How to Assess the Current Cryptocurrency Scene?
After Satoshi Nakamoto changed the world forever with his invention, Bitcoin, the cryptocurrency market saw a massive rise. While Ethereum, Litecoin, and Ripple were some of the most popular cryptocurrencies after Bitcoin, while the total number of cryptocurrencies was more than 2,000. By 2017, the industry touched its peak as Bitcoin surpassed the $20,000 figure – a watershed considering it was not even $1 in 2010. However, then came the bloodbath…
However, after a crash occurred, following which the prices of Bitcoin and all other cryptocurrencies took a severe beating. In the midst of this, there were some projects that were exposed as scams. Some cryptocurrency exchanges were hacked, resulting in loss to many cryptocurrency owners. Hence, skeptics came forward with the million-dollar question: is cryptocurrency dead?
Is Cryptocurrency Dead?
Quite contrary to the general view, cryptocurrency is nowhere dead. Although prices took a nosedive in the last two years, volatility is slowly fading away. This may not excite the speculators; it is a great sign for the institutional investors – those who hold the key to take the cryptocurrency adoption to the next level. Some analysts believe that this institutional money will only grow over the next few years. There are also talks on moving cryptocurrencies to the Nasdaq, a move that can bolster the credibility of Blockchain greatly, and position it as an alternative to present financial options. There are calls for ETFs (exchange-traded fund) too, which is expected to simplify investment in Bitcoin and other cryptocurrencies.
Moreover, the foundational technology of cryptocurrencies Blockchain is becoming popular with real-life impact all over the world. Major tech firms, banks, and many businesses are already working with cryptocurrencies. If you are worried about regulations, then keep in mind that once a critic of cryptocurrency, China, is now competing with the U.S. by issuing digital money to streamline its government services. Last month, President Xi Jinping signaled that the Chinese Government viewed Blockchain as an important piece of the puzzle – one that can elevate the country to become a high-tech superpower.
Moreover, it is expected that Blockchain will be integrated with other modern solutions like IoT to address a slew of problems. For instance, it can provide a secure method to protect customer data. This can especially contribute a lot in healthcare institutions where privacy is highly critical. Similarly, the transparency cryptocurrencies offer can revolutionize the supply chain industry where machine learning can be used to generate real-time information about goods and create optimized routes.
Don’t judge the cryptocurrency market with their prices. These crashes have in fact cleansed the industry off weak platforms and have allowed better ventures to make a difference. These are the platforms that have highly-skilled teams who are dedicated to resolving centralization issues with their innovative solutions. As governments and industries are ramping up their adoption strategies for digital assets, cryptocurrencies clearly are here to stay.
Coinbase Going Backwards – Elimination of Key Client Services + Needlessly Complicating Merchant Transactions = Disaster
Coinbase going backwards has made life much more difficult the past few weeks. Up until March I could sell Bitcoin and turn it into usable cash in less than 30 minutes right from my laptop. Then Coinbase utterly eliminated PayPal which now means I need to wait DAYS for a bank transfer. In the “good old days” of just last month I could’ve sold Bitcoin on Coinbase, had the proceeds transferred directly to PayPal within seconds and then have the money sitting in my checking account in less than 30 minutes. All I would need to do is agree to PayPal’s pittance of a 25 cent transfer fee via debit card.
But alas PayPal has disappeared from Coinbase altogether which has rendered this quick, inexpensive solution impossible.
But wait it gets better. An email I received from Cheapair just last week is further proof of Coinbase going backwards:
So Coinbase lost a large corporate client and Bitpay wins one. That’s the very nature of the free market at work.
Regular readers will easily recall how I bought a plane ticket with Bitcoin via Coinbase on CheapAir.com earlier this month in a simple, hassle-free transaction.
I am truly disappointed in Coinbase. For so long I’ve been seeing them do so many good things to move cryptocoin forward into mainstream acceptance. Up until recently I have truly been a fanboy. All of the recent announcements of promising new hires not withstanding, it’s impossible not to see that Coinbase going backwards is a real thing. And a real sad thing.
Coinbase going backwards needs to stop. Coinbase gave up so much ground they won by their asinine actions lately. They need to resume forward thinking and decisive action if they hope to maintain their dominant position as a cryptocoin exchange.
