The past weeks have been an awesome one. I love to see the bitcoin price surge. But I’m sure, like me, you are interested in what led to the recent rise.

After a couple of research, I’ve found out that it is quite impossible to attach this spike to a particular cause. There currently exist several theories, which tried to give a reason for the rise. So, why don’t we start by learning more about these theories?

Bitcoin Price Surge and the COVID-19 Pandemic

We should probably start by revisiting the reasons anyone would want to invest in bitcoins in the first place. I mean, why invest in cryptocurrency in the first place?

We know we all need a safe means of trade; apart from the government and financial institutions. Cryptocurrency provides this. Thus, reducing counterparty risks. Hence, bitcoin stands as a good hedge during financial crises.

Well, there is an economic situation due to the pandemic currently. There’s even been a drop in the Dollar. So, it is easy to understand why assets like gold and bitcoins are receiving more attention. And hence, the price surge.
But, this isn’t the sole explanation for the rise. We have some other proposed causes. And we believe the surge is as a result of these causes overlapping.

Proposed Reasons for the Price Surge

First on our list involves a new development known as the decentralized finance (DeFi). These so-called platforms offer traders some gains. The belief is that these traders have been putting these gains into the leading cryptocurrencies. And this, in turn, has been the reason for driving up the prices of Bitcoin and Ethereum.

Another theory involves a letter from the Office of the Controller of the Currency. This letter stated that banks can now provide cryptocurrency custody services for customers. Now, savvy investors believe this new move will be the beginning of even more lucrative cryptocurrency investments. And hence, the rush into Bitcoin, leading to the price surge.

Finally, there is the belief that this surge is part of the inherent profile of Bitcoin. In order words, we’ve always known that the Bitcoin’s price will rise. This belief is consistent with the Elliott wave theory of price movements.

However- still on the above analysis- Bitcoin is expected to reach- and stay for a while- at points called the “resistant band”. Of this was the recent $13,500, which made it look like Bitcoin was never going to reach up to $16,000. But, now that it’s above this resistance, we believe it should keep rising till its next at $19,800, where we may have to wait a bit before the next surge.

Still, allow me to put this forward here, that there still exists more research to be done on this topic. And hence, the above reasons are not definitive proclamations of why the surge happened.

More disturbing still are the speculations that the current momentum could lessen soon and this could happen before the next resistance is reached. Thus, leading to a drop as fascinating as the present surge. In other words, the bitcoin price surge could be temporary.

Now, I’m sure my last statement brings up some questions in you. And this leads us to the next section.

Should You Invest in Bitcoin During this Period?

With the fears of it being a temporary surge, I understand why anyone would ask this question. However, we know bitcoin has always been volatile. And we know even with that, it has managed to retain its lucrative returns.

One sure thing is Bitcoin will keep growing into the future. And even a comprehensive prediction on bitcoin states that Bitcoin should hit $398,000 by 2030.

So, here’s my advice. With or without the surge, investments always come with its risks, especially in the case of cryptocurrencies. With this in mind, your best bet lies in thinking long-term.

And if you are unsure of where to start, we at Cloudfaremine are here to help you get started with a means of cryptocurrency investments. We provide you a platform to mine bitcoins without having to go through the stress of private setups. Invest today- especially today with the current surge- and start earning more on your bitcoins.

Among the many spectacular news of the past months, two topics have been of particular interest to me- the COVID-19 pandemic and Cryptocurrencies.

First, is the COVID-19 pandemic that has us all having a subtle despise for physical contact. And the other is the decentralized world of cryptocurrency. Many like me have been asking the question, “what are the effects of COVID-19 pandemic on cryptocurrencies?” And also, “Is it still wise to invest in cryptocurrencies?”

My simple answer is this. The impact of the relationship between COVID-19 pandemic and cryptocurrencies is one that will bring further development to the blockchain technology.

Also, the top cryptocurrencies have always been a multifractal system. And that, before the outbreak of the coronavirus. Hence, the behavior of these currencies goes beyond the present pandemic. And thus, COVID-19 has little or no say over if it is still safe to invest in cryptocurrencies.

