What is an altcoin?

Altcoins are any coin that isn’t Bitcoin.

There are hundreds of Altcoins such as Litecoin and Dogecoin. There are a million reasons why an altcoin was created.

Sometimes, the reason is that someone thought of a new feature or idea that could be implemented. Litecoin, which implemented the Scrypt algorithm, is probably the most popular example of a crypto currency that forked the Bitcoin codebase with a new feature.

Sometimes, people create altcoins to “pump them and dump them” otherwise known as “for profit only”.  These coins come and go quickly. Most of these coins don’t actually make any real money and disappear quickly these days.

Dogecoin was started as a joke, but then quickly gained a large scale community around the idea of kindness and giving. They have recently implemented new features and are proving that the community around a coin is what gives it value.

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How do I get a Bitcoin?

Or maybe more aptly, this post should be titled, “How do I get crypto currency?” I will refer to all coins by the more general name, crypto, from here on. This can mean any coin, whether it is Bitcoin, Litecoin, Dogecoin, or another alt-coin.

Purchasing

You can purchase crypto in many different ways. This includes Exchanges, Ebay, LocalBitcoins, in person purchases, and other methods.

Exchanges

Exchanges are exactly what they sound like, sites that allow you to trade one currency for another. This includes USD to crypto and crypto to crypto. An example of an exchange is Cryptsy which is a well known, quick exchange, with relatively high volume. There are tons of exchanges available, but anyone getting on an exchange should talk to the community to make sure it is legit and secure before trusting them with their money.

Another site that is both a wallet and an exchange is Coinbase. They have a ton of money backing them, they are trying to be one of the most secure systems for buying and cashing out Bitcoin specifically, and they make it super easy to buy and sell Bitcoin.

Selling/Trading goods and services

Anyone can sell goods or services for crypto. The trick is to make sure that you’re getting paid what your good or service is worth, based on the current exchange rates. Coinbase provides “buy now” buttons that will handle the exchange rate for you automagically. For me personally, I just keep an eye on the exchange rates for the coins I am accepting and update my prices as I go. I also only have 6 items for sale at any given time, so it’s much easier for me. Often, stores will automate this process in one of many ways.

For services, you can check the Reddit job boards for jobs that pay in crypto.

Mining

Anyone can buy some specialized hardware or use their personal computer (at their own risk), install a piece of software, and start mining crypto. Mining is the way that crypto uses to verify transactions on the decentralized ledger. For the service of verifying these transactions, the miner gets a kickback of coins from the network. Depending on the coin itself, you may mine millionths of a coin or thousands of a coin every minute. Usually, when you’re mining thousands of a coin, those coins are worth less per coin.

Notes:

Assume that all the links in the page are referral URLs. They aren’t all referral links, but it’s a safe assumption.

Yes, people have had issues with Cryptsy being slow in the past. They have ironed out most of these issues and their support is usually very quick to jump on issues and solve them quickly.

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Do you know your Crypto Net Worth?

If you invest in multiple coins, or even a single coin with tons of transactions, you know it’s a pain in the ass to keep track of your net worth. If you add in tracking fiat costs/income to see if you’ve made money over what you’ve spent then you’re adding columns, tabs, and tons of complexity.

If you’re using a google spreadsheet, you can pull live exchange rate data from the APIs with a little bit of work (or just by copying that guy’s spreadsheet). You will have to manually update this spreadsheet with your coin totals each day. You also will have to add in cells and computations for your fiat costs.  You will also not be able to categorize your transactions easily without at least multiple filter operations and extra calculations.

Shameless plug coming, can you feel it like a rising tide?

I built a system called CryptoWalletReport.com. It takes your transaction data and instantly visualizes it, gives you exchange rates for every transaction in your wallet, and allows you to quickly and easily categorize your transactions however you would like. Oh yeah, you can add fiat transactions and those totals will be added into your net worth.  This site does not require an email and allows you to delete your data at any time. I don’t believe it could be quicker or easier to see all of your transactions across all your coins, but I am biased because I built the system.  I would love for you to try it out and let me know what you think. Just use this link to get into the closed Beta: http://cryptowalletreport.com/register/?code=mkbernier.com

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How I am making more money from my mining equipment than I can with multipool

Crypto currency mining is fun, it’s a lot of fun. You buy a machine, plug it into both the internet and electricity, you change a configuration file, and then money starts showing up in your wallet. How could life get any better? If you have semi-efficient equipment, you can receive more value from mining than you spend in electricity, which is nice too. With 67MH/s I can make around $13-15 a day from Multipool.us, this is based on a recent 2-day average. The number changes day to day of course, based on the exchange rates of the various coins.

