Cryptocurrency Investments Part IX. Cryptocurrency mining.
Hello everyone, today I want to consider investments in cryptocurrency mining.
Pos mining.
PoS mining is based on the fundamental principle of capitalism: "Money makes money." In blockchain networks based on Proof-of-Stake, trusted nodes are involved in transaction confirmation and generation of new blocks. They must have a certain number of tokens on the balance sheet and receive remuneration for their work. This is a common consensus algorithm, and it has several subspecies that differ in the schemes for appointing validators and calculating payment for services.
PoS (Proof of Stake) is a modern token mining technique that allows you to perform work and calculations without using expensive equipment! It is necessary to take a very serious approach to choosing a project for mining, as there is a very high market volatility. Also a negative point when working with PoS coins is a rather high entry threshold. In individual cryptocurrencies, it can be measured in tens of thousands of dollars.
If you decide to work independently, then the concise procedure is as follows:
Buy coins on the exchange;
Download the wallet to the computer;
Synchronize the wallet;
Send funds to a local wallet (PC);
Keeping coins on your account and receiving proportional rewards.
The best coins for pos mining are regularly announced by specialists publishing relevant reviews. To determine which coins for pos mining to choose, you can pay attention to the following list.
1 Peercoin 2012
2 Decred 2015
3 BlackCoin 2014
4 Novacoin 2013
5 Cardano 2015
6 EOS 2017
7 LEOcoin 2016
8 Stratis 2016
9 Lisk 2015
10 Diamond 2014
11 ICON 2014
12 SolarCoin 2014
13 EmerCoin 2013
14 Reddcoin 2014
15 PIVX 2016
You should pay attention to what liquidity the token is traded on which exchanges. Otherwise, you can not sell tokens at the market price and all the relevance of mining will be reduced to zero.
PoW mining.
Proof of Work (translated from English as “proof of work”) is an algorithm that requires you to do work in order to enter information about operations on the blockchain. It is impossible to find a hash on your own (without the necessary equipment), so miners need computing equipment with sufficient power (hashrate). Therefore, the one who has the highest hashrate has much more chances to find a solution. At the moment, all the main cryptocurrencies mine large farms, so for an individual user this is a low-profit type of investment. Or you need to constantly look for tokens that are not included in the Coinmarketcap TOP, but the project itself is very promising.
On average, the mining payback in 2020 for different cryptocurrencies and on different equipment is from 1.5 to 3 years, taking into account the cost of electricity. Think for yourself. Going into mining in 2020 with such rates for cryptocurrency is generally very profitable, BUT you yourself need to understand whether you are ready to wait for a payback of 2-4 years and does your budget allow such expenses? Moreover, the market is still volatile. And analogues of the cryptocurrency that you mine with much more serious partners and prospects may appear, respectively, the course of the cryptocurrency you choose can sag even more.
Cloud mining
Cloud Mining is a cryptocurrency mining process using a remote data center, with a common computing power. This type of mining allows users to mine bitcoins or alternative cryptocurrencies without equipment management. In this case, you do not buy equipment for yourself, do not deal with the issue of its location, do not incur additional costs for electricity, but simply pay a fixed amount for using other people's video cards or processors.
The main point is the correct search for projects that provide this service, since you are not “controlling” your investments.
There are several key differences between cloud mining and ownership of a cryptocurrency farm:
Does not require large investments in the arrangement of the farm;
There is no need to invest labor and time;
there is no need to regulate the supply of electricity, look for cheap sources and minimize the risks of power surges and blackouts;
You can not delve into the technical aspects of mining;
You can mine cryptocurrency on several algorithms at once;
access to the cloud mining farm can be obtained from anywhere in the world, mining does not require the constant presence of a miner nearby.
Choosing a cloud mining service:
Reputation. Mining in the cloud must be reliable. It is desirable that the service has several years of successful work, the success and honesty of which can be confirmed by expert and customer reviews.
Publicity. For security reasons, most companies hide the exact location of data centers, but general information about them and the founders of the service should be made publicly available.
Professionalism. Pay attention to the technical features of the arrangement of the service and data centers, site security and the company's ability to withstand hacker attacks and technical failures.
Opportunities. Different services offer mining using various algorithms. Some focus only on Bitcoin mining, others provide a wide range of mining services for various altcoins, switching between contracts and other additional services.
Convenience. Each service has individual features. Available methods of depositing and withdrawing funds can be quite limited. You should also consider the minimum amount for withdrawal. Too high a minimum withdrawal amount indicates that it is advisable to invest only impressive investments in the service, otherwise it will be problematic to withdraw earnings.
Features. All services try to make production as efficient as possible, but not all of them succeed. Pay attention to the features of the placement of data centers. They should be located in optimal conditions and regions with a low cost of electricity, otherwise the service charge will hardly exceed the income.
Useful resources:
https://www.stakingrewards.com/
You can see the full range of investments in cryptocurrency here.