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Jumping into the pool: How to earn a profit mining Bitcoin and Ether

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For the past several months, miners around the world have been extremely active, which can be seen through spikes in hash rates that coincided with a significant increase in the prices of cryptocurrencies. At the beginning of 2020, Ether (ETH) could be bought for $130, and now, ETH has reached $500. The king of cryptocurrencies, Bitcoin (BTC), added almost a cool $10,000 to its price.

So, how can users engage with the industry? What has been obvious for some time now is that solo mining is not the way to go. For Bitcoin, Ether and every major altcoin, the blockchain is built in such a way that the complexity of finding blocks is constantly increasing, which means that a pair of GPU cards is not powerful enough to generate one block.

The point is not that the rig is insufficiently powerful to mine Ether, rather it’s impossible mathematically. One rig can sit there searching for a block for several months. If we are talking about mining Bitcoin on ASICs, then it will take even more time. It’s easier to go bankrupt on equipment and electricity than to mine crypto solo. The calculation is simple: divide the total hash rate of Ether by your hash rate and get the number of seconds it will take on average to find a block.

So, it seems logical that miners would flock to mining pools, especially today, as even non-mining companies are starting to launch such products. For example, Binance recently launched its own mining pool for Ether.

What to know before joining a mining pool

A mining pool is a server that combines the computing power of all the participants connected to it. Miners join the pool over the internet, reallocating their hardware to the pool. They jointly perform mathematical solutions to find blocks of a specific cryptocurrency. When the pool finds a block, the pool obtains a consensus from other network participants, then receives a reward. This reward is shared among all members of the pool in accordance with the amount of hash rate provided.

Before choosing a pool, it’s important to know the size of the pool. When a pool grows, the chances of discovering a block increase. But the more people join the pool, the less profit each participant receives. This is a double-edged sword: small but frequent payments, or bigger payments, but less often.

Before joining the pool, users need to find out the minimum payment, which is the minimum amount of crypto that must be mined before it will be sent to the users’ wallet. If the minimum payment is high, then the user will have to be part of the pool for a long time before receiving any income.

Another important thing that should be mentioned is that participation in any pool is not free. Users pay a certain percentage of their income for participating. Usually, such commission varies from 1% to 3%. In general, participation in any pool does not require serious investment and knowledge, and if the user has already put together a rig, then it will not be difficult to figure out which pool to choose. Here is what to pay attention to when choosing a pool, regardless of the cryptocurrency mined:

  • The number of participants in the pool, which affects individual income.
  • Ping time, or time delay, which is a result of the user’s computer needing to transfer information to the pool. Ping time depends on territorial distance — the lower the ping, the lower the time delay and the faster the data is transferred. A high ping is not appropriate because there are pauses between block changes in cryptocurrency networks, and with high ping, the user’s computer can go over the values ​​for the old block and mine in vain. Usually, a comfortable ping is up to 10 milliseconds;
  • The size of minimum payout, which should not be too large, otherwise the payment may not take place for a very long time.
  • There are many pools that are fraudulent or take a larger amount of income. Users need to find out the pool’s reputation in advance.

After constructing a rig, it’s time to choose a mining pool. Of course, most of the pools work for Bitcoin or Ether mining. Below are some of the most popular pools used to mine the top two cryptocurrencies. For Bitcoin, almost all the main pools are based in China, which is not surprising, as the country produces most of the Bitcoin mining hardware.

F2Pool

Founded in 2013, F2Pool is one of the oldest Chinese pools, and it’s of primary interest for Bitcoin miners. The pool accounts for almost a fifth of the total amount of BTC mined. The pool uses Pay Per Share+, or PPS+, as the payout model in which the miner receives a reward for each share accepted by the pool, regardless of the blocks found by the pool. The pool determines the cost of each share independently, taking into account the network complexity, reward, block time and the pool’s own power.

In addition to Bitcoin, the pool mines more than 40 coins. The commission, depending on the coin, ranges from 1% to 5%. As for Bitcoin, the pool takes 2.5% of the rewards as a commission, and payments are made once per day. Users must withdraw the earned money within 90 days, otherwise the pool will keep it for the development of the service.