Ok, this is great information, but how the hell am I making more money from my mining rig? 

I signed up for a service called MiningRigRentals.com*. It is a pretty ingenious and simple method for allowing people to rent out their mining rigs. You just point your rig at their site, instead of your pool. Then you go into their site and add your pool data. If your rig is not rented out, you mine at your pool like you would normally. If someone rents out your rig, you mine for them, but they pay you for the time they use your mining rig.

I am making a little over 1.5x what I would make from mining at Multipool by myself, by allowing someone else to jump in an use my miner whenever they want.

* That is an affiliate link and I get a little bit of extra money if you use this link, sign up and either rent our your rig, or rent someone else’s mining rig.

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What the hell is a bitcoin?

The quick answer

Bitcoin is online digital currency.

The slightly less quick answer

Bitcoin is a decentralized online digital currency that has a built in system for automatically verifying every transaction.

The reasons Bitcoin was started are varied, but one of the main ones was that most fiat currencies that exist today are managed, backed, and controlled by the government that implemented them. For example, the US dollar used to be gold-backed, meaning that it’s value was based on the value of the gold in the US reserves. When that system was thrown out, the value dollar was based on the imports, exports, and usage of the dollar by so many people around the world. Oh yeah, and the might of the US military saying that it has value. Then, we realized that we could change the value of the dollar by putting money in or taking money out of the system. Remember that whole Trillion Dollar Coin thing?

Then, you also have banks. Ones that are too big to fail and ones that can do whatever they want with your money, because once you put it into their system it’s technically not yours until you go to withdraw the money.

When you deposit your money in the bank, your money goes into a big pool of money along with everyone else’s, and your account is credited with the amount of your deposit. When you write checks or make withdrawals, that amount is deducted from your account balance. Source: ehow.com

Read into this a bit, “your account is credited with the amount of your deposit” means that the bank has a ledger and your money is represented by data in that ledger. It’s not money anymore, it’s pencil on paper or more properly, bits on a distributed storage device somewhere. Hopefully, that data is secure and hopefully you have proof of this deposit should you ever need to contact the FDIC to get your money back.

Bitcoin puts the onus of keeping track of your money on the consumer, aka the owner of the coins themselves. Each owner has their own wallet, which is just a program that accesses the centralized ledger called the blockchain.

Yeah, but what the hell is a blockchain?

The blockchain is just a ledger. Yes, this is similar to what the banks have, but instead of a centralized agency, company, or person owning and managing this ledger, with bitcoin the network and everyone involved in the network has a copy of the ledger. This allows the network to verify transactions and make sure that if you sent or received coins, that you actually sent or received those coins.

How does the network verify transactions?

A specialized piece of computer hardware, called a “miner”, hooks into the ledger, does some math, and verifies the transaction. Then it kicks back that verification to the network. Other miners do the same thing and at some predetermined number of verifications*, the transactions are written to the ledger and everyone on the network gets that update. This way, everyone knows where that coin went and when it went there.

The owners of the miners get a kickback of coins from the network for burning precious electrons and doing all that math.  This kickback is a combination of newly generated coins and transaction fees that are paid to the network for transactions under a predetermined threshold.*

* These “predetermined” values are setup by the group or entity who initially created the coin. In the case of Bitcoin, there was a quorum of open source software developers who fought, argued, and worked together for quite a while to determine the proper fees and verifications that would allow Bitcoin to continue in perpetuity.

There is, of course, a ton of other information that could be said about Bitcoin, but this is the very basic information that you would need in order to understand what’s going on.

If you have questions about any of this information, if I missed something, or if I got something wrong – please let me know!

 

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How could money transmission get easier?

With services like CoinBase and the plain old blockchain, money transmission couldn’t be easier. You can send money around the world in less than a minute. You can cut out expensive services like Western Union, Money Orders, and thankfully less reliable services like Paypal.

The problem is that normal-and-non-technical people either don’t trust Bitcoin or don’t want to be bothered with learning what it is. As a result, it IS complicated for the normal consumer. Services are quickly realizing that for wide spread usage they need to make it even easier than it actually is now.

A conversation I was having this morning led to an idea of how this could be easier and keep the nerd-speak out of the conversation, while also allowing a regular consumer to use the blockchain without even knowing or needing to know.

