Category Archives: Cryptocurrencies

My thoughts on the Bitcoin ETFs

There’s a lot of talk right now in the Bitcoin community about the new Bitcoin ETFs. Some of the discussion has been negative in tone because let’s face it – the whole idea goes against the original value proposition of Bitcoin as “being your own bank” – i.e. a permissionless, decentralized, and censorship-resistant peer-to-peer currency that doesn’t rely on centralized institutions and trusted third parties.

That being said, I can also understand why some people might prefer to invest in a Bitcoin ETF instead of holding actual coins. Bitcoin ETFs do have a place even though they aren’t for someone like me. Older people for example who tend to know little about computers and technology but might be interested in this fancy new Bitcoin thing that everyone seems to be talking about could be well served by throwing some money into a Bitcoin ETF. Such people are likely to fall victim to hacks, scams, or otherwise accidentally lose their private keys if they attempted to buy and store bitcoins themselves so it can be safer to let other people who are (hopefully) more knowledgeable than them deal with the security issues involved – even if it comes with a 1.5% annual management fee in the case of BlackRock’s offering.

But if you have the technical skills and know-how to purchase bitcoins and safely store your own private keys then I would stay away from these ETFs. Bitcoin isn’t like gold where self-custody is a difficult and expensive ordeal. Bitcoins don’t require a pickup truck to haul or take up valuable space in your basement. You don’t need to worry about declaring your bitcoins to state authorities when crossing between national borders. As long as you can remember a 12-word passphrase, your coins will always be yours.

The Song dynasty in China was the first to issue paper money called jiaozi. These were valued at a certain exchange rate for gold, silver, or silk. Originally, the notes were meant be redeemed after three years, to be replaced by new notes for a 3% service charge. However, as more of them were printed without older notes being retired, inflation became rampant and all of the notes eventually became worthless. It’s stories like these that provide historical precedent as to why some people in the Bitcoin community dismiss these Bitcoin ETFs as “paper coins”.

In 1933, the US government enacted Executive Order 6102 which forbid its citizens from owning gold outside of small amounts of gold jewelry and coins. Bitcoin is unique among asset classes because it threatens the role of the US dollar as the global reserve currency. Could the state attempt to nationalize the bitcoin holdings of its citizens in a last-ditch attempt to save a collapsing dollar? If anti-cryptocurrency politicians like Elizabeth Warren manage to secure key positions of power then such a scenario could be more likely than you think.

In 1938, Nazi Germany enacted the Decree on the Registration of Jewish Property – a law that forced Jewish people to register their wealth with the government – paving the way for state-sanctioned theft on a massive scale. Those who were fortunate enough to leave Germany before the Holocaust were forced to relinquish up to 90% of their wealth. More recently, the government of Cyprus seized a portion of their citizens’ bank accounts in 2013 in order to make up for its own mismanagement of their economy. If the majority of people had their savings in Bitcoin and cryptocurrencies which they held their own private keys to, then these governments would have been powerless to confiscate their citizens’ wealth.

Coinbase is listed as the custodian for 8 out of 11 Bitcoin ETFs in the US including Grayscale’s and BlackRock’s offerings. Will Coinbase become the next Inputs.io? The next Mt. Gox? The next Cryptsy, QuadrigaCX, Celsius Network, and FTX? Wallets can be hacked and employees can go rogue. The only way to protect yourself from situations like these is to hold the private keys to your bitcoins. However, if you don’t trust yourself to safely store your own private keys and are only interested in speculating on the price of Bitcoin (rather than using it as a currency) then a Bitcoin ETF might be the best option for you. Just understand that you’re not holding actual bitcoins. “Not your keys, not your Bitcoin” is a often quoted phrase in the Bitcoin community and it’s specifically situations like these where it matters most.

