Category: #Exodus

Bitcoin’s Store of Value

To any intelligent observer, it has been apparent that bitcoin’s primary use has emerged to be store of value/investment.

Yes, bitcoin’s decentralized/permissionless solution to creating an immutable cryptographically secured database brings a vast array of different potential revolutionary applications not seen since the advent of the internet but again, the primary use has emerged to be store of value/investment.

bitcoin has been so good at this store of value thing that it has become detrimentally  successful – enter the (well-funded) hacks and puppets…attacks from the outside and from within – some of which via spread of (FUD) tangent ideas with coders, media, investors, and within bitcoin community to maybe start an idea of even ‘slight’ change.

First, please realize no other tool in modern-day finance has been so successful at being an effective savings mechanism which unlike traditional ‘savings accounts’ this bitcoin actually keeps up in value for you to be able to afford higher cost of rent, education, healthcare, vacations, etc. (due to its beautiful combination of scarcity, a ceiling of 21mill coins, immutable, permissionless->not controlled/influenced, secure, and being established/developed).

This effective savings tool of bitcoin is made accessible to the 99% of us and cuts to the core of exposing the flaw of the central bank fiat system with its funny-money creation out of thin air paper/credit-currencies benefiting the privileged institutions and then last to benefit would be the rest of us.

It can also expose flaws of fraudulent funneling of extra paper-currencies created by central banks…now think, even those privy to any fraudulent funneling of funny-money will see what’s going on and understand something like bitcoin as an alternative being effectively immune to these games that even these bad-actors themselves would buy bitcoin! Bitcoin changes the paradigm of central-bank funny-money (Bitcoin is the anti-funny-money warrior: open & mechanism)….and it has taken off….and will catch the attention of the central banks who by definition, have nearly unlimited systemic resources and influence (think governments, telecoms ISP providers, hardware/chip manufacturers, software developers, search engines, exchange conartists).

Even if a hard-fork doesn’t happen anytime in the next couple of years, it’s the threat that an attack on this pure beautiful store of value system to something even slightly different that can actually gain a noticeable percentage raises the question…is it possible that someday that the groups influencing bitcoin (those controlling mining or those involved with coding development, or the rest buy/transacting in bitcoin) would (either out of ignorance/misunderstanding or out of vested-interest to undermine bitcoin) start demanding (even slight) changes that may contradict the store-of-value that bitcoin is???

That is the big question that if the answer starts looking like yes…then value would plummet as bitcoin no longer be seen as a store of value but would eventually turn into another app coin (i.e. Ethereum) that can do many amazing things but not the one store-value amazing thing that it has done these past few years. the price would be zero-bound (compared to what we’ve been accustomed to with bitcoin today).

If the answer to that question is no (that you reading this, this community, software coders, mining operators, investors, everyday folk, work to stay educated on the above and act to keep the integrity of this bitcoin system)…then even a $50 billion market cap would still be seen as trivial in the financial assets arena where one bitcoin can easily go above $5,000 USD. But really, as the years pack on and integrity remains intact, the price would be infinity-bound. 

21M or Death

21 Million or Death
Arise…

The supply of Bitcoin is fixed at 21 million BTC, and as a hard coded monetary policy of the protocol, the fixed supply of the dominant cryptocurrency cannot be altered.

Former Google Product Director Steve Lee stated that only 1 percent of the world’s population can own more than 0.28 BTC, due to the fixed supply of Bitcoin.

In late 2017, Chainalysis, a blockchain forensics company that monitors and investigates cryptocurrency transactions, revealed in a research paper that up to four million BTC are permanently lost on the blockchain as a result of theft, loss of wallets and private keys, and the dormant wallet of Bitcoin creator Satoshi Nakamoto, which experts have said is no longer accessible.

Kim Grauer, Senior Economist at Chainalysis, said at the time, that the lost supply of BTC is not taken into consideration by the market cap.That means, the real price of BTC could be substantially higher, as 4 to 6 million BTC are estimated to be lost.