Poolin

Poolin is a pool owned by parent company Blockin that launched in 2017. The pool is popular among Bitcoin miners. Poolin offers quite a few coins to choose from: Ether, Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC) and so on. Commission fees are not fixed; rather, they are set for each cryptocurrency separately, with a 2.5% fee for BTC.

The payment model depends on the chosen coin: PPS or Full Pay Per Share, known as FPPS. Under the latter method, the pool also distributes transaction fees among miners, which adds 10% to 20% to their income. This method is used to pay for Bitcoin mining.

A notable feature is that Poolin provides mining on ASICs and GPUs from Nvidia and AMD. The development team regularly updates the software every couple of weeks to ensure the stability of the service.

BTC.com

BTC.com is one of the largest international cryptocurrency mining pools. It’s controlled by well-known manufacturer of mining equipment Bitmain, which produces a line of ASIC miners under the Antminer brand. The China-based platform was launched in 2013.

The commission for each block mined by the pool is set at 4%. Besides Bitcoin, a number of other cryptocurrencies can be mined through BTC.com, including Bitcoin Cash and Litecoin. Mining pool representatives keep records of its users’ income.

AntPool

AntPool is a Chinese project that was launched in 2014. Just like BTC.com, the pool is controlled by Bitmain. In addition to BTC, AntPool can mine seven more cryptocurrencies, including the privacy-oriented coins Dash and Monero (XMR).

Payments are made daily, and the service has low commissions, with some payments made with zero fees. In AntPool, payments are mainly made using the standard method, Pay Per Last N Share — or PPLNS — in which users get payments for the last share based on pool luck.

With this method, there is no fixed payment for the share, and the main issue is the speed of finding a block. When a pool uses the PPLNS method, the payment comes from “time shifts” between searching two blocks. It means that if the block is not found for a long time, the payment gradually increases.

A distinctive feature of the pool is the ability to work in “solo” mode — but not in the literal sense. The pool makes it possible to carry out “solo” mining through joint efforts. This means that the user whose rig has discovered the block will receive the payment.

SparkPool

SparkPool is registered in China and was launched in January 2018, and half a year later, the pool has entered the list of leaders in mining Ether. Additionally, SparkPool allows the mining of coins such as Nervos’ Common Knowledge Base (CKB), Grin, and Beam.

Mining takes place using the Ethash algorithm, and payments occur using the PPS+ method. Payments are made every day, based on Singapore Standard Time, and the minimum amount for payments is 0.1 ETH. On the 28th of every month, funds are withdrawn automatically if the balance is more than 0.0105 ETH, and the withdrawal fee is 1%.

Registering with the pool is optional. Users can mine anonymously, but if so, not all the functions of the pool will be available.

Ethermine

Ethermine is one of the most popular pools dedicated to Ether mining. This pool is the largest for Ethereum. Pool servers are located in Europe, Asia and the United States.

The pool uses the PPLNS payout model. The minimum payment amount is the equivalent of 0.5 ETH, and the maximum amount is 10 ETH. There is no commission for the withdrawal of funds, and payment comes instantly if the blockchain network is stable. The pool is intended only for mining cryptocurrency on GPU processors.

SpiderPool

SpiderPool is a five-year-old Chinese project that only supports four coins: ETH, BTC, BSV and BCH. Nevertheless, the pool is quite popular among Ether miners.

There is not much information available for non-Chinese users, but the pool’s commission is 2%. The minimum payout amount depends on the coin, but once per week, users can apply for an amount that is below the minimum threshold. Otherwise, payments are made automatically once per day.

Nanopool

Nanopool specializes in coins that are mostly mined using GPU cards. Currently, Ether, Ethereum Classic (ETC), Zcash (ZEC), Monero, Ravencoin (RVN) and Pascal (PASC) mining are supported. The pool allows users to mine not only a single cryptocurrency but also two different cryptocurrencies simultaneously, with a proportional distribution of power between them. Like any other mining pool, Nanopool has a fee that is charged based on the income of its users. The pool uses the PPLNS payment method.

Withdrawing Ether from a miner’s account balance to their wallet is carried out in Nanopool automatically when the minimum payment is reached, which is 0.05 ETH.

Nanopool does not have a clear payment schedule, but payments happen in several stages throughout the day. As soon as the miner’s account balance exceeds the set minimum value, it will be paid during the next round of payment.

