Bitcoin Mining: A Competitive and Rewarding Business

Did you know that there are over 1000 cryptocurrencies listed on Coinmarketcap. Out of all these cryptocurrencies, Bitcoin mining is unquestionably the most profitable. There’s a big reward in store for any miner who takes part in finding new blocks and helping to verify transactions.

Before 2013 when advanced mining kits were introduced, virtually everyone could mine Bitcoin using their home computers and the profits were huge. But when ASICs came into play, big players- those with deep pockets dominated the industry, and groups of miners, called mining pools started taking over.

Also, after every 4 years, the mining reward halves. At the moment, the reward for validating a block is down to 12.5 BTC.

This does not mean Bitcoin mining is not lucrative.

In fact, from 2017, the number of miners on the Bitcoin blockchain has been increasing by the day. At the moment, 1 BTC is valued at more than $10,000. This means the reward per block is roughly (12.5×10, 000) $125,000. However, this is not the net profit as you would need to deduct electricity costs.

Picking a Pool

When deciding to become a miner, there are usually two roads before you; becoming a solo miner or joining mining pools. There are a number of pools running at any given time.

More importantly, there are a number of things to consider when picking a pool. The larger the pool, the smaller the pool fees which are used to manage the pool. Larger pools should be able to spread the cost across many more people.

However, as a community, we do not want any one entity to ever manage 51% of the entire network hash. This would allow for a 51% attack on the network.

After picking a pool to use, you will need to set up an account and configure your miner to log into the pool. The pools consist of two interfaces.

The first interface is the one that the mining software uses to get work and report the result of the work done. The second is the web interface that gives you, the user, the ability to interact with the system.

There is no need to determine which mining pool is better but there are many options out there for you to choose. First, do a thorough research and read as many reviews as possible to figure out which pool will be suitable for your location and timezone.

Do I mine in a Pool or Solo?

Deciding to mine solo or in a pool is a risk-based decision and will differ for everyone.

Some folks who go solo find it rewarding while there are others who prefer to join pools. Those with limited resources should not even think twice about joining a mining group as this is the best way to get going.

If you’ve got powerful and the latest mining rigs, then there is nothing stopping you from going solo.

Mining Strategy

There are a couple of different mining strategies that you could engage in when you decide to start mining BTC. The first thing you want to do is go in all the way. Do not enter this market if you just want to put in 2 or 3 thousand dollars and just get your toes wet.

That’s a waste of time. You will lose money and you will hate the industry and yourself for not making it.

When you want to play this game, remember the old adage of strength in numbers. The chances of being successful in Bitcoin mining depends entirely on the cumulative hashing power you can get. Go in with a couple of friends and start off with no less than $100,000, then set up the system in the coolest room in the building.

What most people do not understand is that it’s not just about the number of fans to make sure that the processors do not overheat, it is also about keeping them at their optimal temperature. Overheating is a major problem, but optimal temperatures increase the average hash rate.

In the winter, open up the windows if you have to, and in the summer crank up the air and keep the fans channeling air out of the room. If you have an attic fan, that will work great to keep the airflow in the home or office better regulated.

The next thing you need to do is have standby fans and power generators.

Remember this:

The power generators are not for the processors to keep running if the power goes down. They are there to keep the fans running in case of an outage. If the fans aren’t running and the processors suddenly stop, they are still producing heat and the fans would be off too?that’s a problem. So make sure you have backup power to run the fans and to gently wind them down after a power disruption.

Run the machines 24/7. Running them at shorter intervals doesn’t increase the life of your equipment; keeping them cool does.

You are going to enter the game. This is a business just like any other. The time to think of Bitcoin mining as a hobby or as a pastime is long gone. Bitcoin mining is a serious business that requires that you are willing to understand the idea of cryptocurrencies, the fundamentals of cryptography as it pertains to coins, and the operating systems and software that are involved in getting this hardware to run at the most optimal rate you can devise.

There are a number of tweaks and add-ons that you can take advantage of to make your rig perform as efficiently as you could hope for.

Wrap Up

At the end of the day, you need to be able to answer these two questions. Firstly, do you want to mine Bitcoin? The idea of mining cryptocurrencies should not be something that you mistakenly think you can jump into without forethought and planning.

It is, after all, just like any other business, with an investment requirement, the potential for risk and profit, and the need to apply consistent effort and problem-solving. There’s always the chance of its value dropping down or ‘going to the moon’.

However, since Bitcoin is backed by a strong community consisting of many famous investors and entrepreneurs who have made bullish predictions, the future appears to be certainly bright for investors and miners alike.

It goes without saying that you need to constantly upgrade your skill level. It doesn’t mean if you can turn on a computer, that you’re ready to make money mining. Even if you join a pool, it still requires some sort of knowledge of what you are doing so that you can counter any obstacles along the way.

So before you proceed to Bitcoin mining, make sure you upgrade your hardware and brain.

Catalin is the founder of Ecommerce Platforms and Unblock. He’s a design enthusiast and loves matcha, and is uber passionate about Bitcoin and blockchain technology.