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Cryptocurrencies

In my downtime, I have fun looking at all of the cryptocurrencies out there. There are tens, or even hundreds of different coins out there that have all followed Bitcoin out the door and into the world.

Some of these coins are, frankly, garbage -- not even worth the source code that spawned them, and are swallowed up by the great pool that is the Internet. Some of them go on to grow up and become accepted in many places, like Litecoin and Dogecoin.

All of this begets the questions that might be asked:

The easiest (and cheapest) way is to start off with a wallet and check the faucets. There are numerous faucets for many of the coins out there. These faucets will often grant a little trickle of coins that are intended to whet the appetite for more cryptocurrency. As an example, if one is interested in Bitcoin, one of the faucets out there is called Moon Bitcoin. Provide it with an address from your Bitcoin wallet of choice or with a Xapo wallet, and claim it. They will give you a number of satoshi for your effort. As far as faucets go, it is very painless, as one can check in a few times per day to scoop up a handful of satoshis for eventual use.

Other faucets that are out there are listed below:

This is not an exhaustive list of faucets, and some of these faucets could disappear overnight. There are other, more full-bodied lists of faucets available, but these help me, specifically.

In a previous iteration of this document, I addressed cloud^Wbutt mining as a potential option. Since then, all three companies I pointed at have either disappeared in a cloud of your money, or have stopped paying out, or have some arbitrary as hell rules that are intended to keep a ponzi scheme afloat.

CoIntellect was one of the cloud services I had recommended, but I cannot, in good conscience, tell anyone to mine with them. The service is flat out ponzi-scented, where they rake users in by promising and paying out phenomenal amounts, and hoping that as a user, you'll buy into the contracts they sell, which in turn allows them to float on a little longer. Further, they then scam miners who bring actual, dedicated mining hardware to the table with odd, nigh unbelievable payouts to THEM as well: I was able to pull in 7000 to 13000 dogecoin per day mining with them and using only a Gridseed Orb, clocked to mine at 371 kH/s.
A brief pause for perspective: at that time, a single dogecoin was worth about 62 satoshi, average, when exchanged on Cryptsy. Seeing five hundred thousand satoshi per day was NOT unheard of, and sometimes, I'd have days where I'd see eight hundred thousand satoshi. This mining equipment, when I moved it over to other pools, was lucky to bring in just under a hundred dogecoin per day. This alone exposes CoIntellect for some wrongdoing. Coupled with miners that were pointing 10 MH/s or MORE at their pool, and not seeing the expected gains set off another flag. Once miners started getting vocal about it, the banning started, with arbitrary reasons.

HashProfit was another one of those services. You fed them your hard-earned bitcoin to buy mining time on their mining rigs, or you fed into mining/buying their ProfitCoin, then using it to buy mining time, and you were supposed to get some return on it. As a customer, I wanted to think they'd come back. I didn't put much into buying anything through them, but I did scoop up a fair sum of ProfitCoin while the price was drifting downward, and poured it into my account. After that, they went down under claims of being DDoSed by arbitrary people that didn't want them to succeed. It's been several months now, with no return beyond a message in Russian that asks people to tell them about someone that is badmouthing their service, and they intend to pay Russian users first.
This is the kind of shtako we do not need in our global community: We're all humans, first. We can't get over that mess for some reason, and it's infuriating to see it continue this far into my lifetime. But hey, I'm out of a little bit of currency to learn an important lesson:

Do not trust in cloud mining. If you cannot smell, feel, or taste the hardware, it is not to be trusted.

Note how I skipped 'see' and 'hear' in the above list. Any milquetoast can record video of 'mining hardware' that is 'dedicated' to serving you, the mark^Wcustomer in your butt^Wcloud-mining endeavors, but they can't email you the taste, scent, or tactile sensations of real hardware (at least for now). Speaking of real hardware, though...

One can also buy dedicated mining hardware to earn coins, but from one person to another, I recommend starting and staying with the faucets until you are well and truly prepared to spend money you may not ever recoup. Be careful about the hardware you are considering purchasing. Block Erupters are a very poor choice at this time if you intend to mine bitcoin, unless someone is literally (not figuratively) giving them away in bulk to you: They mine at ~330 megahashes per second (MH/s). At the current difficulty, at the time of writing (31 March 2015), you would earn 0.00000355 BTC per day (a generous prediction, based on minor overclocking, 100% uptime to a given pool, and a few other factors), per Block Erupter if you mined non-stop. You would spend more in power to run these for one day than you would earn -- six of these will not even earn one penny at the current exchange rate, and makes faucet farming a significantly better investment of time! Anything over US $0 spent on a Block Erupter is a waste.

