Answering your cryptocurrency mining and colocation questions
What is cryptocurrency and how does mining work?
Cryptocurrency is a computer-generated monetary system. It’s created by specialized, powerful computers called “miners,” which compete mathematically to secure “transactions.” The transactions are bundled into a “block,” which the cryptocurrency miner digitally verifies to assure the validity of all transactions. The miner computes a “cryptographic hash,” a computerized method to ensure the block’s validity and prevent invalid block construction. Blocks are accumulated and accounted for in the blockchain, functioning as digital ledgers. Miners are rewarded for their transactions with a set amount of cryptocurrency.
What are the long-term projections for cryptocurrency?
The cryptocurrency market is projected to grow ten-fold by 2025. This decentralized form of money does not require a processor like a bank or credit card company (and their fees), offering major benefits over fiat currency or credit systems. Values may fluctuate, but they have continued to generate excellent value returns.
What are the advantages of cryptocurrency over fiat money or a credit card?
Because the cryptocurrency system is a “peer-to-peer” transaction, there is no middle institution involved, like a bank or credit card company, which means no third-party fees. You’re also assured of privacy since there is no way for the seller and purchaser to identify one another. And you aren’t charged any account fee just for keeping your currency in your digital ledger.
What cryptocurrencies can I mine with Compute North's colocation services?
Our facilities are built specifically for cryptocurrency mining and can handle virtually any coin. Initially, we see the potential for the following: Bitcoin, Litecoin, Zcash, Ethereum, Dash, and Monero (XMR). However, we are constantly evaluating other coins, and you can mine virtually any cryptocurrency with us.
What are the advantages of colocation over cloud mining or running my own equipment?
Colocation is by far the most cost-competitive way to mine cryptocurrency. The increasing complexity of mining operations requires far too much power for at-home mining to be effective. Cloud mining requires high upfront costs that may never be returned. Colocation gives you the best opportunity to enter the market and scale your operations quickly and profitably.
How does Compute North help me collect, trade, and spend cryptocurrency?
Compute North provides you with a digital ledger, which can reside with your smartphone, tablet or computer. Any results are directly deposited into your ledger. More and more retailers are accepting cryptocurrency, and making a purchase is as a simple as an online payment, as you would with a credit card, but without any fees involved. There are also online transaction centers where you can cash cryptocurrencies in for U.S. currency.
What type of mining equipment can Compute North operate?
Compute North partners with the most well-known brands including Bitmain, AvalonMiner, DragonMint, PandaMiner, Innosilicon, GPU rigs, and more. Our facilities are built with the power and resources to handle almost any mining equipment.
How does Compute North economize on energy consumption?
Crypto mining computers require significant energy. Compute North has established facilities where energy costs are low. We also partner with renewable energy companies to conserve energy and lower costs. Our data centers are in geographic locations where the innovative use of ambient cooling technologies further reduce costs for our mining operations.
Where are Compute North's facilities?
Compute North is headquartered in Minneapolis, MN, and owns colocation facilities in strategic locations around the U.S. and other parts of the world. For security purposes, we don’t publicly reveal the locations of our facilities.
How much does it cost for colocation services?
Our cryptocurrency mining colocation services start at just 10 cents per kilowatt hour. We can give you an exact quote based on the types and quantity of equipment you plan to colocate with us.
What is proof-of-work?
Proof of work is a protocol with the main objective of deterring cyber-attacks. In order for a miner to have a block accepted by the network, it must complete a proof-of-work.
What is cryptocurrency's legal status?
Cryptocurrency is legal in the U.S., though other countries like Russia and Argentina have restrictions on foreign currencies. The United States Treasury Department has issued non-binding guidance on how it perceives certain cryptocurrency activities. FinCEN (Financial Crimes Enforcement Network) does not consider cryptocurrency “money transmitters,” as it relates to money laundering and terrorist financing.
Is cryptocurrency taxed?
Different jurisdictions have different regulations regarding payrolls, income, sales, capital gains and other aspects involving cryptocurrency. Investors are responsible for reporting and dealing with taxes in their local jurisdiction.