely too heavily on your own memory, your simplest options include writing the phrase using the good old pen and paper. If you choose this method, make sure to store it in a secure place (preferably in a waterproof container) and prevent it from extreme hot and cold temperatures since they can destroy or corrupt the written info. You might also want to laminate the aforementioned piece of paper. Some suggest a more complicated and elaborate method that involves engraving your phrase on a steel plate. Be aware of things like corrosion or destruction in case of house fires, floods, and earthquakes. The two most optimal locations to keep your information would be either at home or in a safe deposit in a bank.
Use two-factor recovery seed phrasesIn case you use this method, the authorization system will additionally ask you to put in some kind of a code or a PIN number. The password can be kept in the same place with the recovery seed phrase, yet it would be more effective to memorize it or at least store them separately in different places or forms. This way you can ensure your crypto money is secured twice as well: in order to unlock your funds, you will need two forms of passwords and it's less likely the hackers will get access to both. There is no universal and one hundred percent effective method for keeping your cryptocurrency secure. Losing money usually occurs as the result of either laziness or being underinformed, so take your time to research the topic. You will have to figure out on your own which method works out in your particular case and stick to it for a while, but you can always choose an additional method if you feel like it's not safe enough. Remember that safety and easy access lay on different sides of the spectrum and find the perfect balance between them.
El Salvador Adoption of Bitcoin as Legal Tender: Why Is This Exciting and How to Understand It BetterJune Katz 8 min read
For the past few weeks, the crypto world has been abuzz with the news of El Salvador’s official adoption of Bitcoin as legal tender. But why is it such a big deal? Let’s review the regulatory situations concerning digital money, look at why cryptocurrencies are special among them, and in the process find out what makes El Salvador’s case so unique. Types of Digital Money There are many kinds of digital money, many of which differ only in detail. So, for the purposes of this article, they can be roughly divided into three groups: centralized virtual currency, central bank digital currency, and cryptocurrency. Centralized Virtual Currency This is a type of currency that is accepted in some environments, like online game communities. Such currencies have a central authority that has the right to mint them and impose policies — for example, the publisher of the game. Those are not usable in the world outside the community, and there’s no real chance of any government to adopt any of them. Central Bank Digital Currency Central bank digital currency (CBDC) has been widely discussed in several countries for a long time. It’s a fiat currency that’s supposed to be minted digitally, not corresponding with the physical bank reserves but “in parallel” with them. On its face, a digital currency that is accepted as legal tender sounds innocent enough and incredibly convenient, as it’s basically an official endorsement of the touchless payment systems liked by many people already. However, depending on the country, CBDC can be used as a part of a larger effort to regulate the payments market within its territory. One of the most obvious examples of this is China, whose digital renminbi has been in the works since 2014 and is slated for the country-wide rollout in 2022. At the same time, China has been slowly tightening regulations on cryptocurrencies, banning crypto exchanges, prohibiting financial institutions from dealing with crypto, clamping down on crypto mining. There’s no reason to assume that those regulations will loosen any time soon; if anything, it seems like China is looking to offer its citizens the user experience associated with crypto, but replaced with the CBDC, and drive the crypto community out of the country. Cryptocurrency Obviously, this is the most interesting (and intriguing) one. After starting out as just a small subgroup of virtual currencies, crypto can be said to have won its unique position among digital money. As opposed to most virtual money, its use is not limited to one community (even if some opponents claim that the only people using cryptocurrency are criminals and drug lords — we all know it isn’t true). On the other hand, most governments are wary of crypto, and probably rightfully at that, as it’s unregulated (more than that, even if you wanted to regulate it somehow, nobody understands yet how to do it in practice) and can be used to avoid capital control. The cryptocurrency case is a curious one, as it’s been invented with the exact purpose of being a decentralized, non-governmental form of money, but at the same time, crypto developers and users are clamoring for the widespread crypto adoption (and there’s nothing wrong with that, obviously). But the adoption trend contradicts the initial idea of crypto, which is evidenced by the high-profile clashes between the regulators and crypto communities. We will probably