Tag: bitcoin mining

  • Bitcoin Mining, Is It Profitable At All?

    Bitcoin Mining, Is It Profitable At All?

    Bitcoin mining, is it profitableBitcoin mining is a legit job, but initial investments and cost of mining are very big.

    By Guy Avtalyon

    Is Bitcoin mining profitable these days? When the price of gold drops, miners are losing. It is the same story in the world of cryptocurrencies.

    According to CoinMarketCap data, the prices of Bitcoin have tumbled nearly 30% in the past week and hit a 14-month low of about $3,800. The total market value of cryptocurrencies has slumped to $148bil, which is less than one-fifth of its worth during the market’s peak in January. Hong Kong-based cryptocurrency exchange OKEx forced an early settlement of Bitcoin cash futures contracts on its platform the day before. Widely thought is that it has triggered the sell-off. 

    Miners position

    The price drop has left miners in a weak position. They claim it has become unprofitable for them to run at least four models of bitcoin mining machines. According to the latest estimates of Beijing-based F2Pool, if they spend power at a rate of $0,06 per kWh it is clear that mining becomes unprofitable. F2Pool is one of the world’s biggest bitcoin mining pools.

    Cryptocurrency mining has developed from a bedroom activity to mass-scale production. Later, it was undertaken by enterprises that use specialized equipment with application-specific integrated laps. The crypto miners combine their computing power in mining pools to increase their odds of winning new digital currency. They are counting various factors, the total amount of computing power in the network, and costs. Coasts are electricity and rental fees. That determines which coins to mine and where to house their devices. The cryptocurrency dropdowns have forced miners to remove at least four models of bitcoin mining machines. Some of them have become too expensive to operate under present market conditions, estimates F2Pool. These models are Antminer S7 and Antminer S9 from Bitmain Technologies as well as Canaan Creative’s AvalonMiner 741.

    Is Bitcoin mining profitable now?

    A group of Chinese cryptocurrency miners said they have already shut down 20,000 rigs, or about 10% of the total number of machines they operate. They declined to be named for fear of government reprisal.

    But their struggles are an opportunity for others.

    One miner bought about 50,000 used mining rigs that were put up for sale in the market over the past few days. He intends to send these used rigs to countries with lower electricity prices. He is thinking about Russia and Venezuela. In this way, he can turn a profit selling them there.

    Correlation between mining and Bitcoin price

    Mining Bitcoins takes time and resources. Let’s say, it’s not an easy thing to do in the first place. It requires high-powered machinery to make Bitcoin mining profitable. If you lack the resources, you will lose the potential earning and have to pay a huge sum of money for your electric bills.

    According to CNBC, in March, the miner’s profits have roughly halved compared to their earnings in December due to the surge of interest. So, we can say Bitcoin mining is no longer profitable today. Over the past days, Bitcoin’s range had tightened up and seemed like another wild move will take place. We are not quite sure in which direction. From one side, the market is eager and deserves a correction back to the $5K+ area. But on the other hand, there is still a lot of panic selling, and Bitcoin looks like has to go lower.

    There are several profitability calculators that miners can use to analyze the cost/profit equation of Bitcoin mining. Calculators vary as they have different levels of complexity and variables that can be inputted.

    Trading Bitcoin

    Bitcoin currently trades essentially at the break-even cost of mining it.

    To answer if Bitcoin mining is still profitable you have to figure out if you are willing to invest the necessary initial capital for the hardware. And you have to predict Bitcoin’s value in the future as well as its mining difficulties. When both prices and mining difficulties fall, it usually means less miners, but more Bitcoin to mine. When the opposite happens, more miners are competing for fewer Bitcoins. Bitcoin is a real business, so you may accept mining bitcoin as a legit business. There are people working in this business, also have revenues, profits, earnings, plant, and equipment. It’s almost the same, there is no difference between mining bitcoin or coal. Except, mining bitcoin is all math. And there’s no scam.

  • BITCOIN MINING EXPLAINED: HOW IT WORKS, HOW MUCH ENERGY IT USES AND WHAT NEEDS TO BE FIXED

    BITCOIN MINING EXPLAINED: HOW IT WORKS, HOW MUCH ENERGY IT USES AND WHAT NEEDS TO BE FIXED

    BITCOIN MINING EXPLAINED: HOW IT WORKS, HOW MUCH ENERGY IT USES AND WHAT NEEDS TO BE FIXED

    The cryptocurrency has staged a meteoric rise in 2017 that has attracted new investors, but, for many, question marks still surround bitcoin and the technology behind it. With recent reports pointing to the high energy cost associated with mining, the process used to create bitcoin, is there any way to fix it? Here are all your questions answered.

    WHAT IS BITCOIN MINING?

