Growing Wealth Archives | Page 163 of 224

Sep

2022

Is It Possible to Negotiate a Higher Savings Interest Rate?

By Jacqueline DeMarco | Budgeting & Goals, Growing Wealth, money | Comments Off

It’s a simple equation: The higher the interest rate is on a savings account, the more money you will earn on your savings. And who wouldn’t want to see their savings grow faster?

In your quest to find the highest rate possible, you may wonder, “Can you negotiate interest rates on savings accounts?” While it is indeed possible to talk your way to a higher interest rate, there’s no guarantee that all banks will grant this.

To stack the deck in your favor, keep reading to gain insight and learn some strategies, including:

• What is the current national average for savings account interest rates?

• Can you negotiate savings account interest rates?

• How can you get a better rate on savings accounts?

What Is the Current Average National Savings Rate for 2022?

Savings rates ebb and flow over time and specifically throughout the year. They can vary greatly based on market conditions.
According to a Bankrate survey, the national average for interest rates on savings accounts was 0.13% at the end of the summer in 2022. While that is the average, you will likely find a great deal of variation in the numbers, possibly due to how banks calculate interest on savings accounts.

The type of financial institution that holds your money can also impact the rate offered. For instance, when looking at online banks vs. traditional banks, digital banks typically pay a higher rate than their bricks-and-mortar counterparts. Since they aren’t spending on building and staffing bank branches, they can pass the savings on to their customers. As of August 2022, several online banks were offering in the 1.7% to 2% range of interest on savings accounts.

Can I Negotiate a Higher Savings Rate?

The answer to “Can you negotiate savings interest rates?” is: It’s possible. There’s no guarantee a bank will agree to raise your interest rate, but they might. That being said, it can be easier to convince a bank to raise their interest rates for an individual if you have a longstanding relationship with the bank.

Typically, the key to making this request be approved is to be in good standing with the bank. For example, if you have held a business or personal loan or mortgage at a bank for many years and reliably made on-time payments to that loan, the bank may be willing to increase your personal checking and savings account interest rates to hold onto a good customer (that means you).

If you have bank accounts at a variety of different banks, you may find that a banker is willing to offer you a better interest rate if you agree to move all of your account balances to this single bank.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!

Tips for Negotiating a Higher Savings Rate With Your Bank

The answer to whether you can negotiate interest rates on a savings account will depend on two factors: how you approach this request and how receptive the bank is. While there’s no guarantee of success when asking for a higher interest rate with a bank, these tips can help improve your odds of getting that rate boost and helping your money grow faster.

Contact Local Banks to Compare Rates With Your Current Bank

Before you start the negotiation process, do some research. Take a look at what types of interest rates other banks (including local small banks) and credit unions are offering to see if any of those rates are higher than your current one.

This research serves two purposes. Firstly, you can take this research to your bank and ask them to match their competitors or even exceed that rate. If the bank says no, then you have already done the legwork of finding a bank that can offer you superior rates. You can then decide whether you want to switch banks so you can earn more money on your savings.

Review Account History With Your Bank

As briefly noted earlier, the better someone’s history is with a bank, the more likely the financial institution will be to negotiate a higher interest rate. Consider your account history and whether you have made on-time payments to loans and credit cards issued by the bank, not overdrafted when using your debit card, and kept your account balance at the required minimum amount.

If you have had a troubled history with your bank, you might be better off opening an account at another bank that offers a higher interest rate and starting fresh.

Ask the Bank for a Higher Savings Interest Rate

As the saying goes, it never hurts to ask. One of the best ways you can improve your odds of getting your savings interest rate increased is simply by requesting an increase and seeing what the bank says. Contact a representative in person (if you bank at a traditional bank), via chat, phone, or email with a polite request vs. a threat to pull your money out, and see what response you get. The worst they can say is no, so there’s really no harm in asking.

There’s also the possibility that you can earn a higher interest rate on your savings if you keep more money in the account. Some financial institutions will pay a higher rate on what are known as premium accounts or high-yield accounts, which may have a minimum balance requirement. If that’s the case, you might see if you and the bank can meet in the middle in terms of the amount required to be on deposit to snag that higher annual percent yield, or APY.

Will My Bank Be Willing to Negotiate?

Some banks may be willing to negotiate savings interest rates, and others may not — it really just depends on their policies. That being said, if someone has a good relationship with their bank, the financial institution may be more likely to up their interest rate to keep a good customer happy.

Another angle on this: If you have multiple accounts with a bank (say, a couple of different kinds of savings accounts, plus a business checking account), they may be more likely to raise your interest rate. For instance, if you keep both your checking and savings at a financial institution and also have a mortgage with them, you may have a better shot at a rate hike.

Is it Worth Switching if You Find a Savings Account With Higher Interest Rates?

It can be worthwhile to switch banks if doing so will result in a higher savings interest rate, but this isn’t the only factor to keep in mind. The type of bank, the services they offer, and the fees they charge can also be taken into account. It’s important to look at the overall picture before making a move.

Earning a small percentage more in interest may not be worthwhile if you wind up with account fees, minimum balances, or other inconvenient and costly issues. So do your research before you make a shift.

Variables to Take Into Account When Looking To Switch Banks

Before switching banks, keep the following factors in mind to make an informed decision.

• Type of bank. Traditional banks with bricks-and-mortar locations, online-only banks (some of which offer high-yield savings accounts which pay higher interest rates), and credit unions can help meet different consumer banking needs.

• Features. Most banks and credit unions offer basic checking and saving accounts features, but you may want to keep the extra features in mind. For example, you may want to choose a bank that also issues a variety of loans, creates incentives to save money, has tax-free savings accounts, or offers free access to credit scores.

• Interest rate. Of course, savings interest rates are a great thing to keep in mind as banks that offer higher savings rates make it easier to earn more money and increase savings.

• Fees. See how much it will cost to work with each bank. While some banks charge monthly account maintenance fees, others do not. Some banks charge overdraft fees as well, which can be steep, around $35 per incident.

Can I Expect the Savings Account Rate to Change Soon?

Although interest rates are considered to be relatively low right now, some experts expect that savings rates will increase throughout 2022 and possibly beyond. However, there’s no guarantee that these predictions will be accurate.

