Bitcoin and altcoin mining attracts a lot of attention. After all, cryptocurrency exchanges are influenced by a lot of uncertain, rapidly changing factors and market psychology. Because of this, conducting a fundamental analysis and forecasting revenues in the secondary market of cryptocurrencies is quite a challenge. But with mining everything looks easier. ProstoCoin explains whether this is true.

How profitable cloud mining is
By comparison, some of the determinants of mining efficiency – such as processing power (production volume), electricity charges, and network fees – are public information from which a relatively objective quantitative analysis can be made. Given that miners’ earnings are closely tied to the value of the cryptocurrency, the return on investment becomes more predictable and stable than when buying cryptocurrency on the secondary market.

Many private and institutional investors from non-mining industries want to get involved in cryptocurrency mining. When bitcoin was not yet so popular, it was easy for a miner to mine bitcoins at home and make a good profit.

But now is not the “good old days” when the processors of ordinary computers can mine large amounts of bitcoins. The entry threshold into mining has gone up a lot: negotiating electricity supplies at discounted prices, choosing a location for a data center, choosing mining rigs and pools, calculating the seasonal volatility of electricity charges, keeping track of changes in cryptocurrency legislation, and much more.

As mining grows in popularity, so does its complexity. This makes it impossible to mine bitcoins from home with an ordinary computer. Home mining is only profitable if you have extremely cheap electricity and a cold climate to mine in for many months.

While the quantification of bitcoin mining is more objective than that of stock trading, the high entry threshold can deter many investors. That’s why cloud mining has emerged. It is a subspecies of mining that allows investors and crypto-enthusiasts to mine bitcoin, avoiding the complexities of mining bitcoins themselves.

The concept of cloud mining emerged to reduce the high costs of mining and to shield investors from the technical challenges of self-mining. The idea quickly attracted a large number of miners who could not afford expensive equipment.

For comparison, the cost of a single modern miner starts at $2,000. For stable bitcoin mining, you will need several of these machines. You also need to provide noise isolation and heat dissipation (otherwise your neighbors will ask you to give up this investment). The cost of a cloud contract can start at $10. This is a huge difference, which is what attracts investors to mine bitcoins using companies that specialize in this – cloud mining providers.

How to Calculate Profit
Providers commit to buying, maintaining, and upgrading equipment. They also provide a special platform for investing, withdrawal of earned bitcoins, mining statistics, and a special yield calculator. For example, on the website of one of the most popular providers ECOS you can compare the yield of cloud mining with buying bitcoin on the exchange.

ECOS calculator

Cloud mining allows you to noticeably reduce the impact of cryptocurrency market volatility while keeping your earnings stable. You get income on a daily basis. This approach is especially convenient for long-term investors, whose goal is not to make money from quick speculations, but to keep and multiply their capital for many years.

The main disadvantage of cloud mining is finding a reliable provider. There are a large number of scammers on the market. Sometimes it is hard to distinguish a bona fide company from a scam. Therefore, before you enter the world of cloud mining, carefully check the provider you want to work with.

One of the most popular and reliable providers is the company ECOS. Their data center is located in the Free Economic Zone of Armenia. The company is free from income taxes, VAT, import and export customs duties as well as property and real estate taxes. It allows the company to save not only clients’ money, but also its own.

Conclusion
Cloud mining is probably the best way to invest in bitcoins that is currently available. It is more profitable than self-mining and less risky than trading cryptocurrency on an exchange. If you believe in bitcoin growth and want to have a stable income for a long time, invest in ECOS cloud mining and earn daily!

Almost every member of the cryptocurrency community is familiar with the story of how in 2010 a US resident purchased a couple of pizzas for 10,000 BTC. Now that story makes us smile, and the man who then ordered pizzas for Bitcoin is called the greatest fool of the twenty-first century. If that customer had been more patient and didn’t spend the available coins, he would be a multimillionaire now. Together with ProstoCoin, let’s remember the day of this purchase – which is now known as Bitcoin Pizza Day – and consider what impact it had on the cryptocurrency industry.

At the time, the price of a pizza was approximately $20. Consequently, $40 was paid for 2 pizzas. In late spring 2010, 10,000 Bitcoins were worth $40 to $50, so the deal could be called fair.

On May 22 Laszlo reported that he bought 2 pizzas for digital coins and posted a picture. This date became a landmark for the cryptocurrency community – the man purchased a real commodity for the first time for the coins. Prior to that, bitcoins were only used in trading transactions.

Bitcoin pizza

In mid-summer 2010, the price of Bitcoin skyrocketed. In early August, 10,000 coins were worth $600. At that time, Laszlo’s offer on his website to buy food for BTC became relevant again. However, he said he was no longer planning such expenditures. At the end of fall 2010, 10,000 Bitcoins were already worth $2.6 thousand.

During the next nine years BTC only grew in price – so, the price of one coin reached $20,000. Due to this fact, those who possessed large amount of bitcoins later became millionaires. The deal to order 2 pizzas for 10,000 BTC became known as one of the most famous follies of the modern world.

In 2013, Laszlo, whose real name was Laszlo Heniec, gave an interview to The New York Times magazine. It was revealed that after the famous deal, cryptocurrency stopped being interesting to him for a while. Laszlo said that at the beginning of 2013, he sold all of his digital coins for $1 each, earning $4,000. He used the proceeds to buy several PCs and video cards. Laszlo did not plan to mine the coins, as one might think. The purchase of office equipment was due to Laszlo’s line of work – he works in the IT sphere.

When reporters asked him about the Bitcoin pizza deal, Laszlo said that his goal was to become the first person to buy physical products with coins. He said that he hadn’t believed in a successful future for BTC before, so it was easy for him to spend the coins.

