7 Critical factors that your mining calculator isn't telling you.

Mining calculators might give you an algorithm best suited for your gear, but there are other factors you have to weigh. You might have a few factors in your life that make investing your time and effort and hashing power in crypto even more worthwhile... or not at all.

Let’s say you have a rig. You like to game and you know a couple things about your hardware. You keep seeing Crypto everything popping up, warnings and lambos galore. You’ve decided you could manage to pull together some funds. Now, which path to take? If your numbers are right, mining is super profitable. But those power bills, what if you break even or worse? You could just buy the coins and trade them. Which path to take?

I’m going to assume you’ve looked into the following factors, (paying special attention to dates on sites).

• Cost of components (building or buying a suitable computer, or the replacement cost of what you have if you burn out your hardware)

• What the hashing power of that hardware is and what kind of coin it’s most suited to mine (reading sites like Toms hardware and 1stminingrig.com)

• Your power costs and any clauses around tiered consumption or maximums. (Read your electric bill, call the utility company or read your lease agreement etc…)

With this information you’ll get some valuable averages from one or both of these sites. But that is NOT the complete picture.

https://www.coinwarz.com/calculators
https://www.cryptocompare.com/mining/calculator/btc

That is just one set of factors. There’s more and they aren’t being properly weighed until people dive in head long.

1. Time

If you’re investing money, you should be willing to and able to invest twice as much time. How hard did you work for the money you’re willing to spend? You should be willing to spend at least twice that effort protecting your money. That alone, will ensure you’re successful. If you work for 15 dollars an hour, you need to think about that 1000 you’re thinking of pulling off your credit card and look at it as the 67 hours of work it took you to make, and protect it with 134 hours of research. The only thing that is guaranteed, is that you will need to pay off that credit card. You will have most likely accrued interest on it, and by the time you have that money to pay your debt, you’ve already paid your taxes. So in reality, that thousand dollars took you a lot of time to make. Take your time, learn lots, there is SO much to learn.
If you’re thinking of buying OR mining, both involve learning a lot about how to make trades, keeping your money safe, transferring between fiat and crypto, securing tokens and new ICOs, taking out your earnings, calculating for taxes, and wallets. Never has there been so many wallets. Online wallets and paper wallets, hot wallets to hardware wallets, and so many security barriers along the way.

My point is, that this is the pioneer stage of the journey. Yes, it will take hold faster than the internet, but only because it HAS the internet to grow upon. I no longer lament not getting into crypto sooner. Quite frankly, I wouldn’t have known how. At this stage as we enter 2018, it’s only just now becoming useable to many, but it’s still not useable to most. In short, until your Grandma is using it without knowing anything about the technology behind it, you have time. So take your time, there will be many more rises to come, lots of opportunity to come. Watch a few ICOs come and go, see what happens. There will be more. So the big question is, do you have the time to learn and if you don’t, wait for it to come to you a little. Technology races towards ease of use. If you have a gaming rig but little time, consider lending your computer to work the night shift on a cold night, there are cloud mining platforms that will pay for your efforts. But don’t spend your savings or blow up your power bill trying to make a quick buck.

2. Chops

In short, this is going to test your tech savviness. There’s no calculator for that. If you’re comfortable with using simple scripts and batch files, dive in. If you get frustrated with Facebook, hold off. Instead, if you’re really interested and have the time (as above) please take classes and get into programming. I believe in you, you can do anything, you just need the time, and the willingness to put in the effort.

In my own case, this has really tested me – but I happen to like that kind of thing. I’m not a programmer, and I’m not a gamer. I studied Architectural Technology in College and worked in Civil, Structural and Architectural design eventually becoming a 3D CAD administrator and then went into information management. For 15 years I dealt with software, databases and faced technical challenges, limitations and changes daily. It was up to myself and a small team to make sure that designers could meet deadlines and meet design criteria, and the software was not always developed enough to be up to the task. I read and contributed to forums, and attended conferences, gave a speech once. I trained hundreds if not thousands of users on many different platforms. I’d built a computer once before. I’d never seated a CPU on a motherboard however. But guess what, I learned it all on YouTube. The point is, you can find transferrable skills of your own to apply to this realm, and time, elbow grease and a stubborn sense of never giving up will get you the rest of the way. If you want to get to a point where you can confidently build a computer and make it work for you no matter how hard or what you have to do to get there, you will make it. The best part is that you’ll have learned some of the best skills you can ask for in the new economy that is emerging.

3. Space… and temperature

Mining takes up space. If you’re in a small apartment in a very warm climate, please don’t build a computer. That’s just a race to who melts/catches fire first. You, or the computer. We live in Canada on an acreage, and we’ve got space and half the year we’re in need of warmth. All I had to do was clear junk and kill spiders (https://steemit.com/crypto/@lovea/it-s-been-awhile-but-you-re-not-going-to-believe-what-i-ve-been-up-to) and I now have a garage heated by computers. A month or so of stable temperatures in our semi insulated garage finally convinced my husband, we can do the same inside too.

What mining calculators won’t tell you is that if you currently heat your space, you can give your furnace a break and let your computers get your house nice and toasty. That’s a cost offset simply through design considerations. If you have a need for a heating load you’re in luck. Might as well have a space heater that pays your mortgage too, now even if your power is on the pricier side, mining can still make sense for you. Again, i haven't seen any mining calculators deal with heating and cooling loads. This might be the single biggest swing factor that you can take into account, that can actually be measured. If anyone asks in the comments, I can share my calculation sheets.

