Those who started mining Bitcoin and have hold their rewards, have become now multi-millionaires thanks to the sudden rise of Bitcoin. Imagine that somebody earned $500 for mining when the Bitcoin price was only $1.Now that $500 would be worth $5-10 million.
But is cryptocurrency mining still profitable in 2018? Should you build or buy your own mining rig and start earning some passive income?
Cryptocurrency Mining Review – My Video on YouTube
In this article, I am going to answer your questions thoroughly and I’m happy you’ll find this helpfull. Let’s have a look!
What Is Cryptocurrency Mining?
With many cryptocurrencies including Bitcoin so-called ”miners” maintain the whole network and confirm the transactions. When you make a transaction, miners will confirm it with their equipment. In the other words, Bitcoin is a huge network of computers and CPUs all over the world that maintain the whole system.
Each 10 minutes miners get a small reward for confirming transactions and giving their capacity for mining. Some say that Bitcoins heart beats once every 10 minutes. Miners’ reward is pre-determined in the Bitcoin whitepaper and also with other cryptocurrencies.
With Bitcoin, for example, the mining reward is 1,800 Bitcoins per day. That amount is allocated between all miners all over the world.. The reward of miners halves next time in June 2020. Halving is always an important event for Bitcoin and in the past it has always raised the price significantly. Halving means that the miners get less rewards for mining which also means that there will not be so many new Bitcoins in the market.
Of course, the overall circulating supply is bigger but the number of new Bitcoins is then smaller. If the demand for Bitcoins remains the same, the price will naturally go up. It’s planned that in the whitepaper that in 2140 all Bitcoins have been mined and no new Bitcoins are issued anymore.
How Can You Do Cryptocurrency Mining?
Basically, there are 3 ways to earn money for cryptocurrency mining:
- Use your computer or current equipment for mining or build a mining rig.
- Buy a mining rig for example from Amazon.
- Participate in cloud mining.
The easiest way is probably to participate in cloud mining. In that scenario, you give money to somebody else who has already built a huge mining rig and your earn a little interest on your investment.
If you just use your computer or mobile phone for mining, your earnings are extremely small because the processing power is so minimal. Therefore, it isn’t even worth your invested time. So, then we would have two options: Either building your own mining rig or buying one.
Challenges of Cloud Mining
Cloud mining may sound like an easy money but I would like to discuss a few risks that are involved with cloud mining.
First of all, you need to be able to trust the company that takes your money. I believe have been many cloud mining scams over the years. The company has promised to give you an interest to your investment but they have just suddenly disappeared with your money. Your only option would be to try to find them and sue the company but it can be a lot of hassle and not so easy at all.
Second, with cloud mining, you are committing your money for a certain period of time. You don’t have control of your money during that time because the company is holding it. If you are investing in cryptocurrencies directly, you always have a control when you sell, buy or do something else.
Third, you may earn much more by just holding cryptocurrencies rather than investing in cloud mining. The history has shown that it’s possible to make even 10-100x returns on investments in a year by investing in potential cryptocurrencies.
Some exceptional situations have given even 1,000x profits in a year. If you would invest $1,000, that would turn in those scenarios into something between $10,000 and $1,000,000.
Of course, the history can’t guarantee the future but you still need to consider that you may earn more than holding rather than investing in mining. At least that has been the case in the past.
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Should You Build Or Buy a Mining Rig?
I have sometimes considering building a mining rig. I have a friend who makes $300 passive income per month for his mining rig and I have seen numerous people on the Internet showing their cryptocurrency mining and earnings.
However, so far I haven’t bought or built it myself and now I’ll explain you the reasons. I believe this will also help you to consider whether it’s’ worth building or not.
First of all, if you want to do cryptocurrency mining this way, you need to have money that you can invest money and time for the mining rig. If you build it yourself, it will take several hours to research how to do it, buy all the equipment and actually do it. I would say it takes at least 1-2 work days in total from a complete beginner.
The mining rig isn’t either very cheap. If you buy it, you may need to use thousands of dollars to get a high-quality equipment.
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The #1 Reason Why I Can’t Do Cryptocurrency Mining!
Second, you need to find a place to do the mining. For example, Bitcoin mining is pretty loud and it can’t be done in your bedroom while you are sleeping. If you get a big mining rig, you also need to arrange a cooler for them because otherwise, it will heat up too much.
