Mining versus Minting: Which is best for crypto extraction?
2018: Not all cryptocurrency is produced through “mining”
The Bitcoin model depends on “mining” to release a digital store of value. But a more sustainable model exists too.
CRYPTOCURRENCY mining is not an easy pursuit, and in truth its golden age may have already passed. Parallels can be drawn with the California Gold Rush, which precipitated a hectic, rabid pursuit for lucrative gains only for disappointment and disillusionment to set in for most would-be prospectors.
All the easily extractable precious metal had been hoovered up long before most would-be prospectors pitched up in Sacramento. Similarly, 2017 provided a watershed year for cryptocurrency in the same way that 1850 was for gold in California. In January, profits remained easily obtainable for both sets of speculators. By December, it was a difficult task for either group to get rich quick.
What actually is cryptocurrency mining?
Mining a coin — and let’s use Bitcoin as an example — essentially involves an arms race between computers all over the world to complete a unit called a “block”. It’s essentially about verifying a string of Bitcoin transactions.
If John walks into a trendy coffee-shop in Manhattan and pays for his soy latte in bitcoin, miners need to check the transaction is good. But it’s not just one transaction individuals are trying to verify. There are other transactions ongoing, and they are all gathered into virtual boxes with a virtual padlock on them. These virtual boxes form what we have come to know as “blockchains” — the alternative term, mutual distributed ledgers, having not proved quite so popular
Miners set their computers to find the key that will open that padlock. Once their individual machine finds it, the box is opened and all the transactions in the block are verified. For solving that incredibly complex puzzle, the miner gets a reward of a set number of bitcoins.
Easy, huh? Think again. One key point is that the value of the reward halves every 210,000 blocks. At the moment it is 12.5 Bitcoin. In late May/early June 2020, it will drop to 6.25 Bitcoin. Meanwhile, the current number of attempts it takes to find the correct key is around 3.4 trillion according to Blockchain.info, a site that lists the latest real-time bitcoin transactions.
In addition, the value of Bitcoin itself has undergone a serious correction. Having peaked in excess of $19,000 per Bitcoin just before Christmas 2017, it is now below $10,000. These are all major disincentives. But there’s more to discourage amateurs from joining the mining craze.
Prohibitive up-front costs for would-be miners
When it all began, regular PCs purchased out of a retail catalogue were easily good enough for harvesting Bitcoin. Not now: the hardware for a full mining rig currently costs in the ballpark of $12,000. Then there’s the very high cost electricity to factor in. You might be better off joining a syndicate to try to earn Bitcoin, but that means you earn only a small fraction of the reward.
In other words, by mining you can acquire cryptocurrency without having to deplete your bank account. However, the way things are in 2018 make it a significantly less attractive proposition than it once was.
So how about something entirely different? DasCoin does away with mining altogether; instead it operates a system whereby software licenses are sold through the NetLeaders organization, a key DasCoin partner. Licenses suit most budgets, weighing in anywhere between €100 euros and €25,000. Each comes with a package of Cycles which represent real value in the ecosystem that has DasCoin at its center.
DasCoin: Utility for the blockchain
Cycles can be doubled when a Network Upgrade takes place evey 108 days. And usually, once they have reached their full potential, Cycles are presented to the Minting Queue and are turned into DasCoin. However, Cycles will also become increasingly useful for other purposes in the near future, because DasCoin intends to operate a number of blockchain-enabled services that will provide great utility for its ecosystem. And once people understand how important blockchain can be providing major efficiencies to society, this is the avenue that could help set DasCoin apart.
The minting model that DasCoin operates is transparent. At point of entry, it is clearly laid out exactly what the process is. Customers also know the maximum number of DasCoin that can be earned for each type of license. DasCoin can be traded internally already on the DasExchange and very soon they will be traded externally too. Having a stake in the system also provides rewards to those license-holders who are able to act as Advocates by bringing in new customers into the business. The incentivized marketing angle is another key aspect to DasCoin.
In cryptocurrency, mining is haphazard, arduous, expensive and operates in an increasingly overpopulated and under-rewarded market. Minting is quite possibly the new way. It is certainly a method that is well prepared for the long-term future of blockchain and one that merits serious consideration for people entering this sector in the post-Bitcoin era.
