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What is Blockchain Technology?

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If you’ve paid attention to Bitcoin or cryptocurrency in general in recent years, you’ve no doubt heard about the “blockchain,” the technology used to power these currencies.

Many news sources will breathlessly talk about the blockchain and the potentials it holds, but few will actually define what it is. This is a shame because blockchain technology is what defines cryptocurrency, and while you don’t need to be an expert on it to buy or sell crypto, a basic overview of it will help you make better crypto investing decisions.

Defined in short, a blockchain is a list of blocks (digital records) that are linked through cryptography. (1) The blockchain forms the heart of Bitcoin and every other cryptocurrency; indeed, blockchain technology is what makes cryptocurrency a viable concept, ensuring its resilience and longevity in an unstable marketplace.

If you’re unsure about investing in cryptocurrency, understanding how the blockchain works will allow you to better comprehend the value of Bitcoin and other crypto.

Overview

Blockchain technology was invented in 2008 by pseudonymous computer programmer Satoshi Nakamoto as part of the development of Bitcoin. (2) While blockchain technology had been theorized and experimented with as early as 1991, Nakamoto’s implementation of it was the first one that was stable enough to be used as the basis of a cryptocurrency.

A blockchain can be thought of as a digital ledger, one that is virtually impossible to tamper with. Each block in a blockchain consists of a cryptographic hash of the previous block, a timestamp, and relevant transaction information. (3) Each block is linked to the ones preceding and following it, hence the “chain.” When a transaction occurs on the network, a new block is created and added to the blockchain, with every computer connected to the blockchain verifying it for authenticity.

Blockchains are managed through peer-to-peer networks using a single protocol in which all computers connected to said blockchain share in its functioning and upkeep. (4) This means that every system that participates in the use of a particular cryptocurrency—wallets, exchanges, and merchants, for example—is connected to that currency’s blockchain.

Every interaction between users is recorded on the blockchain in such a fashion that blocks cannot be altered after the fact without altering all subsequent blocks. This requires a majority consensus from all other blockchain users, effectively rendering fraud and theft impossible due to the expense and time necessary to seize control of a large network.

The invention of blockchain technology is what made the creation of Bitcoin and other cryptocurrencies possible. Fiat currencies, the currencies that most people use in their day-to-day lives, are backed by central authorities that give them security and value. For example, the U.S. dollar is backed by the federal government, while the euro is backed by the European Union.

No such authority exists for cryptocurrencies, which compensate through decentralized security via the blockchain. In order to modify a transaction on the blockchain (to invalidate a transaction or steal money, for example), an individual user needs to obtain a consensus from the other users, which is extremely difficult to do. (5) This allows currencies like Bitcoin to avoid double-spending—where users are able to spend units of currency more than once—and other issues that prevented effective cryptocurrency development.

Another advantage of blockchain technology is that it is completely transparent. All transactions that occur on a given currency’s blockchain are recorded, logged, and visible to anyone who seeks that information out. (6) While there are some cryptocurrencies such as Monero that are capable of anonymizing the identity of individuals in transactions, most crypto transactions can be viewed publicly, allowing for open use of the currency.

The blockchain’s nature as a decentralized, secure system means it has the potential to disrupt world business by simplifying it. Many existing online business models rely on providing middleman services between two people who wish to engage in a financial transaction. For example, PayPal is a payment processor that connects merchants to customers, taking a small fee as its cost for transferring money via their platform. With blockchain technology, however, customers and merchants can deal with each other directly, with the blockchain ensuring the integrity of their transaction; hence, PayPal’s role is made obsolete.

The same goes for services such as Uber and Airbnb. Using the blockchain, it is possible for someone who wishes to rent out their property to connect with prospective customers without the need for a service such as Airbnb. Middleman services essentially act as guarantors of the transactions they handle; with the blockchain, the system itself guarantees the transaction.

The potential for blockchain technology to revolutionize business in this manner has attracted attention across the world. For example, in the Eastern European nation of Georgia, all real estate has been added to the Bitcoin blockchain to make transactions faster and more transparent. (7) In 2016, IBM opened a blockchain research center in Singapore to study potential uses for the technology. (8) Banks and other financial institutions have also begun researching ways to use blockchain technology to improve their business models.

Finally, blockchain technology allows for fast and easy distribution of content over the Internet. While the original purpose of the blockchain was to allow for fast and secure peer-to-peer currency transactions, it can easily be adapted to serve as a low-cost content distribution system. Because every transaction on a blockchain is validated and processed by all machines connected to it, sending information over the Internet at little to no cost becomes easy.

Much in the same way that blockchain makes middleman services such as PayPal obsolete, content providers such as Netflix could potentially be made obsolete. Since files sent via a blockchain are embedded in the structure of the blockchain itself, there is no need for applications such as iTunes or Spotify, as the files can simply be sent peer-to-peer, akin to file-sharing programs, albeit legal. (9)

While Bitcoin was the first major use of the blockchain, the technology has already been adapted in ways that can facilitate all of these uses. Most notably, Ethereum, one of the top competitors to Bitcoin, introduced the concept of “smart contracts,” which helped extend the blockchain technology into everything from securing medical records to speeding up financial transactions in the mainstream banking world. (10) Websites such as Steemit and DLive allow users to create content (blog posts or video streams) using blockchain technology, which dramatically lowers costs compared to traditional content platforms.

In short, blockchain technology is revolutionizing the world. From its origins as the backbone of Bitcoin and other cryptocurrencies, it is rapidly being expanded into every sphere of life. It is no stretch to say that in the near future, the vast majority of business transactions, from buying groceries to paying rent, will involve blockchain technology in some form or another.

Blockchain FAQ

1. Is the blockchain safe to use? This is the number one concern of anyone engaging in financial transactions: security. There is no such thing as a 100 percent secure system, as any computer system can be hacked or abused given enough time and resources. However, the blockchain’s consensus-oriented design makes hacking it nearly impossible. Because every block must be validated by every other machine connected to the blockchain, any unauthorized changes must be approved by a majority of users on the network, which is extremely unlikely to happen due to the massive amounts of money and coordination it requires. While some blockchains are less secure than others, blockchain technology itself is one of the most resilient technologies out there when it comes to fraud and malfeasance.

2. How many blockchains exist? There’s no way to definitively answer this question because new blockchains are being created all the time. Additionally, while many blockchains are publicly accessible, there are also a great many private blockchains that are not accessible via the wider Internet. In general, there are three types of blockchains: public, private, and consortium. (11) Public blockchains are publicly accessible and are generally secure due to their large userbases. Cryptocurrencies, for example, use public blockchains. Private blockchains are only accessible to a select group of users and, while faster than public blockchains due to their smaller userbases, are more susceptible to attack for the same reason (since a smaller userbase means it is easier to gain a majority and thus take control of the network). Consortium blockchains fall between these two extremes.

3. Who can create a blockchain? Anyone with the appropriate skills can create a blockchain of their own for whatever purpose they want. Blockchain technology is a relatively advanced skill, requiring considerable knowledge in programming as well as a base of users in order to make the blockchain work. Many developers choose to use public blockchains such as Ethereum to build applications due to their large userbases, wealth of documentation, and large public profiles. However, due to the bottlenecks and other issues with public blockchains, many developers opt to develop their own blockchains in order to have their needs met. For example, while Ethereum is a powerful blockchain, its relatively slow speed of 15 transactions per second means that anyone looking to develop a program that relies on speed will not be able to use it effectively. Most custom blockchains are built precisely to serve the needs of a particular service or community, and are typically made either from scratch (which takes longer but allows for total control and flexibility) or forked from an existing blockchain (which is faster and cheaper but allows for less control over the final product).