As an extension of my thinking I am going to visit a Bitcoin ATM machine here in the Las Vegs valley. I expect an attempted robbery vis a vis their published exchange rate, transaction fees, etc. Expect a full report from me within the next 48 hours. Personally, I expect to give Coinbase an expanded business model as a result. Stay tuned!
Buying Stuff with Bitcoin – It’s a Real Thing. Not Just Lambos or Mansions Either.
Buying stuff with Bitcoin has been real for years. From buying a house with Bitcoin to the legendary “Lambo” to anything else, Bitcoin is gaining wider acceptance all the the time. I just bought a plane ticket using Bitcoin on CheapAir.com. CheapAir.com is one of the earliest adopters of Bitcoin as a payment method online and certainly the pioneer in the travel sector.
Buying stuff with Bitcoin got a lot easier thanks to Coinbase and their super-simple to install merchant tools. In my base Coinbase recognized me immediately which makes buying stuff with Bitcoin even easier. But even if I weren’t a Coinbase client I could’ve used any Bitcoin wallet. And from there I had my choice of Bitcoin, Bitcoin Cash, Ethereum or Litecoin.
Here’s how easy it is to buy stuff with Bitcoin, in my case paying for my airline ticket:
It was actually faster and easier paying with Bitcoin than a credit card. Many merchants accept Bitcoin today including Dish Network, Microsoft, Shopify , NewEgg, Overstock among tens of thousands of companies large and small. Bitcoin’s wider acceptance for payment will solidify its position as THE cryptocurrency standard not just for investors but for consumers as well.
Buying stuff with Bitcoin – be it a pizza or a diamond ring or a luxury cruise – silences the critics that continue to pound the table declaring Bitcoin has no value and is useless. I’m entertaining the idea of living an entire year on only what I can buy with Bitcoin. This experiment with lifestyle design should conclusively end the debate of Bitcoin’s relevance once and for all. In the back of my mind I envision buying a mansion, a Lambo and hiring a personal chef. Then I consider a wiser impact by simply grocery shopping, putting gas in the car or buying some books. Wait and see.
Should You Buy Used Mining Rigs? Yes. Well maybe…. And perhaps no.
The option to buy used mining rigs is a tempting one. With the madness surrounding crypto mining and alt-coins, many people are going to look into building their own mining rigs. While this isn’t a huge undertaking for those who are quite computer savvy, what about those who aren’t? Building a mining rig yourself can be quite daunting if you don’t understand the basics of building a computer from the ground up. This would lead many to look towards eBay and Craigslist to shop for used mining rigs that other miners are trying to sell. But is it worth it?
Arguments In Favor to Buy Used Mining Rigs
Difficult to Source
Sourcing hardware for a mining rig build can be somewhat difficult. The main issue that one would encounter in acquiring the hardware for a mining rig is limitations on GPU quantities you can purchase. Many retailers, such as NewEgg.com, will have a limit of one per customer per purchase. Getting the bulk of your GPUs may be difficult, so buying a rig with all the parts sourced may be an attractive option to some.
Assembly is Complicated
Building a mining rig is also quite an undertaking in and of itself. It requires more than a working knowledge of assembling a normal desktop PC, as you’ll be required to run PCI-E USB riser cards and possibly need to daisy-chain power supplies in order to get the entire rig up and running. Buying used mining rigs with all of the assembly, troubleshooting, and OS installation and configuration done for you may be an attractive prospect.
Arguments Against Used Mining Rigs
As with any used PC, you can never be fully certain how old all the parts are or how long they will last. Additionally, people selling their mining rigs are looking to get out of the mining business altogether, so their rigs will be sold as-is. So a warranty will most often be off the table when dealing in used mining rigs. Once you drive off with it, it’s yours. When you buy used mining rigs you are taking on no small amount of risk.
Used rigs could also contain dated or aging hardware. Dated hardware means the GPUs are from previous generations, and thus offer less hashing power. Aging hardware could mean your used rig won’t mine for a long enough period of time to recoup your investment, much less turn a profit. A key talking point when speaking with the seller would be to ask how long the rig has been mining. If it’s been up and running for longer than a year, it’s probably best to not buy it – you’re on borrowed time. And if the hardware is dated, avoid it altogether. Dated hardware isn’t able to keep up with the mining difficulty to produce viable hashing power. This means it will take far longer to recoup your initial investment, if you recoup it at all.