I am at the moment traveling around the world (Bulgaria-Macedonia-Turkey-UAE-Philippines-Malaysia, etc.) so I couldn’t even have a mining rig because I don’t have a permanent place to hold it unless I would hire someone else to take care of it. That brings me to the next point.
You also need to monitor your mining rig. Miners have told that the parts have broken sometimes and they needed to arrange new ones. In addition, mining also takes a certain part of your brain capacity, time and thinking because you know that it’s there. Of course, this isn’t a huge thing but still needs to be taken into account.
For example, I have an investment apartment in Finland and even though it doesn’t take almost at all my time or effort, it still takes a small amount of my time every now and then.
If I would do cryptocurrency mining, I would probably just buy mining rigs instead of building them myself. The time and effort costs money also because it’s away from some other activities. Nowadays buying a mining rig is easy because you can have one easily on eBay or on Amazon.
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How Much Money Can You Earn for Cryptocurrency Mining?
Your earnings depend on the power you have in your mining rig. The more money you have invested for the better quality, the more you will earn.
Based on numerous miners that I have listened to, it takes around 6-10 months to break even with your initial investment. If you have invested, for example, $5,000 we can estimate that it will take 6-10 months that you earn it back unless something unexpected happens. This estimation is based on the assumption that the cryptocurrency that you are mining stays stable.
If the price goes up, you’ll earn your own investment back faster. If the price goes down, it will take a longer time to earn your initial investment. We also need to consider that you have invested time and effort for the mining rig. You could have used that time for something else that would have made your money during the same time.
In the other words, we come to a conclusion that it takes almost a year to earn back your initial investment and break even. In many cases that would be a huge return on investment. By investing in the stock market you can expect 8% annual return rather than 50% return per year.
Conclusion – Is Cryptocurrency Mining Still Profitable in 2018?
The truth is that it can be profitable but there aren’t guarantees. You may make much better profits just by investing your money directly into cryptocurrencies. Spending money on building or buying a mining rig isn’t riskless
If I would live permanently in one place and I would have extra rooms, I could certainly consider mining. However, now when I’m moving around the world, I just prefer stick to investing.
There are several cryptocurrency projects that I have invested in and I believe they are going to give me awesome returns during the coming years. One of my favorite projects at the moment is Bankera and I’ve invested around $7,000 in their tokens during the ICO. Of course, there are also many other cryptocurrencies that I’ve invested in.
I’m also building passive income streams with the help of Wealthy Affiliate because I don’t want to put all my eggs in one basket. If you would like to learn more about it, I’m always happy to help you out.
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Have you been thinking about starting cryptocurrency mining?
Have you already done mining or do you have friends who are doing it?
Let me know in the comments below!
If you have any questions, I will be more than happy to help you out as always. 🙂
It is much easier to work on other projects that delve into mining. First off at the moment you need to have an organized pool of miners for little units of coins that you share amongst yourselves. I don’t think it is tbe thing for me.
Great review anyways and thanks.
Thanks for sharing your insights Kabiru!
I’m not a fan of mining. I believe the returns are very minimal. I know you earn a bit every single day, but if you calculate you are making very very little money. I agree you are better off buying directly into cryptos because if their value goes up you make a profit.
In mining your profit is divide e.g administration costs e.t.c The only advantage about joining a mining company is that you get a lot of information about cryptos which you can latter use to make money.
Yeah, mining requires some investments and time but it can possibly be profitable. My friend has been mining a little bit and he is making quite easily $300-400/month passive income with it. So, not too bad I guess?
I just personally don’t have space for mining and I tend to travel regularly so I can’t build and maintain a mining rig.
Just be careful if some cloud mining companies are selling you their “educational packages” and tries to get you to climb their ladder. There have been many pyramid schemes in the space. I just published an article of Bitcoins Wealth Club. Another shady program is BitClub Network.
In my opinion, mining is for people who are extremely rich. The reason why I say this is that they can buy an expensive rig and they don’t have to worry about earning their initial investment faster. Moreover, they can buy a mining rig for thousands of dollars and expect to get big returns. Thus, for an average person, it is better to invest in cryptocurrencies.
I just want to share to all of you what ive read in a blog that I read earlier. It is still to my mind the bottom line in that article which says that for you to prepare for your future you have to save for your self and buy bitcoin because they say that it can really help you for your future and it is a savage life changer they say. So now I am thinking where should we start investing and buying a bitcoin for us teen agers to prepare a better future for all of us.