Investing in cryptocurrencies, like many other investments, has always been risky, but also, lucrative. Thus, investing in these currencies only needs you to question your ability to take risks, your personal goals, and your needs. And when you finally take on the decision to invest in cryptocurrencies, we at Cloudfaremine are here to make it a whole lot easier for you to increase your wealth.

Cryptocurrencies Before the COVID-19 Pandemic

Before the outbreak of the disease, the world has always known cryptocurrency investments to be both risky and lucrative. But that didn’t stop the drive of investors into cryptocurrencies. And that is a bit funny. Why would anyone invest his resources into something with vivid risks?
So, why don’t we start by reviewing what these risks have always been? And then, see why investors still go into it.

Risks of Crypto-Investment

I keep talking about risks. And if you are yet to be familiar with what these are, here is a quick summary. According to Forbes, we have the following to be the top risks associated with crypto-investments:

1. On top of the list is the fear that comes with trusting a new technology. And the fear is a simple question of if the blockchain will never turn out to be useless in the future. Because then, all investments can varnish in the blink of an eye.
2. The next is cryptocurrency’s total reliance on digital technology. It has no physical backup. And a breakdown of the technology can lead to years of investment going down the drain.
3. There are no real regulations attached to cryptocurrency. And hence, it is a qualified space for hacks and fraudulent practices.
4. There is a constant market fluctuation. And it’s quite tasking to predict its behavior. A careless investor could run into losses by investing in cryptocurrencies.
5. Finally, not everyone currently accepts digital currency payments. So, why invest in it, right?

Why Invest in it?

Now, you know the most prevalent risks attached to investing in cryptocurrencies. So, why would anyone still invest in something that could vanish anytime?

Well, the answer to this is quite simple too. And it stems from the fact that we have all suffered burns by trusting a third-party with our money. Thus, it became necessary to embrace a new form of currency that removes every counterparty risk.

And the new currency that offered us this financial freedom was cryptocurrency. With bitcoin and the likes, we became free from governmental powers and financial institutions. And we had before us, an uncorrelated system of trading. One in which we all felt safe, being our masters of every transaction.

So, we embraced this new currency. We were enjoying it. But now, we have a new world enemy, the coronavirus. And what then has happened to our cryptocurrency since the outbreak?

During the Coronavirus Pandemic

Since December 2019, we became aware of the novel coronavirus. But we didn’t pay that much attention to it. At least, not until the early months of 2020. At the time of writing, we already had over half a million deaths. And cryptocurrency?

According to the charts in our featured image- thanks to CoinMarketCap– it is glaring that bitcoin, the number one digital currency, suffered a bit of decline too around March 2020. However, this decline came as a result of some liquidity issues.

Whenever there is an occurrence of crises and epidemics, people often get scared, uncertain about the future. And this often births the herding behavior, which involves following the trend of other investors, rather than private strategies.

From this behavior, a lot rushed to get part of their currencies sold to get physical cash. And it is quite easy to understand that most were scared of losing their investments.

The truth is that bitcoin, and other cryptocurrencies, were not the only ones that suffered a decline. Even gold, with its high reputation as a haven, went down around this time too. Thus, it was more or less a general decline in the financial world.
But after some time, bitcoin started rising again. And it keeps going up!

Why it Started Rising Again, and Even More?

Well, the answer remains the same. Even with the attached risks, we still prefer a means of exchange without counterparty risks. And this brings to our table gold and cryptocurrency.

These two are similar in ways such as their scarcity. But are also different as cryptocurrency allows ease of exchange, more than gold does. Thus, leading us back to our safe friend, the cryptocurrency. And with the recent rush into cryptocurrency, it had made developing the technology a crucial need. Hence, the belief that this pandemic will birth a more developed blockchain system.

Conclusion

With the recent rise in bitcoins and other cryptocurrencies, it is clear that the pandemic has little or no down effect on the crypto world. Thus, if you are looking for a safe investment from the impart of COVID-19 on world economics, we are here to help you.