see many more of those in the future, although there can always be exceptions. Regulatory Practices: A Short Overview We have looked at three types of electronic money. Now let’s quickly lay out what people and institutions may or may not be allowed to do with it in general, before talking about what’s being done in reality. Without diving deep into the regulatory waters, we can say that there’s basically a spectrum: the asset (or currency in this case) can be banned outright within a certain country, under the fear of criminal proceedings; it can be fully legal (for currencies — with the status of legal tender); or it can be somewhere in between. A government can ban a class of asset, citing lack of regulation, caring about the citizens, or some traditions prohibiting the use of this asset. The governments that are open to more nuanced interpretation of the laws may put some partial restrictions, for example, on banking or use as a payment tool, or just discourage the use of an asset without passing formal regulations. Others can allow any use of an asset in the private sphere, while not wanting anything to do with it in public and governmental affairs. And on the extreme end of this spectrum is full adoption of an asset class with the full backing of the government. We mentioned the status of legal tender several times here, so to give a quick definition — to be legal tender means for a currency to be accepted in the settlement, or tender, for all debts within the country. This means that the government fully supports the currency, and because of it it’s usually widely accepted by various institutions and merchants. This is why being legal tender is a big deal. The State of Digital Money Regulation in 2021 In practice, the discussion about the digital money regulatory status can be reduced to the question concerning only cryptocurrencies. As any centralized virtual money existing now is essentially private, it’s obvious that it’s not going to enjoy full legal status anytime soon. Virtual money is not banned in most countries (with some exceptions like Algeria and Morocco, where any form of it is illegal), but at the same time, it’s not accepted outside of its community of origin. Central bank digital currency, as opposed to virtual money, is basically obligated to have a full legal tender status, because anything less defeats its purpose. Cryptocurrency regulation, until very recently, could fall on any point of the spectrum described in the previous section — except being backed by the government. Crypto has been banned fully (like, for example, in Egypt, Bolivia, or Nepal), legal (like in the US, Australia, and most of the EU), or partially regulated, taxed, etc. all around the globe. But only in 2021 it became adopted as legal tender for the first time, in El Salvador. So, What’s the Deal with the El Salvador Bitcoin Law? El Salvador is a small Central American country without its own fiat currency, choosing to use the US dollars instead. This has some consequences for the economy: for example, simply put, the El Salvador government has too much debt and too few reserves — not a good situation for the government to be in. To fix the economy somewhat, El Salvador needs to attract new investors. Many El Salvadorians live and work abroad and send remittances to their families, which is good for the economy, but this process is usually slow and difficult; besides, much of the population is unbanked. These considerations, among others, led El Salvador’s government to propose officially adopting Bitcoin. This, they argued, would revitalize the economy, bringing the new investments and allowing unbanked citizens to manage, send and spend their money more efficiently. In June 2021, El Salvador President Nayib Bukele put the cryptocurrency adoption law through Congress, and on Tuesday, September 7, it went into effect. The Bitcoin adoption in this country is surrounded by controversy. For example, El Salvador Bitcoin wallet Chivo, officially endorsed by Bukele, has some corrupt officials on its management team, not to mention the accusations of the El Salvador President of being corrupt himself — or, at the very least, a populist. Many people felt the crypto volatility as well — new Chivo owners in El Salvador received $30 in Bitcoin on signup, only to see it lose more than 15% of its value in one day. These and many other “hiccups” led to El Salvadorans protesting Bitcoin adoption and Bukele personally. One of the biggest protests happened on September 15, when El Salvador is celebrating its independence from Spain. Despite the somewhat botched execution in this case, it doesn’t seem to be fair to summarily reject the idea of the governmental adoption of crypto. Other countries have been carefully expressing their interest in following El Salvador’s suit — although, hopefully, if they do, they will learn from each other’s mistakes. Besides, the El Salvadoran story itself is far from over right now, and the potential good effects of Bitcoin adoption, noted at the beginning of the discussion, may still be realized. So, it seems like we need to watch the situation some more to decide whether it’s going to be a net positive. Final Thoughts El Salvador Bitcoin adoption move, while controversial, is also inspiring. The issues we touched upon in this article show that currently, among all digital currencies, crypto is the biggest headache for regulators all over — but for many people, it’s exciting to see what happens next in this new world. The crypto adoption does seem like the final frontier for now, doesn’t it? We will write more about this topic, as the stories unfold — so stay tuned. Read more ❯