4. What is forking? In software development, a fork is when an existing program or project is split into two entirely separate programs. In the context of blockchains, a fork is when a blockchain splits into two separate blockchains that are no longer connected despite their common origin. Forks can be accidental—such as when two updates are not compatible and end up forcing the creation of a new ledger—or they can be implemented by design. Intentional forks are separated into soft and hard forks. A soft fork is when blocks that would have been regarded as valid become invalid and is backwards compatible due to old nodes continuing to recognize new blocks, only requiring a majority of miners to switch to the new protocol. A hard fork is a fork that makes previously valid blocks invalid or vice versa and requires all systems on the network to update to the new protocol; old users will be rejected by the network, meaning hard forks are not backwards compatible. Hard forks can result in two separate blockchains continuing to exist in parallel or it can result in one blockchain dying off due to obsolescence. The most famous example of a cryptocurrency hard fork was the Ethereum fork of 2016, which occurred due to the theft of three million Ether in the DAO hack. (12) The fork resulted in the creation of Ethereum Classic, maintained by developers who believe that Ethereum abandoned its original mission by forking the blockchain. More recently, in 2017, Bitcoin was hard forked into Bitcoin and Bitcoin Cash, the latter of which features a larger block size allowing for faster transactions, a common feature request among some Bitcoin users as the currency became more popular. (13)

5. What is mining? Many cryptocurrencies, most notably Bitcoin, rely on miners in order to function. Cryptocurrency mining is when a computer connected to the blockchain validates new transactions and records them on the ledger. (14) This is done through solving difficult math problems via a hash algorithm. When a problem is solved, a transaction is confirmed on the blockchain. In exchange for solving these problems, which require processing power, miners receive a monetary reward for every problem they solve, which is taken from the transaction itself as a “mining fee.” Mining is often a good means for those who own computers to make money, though mining popular cryptocurrencies such as Bitcoin requires considerable amounts of processing power and electricity that is beyond the budget of many users. Not all blockchain-based systems use mining—Ripple, for example, is a prominent cryptocurrency that does not use miners—but a great many do as a means of speeding up the rate of transactions on their systems.

6. What is encryption and how does it work? Encryption is a means of obscuring data or information so that it cannot be decoded—decrypted—by anyone who does not know how. Blockchains use encryption to prevent transactions from being tampered with by external actors. Only the nodes involved in the transaction are able to decrypt it, making blockchains a secure means to engage in business.

7. What is a ledger? If you’re familiar with auditing and accounting, a ledger is a record of financial transactions at a given business or other institution. Ledgers have been used for thousands of years to keep accurate financial records. In the context of the blockchain, it is at heart a distributed ledger: a ledger that is kept accurate through constant communication and confirmation from all nodes connected to the network. The blockchain itself is a ledger of transactions represented in computer code, its decentralized nature preventing any one individual or group from engaging in fraud. Given the nature of blockchain technology, blockchains can expand up to an infinite size as they accumulate transactions.

8. What is double spending? Double spending is when one digital token (unit of currency) on a cryptocurrency network is spent twice or more. Imagine if you had a dollar and were able to spend it multiple times and you have an idea of what double spending is. It is obviously impossible to spend physical currency more than once without counterfeiting it (which is illegal), but since digital currencies consist of replicable computer files, it is possible to spend the same tokens repeatedly without an anti-fraud system built in. (15) Double spending, if allowed to spiral out of control, leads to hyperinflation and losses for organizations and businesses who are victims of it. The blockchain is designed to prevent double spending through distributed verification of all transactions. By requiring all nodes on a blockchain to process and verify the transaction, the network ensures the integrity of all transactions that occur without needing a central authority.

9. What is the difference between the Bitcoin blockchain and the Ethereum blockchain? While all based on the same fundamental technology, there are often steep differences between different types of blockchains. Bitcoin and Ethereum are the two most popular and well-known cryptocurrencies and their blockchains are incredibly divergent. The most important differences between them is their algorithm, transaction time, and scalability. Bitcoin uses the SHA-256 algorithm, while Ethereum uses the proprietary Ethash algorithm. This is more relevant to miners as it means that Bitcoin and Ethereum require different types of hardware to mine. Bitcoin also takes an average of ten minutes to conduct transactions, while Ethereum takes 12 to 14 seconds. Ethereum is also scalable while Bitcoin currently is not.

10. What types of records are found in a blockchain database? All blockchains contain both transactional records and block records. While both can be readily accessed, it is also possible to integrate one with the other.

11. What kinds of records can be stored on a blockchain? Any type of record can be stored on a blockchain; there is no limit. This flexibility has resulted in many industries using blockchains for record-keeping.

12. What is a Merkle tree and what does it have to do with the blockchain? Also known as a hash tree, a Merkle tree is a common data structure in cryptography. In a Merkle tree, certain nodes are identified as “leaf nodes,” which are designated with the hash of a block. (16) Non-leaf nodes are responsible for storing the child nodes’ cryptographic hashes. This type of data structure streamlines the processing and verification of transactions on a blockchain, because it eliminates the need for transferring entire blocks between nodes in order to verify them. Initial experiments in the early 90’s theorized about the use of Merkle trees to speed data processing, but it wasn’t until the blockchain was formally invented in 2008 that the Merkle tree was utilized for this purpose.

Recap

The blockchain is the key technology that powers cryptocurrencies such as Bitcoin and distinguishes them from attempts to create digital currencies in the past.

The versatility and security of the blockchain makes it the first technology of its type to allow digital currencies to compete with traditional fiat ones. Even better, given the blockchain’s distributed nature, no one single authority can dominate a blockchain, freeing cryptocurrencies such as Bitcoin from political and financial manipulation.

Beyond these advantages, the nature of the blockchain makes it a revolutionary technology. In eliminating the need for middleman businesses, the blockchain makes it possible to connect consumers and merchants like never before. Financial services such as PayPal and merchant services such as Uber and Airbnb could be turned upside down by the blockchain’s ability to allow customers and sellers to engage in transactions that are automatically verified and guaranteed by a decentralized network that is nearly impossible to hack.

In short, the blockchain is a technology that has the ability to change the world. It is part of what has given Bitcoin and other cryptocurrencies their resilience in a market where exchanges go bust and prices constantly fluctuate. Free of human error due to its distributed nature, developers and businesses are finding new uses for the blockchain every day, from real estate transactions to secure digital communication.

While becoming an expert on the blockchain isn’t necessary if you want to get involved in crypto, understanding its basics will allow you to make better investment decisions. Not all blockchains are created equal, and knowing about how the blockchain functions will make it possible for you to spend your money wisely. Ultimately, the blockchain is a technology that will come to dominate our lives due to its versatility and usefulness, so it behooves you to understand how it functions.

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Learning Lab

Best Bitcoin faucets of 2020

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If you are interested in Bitcoin, you have probably heard of Bitcoin faucets.

Bitcoin faucets are websites that give out small amounts of Bitcoin for free on a regular basis. They were originally established to promote Bitcoin and make it easier for newbies to start acquiring and using it.

While Bitcoin faucets have receded in popularity over the years due to the growing mainstream acceptance of cryptocurrency, because they give away free money, they remain a fixture of the crypto landscape.

If you want to start using Bitcoin without investing any of your own money, Bitcoin faucets are a great way to do so.

