Mining Bitcoin with pencil and paper: 0.67 hashes per day

This is for you. Get ready.

First of all I want to say a proper hello to you. Hello! :) I've been a member of this community not for a long time, but I've been in the crypto world since 2015. I'm not from US (since 90% of reddit is US) but I'll try my best to explain my thoughts in english in this post. Trust me, you won't regret reading it.
I started studying the crypto world for my own since it's a passion, a hobby. Why? Because the whole concept of crypto fits my ideals, ideas and thoughts when it's about the world.
But I will be talking about the Bitcoin, since it's the most important part here. We'll exclude any other alt-coin because makes no sense to talk about them here and is a way broader topic.

The main statement : Bitcoin is the 8th wonder of the world. Is the chance of every single one of us, to have a free life. I want to explain why, because I'm too enthusiastic and all of my friends do not share the same ideas and have no clue about the crypto world, and you are my friends now :).
Money. When it was first created, it got completely centralized. GOVs and institutions were controlling the money. Imagine a country with 1000 people and 1000 whatever-currency. Every one would have 1 currency (let's call it banana-coin). So every person would have 1 banana coin. The GOV is controlling all the banana-coins. If something bad happens, they product more banana coins. What happens when more banana coins are produced? Inflation, thats right. So in order to buy 1 bread, you need now 2 banana-coins instead of 1. This everyone can understand, right? But what if the GOV prints even more? Right, 10 banana-coins for a bread. But we have only one country. Let's add 2 more countries. The country with 10 banana-coins/bread is doing worse than the other 2 where they can still buy 1 bread with 1 banana coin. Then the 2 countries can "destroy" the first country only with the power of money. (I'm trying to keep this as simple as possible)
Now imagine this with USD/EUROS, in a CoronaVirus world with the GOVs. Yup, everything is falling apart, everything is in chaos. The systems are controlled by greedy people.
The conceptual idea of money, is to be UNCONTROLLABLE. Before the invention of money, the goods used as currencies were much better in term of freedom than the money created after. Then money was created, real gold coins, then data in systems, then recessions every time on a period of time, as example 2008 because THE MONEY WASN'T USED AS IT SHOULD BE. FINITE AND FREE.
Then Bitcoin appeared. BOOM! Finite, free and sustained only by its users. It's a wonder. I'm sorry I can't explain this as I have everything in my mind, but I'm trying... The bitcoin creator is not known, but he gave us something he knew we would need. It's like someone came from future to give us this in order to evolve as a society. He knew that the currency in a modern world cannot be used forever if its not gonna change to something that NOBODY CAN CONTROL it. Very few people really understands the quality of this, the chance that we have.
If 21 mil btc were mined, no more producing, the price lets say was at 100k. And the corona virus hits, WE DONT NEED TO PRODUCE MORE. The value will just go up, the bitcoin would help us. We don't need to MAKE more. The whole concept behind the Bitcoin is that HE WOULD WORK for us, we dont need to do anything else just to USE IT. Behind the scenes, it is the 8th wonder of the world. I'm so sad I can't explain exactly how I can in english because I know you would understand me.. I think I need better friends IRL lol
Money = inflation, the GOV is controlling it, they produce it legally (if we produce it we go to jail), ITS NOT FREEDOM. People are not understanding this. You work 20 years of your life for 2.000$ a month and then boom everything crushes because of some greed people and you are ruined.
Bitcoin = if we use it, we are saved. The price can go only up. Even in a Corona Virus situation, when businesses are closing, the bitcoin price would go up and it would sustain us on the timeframe we need. There is no need to do anything else JUST TO USE IT. Globally.
It will be slowly implemented into the word more and more by different companies, BECAUSE WE DICTATE IT. The use of this, will make big financial companies TO USE IT FOR THE SAKE OF THEIR PROFITS. This is our chance.
The price of it will hit big numbers. Maybe not now, maybe not tomorrow or after a month. But at one point, it will get extremely big. It can't hit 100$ anymore at it was. But it's at almost 10k. Remember the 2017? Most of you were like "Ohh If I would have invested then" etc etc. No. You have the chance to invest now. Even if its higher then before. Since it will go only up, there is ALWAYS THE BEST TIME TO INVEST. NOW is the "then" for what's coming next in the phrase "Ohh if I would have invested then".

Thank you if you read the whole thing, I just wanted to share with you my enthusiasm. This is the wonder WE NEED.
submitted by 2poor2die to Bitcoin [link] [comments]

My wife (32F) is threatening to leave me if I (30M) don't get what she considers help for my depression. This isn't the first time she has threatened to leave me.

This is going to be a long post.
I met my wife online 8 years ago. We lived across the country from each other and kept a long distance relationship going well, and go the opportunity to see each other every few months for weeks at a time. We would fall asleep on Skype together every night, text each other throughout the day, and phone each other when we had time to talk or wanted to play games together. In 2013 after a year and a half of dating I asked her to marry me and she said yes.
I was overjoyed! I had spent my highschool years as the guy that everyone avoided because my mother had been sending me to therapy for over 10 years for issues that may have been real at the time of my childhood, but regressed as I grew into adulthood. I would routinely take a cocktail of 8 different medications in the morning and before bed, and my friends are the time would better describe me as a zombie over a functional human being. I had issues holding conversation, would regularly space out, could not perform sexually, and could not get good grades in college. After I got married to my wife, we got an apartment together, and I stopped my medication cold turkey of my own volition.
I was a new man, I no longer any of my previous issues and I felt free and full of life. I never resented my mother because she only had my best interests in mind, and was not doing sending me to therapy and keeping me medicated for her own peace of mind. My parents gave me a great life growing up and gave me everything I ever wanted, being from an upper class household, they bought me a brand new car for college, anything I wanted growing up, and would support me financially on almost anything I wanted within reason. My college was fully paid for and I went to one of the best private schools in the area while growing up. I had been to every continent in the world, visited tons of grand architecture and theme parks, and seen so many wonderful things, and I was looking forward to sharing that life with my new wife.
My wife did not have the upbringing I did. She was the second oldest of 6 children. Growing up, she did not get any luxury. From having to work a summer job to buy her own school supplies and clothes, to dealing with an elder brother that sexually assaulted her every month while her parents slept, to a junkie father that would work odd jobs only to get money to get high, and a mother that worked 3 jobs to keep a roof over her children's head, her child hood was not easy. Her parents got divorced when she was 17, after being together for 23 years. Her father never gave her any love despite her efforts, she would regularly make love notes and lunches for him growing up, only to find them crumpled up and thrown in the trash and never responded to. Her elder brother would force her to give him oral at least a few times a month from the age of 15-16 while everyone in the house was asleep. Her father left and had no contact with her since she was 19, only showing back up in her life for our wedding, just to disappear again. He hasn't spoken to her in 4 years now.
Before we got married, I flew out to meet her, and we packed up everything she owned and put it in her car. We drove 2900 miles across the US to move her into our house with my parents, and after we got married, my parents paid for us to get an apartment near their house. We were so happy! After we moved in together after getting married, we both were young, only 23 and 25. We worked fast food and don't have a lot of money, surviving on only a hundred dollars of food a month. But, because we were together, everything was ok.
Or so I thought. My wife has constantly struggled with insecurity since we got married. We made sure when we got married that we would keep our finances separate. She was a bad money manager and didn't want to "ruin me" like she had ruined herself. She would break down sometimes for no reason begging me not to leave her, and I have never done anything to make it seem like I was. My parents decided that since I had gotten married and was doing OK, they were going to give me part of my inheritance up front. I took this money to pay off all our debt, I paid off half her student loans, and I would take care of any issues that came up for her that she couldn't handle without complaint. She crashed her car, I helped her buy a new one, she couldn't pay a bill, no problem, I've got her covered. Anything she felt she couldn't handle, I was always right there to support her.
Near the end of our first year together, my wife for some reason had reached the end of her rope. If we didn't move out of the big city where she didn't have any friends or know how to get anywhere, she was going to leave me. It wasn't me, but she said was devastatingly homesick, and said she couldn't live here any longer. She had made a real home away from her parents at her college town, and her best friend of 6 years lived there, who had supported her through thick and thin. Despite my aversion to this at first, I could tell that moving back home where her best friend lived and what was familiar to her was important. After 2 weeks of talking about it, I agreed to move with her back to what she considered home. My parents were planning to move around this time as well, as they no longer had any children and we're looking to downsize their home. So, for her, I left my hometown of 25 years, and all my friends that I grew up with.
My parents gave me money for us to buy our first house, and another 30 thousand on top. My wife and I found a nice 3 bedroom, 2 bathroom single family home, and bought it outright with cash. Because there was money left over, we used that for moving costs, and I began searching for a job I knew I would enjoy, while living off the interest on my savings. We were working on having a child and I knew that a kid was going to be expensive, so I was trying to make sure we had the money to support our child, and I could still make my wife happy.
In 2015, 2 years after we moved into our house, my wife said she was going to leave me again. Despite her only ever needing to pay her bills (she had gotten herself into more credit card debt), despite her crashing another car and me paying a $5,000 down payment to buy her another new one (she had to get a loan out), despite me spending time with her every night and never going anywhere without her, taking her on trips and little date nights to make her happy, she was threatening to leave again. A month after her telling me this, my father passed away from early onset Alzheimer's. I was having a rough few months.
We were having trouble conceiving and she was having severe body confidence issues. She was convinced that before I left her for someone else, she was going to have to leave me. Since we had gotten married, she had gained over 100 pounds, and I had never made an issue about it, other than showing concern for her health (her family has a history of diabetes and heart disease). She said that despite me continuing to support her in all her hobbies (she likes dancing and volunteering at the pet shelter), me not having a job was stressing her out because she wasn't sure that I could keep helping her. Despite my reassurances, she believed that I was going to leave her for someone better, and that she needed to leave before I did. No re-assurance I gave her would stop her from believing that I was going to be gone the next time she came home from work.
She started self harming. When she was younger, she frequently thought that the reason that her mother was never around, her father left, her brother abused her, was all her fault. Hurting herself made her feel like she was being punished, and that her sins were being forgiven. Her church growing up was very abusive. They would make people stand up in front of the entire congregation and "confess" their sins in front of everyone. When she had premarital sex with her first boyfriend, she almost killed herself after when her mother found out and made her "confess" to the congregation. She hospitalized herself with a suicide attempt after this happened, and has never respected her mother since.
I called up our PCP and told her that my wife dseperately needed help. After an appointment, blood work, and a CT scan for the issues with concieving, she was diagnosed with Severe Depression, Insulin Resistance, and PCOS. She was put on medication and around this time I had found a job, so I told her that she could cut back on her hours and I would start helping her with her bills. We also started looking for a therapist for her. She started going to the therapist and she seemed a lot happier. We were having fun with friends again, and she felt like the happy, bubbly woman I married again.
In early 2016, we got great news! We were pregnant! Because I was making enough money at the time to pay her bills and mine, she was able to only work 20 hours a week through her pregnancy, and then her job gave her 6 months leave when the baby was due. While she was a few months along, she unfortunately got into another car accident, and so again, I helped her buy a new care, this time a minivan, because she wanted it for our kids. She was going to pay for it again, because she said she was tired of me paying for everything for her again. I have no issues with this as I never have, because whenever I try to pay for something, she doesn't let me.
When we had our child, I had saved up enough money to start my own business. Using the money I had saved, I started up a computer system building company, and servicing the local area, I was able to be home a lot more than working my job, and still make the same amount of money. The business started doing extremely well, and I hired a few employees and a friend of mine to work for me, letting me spend more time with my wife and newborn daughter.
Then, we started having problems again. My wife was in a lot of credit card debt from not managing her money ($30,000), and she had been hiding it from me. She was having issues breastfeeding our kid and would break down for hours at a time over not being able to do it. She was diagnosed with post-partum depression and started going to a different therapist. I wasn't making enough money for paying for our insurance, electrical, car payments, taxes and the credit card debt she had built up. I was upset, but it's extremely uncharacteristic for me to get mad about money, because I have always had money. I offered to use our house savings (we were saving up for a bigger house to have more kids) and pay off her debt again. She said no.
She decided she was going work full time again. I helped her get a debt consolidation loan for her cards, and she began working full time while I took care of our daughter.
This was in the beginning of 2017.
Towards the middle of 2017, our life was going great. My business had taken off, and I was making $10,000 dollars profit a month. I had gotten early in on cryptocurrency back in 2013, and was riding high on the bull run from Bitcoin. My company made crypto mining machines due to having a ton of stock from system building, and we were selling those for record amounts. My wife had cut down to part time because I could afford the extra to help her bills, and she could spend more time with me and our daughter. Things couldn't of been better.
Then in 2018, the crypto market crashed. My cryptocurrency that had been worth almost $500k crashed down to $60k of value in the span of a month and a half. I had to start selling it to pay off debt the company had taken on to expand, or else it was going to hurt me more. But I kept holding onto the majority of it.
I kept my business running, but things were winding down because the crypto run was over. We were operating on razor thin margins. In May of 2018, I stopped paying myself while still running the business to make sure I could keep paying my employees. I was still getting a stipend from investments every month in the amount of a few thousand, so I could afford to not pay myself. I was still taking care of my daughter, but my wife had to go back up to full time. I started looking for jobs, figuring with my 2 associates degrees and my master degree, I could get a good job easy.
In the beginning of 2019, I found out my wife had gotten another $25,000 of credit card debt she was hiding from me. She was eating out daily, bringing home for us to eat, and telling me she was making enough money to afford it. She was now up to almost $45,000 of debt, not including her car. I was upset. I told her she can't keep spending money like we have millions. My business wasn't going well, and we needed to cut back our spending so we can get a bigger house to have another kid like she wants. She broke down again.
She admitted she had a money management issue. She locked all her credit cards up in the house safe, and she agreed to only spend money off her debit card.
Then, the trade wars hit. Our stock account took a huge hit, and because I didn't have strong hands, I sold, at a loss of almost $55,000 dollars. Our stock brokerage trading account that had almost 70k of assets was only worth around $15k dollars. I no longer had the money to cover paying off my wife's debt in an emergency.
In April of 2019, we just received our income taxes, due to my losses from last year, and reduced income, we were due back a large amount. I had unfortunately cut down the business to only myself working for it, as the company still had debt that was used a few years ago to expand to pay off. I still have kept the business operating, unable to pay myself for close to a year now, having to sell crypto to cover bills when business wasn't good enough.
The first day of May, I took this money and put it back in the stock market, but due to weak hands again, I lost 60% of it again before the markets rebounded. The trade wars had taken a ton of my wealth again. Our brokerage account was now worth less than $10k, and I withdrew the rest to put it into my checking account.
Over the past 6 months, I've had to sell off all my remaining cryptocurrency. I have none left. I have to continue running my business in it's dilapidated state, only making enough to pay the bills at the end of the month. I have gotten down to my last $5,000 in cash, and my monthly inheritance stipend, barely pays the bills for the house.
All of the money my wife makes goes to paying off her credit card debt, her student loans, and her car payment. When she comes home, she sits down and plays video games while letting our 3 year old run wild and destroy the house while I sleep. We are trying to potty train, but that's not going well, and when I'm sleeping, our daughter will routinely use the bathroom on the floor then smear it on the walls. My wife will not always notice, and I will wake up having to clean up shit off the walls.
I have been breaking down nonstop. I cannot handle the level of stress I have been having. I have interviewed for 12 jobs in the past 6 months, and not gotten hired. I have applied to over 30. I have lost over $100k of our savings in the past year alone. I never get to see my wife because when she is working, I have to take care of our daughter, and when she gets home, I have to sleep so I can make sure I'm able to work while they are sleeping, because I am unable to work while they're both awake. I make it a priority to make sure I spend a few hours with my wife and daughter a day, so they have time with me.
My wife has not been a responsible adult for months now. She doesn't do her small part of the chores, which is simply do the laundry every week. Every week I take out the trash, clean up the yard, do all the dishes, cook dinner daily, vacuum the house daily, clean up my daughters shit and piss off the floor daily, clean up the mess that my daughter makes when she's playing. We recently found out my daughter is going to need speech therapy. Our house looks like a disaster zone. Our PCP said the speech therapist will come to our house to make it a more "secure environment" for our daughter to get help in. I'm terrified that we're going to get social services called for the state of our house and lose our daughter, but I physically cannot keep up with keeping it clean by myself, because every time I clean something, something else gets destroyed because my wife doesn't watch our daughter.
My wife will throw trash on the floor in the house. She won't pick up dishes. She won't clean up the toys or help our daughter do that when I'm sleeping. There is shit caked on the wall in the nursery because almost every day I can't find it all and clean it all up when my daughter is awake.
I cracked. I cursed at her for the first time in my life. She broke down, she said she's been so stressed and she's trying. I understand how it is to be stressed, I'm stressed too, but I said we need to try harder for our daughter. I told her I don't want to lose her.
Then 2 weeks ago, a text sent late. I'm sure everyone heard about the Verizon bug where texts got send late. You can read about it https://www.theverge.com/2019/11/7/20953422/text-messages-delayed-received-overnight-valentines-day-delay
I had an old text get sent that said "Do you still need me?"
My wife thought I was going to commit suicide.
She said that if I don't get help she's going to leave me and take our daughter with her. She didn't believe me when I showed her the text issue. She says I've been having depression issues for months, and that she's been asking me to get help. She said her therapist has been telling her for months that I need to go get help, and that the idea to threaten to leave me was her THERAPIST'S IDEA, because that threat has MOTIVATED ME BEFORE. This made me extremely upset. I tell her the same thing I did every time, unless they are going to give me a well paying job or hand me a million dollars, therapy is not going to help me.
But I need advice. I love my wife. I have no reason to leave her. In the almost 8 years we've been married, I've never told her I was going to leave her. I pointed this out to her, she still says she can't trust me when I tell her that. I told her why am I being punished for her insecurity. I have done nothing but try to give her a great life. Yes, we've been having a hard time with money for the past year, and I've been very frustrated, but all couples have issues throughout their relationships. She says she doesn't want our daughter growing up hearing her daddy talk about suicide and her maybe hear that.
I'm just trying to figure out how to handle this. I have friends telling me I should leave her. I don't see why I should. I love my wife. I would never leave her, and I feel like now she needs help again. She has gotten happier in person or at least it seems so, but her therapist telling her to threaten me to make me take action seems like a flag for her therapist. But she likes her therapist and likely wouldn't listen if I asked her to find a new one. I asked her to get therapy when she was severely depressed because she didn't seem like the woman I fell in love with anymore. Maybe part of her has come back, but the woman I fell in love with wouldn't be so irresponsible with our daughter, and wouldn't ignore her chores like she does.
I just don't know what to do. I'm scheduled to see our PCP in Janurary for depression, but I don't think it's going to go like she expects, and she hasn't set any expectations of what she's expecting me to get out of this. She says I'm not the man she married any more, but of course I'm not when I'm broke and at the end of my rope with trying to find a job. I feel like anyone would be frustrated and upset if they were in the same position as me. Every day I wake up, work for my failing business that doesn't pay me, take care of my toddler while my wife works, and never get to do anything fun with my family because we have no money and no one will hire me.
I just don't know what to do. I don't want to lose my wife. I have sacrificed so much for her. I want to make her happy. I want my daughter to not have a broken family like my wife had and grow up happy. After her threatening to leave me again, it feels like she doesn't need me anymore. It hurts me severely that she can say that so easily after everything I have done for her. I know she is stressed, and I feel like her saying she's going to leave me helps her cope somehow. I'm resenting her still seeing the same therapist, giving her advice on her home life off my wife's singular perspective. I just don't know what to think anymore.
I want to make the people I love happy.
submitted by ThrowRALovemywife to relationship_advice [link] [comments]