Price is also a major consideration for buying mining rigs. Due to the nature of cryptocurrency mining, GPU prices are overly inflated, even on the used market. This was covered more in-depth in my previous article. This will lead to mining rigs being sold at above retail price for new equipment, as even used GPUs are being sold for more than MSRP. And you can bet your bottom dollar that any miner looking to get out of the cryptocurrency mining game will look to fully recoup all the money they spent on their rig, so they will sell it for the highest price that people will pay. Given the hype around crypto mining, this means seeing used mining rigs going for north of $4,000 will be the norm.
The main thing one should always do when looking to buy used is to research the price of the individual components before contacting the seller. Purchasing etiquette dictates that one should do all their research regarding pricing before they arrange to meet the seller. This will allow you room to haggle if you know what you’re buying. Plus, it’s considered rude to meet with a seller and begin research while you’re on their time.
Typical Craigslist Ads for Used Mining Rigs
My Opinion: Should You Buy Used Mining Rigs?
With the main pros and cons laid out, my professional opinion is that it can be reasonable to buy used mining rigs. If, and I stress IF, you can find a good deal where the sum of the parts is at or below MSRP, it may be worthwhile for you to buy a used rig. Since the rig will come assembled, you should expect to pay a little extra for that luxury. How much extra you find reasonable is completely subjective.
Now for my conditions:
- Condition 1: You must be comfortable replacing parts if/when they go out. I would highly recommend you only buy a used rig if you have a friend or loved one with the knowledge necessary. That, or you’ll need to be willing to spend hours pouring over how-to’s and in-depth guides on the web to figure out how to troubleshoot and replace any issues that arise with your rig.
- Condition 2: One should be able to comfortably absorb the cost of the mining rig if the entire enterprise goes belly-up. Buying used mining rigs will almost never come with a warranty or guarantee.
- Condition 3: Understand the hashing power of the rig you’re buying. It will be essential to understand just how much cryptocurrency you should expect to mine with your rig so you can plan your ROI. If the rig won’t pay for itself within a year, don’t buy it.
Given the volatility of the cryptocurrency market and the inherent dangers of investing in cryptocurrency, I must add the following disclaimer: the above article was written as my opinion, and should be taken as such. We (myself and CryptoCapers.com) are not responsible for any losses incurred by any reader investing in the cryptocurrency market, mining rigs, or ASIC mining equipment, using any advice we have published as guidance in buying used mining rigs or any other mining hardware. The cryptocurrency market is extremely risky and volatile, and our advice should only be used as part of one’s research into any crypto mining or investing. If you are in doubt, or if high risk isn’t for you, then don’t pull the trigger. But if you’re eager to take a risk in hopes of making real money in the future, then by all means, join us and the rest of the crypto pioneers and invest in mining your own cryptocurrency.
GPU Availability Trending Downward – Cryptomining is the Culprit.
Ask anyone looking to build a PC for gaming or cryptomining and they’ll tell you the same story: GPU availability trending downward is reality. As a result of supply and demand GPU prices are through the roof. A recent boom in popularity of cryptocurrencies, like Ethereum or Monero, has led to a record high demand for GPUs driven by crypto mining. Such high popularity of cryptocurrencies has led to GPU prices trending upward. Yet, higher prices aren’t helping shore up supply. Both major retailers of consumer-end graphics cards, Nvidia and AMD, are experiencing a supply shortfall. Their core markets are also suffering from this relatively sudden price increase and poor availability.
GPU Availability Trending Downward is not an accident….
Demand Far Exceeds Supply
Even with prices for consumer cards on a steady rise, many retailers and even GPU manufacturers can’t seem to keep GPUs in stock. But the rise in GPUs scooped up for cryptocoin mining isn’t the sole culprit in this matter. ASIC manufacturers, such as Bitmain, are buying out major foundries so they can keep pace with demand for ASIC miners. This puts foundries like TSMC at a production deficit when it comes to supplying GPU manufacturers like Nvidia and AMD.
While your average end-user won’t notice a huge difference, this shortage is impacting small-time altcoin miners and gamers alike. Prices are being driven ever higher by major mining corporations buying their GPUs en masse from major distributors in China. GPUs are being bought in such bulk that consumers aren’t able to get their hands on a high-end graphics card without paying a hefty price, if they are able to obtain one at all. With markets devoid of stock, and demand doubling or even tripling supply, even having the money doesn’t guarantee you’ll be able to buy the graphics card you want. That’s where GPU availability trending downward hits hardest.