There has been a recent rise in the number of those asking the question of bitcoin VS gold. Which among the two should you get? And we know how that gold has always been a haven to investors. But could bitcoin with its many similarities to gold be a viable alternative?

Some people refer to bitcoin and other cryptocurrencies as of today’s equal to gold. This statement rings true in certain respects. But there are distinct differences between bitcoin and gold that merit discussion.

The connection between bitcoin and gold is one that only a small part of our populace knows. But this article provides you with a detailed comparison between the two.

We at Cloudfaremine, are on the front lines of bitcoin mining. And we see ourselves as crypto miner experts. Hence, it is our job to explain the functions of cryptocurrency in the economic environment today. And what it might be in the long run.

Bitcoin VS Gold Similarity: Scarcity

Gold covers 0.000031% of the total earth crust. And that means gold has a limit to its supply. Hence, it is scarce. But its scarcity makes it valuable, and that is why we all want to have our share of the rare commodity. So, what if there was an alternative to gold? What if we can transfer this other option through communication channels, unlike gold?

Well, bitcoin is even rarer than gold. It cannot ever go above the cap of 21 million for the number of Bitcoins that can ever exist. This top limit has established a discernible scarcity. And this guarantees supply-driven hyperinflation can never reduce the value of bitcoin. At least, not to zero.

Bitcoin VS Gold Difference: Liquidity

Today, it is no news that bitcoin is not as real-world-ready as paper money. For instance, your local filling station might not be ready to accept your bitcoin in return for gas. But, imagine the days when many card readers, retailers approve bitcoin debit cards. It’s not a wild idea to believe bitcoin will be as user-friendly as the U.S. dollar.

You can’t make the same argument for gold. Gold is much less liquid compared to cryptocurrencies. And if we could have replaced the dollar with gold, we would have done so ages ago.

So, have you ever wondered why gold is not the national currency? Well, one tangible reason is that gold is not a valid tool for buying and selling goods and services.

The Bars of Gold is heavy — They can’t be so broken up (as you might make a dollar change). Or transfer via digital means (as you might transfer funds via debit card, or a Bitcoin wallet). Gold prices are always fluctuating. Even open-minded traders refuse to consider gold as payment. At least, until they get a sum well above the cost of the products or services they offer.

Contrary to this, bitcoin is digital. Bitcoin owners transfer digital funds daily via the same payment modes as dollars. Merchants with the available infrastructure can take payment through a Bitcoin debit card.

This real-world, day-to-day use proves bitcoin a favorable alternative to gold. The difference is critical. And that’s why bitcoin advocates believe that one day it can become a universal currency.

Conclusion: They are Alike, Yet Different

Both gold and bitcoin fluctuate in value. The two are both valuable, gold due to its physical properties, bitcoin due to the nodes/users that back it up. You can exchange them for paper money. Their rarity gives them a level of inherent worth that fiat currencies do not provide. Bitcoin and gold are similar in these ways.

But, gold is more or less a store of value and not a realistic medium of exchange. Bitcoin has no restricting characteristics, such as weight and indivisibility. And thus, it has no hindrance to its potential of becoming a universal medium of exchange.

The uniqueness of Bitcoin is its blockchain’s security. And this is due to its stability, and its transparent transaction ledger. It is safe to believe that the bitcoin blockchain is unhackable. Its support comes from a sequence of checks and balances that maintain security. But, there is one way to disrupt the system, and this is with the 51% Attack.

Read on for more information about what a 51% attack is, and how it could affect Bitcoin ‘s stability.

What is an Assault of 51%?

It all boils down to hashing capacity. Hashing strength, or hash rate, is the energy that miners use to speed up numerical calculations. This support is necessary to build blocks in the blockchain. And to culminate in Bitcoin’s compensation for the difficulty of validating transactions in that block. The norm involves a widespread distribution of the hashing speeds throughout the network.

But, a 51% attack, also called a majority attack, occurs when one party holds over 50% of the hashing power in bitcoin mining. And may use the majority influence to trigger a disturbance to the network. This person, the attacker, will be capable of censoring transactions. They could develop their hidden blockchain. And use that hidden blockchain to interrupt the network agreement surrounding activities. They do this by fooling the network into trusting events that never happened. Also, they could inhibit miners from mining. They do this by triggering long pauses between creating blocks.