If there was a way to allow a user to never exchange their coins to Bitcoin, but still use the Bitcoin network to securely transmit their money, then a lot of problems could be solved while keeping the relative costs associated with money transmission very low.

This could (relatively) easily be done by having a backend process that takes the USD, exchanges it to BTC, transmits the currency to the other side, and then exchanges it out or keeps it in BTC according to that user’s preference. Maybe the receiving user just gets a Paypal style email to go log into their secure account and choose how they want their money.  Transmission could be done for 1% and it would guarantee that the money was sent and received, fairly quickly.

It turns out Stellar is doing this right now. They have built a new altcoin that will be able to be bought and sold like so many others, but they are using their blockchain to send the money securely and exchange it out to whatever pairs you want on either end. It’s an amazing idea that has the potential to completely revolutionize both the money transmission market and to help bring in millions of users to cryptocurrency.  I wish them well and I hope it does what they (and I) think it can do.

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Wikimedia, Bitcoin, and proper reporting of finances to the IRS

Many people in cryptocurrency don’t want to report their finances to the IRS and this is the reason they are in cryptocurrency in the first place. I get it. I really do. The system we have is not the one that could have been envisioned in 1776 and it is no where near what the Founding Father’s set up for us. But, as humans, we have taken what we were given and run with it. So, we’re here. One of the biggest reasons for blockchain based money is, “how do we fix what we have?”

There are plenty of other people, like me, who are what I call “rule followers”. Not because we love the way the government works or because we really like paying taxes, but because we look at things from the perspective of, “The less suits sending me letters and knocking on my door, the better”. So, we report everything we’re supposed to. We don’t play games and we seek out the rules and find ways to make them work for us. Yeah, we will pay tens of thousands more in taxes each year, but we also won’t end up with new bracelets and lots of suits in our lives.

It turns out Wikimedia is run by rule followers too. They have hesitantly been paying attention to Bitcoin and either toying with the idea or literally playing with it since 2011. Recently, they decided to start taking Bitcoin for donations.

This is great! It will literally give visibility and credibility to millions of people who would otherwise ignore or avoid Bitcoin altogether. Also, it means that they figured out it is possible to accept, use, and cash out Bitcoin completely legally.

The IRS ruling roughly states that Bitcoin and crypto currencies are property, not currency. Technically, according to the constitution, they couldn’t rule crypto as currency because the federal government is the only body that has the power to create currency in the US (never mind the legality of exchanging other country’s currencies to USD and back).

Many people think this is a bad thing, but I don’t see it that way. Yes, it is a pain in the ass to calculate each transaction’s value to USD. That is if you’re doing it manually. If you are using a tool like CryptoWalletReport.com*, it’s automated and easy to do.

Likely, Wikimedia talked to the IRS and they said one of two things:

  1. Cash it out immediately to USD and then the value of the crypto doesn’t matter to us
  2. Keep it in BTC and calculate your capital gains, pay taxes on that.

Since Wikimedia is a 501c3, they likely went with option 1 and are treating the crypto like the Salvation Army or GoodWill treats clothing, as temporary value containers until they can get cash out.

If they can do this, track their transactions and show the reporting that it came in and went out the same day, then they are good to go. Nevermind the implications to the value of BTC as they cash out every transaction.  I guess the rest of us will just hope that those donors will go straight back to their exchanges and re-up their wallet for what they donated.

 

 

*Disclaimer: I built CryptoWalletReport.com

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Potcoin, why it’s interesting and why now is the time to buy or mine

Potcoin purports itself to be the official cryptocurrency of the cannabis community. That’s all well and good, unless you’re willing to jump in and ACTUALLY be THE cryptocurrency of the cannabis community.

I’m here to tell you that they are going at this 100%.

The guys at potcoin.com are putting dev time, serious money/capital, and marketing effort at getting dispensaries and other community members around the dispensaries to accept and even give discounts for using Potcoin. They will set the shop up with an ATM, teach them what they need to know, give them a merchant wallet, and show them the benefit of no longer accepting cash for goods. Not only all of that, but they are also helping these merchants to keep their reporting above board, easy to read and follow, and totally legal.

There really is nothing like watching a company that realizes the need of an industry and then does everything they can to help it along. Since MMJ and RMJ stores can only accept cash and can’t have bank accounts at most banks, there is a huge problem for these stores from a security and management perspective. Now, with crypto, these merchants can utilize storage space on the blockchain rather than in their safe. This secures their money and their livelihood.

