People with interest in owning cryptocurrencies have the choice to either buy or “manufacture” them themselves, also known as mining. However, there are some altcoins like Ripple that are not actually mined.
On the surface, the latter might seem the more logical choice. But those who have tried know better, mining some is as hard if not harder than mining gold in an overcrowded field. The sheer technicalities, as well as unexpected levels of investment required, has made it apparent that anyone who seeks to pursue this endeavor weigh their options before striking out. This article highlights a few things to consider when mining Bitcoin.
Bitcoin was the curtain raiser in the world of peer to peer cryptocurrencies. There will only be 21 million Bitcoins ever in circulation, the discovery of these 21 million bitcoins is designed in such a way it gets harder with each passing year meaning that the required hardware to mine it has to be updated accordingly with newer more expensive ones if one wants to keep ahead of the game. And with an increase in miners all over the world, the reward gets ever smaller, resembling a gold mine filled every square inch with miners.
Even if all the miners get a share, it will definitely be smaller due to the high competition. The result is that individuals, as well as small mining groups, get pushed out simply because the reward they get isn’t worth the cost. Only industrial scale miners remain in the field and even they are only kept afloat due to the present high price of the coin. So for individuals, days of mining have been lost since the first days, while for large-scale miners, it simply depends on how much you are willing to spend to reach the threshold where it is profitable.
Profitability of bitcoin mining operations
The main factors that determine whether mining is viable or not is the amount and cost of electricity that is needed to mine a coin as well as whether specialized equipment is needed for the mining itself. And if yes, what is the cost of purchase and maintenance of the said equipment. A standard Bitcoin Antminer today will set you back thousands of dollars, each of this mining rigs comes with its own power consumption ratings which figure prominently in the profitability of your mining operations. With just a single miner, striking it out on your own, the chances of your finding that rewarding block gets miniaturized when compared to mining farms built around on an industrial scale. As such your best chance is probably to join a mining pool where you get a fraction of the overall reward earned by your pool according to the hash power you contribute.
It is estimated that the minimal cost of building a miner rig that can be marginally profitable today is around $450,000. This automatically eliminates all small-time miners that try it on their own. With deep pockets, however, there’s no cryptocurrency that is not worth mining, but if you have decent means be sure to make an educated decision lest you bite more than you can chew.