4. Risk

Mining can have some great advantages. My husband and I like to “mine our position” as much as possible. Treat it like building an investment portfolio where we have one machine pointed at a cloud miner that pays out in BTC another one mining ETH and another one that we use to pursue smaller altcoins. Instead of navigating centralized online exchanges and losing bits here and there to exchange fees, we try to mine what we want to hold and transfer to cold storage as much as possible. For us, we wanted to put our tangible dollars into tangible items and use those to create our portfolio. We think about our crypto kind of like our RRSP or TFSA (or 401k for US!) you don’t expect to have enough for retirement in a day, but you put into it a little bit at a time and watch the market grow. It’s the most volatile market there is. If you’re lucky enough to see massive gains in a coin you own, please do take some profit and make sure that you’ve covered your investment. Then its time to hold on for the ride. Ups and downs. Try not to get scared and sell low. Just HODL. If you’ve taken profits however, hopefully that will help you to take the feelings out of these big dips. The next biggest risks are security of your wallets.

The newer the coin, the crappier the wallet. That’s just how it works. So early on stuff is not for the faint of heart and unless you’re John McAfee, you’re not an internet security pro. Trying to get in on the penny stocks usually means you’re leaving your money on an exchange. Hey, what’s the ROI if you lose all your money because of an internet hack? Yep, I’ll take mining to a paper wallet address any day of the week over that vulnerability. So make sure that you know who really has your money when you’re investing in all this. The best risk management is a hardware wallet like Nano Ledger or Trezor.

5. Be the perpetual Noob

Not having much of a technical background myself, but just enough confidence to try anyways, I’ve decided to approach this as a researcher and I think you should too. If this is a world that intrigues you, dive in and revel in the fact that you’re new. A beginner’s mentality is the best way to keep yourself open to new areas and ideas and ensure that you’re absorbing the information. Having the interest will propel you to learn more and more, and that will undoubtedly shine to others. Whether you buy or mine crypto, learn enough that you could teach others. If you can do that, then you might be able to begin trading with others too. When people talk about how much money they can make with Crypto I do think that they miss the point in some ways. Yes you need to cover the costs of your investment (please do cover your costs!) but you’ll have generated value more importantly. If you can trade that value with others, you’ll be fulfilling the whole point of this currency to begin with. To trade with others without the need of a central third party. The sooner you can see the value of a currency without its correlation to USD, the better. This is why I like mining. I’m not watching the markets as closely or using the calculator to flip algos all the time. We mine mostly what we want to hold and use. But keep researching. Keep being curious. Keep learning and keep challenging what you learned. This is a space where all the worlds geniuses have come to change the world while making themselves filthy rich. Plan to always be trying to catch up, and always feeling new and learn to love it. Again, no calculator can tell you any of this, but this factor will keep you inspired to keep optimizing and keep learning and that will bring you success.

6. Transfer fees

Not all cryptos are created equal. This critical component isn’t worked into the mix when you’re new. What do you think people will use? What would you want to use to buy a cup of coffee? What would you want to be paid in for services rendered? These are the coins you want to build up now. Something that a mining calculator won’t tell you, is how many steps are you from moving your money to safety? Nicehash got hacked in December 2017, and that was a tough lesson. I allowed our mining rigs to build up before transferring because simply sending under $100 worth from wallet to wallet found the money disappear through transaction fees. We’d just gotten to $125 USD and then it was gone. Nicehash says they’re paying it back. I’ll believe it when I see it to be honest. Point is, that to get your money you might have to move it to a paper wallet to then move to a hardware wallet to keep it all safe. When you’re choosing between buying and mining, and how you’re mining or how you’re buying, you have to think about who has your money and how much they’ll charge you to have it. Nicehash and the currency exchanges are all prone to the same vulnerability that blockchain itself stands against, that is, a single central point of failure. The option we’ve liked the most is to use a mining pool and mine directly to our paper wallet. It saves us a significant fee that the calculators just don’t account for.

7. TAXES… shudder

Now I don’t know what the tax laws are in your land, but this matters. Big time. No matter what you plan on doing, you need to track your transactions carefully. The fewer transactions the better for a whole new reason now. If your country taxes every transaction, or if only when its exchanged for goods and services or converted to legal tender, this is going to be a heavy consideration in how you achieve the portfolio that you build. In North American Countries a long term hold, (subject to Capital Gains tax not Income tax) is a year. If you intended on making trades and cashing in quickly, you might not like what you owe in taxes. Long story short … HODL. Pick the currencies you believe in long term and hold on. It might take you a year before you find transaction fees low enough to spend your crypto on a cup of coffee anyways.

I hope you enjoyed these tips and ways that you can use your skills, talents, surroundings and circumstances to make your crypto strategy profitable… I’ll bet you have lots to add. Please comment and share! Give an upvote so I continue to research and share more, follow and I follow back too.

This post I wrote after having a great exchange on twitter, with @coinrypto. Give him a follow! Here's hoping this will help him join Steemit. It's great to have more likeminded, bright and courteous people like the Steemians I already know and love!

Much Love!
LoveA