WHY YOU SHOULD MINE CRYPTO

Why Mine Crypto?

Beyond releasing new coins into circulation, mining is central to Bitcoin’s (and many other cryptocurrencies’) security. It verifies and secures the blockchain, which allows cryptocurrencies to function as a peer-to-peer decentralized network without any need for oversight from a third party. And it creates the incentive for miners to contribute their computing power to the network.

Bitcoin offers a disrupting technology in the blockchain. The currency itself is decentralized, allowing transactions to happen globally without government restrictions and delays. Miners of Bitcoin see value in the decentralization of cryptocurrency.

With the latest mining technology, Bitcoin mining can be broken down to determine a stream of income based on the output of mining rigs (computers). The following are the important factors to Bitcoin mining profitability:

1. Computing hardware

Miners need to own the latest hardware to compete with the increasing requirements for successful mining. Equipment can become obsolete in a matter of years. They need mining-specific hardware, which can be costly. The latest ASIC mining rigs cost over $1,500 per computer.

2. Power costs

Power will be the main operating expense. Electricity is charged per kilowatt-hour (kWh). Profitability for mining can float from $0.03 – $0.08 per kWh. A shift in a few cents can make all the difference for mining profitability. It is imperative that a miner can use power at the lowest possible cost.

3. Bitcoin price

The price of Bitcoin is important in mining because miners receive a certain amount of Bitcoin when they correctly solve math problems. If the current

Bitcoin block reward is 6.25 coins; you will want those coins to be worth as much as possible. If you receive 6.25 coins and the price of Bitcoin is $5,000, your mining operation will likely be unprofitable. If the price is $12,000 a coin, your mining operation may operate at healthy profitability.

The right mixture of the elements above makes mining an attractive venture. If the variables are all favorable, miners can scale up operations and mine profitably.

The other attractive reason to mine Bitcoin is its potential as an investment. Believers of Bitcoin predict the price can shoot far past $100,000 per coin (price was around $10,000 in 2020).

With a finite amount of Bitcoin available to mine, the demand will edge higher as the reservoir of available coins to mine shrinks. If Bitcoin becomes more adopted for use as currency, it will add to the demand.