Banking With SoFi

It is possible to negotiate interest rates on savings accounts, and there could be an upside to asking for a boost. Specifically, you might earn a higher interest rate so your money can grow faster, whether it’s earmarked for a rainy-day fund or for a future vacation.

Among the best deals you can find for savings accounts: SoFi’s Checking and Savings. It’s a high-yield bank account where you can spend, save, and earn an ultra competitive APY. Plus, you’ll pay no account fees.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Can you negotiate savings account interest rates?

So, can you negotiate interest rates on savings accounts? Yes, it is possible to negotiate a savings account interest rate hike, but there’s no guarantee a bank will agree to this increase. That being said, asking for an increase and being shot down doesn’t do any harm.

Can you get a higher interest rate on a savings account?

It is possible to get a higher interest rate on a savings account. Account holders can ask their bank for an increase any time. It helps to have a good history with the bank. So if you always make your loan payments on time, don’t overdraft your checking account, and meet minimum balance requirements every month, the bank may want to give you this perk to retain a good customer.

How can I negotiate with a bank for a better interest rate?

There are a few ways you can increase the odds that your negotiation with your bank will be successful. To start, do competitor research so you can point out if other banks are offering higher interest rates. You can also offer to close other bank accounts and move all of your money into this one account if you get an interest rate increase.

Photo credit: iStock/matdesign24

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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Sep

2022

Tracking Down Lost Bitcoins and Other Cryptos

By Brian Nibley | Growing Wealth, invest, Investing | Comments Off

It’s a common crypto problem: Because people tend to forget the private keys that give them access to their crypto investments, countless coins — e.g. Bitcoin, Ethereum, Litecoin, Dogecoin — have been lost. As much as 20% of the entire supply of Bitcoin might be lost owing to lost private keys.

Does that mean your lost Bitcoin or other crypto are truly irretrievable?

In many cases, unfortunately, recovering lost Bitcoin or any other crypto is impossible. There are, however, some ways to try and recover an old or lost crypto wallet along with the crypto stored there. The best methods for doing so — and whether or not it will work — depends on how you lost the wallet.

This guide will take you through the process of finding lost crypto, if it’s possible.

What Does It Mean for Crypto to Be Lost?

Crypto is generally considered “lost” if it’s irretrievable, unrecoverable, or otherwise out of circulation. But how you lose your crypto can determine whether you can ever recover it.

Lost Keys

Most often, crypto is lost when people lose the “keys” to their wallet. That is, they have possession of their coins, but may have forgotten their seed phrase or other tools that would help them access the wallet. Their crypto is essentially stuck in the wallet, with no way to get it out.

That’s why it’s important for users who choose to hold their own private keys — a 256-bit string of numbers — to have a backup seed phrase (like a secret password) stored safely.

If you’re able to find or remember your keys, or otherwise access your wallet, you may be in luck. There are some services that may be able to help, but beware of scams.

Sent to the Wrong Address

Coins also get “lost” when they are sent to the wrong address. Sometimes people make the mistake of sending Bitcoin (BTC) to a bitcoin cash (BCH) address, for example. This often results in permanent loss of funds.

Fortunately, this has become increasingly rare, now that many wallets validate a recipient’s address (read more about what a Bitcoin address is) before allowing a transaction to go through.

Forgotten Passwords

Finally, you could lose your crypto by forgetting your password for a crypto exchange account. In most cases, however, the crypto exchange will let you create a new password.

Having a platform’s help in reaccessing your wallet and holdings if you lose your password is one of the advantages of investing in a crypto exchange. Similarly, if you lose a hardware wallet, you can get a new wallet and restore your crypto balances using your old backup seed phrase — assuming you have those safely stored away.

What Happens if You Lose Your Crypto Wallet?

Recovering unclaimed crypto isn’t easy. There are cautionary tales about people who have lost millions of dollars worth of Bitcoin and still don’t have access to it. That’s not the end of the story, though, as some people who have lost Bitcoin might still be able to recover their coins.

Recovering Private Keys

Some developers have created software programs that can help recover the private keys to a Bitcoin wallet. But this only works in cases in which the individual who lost their keys has deleted some or all of their keys. Software usually can’t help those who have forgotten their passwords, PIN numbers, or backup seed phrases.

But if the user mistakenly deleted files with the relevant information, they may be able to recover them. And if a user has a portion of the private key, it may be possible to find the rest of the key.

Recovering the Assets from a Lost Wallet

When you use a wallet, you’ll be able to unlock both the wallet and the crypto inside using your seed phrase. So, as long as you have the backup recovery seed, you can enter that into a new wallet and regain access to your crypto assets in a wallet, even if it’s lost.

But ultimately, whether you can recover assets from a lost wallet will depend on how the assets were lost.

Scammers

If you fall victim to one of the many Bitcoin scams out there, it may be possible to recover your assets. For example, if you’re somehow tricked into giving a scammer your seed phrase or wallet passwords, they can access it, change those passwords, and effectively take ownership of your wallet.

In that case, you may be able to get help from the wallet’s support team. But in many cases, keeping passwords and seed phrases secure is on the user, and no one would be able to help.

You should also be aware that some scammers may pose as crypto recovery specialists in an effort to gain access to your wallet. If you hope to hire a company to help you recover lost Bitcoin wallets, do some serious research to make sure it’s a legit operation.

Losing Cold Wallets

If you lose your cold wallet — and most cold wallets are hardware wallets — it is usually possible to recover the assets you had stored on it. It all depends on whether you have your recovery phrase. If you do, you should be able to safely and securely recover your assets and store them in a new wallet.

But again, it all comes down to whether you kept and securely stored your keys.

Prevent Lost Bitcoin by Safely Storing and Sending It

In a way, Bitcoin allows anyone to become their own bank. This has several advantages, but it also has several risks. Mainly, the risk that users might not be able to recover an old bitcoin wallet if they’ve lost their private keys.

Many people choose to store their private keys in a cold storage wallet in their personal possession. These include hardware, software, audio, and paper storage options that exist offline; cold wallets can be a more secure, long-term method of holding coins. The big tradeoff is that doing so puts 100% of the responsibility for securing those assets in the hands of the holder — if you lose them, there’s no recourse.