Here are our picks for the top Bitcoin faucets on the Internet.

8. BitFun

BitFun is a Bitcoin faucet oriented around earning Bitcoin in a number of different ways.

In contrast to other Bitcoin faucets that merely dispense Satoshis without any required action on the user’s part, BitFun allows users to earn Satoshis through playing browser games, rolling dice, or viewing ads. Each method dispenses a different amount of Satoshis, allowing you to choose which methods you enjoy the most.

Like Moon Bitcoin and BonusBitcoin, BitFun processes withdrawals via CoinPot. CoinPot allows users to withdraw their earnings once they have reached a minimum of 10,000 Satoshis. Users who have 50,000 Satoshis or more can withdraw their funds without paying a fee.

BitFun is an ideal choice for those who enjoy playing browser games or simply want more choice when it comes to earning Bitcoin.

7. SatoshiLabs

SatoshiLabs (not to be confused with the company that manufactures Trezor hardware wallets) is a Bitcoin faucet known for its simplicity and low withdrawal limits.

In comparison to other Bitcoin faucets, SatoshiLabs is easy to get into, offering five to ten Satoshis every five minutes. For users who wish to increase their earnings, the site also offers ads, surveys, and other options.

With a withdrawal limit of 5,000 Satoshis, SatoshiLabs is one of the easiest Bitcoin faucets to use in terms of getting paid quickly.

For users who want to jump into Bitcoin and not wait too long before they can use their earnings, SatoshiLabs is a good choice.

6. Moon Bitcoin

Established in 2015, Moon Bitcoin is a Bitcoin faucet that allows users to increase their claims via mining.

Moon Bitcoin’s faucet allows users to claim Satoshis every five minutes, with an average claim of ten Satoshis per use. It’s also possible to increase your earnings by running a CPU mining background on your computer, making Moon Bitcoin a good option for those who own high-end computers.

Like BonusBitcoin, Moon Bitcoin uses CoinPot to process withdrawals, meaning you need a minimum of 10,000 Satoshis in order to withdraw your earnings to your Bitcoin wallet. If you have 50,000 Satoshis or more, you can withdraw your earnings without a fee.

If you own a fast computer and are comfortable using it for Bitcoin mining, Moon Bitcoin is a good choice.

5. FreeBitcoin

FreeBitcoin is a lottery-based Bitcoin faucet established in 2018 and noted for its low withdrawal limits.

Every hour, FreeBitcoin allows users to draw a random number in order to win a preselected amount of Satoshis. Lottery earnings range from $0.0003 to $300, and FreeBitcoin allows users to withdraw their earnings to their wallet after earning as little as $1 worth of Bitcoin.

While it lacks frills, FreeBitcoin’s low withdrawal limit make it a useful option for those who want to transfer their Bitcoin quickly.

4. Blockchain Poker

Blockchain Poker is a hybrid Bitcoin faucet and online poker game that allows card players to earn Bitcoin for successful play.

Unlike many Bitcoin faucets, Blockchain Poker is totally anonymous, and new users are allotted free Satoshis to play with, allowing users to jump in even if they don’t have any Bitcoin. The game offers single-table, no-limit Texas Hold ‘Em poker, and users who have fewer than 50 Satoshis can top off their balance to 100 Satoshis every three minutes.

Uniquely, unlike many Bitcoin faucets, Blockchain Poker allows users to play using Bitcoin or Bitcoin Cash.

At 100,000 Satoshis, Blockchain Poker has one of the highest withdrawal limits of any Bitcoin faucet. The site’s anonymity also opens the door to fraud, as users can set up multiple accounts at the same table in different browser windows.

However, for those who are skilled at poker, Blockchain Poker is an interesting and lucrative alternative to traditional Bitcoin faucets.

3. BonusBitcoin

BonusBitcoin is one of the oldest Bitcoin faucets on the Internet and is noted for its reliability and trustworthiness.

BonusBitcoin pays out Satoshis every 15 minutes, with an average haul of 24 Satoshis per interval. For those who want to earn more, BonusBitcoin also allows users to increase their payments through its coin multiplier feature as well as by filling out surveys and accepting special offers.

Users can withdraw their BonusBitcoin payments via CoinPot, a cryptocurrency micropayments wallet. CoinPot allows users to withdraw with a minimum of 10,000 Satoshis if they pay a fee. Users can withdraw 50,000 Satoshis or more without a fee.

For users who are concerned about security and reliability, BonusBitcoin’s longevity make it a good choice.

2. Bitcoinker

Bitcoinker is a long-running Bitcoin faucet that uses a lottery system for allotting Satoshis to users.

Unlike other Bitcoin faucets that offer a set number of Satoshis at regular intervals, Bitcoinker allows users to win up to 100,000 Satoshis every five minutes, though the average payout is seven Satoshis. Bitcoinker also features a referral program, allowing users to earn a 10 percent commission for referring new users to the site.

Withdrawals from Bitcoinker are made on a weekly basis to the user’s Bitcoin wallet, with a minimum of 20,000 Satoshis required for a withdrawal.

Finally, Bitcoinker has a loyalty program for long-term users. Using the faucet over a period of time can allow you to earn up to a 25 percent seniority discount.

Bitcoinker’s frequent payouts, lottery system, and referral and seniority bonuses make it a good option for those who plan on long-term Bitcoin faucet use.

1. Cointiply

Cointiply is a relatively recent entry into the world of Bitcoin faucets and is an ideal first choice for those who want to dip their toes into the world of cryptocurrency.

Cointiply allows users to claim 200 Satoshis every hour from their Bitcoin faucet. It is one of the most stable and reliable Bitcoin faucets on the Internet, with near 100 percent uptime, so you won’t have to worry about technical issues keeping you from claiming your Bitcoin.

After claiming your Bitcoin, Cointiply allows you to withdraw your Bitcoin to FaucetHub once you accumulate 35,000 Satoshis. If you have over 100,000 Satoshis, you can withdraw them directly to a Bitcoin wallet of your choice.

In addition to its Bitcoin faucet, Cointiply offers a number of other ways to earn Bitcoin, including playing browser games, watching videos, and clicking on ads.

Cointiply is a great Bitcoin faucet, allowing you to accumulate and experiment with Bitcoin with a minimal investment of time and money.

FAQ

1. What is a Bitcoin faucet? A Bitcoin faucet is a website or app that dispenses a small amount of Bitcoin to users for free. Many Bitcoin faucets allow users to simply claim their Bitcoin through signing up and following directions, but some also allow users to earn Bitcoin by watching ads or videos or playing browser games. Bitcoin faucets dispense coins at set intervals, allowing users to come back and receive additional Bitcoin.

2. Why do Bitcoin faucets exist? When Bitcoin was first launched, many people were skeptical about its usefulness and reliability and were unwilling to risk their own money to buy some. Bitcoin faucets allow users to obtain Bitcoin and start using it without any financial investment on their part, making it an easy, no-cost way to learn about cryptocurrency. Bitcoin faucets take their name from the Bitcoin Faucet, the very first site of its type. Created in 2010 by Bitcoin Core developer Gavin Andresen, the Bitcoin Faucet dispensed five Bitcoins per use and helped popularize both Bitcoin itself and the usefulness of faucets in attracting new users. While Bitcoin and cryptocurrency have become more mainstream, Bitcoin faucets remain popular as a way for new users to learn about Bitcoin and start using it at no risk to themselves. In the years since Bitcoin’s launch, Bitcoin faucets have become more commercialized and are less about giving away Bitcoin for the sake of it and more about earning money via ads and other methods, but they still serve the same function of allowing new users to get into Bitcoin quickly and easily.

