Proof of Walken — The Dangers of Spec Mining and What you Need to Know
With the recent launches of Veil and Beam, a new batch of miners have tried to jump into the foray of spec mining. And it’s not a pretty sight. Many people don’t know how to set up miners, struggle using a wallet, connecting to pools, and can’t find mining pools. This is showing that there was not enough research done and people are just fomoing in because they heard about it. Here’s the truth of the matter. No one has the time to give you a step by step on a spec play that we ourselves are still battling to try and set up. Some things in this article may upset the new miners. But its things that need to be said. I know we always preach do your own research but it needs to be done and not just do it because someone else is. With that let’s get to it.
What is Spec mining?
Spec mining, or speculative mining, is mining a coin that is just launched and not many people know about. These coins aren’t listed on exchanges, have no real price discovery and are being mined purely on fundamental analysis. Spec mining is normally something for the more seasoned miner. As some of you saw with Veil and Beam, mainnet launches can be a mess and frustrating. Most new coins have their own mining software or a buggy beta version of a known miner that can be unstable. The wallets are normally very rough and have tons of issues. You’ll have to use pools that seem iffy or may be in another language that you’ll have to use google translate to navigate. This is why you need to know what you are doing. Or you can throw hash at something for a few days, mess up a transaction and lose it all. You also need to know about the dangers of OTC trading.
The key aspect of spec mining is getting in early. At a coins launch, it will be the lowest difficulty and highest chance of a block reward that the coin will ever have.
OTC trading, or Over the Counter trading is the buying and selling of coins between two parties without using an exchange. Almost all coins after being newly released are not listed on an exchange. So if you are looking to buy or sell, OTC is the only way. Here are some things you need to know:
- Only use an approved OTC channel that is approved by the coin itself. These are normally through discord. Some coins have their own, others use a third party.
- Only use approved escrow agents. Every official discord has approved escrow agents. Don’t get scammed!
- Don’t overpay and don’t sell too low. Always wait until there is a little bit of price discovery on a coin before buying or selling.
- If you don’t feel comfortable with OTC and believe in the project, then just wait for an exchange.
The Dangers of Spec Mining
The project can be a total scam!! People get upset with me because I don’t always broadcast to the world what I’m mining. This is solely protection. As I stated above there are still a lot of people that refuse to do research and will just mine something because I am. Then it’s my fault if the coin ends up being crap and they lost money hashing at it. I’ll give you an example.
Example of Failed Spec
Caliber was on the twitter hype train. I knew about it the day after the Bitcoin Talk announcement was made. It never gave me a warm fuzzy but I threw some hash at it and sold it all off OTC because I didn’t believe in it. Now its most likely a dead project as the devs haven’t said anything in over a month. I even brought it up on Miners Oasis and warned everyone about it when the OTC trading was going nuts.
This is just one example. It happens all the time in Spec mining.
Should I try Spec Mining?
Here are some questions you should honestly answer before you attempt Spec Mining
- Can you set up mining software on an established coin without a walkthrough?
- Can you set up a native wallet?
- Can you restore that wallet with your seed?
- Can you use an established pool and manage payouts?
If you answered no to any of these then it is my opinion you should beef up your knowledge a bit more before proceeding
I’m Ready to Start Spec Mining!! Where do I start?
Bitcoin Talk Announcements
The Bitcoin Talk Announcements are where the initial announcements are made for new coins. This is a resource that a lot of new miners don’t know about. But in truth the biggest resource. Just a few things that are normally listed:
- The coin’s official website
- Their GitHub
- Coin name, ticker, algorithm, and release date if not already released
- Links to wallet
- Links to available mining pools
- Links to supported mining software
- Links to Telegram and discord
- Team members if they aren’t anonymous.
Another thing to look for on the Bitcoin talk announcements is legendary members. If a legendary member is posting positive things on a project and/or is involved, it’s probably something you should look at.
Discord is truly the main hub for any proof of work coin. This is where you will get the most up to date information, support, settings from other miners, ect. It’s also the easiest way to get in touch with the people involved in the project including the DEVS. A good discord channel with a lot of community and DEV activity is a great sign.
Telegram is another great source. It isn’t as robust as discord but if you have an easy question that you want a quick answer on it’s normally the spot to go if they have good admins
This is the first place you should go after the bitcoin talk announcement. Here you should be able to see their road map, read their whitepaper, and download their official wallet. Side note, the official website is the only place you should download the wallet. Most of the time the link will take you to their Github.
The most important place for a coin that most people don’t visit. Here you will find source code, wallet updates, dev notes, etc, etc. If there is one thing on a project that you want to see active, it’s their Github.
Hopefully, this article has helped show you the resources available to miners for spec mining.
As always you can follow me on twitter for mining and memes @cryptochrisw
And join my mining telegram Proof of Walken. We are nearing 1500 members!!
Originally published at Whale Reports — Bitcoin & Cryptocurrency News .