Based on the estimate that the supply of Bitcoin is around 17 million, only 0.8 percent of the world population can own more than 0.28 BTC and less than 0.2 of the world population can own more than 1 BTC.

The 0.28 BTC figure introduced by Lee assumes the supply of Bitcoin to be 21 million, as it divides 21 million by 0.28 and divides the outcome of that by the world population that is 7.442 billion. If the research of Chainalysis is accurate and that 4 to 6 million BTC are lost on the blockchain, the supply of Bitcoin should be closer to around 16 to 17 million

The fact that any investor in the global market can be within the 1 percent of the world population with a $1,830 investment demonstrates that the cryptocurrency market is still at its early phase, and in terms of adoption, market development, infrastructure, and regulation, the sector can still grow significantly in the mid to long-term.

Hal Finney
There is no “Whole Coin”

First Time/Small Miner

First time/Small miner reference
for getting started.

If you want to start mining here is what you need… and what you need to know.

This is written for home miners/small farms, but can be used as a guideline for most operations. Use this as a reference for what you need to research, or what questions you need to ask before jumping in.

What you need to mine can be broken down into the following categories:

  • Hardware
  • Electricity
  • Location
  • Internet connection
  • Information

Mining BITCOIN is done exclusively with dedicated BITCOIN mining hardware based on ASICs: https://en.wikipedia.org/wiki/Application-specific_integrated_circuit .

You CAN NOT meaningfully mine bitcoin today with CPU, GPU or even FPGAs. Bitcoin difficulty adapts to match the amount of mining done on the network and has reached levels trillions of times too high to mine meaningfully with PCs, laptops, tablets, phones, webpages, javascript, GPUs, and even generalised SHA hardware.

Even if you combined all the computers in the world, including all known supercomputer, you would not even approach 0.1% of the bitcoin hashrate today.

There isn’t any point attempting to mine bitcoin with CPU or GPU even in the interests of learning as it shares almost nothing with how bitcoin is mined with ASICs and will not teach you anything.

Hardware

Asic Miner:

Here is a list of the companies currently manufacturing Miners for public purchase.

Each one has their Pro’s and Con’s it is up to you to do your research and decide what is best for you.

A few points to consider while researching are :

  • efficiency
  • reliability
  • warranty period/policy
  • power draw

Each company has a different way of handling warranty repairs, depending on your situation and the policy repairs can become cost prohibitive. I will touch more on efficiency and power draw in the electricity section.

• Current list of competitive hardware

Power supply: You will need to purchase a power supply to run your miners. You will find ATX and Server grade PSU’s, the latter being preferred for mining BTC. 

When it comes to selecting a PSU purchase something with a capacity 25% higher than your miner is rated to draw. This will have you operating within the 80% rule.(explained further in the electricity section)

EX. Miner draws 1000 PSU should be able to provide 1250W.

** Many current generation miners are now being manufactured with Integrated PSU. Again do your research to see if your unit comes with or without. Generally you will still need to source a power cable.**

Auxilliaries – Avalon miners require an external controller, 1 per 20 miners. You may have to run additional fans for intake and exhaust depending on your location.

PSU’s can be purchased large enough to run 2 Miners; or the opposite 1 Miner fed by 2 PSU’s. Ensure the PSU you have selected will have the correct amount of PCI-E connectors required to operate your miner(s)

You can also find a large supply of used miners and PSU’s. Again it’s up to you to do your research as these often are a no return transaction.

Electricity

Follow all local codes and regulations

This is the number 1 factor in whether mining is right for you. As discussed with Miners being a 24/7 machine drawing power those costs will make it cost prohibitive for some people to mine. You need to be aware of what your costs/kWh are and run the numbers.

This will be done in a profitability calculator. This is just an example of 1 there are many out there.

