Bitcoin was introduced in 2008 and has gained much popularity since then. At the time of writing the exchange rate for 1 BTC is about €1100 (or $1166), quite an increase from when you could get 1 BTC for just a few euro.
It is 29 November 2017, just eight months after writing this post, and the exchange rate has skyrocketed. The $10,000 barrier has already been broken and the €10,000 barrier is in sight. If you’re interest in mining bitcoin, this post is still relevant. Fees will be lower (as they are charged in $/€) and your net yield will be higher. Good times!
The problem with mining Bitcoin#
Mining bitcoin can be quite lucrative, but it’s hugely dependent on the exchange rate and the difficulty of mining. The difficulty is something that is only going to increase. In the early days a fast CPU was enough to mine new Bitcoin blocks, followed by GPU mining and eventually specialized ASIC chips.
Besides investing in powerful hardware to mine blocks, there’s also the utilities bill. Calculationg millions of SHA-256 hashes per seconds is not very power efficient.
If you’re like me, you don’t want to have a machine in your study or living room generating noise and heat to mine Bitcoin. There are several options, like renting a powerful GPU machine at Amazon AWS, but there’s a huge upfront cost. For the past few years did not find mining bitcoin interesting or cost effective enough. Last week that changed.
Welcome to 2017#
Last week I found Hashflare.io. The great thing about Hashflare.io is that you choose how much you want to invest in hardware by purchasing mining capacity in units of 10 GH/s, currently at a price of $1.20 per unit.
Your mining capacity is put towards mining Bitcoin in different pools (you can change these), resulting in a daily payout of mined Bitcoin.
The good part? This is a life-time purchase. You keep the mining capacity - forever.
The only cost is a fee for power and management of your hardware, which is substracted automatically from your daily payout.
Purchasing capacity is easy and straightforward. Payment options include credit card and Bitcoin. It’s also possible to reinvest your earned bitcoin into purchasing more mining capacity.
Return on Investment#
Right now I’m seeing about 40% of my Bitcoin yield go to power and management costs. This means I’ll earn back my initial investment in ± 5 months. After that it’s pure profit.
The current exchange rate is also of importance here, because power and management fees are calculated in USD. Any increase (or decrease) in exchange rate will influence the amount of BTC that goes towards fees.
Since the value of Bitcoin has been steadily rising since 2008 (there have been some extreme fluctuations), it’s very well possible that I’ll break even before 5 months.
Let’s get mining!#
There’s no reason not to start mining Bitcoin today. Hashflare.io makes it rediculously easy to purchase mining capacity and start minting Bitcoin.
Will you make your money back? Given time, probably. Is it fun to be part of this Bitcoin thing? Oh yeah!
Note: Besides SHA-256 hardware, for Bitcoin, you can also purchase capacity for mining with Scrypt, ETHASH and X11.
Disclaimer: The links to Hashflare.io in the article are referral links, I will get 10% of any purchases you make on Hashflare.io. I understand if you object to using a referral link, here’s a non-referral link instead.