Bitcoin Mining in 2017

Bitcoin Mining in 2017

How to Remain Profitable in this Challenging Environment

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Mining adds transaction records to the public ledger of Bitcoin that contains previous transactions. This process used to be performed by individual desktop computers that run BTC nodes as miners competed to address algorithmic issues while verifying transactions on the crypto currency’s Blockchain. The PC that resolves the problem first is rewarded with Bitcoins. This was the method by which new coins were introduced into the network. The term given was Bitcoin mining.

More Difficulties

Nowadays, Bitcoins halvings have become a factor. Technology improved and efficient mining equipment was developed. However, all these also boosted mining complexity as competition became more intense.

“Satoshi Nakamoto”, alleged creator of Bitcoin, started this concept of millions of PCs mining BTC independently worldwide and later evolved into the creation of large mining farms. As a rule, this farm consists of numerous processors or mining pools which are connected to each other. It competes as one unit in transaction processing on the Bitcoin chain. This essentially makes mining hard for independent miners to become profitable.

ROI

Returns on Investment (ROI) normally determine the feasibility of BTC mining.

This year, this will remain as a difficult venture. Companies or individuals who decide to put in money must realize ROI comes between nine and 11 months even for the most efficient miners. Yet, this actually varies depending on energy and cooling expenses. Countries with cooler weather and more affordable electricity have bigger advantage with respect to mining profitability. Computation of ROI also relies on difficulty of network which is actually increasing as time progresses.

When it comes to equipment, it seems more practical to install the GPU mining rig because miners and users are provided with more choices. With Bitcoin Application-Specific Integrated Circuits (ASICs), the only option is to mine SHA256 crypto currencies although a few others are in Proof of Work stage. Individual mining can prove to be convoluted for those new to the Bitcoin platform.

Volatile Business

According to Blockchain researcher Sean Brizendine, the profitability of this virtual currency cannot be predicted because of its parameters. BTC mining may not be a rewarding investment but he suggests that holders of many coins can have one miner to maintain the network. It does not matter if profit can be very small.

This research expert said he will purchase and operate one Bitcoin miner to advocate for decentralization. It will also make the Bitcoin network stronger. Investors can keep the coins in hardware wallets such as Keep Key or TREZOR. The latter is not only a bulletproof wallet but security device for accounts, passwords and emails as well. Keep Key is a simple hardware wallet capable of securing Bitcoin and Ethereum along with other similar currencies from hackers.

Price of Bitcoin

Aaron Foster, chief executive officer and co-founder of The Bit Point, believes Bitcoin mining profitability will always be dependent on the virtual currency’s market price. With the scaling situation, returns may turn out negative if this concern is not addressed immediately. Worse, the hard fork that has two chains can lead to mining of BTC or BTU.

Likewise, Mr. Foster observed hardware lifespan should be considered. It is important to know how long before the mining device becomes outdated. Small investors can profit from BTC through the buy and hold scheme unless they hire inexpensive ant miners or electricity is very cheap.

Another point of view comes from Fred Gondzar, President and chief executive officer of Healthy Wealth LLC. The best strategy is to join mining clubs since you can get rewards from Bitcoin mining. As a participant, he earns dividend every day. This is large-scale mining which makes earnings more lucrative. Thus, he is in favor of this approach.

Looking Back

The Bitcoin mining venture started with only a small number of miners who were like supporters of small cottage industries. Later on, it slowly progressed into a focused commercial and industrial venture. Money was very easy at that time until issues made the phenomenon quite intricate.

At present, only individuals or companies that own special and sophisticated equipment can profit significantly from extracting Bitcoin. This does not mean mining is not a prospect for all people. The logic is miners with under-powered apparatus will discover more money is spent on hardware and electricity instead of profits. In short, crypto currency mining cannot be gainful unless electric power is free or very, very cheap.

Conversion or exchange rates from the USD to BTC must also be taken into account. This also impacts profitability of said currency. Unless one is mining to collect coins, then there is nothing to worry about. The thing is you may want to convert BTC to major currencies; the profitability aspect becomes a problem.

What is the present scenario?

Ordinary home-based miners will continue to struggle if they want to earn more or at least, recover their costs for electricity and hardware. The good news is this condition may get better if innovation in ASIC mining attains the so-called “Point of Diminishing Returns”. If combined with cost-effective and sustainable power solutions, mining can become lucrative for small players once more globally. Likewise, this will contribute meaningfully to the goal of decentralizing the Bitcoin platform and reduce regulatory constraints, bureaucracy restrictions as well as legal risks.

It is very clear that Bitcoin mining in 2017 can be complicated but it always depends on multiple factors. Of course, it is not easy but individual miners can still obtain benefits from the ecosystem. Strategic planning and favorable environment are among the factors that can help them flourish in this enterprise. All in all, these should not detract investors and miners to continue mining this year and beyond.