( Miner usage in kW ) * ( Hours run per day ) 24 * ( Cost/kWh ) = Cost per Day to Operate

( Ideally less than the FIAT value of BTC mined )

The second part to the electrical requirements of mining is the available service; written for North America.

You will need to figure out the amperage you can spare, what circuits and receptacles you have in place, are you setting up on 220V or 110V. You will need to make sure that you have the right cord end for your PSU to match the receptacle, picking the wrong one can cost you a few days of mining if it has to be shipped.

If you can try and set up on a 220V circuit for 2 reasons :

– You will pull half the amps, and it is more efficient.

– Doing so requires 2 breaker spaces in your panel. Breaker sizing will depend on how many miners you plan to run. Here is the formula for calculating amps.

Watts / Voltage = Amps

Here is where you will bring the 80% rule back into play by sizing the continuous miner load to 80% of the breaker rating. 12 Amps on a 15 Amp breaker, 16 Amps max on a 20 Amp breaker, 24 Amps on a 30 amp breaker.

If/when you increase the amount of miners you are running you may want to look into PDU’s, as opposed to more receptacles. 

Location

This is something that is often overlooked to the headache and frustration of many would be miners. These machines are loud and hot .
You essentially have an electric heater that also uses an industrial fan to keep it from melting itself. This space will need to have the electrical requirements as discussed previously.

So make sure you have a space that is well ventilated with a plan to exhaust heat, and bring in fresh dust free air. I say this as using AC to cool the room will eat into your profits and may even make mining unprofitable.

The noise issue is a consideration you can sort out depending on whats available. (garage, basement, remote building)

Both of these issues can be handled with hosting, which is further explained in the information section.

Internet connection

Some miner setups have the option to use wifi. It is advisable to use a wired connection where available. This will provide a more stable connection and ensure you are submitting the expected amount of shares which is directly related to your payouts.

Please note that mining uses a negligible amount of bandwidth, and will not affect your other internet usage.

Information

You can use this information in this post as a good baseline to get you going. In addition to this you will want to research network difficulty; this readjusts every 2016 blocks to maintain a 10 minute block time on average. While this can go down it generally increases.

Solo or Pool?

You can solo mine but this is essentially a lottery even as a large scale miner. Should you chose this you can check this out as a starting point.

solo.ckpool.org 1% fee solo mining USA/DE 250 blocks solved!

Odds are most of you will join a pool. I will only say that it is in your best interest to mine at a pool that pays transaction fees (miner rewards). Then you will want to consider the fees associated with the pool.

When it comes to these pools you want them to be large enough that they are getting at least 1 block every Difficulty adjustment period. Larger pools will offer smaller rewards paid out more frequently, and vice versa.

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Crypto Wallets

Types of CryptoWallets

What is a Cryptocurrency Wallet and How Does it Work?

If you want to learn about the basics of cryptocurrency and blockchain technology, one of the first things that you should become familiar with is the role of a cryptocurrency wallet.

This guide will explain everything you need to know, using really simple, real-world examples. By the end of reading it from start to finish, you will have all the information you need!

Table of Contents :

A Brief of Crypto Wallet

Before I go any further, I want you to think about how you store your real-world cash. You don’t walk about holding it in your hands, do you? Instead, you most probably store it a leather wallet or purse, or maybe even a piggy bank!

Either way, it is wise to store your money where it is safe. A cryptocurrency wallet follows the same core principles.

Nevertheless, by obtaining a crypto wallet, you will have the ability to send and receive Bitcoin and other cryptocurrencies.

So, now that you have a basic understanding of what a cryptocurrency wallet is used for, let’s see more depth how it works.

How Does a Cryptocurrency Wallet Work?

In the above section, I used the example of a real-world leather wallet, insofar that the wallet physically stores your cash. However, things are slightly different in the digital world of cryptocurrencies and blockchain technology.

Coins are not actually stored in a physical wallet, as cryptocurrencies do not exist in a physical form. Instead, the blockchain consists of transactional records that details which private and the public key has control over the funds.

