Bitcoin Mining – Introduction
Crypto mining is a procedure of making new cryptocurrencies – Bitcoin (BTC), Ethereum (ETH) and other ones – by solving extreme math problems or computational puzzles.
It uses Blockchain technology for processing and recording information related to transactions with a chosen digital currency – in this case, BTC.
Mining is a type of service that helps a network with a large number of crypto traders, because it validates all transactions made between them and more cryptocurrencies (those that are used by the investors) are released as a reward.
Miners can use them for investing, for example.
However, it doesn’t mean that it is an easy and cheap process. In this article, we will show you some tips traders should think about to decide if BTC mining is worth it or not. Read the tips and enjoy it!
Bitcoin mining difficulty
Coming up next, we will see what most people consider as the main difficulty of mining BTC and some of the components that make earning money so hard.
Equipment used while processing digital currency
When BTC came into existence it was possible to mine it from almost any computer.
However, as time went by and the number of miners had increased, the system had improved, and it required more and more newer and better equipment (processors).
In addition, efficient measures to avoid equipment’s overheating are necessary.
It is important to have good mining programs, because they balance the system, avoiding that digital currencies reach their supply soon due to many people mining new units of them.
As we know, most cryptocurrencies have a limited number of units that can be mined. For example, since the maximum number is reached, new BTCs cannot be mined.
It is more common for rich companies to mine digital currencies, whereas mining processors need and spend a lot of energy.
Energy consumption
Just one single computer doesn’t provide high profits. The tools used for mining cryptocurrencies need to be working 24/7, to solve equations.
It means an increasing electricity demand. That is why the monthly price of energy bills rise. Besides, it is important to check if the power is down constantly where you live, because it damages your equipment.
Fierce competition
As previously mentioned, with the advent of mining, this process became ordinary, and the profit provided for miners also decreased due to increased supply.
As a result, better players are those who have the best mining equipment. Because the processors make the hard work.
Time invested
The result of the last point is that the time to complete each mining process and start another one ends up being extended.
In this way, traders will make money only in the medium-term or long-term.
It is important to think about how you will spend your time researching, buying and installing the most appropriate mining processor.
Calculating crypto mining profitability
Calculating mining profitability requires that some information needs to be taken into consideration. There are sites and tools that help investors to make the best decision.
For example, sites like whatomine.com and minerstat.com will allow you to calculate it by analyzing your hashrate, the digital currency you are mining (BTC or altcoins), the equipment used for making the new units of cryptocurrencies and your energy demand (kWh).
You will have to consider how much you’d pay for all the mining processor, air conditioner (to let your equipment cool) and (if you wish) you can soundproof your room for mining.
Other cryptocurrencies
There are many other cryptocurrencies (besides BTC) available to mine, but you must think about which ones are worth it.
BTC is the most popular digital currency in the world. BTC’s fixed-supply scarcity is most highly valued because it is coupled with accelerating, that is why its trading value is increasing.
Therefore, if you want to have the lowest chance of losing your money, you should invest in BTC.
However, other cryptocurrencies are mined faster than the first one, but their value is lower than BTC.
Bitcoin mining – Conclusion
For those who are incapable of investing in excellent mining equipment (including extra processors) and paying expensive energy bills the BTC mining process may not be indicated. However, you can research more about it to identify cryptocurrencies that are worth it for you.
Just to remember that mining is a process of making money into the “crypto universe”, but it is not the only way. There are professional ways that you can investigate in this world!
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