Business has never been better in the world of bitcoin mining. The amount of investment and new businesses popping up in the bitcoin mining space has increased rather dramatically over the course of 2014, and there’s never a dull week in this particular part of the bitcoin industry. Let’s take a closer look at some of the bigger stories from the past few weeks.
Chinese Bitcoin Mining Alliance Wants to End Ponzi Schemes
The idea that some bitcoin mining companies could be operating as Ponzi schemes is nothing new, and even Gavin Andresen has mentioned his skepticism of it. To combat these possible bad actors, a group of major bitcoin mining companies have come together for the purpose of promoting transparency for bitcoin mining in the cloud. ASICMiner, Gridseed, and Zuesminer are just a few of the names involved in the new partnership. The group has noted that this new consortium of bitcoin mining companies is “the strongest alliance ever in cloud mining history.” To promote transparency, the companies involved with the new bitcoin mining group are going to reveal the specific source of their hashing power and how all of the coins that are paid out to customers are generated.
GAW Miners is Creating Their Own Cryptocurrency
GAW Miners Founder Josh Garza is planning to launch Paycoin, which is a digital currency that he says can correct all of the mistakes that bitcoin has made in the past. This is obviously not the first time that someone has claimed to have created a “bitcoin killer”, as many others have attempted to tweak bitcoin’s core protocol in order to fix some of the perceived problems with the world’s most popular cryptocurrency. Josh Garza seems to believe that he can succeed where all of these other projects have failed. It appears that the main selling point of Paycoin, which used to be known as Hashcoin, is that an extra layer of mining could enable the ledger to clear transactions at a rate much faster than bitcoin’s average of ten minutes. There are also plans to use reserves of fiat currency to lower the possible exchange-rate volatility associated with most cryptocurrencies.
CoinDesk Looks into Whether or Not Mining is Still for Hobbyists
Although the earliest bitcoin miners were hobbyists who just wanted to play around with a new technology, it takes much more than a laptop to make any money in the mining world these days. With the bitcoin price falling over the course of 2014, bitcoin mining hobbyists who are just interested in mining a small number of bitcoins have effectively been taken out of the market. Mining has continued to become more centralized in a growing number of large mining centers, and it is becoming less practical for anyone to mine bitcoins with hardware in their homes. People who are able to create the most efficient methods of mining bitcoins are going to continue to grow over the next few years, which is why many are predicting that certain countries that have cheap electricity could turn into bitcoin mining hubs.
The main issue with trying to mine at home is that hobbyists don’t have access to the latest bitcoin mining hardware. By the time the hardware is created by the manufacturer and shipped out to a customer, it’s possible that the bitcoin difficulty could have increased by as much as 30%. For this reason, it is becoming less likely that those who are not making the hardware will be able to use it to their advantage. Read CoinDesk’s full report on small-time bitcoin mining to gain a full understanding of this issue.