How Does Bitcoin Mining Work? - Investopedia

Introduction Thread + Plans for the future!

Hey everyone! Welcome to the ABCmint (Or ABC, or Abcardo) subreddit! Please feel free to introduce yourselves below. I wrote a few questions to get the creative juices flowing.
Quick intro here: I'm u/seekingomega, and I've been mining ABCmint for roughly 2 years now (give or take).
On my ABC journey, I've made a few YouTube videos about the project, created a (pretty crappy) block explorer, and have had the pleasure of meeting others who have an interest in PQC blockchains as well.
To answer my own questions...
Plans for the future: I'll start scouring the web for ABC related news that pops up, and share them on this subreddit.
Additionally, I'd like to add some good PQC readings. If you have articles or books, please share them in a comment!
submitted by seekingomega to ABCMint [link] [comments]

What Is Bitcoin? What is bitcoin Mining?

Bitcoin Overview
Bitcoin is digital-currency, It is known as the cryptocurrency. Bitcoin is a widely used cryptocurrency. It is one of the most secure cryptocurrencies in the world. It doesn't govern by a central bank or any government. Here you don't need to pay high transaction fees while you are making a transaction over the bitcoin network. Here your privacy is also hidden. So no one knows who transferring fund to whom. This is the main reason why people start taking an interest in bitcoin. From the researcher, It is the future of the digital currency.
What Is Bitcoin Mining? Why It Is Important?
Bitcoin mining is the process done by miners from the world. Miners can participate in mining to secure the whole bitcoin network. Miners confirm the transaction over a bitcoin network called blockchain and regularly update to the bitcoin ledger called a blockchain. This process is done by powerful bitcoin mining hardware such as GPUs, AICS' chips, Mining Rigs, etc. Mining hardware help to solve a complex mathematical problem. If miners successfully solve the problem then they rewarded with newly generated bitcoins. The current reward is 12.5 BTC + Transaction fees.
What Is Bitcoin Cloud Mining? List Of Best Free Cloud Mining Website
If you don't want to invest in costly mining hardware then here is the solution. You can participate in the bitcoin mining cloud. Here mining hardware is maintained by mining companies. You just need to purchase hardware on lease or hashing power on rent. Then you participate in bitcoin mining using mining hardware & mining software. Rest of the things done by mining companies.
If you are interested in bitcoin mining? I highly recommended to join Global Mining, It is one of the best bitcoin mining service provider. The regularly maintain hardware and also get 24/7 support from their efficient support team. This is one of the best free cloud mining company which provides everything in a transparent way. You bitcoin is 100% secure and it is a trustworthy bitcoin mining company.
You can find more info about bitcoin or bitcoin mining from here Wikipedia, Bitcoin.it, Bitcoinwiki.org
submitted by anneandersn8 to u/anneandersn8 [link] [comments]

Dogecoin: The Meme That Turned Into A Cryptocurrency With A $300 Million Market Cap, An Important Portal To The Crypto Space

Dogecoin: The Meme That Turned Into A Cryptocurrency With A $300 Million Market Cap, An Important Portal To The Crypto Space
http://www.cypherpunklabs.com/dogecoin-the-meme-that-turned-into-a-cryptocurrency-with-a-300-million-market-cap-an-important-portal-to-the-crypto-space/
Dogecoin (DOGE), a cryptocurrency which now has a market cap of over $300 million, and at one point a market cap in excess of $2 billion, traces its origins back to a Japanese kindergarten teacher who posted pictures of her Shiba Inu in February 2010. There was one particular picture where the Shiba Inu was glaring sideways with raised eyebrows, and for some reason this picture has a similar allure as the Mona Lisa. The picture leaves it open for interpretation as to what the Shiba Inu is thinking, and people began plastering words all over the picture to indicate the dog’s thoughts. This meme was then nicknamed the doge.

https://preview.redd.it/o5a3qeyoxmk31.png?width=500&format=png&auto=webp&s=2d34893576658da1e88576d001c8a40371e65ffd
By 2013 the doge had become a full fledged viral internet sensation, and this simultaneously coincided with the rise of alternative cryptocurrencies. In 2009 the first cryptocurrency, Bitcoin, was released. Around 2013, and perhaps a little before then, people began to fork Bitcoin’s code and create all sorts of alternative cryptocurrencies.
Billy Markus, a programmer from Oregon, decided to create a cryptocurrency that would be more fun and reach a wider audience than Bitcoin. Markus teamed up with Jackson Palmer, a marketer for Adobe Systems, and they made this new fun cryptocurrency a reality. They chose the doge meme as the basis for their cryptocurrency, since it was quite popular at the time, and also adopted the algorithm from Luckycoin, where the block rewards are random like a lottery, unlike the fixed Bitcoin block rewards. Luckycoin derived its code from Litecoin, which is the #1 Scrypt cryptocurrency, and Litecoin itself is a derivation of Bitcoin.
Also importantly, Dogecoin’s Scrypt algorithm made it so miners had a low barrier to entry. Bitcoin mining had already become so competitive that only people with specialized and expensive equipment could realistically mine Bitcoin, whereas Dogecoin could be successfully mined with a GPU or even a CPU on a regular computer. This means anyone interested could easily start mining Dogecoin without spending money on mining rigs.
Further, despite being based on a meme, Dogecoin is decentralized, which puts it ahead of most of the alternative cryptocurrencies. Dogecoin has no premine and no initial coin offering (ICO), meaning all Dogecoins in circulation were distributed via mining, and the market is less prone to centralized dumping. Dogecoin uses the proof of work (PoW) algorithm which ensures the network is decentralized as well, rather than more centralized options like proof of stake (PoS).
Dogecoin launched at the exact right time to ride the dual waves of the doge meme’s popularity and the popularity of new alternative cryptocurrencies, and less than two months after launch Dogecoin had become a major cryptocurrency with a market cap in excess of $60 million.
After that, Dogecoin continued to be quite popular for a couple of reasons. As originally intended, Dogecoin ended up being a fun cryptocurrency, and a community developed around Dogecoin, especially on the Dogecoin subreddit. People began to tip each other Dogecoin constantly, especially since there were on the order of 100 billion Dogecoins, as compared to a maximum supply of only 21 million Bitcoins. This means that someone could easily tip hundreds or thousands of Dogecoins since it is not very expensive, while it is simultaneously exciting.
The general Dogecoin culture of tipping and generosity attracted many new users who had never been involved with cryptocurrency before. Newbies would first start accumulating Dogecoin tips, and then within the community they would learn how to accumulate even more Dogecoin by mining, and this represented a launching point where such users could go on to dive into the rest of the crypto space.
That is the reason why Dogecoin is still a major cryptocurrency to this day and will likely be a major cryptocurrency for the foreseeable future. The Dogecoin community is welcoming, generous, fun, and insightful. Essentially, Dogecoin is an important portal for the crypto space.
submitted by turtlecane to dogecoin [link] [comments]

