Crypto Mining: Should You Start Mining?
Cryptocurrencies and Bitcoin have lately become the subject of mainstream news as the market price of Bitcoin has reached record figures this year. Due to the growing value of the cryptocurrency, many people wonder if they should get into crypto mining.
Crypto mining refers to mining of the cryptocoins through which small profits can be made. However, the cryptocoins cannot be mined on an ordinary desktop computer. Investment in advanced equipment is required for mining.
The question in this case is “would the investment be worth it?” The answer to this question can be given by highlighting the key requirements for crypto mining and its rewards.
What You Need for Mining?
Advanced hardware equipment is required to begin the process of mining. This includes mining ASIC chips which cost from a minimum of $90.00 to a maximum $3,000, or a graphics processing unit (GPU). Fans are required to keep the hardware unit cool as substantial heat is generated in the mining process. A fast and reliable internet connection is also required to stay in the mining game. In addition to these hardware requirements, mining software is a must.
How to Mine?
After the hardware requirements are met and the software is set up, the next step is to join a mining pool where users mine together. The rewards are usually distributed among all the participating members.
Mining can also be done individually but the rewards in this case are not comprehensive. Most pools provide instructions on the process of mining but the speed of mining varies depending on the software and clock-speed of the hardware. It is also important to mine coins which are valued in the market, such as Ethereum, and not coins which are of no value.
What to Expect in Return?
Due to complex requirements for crypto mining, you can expect a lot of power to be consumed in the process. For users in areas where power costs are less expensive, mining could be a profitable endeavor. However, for those in areas with power costs going beyond normal limits, mining can bring no favorable outcome. The value you can generate from the crypto mining depends on the market price of the crypto coins you are mining.
For example, Ethereum’s current price is around $300. If all the mined Ethereum coins are sold, a lot of money can be earned and if user holds the coins and sells them when the value of Ethereum increases, significant profit can be made. However, on the contrary if the value of the coins drops it can lead to substantial loss as well.
The answer to the question of whether one should start mining or not depends on the factors presented above. If the expected returns can make up for all the investments in hardware and power costs, then one should go ahead with mining. However, in the opposite case, it would be better to not engage in the process of crypto mining at all.