The best way to prevent permanent loss of Bitcoin is to make sure that you safely and securely store your coins from the get go, and avoid mistakes when sending Bitcoin.

Storing Crypto

There are a number of ways you can store your crypto for safekeeping, but most investors will likely choose to either leave it on an exchange, or transfer it to a wallet.

Exchanges

Leaving your holdings on an exchange may be worth considering if you only have a relatively small amount of crypto. The chief risks in doing so are that your holdings are out of your hands — and aren’t technically “yours” (as the saying goes: Not your keys, not your coins!) — and they could be more vulnerable to a cyberattack or theft.

Using a custodial wallet on an exchange does, generally, mean that you would be able to gain access to them again if you lock yourself out of your account.

Wallets

If you’d rather get your holdings into your own wallet so that you have full possession and control over them, you can do so by transferring them to a hardware or paper wallet. Just know that if you lose access to that wallet, it could be permanent — that’s the risk.

To ensure that you don’t, however, you can take a few steps:

• When setting up a new hardware wallet, safely store the backup recovery seed phrase.

• Create a PIN or password — not one that’s easy to guess or remember — write it down and keep it somewhere safe. Some people even get a safe or a safe deposit box where they store their passwords or seed phrases.

• Keep your wallet somewhere that you won’t forget. Some people even elect to keep their hardware wallets on their person at all times, putting it on their keychains, for example.

You might want to also consider using a paid service that helps users keep track of their private keys, and that can help you re-access your wallet if you lose your seed phrase. It’s an extra expense, but can provide peace of mind.

Sending Crypto

Making a mistake when sending a crypto transaction, whether from an exchange or from a private wallet, can result in total and permanent loss of funds. If that happens, there’s zero opportunity or chance to find your lost crypto. Here’s how to prevent it from happening:

• Whenever possible, use a QR code to get the recipient’s address. Sending coins to a QR code prevents mistakes or typos in the address. Using a string of characters can result in the funds being lost if even one character is off.

• Always double-check to make sure the currency you’re sending matches the one received. For example, that Bitcoin being sent is going to a Bitcoin wallet. Many wallets and exchanges do this automatically, but it’s worth double checking.

• When sending a large transaction, send a smaller amount first, as a test. After the transaction has at least one confirmation on the network, then send the rest of the transaction.

These simple steps will go a long way toward helping holders avoid sending erroneous crypto transactions.

Total Amount of Lost Bitcoin

We don’t fully know the total amount of lost Bitcoin, but it’s estimated that roughly 20% of the Bitcoin mined thus far is unrecoverable. It may be in lost wallets, or in accounts or wallets that people have forgotten the passwords to.

However, there’s a chance that some of it could be recoverable, as new companies with recovery methods are sprouting up in recent years.

5 Largest Bitcoin Fortunes Lost

If you truly want to make your head spin (or at least force yourself to write down your recovery phrase), read on to learn about the biggest Bitcoin fortunes that have been lost — that are widely known about, anyway.

1. Satoshi Nakamoto

Next to nothing is known about Satoshi Nakamoto, the creator of Bitcoin, including whether it’s an actual person, or a group of individuals. But what is known is that Nakamoto has, or had, a wallet containing more than 1.125 million Bitcoins. At one time, it was worth billions of dollars.

Those coins are still out there, somewhere.

2. Stefan Thomas

Stefan Thomas is a software developer from California who held more than 7,000 Bitcoins, worth, at one time, hundreds of millions of dollars. But Thomas forgot the password to the USB wallet he held them on, and has not been able to recover them.

3. James Howells

James Howell, similar to Thomas, had a laptop that stored roughly 7,500 Bitcoins. And he ended up mistakenly throwing it away, losing hundreds of millions of dollars in digital assets. He offered money to people to try and help him search nearby landfills to find it, but it remains lost.

4. Gerald Cotten

Gerald Cotten, yet another would-be Bitcoin whale, co-founded a crypto exchange called QuadrigaCX. In what’s a fairly long and complicated story, Cotten ended up dying at the age of 30, and the keys and passwords to his exchange’s cold wallets were lost. Those wallets contained more than $100 million in assets.

5. Unknown

Another strange story: Allegedly there’s a Bitcoin wallet floating around with roughly 69,000 Bitcoins in it, and nobody has been able to access it. The U.S. Department of Justice reportedly has the wallet now, after it was passed around by hackers and crackers who had been trying to open it.

Does Lost Bitcoin Affect the Network?

Bitcoin that is lost and deemed irretrievable is presumably out of the market forever. It’s as if you took a $100 bill and burned it — it doesn’t exist anymore. The difference being that there is no particular limit to the supply of $100 bills, but Bitcoin has a capped supply of 21 million (meaning there can never be more than 21 million BTC).

Other types of crypto that have a capped supply include: Litecoin, Stellar, Chainlink.

For that reason, lost Bitcoin shrinks the maximum or existing supply of the asset on the market. Since it makes other Bitcoins more rare, these losses can, in effect, increase the value of the remaining Bitcoin or other capped crypto on the market.

The Takeaway

No matter what type of cryptocurrency you’ve lost, it can be almost impossible to recover — especially if you’ve lost the private keys that gave you access to that crypto.

The easiest way to avoid losing crypto is to make sure it never gets lost in the first place. Doing so involves securing your private keys and other passcodes; setting up and backing up a secure wallet; and being careful when sending transactions. While there are services that may claim to help you recover lost crypto, beware of scams and high fees.

FAQ

Is it possible to recover lost Bitcoin?

Depending on the circumstances, it might be possible to recover lost Bitcoin (for example, if you lose a hardware wallet, but still have your private keys and passwords). However, much of the Bitcoin that has been lost over the years is effectively lost forever.

What is the total amount of Bitcoin that has been lost?

While no one knows the exact amount, it’s estimated that roughly one-fifth, or 20% of the Bitcoin that’s been mined has been lost, chiefly because investors lost their private keys.

Is it possible to lose Bitcoins forever?

Yes, you can lose Bitcoin (or any crypto) forever. You can put your coins in a wallet and forget the passwords, for example, or have your crypto stolen — you could even send them to the wrong crypto address. In those cases, it’s typically impossible to recover your crypto.