Double-spending?

If an attacker owns 51% of the hashing power, they will spend their coins twice. Or buy anything they want, and cancel the transfer afterward. For instance, if the offender intends to buy a vehicle. They can make payments using their bitcoins and drive away with their new purchase. But since they have a hashing power monopoly, they could build a false blockchain void of the transaction. Or reverse the whole event. The network can cancel the initial transaction based on the real blockchain on the fake blockchain. The attacker drives off with their car and coins anyway.

Limitations to the attacker‘s power?

Even if a party controls 51% of the hashing power, the damage they can do has its limit. And this is because of the blockchain’s permanent nature. For starters, they will not be able to go back and undo or alter already verified transactions. Also, they cannot adjust the bitcoin incentive for creating blocks. They cannot snatch coins from other people, or even make new coins.

How Does the System Prevent a 51% Attack?

Maintaining the hashing capacity shared between miners is the best way to avoid a 51% Attack. While large mining firms use their size to mine with thousands of machines, the bitcoin blockchain is still decentralized.

Bitcoin’s bedrock is its decentralized structure and consensus-based block creation. As long as the community is aware of where the hashing power is heading, it will deter attacks.

Yet, in the end, it is down to capital and size. Since hashing requires a high amount of resources, pulling off a 51% Attack will cost tons of money. Gains can be higher by utilizing the hashing capacity to mine bitcoin, instead of using it to circumvent the system.

How probable is 51% Attack?

The probability of it occurring is small. And this is because of the intrinsic decentralization involved with mining. And the sheer volume of capital and effort to pull it off. Even if an attacker ends up having 51 percent of the hash rate, the network has a set of fault-safes in effect. These include protocol recording to stop the attack. Moreover, there are too many eyes on the public blockchain that it is easy to spot any fraudulent behavior.

Bear in mind that although Bitcoin is very safe, newer altcoins may be at risk of a 51% Attack. At this stage, bitcoin is very well-established that it will be virtually unlikely to achieve a 51% Attack. And it will be challenging to maintain an attack for too long because of the fail-safes in effect.

If bitcoin keeps adhering to the ideology of decentralization and agreement within the community, control will stay in many hands. Thus, maintaining its security.

So are you feeling secured with blockchain technology or not? Comment below.

The statistics about the current bitcoin mining energy consumption is startling. It is on an equal level with the total amount of electricity used by Ireland each year.
At Cloudfaremine, we pay particular attention to this. We are now ten years into the crypto-era. And as it matures, its energy demands are only increasing. But you would expect that of any developing economy. The energy demands of bitcoin mining today provide proof of three things. These include work, immutability, and consensus within a decentralized network. And are the vital three-ingredient cocktail that helps make blockchain technology operate.

This sector is not using electricity to share memes and post status updates. Instead, it uses energy to improve value exchange and money in the world. There is positive momentum behind blockchain technology. And that even though it is still in a stage of development. It is comparable to the modern internet’s proliferation. But nobody knows how far it will go, so only the best ideas will define its future.

Moreover, bitcoin mining chips have become more powerful each year. Although not to the point that it no longer uses electricity in excess. But I am not concerned about bitcoin mining energy consumption. And I do not believe you should be too.

Reasons Why You Should Not Worry about Bitcoin Energy Consumption

1. The mining industry is quite dynamic
   Bitcoin mining companies need not to stay near civilization. They do not have to only exist in a specific location. But they can carry their usual activities anywhere. At least, as long as they have an internet connection and electricity. Yet, the mining sector associates with places with excess natural energy. Examples are places with enough wind and solar power. And then, they will use these to operate their mining activities
2. Energy use, if it is renewable, is not a bad thing in itself

Hydropower, Solar, Geothermal, and Wind. Thanks to these, there is so much energy available in the world. Bitcoin mining facilities often show up in locations offering these resources in excess. And thus, operators push their electricity bill towards zero. For instance, at cloudfaremine, we recommend working from colder climates. These need very little energy to keep the machinery running at the best temperature.