    Just as gold miners produce the world’s supply of gold, so do bitcoin miners produce all the digital currency available to the market – but, naturally, it is a bit more complicated than that. Mining is the process of adding transaction records to Bitcoin’s public ledger, or the blockchain.

    HOW DOES MINING PHYSICALLY WORK?

    First of all, the blockchain is, simply, a chain of blocks. Miners use special software to solve mathematical problems that both confirm legitimate transactions or blocks and create new bitcoins, adding new transactions to the blockchain about every 10 minutes. The hash rate is the number of calculations a piece of hardware can make every second as it works to solve that math problem, and the higher the hash rate, the more likely a miner is to solve a transaction and thus be rewarded with a set amount of bitcoin.

    WHY IS IT SO DIFFICULT?

    The difficulty of mining bitcoin is part of its design. The ideal average mining time is 10 minutes per block, and if that falls, the process becomes more difficult with the aim of keeping the block creation rate stable. There are a total of 21m bitcoins that can be mined, at which point the miners will close shop unless bitcoin’s protocol – the rules that secure the system – is changed to allow for a larger supply.

    IS IT PROFITABLE?

    Mining can be profitable, as miners are rewarded with a fixed amount of coins and transaction fees for their hard work, but the computers and hardware necessary for powering through blocks can eat up a lot of electricity and end up running huge costs.

    HOW MUCH ENERGY IS USED AND WHAT IS THE COST?

    The massive computer network behind bitcoin uses quite a bit of energy – as much as Serbia, to be exact.

    A recent report by Accounts & Legal said the aggregate computing power of the bitcoin network is nearly 100,000 times larger than the world’s 500 fastest supercomputers combined, and miners are constantly installing upgrades to make their computers faster.

    Digiconomist has created a bitcoin energy consumption index in order to understand how much electricity is consumed by the cryptocurrency. As of 5 December, bitcoin’s estimated annual electricity consumption was 31.96 terawatt-hours (TWh), or 0.14 percent of the world’s total electricity consumption. That’s about the same as Serbia and more than Morocco, Oman, and the Slovak Republic. Annualized estimated global mining costs were $1.6bn (£1.2bn), while annualized global mining revenues were $10.2bn. The index says 250-kilowatt hours (KWh) of electricity are consumed per transaction.

    WHAT’S THE NEXT BIG CHALLENGE FOR BITCOIN?

    Greenspan said working out how to scale the network is next on the agenda. “Energy consumption is only a small part of that. If bitcoin is to replace cash, in the long run, it will need to be fitted to process more than 100,000 transactions per second. At the moment it can do about 10. Many proposals are on the table but as the currency is decentralized it’s difficult to get everybody to agree on one,” he said.

    Read more HERE

    This article was originally posted on markemlickprivateequity.com/

  • Ways to Earn Bitcoin

    Ways to Earn Bitcoin

    2 min read

    Ways to Earn Bitcoin

    After Bitcoin become one of the hottest new investment assets it has surprised many who once believed the blockchain-driven cryptocurrency would never have real-world value. It has also produced huge interest. This interest, as the nature of this digital currency as well, cause great opportunities for making extra money.

    Traders Paradise wants to present you several ways how to make money with Bitcoin and several different ways to earn Bitcoin.

    How to earn bitcoin?

    There is a huge amount of money to be made in this market, and many of the ways of earning with Bitcoin may result in small amounts. It shouldn’t dishearten you. Even small amounts of Bitcoin can be useful assets.

    How?

    The rapid growth of the value of the cryptocurrency gives possibility. If you want to accumulate larger sums of Bitcoin, that’s also entirely possible. It requires some initial investment of course.

    Let’s begin exploring the different ways in which you can start making money and earn Bitcoin.

    Selling Bitcoin-related products

    It is the fact that there are ways to make money from Bitcoin without actually owning any. For instance, you can sell products and services and be paid in Bitcoin.

    The easiest way to get into being an affiliate marketer for Bitcoin products is to promote Bitcoin mining devices through some affiliate program. Point is that you can send visitors from your website and receive a small commission on any products they buy there. For that, you’ll need a website on which to post your affiliate links. The good news is that, since Bitcoin miners are generally priced at $100+, you don’t need to sell too many of them to start making some decent money from your marketing efforts.

    The same concept can also be applied to Bitcoin services. Many services surrounding Bitcoin offer generous commissions to marketers who refer customers to them. If you’re going to create a website, integrating promotions for services can be helpful to your readers and profitable to you. This is one way to earn bitcoin.

    Do freelance jobs and get paid and earn Bitcoin

    A huge online marketplace for freelance services exists to connect freelance workers with customers. A new twist has come in the form sites that send payments to freelancers in Bitcoin. If you are freelancer already or have a skill that businesses would be willing to pay you for, you may be able to render services in exchange for fairly significant amounts of Bitcoin. 

