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Should You Invest in Mining?

By June 11, 2017Bitcoin, Featured

Imagine you had $1,000. Should you invest it in mining cryptocurrencies, or buy another asset class?

Investing in home equity is the most illiquid option. The monthly benefits are negligible compared to the initial sum: a house needs months or even years to mark some price growth, and even then you would need to liquidate it to lock in the gains.

Stocks and bonds have a barrier to entry and require intermediaries and fees. And while one month can bring phenomenal games, the market is a random walk and you may find yourself losing money. But also, gains from the stock market are only on paper and you still have to place and order and sell them.

You could invest in currencies, which are immediately liquid assets, although you may be scared away by market fluctuations.

So should you put your $1,000 toward an ASIC machine? Should you mine Bitcoin? Is Bitmain Antminer a good investment?

Well, mining certainly has some advantages. Depending on your luck, you receive an immediate mining reward. When you join a mining pool, if that pool discovers the next block on any blockchain, you will receive a part of the reward. The crypto-coins will land right in your wallet.

Of course, you will want to use an online mining profitability calculator to see if electricity costs are offset by the mining reward. You can then choose to sell or hold the coins- and holding also means a potential for price growth.

A house will usually pay for itself, if rented, in 10-20 years. A mining ASIC, such as Bitmain Antminer, may pay for itself within months. The positive thing is that adding your Antminer ASIC to a mining pool may automatically calculate profitability and switch mining to another coin. Mining is very profitable when it is done under the right difficulty and does not require too much electricity and hashing power. Then, even a lower-priced ASIC may generate regular returns.

Last but not least, becoming a miner gets you acquainted with the world of cryptocurrencies. And while prices are volatile, in the past months, cryptocurrencies have performed better than any traditional asset class.