Monero vs. Bitcoin

This article, originally published on CoinCentral, explores the key differences between Monero vs. Bitcoin

Bitcoin gave the world digital cash. The ability to transact large sums of money across the globe, without needing to ask permission, and without the need to use middlemen is truly groundbreaking. But for all its advantages over national fiat currencies, Bitcoin now only seems to serve a limited set of use cases. It is not very private, transactions are generally slow and becoming costly. It’s becoming harder to upgrade and add new features to the protocol making it resistant to new innovations and technologies.

Then came Monero – private by default with untraceable transactions. It has an adaptive block size. It has its own codebase and is not simply another Bitcoin clone. Even its developers are mainly anonymous. Monero ticks most the permissionless digital cash boxes – is it all too good to be true?

In this Monero vs Bitcoin comparison, we’ll take a deeper look at Monero’s features that have helped it grow to a top 10 cryptocurrency.

Why Bitcoin lacks privacy and What Monero does about it

Bitcoin is pseudonymous, meaning that users can transact without providing their identities. Instead of using real world identities as banks do, Bitcoin uses addresses to make transactions possible between wallets.

The problem is that the addresses, along with the transaction information, all get stored on a public ledger. Although users can make transactions without attaching their personal identity, it is now widely known that the Bitcoin blockchain is being data mined by blockchain analysis companies. These companies are able to de-anonymize Bitcoin transactions with a high degree of accuracy.

Unlike Bitcoin, where you need to take extra steps to achieve anonymity, Monero has privacy turned on as a default setting. Untraceable transactions and anonymity are baked into the protocol.

As a side effect of anonymous and untraceable transactions, Monero is more fungible than Bitcoin. Fungible simply means that you can’t tell apart one coin from the next. Bitcoins are subject to being tainted. For instance, if a particular exchange has been hacked, or funds are stolen, the hacked or stolen Bitcoins can be tracked and subsequently blacklisted by exchanges or vendors. This can make a percentage of Bitcoins unspendable, which is not ideal for a digital representation of cash. Monero’s inherent untraceability makes this a non-issue.

How exactly does Monero achieve privacy?

Monero uses three different privacy innovations, namely, ring signatures, Ring Confidential transactions, and stealth addresses.

Ring signatures hide information about the sender, using a technique where a group of users sign the transaction. This obscures who the actual sender was.

Next, by using a technique known as RingCT, which stands for Ring Confidential Transactions, Alice can send Bob some Monero, and the only people that will ever know the amount sent will be Alice and Bob. Although the transaction is visible on the blockchain, there is no way to determine the amount transacted.

Lastly, Monero uses stealth addresses which adds privacy to the receiver of a transaction. Stealth addresses use ‘spend keys’ to obscure the receiver’s address. A sender is required to generate a spend key address for the receiver and send the Monero through this address. A ‘view key’ is then used by the receiver to display incoming transactions. This method means that while a transaction is recorded on the blockchain, only the sender and the receiver can determine where the payment was actually sent.

Monero vs Bitcoin: Other Key Differences

Released in early 2014, it is understandable that Monero still has some catching up to do compared to Bitcoin which has been around since 2009. This is reflected in the two coin’s market cap differences, with Monero sitting in 9th place at the time of writing.

Bitcoin had a lot more time to build out its network, and it won’t be giving up its first mover advantage that easily. With Monero, however, the market cap comparison does not reflect the fact that Monero has a different use case than Bitcoin, a use case built around its privacy. Monero is now establishing itself as the ‘coin of choice’ for people that want privacy in their transactions or that want to use Dark Markets. Bitcoin lost flavor with Dark Market users who quickly switched loyalty when they realized that Monero took privacy a few steps further than Bitcoin ever could.

Monero is not a one-trick-pony either. Privacy aside, the Monero developers have been addressing some key issues that Bitcoin has found challenging.

Hard forks have proved dangerous in Bitcoin as they show major rifts in consensus and make protocol upgrades contentious. When it comes to upgrading the protocol, Monero has a policy of hard forking every 6 months. All users are given fair warning and are expected to upgrade their software, making upgrading a breeze.

Monero has a dynamic block size which can adapt to the network’s requirements, unlike Bitcoin’s hard capped limited block size. With dynamic block sizes, you also get dynamic fees. It takes an average of 2-minutes for the average Monero block to be mined, and for transactions to be confirmed – a clear advantage for retail like scenarios.

Miner centralization, due to the use of ASIC chips, is a problem that Bitcoin has not been able to avoid. Short of a contentious fork to change the Proof of Work algorithm, it looks like mining centralization is here to stay in Bitcoin. Monero uses mining algorithms that are ASIC resistant, meaning it can be mined using standard CPUs and GPUs, which keeps the mining decentralized.