Crypto-Currency: A Guide to Common Tax Situations

STATUS: Majority of questions have been answered. If yours got missed, please feel free to post it again.
Introduction
All,
Based on the rapid increase in popularity and price of bitcoin and other crypto currencies (particularly over the past year), I expect that lots of people have questions about how crypto currency will impact their taxes. This thread attempts to address several common issues. I'm posting similar versions of it here, in several major crypto subs, and eventually in the weekly "tax help" threads personalfinance runs.
I'd like to thank the /personalfinance mod team and the /tax community for their help with this thread and especially for reading earlier versions and offering several valuable suggestions/corrections.
This thread is NOT an endorsement of crypto currency as an investing strategy. There is a time and a place to debate the appropriateness of crypto as part of a diversified portfolio - but that time is not now and that place is not here. If you are interested in the general consensus of this sub on investing, I would urge you to consult the wiki while keeping in mind the general flowchart outlining basic steps to get your finances in order.
Finally, please note that this thread attempts to provide information about your tax obligations as defined by United States law (and interpreted by the IRS under the direction of the Treasury Department). I understand that a certain portion of the crypto community tends to view crypto as "tax free" due to the (actual and perceived) difficulty for the IRS to "know" about the transactions involved. I will not discuss unlawfully concealing crypto gains here nor will I suggest illegal tax avoidance activities.
The Basics
This section is best for people that don't understand much about taxes. It covers some very basic tax principles. It also assumes that all you did during the year was buy/sell a single crypto currency.
Fundamentally, the IRS treats crypto not as money, but as an asset (investment). While there are a few specific "twists" when it comes to crypto, when in doubt replace the word "crypto" with the word "stock" and you will get a pretty good idea how you should report and pay tax on crypto.
The first thing you should know is that the majority of this discussion applies to the taxes you are currently working on (2017 taxes). The tax bill that just passed applies to 2018 taxes (with a few very tiny exceptions), which most people will file in early 2019.
In general, you don't have to report or pay taxes on crypto currency holdings until you "cash out" all or part of your holdings. For now, I'm going to assume that you cash out by selling them for USD; however, other forms of cashing out will be covered later.
When you sell crypto, you report the difference between your basis (purchase price) and proceeds (sale price) on Schedule D. Your purchase price is commonly referred to as your basis; while the two terms don't mean exactly the same thing, they are pretty close to one another (in particular, there are three two ways to calculate your basis - your average cost, a first-in, first-out method, and a "specific identification" method. See more about these here and here). EDIT - you may not use average cost method with crypto - see here. If you sell at a gain, this gain increases your tax liability; if you sell at a loss, this loss decreases your tax liability (in most cases). If you sell multiple times during the year, you report each transaction separately (bad news if you trade often) but get to lump all your gains/losses together when determining how the trades impact your income.
One important thing to remember is that there are two different types of gains/losses from investments - short term gains (if you held an asset for one year or less) and long term gains (over one year; i.e. one year and one day). Short term gains are taxed at your marginal income rate (basically, just like if you had earned that money at a job) while long term gains are taxed at lower rates.
For most people, long term capital gains are taxed at 15%. However, if you are in the 10% or 15% tax bracket, congrats - your gains (up to the maximum amount of "unused space" in your bracket) are tax free! If you are in the 25%, 28%, 33%, or 35% bracket, long term gains are taxed at 15%. If you are in the 39.6% bracket, long term gains are taxed at 20%. Additionally, there is an "extra" 3.8% tax that applies to gains for those above $200,000/$250,000 (single/married). The exact computation of this tax is a little complicated, but if you are close to the $200,000 level, just know that it exists.
Finally, you should know that I'm assuming that you should treat your crypto gains/losses as investment gains/losses. I'm sure some people will try and argue that they are really "day traders" of crypto and trade as a full time job. While this is possible, the vast majority of people don't qualify for this status and you should really think several times before deciding you want to try that approach on the IRS.
"Cashing Out" - Trading Crypto for Goods/Services
I realize that not everyone that "cashes out" of crypto does so by selling it for USD. In fact, I understand that some in the crypto community view the necessity of cashing out itself as a type of myth. In this section, I discuss what happens if you trade your crypto for basically anything that isn't cash (minor sidenote - see next section for a special discussion on trading crypto for crypto; i.e. buying altcoins with crypto).
The IRS views trading crypto for something of value as a type of bartering that must be included in income. From the IRS's perspective, it doesn't matter if you sold crypto for cash and bought a car with that cash or if you just traded crypto directly for the car - in both cases, the IRS views you as having sold your crypto. This approach isn't unique to crypto - it works the same way if you trade stock for something.
This means that if you do trade your crypto for "stuff", you have to report every exchange as a sale of your crypto and calculate the gain/loss on that sale, just as if you had sold the crypto for cash.
Finally, there is one important exception to this rule. If you give your crypto away to charity (one recognized by the IRS; like a 501(c)(3) organization), the IRS doesn't make you report/pay any capital gains on the transaction. Additionally, you still get to deduct the value of your donation on the date it was made. Now, from a "selfish" point of view, you will always end up with more money if you sell the crypto, pay the tax, and keep the rest. But, if you are going to make a donation anyway, especially a large one, giving crypto where you have a big unrealized/untaxed gain is a very efficient way of doing so.
"Alt Coins" - Buying Crypto with Crypto
The previous section discusses what happens when you trade crypto for stuff. However, one thing that surprises many people is that trading crypto for crypto is also a taxable event, just like trading crypto for a car. Whether you agree with this position or not, it makes a lot of sense once you realize that the IRS doesn't view crypto as money, but instead as an asset. So to the IRS, trading bitcoin for ripple isn't like trading dollars for euros, but it is instead like trading shares of Apple stock for shares of Tesla stock.
Practically, what this means is that if you trade one crypto for another crypto (say BTC for XRP just to illustrate the point), the IRS views you as doing the following:
  • Selling for cash the amount of BTC you actually traded for XRP.
  • Owing capital gains/losses on the BTC based on its selling price (the fair market value at the moment of the exchange) and your purchase price (basis).
  • Buying a new investment (XRP) with a cost basis equal to the amount the BTC was worth when you exchanged them.
This means that if you "time" your trade wrong and the value of XRP goes down after you make the exchange, you still owe tax on your BTC gain even though you subsequently lost money. The one good piece of news in this is that when/if you sell your XRP (or change it back to BTC), you will get a capital loss for the value that XRP dropped.
There is one final point worth discussing in this section - the so called "like kind exchange" rules (aka section 1031 exchange). At a high level, these rules say that you can "swap" property with someone else without having to pay taxes on the exchange as long as you get property in return that is "like kind". Typically, these rules are used in real estate transactions. However, they can also apply to other types of transactions as well.
While the idea is simple (and makes it sound like crypto for crypto should qualify), the exact rules/details of this exception are very fact specific. Most experts (including myself, but certainly not calling myself an expert) believe that a crypto for crypto swap is not a like kind exchange. The recently passed tax bill also explicitly clarifies this issue - starting in 2018, only real estate qualifies for like kind exchange treatment. So, basically, the vast majority of evidence suggests that you can't use this "loophole" for 2017; however, there is a small minority view/some small amount of belief that this treatment would work for 2017 taxes and it is worth noting that I'm unaware of any court cases directly testing this approach.
Dealing with "Forks"
Perhaps another unpleasant surprise for crypto holders is that "forks" to create a new crypto also very likely generate a taxable event. The IRS has long (since at least the 1960s) held that "found" money is a taxable event. This approach has been litigated in court and courts have consistently upheld this position; it even has its own cool nerdy tax name - the "treasure trove" doctrine.
Practically, what this means is that if you owned BTC and it "forked" to create BCH, then the fair market value of the BCH you received is considered a "treasure trove" that must be reported as income (ordinary income - no capital gain rates). This is true whether or not you sold your BCH; if you got BCH from a fork, that is a taxable event (note - I'll continue using BTC forking to BCH in this section as an example, but the logic applies to all forks).
While everything I've discussed up to this point is pretty clearly established tax law, forks are really where things get messy with taxes. Thus, the remainder of this section contains more speculation than elsewhere in this post - the truth is that while the idea is simple (fork = free money = taxable), the details are messy and other kinds of tax treatment might apply to forks.
One basic practical problem with forks is that the new currency doesn't necessarily start trading immediately. Thus, you may have received BCH before there was a clear price or market for it. Basically, you owe tax on the value of BCH when you received it, but it isn't completely clear what that value was. There are several ways you can handle this; I'll list them in order from most accurate to least accurate (but note that this is just my personal view and there is ongoing disagreement on this issue with little/no authoritative guidance).
  • Use a futures market to determine the value of the BCH - if reliable sources published realistic estimates of what BCH will trade for in the future once trading begins, use this estimate as the value of your BCH. Pros/cons - futures markets are, in theory, pretty accurate. However, if they are volatile/subject to manipulation, they may provide an incorrect estimate of the true value of BCH. It would suck to use the first futures value published only to have that value plummet shortly thereafter, leaving you to pay ordinary income tax but only have an unrealized capital loss.
  • Wait until an exchange starts trading BCH; use the actual ("spot" price) as the value. Pros/cons - spot prices certainly reflect what you could have sold BCH for; however, it is possible that the true value of the coin was highelower when you received it as compared to when it started trading on the exchange. Thus this method seems less accurate to me than a futures based approach, but it is still certainly fairly reasonable.
  • Assume that the value is $0. This is my least preferred option, but there is still a case to be made for it. If you receive something that you didn't want, can't access, can't sell, and might fail, does it have any value? I believe the answer is yes (maybe not value it perfectly, but value it somewhat accurately), but if you honestly think the answer is no, then the correct tax answer would be to report $0 in income from the fork. The IRS would be most likely to disagree with this approach, especially since it results in the least amount of income reported for the current year (and the most favorable rates going forward). Accordingly, if you go this route, make extra sure you understand what it entails.
Note, once you've decided what to report as taxable income, this amount also becomes your cost basis in the new crypto (BCH). Thus, when you ultimately sell your BCH (or trade it for something else as described above), you calculate your gain/loss based on what you included in taxable income from the fork.
Finally, there is one more approach to dealing with forks worth mentioning. A fork "feels" a lot like a dividend - because you held BTC, you get BCH. In a stock world, if I get a cash dividend because I own the stock, that money is not treated as a "treasure trove" and subject to ordinary income rates - in most cases, it is a qualified dividend and subject to capital gain rates; in some cases, some types of stock dividends are completely non taxable. This article discusses this idea in slightly more detail and generally concludes that forks should not be treated as a dividend. Still, I would note that I'm unaware of any court cases directly testing this theory.
Ultimately, this post is supposed to be practical, so let me make sure to leave you with two key thoughts about the taxation of forks. First, I believe that the majority of evidence suggests that forks should be treated as a "treasure trove" and reported as ordinary income based on their value at creation and that this is certainly the "safest" option. Second, out of everything discussed in this post, I also believe that the correct taxation of forks is the murkiest and most "up for debate" area. If you are interested in a more detailed discussion of forks, see this thread for a previous version of this post discussing it at even more length and the comments for a discussion of this with the tax community.
Mining Crypto
Successfully mining crypto coins is a taxable event. Depending on the amount of effort you put into mining, it is either considered a hobby or a self-employment (business) activity. The IRS provides the following list of questions to help decide the correct classification:
  • The manner in which the taxpayer carries on the activity.
  • The expertise of the taxpayer or his advisors.
  • The time and effort expended by the taxpayer in carrying on the activity.
  • Expectation that assets used in activity may appreciate in value.
  • The success of the taxpayer in carrying on other similar or dissimilar activities.
  • The taxpayer’s history of income or losses with respect to the activity.
  • The amount of occasional profits, if any, which are earned.
If this still sounds complicated, that's because the distinction is subject to some amount of interpretation. As a rule of thumb, randomly mining crypto on an old computer is probably a hobby; mining full time on a custom rig is probably a business.
In either event, you must include in income the fair market value of any coins you successfully mine. These are ordinary income and your basis in these coins is their fair market value on the date they were mined. If your mining is a hobby, they go on line 21 (other income) and any expenses directly associated with mining go on schedule A (miscellaneous subject to 2% of AGI limitation). If your mining is a business, income and expenses go on schedule C.
Both approaches have pros and cons - hobby income isn't subject to the 15.3% self-employment tax, only normal income tax, but you get fewer deductions against your income and the deductions you get are less valuable. Business income has more deductions available, but you have to pay payroll (self-employment) tax of about 15.3% in addition to normal income tax.
What if I didn't keep good records? Do I really have to report every transaction?
One nice thing about the IRS treating crypto as an asset is that we can look at how the IRS treats people that "day trade" stock and often don't keep great records/have lots of transactions. While you need to be as accurate as possible, it is ok to estimate a little bit if you don't have exact records (especially concerning your cost basis). You need to put in some effort (research historical prices, etc...) and be reasonable, but the IRS would much rather you do a little bit of reasonable estimation as opposed to just not reporting anything. Sure, they might decide to audit you/disagree with some specifics, but you earn yourself a lot of credit if you can show that you honestly did the best you reasonably could and are making efforts to improve going forward.
However, concerning reporting every transaction - yes, sorry, it is clear that you have to do this, even if you made hundreds or thousands of them. Stock traders have had to go through this for many decades, and there is absolutely no reason to believe that the IRS would accept anything less from the crypto community. If you have the records or have any reasonable way of obtaining records/estimating them, you must report every transaction.
What if I don't trust you?
Well, first let me say that I can't believe you made it all the way down here to this section. Thanks for giving me an honest hearing. I would strongly encourage you to go read other well-written, honest guides. I'll link to some I like (both more technical IRS type guides and more crypto community driven guides). While a certain portion of the crypto community seems to view one of the benefits of crypto as avoiding all government regulation (including taxes), I've been pleasantly surprised to find that many crypto forums contain well reasoned, accurate tax guides. While I may not agree with 100% of their conclusions, that likely reflects true uncertainty around tax law that is fundamentally complex rather than an attempt on either end to help individuals unlawfully avoid taxes.
IRS guides
Non-IRS guides
submitted by Mrme487 to personalfinance [link] [comments]

Burstcoin Is A Robust And Unique Cryptocurrency: Proof of Capacity (PoC) Ensures Decentralization, Energy Efficiency, And Low Barrier To Entry

