Knowing whether it is profitable to mine crypto currency has become a top concern today. Indeed, electronic currencies are breaking records.
The question is all the more important since this universe is arousing great interest among a previously indifferent public.
Even though opinions on the subject differ, the fact remains that there are several factors to consider when it comes to evaluating the profitability of cryptocurrency mining. Find out in this feature whether it is profitable to mine crypto currency.
General information about crypto-currency mining
Crypto-currency mining made its debut in 2008 in the crypto-sphere. The term mining was given to this activity due to the fact that users obtain fragments of crypto-currencies, much like miners looking for a gold nugget. So mining is about earning crypto-currencies in the same way as staking cryptos.
While it has long been said that it is profitable to mine crypto-currency, it is also important to point out that doing this activity yourself requires certain conditions:
A quality equipment;
A high-speed connection;
A real logistics;
A technical service, etc.
Over time, several ways of mining crypto-currency have appeared. Each of them is adapted to the level of skills of the miner as well as to the level of sophistication of the equipment used.
These aspects will be important in determining whether it is profitable to mine crypto-currency.
This is the most commonly used method of mining crypto-currency. Indeed, not everyone has the ability to afford the mining machines whose financial impact is quite substantial.
The miner therefore uses the computing capacity of a company. The main advantage of this method is that it does not require any technical knowledge or investment in mining equipment.
However, the risk of scamming is quite high, so it is best to refer to trusted sites like Feel Mining or Just Mining. The latter is also one of the few companies with a Masternode that can ensure the security of blockchain.
The mining rig
The mining rig is used by people who want to mine cryptocurrencies on their own. It is a powerful computer with several graphics cards that can mine electronic currencies. The most commonly used are ASICs.
The last method used, the mining pool or the mining pool is an association of several miners to mine cryptocurrency together.
Factors to know if it is profitable to mine crypto-currency
It may be more profitable to mine cryptos for some than others. For example, someone who is not bound by electricity charges is more likely to be profitable than someone using their own equipment.
To find out how profitable a crypto-currency mining business is, there are several parameters to consider.
The Hash rate
This is the most important data to know if it is profitable to mine crypto-currency. Indeed, it is the unit of measurement of the processing power of electronic currencies and represents one of the basic concepts to know.
It is used to quantify the number of operations that can be performed by the computer or the miner. Click here to learn more about the hash rate.
Mining hardware has a fairly high cost and its value must be taken into account when determining whether it is profitable to mine crypto-currency.
This is because a low-end computer cannot be used to mine crypto-currencies. Also, the current shortage of graphics cards needed to run the mining hardware makes it even more expensive to configure them.
The cost of electricity
This is one of the constraints related to mining. As it is a very energy-intensive activity, the amount of electricity used by the mining equipment to perform the mining can be colossal.
The commission charged by the mining software
The commission charged by the mining software is also to be taken into account. Usually, the calculators provide data about the selected e-currency and show the level of difficulty of the mining as well as its profit.
They show the profitability of each coin and also offer different alternatives for the miner to choose the one that is most advantageous to him. This allows the miner to know, for example, if his investment will be profitable during a specific period.
What to keep in mind in concrete terms?
It is the above information that will determine the profitability of crypto-currency mining. However, the option of mining pool allows to share the costs between miners and can be profitable since the charges are reduced.
Generally, it is not advisable to mine alone. However, if the charges related to the cost of electricity, purchase of equipment and commission levied are less than the profits made in the long and short term by the miner, the miner may find it profitable to mine crypto currency alone.