It is true that at the time of writing this the bitcoin is not at its greatest value of only 6,802.87 (USD) but, I would say high enough to make a profitable investment. The reason as to which I did not title this paper “Is bitcoin mining the assured investment” is because I believe that other cryptocurrency are still profitable such as the ethereum presenting itself at 120 (USD) at the time given. An interesting fact that is worth mentioning is that ethereum was valued at 1500 (USD) around 4 years ago but has fallen in value as most miners decide to mine bitcoin and also because of the bitcoin boom of 2017. Yes you would say that is a lot lower and as it is a greater deal of lower value why would you invest in any other cryptocurrency?
It has been proven over the years that ethereum is more efficient to mine on most systems and that it does not require such a high investment in graphical processing units in order to gain a good enough efficiency of the system through the ratio of units mined/cost of electricity. I shall focus more on those points throughout the article
The hardware that the system is made up of may be more efficient at mining a certain cryptocurrency even if you are using the same software, it is a more complex figure and professional miners have spent a lot of time trying to figure out the most efficient system for certain cryptocurrency. The reason as to why bitcoin is so valuable is because it was the first cryptocurrency to officially be launched and used for purchases as well as trading on the online market. As you may see most cryptocurrency do not come even close to even the 5 dollar mark, let alone close to the value of the bitcoin itself. The reason as to why ethereum has made it so far is because of the efficiency it shows.
On the other hand we must discuss that most people make the huge mistake on going into cryptocurrency mining (mostly bitcoin mining as it has the highest value and that is all that matters to them) with no research done what so ever. They purchase the cheapest graphical processing units which tend to be very inefficient at mining (especially bitcoin mining) and they do not take most factors in consideration.
· Calculating the ratio between units mined and cost of electricity
· Rate at which they will get back their investment
· How does their geographical location affect the process
At the end of the day this is an investment for most miners, as an investor you would like to know if it is a long term or short term investment which is determined by the period of time it takes to break-even therefore gaining back what you have invested. I would not go more onto the factors as you can find more information from the article “Is bitcoin mining still profitable”. The point that I am emphasizing is that most miners are armatures and they just throw their money at this investment without a clue.
As mentioned before things are more complex than they look or sound. Let’s say you do chose to make an investment on the bitcoin because of its high value and you have made most of the research necessary to know what you are getting involved into or better yet what you are investing in. As with most investments there is a certain risk taken as you may not see the sum of the original investment back. I know a few individuals who have tried it without taking in consideration the most important factors and because of such have failed sadly. They have managed to get 70% of their original investment back at best but, do take in consideration that does are people who have not done their research.
For the sake of research as well as this article I have taken a look at various beginner guides to bitcoin mining in 2019 and most of them are mediocre at best. None of them have discussed factors such as the efficiency that the right graphical processing unit can provide as well as the importance of investing in a good graphical processing unit (especially for a long term investment). They are just as the trading adverts we all see all over the internet. So it is a common mistake even for the people who do intend on doing research that they will end up seeing one of those guides with a “professional miner” telling them how and what. However, what you actually need is advice from people in the IT industry or computer engineers even as they have the best knowledge on how to raise the efficiency of the system itself, with the right budget in order to make a profit from the investment.
If we look at the subject at hand from an economical point of view, leaving aside all the efficiency we can say that the investment is assured and can even be very profitable as there may be a rise of the bitcoin value in the near future. However, as likely as it is to have a raise in value there is also a high and unknown chance for another crash. A economical trick that many investors do not see is that they look at the high number of 6,802.87 (USD) but, they do not take in consideration at that moment in time that you are only mining small bits of the bitcoin which let’s say with a Nvidia GTX 1080ti graphical processing unit you would end up making 0.00089 of a bitcoin that would earn you 6 dollars at best. So therefore you would not be able to make even half a bitcoin in one whole year. With this said it is hard to think of cryptocurrency mining as a short term investment.
Most economic specialist to say that this early rise in the bitcoin value is to stay for a long term and that any investments made should not be affected by an immediate crash of the bitcoin. If we are looking at a constant rise than the bitcoin would be the cryptocurrency to go to from an economical point of view. At the same time I would agree very much with this investment as Bitcoin is not so alienated anymore to the majority of the society and it is becoming slowly a common paying method (at least on online shops).
Many may argue that this is quite different from other investing methods as it is something assured to offer you some sort of financial gain, this is very true but when it comes to cryptocurrency mining it is all about the time in which you will gain back your investment and actually start making a profit. As you may even have to wait 5 years until you gain your investment back based on different factors but mainly on the value of the bitcoin in such a long term.
Putting in more simple terms it is as any investment procedure or investing industry; if you know what you are doing it will be most likely profitable.