http://www.cypherpunklabs.com/burstcoin-is-a-robust-and-unique-cryptocurrency-proof-of-capacity-poc-ensures-decentralization-energy-efficiency-and-low-barrier-to-entry/
Decentralization is perhaps the fundamental reason why Bitcoin has been successful. Since Bitcoin is decentralized, its network cannot be controlled by any government, corporation, or other centralized entity, and this is why Bitcoin still exists to this day rather than being shutdown a long time ago. Bitcoin achieves decentralization through its Proof of Work (PoW) algorithm, where miners around the world cryptographically hash transactions into blocks and receive block rewards for their efforts, and nodes constantly check to ensure that all confirmed transactions are following consensus rules.
The major caveat with PoW is it is energy intensive. This has especially become a problem due to the rapid rise in Bitcoin’s price long term, which has resulted in an arms race of sorts to amass the most hashing power in order to obtain the most mining profits. Indeed, the Bitcoin hash rate has risen orders of magnitude, from MH/s, to GH/s, to TH/s, to PH/s, and now up to its all-time high so far of 84 EH/s. This represents exponentially more computing resources and energy consumption.
This is a problem for two reasons. First off, there is a very high barrier to entry for new users to mine Bitcoin. It requires thousands of dollars of mining equipment to make any worthwhile profit from mining Bitcoin.
Secondly, Bitcoin mining consumes a massive amount of energy worldwide. It is estimated by Digiconomist that Bitcoin mining uses 73.12 TWh of energy annually, equivalent to the electricity consumption of the entire country of Austria, or 0.33% of total global electricity consumption. This releases nearly 35 Megatons of Carbon Dioxide annually, contributing to global warming, aside from other environmental damage caused by burning fossil fuels and manufacturing mining equipment. Digiconomist may be an overestimate of Bitcoin’s environmental impact, but it is somewhere in the ballpark.
Numerous alternative cryptocurrencies have tried to be environmentally friendly via using the Proof of Stake (PoS) algorithm, but this sacrifices decentralization, since all the voting rights end up concentrated into the hands of developers and major bag holders.
This is where Proof of Capacity (PoC), formerly called Proof of Space, comes in. Instead of using specialized Bitcoin mining equipment, PoC simply uses hard drive space to mine cryptocurrency. Burstcoin (BURST) is the #1 PoC cryptocurrency. Bitcoin HD (BHD) is another PoC cryptocurrency, but it has a highly centralized supply with 3.1 million out of 5 million total coins in the hands of the developers, so it is nonsensical to choose BHD considering that BURST has a highly decentralized supply. The problem with a centralized supply is it can cause a coin’s value to collapse long term due to developers dumping on the market.
In order to start mining BURST, a user simply allocates part of their hard drive, and this area of hard drive is plotted. Plotting is a 1-time hashing cycle where the hard drive is filled with cryptographic hashes via the Shabal cryptographic algorithm. The node also has to synchronize with the BURST blockchain before mining. Fortunately, the BURST blockchain is less than 9 GB, versus the Bitcoin blockchain which is nearly 240 GB.
Once plotting and synchronization is complete the user can begin mining. During each mining round the plot file is searched to find the correct cryptographic hash for the block, and when the correct hash is found the user receives a block reward. Essentially, the hashes in the plot file can be thought of as lottery tickets, and the bigger the size of the plot, meaning the more hard drive space dedicated to mining BURST, the more likely it is to find the correct hash.
Like with Bitcoin mining, users can join pools so that even if they have a small amount of hard drive space they can still earn BURST at a steady pace.
Since BURST’s PoC algorithm simply reads a hard drive versus the intense computational work of Bitcoin’s PoW, BURST mining uses a negligible amount of electricity. It is estimated that each BURST transaction consumes 0.0024 KWh of electricity, versus about 1,000 KWh used for each Bitcoin transaction.
Aside from being far more environmentally friendly, electricity costs are negligible for BURST miners, so BURST miners earn nearly 100% profit. This opens the door for users with any level of technology to profitably mine BURST, including personal computers and technically even cell phones. Compare this to Bitcoin where mining with even a powerful personal computer is impossible.
Ultimately, BURST’s energy efficiency makes the barrier to entry very low, a user simply needs to have hard drive space to mine BURST. This results in the BURST network being highly decentralized.
Notably, miners do not have to buy any special equipment to mine BURST, they just use spare hard drive space that was sitting unused, versus Bitcoin mining where specialized hardware that costs thousands of dollars is required. Bitcoin mining rigs often become obsolete with time, and also have no other use besides Bitcoin mining, whereas hard drive space used for BURST mining never becomes obsolete and can easily be freed up and used for storage by deleting the plot file.
In summary, BURST is one of the most unique and fundamentally robust cryptocurrencies due to its PoC algorithm, which ensures decentralization while simultaneously guaranteeing energy efficiency and a low barrier for miner entry.
submitted by turtlecane to burstcoin [link] [comments]

How Bitcoin (BTC) Can Prepare for a Severe Geomagnetic Storm

How Bitcoin (BTC) Can Prepare for a Severe Geomagnetic Storm

https://preview.redd.it/kn9csywepzb21.png?width=690&format=png&auto=webp&s=550d1e5b0f2f1171b055016966d4a0df2a8a4833
https://cryptoiq.co/how-bitcoin-btc-can-prepare-for-a-severe-geomagnetic-storm/
Since the creation of Bitcoin (BTC) in 2009, there have been no severe geomagnetic storms. However, Bitcoin (BTC) users are highly dependent on internet and electricity, and it is inevitable that one day, a severe geomagnetic storm will disrupt Bitcoin (BTC) users across the globe.
A geomagnetic storm starts at the surface of the sun, where massive helical loops of magnetic energy extend outwards into space. These helical magnetic fields often break down in a phenomenon known as magnetic reconnection, and this projects a tremendous amount of radiation and charged particles into space. This is called a solar flare and coronal mass ejection.
When solar flares hit the Earth, they cause rapid fluctuations in Earth’s magnetic field. A fluctuating magnetic field induces electrical currents in conductors. The world’s internet is connected with cables that span the entire ocean, and these cables are highly susceptible to induced electric currents from a geomagnetic storm. Further, electrical power lines extend across great distances on land, and during a severe geomagnetic storm, the current would become so great that transformers would explode and power substations could catch fire.
In March 1989 a severe geomagnetic storm caused Quebec’s power grid to go down within seconds, and another storm in August 1989 halted trading on the Toronto Stock Exchange. However, these events do not compare to the Carrington Event of 1859, the largest geomagnetic storm in recorded human history. Telegraphs system across the world were overloaded with induced electrical current, causing pylons to spark and operators to get shocked. After electricity was cut from the grid numerous telegraph operators were still able to send messages since the geomagnetic storm was generating electricity in the lines. Aurora Borealis, an atmospheric phenomena typically only observed in polar regions, was observed as far south as Cuba and Hawaii.
If the Carrington Event were to occur today, it would shut down electrical and communication grids for days, months, even years, and ultimately, damage could be trillions of dollars. In 2012, a Carrington-sized solar flare happened, but it missed Earth.
The Bitcoin network has just over 10,000 full nodes as of this writing, mostly centered in the United States, Europe, China, and Japan. Unfortunately these nodes are far enough from the equator that they would be highly susceptible to a severe geomagnetic storm and would likely go offline.
Maintaining Bitcoin nodes in the tropics, especially right around the equator, will be crucial to the survival of the Bitcoin network during a severe geomagnetic storm. Even in the worst geomagnetic storm, the equatorial region will be shielded by Earth’s magnetic field, and nations right on the equator may experience little disruption to their electricity and internet.
At this time, there are only about 50 Bitcoin nodes in the equatorial region, mostly in Malaysia, Venezuela, and Colombia. In order for the Bitcoin network to be robust in the event of the most catastrophic geomagnetic storm, global efforts should be made to increase the number of Bitcoin nodes and mining farms along the equator.
Bitcoin users at higher latitudes, like the United States, can take steps to prepare for a geomagnetic storm. All Bitcoin and cryptocurrency should be held in personal wallets where the private key is exclusively controlled by the user, since even reputable wallet services could have their servers fried during a severe geomagnetic storm.
Also, having a personal source of renewable electricity like wind, solar, or hydroelectric could ensure that Bitcoin users keep their electricity running even when the whole grid collapses.
Bitcoin users and miners should disconnect their computers and rigs from electricity before the geomagnetic storm hits. For the most severe geomagnetic storms — ones like the Carrington Event — there is less than one day of warning. Bitcoin users can monitor the Space Weather Prediction Center (SWPC) to avoid being caught off-guard. Computers and mining rigs connected to electricity during a geomagnetic storm could get fried by the induced electrical current.
Maintaining an internet connection is the hardest thing to prepare for. Not even satellite internet is a good option, nor the Blockstream satellites which broadcast the Bitcoin blockchain from space, since satellites can easily get fried by radiation during a severe geomagnetic storm. The best thing Bitcoin users could do is make sure they control their private keys, have a personal renewable electricity source, protect their computer from the storm, and wait for electricity to come back up.
submitted by turtlecane to Bitcoin [link] [comments]

Retailers Around The World That Accept Crypto, From Pizza to Travel

Retailers Around The World That Accept Crypto, From Pizza to Travel


News by Cointelegraph: Jinia Shawdagor
Earlier on, when Bitcoin (BTC) arrived on the scene, most cryptocurrency enthusiasts held on to their coins, as there were only so many places they could be spent. Nowadays, the list of marketplaces and retailers accepting Bitcoin and other cryptocurrencies is significantly larger, providing crypto enthusiasts with more options for making real-world purchases.
After all, with recognizable organizations like Microsoft and Wikipedia now accepting Bitcoin as payment, conversations about Bitcoin and the power of cryptocurrencies are becoming more prominent.
Currently, several fast-food restaurants and coffee shops have started accepting Bitcoin as payment. This will likely provide traction for mass adoption as cryptocurrency payments become increasingly commonplace in day-to-day purchases.
Granted, there are some jurisdictions that do not consider Bitcoin or any other cryptocurrency as legal tender. Despite this set back, even big tech companies like Facebook are coming up with payment systems that mimic cryptocurrencies.
Here are some of the leading retailers, merchants and companies that will let you book flights and hotels, buy coffee or pizza, or even go to space with crypto.

Pay for a burger in Germany with crypto

The German branch of fast-food restaurant chain Burger King now claims to accept Bitcoin as payment for its online orders and deliveries, but this is not the first time Burger King has warmed up to Bitcoin as a form of payment.
The company, headquartered in Florida in the United States, had its Russian branch announce in 2017 that it would start accepting Bitcoin payments, but it ultimately did not take off. The global fast-food retailer reports an annual revenue of about $20 billion and serves about 11 million customers around the world. If all its outlets move to accept Bitcoin as payment, cryptocurrency adoption would inevitably spread.

Spend crypto at Starbucks and other places

For crypto payments to gain traction, merchants need to implement systems that enable swift and easy cryptocurrency spending. Starbucks is one of the companies taking advantage of this concept through Flexa, a U.S.-based payment startup that is helping the cafe giant, as well as dozens of other companies, accept cryptocurrency payments.
The company developed an app called Spedn that enables crypto holders to make purchases with merchants like Starbucks. The company’s CEO believes that by making cryptocurrencies spendable in the mainstream, commerce will realize the full benefit of blockchain technology all over the world.
Crypto enthusiasts in Silicon Valley’s Palo Alto might already be familiar with Coupa Cafe for other reasons apart from its coffee and food. Through its partnership with a Facebook software developer, Coupa Cafe has been accepting Bitcoin as payment since 2013.
Reports show that the cafe received a steady stream of Bitcoin revenue as soon as they started implementing crypto payments — a clear sign of how eager its customers were to pay in Bitcoin. Coupa Cafe is among the few physical businesses in Palo Alto that accept Bitcoin at the moment. The cafe owners believe that their collaboration with the Facebook software engineer will create more traction in terms of Bitcoin adoption.

Buy food with crypto

With over 50,000 takeaway restaurants listed on its United Kingdom-based site, OrderTakeaways is one of the surest ways to get a pizza paid for with crypto delivered to your doorstep. The company has been accepting Bitcoin payments for online takeout orders since 2018. And other similar services include the Korean platform Shuttledelivery as well as German-based service Lieferando and its subsidiaries in several other countries.
Apart from online orders, crypto can also be spent at a regular Subway restaurants. As early as 2013, several Subway branches started accepting Bitcoin as payment. Now, for a fraction of a Bitcoin, a Subway sandwich can be purchased at select restaurants.

Pay with Bitcoin to tour space

Besides buying food and inexpensive, day-to-day items with crypto, a trip to space can now be bought with Bitcoin. That’s right. Richard Branson’s space tourism company, Virgin Galactic, started accepting Bitcoin as payment as far back as 2013. Although Branson’s predicted date for the first commercial flight has been pushed back several times, the company achieved its first suborbital space flight last year. Perhaps soon, people will be able to tour the moon on crypto’s dime.