3. How do Bitcoin faucets make money if they’re giving Bitcoin away for free? Bitcoin faucets dispense Bitcoin in extremely small amounts, meaning that the faucet itself experiences little financial risk in giving away Bitcoin at no cost. Faucets also generally only dispense Bitcoin at set intervals, only allowing users to claim more Bitcoin after a certain amount of time has elapsed, ranging from a few minutes to an hour. Finally, Bitcoin faucets make money through paid advertising, surveys, and other traditional means of earning money via the Internet, and because many people are attracted to the promise of free Bitcoin, this ensures a steady stream of revenue. So long as the Bitcoin faucet is making more money via these methods then it is giving out to users, it will remain profitable. Another common method that Bitcoin faucets use to make money is through cloud mining, using users’ CPUs without their knowledge to mine altcoins. This is possible because improved cryptocurrency technology allows mining operations to be hosted via websites and because some cryptocurrencies such as Monero are more efficiently mined with computers then with dedicated equipment.

4. How do I use a Bitcoin faucet? Most Bitcoin faucets allow users to simply sign up for an account and claim their Bitcoin by following simple directions; a few allow users to claim Bitcoin anonymously. Some faucets also allow users to earn Bitcoin by playing browser games, watching videos, viewing ads, filling out surveys, and other methods. Finally, some Bitcoin faucets allow users to increase their earnings through affiliate programs, allowing users to claim more Satoshis for each user they refer to the site.

5. What is a Satoshi? The Satoshi is the smallest subunit of Bitcoin, similar to how the cent is the smallest subunit of the U.S. dollar. One Satoshi is equivalent to one 100th million of a Bitcoin, or 0.00000001 Bitcoin, meaning that 100 million Satoshis make up one Bitcoin. Satoshis are named after Satoshi Nakamoto, the founder of Bitcoin. Satoshis are used to denote smaller Bitcoin transactions due to Bitcoin’s constantly fluctuating price and its higher value over the years, allowing users to make more finely measured and readable transactions.

6. Is it possible to get rich using Bitcoin faucets? While it is possible to accumulate small amounts of Bitcoin by using faucets, the small amount of Bitcoin dispensed by each one combined with the steadily fluctuating price of Bitcoin means that you are unlikely to amass a sizable amount by using faucets exclusively. Additionally, many Bitcoin faucets have very high withdrawal limits, meaning that you will not be able to claim your Satoshis until you have accumulated a large amount. Bitcoin faucets are designed for users who are unfamiliar with cryptocurrency and want to start using it immediately without risking their own money. For users who are already comfortable with cryptocurrency and are willing to invest their own money, Bitcoin faucets are an inferior option compared to trading or mining it, as those methods allow users to accumulate cryptocurrency more rapidly.

7. Why do Bitcoin faucets have withdrawal limits? Bitcoin faucets have withdrawal limits due to the cost of transferring Bitcoin; faucet owners generally seek to minimize the cost by keeping users from withdrawing amounts that are too low. Additionally, Bitcoin faucets use withdrawal limits as a means of keeping users engaged with the site as long as possible in order to earn more money from online advertising, which earns the faucet money based on how many users are on the site and how long they use it. The longer a faucet can keep people coming back to the site and the more users they garner, the higher their income. As such, when using a Bitcoin faucet, you should keep withdrawal limits in mind, since they are designed in such a manner to keep you returning to the site.

8. Are Bitcoin faucets trustworthy? The Bitcoin faucet industry is known for shady practices, but there are a number of faucets that have earned a reputation for honest business. When looking at Bitcoin faucets, there are a number of factors you should consider. Chief among them is the claim amount, which is how many Satoshis it dispenses upon use, and the timer, which is how often you can use the faucet to claim more Bitcoin. The minimum withdrawal amount is also a major factor, as it determines how much Bitcoin you must accumulate before you can transfer it to your own wallet. Also be sure to check the faucet’s withdrawal method; some faucets allow you to directly transfer Bitcoin to a wallet of your choice, while others use micropayment wallets such as CoinPot. Finally, you should see if the faucet has any referral or seniority programs; the former will allow you to earn money by signing up other users to the site, while the latter will increase your earnings the longer you use the faucet. Another factor to consider is Bitcoin faucet ads that install malware on your computer, a common business practice among shadier operators. Another thing to keep in mind that hackers frequently target Bitcoin faucets due to their lax security. Also, be wary of Bitcoin faucets that use their users’ CPUs to mine altcoins, as the software used may have security faults that can be exploited by hackers as well. If you notice a sudden drop in your computer’s performance when accessing a Bitcoin faucet, it likely means that the site is using your computer for altcoin mining. As a general rule, if a Bitcoin faucet has been in business for years, it is more reliable than faucets that are run by fly-by-night operators. Use your gut and common sense and you’ll be able to find a Bitcoin faucet that you can trust.

9. Do other cryptocurrencies (such as Ethereum) have their own faucets? Yes, there are a number of other cryptocurrency faucets, and they often serve a vital role in allowing users to sample new cryptocurrencies without worrying about financial risk. However, due to Bitcoin’s longevity and popularity, Bitcoin faucets remain by far the most popular type of cryptocurrency faucet.

10. Are Bitcoin faucets legal? The legal status of Bitcoin faucets is murky due to differing cryptocurrency laws in each country. In some countries, cryptocurrency is fully legal and regulated, while some countries outlaw cryptocurrency and still others have no laws on the subject. Additionally, Bitcoin faucets that offer online gambling, such as poker, may be illegal in jurisdictions where online gambling is outlawed, even if Bitcoin itself is legal. Check your local laws before using any Bitcoin faucet.

Recap

Bitcoin faucets were originally conceived as a way to attract new users to Bitcoin when it was a new, fledgling cryptocurrency.

While Bitcoin has become more established and mainstream in the years since it launched, Bitcoin faucets remain a popular way of earning free Bitcoin and becoming acclimated to using it.

However, due to the shady business practices of many cryptocurrency faucets, you should be careful before signing up to a new site or app.

Many Bitcoin faucets are honestly run and allow users to easily claim Satoshis by simply following the directions. A number of faucets also allow users to claim Bitcoin by playing games, viewing ads, or other simple methods that only require you to invest your time.

However, there’s no such thing as free money, and many Bitcoin faucets make it difficult for you to claim your Satoshis through the use of high withdrawal limits and timed intervals that make accumulating the required amount of Bitcoin a time-consuming affair.

Additionally, many Bitcoin faucets are vulnerable to hacking due to poor security. Faucets that use cloud mining software to mine altcoins with their users’ CPUs are also a security risk due to potential software vulnerabilities.

Finally, the increasing price of Bitcoin combined with the business-oriented outlook of Bitcoin faucets means that it is extremely unlikely that you will be able to accumulate a large amount of Bitcoin by exclusively using faucets. Depending on cryptocurrency laws where you live, you may not be able to use Bitcoin faucets at all.

However, Bitcoin faucets remain a popular and easy way of introducing yourself to the world of cryptocurrencies. They require no financial investment on your part, are easy to use, and in some cases can allow you to make money by doing things you enjoy, such as playing online games or poker.

Bitcoin faucets are not ideal for serious users due to the limited amounts of Bitcoin that they dispense. If you are planning to invest seriously in Bitcoin, you should consider more lucrative means of acquiring it, such as buying it from exchanges or mining it with dedicated equipment.