Top 50 cryptocurrencies described in five words or less

In 2018, there was a popular infographic that made rounds on social media that listed the top 100 cryptocurrencies in terms of market cap with short descriptions of each project (click to expand):

The author also wrote lists for the top 200 and 300 cryptocurrencies:

I found these lists to be useful because they provided a bird’s-eye view of the cryptocurrency industry at the time. The lists are a bit outdated now because a lot of new projects have appeared since then while others have fallen out of popularity. As a bit of a homage to the original series, I decided to create an updated list for 2024. Due to time constraints, I have shortened the list to include only the top 50 cryptocurrencies:

Here is the same list as a table:

Market cap rankCoinTickerDescription
1BitcoinBTCFirst decentralized cryptocurrency.
2EthereumETHSmart contract platform.
3TetherUSDTStablecoin pegged to USD.
4BNBBNBBinance exchange utility token.
5SolanaSOLFast, cheap transactions and DApps.
6USDCUSDCStablecoin backed by USD.
7XRPXRPGlobal money transfer network.
8ToncoinTONTelegram-linked scalable blockchain.
9DogecoinDOGEFun, meme-inspired cryptocurrency.
10CardanoADADecentralized app platform.
11TRONTRXDecentralized app platform.
12AvalancheAVAXFast, scalable smart contracts.
13Shiba InuSHIBEthereum-based meme token.
14PolkadotDOTInteroperable multi-blockchain platform.
15ChainlinkLINKDecentralized oracle network.
16Bitcoin CashBCHPeer-to-peer electronic cash.
17UNUS SED LEOLEOBitfinex exchange utility token.
18DaiDAIStablecoin pegged to USD.
19NEAR ProtocolNEARFast, scalable smart contracts.
20PolygonMATICEthereum L2 scaling solution.
21UniswapUNIDecentralized Ethereum token exchange.
22LitecoinLTCSilver to Bitcoin’s gold.
23KaspaKASSecure, scalable PoW cryptocurrency.
24PepePEPEMeme-inspired cryptocurrency.
25Internet ComputerICPDecentralized world computer.
26Ethereum ClassicETCImmutable smart contracts.
27Artificial Superintelligence AllianceFETFetch.ai utility token.
28MoneroXMRPrivate, anonymous cryptocurrency.
29AptosAPTScalable smart contracts in Move.
30StellarXLMFast, cheap cross-border transfers.
31RenderRNDRDecentralized GPU rendering.
32HederaHBARAsset tokenization platform.
33CosmosATOMInteroperable blockchain ecosystem.
34ArbitrumARBEthereum L2 scaling solution.
35CronosCRODeFi and metaverse platform.
36FilecoinFILDecentralized storage network.
37OKBOKBOKX exchange utility token.
38MantleMNTEthereum L2 scaling solution.
39MakerMKRDai decentralized governance token.
40VeChainVETSupply chain transparency blockchain.
41StacksSTXBitcoin smart contracts and DApps.
42InjectiveINJInteroperable DeFi smart contracts.
43ImmutableIMXEthereum NFT L2 scaling solution.
44First Digital USDFDUSDStablecoin pegged to USD.
45SuiSUIFast smart contracts.
46OptimismOPEthereum L2 scaling solution.
47BittensorTAODecentralized machine learning models.
48BonkBONKDog-themed Solana memecoin.
49The GraphGRTDecentralized indexing system.
50NotcoinNOTTelegram-based play-to-earn token.

I hope this post is helpful to anyone interested in investing in cryptocurrencies. If you find a mistake then feel free to post it in the comments.

Riecoin: First impressions of Primecoin’s little brother

Riecoin is a math-focused cryptocurrency launched in 2014.

Those who have been active in the Bitcoin and cryptocurrency space for a while are probably aware of Primecoin (XPM) – a cryptocurrency that contributes to scientific and mathematical research by searching for primes. There has been a lot of discussion about how wasteful Bitcoin mining is in terms of energy usage and resources and Primecoin’s innovative proof-of-work algorithm is viewed by some in the cryptocurrency community as a potential way of turn mining into something that can be more useful for society. But Primecoin isn’t the only altcoin with mathematical research in mind out there – there’s Riecoin (RIC) too.