How has the Market received Monero?

Monero saw incredible growth in 2016, where it was the best performing crypto for the year. It has a growing legion of fans. Many were originally Bitcoiners that became frustrated with Bitcoin’s inability to achieve consensus to add improvements. As data analysis firms started de-anonymizing Bitcoin users, privacy oriented coins became all the more appealing.

Eager to grow their community and see their currency gain use, Monero fans have organized and have even set up their own LocalBitcoins style exchange for Monero called LocalMonero.co where buyers can find local sellers for one-on-one trades.

The bottom line

Since its inception, Monero has forged ahead and carved its own path in cryptocurrency privacy innovation. When compared to Bitcoin, and despite early setbacks and engineering challenges, it clearly leads the way in terms of anonymity and untraceability. But it is not alone in the privacy niche. Hot on its heels are other privacy focused coins, like Dash, Zcash, PIVX and Verge among others.

But competition is good in the cryptocurrency space because a coin can adopt new and innovative techniques that other developers have found to be successful. It is more about keeping the protocol agile so it can implement improvements and upgrades. Monero devs have shown that this is something they consider to be very important.

Bitcoin has gone through its own upgrade recently with the activation of SegWit, providing the oldest blockchain with some much needed new capabilities. SegWit allows for second layer innovations to be built on top of Bitcoin’s protocol layer. The SegWit upgrade was hotly contested for a couple of years. This had the effect of stalling innovations like the Lightning Network for fast transactions, and Confidential Transactions which offer enhancements in user privacy.

With SegWit now activated, these innovations can be deployed. Any increased privacy and anonymity in Bitcoin transactions can erode some of the gains that privacy coins like Monero have made.

Other innovations are also in the pipeline, like MimbleWimbe and Atomic swaps, that can make cross-chain transactions possible, meaning you can send someone Monero, and they get the value in Bitcoin – or vice versa. Such developments can foster a sense of blockchains cooperating instead of directly competing to eat each other’s lunch. With that in mind, it is probably less about picking a winner between Monero and Bitcoin, and more about both coins growing independently and serving distinct use cases and markets.

Monero’s clear efforts in being distinctly different from Bitcoin are already paying off as it is clearly the leader in the privacy niche, and it is certainly here to stay.

This is  article was written by Theo Tsihitas and originally published on CoinCentral . Read the full article here.

Crypto Mining Mastermind

At the request of our readers we are looking at forming a small, virtual crypto mining group. 

This will most likely be by invitation only, with members being accepted based on their level of experience and specific areas of interest. It will also be limited to 8-12 members initially.

This will ensure that the conversation is focused on things that people will get most value from, and that people’s voices will be heard.

We envisage that the group will include:

  • Fortnightly call to discuss all things crypto
    • Rough agenda agreed with participants beforehand
    • Occasional guest / expert speakers
    • Typed up minutes from the meetings shared afterwards
  • Access to closed Facebook group for ongoing conversations

We are still in the planning stages and would very much appreciate your input on what this group could look like.

If this sounds like it could be of interest to you and you’d like to be kept in the loop as the group evolves, please register your interest using the form on our contact page, with “Mastermind” as the subject.

 

What is Ethereum? The Ultimate Beginners Guide

With the second largest market cap in the cryptocurrency world, Ethereum has drawn a lot of attention from investors and crypto enthusiasts alike.

This relatively new cryptocurrency not only presents a significant change to the status quo, it also allows for the quick development and deployment of new applications. Ethereum essentially enables dozens of new and extremely innovative cryptocurrencies to exist.

While Ethereum’s utility is obvious to programmers and the tech world at large, many people who are less tech-savvy have trouble understanding it. This guide to will appeal to both crowds and expose anyone from complete crypto beginners and intermediates to this potentially game-changing cryptocurrency.

If you’re interested in learning about how you can profit from trading crypto currencies, you might want to consider enrolling in a crypto currency trading course

What is Ethereum?

Simply put, Ethereum is a blockchain-based decentralized platform on which decentralized applications (Dapps) can be built.

Remember, blockchain is the structure the vast majority of cryptocurrencies run on. It’s a database with no central server that keeps track of every transaction and exchange.

Ethereum’s appeal is that it is built in a way that enables developers to create smart contracts. Smart contracts are scripts that automatically execute tasks when certain conditions are met. For example, a smart contract could technically say, “pay Jane $10 if she submits a 1000 word article on goats by September 15, 2018,” and it would pay Jane once the conditions are met.

