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Why doesn’t pledge mining require a mining machine (Is pledge mining a financial pyramid)?

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Why doesn\’t pledge mining require a mining machine? In the smart contracts runn

Why doesnt pledge mining require a mining machine (Is pledge mining a financial pyramid)?

Why doesn’t pledge mining require a mining machine? In the smart contracts running on the Ethereum network, pledge mining allows users to transfer assets (such as ETH) associated with them to each other.

To achieve this goal, the Ethereum team developed a service called “StakingPool” to solve this problem: pledge mining does not support any type of wallet address and does not require miners or other third-party participants to join the system; the pledge pool only allows holders to vote for which tokens they want to receive rewards.

Why use a mining machine? Because pledge mining is an important application of blockchain technology, it makes cryptocurrencies such as Bitcoin and Ethereum Classic more secure and accessible, and with more mainstream investors starting to accept this field, this value may rise to a new height. (AMBCrypto)

For ordinary people, pledge mining is not suitable for everyone (including small payments) because pledge mining does not require the purchase of hardware devices. However, as representatives of digital currency trading platforms, exchanges and other institutions will provide better services—from trading platforms to wallets. Therefore, “pledge mining” is also very suitable for most individual or corporate clients.

So what is pledge mining? Simply put, pledge mining means that users can earn a certain amount of funds by depositing certain assets (such as BTC, ETH, etc.) into the pledge mining protocol. Pledge mining is so attractive because many projects currently on the market adopt a centralized management method, which means that many projects cannot operate directly through centralized entities, and even their own companies can control the operation of these companies. “Decentralized storage”, that is, “distributed storage + peer-to-peer transmission.” What are the characteristics of pledge mining? First, pledge mining does not require mining machines.

Second, pledge mining does not require complex software and hardware configuration. Only simple operations are required to generate a block and upload it to the node. In addition, there is a benefit that you don’t have to worry about key leakage and other issues.

1. If your account loses its password, you can unlock it by setting a cold and hot separator or a separate computer, and then restart it.

2. If you have multiple hard disk spaces and each hard disk has different sizes, you can adjust the difficulty values freely according to different time periods, which can ensure the stability of the system and improve security. But if there are multiple servers, you cannot have complete control of ownership and resources.

3. Even if you have multiple independent data sets, you can view all the information at any time to ensure that you will never be troubled by hacker attacks or fraud.

Is pledge mining a financial pyramid?

Editor’s note: This article comes from 8btc.com (ID: bitcoin8btc), author: Kyle, authorized by Planet Daily.

“Pledge mining” is a term that has been widely circulated in the currency circle, which means that users can obtain token incentives by pledging certain assets. This mechanism is similar to traditional centralized trading platforms, which require cryptocurrencies to be deposited in an exchange for buying and selling. If it is used as a tool for financial pyramids, then this is actually a problematic concept. Terms such as “liquidity provider” and “lending company” often appear in the currency circle, but superficially, they do not have any physical support, or even a “wallet”. They only exist with code and data as support.”

So what exactly is pledge mining? Simply put, it means putting digital currency on the Ethereum chain or pledging it in smart contracts to earn interest.

According to data from CoinMarketCap, four out of the top five pledge mining projects in the market belong to this category. For example, Compound, MakerDAO, and AAVE, among them, COMP has ranked fourth; followed by CurveFinance (CRV) and Synthetix, ranking fifth and sixth, respectively.

Although pledge mining projects are not recognized by regulatory agencies, some investors still choose to invest in the tokens of these projects. For example, the market value of SNX has just exceeded 1 billion US dollars, so its price has risen by more than 200%; and YFI has a market value of nearly 300,000 US dollars. (Image source: Decrypt)

Another particularly noteworthy one is YFI. YFI claims to be a synthetic asset issuance protocol based on Ethereum. In just over a year before YFI, its token sales increased to more than 100 million US dollars and achieved a return on investment of more than 40 times in a nine-month period.

Of course, many people believe that the value of YFI lies in its community governance structure. But in fact, YFI has never been banned like other staking projects, so it is still a new way to play. Why do people pay attention to the distribution of its tokens? Because many people know that YFI is a very niche and unstable market, but due to its different design concepts (such as “dividends + returns”), its token quantity is relatively small and supply is limited. And the price of YFI is also declining.

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