Yes, we’re really seeing a mass adoption of cryptocurrencies in front of our eyes. We’re living exciting times. I think that holding 1 Bitcoin can provide a full retirement fund because the price can still significantly go up when masses start using cryptocurrencies.
Cryptocurencies are very trending now and I am still trying to learn on how to deal with with because there some says it’s a black market. Risk is always anywhere that’s why we should be careful in putting our money as an investment. Crypto’s is global and we cannot define the high and low level of values on each day.
I definitely respect your opinion. Good day to you. On the other hand, you are one hundred percent right because investing in a cryptocurrency is very risky not because it is a black market. But bacause there is some existing scammers which is the false cryptocurrency sites that every bitcoin miners should avoid. Honestly I am 50-50 in believing the black market. I am not sure if it really exist. if you know about it please enlighten me.
What do you mean with black market in this context?
Hi, im from Philippines and im a freelancer. Started online job just a year ago, and my experience in cryptocurrency is good. I’m very thankful to a friend who introduce me to this job, just claiming free btc then you can get extra income. I’m a freelancer that not investing money in online job to start of, i just want to put extra time and effort to earn money not to invest before working. And i can say that my strategy is good for me.
So, what kind of online job are you doing to earn free BTC?
Actually the growing of cryptocurrency mining is the reason why the graphics card or the video card (a part of a computer) is very expensive now a days. I ask a staff how much is the graphics card that I pointed and it was so expensive compare of its price before and the staff explained to me that the price go high because the stocks goes limited because in cryptocurrency mining requires atleast I think 10 graphics card to start mining. So I can say that cryptocurrency mining is still profitable because the people that do it go more and more each day.
That’s an interesting point of view. I didn’t think that it would affect video card sales so dramatically but now after I think about it, that feels natural because cryptocurrencies have been growing so fast (and most likely keep on growing in the future as well.
Yes, at first I dont believe that the cryptocurrency mining affects the sales of video cards but honestly it really does. Specially does high end quality of video cards. Because in bitcoin mining you need not just a video card but a really good quality video cards. And now a days video cards goes expensive so you have to invest a lot of money in just a video card.
Yes it could still be profitable but it depends on the volatility of the crypto that you are mining. If the crypto crash then your earnings also crashes. You really have to be cautious of the market. Cloud mining contracts has a longer ROI and very risky, the good thing about setting up your own rigs is that you have the option to resell the equipment when you think it’s not profitable anymore.
Ahaa that’s a good point. I didn’t thought about the reselling opportunity but that can also be a good choice. On the other hand, it can be challenging to sell if mining wouldn’t be profitable anymore.
For me, there isn’t any doubt that cryptocurrency mining is still profitable in this year (2018), well not only this year but with the years to come. Cryptocurrency, specially Bitcoin mining is so in-demand right now and a lot of people are trying to take a dip in this unstable flow of cyrptocurrency mining. With the continuous advancement in information technology i believe that cryptocurrencies will also take a leap into its own developing capabilities. What makes bitcoin mining and other cryptocurrencies gain its popularity is through the support of digital medias, and publishing channels. People nowadays are greatly aware through the existence of this cryptocurrency mining and easily gained interest which opened to greater possibilities and learning. Thus, bitcoin mining and other cyrptocurrencies will continue to grow and evolve over the course of years.
We are all aware that cryptocurrency is a passive investment wherein we need to invest first before we can gain something out of it. Its a risky gamble according to some because of its unstable currency conversion. And with the emerging mining companies that offers cloud mining wherein we need to put and entrust our hard earned money to them clueless if it will be a pop or flop in the future. Based on my research, there are several legitimate mining companies that are operating since the beginning of cryptocurrency and can be trusted with our hard earned money.
Another thing is building your own mining rig. This is also a hot topic in some other forums that I’ve joined recently. But for me, personally, I would go into this mining method since I have a background in Information Technology. There’s a great challenge on building your own mining rig but you’re assured that your money is put into good use, and if cryptocurrency becomes unprofitable the components can be used in some other ways or to just sell it on ebay or the likes. The only hindrance I might think for others to delve into cryptocurrency mining is the cost of electricity.
Thank you very much for sharing all your thoughts about mining and cryptocurrencies in general.
I see that we have many similar thoughts about cryptocurrencies. I strongly believe that in the coming years we will see massive adoption of cryptocurrencies like we have seen in the past years. It’s a new technology that evolves fast just like mobile phones or the Internet. The older generation didn’t fully believe in the Internet but now they are using it daily. I think the same will also happen with cryptocurrencies.
