4 things you have to do to make money mining cryptocurrency
At first glance, mining cryptocurrency might seem like an easy way to get rich quickly right from the comfort of your own home or office. You just need an internet connection and the right equipment, right? While crypto mining does present a tremendous financial opportunity, there’s a bit more to it than that. Successfully establishing a mining operation takes patience and a clear understanding of the industry and your own objectives. Here are four things every serious miner must keep in mind in order to achieve a lasting ROI.
Have a clear crypto mining plan – then execute
If you enter crypto mining without a clear objective or an understanding of how to achieve that objective, it’s almost certain you’ll end up losing the majority of your investment. Before you set up your operation, you first need to put in your time conducting research and establishing what you hope to accomplish.
Keep in mind that crypto mining is not a get-rich-quick scheme. There are many specific factors that will determine your success. You need to decide which equipment is right for you, which coin you want to focus on, and where you’ll conduct your mining operations. Any successful miner will also need to have patience to work with the long-term nature of this investment and to deal with the fact that the crypto market is not constantly on the upswing.
Use the right equipment – and know when to upgrade
To mine successfully, you’ll need to analyze your goals and use that information to decide which equipment to use. Figuring this out early will help you mine more quickly and at a lesser cost than those whose equipment is not suited to their needs. Don’t try to save money upfront by buying cheap equipment. Make sure you’re aware of what’s available on the market and how much you can feasibly mine with your hardware. New models are constantly available and can quickly make older units obsolete, so be sure to upgrade when it makes sense for your operations.
Your two main options in mining equipment are ASIC and GPU. ASIC stands for application-specific integrated circuit, while GPU stands for graphics processing unit. ASICs are typically faster than GPUs but are also limited to a narrower set of functions. Here you can find a more in-depth breakdown of ASIC and GPU to help determine which is right for you. This decision will also affect which kinds of coin you can mine.
Mine the right coin – and be patient
Starting out, you might be tempted to mine bitcoin and nothing else, but bitcoin is often less profitable than mining altcoins. When deciding which coin to mine, you should consider its current price, the cost of mining the coin, and its potential for growth. You’ll want to mine a coin with a high enough current price that your returns will exceed your cost of mining. Pay attention to the markets to see which coins offer the best overall opportunity, but be wary of pulling out just because the value drops. The cryptocurrency market is volatile but still shows strong long-term returns overall and has experts prepping for continued growth.
Use mining colocation
Mining colocation is the clear winner when it comes to where you should mine. Mining at home isn’t cost-effective unless you’re running a small operation, in which case you’ll only see minimal returns and lots of inconvenience. Cloud mining doesn’t give you enough control and represents more of a side-venture than a true primary pursuit. Although cloud mining can seem like a more affordable entry into mining, it isn’t scalable and you’ll only see a small share of the profits.
Unlike other options, colocation provides everything you need to optimize your mining operation, from technology to space and more. Colocation facilities are often located in areas with low power costs, allowing the equipment to run faster at less cost to you. You’ll get the most control over your efforts and receive a much greater return on your investment in the long run. Just make sure you know how to choose the right colocation provider before signing a contract and sending off your equipment.