If you learn how to do it right (and if you spend enough time on this activity), mining bitcoins can be very lucrative. The first thing you should know is that there are two routes you can take: the first focuses on resorting to a mining company in the cloud and the second revolves around acquiring hardware created for this purpose. In this article we will examine both options and explain why, although neither is cheap, cloud mining represents the safest investment.
You will be interested in:
Mining vs. investment
When Bitcoin made its appearance in 2009, the process to mine or mine the world’s first cryptocurrency needed little more than a home computer, and it didn’t even have to be very fast or modern. Currently, the entry point for the world of cryptocurrencies is much more complicated if you want to make a profit, although that does not mean that it is impossible but it is no longer the cottage industry that it once was.
Before we discuss how to mine or mine bitcoins yourself, it is important to note that while there is uncertainty in all things cryptocurrency, mining is probably the most volatile decision. Fluctuations in hardware prices, changes in the difficulty of mining bitcoins, and even the lack of a payment guarantee at the end of your hard work, make it a riskier investment than even buying bitcoins outright.
Due to this and the volatility of the market in general, it can be challenging to know how to make a profit from mining bitcoins. 2018 saw the mining market plummet in profits and skyrocket when it comes to barriers to entry. Unless there is a significant change in Bitcoin technology, everything is likely to remain the same. One bitcoin is valued at around $ 50,000 today, but mining it can come at a great cost.
In the end, buying bitcoins directly, at the very least, it gives you something for your money immediately. Clearly this is worth considering before going the mining route.
Mining in the cloud or “cloud mining” is the practice of renting mining hardware, and having someone else do the work for you. Generally, you are paid for your investment in bitcoins, even if the hardware is not used to mine this cryptocurrency. As with any investment in general, it is important to do your research, because even companies that claim to be the best have various naysayers and complaints from previous investors.
Various mining companies have come and gone over the years, including those that we have spoken with and validated directly, such as Hash Flare, who told Digital Trends in an interview that each of their clients has made a profit using their services. In early 2021, you’ll be better off with a company like Coinbase, an established and respected cloud mining company. It is expensive to start, but it is one of the best options.
For a wider variety of options, CryptoCompare It has a list of mining companies with reviews and user ratings, although you should be vigilant because there are many people who are reviewing and looking to take advantage of the situation.
Once you have chosen a cloud mining company and registered, you must choose a mining package. That will usually involve choosing a certain amount of power, and combining it with how much you can afford. In general, paying more should give you a better return or a faster profit, although that is not always the case.
Most cloud mining companies will help you decide by providing you with a calculation based on the current market value of Bitcoin, the difficulty of mining bitcoins, and cross-referencing the power you are renting. However, it is important to note that those numbers can and will change, which is why it is important to observe market trends and estimate where Bitcoin will go before choosing your contract. What may be profitable now may not be if the value of Bitcoin plummets.
As long as companies like Coinbase continue to offer their calculators, we would suggest using other alternatives to alleviate the potential of any trend that could enter the calculation.
Some cloud mining companies will sell you a contract on a “pre-sale” basis. As the name implies, that means you pay upfront for a contract that won’t start for weeks – or months – when the new hardware becomes available. In most circumstances that is not advisable, because there is no way to guarantee that these contracts will be profitable when they start and there is not even a concrete indication of when it will happen.
After choosing your contract, most companies will ask you to choose a mining pool or mining pool. This is where you should choose a global mining team to join.
It is a method of increasing the chances of earning bitcoins through mining, and it is standard practice in personal and cloud mining. There are pros and cons to different groups that are beyond the scope of this article, but joining an established and proven group with low fees is likely to be your best option.
One of the most popular and trusted pools for new miners is Slush Pool, but you should always do your research. As with companies, many groups are not trustworthy.
Once you have completed that last step, your cloud mining has started. In a few days or weeks, if all goes well, you should start to see your account start to fill up with bitcoins. At this point, it is advised that cryptocurrencies be withdrawn from the cloud and deposited in a secure wallet. However, some cloud mining companies will allow you to reinvest your profits for greater dispersal power.
However, whatever you do you need to decide what you are going to do with your bitcoins in the long run. Although you can buy many products and services with bitcoins, prices can fluctuate and you would have to do even more research to see if you are doing a good deal.
Another option is “HODling”, that is, keeping your bitcoins, this is also a viable strategy for some people. HODlers are those people who hold onto their bitcoins because they are convinced that their value will increase over time. Unfortunately, there is no reliable way to predict the future values of bitcoins.
Sure, we are not financial advisers and we would not suggest that you do anything in particular with your cryptocurrencies. If you decide that you want to keep your bitcoins, you should consider a secure, even potentially hardware-based wallet to deposit them.
Before you spend money on any hardware or mining setup, you should use a bitcoin mining calculator to see the costs of the process. Then you can decide if it is possible that you will make a profit with all the costs considered. Keep in mind that prices can also fluctuate, and electricity costs can vary widely. Bitcoin mining is exorbitantly expensive for the average person and there is a very low chance that you will be able to accumulate enough profit running your own operation.
Since it is very expensive to set up a proper system, we only recommend mining bitcoins if you have proven access to abundant and crucially cheap electricity. You will also need a strong network connection. When it comes to Hardware, only state-of-the-art ASIC miners offer the hope of making a profit from bitcoin mining, so for direct bitcoin mining, check out the site of AsicMinerValue to see what you need.
An alternative to direct bitcoin mining is to use a service like NiceHash to develop your own method. NiceHash allows users to plug in their ASIC or GPU / CPU machines and rent them for altcoin mining, with all profits sent to you in the form of bitcoins. However, it is worth checking the profitability calculator before you start, as you will need to consider the relative power of your hardware and the cost of your local electricity to potentially make a profit.