Crypto investing

Creeper

Well-Known Member
Messages
15,740
Reaction score
19,965
I know it's not energy efficient, eats graphics cards, but I don't believe it has anything to do with stealing. I haven't cared enough to know what mining is, maybe someone here can provide a basic rundown.

I have been mining various crypto coins for 6 or 7 years. Basically, some coins, but not all, allow "mining", which is essentially using some kind of computing device (CPU or GPU or specialized hardware called ASICs) to calculate an acceptable cryptographic hash for each transaction on the network. Miners are basically verifying that every transaction is legitimate and that no one is copying digital coins and trying to spend them twice. The design of the coin determines how difficult it is to calculate the hashes. Different coins use different hashing algorithms although some use the same. Every time a miner calculates the correct hash he is rewarded with a block of coins. Again, the amount of coins is different for each currency. Usually the reward is decreased over time making the coins more scarce. This feature was designed into Bitcoins to slow inflation and keep the value of the coins more stable.

There is downloadable mining software miners use to calculate hashes. You can run it on any PC and use the CPU or GPU to "mine" for crypto coins. There are a few freeware miners, or miners that do not charge a fee to use, but most charge a fee now, by allocating a certain amount of mining time and rewards, to the owner of the software. The software has made the process of mining pretty easy and almost anyone can do it with a little knowledge and some light reading. Some coins have point and click mining.

While you can mine with a single CPU or GPU, most coins require a bit more hardware than that. People build mining rigs with as many as 6 GPUs installed and the mining software will recognize all of them and allocate all of their GPUs to mining. Obviously, the more GPUs you use, the more hashes you can calculate which means the probability of finding the correct hash first increases. It is a little more complicated than this but this is basically the gist of it.

Obviously there is a cost to mining - electricity. Bitcoin has become so difficult to mine that only big energy consuming rigs can calculate the hashes correctly. Most bitcoins are mined in big data centers that are using enormous amounts of energy. This is what Elon Musk is complaining about. If you have access to your own solar power, the cost of mining is only the capital investment in equipment and solar panels. Once depreciated, mining is free! But most people use electricity from the electric companies.

By the way, there are hundreds and hundreds of different coins. Some were designed to allow GPU mining with less difficulty to keep ordinary people interested in mining. I only mine coins that are "profitable" for my rigs. Usually I convert those coins to Bitcoin or some other currency that is more stable than the one I am mining. When the difficulty increases to the point where I cannot earn enough coins to pay for the electricity, I move on to another coin. So far there has always been another coin for me to mine. Someday that might not be the case at which time I will shut down my operation and attempt to sell my rigs for parts.

I hope this was helpful.
 

Reality

Staff member
Messages
31,241
Reaction score
72,816
CowboysZone ULTIMATE Fan
Please tell me Elon Musk has not invested in DMD? If there is a Ponzi scheme in crypto, DMD is it.
I don't think he has anything to do with it as that's just a "diamond hands" phrase that a lot of people use to described holding during dips as opposed to "paper hands" for those who panic sell.
 

Hoofbite

Well-Known Member
Messages
40,877
Reaction score
11,574
Riskiest game out there. I want no part of it, but also want every part of it. Ultimately, I've decided to just watch all the gains and losses from the sidelines. I have the wrong predisposition for something as volatile as crypto. If I started getting ahead, I'd probably get too excited and eventually lose everything I have.
 

Reality

Staff member
Messages
31,241
Reaction score
72,816
CowboysZone ULTIMATE Fan
Riskiest game out there. I want no part of it, but also want every part of it. Ultimately, I've decided to just watch all the gains and losses from the sidelines. I have the wrong predisposition for something as volatile as crypto. If I started getting ahead, I'd probably get too excited and eventually lose everything I have.
People should never invest money in anything they cannot afford to lose.
 

Creeper

Well-Known Member
Messages
15,740
Reaction score
19,965
I don't think he has anything to do with it as that's just a "diamond hands" phrase that a lot of people use to described holding during dips as opposed to "paper hands" for those who panic sell.

I learn something new every day! Thanks.
 

ShortRound

Well-Known Member
Messages
24,226
Reaction score
84,298
Isn't the point of BTC being finite the reason for it's worth, similar to gold. It's not meant to be a currency but a reserve for government's currency.

Currently, I'm invested in $TSLA, but I have money in some miners: $MARA, $HVBTF, $ARBKF (Argo Blockchain has some really great upside and I'm looking for them to make some great moves this year)

Crypto itself, I have a very small Coinbase portfolio mostly in Cardano, but some Ethereum and Bitcoin as well.
 

CowboysFaninHouston

CowboysFaninDC
Messages
34,463
Reaction score
19,789
I have been mining crypto for about 7 years now I think. I built few rigs maybe for $3500. I saved a few bucks by scavenging some old computers and parts I had. In any case, I have mined all kinds of cryptos, moving from one to another as the markets change. Some crypto coins have failed completely. In fact, many have. I have over the years made back my investment and some profits and I only mine coins that have a positive return after taking out my energy costs.

I have had some big positives and some big negatives. I mined a coin called Amber at one point, which was supposedly backed by real amber mining, but got out before it failed. I mined Diamonds and held as many as 25,000 of them. At the time they were worth a few cents, but recently hit $32. Too bad I sold all mine a long time ago just before Diamond Coins were delisted by the major exchanges. I had come coins stored on Cryptsy when it was suddenly taken down after its owner and founder ripped off the exchange and was indicted for fraud. At the time Bitcoins were worth a few hundred buck so I did not lose much $$ but my Bitcoins I lost would be worth thousands today.

The thing about crypto is it's pure supply and demand. There is nothing backing any of these coins. The price is purely dependent on what people are willing to pay for it. In that sense, all these markets are risky. Anyone can start a coin. People just reuse the technology and make a few simple changes to the configuration and voila! A new coin. The markets for some coins are so small that they are easily manipulated.