Buy jewelry with Bitcoin

A brick-and-mortar American jewelry company called Reeds Jewelers accepts Bitcoin for both its physical and online stores. What’s more, if a purchase is worth more than $25,000, the company provides free armored delivery for safety. Other jewelry companies accepting Bitcoin include Blue Nile Jewelry, Stephen Silver Fine Jewelry and Coaex Jewelry, to name a few.
A big advantage of purchasing large ticket items — like a diamond — with crypto is that it makes moving around large amounts of money cheap and effortless. Reports show that more Silicon Valley investors are buying jewelry with Bitcoin. Last year, Stephen Silver Fine Jewelry reported a 20% growth in crypto transactions, leading to a boost in the company’s sales. The company has been accepting Bitcoin since 2014.

Send and redeem gift cards with Bitcoin

Gyft, a digital platform that allows users to buy, send and redeem gift cards, was one of the first merchants enabling cryptocurrency adoption to gain traction in the real world. The mobile gift card app allows Bitcoin to be used to purchase gift cards from several retailers, some of which include Burger King, Subway, Amazon and Starbucks. The company has also partnered with popular crypto exchange Coinbase to enable users to buy gift cards from their Coinbase wallets.

Travel and pay in Bitcoin

If a traveler only has Bitcoin at their disposal, the following merchants will gladly offer services in exchange for it. TravelbyBit, a flight and hotel booking service, accepts cryptocurrencies like Bitcoin, Binance Coin and Litecoin (LTC) as payment.
With a network of over 300 crypto-friendly merchants, the platform is one of the biggest supporters of crypto adoption. TravelbyBit can also alert you to upcoming blockchain events in order to interact with other crypto enthusiasts from around the globe. Other platforms to book flights with crypto include Destinia, CheapBizClass, CheapAir, AirBaltic, Bitcoin.Travel and ABitSky, among others.

Use crypto to book a five-star hotel in Zurich

If ever one finds themselves traveling to Zurich Switzerland, either BTC or Ether (ETH) can be used to pay for a stay in a five-star hotel in Zurich. In May 2019, five-star hotel and spa Dodler Grand announced that it will start accepting Bitcoin and Ether as payment.
The hotel has partnered with a fintech firm Inacta as well as Bity (a Swiss-based crypto exchange) to facilitate the payment and conversion of crypto to fiat money. The hotel boasts an amazing view of the Swiss landscape among other enticing amenities that come with a five-star hotel.

Pay for electronics and more with crypto

For all the gadget lovers, there are a bunch of platforms that allow electronic purchases with cryptocurrency. Newegg, for instance, is an electronic retail giant that uses BitPay to process payments made with digital currencies. Even though one cannot get refunds for Bitcoin purchases, Newegg has a good reputation for quality items.
Plus, the company boasts its being among the first merchants to support cryptocurrency adoption. Other platforms for gadget junkies include Eyeboot (a platform that sells crypto mining rigs in exchange for crypto), Microsoft, FastTech and Alza (a U.K.-based online store that sells phones and beauty products).

An ever-expanding list

It seems clear that more retailers are warming up to the idea of accepting cryptocurrencies. There is still a long way to go before full adoption can be achieved, but many companies have nevertheless benefited from being early adopters. Despite the volatile price movements of cryptocurrencies, all evidence points to a future cashless society that uses digital currencies, and crypto is leading the way.
submitted by GTE_IO to u/GTE_IO [link] [comments]

Burstcoin Is A Robust And Unique Cryptocurrency: Proof of Capacity (PoC) Ensures Decentralization, Energy Efficiency, And Low Barrier To Entry

http://www.cypherpunklabs.com/burstcoin-is-a-robust-and-unique-cryptocurrency-proof-of-capacity-poc-ensures-decentralization-energy-efficiency-and-low-barrier-to-entry/
Decentralization is perhaps the fundamental reason why Bitcoin has been successful. Since Bitcoin is decentralized, its network cannot be controlled by any government, corporation, or other centralized entity, and this is why Bitcoin still exists to this day rather than being shutdown a long time ago. Bitcoin achieves decentralization through its Proof of Work (PoW) algorithm, where miners around the world cryptographically hash transactions into blocks and receive block rewards for their efforts, and nodes constantly check to ensure that all confirmed transactions are following consensus rules.
The major caveat with PoW is it is energy intensive. This has especially become a problem due to the rapid rise in Bitcoin’s price long term, which has resulted in an arms race of sorts to amass the most hashing power in order to obtain the most mining profits. Indeed, the Bitcoin hash rate has risen orders of magnitude, from MH/s, to GH/s, to TH/s, to PH/s, and now up to its all-time high so far of 84 EH/s. This represents exponentially more computing resources and energy consumption.
This is a problem for two reasons. First off, there is a very high barrier to entry for new users to mine Bitcoin. It requires thousands of dollars of mining equipment to make any worthwhile profit from mining Bitcoin.
Secondly, Bitcoin mining consumes a massive amount of energy worldwide. It is estimated by Digiconomist that Bitcoin mining uses 73.12 TWh of energy annually, equivalent to the electricity consumption of the entire country of Austria, or 0.33% of total global electricity consumption. This releases nearly 35 Megatons of Carbon Dioxide annually, contributing to global warming, aside from other environmental damage caused by burning fossil fuels and manufacturing mining equipment. Digiconomist may be an overestimate of Bitcoin’s environmental impact, but it is somewhere in the ballpark.
Numerous alternative cryptocurrencies have tried to be environmentally friendly via using the Proof of Stake (PoS) algorithm, but this sacrifices decentralization, since all the voting rights end up concentrated into the hands of developers and major bag holders.
This is where Proof of Capacity (PoC), formerly called Proof of Space, comes in. Instead of using specialized Bitcoin mining equipment, PoC simply uses hard drive space to mine cryptocurrency. Burstcoin (BURST) is the #1 PoC cryptocurrency. Bitcoin HD (BHD) is another PoC cryptocurrency, but it has a highly centralized supply with 3.1 million out of 5 million total coins in the hands of the developers, so it is nonsensical to choose BHD considering that BURST has a highly decentralized supply. The problem with a centralized supply is it can cause a coin’s value to collapse long term due to developers dumping on the market.
In order to start mining BURST, a user simply allocates part of their hard drive, and this area of hard drive is plotted. Plotting is a 1-time hashing cycle where the hard drive is filled with cryptographic hashes via the Shabal cryptographic algorithm. The node also has to synchronize with the BURST blockchain before mining. Fortunately, the BURST blockchain is less than 9 GB, versus the Bitcoin blockchain which is nearly 240 GB.
Once plotting and synchronization is complete the user can begin mining. During each mining round the plot file is searched to find the correct cryptographic hash for the block, and when the correct hash is found the user receives a block reward. Essentially, the hashes in the plot file can be thought of as lottery tickets, and the bigger the size of the plot, meaning the more hard drive space dedicated to mining BURST, the more likely it is to find the correct hash.
Like with Bitcoin mining, users can join pools so that even if they have a small amount of hard drive space they can still earn BURST at a steady pace.
Since BURST’s PoC algorithm simply reads a hard drive versus the intense computational work of Bitcoin’s PoW, BURST mining uses a negligible amount of electricity. It is estimated that each BURST transaction consumes 0.0024 KWh of electricity, versus about 1,000 KWh used for each Bitcoin transaction.
Aside from being far more environmentally friendly, electricity costs are negligible for BURST miners, so BURST miners earn nearly 100% profit. This opens the door for users with any level of technology to profitably mine BURST, including personal computers and technically even cell phones. Compare this to Bitcoin where mining with even a powerful personal computer is impossible.
Ultimately, BURST’s energy efficiency makes the barrier to entry very low, a user simply needs to have hard drive space to mine BURST. This results in the BURST network being highly decentralized.
Notably, miners do not have to buy any special equipment to mine BURST, they just use spare hard drive space that was sitting unused, versus Bitcoin mining where specialized hardware that costs thousands of dollars is required. Bitcoin mining rigs often become obsolete with time, and also have no other use besides Bitcoin mining, whereas hard drive space used for BURST mining never becomes obsolete and can easily be freed up and used for storage by deleting the plot file.
In summary, BURST is one of the most unique and fundamentally robust cryptocurrencies due to its PoC algorithm, which ensures decentralization while simultaneously guaranteeing energy efficiency and a low barrier for miner entry.
submitted by turtlecane to burst [link] [comments]

Blockchain Dictionary for Newbies

Blockchain Glossary: From A-Z
51% Attack
When more than half of the computing power of a cryptocurrency network is controlled by a single entity or group, this entity or group may issue conflicting transactions to harm the network, should they have the malicious intent to do so.
Address
Cryptocurrency addresses are used to send or receive transactions on the network. An address usually presents itself as a string of alphanumeric characters.
ASIC
Short form for ‘Application Specific Integrated Circuit’. Often compared to GPUs, ASICs are specially made for mining and may offer significant power savings.
Bitcoin
Bitcoin is the first decentralised, open source cryptocurrency that runs on a global peer to peer network, without the need for middlemen and a centralised issuer.
Block
Blocks are packages of data that carry permanently recorded data on the blockchain network.
Blockchain
A blockchain is a shared ledger where transactions are permanently recorded by appending blocks. The blockchain serves as a historical record of all transactions that ever occurred, from the genesis block to the latest block, hence the name blockchain.
Block Explorer
Block explorer is an online tool to view all transactions, past and current, on the blockchain. They provide useful information such as network hash rate and transaction growth.
Block Height
The number of blocks connected on the blockchain.
Block Reward
A form of incentive for the miner who successfully calculated the hash in a block during mining. Verification of transactions on the blockchain generates new coins in the process, and the miner is rewarded a portion of those.
Central Ledger
A ledger maintained by a central agency.
Confirmation
The successful act of hashing a transaction and adding it to the blockchain.
Consensus
Consensus is achieved when all participants of the network agree on the validity of the transactions, ensuring that the ledgers are exact copies of each other.
Cryptocurrency
Also known as tokens, cryptocurrencies are representations of digital assets.
Cryptographic Hash Function
Cryptographic hashes produce a fixed-size and unique hash value from variable-size transaction input. The SHA-256 computational algorithm is an example of a cryptographic hash.
Dapp
A decentralised application (Dapp) is an application that is open source, operates autonomously, has its data stored on a blockchain, incentivised in the form of cryptographic tokens and operates on a protocol that shows proof of value.
DAO
Decentralised Autonomous Organizations can be thought of as corporations that run without any human intervention and surrender all forms of control to an incorruptible set of business rules.
Distributed Ledger
Distributed ledgers are ledgers in which data is stored across a network of decentralized nodes. A distributed ledger does not have to have its own currency and may be permissioned and private.
Distributed Network
A type of network where processing power and data are spread over the nodes rather than having a centralised data centre.
Difficulty
This refers to how easily a data block of transaction information can be mined successfully.
Digital Signature
A digital code generated by public key encryption that is attached to an electronically transmitted document to verify its contents and the sender’s identity.
Double Spending
Double spending occurs when a sum of money is spent more than once.
Ethereum
Ethereum is a blockchain-based decentralised platform for apps that run smart contracts, and is aimed at solving issues associated with censorship, fraud and third party interference.
EVM
The Ethereum Virtual Machine (EVM) is a Turing complete virtual machine that allows anyone to execute arbitrary EVM Byte Code. Every Ethereum node runs on the EVM to maintain consensus across the blockchain.
Fork
Forks create an alternate version of the blockchain, leaving two blockchains to run simultaneously on different parts of the network.
Genesis Block
The first or first few blocks of a blockchain.
Hard Fork
A type of fork that renders previously invalid transactions valid, and vice versa. This type of fork requires all nodes and users to upgrade to the latest version of the protocol software.
Hash
The act of performing a hash function on the output data. This is used for confirming coin transactions.
Hash Rate
Measurement of performance for the mining rig is expressed in hashes per second.
Hybrid PoS/PoW
A hybrid PoS/PoW allows for both Proof of Stake and Proof of Work as consensus distribution algorithms on the network. In this method, a balance between miners and voters (holders) may be achieved, creating a system of community-based governance by both insiders (holders) and outsiders (miners).
Mining
Mining is the act of validating blockchain transactions. The necessity of validation warrants an incentive for the miners, usually in the form of coins. In this cryptocurrency boom, mining can be a lucrative business when done properly. By choosing the most efficient and suitable hardware and mining target, mining can produce a stable form of passive income.
Multi-Signature
Multi-signature addresses provide an added layer of security by requiring more than one key to authorize a transaction.
Node
A copy of the ledger operated by a participant of the blockchain network.
Oracles
Oracles work as a bridge between the real world and the blockchain by providing data to the smart contracts.
Peer to Peer
Peer to Peer (P2P) refers to the decentralized interactions between two parties or more in a highly-interconnected network. Participants of a P2P network deal directly with each other through a single mediation point.
Public Address
A public address is the cryptographic hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
Private Key
A private key is a string of data that allows you to access the tokens in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the address.
Proof of Stake
A consensus distribution algorithm that rewards earnings based on the number of coins you own or hold. The more you invest in the coin, the more you gain by mining with this protocol.
Proof of Work
A consensus distribution algorithm that requires an active role in mining data blocks, often consuming resources, such as electricity. The more ‘work’ you do or the more computational power you provide, the more coins you are rewarded with.
Scrypt
Scrypt is a type of cryptographic algorithm and is used by Litecoin. Compared to SHA256, this is quicker as it does not use up as much processing time.
SHA-256
SHA-256 is a cryptographic algorithm used by cryptocurrencies such as Bitcoin. However, it uses a lot of computing power and processing time, forcing miners to form mining pools to capture gains.
Smart Contracts
Smart contracts encode business rules in a programmable language onto the blockchain and are enforced by the participants of the network.
Soft Fork
A soft fork differs from a hard fork in that only previously valid transactions are made invalid. Since old nodes recognize the new blocks as valid, a soft fork is essentially backward-compatible. This type of fork requires most miners upgrading in order to enforce, while a hard fork requires all nodes to agree on the new version.
Solidity
Solidity is Ethereum’s programming language for developing smart contracts.
Testnet
A test blockchain used by developers to prevent expending assets on the main chain.
Transaction Block
A collection of transactions gathered into a block that can then be hashed and added to the blockchain.
Transaction Fee
All cryptocurrency transactions involve a small transaction fee. These transaction fees add up to account for the block reward that a miner receives when he successfully processes a block.
Turing Complete
Turing complete refers to the ability of a machine to perform calculations that any other programmable computer is capable of. An example of this is the Ethereum Virtual Machine (EVM).
Wallet
A file that houses private keys. It usually contains a software client which allows access to view and create transactions on a specific blockchain that the wallet is designed for.
submitted by Tokenberry to NewbieZone [link] [comments]