Photo credit: iStock/anilakkus

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Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

²Terms and conditions apply. Earn a bonus (as described below) when you open a new SoFi Digital Assets LLC account and buy at least $50 worth of any cryptocurrency within 7 days. The offer only applies to new crypto accounts, is limited to one per person, and expires on December 31, 2023. Once conditions are met and the account is opened, you will receive your bonus within 7 days. SoFi reserves the right to change or terminate the offer at any time without notice.

First Trade Amount		Bonus Payout
Low	High	Bonus Payout
$50	$99.99	$10
$100	$499.99	$15
$500	$4,999.99	$50
$5,000+		$100

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Sep

2022

Tips for Investing in Tech Stocks

By Matthew Zeitlin | Growing Wealth, invest, Investing | No Comments

It’s almost become a trope at this point. Your friend’s aunt bought some Apple stock way back when and now lives full-time on a yacht. Or your cousin knows somebody who knows somebody who bought some Microsoft stock for a few dollars a share in the ’80s, and now they’re a multimillionaire.

These stories are practically the stuff of urban legend. But if you’re looking to buy a first tech stock or want to add some diversity to your portfolio, you may find the reality to be slightly different from the stories. There are many kinds of tech stocks, each with its own performance trends, pros, and cons. Here are a few fundamental truths worth knowing about investing in tech stocks.

Why Investors Are Investing in Technology

Much of the recent growth in the stock market overall has been concentrated in the shares of technology companies. Technology stocks, as measured by the S&P Technology Select Sector Index, rose 129.8%, or 18.11% annually, during the past five years. In contrast, during that period, the broad S&P 500 Index grew by 60.2%, or 9.9% annually.

The top five most valuable companies in the S&P 500 are technology-related companies. These firms — Apple, Microsoft, Alphabet (the parent company of Google), Amazon, and Tesla — have an average market capitalization, or overall stock value, near $1 trillion or more. And during the past five years, the stocks of these companies have experienced substantial growth.

Five Largest Companies in the S&P 500 Index
Company	Ticker	Market Cap^*	5-year growth^*
Apple	AAPL	$2.5 trillion	302.5%
Microsoft	MSFT	$1.9 trillion	256.0%
Alphabet	GOOGL	$1.4 trillion	134.7%
Amazon	AMZN	$1.3 trillion	170.6%
Tesla	TSLA	$868.5 billion	1,104.6%
^*As of Sep. 2, 2022

Investors flock to technology companies, especially the previously mentioned tech giants, because they’re often considered solid businesses.

The products of technology companies — especially software companies — are relatively cheap to reproduce but can be quite expensive to buy. Apple, for example, prices iPhones ahead of their competitors, sells a lot of them, and then operates an ecosystem of apps and services that generate steady revenue. Amazon’s success is attributed to the effectiveness of its operations and low prices. For Alphabet, the sheer scope of its networks and the popularity of its services allows them to sell more ads than its competitors.

Aside from the giants that have established business models, many investors pour money into tech companies due to the promise of future earnings. Even when tech companies are not profitable or see regular cash flows, investors will still support the stocks because of the potential for future earnings. Companies like Amazon and Tesla took years before they turned steady profits.

Popular Technology Stocks to Own

The technology industry is incredibly diverse. Beyond the five companies mentioned above, these are some of investors’ most widely held technology stocks.

Companies in the S&P Technology Select Sector Index
Company	Ticker	Technology Sector	Market Cap^*	5-year growth^*
Nvidia	NVDA	Semiconductors	$539.4 billion	233.8%
Broadcom	AVGO	Semiconductors	$198.7 billion	104.7%
Adobe	ADBE	Software	$219.7 billion	137.0%
Cisco Systems	CSCO	Communications Equipment	$187.5 billion	41.6%
Salesforce	CRM	Software	$153.5 billion	59.9%
^*As of Sep. 2, 2022

How Can You Invest in Tech Stocks?

At the most basic level, you can invest in tech stock by buying the individual stocks of an appealing company.

Another way to invest in tech is by trading technology-focused exchange-traded funds (ETFs) or mutual funds. Tech ETFs and mutual funds allow investors to diversify their investments in a single security, which may be less risky than buying a specific company’s stock.

If you are interested in a particular tech sector — like artificial intelligence or green tech — you can invest in more targeted funds rather than broad-based technology-focused ETFs.

Different Sectors for Technological Investment

The technology industry is vast, filled with companies specializing in different areas of the market. For an investor, this means it’s possible to diversify, investing in tech stocks across various sectors.

Artificial Intelligence

Artificial intelligence (AI), which refers to ways that computers can process data and automate decision-making that humans would otherwise do, is a burgeoning tech sector. Many companies are operating in this sector, using new technologies to support fields like finance and healthcare. Artificial Intelligence, along with the related field of Machine Learning (ML), has long been one of the most exciting technology areas.

Transportation

Another bustling sector of the industry is transportation. Tech underlies all transportation, and some of the most exciting companies are building electric cars, creating the batteries and software that support the navigation and operational systems in automobiles, or using software to connect drivers and passengers.

💡 Recommended: Investing in Transportation Stocks for Beginners

Streaming

Streaming companies have completely revolutionized the entertainment industry. These companies offer direct-to-consumer content, including shows and movies, that is bundled in a monthly subscription. There are standalone streaming companies, companies that include streaming as an ever-growing part of their business, and companies that build digital and physical infrastructure to support streaming services.

Information Technology

Information technology (IT) is one of the broadest and most valuable sectors of the technology industry. It typically refers to how businesses store, transmit, and use information and data within and between networks of computers.

Semiconductor Technology

Semiconductors are arguably the foundation of all technology. Semiconductor companies make components found in phones, computers, and other electronic devices. The manufacturing process for semiconductors is incredibly precise and expensive, making the industry ruthlessly competitive.

Web 3.0

In recent years, cryptocurrency, blockchain technology, and Web 3.0 have been the focus of many investors. That’s because computer engineers and companies are now developing new technologies that will allow users to interact with the web in a more interactive, personal, and secure way. These new technologies, like blockchain, crypto, and the metaverse, may usher in new opportunities for investors.