My personal preference, once you're ready to spend the cash on a new hobby is to suggest combing Amazon or eBay for a scrypt based ASIC: One or several of these can easily be used with a controlling computer to mine for scrypt based coins (Dogecoin, Litecoin, and at least 70 other coins), without burning a huge sum of electricity in comparison to Bitcoin. Granted, do not expect to break even unless you manage to catch some new coin that becomes popular overnight right at the beginning of its mining period, but it's still a novel learning experience.

You may notice that for most of this, I've focused on Bitcoin for a few minutes here -- I did this because of the general familiarity of the name 'Bitcoin', with regard to cryptocurrencies. It has been around for a while, and has gone through some interesting ups and downs, from being worth less than a penny per coin, to being enough to pay rent for a month in much of my city (Peak was around $1200 or $1300, I believe). There are hardware miners for Bitcoin and its derivatives (which use SHA256), as well as Litecoin and its derivatives (which use Scrypt), and these may be easily found on Amazon.com in the USA, as well as other venues. Be prepared to leave a computer on unless your miner of choice is compatible with a low powered controller, such as a Raspberry Pi, or a Wyse Winterm 9455XL (which may need a PCI USB 2.0 card depending on the number of miners you intend to connect).

One other thing to note: Because Bitcoin is currently the heavy hitter coin out there, you could use those free satoshis you gather from faucets to buy the altcoins like Litecoin, Dogecoin, etc. at a fairly decent rate through a site like Cryptsy.

I never addressed the criminal element in the previous iteration of this, so I'll touch on it quickly: Nope. It's not just for criminals. It's for anyone who would like another potential option to accept a new customer, and would like to do it without being penalized by a company for accepting a small payment. Here, catch some math:

A blogger that you follow has a tip jar on their site through laPyaP, and would like it if you'd toss some change in there to buy a coffee. They're fine with the gesture of a dollar, at least up front, and you happen to have a laPyaP account. So, you send them $1, hoping they'll enjoy the cup of coffee. HOWEVER, on the backend, this company takes 30 cents plus 2.9% of anything that comes in, when you're doing it all by the books the way they want it. Your favorite blogger just got punched in the throat there for 33 cents, and can't even afford a cup of coffee at a bus station or gas station.

Fast forward to a couple of months later, where your favorite author got fed up and says, "I'll take some of your dogcoins or whatever instead. I'm tired of being screwed for exorbitant fees." Your author now has a button on their site that allows you to send Dogecoin, Bitcoin, Litecoin, or Ripple to them -- maybe a button like the one at the bottom of the page here. They can set the button to ask for $1 in coins. You pay them 7777 Dogecoin (yay arbitrary numbers!), and they get 99.5 cents of that in their account the next morning. Yes. 99.5 cents. Why, that's almost all of the tip!

It's not a criminal's tool in the sense that people bandy it about. It's a tool for everyone. Just like dollar bills can be used to soak up blood, buy or sell people into slavery, or buy someone's next overdose on some strange, cooked up chemical from Jim-Bob's backyard, dollar bills can be used to buy a first aid kit, pay for a kid's tuition into a local private school, and pay for antibiotics to clear up a nasty infection. The same rule goes for anything that can consider itself a currency: it's only as dirty as we make it be. I've bought dinner for people who were a day away from a paycheck, helped a friend get their car registered when they moved to a new state, picked up a webcam for someone who wanted to be able to use Skype and see someone they loved, and to be seen at the same time. All of this with cryptocurrency. All of this with minimal fees. Things I would NOT have wanted to do if I had to go through MoneyGram or Western Union, or wait for money to be wired from bank to bank.

Either way, I hope that this has sufficiently whet your appetite for the crazy world of cryptocurrencies. It's really not intended to be a full-fledged, in-depth guide, but it is intended to give one a peek at what is going on. Remember: have fun, and remember to protect your coins -- use a local wallet, back it up and password protect it.

If anything in this guide has been useful to you, feel free to spot me a cup of coffee (US$1.25 in coins) for the time by clicking here:

series thirteen pixelechoes is designed by justin hobley in 2013, with creative commons by-nc-sa-30 licensing.