Purpose (PRPS) Recap

This will be a recap of what we know so far (with proof) and what to expect going forward.

Table of contents

  1. What is Purpose?
  2. What is Hodl?
  3. What is Hope?
  4. The Buy Wall
  5. What we know about the people behind this.
  6. What can we expect going forward?
  7. Conclusion
  8. Updates
  9. Sources

1. What is Purpose?

Purpose is a cryptocurrency acquired by donating to the developers of the game or to a good cause selected by them. They currently work together with Save The Children. A charity that has received a $50 million backing by Bill Gates.

Things we know about Purpose.

2. What is Hodl?

Hodl is a cryptocurrency. It's generated by locking down Purpose. It's basically an interest rate that you get immediatly when you lock down your Purpose. If you have Hope, you'll have to wait until it turns to Purpose, but you will still receive your Hodl the moment that happens.

3. What is Hope?

Hope is a cryptocurrency. It's the chargeback protection version of Purpose. Its goal is to protect the Purpose economy from potential malice. After 6 months your Hope will turn into Purpose. This process might take less than 6 months depending on your trust status within the community or your payment method. Payment methods that don't have a chargeback mechanism get Purpose immediatly (Bitcoin, Ether, Paysafe, ...). However, if you donate to charity the payment method does not matter. You will without a doubt receive Hope instead of Purpose and you will have to wait the full 6 months for it to turn into Purpose. This is to prevent people from gaming the system.

4. The Buy Wall

The buy wall is a pledge that Purpose and Hodl will NEVER go below $1/coin.

5. What we know about the people behind this.

There is a group of people that goes by the name of Singularity Group. This group was founded by online persona Athene. The group itself is not yet known for its philanthropic endeavors, but founder Athene has a rich history of philanthropy together with long time friend Reese. Athene is the person giving out Purpose. He is not allowed to benefit from Purpose by law, so all donations made to them go directly to Reese. They claim to use the money to further increase the value of Purpose. If you don't buy that idea and want to be really safe about this you can always donate to charity instead.

6. What can we expect going forward?

There is a proven history of philanthropy, so it is quite likely we see a continuous trend. The group has made it clear their first project as a collective will be a 'revolutionary' mobile game release. It's scheduled to be released at the end of 2017/early 2018. In this game people will be able to make use of their Purpose. You can have a sneak peek at the game for a $5000 donation. Their streaming platform Gaming For Good will receive a major update next year. In addition there will be an app and there's also a 'secret project' in the making. Little is known about the project. They have said it has enormous potential, but they are not in the position to talk about it due to the possibility of companies running away with the idea. A documentary and white paper will be released a few weeks from now.

7. Conclusion

It's very hard to predict the future. Investing in a new cryptocurrency is always a risky move with a high potential reward. Things are moving in the right direction so far. People already donated more than $1 million during the presale without proof they will actually come out with it. No white paper, nothing. There is always a possibilty this is a scam, but due to their track record and how they have managed big amounts of money up until now, it's quite unlikely this is a scam. It's up to you to decide what you want to do with this information. I will try to update this thread with new developments and more sources. If you have valuable information, feel free to post it below. I'm sold on the idea. This could go big! Good luck to everyone involved!

8. Updates

9. Sources

Philanthropy
http://www.savethechildren.org/site/apps/nlnet/content2.aspx?c=8rKLIXMGIpI4E&b=7942601&ct=11943221
https://www.youtube.com/watch?v=ovzL7libvi8
https://www.youtube.com/watch?v=N1W7oJZerJU
https://www.youtube.com/watch?v=_7S9jqefxf0
http://www.savethechildren.org/site/c.8rKLIXMGIpI4E/b.8157995/k.7191/Athene_and_Gaming_for_Good.htm#match
Media appearances
http://edition.cnn.com/videos/tv/2015/03/05/qmb-athene.cnn
https://www.cbsnews.com/videos/worlds-best-gamer-athene-on-raising-money-for-charity/
http://www.foxnews.com/tech/2013/12/19/worlds-best-gamer-on-how-to-turn-hobby-into-profitable-career.html
http://www.wsj.com/video/athene-rallies-gamers-to-fight-ebola/27CD74EB-5E14-48ED-978D-B3C21836EDD3.html
https://www.bloomberg.com/news/videos/2015-03-05/-world-s-greatest-gamer-takes-up-the-ebola-fight
https://www.cnbc.com/2014/01/17/worlds-best-gamer-aka-athene-gamers-can-be-real-life-heroescommentary.html
Other sources
https://www.youtube.com/watch?v=z1CMnEUp_VA
https://www.forbes.com/sites/kasiamoreno/2016/04/11/gaming-for-good/#c33f05e4b73a
submitted by EvergrowthLIVE to PRPS [link] [comments]

Achieving consensus in distributed systems – that chink in the armor hasn't gone away