These smart contracts are executed by the Turing-complete Ethereum Virtual Machine (EVM), run by an international public network of nodes.

The cryptocurrency of the Ethereum network is called ether. Ether serves two different functions:

  1. Compensate the mining full nodes that power its network. This keeps things running smoothly at an administrative level.
  2. Pay people under smart contract conditions. This is what motivates users to work on the Ethereum platform.

If you’re still a little confused, don’t worry. The underlying technology is complicated even at a surface level.

By the end of this guide, you’ll have a better understanding of Ethereum than 99.999% of people out there… and that’s a pretty good start!

We’ll go over things such as how Ethereum functions, Ethereum’s history, and some of the exciting dapps running on the Ethereum platform.

Welcome to a Wild Ride: Ethereum

In 2011, a 17 year old Russian-Canadian boy named Vitalik Buterin learned about Bitcoin from his father.

In 2013, after visiting developers across the world who shared an enthusiasm for programming, Buterin published a white-paper proposing Ethereum.

In 2014, Buterin dropped out of the University of Waterloo after receiving the Thiel Fellowship of $100,000 to work on Ethereum full-time.

In 2015, the Ethereum system went live.

In 2017, Ethereum hit a cap rate of $36 billion dollars.

Whether you’re looking at this from an investment standpoint, tech perspective, or witness to history; Ethereum is extremely exciting.

Buterin’s goal was to bring the same decentralization from Bitcoin to more than just currency. This could be accomplished by building a fully-fledged Turing-complete programming language into the Ethereum blockchain.

The Ethereum white paper goes into detail for some of the potential use cases, all of which could be built through decentralized apps on the Ethereum network. The list goes on and on:

  • Token Systems
  • Financial Derivatives
  • Identity and Reputation Systems
  • File Storage
  • Banking
  • Centralized Autonomous Organizations
  • Insurance
  • Data Feeds
  • Cloud Computing
  • Prediction Markets

By building these apps on the Ethereum network, these dapps can utilize Ethereum’s blockchain instead of having to create their own.

The Ethereum Virtual Machine

Early blockchain applications like Bitcoin only allowed users a set of predefined operations. For example, Bitcoin was created exclusively to operate as a cryptocurrency.

Unlike these early blockchain projects, Ethereum allows users to create their own operations.  The Ethereum Virtual Machine (EVM) makes this possible. As Ethereum’s runtime environment, the EVM executes smart contracts. Since every Ethereum node runs the EVM, applications built on it reap the benefits of being decentralized without having to build their own blockchain.

Smart Contracts

Smart contracts are strings of computer code capable of automatically executing when certain predetermined conditions are met.

Instead of requiring a single central authority to say “yay” or “nay,” these contracts are self-operated. This not only makes the entire process more effective, it also makes it more fair and objective.

For example, a simple smart contract use case would be:

  • Jim wants to bet Sarah 100 Ether (ETH) that the price of ETH will be above $1000 on August 30th, 2018.
  • They agree on a data feed to be used to determine the ETH price.
  • They each escrow 100 ETH to a smart contract, with the winner taking the full 200 ETH.
  • On August 30th, 2018 the data feed is queried and the contract immediately executes sending money to the winner.

Using the smart contract, there’s no need for Jim and Sarah to trust each other. They just have to trust the data feed.

Keep in mind that this is only a very simple example. Many smart contracts are extremely complex and can work wonders.

The takeaway: Smart contracts can automate a variety of tasks, without requiring intermediaries. All a smart contract needs is the arbitrary rules written into it.

Ethereum vs Bitcoin

Now that you have a decent understanding of what Ethereum is and how it functions, it’s useful to consider how it compares to Bitcoin at a technical level.

While the two cryptocurrencies serve different purposes, Ethereum provides a number of benefits over Bitcoin:

  1. Shorter Block Times – On Ethereum, blocks are mined roughly every 15 seconds compared to Bitcoin’s 10-minutes rate.  This shorter time allows the blockchain to more quickly start confirming transaction data, although it also means more orphaned blocks.
  2. More Sophisticated Fee Structure – Ethereum transaction fees are based off storage needs and network usage. Bitcoin transactions are limited by block size and compete with each other.
  3. More Sophisticated Mining – Bitcoin mining currently requires ASICs (Application-Specific Integrated Circuits), necessitating a large amount of capital investment to mine.  Ethereum’s mining algorithm was designed with ASIC-resistance in mind, thus leveling the playing field and aiding in the decentralization of mining.

