In September of 2017, economist, El Erian pegged the Bitcoin price at a staggering $1, 300—a third of its present mark. In recent months, it hit a high of $3, 875—hardly a meagre number for investors, let alone buyers looking to fill their virtual shopping carts. Cryptocurrencies are here to stay, and if you have a head for computational puzzles and an internet connection, you could hammer together a decent portfolio.
Your Tools
- To mine Bitcoins, you’ll have to purchase the hardware. In the past, you could use your desktop, but today, only custom Bitcoin ASIC chips have enough power efficiency to generate genuine returns.
- Alternatively, you can use a cloud mining contract like Genesis Mining, which offers extra bells and whistles such as promotional codes and upgrades.
- Software such as CGminer and BFGminer connect miners to a blockchain or mining pool. Choose one that provides analytics so that you can keep track of hashrates and speeds.
- Bitcoin mining pools allow you to work as a group at solving blocks in exchange for shared rewards. While it’s possible to mine alone, it takes significantly longer to earn this way. You could wait a full year before you receive your first payout.
- A Bitcoin wallet will be needed. You’ll be selling and buying Bitcoin, so you’ll also need an exchange. Keep your wallet on a device that lacks an internet connection because anyone who can access it can use your Bitcoins.
Mining
To mine, you’ll need to log into your account, set up an address, and enter it into your mining pool so that your Bitcoin will automatically be moved to your wallet. Once you’ve installed your software and signed in, choose your mining pool. It’s that simple—unless you actually intend on profiting from your venture.
How to Earn Genuine Returns
You will want to monitor the performance of your mining rig, so check your profitability. Much like stock trading, you’ll need to watch projections, market conditions, and the like so that you can buy and sell timeously. You’ll also receive a block reward, which was set at 25 Bitcoin in 2014, about every four years. This is the greatest incentive among most miners, but it diminishes as time marches on.
As with any investment, your security is created by your diversification, but instead of spreading your investments across investment types and regions, you will spread them across a network. Bitcoin mining difficulty is adjusted every two weeks to offset the computational power that’s being dedicated to it. You’re thus looking for a network that’s easy to mine and then moving to a new one as your current one adjusts. Of course, the more miners there are in a network, the smaller your payouts become.
If you’re not part of a pool, the rewards will go to the person who solves the puzzle first. If you have negligible mining power, your odds of receiving worthwhile rewards are insignificant, so your hardware investment has a direct effect on your pocket. Mining pools overcome this issue by splitting rewards evenly and increasing mining power exponentially. Cloud-based offerings overcome it by offering their hardware and power in exchange for a fee. You’re guaranteed uptime if you choose a reputable provider.
Is It Worth It?
Bitcoin mining gives you a relatively passive income, and it’s possible to earn about $2, 000 a year once fees, electricity, and hardware expenses are deducted. Bitcoin can be bought and sold, but online shopping could be more profitable. You can spend your profits on auction sites and at specialized Bitcoin stores.