Top Cryptocurrencies That Can’t be Mined
Everyone involved in the cryptocurrency ecosystem is well aware of how bitcoin uses a proof-of-work algorithm. New coins are generated through the mining process, which becomes more difficult over time. However, not all cryptocurrencies in existence can be mined. Below are some of the more popular altcoins that offer no mining incentive, yet are still quite valuable.
The Ripple network works in a rather different manner compared to Bitcoin or even Ethereum. Positioning itself as the global settlement network, Ripple is not your average cryptocurrency by any means. Obtaining Ripple can only be done by buying the currency from various exchanges, as there is no option to generate XRP by mining. A total of 100 billion XRP has been created once the project launched. A few coins are destroyed every time a transaction takes place.
NXT is a popular altcoin that cannot be mined in the traditional sense. It is possible for users to forge new coins, but it doesn’t require dedicated hardware to do so. Instead, users need to leave their wallet open – assuming it contains a balance – and they will earn small amounts of interest in the process. NXT runs a proof-of-stake algorithm, which makes mining in the traditional way obsolete.
Mining WAVES is entirely out of the question as well, since the project makes use of a delegated and leased proof-of-stake algorithm. The entire supply of WAVES tokens was premined, although users will be able to “mine” tokens in the future using a computer or mobile device. However, the entire token supply will never surpass the 100 million mark. All of the available tokens were issued during the WAVES pre-sale and the team’s bounty program.
When Factom was first launched, there was a lot of excitement regarding this project. Considering how the project runs on top of the bitcoin blockchain, it cannot be labeled as an altcoin per se. Factom is something entirely different, although the project’s currency – called factoids – can’t be mined directly. One could call this system “proof of usage”, as users who hold factoids can convert them into Entry Credits to be used within applications using the Factom blockchain.
The network does not support mining, as a Factoid Software Sale was organized once the project was announced. Investors who bought Factoids can either sell them on an exchange or keep them as a tool to buy Entry Credits. It is also possible to earn Factoids, by sharing computing power and resources with the network. It is quite an intriguing project that anchors data into the bitcoin blockchain. In fact, Bitcoin’s proof-of-work algorithm ensures all of the data processed by Factom is safe from tampering.
MaidSafe is another one of these projects that it not allow users to mine the native currency. All of the available tokens were issued two years ago, and no more tokens will be generated moving forward. This also makes it somewhat impossible to generate Safecoin right now, although it will be possible to mine the currency in the future. Investors hold 10% of the total supply, with 90% waiting to be rewarded to miners providing resources securing the system. However, Safecoin is not mined with graphic cards, but rather by users dedicating hard drive space to the project.