What is Pirate Chain (ARRR)? How to Buy Pirate Chain?June Katz 5 min read
Pirate Chain (ARRR) is the most anonymous and private cryptocurrency, as its developers claim. It’s based on an asset chain on the Komodo platform, which is a fork of ZCash — a privacy-focused chain. Pirate Chain was launched by a group of developers from the Komodo network. Komodo has kept all the privacy features of ZCash, so it makes sense for Pirate Chain to utilize them. However, Pirate Chain developers have built on these features to ensure even higher levels of anonymity. Here’s a short overview of what Pirate Chain can offer its users. Pirate Chain Features Zero-knowledge proof (zk-SNARKS) zk-SNARKS (or Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is a zero-knowledge method of constructing cryptographic proofs. Zero-knowledge proofs allow verifiers to check the truth of a statement sent by another party without knowing the details about the statement. Zero-knowledge Proof of Knowledge goes one step further, not only allowing to verify the statement itself but also the fact that the sender has the answer. Being succinct and non-interactive means that the verification takes a short time and doesn’t require exchanging information back and forth several times. zk-SNARKS is a very secure method of anonymizing (shielding) the transactions, as there’s no need to publish the details about the sending and receiving addresses, inputs and outputs. However, the way it’s employed by ZCash which has pioneered it leaves some information unprotected since the shielding on ZCash is optional. Delayed Proof-of-Work Delayed Proof-of-Work (dPow) is a security mechanism built upon the Proof-of-Work consensus protocol. The Pirate Chain periodically makes block-hashes, which are in essence the snapshots of this chain. Those snapshots are then group-signed and inserted by notary nodes into the main Komodo chain and the Litecoin chain through the process called notarization. This way, if an attacker wants to change some information within the block on Pirate Chain, they have to also rearrange blocks on both Komodo and Litecoin chains, which requires enormous power. Tor support In order to obfuscate not only sender and receiver blockchain addresses, but their IP addresses, Pirate Chain developers choose to support the Tor network. This is a proven tool for people wanting to protect their anonymity. Forced shielding As it was said above, the shortcoming of most of the anonymous networks is that anonymity is optional, left for the user to decide. This prevents the total fungibility of the tokens on those networks, as some of the transactions still can be traced and the token’s ‘baggage’ can be seen. Pirate Chain avoids this issue by forcing 100% of the transactions to be shielded. Pirate Chain (ARRR) Pros and Cons Pros The obvious argument for Pirate Chain is its anonymity, as there is a lot of users who value their privacy. The devs claim that ARRR crypto is better than other privacy coins — for example, it would win the comparison of Pirate Chain vs Monero ; The network is secured very well, allowing it to easily withstand the 51% attacks ; There is a strong community on social networks; It’s being actively developed. For example, there is a plan to roll out a wrapped Pirate Chain token (wARRR) on Binance Smart Chain on September 20, 2021, which has got DeFi fans quite excited. Cons The network’s privacy, which is its main selling point for its users, is a concern for some other people: for example, there is no way to know how much ARRR is in the hands of the whales. Where to exchange Pirate Chain (ARRR) Exchanging or buying ARRR is quite easy. Some of the Pirate Chain exchange options are KuCoin, Gate.io, Bitcoin.com Exchange, Changelly PRO, and CoinEx. One can also use SwapSpace as their Pirate Chain coin (ARRR) exchange, following this step-by-step guide: On the SwapSpace homepage, select ARRR in the “You send” section and the cryptocurrency you would like to receive in the “You get” section. Enter the amount of ARRR you want to exchange. Choose the instant exchange service that suits you most. Specify the recipient address and check if all the data is correct. Send your ARRR coins to the address you will see on the screen. Wait until the exchange is complete. Where to store Pirate Chain (ARRR) The best way to store Pirate coin (ARRR) is in the wallet developed by the Pirate chain team. This wallet comes in several variations: Treasure Chest, Skull Island, Pirate Wallet Lite, and Paper Wallet. Among the recommended wallets there is also Verus Desktop. Final thoughts Pirate Chain crypto is a great way to ensure the anonymity of the transactions, making it invaluable for those users who take their privacy seriously. It combines several different approaches to security in a way designed to protect every user of the ARRR token. This, together with the strong community and active development team, is very exciting for the Pirate Chain’s future. Read more ❯
