Disclaimer: Don’t take any financial advice from one source only. Always research multiple opinions. The CEX.IO links in this article are affiliate links. If you prefer a non-affiliate link, look towards the bottom of the article. Finally, do not under any circumstance invest more money than you’re comfortable throwing out the window. You can lose everything overnight. don’t say I didn’t warn you!
I’ve previously written about CEX.IO, which is a new way of investing in mining power where you purchase Bitcoin mining hashrate as a commodity on an open market. In short, if you can’t be bothered to read the original article, this is a great way of getting started with Bitcoin mining without having to risk more than exactly the amount you need and with the added security that you can sell your hashrate back to the market whenever you want. Oh, and you start mining the moment you purchase the mining power.
A nice feature of Bitcoin mining is its ability to do merged mining with other coins. Without getting too technical, this means that Bitcoin miners can mine several other cryptocurrencies at the same time using the same mining hash rate. Effectively, you get multiple coins from the same mining effort.
One of the most widely known merged mining coin is Namecoin, or NMC. Namecoin is a cryptocurrency that is built to support anonymous domain (DNS) names. Right now, however, the use of Namecoin is limited and due to the fact that there is a huge amount of Namecoin in circulation, a lot of miners have spare NMC in their wallets.
Note: If you want to read my opinion on why we need multiple cryptocurrencies, here’s my take.
CEX.IO supports merged mining, so you get several merged mined coins as part of your output, currently Namecoin, Devcoin, and IXCoin. That is fine and all, but unless you can actually use those coins for something, they’re pretty much useless for anything but trading to other speculators for Bitcoin.
Now, however, CEX.IO has started selling Bitcoin mining power for NMC, so suddenly all those Namecoins can be turned into something useful. The GHS price is pretty much the same as it is for hashrate bought with Bitcoin, but because there’s huge amounts of Namecoins out there that is pretty much only used for trading with other cryptocurrencies, the ability to turn them into Bitcoin mining power at CEX.IO is pretty cool.
You can also trade your NMC in your CEX.IO account for BTC directly so you don’t need to transfer it to a different exchange, sell them for Bitcoin, and then transfer them back. The exchange rate hovers at around the same exchange rate as for other exchanges, but because the transaction is instant, you save significant time even if you can’t speculate in the difference between exchange rates.
I’m still hoping that CEX.IO will also support buying hashrate for the other two merged mined coins you get, though, because it would greatly increase the value of these coins to the cryptocurrency miners.
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