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This is Lutpin, and I edit, review and publish articles for CryptoNews. Sometimes, I also write them myself. I started being interested in bitcoin and cryptocurrencies as far back as late 2012/early 2013. A year later I dropped out of the scene due to losing interest. Since 2015 I'm back in and involved deeper than ever. Besides writing articles, I'm a huge fan of gambling, preferrably combined with cryptocurrencies. Another big interest of mine are physical bitcoins, I know everything about them. Besides Crypto-News and Crypto-Games, you can find me mainly on bitcointalk.org

2 COMMENTS

  1. Being involved in mining of BTC as well as the recent mining of alt-coins, I as an individual will go to where the biggest reward exists for my output of time and money. This does not mean that I wont still have a s7 antminer keeping up and mining what it can given the increase in difficulty that most of us have succumbed to. I was in a lucky place and time where I had an opportunity last month to sell my other 2 s7s at 400 each which is almost their new value. This however did get me thinking and upon reading this article it is even more clear as to where the mining of btc has gone in recent months if not the past year. I will still always support bitcoin and I will and always want to have not only the equipment to help the infrastructure but also to have a say in things they do and don’t do, as the questions come up like the recent seg-wit vs hard fork war. I only hope for the best of us all lets do what is best for the consumer with the least risk for the chain itself. I know and have a good feeling that segwit will not only be an assett to btc as is recently has to Ltc but it will also find other uses in the cryptocurrency markets for a time to come. To quote the author and then respond to his article…

    “It is very clear that Bitcoin mining in 2017 can be complicated but it always depends on multiple factors. Of course, it is not easy but individual miners can still obtain benefits from the ecosystem. Strategic planning and favorable environment are among the factors that can help them flourish in this enterprise. All in all, these should not detract investors and miners to continue mining this year and beyond”

    I believe there are a few ways that us miners can obtain certain benefits from the ecosystem. These decisions would also tie in to the next part of that Paragraph. Strategic planning and a favorable environment are what people with huge operations have and what has and will continue to drive the difficulty of btc up and up….an up even more. By the time anyone who mined on an individual level would be in a place to compete with what was in essence a large take over and a slap in the face to those that were supporting nodes and the chain waaay early and to have it ripped out of our hands by the people who decided where the levels would go every few weeks wasn’t a very nice or kind thing but it was a business decision. So when people like Adam Meister say they want to keep the btc system for the people he says he sees like himself who have been doing this for quite a few years now he should look at what he has done to those people before making rash decisions that actually took away trust in BTC and was very clear to see in the markets. I am not going to say right now the best alts to mine but just like most other btc miners I have been gifted with a niche that I will use to my advantage and support early blockchains of many sorts. I just hope all independent miners to find a place to communicate so we can make sure to share similar pools etc to fight against what has been done to us to keep us in the best possible position givin the state of this market today. You can always reach me either on here or crypto-games and there my names abbasabba as well.

  2. Being involved in mining of BTC as well as the recent mining of alt-coins, I as an individual will go to where the biggest reward exists for my output of time and money. This does not mean that I wont still have a s7 antminer keeping up and mining what it can given the increase in difficulty that most of us have succumbed to. I was in a lucky place and time where I had an opportunity last month to sell my other 2 s7s at 400 each which is almost their new value. This however did get me thinking and upon reading this article it is even more clear as to where the mining of btc has gone in recent months if not the past year. I will still always support bitcoin and I will and always want to have not only the equipment to help the infrastructure but also to have a say in things they do and don’t do, as the questions come up like the recent seg-wit vs hard fork war. I only hope for the best of us all lets do what is best for the consumer with the least risk for the chain itself. I know and have a good feeling that seg-wit will not only be an asset to btc as is recently has to Ltc but it will also find other uses in the cryptocurrency markets for a time to come. To quote the author and then respond to his article…

    “It is very clear that Bitcoin mining in 2017 can be complicated but it always depends on multiple factors. Of course, it is not easy but individual miners can still obtain benefits from the ecosystem. Strategic planning and favorable environment are among the factors that can help them flourish in this enterprise. All in all, these should not detract investors and miners to continue mining this year and beyond”

    I believe there are a few ways that us miners can obtain certain benefits from the ecosystem. These decisions would also tie in to the next part of that Paragraph. Strategic planning and a favorable environment are what people with huge operations have and what has and will continue to drive the difficulty of btc up and up….an up even more. By the time anyone who mined on an individual level would be in a place to compete with what was in essence a large take over and a slap in the face to those that were supporting nodes and the chain waaay early and to have it ripped out of our hands by the people who decided where the levels would go every few weeks wasn’t a very nice or kind thing but it was a business decision. So when people like Adam Meister say they want to keep the btc system for the people he says he sees like himself who have been doing this for quite a few years now he should look at what he has done to those people before making rash decisions that actually took away trust in BTC and was very clear to see in the markets. I am not going to say right now the best alts to mine but just like most other btc miners I have been gifted with a niche that I will use to my advantage and support early blockchains of many sorts. I just hope all independent miners to find a place to communicate so we can make sure to share similar pools etc to fight against what has been done to us to keep us in the best possible position possible

    . I am on crypto-news often and will continue to be. Thanks and I hope some if not many feel the same or have something to ad to what I felt needed to be said. We are all in this together so just hoping it stays that way!!

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