3. Research shows that mining leads to renewable energy funding.

Bitcoin companies not only subsidize the acceptance of their products by using renewables. But emerging technologies are bound to become more efficient as they grow.

Dr. Katrina Kelly-Pitou published an article. She is a research associate in electrical and computer engineering.

She compares alternative sources of energy with new technologies. And their cost reductions for the companies implementing them.

I am a researcher studying clean energy technology. Particularly the transition towards zero-carbon energy systems.

New technologies are sometimes energy-intensive. They often become more efficient over time. And that is a natural improvement of any technology. Saving energy equals cost-saving.

We can label bitcoin mining as resource-consuming. And wasteful. But this will only encourage people to make it more energy-saving.

4. Renewable energy sources will become the new normal for mining operations.

Mining activities that use renewable energy are bound to have a competitive edge. They invest upfront in some technology, but afterward, they enjoy free energy. The bitcoin mining business relies on harnessing every possible efficiency. So, beating an electric bill for it is pretty hard. That is why there is going to be a drive to create energy-saving blockchain technology. Eco-friendliness is a new productivity area for these businesses to explore.

Blockchain development is a good thing. And that because other technologies will emerge in the process. For example, the increased demand for green energy will lead people to develop a solution. NASA designed technology to help humans reach space. But in the process, they created a lot of new items to better human life on earth. An example of such was the LASIK surgery.

Conclusion

Mining operations have a strong financial incentive to cut their power costs. And economics dictates that operators will find ways to pay near to zero for energy. The blockchain space could be the breakthrough we need. One that will lead us to the next generation of green innovations.

A mining pool for bitcoin involves a collective group of cryptocurrency miners who combine their computational resources over a network. Individually, participants in a cloud mining pool contribute their processing power toward the effort of finding a block. And which do you think will be faster? Your private mining resources? Or a network of computational resources? Read on and find out.

What is Bitcoin? —

You all heard about this bitcoin thing? We are assuming Yes. It has been on the front page on the mainstream media in recent times due to its rise in value in the last few years.

Simply put, bitcoin is a digital currency. No bills to print, nor do you have to mint coins. It’s decentralized — there’s no government, institution (like a bank), or other authority that controls it. Owners are anonymous; instead of using names, tax IDs, or social security numbers, bitcoin connects buyers and sellers through encryption keys. And it isn’t issued from the top down like traditional currency.

Instead, bitcoin is “mined” by powerful computers connected to the internet. A person (or group, or company) mines bitcoin by doing a combination of advanced math and record-keeping.

How Does Bitcoin Mining Work?

When someone sends a bitcoin to someone else, the network records that transaction, and all of the others made over a certain period, in a “block.” Computers running special software — the “miners” — inscribe these transactions in a gigantic digital ledger. You refer to these blocks, collectively, as the “blockchain” — an eternal, openly accessible record of all the transactions.

Bitcoin mining is essential to release new BTC in the market. Mining is the only way new bitcoins get generated — Satoshi Nakamoto was the first person to create bitcoins, and we refer to him as the founder of bitcoins. Without miners, already created bitcoins will keep existing.

Every bitcoin comes in the circulation only because of miners. And there will come a time when bitcoin mining will end. As per the protocol, there will be a finite amount of bitcoins, and the magic number will be 21 million.

How can anyone maximize the chances of mining bitcoin before anyone else does?

Whoever wants to mine bitcoins needs to have a faster mining rig. Or you have to join a mining pool or a group of miners where they combine their mining powers and split the mined bitcoins.

We know that there is the only way to generate new bitcoins is through mining. But chances are minimal for an individual to find the next solution to the puzzle. And difficulty going up makes it worse, and miner may never recover their investments. Right now, mining is at a place where we cannot afford to do so in person.

The best way to mine bitcoin is to join cloud mining pools for bitcoin. Third parties or companies operate cloud mining pools. At Cloudfaremine, miners will get a steady flow of bitcoins starting the day they activate their plan.

