It was once possible to mine Bitcoin directly from your laptop or PC’s CPU/GPU. As competition has heated up in the Bitcoin mining space it is now no longer viable to do so. Today, Bitcoin mining is done by computers specifically designed for the purpose. But you can still earn Bitcoin from your computer via mining. Honeyminer allows you to mine an easier to mine cryptocurrency and then they exchange it for Bitcoin for you!

What Will I Earn?

The way the program works is it runs in the background mining a cryptocurrency like Monero using your computer’s CPU or GPU. It then converts it to Bitcoin for you. If you have a new computer with a good GPU you will earn more than if you have an older laptop and can only use your CPU.

Either way though, you won’t earn a ton of money. It’s more about being part of the process of mining cryptocurrencies than earning a lot of money. If Bitcoin goes up in value as much as it has done in the past however, the small amount of money you make could become a large sum one day.

Are there fees?

Honeyminer is free to use. But they do take some of the mined currency in fees. At the time of writing it is 8% for 1 GPU and for 2 GPUs or more the fee is 2.5%. When you withdraw funds you will also need to pay Bitcoin’s network fee, this is not charged by Honeyminer but is the fee charged to transact on the Bitcoin network. The network fee is deducted from your withdrawal. Also remember that extra use of your computers CPU/GPU will mean that you use more electricity.

Honeyminer Referral Code

If you use a Honeyminer Referral Code when signing up you will get a small amount of Bitcoin fore free (1,000 Satoshis). Using a referral code also helps the person that refers you. You can try and find someone you know with a referral code or use mine. My referral code is 5c3dq to get 1,000 Satoshis free. Click here to use it.

Are the better options than Honeyminer?

If you are technically inclined you may prefer to mine various cryptocurrencies yourself as part of a pool. You would then be in control of when or if you convert them to Bitcoin. You may be able to earn more and pay a lower fee this way as well. But if you are a beginner, Honeyminer offers an easy way to get involved. If you are looking to make a fortune, this isn’t for you. If you want to get a little Bitcoin and be part of the fun of the cryptocurrency revolution, why not give it a go?

In this series of articles I will be taking complex subjects and simplifying them. These are subjects that are impactful enough that everyone needs to know something about them, even if they don’t want to learn the complex details. You don’t need to know exactly how electricity works, but you do need to know how to switch on a light!

In this article we are going to look at DeFi…

What is Decentralised Finance?

Bitcoin is decentralised money. DeFi is the rest of the financial system decentralised. If you haven’t read my article on Bitcoin yet, I would advice reading that first.

DeFi allows people to interact financially without there needing to be a bank or other third-party acting as a middleman. It does this via computer code called smart contracts which are shared across computers all over the world via blockchains. Think of this as similar to how the internet is not controlled by any specific entity.

There are blockchains that are not set up for these smart contracts such as Bitcoin and ones that are such as Ethereum.

What are the current applications of DeFi?

There are many applications of this technology. Here are three interesting examples:

1. Loans

With Bitcoin it is possible to send and receive transactions. With DeFi it is possible to do more complex things such as lend and borrow money safely without any middleman. This is achieved by the smart contract taking the borrowers cryptocurrency as collateral. The lender can then be assured that they will be paid back. Lending your cryptocurrency in this way is becoming an increasingly popular way for investors to earn interest on their holdings.

Projects offering this service include Compound and Dharma.

2. Automated Crypto Swapping

Rather than investors trusting their cryptocurrency with an exchange when wanting to move their money from one cryptocurrency to another, DeFi allows tokens to be swapped via a smart contract.

A current example of this is Uniswap which allows cryptocurrency tokens to be swapped without the need to send them to an exchange.

3. No Lose Lottery

PoolTogether allows users to pool their cryptocurrency which is then lent out via a smart contract. The interest from the loan is then collected and send to one lucky winner each month. Everyone gets their initial deposits back in full. While lotteries are normally not a sensible place to put your money, one where the ticket price is returned to you is certainly a lot less risky!

What does the future hold for Decentralised Finance?

DeFi is extremely new so it is hard to tell exactly how it will be used in the future. That said, it has the potential to change the world. When there is no longer a need for middlemen in the financial industry a world of choice normally reserved for the wealthy will open up to ordinary people.

Increased access to the financial world will mean more choice and more competition, leading to better products and better prices. DeFi is definitely worth keeping an eye on.

Bitcoin came out of the 2008 financial crisis and the choice of headline was, seemingly, no accident.