Best Cryptocurrency to Mine in 2021: How to Make a Profit from Crypto Mining Among All The Competition?June Katz 22 min read
What Is Cryptocurrency Mining ? Cryptocurrency mining is one of the ways in which crypto’s circulating supply gets expanded. Although there are other ways like ICOs, mining is the oldest of them. It was introduced together with the first crypto — Bitcoin , and is a part of Bitcoin’s reputation of being “digital gold”: it’s bound to remind the public of scarce and precious metals. As in the Gold Rush, the prospector looking to get rich from mining needs to get some equipment and join the ranks of thousands – or millions – of dreamers like him, to compete with them for rewards, which is as much a game of skill as it is the one of luck and chance. So, what is it exactly? Cryptocurrency mining usually requires solving complex computational puzzles. This process has a double purpose: the puzzles are there not just to confound miners: they are needed to verify blocks (consisting of multiple transactions) so that they can be added to the blockchain; miners who keep the network secure by solving the puzzles get rewarded for their work. In fact, the oldest software protocol used in the blockchain networks is called Proof-of-Work, because to get the reward, the work done by the first miner to solve the puzzle has to be accepted by all the other nodes in the network. The puzzles involve the cryptographic challenge — hence the name, cryptocurrency — with a brute force mechanism which is usually called hashing . The chance to be that first person who can claim the reward gets lower when many people with the ability to solve the puzzles join the network — the speed with which different solutions can be computed across the network is called its hashrate . So, the prospective miner has to be just a little bit luckier than others — as well as have the fast-enough hardware. The types of hardware used for this are called CPUs (Central Processing Units), GPUs (Graphics Processing Unit), and ASICs (Application-Specific Integrated Circuits). Things to Consider When Choosing a Cryptocurrency to Mine in 2021 As you may already know, or maybe have noticed just now, the process described above just says “cryptocurrency mining” without specifying which one. This is because there is a wide selection of cryptocurrencies to mine today. Here are some things to look at when choosing the best currency to mine for you personally. Cryptocurrency Features The most important factors are, of course, the ones inherent to the chosen currency itself: Different coins are designed to contain different numbers of transactions in one block, meaning that the frequencies with which block rewards are minted can differ across networks too; Block rewards differ not only in frequency but in size. Make note of the block reward for a coin, as well as whether there are halvings and if so, when; Different blockchain networks may use different variations of the hashing algorithm or employ different levels of puzzle difficulty. This can translate into differences in energy consumption volume across coins; The currency’s popularity is also a factor since it affects the network size: the more competition there is, the more taxing mining would be. This can affect — again — electricity consumption, accelerate wear and tear on equipment, as well as require upgrading and expanding mining rig regularly just to keep up; Another obvious factor affecting mining profitability in 2021 is the coin’s price: easily mineable but cheap coin may not bring as much profit as you’d like. Cryptocurrency price predictions are also important to consider: a coin with great prospects is probably a good choice for mining. Your Location The next group of factors that can influence the choice of a cryptocurrency to mine concerns where in the world you are, or rather where your mining rig is. Since electricity is one of the main resources used to mine crypto, you need to consider not only its consumption volume, which we already looked at, but also its price. Electricity costs are very regionally dependent so do your research. For example, generally, if you live somewhere with prices above $0.14/KWh, it’s not worth it; The regional regulations may also affect the choice of the cryptocurrency to mine: if a country hasn’t banned all crypto outright, it may still heavily regulate some particular currency mining or its subsequent trading; Hardware costs and accessibility may differ from location to location, so you may be limited in your choice in this way too. Mining Hardware This is probably the most obvious factor of all when thinking what is profitable to mine among mineable cryptocurrencies. The initial costs of the mining setup, including taxes, shipping, and installation; Or, for solutions like cloud mining, renting costs. Is Cryptocurrency Mining Profitable in 2021? Despite all the associated costs described above and other possible difficulties, overall, cryptocurrency mining is still profitable — otherwise, nobody would do it. For example, with the coins whose price predictions are good, one of the profitable strategies is mining and holding until they grow in price. Consider that the growth in electricity prices is often limited to 1–2% a year — far