With massive supply shortfalls, GPU manufacturer Nvidia is trying to limit who buys their GPUs. According to Nvidia spokesman Boris Böhles: “For NVIDIA, gamers come first. All activities related to our Geforce product line are targeted at our main audience. To ensure that Geforce gamers continue to have good Geforce graphics card availability in the current situation, we recommend that our trading partners make the appropriate arrangements to meet gamers’ needs as usual.”
AMD has similar issues. Trying to get the latest Radeon graphics card will likely cost you a small fortune, if you’re able to buy one at all. AMD’s Radeon line tends to be more popular with miners due to their reputation of having better mining efficiency than Nvidia’s GeForce line. This leads to getting all but the most entry-level Radeon cards nearly impossible.
With supply issues and the wide unavailability of AMD’s Radeon RX 500 series, AMD is also putting gamers first. According to an AMD spokesperson in an email to CNBC, “The gaming market remains our priority. We are seeing solid demand for our Polaris-based offerings in the gaming and newly resurgent cryptocurrency mining markets based on the strong performance we are delivering.”
The Future for GPUs
While the short-term is definitely horrible for end-users, answers may be just over the horizon. With both major GPU manufacturers acknowledging the problem, perhaps we’re on the cusp of a revolution in GPU technology. We may be seeing the major GPU players developing graphics cards geared specifically at miners while still innovating and improving graphics cards for the hardcore gamers. Only time will tell. One thing is for certain: current GPU market trends are unsustainable for both the miners and the gamers of the world.
Bitcoin Mining for Beginners – Episode 6: ASIC Miners
When we last left off, I was sharing my experiences with purchasing my first ASIC miner. Before continuing, I highly recommend reading my previous article here. Bitcoin Mining for Beginners is a complicated topic with lots of moving parts.
Writer’s Note: This article was heavily delayed due to the holidays and unexpected health issues. I’m very well now, but the past month has been very trying. I thank you all in advance for your understanding.
The miner I ordered from eBay had arrived, and I had begun the process of configuring the ASIC for mining Bitcoin. Yes, you can mine other SHA-256 cryptocurrencies with ASIC miners designed for mining Bitcoin. But that is a topic for another day.
As previously mentioned, I reset the device, connected a power supply, and connected the miner to the network via Ethernet. From this point, one is required to enter the web-based configuration interface by entering the IP address of the miner into a browser. One then enters the username and password, which should be the default account on the device if the reset process was done correctly.
Since I was using a Bitmain Antminer S3+ as my first foray, the default username and password were “root.” If you’re running a different device, your default credentials may vary. Please consult documentation for your device to verify. You may have to do some digging online if you’re using an older ASIC to test the waters, much the way I did when I began.
ASIC Web Configuration Interface
A very important step in locating your miner on the network is knowing whether or not the device will use DHCP or a static (pre-programmed) IP address. This should be documented with the ASIC device itself, but if you’re using older generation hardware like me, you may receive your miner without documentation. If this happens, you may have to perform more in-depth research and fact-finding on the web. You will also require the use of an IP scanning tool, such as Angry IP Scanner.
Angry IP Scanner
After all configuration steps were complete, I was then tasked with configuring my ASIC miner for mining. As documented in previous editions of this series, one should have an account setup with both a mining pool and an online wallet. That’s Bitcoin Mining for Beginners 101 — establish how and when and why you get paid!
So I had all of my information in hand, including links, port numbers, and login credentials for my mining pool. I then entered that information into the ASIC’s configuration interface, and voila! I was actively mining!
After 12 hours of mining, my device stopped mining suddenly. I attempted to access the web interface, to no avail. I tried power cycling. Nothing. I tried resetting the device to being anew. Nothing. The device was simply not responding or working correctly at all. I was at a total loss.
We all know that buying used tech on eBay is a perilous experience. You can never be sure if what you’re buying is as described. You can also never be certain that a seller will provide good support after a transaction is complete. This is especially true in the world of used mining equipment – every item has a tagline that states something along the line of “due to the nature of cryptocurrency, this item is sold as-is without warranty.” Not very comforting when dealing with a $250 doorstop. Then are the examples of eBay sellers shipping goods only to have empty boxes arrive – or eBay buyers keeping ASIC miners then filing false claims and shipping back empty boxes. No Bitcoin Mining for Beginners guide would be complete without this ample warning to the perils of buying bitcoin miners on eBay.
