Showing posts with label mining. Show all posts
Showing posts with label mining. Show all posts

December 14, 2017

Why some claim Ripple isn’t a 'Real' Cryptocurrency

By Joe Liebkind - December 14, 2017 (

  • founders of Ripple recommend not using their creation as a currency for speculation

  • ReRipple has no mining and transactions are powered through a “centralized” blockchain to make it more reliable and fast

  • Ripple may be the dividing line that separates two distinct products of cryptocurrencies : assets and solutions

There are many cryptocurrencies out there, each of which gained inspiration from bitcoin, the ancestor to them all. Bitcoin was humanity’s first definition of what it means to be a cryptocurrency, but it is a complicated creature that relies on many special functions and components. For instance, bitcoin has a decentralized blockchain ledger, on which its millions of participants organize and save a record of their transactions. It also has cryptographic hashing, so that traders can use a system of public and private keys to safeguard their identities.

Bitcoin’s transactions are processed by miners, a supportive and incentivized community that keep everything running smoothly. Relevantly, it also has a finite supply. These characteristics have made it easy to transact safely, store value, and even speculate.

Should a cryptocurrency exhibit each of bitcoin’s traits or can any kind of digital money be labeled as such? These are logical questions, but ones that haven’t often been asked, largely because most of bitcoin’s peers have generally stuck to their collective predecessor’s model.

Ripple is a currency gaining popularity after years of living in bitcoin’s shadow, bereft of interest from traders due to its traditional infrastructure that makes a greater compromise between crypto and fiat money. Some in the community have refused to consider Ripple a real cryptocurrency because it’s so different. Are they correct? (See more: Ripple Is Back: Here's Why.)

Ripple: The Strange Hybrid

Ripple wasn’t designed to be a coin, or a normal cryptocurrency by the standard definition. While bitcoin and comparable cryptocurrencies give the value of the coin equal priority with network security, speed, and applicability, Ripple does away with the idea of XRP as any kind of investment asset and instead focuses on making the blockchain as strong as possible. This is primarily for the good of the institutional entities that Ripple serves, like American Express or Santander Bank. To achieve this goal, the Ripple Foundation created XRP but tweaked each traditional component of cryptocurrency into an almost unrecognizable state.

Miners Be Gone

Ripple has no mining or miners whatsoever. Instead, transactions are powered through a “centralized” blockchain to make it more reliable and fast. Mining is a core tenet of most other cryptocurrencies, and each uses their own system to determine how much power the miners have. Some, like bitcoin, use Proof-of-Work, but there is also Proof-of-Stake and Proof-of-Importance.

In cryptocurrency, miners are incentivized to process network transactions with the currency itself, but this has created some issues that Ripple deems untenable. In a solution built for big banks, there should be no separate group with its own special motivations for running the network.

While this idea has helped other cryptocurrencies to remain decentralized, it has also slowed them down: a problem Ripple cannot afford. This lack of mining affects other aspects of Ripple as well, taking it further from the standard.

Plug in the Printing Press

Besides processing transactions, miners are also rewarded with cryptocurrency. This is essentially how it’s created. Ripple’s exclusion of miners naturally throws a wrench into the machinery in this regard. Ripple is not finite, and can be “printed” on-demand, which makes it much more reliable for payment processing, money exchange, and other institutional activities. When it’s used, it’s simply destroyed.

The Ripple Foundation already created the 100 billion XRP currently in circulation, giving it a stable, non-volatile character perfect for its biggest clients. However, this also removes one of the biggest factors in any true cryptocurrency: the ability to accumulate and store value as only a deflationary asset can.

A Centralized Blockchain?

Ripple does have a wallet, but getting access to the blockchain is tough. Retail participants aren’t supposed to have access because it introduces risky, strange elements into an otherwise sterile environment. The Ripple blockchain isn’t open like those of other cryptocurrencies. XRP can be safely stored and kept, and uses cryptography to protect participants, but the nodes it’s protecting aren’t individuals but “trusted” operators registered in the Ripple network. This allows the currency to use the advantages of the blockchain ledger, but in a closed ecosystem that makes it more efficient.

