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In the last few years, the world of cryptocurrency has experienced dramatic growth, and new platforms and currencies have been introduced. And despite changing trends and an influx of new currencies into the market, the originator, Bitcoin, is still the most valuable decentralized cryptocurrency.
When the Coronavirus pandemic hit our world, it changed many things–from business to consumer behavior. So, you may probably be wondering if Bitcoin mining is still profitable? The answer is yes, it is. While the pandemic has disrupted business-as-usual and affected economic development across countries, the economic uncertainty it has created has also led to the popularity of cryptocurrencies. So, if you’re thinking of starting a bitcoin mining business in 2021, here’s how to go about it.
1. Get the Right Tools for the Bitcoin Mining Rig
To start bitcoin mining, you need these 4 things:
- Mining software
- Low-cost power supply
- Mining pool membership
- Application-specific integrated circuit (ASIC)
While the costs of mining Bitcoin haven’t changed much, miners now use a different technique to create Bitcoins. Instead of graphics cards and home computers, cryptocurrencies like Bitcoin require hardware called application-specific integrated circuit (ASIC).
The hardware comes in different shapes and sizes, each with unique cooling and maintenance needs. But the good news is there are many tools in the market that can help Bitcoin miners estimate the costs.
For instance, NiceHash’s calculator can help you see the potential earnings of your hardware. You can also buy bitcoin mining hardware on Antminer. The popular brand has a wide range of products and is a great place to start. If you don’t have all the money needed to start a bitcoin mining business, you can get a small loan and boost your capital–as long as you pre qualify auto loan.
You can also mine other cryptocurrencies using a traditional desktop PC, but do some research first. Use a cryptocurrency profitability calculator like NiceHash to see if you’ll earn enough money and have a good return on investment. There are 3 popular Bitcoin alternatives that may not require a huge initial investment: Ripple, Litecoin, and Ethereum.
2. Pool vs. Solo Cryptocurrency Mining
There are 2 major forms of cryptocurrency mining: solo mining and pool mining. In terms of execution and hardware, they have a lot in common. But your personal routine will differ depending on the one you settle for. Crypto miners started pool mining as a way to offset high energy costs. The mining technique allows you to start mining right away without having to buy expensive hardware as you would with traditional solo mining.
With pool mining, you utilize the joint hardware capacity of all members, however, with solo mining, you depend exclusively on your own Bitcoin rig. Because mining pools have a distributed framework, the income is more stable. However, you’ll also be subjected to problems with the network and outages.
If you’re already familiar with cryptocurrencies and keep up with industry trends, solo mining may be the best option. Long-term miners prefer it, but the payouts may not be consistent as in pool mining. Pool mining is a great option if you want more predictable income. Most pools are currently based in China, but more are being opened around the world. In March 2021, Foundry USA, a newly-established U.S. pool, began taking institutional clients.
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