As more merchants, more customers, and more support industry begin to accept Potcoin, we will begin to see the price rise dramatically because it will become the defacto standard for automatic payments and instant reporting of current accounts and profits.

The price is currently at 1/2 of a cent, which means Potcoin is super cheap right now. It’s going to go back up and it will be going back up very soon.  Not only that, but the difficulty for mining is VERY low compared to so many other coins, meaning that you can get your hands on some Potcoin right away with very little effort.

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How to setup GAWMiners to mine with your computer Windows, Mac, or Linux


Earn more from your miner, by renting it out!



If you are looking to buy a new miner, click my referral link to say thanks before you buy! Or checkout ASICPrices.com

This is straight from gawminers’ support with a little more OS specific clarity added by me. My ZenController didn’t work out of the box, so they sent me these instructions. I ended up flashing the raspberry pi and just installing Raspbian with cgminer and using the command below. However, this would work for any computer if you didn’t have a Raspberry Pi or ZenController!

Step by Step Setup Guide for Gen A Miners:

1. Download and Extract: http://sgminer.builders/binaries/gawminer-cgminer-curses-3.1.1-win32.zip also available on my site here

2. Make sure you have this driver installed: http://www.silabs.com/products/mcu/pages/usbtouartbridgevcpdrivers.aspx

3. Open up notepad and paste in:

cgminer.exe -o stratum+tcp://us.clevermining.com:3333 -u 1KQxLLQNxgn2upd4TtGbtiRdm3f5UWC9k8 -p x –nocheck-golden –chips-count 128 –ltc-clk 328 -S //./COM4

3a. Change pool info to your own

3b. change COM4 to your COM port (Go to device manager to find your COM port for your miner)

3c. change chips count to your miner’s

Please Note:

Chip Count

War Machine: 256

Falcon: 128

Black Widow: 64

Fury: 6

4. For Windows: Save text file as miner.bat file in the same folder as your cgminer.exe

For Mac/Linux – just save it as a miner.sh file in the same folder as cgminer, set permissions to 755 “chmod 755 miner.sh”

5. Run batch file and profit!

Windows cmd line: run minder.bat

Mac/Linux: ./miner.sh

If you want to build cgminer from source:

cd to the root directory

Run “autoreconf -fvi”

Run “CFLAGS=”-O2″ ./configure”

For Linux, just download the first zip file, unzip and type “make” to get your cgminer application ready. After that, you just need to add the params for pool and user/pass to get mining.

Update: I found instructions on how to add ncurses support to this version of cgminer. Thanks /u/ross549!!

 

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Controlling my email habits

I have had to learn to control my email checking habits. It took a long time, because the anxiety of possibly missing something was too much for a long time. Then I realized that I am not responsible for someone who emails at 4:55pm on a Friday asking for an answer by Monday at 9am.  I am also not responsible for someone who emails me on Saturday or Sunday, either.

My weekends are for my family and for me. If I wanted to work on the weekends, I would have negotiated that into my pay and I would have not become a father.

If you’re emailing me on Friday in the late afternoon, Saturday, or Sunday and expecting an answer before Monday at 11am, you’re going to have a bad time.  If it’s that much of an emergency, call me. If you don’t have my number and can’t find it, then I’ll get back to you on Monday.

Also, you need to know that my phone doesn’t ring or vibrate because I am not a slave to my phone. Yeah, I play games on it or check Facebook, but I choose when that happens. Not the other way around.  If you call and you find my voicemail, I am not avoiding you. I am avoiding everyone. There’s something else going on, like work, or hanging out with my wife and baby. I’ll get back to you.

What are the repercussions?

Well, on Monday I usually get messages or texts or more emails asking me if I saw this or that email. My response is, “I haven’t checked my emails yet, but I will, and I will respond accordingly.” This is a hard line and people don’t always like it. Guess what, they’re not the boss of me. I am not saying this to be rude or inconsiderate to other people. I am saying this, because I have to control my surroundings, my inputs, the things that pull on me, and the signal vs. noise. If I don’t my heart starts racing, my brain stops working, my stomach gets in knots, and I can’t breathe. It’s like drowning and it’s not fun.

This process is not for everyone and frankly, it’s a bit new to me. However, it is working for me and it’s helping me to be more organized, more focused, and less drown-y. Which is the best for me, right now.

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