💡 Recommended: Web 3.0 Guide for Beginners

Evaluating a Tech Stock Before Investing

When investing, you must carefully evaluate the stocks you’re interested in.

Technology companies, in particular, tend to have high price-to-earnings (P/E) ratios, meaning that the company’s profits may seem low compared to the price of their shares. This is often because investors are expecting rapid future growth.

Other key metrics include price-to-sales, which compares the stock price to the company’s revenue. This is something to consider in the case of a fast-growing company that doesn’t yet have substantial profits.

Another critical factor is the company’s overall revenue growth — the pace at which revenue increases year-over-year or even quarter-over-quarter.

A more detailed metric that can be useful for tech companies is “gross margins,” which is the difference between a company’s revenue or sales and the cost of generating those sales, divided by total revenue. The resulting percentage indicates whether the company can make money on the actual product it sells and how much. If the company’s other costs can go down as a percentage of total revenue, profits can grow more quickly.

💡 Recommended: The Ultimate List of Financial Ratios

Pros of Adding Tech Stocks to a Portfolio

There are many benefits to investing in tech stocks, most notably attractive returns. With artificial intelligence, blockchain, and Web 3.0 technologies on the horizon, there are increasing opportunities to invest in this sector. These are some possible benefits of adding tech stocks to a portfolio.

• There are many blue chip tech companies. Blue chip stocks typically refer to stocks from long-established companies with good returns. Today’s blue chips include huge tech companies like Apple, Alphabet, and Amazon.

• Some tech stocks pay dividends. There can be benefits to dividend-paying stocks, including consistent earnings, which might indicate that the company is positioned to deliver strong performance.

• Investors can buy shares in things they use. Most people use some tech in their daily routines. You might have a smartphone, or a laptop, hop on a social network, or order groceries or clothing online. With a tech stock, investors can buy a little piece of the companies they know and like.

• It’s easy to diversify in tech. Tech stocks aren’t a monolith. Investors can add diversity to their portfolio by purchasing different aspects of the tech sector, for example, buying stock in social media companies, smartphone glass manufacturers, hardware makers, software companies, and even green tech companies.

A great thing about the tech sector investing space is that there’s so much of it out there, and investors should be able to find something that works for their goals, ambition, and knowledge base.

💡 Recommended: How to Invest in Web 3.0 for Beginners

Cons of Investing in Technology

All stocks come with their own risks and potential downsides. Tech stocks are no different. As with any stock purchase, it’s helpful to do a good amount of research before buying a stock. Take these considerations into account before deciding to pull the trigger on a tech stock.

• The potential for tech backlash. Some experts think increased regulation and government scrutiny could lead to a backlash against tech stocks that could affect their prospects. They cite 2018’s passage of the European Union’s General Data Protection Regulation (GDPR) and Facebook’s hearings before Congress as evidence that even more regulation might be coming in the future. But like many other sectors of the stock market, various tech stocks react differently in the face of volatility.

• Buying what you know can be complicated. You might have a solid grasp on some social media giants, for example, but some of the nuances of emerging semiconductor firms might be a little harder to wrap your head around. You may have to ask yourself if you want to invest in a company that you might not fully understand.

• Stocks may be priced too high. Some tech companies, like Amazon and Google, often have shares that venture into the four figures, so for a first-time tech stock investor, those companies may feel out of reach. However, many tech companies occasionally engage in a stock split to decrease their share prices.

Do You See the Most Returns When Investing in Tech Stocks?

Most returns when investing in tech stock can vary depending on the specific company and the current market conditions. Nonetheless, many investors believe that tech stocks generally have a higher potential for growth than other types of stocks, making them a good choice for those looking to generate returns. During the past five years, technology stocks rose a total of 129.8%, while the broad S&P 500 Index grew by 60.2%.

But just because tech stocks have outperformed other industries, it doesn’t mean that it will always be that way. During 2022, for example, tech stocks have declined 22.7% through Aug., while the S&P 500 fell 16.8% year-to-date.

💡 Recommended: Lessons From the Dotcom Bubble

How Frequently Should You Invest in Tech Stocks?

The frequency you invest in tech stocks will depend on your individual investment goals and risk tolerance. Some investors may choose to trade tech stocks monthly or quarterly to take advantage of any short-term price fluctuations. Others may invest in tech stocks on a more long-term basis, holding onto their shares for several years to benefit from any potential long-term growth.

What Percentage of Your Portfolio Should Be Tech Stocks?

The percentage of a portfolio allocated to tech stocks differs for every investor. Some experts recommend that investors allocate no more than 20-30% of their investment portfolio to tech stocks, but this percentage may be higher or lower depending on the investor’s risk tolerance, investment goals, and other factors.

Mistakes to Avoid When Investing in Tech Stocks

Many investors are drawn to tech stocks because of the potential for a significant return. But the allure of large gains may cause investors to take on too much risk or lose sight of their overall investment goals.

For example, you don’t want to invest in a tech stock just because it’s popular. It’s easy to fear you are missing out when you see a particular stock’s price skyrocket. You may hear about a tech stock lot in the financial media, and you know many people who say they own it, but that doesn’t mean it’s a good investment.

Additionally, you should avoid investing in a stock just because the company is a household name. While sometimes the stocks of well-known companies do well, there are other cases of these companies not being well run and thus not being a good investment.

The Takeaway

The tech sector is vast and getting bigger by the moment as blockchain, artificial intelligence, and other technologies push boundaries. New founders are working on startups in garages and basements, potentially developing the next new thing that could change the world. Investors looking to invest in tech stocks can find a stock or ETF out there that could meet their needs. For instance, SoFi ETFs can remove some of the headache from picking individual stocks by allowing you to invest in a bundle of companies all at once.

SoFi makes it easy to invest in tech stocks and more with an online brokerage account. With the SoFi app, you can trade stocks, ETFs, and fractional shares with no commissions for as little as $5. You’ll also get real time investing news, curated content, and other relevant data for the stocks that matter most to you. For a limited time, funding an account gives you the opportunity to win up to $1,000 in the stock of your choice. All you have to do is open and fund a SoFi Invest account.

