Should I Mine Bitcoin?

Since the middle of the decade, interest in cryptocurrencies such as Bitcoin and Litecoin has rapidly surged. Likewise, the price of a single Bitcoin has risen from about $300.00 US in 2015 to over $20,000 US per coin in December of 2017, dropping to today's $8,900 US per coin. Friends, family, and strangers alike have periodically asked me whether or not they should also try their hands at Bitcoin mining to either make some pocket money or even strike it rich. However, my answers to them have almost always been the same: "Unless you somehow have access to cheap or free power, it's almost always a bad idea to mine Bitcoins by yourself". 

What are some things I should consider before mining?

1. Electricity Cost: Mining Bitcoin is an extremely energy intensive process. For reference, a single Antminer S17 eats over 2000W. At $0.10 kWh, running this S17 will end up costing over $1,700 annually. Now, imagine what happens if you have 5 or even 10 of these miners. Bitcoin mining becomes a very costly endeavor, of course this is a different story if you have access to extremely cheap power. 

2. Noise: A single contemporary miner with 2 fans produces between 65 and 76db of noise. For reference, my hairdryer makes about 70-75db of noise. If you're really interested in mining with large miners, you'll need to be ready to live with what sounds like a hairdryer that's on and running 24/7. 

3. Upfront cost: Today, Bitmain is selling their top-of-the-line Antminer S19+ for just over $2,600 per unit excluding shipping and possible import taxes. This by no means is a small purchase. Bitcoin mining can be extremely costly to even start up. 

4. Long Term: Mining bitcoins isn't exactly a 2 or 3 day adventure. instead, it could take months to even get close to breaking even. Patience is crucial.

What are the benefits of mining?

1. Secure the Bitcoin network: More hashpower will help combat 50%+1 attacks, making the currency more decentralized and resistant to cybercrimes. In other words, the more miners, the more stability and security in the Bitcoin network as a whole. 

2. Learning: For small scale mining and people who want to learn a little more about cryptocurrencies and how they work, mining is a great way to get started! Smaller (and not exactly profitable miners) miners such as USB miners are a relatively cheap way to enter the crypto world and learn a little about Bitcoin, blockchain, and cryptocurrency as a whole. 

3. Potential Long-Term Gain: Because Bitcoin has grown quite a bit in the past, it could be a good idea to mine some coins now and hold onto the coins. As another halving is coming, the price of Bitcoin could shoot up, like what happened in 2016 and 2012. However, since I'm not a financial advisor, please take this with a grain of salt :) 

Cool. I know some things to consider and some benefits... But... Maybe large scale mining isn't for me. What about USB mining?

Some of the first ASIC miners were USB miners, and it also isn't uncommon for people to ask me on my advise for USB miners. if you want to learn a little something about blockchain technology, your return on investment with a USB miner is an educational experience and cool new knowledge. However, if your intent is to earn cash, your return on investment with a USB miner is disappointment and defeat. 

While relatively cheap to purchase (Some USB miners are for sale for under $30 US!), consumes very little electricity (Some USB miners are only between 5 and 10 watts), make little to no noise, and don't take much space, USB miners have miniscule computing power. For example, a Gekkoscience 2pac USB miner can be purchased for about $25.00 US and can mine SHA256 coins like Bitcoin or BitcoinCash at about 15GH/s without overclocking. Meanwhile, the Bitmain Antminer S17+ costs about $1,400.00 USD and can mine SHA256 coins at up to 70TH/s. So, to rival the same $1,400.00 computing power of a contemporary ASIC such as the S17+ with 70TH/s computing power, you would need about 4,667 Gekkoscience USB sticks totaling well over $100,000.00 US. There's just no way that could be profitable. 

Alright... So... What about Cloud Mining for Bitcoins?

Congratulations. You have opened a can of worms I never wanted to even touch... But because you asked, I'll give a little breakdown!

First off, what is cloud mining? Basically, you pay a company or individual to rent their equipment to purchase cryptocurrency. While this could seem like a cheaper option, the renting side of things could charge you much more money than you'll make. Put another way, if they have a profitable mining operations, why share, unless they can make even more money? Additionally, you risk the volatility of crypto prices, changes in electricity and maintenance bills, and of course... it could all be a scam. 

Over the years, many companies have come and gone, but if you REALLY are curious about cloud mining, companies like Genesis Mining and BitDeer (by Bitmain) are two more legitimate companies. I have personally purchased a contract from Genesis Mining back in 2017, and I was able to just break even at the end of the contract, only because Crypto prices skyrocketed. I have heard many stories where thousands of dollars were lost. If you consider cloud mining, please be sure you understand the risks. However, I have also heard stories of small profits. Regardless, just be careful here... 

Final Verdict

Personally, I am very against cloud mining; there's simply many more risks than rewards. If you truly want to learn something about Bitcoin, consider a USB miner. If you're looking for a large profit, consider large-scale mining or just straight up buying the coins from exchanges. 

Author's Note

Hey Publish0X! Thank you for reading my article! I hope that this article was helpful. Please let me know what you want to see next on my platform! 

Important Disclaimer: I am not in any way affiliated with FutureBit, Bitmain, TTBit, Genesis Mining, or any other crypto/crypto-related company. All photos used in this post including the thumbnail image are my own personal photos of my own miners, ledgers, etc. All info here is based on my personal experience, and everyone's individual experience may be different. 

Remember, investments in cryptocurrencies are like any other investment: Invest only what you can afford to lose. No investment is a guarantee.