How to make money from cryptocurrency mining
When people start their adventure with Bitcoin, they usually go through a gold rush with the concept of mining (that's how I started ;) ). Here's a short guide to answering the age-old question "Will this make me money?" :
Let's talk about the hardware first (click the link for a long list). Unless you have a very high quality ATI, FPGA or ASIC GPU, you cannot make money from Bitcoin mining. That is the short answer. A good processor can be used to mine Litecoin, which can be a small income, but we are talking about Bitcoin here. To know if you are profitable or not, you need to enter your data into a special calculator.
1. Hardware cost (cost of buying ASIC, GPU, motherboard, power supply, etc.)
2. Hash rate (megahash per second). You can find it in the hardware list. 3. How much energy do you use (list materials again)
4. Electricity bill (check with your utility company)
And there are two things that determine whether things go well or fail. There is a magic variable:
5. Difficulty - automatically filled in by the computer, but should be pessimistic if mining for a long time (several weeks or more). Multiply the value by 10 for multi-month forecasts and 100 for 1-2 year forecasts (exponentially fast).
6. The price of bitcoin - also entered into the computer - may increase or decrease in the future, which will affect profits. It will probably go up in the long run, but drop it and drop it to $10-$20 to make sure you make some money.
Put all your hard data and all your predictions about the last two variables into the mining calculator and see what you get. Earnings are displayed in BTC and USD, showing an overview of expenses, break-even point and net profit over the investment period.
Most of the time, you won't make any money mining Bitcoin, but that's okay. Mining has become a very specific process. If you want to invest your money in a new ASIC, you can get a good return.
Even the mining computer will fool the absolute newbie. Difficult point. This means that the GPU/FPGA hardware you buy today won't pay for itself (at least compared to a direct investment in BTC). ASIC has a big barrier to entry, they are the only company with orders and they are almost five months behind the delivery date, and it is still lagging behind. It is definitely a risk to order if you are late. In short, mining is a failure for beginners. However, if you decide to make a large initial investment, buying an ASIC is a great way to further secure that investment by expanding network performance and enhancing security. However, this is still not a safe option as you can only "pre-order" at this point. Better to wait for these companies to actually deliver.
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