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
BitMEX (10% fee off) @ bit.ly/melancholic-100x
TradingView (~ 50% off in BTC) @ bit.ly/tradingview-moon
Conbase (no offer but you still click this lol) @ bit.ly/plebtier
EthFinex (NEC token rebates for MM) @ bit.ly/ethfinex
TensorCharts @ bit.ly/tensor-charts
Upcoming and current airdrops 2019
|Name||Date||How to access||Official URL||Additional Info|
|MAN Airdrop to token holders||On 5 May 2019||With the mainnet launch of Matrix AI Network, total of 300,000 MAN to be airdropped to MAN holders who are holding 100 MAN or more on KuCoin. Snapshot runs on 5th of May at 6 PM UTC+8.||participate||announcement|
|Bethereum Prize Pool||Until 1 June 2019||Bethereum, the betting platform on ETH, is giving away free bets with the chance to win prizes from a pool worth 12M Bether. Upon signup you get enough points to make your bets, and you can wager on sports and esports.||join||web|
|FanEspo Big Competition (ERC20)||Limited||Fanespo is launching a new promo contest worth $40 in tokens. Details will pop up on you when you sign up on site. In general, the eSports platform FanEspo is giving away the total of $1.6 million of tokens in contests. Top winner's prize is over $100K worth. You need to have a FanEspo account, the tokens you get are beta but they will be transferred into real tokens upon launch. Estimated value is 1 USD per token.||details||make acct|
|Greencoin Airdrop||Until 15 May 2019||Greencoin Team has decided to give away 500 000 GNC worth 150k USD in total. Simple social media tasks - twitter follow, medium follow etc - each pays 200 GNC each.||join||web|
|BlockWage Airdrops + Bounties||Recurring||Platform for freelancers marketplace. Airdrops randomly announced via Discord, there's also the possibility of Masternodes.||join||web|
|DSTRA / $DST Discord Airdrop||Biweekly||DSTRA is PoS Scrypt Masternode coin with limited supply that will be used in DEX environment and marketplaces. There are airdrops every two weeks, users need to register via discord. Regular payouts verified.||discord||rules|
|HubrisOne Airdrop Round + Bounties||Weekly (16 weeks of airdrops, each weekly round starts on Tue)||HubrisOne is a UK financial service that offers personal and business crypto-friendly bank accounts and crypto-fiat cards. The easiest way to get the token is to download their banking app, which gives you 1000 tokens (10 USD) but there is a massive bounty campaign with weekly payouts. The work ranges from social media engagement or Bitcointalk signature to content creation, all must be properly reported. New round starts every Tuesday, but on other days they publish random airdrops on their Twitter.||airdrop, bounty||twitter (more drops)|
|BitcoinLux Bounty||From 28 March 2019||A project that requires you to install their wallet, be vigilant here. Drops coins for blog or social media shilling.||details||web|
|SiQs Bounty||As available||New smart-contract based marketplace for freelancers. Pre-alpha minimum product available, just as litepaper and wallets for Linux and Windows (sadly not paper, so be vigilant). Runs on PoS / MN. Join discord for airdrops.||discord||wallets|
|Synchrotron / $STC Airdrop #15||30 weeks of airdrops (Airdrop #15 starts 25 March 2019)||Hybrid PoW/PoS payment cryptocurrency. The team drops 72% of supply (18 MM coins) during 30 weeks of airdrop campaign; there is additional budget for bounties. The bounties are announced on discord server. Each airdrop round runs from Monday 10AM UTC to Friday 10PM UTC. Validation runs weekends and distribution Mondays. You need to download a $STC wallet.||drop rules in this thread||info|
|Cargo Coin Bounty||Weekly||Cargo Coin, a token for transport & logistics with an ICO past the soft cap by now, is having a weekly extensive bounty. It spans from simple retweets to YouTube reviews - make your bounty hunter account and pick your poison.||join||info|