First a disclosure: My name is Will, I founded Novauri, and our team is building a service that will allow users to buy and sell bitcoin in the US while keeping full control of their private keys as a mandatory design element, not an option.
Please SIGN UP for our US only closed beta test in 2015 here. It's super fast, takes 20 seconds, and we'll guarantee no transaction fees for the life of your account. Plus our rates will be highly competitive. Read all about it on the website!
I don’t like marketing, I intensely hate the spam I see on the forums, so my approach is going to be to write (semi) intelligent posts and hopefully gain customers through interaction and discourse, as opposed to spamming it up with astroturf and pictures of hipsters having fun that you could be like if you used our product. Now… my thoughts.
Proof of work – a tragedy of the commons
Not very long ago a mining pool called ghash.io reached 55% bitcoin mining power. It’s widely known that POW suffers from the tragedy of the commons. Mining is SHA256x2, which makes it really simple to build coin flipping application specific integrated circuits (ASICs) that run this faster than general purpose processors. This creates an economic incentive towards centralization where miners who can access the best ASICs first have a major advantage in hashing power per dollar.
Pools, a solution to a market demand that exacerbates the problem
A second problem is a solution to an economic demand, the existence of mining “pools”. Because a block is solved only every 10 minutes, as bitcoin scales, it becomes increasingly unlikely to ever solve a block by yourself, even with substantial processing power. Mining pools allow the “little guys” to participate too and contribute their hashing power to a pool of miners. This way they receive a portion of any block solved by the pool, enabling a steady and more consistent return on their investment in hardware, facilities and electricity.
Yet while pools solve a problem, they create a second issue, the centralization of mining power by pool operators. Because the blocks are “solved” by the managing pool directly, this gives the pool the same controls and ability to act poorly as if they had the hardware themselves.
One might argue that market forces will naturally correct things if a mining pool approaches 51%, but this has been disproven in practice with ghash.io. Selfish miners using ghash.io essentially put the entire system in dire peril by letting ghash.io reach 55%. They waited for others to “go first” before switching pools. This is the very definition of “tragedy of the commons”. I would argue it was only the price of bitcoin that changed the miners’ behavior, and reviewing the charts shows that the prices did not lead the mining power concentrations at all, which also defies common wisdom, but in reality is entirely true. P2P pool is a great idea, but it has not offered the same economic benefits to miners as other privately run pools on a balance sheet. Until it does, don't look there for a long term answer. Miners are trying to make a return, and if a pool gives them an advantage, most will use that pool over P2P. Mining is not a charity.
Proof of state – lack consensus and bring monopoly issues
Some might point to proof of stake as a potential solution (POS). Put very simply, POS is where by virtue of the fact that you own X virtual currency, you have a proportionate chance to win a vote or tiebreaker when confirming transactions.
Unfortunately, POS fails to provide a disincentive to fork and suffers from the monopoly problem. Ownership carries voting rights, and there is nothing wasted (no work) by voting for both sides of a fork. There is no consensus, so POS systems are generally hybrid models where POW is used to achieve consensus of forks regardless. POS also has a monopoly problem, which are as serious as POW’s problems. So solving bitcoin's problems with POS seems like a dead end. Very smart people have tried, and so far nothing viable has materialized that is stable enough to be trusted with something as mature and valuable as bitcoin.
So… let’s relist all of the bad news!!!
Solutions thus far are myopic, influenced by personal interests or blimp sized egos (I am one to talk), and are often more academic than pragmatic. Most are just to complicated to work or to be implemented safely without years of refinement in an alt coin.
Well, is there hope? What is the practical thing to do? Should we do nothing?
I would argue that there are three problems we must solve at once, and all three problems are very much interrelated. It’s one @[email protected]@ of a puzzle. We need to:
1) Make pooled mining uneconomical
2) Figure out a way to make small scale mining cost advantageous
3) Do 1 and 2 but allow normalized returns for little guys so they can run a small business or profitable hobby, without it being a lottery ticket.
Some say that a 51% issue would not be the end because we would know very quickly who the bad actor is and could react accordingly. I’m a little more concerned. A real shakeup in the core of bitcoin would shake confidence, and could set us back years. I feel we should as a community put a much higher priority on finding a practical, viable solution. Nothing academic, nothing incredibly complicated, but something that can shift the economics of the situation and solve the three problems listed above. While we have plenty of issues around individual usability, this is, in my humble opinion, the largest remaining vulnerability in bitcoin today.
So… what to do? How do we solve all three of these problems at once? What are the possible combinations of solutions that work? Let me take a stab at it…
1) Deterring pooled mining
Let’s give more serious consideration to two-phase mining.
The idea is to keep (SHA256(SHA256(header))) and add a requirement for (SHA256(SIG(header, privkey))), requiring the block to be signed with the private key of the miner. This kills pooled mining, dead. Miners can solve SHA256x2 but the pool needs the miner’s private key to sign the block header, which would allow the miner to steal the reward, which kills pools very fast.
2) Disincentivizing centralization of mining power
2a) Small scale heat recovery systems
We need to get people thinking about small scale heat recovery systems built around mining hardware. This will allow mining activity to serve as a source of heat in cold climates, or perform work where heat is required.
One example might be liquid submersion of the asic or heatsinks couples with a pump, radiator and fan in small, modular design might be economically viable. Electric heat is used very commonly, and when powered from clean power sources like solar, geothermal, nuclear (yes, nuclear I would count in the “clean” bucket) and wind, the net is a zero emission system that heats like an electric heater but adds security to the financial system in return, and generates profit for the beneficiary.
2b) Rotating or amorphous block hashing algorithms
Another possibility is to rotate or add complexity to the hash algorithms used to solve blocks. Instead of SHA256x2, perhaps SHA256x2 is rotated with scrypt? Perhaps there are many algorithms that rotate to add even more complixity. This would at a minimum make it much harder to design ASICs, and would institute a memory requirement as well. This would at least close the gap between specialized mining operations and home hobbyists. The problem is, what miner in their right mind would go with a hard fork in this direction? This is likely unviable because of economics.
2a is probably the way to go. Is there a 2c or d?
3) Normalizing returns
The issue here is that coinbase generation in a decentralized model is like winning the lottery. Your 2a heater would be unlikely to ever solve a block in it’s lifetime.
So this last issue is even harder to solve than 2. 3 is the reason mining pools were created in the first place. How do you increase reward frequency while lowering reward to generate a more predictable return?
Or maybe we are asking the wrong question or thinking in the wrong direction or dimension? Is there a way to centralize and normalize rewards in a safer way? Could the heater's price be subsidized by the mining activity if that activity was safely hard wired in the heater's hardware to pay block rewards to the reseller or manufacturer? Could electricity rates be offset by rewards going to electricity companies as a subsidy to completely smooth out the return on investment for a bitcoin heater?
That last one is tough and would need a really great strategy to reach a critical mass.
Does anyone smarter than me have an idea? This is really the problem. It’s three interrelated issues.
In closing, sign up for our closed US beta. There are still some spots left. We're poor but talented and our hearts are in the right place. Thank you!
submitted by MrMadden to Bitcoin [link] [comments]

Coin-a-Year: Nyancoin

Hello cryptocurrency lovers! Welcome to Coin-a-Year, the laziest series yet in the Coin-a-Day publishing empire. This year's coin is Nyancoin (NYAN). I originally covered Nyancoin in an article here in /cryptocurrency published January 4th, 2015.
Without (much) further ado, I'm going to include the original report next, unmodified. This is unlike my Coin-a-Week series, where I use strikeout and update in-text. Because this is going to be a longer update, I'll just make all further comments and updates below, just realize that all information below is as of January 4th, 2015 and thus is more than a year out of date as of posting now, at the end of February 2016.
Since I use horizontal rules as internal dividers in the original post, I'll use a double horizontal rule to divide the original text from this prelude and the following update.
Coin-a-Day Jan 4th
Welcome to the fourth installment of Coin-a-Day! To see convenient links to the introduction and the previous entries, please see /coinaday. Today's coin is Nyancoin (NYAN).
Summary
• ~173.6 million available currently [1]; 337 million limit [2]
• All-time high: ~0.000024 BTC on February 16, 2014 [1]
• Current price: ~3 satoshi [1]
• Current market cap: ~$1,275 [1]
• Block rate (average): 1 minute [1] [3]
• Transaction rate: ~25? / last 24 hours; estimated $3-4 [4]
• Transaction limit: 70 / second [5]
• Transaction cost: 0 for most transactions [6]
• Rich list: ??? [7]
• Exchanges: Cryptsy [8]
• Processing method: Mining [10]
• Distribution method: proof-of-work block rewards and 1% premine for "bounties, giveaways & dev support" [2] [10]
• Community: Comatose [9]
• Code/development: https://github.com/nyancoin-release/nyancoin ; there hasn't been a released code change in 10 months. The new developer has talked about some changes, but has not made a new release. He has given advice about how to keep the network running and operate the client. [10]
• Innovation or special feature: First officially licensed cryptocurrency (from Nyancat) [2]; "zombie"-coin [11]
Description / Community:
So you're probably wondering why in the world we're talking about a coin which has been declared dead and already written off. I actually first selected this coin to illustrate a "deadcoin", but the more I dug into it, the more I was amazed at the shambles I discovered. I am combining the description and community sections for this coin, because the community (or lack thereof) is the central issue for Nyancoin.
Substantially all, if not literally all, of the original infrastructure is gone. From the announcement post, the original website has expired. The nyan.cat site itself survives, but has no reference to the coin. The github repo remains, but then there was never much changed from the bitcoin/litecoin original. In fact, the COPYING file doesn't even list "Nyancoin Developers". None of the original nodes seem to be running anymore. @Nyan_Coin hasn't tweeted since July 6th. And that was just to announce posting an admittedly cute picture to facebook which makes a claim for a future which seems never to have developed. Of the original 15 pools, I think all are dead except p2pool, for which at least one node still supports NYAN. The original blockchain explorer, nyancha.in, is still running. The faucet is dead or broken. The original exchanges no longer list it (two of the three having died; SwissCEX having ended its trading as of the first of this year). And so forth.
And yet:

I'm not dead! I'm getting better!