However, if you are new to Bitcoin and want to try it out with a minimum of risk to yourself, Bitcoin faucets are a great way to get your hands on some Bitcoin and learn the ins and outs of cryptocurrency.

Before signing up for a Bitcoin faucet, research faucets carefully to see how much they pay out, how often they pay out, what their withdrawal limits are, how they process withdrawals, and more. Also check to make sure the faucet has a good reputation so you can avoid having your funds stolen.

With proper research and planning, you’ll be able to find a Bitcoin faucet that will allow you to start earning Bitcoin quickly and teach you the ropes of cryptocurrency.

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Learning Lab

Best cryptocurrency apps of 2020

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If you are interested in using cryptocurrency, you’ll want to know which cryptocurrency app to use.

Cryptocurrency has come a long way from the days of Mt. Gox and computer wallets. With more and more people using Bitcoin and other cryptocurrencies, a wealth of apps have sprung up to serve the needs of everyone from newbies to advanced users alike.

Given the unique nature of cryptocurrency as decentralized money, using it can seem more involved than traditional financial instruments, but fortunately, there are many apps that can make getting involved with cryptocurrency easy.

Here are our picks for the best cryptocurrency apps, covering everything that you need when managing your bag.

7. Voyager

Voyager is an all-in-one app designed for intermediate-level traders who want more functionality than basic apps can offer.

Voyager boasts a commission-free exchange system, ideal for frequent traders who want to save money buying and selling Bitcoin. It also boasts a larger selection of cryptocurrencies then other exchanges, as well as charting tools that allow you to more easily track the value of your investments.

As a bonus, Voyager also includes a news section that allows you to keep track of developments in the world of cryptocurrency.

Originally designed for iOS devices, Voyager is also available for Android. However, it is currently only available in the U.S., though the company has plans to expand internationally.

6. Crypto News Scoop

Crypto News Scoop is an app that agglomerates crypto news, allowing you to keep track of new developments in the cryptocurrency world.

Staying on top of cryptocurrency news is important given the rapidly-evolving nature of the industry. With new coins and ICOs springing up, software upgrades to existing coins, and new laws being passed in countries around the world to regulate the industry, you need to stay appraised in order to make the best decisions. But where can you find important cryptocurrency news without spending hours searching the Internet?

Crypto News Scoop is an app that aggregates news stories from countless cryptocurrency websites, allowing you to keep tabs on the market. You can customize it in numerous ways, such as filtering for news stories on particular cryptocurrencies, allowing you to cut out the noise and focus on what you’re interested in.

Crypto News Scoop is available for free for both Android and iOS devices.

5. CryptoConvert

CryptoConvert is a handy conversion app that allows you to convert between different cryptocurrencies on the fly.

For most of cryptocurrency’s history, users generally focused on the conversion rate between cryptocurrency and their chosen fiat currency, such as U.S. dollars or euros. However, with the rise of Ethereum, Litecoin, Monero, and other cryptocurrencies, many traders and platforms now use conversions between Bitcoin and the cryptocurrency in question.

Moreover, a number of cryptocurrency exchanges, such as Binance, do not accept fiat currency, but require you to purchase cryptocurrency with other cryptocurrency, most commonly Bitcoin. Decentralized, peer-to-peer exchanges such as ShapeShift also do not use fiat currency. This means that you need to be able to convert between different cryptocurrencies on the fly.

This is where CryptoConvert comes in. This app allows you to quickly convert between Bitcoin, Ethereum, and hundreds of other cryptocurrencies, allowing you to accurately determine the value of your holdings and make trades with a minimum of hassle. Powerful, fast, and intuitive, CryptoConvert also works without an Internet connection, allowing you to check the value of cryptocurrencies even when you’re offline.

CryptoConvert is available for Android devices and is free to use, though there is a premium version that has additional features.

4. Blockfolio

Blockfolio is a portfolio management app that allows you to track the value of your cryptocurrency holdings over time.

Due to the rapid shifts in price that most cryptocurrencies experience, keeping track of the value of your bag is important. Monitoring your portfolio across multiple wallets, which may be necessary depending on which cryptocurrencies you hold, can be a real hassle, so you want a solution that allows you check your portfolio in a snap.

Blockfolio is an all-in-one portfolio app that links directly to your wallets, allowing you to see the full value of your holdings in one place. This can save you from having to check multiple wallets constantly, saving you time and also minimizing the chances of your money being stolen. Blockfolio supports over 800 different cryptocurrencies and over 300 different exchanges, allowing you to use it no matter where you keep your money.

Blockfolio is free to download for both Android and iOS devices.

3. Coinbase

Coinbase is a cryptocurrency exchange noted for its ease of use, security, and reliability.

In order to purchase cryptocurrency or sell it for fiat currency, you need to use an exchange, a website, app, or service that allows for exchanging dollars or other currencies for Bitcoin and the like. There are countless exchanges on the Internet, many of which are dodgy, so you want to use an exchange that you can trust to keep your bag and your banking information safe from hackers.

Coinbase is one of the most popular and trusted cryptocurrency exchanges in the world, allowing users to buy and sell Bitcoin, Ethereum, and many other coins using bank transfers and debit cards. It features bank-grade security and is regulated by U.S. financial law, ensuring that it can protect your assets. Note that due to these regulations, Coinbase is not available in certain jurisdictions, and even if it is, certain cryptocurrencies may not be available to purchase on Coinbase in your area.

Coinbase utilizes two-step authentication, PINs, and other standard methods to safeguard its users’ accounts. In addition to this, Coinbase features a robust mobile app that allows users to make trades and transfers using their smartphones or tablets, without having to log on to a computer.

Coinbase’s mobile app is available for both iOS and Android users and is free. It’s also intuitive and simple, allowing users to jump in immediately.

2. eToro

eToro is an all-in-one exchange and forum service for those who are looking to connect with other cryptocurrency users.

In addition to offering exchange services with over 30 cryptocurrencies, eToro boasts unlimited withdrawal amounts and a fast, easy deposit procedure. Uniquely, eToro also includes a virtual portfolio feature, allowing you to practice trading with $100,000 of virtual currency. It also allows for conventional stock trading, making it a one-stop shop for all your investment needs.

As an added bonus, eToro allows users to connect via its app, letting them share crypto trading strategies and more. This is helpful if you are just starting out and want some advice, or you’re an advanced trader and you want to up your game.

eToro’s app is available for both iOS and Android devices and is simple and easy to use.

1. CoinStats

CoinStats is a comprehensive app that allows you to manage your cryptocurrency portfolio in one easy-to-use program.

CoinStats allows you to connect your exchange accounts and wallets and make trades from within the app using debit cards or Apple Pay (for iOS users), saving you time. It also allows you to track the prices of over 8,000 cryptocurrencies on over 400 different exchanges. CoinStats also incorporates a large number of analysis and charting tools, letting you examine your portfolio’s value in just about any way you want.

Other notable features of CoinStats are its news section, which allows you to stay on top of the latest developments in cryptocurrency. You can add your own news sources to your CoinStats account as well as vote on the reliability of stories you read via the app. As an extra, CoinStats allows you to easily share your portfolio information with other people through a handy link system.

CoinStats is available on a wide variety of platforms, including Android, iOS, and Apple TV. It’s also available as a website, a Chrome extension, and a Mozilla Firefox add-on.