Yes, I think yes for me. Look at the cryptocurrency market, It’s still alive and kicking even the bitcoin price is still unpredictable. So it means, It’s time for the new crypto to rise up. The wait and earn strategy with mining, is still the best strategy. All those who has this mining site, all they need to do is to wait, If I could have enough money to buy rigs, I ‘m going to buy that, but I need to earn first.
I understand. It would be exciting to hear your updates after you’ve built/bought a mining rig.
I have to say that buying a mining rig for cryptocurrency can’t be compared with just trading and this is the reason I would glad go with the option of trading for it invloves less risk than going on to buy a mining rig, or in some cases investing in cloud mining. The issue of the mining rig taking most of my time is something that I wouldn’t want to talk about as well for I value my freedom more than anything else.
It’s hard to say whether mining or investing is riskier. Both of them have their own risks. But yeah, as you said, having a mining rig limits the freedom a little bit if you need to monitor it regularly.
Sure, we would not basically assume that one comes with more risk than the other, but the reality is that you may decide to sell off your coins when you want, but the risk of having to invest in cloud mining and not getting your money back when you wish is not really the path that I want to follow.
I completely understand.
Firstly, I would like to appreciate this article for doing enough in trying to explain cryptocurrency/bitcoin mining because for a moment there is seem not it grasp exactly how it’s done. But after reading this content, I have a good understanding of what bitcoin mining is all about.
Cloud mining seems good but I’m more comfortable investing directly in bitcoin to have control over my bitcoin with selling when I feel like or keeping it to further appreciate in value before selling.
I once toyed with the idea of buying a mining rig when crypto coins were still fairly new idea and sadly I never really had that much to put in as capital so I was not able to. Additionally I guess rigs might have been more expensive back then anyway and I didn’t have room too as I heard that rooms get extremely hot if you have a significant enough rig.
I think maybe rigs nowadays are probably a little bit more efficient but I agree with you that it’s difficult to take care of a rig and instead you could just invest in the market. I think that would be a similar way of entering the game as they both carry the same amount of risks anyway and investing means you won’t have to worry about hardware and making extra room.
Yeah, finding room is one thing to consider when starting mining. I think the best way to start would be having a separate room or house for that. However, many people don’t have such opportunity of course. I don’t know how well banks would give loans for buying a crypto mining rig lol 😀
From the looks of things, it would cost a lot fortune for one to buy a bitcoin mining rig. A separate house to have the rig set up wouldn’t be a problem for me because we have spare building among my family’s property but the funds to buy the rig is a major deterrence.
It costs lots of money but you can earn even more. I think that buying a mining rig would be 10x times better investment for most people than buying a car for example 😀
Buying a car without having a good source of income is one serious mistake because a car is like getting married to a second wife, and the funny thing is that as a car owner, you must always provide for the good and up keep of the car otherwise it disgraces you publicly without any atom of respect. So I would categorize buy a car a a liability even though it serves as a good things of life (an asset but not an investment)
When I was introduced to bitcoins, I was very eager to try mining. However, my research told me that it is very expensive to do mining, You will have to invest in hardware, software as well as manage operation cost such as internet and electricity. I found it was easier to mine bitcoins when you join mining programs. However, you will have to choose a mining program wisely otherwise you might be scammed just like me.
Ahaa. Did you got scammed by a cloud mining program? Which one have you tried? Is there some cloud mining program that you would recommend to others?
This one discouraging story you have here about cloud mining. I have heard that there are some fake sites that promise bitcoin after hours of mining but fails to give it. I really hope this doesn’t happen to me, although I haven’t decided my time to mining yet. I prefer buying bitcoin directly just like I did when it fell few weeks ago.
Another huge factor in cryptocurrency mining is the electricity billing. In some countries where electric energy is expensive, the continuous use of a whole set of computers dedicated to mining 24/7, not to mention the fanning, A/C system and other expenses may end up being quite a lot, at least to start up.
Cloud mining is full of risks and mining is costly if you live in certain parts of the world, so I think I’ll stick to the Bankera option you suggested, at least for now.
Yes, of course you need to take all these costs into account when considering mining. Despite all the costs, some people have made millions with the mining.
But yeah, it’s a lot of hassle and for example for myself it’s impossible because I’m traveling around at the moment.
Over here some people take advantage of the power company by having their electric meter bypassed so as not to have their electricity bill reading for them. This is an illegal thing to do but some still do it in order to cut the cost of electricity bill.