On 15 September 2022, the world’s second largest cryptocurrency at that time, Ethereum, transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as “the Merge” https://rainreality.com. According to the Ethereum Founder, the upgrade would cut both Ethereum’s energy use and carbon-dioxide emissions by 99.9%.
For beginning investors, it can also be worthwhile to examine how widely a cryptocurrency is being used. Most reputable crypto projects have publicly available metrics showing data such as how many transactions are being carried out on their platforms. If use of a cryptocurrency is growing, that may be a sign that it is establishing itself in the market. Cryptocurrencies also generally make “white papers” available to explain how they’ll work and how they intend to distribute tokens.
Many cryptocurrencies were created to facilitate work done on the blockchain they are built on. For example, Ethereum’s ether was designed to be used as payment for validating transactions and opening blocks. When the blockchain transitioned to proof-of-stake in September 2022, ether (ETH) inherited an additional duty as the blockchain’s staking mechanism. The XRP Ledger Foundation’s XRP is designed for financial institutions to facilitate transfers between different geographies.
Many cryptocurrency networks charge a fee for any transaction, including buying or selling crypto as an investor. These can vary wildly, and high fees can cut into returns. Bitcoin transaction fees, for example, have varied between less than 50 cents and more than $100 per transaction over the last year, during periods of exceptionally low or high transaction activity.
In a way, crypto mining is really just solving these incredibly complicated mathematical puzzles. Do it fast enough, and the reward is a coin. If you’re slower than the competition, you don’t get one. This method is called “proof of work.”
Of course, if you don’t have a supercomputer, you can always build one. Plenty of people interested in making money from cryptocurrency—Bitcoin in particular—have started doing so, often by connecting several devices to each other to create powerful networks that can combine and amplify the processing power of each individual device.
Remember – the method that suits you the most will depend solemnly on what you want and what kind of resources you have, so choose carefully! The world of crypto mining is full of surprises. If you do decide to give mining a chance, I wish you the best of luck!
The profitability of crypto mining depends on several factors. One of them is changes in cryptocurrency prices. When cryptocurrency prices increase, the fiat value of mining rewards also increases. Conversely, profitability can decline along with decreasing prices.
In short, crypto mining is how new units of cryptocurrency—usually called coins—are created. As you can imagine, this type of mining doesn’t involve callused hands gripping pickaxe handles. Instead, it’s computer processors that do all the hard work, chipping away at complex math problems.
Celsius filed for Chapter 11 bankruptcy on July 13, 2022, one month after pausing withdrawals. A declaration filed the following day reported a $1.2 billion deficit in the company’s balance sheet. Mashinsky said that the company had “made what, in hindsight, proved to be certain poor asset deployment decisions”. According to the bankruptcy filing, the company had $167 million in cash on hand, which it said would provide “ample liquidity” to support its operations during its bankruptcy. Of Celsius’s $5.5 billion in total liabilities at the time of its bankruptcy filing, the company owed $4.7 billion to its users, who were listed as unsecured creditors. Celsius’s choice of Chapter 11 bankruptcy would prioritize repayments to secured creditors first, then unsecured creditors, then equity holders.
CEL tokens are available for purchase on many crypto exchanges, as well the Celsius app. You can also get them as a reward on the Celsius app in the form of interest rates on your deposits, but you would have to already own some CEL tokens in order to do that.
July 14, 2022: A court filing from Celsius’ advisory partner Kirkland & Ellis reveals Celsius has a $1.3 billion hole in its balance sheet. The filing marks the first time Celsius has acknowledged the hole in its balance sheet.
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Celsius filed for Chapter 11 bankruptcy on July 13, 2022, one month after pausing withdrawals. A declaration filed the following day reported a $1.2 billion deficit in the company’s balance sheet. Mashinsky said that the company had “made what, in hindsight, proved to be certain poor asset deployment decisions”. According to the bankruptcy filing, the company had $167 million in cash on hand, which it said would provide “ample liquidity” to support its operations during its bankruptcy. Of Celsius’s $5.5 billion in total liabilities at the time of its bankruptcy filing, the company owed $4.7 billion to its users, who were listed as unsecured creditors. Celsius’s choice of Chapter 11 bankruptcy would prioritize repayments to secured creditors first, then unsecured creditors, then equity holders.
CEL tokens are available for purchase on many crypto exchanges, as well the Celsius app. You can also get them as a reward on the Celsius app in the form of interest rates on your deposits, but you would have to already own some CEL tokens in order to do that.
Cardano is intended to evolve into a system for decentralized applications (dApps) with multiple use cases governed by stakers. The blockchain’s cryptocurrency token is named ADA after Augusta Ada King, Countess of Lovelace, an English aristocrat commonly regarded as the first computer programmer. ADA can also be purchased on most major cryptocurrency wallets and cryptocurrency exchanges.
Cardano’s PoS consensus mechanism also makes its validation process more accessible to the average user than Bitcoin’s PoW. Cardano staking can be done simply by installing compatible wallet software on computers or devices—Bitcoin mining can also be done this way, but it is not very efficient, even if it is done through a pool, which is the least commitment-intensive option for mining.
Validators open and finalize blocks of transactions and are rewarded with ADA from other validators based on the number of tokens they have staked. Users can participate in the validation process by creating or joining a pool, which can be public or private.
Cardano is a decentralized PoS blockchain founded in 2015 and launched in 2017. It has positioned itself as an alternative to PoW blockchains like Bitcoin because it is more energy-efficient and scalable.
Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.
