8 Tips on Keeping Your Bitcoin Mining Gig Profitable in the Long Run

The mining of Bitcoin and other cryptocurrencies is an industry with its ups and downs. Mining profit is always changing. Factors such as network difficulty, fluctuating prices, and Halvings are constantly changing the mining revenue. What makes it even more complicated is that these factors have a different impact on each mining machine! Given that the return of capital in Mining usually takes between 6 months to two years, and in this period the mining conditions will change rapidly and may disturb your calculations, we hereby describe the best strategies for earning a good profit out of it. 1. If you do not have access to cheap electricity, you are doing risky work Electricity cost is the most important factor in the mining industry and has a determining role in whether mining is profitable or not. Each time the price of the coin drops significantly or its network difficulty increases, a lot of its miners lose their profitability. If your electricity and maintenance costs are high, you are among the first groups to lose. Instead, miners consuming cheap electricity are always in a safe and profitable zone. A vast range of miners now has access to 0.03 to 0.04 USD per kilowatt in countries such as China, Russia, Georgia, etc. If the price of your electricity is much higher than these numbers, then you are exposed to high risks. 2. Keep upgrading your devices to more energy-efficient ones Bitcoin’s difficulty has almost always grown faster than its price, even in the bull market. Which means mining revenue, in general, is always decreasing. Bitcoin’s price jumped from $ 220 in August 2015 to $ 19500 in December 2017, about 89 times. But the amazing point is that the difficulty of the network has increased 120 times in the same period! This means when Bitcoin was $ 200, mining was more profitable than when it was $ 19500! Bitcoin price chart vs network difficulty chart In order not to lose in this marathon, always spend some of your profit on replacing older mining devices by acquiring newer and more energy-efficient ones. 3. Buy mining devices when Bitcoin price is in retracement The price of mining devices is highly dependent on the price of cryptocurrencies. When Bitcoin reached $ 3,000 by the end of 2018, the price of ASIC miners fell sharply, even more than bitcoin, and provided the best opportunity to buy miners. Again when bitcoin jumped from $ 3,000 to $ 14,000 in June 2019, miner prices jumped more than six times. 4. Don’t overlook BCH and BSV The BCH and BSV mining algorithms are similar to the Bitcoin’s, SHA256. Sometimes mining these currencies is more profitable than Bitcoin. For example, at the time of writing this article, every 1 Terahash could generate $ 0.175 in 24 hours from bitcoin mining, while it can generate $ 0.181 by mining BSV, 3.5% more. But the difference is even greater if we subtract the cost of electricity from the mining income. Suppose you have an S17 53 Terahash Miner with a 2400 Watts PSU and you pay $ 0.06 per kWh. So subtracting electricity cost, the miner generates $ 5.82 revenue per day if mining Bitcoin and $ 6.14 per day while mining BSV, which is 5.5% more. This difference is more on older and less efficient devices. However, given the fluctuations in the prices of these currencies, the most profitable currency is switching very often. Some applications automatically switch the miner to mine the most profitable currency. and are some examples of these apps. Also some mining pools like support . Awesome Miner Minerstat Poolin hash rate auto switch 5. Keep an eye on Halving In May 2020, the third Halving of bitcoin will occur and the mining bonus will be reduced from 12.5 bitcoin per 10 minutes to 6.25 bitcoin. This will outdate many mining devices. A miner that is profitable today may not be profitable after Halving. More energy-efficient miners will experience less damage from Halving. However, some risky miners invest in cheaper devices that consume more energy with a shorter return period, earn their original capital before Halving and buy new energy-efficient devices after Halving. This is a clever yet risky action. 6. Mining Altcoins can be more beneficial but it is also riskier Altcoins are much more volatile than bitcoin, so research well on their future before buying their mining equipment. It is best not to invest all your capital in mining one Altcoin. The value of some Altcoins fell by 99% in 2018! Some Altcoins are against ASIC miners and try to outdate ASIC miners by changing algorithms. Price decreasing or Halving of an Altcoin affects the mining of other Altcoins with the same algorithm. For example, Litecoin, Verge, Digibyte, Doge and several other currencies use the Scrypt algorithm. Litecoin currently owns most of the Scrypt hash rate. Litecoin’s Halving happened in August 2019, and its mining profitability suddenly halved. This led the miners to switch from Litecoin to other Scrypt algorithm currencies and increase the difficulty of their networks greatly. I do not like GPU mining rigs and think they will be outdated as CPU did. While not very profitable right now, GPU mining is generally not as easy as ASIC mining. 7. Have a strategy for selling mined currencies or convert them into promising currencies To get the most out of the mining you need to have a clear strategy for when and how to sell the mined currencies and pay the maintenance costs. This requires researching currencies, their futures, and their price analysis and have at least some technical analysis information. You can hold them or convert them into more promising currencies and sell them at a higher price at the right time to make more profit from your mining. Or vice versa if you’re in the bear market, sell the mined coins as soon as possible. 8. Don’t be fooled by mining calculators Many websites calculate mining profit based on your hardware and your electricity price. If you have never experienced mining before, you might be thrilled to see the numbers these sites and calculators provide and hence think “I’ll be rich!”. But here’s what those websites don’t tell you: You will probably have other current costs in addition to electricity costs such as maintenance, cooling, renting, manpower, etc.Usually, the hash rate and power consumption of the devices are slightly different from what the factory says. This difference is more common in unpopular brands such as Ebang, Strong, Aixin, etc. You can get a better insight into real hash rates and their actual power consumption by watching Miner Test videos on YouTube. Besides, up to 200 watts of power loss can occur from the electricity meter to the device depending on the distance from the device to the meter and the type of cable used. In addition to the cost of the mining device, there are also some initial costs to pay for preparing the infrastructure like cooling and exhaust, electrical cabling & switching, shelving, networking & monitoring equipment, security, etc. The network difficulty is constantly changing and increasing at a significant rate, which has a direct impact on mining revenue. Take a look at the to see how rapid it is growing.Your miner will not be active 100% of the time. bitcoin network difficulty chart For maintenance, internet problems, mining pool problems, electrical problems, and many other ones, miners may get offline for some hours. I suggest considering miner uptime below 97% in your calculations. We have experienced mining in professional farms. They too have no more than 97–98% uptime. Create your own Excel and take into account all of the items that influence mining. I’ve made one for example. You can view it here: https://docs.google.com/spreadsheets/d/1rUfoEZmeoSjnRMCjQWezETfT84ClKkuXkDtVPRmn0c8/edit?usp=sharing Last words It is not always easy to profit from mining, but it doesn’t mean it’s not worth it. If you want to do it or are doing it, you will need to complete your information and plan for the future. Enter the market at the right time, buy the mining machine at the right time. Be aware of its risks and how to deal with them. Start on a small scale. You may even have to get out of the game some time, sell your devices and wait for another suitable time to enter!