No you're not, you'll be stone dead in a moment.
[Of course, that scene finishes with knocking out the "recovering" patient so he can be taken away...not to mention the absurdity of including Monty Python in a financial article, but moving right along.]
There is still just enough left to Nyancoin to keep it twitching, even if it is on life-support. Whether it's an individual node or whether it's a pool, there are blocks being produced at a steady rate as intended. Transactions are being processed. There is still a market. There is still a block explorer. And there is a dev. It is like a case study in the absolute minimum necessary to keep a coin alive. The most likely outcome is almost certainly a final collapse when one critical piece or another of the infrastructure goes away. And yet in the meantime, a person can own a million NYAN for $8 [12], and then move this coin quickly and easy, albeit with no particular external demand. It's like the world's most hyped testnet.
I think this case presents an interesting example of what happens to an altcoin when its initial support dries up. NYAN coin is more fortunate than some, actually, as there are some where there are no longer any nodes running it nor the original announcement thread (in fact, there was actually a second Nyancoin launched around the same time. But it died hard and its original announcement thread was deleted and at this point I would have no idea how to access it; so "Nyancoin" thus illustrates how hard a coin can die (Nyancoin 2) as well as how it can hang around despite being proclaimed dead, with far more justification behind that pronouncement than there has been for bitcoin (NYAN) ).
Footnotes
[1] http://coinmarketcap.com/currencies/nyancoin/
[2] https://bitcointalk.org/index.php?topic=402085.0 Regarding the premine, it's unclear to me where this money is now, since the original poster hasn't been active on BCT since May and the original site is down. However, given that it's only 1%, and about $25 in value right now, there seem to be more significant concerns for NYAN.
[3] http://nyancha.in/chain/Nyancoin - Nyan blockchain explorer; blocks are somewhat inconsistent but somewhere around the 1 minute average
[4] There doesn't seem to be anything automatically doing these stats, so I did visual inspection on about 1500 blocks (about one day) excluding the block generation reward (~250k/day). Most blocks are otherwise empty. I counted about 24 transactions or so scrolling through, with an outlier around 300k NYAN and another around 100k NYAN. In total, about 500k NYAN, excluding the block rewards. This is very approximately $3-4.
[5] Nyancoin is a basically unmodified, slightly out-of-date bitcoin as far as code goes, and ignoring the change in block rate and total coin supply, as well as the difficulty retarget after every block. So for purposes of estimating maximum possible transaction throughput, I start with bitcoin's estimated 7 transactions per second, and multiply by 10 for having a block on average every minute rather than every 10 minutes. In any event, this limit is not likely to be reached in the foreseeable future.
[6] Like bitcoin, transaction fees appear to be optional in Nyancoin. Unlike bitcoin, there is almost no transaction volume, and coins tend to sit for a relatively long time before being moved. So zero-fee transactions appear to be the norm from looking at a couple transactions on the block explorer.
[7] I couldn't find one. See the disclosure section of this article: your humble correspondent is likely represented in some way on a top 100 if one were to be made or if one exists, despite not holding it directly, depending on how the exchange holds it.
[8] I could not find any other exchanges still listing Nyancoin. SwissCex appears to have disabled it as of a couple days ago. Cryptsy has a notice that the NYAN/BTC market will be closing, but its NYAN/LTC market appears strong.
[9] Essentially all of the original sites, pools, faucets, etc. are dead and there has been very little to replace it. There is basically a single node, or perhaps a very few, which are running the blockchain. However, there is a developer still trying to hold things together, maxvall_dev, maxvall on BCT. He is the last hope for the NYAN.
[10] https://bitcointalk.org/index.php?topic=597877.0 This is the thread where maxvall took over as dev, and it also discusses switching to PoS, which hasn't happened as far as I know.
[11] "zombie"-coin: Not to be confused with ZMB (my god, does it ever end?). This is my term to describe a coin which is "undead": by rights it should be dead. And yet it's still walking around and acting like it's alive. What is it? What's going on? It's quite debatable whether this gives it any special value, but I find it an interesting state, and it's why this was chosen for early coverage. There are plenty of actually popular and successful coins, and we will go onto covering more normal selections; we're looking for variety rather than repetition. But I think this is an interesting example for what can go wrong, and yet in the midst of that, how little it takes for a coin to survive. In fact, it's almost like an alternate history bitcoin to me; this shows the concept that "it was run on one computer before; it can be run on one computer again" to some extent. And there are even some strange pragmatic benefits as well, like having no competition for getting a transaction into a block and thus zero transaction fees.
[12] And, in fact, the author chose to do so today, spending about 0.03 BTC for about 1 million NYAN.
Additional Reading
/nyancoins - Like NYAN: mostly dead, but not quite
http://nyan-coin.org/ - new official website
BCT thread listing nodes, xpool (p2pool), for mining information.
americanpegasus predicting in February that NYAN will hit $1; always an entertaining read
Giveaway
Instead of a challenge today, since NYAN has enough challenges, I decided I would give away 10,000 NYAN to at least the first ten people who ask for it. This still remains at my discretion, but honestly, if you really want, say, 50,000 NYAN and create four new accounts to do so, I'll probably be too amused to say no. I don't expect to get ten requests. If I get more, I'll probably still fulfill them, but as with everything else, this is left to my whim.
Donations and Disclosure
Okay, this is an important one today because of the tiny market here. I actually hold less USD value in NYAN than in BTC, DOGE, and PPC (although my value in PPC might be about equivalent actually), but I hold more of the total market in NYAN than any of those three. And I'll probably be buying more. So I have a conflict of interest in writing this article.
I am not providing financial advice and I do not make any recommendations of any sort on any matters. Make your own decisions; do your own research. Please, I do not want to hear about anyone doing anything "on my advice." I am not offering advice.
I personally hold just over 1 million NYAN on Cryptsy right now.
Perhaps it would be better if I didn't write any articles about anything I were invested inspeculating on, but I started this series for my own education to further my speculation, so unfortunately, dear reader, your needs come second to my own. tanstaafl; you get what you pay for, and I'm giving you my thoughts.
If by some strange quirk of fate you actually own NYAN and enjoyed this article and wished to donate some to me, K7Ho9HghBF6xWwS6JsepE6RAEPyAXbsQCV is mine (first non-empty account I've posted; transferred 1000 NYAN into here earlier from Cryptsy to test that the network and my wallet were actually working).
Thank you all for reading and commenting! I've already learned a lot from this process and I look forward to more!
Upcoming coins:
• January 5th: Nxt
• January 6th: Darkcoin
• January 7th: Namecoin
I'll use alphabetic labeling for footnotes in the updates to avoid any confusion with the footnotes in the original. For simplicity, unchanged items, like the 337 million limit and the 1 minute will not be mentioned, and we'll start with the summary changes.
Updates:
Summary
  • ~263.7 million NYAN currently exist [a]
  • Current price: ~7 satoshi [b]
  • Current market cap: ~$8,000 [c]
  • Transaction rate: ~185 / last 24 hours; ~3,300,000 NYAN (~$100) [d]
  • Exchanges: Cryptopia [e]
  • Community: We're not quite dead yet; in fact, I think we're getting better! [f]
  • Code/Development: I have an early draft of NYAN2, but I'm about six months past my initial goal for having it available to use. Life/work/lack of build machine/procrastination. NYAN2 will be a rebase onto a modern LTC codebase which will soft fork to fix a current vulnerability to a fork bug. For now, the network still runs on the same code that it did when I wrote the first article.
Discussion
I'm going to consider the community first, since I pointed it out as the weakness and central topic in the last one, then talk about the technical situation briefly, and then review the financial results.
The community has been excellent, if I do say so myself. We've got working infrastructure going thanks to the contributions of many Nekonauts (see [f]). Some original Nekonauts have returned or at least popped in from time to time, and new ones like myself have found Nyancoin (I would say given what I wrote in the original, I was still a skeptic of it at that point. Not that skeptics can't be Nekonauts, but I think I'd put my conversion to the cult of nyan shortly after writing that, even though I was already a nillionaire then for the heck of it.)
While I do look forward to seeing the community continue to grow in future years and consider that important, I don't think the community is our weakest point any longer; I think it's now our strongest point. I've tried to encourage the community's revival as best I could, including giving away tens of nillions in total, and lots of long rambling articles on my views on ethics and philosophy and frankly it's worked better than I would've really expected (or at least it has coincided with an effective recovery of the community). The community also helped me through at least a couple hard times personally in there as well.
The technical situation in Nyancoin is mostly unchanged but slightly improved, although with two additional known vulnerabilities. It's unchanged in that it's the same client. It's improved in that we have an active nyanchain explorer host (nyan.space), and we have a public draft of a plan for a soft forking security fix update in the near future (hopefully by the end of March (although I've slipped these deadlines before and may well miss March for release by a bit, I do think I'm inching closer now and then)).
The most serious vulnerability is to forking. This is the bug which hit Peercoin if I recall correctly. NYAN2 is intended to solve this through its soft fork from the LTC fix upstream (from the BTC fix upstream). In the meantime, we've been lucky we haven't been attacked. The tiny marketcap probably helps with not being a particularly attractive attack target. We're not exactly about to pay ransom to move faucet outputs. But that's no excuse; we want this fixed and should have it finally done "soon" (tm).
The less serious vulnerability is to a time warp attack in the difficulty function (Kimoto Gravity Well), which relates to general weaknesses it has and issues we've had with large gaps in the block chain because of spikes in the difficulty function causing it to be unprofitable and driving away most of the hash, and then low difficulty and price rise making it attractive to more hash, creating a spike and causing it again. While this is irritating, the chain still works, even if there are fits and starts at times. An important part of the reason I can get away with this is because there is at least one Nekonaut-supporting miner, CartmanSPC, who rescues us from time to time, and did so during the course of this article being written. We have a bunch of pools, but sometimes the hash just isn't there to get us unstuck when the difficulty goes high enough. Another part of the reason I consider it not an especially serious issue is because there's a workaround which works for me (classic bad developer logic): I use a large transaction fee (generally 337 NYAN, although I might have halved it after the most recent halving, I'll probably use 337 again) on my personal wallet by default. If necessary, I use a couple of them. It can make NYAN profitable to mine again despite the higher difficulty and "unstick" the chain. The difficulty function can go back down again in the next block if the gap has been long enough, so that can be enough to keep it going again for a while (although it can also get stuck again irritatingly fast at times). A fix for this will be putting in a better difficulty function for NYAN3, which will require a hard fork. This is tentatively scheduled for feature freeze around the middle of this year, coding to follow, activation sometime early 2017.
Financial has been our most disappointing performance. A graph of the 1 year performance right now on coinmarketcap looks pretty sad, showing our fall from a little over 60 satoshi down to around 7 satoshi now.
We rose too high, too fast, and I didn't stick with the safe high paying job like a sane person. Instead I hit the road, went to jail, and worked minimum wage. That doesn't sound like a sentence from a cryptocurrency financial review, does it? But the performance of NYAN since the article has been the story of my personal finances, which is the story of my life since then.
So, autobiographical coinaday interlude, trying to keep it generally to the most salient points. Well, in 2014 I had been on my way home to Minnesota from California when I was pulled over leaving Eureka, Nevada for speeding (got sloppy and went 45 approaching the 45 sign and thus technically still in the 35; bored cop seeing out-of-state plates). My vehicle reeked of weed, what with having been in Mendocino County previously with no intention of traveling out of the county much less state anytime soon but family emergency brought me back, and the end result was a citation for possession of cannabis and paraphernalia along with the speeding.
Fast forward to the beginning of 2015, I'm settled into a good software position and start looking more at cryptocurrency in my spare time. I write the coin-a-day series for a bit and then got annoyed and quit after a while when trying to do one a day on top of an actual job was too much for me (along with some annoyance over criticism; I can be rather thin-skinned at times). But I had gotten interested in Nyancoin, and started buying it up more and more with extra money I was making.
And then comes the crash. I had to stop putting as much in as I realized that where I was living and what I was working on wasn't going to work out for me and I needed to figure something else out. So, as I seem wont to do, I went on a roadtrip. I quit my job. And I went back for the court date for my citations and refused to pay, instead spending 10 days in jail rather than pay ~$1400 (I actually had the money in cash available to me if I chose to pay as a backup if I chickened out, but the judge annoyed me enough that I really preferred to be jailed instead of paying, as stupid as that sounds since I'm quite sure the judge didn't care in the least one way or another).
After that, I went back to roadtrip lifestyle for a while. It was a nice period. A lot of beautiful scenery; a lot of reading. Eventually, I busted up my car pretty badly...a couple times actually, the second time for good. Fast forwarding through the rest of the year, I worked a couple minimum wage jobs to pay bills and avoid cubicle life and kill some time until I figured out what I was going to do next. Just recently I quit as delivery boy after getting a speeding ticket (I swear, I'm not as horrible of a driver as this makes me sounds, although I have had a bad tendency to speed in the past, which I really have curbed to almost nothing; but I'm clearly not good enough) and am currently writing a Coin-a-Year article with a friend's incentive and applying to do documentation and development with the Nu project.
Okay, so what did any of that have to do with NYAN? Well, it's the mess of a life that has led to the fall of the price from 60 satoshi to 7 satoshi. If instead my life history for the time since the article had been simply "I was happily employed writing software", then I don't believe we would have dropped below 20 satoshi. It's easy to see in hindsight. If anyone can lend me a time machine, I'm sure I can get some condensed instructions which should improve performance significantly. Otherwise, just going to have more chalked up for the "character building" tally.
So, lessons learned if you are the major buy support for your coin: you need long-term reserves. Whatever you put in bids can be taken out in a moment by a dump for no apparent reason. This is particularly true if you may be quitting your cushy, high-paying job and wandering around without income for an extended period of time. Rather obvious, but hey, maybe someone else can learn from my mistakes. If I'd been bidding as cautiously as I am now from the beginning, I think the price would probably be somewhere from 10-20 satoshi now instead of around 7 satoshi.
It's especially unfortunate given that I wanted to be able to demonstrate the more consistent growth possible building a stable store of value, as opposed to the pump and dumps common in altcoins. And instead we had a pump-and-dump looking graph ourselves after I bid up higher than I was able to sustain, and a large (10+ nillion) instadump crashed the market all the way back down to 1 satoshi momentarily. We've had a few large (2+ nillion) dumps since, but nothing that large. We haven't generally had that large of bids though either.
It's hard to know when I've exhausted the supply at a price level, when it sometimes waits for a couple weeks or even more and then fills all the bids at once. But I want to maximize the minimum price paid because I think that's important for building confidence in a store of value long-term, which is one of my core goals for NYAN.
At the same time, we're still up from the lowest parts of the floor and where I found it. Since I own about 30% [g], the very cheapest supply has been taken off the market. I plan to keep on buying up "cheap NYAN" as much as I can. I've bought up to 60 satoshi before, I'll probably buy up that high this time around. I've got a token 100,000 NYAN ask at 300 satoshi; I hope never to sell lower.
Conclusions
Now I try to wrap it all together as if I saw this all coming and am the wise expert, despite having had about 90% drop in price in the last year after bidding too high. My original concept was taking the "minimum viable coin" and reviving it to a powerhouse as a textbook example in how to do it.
Part of my core concept in this is the arbitrariness of value: throughout history, humans have chosen any number of things as a store of value for the time: salt, large rocks, certain metals, disks, marked sticks, and so forth. While there has generally been a certain logic in the choice, in that there is a locally restricted supply in one way or another, and so forth, from the perspective of other centuries or cultures the choices can seem quite strange. Growing up, I was always struck by how strange the notion of salt being limited and valuable seemed in a world where people were trying to reduce intake and large amounts could be bought for trivial sums. And yet, a key nutrient necessary for life fundamentally makes more sense as being valuable than notched sticks or printed paper or a piece of plastic with some encoded information.
Humans have perpetually come up with stranger and stranger ways of storing and transferring value. Each new step, as always, comes with its own disadvantages and, frankly, has generally appeared nonsensical at best and fraudulent at worst to the status quo. Which doesn't mean that each new attempt is valuable. The gold bugs always like to point out that every fiat currency ultimately returns to its true value of zero. And the skeptics of cryptocurrency argue that all cryptocurrencies will eventually return to their true value of zero.
It's certainly possible. And it's possible the USD will hyperinflate someday. I tend to try the moderate view for a plausible guess of the future. By that type of logic, I would guess that over the course of decades, USD will in general lose value, and cryptocurrency will tend to slowly gain value. That might not seem the moderate view, but USD not losing value over decades would be truly shocking. And hyperinflation has been predicted since the USD went off the gold standard, or before. So some amount of inflation less than hyperinflation seems like the safe guess (but then, the Titanic arriving would also have seemed like the safe guess to me). And with cryptocurrency, I think it's clear by now the technology will continue to survive. So my first question is with what overall value as a market? It could go down, of course, but that seems unlikely in an already small, young market. Even if all the current crop die off and are replaced, whatever cryptocurrencies are around should be able to do better than a handful of billion in market cap in my view.
I believe that cryptocurrency has a bright future ahead of it. The best coins should ultimately survive and thrive. But I've been wrong on most of my major calls so far, like for instance when I thought BTC was over-priced around $5-$10.
I think Nyancoin can have an important role to play in the future of cryptocurrency in the years and decades to come, but it's a massively speculative long-shot. See also Nyancoin risks document. But like Linus Torvalds' autobiography, I try to keep "Just for Fun" as a core motto and principle. It's makes for a good hobby project because there will always be more to work on, with a core community motto of
TO INFINITY AND BEYOND!
Disclaimers / Sponsorship:
As I said before:
I am not providing financial advice and I do not make any recommendations of any sort on any matters. Make your own decisions; do your own research. Please, I do not want to hear about anyone doing anything "on my advice." I am not offering advice.
And I'll reiterate that I own about 30% [g] of the current supply of NYAN, which makes me by definition maximally biased.
Also, I'm not sure what's up with the address from the first post. It doesn't show up in my current wallet as a recognized address. So, anyhow, don't send there. :-) If you'd like to donate, please consider sponsoring a coin-a-day or coin-a-week article.
This is the first sponsored article. This Coin-a-Year article has been brought to you by spydud22 's generous patronage. I'd been meaning to do a Coin-a-Week article on Nyancoin for a while, but between wanting to "wait until the price recovered a bit" and general procrastination, then it seemed like it would make a good Coin-a-Year article, and then I wanted to wait until the price recovered a bit more...anyhow, so thank you spydud22, for causing me to finally do this. :-)
Footnotes
  • [a] nyan.space/chain/Nyancoin ; as of block 1091430, 263738786.71890615 NYAN outstanding. This is slightly over 50% more than the last report, which is what we would expect, since it had existed for about a year then, and has approximately annual halvings. The first year generated about 50% of total supply; the second year generated about 25% of total supply. We should expect in a year to have about 17% (one-sixth) more than we have now.
  • [b] https://www.cryptopia.co.nz/Exchange?market=NYAN_BTC ; this is the only market reflected in coinmarketcap and it is the primary one on which I trade. Cryptopia also has other base pairs which operate at significantly higher spreads (lower bids; higher asks) and have minimal volume. In the time since the last report, NYAN has traded as high as 60 satoshi (and briefly a little higher at times), but over the last almost twelve months since a peak about a year ago, the price has been generally declining overall, as a gross oversimplification of a lot of movements. This has been an effect of me not being able to keep buying as much and there being large dumps I wasn't expecting from time-to-time. Now I'm taking the approach of building large (one or more nillion (million NYAN)) bids on each price as I slowly work my way back up again in order to be able to handle possible dumps with less price shock.
  • [c] coinmarketcap.com/currencies/nyancoin/ ; as noted in [b], this only reflects the /BTC basepair on Cryptopia but that's where most of the volume is anyhow. Of course, the market is also not particularly liquid since I'm the primary buyer and have rather limited means currently.
  • [d] I haven't setup a script to count this yet, among many things on my to-do list for someday, so I went through by hand from what was the then-latest block of 1091430 on nyan.space back to 1089766 which was the first block generated less than 24 hours before. There was actually a three and a half hour block gap at that point, such that the next prior block was about 24 hours and 15 minutes before 1091430 while 1089766 was only about 20 hours and 45 minutes prior, and has a disproportionate number of transactions and value compared to a typical block (8 and ~313,000 NYAN respectively) from the build-up during the gap. But since that gap conveniently started right about at the start of the 24 hour period, doesn't really skew our results here.
Note that there are often times where the UTXO created during one transaction during the day is spent during a later transaction in the day. This can be considered the "same" Nyancoin being "spent" twice in the same day in our total. But in practice, I believe what's happening here is the faucet is breaking off small (10-50 NYAN) pieces from a larger (~40,000 NYAN) chunk, and so that pops up a bunch of times. So the total NYAN blockchain volume as counted for this topline number should not be interpreted as "NYAN spent in the day" but "NYAN moved on the chain", where the "same coin" can move many times. So it's a very easily gamed metric and not a strong / resistant metric like the market price tends to be (at least relatively speaking), but it's a fun number to calculate and provides a little bit of information.
The transaction count can also be easily inflated and certainly, for instance, having the faucet does generate transactions which are a very common transaction.
And this is also just an arbitrary 24 hour period compared to a previous arbitrary 24 hour period. Nonetheless, I do think there's clearly a bit more activity on the Nyanchain, even though the typical block is still empty and the number of transactions and volume is still tiny compared to the major cryptocurrencies.
Here's an arbitrary example of the faucet transactions Note the zero transaction fee, which I love that the miners support (the defaults are all quite low as well).
Here's an example of what may be the smallest transaction by NYAN volume of the day; but no, I followed its small, spent output, and it led to this gem which also links to this. I have no idea what's going on here, but it's hilarious and I love it. How's that for microtransaction support? :-)
  • [e] Obviously Cryptsy went down. We had had more than enough red flags with Cryptsy (including one time where I was able to withdraw 6 nillion more than I had in my balance) and got onto Cryptopia. spydud22 basically accomplished that for us, although I helped out in the tail end of the campaigning.
  • [f] Our community is still small (I wish there were literally dozens of us!) but we've had valuable activity from multiple people, including, just as highlights, vmp32k who hosts nyan.space, a clone of the original nyancha.in, jwflame who created the excellent nyancoin.info intro site, with the awesome status page (which currently notes that "the last 500 blocks actually took 111 minutes, which is approaching the speed of light, causing the universe to become unstable"), KojoSlayer who runs the faucet and dice, spydud22 who got us on Cryptopia, and many other Nekonauts have made worthy contributions, and the Nekonauts mentioned have done more than just that listed. So while we are small, we are active at least from time to time and technically capable.
Even though our posting rate is still around 1 post a day or so on average, and so still a relatively quiet subreddit (and it is our main (only?) hub), it's still a very noticeable and significant difference from how /nyancoins looked when I was reviewing it for the original piece here. Here's an attempt to approximate what was there using Reddit search ; archive.org has a snapshot on January 19th, 2015, which is well into the early revival mania and one from August 14th, 2014, before four and a half months of little to no activity. Apparently archive.org unsubscribed to /nyancoins in that interval itself...
  • [g] Maybe up to around 35% by now; maybe still around 30%. I haven't updated hodling report lately; it was 30% last time I recall, but I've bought more and more has been made since.
submitted by coinaday to CryptoCurrency [link] [comments]