While Primecoin and Riecoin have their own independent development teams and communities, saying that Riecoin is Primecoin’s little brother seems like quite an accurate description. Both were developed by pseudonymous developers: Primecoin was launched in 2013 by Sunny King who would later go on to develop the first proof-of-stake coin in the form of Peercoin while Riecoin was launched in 2014 by a developer who went by the name of gatra on the BitcoinTalk forum. Perhaps as a nod to Satoshi Nakamoto, both Sunny King and gatra also stepped away from development of their coins after a few years and handed over the reins to their respective communities.

Both coins are CPU mineable (although Primecoin can be mined more efficiently with GPUs now) which is a bit of a rarity in today’s ASIC dominated world. While SHA-256-based coins like Bitcoin and Namecoin and scrypt-based coins like Litecoin and Dogecoin have been dominated by ASICs for a several years now, coins like Primecoin and Riecoin show that mining with regular home computers is still feasible in this day and age.

In terms of differences, Primecoin has 1 minute blocks, no maximum cap on coins, continuous difficulty adjustment, block rewards that are determined by the current difficulty, and a centralized checkpointing system. Riecoin on the other hand has 2.5 minute blocks, a maximum cap of 84 million coins, difficulty retargeting every 12 hours, and block rewards of 50 coins – halving every 4 years.

Both coins look for chains of prime numbers but Primecoin looks for Cunningham and bi-twin chains while Riecoin looks for chains of primes with minimum possible distances between each other. Primecoin also uses a combination of the Euler-Lagrange-Lifchitz and Fermat tests to prove primality (a faster but less accurate method) while Riecoin uses the Miller-Rabin test to test for primality (a slower but more accurate method).

Market cap-wise, Primecoin is certainly in the lead. As of July 8, 2024, Primecoin has a market cap of nearly $1.4 million while Riecoin’s is only $500,000. Both coins had fair launches with no signs of premines, instamines, ninjamines, and so on that plague the cryptocurrency community (I’m looking at you Bytecoin). From the Riecoin announcement thread:

“Fair launch:

Since this is a new PoW, it is very hard to define a starting difficulty that avoids instamining. To overcome this and contribute to a fair launch, the first 576 blocks will have no reward and the next 576 will linearly increase and reach the full reward at block 1,152, after 4 difficulty adjustments were performed. Besides avoiding instamining, this should allow time for those who want to compile their own clients. Expect the starting difficulty to be hard.

Source code will be provided a few days before launch, but the PoW functions will be replaced by stubs. The idea is that everyone would be able to examine the code and confirm that there’s nothing strange and it is indeed pretty similar to Bitcoin’s. Everyone would be able to compile it, see if they have the correct dependencies, etc. but it won’t run. At launch time, when the final code is released, everyone could easily check that the only thing that changed is the PoW code, so you’d only have to check the diff of a few lines of code and recompile.”

If you are interested in what Riecoin has to offer then I encourage you to visit the official website. It has all of the information you need to download, install, and run the software and guides to set up mining either by yourself or in a pool. There is also a handy link to download the entire blockchain bootstrap so that you don’t have to spend hours to days waiting for the client to sync up with the network.

Alternatively, if mining isn’t your cup of tea then you can head over to FreiExchange and buy them directly.

So far, I’ve been mining on a mid-range gaming laptop with an Intel Core i7-8750H for the last three hours and it takes little less than a day on average to mine a block. That being said, I don’t recommend mining on laptops for extended periods since their thermal designs aren’t as good as desktops.

Alexology now accepts Nxt donations!

The Nxt cryptocurrency was launched in 2013.

If you’ve read my earlier post then you would know that I began accepting Peercoin donations for my blog because I believe the technology of proof-of-stake (PoS) to be interesting and worth exploring. Despite being the first PoS coin however, Peercoin still retained a proof-of-work mining scheme in order to handle the distribution of their coins especially during their initial phase of growth.

Nxt is another cryptocurrency that is interesting to me because it relies purely on proof-of-stake and thus forgoes mining entirely. In addition, it also features a Java-based codebase written entirely from the ground up as well as features not found in simple Bitcoin clones such as a decentralized asset exchange (think of a stock exchange) and a monetary system that allows users to create their own coins and tokens on top of the blockchain:

The official Nxt client interface (click to expand).