Fortune smiled on me, however, as the seller I had chosen to do business with was highly rated. This seller responded to my initial questions about the defunct miner within 8 hours, and they offered me a deal I couldn’t refuse. They not only refunded my miner in full, but they sold me a new miner for the ridiculously low price of $60. They were trying to do right by me, as they said in their reasoning for doing so. I was giddy, to put it lightly.
The new miner arrived after a couple of weeks. I plugged everything in and repeated all of the aforementioned configuration steps, and voila! It was working. I held my enthusiasm for a couple of days, to ensure I wasn’t dealing with another DOA miner. This time, however, fortune smiled upon me. yet again. This miner is still working to this day.
My First ASIC Bitcoin Miner
About the Defunct Miner
At this point, you may be wondering what happened to the dead miner. I wasn’t required to send it back, per the seller. So what now? Well, I decided that I should take this learning experience to the next level and try to repair the device. Bitcoin Mining for Beginners is an ongoing series.
Stay tuned to this space for my adventures in ASIC miner repair!
USI-Tech Closed to North America – Covering Their Bet on the Texas Bitconnect Smackdown
USI-Tech Closed to North America was a smart move by Dubai-based USI-Tech in light of the recent cease and desist letter they received from the Great State of Texas last month. What took them so long? Perhaps they noticed that Texas sent Bitconnect a cease and desist letter and thought it best to “get out of Dodge” as the saying goes.
According to an email shared on a Reddit group assumed to be from USI-Tech:
“We were utterly dismayed to learn that a large number of our sales partners extensively advertise our services on their own websites as well as on social media in a manner which is a breach of contract as well as illegal, and which gives the appearance that our service portfolio violates both US and Canadian law. Despite the measures which we have already initiated, this behavior has even intensified in recent weeks and months. This has already resulted in actions by the respective authorities against various distributors, as well as the first preliminary injunctions in response to this advertising behavior. “
The last sentence is eye-opening…. “injunctions”? Are there other states or even local jurisdictions in the USA that have taken legal action against USI-Tech? We may never know and now it’s moot since USI-Tech Closed to North America is a done deal. This article out of Guam mentions legal action taken by Canada and going so far as to propose the notion there may be a Ponzi scheme at work.
Here are actual screen shots from a USI-Tech account holder’s screen…
So USI-Tech Closed to North America is reality. We suspect that Bitconnect will follow suit. They’ve already eliminated operations in Texas which I suspect is the first step towards their exit from the US and Canadian markets. A lot of American and Canadian citizens are frequently outraged by overregulation but this is one example of how government regulations really can work and benefit the people.
The Best Cryptocoin Investment – Badasseum
Digital currency investors are always scouring the Internet in search of the best cryptocoin investment. Looking past established crypto currencies like Bitcoin, Litecoin and Ethereum they dig deep into coins of all kinds including DragonCoin, Sether, Verge, Ripple and over a thousand others. You can compare cryptocoins for days on end and still not be sure of where to invest. That’s assuming you’re like most neophytes in cryptocoin investing looking to make a killing in 24 hours or less. Or even a month or less.
Cruising through a dozen or so digital currency discussion groups today, I witnessed the aftermath of financial slaughter and monetary mayhem as altcoins plunged while Bitcoin, Litecoin and Ethereum took off — yet again. And, yet again, Bitcoin led the herd with the highest single day gains. And all the while cryptocoin investors betting on altcoins were shell shocked after watching their investments plunge for no obvious reason.
That’s when I came up with the idea for the best cryptocoin investment; badasseum. Badasseum, as the name implies, is the most badass cryptocoin investment of them all. No matter when you buy in you only make money. It only goes up in value, haters love it and trolls respect it. Financial experts are in awe of it and the brightest minds in the world are boggled by it.
The best cryptocoin investment naturally comes with zero risk. Badasseum can never lose value or take a hit due to bad news, negative public perception or anything else. Badasseum is badass personified. Yes this article is an exercise in satire. And yes don’t take me seriously. There really is no such coin as badasseum. No coin can be badass. The closest thing we have to badasseum these days is Bitcoin. So if you want the best cryptocoin investment Bitcoin is the closest you’re going to come.