If you want to start bitcoin mining, then the answer right now is to join the bitcoin mining pool and get the most profit. The main benefit of bitcoin mining cloud is you don’t have to manage any hardware or software yourself. You only have to join the bitcoin cloud mining pool. And you will be assigned mining power with which you can start your mining at your home with your computer connected to the internet.

Is Mining the Only Way to get Bitcoins?

There are some other ways without bitcoin mining, such as buying BTC at an exchange, but this is a bit costly. You can also try trading with cryptocurrency. But the easiest and secure way to start mining bitcoin right now is to join cloud mining pools.

At cloudfaremine, we offer bitcoin cloud mining for free. You will get free hashing power with no additional charges. Once you join the Cloudfaremine pool, your mining rig will start mining. Cloudfaremine Pool supports an excellent affiliate program with which you can also earn extra BTC by referring your affiliate links on social media platforms.

A news item recently took the crypto community by storm after answering the crucial question- How Many Bitcoins Have Been Mined? It reported that 85% of the total Bitcoin supply is now in circulation.

Newbie crypto-investors misunderstand this piece of data as disappointing news. It sure looks very much like the end of bitcoin is close.
Yet, this is not an objective description of the case. We are nowhere close to the end of bitcoin. Rather, we are at the beginning.

We have always understood that one day there will be no more bitcoins to mine. From day one, the stock of this cryptocurrency was finite. The amount of 21 million is hardcoded into the network-driving algorithms. And like there is only so much gold on the planet, the same statement is true about bitcoin.

If bitcoin had no limit, then individual tokens would have been worthless.

When all Bitcoins have Been Mined…

Bitcoin is straightforward in how it works and sustains its value. This sustenance depends on a mathematically controlled mechanism of scarcity called Block Halving. Per 210,000 blocks, block halving lowers the incentive for mining new BTC by 50%. And by halving, it would take miners until the year 2140 to mine the last Bitcoin.

Yeah, we have mined 85% of the most common cryptocurrency in the world. Yet it would also take over 100 years to hit 100%. So, miners will still have chances to raise income well enough after this tipping point. They will stop resolving complex math problems that generate new BTC. And focus on solving problems to affirm network transactions. Thus, collect incentives for their role in promoting the network. The reward will be in the form of transaction fees.

There will come a period when Bitcoin achieves top growth. And then, there will still be several transactions left for people to handle. It is not going to be the end. But it is going to be a new beginning where cryptocurrency is the new normal.

Now that the question of how many bitcoins have been mined has received an answer. Crypto enthusiasts are curious about what to do in reaction to this 85% percent news. Here are three actionable takeaways:

1. The right time to mine is now!
   As mentioned above, bitcoin mining will go on for a long time. With 15% of the total supply remaining, the crypto community still stands to produce some 3,150,000 BTC. And with the recent BTC value of about $10,000, there is much more than $31 billion currently available for claim.There is no telling how that value is going to change in the future. Grab any that you can now! At Spectra Mining, we got you covered. Our mining pool offers the best ROI rewards in the industry.
   Bitcoin mining is a very different game for the existing 15% of the supply, as opposed to when it was 100% available. You will need high-powered equipment nowadays to contend against the consolidated commercial mining operations that profit from economies of scale.
   You might be contemplating having an ASIC mining tool to be able to earn some bitcoins. Or you may hire access to charged-up offsite equipment. The latter comes by employing a cloud mining company such as ours.
2. Take the opportunity to get yourself educated.
   If you feel a tinge of gloom or fear at this point, I am glad to inform you that there is no reason to worry. Yet, I will tell you as well that now is a perfect opportunity to develop a better understanding of bitcoin. And other cryptocurrency topics. Big players did not flinch at the 85% figure, so you would do well to adopt their route. It only means that you need a bit more knowledge in this arena.
   Read news sites on cryptocurrency. Consider joining any of the many crypto meetings that convene in cities worldwide. Get used to receiving new information and external opinions about Bitcoin. And our crypto-enabled future. Not only can you broaden your information base. But you will come across similar-minded crypto enthusiasts seeking to do the same.
3. Are you worried about the amount of already mined bitcoins? Keep Calm and Carry on.
   Once again, do not waste time asking how many bitcoins have been mined. There are still 100 years until the cap. Bitcoin mining still isn’t over. So, the eventual conclusion is not anything agonizing. This decentralized structure will keep running as planned. Crypto enthusiasts can work out how they want to blend into this new economy.
   Bitcoin will not go anywhere. It is going everywhere. And it won’t be like chopping down the last tree in a forest to mine the last bit of coin. Instead, it will be far more like a full-blooming flower.