Ethereum arguably currently functions better than Bitcoin as a currency. With Ethereum, you can reliably send transactions faster, pay lower transaction fees, and mine at a more profitable rate (although it still has its downfalls for miners).

Future Updates to Ethereum

The future for Ethereum is bright, but it is not without its potential uncertainty.

A notable event on the horizon is the Metropolis hard fork that is set to occur in late September. This hard fork indicates some major upgrades for the platform including:

  1. Increased anonymity with new zero-knowledge proofs, or “zk-SNARKs.” This means users will be able to conduct transactions at much more secure levels of anonymity than ever before.
  2. Smart contracts and programming will be much easier to work with. Gas is also going to be adjusted for bill setting.
  3. Masking will increase security on the network. Users will be able to determine the address for which they have a private key, and this will protect them from quantum computer hacking.
  4. A “difficulty bomb” will be included in the upgraded, meaning mining will become much more difficult. This is a significant step as Ethereum transitions from proof-of-work (PoW) to proof-of-sake (PoS).

We won’t know how this hard fork will affect the price of Ethereum as markets could adjust in a variety of ways. If the upgrades attract more users, the price could rise. However, if mining becomes more difficult and slows, the price could fall.

The next upgrade after Metropolis is referred to as Serenity, which should increase stability and encourage more investment.

How to Buy Ethereum

The easiest way to invest in Ethereum is by using a cryptocurrency exchange. CoinCentral has compiled a list of the best exchanges where you can buy Ethereum.  On this page you can find key details of these exchanges, as well as links to their individual reviews and user guides.

If you’re new to the world of cryptocurrency, Coinbase offers one of the simplest ways to buy, sell, and store Ethereum.

Coinbase offers free BTC worth $10 for new joiners using this link

For those interested in regular trading, the following exchanges may be more suited to your needs:

  • Gemini
  • Kraken
  • GDAX
  • Bittrex
  • CEX.IO

Final Thoughts

While there is a lot of speculative interest around Ethereum, it’s important to note that the Ethereum and dapp communities are very much focused on building a tangible future.

Ethereum is a phenomenal application of the blockchain and has made it possible for hundreds of projects to exist.

This is a condensed version of an article originally published on CoinCentral written by Alex Moskov. Read the full article here.

Crypto Currency Trading Course: How to Find a Winner

If you’re reading this page, it is likely that you’re aware of all the buzz in the media over the past few months around Bitcoin and other crytpo currencies like ETH and Ripple (XRP).

The internet is awash with stories of people who have made millions from Bitcoin in just a few short years.

e.g.

It’s easy enough to purchase bitcoin through an exchange. Coinbase is one of the most popular and easiest to use in the US. 

BUT Investing in cypto currencies is not something you should jump into without first getting a greater understanding of the topic. Enrolling in a crypto currency trading course is a good way to get you up to speed quickly. 

This article will provide an overview of some of the popular courses currently available on the internet.

Crypto Currency Trading Course: Which one should you choose?

There are lots of courses available on the web, and obviously each claims to be the best. You have to take these claims with a pinch of salt, and delve a bit deeper into the actual contents.

Also, bare in mind that trading anything for a profit, let alone crypto currencies, is incredibly difficult and there are no surefire answers. If it were easy then everyone would be doing it.

Once you’ve decided on a course that you like, you should view the expense as a cost against any future earnings from trading cryptos.

We’ve outlined some of the bitcoin crytpo trading courses below:

  1. Bitcoin Black Book, – $47

This course makes some bold claims, it promises to”reveal the five steps anyone can follow to profit from one of the most exciting opportunities of our lifetime, from explaining what Bitcoin even is… the full risks involved… to how you go about buying and selling them…”

The guide also comes with a number of bonuses, including a 8 part video masterclass, covering some of the need to know information, like trading patterns and ICOs.

Unlike some other online products, the author is transparent about his background, Tiz Gambacorta (view on LinkedIn) holds an MSc in Maths and finance and previously worked at Barclays Capital.

See more info here.

2. Cryptocurrency Codex, by the Crypto Currency Institute – $47

 

This course claims to be one of the best for beginners, citing that it “shows complete newbies how to profit from Cryptocurrency.”

The course covers more or less everything you might want to know about cryptocurrency, right from mining, though to how to store your currencies. It also obviously covers trading strategies and how to profit from trading bitcoin.

Of the many bonuses, there is access to a private “ask me anything” Facebook group, where you have the opportunity to discuss trading with a wider community of members.

Get more info here.

Crypto Currency Trading Course: Final Thoughts

You can’t go into trading bitcoin with 100% certainty that you’ll come out successful, trading is invariably difficult. That being said, taking the time to study the area puts you ahead of most of the average punters that are investing at the moment.