The Great NiceHash Profit Explanation - for Sellers (the guys with the GPUs & CPUs)

Let's make a couple of things crystal clear about what you are not doing here:
But hey, I'm running MINING software!
What the hell am I doing then?!?
Who makes Profit, and how?
How is it possible everyone is making a profit?
Why do profits skyrocket, and will it last (and will this happen again)?
But my profits are decreasing all the time >:[
But why?!? I’m supposed to make lotsa money out of this!!!
But WHY!!!
  1. Interest hype -> Influx of Fiat money -> Coins quotes skyrocket -> Influx of miners -> Difficulty skyrockets -> Most of the price uptrend is choked within weeks, since it’s now harder to mine new blocks.
  2. Interest hype drains out -> Fiat money influx declines -> Coins quotes halt or even fall -> Miners still hold on to their dream -> Difficulty stays up high, even rises -> Earnings decrease, maybe even sharply, as it's still harder to mine new blocks, that may be even paid less.
So, how to judge what’s going on with my profits?
Simple breakdown of the relationship of BTC payouts by NiceHash, BTC/ALT Coins rates, and Fiat value:
BTC quote | ALTs quotes | BTC payout | Fiat value ----------------------------------------------------- UP | UP | stable*) | UP stable | UP | UP | UP UP | stable | DOWN | stable*) stable | stable | stable | stable DOWN | stable | UP | stable*) stable | DOWN | DOWN | DOWN DOWN | DOWN | stable*) | DOWN 
Some rather obvious remarks:
More help:
Disclaimer: I'm a user - Seller like you - not in any way associated with NiceHash; this is my personal view & conclusion about some more or less obvious basics in Crypto mining and particularly using NiceHash.
Comments & critics welcome...
submitted by t_3 to NiceHash [link] [comments]

ethtrader Glossary of Terms

I recently introduced a friend to our humble, little subreddit and they quickly pointed out that the language spoken here did not appear to be English. I suppose we do toss around a fair amount of acronyms, memes, and slang. I put together a quick glossary of terms for them and figured I should post it here in case any other new ethtraders can benefit from it:

Trading Related:

Crypto-currency related, but not really specific to Ethereum:

Terms more specific to Ethereum

Memes:

Any mistakes I made? Any terms you would add?
submitted by Basoosh to ethtrader [link] [comments]

Regarding the Venezuelan user that "scammed" people here

Hey, my name is Roy, and I came here to address a delicate subject, I am not a mod, I am just a regular user, living in Venezuela, with just a simple advice; please have some common sense, I am not here to insult you, that is not my intention, the majority of Venezuelans in Reddit are very upset because of this (if you can speak spanish, or you can use google translate please have a read here), and are calling it "Viveza Criolla", we as Venezuelans DO NOT CONDONE this, that was just plain and simple a scam.
Of course with this I am not saying there are no miners in Venezuela being arrested and their miners taken away (https://news.bitcoin.com/venezuelan-bitcoin-miners-bribed-thrown-jail-secret-police/) --- (https://www.marketwatch.com/story/venezuelan-authorities-arrest-4-bitcoin-miners-2017-01-26) --- (https://www.ccn.com/report-two-venezuelans-arrested-mining-bitcoin/), but there are very punctual cases, for example, in the first case two brothers were arrested, but it all happened because they had OVER 90 MINING RIGS.
In November, Venezuela’s secret police raided the house of two brothers in Caracas and found more than 90 mining terminals. The agents demanded $1,000 in bribes for each machine, according to the brothers, who spoke on the condition of anonymity because they fear arrest. The brothers said they paid the bribes to stay in business.
On the second report, the guys had over 300 mining rigs, they had a whole hangar for them
Authorities confiscated 300 mining terminals, according to photos published on Rico’s Instagram account, Criptonoticias reported. The models included Antminer S4s, produced by Beijing-based Bitmain, and SP31 Yukons, manufactured by Israel-based Spondoolies.
On the third one, they don't state how many miners were seized but you can presume they were a lot of them
With the arrests, authorities also seized mining machines as well as four laptops.
The two bitcoin miners are awaiting prosecution at Tribunal Séptimo de Control, or the Seventh Control Court in Carabobo.
I can also tell you that the government takes these machines they seize and put them to work for them
None of the low time miners have been arrested, specially because here in Venezuela, there is absolutely NO CONTROL of the electricity consumption(which is their excuse everytime they make one of these busts, truth is, there is always someone slipping, or saying something to someone else, then it all goes from there), I can tell you for experience that none of the low time miners have been arrested and their machines seized, I have several friends up to 10 mining rigs and none of them have even been disturbed by the police, also, why was this guy's machines taken away but he was not arrested?
I am sorry I am getting off track here, about the common sense, please just look at this guys history. it's full of red flags
He claims Venezuela minimum wage is only 20$ (which was real at that time) and might make you think, oh dude, this guy is poor.
But a little over 6 months later he was trading his PSN and Amazon cards for paypal, again this is not an indication of any wrongdoing, but for a normal Venezuelan, a year ago $100, was a lot of money.
Up from there, he trades a lot of money in gifts cards, (again for a Venezuelan more than $100 is a lot of money)
He then goes to mining Ether with his rig and then he says another red flag in his post he says that he doesnt pay for electricity
After that he goes dark for like 6 months, then 14 days ago he posts this: "my dad stop giving me money for college in my first year, had to start making money by my self, still no car but I made it to the last year, but I live in Venezuela so I can't afford public transport anymore to college so he can't afford money for transportation yet recently he claimed that he has 1000$ in crypto?
Just so you know, many Venezuelans with real problems are trying to leave the country and believe me, $1000 can buy you a plane ticket, in first class. To leave the country by land in a bus to Ecuador can costs you $250
These are the prices I collected when I first started making plans to leave but they have increased since, not by much, but is still an approximate
Then 4 days ago in an assistance thread he claims that he is migrating to Chile and he has not much money
Here comes the part where he was asking for advice deciding if he should buy Antminers S2 or trade but when Gasset told him to go to charities subreddit, he posted in vzla saying "How do you manage to not kill yourself" or http://prntscr.com/i4rdc8 (in case he decides to delete it).
Also, worth nothing in the thread about killing himself he says that he is "tired of the creole' cleverness", or Viveza Criolla as said early.
AND THEN!!! Comes the big one, suddenly 14 hours ago "Police came to his house and took his miners" also, worth nothing that in his comment he says that police said they knew because of his "electricity consumption", (again HUGE red flag), or a neighbor told someone, this, while (if real) is the most likely scenario, why in the world anyone mining BTC would even tell anyone that you have miners? in a country were police is arresting miners. (Of course not for one second I believe he had them, he would be in handcuffs)
Of course he then goes to contradict himself all over, saying things like "He was planning to sell his rig for $1000 to go to chile
Then when someone gives him a tip (reddit is down i can't see how much he got) He says "You didn't have to!" (Oh poor you, you mother*****) (Sorry I am pissed off right now)
And then all hell breaks loose from then on.
As I said earlier, there are Venezuelans in real need to leave the country, and even $200 can help them leave.
Before donating to any random redditor (not only Venezuelans) please check his post history, check if his story adds up.
There was recently the case of a guy from Venezuela saying he was waiting for donations to help other Venezuelans (https://www.reddit.com/userandomizerdude that created the website https://helpvenezuelans.com/), he received 1 btc, and he vanished, his last post was from a month ago. now, those 17k could have helped a LOT of people to eat, or simply leave their country
Or better yet, if you want to help Venezuelans, donate to a Venezuelan charity https://raymasuprani.com/mas-is-more-foundation/ This one is one of the bests (there are other, it's 3 am here sorry)
I suggest you please take a second and have a little common sense.
Thank you and so sorry for ranting here, as I said, there are Venezuelans with real needs and real problems out there.
I also hope you don't label ALL Venezuelans as scammers because of one rotten apple.
Again, thank you. If you have any questions I am happy to answer, also I am sure many Venezuelans will come here to express their opinion.
Edit: Formatting

Edit 2: GODDAMMIT! Not again
submitted by Roy_Vzla to btc [link] [comments]

Working of Cryptocurrency Mining pool

Working of Cryptocurrency Mining pool
Source - https://coinscapture.com/blog/working-of-cryptocurrency-mining-pool