from the typical crypto price growth rate in a bullish year. A good rule of thumb is to note the coin halving date if there is one: despite the diminishing reward, as this process cuts the inflation rate and increases scarcity, the price often surges after a delay. For example, Bitcoin price grew more than 6x within the year after the last halving, which took place in the spring of 2020. Since one of the biggest costs to consider while calculating crypto mining profitability is the hardware cost, let’s take a closer look at the different mining setups. Types of Mining: What Hardware to Use? CPU CPU mining is the oldest method, requiring the least specialized hardware: there is a CPU literally in any computer. So, if the network has a small hashrate, meaning a small competition pool, it’s possible to mine a cryptocurrency on a home PC. So, on one hand, this way demands the least investment, but on the other hand, as soon as the value of the crypto starts to grow, CPU mining very quickly becomes obsolete: there’s basically no chance to compete with another miner with the average CPU speeds. GPU GPU mining is the “next generation” after CPU mining. Due to their primary function — graphic processing — GPUs are good at performing some specific calculations, and they turned out to include calculations used in mining, thus giving miners using them an edge. Some cryptocurrencies can still be mined effectively using GPUs, although current GPU mining setups are a far cry from the ordinary (albeit powerful) video cards which could be enough in the early days. Now, those miners who don’t use ASICs usually have many GPUs bundled together for that purpose. One unintended negative consequence of GPU mining is that it has been seriously driving up GPU prices, which affects everybody who needs a computer with decent graphic performance: artists, designers, video content producers, gamers, and many more. ASIC The newest generation of mining software is called ASICs. Those are computer chips used for one purpose only — cryptocurrency mining. Most of the cryptocurrency mining now is done with ASICs, since they are the only things still allowing users operating them to be competitive in most cases. ASICs, however, are quite expensive and require some special skills in setting up. Ways to Mine Crypto in 2021: Best Practices Besides differences in the ways to mine crypto based on the hardware used, there are also different approaches to crypto mining based on the method. There are three main ways: solo, pool, and cloud mining. Solo Mining Solo mining is the first and most obvious approach. To do it, a miner has to buy the equipment, set up specialized mining software, and start mining. The main advantage of this approach is that the miner is completely independent — there’s no need to share the hardware or split the mining rewards with anybody. Also, this way can be satisfying on the “ideological” level: solo mining equals decentralization, just the way crypto was intended to be. Most of the disadvantages of solo mining stem from the fact that by 2021 crypto mining has gotten seriously competitive, which means that to mine most cryptocurrencies profitably, one needs a serious setup, which can run up to $10,000 — otherwise, the chances of getting any kind of rewards are very slim. Pool Mining Pool mining entails buying the mining equipment and, as the name suggests, joining a pool — a setup made out of many such contributions, essentially functioning as a single mining entity. A pool has more computing power than any one person can usually afford, which means more chances to win a mining reward, even if the individual setup is not so expensive. So, this is the main advantage of pool mining compared to doing it solo. On the other hand, mining rewards are split between all the miners in the pool, which may not feel good to the miners who feel that they could scrounge enough power to be competitive on their own. Secondly, mining pools are usually managed by so-called mining pool operators, who take their cut of the profits. Besides the obvious losses, this may also be uncomfortable for many people since it means essentially letting the third party into the mining process — the very thing that crypto set out to destroy. Lastly, although the equipment needed to join a pool may not be very expensive, the miner still has to buy it. Cloud Mining Cloud mining can be seen as an evolution of pool mining. The difference is that instead of buying equipment to join, a miner can lease or rent a part of the existing mining farm, or cloud. The miners get part of the reward proportional to their contribution. The advantages and disadvantages of this method are pretty much the same as with pool mining, although cloud mining doesn’t require an initial investment and therefore may be more attractive to the miners who are just starting out. What Are the Best Cryptocurrencies to Mine? 10 Most Profitable Coins for Mining Zcash Zcash is a fork of Bitcoin with improved anonymity — there are no addresses or other identifying info in the transaction record. Zcash is hard to mine solo in 2021, as the network’s hash rate is very high now, so the best bet would be to join a mining pool. Consider in your calculations that, as usual, pool mining requires an initial investment — for example, ASICs