MeWe: A trip report

Among the more frequently mentioned G+ alternatives at the Google+ Mass Migration community, and others, is MeWe with over 250 mentions. The site bills itself as "The Next-Gen Social Network" and the "anti-Facebook": "No Ads, No Political Bias, No Spyware. NO BS. It is headed by professed Libertarian CEO Mark Weinstein.
As the site reveals no public user-generated content to non-members, it's necessary to create an account in order to get a full impression. I thought I'd provide an overview based on recent explorations.
This report leads of with background on the company, though readers may find the report and analysis of specific groups on the site of interest.

Leadership

Founder & CEO Mark Weinstein.
Co-Founder & Chief Scientist, Jonathan Wolfe (no longer with company).
Weinstein previously founded SuperFamily and SuperFriends, "at the turn of the millennium". Weinstein's MeWe biography lists articles published by The Mirror (UK), Huffington Post, USA Today, InfoSecurity Magazine, Dark Reading, and the Nation. His media appearances include MarketWatch, PBS, Fox News, and CNN. He's also the author of several personal-success books.
His Crunchbase bio is a repeat of the MeWe content.

Advisory Board

Ownership & Investment

MeWe is the dba of Sgrouples, a private for-profit early-stage venture company based in Los Angeles, though with a Mountain View HQ and mailing address, 11-50 employees, with $10m in funding over five rounds, and a $20m valuation as of 2016.
Sgrouples, Inc., dba MeWe Trust & Safety - Legal Policy c/o Fenwick West 801 California Street Mountain View, CA 94041
Crunchbase Profile.
Founded: 2012 (source)
Secured $1.2M in seed funding in 2014.
2016 valuation: $20m (source]
Backers:
Despite the business address, the company claims to be based in Los Angeles County, California and is described by the Los Angeles Business Journal as a Culver City, CA, company.

Business

Policy

In an August 6, 2018 Twitter post, Weinstein promotes MeWe writing:
Do you have friends still on Facebook? Share this link with them about Facebook wanting their banking information - tell them to move to MeWe now! No Ads. No Spyware. No Political Agenda. No Bias Algorithms. No Shadow Banning. No Facial Recognition.
MeWe provide several policy-related links on the site:
Highlights of these follow.

Privacy

The privacy policy addresses:

Terms of Service

The ToS addresses:
Effective: November 6, 2018.

FAQ

The FAQ addresses:

Values

This emphasises that people are social cratures and private people by right. The service offers the power of self expression under an umbrella of safety. It notes that our innermost thoughts require privacy.
Under "We aspire...":
MeWe is here to empower and enrich your world. We challenge the status quo by making privacy, respect, and safety the foundations of an innovatively designed, easy-to-use social experience.
Totalling 182 words.

Privacy Bill of Rights

A ten-item statement of principles (possibly inspired by another document, it might appear):
  1. You own your personal information & content. It is explicitly not ours.
  2. You will never receive a targeted advertisement or 3rd party content based on what you do or say online. We think that's creepy.
  3. You see every post in timeline order from your friends, family & groups. We do not manipulate, filter, or change the order of your content or what you see.
  4. Permissions & privacy are your rights. You control them.
  5. You control who can access your content.
  6. You control what, if anything, others can see in member searches.
  7. Your privacy means we do not share your personal information with anyone.
  8. Your emojis are for you and your friends. We do not monitor or mine your data.
  9. Your face is your business. We do not use facial recognition technology.
  10. You have the right to delete your account and take your content with you at any time.

Press

There are a few mentions of MeWe in the press, some listed on the company's website, others via web search.

Self-reported articles

The following articles are linked directly from MeWe's Press page:
The page also lists a "Privacy Revolution Required Reading" list of 20 articles all addressing Facebook privacy gaffes in the mainstream press (Wired, TechCrunch, Fortune, Gizmodo, The Guardian, etc.).
There are further self-reported mentions in several of the company's PR releases over the years.

Other mentions

A DuckDuckGo search produces several other press mentions, including:

Technology

This section is a basic rundown of the user-visible site technology.