Get started trading technology stocks and ETFs with SoFi Invest® today

FAQ

Why is investing in tech stocks so popular?

Tech stocks are popular because they are some of the largest and best performing assets in the financial markets. As a whole, the technology sector is one of the fastest growing sectors in the economy. This means that there are a lot of new and innovative companies that are constantly coming out with new products and services. This provides investors with a lot of growth potential.

How can you start investing in tech stocks today?

You can start investing in tech stocks by trading individual stocks, invest in a tech-focused mutual fund or ETF, or invest in a more general stock market index fund that includes a mix of tech and non-tech companies.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
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Sep

2022

Will Dogecoin Ever Be Capped?

By Brian Nibley | Growing Wealth, invest, Investing | Comments Off

When evaluating a cryptocurrency, such as Dogecoin, it’s important to know whether it has a supply cap, since that can have an impact on the long-term value of the coin.

Bitcoin, the first and largest cryptocurrency by market cap, is known for having a 21 million coin hard cap, meaning there will only ever be 21 million BTC in existence. Similarly, XRP has a cap of 100 million. However, all cryptocurrencies are different and many do not have a supply cap.

Here’s what you need to know when it comes to the Dogecoin cap.

What Is a Cap in Crypto?

A supply cap, or cap, refers to the upper limit of the amount of new cryptocurrency coins that can be created.

Once miners have mined a certain number of coins, the protocol will stop distributing block rewards, and miners will only collect transaction fees. For Bitcoin, this point is estimated to be reached by about the year 2140, for other types of crypto the cap will be reached at different times.

💡 Recommended: How Many Bitcoins Are Left?

Does Dogecoin Have a Cap?

No, Dogecoin does not have a cap, meaning there is no Dogecoin supply limit. But there is a fixed reward of 10,000 DOGE for each block of transactions added to the Dogecoin blockchain (more on that below).

Thus, miners have an incentive to mine for Dogecoins. After they mine Dogecoin, they can move it from their wallets onto a crypto exchange where other investors can buy it. But as more miners come online, more of them will dump new coins onto the market, causing the price to fall.

Either way, it’s important to understand how the lack of a Dogecoin cap (i.e. the fact that there is no Dogecoin supply limit) can affect this crypto’s long-term value.

How Dogecoin Works

Developers Billy Marcus and Jackson Palmer launched Dogecoin as a low-stakes way for people to learn about cryptocurrency. The meme coin or joke coin, with its famous Shiba Inu logo, traded at a tiny fraction of a penny so people could send it to each other for fun while learning how to use crypto wallets.

In 2018, as cryptocurrencies caught the attention of mainstream investors, the altcoin reached more than $0.01. In 2021, Dogecoin attained record highs around $0.70 before crashing down to about $0.06, as of September 7, 2022.

DOGE is a proof-of-work (PoW) crypto, which means that mining Dogecoin involves running powerful computers known as nodes that process transactions for the network. In exchange for this work, miners receive block rewards of 10,000 newly minted DOGE.

A new block of transactions is mined roughly every minute on the Dogecoin network. The block reward is 10,000 DOGE, or about $600 as of September 7, 2022. Unlike Bitcoin, which has a hard cap of 21 million and releases fewer coins over time, there is no Dogecoin supply cap.

Is There a Limit to the Dogecoin Supply?

Is Dogecoin unlimited? Yes, as of September 7, 2022, there is no Dogecoin supply limit. But the reality is that 10,000 DOGE are mined every minute, which adds up to about 14.4 million DOGE per day, and over 5 billion DOGE per year added to the supply.

Although some argue that the vast number DOGE may depress the price.

Will Dogecoin Ever Have a Cap?

It’s hard to say for certain whether there will ever be a Dogecoin cap. In theory, DOGE developers could choose to implement a cap on the creation of new coins, but to date there hasn’t been much discussion about this.

Sometimes the crypto community decides to alter the protocol of a currency. An active cryptocurrency needs periodic upgrades to its software to remain functional, relevant, and secure.

For now, it seems reasonable to work from the assumption that there might never be a Dogecoin cap limit.

Has Dogecoin Ever Been Capped?

In the eight years since Dogecoin’s creation, there’s never been a cap on the crypto. In fact, for much of those eight years, no one thought much about DOGE at all and it traded for less than a penny.

In 2017 when cryptocurrency began reaching the masses in a big way, the valuation of DOGE hit $1 billion. Many investors considered this a sign of irrational exuberance in the crypto markets, as DOGE had no special features (it’s simply a clone of Litecoin, which is a clone of Bitcoin), and hadn’t had a developer update in three years at that time.

Nonetheless, in 2021 DOGE took a seat among the top 10 cryptocurrencies by market cap, a feat few would have thought possible just a year earlier.

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3 Reasons Why Dogecoin Doesn’t Have a Cap

Some say the decision to not cap the supply of DOGE was intentional on the part of developers. They wanted to create a currency that people would be more likely to spend. DOGE was created as a joke, but it was also intended to be used for transactional purposes.

The DOGE developers set out to create a cryptocurrency that would differ from Bitcoin in several key ways. Most if not all of those ways stem from the fact that there is no Dogecoin max supply.

Here are three reasons that are thought to have been big factors contributing to the decision to never implement a cap on Dogecoin.

1. Cheap Transactions

Dogecoin is an altcoin that developers created for spending meant to be spent, so they intentionally made it inflationary (meaning that the supply of DOGE increases, or inflates over time).

By contrast, Bitcoin is deflationary (the supply of BTC decreases over time), which makes its value relative to inflationary currencies likely to continue rising. As a result, BTC has become more of a store of value investment, making many investors want to HODL it.

If you think your Bitcoin might be worth twice as much next year, you’re less likely to use it to make purchases in the short term. But a currency like DOGE, with no supply cap, is more likely to be spent. People will use it today, while it still has value, and be less likely to hold it for the long-term as they know it’s unlikely to increase in price.

2. New Coins Forever

It’s estimated that about 20% of all the Bitcoins mined to-date have been lost forever. This happens when people forget their wallet password or lose a piece of physical hardware they used to store Bitcoin. This makes the supply of BTC even more deflationary, as those coins won’t be replaced. Meaning: A deflating supply means that the value may rise over time, assuming demand doesn’t decrease.