While bitcoin claims to be “trustless,” it’s just created a precarious house of cards whereby everyone has some incentive not to let it topple. Miners can still shut off their computers and freeze the network if they wanted to, but not with Ripple.

Putting a Title on Ripple

Much like the many questions surrounding bitcoin cash, even the founders of Ripple recommend not using their creation as a currency for speculation because it isn’t one. Ripple resembles a fintech platform more than anything else and has simply combined the best elements of fiat money and blockchain cryptocurrency.

Not a “true” cryptocurrency by the standard definition, Ripple may be the dividing line that separates two distinct products to emerge from the cryptocurrency revolution: assets and solutions. While assets can serve as investments placing faith in a decentralized community and the deflationary properties of mining, solutions will dispense with the speculation and instead create platforms that are “technically” cryptocurrency, but not traditionally viewed as such.

November 21, 2017

How to check if your PC being pirated to mine Bitcoin

By Darryn Pollock - October 02, 2017 (

First it was The Pirate Bay, then Showtime was caught secretly using page visitor’s processing power to mine cryptocurrency as a form of alternative revenue.

It has led to some indignation from users of such sites, as well as worry and fear about the vulnerability of users who are visiting sites and staying on them for a long time. However, there are a few things that can be done to protect yourself.

An issue with secrecy

It must be stated that the reasoning put forward, along with an apology, from The Pirate Bay was that they saw it as an alternative to banner advertising, which is tricky for what is essentially an illegal website.

Many were happy with the idea of their processor being used, but not happy with the secret nature of it all.

What can be done?

If however you are not happy with the idea of being mined, secretly or not, there are a few ways to check if you are indeed a victim of processor pirates.

Check your CPU usage

Simply by opening your resource manager on your computer, and looking at the CPU usage, it can quickly become clear if there is indeed something sucking your processing power.

A noticeable spike when visiting a certain site that should not be taxing your CPU is an obvious sign of Javascript running that is using your processing power.

Additionally, if you have everything closed but CPU usage is still super high, then you may have a crypto mining malware problem.

Ad Blockers can help

Mining hijacking can occur simply by visiting certain sites, but there have been instances where infected adverts on sites have also led to this CPU pirating. Researchers at security software vendor ESET have explained this process.

Thus, running an ad blocker can put a stop to this. Additionally, ad blocking software can also filter out known types of in-browser miners. One such mining script is called Coinhive, which isn’t necessarily malware.

Coinhive is trying to approach this as legitimately as possible and condemned Showtime for using their Javascript without alerting users that they would be utilized for mining.

There is other malware

Besides from legitimate pirate mining software, there are more sophisticated forms of malware which actively penetrates the system. These are delivered through infected image files or by clicking on links leading to a malicious site.

If one of these hits you, you should open up Task Manager and identify the process that is eating up all those compute cycles and terminate it from your resource monitor.

November 14, 2017

Chinese hydroelectric crackdown could herald the demise of cheap Bitcoin Mining

By Kai Sedgwick - November 14, 2017 (

Chinese bitcoin miners are the latest tranche of the country’s cryptocurrency community to be hit by restrictions. This time it’s not the government but a subsidiary of the State Grid Corporation that has issued the decree, in a move which calls into question the country’s ability to sustain bitcoin mining operations. At present, both the bitcoin and bitcoin cash networks are heavily dependant upon the efforts of Chinese miners, who hold over 80% of the hashrate distribution

A Major Miner Incident

The notice posted by Sichuan
Electric Power Company
The cryptocurrency space has grown accustomed to the words “Chinese crackdown” being appended to one another. This year they’ve already been applied to ICOs and exchanges within the country, and it is no secret that the government isn’t enamored with mining either. According to Beijing’s Caijing magazine, hydropower stations have been ordered to cease all supply of electricity to customers involved in bitcoin mining.

Bitcoin mining has long been beyond the preserve of hobbyists, meaning that the only entities affected by the utility company crackdown will be operators of large mining farms. Sichuan Electric Power Company, a national supplier based in Chengdu in the southwest, has issued an edict declaring that it is henceforth illegal to supply electricity for bitcoin mining operations. Hydropower stations found to be flouting this order will be subject to “punishment”.

The End of Cheap Power?