Mobile Web

The site is not natively accessible from a mobile Web browser as it is overlayed with a promotion for the mobile application instead. Selecting "Desktop View" in most mobile browsers should allow browser-based access.

Mobile App

There are both Android and iOS apps for MeWe. I've used neither of these, though the App store entries note:
Crunchbase cites 209,220 mobile downloads over the past 30 days (via Apptopia), an 80.78% monthly growth rate, from Google Play.

Desktop Web

Either selecting "View Desktop" or navigating with a Desktop browser to https://www.mewe.com your are presented with a registration screen, with the "About", "Privacy Bill of Rights", "MeWe Challenge", and a language selector across the top of the page. Information requested are first and last name, phone or email, and a password. Pseudonymous identities are permitted, though this isn't noted on the login screen. Returning members can use the "Member Log In" button.
The uMatrix Firefox extension reveals no third-party content: all page elements are served from mewe.com, img.mewe.com, cdn.mewe.com, or ws.mewe.com. (In subsequent browsing, you may find third-party plugins from, for example, YouTube, for videos, or Giphy, for animated GIFs.)
The web front-end is nginx. The site uses SSL v3, issued by DigiCert Inc. to Sgrouples, Inc.

Onboarding

The onboarding experience is stark. There is no default content presented. A set of unidentified icons spans the top of the screen, these turn out to be Home, Chats, Groups, Pages, and Events. New users have to, somehow, find groups or people to connect with, and there's little guidance as to how to do this.

Interface

Generally there is a three panel view, with left- and right-hand sidebars of largely navigational or status information, and a central panel with main content. There are also pop-up elements for chats, an omnipresent feature of the site.
Controls display labels on some devices and/or resolutions. Controls do not provide tooltips for navigational aid.

Features

Among the touted features of MeWe are:

Community

A key aspect of any social network is its community. Some of the available or ascertained information on this follows.

Size

Weinstein claims a "million+ following inside MeWe.com" on Twitter.
The largest visible groups appear to have a maximum of around 15,000 members , for "Awesome gifs". "Clean Comedy" rates 13,350, and the largest open political groups, 11,000+ members.
This compares to Google+ which has a staggering, though Android-registrations-inflated 3.3 billion profiles, and 7.9 million communities, though the largest of these come in at under 10 million members. It's likely that MeWe's membership is on the whole more more active than Google+'s, where generally-visible posting activity was limited to just over 9% of all profiles, and the active user base was well under 1% of the total nominal population.

Active Users

MeWe do not publish active users (e.g., MUA / monthly active users) statistics.

Groups

MeWe is principally a group-oriented discussion site -- interactions take place either between individuals or within group contexts. Virtually all discovery is group-oriented. The selection and dynamics of groups on the site will likely strongly affect user experience, so exploring the available groups and their characteristics is of interest.
"MeWe has over 60,000 open groups" according to its FAQ.
The Open groups -- visible to any registered MeWe user, though not to the general public Web -- are browsable, though sections and topics must be expanded to view the contents: an overview isn't immediately accessible. We provide a taste here.
A selection of ten featured topics spans the top of the browser. As I view these, they are:
Specific groups may appear in multiple categories.
The top Groups within these topics have, variously, 15,482, 7,738, 15,482 (dupe), 7,745, 8,223, 8,220, 1,713, 9,527, 2,716, and 1,516 members. Listings scroll at length -- the Music topic has 234 Groups, ranging in size from 5 to 5,738 members, with a median of 59, mean of 311.4, and a 90%ile of 743.5.
Below this is a grid of topics, 122 in all, ranging from Activism to Wellness, and including among them. A selected sample of these topics, with top groups listed members in (parens), follows:
To be clear: whilst I've not included every topic, I've sampled a majority of them above, and listed not an arbitrary selection, but the top few Groups under each topic.

Google+ Groups

The Google Plus expats group seems the most active of these by far.

Political Groups

It's curious that MeWe make a specific point in their FAQ that:
At MeWe we have absolutely no political agenda and we have a very straightforward Terms of Service. MeWe is for all law-abiding people everywhere in the world, regardless of political, ethnic, religious, sexual, and other preferences.
There are 403 political groups on MeWe. I won't list them all here, but the first 100 or so give a pretty clear idea of flavour. Again, membership is in (parentheses). Note that half the total political Groups memberships are in the first 21 groups listed here, the first 6 are 25% of the total.
  1. Donald J. Trump 2016 - Present (11486)
  2. The Conservative's Hangout (8345)
  3. Qanon Follow The White Rabbit (5600)
  4. Drain The Swamp (4978)
  5. Libertarians (4528)
  6. United We Stand Trump2020 (4216)
  7. The Right To Self Defense (3757)
  8. Alternative Media (3711)
  9. Hardcore Conservative Patriots for Trump (3192)
  10. Bastket Of Deplorables4Trump! (3032)
  11. Return of the Republic (2509)
  12. Infowars Chat Room Unofficial (2159)
  13. Donald Trump Our President 2017-2025 (2033)
  14. Berners for Progress (1963)
  15. Sean Hannity Fans (1901)
  16. The American Conservative (1839)
  17. I Am The NRA (1704)
  18. Tucker Carlson Fox News (1645)
  19. We Love Donald Trump (1611)
  20. MAGA - Make America Great Again (1512)
  21. Q (1396)
  22. ClashDaily.com (1384)
  23. news from the front (1337)
  24. Basket of Deplorables (1317)
  25. Payton's Park Bench (1283)
  26. Convention of States (1282)
  27. Britons For Brexit (1186)
  28. MoJo 5.0 Radio (1180)
  29. MeWe Free Press (1119)
  30. The Constitutionally Elite (1110)
  31. Libertarian (1097)
  32. WOMEN FOR PRESIDENT TRUMP (1032)
  33. AMERICANS AGAINST ISIS and OTHER ENEMIES (943)
  34. #WalkAway Campaign (894)
  35. ALEX JONES (877)
  36. The Lion Is Awake ! (854)
  37. We Support Donald Trump! (810)
  38. The Stratosphere Lounge (789)
  39. TRUMP-USA-HANDS OFF OUR PRESIDENT (767)
  40. Official Tea Party USA (749)
  41. Mojo50 Jackholes (739)
  42. Yes Scotland (697)
  43. "WE THE DEPLORABLE" - MOVE ON SNOWFLAKE! (688)
  44. Judge Jeanine Pirro Fans (671)
  45. Anarcho-Capitalism (658)
  46. Ted Cruz for President (650)
  47. No Lapdog Media (647)
  48. Q Chatter (647)
  49. Daily Brexit (636)
  50. Tucker Carlson Fox News (601)
  51. The Trumps Storm Group (600)
  52. QAnon-Patriots WWG1WGA (598)
  53. 100% American (569)
  54. Ladies For Donald Trump (566)
  55. Deep State (560)
  56. In the Name of Liberty (557)
  57. Material Planet (555)
  58. WikiUnderground (555)
  59. Trump NRA Free Speech Patriots on MeWe Gab.ai etc (546)
  60. Magna Carta Group (520)
  61. Constitutional Conservatives (506)
  62. Question Everything (503)
  63. Conspiracy Research (500)
  64. Bill O'Reilly Fans (481)
  65. Conservative Misfit's (479)
  66. Canadian politics (478)
  67. Anarchism (464)
  68. HARDCORE DEPLORABLES (454)
  69. Deplorable (450)
  70. Tampa Bay Trump Club (445)
  71. UK Politics (430)
  72. Bongino Fan Page (429)
  73. Radical Conservatives (429)
  74. RESIST THE RESISTANCE (419)
  75. The Deplorables (409)
  76. America's Freedom Fighters (401)
  77. Politically Incorrect & Proud (399)
  78. CONSERVATIVES FOR AMERICA ! (385)
  79. Political satire (383)
  80. RISE OF THE RIGHT (371)
  81. UK Sovereignty,Independence,Democracy -Everlasting (366)
  82. The Patriots Voting Coalition (359)
  83. End The Insanity (349)
  84. Coming American Civil War! (345)
  85. Constitutional Conservatives (343)
  86. United Nations Watch (342)
  87. A Revival Of The Critical Thinking Union (337)
  88. The New Libertarian (335)
  89. Libertarian Party (official ) (333)
  90. DDS United (Duterte Die-hard Supporters) (332)
  91. American Conservative Veterans (331)
  92. Anarchism/Agorism/Voluntaryism (328)
  93. America Needs Donald Trump (326)
  94. The UKIP Debating Society (321)
  95. Coalition For Trump (310)
  96. Egalitarianism (306)
  97. FRIENDS THAT LIKE JILL STEIN AND THE GREEN PARTY (292)
  98. 2nd Amendment (287)
  99. Never Forget #SethRich (286)
  100. Green Party Supporters 2020 (283)
It seems there is relatively little representation from the left wing, or even the centre, of the political spectrum. A case-insensitive match for "liberal" turns up:
Mainstream political parties are little represented, though again, the balance seems skewed searching on "(democrat|republic|gop)":
The terms "left" and "right" provide a few matches, not all strictly political-axis aligned:
Socialism and Communism also warrant a few mentions:
And there are some references to green, laboulabor parties:

Conclusion

Whilst there may not be a political agenda, there does appear to be at least a slight political bias to the site. And a distinctive skew on many other topical subjects.
Those seeking new homes online may wish to take this into account.

Updates

submitted by dredmorbius to plexodus [link] [comments]