With Dogecoin, there will always be plenty of new coins. Even if someone loses millions of DOGE, the long-term impact is minimal, since there are constantly new coins going into circulation. With no supply cap, lost coins don’t matter as much.

3. Mining Longevity

At some point, there will be no more Bitcoins left to mine. When that happens, the only monetary incentive for mining BTC to keep the network secure will be transaction fees.

In theory, this could sustain miners interest in mining DOGE.

Pros and Cons of a Capless Cryptocurrency

Should there be a Dogecoin cap? It’s a good question, given the relative successes and failures of DOGE thus far. Here are some advantages and disadvantages.

Pros

By keeping DOGE as an inflationary currency, it’s more likely that people will spend it rather than hold it as a store of value.

With no Dogecoin cap, theoretically miners will always be able to mine more DOGE and keep earning Dogecoin as a reward.

Cons

Because it’s inflationary, DOGE has less appeal for buy-and-hold investors.

With its unlimited supply, the value of DOGE may never rise much above $1.00. At its peak in May of 2021, it was worth about $0.70.

Pros	Cons
DOGE has value as a transactional currency.	Low demand from buy-and-hold investors.
Miners can always mine more DOGE and get rewards.	Price unlikely to rise above historic high of $0.70.

How Many Dogecoin Are in Circulation?

According to CoinMarketCap data, there are about 132.6 billion DOGE in circulation as of Sept. 7, 2022. Keep in mind, 10,000 new DOGE are mined every minute, so the number will be higher by the time you read this.

It’s also worth noting that more than half of DOGE’s total supply is held by only about 20 different wallet addresses, making it one of the most unevenly distributed of the different types of cryptocurrency.

How Many New Dogecoin Are Created Every Day?

Every time a new block of transactions is added to the Dogecoin blockchain, 10,000 DOGE are mined. That’s about 14.4 million DOGE added per day, or about 5.26 billion per year.

How Much Dogecoin is Left?

There is an unlimited amount of DOGE left to be mined. Just like U.S. dollars or any other national fiat currency, there’s no upward limit on the creation of Dogecoins.

There are some key differences between DOGE and fiat currencies, of course, like the fact that anyone can mine Dogecoin, but only central banks can print money.

The Takeaway

The answer to the question, Will Dogecoin ever be capped? is likely a “no.” Nothing is for certain, as developers could decide to alter the Dogecoin protocol, but the history of the coin and the ethos of the community surrounding it suggest that they will not enact a cap.

Just as the Bitcoin community tends to value scarcity and a fixed supply cap, the Dogecoin community tends to value low transaction fees, large block rewards, and the other benefits that can arise from not having a supply cap. For investors, there may be a place for both types of cryptocurrency in their portfolio.

FAQ

Is there a cap on the supply of Dogecoin?

No, Dogecoin does not have a cap on its supply.

Will DOGE be capped at $1?

At the moment, there are no signs that DOGE will have a price cap or a supply cap.

Is the supply of Dogecoin infinite?

In theory, the supply of Dogecoin could be infinite. In reality, though, the annual supply is somewhat limited by the block reward, which is 10,000 DOGE per minute.

Photo credit: iStock/Amax Photo

²
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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
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$50	$99.99	$10
$100	$499.99	$15
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SOIN0822018

Sep

2022

What Is a Good Hashrate?

By Brian Nibley | Growing Wealth, invest, Investing | Comments Off

What Is Hashrate?

Hashrate is the total computational power being used by miners to process transactions in a proof-of-work (PoW) cryptocurrency network. A high hashrate is one indicator of a network’s security because it shows a large number of miners are verifying transactions.

When it comes to mining Bitcoin, Litecoin, Dogecoin, Bitcoin Cash, Zcash, or any other PoW crypto, a good hashrate is a higher hashrate. The more computing power going towards maintaining a network, the more secure it will be and the more transactions it will be able to handle. The hashrate is one of the most important concepts to understand, especially for anyone considering investing in cryptocurrency.

How Does Mining Work?

To understand what is meant by the term “hashrate” it’s important to understand the process of crypto mining.

Mining is the method by which crypto transactions are processed and consensus is achieved in a PoW system (proof-of-stake or PoS is a different type of consensus mechanism).

Miners rely on high-powered computers to run computations on complex puzzles based on crypto transaction data. These systems generate millions or trillions of guesses — or hashes — per second as to what the solutions to these puzzles could be in order to validate as many transactions as possible.

Valid hashes in proof-of-work networks have to be verified by other miners. Once the block has been validated, it’s added to the chain and the original miner receives a reward in new coins or tokens.

A group of transactions is called a block (and different blockchains have different block sizes or heights). For example, every 10 minutes or so, a new block on Bitcoin is mined, and the reward goes to the miner who can prove they did the most work toward creating the block (hence the term proof-of-work). Different blockchains have different transaction times.

Why Does Hashrate Matter?

Hashrate refers to the amount of computing power being contributed to the network at any given time. The more mining, the higher the hashrate. Bitcoin has a lot more hashing power behind it than all the other cryptocurrencies combined.

A hashing algorithm takes a unit of data and turns it into a random string of numbers and letters. This process is called encryption, and it ensures that data will be secured.

A hash is just a computer performing this action. Bitcoin’s PoW algorithm is based on an encryption algorithm called SHA-256. Ethereum has been known to use Keccak256 hashing algorithm (but has shifted to a proof-of-stake system with the Merge). The bitcoin hashrate boils down to how many times per second this algorithm is hashing calculations.

Bitcoin miners perform as much of this work as possible in an effort to obtain the next block reward of 6.25 bitcoins.

Today, however, most mining occurs in “pools,” where a group of miners pool their hashing power together and then split the block rewards amongst themselves, according to the hashrate each contributed.

Hash Rate As a Bullish Signal

For almost any cryptocurrency, a higher or increased hashrate can be a sign of demand from either miners or traders or both.

A high hashrate and network difficulty can be considered a bullish signal since it shows that miners are committed to block processing on the network, and producing a steady flow of new coins in the market.

How Hashrate Impacts Mining Difficulty

One of the ingenious aspects of the Bitcoin protocol (and some other coins as well) is something called the difficulty adjustment.

