Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
A digitally signed proof of financial solvency. Kraken was the first to undergo and publish a full audit. There are only a handful of blockchain experts able to do a full 3rd party audit, but most of the major exchanges are following suit. It's very popular with customers.
With the results of a full audit, the blockchain, and some cryptographic expertise I don't have, you can verify that every last asset credited to all customer's accounts are matched by valid transaction inputs to addresses controlled by the exchange, without being able to figure out just how much money that total actually is. It's quite impossible, mathematically speaking, to fake or fudge the numbers, but for most of us it's similar to using Linux - you're trusting that an invalid audit would be promptly announced by some crypto guy somewhere who bothered to check the math.
In lieu of an actual audit, you can do what 796 does: simply publish your cold storage address with a signature proving it's actually you're address. They also publish the balances of their top 100 asset holders each week after contract settlement. (Not names, just balances.) Comparing these with the traded contract volume gives a general picture of solvency.
A full audit is obviously preferable, but just asset transparency alone would have revealed to the world that Mt. Gox was 'losing' coins to one or more thieves long before it drove them into bankruptcy.
Mt. Gox coming from a trading card game is true and kind of funny, and I'm reluctant to call Mark Karpeles or his team 'incompetent,' but the fact that they had no idea money was evaporating from their system (being stolen) for nearly 2 years is a bit damning. It's curious that the little guy of the original 3, BTC-e, is still going strong with a very solid reputation for honesty - while maintaining total anonymity as to who the two Alek's are that actually own it. If any exchange could run off with their customer's money and get away with it it would be them. -- Or a well regulated bank. They can get away with anything.
Unless you're using ASIC's specifically designed to calculate SHA256, you'll burn vastly more electricity than you earn.
The original Bitcoin client had a "generate coins" button and the first few million were earned with CPU's. After the SHA256 algorithm was ported to GPU's that feature was removed. It is no longer possible to make a return using GPU's either. In order to make a positive ROI you have to purchase the most energy efficient mining hardware as early as possible AND have access to cheap electricity.
Bitcoin mining is the process of creating a new block of transactions on the blockchain. A block contains all the recent transactions, the hash of the previous block, and a random number. A miner simply hashes the new block repeatedly, using different random numbers, until it finds a hash that has the currently required number of leading zeroes (this 'difficulty' changes dynamically - usually increasing - to maintain the average frequency of new blocks at 10 mins.)
The current Bitcoin network is several orders of magnitude faster at calculating SHA256 than the worlds top 500 supercomputers put together and it's function is to process transfers of value from one address to another without the possibility of forgery or reversal by simply keeping a public record of every penny ever spent. The purpose of all that processing power is to eliminate the likelihood that one person or group could find new blocks faster than everyone else put together (a 51% attack) allowing them to un-spend money recently spent.
If anyone's genuinely interested, I've purchased mining hardware from 4 companies and I can recommend 2 of them: KnCMiner in Sweden and Spondoolies-Tech in Israel. Just purchase their newest model on the first day it's available, connect it to cheap electricity and keep it running. You can very likely make a small positive ROI.
On a side note: a 51% attack is not capable of stealing your money.
Keeping your bitcoin secure simply means keeping the secret spending key a secret, whether you trust your keys to an insured bitcoin bank (like Coinbase, Circle, or Xapo,) use a hybrid online service that stores encrypted copies of your spending keys and only decrypt them on your own device (blockchain.info,) or run your own Bitcoin node at home. For really safe storage you can always create a new set of keys on a trusted computer, print them to paper and then delete them. This is called a 'cold wallet' as no hacker can hack keys off a piece of paper!
Thank you, after I posted my questions I did some research and leaned that it is not easy to make any ROI without the right equipment. Appreciate the details.
"To begin mining, you'll need to aquire bitcoin mining hardware. In the early days of bitcoin, it was possible to mine with your computer CPU or high speed video processor card. Today that's no longer possible. Devices based on custom ASIC chips who's performance offers up to 100x the capability of older systems have come to dominate the industry. Mining with anything less will consume more in electricity than you're likely to earn. It's essential to mine with purpose built bitcoin mining hardware."
Question is, what about if you have high end servers with Intel 13th gen chips, lets say dual Intel® Xeon® E5-2697 v3 2.6GHz chips, and let's say your electricity is free. Does it become more viable? What sort of Hash/s can something like that even produce?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,057 since Dec 2013
Thanks Given: 4,409
Thanks Received: 10,225
Well free maybe not 100% correct. Prepaid for - whether you use it or not is probably more accurate. And currently I'm not using it for 12 hours a day even though I've paid for it.
Wow. now that would not be worthwhile. Maybe I'll try it for a week and see what happens. Mining software must be pretty impressively configured to be 1000x better than the best Intel chips money can buy. (I know we are comparing applies and oranges). Makes you realize though, when we talk about HFT and their FPGA setups, how much faster they will be than any standard computer can be.
It's interesting reading a lot of the FAQs/101s/Info around on the web. So much of it is all 12-18 months out of date - it was obviously all written/popular when Bitcoin was in its bubble explosion phase.