My advice is to watch the exchanges for activity on any coins you are considering making an investment. If the activity or daily volume is low, be careful. Coins with low volume trading are candidates for delisting by the exchanges. Like any investment, do your research. Only use the major exchanges and read what people say about them because a few have failed because of fraud and theft and investors lost all of there crypto currencies they stored in the exchange's accounts. Find out who is behind the coin, its history, its growth strategy. I would only invest in established coins, although new coins can be high risk high reward investments. When you see a new coin, check to see if coins are pre-mined and who is awarded the pre-mined coins. Some unscrupulous actors will start a new coin, pre-mine millions of them which they keep and the use the pump and dump scam to make themselves rich. Before long the coin falls off the face of the earth after the founders take their profits and move on to a new scam. No one regulates the crypto markets so all the scams the SEC prevents in stocks are possible in crypto.

While I have been in crypto for a long time, and I have made money on it, I am a full skeptic. I do not invest other than in mining. I think I made one actual purchase of crypto a few years ago.

Remember too, the IRS is watching now. I few years ago crypto was not on their radar. Now you are supposed to report your profits. But being the IRS, they do not allow you to take your mining expenses as deductions against earnings, which is BS. At least I did not see how you can do it when I filed my taxes last year.

I do it for a hobby, not to get rich, although as you know, with growth rates like 70% on some coin, the right investment can net lots of money. Some folks have gotten very rich off of Bitcoins recently when the price went from about $10,000 to $44,000. When I started Bitcoin was around $300.
I just invested in crypto currency. tipping my toes. heard about minning, but not sure how you do it...would love to learn a little. can you PM me and talk me through?
 

CalPolyTechnique

Well-Known Member
Messages
27,710
Reaction score
44,659
Can someone explain why crypto has been criticized as not being eco-friendly (Musk’s criticism). I seriously don’t understand.
 

Hardline

Well-Known Member
Messages
21,374
Reaction score
37,272
For those investing in cryptocurrency.
Are you buying through apps like Coinbase or other apps?
 

Creeper

Well-Known Member
Messages
15,740
Reaction score
19,965
Can someone explain why crypto has been criticized as not being eco-friendly (Musk’s criticism). I seriously don’t understand.

He is claiming that the power used to mine Bitcoin comes from dirty sources like coal and mining takes a lot of energy. This is true, the algorithm for mining Bitcoin is far more power consuming than some other coins that use a more efficient algorithm. I am not sure why he wants to make this argument considering his cars run on batteries that require both lithium and cobalt. Both minerals are mined using highly eco-destructive processes.
 

Reality

Staff member
Messages
31,241
Reaction score
72,816
CowboysZone ULTIMATE Fan
Can someone explain why crypto has been criticized as not being eco-friendly (Musk’s criticism). I seriously don’t understand.
Bitcoin and ethereum use the Proof-of-Work (POW) method for mining which requires a lot more power consumption than Proof-of-Stake (POS), though I think ethereum is planning to switch to POS at some point.

Currently, bitcoin mining is one of the worst cryptos at consuming power and because each coin is so valuable, there are industrial mining facilities setup like in China's coal provinces which represent 30-40% (or possibly higher) of all bitcoin mining. We know this because after an accident and shutdown at one mining facility in China, bitcoin mining hash rates dropped 25-30% immediately.

That said, several other lesser cryptos use POW as well but they are not nearly as valuable or popular as bitcoin so there are a lot fewer industrial miners mining them which of course means they use less power regardless of the mining method used.
 

InTheZone

Well-Known Member
Messages
7,520
Reaction score
7,122
For those investing in cryptocurrency.
Are you buying through apps like Coinbase or other apps?
I use voyager. In the settings it tells you what tokens get you interest for holding a minimum amount. They pay out monthly, adding whatever percentage of tokens to your existing balance. Some are 1%, some are 7% like VGX - voyagers own token.
 

Creeper

Well-Known Member
Messages
15,740
Reaction score
19,965
For those investing in cryptocurrency.
Are you buying through apps like Coinbase or other apps?

I use Bittrex and Kraken. I think Kraken is the safer of the 2. I had some Bitcoin on Cryptsy when it collapse but Bitcoin then was only worth about $400. I didn't get any money back because the lawsuit required me to prove my holdings on Cryptsy. The problem was, they took the system down when the owner absconded with everyone's holdings. There was no way for users to get in and print off their balances for confirmation. People who could provide proof still only got a fraction of what they lost in the settlement. So a word to the wise, if you store your crypto on an exchange, make sure it will be around for a while. Always keep a wallet to unload your coins to if an exchange should get into trouble. Periodically take a screen copy of your balances just in case you have to prove you actually had a balance.

Stocks are risky, but when you invest in stocks you rarely have to worry about your broker going broke and you losing your holdings. But this is a possibility with crypto exchanges which are not regulated.
 

Reality

Staff member
Messages
31,241
Reaction score
72,816
CowboysZone ULTIMATE Fan
a40bd92058b2feaf4aa898670cca5c6c.jpg


3ubH7w4.png
 

Creeper

Well-Known Member
Messages
15,740
Reaction score
19,965
https://www.msn.com/en-us/money/mar...-plunge-in-steepest-drop-since-may/ar-AAKP7aY

Bitcoin dropping big again on the news that the FBI recovered the Bitcoin payments to the Colonial pipeline hackers. It turns out Colonial was cooperating with the FBI when they made the payments. But investors are concerned that Bitcoin's security, or anonymity may not be as strong as advertised. Could it be Bitcoin support is cooperating with authorities to stave off possible sanctions which would destroy the currency?
 
Top