The official download page for the Nxt client can be found here. Make sure that Java is installed first. If you’re using Ubuntu like me, just enter sudo apt install default-jdk in the command line to install Java. Underneath the download links, there is also a blockchain bootstrap available to speed up syncing with the network.

And finally, if you are interested in helping support my work then feel free to donate some NXT to the following address:

NXT-6RSM-7JWZ-VUZL-G3LJA

A regularly updated list of all donation methods accepted by this site can be found here.

On the need for cryptocurrency auditing services

History shows that the cryptocurrency community desperately needs good auditing services. Currently, those who are best equipped to audit businesses such as exchanges are people who have an in-depth understanding of Bitcoin and cryptocurrencies – often but not necessarily developers.

For example, Mt. Gox invited Roger Ver (a.k.a. “Bitcoin Jesus”) to audit their reserves in 2011 and again in 2013. In 2014, exchanges responded to the influx of new customers, increased competition, and the collapse of Mt. Gox and the resulting negative effect on the public’s perception of cryptocurrencies by taking audits much more seriously: Coinbase was audited by Bitcoin advocate and entrepreneur Andreas Antonopoulos, Bitstamp was audited by former Bitcoin Core developer Mike Hearn, and Bitfinex, Kraken, Huobi, and OKCoin were audited by software developer, early Bitcoin advocate and investor, and former Ripple Labs CTO Stefan Thomas.

Sounds great right? The only problem is, those who have the technical skills to audit exchanges generally don’t have the skills to audit the fiat side of things. And the people who have the skills to audit the fiat side generally don’t have the technical skills to audit the crypto side of things, as Mike Hearn explained during his audit of Bitstamp:

“The overlap between people who are traditional accredited auditors and people who understand the Bitcoin technology and things like signing with private keys is presently very small.”

In December 2022, Binance CEO Changpeng “CZ” Zhao also indicated during an interview that traditional accounting firms had difficulties auditing crypto exchanges:

“Audits don’t reveal every problem… Many of them don’t even know how to audit crypto exchanges.”

The fiat side is important because it is possible for a business such as an exchange to make up for a shortage of BTC or ETH by borrowing or buying cryptocurrencies with fiat. In such a case, someone like Andreas Antonopoulos might look at the hot and cold wallets and assume that everything is fine. However, a closer look at the fiat side would indicate that the exchange is actually insolvent.

In fact, during his audit of OKCoin, Stefan Thomas explicitly warned about this possibility:

“Note that there are limitations to this type of audit. It does not verify an exchange’s fiat assets and liabilities or other aspects of their balance sheet. It is also difficult to prove definitively that the bitcoins in question are actually owned by the exchange versus being on loan for instance.”

Today, there are auditing services out there that focus on cybersecurity and code such as smart contracts. Last year, a blockchain security firm called CertiK was awarded $500,000 for finding a bug in the Sui network’s code that if exploited, would have crashed the network by rendering all of its nodes inoperable. This is great but these companies usually don’t deal with significant amounts of fiat.

Of course, there could still be issues even if we had a healthy and competitive marketplace of cryptocurrency auditing services to choose from. For example, Roger Ver had name recognition but his audit of Mt. Gox wasn’t a particularly thorough one and it couldn’t save them from collapse in 2014.

And while cryptocurrency reserves can be proven transparently and in real time, confirmation of fiat reserves cannot be done in real time and companies might not want to expose their financial operations for their competitors to see. Therefore, some degree of trust will probably be necessary in this field which begs the question of which companies should be trusted, especially during the initial stages of the industry.

Finally, there’s also the issue that the cryptocurrency industry is much more complex and diverse now. Back in the old days, when nearly all attention was focused on Bitcoin and a handful of altcoins that simply copied Bitcoin’s code, a technically inclined and sufficiently dedicated accountant could have gained a working knowledge of the entire space in just a few months. Now the cryptocurrency space is a lot more complex with multiple layer 1 and layer 2 platforms, token ecosystems, NFTs, smart contracts, stablecoins, DeFi, DAOs, and DApps.