To make sure you have a full understanding, I will quickly explain the role of a wallet address, as well as a private and public key, as they are all related.

A wallet address is like a bank account number. There is no harm in giving somebody else your bank account number, as people will need it if they are to transfer your funds. This could be so your employer can pay you your salary, so a customer can pay your invoice or so that your friends and family can send you some birthday money!

In the world of cryptocurrency, if somebody wants to transfer your coins, you simply give them your wallet address. Just like in the real world, no two wallet addresses are ever the same, which means that there is no chance that somebody else would get your funds. Also, there is no limit to the number of wallet addresses you can create.

To give you an example of what a Bitcoin address looks like, here is the wallet address that is believed to belong to the creator of Bitcoin, Satoshi Nakamoto!

1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa

As you can see, it uses a combination of numbers and letters, using both upper case and lower case. As most blockchains are transparent, it is easy to find out how much money a certain cryptocurrency wallet has, as well as the transactions the owner has previously made.

However, a cryptocurrency wallet address does not reveal the real-world identity of its owner, which is why the blockchain is referred to as “pseudonymous”.

How Do Private and Public Keys Relate to a Wallet Address?

So, now that you know that a wallet address is very similar to a bank account number, I am now going to explain how you are given control of the funds. People often think that a public key is the same as a public wallet address, however, this is not correct.

Essentially, each individual cryptocurrency wallet address (remember, no two addresses can be the same) each have a unique private and public key. The private key allows you to access the funds that are related to the crypto wallet address.

To give you a real-world example, when you want to transfer money from your bank account to somebody else’s bank account, you will need to enter your private password. Nobody else has access to this password, not even the bank. Otherwise, if somebody knew what it was, they would be able to send money from your bank account!

A private key does the exact same job and it is linked specifically to the individual crypto wallet address. So what about a public key? A public key is mathematically linked to your wallet address! However, it is a “hashed version”, which I will explain below.

A hash function allows a sequence of letters and/or numbers (called an “input”) to be encrypted into a new set of letters and/or numbers (called an “output”). This adds an extra layer of security and ensures that your wallet cannot be hacked.  Here is a quick example to make things simple.

Private Key: 03bf350d2821375158a608b51e3e898e507fe47f2d2e8c774de4a9a7edecf74eda

Public Key: 99b1ebcfc11a13df5161aba8160460fe1601d541

Now, I know what you are thinking: these two sets of keys are completely different? To the human eye, yes, however, the software technology knows that the two keys are specifically linked to each other! That proves that you are the owner of the coins and it allows you to transfer funds whenever you want!

The important thing to remember is that everything I have explained here is very technical. However, when you use a cryptocurrency wallet, the software does everything for you. It’s like using the internet to send an email!

You don’t actually need to understand the technology that runs in the background, the likes of Gmail and Hotmail do everything for you regarding emails – just like a cryptocurrency wallet does regarding crypto transactions!

Are Coins Aren’t Actually Stored in Crypto Wallets?

You should now have a good understanding of what a cryptocurrency wallet is and how public and private keys are linked to a public wallet address. However, you might remember earlier that I said the coins aren’t actually physically stored in the wallet? That’s true! Let me clear things up.

As Bitcoin and other cryptocurrencies are not physical money, they are digitally stored on the blockchain. The blockchain is like a giant accounting ledger that stores every single transaction that has ever occurred in the system, as well as the total account balances of each public address.

The software within the cryptocurrency wallet is connected directly to the blockchain, so it allows you to submit transactions to the ledger. However, the crypto wallet is the protocol that generates your public and private keys. Without it, you wouldn’t be able to access your funds in the real world.

To get a better understanding of this relationship, think about walking into a store and paying for goods using a debit or credit card. There is no physical exchange of money between you and the store. However, by entering your private pin number, you verify that you own the funds and so they can move the funds from your account to the account of the store.