Every two weeks or so, the protocol automatically changes how difficult it will be to mine Bitcoin based on the current hashrate. When the hashrate rises, so does mining difficulty. When hashrate falls, mining difficulty also falls.

This helps to ensure that the supply of Bitcoin remains scarce while also keeping mining competitive. In 2020, the Bitcoin hashrate hit several new all-time highs, signaling confidence in the largest cryptocurrency by market cap.

What Is Hashing Power?

The hashrate can be in the billions, trillions, or more calculations per second. That’s why so much power is required when doing PoW mining. Here’s how hashrates are abbreviated:

• KH/s — kilohashes per second (thousands)

• MH/s — megahashes per second (millions)

• GH/s — gigahashes per second (billions)

• TH/s — terahashes per second (trillions)

• PH/s — petahashes per second (quadrillions)

• EH/s — exahashes per second (quintillions)

Altcoins and Hashrate

Other cryptocurrencies also need hashing power to run their networks, and the hashrate can vary considerably from crypto to crypto. But the hashrate also fluctuates for each crypto individually.

As with most PoW crypto, a higher hashrate is considered better for the network’s stability and security overall.

That said, the hashrate of a given coin doesn’t determine how quickly each block is completed. That’s a function of something called the block time, which is predicated on the mining difficulty value of the crypto network. To keep blocks being solved at a constant time frame, the mining difficulty value is calibrated up or down when the block difficulty is reset.

What Is a Good Hash Rate for Dogecoin?

As of Aug. 12, 2022, the Dogecoin hashrate was roughly 496.15 TH/s, which is significantly lower than the network’s all-time high of 1.34 PH/s on April 23, 2022.

The meme coin saw lower values and a drop in dogecoin mining profitability in Q2 of 2022, which may have affected the hashrate.

What Is a Good Hash Rate for Ethereum Mining?

As of Aug. 12, 2022, the Ethereum hashrate was 942.50 TH/s, a bit lower than the network’s all-time high of about 1.32 PH/s on June 4, 2022.

The drop in July was believed to be a function of lower miner profitability — perhaps in relation to the upcoming “merge”, as Ethereum’s transition from PoW to PoS is being called.

How Does Proof-of-Stake Work?

While Bitcoin and many others use the PoW consensus algorithm, some coins use different algorithms, like proof-of-stake (PoS).

Rather than using powerful computers to contribute hashing power toward proof-of-work, proof-of-stake block rewards are distributed according to whoever has the most tokens “staked” on the network. Staking tokens involves locking them up for a period of time, sort of like a long-term savings account.

This method of consensus is less energy intensive compared with PoW, although some also argue it’s less fair and less secure.

Some cryptocurrency exchanges now allow for automatic staking of tokens that utilize PoS. Users can hold the tokens in their crypto wallet and automatically receive rewards.

There are many different ways coins secure their networks, but the important thing to know is that the total hashrate of all other coins combined pales in comparison to the Bitcoin hashrate.

How to Calculate Hashrate

For users interested in mining cryptocurrency, it could be useful to calculate the expected hashrate of a computer or mining rig. The two primary factors that determine the profitability of mining bitcoin are the hashrate and electricity costs involved.

Miners can insert the appropriate variables into a hashrate calculator and receive a result right away.

Investors considering speculating in altcoins could think about looking at the hashrates of different cryptos, as this may be one of the few fundamental factors available for analysis.

Benefits of a High Hashrate

The more computing power contributing to a network, the harder it becomes for potential bad actors to spam, hack, or commit fraud on the network, because doing so requires more power.

To take control of a network and do things like reverse or double-spend transactions, an individual needs to own 51% of the hashrate. And at this point, having enough power to control 51% of the Bitcoin hashrate seems very unlikely.

That’s the main benefit of a high hashrate — increased security. This can also lead to increased confidence in a coin, higher user volume, and potentially higher currency prices. For investors looking to build their crypto portfolio, security can be extremely important.

Bitcoin’s excellent hashrate has a lot to do with its continued success and increasing value. Many people argue that BTC is the only reliable store of value for investment purposes for this very reason.

Bitcoin Hashrate vs Price

There tends to be a correlation between the bitcoin hashrate and the bitcoin price. When a hashrate moves higher, prices tend to rise, although it’s not clear which causes which. It’s somewhat of a chicken-and-egg kind of scenario, and the topic has been much debated.

When prices go up, the hashrate is likely to follow, as mining coins becomes more profitable. A higher hashrate indicates that miners have a degree of confidence in the price, as they’re willing to make investments in computing hardware to mine more coins. When the hashrate goes up, prices could also follow, as investors see this as a signal of confidence.

When a hashrate is rising, it could be a good time to buy cryptocurrency, although the trend has not been proven.

The Takeaway

What is a crypto platform’s hashrate? Hashrate is the total computational power being used by miners to process transactions in a proof-of-work (PoW) cryptocurrency network. Ideally, a higher hashrate is preferable as it can indicate a) greater support among miners; b) greater interest among traders; and c) it’s also a signal of the network’s security.

When it comes to PoW crypto mining, a good hashrate is a higher hashrate. The more computing power going towards maintaining a network, the more secure it will be and the more transactions it will be able to handle.

FAQ

How do I find the hashing power of my computer?

Your computer or hardware uses a certain amount of power — or hashing power — to solve different algorithms. Your computer may display a higher or lower hash power, depending on each blockchain’s algorithm. You can determine the hashing power of your hardware through various means, including online services or internal commands.

What is the hashrate of Bitcoin?

As of Aug. 12, 2022, Bitcoin’s hashrate was roughly 210 EH/s (exahashes/second). That’s 196 quintillion hashes per second.

How long does it take to mine 1 Bitcoin (BTC)?

You can’t really mine a single Bitcoin, because the reward for validating one block of transactions on the Bitcoin network is 6.25 BTC, which takes about 10 minutes. In theory, then, you could mine 1 BTC in 10 minutes (as part of the 6.25 mining reward).

First Trade Amount		Bonus Payout
Low	High	Bonus Payout
$50	$99.99	$10
$100	$499.99	$15
$500	$4,999.99	$50
$5,000+		$100

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