Go in with your eyes open, pick a course that interests you and that you enjoy, and don’t invest money that you can’t afford to lose!

Top Ethereum Mining Pools (2018)

Joining an Ethereum mining pool and combining your resources with other miners will help you see results faster and realize a quicker return on your investment.

This post will take a look at some of the top Ethereum Mining pools in 2018.

With so many mining pools at play in the market, solo miners are finding it more difficult to get blocks to process and the Ethereum mining rig that a solo-miner uses, needs to have massive processing power to be able to compete with the pools, which can be very expensive.

INTERESTED IN JOINING A CRYPTO MINING MASTERMIND? REGISTER YOUR INTEREST HERE

If you decide to join a pool, then choosing the right pool that meets your mining expectations is important, as well as understanding the different pay-out methods and how they will impact your earnings.

The larger pools, that have been mining for longer, are more reliable and you can be more certain of receiving your profits.

To calculate your expected earnings and see the best path to choose, you can use the calculator at this link.

Check out our other post on Ethereum mining calculators

If you’re interested in learning about how you can profit from trading crypto currencies, you might want to consider enrolling in a crypto currency trading course

The Best Ethereum Mining Pools for 2018

The top two Ethereum mining pools are Ethpool (http://ethpool.org) and Ethermine (https://ethermine.org). Together they have more than 27% of the network hashrate.

The two share an underlying pool, but have different payment methods. Ethermine uses the PPLNS payment method, (Pay Per Last “N” Shares) which involves some luck in the payment but on average pays 5% more. Ethpool is a predicable solo mining pool and pays on the PPS method, a standard pay per share model. Ethermine has more than 200 000 active workers and processes about 32 blocks an hour, while Ethpool has about 12500 active workers and processes about 5 blocks an hour.

See our full post on Ethpool vs Ethermine and the ethpool payout scheme

Other top pools include:

  • F2pool – Also known as Discus Fish (https://www.f2pool.com/).  F2pool has been operational since 2013 and contribute about 24% of the network hashrate.  Payments are also made via the PPS method and on a daily basis. The site is predominantly Chinese but has an English interface and has servers across Asia to ensure security and redundancy. F2pool can also be used as a litecoin mining pool.
  • Nanopool – Next on our list is Nanopool (https://nanopool.org). Nanopool currently has 40 000 Ethereum miners and accounts for 15% of the hashrate. Nanopool uses the PPLNS method to calculate payments the same as Ethermine. Payments are made several times during the day and Nanopool has servers in Asia, Europe and America. Nanopool also offers miners the option to mine in Ethereum Classic which is a split from the traditional Ethereum currency. Also see our article on Nanopool vs Ethpool.
  • MiningpoolhubMiningpoolhub (https://miningpoolhub.com) currently generates about 7.6% of the hashrate activity on the network. The reward calculation is based on a transaction fee, a block finding fee and uncle rewards and incentives. Miningpoolhub also has servers across more than one continent (US, Europe and Asia) ensuring a redundant environment.
  • Dwarfpool – The last of our top performing Ethereum pools is Dwarfpool (https://dwarfpool.com). Dwarfpool uses a RBPPS payment method (round based pay per share), which is based on the PPS method. Autopayouts are done hourly and they guarantee 100% uptime due to their distributed infrastructure. Dwarfpool makes up about 13% of the network hashrate.

All these top pools offer statistical reporting and monitoring via e-mail.

There are a number of pools that support multiple currencies, we’ve covered some of these in our posts on dogecoin mining pools, and LTC mining pools.

Cloud Mining

Mining pools are not to be confused with Ethereum cloud mining where the full task of mining is outsourced to an organisation which supplies the hardware and running costs and pays you a dividend based on your investment.

Mining pool payout schemes

The various different mining pools have different payout schemes, including PPS+ vs PPLNS. These determine the method by which your contribution to the pool is calculated, and ultimately how much money you get. It is important that you understand the payment scheme before you get involved in a pool.

Ethpool Payout Scheme

Many people have been asking for more information about the payout schemes for various Ethereum mining pools.

For example, what are the pros and cons of pps+ vs PPLNS.

In this article we’ll look specifically at the Ethpool Payout Scheme and point you in the direction of other resources where you can get more info.

EthPool Payout Scheme

EthPool.org is slightly different to other mining pools in that it is more like solo mining and therefore doesn’t use the PPS / PPLNS / PROP methodology that some others do.

