Weekly E-mails:  Crypto Trading Strategy 5 Weeks of Onboarding Reads. Latest Airdrops (Thu 7 AM EST). Or all of it.

Dismiss   Pick Your Preference
This site uses cookies (More).


The True Crypto Fundamentals: Crypto Mining and Transactions - #CryptoTrading

Crypto mining is the true fundamental limit of all PoW cryptocurrencies. Transactions, a somewhat softer fundamental, can also provide some guidance. Learn the basics of the nature of these crypto fundamentals.
Fundamentals  .  Published  · By KarlVonBahnhof

Immutability as a fundamental

Cryptocurrencies operate in a drastically different way than fiat money as we know it today. Cryptocurrencies are based on blockchain, a ledger that gets generated in a sequence that cannot be reshuffled.

Blockchain shares all of its data equally between its participants. Any changes brought to the blockchain are publicly recorded, and these records cannot be tampered with. That provides it with a digital, but nonetheless real fundamental - it is impossible to generate a coin out of thin air based on the order of some authority.

The only type of cryptocurrencies where this doesn’t hold true are IOU-type coins, such as some stablecoins.

Proof Of Work

Rather than keeping all data in a single central hub, on blockchain information gets distributed in nodes called blocks. To add new information to the blocks, a member of the network would have to provide the so-called proof of work, or PoW, by solving complex mathematical problems.

One type of such “new information” are crypto transactions. In the case of PoW cryptos, that’s also how new coins are made - a process called mining.

If you want to at first learn about the very basics, and if you at the same time like straight to the point stats and numbers, just scroll down to Bitcoinfy’s infographic below.

For more advanced stuff, keep reading!

Mining as a fundamental

In PoW mining, mining devices are set up to look for a solution of a mathematical problem. When a solution is found, a new block in the ledger is found; the block is broadcast and the miner collects a reward.

An important metric called “hashrate” is the speed at which mining devices are completing this operation. Higher hashrate in the network means there is higher opportunity of finding the next block and receiving the mining reward.

There have been only a few people who studied the relationship of hashrate with a PoW cryptocoin’s price, and the amount of traders who consider this is even lower.

It makes sense, because hashrate vs price dynamic in Bitcoin or other similar cryptos it is not a quick one to react. If most crypto traders are daytrading rather than making decisions for longer horizons (say, less than ten trades a year), naturally most people in the trading community will study momentarily chart patterns instead.

There are traders who claim that “Bitcoin is structured so that hashrate follows price”. The reason is meant to be the same one as the one that contributes to the jumpy character and overreactions we keep seeing in crypto: Vague and delayed decisions.

In a bear market, a lot of miners will keep mining at a loss, hoping they will survive long enough to realize the profit once the slump is over. Traders and hodlers do a very similar thing. When it starts looking like the price is reversing, pretty much no traders are jumping in until there is some sort of confirmation. In mining, as miners drop out, the profitability of mining will start increasing to lure them back in, but just as with traders, very few are eager to make that move without confirmation. Once that comes, a whole crowd of both traders and miners return to the market.

This is why crypto mining is a fundamental aspect of PoW cryptocurrencies: It limits the movements of the market.

If it is a limit, for a trader or an investor it will make more sense to look not at the short term hashrate movements but instead at the places where the direction changes.

For that, also consider “hashprice” instead of “hashrate”. Hash Price measures the daily mining profits, it is the ratio of daily mining revenue and the hashes generated per day. Hashrate fluctuates a lot, hashprice gives a much clearer picture.

On the chart from here you can see that both hashrate and hashprice of BTC started reversing upwards when the market overreacted with the drop to 3K USD.

Crypto Mining - The Numbers

About the author

Written by KarlVonBahnhof

KarlVonBahnhof also on Reddit, Chris belongs to the crypto trader class of 2013. Located in the Americas most of the time, you're most likely to meet at r/BitcoinMarkets though.


Last added to Crypto Airdrops, Bounties & Opportunities
Name Date How to access Official URL Additional Info
DAPPT Airdrop New Opportunity LIVE until 16 July The dapp.com pre-listing airdrop that we published in June is done now and users can withdraw their airdrop rewards. Dapp.com now opened another opportunity to earn money - there is a TRX reward for trading the DAPPT token. How to get money:Sign up on PIEXGO where DAPPT is listed with code 3I2QDP. Make at least one trade on DAPPT/USDT market. PIEXGO will snapshot user holdings every hour before 15:00 (UTC +8). Users will share a total of 30,000 TRX according to proportions of their average daily DAPPT holdings. DAPPT withdrawal PIEXGO exchange
MAXUM Crypto Airdrop As available New deflationary ERC-20 token (with a token burn rate of 2% per transaction). Because the only issue there is with the token ecosystem is inflation, or whatever. Drops for classic shilling (Twitter) and Telegram join. info form
PDATA Bounty Until 7 July PDATA is seeking to increase their brand awareness and would like to reward content producers in their native language with $20 in PDATA tokens in exchange for published articles and or videos. Maximum of 20 submissions. You should fill the pre-signup form ASAP, deadlines just now. info form
Product Protocol ERC20 Airdrop Until 22 Juny 2019 Product Protocol is a opensource protocol for crowdfunding/crowdlending campaigns based on digital assets issuing. Drops up to 18 USD worth of tokens for classic social media engagement. info join
INNOU Crypto Airdrop Limited INNOU is a new digital ecosytem and complete decentralized multimedia app. During their pre-ICO/ICO they are giving away up to 120 tokens (11 USD) for easy social media tasks. The 'Join' link takes you directly to the Telegram airdrop bot. info join
FanEspo Big Competition (ERC20) Regular Fanespo is launching a new promotion contest worth $400 in FAN tokens. Details will pop up on you when you sign up on site. Overall, the eSports platform FanEspo is giving away the total of $1.6 million of tokens in contests. You need to have a FanEspo account, the tokens you get are testnet but they will be transferred into real tokens upon launch. details make acct
Ethereum Card Airdrop Until end of June 2019 The escrow service on Ethereum is giving away up to 100 ETHCD tokens (15 USD) for a signup through referral and social media joins. Sign up with email and in your dashboard click "Join Airdrop". info sign up
Lunox LNX Airdrop Until end of June 2019 A retail marketplace that for some reason uses blockchain technology. Drops ERC20 tokens for social media shilling. info form
Bethereum Photo Contest Until end June 2019 Bethereum, the betting platform on ETH, is giving away prizes in a social media campaign to the platform users who take a photo of the platform in an unexpected place, post it as a comment and hashtag it #BethereumAnywhere Twitter. The monthly prizes of 25K Bether, AND 3 grand prizes of 100K BETHER! join platform photo thread
BlockWage Airdrops + Bounties Recurring Platform for freelancers marketplace. Airdrops randomly announced via Discord, there's also the possibility of Masternodes. join web
BitForex Exchange Launch Promo Limited The new altcoin trading platform is dropping exchange tokens to new signups. You get 20 BF for your signup with code 2178778 and can earn more for referrals, limited at 30k BF. details make acct

#DEX Series - The Business Of Decentralized Trading

Blog  #exchanges   29 Jun 2019, 09:14 UTC
DEX Series, Episode 2: Copy trading
Blog  #exchanges   29 Jun 2019, 09:14 UTC
DEX Series, Episode 1: Order Execution Management