What is

Bitcoin mining?

At its core, Bitcoin mining is the process through which people around the world contribute their computing power and electricity to secure the decentralized Bitcoin network. This process ensures that Bitcoin can never be hacked, taken down, or censored. In return for their hard work, the miners are rewarded from the Bitcoin code in the form of, you guessed it, Bitcoins.

The actual process is of course far more complex and complicated than the scenario we described above. However, if you want to get your geek on, there are loads of online resources and materials that explain the process in depth.

Useful links
Bitcoin mining for beginners by Cointelegraph  – Click Here
Getting started by Bitcoinmining.com – Click Here

Economics of mining

Bitcoin mining can be either very profitable or not at all depending on a multiple of factors.

The most important factor in our opinion is the investment timeframe of the investor. Most Bitcoin enthusiasts and investors are people who truly believe in the core ideas behind Bitcoin. These investors have a very long investment horizon, so for them Bitcoin mining is an extremely lucrative investment. The core reasoning is very simple: Bitcoin is inherently deflationary with a limited supply of only 21 million. If every USD millionaire in the world tried to own 1 Bitcoin, there would not be enough Bitcoins to go around. And of the 21 million that will ever exist, 80% has already been mined.

However, not everyone can afford to invest with such a long-term position. Which is for most investors, the current and expected future price of Bitcoin in the short term is the deciding factor. A short-term position on Bitcoins is inherently a risky venture, because Bitcoin is by far one of the most volatile assets you can trade. Currently, the community consensus is that method of dollar cost averaging, combined with periodical portfolio rebalancing is the most effective strategy for investment in such an unregulated, wild, and volatile market. It is our humble opinion that the same holds true for investments made into Bitcoin mining.

There is numerous mining hardware available on the market. For the sake of simplicity, go with the latest and greatest ASICs miners Bitmain has to offer. With Bitcoin mining, its just simple as that. However, even the best from Bitmain does get outdated when new mining rigs are released from competitors. To check out the best bang for bucks machines you can visit other sources online, although the websites below covers most of them:

Useful links:
Bitcoin Mining Hardware ASICs: Click Here
Asic Miner Value: Click Here

If you already have an idea of how you are going to deal with Bitcoin’s volatility, the next most important consideration when it comes to mining is the cost of electricity. Bitcoin mining is electricity intensive. The cheaper the electricity, the better. The electricity usage of the Bitcoin network is growing at an exponential pace and has already surpassed the total electricity consumption of countries such as Denmark. Some say this is an utterly pointless waste of energy. And others say it is a small price to pay for having a truly global, decentralized currency, immutable and censorship resistant. As a blockchain company, we lean towards the latter. If you are interested in mining, look for cheap electricity. And if you find a price range that you like, look into the environmental and social aspects of the energy source.

And last but not least, one of the biggest considerations is to have a reliable partner to work with. There are a lot of people who have decided to go it all alone, build everything from scratch themselves, and that is perfectly fine. The more people participates, the more secure the network. However, for most investors, they do not want the hassle of dealing with the numerous operational challenges that can arise with a Bitcoin mining operation. Which is why they host their machines with any one of the companies spread out around the world that offers such a service. Finding a long-term partner that you can work with without headaches is not an easy task. So, try to find a company that is not just clinical in its approach towards blockchains, but also passionate about the opportunities that this technology presents. And if you have read this far, why not give us a try. You might be pleasantly surprised.

Once you have your mining machine ready and setup at our facility, you will need to decide upon which pool to join. A pool is a network of miners who have agreed to join their computing powers and share their rewards based on the amount of their individual processing contribution.  There are numerous options you will need to consider when choosing a pool to join. The most important ones are the fees and the size of the pool. If you are having a difficult time deciding on a pool, we are more than happy to make recommendations.

Useful links
Comparison of mining pools: Click here
Bitcoin Mining Pools: Click here

Be sure that your mining equipment is located in a region with favorable climate, regulation, and environment. Cold regions are more suitable, since natural cooling not only makes it unnecessary to expend energy for cooling, but it also improves the longevity of mining machines. Regulation is another important factor. A lot of countries and governments are having a knee jerk reaction against decentralized systems, and some are imposing burdensome regulations that are sure to add unnecessary costs for mining operations. The surrounding environment of a mining facility is also crucial. Bitcoin mining is a noisy business and having an operation setup in a residential area is sure to bring trouble down the road.