A Beginners Guide Buying, Selling, Using and Mining Golem:
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One of the fears of some blockchain advocates is that crypto coins will behave too much like commodities or fiat currencies. If cryptocurrencies act just like other assets, then what’s the point? And what’s more, if cryptocurrencies just imitate each other, what’s the need for such a large variety? These concerns keep blockchain companies on their toes. As more companies and their respective coins, or tokens, are developed, they must come up with a competitive edge that will distinguish them from other startups.
One increasingly popular option is to create tokens that can be used like other blockchain coins while at the same time unlocking certain features of a blockchain platform. In the case of Golem, the token (GNT) serves as a cryptocurrency as well as a means by which users can participate in the Golem Network--Golem’s decentralized sharing economy of computing power.
Golem first and foremost defined as a blockchain--an auditable, centralized ledger that contains a visible record of all transactions that have taken place on the platform. By definition, the ledger or database is decentralized--it is free from a ruling authority, allowing users to verify transactions independently of a governing body.
Golem is also a token that allows users to access keys functions of Golem’s proprietary computer-sharing platform. With tokens, Golem users can rent out other users’ computers--it is like Uber or Lyft for PCs.
Finally, Golem is a cryptocoin, one that can be traded and converted in the blockchain marketplace. Due to its unregulated nature, more information about Golem is confined to the internet. Those interested in Golem can find definitions and explanations on chat based forums like Reddit.
Though Golem’s ICO is over, potential buyers can still purchase GNT through an exchange. First users must create a wallet--a digital safe that stores cryptocurrency assets. Then, they must register an account with a blockchain exchange of their choosing and fund it with their traditional bank account. This can either be done with cash--a bank transfer--or with a credit card.
Next, users must purchase Bitcoin or Ethereum. (That’s right, there’s currently no way to convert fiat currency directly into GNT.) Thus potential buyers must first buy another cryptocurrency and then convert that cryptocurrency into Golem. Though the extra step seems like a hassle, it’s actually quick and easy.
To convert GNT back into USD, GBP, or any other fiat currency, users must first exchange their GNT for Bitcoin or Ethereum. The process is the exact opposite of buying Golem. After turning GNT into another cryptocurrency, that cryptocurrency can be sold and cashed out as a fiat currency. From there, the funds transfer to a bank account where the money can be withdrawn from an ATM.
Golem is unique from other digital coins because its primary use is for the Golem Network. Golem allows users to rent out cycles of other users’ computers--in essence a decentralized computer sharing operation. The user can be an owner of a single PC, or a large data center that wants to earn Golem tokens.
The decentralized platform allows renters and lenders to interact directly. Renters pay lenders in Golem tokens to lease computer power, while lenders receive Golem tokens for sharing their machines. With these tokens, lenders can create software products, develop businesses, and run microservices--all available on Golem’s decentralized blockchain.
But Golem’s use isn’t limited to its platform. Investors and traders can use the GNT in their wallets to make bets on the price of the cryptocurrency and even play Golem poker. Like many crypto coins, GNT has grown rapidly in value, even after pulling back from its recent peak over the summer. Those that have accumulated GNT can use their newly earned coins to hedge against exchange rate changes--cryptocurrencies, as decentralized coins, are free from central bank monetary policy.
Golem mining is a bit different than mining other cryptocurrencies. In short, GNT can’t be mined directly, according to Reddit forums. However, there are two options that form as substitute “mining”.
First, miners can join a multipool and mine blockchains the traditional way. However, users must be sure that the pool outputs GNT. This is similar to purchasing and selling GNT as described above. It can’t be done directly, but they are roundabout ways of “mining” Golem.
Another option is to run computing nodes on Golem’s network. In this scenario, “miners” are performing computing tasks that receive from requesters on Golem’s platform. If a node completes a request, the user is rewarded in GNT for their work. On the flip side, users can pay others for tasks they send them.
Overall, the big picture is similar to traditional blockchain mining. Though Golem users won’t use a mining calculator to determine profitability, they must still consider the outcomes and rewards of particular tasks. If a task isn’t worth the computing required, they can always find other requests.
In order to receive GNT for mining, users must join a pool that pays out GNT. In this sense, miners need to act as if they were mining any other coin. Miners must download software that links the user to the target platform. Then they need to download mining software and make sure their machine has the necessary GPU or CPU requirements. Next, miners must choose whether to mine solo or in a pool. Finally, calculators can be used to determine profitability. Though GNT’s market cap won’t necessarily be affected through this “mining” process, users can still receive compensation for their work.
The price appreciation of cryptocurrencies like Golem has resulted in questions of cryptocurrencies’ scalability. Even a brief review of GNT’s price chart and platform will show large increases and decreases in price, along with fluctuations in trading volume. As Golem transactions increase in number, miners must come up with solutions that will allow the platform to expand. Thankfully, this is one of Golem’s huge advantages over its competitors. Golem’s peer-to-peer architecture guarantees scalability, allowing the platform to grow organically and process more transactions as volume and interest increases.
Golem tokens are remarkably flexible crypto coins that offer a wide range of uses in the blockchain sphere. Their use as a platform token as well as an investable digital coin gives them a leg up on many of their competitors that only function as cryptocurrencies. Golem’s blockchain platform provides a wise and practical investment option--not only for capital appreciation, but for immediate use as well.