Bitcoins need mining and mining costs money. This statement is an absolute truth that can´t be denied in any possible way; unless until someone finds out about a way of doing it in a non-hardware way. The mining process is a way to make some money as an extra income. What´s very important is not to lose money because the costs of mining are higher than profit. Read on as we unveil how to calculate the mining cost in simple steps.
Table of Contents
The first thing you have to choose is which currency you will mine for. This is a major decision because as you “mine” for them, they will be rewarding you with Bitcoin, and if that cryptocurrency is not on the rise, you might be losing money.
Once you´ve chosen the CryptoCoin, you have to choose the hashing algorithms you will be using for the mining. The most common one’s today are SHA-256 and Scrypt. Both of them require state-of-the-art technology to support the increasingly difficult processing involved in the process.
Because of this increase in difficulty, what happens is that even the latest releases by the major companies can be obsolete after a little time. This is one of the reasons why investing in good hardware can be a game changer for most people. There are several ways of doing mining; what you choose usually depends on your budget.
This is what many people start with. It is not unlikely to see someone reutilizing old big beer cans to transform them into mining stations keeping it cool and fitting as many GPUs and CPUs as possible. With DIY rigs you can do GPU as well as CPU mining at the same time.
These are highly specialized units built specifically for mining mostly in the USA. They come with either a USB or Ethernet port and are ready to plug and go with no added effort.
Mining takes power, much power. It is one of the main reasons why some people say that it is expensive to set up a mining terminal (or several). In this regard, buying the most efficient power source is always the answer.
Mining works when it is uninterrupted. Since it is a very demanding operation that goes on for a long time, you need to keep it cool to keep it going efficiently.
Common Problems & Hidden Costs
As with every other endeavor in the world, it is common to encounter some not-so-nice surprises on the way; these are the most common.
Downtime is lost time and lost time is lost money. To minimize downtime, you have to maximize measures regarding power, cooling, and rebooting.
Customs & Delivery
Many of the best ASICs in the world are manufactured in the US. Beware of the costs of customs and delivery to your front door.
Most people overlook the cooling costs because coolers are inexpensive, and this is a major mistake; you should buy the most reliable ones.
The small hidden costs are cables, adaptors and all the small things needed to get your rig up and running.
Once you have calculated all of the above costs, it is time to make them into one number representing your overall cost on an hourly basis. It is important that you calculate the power consumption, which will very likely be your highest cost. The overall number has to be taken from the current worth of the cryptocurrency you are receiving in exchange for the mining in a Bitcoin calculator of your choice and if the result is above zero means its profitable.
Bitcoin mining can be a great business when done right or a very cool and modern way to lose money. Make sure you calculate costs and profits the right way.