cost $900+. Block reward: 3.125 ZEC Block time: ~75 seconds ZEC price: ~$153 Next ZEC halving date: 2024 Ravencoin Ravencoin network is designed to facilitate light and easy instant payments. It has been forked off of Bitcoin and launched in 2018. Ravencoin is one of the most beginner-friendly coins to mine: it’s enough to use consumer-grade equipment to get results. The project’s team is actively working against the possibility to mine their coin with ASICs, changing the algorithm several times to cut those miners off. The current algorithm is called KAWPOW, and it works best with GPU pool mining. Best hardware to use: GPU Block reward: 5,000 RVN Block time: ~1 minute RVN price: ~$0.15 Next RVN halving date: early 2022 Best for: new miners Ethereum Classic Ethereum Classic is a result of a fork in the Ethereum blockchain, intended to keep the original chain alive. The advantage of this coin for a new miner is that it can be mined using GPU, i.e. not just high-powered ASICs. Note that Ethereum itself is planning to change its protocol to Proof-of-Stake in 2021–2022. This may mean an interesting future for Ethereum Classic since the current Ethereum miners could decide not to waste their mining setups and switch to ETC. If this is the case, it may become harder for the new miner to get into Ethereum Classic mining in the future. Note that instead of halving, ETC goes through a reduction: block rewards are not cut in half but instead get 20% lower every 4 years. Best hardware to use: ASIC Block reward: 3.2 ETC Block time: 13 seconds ETC price: ~$70 Next ETC reduction date: early 2022 Best for: the miners who cut their teeth on Ethereum Dash Dash is a currency with a focus on instant payments. It’s also one of the best cryptocurrencies to mine in 2021 considering its investment/rewards ratio. It uses X11 hashing protocol, which is, like Ravencoin’s protocol, a development aimed to deter ASIC miners and keep mining decentralized as long as possible. Dash mining is mostly done with GPUs and as such, this currency is considered to have a low barrier for entry. Best hardware to use: GPU Block reward: ~2.7 DASH Block time: 2.5 minutes DASH price: ~$241 Next DASH reduction date: early 2022 Best for: new miners Monero Monero is another privacy coin that’s great to mine in 2021. Monero is one of the better-known privacy coins. It doesn’t require an ASIC to mine and instead can be mined using CPU or GPU. Monero doesn’t have halvings, but the block reward is going to be gradually reduced to 0.6 XMR, which it’s going to hit around May 2022. After that, it’s going to stay at this level. Best hardware to use: GPU Block reward: ~0.88 XMR Block time: ~2 minutes XMR price: ~$305 Best for: new miners Dogecoin Despite being a meme coin, Dogecoin is still one of the most lucrative cryptocurrencies to mine. Dogecoin gets a lot of attention, so its price can surge very quickly sometimes, although it’s not always predictable. This helps DOGE miners turn a hefty profit from time to time. On the other hand, Dogecoin uses the Scrypt mining algorithm, which means that it’s best to use ASICs to mine it, preferably in pools. Note that Dogecoin hasn’t had a halving since 2015. Best hardware to use: ASIC Block reward: ~ 10,000 DOGE Block time: ~1 minute DOGE price: ~$0.3 Best for: miners with low risk aversion levels Verge Verge is a cryptocurrency designed to combine good user experience with security in day-to-day transactions. Verge supports five hashing algorithms: Namely, Scrypt, X17, Lyra2rev2, myr-groestl, and blake2s. This means that this coin can be mined using many different setups, including GPU/CPU mining accessible for beginners. Best hardware to use: ASIC Block reward: 50 XVG Block time: ~34 seconds XVG price: ~$0.03 Next XVG halving date: early 2022 Best for: miners who are not afraid to dive into technical details Peercoin Peercoin is a sustainability-focused cryptocurrency. It was the first cryptocurrency using a hybrid Proof-of-Work and Proof-of-Stake consensus to reduce energy consumption. Peercoin uses the SHA-256 hashing algorithm, same as Bitcoin, and can be mined using any hardware that can be used to mine BTC. Nowadays Peercoin is not so popular anymore, but it works well as a starting point, for example, for a miner wanting to get into BTC. Best hardware to use: ASIC Block reward: 55 PPC Block time: 10 minutes PPC price: ~$0.92 Best for: new miners with a great setup but needing “training wheels” Vertcoin Vertcoin was modeled on Litecoin as another ASIC-resistant cryptocurrency. It uses the Lyra2REv3 hashing algorithm. As opposed to Litecoin, which eventually switched to primarily ASIC mining, Vertcoin still can be mined using GPU, with pool mining being a recommended way. Best hardware to use: GPU Block reward: 25 VTC Block time: 2.5 minutes VTC price: ~$0.6 Next VTC halving date: late 2021 Best for: new miners Decred Decred is another one of the mineable coins founded in 2016 that started making waves recently. It’s heavily community-oriented. As it’s relatively obscure, it's still one of the most profitable crypto coins and can be considered one of the new coins to mine. This currency is using Blake256R14 algorithm and requires an ASIC miner. Best hardware to use: ASIC Block reward: ~7.27 DCR Block time: 3 minutes 41 second DCR price: ~$178 Best for: new miners not minding unknown coins Mining Profitability Calculators To make things easier for a new miner trying to decide which cryptocurrency to mine in 2021, there are numerous profitability calculators online where one can plug in the necessary parameters such as electricity costs, hardware type and model, hashing algorithm, and others, and see how profitable crypto mining will be for him or her. Mining Bitcoin in 2021: Is It a Good Idea? Bitcoin mining in 2021 is a far cry from the times when you could just do it on your home PC bought for pennies and get 50 BTC block rewards. In other words, it's not the best coin to mine in 2021. However, you still can mine BTC and even get a good profit – it depends on your investment abilities, i.e. whether you can buy good hardware. If you can’t afford a high-quality mining rig, you can also join a pool or a cloud. There are also some external circumstances to watch for. For example, there was an unexpected advantage for western miners in 2021: China clamped down on mining. As a result, the number of miners in the network has fallen to about half as much as it has been, which makes mining easier and more profitable. The difficulty of the puzzles has already been adjusted, but the results still ripple through the community. Still, it might be best to look into what altcoin to mine, as listed above. Advantages and Disadvantages of Mining Cryptocurrency in 2021 Pros If you can afford the investment in equipment and are not very risk-averse, cryptocurrency mining is a great passive income source; One can choose the currency to mine, make necessary calculations, and do their own research to determine whether it’s worth it: for example, there are cryptocurrencies with the hard cap, i.e. only the predetermined amount will be mined, and you can use it in your calculations. Cons Crypto mining used to be a very lucrative venture, but now there’s a lot of people doing it so a single miner gets fewer rewards; Energy consumption: many people consider crypto mining a “dirty” process, so for environmentally-conscious people, it’s not a great look. Crypto Mining VS DeFi: Passing Fad or a Revolution in Making Profits on Crypto? Is Mining Alive and Profitable after the DeFi F arming Boom? DeFi is another way of making profits on crypto but it’s not clear whether the two should be compared. There is an interesting dynamic: to yield farm, one obviously should already have crypto, so yield farmer basically should watch both peaks and troughs in prices: buy low, stake high. Another thing is that while farming one can’t use the bulk of his crypto, so (to avoid FOMO) the farmer should make up his mind to hold. On the other hand, miners are free to sell their crypto as soon as they get it, so there’s less pressure to plan long-term; obviously the higher the price, the better. The best thing would probably be to hedge one with another: focus on mining new coins while the price is high and on buying them while the price is low, while continuously yield farming. Final Words Cryptocurrency mining can still be very profitable in 2021. However, there is a lot of factors to consider, including the features of the coin itself, where you are, and what hardware you can afford. The best bet for a new crypto miner in 2021 is probably using a mining pool or cloud, as the field has become quite competitive. There is a lot of information to help a beginner in crypto mining to choose the right coin, hardware, and method to start, so as always you are welcome to do your own research. If chosen well, crypto mining can become a good source of passive income for a long time. Frequently Asked Questions Which cryptocurrency is the easiest to mine in 2021? The easiest cryptocurrencies to mine in 2021 are probably the ones that are ASIC-resistant — Monero, Dash, Vertcoin. They don’t require specialized hardware, instead making use of GPU chips that are in many home computers. This makes it easier for a new miner to start making sense of the crypto mining process. Note that the easiest coin to mine doesn't equal the best coin to mine, or even the most profitable cryptocurrency to mine. What is the best crypto to mine right now? The best crypto to mine in 2021 — right now — is probably different for every miner, as you have to consider all the details like electricity costs, hardware affordability, etc. You are advised to do your own research to decide for yourself what is the top currency to mine. What is the best cryptocurrency for cloud mining? The best cryptocurrencies for cloud mining are those that require investment-heavy setups and are sufficiently stable so that the investor doesn’t lose money during his contract. For example, Bitcoin mining can be worth it, since mining it efficiently solo or even in a pool requires a lot of money in equipment costs. Try to play around with mining profitability calculators to find out more. Is it worth mining Ethereum in 2021? It may still be worth it to mine Ethereum in 2021, but you should consider what setup you can afford as it's not the easiest coin to mine. Also you should note that with rising difficulty in mining, even if the coin goes to the moon, your profits might be steady but probably not in the millions of dollars anymore. Is mining pool more profitable than solo mining? Mining pools probably should be considered more profitable than solo mining in 2021, when the competition is that high. Mining pools offer less profits at a time than solo mining, but more opportunities to get profits — individual miners have less chance to add blocks nowadays, especially to large chains.Read more ❯