Although no one knows who Satoshi Nakamoto really is, his writings reveal a little about his feelings on the financial system. For example, in one forum post he said of banks:

“Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.”

Bitcoin open source implementation of P2P currency 2009-02-11 22:27:00 UTC

In another forum post he talks about central banking saying:

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”

Bitcoin open source implementation of P2P currency 2009-02-11 22:27:00 UTC

Bitcoin, it appears, was created as an alternative to the fiat currency system of continuous currency printing. With a fixed supply, Bitcoin comes into existence in reducing amounts over time until it reaches 21 million coins. Then it stops. It is in sharp contrast to Government created currency like dollars and pounds which seem to be printed at greater amounts over time and have no fixed cap.

Satoshi and the community of coders around him leaned heavily libertarian. He said of Bitcoin in an email:

“It’s very attractive to the libertarian viewpoint if we can explain it properly. I’m better with code than with words though.”

Bitcoin P2P e-cash paper 2008-11-14 18:55:35 UTC

The libertarian world-view very much blames the central banks currency printing for the boom and bust cycles of depression and expansion we see today. Hence the importance to Nakamoto of the headline “[c]hancellor on brink of second bailout for banks”.

Since the creation of Bitcoin, until recently, we have been in a boom period. But Bitcoin was created as an alternative currency which really comes into its own in the busts. In busts, central banks tend to go into massive currency printing drives, thereby reducing the value of their currency. This is a perfect environment for a currency with a limited supply such as Bitcoin.

As a number of factors were coming to a head, the COVID-19 crisis occurred, almost certainly bringing a new long-term bust cycle into being. This will be a test for Bitcoin. Will it act as a store of value that protects people from massive money printing as Satoshi Nakamoto cryptically predicted? Will Bitcoin be the foremost asset of the coming collapse?

Bitcoin has done very well in the boom cycle. It has risen out of nowhere to become a household name, traded on futures exchanges and discussed by global governments. Its limited supply should allow it to prosper during the bust cycle too. But perhaps in a recession people will prefer more familiar assets with less perceived risk. That’s why this Time’s headline is so important, it represents a key question about Bitcoin and the future of finance: will Bitcoin thrive, as it is meant to, during a financial crisis?

It’s a question I suspect we will soon have an answer to.

You can check out Measuring Worth for a cool (scary) calculator that shows you how currency loses value over time.

The good news is there are ways to get inflation beating interest rates. Each method has it’s pros and cons and we will look at 3 of the best options.

#1. Cryptocurrency Lending

Don’t worry, you don’t have to buy any Bitcoin for this one. There are companies that lend out cash to businesses secured by their cryptocurrency holdings. They require fiat currency (pounds, dollars, etc) to lend out to these businesses. If you lend these businesses your cash you can earn 8% on your money. A company called Nexo will accept your Pounds and Euros, while Blockfi will accept your dollars.

If you are interested in cryptocurrency at all then the good thing about Blockfi is they offer the option to have your interest paid in Bitcoin or Ether! This is a great way to get your feet wet in crypto without having to buy any directly.

The potential risks with this method is the fact that unlike a bank your money is not backed by deposit protection schemes. Do your research into any company you invest with and understand their risk management strategies to keep your money safe.

#2. Peer-To-Peer Lending

Peer-to-peer lending is where you loan money to businesses seeking finance. There are a number of platforms in the UK that you can use to lend out your cash. It is possible to earn around 8-10% on your money with this option. Most platforms require you to select which loans to fund and in what amounts (though there are automated options as well).

The potential risk with this option is that the businesses default on their loans. You can mitigate this by diversifying the businesses you lend to and ensuring you only lend a small portion of your savings to each. You should also remember that it is not usually possible to withdraw your capital during the term of the loan so make sure to only invest your long-term savings.

#3. Lending To Property Investors

If you have savings of £100,000 or more you could consider lending to a property investor. Often, investors need cash to purchase properties that they will refurbish and refinance. You can lend at 8-12% (or sometimes more) and have your loan secured against the property. The investor will normally refinance the property in 6-18 months and return your interest and capital. If they can’t refinance for any reason they will keep paying you the agreed interest rate until they can pay back your capital.

The potential risk with this method is that the investor defaults on the loan. You can mitigate the risk by securing the loan against the property and ensuring the loan-to-value (the amount you lend compared to the market value of the property) isn’t too high.

Remember...

Always do your research before parting with your cash. Be careful and understand the risks associated with any investment.