You must have come across the term mining pool in almost every article that relates to bitcoin and ethereum. We‘re going to concentrate on the bitcoin mining pools in this post and how they work. We have already explained in previous articles what bitcoin mining is. So, let’s talk about the pool for mining.

What are the Mining Pools?

Consider a scenario when you are alone with a torch in a haunted and dark palace, and you need to look for a way out of it. In this particular instance, chances that you will stumble into the exit are slim.

Let’s consider that same situation, only this time you’re with your best friends. They are with torch lights and flashing lights. In this scenario, the odds for you to stumbling into the exit will be higher. And your buddies will cover more area compared to when you were alone. Because they inspected many areas, they will get higher praise for discovering the exit than you.

Bitcoin mining pools work in much the same way. Here, miners with varying computing capacity work by combining their efforts to find the solution to the mystery. And each participant gets a reward based on the mining power he contributes.

According to Wikipedia, coming to the formal definition of a mining pool — “In the context of cryptocurrency mining, a mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block.”

How do they Operate?

We are already aware of the primary nature of the process of bitcoin mining. You have to be mindful of the value of nonce and timestamp when determining the target hash.

Single miners have a hard time identifying the target hash with a rise in bitcoin mining complexity. Here the mining pool enters the equation where miners can contribute to mining with average computing power.

We already know that all transactions wait before they get mined in the mempool. Mining pools make transactions with larger transaction fees a priority. Each member will receive a selection of nonce. And this is according to the number of hashes determined by each individual in one second.

Below is how each participant helps in mining: –

Each participant will be allocated to picked transactions.
Transactions and timestamp are the constants in the input to the hashing functions.

Then, each participant differs the nonce value and afterward checks whether the computed hash is under the target hash.
If they discover the hash, the mining incentive and the mining fee will be shared evenly according to work produced by each in the hash calculation.
A pool operator keeps track of each participant ‘s work so that the reward can get distributed in proportion.

Distribution of Rewards in Mining Pools

Let’s have a little share introduction in the sense of a mining pool.
A share is a means of keeping the miners genuine and it assists in distributing the mining rewards fairly. Below is a method of keeping fair and transparent operation with miners in a mining pool program.

Proportional Mining Pools (PMP): miners contribute to the pool’s processing power in this type of pool, and keep receiving shares until the pool mines a block. Miners then get incentives proportional to the number of shares they possess.

Pay-Per-Share Pools (PPSP): Each miner in this pool receives shares for his or her input to the pool’s computing capability. Such pools offer instant payouts regardless of whether or not a block is being mined. A miner who contributes to the PPSP may exchange shares at any time for a proportional payout.

Peer-to-Peer Mining Pools (PPMP): It is more of a decentralized pool in which members work on a different side blockchain. If they find a hash lower than the goal hash, there will be an update in the side chain and in the bitcoin network. This avoids cheating by mining pool operators as well as pool failure.

You now know how bitcoin mining pools operate and how you can pick the one that works for you.

Bitcoin this, cryptocurrency that. By now, you must have heard of bitcoin and its peers. It may even be tempting to take a crack at owning some. If only you could figure out how to do that.

I know, I know. It is confusing at first (kids these days, coming up with their currencies). You may be thinking, “What is bitcoin? What is a blockchain? I have to mine what now?” No need to worry! You do not have to mine anything. Here is everything you need to know about bitcoin.

What is Bitcoin?

The idea behind bitcoin and other cryptocurrencies is not only about having a store of value. Or something that can you can use to buy physical goods and services. Bitcoin is not a VISA prepaid card. It is more than that.

