This article talks about some of the ways of earning profits from bitconnect mining…..
There are ways to profit with bitcoin mining. Ways to earn from bitcoin mining typically involve upfront investment of mining hardware. Raw mining earnings are calculated by mining power of your bitcoin mining hardware, measured in hashes per second, and the current difficulty and block reward of the bitcoin network.
Most modern hardware measures its power in TH/S (trillion hashes per second) please note that bitcoin mining is not a get rich quick scheme. This article will discuss the factors affecting profit, best process to follow to make a profit if it’s possible with your power costs, limitations on small scale operations, how to secure your earnings from theft/loss, alternative mining options, and prospects of making a profit. This is a moderate risk investment and many factors which will be discussed in this article must be considered.
What factors affect profit?
- To earn from bitcoin mining you need to consider the following in your bitcoin mining calculation:
- Upfront hardware cost, the price you pay for the hardware
- The mining power of your hardware, in TH/S
- Mining difficulty
- Power consumption of the hardware
- Your electricity cost
- Climate of your country
- Bitcoin price
- Block reward, which halves every four years, the last halving occurred in 2016.
What is the best way to profit bitcoin mining?
First, you need to evaluate your current electricity cost, before anything else. This is typically measured per kWh. This is how much it costs a 1,000-watt device to run every hour.
Second, you need to look at mining hardware options but do not purchase yet. Unless your electricity is free, you will not profit with anything lower than an Antminer S7, but even that is limited in profit. The Antminer S9 is the latest hardware, costing around $2000 USD and mines on average at 12 TH/s. It consumes around 1,300 watts of power. So evaluate your upfront cost, including any import duty of your country. If you are in a hot climate, you can reduce the miner’s hash rate which reduces power consumption, but also reduces earnings. Most hardware cost does not include a power supply with high quality cables, this is required.
Third, you need to evaluate the current bitcoin price, the price of hardware is adjusted for this.
Fourth, you want to enter your hardware and electricity cost into a bitcoin mining calculator. Typically, with an electricity cost of $0.10 per kWh at the current exchange rate of $590 per bitcoin as of writing and $2000 upfront hardware cost, monthly profit is $153 USD, with $1866 after a year. This is at 12 TH/s, with a power consumption of 1300 watts, with a current difficulty of 217G.
The difficulty is increasing over time though, slowly eroding your earnings every month. At those prices you are looking at over a year to break even with the best hardware. If your power is subsidized or ‘free’, you can greatly increase the profit margin. Free power will result in a $1000 profit after a year with the same hardware based on the current data, not taking into account difficulty increases or import duties as in EU countries and other countries. Only use gold or platinum power supplies, these are more efficient in converting mains voltage into lower voltages and thus cost less to run.
Fifth, once you are happy with your figures, and you are prepared to make the investment, make your investment, set up the hardware and mine!
What are the Limits of small scale mining operations?
There are many limitations of small scale mining operations, which can include:
1. Limit of power draw in your home. In countries with 220/240 volt supplies such as Europe, this is often 4800 watts, but room must be made for other devices such as fridges, oven etc. This figure is half in 110/120 volt areas such as the U.S and Japan. Check your wiring and breaker ratings as your electrics may differ.
WARNING! NEVER ATTEMPT TO REPLACE YOUR BREAKER WITH ONE OF A HIGHER RATING WITHOUT REWIRING AND FITTING BY A QUALIFIED ELECTRICIAN! OVERLOAD OF YOUR WIRING CAN CAUSE FIRE AND RISK OF INJURY/DEATH. IF IN DOUBT, CONSULT A QUALIFIED ELECTRICIAN! ENSURE CABLE RATINGS TO YOUR EQUIPMENT ARE RATED FOR THE LOAD YOU INTEND TO PUT THEM UNDER. ALSO, LOW QUALITY PSU CABLES NOT RATED FOR THE LOAD CAN MELT! ALWAYS FOLLOW THE MANUFACTURERS GUIDELINES FOR CABLE GUAGE.
What are the pitfalls in mining for profit?
- Hardware breakdown outside of the standard 90-day warranty. This can leave the miner severely out of pocket.
- Pre-Order of hardware. Late delivery while difficulty is ever rising can reduce profit or in the case of the KNC Neptune miners, make return on investment (ROI), impossible.
- Larger scale operations due to the high power draw and heat requires proper electrical installations and installations of cooling, and possibly a three-phase electrical supply. This cost must be factored into calculations when investing in a mining farm.
- Insurance for large scale operations.
- Pool downtime, which can cause lost mining time. Set up failover pools for this scenario.