The Terms of Payment for the site states that:

“http://ethpool.org is a predictable Ethereum solo mining pool and implements a solo mining payout scheme. Each submitted share will increase the credits of the Miner who submitted the share by the fixed share difficulty of the pool. The Miner who accumulated the most credits will receive the reward of the next block that has been mined by the pool and his credits will be reset to his current credits minus the credits of the runner up Miner. “Uncles” are distributed in a similar way only that the credits of the Miner receiving the uncle reward will not be reset.”

This also clearly sets out the pool fees, which for EthPool is 1%.

EthPool also offers a support portal that covers many other specific questions relating to payment methods, frequency of payments etc.

This page explains further that the pool operates with a solo mining payment scheme.

“This means the miner who contributed the most work to the pool will receive the full reward of the next found block (or uncle) and his work account (credits) will be reset to his current credits minus the credits of the runner up miner.”

The site has a couple of useful features that will allow you to work out when you’ll be paid, including “time to next block”, on the balance page.

Top Ethereum mining pools

We’ve looked previously at ethermine vs ethpool.

And there is some debate around which pools offers the greater payout. Many suspect that Ethermine is better for smaller miners, while ethpool benefits much larger mining operations.

Large outfits are making it more difficult for smaller miners to compete on the pool, increasing the time it takes to get paid. As a result, several miners have switched to other pools like Nanopool.

See our other article on top ethereum pools in 2017 here.

Final thought

Here is a useful run through of the payment methods for most of the top pools, including the ethpool payout scheme.

Finding the right pool is really important, and it is definitely worth taking some time to investigate your options. Have a play around with the mining calculators as well.

The differences in picking the right pool can be substantial, beyond just the processing fees. You also have to consider things like opportunity cost, if you’re tied into a pool that is taking a long time, but you can’t leave as you are awaiting payment, that is time lost that could have been much better spent in another pool.

Trezor vs Ledger Nano S

Hardware wallets are physical devices for storing cryptocurrencies and tokens in a safer and more secure environment than the traditional software wallets.  Where software wallets are often developed in open-source and generally more susceptible to hacking and theft, a hardware wallet is isolated from the Internet and has to be attached to your computer for the codes to be accessed, rendering your tokens more secure.

To date there have been no reported thefts of tokens or coins from a hardware wallet, however even hardware wallets do have their vulnerabilities.

The cost of a hardware wallet is higher than that of a software wallet and with the small returns many miners are seeing, the cost of the hardware wallet might not be easy to justify.

If you’ve invested in an ethereum rig, or cloud mining service, you definitely need a safe place to store your ether and an Ethereum hardware wallet is definitely a good bet.

Trezor vs Ledger Nano S

Trezor

Trezor was first to market with a hardware wallet for cryptocurrencies in August 2014. Each Trezor wallet has a unique passcode that prevents anyone from accessing your transactions should your wallet be stolen and in cases where you Trezor is lost or stolen; you can recover your tokens by accessing the wallet with this passcode. Trezor works with a long list of client wallets such as ArcBit, Chrome Extension, Electrum, Sentinel and Etherwall. Trezor is fully supported on Windows 7 and higher, OSX and Linux platforms as well as being compatible with most Android devices which have a USB on-the –go.

Trezor safely stores tokens for Bitcoin, Litecoin, Dash, Zcash, Ethereum, Namecoin and Dogecoin.

Trezor is a small device, about the size of a key, with a screen, which connects to your computer via a USB cable.

Trezor is slightly more expensive than some of the other hardware wallets available.

Ledger Nano S

The Ledger Nano is a slightly less expensive hardware wallet option comparative to the Trezor but offers a similar level of advanced security versus a software wallet, however it does not offer passpharse support.

A passphrase is an additional text the user creates when setting up the account, which is required when the wallet needs to be recovered, thereby adding another layer of verification.  The Nano S requires the user to set up a PIN code that keeps device secure and after three failed attempts to enter the correct PIN code, the device will not be accessible.

The Ledger Nano S is very easy to setup can be done without needing to connect the device to a computer. The Open Bitcoin Privacy project voted Ledger wallets as the most private wallets available in their report in 2016.

The Ledger Nano S works with Bitcoin, Ethereum as well as Altcoins and is compatible with a variety of Cryptocurrency wallets.

You can find the ledger nano s for sale on sites such as Amazon.com or direct from the manufacturer.

Final Thoughts

Both the Trezor and Ledger Nano S have built in screens, which is advisable largely due to the increased security offered. Hardware wallets with a screen will display the generated password on the screen of the device, while wallets that do not have a screen will send the passcode to your phone.

As your phone is accessible via the Internet it does put the security of the passcode at risk. The screen also adds an additional level of verification when you are making payments.