    Freelancing in exchange for Bitcoin has two advantages: first, unlike mining or investing, there is little or no initial cost for most forms of freelance work and the second, some freelance jobs can pay amounts of Bitcoin worth dozens or even hundreds of dollars. If you want to earn Bitcoin at a reasonably fast rate without investing a large amount of money at the outset, freelancing can be your best option.

    You’ll just need to sign up for a freelance marketplace that pays in Bitcoin.

    Invest in Bitcoin and Bitcoin derivatives

    Investing in Bitcoin, indeed still not as common as investing in stocks and bonds, but is fast moving into the financial mainstream. To be honest, investment is one of the profitable ways of making money with Bitcoin. 

    Basic Bitcoin investment is the simple buying and holding Bitcoin until its price goes up enough to gain a profit. Bitcoin has produced some incredible gains for investors in past years. If you had invested just $200 into Bitcoin when it was worth $1 in early 2011, your investment would be worth millions today. This is an ultra example, which demonstrates how profitable Bitcoin investment has been for some traders who have been willing to hold their investments for long periods of time.

    High-risk investment

    In the past Bitcoin exchange was easy to hack, like Mt. Gox exchange which was hacked 2014. But now the new generation of more secure exchanges come onto the market to supply Bitcoin services.

    A less known way of investing in Bitcoin is to trade it as a CFD, or contract for difference. In core, a CFD is a derivative instrument that is based on the price of an asset, in the case of Bitcoin.

    Unlike standard investment, however, CFDs don’t involve actually buying the asset they mirror. Instead, traders open positions on the movement of an asset’s price with a CFD broker. CFDs typically have high leverage rates. Meaning that both gains and losses are higher than they would be in a more traditional investment environment. 

    Used properly, Bitcoin CFDs can be fairly profitable. If you’re too careless with them, they can be high-risk investments. It depends on your personal level of risk tolerance.

    Ways to Earn Bitcoin 2

    Bitcoin mining

    Mining refers to the use of computer hardware to automatically perform a set of mathematical operations. That, in turn, creates new Bitcoin. Bitcoin is set up that only 21 million can ever be produced. At this moment, more than four million are on the table for Bitcoin miners. 

    You have to know one important fact about Bitcoin mining before getting into the difficulty increases over time, which means, it will take more time and more computing power to generate each following Bitcoin.

    At the beginning of Bitcoin, cryptocurrency enthusiasts were able to use graphics processing units on regular computers for mining. But nowadays the difficulty has gone up so much that much more specialized equipment is needed.

    To start Bitcoin mining, you’ll need to invest in external devices called a Bitcoin miner. That provides the necessary computing power to produce Bitcoin. The price of a Bitcoin miner will vary based on its processing ability.

    Small USB miners start at under $100, while larger, more powerful mining devices can cost thousands of dollars. Although the initial investment of buying a Bitcoin miner can be fairly large, it allows you to produce your own permanent flow of new Bitcoin until the full 21 million has been reached.

    Start mining

    If you decide to start mining yourself, you will have the peripheral costs too, like electricity costs, for example. If you have a large miner that produces a large amount of heat, you may have to install a cooling system.

    These costs can eat up much of the profit margin in Bitcoin mining. Fortunately, if Bitcoin continues to grow in value, these costs will be compensated later.

    But there is another way you can get in on the action. It is known as contract mining. In contract mining, you’ll pay a fee in exchange for a company to employ its Bitcoin mining equipment on your behalf. This contract will last for some period of time. And all Bitcoin mined during that time on the equipment you’ve contracted will be sent to your Bitcoin wallet. Contract mining is an easy and passive way for you to accumulate Bitcoin. But it will cost more over the long period than having your own Bitcoin mining equipment.

    What else you can do to earn Bitcoin?

    For example, you can do micro-tasks small, simple actions, such as viewing an advertisement or engaging with a post on social media. Though the pay is usually very low, micro-tasks are the simplest way to get into Bitcoin.
    Ways to Earn Bitcoin 3
    Bitcoin faucets are a bit like micro-tasks in the sense that they pay very small amounts of Bitcoin in exchange for a small amount of your time – often around 1 Satoshi, which is a hundredth of a millionth BTC. In the case of faucets, though, Bitcoin is usually available to be claimed by users at a set interval, such as every five minutes.

    Or you can create content to be monetized with Bitcoin-based ads. Maybe you can lend out the Bitcoin you already have and generate passive income. But if you have respectable knowledge you can make a decent amount of money form helping other people learn about cryptocurrencies.

    Bottom line

    The easiest and fastest way to have Bitcoin is to buy instantly with a credit card or debit card. You can acquire $50 or less for Bitcoin, fast and usually within 10 minutes. However, you may be new to the entire cryptocurrency concept and for that we recommend you learn these few things above.

    Bitcoin is extremely empowering but also different than the currency you know and use every day.

    Risk Disclosure (read carefully!)