In conclusion, I believe that auditing services that team up cryptocurrency experts with fiat experts is a good idea. There is an enormous void in the industry but unfortunately, there doesn’t seem to be many startups that have expressed an interest in filling it. Companies that enter this space will likely face challenges such as finding sufficiently qualified experts that are respected in the community and building up a reputation (especially if they are starting from scratch) but none of these should be insurmountable.

How to use Vanitygen to generate custom addresses for different cryptocurrencies

Instead of having a Bitcoin address with random characters, Vanitygen allows you to generate addresses that contain meaningful strings. It does this by searching through thousands of random addresses every second and finding the ones that match your query. Longer strings require more processing power and take more time to find however so it’s useful to have a computer with beefy specs.

I use Vanitygen to generate cold storage paper wallets on an offline computer. Most people who have been in the Bitcoin community for a long time are probably quite familiar with Vanitygen. If you see an address that has a recognizable word in it, then chances are it was generated using Vanitygen or one of its forks. But did you know that Vanitygen can be used to generate vanity addresses for other cryptocurrencies too?

By default, Vanitygen will generate Bitcoin addresses that start with “1”. However, the program can be used to generate vanity addresses for coins whose addresses start with other characters by using the -X option followed by a decimal version number.

The following table provides examples of command line calls for Bitcoin and some popular (and not so popular) altcoins (the decimal version numbers are highlighted in bold):

CoinCommand line call
Bitcoin, Devcoin, Freicoin, Terracoin$ ./vanitygen -X 0 1 or $ ./vanitygen 1
Bitcoin (multi-signature)$ ./vanitygen -X 5 3
Novacoin$ ./vanitygen -X 8 4
Feathercoin$ ./vanitygen -X 14 6 or $ ./vanitygen -X 14 7
Anoncoin$ ./vanitygen -X 23 A
CHNCoin$ ./vanitygen -X 28 C
Digitalcoin, Dogecoin$ ./vanitygen -X 30 D
Franko$ ./vanitygen -X 35 F
Pesetacoin$ ./vanitygen -X 47 K or $ ./vanitygen -X 47 L
Litecoin$ ./vanitygen -X 48 L
Namecoin$ ./vanitygen -X 52 M or $ ./vanitygen -X 52 N
Peercoin$ ./vanitygen -X 55 P
Gridcoin$ ./vanitygen -X 62 R or $ ./vanitygen -X 62 S
Yacoin$ ./vanitygen -X 77 X or $ ./vanitygen -X 77 Y
BBQCoin$ ./vanitygen -X 85 b
Bitcoin (testnet)$ ./vanitygen -X 111 m or $ ./vanitygen -X 111 n
Ixcoin$ ./vanitygen -X 138 x

Some coins like Namecoin can start with two different letters (either “M” or “N”) while others like Litecoin can only start with one letter (“L”). For example, the following command line calls will generate Namecoin addresses starting with “NBoat” and “MyName” respectively:

$ ./vanitygen -X 52 NBoat
$ ./vanitygen -X 52 MyName

Some coins have other restrictions on letters. For example, BTC addresses can’t include the letters “l” (lowercase), “I”, and “O” (uppercase), LTC addresses only start from “LK” and end at “Li”, and DGC addresses must start with an uppercase “D” followed by either a digit or an uppercase letter.