If you’re interested in a hardware wallet you should also consider the ledger nano s vs keepkey.

For more info check out this useful video:

 

 

Ethpool vs Ethermine

The costs of mining Ether can be very high, with electricity costs and the cost of setting up a mining rig that can process at the speed required.

As the rewards of mining can be slow and intermittent, many miners choose to combine their hardware resources and create an ethereum mining pool, increasing the speed at which blocks are processed and the profits paid out.

This post will focus on the two main pools, Ethpool vs Ethermine. For information on other pools, see our post on the top ethereum mining pools.

Miners then share the rewards of the payout on proof of work. Ethereum is the fastest growing cryptocurrency, more than 2000% since its launch, in the market and Ethereum miner’s work for tokens called “Ether”.

Payments to the miners can work on different principles and calculations, depending on the type of pool they have joined.

Ethpool vs Ethermine

Two of the biggest Ethereum mining pools are Ethpool and Ethermine, which run on the same platform and have combined process of more than 25% of the total network hashpower. However the manner in which the pools run, and the risks and rewards are quite different. Both pools run on a global network with servers based the United States, Europe and Singapore, which are fully redundant and run 24/7.

Ethpool

Ethpool is a predictable solo mining pool and 100% of the proceeds are paid to the miner that contributed the most work. By using Ethpool you get the advantages of pooled mining with a solo mining payment scheme.

Ethpool offer miners the ability to mine anonymously and supports all types of Ethereum miners. Full support is offered to miners, including those using Stratum protocol. There is a big reduction in variance so miners earn their payment as soon as their work is equal to the difficulty of the block. The site includes online mining statistics and can help you estimate your earnings, when used with a calculator. The pool fee is currently 1%. Ethpool offers e-mail monitoring of your work in progress and e-mail notification of found blocks.  Ethpool has about 12,500 active workers and processes about 5 blocks an hour. Uncles (blocks that are almost correct) are paid on top of full block rewards.

Ethermine

Ethermine works on the PPLNS (Pay Per Last N Shares) payout scheme, which includes a luck factor in the calculation of the payment and favours loyal pool clients versus those that jump from pool to pool.

As with Ethpool, full Stratum support is available and payments are made instantly with the minimum payout being a single Ether. The pool fee for participation is also 1%. Ethermine promises all miners accurate hashtag reporting and low costs due to the efficiency of the mining rigs.

E-mail reporting and tracking is available on Ethermine as well as notifications of invalid shares and detailed per-worker and global statistics. Ethermine has more than 200,000 active workers and process about 35 blocks an hour.

Cloud Mining

As an alternative to Ethereum pool mining, a miner can use Ethereum Cloud mining, where instead of providing a Ethereum rig and combining resources, an organisation that specializes in cloud mining will do the mining on the miners behalf for a fee and then pays a percentage of the profit made.

Other Mining Pools

Although these are regarded as the two main ETH mining pools, there are other pools available, particularly a few multi currency pools. Check out our article on Nanopool vs. Ethpool to see how these two stack up.

 

Ethereum Hardware Wallet: The Most Secure Way to Store Ether

Ethereum is one of the most popular blockchain platforms of 2017. Released in 2015, the Ethereum platform features smart contracts and lightning fast transactions. The token used to run the Ethereum platform is called Ether.

For the purpose of this article, we are going to use Ethereum and Ether interchangeably. Like Bitcoin, Ethereum uses a public and private key system. The public key being similar to an email address and the private key being similar to your password.

The holder of Ethereum is responsible for protecting their private keys.

Mining hardware is incredibly expensive and it is foolish to store mining profits on exploitable software and hardware. It was recently discovered that the Jaxx software wallet stored private keys unencrypted.

Ethereum Hardware Wallet

One of the oldest and most secure ways of securing cryptocurrency is by using paper wallets. The problem with paper wallets, is that a lot can go wrong when creating them. For example, a paper wallet created on a computer connected to the internet is technically a hot wallet.

This is because paper wallets make the private key visible. There is no way to know who may be snooping around your computer while it is connected to the internet.

The better option is to use a hardware wallet. The two most popular Ethereum hardware wallets are the Ledger Nano S and the Trezor.

These wallets function as external USB drives that store your private keys and encrypt them using a mnemonic backup phrase. This makes storing and securing your Ethereum user friendly. Because even if you lose the hardware wallet, you can always restore your Ethereum using the mnemonic backup phrase.

A mnemonic backup phrase is usually a list of easy to remember words that can be stored in multiple locations.

The Ledger Nano S is the easiest to use, of the two, because it features it’s own Chrome app. The downside is that delivery has been slow.