FAQ

1. What kinds of cryptocurrency apps do I need? At bare minimum, you need a wallet in order to hold any cryptocurrency that you have. A wallet is a digital file that can store an unlimited amount of a particular cryptocurrency. Historically, users would use the default wallet provided with a cryptocurrency, such as Bitcoin, and while this is still an option, there are now many services that allow you to maintain multiple wallets within a single app. You will also likely need access to an exchange so you can buy and sell cryptocurrency; again, many exchanges now offer mobile apps that allow you to make trades from your smartphone or tablet. If you are planning to hold multiple cryptocurrencies, you will want a portfolio app that will let you examine the value of all your coins without having to log in to different wallets and exchanges. While many exchange and wallet apps have portfolio functions built in, not all exchanges have all coins, so you will likely have to use multiple exchanges and/or wallets to hold your bag; in this case, a portfolio app is helpful because it will let you manage all of your holdings from a single place. If you are using exchanges like ShapeShift or Binance that do not use fiat currency, a cryptocurrency exchange rate calculator will allow you to easily convert between prices for easier selling and buying. Finally, if you want to keep on top of crypto news, a news app will allow you to do this without having to keep tabs on a bunch of different websites or continuously searching Google for new information.

2. Why aren’t some cryptocurrency apps available in my country/region/state? Every country has a different set of laws pertaining to finance, and many governments are now passing laws relating to cryptocurrency. This means that certain apps and services may not be available in your jurisdiction. For example, the popular exchange app Coinbase is based in the U.S. and is only licensed to operate there and in a few other countries, meaning that if you don’t live in one of the countries where Coinbase does business, you will not be able to use the app. Coinbase is further regulated in New York state due to that jurisdiction’s different cryptocurrency laws, so certain Coinbase features are not available to New York residents. Before choosing a cryptocurrency app, you should research your local laws as well as the policies of the app in question, as you don’t want to waste time signing up for an app or service that is not available in your area.

3. Some cryptocurrency apps offer multiple features, such as exchange and portfolio services. Do I need multiple apps? It depends on your particular situation. For many basic users, an exchange app such as Coinbase is really all they need. However, users who want to invest in many different types of cryptocurrencies will typically need to use multiple wallet and/or exchange apps to manage all of their investments. For example, the popular cryptocurrency Monero is currently not available on Coinbase and other popular exchanges, so if you want to hold Monero in addition to Bitcoin and other mainstream cryptocurrencies, you will likely have to use multiple apps to manage everything. In this case, a portfolio app will come in handy since it will let you track the value of all your investments in one place, and some portfolio apps even connect directly to your wallets and exchange accounts, saving you from having to manually enter information.

4. Should I pay money for a cryptocurrency app? Again, the answer to this question depends on your particular needs. Most cryptocurrency apps are available for free; those that have a premium version will have a free version supported by ads. If you only need basic functionality, you’ll likely be satisfied by using the free versions. If you need more advanced functionality from an app, you should consider purchasing the full version of the app. Exchange apps are almost always free because they make money from charging commissions on sales and purchases.

5. Is it safe to use a cryptocurrency app to store my money? There is no such thing as a 100 percent hack-proof computer system; given enough time and resources, any server, website, program, or computer can be hacked. However, strong security features can reduce the chances of a hack occurring. Mnemonic seeds, PINs, two-factor authentication, email verification, and more are examples of how cryptocurrency apps secure their users’ information and funds from intruders. A number of exchanges go further by using “cold storage,” transferring their users’ funds to offline hardware wallets, an additional measure against security breaches. Finally, many exchange apps, such as Coinbase, are officially licensed by national governments, meaning that in addition to standard security measures, they also comply with laws relating to finance and investment. These changes have made cryptocurrency apps much safer over the years and help prevent incidents such as what happened to Mt. Gox, a popular Bitcoin exchange that collapsed in 2014, causing the loss of millions of dollars’ worth of users’ funds. All that said, you should carefully research a cryptocurrency app before you entrust it with your money.

6. Most cryptocurrencies are valued in relation to the U.S. dollar and other fiat currencies. Why do I need to convert between different types of cryptocurrency? A growing number of exchange services do not allow users to purchase cryptocurrency with fiat money or sell it for fiat money. Binance, one of the world’s top exchanges, does not allow its users to use fiat currency. Similarly, decentralized exchanges such as ShapeShift or Exodus, which allow users to directly trade cryptocurrencies, do not use fiat currency. The reason for this is to improve security as well as allow a wider range of services, since services involving bank accounts and credit cards are more tightly regulated in many jurisdictions. As a result, if you are using a decentralized exchange or another non-fiat exchange such as Binance, you will be purchasing cryptocurrency with other cryptocurrency, most commonly Bitcoin. If you are in this situation, having a cryptocurrency conversion app is useful. For example, if you are planning to purchase another cryptocurrency using Bitcoin, converting between Bitcoin and that currency is more useful than converting between said cryptocurrency and fiat money such as U.S. dollars.

7. Is a crypto news app necessary for me to follow crypto news? No, but using a crypto news app will allow you to save time when looking for news. There are countless crypto news sites out there with varying degrees of reliability, and searching for and reading news stories that you are interested in can be time-consuming. A crypto news app will aggregate stories based on your particular interests, such as only focusing on cryptocurrencies that you own or are curious about using. If you are a busy person, consider using a crypto news app to save yourself time.

Recap

Cryptocurrency is a rapidly growing and maturing field, and to meet the needs of its expanding userbase, a number of solutions have been developed. The panoply of crypto apps available reflects this, and which crypto apps you need depends on your particular goals.

If you’re just planning to hold Bitcoin, use it or other cryptocurrencies for basic transactions, or otherwise aren’t expecting to get too involved, one or two apps will probably satisfy you. Most major exchanges and wallets such as Coinbase and Exodus now have app versions for added convenience.

However, if you are planning to become a serious trader, you’ll need more app functionality than basic apps can provide.

For example, if you are looking to use decentralized exchanges to make peer-to-peer cryptocurrency transactions, you’ll need a conversion app that will allow you to more easily determine the value of your trades. Since not all coins are available on all exchanges, you’ll likely have to use multiple exchanges in order to purchase the cryptocurrencies that you want.

Similarly, if you want to keep your finger on the pulse of the crypto world, a crypto news app will allow you to more easily monitor new developments. You can stay on top of news relating to your favorite cryptocurrencies and stay appraised of new potential investments.

Finally, if you have a large crypto portfolio, using a portfolio app will allow you to keep track of the value of your investments over time. If you’re using multiple wallets and exchanges, a portfolio app will let you check your holdings without having to go through a bunch of different apps and websites.

Of course, the other advantage of apps is that they allow you to easily use cryptocurrency from your mobile device, keeping you from having to log into various websites and allowing you to access your money no matter where you are.

The world of cryptocurrency is constantly evolving, and it’s impossible for a single article to list all crypto apps or predict how the market will evolve. However, keeping a few simple principles in mind will allow you to determine which types of apps will best suit your needs.

Before looking for crypto apps, determine what your goals are and how you can accomplish them. Are you looking to day trade crypto, store it for the future, or simply use it to buy and sell things? Once you’ve determine what you want to do, you’ll be able to select the apps that will make your goals that much easier.

Additionally, don’t forget to research potential apps to ensure how reliable they are and how effectively they can protect your funds and sensitive information from hackers.

While crypto can seem bewildering for novice users, if you do your research and outline your goals, you’ll be able to find crypto apps, exchanges, wallets, and more that will be able to help you.