What is IDO?June Katz 4 min read
What is an IDO? IDO or Initial DEX offering is a way of amassing financing, a relatively new fundraising model that follows the success of the DeFi. IDO is the initial offer of coins on decentralized exchanges (DEX). This is an alternative to ICOs and IEOs, but fundraising takes place through liquidity pools. Unlike ICO and IEO, where investors first buy coins of the project, and then it is listed on the exchange, in IDO, the initial sale of coins and their listing occur almost simultaneously. The main difference between these models of fundraising is that in IDO, projects do not need to pass verification by the crypto exchange. It’s worth learning how IDOs work and what the advantages, disadvantages, and prospects for the future are, which we will cover in this article. How it works Funds are raised using smart contracts of liquidity pools that work as automated market makers. They allow traders to exchange assets directly from the pool, without waiting for buyers or sellers. The specific exchange price is set by a complex pricing algorithm called Bonding Curves. It is based on the ratio of assets in the pool: when coins are bought, their price increases, and when they are sold, it falls. The price balance is maintained at the expense of traders. They "freeze" their assets in the pool, providing liquidity, receiving remuneration for this. At the same time, the asset price in the pool may differ from the prices on centralized exchanges. Formally, any DEX user can conduct an IDO so the sites select projects which end up on launchpad platforms. When launching an IDO, developers need to follow multiple steps: One needs to determine the options for using the token and the system for distributing it to users. Next, you need to set the token issue and the number of coins for IDO. Then you turn to the auditors who will analyze the smart contract. To participate in most IDOs, participants need to register in advance and enroll in the white list via social media or a website. More important websites to keep in mind when dealing with IDOs are Coinspaid, Coinlist, and Uniswap. High fees on the Ethereum network have led to projects choosing other blockchains to conduct IDOs. For example, such as Binance Smart Chain or Polkastarter. The Solana platform also introduced its own launcher. Other options are Chainlink and Thorchain. Examples of IDOs The first-ever IDO is known to have happened in June 2019 on Binance DEX by Raven developers. The most profitable IDO at the moment is Flow from the Dapper Labs project. There has been growing public interest in IDOs ever since. Among other major IDOs, there are Compound , bZx Protocol , mStable, SushiSwap , Shift, and ExeedMe. The coins of these projects have grown tenfold after the tokensale. Advantages and disadvantages of IDOs + IDO’s advantages include immediate token liquidity, instant start of trading and lower costs for conducting it. IDOs are also suitable for new small projects and start-ups. It is decentralized and has no high fees. IDO can be used not only by companies from the DeFi sector, but also by centralized ones. Due to lower costs than ICO and IEO, the new method of attracting funding is suitable for small crypto projects. In case the IDO token is a governance token, it gives its holders the right to vote and control the direction of development of the basic protocol. If it is a native token on a DEX exchange, for example, users can also get discounts on making transactions on the platform. - Even though projects issue tokens that are already backed by DEX liquidity pools and the tokens are guaranteed to be on the crypto market without the need to wait for listings, this doesn't necessarily mean that the token will be successful. Before taking part in any IDO, one needs to study the project and be prepared for all the risks since sometimes participating in IDOs can cause serious losses. The trading volumes of decentralized crypto exchanges are actively growing, but they are still significantly inferior to classical platforms. At the same time, DEX is more difficult to use, which makes them accessible to a limited number of technologically advanced users. Conclusion Overall, IDO is a new way of attracting financing to cryptocurrency projects that focuses on transparency and being easy to use. They majorly depend on DeFi and its success. In comparison with ICO and IEO, IDO projects do not have to pay hefty sums for listing on the stock exchange and conduct lengthy discussions with regulators in different countries. Some claim that IDO is the optimal option for entering the DeFi space and gaining trust of the DeFi market participants. This can be illustrated by already existing examples like Compound, bZx Protocol, mStable, SushiSwap, Shift, and ExeedMe. Undoubtedly, IDO should go down in the history of the crypto economy and will launch new opportunities in the DeFi sector.Read more ❯
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