To mine or not to mine?

When choosing a pool, each person should pay attention to the list of available coins to make sure their coin of choice is on the list. Also, consider the payout and commission model, as a pool that offers the lowest commission and pays for transactions is preferable. Another issue is the proximity of the pool servers: the closer the server, the more stable the mining process will be.

Related: The top crypto-mining graphics cards to get a big bang for your buck

In general, it can be said that no matter what coin the user chooses, they are unlikely to lose out when using a mining pool. According to Chun Wang, co-founder of F2Pool, the entire mining industry is currently on the rise:

“Bitcoin and other cryptocurrencies mining are continuing to grow, just the same as last year. Thanks to DeFi, there has been a period of high transaction fees in the ETH network in the past few months, leading to the ETH mining revenues much higher than usual. People were attracted to buy related mining machines to mine ETH. With the decline in mining revenue, miner’s passion for ETH mining participation fades recently. But BTC and other coins’ price rising rapidly makes mining more profitable, more people are willing to participate in mining now.”

Source: https://cointelegraph.com/news/jumping-into-the-pool-how-to-earn-a-profit-mining-bitcoin-and-ether

Blockchain

Bitcoin: Temporary Correction or No ATH This Year? The Crypto Weekly Market Update

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Bitcoin has a way of surprising people. This week was no exception. A few days ago, almost everyone believed that the cryptocurrency is inevitably headed to a new all-time high. And how could they not? BTC was trading at a few hundred USD below the record from back in 2017. Unfortunately, things took a turn for the worst.

Yesterday was undoubtedly a bad day for bitcoin as it plunged a total of around $3,000 in less than 24 hours. From a high of about $19,500 down to $16,200, the bears poked and showed their faces. The entire market lost around $80 billion of its capitalization as altcoins actually had it worst.

During the market dive, Bitcoin’s dominance actually increased, showing that not only altcoins failed to hold their ground, but they dropped harder than BTC. Since then, there has been a slight recovery and at the time of this writing, the primary cryptocurrency is trading at around $17,000.

The move was seemingly propelled by the news that US regulators might seek to require identity verification from crypto wallet providers. Coinbase’s CEO, Brian Armstrong, commented on the matter, expressing his worries that if the new rules are implemented, they would be rather harmful to the users and the industry, in general.

At the same time, the popular cryptocurrency exchange OKEx opened withdrawals for the first time since they were shut down around a month ago, which might have prompted users to cash out the profits that they have been sitting on. In fact, CryptoPotato reported that around $500 million were withdrawn from the exchange as the crash started to take place.

In any case, the results are here, and it remains particularly interesting to see where will bitcoin go from here.

Market Data

Market Cap: $512B | 24H Vol: 181B | BTC Dominance: 62%

BTC: $17,132 (-7.98%) | ETH: $516.86 (+1.71%) | XRP: $0.56 (+74.08%)

Bitcoin Worth $500 Million Withdrawn From OKEx as Users Look for Other Alternative. Data shows that users withdrew a total of 29,300 BTC from the popular cryptocurrency exchange OKEx right after it resumed full functionality. This happened just as bitcoin plunged $3,000 in a matter of 24 hours. The exchange also resumed the withdrawals a day earlier than announced and during the Chinese trading hours.

Bitcoin Black Friday 2020: The Sales You Better Not Miss. It’s the end of November, and with this comes the long-anticipated shopping season. For many, this is a time to enjoy massive sales. We’ve taken the liberty of listing a few sales within the cryptocurrency field that aficionados might find interesting.

Facebook’s Libra Could Reportedly Arrive in January 2021 in a Scaled-Down Version. Libra, Facebook’s long-awaited cryptocurrency project, might be set to launch in early 2021. However, the version that’s potentially hitting the market is scaled-down and specifically intended to abide by the regulations of Switzerland’s FINMA.

Research Suggests Satoshi Nakamoto Launched Bitcoin From London. New research shows that activities associated with Satoshi Nakamoto from 2008 and 2010 might have taken place in London when Bitcoin’s network went live. This brings the experts a step closer to identifying who’s behind the legendary pseudonym.