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Learning Lab

Best mining GPU of 2020

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If you’re interested in mining cryptocurrency, you need mining equipment in the form of an ASIC miner or a mining GPU.

A GPU, or graphics processing unit, is a computer component designed to display images. They are also sometimes known as “graphics cards” or “video cards.” Gamers use GPUs in order to play video games due to the fact that CPUs typically lack the power to display most 3D games on their own.

Both CPUs and GPUs can be used for cryptocurrency mining, but GPUs are capable of mining much more quickly than CPUs for the same reason they can run video games more efficiently.

While not specifically designed for mining, GPUs are less expensive than dedicated ASIC miners and can also be used for gaming, graphic design, and other tasks.

Here’s our rundown of the best mining GPUs on the market.

7. AMD Radeon VII

The AMD Radeon VII is another pricy card that delivers when it comes to hashing power.

With a boost clock of 1,400 MHz and a 16GB HBM2 frame buffer, the Radeon VII is capable of a mind-boggling 90 MH/s hashrate. However, the Radeon VII is also one of the most power-hungry GPUs on the market, drawing 300 W per unit, which could be a deal-breaker if you live in an area with costly electricity.

At a price of $700, the Radeon VII is less expensive than its NVIDIA competitors, but it’s still quite pricy by the standards of graphics cards.

However, if you are a serious miner looking to upgrade your hashing power and you don’t have to worry about electricity costs, the Radeon VII is a strong choice.

6. NVIDIA GeForce GTX 1080 Ti

The NVIDIA GeForce GTX 1080 Ti is one of the most powerful mining GPUs available and is a good option for those who aren’t concerned about cost.

This NVIDIA card features an 11 GB GDDR5X frame buffer and a 1,582 MHz boost clock, giving it an insanely high hashrate of 32 mh/s. The cost of this hashing power is its high power consumption, which is 250 W per unit.

Another problem with the NVIDIA GeForce GTX 1080 Ti is that it is quite expensive, usually priced around $900. Combined with its power consumption, this means that it’s not a GPU for amateur miners.

However, if you’re not constrained by a tight budget and have access to cheap electricity, the sheer power of the GeForce GTX 1080 Ti makes it a good option.

5. NVIDIA GeForce GTX 1070 Ti

The NVIDIA GeForce GTX 1070 Ti is a good mining GPU for experienced users who want to get into the nitty-gritty of their mining operations.

As its name suggestions, the GeForce GTX 1070 Ti is based on the GeForce GTX 1070, boasting an increased number of cores, though all other stats remain the same. The GeForce GTX 1070 Ti has a hashrate of 28 mh/s, only slightly slower than the GeForce GTX 1070, and its power consumption is roughly the same, at 180 W per unit.

Where the GeForce GTX 1070 Ti excels is in its overclocking capabilities. Users can customize it to a far greater degree than other mining GPUs, making it a good choice for those who are experienced in building gaming PCs. The GeForce GTX 1070 Ti is also priced less expensively compared to the GeForce GTX 1070.

If you’re comfortable with building high-end PCs and customizing computer hardware, the GeForce GTX 1070 Ti will appeal to you.

4. AMD Radeon RX Vega 56

The AMD Radeon RX Vega 56 is a high-end GPU ideal for those who aren’t concerned about cost, power consumption, or heat.

The Radeon RX Vega 56 has an 8 GB HBM2 frame buffer, a boost clock of 1,471 MHz, and a whopping 3,584 cores, allowing it to achieve a hash rate higher than even the NVIDIA GeForce GTX 1070. However, this hashing power comes at a cost in the form of dramatically higher power consumption, making the Radeon RX Vega 56 a poor choice if you’re worried about electricity bills.

Another downside to the Radeon RX Vega 56 is that it has extremely high heat output, so you’ll have to work harder to prevent overheating, particularly if you live in a warm part of the world. The Radeon RX Vega 56 is also priced at an enormous $800, putting it out of the reach of more budget-conscious miners.

However, if you live in a cool part of the world and/or have access to cheap electricity, the sheer hashing power of the Radeon RX Vega 56 makes it a worthwhile choice.

3. AMD Radeon RX 580

The AMD Radeon RX 580 is a modestly-priced graphics card that delivers far more hashing power than its price tag would suggest.

The Radeon RX 580 features an 8 GB GDDR5 frame buffer, a boost clock of 1,340 MHz, and 2,304 cores, allowing it to achieve a hash rate of 29 mh/s, which is only slightly less than the NVIDIA GeForce GTX 1070. Additionally, the Radeon RX 580 runs at a very low temperature, which is useful if you’re concerned about overheating.

The biggest downside to the Radeon RX 580 is its excessive power consumption. At 185 W per unit, this GPU is not a good choice for those who are concerned about the cost of electricity. As consolation, the Radeon RX 580 is only priced around $350, nearly half that of the NVIDIA GeForce GTX 1070.

The Radeon RX 580 is an ideal choice for those looking to save money and who also have access to inexpensive electricity.

2. NVIDIA GeForce GTX 1060

A budget alternative to the GeForce GTX 1070, the GeForce GTX 1060 is ideal for those who are concerned about the cost of electricity.

The GeForce GTX 1060 comes in two variants: a 3 GB GDDR5 frame buffer version with 1,152 cores and a 6 GB GDDR5 frame buffer version with 1,280 cores. Both have a boost clock of 1,708 MHz. Its hash rate is considerably slower than the GeForce GTX 1070, but the GeForce GTX 1060 only draws 120 W of power per unit, making it one of the most cost-effective mining GPUs when it comes to electricity usage.

In addition to this, the GeForce GTX 1060 is more modestly priced than the GeForce GTX 1070, costing around $300.

If you live in an area with expensive electricity, the GeForce GTX 1060 is the ideal mining GPU, as it doesn’t cost much either to buy or in terms of power usage.

1. NVIDIA GeForce GTX 1070

The NVIDIA GeForce GTX 1070 is an upper-tier GPU that provides incredible power and efficiency when it comes to mining.

Boasting 1,920 cores, an 8 GB GDDR5 frame buffer, and a boost clock of 1,683 MHz, the GeForce GTX 1070 has a hash rate of 30 mh/s. It also only consumes 150 W of power per unit, making it extremely cost-effective as well. The GeForce GTX 1070 Ti, a variant on the GTX 1070, increases the number of cores to 2,432 for greater hashing power.

The primary drawback of the GeForce GTX 1070 is that it is extremely expensive, with prices ranging from $600 to $1,000. However, its sheer amount of power means that it will not become obsolete for many years, giving it added value.

Overall, if you have the budget for it, the GeForce GTX 1070 is the absolute best mining GPU out there.

FAQ

1. What is cryptocurrency mining? Mining is the process by which new cryptocurrency is created and transactions are validated. A cryptocurrency “miner” is a computer that creates new coins by solving difficult math equations. Miners are also responsible for processing transactions on a cryptocurrency blockchain. In exchange for expanding the cryptocurrency supply, miners are rewarded with a portion of new coins created. Miners also receive fees as a reward for helping process transactions, which gives miners an incentive to do so. Users can choose to pay higher fees to have their transactions processed faster.

2. What is proof-of-work? Proof-of-work is a cryptocurrency algorithm in which miners solve difficult math equations to create new coins. It is called “proof-of-work” because miners perform work—i.e. solving the aforementioned math equation—in exchange for a share of new coins. Proof-of-work is distinguished from proof-of-stake, an algorithm in which existing users stake their coins in order to ensure the blockchain’s continued operations. Proof-of-work is the most popular cryptocurrency algorithm and is used by Bitcoin, Litecoin, and a number of other top cryptocurrencies, though proof-of-stake is gaining in popularity.