Choice of Entity: Legal Concerns Associated With Founding a Mining Business

Hey everyone, I just wrote something up about the nuances associated with forming a mining business in the United States. It's meant to help people comply with tax reporting requirements in the most business-owner friendly way possible. As always, please consult with your accountant and/or lawyer before acting on any of this information, it's meant to be used as a resource, not as legal advice. I'll be writing up more legal-related news like this in the future, if you'd like more info, let me know and I'll give you the URL of the website I'm working on (still in development but will eventually have lots and lots of useful info like this).
*Please keep in mind I am NOT a lawyer (I am in law school, but I have zero credentials as of yet). This should NOT be relied on as your exclusive source of legal information.
Without further ado:
-------------|Choice of Entity: Legal Concerns Associated With Founding A Mining Business|-----------
You're probably wondering, what is the most efficient way to structure a new mining business. While the facts do vary, in the most instances, the answer is as an S-Corporation. Odds are, you're either thinking about setting the business up as an LLC or an S-Corp. Although many think the tax consequences are the same because these are both pass through entities, this assumption is false.
S-Corporations are usually going to the be the most efficient tax vehicle for a new mining business. The reason for this is self-employment tax.
LLC co-venturers must pay self-employment tax, in addition to their normal individual rate tax, of approximately 17% if they provide a 'service.' Mining is a service!
-------------------------------------------|Why is Mining A 'Service'?|------------------------------------------
At first glance, mining may seem like a passive activity. All you do is plug in the miner and it runs in the background all by itself with little to no maintenance required. Where's the service?
The easiest way to conceptualize mining as a service is to think about the actual passive version of investing in whatever cryptocurrency one plans to mine. Truly passive cryptocurrency investing simply entails buying a cryptocurrency on an exchange and holding it with the hope of turning a profit. Unlike mining, passive cryptocurrency investing requires no specialized hardware, limited internet connectivity, and minimal power inputs (just the amount required to use your computer to access the internet to buy/sell the cryptocurrency).
Unlike investing in cryptocurrency, mining is a business like activity (although in certain instances, it may only constitute hobby income; see section 183 of the Internal Revenue Code and the associated Treasury regulations for more information) that utilizes high tech machinery to solve a variety of complex equations and hash functions. In exchange for solving these equations, miners are rewarded with blocks of cryptocurrency that function as rewards. The cryptocurrency network benefits from miners (unless using a pure Proof of Stake framework, but that is outside the scope of this article) because miners process network transactions in a way that helps secure network stability and security.
To hammer the point home, Bitcoin would collapse without miners. Think about the magnitude of that statement. Mining is an essential service for a multi-billion dollar asset class that benefits the national investing public AND the international investing public. Thus, mining is a service.
-------------------------------------|Why Does It Matter if Mining Is A Service?|-------------------------------
Knowing that mining is considered a 'service' is important when deciding what sort of limited liability entity to use when forming your client's mining business because it drastically affects their future tax liability.
------------------------------|Self-Employment Tax Implications of Operating a LLC|-------------------------
LLCs are generally seen as desirable entities for new businesses because of lax corporate governance requirements, extreme freedom of contract, and favorable pass-through tax treatment (unless the founder elects to 'check-the-box' to be taxed as a corporation on the appropriate documents). Additionally, single member LLCs are seen as disregards and have a special tax treatment that will be discussed further elsewhere. For the purposes of self-employment tax, however, single member LLCs (a/k/a disregards) are afflicted by the same malady as member managed LLCs and Manager Managed LLCs--self-employment tax!
Self-employment tax has an effective rate of roughly 17% (check these numbers). This tax is ADDED to the LLC member's pass-through tax liability on their tax returns.
The governing statute (for self-employment related taxes) is 26 U.S.C. § 1402(a) and the regulations can be found at 26 C.F.R. 1.1402(a)-1, 1.1492(a)-2, and 1.1492(a)-3.
This means that if a LLC co-venturer is in the highest tax bracket, they will be paying 37% in individual income tax on all earned income (whether or not distributed to members) PLUS 17% self-employment tax for an EFFECTIVE TAX RATE OF 54%!!!!!!!
Even if a shareholder is only in the 25% individual income-tax rate, they will still have an effective tax rate of 42%, way too high to justify!
Note that, at time of writing (and since 2015), the self-employment tax (when required to be paid) must be paid on the first $118,500 of "combined wages, tips, and net earnings;" note that the business will still be responsible for 2.9% Medicare tax on all self employment income (including all income about $118,500). [cites directly below].
See Self-Employment Tax (Social Security and Medicare Taxes), IRS, https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes (last accessed Jan. 21, 2018); see also Tony Nitti, S Corporation Shareholder Compensation: How Much Is Enough?, THE TAX ADVISOR (Aug. 1, 2011), https://www.thetaxadviser.com/issues/2011/aug/nitti-aug2011.html#fnref_6.
--------------------------|Self-Employment Tax Implications of Operating a S-Corporation|-----------------
Forming an S-Corporation instead of an LLC offers many tax benefits for potential mining businesses. For example, S-Corporations offer the same beneficial tax pass-through treatment as LLCs. S-Corporations also offer the ability to AVOID ANY SELF-EMPLOYMENT TAX WHATSOEVER (in theory)!!!!!!!
DISTRIBUTING INCOME
S-Corporations have three main ways of distributing income: (1) employee salaries and payments to other creditors; (2) expansion / improvement expenses; and (3) making distributions to shareholders.
EMPLOYMENT TAXES
It is generally disadvantageous to pay yourself a salary when running an S-Corp. because salaries come with concomitant payroll tax requirements (the payroll tax is in place of a self-employment tax). Generally, shareholders prefer receiving distributions because no payroll tax is imposed on such distributions. Furthermore, these distributions are often tax free events if the shareholder has a positive basis in the corporation in excess of the amount of money being distributed to the shareholder.
Rev. Rul. 59-221, 1959-1 C.B. 225 holds that a shareholder’s undistributed share of S corporation income is not treated as self-employment income.
BASIS
As a shareholder receives tax free distributions, their basis decreases dollar-for-dollar measured against tax-free received. Once a shareholders basis is zero, they will owe taxes on any additional income earned that year. Shareholders will pay long-term capital gain rates (in most instances) on distributions in excess of the shareholder's basis in the S-Corporation.
------------------------|SHAREHOLDERS PERFORMING SERVICES FOR THE CORPORATION|------------------ S-Corporation employee shareholders (i.e., a shareholder who also performs employee-like functions for the S-Corp) MUST be paid a "REASONABLE SALARY" for the performance of "SUBSTANTIAL SERVICES."
For years, there was very little guidance on the meaning of "reasonable salary" or "substantial services." Luckily, we now have a much better idea of what these terms mean. For a great overview of case law and administrative rulings governing these issues, check out this article (also cited above) entitled S Corporation Shareholder Compensation: How Much Is Enough? (written by a CPA, MST).
Essentially, within the context of a cryptocurrency mining business, your clients can avoid employment taxes (in most cases) because there is very little your clients will be doing that would qualify as substantial services. The term "substantial services" has been interpreted to require a fair amount of work (case law examples often talk about someone working for 35 hours a week, 52 weeks a year as constituting "substantial services"). Running a small to medium scale mining business is a fairly barebones operation.
---------------------------------|Fundamentals of Running a Mining Business|---------------------------------
STARTING UP
Most mining operations require only the following startup materials: (1) mining hardware; (2) internet connection; and (3) adequate power source. These are the minimum components required for a mining business. Medium to large scale mining operations will likely also require some sort of separate area (i.e., signing a commercial lease) to put the mining hardware as it can get quite loud with $50,000 or more of equipment running on a non-stop basis.
The mining business operator need only set up his mining hardware once and maybe troubleshoot occasionally or add/upgrade a machine. While setting up a miner can sometimes be a pain in the rear, it seldom takes more than a couple hours (keep in mind, this estimate is for businesses using commercial ASIC miners; people building their own miners warrant special considerations due to extreme time commitments required for such build-outs).
PRINCIPAL FUNCTIONS
As the principal function of the business is to solve transactions with complex hashing functions only solvable with specific computerized technology, the other duties associated with running a mining business are largely administrative, can be easily automated, and require only minimal supervision and monitoring. These other duties include: (1) sending mined coins from the mining pool to their wallet; (2) recording the value of a mined coin at the time it is mined (or transferred from the mining pool to the miner's business wallet if done on a consistent incremental basis); (3) keeping accurate financial records; (4) paying overhead costs; (5) occasionally logging into mining pool or miner IP address to ensure miner is running properly; (6) occasionally research new equipment for future purchases; and (7) make occasional but simple business decisions regarding whether to reinvest profits or distribute them to shareholders.
TOTAL HOURS WORKED (WEEKLY BASIS)
In the author's experience (running a very small three miner mining business), the average amount of time it takes to get a commercial ASIC miner running and to join a mining pool is about one hour of research and three hours of tinkering (and this was for someone with little previous experience in such matters) for a total of four hours per miner, plus or minus two hours depending on the type of miner and person. In terms of the other tasks associated with running a mining business, the author estimates that a total of roughly 20 hours per year is the maximum amount of work required to operate a small mining business. A medium-sized mining business in a commercial building should expect to spend between 10 and 50 hours per year performing employee-like tasks. A large-scale mining operation's employee-like annual hour requirements will vary substantially depending on the business owners' automation and efficiency skills but may reasonably range anywhere between 10-200 hours.
Looking at the above numbers, regarding hours spent performing employee-like tasks, it is relatively simple to figure out if the shareholders of a mining business may end up performing substantial services (see S-Corp info in section above) for the corporation. For small businesses, such as mine, the mining operator may only spend a maximum of 0.3846 hours per week (20 hours per year divided by 52 weeks) working on employee-like tasks. It is safe to assume 0.3846 hours per week does not constitute "substantial services." As such, no reasonable salary need be paid to the shareholder performing this amount of work.
For medium-sized mining businesses, the average amount of hours worked per week may range (based on 10-50 hour annual estimate provided above) between 0.1923 hours per week and and 0.9615 hours per week (# of hours per year divided by 52 weeks). Once again, it is safe to assume that 0.9615 hours per week (the highest end of the average) does not constitute "substantial services." As such, no reasonable salary need be paid to the shareholder performing this amount of work (especially if this amount of work is spread out over multiple shareholders).
For large-scale mining businesses, a special evaluation will be necessary as setup may require a substantial amount of upfront effort and may skew the number of hours being worked. Additionally, it is possible for the amount of employee-like annual hours to vary substantially year-to-year which would cause the corporation's employment tax liabilities to vary accordingly. If we assume that the 10-200 hour estimate provided above is reasonable, we can calculate an average weekly hourly output of between 0.1923 hours per week and 3.84 hours per week (# of hours per year divided by 52 weeks). If a single employee is performing 3.84 hours of work per week, it is possible this constitutes "substantial services" when performed on a consistent basis over a continuous 52-week period. Contra Davis v. United States, No. 93-C-1173 (D. Colo. 1994) (holding that an average work week of 12 hours per week does not constitute substantial services). That said, it is entirely possible that 3.84 hours per week may fall well below the standard established by Radtke v. United States, 712 F. Supp. 143 (E.D. Wis. 1989) (distinguished on other grounds) (holding "where the corporation’s only director had the corporation pay himself, the only significant employee, no salary for substantial services . . . [h]is ‘dividends’ functioned as remuneration for employment."). As always, do your own research and advise your clients accordingly. The sources identified in this article should steer you in the right direction.
Keep in mind that hiccups happen in business, and sometimes, a mining business may require long and consistent employee-like working hours by the shareholder-operator (i.e., in the event of unexpected problems). In these cases, the general principles elucidated above become muddled. As hours increase in an upward fashion, the more likely it becomes that a shareholder may need to be paid a "reasonable salary." Make sure your client is aware of this and have them call you if they anticipate working substantially more hours than expected in any given year.
Should your client encounter an unexpected and substantial increase in weekly hourly requirements, one possible option to avoid incurring employment tax liabilities is to break up the total amount of work among as many shareholders as possible to keep individual hours low. Please note that the IRS may take umbrage at this sort of gamesmanship and audit your client (please note that I have not researched this tax position; it is possible existing case law or Treasury Regulations already explicitly allow or disallow this; as always, do your own research).
Davis v. United States, No. 93-C 1173 (D. Colo. 1994) (pertains to hours worked and duties performed)
One case, Davis v. United States, No. 93-C-1173 (D. Colo. 1994), provides strong support for the position that S-Corporation shareholder mining operators, in most instances, are unlikely to be considered to have provided substantial services requiring reasonable compensation.
In Davis, the taxpayer is a S-Corporation shareholder who performed "part-time clerical duties for the company, including paying bills, submitting invoices, making bank deposits, and communicating with independent contractor truck drivers." Ms. Davis also made business decisions for Mile High and took a few business trips.
Ms. Davis was not paid a salary for her performance of these duties. Rather, Ms. Davis was paid in shareholder distributions. The IRS argued that such shareholder distributions were improper as the income received should have been classified as salary income as it was actually compensation for performance of substantial services.
Davis held for the taxpayer voiding the IRS's imposition of employment taxes by holding that such taxes were assessed in a manner that was arbitrary and capricious.
If Davis can be reasonably relied on (make your own judgment), most S-Corporation mining business shareholders will not be required to pay themselves a salary. Figure out your facts and apply the information above accordingly!
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[Table] IAmA: We are scientists working at CERN, home of the Large Hadron Collider and birthplace of the World Wide Web! Ask Us (Almost) Anything!