Laszlo gave a comprehensive answer to the question about his motivation. He said that it was food he wanted, not a gift certificate for it. Laszlo’s logic is that if food can be purchased with Bitcoins, it means that one can live on them.

The journalist asked if Laszlo had any regrets about the money he spent in 2010, as the value of those 2 pizzas had already risen to $80,000,000. To this, Laszlo smiled and said that he preferred not to think about the purchase made in such a context.

In February 2018, news of Laszlo again appeared in the media. The enthusiast conducted a repeat experiment using the Lightning Network. The man purchased 2 pizzas for 0.00649 Bitcoin. He needed help from a friend in London for the new experiment, because it was impossible to complete the transaction without an intermediary. The deal turned out to be successful and Laszlo purchased his pizza. However, this experiment did not have such an impact on the cryptocurrency industry as the first purchase of food for Bitcoins. According to the crypto-enthusiast himself, the new experiment was staged as a tribute to Bitcoin Pizza Day.

How is Bitcoin Pizza Day celebrated in the world?
In honor of the first purchase for digital coins, the cryptocurrency community eats pizza and thanks Laszlo for his great contribution to shaping the industry. The date for Bitcoin Pizza Day is May 22. Various firms organize pizza parties for their employees on this day. There are companies that hold larger events. These include Blockchain Hub Kyiv, which for several years now invites everyone to celebrate pizza day on the banks of the Dnieper River.

Pizza Day is also known as Bitcoin Christmas. The tradition of giving each other gifts for Christmas has also passed into this holiday. For example, pizzerias from different countries reduce prices on their dishes, and cryptocurrency exchanges organize drawings for prizes for community members.

The Etherium network, unlike Bitcoin and many other cryptocurrencies, operates not only the main cryptocurrency, but also Gas. It is Gas that allows users not only to make transactions, but also to run smart contracts, deploy DApps, and store information on the blockchain. In this article, we’ll take an in-depth look at what Gas is in Etherium, talk about what it’s used for, and how to optimize its costs.

Gas in Etherium

We’re all used to the fact that you have to pay a fee to miners for their services to verify transactions and support the network in order to make transactions in the blockchain. And the Ethereum network is no exception. However, in Bitcoin and many other cryptocurrency networks, the commission process is quite simple. The user only needs to choose the optimal amount of commission and wait for the transaction. Pay more – the transaction will go faster, less – you’ll have to wait a bit.

With Etherium, it’s more complicated. The commission for transactions in the Etherium network is calculated in gas and paid in ETH. That is, the more energy-consuming the transaction, the more gas it will take, and the higher the commission will be.

Essentially, Gas is the unit of calculation on the Ethereum network that is used to calculate fees for a transaction or action on the blockchain. Ethereum Gas is also often referred to as the fuel of the network. Using the analogy of regular fuel, the easiest way to explain what gas is in Ethereum is.

Imagine that you are going to go somewhere by car and you need a certain amount of gasoline to do so. You go to a gas station, fill up your tank with the right amount of fuel, and pay for it. If you draw a parallel to this situation with Ethereum, the trip you’re about to take is a transaction, the gasoline is Gas, and the gas stations are miners.

Why does Ethereum need Gas?
The Ethereum network combines more functions than the usual cryptocurrency. ETH can be used to send cryptocurrency transfers between users, but the main purpose of Ethereum is to create and execute support for smart contracts. The concept of using gas allows Ethereum to share the computational cost of EVMs and the real value of ETH.

The second reason is to incentivize miners. Many dApps are deployed on Ethereum smartcontracts, which integrate a variety of fields: games, insurance, finance, real estate, and more. Naturally, such a network requires special protection, and in the case of blockchain networks, the security of the network is directly proportional to its hash rate, i.e. the number of miners.

In order to encourage miners and offer them attractive earning conditions, a gas system was introduced. With its help, miners can receive a commission commensurate with their resource costs, because the more complex the transaction, the more gas it will take to perform it.

Ethereum Gas appears for any transaction that requires a fee. Specifically, gas is needed to:

make a transfer of ETH to another wallet;
to create a smart contract on the Ethereum blockchain;
execute a smart contract on the Etherium blockchain.
Each of these operations requires a different amount of gas to perform. For example, a cryptocurrency transfer would require 21,000 gas. The cost of creating and executing a smart contract depends on its complexity and how many EVM commands will need to be executed.

How much does gas cost
There is no fixed price for the cost of gas. The sender sets two key parameters for each transaction:

Gas Limit – the maximum gas limit that can be charged for a transaction.
Gas Price – the price of gas selected by the initiator of the transaction.
Gas Limit is primarily a function for developers. It allows you to warn users against huge expenses as a result of an error, a huge or infinite contract cycle. For example, if a transaction requires only 21k gas, and the user has set a limit of 50k, the unspent difference will be returned to his wallet. At the same time, if a lower limit than required was set, the gas will be wasted and the operation will be rejected.

With the Gas Price parameter, users of the cryptocurrency network can control the speed of their transactions. After all, the principle of price priority also applies in the Etherium network: the transactions with the highest value are the first to be included in the block.

The cost of gas is measured in the minimum part of the Etherium – wei. However, in most wallets this parameter is specified in Gwei. 1 Gwei equals 1 million wei. So, for example, if Gas Limit is set to 50,000 and the sender specified a price of 20 Gwei for one unit of gas, the transaction will cost him 0.001 ETH.

The average cost of Etherium gas is usually 50-60 Gwei. But this parameter can change depending on the load on the network. For example, the surge in interest in DeFi in 2020 caused the cost of gas to jump from 11.7 Gwei to 538 Gwei.