Instead, consider bitcoin as an infrastructure. One that is for completing financial transactions between two entities without a third party. Sure, there are digital coins that can act as a currency, but that is only part of it. The novelty behind cryptocurrencies lies in something called the blockchain.

Think of the blockchain as a distributed digital ledger. And its use is to verify ownership of goods and to verify financial deals. After a transaction, computers on the network confirm the inputs (“I used this much coin”). And the outputs (“valued at this dollar amount”). The confirmation involves comparing the results from many computers. And these confirmed results will come together, forming a chain. Thus, the blockchain.

What is the Advantage of Using the Blockchain?

The blockchain is the store of the records of every transaction completed (by definition). Activities are less private than using cash. The identities of those behind each event are not readily displayed. But, it is still possible to trace them back to specific individuals or entities. So, generally, bitcoin is private. But not exactly anonymous. Well, unless you take some extra steps. But the reputation of bitcoin as a secretive currency for cybercriminals is untrue.

These attributes are quite different than other financial tools. And these provide a couple of advantages.

For example, the blockchain allows financial contracts without a third party. The community oversees the transaction ledger, rather than an individual at a bank. And this lowers transaction fees. It is also pretty hard- and expensive to alter transaction terms. And this is because a majority of computers on the network must agree on the same verification. That results in excellent security.

Several types of blockchains have different advantages and disadvantages. Details aside, the growing adoption, regulation, and acceptance of blockchains to conduct financial transactions have played a significant role in driving up the value of bitcoin. It is not all hype.

How is Bitcoin valued?

Bitcoin does not have financial metrics like EPS or revenue, which makes it easy for seasoned investors to dismiss it as a bubble.

It sure can be hard to see the point of cryptocurrency or a logical reason for a 100% weekly gain. But there are several financial metrics for bitcoin that should be more familiar to investors.

For example, bitcoin has a market cap of 117.81 billion U.S. dollars. You calculate this by multiplying the number of circulating coins by the price of a single bitcoin. And although the number of coins increases over time, it becomes harder to create a bitcoin as the blockchain expands. And this results in slower rates of coin creation. More demand for a limited resource helps to drive up the price. Sure, some of the “demand” comes from the speculative buying of bitcoin. But some are also caused by greater adoption for purchasing real goods or storing value.

How is Bitcoin Created?

Remember those distributed computers validating the terms of financial transactions. And who also build the blockchain? Well, they do so in a record-keeping action called mining. And this is a fancy word for completing the digital ledger.

After completing a block, the miners involved receive a reward. It is more or less the bounty for doing the work of a digital secretary. And each time a block gets completed, 12.5 bitcoin goes into circulation. Contributing more computing power to a block- results in receiving a larger slice of the new bitcoins.

There is a limited number of coins that can ever be in circulation.
When the 21 millionth bitcoin joins the circulation, that will be it! No more bitcoin for miners. And all value from the system will come from transaction fees.

How do you own it?

You can own bitcoins through bitcoin mining. But, you do not have to do this to own bitcoins. You can buy bitcoins on the open market on several exchanges. The most used platforms are coinbase, blockchain.com, Binance exchange. These platforms allow you to buy, sell, and gift several crypto tokens. All these, with the comfort of buying with your credit cards from home.

But, bitcoin is bound to split. Once again, like stocks for public limited companies, cryptocurrencies can split. The difference is that, instead of creating more shares that are identical to those existing (save for the price per share), splitting- or halving a cryptocurrency is complex. And thus, full of uncertainty.

Should you own yours?

There is no denying that speculation has played a role in inflating the value of bitcoin. Yet, it is also true that tangible progress has and is being made that will increase the use and adoption of bitcoin. Bitcoin has a high tendency to grow into new global infrastructure. One for transferring value and executing financial contracts. By then, a market cap of $117.81 billion will look pretty cheap.

So, should you own bitcoin? As with any investment decision, it is your decision. And you have to take your personal goals and needs into consideration. You’ll also need to educate yourself more before making any decision. And when you do choose to include cryptocurrencies as a part of your portfolio, then Foolish investing principles still apply: think long-term.