Working of Cryptocurrency Mining pool
Cryptocurrency is the most discussed and trending topic on various internet forums, communities, and social media. Many individuals are keen to enter the cryptoworld and unfold all the profits within it. Cryptocurrency can be bought from an exchange or mined through the mining pools. In this guide, we’ll understand the working of the cryptocurrency mining pool.
What is Mining Pool?
Cryptocurrency mining is the same as mining the metals from the earth. The individual or company that digs out the metal from the earth becomes the owner similarly the individual who discovers first the valid hash using the computational power becomes the owner and earns a block reward. The crypto mining can either be done solo using his/her own mining devices or through a mining pool.
As more and more enthusiasts participated in mining to earn a block reward became equally difficult and it would take centuries for a miner to generate a block because the probability of finding the hash value first and generating a block is directly proportional to the computing power in the network. The smaller the computational power the smaller is the chance of generating the next block. Hence a solution, to this problem mining pools were formed.
A mining pool is a group of miners pooling/combining their computational power together in order to mine a cryptocurrency quickly and earn a block reward consistently. Each contributing miner earns reward according to their investment in processing power. The working of mining pools depends on certain algorithms that are designed to check the authenticity and validity of the transactions. Miners are required to solve a complex math problem that requires millions of calculations with the help of High computational power. When the miners combined their computational power the block generation process happens at a much faster rate as compared to a single mining rig. For more understanding of mining please refer our previous blog (What is Bitcoin mining?)
Types of Mining Pools
  • Single mining pools: This type of mining pool mine only single cryptocurrency
  • Multi-currency pools: This type of mining pool mine different cryptocurrencies and gives the miner a chance to choose the cryptocurrency for mining timely depending rewards points offered.
  • Cloud mining pools: Cloud-based mining can be combined with mining pools by making an online contract. This type of mining pool allows individuals to participate in mining activity without even buying specialized equipment.
How rewards are shared on mining pools?
The rewards shared after successfully adding the new block to the blockchain vary from currency to currency. The reward sharings also depend on the factors like mining difficulty, the exchange rate between different coins, the hash rate and the block generation time. Some of the followed reward structures are as follows:
  1. Pay-per-share (PPS): This method offers instant payout depending on the miner’s contribution to finding the block. The payment is done using the pool's existing balance and can be withdrawn immediately.
  2. Shared Maximum Pay Per Share (SMPPS): It is the same as Pay-per-share (PPS) but limits the payout to the maximum that the pool has earned.
  3. Equalized Shared Maximum Pay Per Share (ESMPPS): This method is similar to (SMPPS) but the rewards are distributed equally among all miners in the pool.
  4. Proportional (PROP): The miner is rewarded the share that is proportional to the number of shares he has in the pool with respect to the pool’s total shares
Advantages of mining pools
  • Mining pools offer a more stable income
  • Mining pools lower costs of mining
  • Mining pools helps in generating a higher income
Disadvantages of Mining pools
  • There may be some interruptions in the Mining pools
  • There is a sharing of block rewards
  • There may be sometimes unfavorable pool reward structure
Widely-Used Mining Pools
  • Antpool: The largest pool available on the web offering mining of cryptocurrencies like BTC, BCH, LTC, ETH, ETC, ZEC, DASH, SCC, XMC, BTM
  • Minergate.com: A public mining pool mining of cryptocurrencies like ETH, ETC, ZEC, BTG, BCN, XMR, XMO, FCN, XDN, AEON
  • Btc.com: The most popular mining pool among miners offering cryptocurrencies BTC, BCH, ETH, ETC, LTC, UBTC, DCR to mine
  • BTCC: The largest Chinese pool in the world mining 7% of all existing blocks.
  • Slush: The most trusted mining pools on internet mining 7% of all available blocks.
Mining pools can definitely be a change to the entire mining process offering the highest and the real income without spending years depending on the computational powers. Hence, investing in a mining pool can be beneficial but always choose the mining pool that fits your personal needs and facilities.
submitted by coinscapturecom to u/coinscapturecom [link] [comments]

Decred Journal — June 2018

Note: You can read this on GitHub, Medium or old Reddit to see the 207 links.

Development

The biggest announcement of the month was the new kind of decentralized exchange proposed by @jy-p of Company 0. The Community Discussions section considers the stakeholders' response.
dcrd: Peer management and connectivity improvements. Some work for improved sighash algo. A new optimization that gives 3-4x faster serving of headers, which is great for SPV. This was another step towards multipeer parallel downloads – check this issue for a clear overview of progress and planned work for next months (and some engineering delight). As usual, codebase cleanup, improvements to error handling, test infrastructure and test coverage.
Decrediton: work towards watching only wallets, lots of bugfixes and visual design improvements. Preliminary work to integrate SPV has begun.
Politeia is live on testnet! Useful links: announcement, introduction, command line voting example, example proposal with some votes, mini-guide how to compose a proposal.
Trezor: Decred appeared in the firmware update and on Trezor website, currently for testnet only. Next steps are mainnet support and integration in wallets. For the progress of Decrediton support you can track this meta issue.
dcrdata: Continued work on Insight API support, see this meta issue for progress overview. It is important for integrations due to its popularity. Ongoing work to add charts. A big database change to improve sorting on the Address page was merged and bumped version to 3.0. Work to visualize agenda voting continues.
Ticket splitting: 11-way ticket split from last month has voted (transaction).
Ethereum support in atomicswap is progressing and welcomes more eyeballs.
decred.org: revamped Press page with dozens of added articles, and a shiny new Roadmap page.
decredinfo.com: a new Decred dashboard by lte13. Reddit announcement here.
Dev activity stats for June: 245 active PRs, 184 master commits, 25,973 added and 13,575 deleted lines spread across 8 repositories. Contributions came from 2 to 10 developers per repository. (chart)

Network

Hashrate: growth continues, the month started at 15 and ended at 44 PH/s with some wild 30% swings on the way. The peak was 53.9 PH/s.
F2Pool was the leader varying between 36% and 59% hashrate, followed by coinmine.pl holding between 18% and 29%. In response to concerns about its hashrate share, F2Pool made a statement that they will consider measures like rising the fees to prevent growing to 51%.
Staking: 30-day average ticket price is 94.7 DCR (+3.4). The price was steadily rising from 90.7 to 95.8 peaking at 98.1. Locked DCR grew from 3.68 to 3.81 million DCR, the highest value was 3.83 million corresponding to 47.87% of supply (+0.7% from previous peak).
Nodes: there are 240 public listening and 115 normal nodes per dcred.eu. Version distribution: 57% on v1.2.0 (+12%), 25% on v1.1.2 (-13%), 14% on v1.1.0 (-1%). Note: the reported count of non-listening nodes has dropped significantly due to data reset at decred.eu. It will take some time before the crawler collects more data. On top of that, there is no way to exactly count non-listening nodes. To illustrate, an alternative data source, charts.dcr.farm showed 690 reachable nodes on Jul 1.
Extraordinary event: 247361 and 247362 were two nearly full blocks. Normally blocks are 10-20 KiB, but these blocks were 374 KiB (max is 384 KiB).

ASICs

Update from Obelisk: shipping is expected in first half of July and there is non-zero chance to meet hashrate target.
Another Chinese ASIC spotted on the web: Flying Fish D18 with 340 GH/s at 180 W costing 2,200 CNY (~340 USD). (asicok.comtranslated, also on asicminervalue)
dcrASIC team posted a farewell letter. Despite having an awesome 16 nm chip design, they decided to stop the project citing the saturated mining ecosystem and low profitability for their potential customers.

Integrations

bepool.org is a new mining pool spotted on dcred.eu.
Exchange integrations:
Two OTC trading desks are now shown on decred.org exchanges page.
BitPro payment gateway added Decred and posted on Reddit. Notably, it is fully functional without javascript or cookies and does not ask for name or email, among other features.
Guarda Wallet integrated Decred. Currently only in their web wallet, but more may come in future. Notable feature is "DCR purchase with a bank card". See more details in their post or ask their representative on Reddit. Important: do your best to understand the security model before using any wallet software.

Adoption

Merchants:
BlueYard Capital announced investment in Decred and the intent to be long term supporters and to actively participate in the network's governance. In an overview post they stressed core values of the project:
There are a few other remarkable characteristics that are a testament to the DNA of the team behind Decred: there was no sale of DCR to investors, no venture funding, and no payment to exchanges to be listed – underscoring that the Decred team and contributors are all about doing the right thing for long term (as manifested in their constitution for the project).
The most encouraging thing we can see is both the quality and quantity of high calibre developers flocking to the project, in addition to a vibrant community attaching their identity to the project.
The company will be hosting an event in Berlin, see Events below.
Arbitrade is now mining Decred.

Events

Attended:
Upcoming:

Media

stakey.club: a new website by @mm:
Hey guys! I'd like to share with you my latest adventure: Stakey Club, hosted at stakey.club, is a website dedicated to Decred. I posted a few articles in Brazilian Portuguese and in English. I also translated to Portuguese some posts from the Decred Blog. I hope you like it! (slack)
@morphymore translated Placeholder's Decred Investment Thesis and Richard Red's write-up on Politeia to Chinese, while @DZ translated Decred Roadmap 2018 to Italian and Russian, and A New Kind of DEX to Italian and Russian.
Second iteration of Chinese ratings released. Compared to the first issue, Decred dropped from 26 to 29 while Bitcoin fell from 13 to 17. We (the authors) restrain ourselves commenting on this one.
Videos:
Audio:
Featured articles:
Articles:

Community Discussions

Community stats: Twitter followers 40,209 (+1,091), Reddit subscribers 8,410 (+243), Slack users 5,830 (+172), GitHub 392 stars and 918 forks of dcrd repository.
An update on our communication systems:
Jake Yocom-Piatt did an AMA on CryptoTechnology, a forum for serious crypto tech discussion. Some topics covered were Decred attack cost and resistance, voting policies, smart contracts, SPV security, DAO and DPoS.
A new kind of DEX was the subject of an extensive discussion in #general, #random, #trading channels as well as Reddit. New channel #thedex was created and attracted more than 100 people.
A frequent and fair question is how the DEX would benefit Decred. @lukebp has put it well:
Projects like these help Decred attract talent. Typically, the people that are the best at what they do aren’t driven solely by money. They want to work on interesting projects that they believe in with other talented individuals. Launching a DEX that has no trading fees, no requirement to buy a 3rd party token (including Decred), and that cuts out all middlemen is a clear demonstration of the ethos that Decred was founded on. It helps us get our name out there and attract the type of people that believe in the same mission that we do. (slack)
Another concern that it will slow down other projects was addressed by @davecgh:
The intent is for an external team to take up the mantle and build it, so it won't have any bearing on the current c0 roadmap. The important thing to keep in mind is that the goal of Decred is to have a bunch of independent teams on working on different things. (slack)
A chat about Decred fork resistance started on Twitter and continued in #trading. Community members continue to discuss the finer points of Decred's hybrid system, bringing new users up to speed and answering their questions. The key takeaway from this chat is that the Decred chain is impossible to advance without votes, and to get around that the forker needs to change the protocol in a way that would make it clearly not Decred.
"Against community governance" article was discussed on Reddit and #governance.
"The Downside of Democracy (and What it Means for Blockchain Governance)" was another article arguing against on-chain governance, discussed here.
Reddit recap: mining rig shops discussion; how centralized is Politeia; controversial debate on photos of models that yielded useful discussion on our marketing approach; analysis of a drop in number of transactions; concerns regarding project bus factor, removing central authorities, advertising and full node count – received detailed responses; an argument by insette for maximizing aggregate tx fees; coordinating network upgrades; a new "Why Decred?" thread; a question about quantum resistance with a detailed answer and a recap of current status of quantum resistant algorithms.
Chats recap: Programmatic Proof-of-Work (ProgPoW) discussion; possible hashrate of Blake-256 miners is at least ~30% higher than SHA-256d; how Decred is not vulnerable to SPV leaf/node attack.

