Today I’m going to quickly speak about a topic that is brought up a lot with bitcoin and give my honest opinion and answer about the whole thing. And exactly what is that? Bitcoin mining! I can tell you that this article is going to save you lots of stress, time, and money so please be attentive and hear my advice. This is coming from a guy who has lost thousands of dollars messing around with mining since late 2015. If it’s one thing, do NOT be a “sucker”, because that’s how you’ll end up being bald from ripping all the beautiful hair out from your head.
First, I’ll answer the following questions: What is bitcoin mining? How does it work? Is it Profitable to mine bitcoins today? As far as today’s post goes, I’m talking specifically about bitcoin mining. I’m not giving any of my opinions about alt coin mining because that is a whole other subject with completely different factors that influence profitability and mining. Let’s get started, ladies and gentlemen.
What is bitcoin mining?
Bitcoin Mining is the process of adding transaction records to the blockchain ledger system of past transactions made by people all over the world such as yourself. This ledger system is called the “blockchain” and is an open source ledger system containing all past transactions with bitcoin.
How does bitcoin mining work?
Today, there are “pools” which consist of multiple people mining using ASIC hardware together solving algorithms required to “find” a block for transactions to be recorded on. The process goes on and on. The miners get rewarded a piece of the pie for helping to find a block in relation to how much hash power they had to mine. The more hash power you have, the more you will be rewarded in bitcoins. At the moment, every time a block has been found, 12.5 btc are released to the miners. Last year up until July, it was 25btc per block found. It cuts in half every 4 years until 21 million bitcoins are made and in circulation. You can actually check on blockchain.info to see when these blocks are found and which pool found them. Can you mine just yourself? Yes, you can. However, assuming you won’t have near the amount of hash power these other pools have, it will take forever to find a block. At that point, it’s like winning the lotto.
3 Major factors influencing your mining profits
- Bitcoin’s price
- Current Difficulty rate (Increases when more hash power is being added to pools, causing profits to decrease)
Mining yourself vs. cloud mining
Unless you’ve got the resources to blow through tons of electricity, live in a cold place, and casually happen to have a giant storage unit, mining yourself is out of the question so I wouldn’t even worry about it. I want to provide you with something that will help, so I’m not even going to list the different ASIC mining hardware you can purchase to start mining at your place. With cloud mining, companies like Hashnest who is owned by Bitmain will take care of the maintenance and all to do with making sure your hardware is running 24/7.
Companies like Hashnest
Hashnest actually is owned by Bitmain, which is the company behind making the Antminer s7s and s9s that you may have heard about. I am currently mining with them and the interface is great. In terms of ROI and profit, I kind of regret it and I’ll tell you why. Bitcoin mining is very frisky right now and I feel very nervous about having my funds in hash power. With Hashnest, you have a market to buy and sell your btc or hash power to others like me. You receive bitcoins immediately after your pool has found a block and can view everything on blockchain.info. Last year, it was definitely a great investment! This year with the bitcoin halving, not so much.
As the difficulty rate goes up which is apart of mining, your rewards slowly go down. So in order to “hedge” your profits, you’d have to purchase more hash power just to maintain. Sucks doesn’t it? Another scary thing that I’ve observed is that when the bitcoin’s price increases, the price rate of hash power decreases immensely, on top of it already declining because of the difficulty rate always climbing. It is possible to return your investment, but with the halving and the current price, I would strongly suggest you stay away from it if you don’t want to add some big risks to your plate.
Companies like Genesis Mining
This one’s going to be a short answer! DO NOT sign up! Want to know why? Firstly, they are not willing to share what their pool name is because of security reasons. That’s straight baloney everyone. Hashnest is one of the largest mining companies, if not the biggest, and they are completely open about everything. Secondly, there is no market to trade your hash power. So once you give them btc you can say goodbye to it all. It all lies from what they give you from there on out. The apparent ROI time is over 600 days, which is half of Hashnest. It’s a no brainer guys. Take it from someone who has been through this rapid stress funnel and saves some time, stress, and money for yourself.
Bottom line to sum it all up
So to sum it all up for you, here’s the best advice I can give anyone interested in thinking about mining. In my opinion being involved before and after the bitcoin halving in July 2016, I can tell you that bitcoin mining is not going to cut it unless the price continues to rise like it did in 2016. After the halving mining wasn’t a hot thing anymore. Don’t be a sucker and willingly give your hard earned assets to anybody besides Hashnest if anything.
What is the best investment for 2017?
Buying and holding Bitcoins is the absolute BEST investment you can have with anything bitcoin related. Not only are you always in full control of your assets, bitcoin itself also has some amazing plans for this year. One of them is the Winklevoss ETF that could be accepted in march and could drive the price to $1645. Bitcoin started around $300 in January last year and is now sitting around $1000. So if you bought $10,000 worth of bitcoins at that time you would have $30,000 worth of bitcoins. Where else are you going to find an investment that keeps giving people the opportunity to at least double their assets just like that? My plan for bitcoin is to cut all the mining and focus on holding as many bitcoins as I can. I advise you do the same. If you’ve been following up with the news for a while now, I’m sure you can agree that simply buying and holding bitcoins is hands down the best way to go about things!