Buying an ASIC Miner
I decided that, after two months of mining with repurposed PCs, it was time to try buying a dedicated ASIC miner for Bitcoin. But just what is an ASIC miner, and why did I want one?
Well, I suppose we should start with just with a simple description of just what an ASIC is. ASIC stands for “application-specific integrated circuit,” and it’s basically a device designed for one function. In my case, this ASIC was used specifically for Bitcoin mining. ASICs are limited to one particular application, and in the case of cryptocurrency mining, one specific protocol.
If you haven’t seen my previous episode in this series, please go check it out here.
Why ASIC Over GPU?
In the world of Bitcoin mining, miners have many options on how they want to mine. A miner can use their CPU, an array of GPUs, or they can opt for an ASIC. Every option has pros and cons, but typically Bitcoin miners opt for ASICs due to their efficiency and hashing power. Some cryptocurrencies, such as Ethereum and Monero, cannot use ASIC devices due to the simple fact that ASICs don’t exist for their protocols. The difference between ASIC, CPU, and GPU mining is broad enough of a topic to deserve its own write-up, so today we’re simply going to focus on my experiences with buying and deploying my first ASIC device.
Where to Buy?
After several days of research, I decided that I was going to opt into using an ASIC. But that was only the first step. I now needed to source a device from a reputable supplier, and I needed to put a good amount of money up front in order to make my purchase.
The concept of putting a lot of money into something I’ve never even heard of was a scary prospect, I must admit. I believe in the blockchain, but I wasn’t willing to drop the roughly one thousand dollars I needed to spend to get my feet wet in the world of ASIC mining. So I decided to look into an older generation miner for far less money to give myself an introduction to buying, configuring, and maintaining an ASIC miner.
What I’m about to tell you comes with a heavy disclaimer: do NOT spend more than you’re comfortable losing! The world of cryptocurrency is rife with risks, shady sellers, and sight-unseen purchases. As with any investment into cryptocurrency, one should always do their research, find the best source possible, and be ready to be patient. Buying hardware for mining Bitcoin comes with many, many risks, and one should be as informed as possible. One should also not spend more than they are able to lose. I cannot stress this enough!
With the heavy disclaimer out of the way, let us soldier on.
After weeks of research, peer consultation, and shopping around, I decided to buy my first ASIC miner from eBay. I settled on a Bitmain Antminer S3+ 450 GH/s ASIC device for $200 as my first investment. Sure, its hash rate isn’t great, and it won’t make me amazing amounts of Bitcoin, but I was far more comfortable plunking down $200 on eBay than I was plunking down nearly a grand to prepay for a latest-gen ASIC from a distributor I’d never heard of.
Bitmain Antminer S3+
Miner Has Arrived
Weeks later, after my order was placed and my item arrived, I began the process of configuring my ASIC. It was fairly easy for me to configure, as I am an IT professional by trade. However, user experiences may vary.
I was required to provide a power supply for my ASIC, as it didn’t come with one, and I decided on a Thermaltake 750 watt power supply that I sourced from my local Fry’s Electronics. I also purchased some handy power supply manual switches from a seller on eBay because I didn’t like the idea of running a power supply 24/7 using a paperclip as a jumper.
Power Supply Switch
With ASIC and power supply in-hand, I set about the process of configuration. It was very straightforward – connect the power leads to the miner, connect the network cable, and power the device on. I then had to use an IP scanner to locate the device on my network, as resetting the device to factor defaults reverts the network configuration to DHCP.
I thought I was ready to continue, but a slew of challenges still awaited me.
To Be Continued
As I found out, configuring used mining equipment not such an easy prospect. My challenges were many. Too many, as it turned out, for a single episode. As such, we will pick back up next time. We will continue diving into the world of buying second-hand mining equipment. I will also share the trials and tribulations that come with the territory.
Look to this space for more adventures in Bitcoin!
Episode 4: Trading Monero
I recently had a crash course in trading Monero for Bitcoin. Boy was that an adventure!
If you haven’t seen my previous episode in this series, please go check it out here.