6 Possible Reasons For Bitcoin’s $3,000 Daily Price Crash. Bitcoin went through a massive crash two days ago when it lost around $3,000 of its value in a sudden red candle. These are six reasons for which this may have happened and a brief outline of what might be next to come.

Coinbase CEO Fears Rumored Regulations Proposed By The Trump Administration. Brian Armstrong, the CEO of the leading US-based cryptocurrency exchange Coinabse, has said that he’s worried about the rumored regulations concerning third-party wallet providers having to identify their users. He said that this might harm users and the entire ecosystem.

Charts

This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Chainlink, and Stellar Lumens – click here for the full price analysis.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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Source: https://cryptopotato.com/bitcoin-temporary-correction-or-no-ath-this-year-the-crypto-weekly-market-update/

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Blockchain

Ripple Plans To Cash Out 33% Of Its MoneyGram Stake With A Significant Profit

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  • The San Francisco-based payment protocol has filed a document on Friday with the US Securities and Exchange Commission (SEC). It reads that Ripple Labs has entered into an agreement with MoneyGram, which entitles Ripple to sell up to 4,000,000 shares of common stock.
  • Ripple’s option to sell these shares will expire “upon the earliest of March 31st, 2021, the time at which the maximum amount shall have been sold, or the occurrence of certain other customary events affecting the issuer.” 
  • CryptoPotato reported last year that Ripple and MoneyGram announced a strategic partnership. The initial term of the agreement was for two years. Ripple had agreed to provide a capital commitment amounting to $50 million in exchange for equity through the two-year period.
  • As per the SEC filing, Ripple owns 6.22 million shares of the giant money transfer company (or 8.6% of shares outstanding). However, the blockchain company has a warrant to buy up to another 5.95 million shares, amounting to a total equity position of 12.2 million shares or 17% of MoneyGram’s shares outstanding).
  • With the initial investment in 2019, Ripple purchased the MoneyGram shares at 4.10 per stock, which was a significant premium to the market price. 
  • Nevertheless, MoneyGram’s stocks (MGI) have surged in 2020, closing Friday’s session at $7.42. As such, Ripple can cash out with an 80% profit, despite the initial premium.
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Source: https://cryptopotato.com/ripple-plans-to-cash-out-33-of-its-moneygram-stake-with-a-significant-profit/

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Blockchain

South Korea To Postpone Previously Planned Crypto Income Tax

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Lawmakers in Korea are planning to postpone a recently considered tax on crypto assets profits. Reports say the tax rule delay will be about three months – instead of October 2021, January 2022.

The New Crypto Income Tax Rule To Wait Until January 2022

According to a recent media report, the South Korean congress plans to put off the recently considered cryptocurrency income tax rule. A planning and finance committee of the National Assembly has issued a report, which proposes the necessity of implementing the crypto income tax rule from at least 2022.

A few months ago, in July, a report stated that South Korea’s Minister of Finance and Economy believes that the country should come up with a tax on cryptocurrency trading and investing. Back then, he added that South Korea has been in discussion with other countries about introducing a new digital law.

In July 2020, the country’s Ministry of Economy and Finance amended its tax code, where it included the plan for charging residents a 20% tax on gains from cryptocurrency trading, which are worth more than 2.5 million Korean won (about $2,000).

Lawmakers in the National Assembly are to approve the Government’s plan, which was to carry into effect the cryptocurrency income tax rule from October 2021.

Reason For The Delay – Time Is Tight

As per the media report, the reason for the postponement of the crypto tax law is based on some concerns, raised by local crypto exchanges. They have claimed the lack of time to build their proper tax reporting system and infrastructure, needful for the process to begin.

The so-called “Specific Financial Information Act” would be enforced from March next year, so crypto exchanges have to complete the necessary reporting system by September 2021 for verifying their real names of deposit withdrawal accounts.

As CryptoPotato reported, South Korea announced the planning of the crypto income tax in June this year. The Asian country went through some different views on how and whether it should tax profits from cryptocurrency. Firstly, at the beginning of 2020, the Ministry of Economy and Finance did not consider that digital asset trading gains as taxable income. A month later, another local report said the Ministry believes that the nation could start label cryptocurrency trading profits as “other income.”

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Source: https://cryptopotato.com/south-korea-to-postpone-previously-planned-crypto-income-tax/

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