Mining for beginners - all you should think about

Bitcoin mining. Economic value and profitability expertise

Cryptocurrency mining, which has been previously discussed, is a kind of activity aimed to ensure the existence of that, or that one cryptocurrency network, such as bitcoin one. What is this activity about? Miners are searching for a hash necessary for transaction signature (transfer) that are to be included into the current block. 

If you want to evaluate the mining economic efficiency, you need first to estimate the efficiency of cryptocoin mining equipment, which you will buy, including electricity charges. Then, you need to appreciate the approximate date of the purchase expenses to be completely paid off. This will mark a beginning of the profitable period. Here you should also calculate the potential amount of mined cryptocurrency. The end of the period can turn to be prolonged up to a year, or more. In other words, the end of this period comes whenever profitability equals electricity expenses.

Once you have evaluated the chosen type of mining, compare it to the expected revenue out from the price rate growth. Please mind that price rate growth may not always happen. In other words, under specific market conditions mining is likely to have a major economic potential.

Cryptocoin mining is rumored enough. Its profitability is also uncertain. On the one hand, you can always find publicly available information on mining managed “at home” that is likely to pay off the costs of the needed equipment in a year, and even more. On the other, there are a lot of people claiming that mining is unprofitable and risky endeavor. True often these people are technically inexperienced with little investment practice. They will claim that home mining does not worth even trying, and so forth. However, such claims should not be taken for granted. Home mining is worth trying in case you know how does it work, and what instruments to use to mine effectively. Home mining can be surely regarded as one of the ways to earn money, or an alternative for those willing to buy bitcoins on cryptocurrency platform first.

Types of mining

Bitcoin, and some other complex cryptocurrencies mining is performed with the help of highly specialized devices – ASICs. The ASICs are powerful computers with microchips specialized in cryptocurrency mining. The work of ASICs is based on SHA-256 algorithm. The other cryptocurrencies are mined with the help of the so-called “farms” based on up to 7 video cards on a single system board.

It is also important to mention here “cloud mining”, when a client is depositing funds in the Internet-service that seems to rent mining capacities out. It is strongly recommended to use only trusted and reliable services, and avoid services promising fantastic revenue in a few months only. In most cases “cloud mining” services are typical “pyramid investment schemes”; their founders do not buy mining capacities indeed; they pay new investors with contributions paid by people, who had joined “pyramid” earlier. 

Also read: Bitcoin Cloud Mining

Simply said real mining can be divided into ASIC-based bitcoin mining, and other cryptocurrency (altcoins) video cards-based mining. We shall further review pros and cons of the mentioned methods.

Bitcoin mining

Currently bitcoin mining seems to be quite promising due to the significant profitability that has increased much in 2017. During the period from April to November mining mathematical complexity increased by three times during the same period. Besides, there are major opportunities for further bitcoin price rate growth, and current price rate hold. Today a lot of investors prefer buying bitcoin.

Bitcoin mining peculiarities:

— Bitcoin-ASICs are quite simple to get installed and adjusted.
— Complexity rise is less likely to be predetermined in case with bitcoin-mining than altcoin-mining.
— ASICs are pretty much expensive (price for a single ASIC starts from a few thousands of dollars). By the way it could become quite a difficult case to sell ASIC for a worthy price: ASICs are hastily getting out of date.
— The scaling mining needs specialized buildings with fixed and running power supply, and cooling systems (ASICS require more energy than video cards; ASICs are also active sources of heat and noise).
— Reflecting on the above, the absence of a “cheap electric point” is highly critical for bitcoin-miners. Use mining calculating tools to check each time whether bitcoin mining turns out to be profitable to you. Due to high electricity charges people start thinking more about how to buy bitcoin rather than ASICs.
— It is not all easy to buy bitcoin-ASICs. You need to deal only with trustworthy sellers to buy quality ASICs, and avoid funds loss due to cheating; used ASICs can be sent to you as the new ones. If you want to deal with reliable dealer, make sure to read carefully previous users’ feedback posted on the reputable mining sites.
—ASICs are highly specialized devices. You can use video cards of any type to mine almost any altcoin. However, if you are no longer interested in bitcoin mining with ASICs help, a choice of a crypto to be mined is limited.
Evidently the newcomers are expected to consider all pros and cons of home-based bitcoin mining opportunities.

Also read: Where and how to buy bitcoin?

Video cards-based altcoin mining

Here we will review pros and cons of video cards-based altcoin mining .

— It is easier to buy video cards than ASICs.
— A new comer can start exercising mining effectively with the help of a farm made of a single powerful video card with necessary hardware (power block, or Random Access Memory, RAM). It will cost you relatively a little.
— Once you are no longer willing to keep mining, it will be all easy to sell video cards at a worthy price.
— Video cards-based farms require a little less energy providing less noise. Nevertheless, you are still recommended to work out your mining with the help of special calculating instruments.
— A miner does often need to construct one’s own “farm”. The effective farm construction requires more technical skills, and mining knowledge than ASIC-based mining. It is possible to find experienced miners in the large cities that would be glad to construct and adjust other people’s farms.
— Under the fortunate choice of currency pair, and favorable market situation your farm payback period can turn to be pretty less than a year (seldom, a few months).
— The lack of possibilities to predict a mining mathematical complexity is considered to be one of the most serious problems within mining community. The unexpected complexity increase is associated more with altcoin mining than with BTC mining. The matter is that the complexity rise can decrease the mining payback opportunities for years. In practice miners exploiting video cards can avoid mentioned risks due to the “migration” opportunities to mine other cryptocurrencies.

To sum up, a miner exploiting video cards needs to have technical, and market analysis skills to balance cryptocurrencies’ “mining price-complexity” to succeed. 

What bitcoin platforms do experienced miners choose?

No matter what kind of cryptocoin mining you choose, you need to keep the mined cryptos somewhere, and exchange them to the ordinary money. Miners use cryptocurrency platforms to solve these issues. You can consider EXMO cryptocurrency platform as one of the most preferable variants. EXMO is useful and reliable platform gathering miners, and those wondering “How to buy bitcoin?”. After simple registration you can store purchased cryptocurrencies for as long as you wish, trade them, or sell via your wallet to those willing to buy cryptocurrency directly. There are a lot of instruments on EXMO enabling a user to withdraw one’s funds. You can withdraw funds in dollars, euro, rubles, and hrivnas; you can transfer funds via different electronic wallets, and payment systems. You can withdraw rubles, and hrivnas from EXMO to your bank card without account verification procedure. If you have undergone the account verification, you can withdraw dollars, and euro.