Mining Enough Monero
Well, after we’ve setup our miner and found our mining pool (I chose Minergate to start), we then need to actually mine enough cryptocurrency to trade for Bitcoin. This can take a lot of time, depending on your mining rigs, the difficulty of the coins you’re mining, and the miner pool fees that you have to pay to trade. The biggest factor to consider, as a matter of fact, is the pool fees. As I’ve found out.
So using Minergate, I had mined the required amount of Monero that Minergate needed to trade. Subsequently, I began the trading process. Easy as pie, right? Oh boy…
Trading for Bitcoin
Prepare to wade through a minefield of pool fees, transfer fees, and selling fees. There are literally fees attached to every…single…transaction. As such, you have to be very careful before you begin moving your coins around. One must read every agreement for every service they use, and one must carefully calculate how much cryptocurrency you need to cover all your fees. Some services and pools have higher fees than others, but this is usually a trade-off for ease of use. Take Minergate for example. They have an extremely easy-to-use GUI that makes mining various cryptocoins very easy. However, their pool fees tend to be higher than others.
Back to the point: I’m trading my Monero for Bitcoin. To begin this process, I logged onto my Minergate dashboard, and began the selling process. (Pardon the balance inconsistency – I went through this process prior to publication)
Minergate – Sell with Changelly
When you go to sell, it will take you to the associated cryptocoin market. For Minergate users, Changelly is the featured partner with integration for ease of trading (or that’s the plan at least.)
Changelly – Trading Cryptocurrencies
In my particular case, I was exchanging my Monero (XMR) for Bitcoin. As I found out, however, you are required to have a minimum amount of Monero, or any cryptocurrency for that matter, in order to trade. This is due to network fees and commissions that each site skims off of the top. This is simply the nature of cryptocurrency trading and must always be taken into account.
Well, all of this seems simple, right? In theory, yes. But what inspired me to share my experience here was the plethora of issues I encountered. My mistakes, I hope, will serve as a warning to everyone else.
What was my problem, you may ask? I had the required amount of Monero ready to go, which at the time was 0.30 XMR. Also, I had the Minergate fees ready, which was 0.02 XMR, and I was prepared to pay the minute Bitcoin fee to Changelly. So all of my fees were calculated and accounted for. But I ran into an issue that will probably arise for many people – network failures when paying the Changelly invoice with Minergate.
Let me back up a bit. When you complete the steps I outlined above, you’ll be required to manually send your cryptocurrency to Changelly using your online wallet or mining pool. In the case of Changelly, they are partnered with Minergate, and they have a simple interface to send the invoice to Minergate within their client dashboard.
Changelly Invoice Option
My issues arose not here, but when trying to pay the invoice using Minergate. Each and every invoice I’d validate and attempt to pay would end in network failure. Reaching to support took much longer than I’d hoped, and I became impatient due to the rising prices of Bitcoin – I wanted my Bitcoin as soon as humanly possible. And that was my mistake.
In an attempt to get around the issues with Minergate sending XMR to Changelly, I went and opened an online wallet recommended by Monero’s network – MyMonero.
I setup my wallet, enabled 2-factor authentication, and verified my email address. I did everything by the book. So I figured that I’d be able to send my XMR to MyMonero and attempt to pay the Changelly fee that way. And in theory, that would have worked. If only I had remembered the cardinal rule of crytpcurrency trading – REMEMBER THE FEES!
I sent 0.30 XMR to MyMonero, paying the 0.02 XMR fee to Minergate for their part of this. I then attempted to send the XMR from MyMonero to Changelly…
So not only did I neglect to check my fees from MyMonero, I also didn’t have enough XMR left in my Minergate wallet to send the necessary amount of XMR to MyMonero. I broke the cardinal rule of cryptocurrency trading, and I’m paying the price of waiting. Waiting for my miners to gather enough Monero to cover the transfer fee from both Minergate and MyMonero to send the XMR to Changelly.
Moral of the Story
The moral of the story is this: REMEMBER THE FEES!
There is literally nothing more frustrating, as I’ve found out, than making all your transfers only to realize you didn’t account for network fees. These issues could have been subverted with just an ounce of preparation. An ounce that I neglected to measure.
That’s my story. I hope this helps some wayfaring crypto-trader out there. Hopefully my mistakes will be your lessons!
In my next installment, we’ll explore my adventures in buying and configuring ASCI miners for mining Bitcoin. Look to this space for more adventures in Bitcoin!