Markets

DCR opened the month at ~$93, reached monthly high of $110, gradually dropped to the low of $58 and closed at $67. In BTC terms it was 0.0125 -> 0.0150 -> 0.0098 -> 0.0105. The downturn coincided with a global decline across the whole crypto market.
In the middle of the month Decred was noticed to be #1 in onchainfx "% down from ATH" chart and on this chart by @CoinzTrader. Towards the end of the month it dropped to #3.

Relevant External

Obelisk announced Launchpad service. The idea is to work with coin developers to design a custom, ASIC-friendly PoW algorithm together with a first batch of ASICs and distribute them among the community.
Equihash-based ZenCash was hit by a double spend attack that led to a loss of $450,000 by the exchange which was targeted.
Almost one year after collecting funds, Tezos announced a surprise identification procedure to claim tokens (non-javascript version).
A hacker broke into Syscoin's GitHub account and implanted malware stealing passwords and private keys into Windows binaries. This is a painful reminder for everybody to verify binaries after download.
Circle announced new asset listing framework for Poloniex. Relevant to recent discussions of exchange listing bribery:
Please note: we will not accept any kind of payment to list an asset.
Bithumb got hacked with a $30 m loss.
Zcash organized Zcon0, an event in Canada that focused on privacy tech and governance. An interesting insight from Keynote Panel on governance: "There is no such thing as on-chain governance".
Microsoft acquired GitHub. There was some debate about whether it is a reason to look into alternative solutions like GitLab right now. It is always a good idea to have a local copy of Decred source code, just in case.
Status update from @sumiflow on correcting DCR supply on various sites:
To begin with, none of the below sites were showing the correct supply or market cap for Decred but we've made some progress. coingecko.com, coinlib.io, cryptocompare.com, livecoinwatch.com, worldcoinindex.com - corrected! cryptoindex.co, onchainfx.com - awaiting fix coinmarketcap.com - refused to fix because devs have coins too? (slack)

About This Issue

This is the third issue of Decred Journal after April and May.
Most information from third parties is relayed directly from source after a minimal sanity check. The authors of Decred Journal have no ability to verify all claims. Please beware of scams and do your own research.
The new public Matrix logs look promising and we hope to transition from Slack links to Matrix links. In the meantime, the way to read Slack links is explained in the previous issue.
As usual, any feedback is appreciated: please comment on Reddit, GitHub or #writers_room. Contributions are welcome too, anything from initial collection to final review to translations.
Credits (Slack names, alphabetical order): bee and Richard-Red. Special thanks to @Haon for bringing May 2018 issue to medium.
submitted by jet_user to decred [link] [comments]

[Saturday, November 17 2018] Colorado adopts California emissions standards; It's now cheaper to build a new wind farm than to keep a coal plant running; Oil Demand for Cars Is Falling: Electric vehicles currently displace hundreds of thousands of barrels of oil a day

/worldnews

/news

/UpliftingNews

/technology

  • mvea
    [Title Post] It's now cheaper to build a new wind farm than to keep a coal plant running
    Comments || Link

/science

  • mvea
    Bitterness is a natural warning system to protect us from harmful substances, but weirdly, the more sensitive people are to the bitter taste of caffeine due to genetics, the more coffee they drink, reports a new study, which may be due to the learned positive reinforcement elicited by caffeine.
    Comments || Link

/Futurology

  • everyEV
    [Title Post] Oil Demand for Cars Is Falling: Electric vehicles currently displace hundreds of thousands of barrels of oil a day.
    Comments || Link

/bestof

/AskReddit

  • Crazy_Eye_Pete
    In a lot of jobs, a 99% success rate is considered excellent. What employer would consider a 99% success rate to be a poor performance?
    Comments

/todayilearned

  • salvatoreportofino
    TIL that production of “No Country for Old Men” in Marfa, Texas was shut down for a day because of smoke drifting over from the nearby set of “There Will Be Blood”
    Comments || Link
  • diyblogger
    TIL most of the actors that auditioned for the role of Al Bundy on the sitcom Married with Children played him as angry and yelling. Ed O'Neil was the only one that portrayed him as a resigned loser
    Comments || Link
  • Starfthegreat
    TIL that the first Indian restaurant in the UK predates the first fish and chip joint by at least 49 years
    Comments || Link

/food

/movies

  • LithuanianProphet
    William Goldman Dies; Oscar Winning Writer Of ‘Butch Cassidy And The Sundance Kid’ Was 87
    Comments || Link
  • hannibal_nectar
    Leonardo DiCaprio and Martin Scorsese’s Sixth Movie Is Officially ‘Killers of the Flower Moon,’ Filming Starts Summer 2019
    Comments || Link

/sports

  • TooShiftyForYou
    51-point underdog The Citadel produced the longest rushing touchdown Alabama has given up to any team since 2015
    Comments || Link

/books

/Art

/television

  • Element-115
    Erik Oleson, Netflix's Daredevil showrunner, has just pitched Daredevil season 4 to Netflix!
    Comments || Link

/OldSchoolCool

  • ZenMercenary
    My grandparents in the 1950's. You probably can't tell from the picture but my grandfather was the sweetest man I've ever met
    Comments || Link

/pics

/gifs

/educationalgifs

/oddlysatisfying

/mildlyinteresting

/interestingasfuck

/MostBeautiful

/aww

/Awwducational

  • Mass1m01973
    The lilac-breasted roller is an African member of the roller family of birds. Usually found alone or in pairs, it perches conspicuously at the tops of trees, poles or other high vantage points from where it can spot insects, lizards, scorpions, snails
    Comments || Link

Something New

Everyday we’ll feature a selected small subreddit and its top content. It's a fun way to include and celebrate smaller subreddits.

Today's subreddit is...

/Snoots

Its top 3 all time posts
submitted by kaunis to tldr [link] [comments]

Proof of Burn

Proof of Burn
Source - https://coinscapture.com/blog/proof-of-burn-explained

Proof of Burn
To prevent double spending issues of various cryptocurrencies and safeguard blockchain's decentralization feature, it is important to ensure that all nodes in the network share common agreement about the present state of the blockchain. This agreement is achieved by various consensus algorithms like Proof of work (PoW), Proof of Stake (PoS), Proof of Burn (PoB) and Proof of Authority (PoA), etc.
Proof of work (PoW) is a consensus algorithm that involves solving a complex cryptographic puzzle. The first user to solve the puzzle gets the mining right. But this process consumes a large amount of electricity and time along with costly mining hardware that hampers the approach of PoW. Proof of Stake (PoS) is another algorithm in which the mining power is directly proportional to the cryptocurrency stake offered by the user. The more stake amount the more chances of getting mining right
Similarly, Proof of Burn (PoB) is a consensus algorithm created by Lain Stewart with an aim to show the energy consumption issue of PoW. In this mechanism, the users “burn” or “destroy” some of the mined PoW cryptocurrency. In simpler terms, it is a process of sending a small amount of cryptocurrency in a wallet that has an un-spendable address — an address not under the control of anyone (also termed as Eater address). This address is randomly generated with no private key association. So without a private key the coin, the coins sent in the address access or spent. Eater address is simply used to store coins which cannot be used in the future. These coins are permanently removed from circulation but remain in the calculated supply.
In PoB, when a miner decides to burn coins that means he/she is willing to take a long-term gains/advantage by incurring a short-term loss (i.e. burning coins). During such burning a virtual mining rig is given that mines on behalf of you without wasting resources as PoW rig does. More the number of coins that are burnt more powerful is the mining rig thereby increasing their further rewards. The power of these rigs decays or decreases partially like ASIC (Application-Specific Integrated Circuit) and become obsolete over time. Due to these, miners remain active and invest in the rigs periodically.
Why Coins are burnt?
1. For creating new coins: Some coins like Counterparty (XCP) cannot be mined so they are generated after burning Bitcoins. Once a certain amount of bitcoins is sent to an unspendable address, in return Counterparty (XCP) is generated on the bitcoin blockchain. Thus indirectly increases the value of XCP as burnt bitcoins becomes of no value.

2. For rewarding the coin/token holders: This is based on the law of demand and supply. Sometimes an artificial scarcity of cryptocurrency supply is created so that the holders of that cryptocurrency get huge benefits. This is generally practiced in the USA and some other countries as rewarding different cryptos as direct dividends to token holders is not permitted
3. For destroying unsold coins after an ICO or token sale: Some coins are not sold after ICO’s or token sale, so it is necessary to burn these coins as companies may take advantage and sell them at a higher rate. Thus, to maintain a fair play the coins are burned.
Advantages:
  • PoB encourages long-term commitment thereby creating greater price stability of the coin, as long-term investors are less likely to sell their coins.
  • PoB ensures that the coins are distributed fairly and in a decentralized manner.
Disadvantages:
  • There is no guarantee that the user will recover the equivalent amount of the coin burnt.
Proof of Burn is a method that helps in reaching the consensus, safeguarding the decentralized nature of the network without wasting the natural resources.
submitted by coinscapturecom to u/coinscapturecom [link] [comments]

Draft Discussion of Crypto Currency and Taxes for r/personalfinance - Feedback Appreciated