Sichuan province is China’s bitcoin mining heartland. It is here that warehouses filled with row upon row of ASIC miners, mainly powered by cheap hydroelectric, can be found. The province is prized for its mountainous regions and vast flowing rivers and tributaries that have given rise to hydroelectric dams large and small.

During times of peak electricity generation, hydro plants have been left with a surplus. Up until recently, that excess water had gone to waste. Bitcoin mining provided a solution to that wastage, enabling hydro stations to make money and providing miners with cheap electricity. It was a symbiotic relationship that worked for both parties until now.

Shut It Down

The decree issued by Sichuan Electric Power Company doesn’t outlaw bitcoin mining, it should be noted. What it does do is signal an end to direct deals being cut between hydro plants and mining farms. If hydroelectric plants heed the warning, it could herald an end to cheap bitcoin mining in China. Without a steady supply of cheap power, mining profits may dwindle until eventually it is no longer profitable to keep rigs running. The crackdown shouldn’t affect larger mining operations such as Bitmain, who already have a deal in place to acquire electricity at competitive rates. For smaller mining operations which make the most of Sichuan’s rainy season, however, it could be game over.

Current hashrate distribution. Notable Chinese pools include, Antpool, BW, and ViaBTC

With winter approaching, a time when many hydroelectric plants power down, Sichuan’s mining farms would have been gearing up for a switch to more expensive sources of power in any case. The latest proclamation from Sichuan Electric Power Company won’t herald the end of Chinese mining, but it may hasten its retreat to pastures newly equipped with cheap power sources and zero state-level intervention.

There has been speculation for some time that given the legislative uncertainty surrounding bitcoin mining in China, the major pools may jump ship and take their operations overseas. Uprooting a major mining farm is no mean feat however and is an inconvenience and expense that miners could do without. With the mining climate becoming increasingly unfavorable in China, the door is open for another region to emerge as the new frontier in bitcoin mining. The smart money is on Russia to heed that call and take the reins.

Images courtesy of Shutterstock.

November 12, 2017

Sberbank apologizes for buying nearly all graphics cards on the Russian market

By Kevin Helms - November 12, 2017 (

Russia has been suffering from a shortage of graphics cards that can be used to mine cryptocurrencies, causing their prices to almost double. However, it was not ordinary households that purchased most of these cards. State-owned Sberbank has come forward, admitted to buying them, and apologized for causing the shortage.

Sberbank Apologized for Buying Up Graphics Cards

Sberbank, the largest bank in Russia and third largest in Europe, is majority-owned by the Russian government. According to senior vice president, Alexander Vedyakhin, the bank’s research lab was behind the dry spell. Ria Novosti reported on Saturday:

"The reason for the deficit in the video card market was Sberbank, buying up video cards for its laboratory of artificial intelligence".

Alexander Vedyakhin
“We invest very much in technology, and we should, incidentally, apologize for that shortage in the video card market, which occurred recently, because we bought them for the laboratory of artificial intelligence,” Vedyakhin said at the Sberbank international conference on data analysis, machine learning and artificial intelligence. However, he indicated that soon the shortage will be over “because we [have] satisfied our need.”

Is Sberbank Mining Cryptocurrency?

Stanislav Kuznetsov
While Sberbank has said that it is “not yet ready” to use cryptocurrency, the bank admitted to studying it in detail, according to Stanislav Kuznetsov, Deputy Chairman of the Executive Board of Sberbank.

“Sberbank does not intend to use cryptocurrency in business yet, but is studying them to protect itself from scammers,” Tass reported and quoted Kuznetsov saying last month at the World Festival of Youth and Students in Sochi:

"We are not afraid of cryptocurrencies, but in order to defend ourselves, we must understand in detail how scammers operate, we must study each step…Today we are deeply studying this topic, but, unfortunately, there are no solutions yet, how to proceed further, and we are not yet ready to use the cryptocurrency".

Shortage of Graphics Cards in Russia

The Chinese online trading platform Aliexpress, an Ebay-like subsidiary of Alibaba, reported in June that there was a surge in demand for video cards in Russia for cryptocurrency mining. “Aliexpress associated a surge of interest in video cards with the desire to use them to generate cryptocurrency,” the publication emphasized, adding that:

"The trading platform reported that its users began to look more actively for specific models of video cards that are most suitable for creating crypto-farms (GeForce GTX1060, GTX1070 and Radeon RX480), and the number of bitcoin miner requests increased 150% in a month".