This is the same as a cryptocurrency wallet. By entering your private key, you verify that you own the coins and then you can transfer them to someone else. That is the only way that the coins can move from person A to person B.

So, now that you know the function of a cryptocurrency wallet, let’s take a look at the different types available!

What Are the Different Types of Cryptocurrency Wallets?

There are lots of different wallet types available and the one you choose will depend on your personal needs. Essentially, different wallets offer different things, such as extra security, user-friendliness or convenience. I will now list the most popular types of cryptocurrency wallets.

Desktop Wallet

Desktop wallets are to be downloaded to a specific laptop or computer and they can only be accessed from that particular device. Generally speaking, they offer a good combination of security and convenience. However, it is important to remember that if a hacker were able to remotely get hold of your device, they could gain access to your wallet.

Mobile Wallet

A mobile wallet is very similar to a desktop wallet as the wallet is downloaded directly to your device. You normally access your cryptocurrency wallet by downloading a mobile app, which also allows you to spend your coins in a physical store by scanning a QR code.

Web or Online Wallet

A web wallet offers the greatest level of convenience when sending coins to another person, however, they are also the least secure. This is because the wallet provider usually has full control over it.

An example of this would be storing coins in a cryptocurrency exchange. The exchange will store your coins on their central server, which means that if it hacked, the criminal could have access to all of your funds. It is best advised to only keep a small number of coins in a web crypto wallets.

Paper Wallet

Paper wallets are one of the most underrated crypto wallets available. All you need to do is to print your private and public keys onto a piece of paper — and that’s it, your funds are secure!

This is because the keys are not connected to any servers, meaning the only way somebody could access them is if they had the physical paper! When you need to transfer funds, you simply enter the keys into a software or web wallet, or even easier, just scan the QR code that you printed!

Hardware Wallet

In terms of security, it doesn’t get any better than a hardware wallet. This is a physical device that has the sole purpose of storing your private and public crypto keys within the hardware.

The device is never connected to the internet unless you need to transfer funds. However, you enter your private pin directly on to the device, making it virtually impossible for a hacker to access your keys.

Are Cryptocurrency Wallets Secure?

Generally speaking, no matter which wallet you use, if somebody has access to your private key, then they have access to your funds.  However, the key question is what safeguards are in place to prevent it from happening?

Any cryptocurrency wallet that has a relationship with the internet (e.g. a desktop, mobile or web wallet) will always be vulnerable.

Although abusive hackers are unethical people, they can be very intelligent. They are always creating new ways to access other people’s data, which is why you need to make sure you do everything you can to protect your private key.

Here are some examples of how a hacker could access your funds that are stored alongside an internet connection.

  • Malware
  • Virus
  • Key Logger
  • Remote Access to your device
  • Phishing

There are a number of things that you can do to protect yourself from the above threats. Firstly, you should always make sure your device is using the latest software. As hackers find new methods, they are able to override the inbuilt safety controls, so by updating your software, you will always have the highest level of security.

It is also a good idea to set up extra layers of security. There are many crypto wallets that allow you to set up two-factor authentication, which means that to access it you need to confirm a code that is sent to your mobile phone.

It is also a good idea to consider a wallet that allows multi-signatures. Basically, a multi-signature wallet means that to send funds, the user must authenticate the transaction using two or more separate devices. This way, if one of your devices is lost, stolen or hacked, the criminal won’t be able to access your cryptocurrency, as they would need the other device(s) too!

Finally, it is also recommended to back up your wallet on regular occasions. This allows you to write down a backup password phrase so that if anything happened to your wallet, you could still regain access.

By making sure you follow all of the above security measures, you will ensure that your cryptocurrency wallet is safe and secure against hackers!

Can I Store All of My Cryptocurrencies in the Same Wallet?

