With the popularity of bitcoin and cryptocurrency, more and more people are getting into mining. Back in 2009 when bitcoin wasn’t so popular, you could mine with a regular computer. And if you had done that, you’d be very rich today. When I first got into bitcoin, one bitcoin was worth around 80 dollars. I remember thinking “it’s already too late, bitcoin is at its peak”. To everyone’s surprise in 2017, bitcoin shot up to $20,000. Those were the times, bitcoin became the buzz word and everyone wanted to own a share of bitcoin.
Right now, mining bitcoin with a CPU or GPU is impossible. If you try this, you’d end up wasting your time and money. That is why some miners are building mining rigs with powerful graphics cards and finding cheap sources of electricity. If you find very cheap electricity or free electricity, you have found a treasure. Even if your mining rewards are low, cheap electricity can make you good money.
If you plan on building a mining rig or buying an already assembled one, please read through. I will lay out the pros and cons of buying a mining rig. After you have this knowledge, you can make an informative decision.
Why You Should Buy a Mining Rig
If you are not tech savvy, building a mining rig from scratch will not come easy for you. You may have to refer to how-to guides and videos on YouTube. Assembling a mining rig is tedious and there are so many things that can go wrong. Building a mining rig is not like building a normal PC.
You must have the knowledge to connect components to PSU, build the rig’s frame and add video cards, configure the BIOS, and install all graphics cards. Apart from the tedious process of building, you have to shop for the necessary components.
Not to mention the time it takes for all the components to deliver and the limitations when it comes to buying. Some stores have a limitation on the number of components you can buy at a time.
So, for someone who is just getting into mining and have no prior knowledge of building PCs, this is an attractive option.
Why You Shouldn’t Buy a Mining Rig
Mining rigs are priced very high. Sometimes the components in these rigs can be dated. Graphics cards can fail especially if it is been mining for a long time. Mining requires your graphics cards to work at maximum for an extended amount of time. Mining is brutal for graphics cards. Continuously mining always results in failure of one or more of graphics cards.
Miners who are selling rigs are looking to recoup their investment. You have to wonder why people sell their mining rigs if it is making them money? It is likely because mining rewards they earn get lower and lower or it is the time one of these components going to fail.
Apart from sellers that sell used mining rigs, there are sellers that build mining rigs just for the sake of selling. Usually, these rigs are priced extremely high. You can say they charge higher prices for assembling.
If you know how to build PCs, avoid buying mining rigs. Shop for individual components and assemble them yourself. You literally save thousands of dollars. If you have no prior experience building rigs and want to try building one, you can ask help from someone who knows. After all, if you are serious about mining, you should know how to fix when something breaks. And something will break eventually. Building a rig is a good way to learn.
So, should you buy a mining rig?
Yes and no.
Yes, if you can find a good deal with reasonable pricing and hash power. When I say reasonable, I mean the cost of all components individually, should be more or equal to the cost of the rig. You can pay a little extra for the time it took to assemble all the components. Some sellers give a warranty but this is extremely rare.
No, if you know how to assemble or have the time to learn by trial and error. However, if you are doing this, make sure you can afford to lose your investment in the worst case scenario. You will have to replace some components when it breaks. If you are willing to do this or have someone who can help, your best option is to build one.
Buy or build, you must have a good understanding of hash power and difficulty. It is common knowledge that when more miners join the network, difficulty increases and mining rewards get less and less. You should expect your rig to become unprofitable over time. Hash power and cost of electricity are 2 of the major factors that determine the success of your mining venture.
Before you build or buy a rig, you must always estimate the profit you will be making. You can use a mining calculator like CryptoCompare for this. The best thing about having a rig is that you can almost mine any coin. You should be comfortable switching to mining different coins when it is profitable to do so.
Ethereum and Zcash are very popular among miners as it usually gives a good ROI, but really, there is no such thing as “most profitable coin”. Mine what is most profitable at the given time. You can convert these coins to bitcoin or HODL altcoins. WhatToMine is the site I use to research what is most profitable.
But why own a rig at all?
Sometimes, buying a rig is not the best investment you can make. Rather than buying a rig, what if you invest that money in cryptocurrency? The most common reason why miners buy mining rigs is that it can earn more bitcoins in the long term. But this is not always the case. How much bitcoins you are going to earn is dependant on various factors like difficulty of the network and the value of the coin.
And of course, you need to take into account electricity cost and cost of the mining rig itself. If you are planning on buying a rig, you are essentially making a bet on the number of bitcoins you are going to earn. If the price of cryptocurrencies fall, mining will become unprofitable. That is what had happened in this bear market.
Another popular method of mining is cloud mining. Genesis and Eobot are 2 of the services I use. These services take fees for maintenance and electricity. You buy hash power from them and mining rewards are sent to your wallet. Again in terms of profitability, the price of bitcoin needs to be high and difficulty needs to be low in order to make some money.
Buying, on the other hand, is less risky and very convenient. If you are wondering how much should you invest in cryptocurrency, check out this article. Mining takes some time to recoup initial investments. Several months or sometimes years. By mining. you are making a bet on the price of bitcoin.
The above article is written based on my own subjective opinion. I am not responsible for any losses incurred by any reader. Cryptocurrency is a volatile and risky investment. You must only use my advice as part of your research into mining cryptocurrency, purchasing rigs, and buying bitcoin. I hope you succeed in your mining venture!