3. What is hashrate? Hashrate is a system of measurement that shows how fast a computer system can mine cryptocurrency. A higher hashrate means that a computer can mine cryptocurrency more quickly. Hashrate is determined largely by the processing power of a computer, but is also determined by the speed of the computer’s Internet connection; slow Internet speeds will result in a lower hashrate and vice versa. External temperature also affects hashrate; GPUs and mining hardware give off heat when being used, and excessive heat will lower hashrate and can even damage the computer.

4. What is a GPU? A GPU, or graphics processing unit, is a piece of computer hardware responsible for displaying images. Not all computers have GPUs because CPUs are capable of displaying images to a limited degree; this is sometimes referred to as “integrated graphics.” However, GPUs are capable of processing images far faster and more efficiently than CPUs, which is why gamers typically use GPUs in their computers. GPUs are also useful for graphic design, video editing, and other processor-intensive activities.

5. Do I need a GPU to mine cryptocurrency with my computer? It is possible to mine cryptocurrency with only a CPU. However, CPU mining is far less efficient than GPU mining because a GPU can dedicate its entire processing power to mining whereas a CPU cannot. Because of this, GPU mining is far more popular than CPU mining.

6. What is an ASIC miner? ASIC, short for application-specific integrated circuit, is a term used to refer to computers that are specialized for a particular type of use. In the context of cryptocurrency mining, ASIC units are computers that are dedicated to mining. They are contrasted to GPU mining, which is done with regular computers.

7. What is the difference between ASIC mining and GPU mining? ASIC miners are generally faster than mining GPUs because they are specifically built for mining. However, ASIC miners are also more expensive than GPUs and are often more difficult to acquire because they are produced in limited quantities and go out of stock quickly. Additionally, ASIC miners cannot be used for anything other than mining, while a GPU can be used for gaming, graphic design, video editing, and a number of other things. ASIC miners are generally only designed to work with a specific type of cryptocurrency hash function, while a GPU can mine any cryptocurrency. For example, ASIC miners designed to work with the SHA-256 hash function can only mine Bitcoin and other coins that use SHA-256. GPUs are not limited in this manner, giving owners greater flexibility when choosing which coins to mine. Finally, GPU mining is generally easier to get running since it typically just requires downloading mining software, while configuring an ASIC miner can be confusing for a newbie. GPU mining is generally preferred by individuals who want to earn cryptocurrency without having to put too much work in.

8. Is it possible to mine cryptocurrency with a laptop? While laptops with GPUs can mine cryptocurrency, they are not recommended for a number of reasons. Laptop GPUs are less powerful on average than regular GPUs due to the fact that they must be shrunk down to fit inside a laptop case, so any GPU-equipped laptop you purchase will mine cryptocurrency less efficiently than a desktop computer. Additionally, most laptops are poorly ventilated compared to desktop computers, often having only one fan, which presents a problem when considering that GPU mining causes increased heat output. Mining cryptocurrency with a laptop can lead to the computer overheating and shutting off, and long-term mining could cause damage to the laptop. In general, you should not mine cryptocurrency with a laptop for these reasons.

9. Why is electricity consumption important when mining cryptocurrency? While computers typically don’t consume much power during normal operations, GPUs consume additional power when they are being used for intensive work, such as gaming or mining cryptocurrency. This means that when you are setting up a mining operation, you need to be mindful of the cost of electricity in your area; if power is too expensive, any revenue you make from mining coins could be wiped out by higher utility bills. This means that cryptocurrency mining is more lucrative in places where electricity is cheaper; countries such as Venezuela and Georgia that have low-cost electricity have become cryptocurrency mining hubs for this reason. To determine if you can make a profit from mining, you can use mining calculators online that will let you make estimates based on expected hashrate and power consumption.

10. Do I need a high-speed Internet connection in order to mine cryptocurrency? Hashrate is determined in part by your Internet speed; users with faster Internet will be able to access the blockchain more easily and mine more coins as a result. Because of this, you will need fast Internet in order to mine cryptocurrency.

11. What is overclocking? Overclocking is when a GPU or CPU is tweaked in order to run faster than its factory-default settings. When computer chips are manufactured, they are not identical; due to the nature of electronics manufacturing, each chip runs at a different speed, even if they are all part of the same production line. For ease of use, chip manufacturers will pick a speed that each chip can run at and use that as the standard speed. However, by using your computer’s BIOS, you can discover the true speed of your CPU or GPU and increase it for better performance, including a higher mining hashrate. Note, however, that with increased speed comes increased power consumption and heat output, so you will need to make sure your computer is well-ventilated and has a power supply that can handle an overclocked GPU or CPU. Gamers have been overclocking their computers for decades,

12. Why is heat output important when mining cryptocurrency? All computers produce heat when on, and the more intensive work a computer is performing, the more heat it will generate. GPU mining requires your computer to work continuously, which will result in an increase in heat. Excessive heat will degrade a computer’s performance and can also cause gradual damage to its internal components. Gamers can observe this; a poorly-ventilated computer will cause games to run more slowly. To prevent this, all computers need proper ventilation. Computers can also be affected by external temperatures, and if placed in a hot room, they may function less efficiently. To prevent external heat from affecting a computer, it should be placed in a cool, well-ventilated area that is away from windows, the sun, and other heat-producing household objects.

13. Can I upgrade my existing desktop computer to mine with a GPU? This depends on the specifications of your computer. Most GPUs require a minimum processor power to operate correctly, as well as a power supply that can withstand the increased electricity requirements of the computer. If your power supply is not powerful enough, you can damage and destroy your computer. Along the same lines, your computer will need to have enough fans to ventilate the excess heat that the GPU will generate. Additionally, you may need a more modern operating system, such as Windows 10, in order to use newer mining GPUs. Finally, you need to have sufficient room in your computer case to install the GPU. Before purchasing a mining GPU, check its minimum requirements as well as your computer’s specifications to ensure that you won’t have any problems. It may be cheaper or easier to purchase or build a new computer if your existing one is not up to snuff.

Recap

GPU mining remains popular among cryptocurrency enthusiasts because it is less expensive and more accessible than ASIC mining. If you own a gaming computer and/or have experience building them, GPU mining is easy to pick up.

However, while mining GPUs are not as expensive as ASIC miners, you’ll still need to put some thought into which GPU you purchase.

While you may be tempted to buy the most powerful GPU you can get your hands on, you need to factor in the cost of electricity. It won’t help you if all of your earnings are eaten away by the price of utilities in your area. Similarly, poor ventilation could result in permanent damage to your expensive mining hardware.

At the same time, you don’t necessarily want to be cheap, either. As blockchains become longer and computer technology becomes more advanced, mining GPUs eventually become obsolete. A cheap GPU may save you money, but you may be forced to upgrade sooner than expected in order to keep the money coming in.

This isn’t even getting into other factors, such as purchasing/building a computer that is capable of handling your chosen GPU. Internet speed is also a factor, and you may need to upgrade your bandwidth in order to mine efficiently, another cost that must be factored in.

GPU mining is an easy way to get into cryptocurrency, and if you’re a PC gamer, using a GPU to mine coins when you’re not playing is a no-brainer. Do your research and assess your needs and you’ll be able to find a mining GPU that is perfect for you.

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