The following table shows the leading symbols and address lengths for 160-bit hashes for each of the possible decimal version values:

Decimal versionLeading symbolAddress length
01<35
1Q-Z or a-k or m-o33
2o-z or 233 or 34
3234
42 or 334
5, 6334
73 or 434
8434
94 or 534
10, 11534
125 or 634
13634
146 or 734
15, 16734
177 or 834
18834
198 or 934
20, 21934
229 or A34
23A34
24A or B34
25, 26B34
27B or C34
28C34
29C or D34
30, 31D34
32D or E34
33E34
34E or F34
35, 36F34
37F or G34
38G34
39G or H34
40, 41H34
42H or J34
43J34
44J or K34
45, 46K34
47K or L34
48L34
49L or M34
50, 51M34
52M or N34
53N34
54N or P34
55, 56P34
57P or Q34
58Q34
59Q or R34
60, 61R34
62R or S34
63S34
64S or T34
65, 66T34
67T or U34
68U34
69U or V34
70, 71V34
72V or W34
73W34
74W or X34
75, 76X34
77X or Y34
78Y34
79Y or Z34
80, 81Z34
82Z or a34
83a34
84a or b34
85b34
86b or c34
87, 88c34
89c or d34
90d34
91d or e34
92, 93e34
94e or f34
95f34
96f or g34
97, 98g34
99g or h34
100h34
101h or i34
102, 103i34
104i or j34
105j34
106j or k34
107, 108k34
109k or m34
110m34
111m or n34
112, 113n34
114n or o34
115o34
116o or p34
117, 118p34
119p or q34
120q34
121q or r34
122, 123r34
124r or s34
125s34
126s or t34
127, 128t34
129t or u34
130u34
131u or v34
132, 133v34
134v or w34
135w34
136w or x34
137, 138x34
139x or y34
140y34
141y or z34
142, 143z34
144z or 234 or 35
145-255235

In order to find out the version number of a particular cryptocurrency, you should first ensure that the encoding used for keys and addresses in that cryptocurrency is base 58. Then you need to convert an example address to decimal (base 10). There are plenty of converters that can do this and you can even write your own in a programming language like Perl or Python. Here is an example of an online converter.

Enter an example address such as DDogepartyxxxxxxxxxxxxxxxxxxw1dfzr (a Dogecoin address) in the top text box, select the “decimal” radio box, and then click on the “decrypt” button. The result of the conversion should be displayed on the left sidebar (click to expand):

As you can see, the first number “30” which I have highlighted is the version number that corresponds to the base 58 encoding used by Dogecoin addresses.

Alternatively, if you are comfortable with code then you can look through the coin’s source code for a file named “base58.h” in the “src” directory. At around line 280 on most coins, there should be an assignment statement for the constant PUBKEY_ADDRESS. Its value should be the version number you need.

FreiExchange: A sanctuary for older and less visible altcoins

Screenshot of the FreiExchange main page as of July 2024.

I’ve been using an altcoin exchange called FreiExchange for a while in order to trade some obscure altcoins that can’t be found elsewhere. This is my review of them:

Founded in 2016 by a Norwegian dude, the website looks like something straight out of the late 90s but is surprisingly functional and responsive – using modern technologies like Flexbox. The color scheme is a pleasant dark grey with hints of red, green, and blue and is a welcome change from the usual corporate look of other exchanges as well as being easy on the eyes.

The name of the exchange comes from an old cryptocurrency called Freicoin. Released in 2012, Freicoin was unique among cryptocurrencies in that it discouraged hoarding and encouraged spending by causing a portion of one’s coins to slowly disappear over time. It was an interesting economic experiment that failed to attract significant investment for obvious reasons and is relatively unknown today. FreiExchange is the main exchange to buy and trade Freicoin, although the exchange features over 100 other pairs including popular coins like Litecoin, Dogecoin, and Monero.

Registering an account is a simple process that takes less than a minute. There are no KYC requirements which given that there are no fiat currencies being traded, is really the way things should be. Additionally, FreiExchange supports and encourages its users to enable two-factor authentication (2FA) to add an extra layer of security to their accounts. Both deposits and withdrawals were generally fast and easy with my longest withdrawal taking several hours.

Given that many of the coins on FreiExchange aren’t super popular, lack of liquidity and volume can be a real issue however. 24-hour trading volumes for most pairs tend to be quite low (<0.05 BTC) and spreads between buy and sell orders can also be a bit high at times.

FreiExchange also doesn’t support trading in units smaller than one satoshi. This can be an issue for coins with high supplies or low prices. FreiXLite is a sister exchange of FreiExchange that uses Litecoin instead of Bitcoin which helps mitigate the sub-satoshi issue but a quick look at their markets shows that their trading volume is very, very low.

