As promised I am writing the next post on my Crypto Currency adventure. When I last wrote I mentioned some sites for trading and to setup accounts on there. I wanted to preface this post by saying that I have since changed what USD to BTC exchange I am using as well as the coin exchange that I am using.
For my exchange to purchase and sell BitCoins I am using CoinBase. Their verification process and speed of the transactions is top notch. Their site is easy to use and the fees are low. They are also based in California. Everything I have found on them checks out and I can say with confidence that they are very legitimate and there is a very low risk of shady things happening with them.
As for my exchange to trade AltCoins (Doge, Lite, Feather, Spots, etc) I was using Cryptsy but their site is not only VERY, VERY slow but their deposits take hours upon hours to complete. There is also a lot of negative and shady stories from users there that leave plenty of doubt on their legitimacy.
That being said for my current exchange for trading AltCoins I am using Coins-E. Their deposits are very quick and their site is simple and fast. I did not use BTC-E as their selection of AltCoins was lacking compared to Coins-E.
EDIT (1-8-14): Coins-E forked their DOGE blockchain and I lost over 130K DOGE. I am now using CoinedUp. See here: http://www.timothyhoogland.com/2014/01/much-loss-very-sad-such-lacking-support-goodbye-coins-e-hello-coinedup/
Setting up Your Wallet
Before we go any further you will need to download, install, and sync the wallet for the coin(s) that you want to use. I am talking about mining and using DogeCoin. Hit the DogeCoin website and download the wallet. Once it is installed go ahead and run it and let it sync (this takes about 1-2 hours depending on the speed of your internet and PC). Once it is synced I want you to click on the Receive tab and copy the address that is listed there, it will be a long string of letters and numbers. Save that for later.
All the AltCoins that I have been mining are based on the Scrypt cryptography algorithm. BitCoin and BitCoin based coins are all based on the SHA-256 cryptography algorithm. The supposed benefit of the Scrypt type algorithm is that memory is required for the computations and because of that this makes creating ASIC miners difficult. This means that these Scrypt based coins should remain profitable to mine on traditional hardware for a much longer time.
When someone mines coins this means that their computer hardware is being used to do the calculations of the shares of the new block(s) that make up the blockchain of the currency that is being mined. There are 2 main ways to mine, in a pool and solo. I am going over the Pool type mining here today.
To get started with the pool mining you need to decide what coins you are going to mine and then locate a pool. I have mined LiteCoins, FeatherCoins, Spots, and DogeCoins over the past 2 weeks. So far DogeCoins are the most profitable to mine and they are in high demand. There have been a few pools that I have mined in and I actually have lost about 50K coins due to a scam over at scryptpools.com. They are selling peoples mined coins and then up and disappearing. I have switched over to RapidHash pool and they are legit. I found them through the Reddit DogeCoin sub-reddit (which I recommend you check out).
Once you are registered with the pool you will need to setup a worker for each system that you will mine with. You can click the Getting Started link on the left of the pool page and they have a quick start guide for you. They show the command line version of CGMiner (AMD) or CUDAMiner (NVIDIA) and I use that but with the GUIMiner front end. I recommend this as it’s easier to get setup and store multiple profiles for each pool and/or coin that you mine.
Once you get the mining program all setup you can start it and if it is setup correctly you should see how many khashes you are mining at. All you have to do now is enter that address you copied from the wallet earlier and paste it into your deposit address under the settings on the RapidHash website. Make sure you set an auto payout number or you will have to manually pay your coins out.
Now you wait. Just let your miners run and watch the coins come in. You do not need to leave your wallet open for the coins to be deposited into there, next time you open the wallet it will sync with the network and they will show in your wallet.
If you want to trade your DogeCoins or whatever other coin you mine then send them over to your
Coins-E CoinedUp account and trade away. Do note that as of right now the only way to get your coins to USD is to trade them for BitCoins and then transfer the BitCoins from Coins-E CoinedUp to CoinBase and sell them there. CoinBase will then sell them for you and deposit the money in your account within 3-5 business days.
What if I can’t mine?
There are a few options. You can buy DogeCoins directly from people like myself that are selling them (click here, yes shameless plug) or you will have to buy BitCoins from CoinBase and then send them over to
Coins-E CoinedUp and trade for DogeCoins or whatever other coins you want to try your hand at. If you want to see what coins are the most profitable check out the CoinWarz Mining Charts. Just plugin your hashrate, watts, and power usage. It will give you a good idea of how much to expect and if it’s even worth it to try out.
If you have any questions please let me know. I am having a fun time mining and selling the wallets. If it doesn’t take off as well as I hope it will still be a fun experience and the DogeCoin community is a fun place. If you are going to create accounts with CoinBase and/or
Coins-E CoinedUp please use my referral links that are in this post, I would really appreciate it!