Buying vs Mining a Cryptocurrency from an individual miner's perspective?

In my last blog- "Why STEEM's Proof-of-Brain mining experience is better (recently) than Proof-of-Work mining form a individual miner's perspective?" I discussed that how mining was profitable at early stage of CPU mining, GPU mining and ASIC mining but has become a tricky business these days.

I also discussed how getting an ASIC was a hurdle earlier and still worth trying due to high potentiality of price appreciation.

GPU was profitable and is still profitable. However, switching a pool and coin has become a headache for GPU miners due to less profitability and power consumption. ASIC mining has become a farce and tremendous risks for miners.

However, mining is a fun and hobby type work not exactly investment or side hassle for some miners. That's just fine.

Interestingly, there is an alternative to mining that is cloud mining. But they are more speculative and headache these days. In case of GPU or ASIC miner, they can switch pools, coins or stop mining to earn or save. But cloud hashing is a contract, if situation changes (e.g. coin price crashes or difficulty rises due to new hardware introduction), then miners can be in great troubles.

There is an another approach that is investing based mining. For example, miners have favorite coins that they want to invest. Then they can mine the most profitable coins in the most profitable pool, then buy their favorite coins.

Miners can wait for sell timing for their mined coins and buy timing for their investing coins.

If the investment are timed correctly then ROI for mining hardware can be recouped easily.

Here is a practical experience from mining and investing experience. I bought a NVIDIA Gigbyte 1070 GPU for around $420 nine months back. I have mined 0.7 ETH which is around $500 at ETH at $700, after some power cost I may have made ROI for the GPU.

But I have always bought STEEM with ETH. I got almost 180 STEEM since STEEM were most of the time undervalued than ETH. 180 STEEM now can be sold for $720. If I sell my GPU at $500. I have almost made $700 profit on my GPU.

Moreover, if I sell STEEM at $8, my mining profit would be doubled. Therefore, for me mining the right coin at the right time and investing in my favorite coin worked perfectly.

Recently, I am applying similar strategy for a CryptoNight ASIC. I mine the most profitable CryptoNight coin and sell them to buy STEEM.

I still believe STEEM is undervalued and I can gain make more profit due to buying STEEM.

Moreover, as I blog and curate regularly I can earn more on mining profit.

Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.

Thanks for reading.
@riseofth
Cryptominer since 2013, occasional trader and tech blogger