Hi tax,
Mod from personalfinance here - love your sub and appreciate the many members of your community that are also active in personalfinance.
As long-time members are probably aware, we're getting ready to kick off our weekly tax mega-threads over at personalfinance. In addition to normal questions, we're expecting a fair amount of questions specific to crypto-currency.
Many of these can probably be handled by just comparing them to stock/other investments, but I wanted to put together a specific guide for inclusion in our wiki and the weekly tax help thread.
Please see below for a rough draft of this guide and let me know if you have any corrections, suggestions, additions, or other thoughts. The one thing I would ask you to keep in mind is that this guide tries very hard to be written in an "accessible" manner - we're trying to get the majority of people moving down the correct path, not cover every possible exception or situation. Thanks in advance for your time!
The Basics
This section is best for people that don't understand much about taxes. It covers some very basic tax principles. It also assumes that all you did during the year was buy/sell a single crypto currency.
Fundamentally, the IRS treats crypto not as money, but as an asset (investment). While there are a few specific "twists" when it comes to crypto, when in doubt replace the word "crypto" with the word "stock" and you will get a pretty good idea how you should report and pay tax on crypto.
The first thing you should know is that the majority of this discussion applies to the taxes you are currently working on (2017 taxes). The tax bill that just passed applies to 2018 taxes (with a few very tiny exceptions), which most people will file in early 2019.
In general, you don't have to report or pay taxes on crypto currency holdings until you "cash out" all or part of your holdings. For now, I'm going to assume that you cash out by selling them for USD; however, other forms of cashing out will be covered later.
When you sell crypto, you report the difference between your basis (purchase price) and proceeds (sale price) on Schedule D. Your purchase price is commonly referred to as your basis; while the two terms don't mean exactly the same thing, they are pretty close to one another. If you sell at a gain, this gain increases your tax liability; if you sell at a loss, this loss decreases your tax liability (in most cases). If you sell multiple times during the year, you report each transaction separately (bad news if you trade often) but get to lump all your gains/losses together when determining how the trades impact your income.
One important thing to remember is that there are two different types of gains/losses from investments - short term gains (if you held an asset for one year or less) and long term gains (over one year; i.e. one year and one day). Short term gains are taxed at your marginal income rate (basically, just like if you had earned that money at a job) while long term gains are taxed at lower rates.
For most people, long term capital gains are taxed at 15%. However, if you are in the 10% or 15% tax bracket, congrats - your gains (up to the maximum amount of "unused space" in your bracket) are tax free! If you are in the 25%, 28%, 33%, or 35% bracket, long term gains are taxed at 15%. If you are in the 39.6% bracket, long term gains are taxed at 20%. Additionally, there is an "extra" 3.8% tax that applies to gains for those above $200,000/$250,000 (single/married). The exact computation of this tax is a little complicated, but if you are close to the $200,000 level, just know that it exists.
Finally, you should know that I'm assuming that you should treat your crypto gains/losses as investment gains/losses. I'm sure some people will try and argue that they are really "day traders" of crypto and trade as a full time job. While this is possible, the vast majority of people don't qualify for this status and you should really think several times before deciding you want to try that approach on the IRS.
"Cashing Out" - Trading Crypto for Goods/Services
I realize that not everyone that "cashes out" of crypto does so by selling it for USD. In fact, I understand that some in the crypto community view the necessity of cashing out itself as a type of myth. In this section, I discuss what happens if you trade your crypto for basically anything that isn't cash (minor sidenote - see next section for a special discussion on trading crypto for crypto; i.e. buying altcoins with crypto).
The IRS views trading crypto for something of value as a type of bartering that must be included in income. From the IRS's perspective, it doesn't matter if you sold crypto for cash and bought a car with that cash or if you just traded crypto directly for the car - in both cases, the IRS views you as having sold your crypto. This approach isn't unique to crypto - it works the same way if you trade stock for something.
This means that if you do trade your crypto for "stuff", you have to report every exchange as a sale of your crypto and calculate the gain/loss on that sale, just as if you had sold the crypto for cash.
Finally, there is one important exception to this rule. If you give your crypto away to charity (one recognized by the IRS; like a 501(c)(3) organization), the IRS doesn't make you report/pay any capital gains on the transaction. Additionally, you still get to deduct the value of your donation on the date it was made. Now, from a "selfish" point of view, you will always end up with more money if you sell the crypto, pay the tax, and keep the rest. But, if you are going to make a donation anyway, especially a large one, giving crypto where you have a big unrealized/untaxed gain is a very efficient way of doing so.
"Alt Coins" - Buying Crypto with Crypto
The previous section discusses what happens when you trade crypto for stuff. However, one thing that surprises many people is that trading crypto for crypto is also a taxable event, just like trading crypto for a car. Whether you agree with this position or not, it makes a lot of sense once you realize that the IRS doesn't view crypto as money, but instead as an asset. So to the IRS, trading bitcoin for ripple isn't like trading dollars for euros, but it is instead like trading shares of Apple stock for shares of Tesla stock.
Practically, what this means is that if you trade one crypto for another crypto (say BTC for XRP just to illustrate the point), the IRS views you as doing the following:
  • Selling for cash the amount of BTC you actually traded for XRP.
  • Owing capital gains/losses on the BTC based on its selling price (the fair market value at the moment of the exchange) and your purchase price (basis).
  • Buying a new investment (XRP) with a cost basis equal to the amount the BTC was worth when you exchanged them.
This means that if you "time" your trade wrong and the value of XRP goes down after you make the exchange, you still owe tax on your BTC gain even though you subsequently lost money. The one good piece of news in this is that when/if you sell your XRP (or change it back to BTC), you will get a capital loss for the value that XRP dropped.
There is one final point worth discussing in this section - the so called "like kind exchange" rules (aka section 1031 exchange). At a high level, these rules say that you can "swap" property with someone else without having to pay taxes on the exchange as long as you get property in return that is "like kind". Typically, these rules are used in real estate transactions. However, they can also apply to other types of transactions as well.
While the idea is simple (and makes it sound like crypto for crypto should qualify), the exact rules/details of this exception are very fact specific. Most experts (including myself, but certainly not calling myself an expert) believe that a crypto for crypto swap is not a like kind exchange. The recently passed tax bill also explicitly clarifies this issue - starting in 2018, only real estate qualifies for like kind exchange treatment. So, basically, the vast majority of evidence suggests that you can't use this "loophole" for 2017; however, there is a small minority view/some small amount of belief that this treatment would work for 2017 taxes and it is worth noting that I'm unaware of any court cases directly testing this approach.
Dealing with "Forks"
Perhaps another unpleasant surprise for crypto holders is that "forks" to create a new crypto also generate a taxable event. The IRS has long (since at least the 1960s) held that "found" money is a taxable event. This approach has been litigated in court and courts have consistently upheld this position; it even has its own cool nerdy tax name - the "treasure trove" doctrine.
Practically, what this means is that if you owned BTC and it "forked" to create BCH, then the fair market value of the BCH you received is considered a "treasure trove" and you must report it as income (ordinary income - no capital gain rates for this). This is true whether or not you sold your BCH; if you got BCH from a fork, that is a taxable event (note - I'll continue using BTC forking to BCH in this section as an example, but the logic applies to all forks).
While everything I've discussed up to this point is pretty clearly established tax law, forks are really where things get messy with taxes in my opinion. Thus, the remainder of this section contains more speculation than elsewhere in this post - the truth is that while the idea is simple (fork = free money = taxable), the details are messy.
One practical problem with forks is that the new currency doesn't necessarily start trading immediately. Thus, you may have received BCH before there was a clear price or market for it. Basically, you owe tax on the value of BCH when you received it, but it isn't completely clear what that value was. There are several ways you can handle this; I'll list them in order from most accurate to least accurate (but note that this is just my personal view).
  • Use a futures market to determine the value of the BCH - if reliable sources published realistic estimates of what BCH will trade for in the future once trading begins, use this estimate as the value of your BCH. Pros/cons - futures markets are, in theory, pretty accurate. However, if they are volatile, they may provide an incorrect estimate of the true value of BCH. It would suck to use the first futures value published only to have that value plummet shortly thereafter, leaving you to pay ordinary income tax but only have an unrealized capital loss.
  • Wait until an exchange starts trading BCH; use the actual ("spot" price) as the value. Pros/cons - spot prices certainly reflect what you could have sold BCH for; however, it is possible that the true value of the coin was highelower when you received it as compared to when it started trading on the exchange. Thus this method seems less accurate to me than a futures based approach, but it is still certainly fairly reasonable.
  • Assume that the value is $0. This is my least preferred option, but there is still a small case to be made for it. If you receive something that you can't access, can't sell, and might fail, does it have any value? I strongly believe the answer is yes (maybe not value it perfectly, but value it somewhat accurately), but if you honestly think the answer is no, then the correct tax answer would be to report $0 in income from the fork.
Note, once you've decided what to report as taxable income, this amount also becomes your cost basis in the new crypto (BCH). Thus, when you ultimately sell your BCH (or trade it for something else as described above), you calculate your gain/loss based on what you included in taxable income from the fork.
I know this section (and post) are long, but there is one more approach to dealing with forks that I think is worth mentioning. In my personal opinion, a fork "feels" a lot like a dividend - because you held BTC, you get BCH. In a stock world, if I get a cash dividend because I own the stock, that money is not treated as a "treasure trove" and subject to ordinary income rates - in most cases, it is a qualified dividend and subject to capital gain rates; in some cases, some types of stock dividends are completely non taxable.
The dividend - fork analogy breaks down at some point (BTC didn't make the decision to distribute profits; BTC doesn't have any E&P from which to distribute profits; the creation of BCH presumably didn't directly reduce the value of BTC on a dollar for dollar basis the way a cash dividend does). However, I would argue that the treasure trove doctrine also breaks down slightly as well (you didn't randomly "find" BCH on your hard drive - you got is because you held BTC; some crypto investors purchase cryptos and especially BTC because they want to receive the benefit of forks [leading to a very familiar price run up and then drop pattern around popular fork dates]). Still, if you are a tax expert who has somehow stumbled across this post, I would note that I think a more rigorous examination of the potential treatment of forks as dividends is warranted and would be of service to the crypto community.
Ultimately, this post is supposed to be practical, so let me make sure to leave you with two key thoughts about the taxation of forks. First, I believe that the majority of evidence currently suggests that forks should be treated as a "treasure trove" and reported as ordinary income based on their value and that this is certainly the "safer" option. Second, out of everything discussed in this post, I also believe that the correct taxation of forks is the murkiest and most "up for debate" area.
Mining Crypto
Successfully mining crypto coins is a taxable event. Depending on the amount of effort you put into mining, it is either considered a hobby or a self-employment (business) activity. The IRS provides the following list of questions to help decide the correct classification:
  • The manner in which the taxpayer carries on the activity.
  • The expertise of the taxpayer or his advisors.
  • The time and effort expended by the taxpayer in carrying on the activity.
  • Expectation that assets used in activity may appreciate in value.
  • The success of the taxpayer in carrying on other similar or dissimilar activities.
  • The taxpayer’s history of income or losses with respect to the activity.
  • The amount of occasional profits, if any, which are earned.
If this still sounds complicated, that's because the distinction is subject to some amount of interpretation. As a rule of thumb, randomly mining crypto on an old computer is probably a hobby; mining full time on a custom rig is probably a business.
In either event, you must include in income the fair market value of any coins you successfully mine. These are ordinary income and your basis in these coins is their fair market value on the date they were mined. If your mining is a hobby, they go on line 21 (other income) and any expenses directly associated with mining go on schedule A (miscellaneous subject to 2% of AGI limitation). If your mining is a business, income and expenses go on schedule C.
Both approaches have pros and cons - hobby income isn't subject to the 15.3% self-employment tax, only normal income tax, but you get fewer deductions against your income and the deductions you get are less valuable. Business income has more deductions available, but you have to pay payroll (self-employment) tax of about 15.3% in addition to normal income tax.
What if I didn't keep good records? Do I really have to report every transaction?
One nice thing about the IRS treating crypto as an asset is that we can look at how the IRS treats people that "day trade" stock and often don't keep great records/have lots of transactions. While you need to be as accurate as possible, it is ok to estimate a little bit if you don't have exact records (especially concerning your cost basis). You need to put in some effort (research historical prices, etc...) and be reasonable, but the IRS would much rather you do a little bit of reasonable estimation as opposed to just not reporting anything. Sure, they might decide to audit you/disagree with some specifics, but you earn yourself a lot of credit if you can show that you honestly did the best you reasonably could and are making efforts to improve going forward.
However, concerning reporting every transaction - yes, sorry, it is clear that you have to do this, even if you made hundreds or thousands of them. Stock traders have had to go through this for many decades, and there is absolutely no reason to believe that the IRS would accept anything less from the crypto community. If you have the records or have any reasonable way of obtaining records/estimating them, you must report every transaction.
What if I don't trust you?
Well, first let me say that I can't believe you made it all the way down here to this section. Thanks for giving me an honest hearing. I would strongly encourage you to go read other well-written, honest guides. I'll link to some I like (both more technical IRS type guides and more crypto community driven guides). While a certain portion of the crypto community seems to view one of the benefits of crypto as avoiding all government regulation (including taxes), I've been pleasantly surprised to find that many crypto forums contain well reasoned, accurate tax guides. While I may not agree with 100% of their conclusions, that likely reflects true uncertainty around tax law that is fundamentally complex rather than an attempt on either end to help individuals unlawfully avoid taxes.
IRS guides
Non-IRS guides
submitted by Mrme487 to tax [link] [comments]

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