- Power usage should be measured at the wall, and this can vary depending on power supply quality. A gold or platinum rated power supply is best.
How do I secure my earnings?
If you are mining for profit, you will have invested large sums of money into your investment. Bitcoin is inherently secure, but the private keys for your wallet are stored on your machine if you use typical wallet software. This leaves the coins vulnerable to malware, even when your wallet is encrypted, when the password is entered the private key is loaded into memory, leaving it vulnerable to malware. A single hack if all funds are kept in a single wallet can wipe out your entire earnings/bitcoin holdings in seconds. The following precautions should be taken when mining/handling bitcoin or bitcoin hardware:
- For long term storage, NEVER store your bitcoins in an online wallet. If the provider goes bust or is hacked, your coins can be lost. If you do not have exclusive possession of the private keys, coins are at risk of loss or theft. Do not store large amounts on an exchange at once. An exception to this rule is the coin base multi signature vault due to how the keys are shared between you and coinbase.
- Set up two-step login on any online wallet or exchange service if you must use them, especially in the case of exchanges.
- Exchange small amounts of bitcoin at a time.
- Invest in a hardware wallet for long term storage or even general use. This keeps private keys in the device even when signing transactions and renders it invulnerable to most malware and has a recovery seed if the hardware becomes lost or damaged, this recovery seed should never be stored on a computer but handwritten and kept safe. TREZOR and LEDGER are the two main hardware wallets.
- Never use vanity addresses unless generated on your own machine. Vanity websites have had possession of your private keys and you never know if they kept them or not, reports of theft from these websites down the line is not unheard of.
- Keep backups of any wallet private keys/recovery seeds, loss of data due to computer failure can cause the loss of coins. One such user lost over $1 million in bitcoin through loss of data.
- Ensure your hardware has a warranty.
- Ensure good quality cabling and power supplies are use, and surge protection equipment is installed.
- Do not overclock your hardware, this can shorten its useful life.
What are the alternative ways to profit?
There are alternative ways to profit when mining for bitcoins. They can include any of the following methods:
- Mining altcoins as they become profitable and converting them to bitcoin. Some of these can be mined with general purpose hardware such as graphics cards. Some pools are set up to do this automatically.
- Mine Litecoin with KNC Titan hardware. This has a high upfront investment but Litecoin difficulty is typically much more stable and does not increase as much as bitcoin difficulty. The price of Litecoin is stable like bitcoin. ROI time is typically shorter, although due to the KNC Titan power consumption a 240-volt electricity area is recommended.
- Rather than mine, buy and hold coins at the right prices and trade them.
- Mine until you are near to breaking even and then sell your hardware, if done at the right time before any significant drops in price of your hardware you can make a tidy profit.
- Buy a single piece of hardware and mine solo. You do not get paid if you do not find a block, but getting lucky can result in a tidy profit. One individual mined with an old piece of outdated hardware and hit a block within a month when the average time was 22 years with the said hardware, he walked away with 25 bitcoins. This depends on luck, among other things, but if you are fine with taking risks this is a high stakes option. Hitting a block means you could sell your hardware right away to recoup that also. It is an all-or-nothing venture however. The higher the mining speed, the more chance of finding a block.
If mining at home in colder months or climate, consider replacing your heating system with the heat output from the miner. This can offset the power cost and reduce or remove it from the equation, greatly increasing the chances of profit.
What are the future prospects of making a profit?
The overall prospects of making a profit for a small scale operation is quite low in countries with a high electricity cost such as EU countries many of which also have high import duties, but a greater chance of success in countries with a cheaper power cost and lower duties, such as the U.S and China, or places with subsidized power.
If you are in a colder climate, such as the United Kingdom, Nordic countries (such as Norway or Sweden), Northern United States, Canada, Alaska, Northern Russia, Iceland, Greenland, or Korea, consider replacing your heating systems with mining hardware. This can greatly increase profits during winter months or more if it’s cold all year around.
The future of bitcoin mining for profit is not a get rich quick scheme and should be carefully researched, and it only stands to get worse with the difficulty increase, unless bitcoin prices do not increase.
Making a profit with bitcoin mining is possible, but a high upfront investment is needed, and there is a risk involved that is moderate. Thorough research needs to be done before investment. Keep this in mind when calculating mining profit and attempting to earn from bitcoin mining. It is no get rich quick scheme and this must be taken into account when you start mining for profit. It has the potential for reward with commitment. If you are in a colder climate, consider replacing your heating system with your hardware, this can greatly reduce or even eliminate the power cost from your equation during colder months.