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 exchangeShort 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 diminishesProduction 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 exchangePassive income
Daily source of income as long as machines keep runningOpportunity 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 holdingsYou 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 priceChallenges 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 yourselfFull Control
You own everything, you do not need to trust 3rd partiesLow starting costs
You can start with only 1 minerOperational 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 millionsLimited access to ressources
Sourcing energy and latest mining equipment at low costs is challenging without scaleCloud
Mining
Leasing computation power from miners already runningInstant start
No lead time for ordering, shipping and installation since miners are already activeVery low minimum investment
You can only rent computation power that represents a fraction of 1 minerIntransparent pricing and process
Users have little access to details about their mining process and if pricing is good value for moneySecurity risk
You depend on the integrity and professionalism of the providerNo ownership
You do not own the mining equipmentContractual terms
Usually 12 or 24 months contract length bound to specific cryptocurrency, paid in a lump-sum upfront3rd Party
Hosting
Hosting your miners with a professional service providerLow cost
You own everything, you do not need to trust 3rd partiesLow minimum purchase amount
Ranging from 1-10 MinersHardware purchase
Benefit from potential tax write-offsSecurity risk
Most providers use splitters to deduct service free from daily mining proceeds. Hence requires trust in the professionalism and integrity of the counterpartyComplex Pricing Structure
Often different tiers of energy, rental and service feesComittments
Usually 12 or 24 months contracts bound to specific cryptocurrencyHosting with BlockBase
Purchasing and hosting miners in our data center in SwedenVery low costs
Benefit from our very low energy costs, cool climate, strong legal frame work and political stability in SwedenAll-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 minedFirst come, first serve mining capacity
We have limited capacity in terms of space and energy supplyMinimum purchase amount
We can only offer our competitive prices from 30k Euro hardware purchases