Verified? (This bot cannot verify AMAs just yet)
Date: 2014-06-10
Link to submission (Has self-text)
Questions Answers
How much political input/interference is there in your work? Given that so many nations contribute funding, does conflict ever arise in regards to what you can do? There is fortunately no political input/interference in our work, and this is regardless of our origine or anything. What we do is just pure science! (nm)
Does the name Okabe Rintarou ring a bell? SteinsGate, if I am not wrong. But we don't do time machines yet. Ask me again yesterday, if this has changed in five years.
(sl)
How much hooking up goes on between the scientists at CERN? Please rate on a scale of "Frostier than Elsa's Ice Palace" to "Sexy Cheerleader Camp group cabin" What I can tell is that there is an intense social life at CERN which I would call inbred: the community at CERN is somewhat special ... Long hours spent at the lab, sometime a geeky attitude, does not favor contacts outside CERN ... end result: I know a lot of people who have found their companion within the community. (TC)
Do you guys do anything classified? CERN is an academic environment and we take lots of efforts to publish results, technical designs, etc. We do not do any military research. Therefore, there is few stuff being "classified". Sometimes, there is a period when we keep information internal until we are sure the results are correct. Thus, basically, you find only the "usual" classified stuff at CERN: payslips, medical records of our employees, passwords, financial information.
(sl)
That and your time machine research. Oh. Yes. But that has been handed over to SERN.
(sl)
What does it sound like when you turn it on? (Seriously) When we close the LHC after access, the access console beeps. when we send out timing events to synchronise the equipment, we have an announcer that speaks out a line, that recalls what happened.
For the rest, the control room is far from the equipment, so we don't really hear it... but colleagues told me that at the ISR (another accelerator at CERN), they could hear the beam being dumped with a low pitch boom :) (gp)
Would it be technically or bureaucratically difficult to install microphones to record it next year? We have had microphones installed, to listen to the sound of an asynchronous dump on the collimators :) (gp)
What discovery/research should be getting more publicity than it is? We are doing a lot of research which does not get onto the blogs/newspapers: we have published more than 100 scientific papers on major peer reviewed journals.
Such papers are all about measuring the way Nature works at fundamental level. Today this kind of fundamental research can only be carried out in laboratories like CERN and it is our role to exploit such tools to provide mankind with these measurement which could be the basis of the future 'revolution' in understanding the inner workings of Nature. (TC)
What is each of your's favorite work of fiction involving CERN? I personally love the big bang theory. I can offer a free tour of the LHC control room for authors and actors if they come over to Geneva. (gp)
Bruno Arpaia's "Energia del Vuoto' : I have read the original italian book..do not know if it has ever been translated. (TC)
What common misconceptions do people have about your work i.e. black hole makers? What range of qualification and experience do you and your colleagues have? Common misconceptions are the widely advertised black-hole maker thing, but also the fear of us developing new dangerous 'stuff' (the fact that CERN is doing sub- nuclear research adds to the confusion). Another common misconception on the positive side is to think that we might develop the solution to the energy problems of the world. (TC)
What is the most mind-boggling thing you have learned or experienced in your time working there? Diversity of cultures and being able to work with some of the most brilliant minds has been ( and still is after having been at CERN for 28 years) one of the things I consider a unique feature of CERN. (tc)
Do you have any advice for an undergraduate Physics student aspiring to one day work with you at CERN? Sure! Join CERN as a summer student (too late for this year, I fear) but what about 2015? You'll get hands-on at CERN: weeks of lectures in the morning by professionals, hands-on projects within different CERN groups on your favorite subject, and lots of networking and socializing in the evenings. Meet your peers from all over the world. Sign up here.
(sl)
I'm a physics undergraduate and I'll be making the move to Geneva to work at CERN for a year as a technical student in 2 weeks! I'm extremely excited. Great! That'll be definitely fun! Wheather is sunny 30degC. Hope that stays!
How's the weather over there? (sl)
Im educated in this field nor smart enough to really understand but i'd love to spend a summer there as a 40 year old summer student. Age does not really count. I have just seen a 40yrs old applicant to our Technical Student programme. But you would need to be enlisted with an university...
(sl)
What is the coolest thing you've ever had the chance to do in your work at CERN (besides smashing particles together, of course)? I love LEGO. When Google came around and was taking footings of the CERN Computer Centre for their Google Streetview, I had a chance to drop a few LEGO minifigs beforehand. Later we made a treasure hunt of it... Was quite fun. If you want to try yourself, go here. If you want to cheat, solutions are here.
(sl)
How often are you guys able to predict what discoveries you will make? For example, when you found the Higgs Boson there had already been predictions that it would be found at some point in time, as our technology improved. Are there any other examples of less well known, expected, breakthroughs and does the accuracy of these predictions vary from the different areas of research? It is a good question: the way we work is by theorist assembling the information that we , experimentalists, make into models. Such models besides explaining what we have already observed make also predictions which we try to verify ( the HIggs boson is a notable example). In terms of 'how often' this is the most common situation we are dealing in our daily research life.
There are many other questions ( like why there is an obvious asymmetry between matter and antimatter) where the model builders and the experimentalist are trying to bootstrap each other with continous progress in understanding.
And there have been times where experimentalists have surprised the theorists by discovering new particles which nobody had foreseen ( example the tau lepton) (TC)
How close are you to unifying gravity and quantum mechanics? Not very close yet... This is a big area of research, many people are working on it, there have been some progress already but still a lot of work is needed. (nm)
How do you all decide what projects to study and work on? Are you pretty much given free reign? Is it based on budgetary constraints or what could have profitable applications? Is there someone in charge who gets to say "Hey, we should do more research into black holes" or whatever? As theorists, we are free to work on the projects we wish, depending on what we think more interesting or needed. Experimentalists however have also predecided projects to work on depending on the program and preiorities of the collaborations. We also have sometimes common projects between theorists and experimentalists. (nm)
I am a computer science graduate and will complete my masters next year. besides software engineering my other field of interest is physics. what kind of projects do i embrace so i can one day work at CERN with you? Computer science is everywhere at CERN! The massive amounts of data collected by the physics experiment must be filtered, transferred and stored. "Big Data Analytics" is a good start here. High bandwidth networking another. Mass storage (>100PB/year) a third.
Within the CERN openlab we work with third parties on such research --- so if you want to fiddel with hardware come here.
If you love software design, there are lots of opportunities, too: developping applications to run the LHC, to serve our physicist community, etc.
In brief: Make your field of interest a hobby and sign up as a student with CERN! A good master is an excellent start, but hands-on experience you just can get on the job.
(sl)
I've come to CERN for my master thesis in telecom engineering, as a technical student, I worked on optical links for CMS. I did also my PhD at CERN, in digital microelectronics. now I am hired as an applied physicist and work in the LHC control room. There is a very wide range of options here!
Definitely look at the student programs! (gp)
How strong is the firewall in CERN computer system?Does hacker often try to pringe into CERN sytem? Q: What is the purpose of a firwall? A: To let traffic through. If we don't need to let traffic through, we would cut the cable...
We use a standard firewall configuration to control traffic. As we serve a world-wide community, there are hundreds of computing services open to the Internet: web servers, SSH gateways, Windows Terminal Servers, conference room booking systems, document stores, web mail servers, etc...
Like any other organization worldwide, these are permanently probed for weaknesses. We monitor this activiely and, so far, successful attacks (detected by us ;-) have been rare.
(sl)
rare. The usual stuff: web site defacements, stealing/collecting credentials, using CERN as a platform to hop further, misusing computing power for Bitcoin mining, ...
Could you give an example of what happened when a hacker succeeded? I can't imagine there's much trouble a hacker could cause for you guys... (sl)
What do you hope to see happen within physics within your lifetimes? Is there a particular piece of the puzzle that you want solved for closure? There are many puzzles! One of the most intriguing ones though is the nature of dark matter. (nm)
What is it like to work at CERN? Schedules, workloads, commutes, social lives, etc? I love working here, the research and the international environment in particular. my schedule is messy when we have beam, as I take shifts in the control room. the rest of the time, it's normal working hours - which sometimes get extended in case of deadlines that come up.
I live, as many others, close by, so commuting is short (10 minutes). this June many of us are doing bike2work - so I biked in today, the weather is beautiful. my personal interests fit in well also. skiing is close by in between Swiss and French Alps, and the Geneva yoga festival is great too.
(gp)
What are you most excited to see happen in the near future concerning your respective fields of research? I can't wait to see the beam at high energy, early next year. on the accelerator side, we have a few things that might cause issues that we'll have to work on: electron clouds in the beam pipe, Unidentified Falling Objects, beam instabilities, … it'll be fun! (gp)
Finding new particles that could confirm the predictions of the theories I am working on! That will allow us to finally know what is the correct direction to go beyond the Standard Model of particle physics! (nm)
Comic Sans. Why Comic Sans? Because "Arial" sucks, doesn't it?
(sl)
How much does your electric bill average each month? A figure I heard is that we use ~180MW on a good day… most of it taken by the accelerator complex. (gp)
Is there a secret duplicate LHC, like they did for the machine in the movie Contact, in case some crazy-ass incident occurs? No! (nm)
Whats the process of decieding which particles you smash together? do you just take random shit and throw it together or are there scientific reasonings for it? Concerning the LHC, it was designed to do proton-proton, and lead-lead. then we also did proton-lead, and lead-proton, which is less obvious that what it sounds like.
I guess what I want to say is that it depends on the physics goals.
(gp)
Whats your favorite part out using scientific linux, or worst part? Btw, pretty cool that cern has adopted linux for research! I take the chance to point to this picture… I'm in it and the captions are not 100% true. (gp)
What impact will funding have on future research? Today's fundamental research is based on tools which require investment (that has always been the case , but in the past this funding was at the level of individual research institutes or of national initiative). Today not even 'continental' investment can cope with the needs of fundamental research. So if we want to progress further there will be need of substantial investment. For example in the last 12 months it has been decided to exploit fully the potential of the LHC accelerator :in order to exploit the potential of the improved accelerator we will need improved detectors. These do not come for free ...
So yes, funding will be essential for fully exploiting what the LHC accelerator can tell us ( and that might be a lot ... as there a lot of unaswered questions like what is dark matter, why is our universe made of matter and so on ) (TC)
So, now you have the higgs. what's next? We have to measure all the Higgs properties as precisely as we can! We also have new models to go beyond the Standard Model of particle physics and there are active searches ongoing at CERN to look for new particles. (nm)
It seems like lots of students are (appropriately) wowed by CERN and go on to pursue advanced degrees in HEP-ex and HEP-th. Do you think there is a real risk of overcrowding the field? The field has been 'regulating' its market since ever: we have statistics showing that less than 40% of the PHDs formed in CERN experiments remain in the Academic/Research world. The rest find quickly their way into the 'outside' world. The main reasons we have identified for the popularity of our students are : not being afraid of trying to solve problems, no matter how difficult, ability to evolve in a multinational/multicultural environment, ability to work in large teams, being exposed to state of the art software/electronic techniques. (TC)
What would make the LHC look like old tech in the near future? I'm guessing not a "larger" one. And don't forget the newest idea: the FCC (gp)
As the group that helped develop the web, what is your opinion on the current issues of Net Neutrality and the NSA's use of the Internet to spy on citizens of the world? Some personal view: The World Wide Web created 25 years ago at CERN (WWW: “Let’s share What We knoW”) provided a global platform and unique opportunity for people to communicate, to collaborate and to share at unprecedented scale and speed. The accessibility and openness of the internet are crucial to enabling new ideas to flourish and compete with the long-standing traditions and to ensure that the evolution of the web continues to proceed at a pace limited only by our ideas. However, with this capability comes considerable responsibility with all of us – whether politicians, lawmakers, scientists or citizens – to preserve an open internet and a free web for the benefit of humankind.
(sl)
How close are we towards a GUT? Is their some technical aspect holding us back or is it something else? No, I would say we have to verify the GUT model predictions experimentally at the LHC and there are ongoing searches... (nm)
Stefan Lüders, "Head of Computer Security" Actually, I followed a typical CERN career-by-chance. I am educated physicist, turned into control system engineer, investigated security stances of control systems, and then joined the security team with what I learned. Most of the time, I coordinate implementations, provide guidance, and help people to make their products more secure. It's more facilitating and enabling than hard-core security. However, my team consists of white hats who know the techniques much better than I do :-)
I didn't know CERN hired security experts, what does your job entail mostly? For the supa hacka, I would love to learn how he/she would get world domination by hacking into CERN. Sounds like bad reconnaissance...
Also, a more humorous question... are any of you afraid of being hacked by a "supa hacka" who is aware of your schemes and desire for world domination? John Titor 2014. (sl)
Any advice for a high school student trying to get into physics and particle physics in specific? Study hard and keep your eyes open for scholarships (gp)
How long does a test last? And how long between these tests? At the LHC, from a beam dump to the next stable beams it takes at least 2 hours. then we keep the beams in collisions for up to 10-15 hours. then start over. at the experiments, they pack up data from the collisions for years. (gp)
I'm sure you experience work-related pressures and irritations like the rest of us, but you're doing a very special job. Have you ever had a particularly satisfying moment that reminded you, "this is why I work here?" First turn of the beam in the LHC in 2009 - my fifth day on the job. I looked at my boss and whispered: "thanks for hiring me". (gp)
Is there any concept in physics that you look at and think "what the heck is going on here?" Yes ..all the time when confronted with the subtleties of Quantum Mechanics..and every time I dig into it I keep learning more (TC)
What are some (interesting) questions you can't answer? There are many, and that's why we do research! A few examples: how to explain the matter-antimatter asymmetry. Or what is dark matter. Or are there more than 3 quark/lepton families? And many more! (nm)
Please explain what you mean by "dumping the beam when it's depleted". This sounds like something that is required after a jump through hyperspace, and sounds very interesting. The beam gets dumped whenever it is not interesting for physics anymore (and the operators decide to extract it), or whenever anything on the accelerator side goes wrong (and Machine Protection takes care of extracting it automatically).
By means of a special set of magnets, with very fast rise times, the beam gets extracted from the main ring to a special place, the beam dump itself, where it hits a huge block of graphite and scatters its energy.
(gp)
Last updated: 2014-06-14 10:45 UTC
This post was generated by a robot! Send all complaints to epsy.
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