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Is cryptocurrency mining a worthwhile investment?

 

Cryptocurrency mining can be compared to finding the fabled ‘X’ that marks the spot where the buried treasure is. Is crypto mining really that easy and is it right for you? There are a aspects you must know before you decide to Cryptocurrency mine. Such as:

  • Understanding the total investment costs

  • The functions of the hardware and the software associated with mining cryptocurrencies.

  • Discover the secret motherload behind crypto mining

  • Mistakes to avoid that 90% of investors make

 

Is cryptocurrency mining a worthwhile investment? That all depends on the environment you are mining in.

Cryptocurrency mining is the process that produces a cryptocurrency coin or token. That process functions with computer software along with an enhanced configuration of computer hardware.

Mining is the term given to solving a complex mathematical riddle that adds a block of data to a particular blockchain by a computer on the same network. If the miner(computer) that is registered to you solves that mathematical riddle,you were an integral part of adding a verified block of data to the blockchain. For accomplishing that feat, you are rewarded with coins or tokens of the cryptocurrency you are involved in.  For example if the cryptocurrency is Bitcoin that reward is 12 ½ coins of Bitcoin.

There is one thing about digital mining that’s similar to the physical mining of precious stones and metals. You’re chances for success increase when you’re mining in the right location.

Physical mining success happens when you dig where the motherload is.

Digital mining is most successful when you mine in areas where electricity is cheap or free. Elite Fixture reported on average it costs from US$531 to a stunning $26,170 worth of electrical kilowatt hours to  mine(produce) one bitcoin, depending on where you live in the world.

Venezuela can supply electricity at a lower cost than most places in the world. This fact has potential to make cryptocurrency mining there an extremely lucrative investment, given the proper market conditions.

The point of all this information is to help you determine if cryptocurrency mining is a good investment for you.

Understanding what the energy costs are is a critical factor in the decision making process.

A moderately equipped cryptocurrency miner(computer) costs a little less than US$3,000 to purchase the components and configure those components yourself. A pre assembled and pre programmed configuration of similar components costs a little less than $5,000 to purchase. These units can compute approximately 166 MH/s (million hashes per second) and require about 1,000 watts of electricity to function at peak performance.

This piece of equipment will operate 24 hours a day. Therefore you have to be able to calculate energy costs per hour, per day, and per month in order to assess the energy costs. The formula works this way. ( The amount of watts required for a device to function) × 1( hour of use)

= The amount of electricity used in 1 hour. electricity is normally billed in units of kilowatt hours. 1 kilowatt hour is the primary billing unit for electricity.

The units we designed in our example run on about 1,000 watts. Plugging that value into our formula 1000 watts × 1 hour = 1 kilowatt per hour. What is the price of 1 kilowatt hour of electricity where you intend to run (operate) your cryptocurrency miner? If you operate your miner in Manhattan, New York the average cost of 1 kilowatt hour of electricity is about 20 cents. The price for 1 kilowatt hour of electricity in Bangkok Thailand is about 4.5 THB per 1 kilowatt hour which converts to about 14 cents per kilowatt hour.

There are alternative configurations of computing components that can operate at faster hash rates. But the amount of electricity they consume will be greater. ASIC(Application Specific Integrated Circuits) configurations of computing hardware can compute up to 14 TH/s (Trillion Hashes per second) at peak performance. The Antminer S9 Bitcoin Miner costs approximately $1,500 and uses about 1,350 watts of electricity. ASIC units are limited to only one Hashing algorithm and therefore limited to one platform of cryptocurrency. The Antminer S9 only mines Bitcoin or Cryptos using the SHA(Secure Hashing Algorithm) – 256 Algorithm.

1350 watts X 1 hour = 1.35 Kilowatts per hour(kWh).  $0.20 X 1.35kWh = $0.27 for 1 hour of use in New York approximately.

$0.27 X 24(hours in a day) = $6.48 per day = $194.40 per month

$0.14 X 1.35 Kilowatt hours = $0.19 for 1 hour of use in Bangkok.

$0.19 X 24(hours in a day) = $4.56 per day = $136.80 per month.

A versatile cryptocurrency miner running for 1 day in New york consumes about $4.80 worth of electricity per day and $144 in 1 month. That same configuration of components in Bangkok, Thailand consumes $3.36 worth of electricity in one day and $100.80 worth of electricity in one month.

On average a cryptocurrency miner can produce somewhere between $50 – $100 or more daily. If you choose to mine Bitcoin, I’ll repeat, the reward is 12.5 coins for solving the mathematical riddle. Bitcoin traded as high as $20,000 dollars in December of 2017. Many analysts have forecast an even higher price for Bitcoin by the end of this year. This trend and forecast makes the potential of revenue well worth the investment in the equipment.

One thing is for sure. A $3,000 investment in  cryptocurrency mining equipment plus the cost of electricity to run it, can potentially give you a helluva better return than the 2.2% from US Treasury Notes, and the 1% mainstream banks give on hard earned savings in one year. We haven’t even  mentioned the fees banks charge for using your money.

Now that you are armed with this information. You are also able to see a greater potential of return on cryptocurrency investments versus traditional investments. For young people in America today, with limited retirement investment options, cryptocurrency mining may well be a better choice than traditional retirement investments.

What about cloud mining and pool mining of cryptocurrencies?

All the research and reports I have read, revealed that these types of investments are legitimate and many do perform the service they offer, but there are some that are scams The proclivity of human beings to succumb to greed and selfish ambitions, has inspired us to do our best to seek out accredited and proven providers of these services for our readers.

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