I have written an article before, briefly introducing the POW mining output and POS mining output of ALEO. I also wrote an article not recommending ordinary retail players to participate in ALEO's POW mining. Today I will explain in detail why I recommend participating in POS mining.
The initial supply of ALEO is 1.5 billion. I believe everyone who knows ALEO should know this. 25% of the 1.5 billion can be disposed of by the project side, which is basically the liquidity of the listing. The rest is all institutions and funds. Meetings or project parties, but regardless of whether it is an institution, foundation, project party, etc., their coins must be locked for one year. That is to say, once the currency is online, it cannot be sold directly and immediately. It is locked. Yes, it will be locked for 1 year upon launch, and will be released on an average monthly basis over 2 years after 1 year.
In other words, if you go to the market to buy private placement coins now, can you buy them? Of course you can’t. No one in the market can get private placement coins because all the coins are locked.
All ALEO mining is additional issuance, which is the same as Ethereum mining. The mined coins are additional issuance. In the first year, 290 million coins were mined. Many people say that these 290 million coins are all the income from machine mining. In fact, it is not. Half of these 290 million coins are for equipment mining and half for pledge mining. In other words, equipment mining accounts for 145 million, pledge mining accounts for 145 million, and there are an additional 75 million coins for pledge mining.
Therefore, the output of the first year of the POS mining is 220 million coins, which means that the output of the equipment mining in the first year is only 145 million coins, which is far less than the 220 million coins of POS. Moreover, the 290 million coins decrease by 10% every year, which is 29 million coins, and will return to 0 after 10 years, which means that machine mining (POW) will no longer exist after 10 years. On the contrary, the additional 75 million coins of POS mining will always exist, and will not decrease by even 1, and will still exist after 10 years. As long as the ALEO chain is still there, the additional 75 million coins will always exist, which means that after 10 years, ALEO will only have POS mining, and no POW machine mining.
In addition, I have written an article before, in which I do not recommend ordinary retail players to participate in POW equipment mining. If you have not read it, I suggest you take a look. Today, I will add one more reason why I do not recommend ordinary retail players to participate in POW equipment mining.
ALEO's device mining is permissionless mining, which means that as long as you have a device, you can mine. The device is not online, and as long as a new device is added, everyone's mining output will be reduced accordingly.
ALEO is very popular, really popular, very popular. Equipment mining can easily lead to an arms race. Once an arms race is formed, professionals will easily lose money, not to mention ordinary players who know nothing.
Let me give you an example here. The price of Bitcoin has increased a lot in the past six months, but the price of Bitcoin mining machines has fallen a lot. Many people who hoarded second-hand Bitcoin mining machines have lost money instead. I believe that many people do not know this and cannot understand why the price of Bitcoin has increased, but the price of Bitcoin mining machines has fallen?
Shouldn't the price of mining machines increase as Bitcoin increases? In theory, this is the case, but why did the price of mining machines fall when Bitcoin increased? This is because institutions such as Bitmain are frantically mining and deploying mining machines, which has led to a crazy increase in the computing power of the entire network. After the crazy increase in computing power, the output of coins mined by mining machines has decreased, and the price of mining machines has naturally decreased, becoming less valuable.
So this year we have seen a strange sight, that is, the price of Bitcoin has skyrocketed, while the price of Bitcoin mining machines has plummeted. The mining machines here I am talking about are second-hand, I don’t know about new ones.
This is the situation. Because the computing power has grown very rapidly, the profits of mining equipment have decreased after the price of Bitcoin has risen.
ALEO is extremely hot, but what I am most worried about is an arms race. There is no upper limit on the number of devices that can be brought in, so it will form an involution, and there will be no profit. So I don’t recommend anyone to go for it.
For those who don't understand, I don't recommend you to dig for the first mine. Don't listen to the temptation of others' first mine. If the first mine's profit is really that great, others have already dug it by themselves. They still tell you that it will increase competition and reduce the dividends of the first mine. We should have an objective analysis of a thing and not be tempted by interests to make some unnecessary and blind investments.
There is also what I mentioned in my previous article, that is, equipment that costs only one or eight thousand yuan is sold for three or four hundred thousand yuan. After you buy it, you still want to make your money back. It is impossible to make your money back.
So if you don't understand, don't participate. If you don't understand, and still want to get rich, it's impossible. If you don't understand, don't participate. If you don't understand, and still want to get rich, it's a daydream. You don't understand, others use the reason of getting rich to attract you, others just want to harvest you, it's that simple.
ALEO's POW equipment mining does not require permission, and anyone with mining equipment can mine.
ALEO has 10 POS nodes, with 1 node for every 10 million coins. It is a permissioned intervention, and ALEO coins can be staked under the nodes to participate in POS mining and generate stake-staking income.
Therefore, ordinary retail investors who do not understand the equipment but still want to participate in ALEO mining can participate in ALEO's POS mining after ALEO goes online when the coin price is right. The output of POS mining is higher than that of POW mining, and the gap is getting bigger and bigger with the passage of time. In 10 years, there will only be POS mining, and no POW mining.
Moreover, there is an upper limit on the number of coins. Coins cannot be created out of thin air, but equipment is relatively unlimited. Therefore, if you want to participate in mining, just buy coins after ALEO goes online and when the price is right, and participate in ALEO's POS mining.