Prior to Sberbank’s confession, RT reported that “the recent surge in the value of bitcoin has caused a jump in demand for video cards, which are used in cryptocurrency mining.” In addition, “people buy up to 600 video cards at once,” the publication detailed, noting that this has caused “a nearly 80 percent price surge since the spring.”

According to Vedomosti, the spike in demand has caused the price of graphics cards to rise “by an average of twice: for example, a device that cost in spring 16,000-18,000 rubles now costs more than 30,000.” The news outlet added that one store promised that the cards can be ordered within a week while another said it would take 10 days.

Images courtesy of Shutterstock and Sberbank.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

40 foreign companies ask to allow Bitcoin production in Russia

By Olga Novikova - November 12, 2017 (

Many companies in China and the European Union asked the Russian authorities to give permission for Bitcoin mining in the country.

In Russia, at the moment, the production of crypto currency has become quite a common occupation, but there are still large energy capacities that will suffice for foreign mining companies.

The Russian Association of Crypto-Currency and Blockchain (RACIB) has received 40 applications from various companies and individuals for the placement of mining equipment in the country for Bitcoin mining. The president of the association, Yuri Pripachkin, said: "In Russia, there are hundreds of companies in our country and enough resources to accommodate other companies."

RACIB is an association formed in August, created to unite the owners of Blockchain and miners, as well as investors of crypto-currencies. On its formation, adviser to the President of the Russian Federation Herman Klimenko.

Pripachkin commented on crypto-currency production in Russia: "In fact, this is a completely new market for companies. But it is necessary to make the platform at the legislative level and work out possible tax options for foreign investors. "
According to the director of the association Arseniy Sheltsin, "The organization created a committee of participants in the mining market with the participation of representatives of Slovakia and China". Pripachkin believes that Russia can become the world capital of the mining markets.

October 24, 2017

Putin confirms Russia will regulate ICOs, Mining by July 2018

By William Suberg - October 24, 2017 (

Russia’s President Vladimir Putin has signed off on regulation of ICOs and cryptocurrency mining by July 2018.

Quoted in local news outlet RNS, the Kremlin’s press service formally announced the move Tuesday which will see ICOs included in regulatory statutes “on the basis of” longtime regulated IPOs.

In addition, the government may now legally define the status of various terms related to what the Kremlin describes as “digital technology.”

These include so-called ‘distributed ledger technology’ alongside ‘cryptocurrency,’ ‘token’ and ‘smart contract.’

Ideas for a dedicated regulatory sandbox for fintech in partnership with the central bank should also surface by Dec. 20, RNS reports.

VTB Bank: consumers not interested in ‘very dangerous’ crypto

Russian state-owned VTB Bank “has not seen a lot of interest in Bitcoin” from the country’s consumers.

Speaking to CNBC, the bank’s CEO Andrey Kostin joined its international arm CEO Riccardo Orcel in saying that contrary to popular belief, real-world usage was low and cryptocurrencies were “very dangerous.”

"There was some interest reported in the press, but I've not seen in Russia a lot of interest in Bitcoin, to be honest," Orcel told the network.

Kostin added he was “a little bit skeptical” about cryptocurrency.

"We see a lot of high speculation factor in cryptocurrencies and I think it's dangerous," he warned.

"Until the governments decide how to regulate this area I think it will be very, very dangerous for investors to invest in cryptocurrencies."

Kostin’s perspective has been widely echoed in Russian political circles. A current package of regulations is due for release by the end of year, while politicians have expressed a desire to strictly limit cryptocurrency availability to regular consumers.

Conversely, Bitcoin, Ethereum and ICOs have conspicuously entered mainstream consciousness in the country, with everything from restaurant menus to vodka emerging with a crypto theme.

Burger King Russia was the world’s first example of a global fast food giant issuing its own cryptocurrency, Whoppercoin, this year.

In addition, Russia’s largest bank Sberbank announced it had formally joined the Enterprise Ethereum Alliance last week.