Why you should be investing in altcoin mining – and how to do it

alt coins stacked

Date Published

08/08/2018

Bitcoin has become part of everyday vernacular now, and while most people still don’t fully comprehend its mechanisms, they can at least nod along and pretend they understand hashing functions. However, the vast majority of people don’t realize the depth of the cryptocurrency industry and the attraction of altcoins (alternative coins) as an investment opportunity.

What are altcoins?

In this case, the word “coin” is referring to cryptocurrency (or digital currency), and “alternative” is referring to anything that isn’t Bitcoin. Since Bitcoin was the first cryptocurrency, all subsequent cryptocurrencies are alternatives to Bitcoin. Altcoins tend to be more speculative with lower market caps than Bitcoin, but for those armed with the proper knowledge, investment in altcoins can prove extremely lucrative.

Why altcoins are a great investment right now

There’s no denying the strength of Bitcoin. It’s by far the most valuable cryptocurrency on the market today. Yet that certainly doesn’t mean it’s the best investment. There are several altcoins that are poised for tremendous growth in value due to their differentiation from Bitcoin.

In addition to better potential growth opportunities, altcoins have other advantages over Bitcoin including less competition, faster transaction confirmation, better technology, and more uses. Litecoin, for example, is primed to be “one of the first real world cryptocurrencies to be used to purchase goods and services” due to the faster network transaction confirmations than Bitcoin.

The majority of cryptocurrency experts pick Ethereum as the top crypto investment right now. Ethereum is not just a cryptocurrency; it’s a blockchain platform, enabling smart contracts to be executed. A wide range of new features like this is appearing on altcoins giving them strong value propositions even in their infantile stages.

Think of it this way: investing in Apple stock today is a relatively safe bet but not necessarily a very lucrative one. Sure, there’s a chance the stock will keep going up, but it won’t double, triple, or quadruple in value like that of a new tech startup. Investing in altcoins today is more like investing in rising tech companies such as Tesla. Yes, they might disappear, but they also could be worth ten times as much in only a few years.

While investing in Bitcoin or any other cryptocurrency today is not necessarily a safe bet, no investment is a guarantee. Many experts say you shouldn’t put more into digital currency than you’re willing to lose and that is exactly why we don’t recommend buying any cryptocurrency. Instead, you should mine it.

Why altcoin mining is the best approach

It is possible to buy large quantities of cryptocurrencies outright, but based on the volatility of cryptocurrency, trading in your cash for Bitcoin or altcoins could quickly lead to a big loss. Ethereum recently dropped by 25% in a week. For cryptocurrency traders, plummets like that can be devastating to the value of their investment.

Mining, on the other hand, is a smarter and safer long-term investment with much bigger opportunities for growth. If you were thinking about buying $100,000 worth of altcoin, you could instead invest that capital into high-quality cryptocurrency mining equipment. The mining equipment will continuously generate revenue unlike coin investments. Additionally, in the current market, mining equipment is maintaining its value and can be resold for close to market price, an insurance for your investment if the coin value tanks.

If you continue your mining, you’ll continue earning coins. Instead of investing in a fixed amount of coins and relying on the price to increase for a profit to be made, mining units steadily generates more total coin. Even if the price decreases, you will be accruing larger amounts of cryptocurrencies in your portfolio.

Why altcoin mining colocation

The profitability of cryptocurrency mining depends on three main factors: coin price, mining difficulty, and the costs of power to incessantly run the mining units.

The popularity of Bitcoin and the “established” connotation that accompanies the coin has made it a common choice for miners. Although the value of a Bitcoin is much higher than altcoins, due to the number of miners on the network and the accompanying difficulty of successfully confirming a transaction, profits from Bitcoin miners are often much slimmer than altcoin. In other words, Bitcoin wins on coin price, but it’s more difficult to mine and requires more power to mine it.

Currently, the majority of highly profitable mining units are altcoin miners which procure a lesser profit per coin but many more coins overall due to the extremely low block difficulty. Mining altcoins is the most consistent way to generate a large profit. The only missing piece is ensuring that your power costs are reduced as much as possible, which is where mining colocation comes into play.

Cryptocurrency veterans remember the days when you could mine profitably in your own home. Thanks to increased competition and complexity, mining now requires advanced hardware that requires way too much power to run cost-effectively in your home. Mining colocation allows you to get much cheaper power–not to mention more space and better overall resources. Through mining colocation, you can get more altcoin for less than any other procurement method.

Getting started with altcoin mining colocation

If you’re a serious investor, you need to choose a mining colocation provider that’s designed specifically for cryptocurrency mining. Compute North’s strategic facilities are built for miners to deliver the cost-effective power you need to maximize your investment opportunities. Large-scale miners are currently making huge gains in altcoin mining throughout our facilities. Contact us today to find out how you can do the same.

Date Published

08/08/2018

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