A unique aspect of FreiExchange is its lack of trading or deposit fees. Instead, the exchange makes money solely through withdrawal fees. Bitcoin withdrawals also come with a 0.0006 BTC processing fee (about $35) and the minimum withdrawal limit of 0.0025 BTC is quite high (almost $150) so I wouldn’t recommend withdrawing Bitcoin too often unless the high costs don’t bother you. Fortunately, withdrawal fees and limits for other coins are far more reasonable.

Another unique aspect of FreiExchange is the option to invest in FreiXShares (FXS) as a way of making some passive income on the side. According to their official description, these aren’t securities and don’t represent ownership of the exchange. Instead, they entitle you to a cut of the profits of the exchange taken from users’ fees. Just out of fun, I decided to purchase 0.1 FXS (worth about $8.60) and sure enough, about $0.10 to $0.15 worth of dust spread across Bitcoin, Dogecoin, and Namecoin as well as a handful of coins with names like MotaCoin and Riecoin started appearing in my account every Sunday. FreiXShares can be traded on FreiExchange just like any altcoin but they aren’t a cryptocurrency and don’t have their own blockchain. Therefore, if FreiExchange goes kaput then any FXS tokens would cease to exist.

All in all, I’m pleased with FreiExchange. It’s not perfect but it does fulfill a unique role in the cryptocurrency space. According to their website, there are no listing fees for a coin to be added to the exchange and many of the coins featured would otherwise have no other place to trade, making it a much-needed sanctuary for older and less visible coins.

How to make $1 a day by staking Peercoin (or any other coin)

Passive income is one of my interests so putting some money into a proof-of-stake (PoS) cryptocurrency like Peercoin (PPC) and setting up a full node by letting the wallet run on my computer to collect staking rewards seemed like a very interesting idea.

As of July 3, 2024, Peercoin has a total market cap of just over $11.5 million with each coin costing $0.40. According to the official website, the ROI on staking Peercoin is 1% per year.

In order to make $1 a day by staking peercoins, I would need to be making $365 worth of peercoins a year. Since the annual ROI is 1%, I would need $36,500 worth of PPC. That works out to about 91,250 PPC at current prices which would also make my address the 59th richest PPC address on the blockchain.

And that’s not including the fact that like nearly all cryptocurrencies, the price of PPC is very volatile – e.g. it was trading at $0.60 per coin just two months ago. Because of this, small price shifts up or down can make the rewards from staking seem pretty irrelevant.

So there goes that idea…

From this little mental exercise, it seems that the equation to find out how much of a cryptocurrency (in $) needed to make $1 worth of it per day assuming an annual ROI x% is 365*(100/x). In the case with Peercoin, x = 1% so 365*(100/1) = $36,500. And of course, if you want to make e.g. $10 a day instead of $1 then you can just multiply the result by 10. Furthermore, neither the price per coin nor the market cap matter for this equation.

Here is a table that shows several PoS coins, their approximate average annual staking reward rate, and the amount of money that would need to be invested in order to make about $1 a day rounded to the nearest dollar (note that some of these coins might have other requirements for staking such as a minimum balance and coin age):

CoinAverage annual staking rateInitial investment needed to make $1 a day
PRIZM120%$304
Lindacoin70%$521
Bulwark43%$849
Phore37%$986
ION25.15%$1,451
HoboNickels25%$1,460
Stakenet20%$1,825
Decred13%$2,808
Blocknet12.9%$2,829
Neblio8%$4,563
Qtum7%$5,214
Emercoin6%$6,083
PIVX6%$6,083
Komodo5%$7,300
KuCoin Token5%$7,300
ReddCoin5%$7,300
Navcoin4%$9,125
Neo4%$9,125
Particl4%$9,125
Nexus3%$12,167
Electra2.5%$14,600
Waves2.1%$17,381
Stratis1.5%$24,333
BlackCoin1%$36,500
Peercoin1%$36,500
Colossuscoin0.5%$73,000
Nxt0.3%$121,667

Back in the mid 2010s, there was a coin called HyperStake that promised extremely high staking rewards of up to 750% per year. As long as the price of each coin remained the same, an initial investment of less than $50 would have yielded a $1 daily return! Most PoS coins like ReddCoin, Navcoin, Emercoin, and Neo have far less extreme returns of about 4 to 10% per year. However, the prices of many of these coins have fallen by over a third during the past couple of months which goes to show how easy it is for potential returns from staking to be completely overshadowed by price volatility.