This is the golden question — with the answer being sometimes, as it depends on the specific coins you are holding! For example, if you are holding Bitcoin only, you just need to find a wallet that is compatible with Bitcoin. However, what if you are holding Bitcoin and Litecoin?

Although they each have their own blockchain, it is possible to use a multi-currency wallet. These crypto wallets allow you to store different cryptocurrencies within the same wallet, which is much easier than having to use a different wallet for each coin.

However, it all depends on what the wallet can support. Interestingly, most tokens that are available were built on top of the Ethereum blockchain – meaning that they are “ERC-20” compatible. So, if you have lots of ERC-20 tokens, then they can sometimes all be stored within the same multi-currency wallet!

Other coins are not as flexible though, so always check with the wallet provider before you attempt to transfer funds across as if the coin is not compatible you will lose them forever!

Is it True that Cryptocurrency Wallets are Anonymous?

You might remember how I mentioned that the blockchain protocol is pseudonymous, not anonymous.

This means that although your wallet address does not contain your name, people still have access to lots of other information.

This includes all of the previous transactions that the particular wallet address has made (both sent and received), including the amount and the other addresses involved in the transaction.

In reality, this isn’t really an issue, as unless you give somebody your real-world identity, it would be very difficult for someone to know who owns the address.

Just remember, governments now regulate cryptocurrency exchanges, which means that if you want to buy coins using real-world money, then you need to identify yourself by submitting documents.

This means that even once you have withdrawn your funds to your wallet, the exchange will know that your identity is linked to the wallet you sent them to.

Which Cryptocurrency Wallet is the Best?

You should by now have a very good understanding of what a cryptocurrency wallet, how the technology works and the different types available.

You should also have a good idea of how to protect your wallet from hackers, as well as what information you reveal or don’t reveal when you use it.

Exodus

Exodus is a multi-currency desktop wallet that allows you to store lots of different coins, such as Bitcoin, Litecoin and Dash, as well as various ERC-20 tokens.

One of the best features of Exodus (other than it being free) is that it is really user-friendly. When you log in, you can view you entire cryptocurrency portfolio on a visual pie chart, which also lets you know the current market value of each coin.

The wallet provider never has access to your private keys, nor are they connected to the Exodus servers. For even more convenience, Exodus even has a ShapeShift API built in, which allows you to buy and sell cryptocurrencies within the wallet.

Ledger Nano S

For the ultimate layer of security, it doesn’t get any better than a hardware wallet, such as Ledger Nano S. You will receive a physical device that allows you to store a range of cryptocurrencies offline.

Ledge Nano S cryptocurrency wallet

When you want to send coins to someone, you simply need to plug the wallet into your device (such as a laptop) and then enter your private pin number. If the wallet is lost or stolen, you can recover your coins by entering your backup passphrase on another device!

You will need to pay about 90 Euros for the Ledger Nano S, however, if you have a large number of coins, it is well worth the investment. Only ever buy it from the official Ledger Nano S website.

Ledger Wallet Review

Pros

  • Super secure
  • Protection against physical damage
  • Supports more than 1500 coins and tokens

Ledger Nano X

Ledger Nano X Review

Pros

  • Can be managed from mobile device
  • Very secure
  • Supports more than 1500 cryptocurrencies

Trezor

Trezor Model T Review

Pros

  • Top-notch security
  • Touchscreen user interface
  • Easy to set up

Jaxx

Jaxx is also one the most popular multi-currency wallets and it is available for download on most desktop and mobile devices. For extra convenience, you can also access your wallet through a Google or Firefox browser extension, making it great if you need to send funds on the go.

The Jaxx developers never hold your private keys, as these are only stored on your device. Moreover, just like Exodus, there is a built-in ShapeShift API that lets you easily trade/swap coins directly from your wallet!

If you have read the guide from start to finish, you should now have a really good understanding of what a wallet is, how the technology works and what it can be used for.

You should also have a good idea of the different types of wallets available on the market. As you now know, different wallet types suit different needs.

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