Crypto mining essentials

Benefits, challenges and solutions

What is cryptocurrency mining?

Where do bitcoins come from? With paper money, a government decides when to print and distribute money. Bitcoin doesn’t have a central government.

Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain.

Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure.

Essentially every blockchain requires computation power to run its algorithm. Those who provide the required computation power is rewarded by the algorithm with newly issued coins and transaction fees.

Why mining?

High-yield return on investment

Depending on access to resources the production costs of bitcoins can be significant lower than the current coin value. This means a lower entry point compared to buying digital currencies on the exchange

Short time to break-even

As computing power weakens relatively to the network over time the vast majority of the mining return is made within the first months as profitability continuously diminishes

Production costs < market price

Since successful mining means receiving coins at production costs lower than the current market value, mining is a way to get coins at lower prices than buying them on the exchange

Passive income

Daily source of income as long as machines keep running

Opportunity to reinvest your coins to earn a yield

You can reinvest your cryptocurrency balances and earn a high yield in a world where you can not get paid any interest on your crypto holdings

You do not need to keep the coins

Miners can exchange daily their mining proceeds into fiat currency and monetize the difference between production costs and current market price

Challenges with mining

Energy Supply

Access to reliable, low-cost source of electricity at scale

Hardware Sourcing

Access to latest mining hardware at best prices and reasonable delivery times

Uptime Rate

Keep miners running 24/7 by dealing with hardware, software, cooling, power supply and security issues

Maintenance Costs

Including installation, power supply, service personell, maintenance and repairs, software development, cooling, security infrastructure

Scalability & Diversification

Difficult to scale-up & diversify mining activities across multiple coins and locations

What mining options are available to you?

Own
Mining

Source, ship, install, maintain & safeguard your miners yourself

Full Control

You own everything, you do not need to trust 3rd parties

Low starting costs

You can start with only 1 miner

Operational hassle

Requires your constant attention (and the noise the miners produce is a major nuisance!)

High fixed costs at scale

Needs a whole army of experts and a full-fledged business operation, and mistakes may cost you millions

Limited access to ressources

Sourcing energy and latest mining equipment at low costs is challenging without scale

Cloud
Mining

Leasing computation power from miners already running

Instant start

No lead time for ordering, shipping and installation since miners are already active

Very low minimum investment

You can only rent computation power that represents a fraction of 1 miner

Intransparent pricing and process

Users have little access to details about their mining process and if pricing is good value for money

Security risk

You depend on the integrity and professionalism of the provider

No ownership

You do not own the mining equipment

Contractual terms

Usually 12 or 24 months contract length bound to specific cryptocurrency, paid in a lump-sum upfront

3rd Party
Hosting

Hosting your miners with a professional service provider

Low cost

You own everything, you do not need to trust 3rd parties

Low minimum purchase amount

Ranging from 1-10 Miners

Hardware purchase

Benefit from potential tax write-offs

Security risk

Most providers use splitters to deduct service free from daily mining proceeds. Hence requires trust in the professionalism and integrity of the counterparty

Complex Pricing Structure

Often different tiers of energy, rental and service fees

Comittments

Usually 12 or 24 months contracts bound to specific cryptocurrency

Hosting with BlockBase

Purchasing and hosting miners in our data center in Sweden

Very low costs

Benefit from our very low energy costs, cool climate, strong legal frame work and political stability in Sweden

All-In pricing

– Hardware purchases include shipping & installation
– Monthly service fee include energy, infrastructure & maintenance

Receive 100% of your coins mined

Full hardware ownership, meaning:
– We never touch your coins. Your hardware mines directly into your wallet
– Benefit from potential tax write-offs
– Switch hosting provider

Hardware ownership

– Benefit from potential tax write-offs
– Switch hosting provider

No comittments

Cancel monthly and switch currency to be mined

First come, first serve mining capacity

We have limited capacity in terms of space and energy supply

Minimum purchase amount

We can only offer our competitive prices from 30k Euro hardware purchases
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Learn how profitable Bitcoin and Ethereum mining is today!

Download our free excel mining profit calculator and build your own investment case with current market & hardware data