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Cryptocurrency has been getting a lot of attention in mainstream media lately, leading to a large influx of people wanting to get in on the action. As a co-founder of a cryptocurrency index fund, a blockchain developer and a bitcoin miner, Bitcoin's coattails. I'm purposely targeting Bitcoin mining, ignoring other - possibly more profitable or easy to mine -currencies. However, most of the challenges and calculations I'm introducing in this article will apply to altcoins as well.
First off, mining Bitcoin is best done using an ASIC. ASIC stands for "Application-Specific Integrated Circuit" which is not necessary for you. ASICs are only used to perform a single task. Because they're specifically made for one task, they do not have a lot of hardware, like GPU miners. However, ASICs are expensive so expect to spend at least $ 1500 on your hardware.
Secondly, you need to think about power usage. Running an ASIC is like running a tanning bed 24 hours a day. This means your profitability is fully dependent on electricity. If you live in a country where electricity is heavily taxed, you might want to look for a different hobby. However, if you live in Iceland, where electricity is nearly free, you've gotten perfect conditions to make money from Bitcoin mining. Even if you pay only $ 0.10 / kwh (which is low), expect to pay for $ 100 every month.
Your third challenge is location. ASICs are loud and need to be kept in a cool location. This was the biggest thing keeping me from setting up my own bitcoin mine. If we take the ASIC I would actually buy - the S9 Antminer - we would be living with a vacuum cleaner for 24 hours a day, 7 days a week. That's loud and annoying, meaning you probably do not want it in your own house. If you have a place where you can mine the rig (s) without them bothering you, that 's worth considering. The sound has a purpose however, because most of it is coming from the fans who are keeping your investment cool.
Lastly, you need to be warned. Bitcoin is volatile and it's done in the last year, which is not promised for the future. The Bitcoin might drop, making your mining operation worthless. Technically you could use your ASICs for other purposes but you're not going to be making real money from them anymore if they're not mining. Every Crypto Investment is a small, volatile market with high risks. Fortunately, the crypto market can be a ridiculously lucrative one as well.
The amount of money you will be making from your bitcoin mining depends on a few variables (besides electricity usage and cost):
Your hash rate is how many calculations you can do every second. The more efficient your mineral, the more calculations you can do. This is your horsepower. This is the only variable you have impact on.
The Bitcoin has a tendency to rise and fall in an upward trend overall. You're rewarded bitcoins from your mining. The higher the value, the higher the payout. You have no control over this and are just left to the open market's strange volatility.
Bitcoin mining difficulty
Difficulty decides how hard it is to find a Bitcoin block. This is adjusted every two weeks to the price. At some point however, the difficulty will be more likely to be high for the value of a bitcoin. You have no control over this goal but it's a lot of direct impact on your profitability.
Mining alone is almost never worth it. I suggest mining for a bitcoin mining pool. I will not be able to join you. Normally, these pools take a small cut from your mined Bitcoins. You have some control over this one that you can choose from different pools but tends to have static fees.
I'm told you the challenges you'll face Bitcoin, I've told you which variables matter, now I'll give you a quick way to calculate if mining bitcoin is worth it for you. Normally, I prefer to create my own scripts to calculate the profitability of business plans or investments - and have a large excel sheet that does exactly this - but for a simple bitcoin mining operation, there are many sites you can use.
One of the sites I really like it is where you can just input your variables and get an overview of the money you can be making. There are many sites like Coinwarz but it's the one I used to check my own math.
When you start making Bitcoins, you still need to make actual dollars. In my opinion, you should hold yourmoney. A good way to do that by selling your Bitc
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