If you know of any coins with good potential for staking then feel free to share them in the comments.

How to earn a passive income with Clams and Just-Dice.com

Screenshot of the Just-Dice.com main page as of July 2024.

Just-Dice.com is a cryptocurrency gambling site, or more specifically a dice site that has been running continuously since June 2013. That’s almost an eternity in the cryptocurrency space so you can feel safe knowing that they’re unlikely to run off with your coins. On Just-Dice.com, players can make bets on dice rolls and the site makes money by giving the house a slight edge of 1%. While gambling is very unlikely to provide a consistent profit in the long term, investing in the site’s bankroll for others to bet against means that the odds will be in your favor.

Originally, Just-Dice.com used bitcoins but due to concerns about government regulation, the site owner dooglus switched to an altcoin called Clams (CLAM). The initial distribution of Clams was quite interesting – a snapshot was taken of the Bitcoin, Litecoin, and Dogecoin blockchains on May 12, 2014 and all addresses containing non-dust amounts of BTC, LTC, or DOGE at that point in time were given 4.60545574 CLAM for free. The intention was to make the distribution of the coin as fair as possible. If you held coins during the snapshot, you can claim them directly from Just-Dice.com. Just type /dig in the chat and it will give you the directions. Clams can also be bought and sold for BTC on YoBit and FreiExchange.

If you decide to invest in the site’s bankroll, some weeks will be more profitable than others because big wins will reduce the site’s profitability and big losses will increase it. Larger investments will tend to produce greater profits and the appreciation or depreciation of the price of the Clams cryptocurrency itself will also affect your profit in dollar terms.

As of July 2, 2024, 1 CLAM is worth about $0.20. I have almost 60 CLAM invested in Just-Dice.com worth about $12 in total. In order to give you a good idea of what you can earn, I have decided to share a table of my earnings over the past 12 months (click to expand):

As you can see, I was able to turn 55 CLAM into almost 60 CLAM in 12 months. This represents an annual return of about 9%. Just-Dice.com will also stake your coins for you since Clams is a proof-of-stake (PoS) cryptocurrency similar to other PoS coins like Peercoin and Nxt. In order to pay its expenses and make some money for itself however, the site also charges a 10% commission on investment and staking profits when profits are divested or at the end of each week – whichever happens sooner.

I hope this post has been helpful to anyone interested in investing in cryptocurrency gambling sites to make some passive income on the side. If you have also invested in Just-Dice.com or a similar site and wish to share your own experience, feel free to post it in the comments.

Alexology now accepts Peercoin donations!

Peercoin was launched in 2012 as a more environmentally-friendly alternative to Bitcoin.

Bitcoin is great but there are concerns about its environmental impact. Even if you don’t care about the environment, traditional proof-of-work mining consumes a lot of energy that could be directed towards other uses. Therefore, I’ve decided to add a Peercoin (PPC) donation option to my blog. Peercoin is a newer cryptocurrency than Bitcoin that uses both proof-of-work to distribute the initial coins as well as an innovative consensus mechanism called proof-of-stake that requires far less energy to maintain because it doesn’t rely on power-hungry mining equipment to secure the blockchain.

On their official website, you can find more information about Peercoin, news and updates, discussion boards, wallet downloads, and links to exchanges that trade Peercoin.

If you are interested in helping support my work then feel free to donate some peercoins to the following address:

PALEXrBdE9eyEKZEJPBoEJwT3gUaK5NGEo

A regularly updated list of all donation methods accepted by this site can be found here.