Trezor, the oldest of the two, secures your private keys using the open source website MyEtherWallet. There is a bit of a learning curb connecting MyEtherWallet with Trezor, but the upside is that Trezor is a solid Bitcoin hardware wallet as well. The Ledger Nano S can be configured with MyEtherWallet as well.

Trezor has been around a long time and during the Bitfinex hack, it was joked that it could have been prevented by using a Trezor hardware wallet. No matter which hardware wallet you choose, both are going to be better than storing your coins on an exchange, your computer or your phone.

For more information, see our full article on trezor vs Ledger Nano S

How does one become a holder of Ethereum?

A person can convert fiat to Bitcoin and buy Ethereum with Bitcoin via an exchange. A popular option is a company called Coinbase. Alternatively they can mine Ether themselves with using ethereum mining hardware, or an ethereum cloud mining service.

An upside of building an Ethereum rig is that it can be configured to mine other cryptocurrency as well. If you’ve built your own rig you need to decide whether you want to mine on your own, or collaborate with others as part of an ethereum mining pool.

Using an ethereum mining calculator, one can determine exactly how profitable your mining will be.

Altcoin Wallets

A popular method of storing cryptocurrency online is in a software wallet. Check out our full article on finding the best altcoin wallet for more info.

Ethereum Mining Hardware

Ethereum was launched in 2015 and has been hailed by the Telegraph as the “rising star of the cryptocurrency world”.

Since the launch of the currency, it has grown in value by more than 2300% and is the second most used cryptocurrency after Bitcoin. The advantage of Ethereum over Bitcoin is that the technology allows for not just currency to be traded on the platform, but also applications.

As with other cryptocurrencies, you can purchase them through an exchange, but you can also mine them yourselves using specialist Ethereum Mining Hardware.

Ethereum Mining

Miners of Ethereum will work to earn “Ether” as a crypto token instead of earning bitcoins. Ether can be used for trading as a currency as well as for payment of transaction fees on the Ethereum network.

Using the correct mining hardware will help you save costs when mining for Ethereum, however before you purchase mining hardware it is important that you have an ethereum hardware wallet to safely store your coins. Consider the Trezor vs Ledger Nano S wallets.

Ethereum Mining Hardware

In order to mine Ethereum, you will need a computer with a GPU (instead of a standard CPU).

The better the GPU, or graphics-processing unit, the faster the hashing power of the computer, which equates to more calculations possible per second.

It is important however to take the cost of electricity into account when purchasing a GPU.

The more powerful the GPU, the higher the electricity consumption will be.  To calculate the estimated costs more accurately, find an Ethereum mining calculator and enter the numbers relevant to your requirements, investments and electricity costs.

Hardware can be purchased at different capacities from $200 upwards.  The Raedon R9 295×2 is said to have the highest hash rate of all Ethereum rigs and so will give you the biggest returns on money.

Ethereum mining rigs can be dedicated to Ethereum mining only or can be a computer that performs any other necessary tasks and does mining on the side.

Should the price of a mining rig be beyond your budget, it is also possible to build your own Ethereum rig from basic computer parts. You will need GPU’s, graphics cards, motherboards, and power supply units. Each GPU will need about 200 watts of power. For more information on building your own rig, click here.

Ethereum mining is said to be resistant to application-specific integrated circuit (ASIC) as Ethereum contracts can include any type of computation and therefore ASIC’s would not add any benefit to Ethereum mining.

Ethereum Cloud Mining

Ethereum Cloud mining is a good alternative for potential miners that do not want the expense and maintenance of owning their own hardware. By signing a contract with a company that does cloud mining and depositing your money, you can be active as a miner almost immediately.

It is important to ensure the company you contract with is reputable and will not disappear with your money. Large cloud mining companies can keep their costs down due to the large volume of hardware and data they purchase and can therefore pass better earnings over to you.

Of course the downside to cloud mining is that you will be paying a percentage of the profit over to the company managing the hardware and mining in your behalf.

Mining Pools

If you’ve already made the investment in hardware, you could join an Ethereum mining pool online to help share resources.

See our comparison of Ethpool vs Ethermine here or read more about the top ethereum mining pools

Ethereum Investing

Mining is not the only way to invest in Ethereum. You can purchase a wallet and buy Ethereum through an online discount broker. Selected broker has a breakdown of the best Ethereum brokers online to assist you. This is of course a far less time consuming manner to invest, however the risks are greater as the currency is fluid and volatile.

Ethereum has made a significant impact on the cryptocurrency market and is considered to be a better investment than Bitcoin.