IS IT TOO LATE TO START MINING?

maharlicash (31)in #cryptocurrency • 7 years ago

Cryptocurrency Mining

If you’re in the crypto universe for more than 4-5 years, then probably you tried to mine at least once, if only for fun. And if you ever mined, if only for fun, then you know how fast things evolved in this area. There was a time when mining with your laptop was actually doable. Then GPU processing came along and made CPU mining obsolete. Then ASIC gear came along and made GPU mining (more or less) obsolete. Then people started to organize themselves in mining pools, which is pretty much the standard these days.

So, without further ado, let’s try to tackle the big question, which is on everybody’s mind: is it late to start mining?

The short answer: nope.

The long answer: well, it depends.

Let’s dive a bit in the long answer. Because, as you will see, mining can be a highly profitable activity, but you need to take care of a few things.

Mining Costs

If you want to mine then you have to look at the costs. Traditionally, people were only looking at the cost of the mining gear, without thinking too much at the cost of electricity. With margins narrowing more and more lately, because of increased competition, the cost of electricity becomes more and more important. That’s why, in the long run, a bigger facility, like a mining farm which can negotiate better electricity deals, is more suitable than an individual operation.

When it comes to gear costs you have to choose between GPU and ASICS. GPU tends to be more liquid. This means there’s a bigger market for them than it is for ASICS, which allows you to sell them faster and better than ASICS, which can become obsolete quite fast.

And when it comes to electricity costs, you have to find a much better deal than the standard prices you get as a regular user. An increasing trend is using solar panels to at least supplement some of the energy required, while in other parts of the world (notably China) mining facilities are built around river power plants. In Iceland, thermal energy is also used for fueling mining facilities. Whatever the source, you must be aware that is not economically viable to mine in your garage, unless you own some sort of a power plant near that garage.

Mining Expected ROI

Back in the golden days of mining, you could expect to discover a Bitcoin block in about a month. That used to be a full 50 Bitcoin. At the current price of $7000 that would mean today $350,000. Obviously, that’s not possible anymore, the difficulty increased way too much for a single miner to be able to reach that goal. But the good news is that a block still gives 25 Bitcoin, or $175,000 and that amount can be split among many people.

So, the prospects of mining in a mining pool are more and more attractive. If you get only a 0.1% for a block discovery that’s $175. In real life, you won’t see that much of a revenue, unless you are a professional miner and you invested heavily in your gear. But more often than not, with a decent investment and with low electricity costs, you can see revenue in the hundreds per month. Again, these are estimates and we’re not talking about professional mining, which can give much higher return rates.

Mining Caveats

You have to be aware of a few caveats before getting into mining:

there’s no guarantee. Bitcoin (and almost every crypto-currency out there) is a decentralized network. That means there is no central authority that can guarantee your profits. Please repeat this until you understand it;
the market is very volatile. We all saw a fabulous increase in Bitcoin price lately (just one year ago, it was trading at $1000 and now it’s trading at or above $7000). But markets are by definition rules by speculation so what goes up may (and it will, eventually) go down. So it’s paramount to understand that before getting into this;
there are no lone wolves anymore. I can’t stress that enough: solo mining is dead. If you think you can make a living out of it, you’re wrong. Of course, you can make a few dollars per month, but that’s not a business, that’s entertainment. So if you’re serious, you should think about joining a mining pool, contribute your hashing power to the bigger basket and share the rewards;
not all mining pools are born equal. If you came to the terms of joining a mining pool, there are a few things you need to know. First, the connectivity should be top notch, otherwise, you may end up losing tasks and your hashing power will get wasted. Second, you need to assess the payment structure (we may do this in a different article). And third, make sure the mining pool has a transparent communication policy and that you get all the necessary support. Especially with sharp increases in difficulty and good, supportive mining pool is a rare find.

Is It Too Late To Mine?

As you can see, it’s not too late to start mining. Just as an example, if you would have started mining last year, your revenue for this year would have been 7 times higher. A 7x increase in profits is rarely seen in any domain, so yes, this is profitable.

But please make your due diligence first. Make sure you can invest in performance gear and make sure you can get a competitive electricity price. And then, make sure you join an honest, transparent mining pool, which will guarantee that your hashing power is not lost along the way. And, as unpleasant as it sounds, please understand that there is no guarantee. In time, you’ll understand the beauty of decentralized network: there’s no central authority responsible for everybody. Instead, everybody is responsible for everybody. As long as everybody is doing their job, things will only go up.

Source: MinerGate | Tip Jar: maharlicash