While the most popular way of getting cryptocurrencies is by trading on this market, there are still many people who choose to mine these digital units. Mining was especially attractive in the first few years after the introduction of Bitcoin. The main reason for that was high efficiency, low price, and the ability to use a basic PC.
However, things started to change over time, and the process became much more difficult. Many factors could affect the profitability of this process. You can visit jt.org to read more about the technical features of mining, and the potential profit that you can get.
When it comes to current conditions on the market and technical features of mining, many people choose to avoid and decides to buy BTC instead. Buying is much easier, but it brings various risks as well, especially with the fact that no one can be sure that the price of BTC will continue to rise in the future.
There are some positive forecasts, but this market is highly volatile. On the other side, mining can still be an excellent option to acquire this digital unit. Here are the main reasons why mining can still be highly profitable.
1. Increased Value and Predictions
As we can see, the BTC is currently on a record-high value of over $60,000. Also, many financial experts think about how it will continue to rise, and some of their forecasts are assuming that it will reach $100,000 in the next few years. If you get the proper equipment for efficient mining, your profit can be much higher than by simply buying this unit.
On the other side, the investment can be lower than the current price of BTC, which can help you to protect it in case that price starts dropping. Still, many factors could determine the efficiency of mining, like the equipment, cost of electricity, and more. It is interesting that it can be profitable even in countries with expensive electricity, which was not a case in previous years until it reached the current value.
2. Modern Hardware
While people were using PC with high-quality graphics cards for a long time, there are even better tools available today. Depending on how much money you want to invest, you can buy professional mining rigs, which represents the most efficient hardware option for mining today. Some of the best mining rigs are Whats Miner, Avalon, Antminer, and more. When it comes to prices, the average cost of one piece is between $2,000 and $10,000. Also, you can combine more of them for improved efficiency.
3. Cost of Electricity
As we already mentioned, the cost of electricity is one of the main factors that can affect the profit of miners. Still, the best option is to mine in countries where you won’t need to spend a lot of money on bills.
Therefore, some of the best countries are China, Canada, Russia, United States, Iceland, and Venezuela, while you will earn much less in Germany, Denmark, and South Korea. Nevertheless, you should consider the quality of equipment to assure that it is not wasting energy. For instance, an average rig with a price of only $1,000 won’t bring you any profit in most countries.
4. Great Selection of Mining Pools
People are aware of the fact that this process is quite complex and difficult today. Therefore, developers came up with an excellent solution where individuals can combine their resources and mine much faster. There is a wide selection of mining pools where you can join forces with others and share the rewards.
However, it is crucial to choose only those options with a lot of active members. The efficiency will increase if many people use proper equipment. Even after the last halving, where the prize was decreased to 6.25 units, it is still profitable since the price is over $60,000. If the value continues to rise, it will remain profitable even after the next halving, which is set for the year 2024.
5. Low Fees
The only way to sell your digital units is through some online crypto exchange. You can expect that they will charge additional fees during the transaction. Therefore, it is essential to research more about available exchanges and look for an option that offers lower or no fees at all, while you will still be safe during transactions on their platform.
Moreover, when it comes to taxes, in most countries where there are regulations for cryptocurrencies, people will have to pay taxes for capital gain, but you can get a deduction based on your expenses for mining, which is an excellent feature.
6. Cloud Mining
This option became very attractive in recent years. Some big investors created large mining centers in areas with cheap electricity. You can rent a smaller instance of their center and get the amount of BTC according to your investment. The main advantage is that many of these centers have lower expenses, and people in countries where this process is less profitable can make more money with this option. Also, this is the most convenient method since you don’t need any additional equipment.
The most important thing about this process is to check all of the factors that we mentioned and be sure that you can make a profit over time. Also, follow the movement of prices on the market, and be aware that some drastic changes are always possible. On the other hand, the equipment and electricity could become more expensive as well, which can also affect the profit.
Besides Bitcoin, it is a good idea to try mining some other units as well. Many of them require less expensive resources while keeping the high efficiency. Nevertheless, you should choose only those options that have the potential to become more valuable over time. There are over 2,000 units available on the market today, but only a small percentage of them will manage to grow and remain stable.