Alt Coins – What are they good for?

Bitcoin and Litecoin are the two largest cryptocoins traded today. If Bitcoin ever was fatally attacked, Litecoin could easily replace it.

Now that Bitcoin has stabilized above $100 for a while, and the world’s press is sending out a steady stream of info (or disinfo) on the subject of cryptocoins, I’m getting bombarded with questions about the alt-coins, such as Litecoin, PPCoin, Novacoin, Namecoin & even Ripple. “Alt coins” is a term used to describe all of the cryptocurrencies that aren’t the dominant cryptocurrency at the time. (e.g. Not bitcoin.)

Alt coins have all branched out from bitcoin, started in it’s wake, and each and every one of them excepting only Ripple are based on the same decentralized, peer-to-peer architecture that requires a miner crunching cryptography and user wallets to function. Yes, they are all worth dollars in trade on some exchange somewhere right now as I write this, and all have their own developer community and hopeful users like bitcoin does. (Only much smaller, with extremely little, if any, merchant adoption.)

Why are people putting time and money into alt coins? It is assumed by the developers that one day a major government or at least the Mexican drug cartels will have a reason to try to “take out” bitcoin. Although its peer-to-peer behavior should be adequate at stopping these threats, nobody knows what the future holds, and the fate of our very economy is at stake here… So litecoin (LTC) was the first created to be a sort of “understudy” or backup for bitcoin. It has it’s own wallet, mining software and blockchain. Although it was the 2nd alt coin created, it has almost always been the most traded of the group, worth about 2.5% what a bitcoin is worth.

For an updated listing of all cryptocurrencies, with descriptions, see here.

Update on my Mining Rig

I’m dabbling in all things bitcoin these days. Investing, exchanging, technology, and mining… To name a few. It’s an incredible time to be alive and paying attention; and not just because the price of a bitcoin went over $260 recently. There is a whole world to bitcoin with tens of thousands of people interacting; & mostly all of us are working towards making bitcoin take off and become the next major world currency.

So two weeks after building my first dedicated mining rig, I’m ready to spill some details & pictures. First of all, here is the output, from the windows-based Bitminter client:

My mining Rig’s hash rate through Bitminter

What you’re looking at on the dial there is the total hashing rate (in Mega-hashes per second) that my rig is adding to the Bitminter mining pool. I do not use the CPU on this machine, only the 3 Graphical Processors. (GPUs)

Avalon Batch 3 News

Avalon ASIC Chips – News about Batch #3

Breaking News on Avalon ASICs: Batch three may or may not get sold, but will officially cost 75 Bitcoins if it does, and start shipping at the end of April.

75 bitcoins is currently = $5,415 USD on MtGox. Ouch! (They sold the last batch for $1,299 USD.)

They said all of this tonight in a newsletter update and  that they determined this price by taking “the current mining difficulty which at the time of writing, just got readjusted to about 6,695,826. We take that number and multiply it by two ( predicting the network speed will double. ) and calculate the return in a thirty day window, which is about 75 bitcoins.”

The tricky part, however, is that they have said that “it is up to the community” if they are going to sell batch three or use them to farm with themselves! They do not give a date precisely, but at the bottom of the newsletter they said in large letters: “Decide on 8:30AM EST, 3/25/2013.” (Tomorrow.) -So there will be talks all night overnight on their FAQs page that decide the fate of this last shipment.

The ASIC mining revolution

ASIC Chips, made just for one purpose only.

ASIC (App-Specific Integrated Circuitry) is right now revolutionizing bitcoin mining. These circuits and the big boxes that are running them will be absolutely devastating soon to all existing mining techonology… Yes, including those huge $50,000 room-filling rigs that can mine 500 GH/s.

Why? Because a single box (like this one) that runs on one single power supply can produce 1500 GH/s! Sure, it costs $30,000, but the electricity needs are far smaller and the output is far larger… It’s nothing short of a game-changer for all bitcoin miners everywhere. They’re all going to have to evolve or perish as the market changes on them rapidly this year.

The first ASIC rig has already hit the market. For $1599, Avalon has apparently sent out their first batch of 300 rigs, and the miners who received them can confirm they are seeing 65 GH/s or better. At current difficulty & a $0.16/w electricity rate, that comes out to something like $265.68 USD in bitcoins every 24 hours, making a break-even on their money a mere 5 days!

Of course the difficulty will go up as more miners flock to this tech; and then again when the next halving of the output blocksize happens sometime in the future. But for now, if you want to pick up some bitcoins, ASIC is clearly the way to get in.