The early years of mining Bitcoin was usually described as a gold rush. This disruptive technology opened up a whole new field in the financial world that provided freedom from banking dependency and the chance to make a lot of money.
Those who saw the potential in Bitcoin and decided to hit the hills were cryptographers, programmers, and like-minded libertarians. But with the popularity of Bitcoin and thousands of miners digging in the digital hill, is there still gold to be mined? The reality is, Bitcoin mining has achieved a lot of success from a few early adopters.
A specialized industry has reached a massive scale in the financial industry. The chunks of profits were already mined a few years ago, and there are very few blocks to be mined as we are nearing the cap of 21 million BTCs.
And even if there are still enough Bitcoins to mine, only those with powerful hardware and those who have access to affordable electricity can take advantage of Bitcoin mining these days.
While it is still possible to mine for Bitcoins, those who have low-powered set-ups will soon discover that the investment for upkeep and power is higher than what they could generate through Bitcoin mining.
To put it simply, mining is not lucrative for small-scale operations unless you really have access to a cheap power source. It is also true that even large Bitcoin miners are experiencing a threat to their profit margins because of the tight competition. In fact, in 2016 the mining company KnCMiner already filed bankruptcy.
You should also take note that the rate of development in hardware is very fast. At any time, more sophisticated and more powerful mining hardware could be introduced in the market, even though experts believe that we are not hitting the technological peak of developed efficiencies. Meanwhile, even if you pre-order these hardware, there are also delays caused by customs, shipping, or manufacturing.
There are also some possible problems such as price crashes, network disconnections, power disruption, and hardware failures. Bitcoin mining can be considered as a business, and in any kind of business, you should consider these risks.
The average freelance Bitcoin miner could struggle to make money or recover the cost of mining hardware as well as power. Becoming profitable might be unlikely given the present situation.
This could still be improved in the near future if ASIC hardware hits the point of diminishing returns. With this, combined with affordable and sustainable electricity, could once again make mining for Bitcoin more profitable for freelance Bitcoin miners.
Bitcoin Cloud Mining
If you are interested in becoming a Bitcoin miner, but you don’t want to shoulder the burden of buying hardware, you can try cloud mining as an alternative method.
Cloud mining, as the name suggests, uses the cloud to mine the Bitcoin network and earn BTCs in the process. In general, cloud mining makes use of shared processing power to operate data centers that are located remotely.
You only need to have Internet access through a reliable device so you can communicate with the network, manage your Bitcoin wallets, and more.
But there are specific risks when you choose to perform cloud mining, which you must understand first before trying this alternative method. Cloud mining is recommended for you if you want a quiet operation.
If you have experienced traditional Bitcoin mining, you have to survive the constant humming of fans all day to successfully mine BTCs. And because the mining is done remotely, you don’t have to shoulder significant expenses for power.