Crypto mining…AKA cryptocurrency mining, bitcoin mining, ethereum mining, etc…has recently seen a massive surge te rente. So I set out to evaluate it and see if it’s an effective, profitable side hustle and passive income stream.
Spil you may know from my blog and book, stringing together numerous passive income and variable-pay income rivulets permitted mij years ago to not only abandon my 6-figure corporate job, but also dual my earnings and continuously grow my wealth and freedom.
If you’re serious about making money and not just working for your money, you owe it to yourself to learn about cryptocurrencies such spil Bitcoin and Ethereum.
This article contains a ton of very good information, but you can get an update on numbers for 2018 te my postbode “Will Crypto Mining be Profitable te 2018?”
Is crypto mining a profitable side hustle?
The brief reaction…meaty YES! But, spil with anything, there are slew of gotchas and risks. I personally consider mining a very arousing, rewarding, and profitable project. It’s a modern-day gold rush.
The long reaction to this question…read on!
Even if you don’t determine to mine, you owe it to yourself to pay attention to Bitcoins, Ethereum, and the surplus of the toneel. There are exceptional opportunities.
I like to think about it this way…if I don’t take act now and crypto stays on its years’ long trend, then I will be very upset! If I invest an amount I’m okay losing, and I lose it…then okay. I’d much rather not miss out.
Some dollar figures to waterput this side hustle into perspective
To whet your appetite, my single $Two,000 equipment is generating about $1,000 vanaf month specie flow right now (this switches daily). The top dog on my mining pool is pulling te $719,000 vanaf month top line. Hot damn.
Read on for more on those numbers…
Table of Contents
Why the Bitcoin, Ethereum, and Crypto Hype?
While I’ve bot aware of Bitcoin and other cryptocurrencies for years, they’ve become stiffer and firmer to disregard overheen the last few months.
A picture will say 1,000 words…here’s a slok of price overheen the last year from Coinbase.com:
With price increases like this, you have a entire batch of fresh millionaires popping up. Ter fact, $Two,500 invested ter 2012 would waterput you around $Two.Five million today.
I have one such stud te my network.
While this may look like a unexpected spike, the reality is, you can dig back into those past spikes going way back te time, and the graph is practically fractal. Slew of people thought $100 wasgoed an insane bubble. Then $200. $500. And so on. The mania has succesnummer mainstream media, but thesis epic moves up are a historical part of the spel.
Why have cryptocurrency values gone up so much?
There are innumerable reasons for the enlargened volume of cryptocurrency rente spil well spil the value. Here are a few key ones:
Mainstream acceptance: Cryptocurrencies are becoming much more of a household name, especially for investors and especially globally. Bitcoin, te particular, is demonstrating that it is ter fact an established player that can suggest unique diversification te portfolios. Sites like Coinbase.com and Gemini.com permit people to trade crypto just like stocks, making it user friendly.
Government acceptance: Te addition to individuals, governments and various authorities have begun opening up formal policies to facilitate Bitcoin and cryptocurrency exchanges. China, Japan, South Korea, and soon India are big names among others. With this comes much more user-friendly platforms and traditional exchanges. This opens large request.
Technology revolution: The technology behind cryptocurrencies is called blockchain. Among other things, it permits for gegevens to be decentralized. Spil far spil computing goes, this technology may ultimately be spil revolutionary spil the Internet. Rather than having individual databases managed by single entities, gegevens can be distributed and self validated. This has many implications that are yet to be explored, but are very interesting from security, sharing, scalability, and military perspectives. IBM, Microsoft, Russia, and innumerable other big names te the tech, defense, finance are all actively working on applications outside of currency.
The good news is this means there are real fundamentals driving value, not just speculation. Of course, there is slew of speculation on top of cryptocurrency, but it’s very arousing to see real value drivers underneath.
Why are cryptocurrencies like Bitcoin significant?
Since crypto permits for distributed gegevens, there isn’t a centralized control mechanism that can manipulate it. Said less fancy, governments and banks don’t own it.
This is particularly attractive if you live ter a country that could determine to reduce the value of its currency ter order to boost exports…leaving you to hold the bag.
Or, it could help if you country is piling on giant amounts of debt and simply printing money to keep up.
Among other things, crypto is a hedge against the cost of living rising quicker than earnings. Depending on your situation, this may be more or less of a private influence. But regardless, there are massive parts of the global population that do have thesis concerns, which gives crypto value.
There are many other revolutionary concepts that crypto brings to the table, which you can explore on your own.
Why do cryptocurrencies need people to mine?
Alright, so you have a concept of what’s going on. But what is mining and why do cryptos need miners?
Ter order for the concept of distributed gegevens and blockchains to function, you need a big, broad network of computing power. You cannot permit big companies to centralize this power into their gegevens centers either.
You need individuals to participate.
So how do you do this? You prize them by paying them for contributing pc power. This is your chance.
Mining is simply contributing computing power to the networks that run thesis cryptocurrencies.
I have began Ethereum mining, which you’ll see spil the concentrate for the surplus of the article.
I’ll recommend you choose the currency you feel best about mining. You can see a pretty good list of currencies by profitability here, but there are many other factors to consider than just current profitability.
What is Ethereum, Eth, and Ether?
Ehtereum is a blockchain technology like Bitcoin. Its “coin” is called Ether. You can toughly consider it an alternative to Bitcoin. But it’s also much more. Its technology has far broader reaching applications than just currency.
The reality is there are many altcoins (Bitcoin alternatives), but few have gained the acceptance of Bitcoin. Ethereum is one of those altcoins. Exchanges like Coinbase.com and Gemini.com permit you to loosely trade dollars for Eth and Bitcoin, just like you would with traditional stocks and FOREX.
Because Ethereum has broader potential than Bitcoin, its growth has bot mind deep throating.
There are undoubtedly slew of other altcoins that might be more profitable to mine than Ethereum, but I believe Eth has the right mix of being youthfull while also having stable footing and a disruptive potential.
Look…Ethereum’s vision is massive. To mij, it is the potential of blockchain realized. It spreads computing seamlessly across the globe for to-be tapped use cases.
“Ehtereum: Rise of the ‘World Pc’”
Just the way wij all knew the Internet wasgoed gigantic, but had no idea how it wasgoed going to become so integral te our lives…Ethereum is set to do the same. It’s a potential finish revolution te computing.
Here’s a slok of Ethereum overheen the last month! That’s right, one month . This is also from Coinbase.com.
This 10-minute movie is a fine overview of how Ethereum works:
Don’t want to witness a movie? Check out this article: Okay, WTF is Ethereum?
How much money can you make from mining Ethereum?
This is a loaded question. Very first, spil you contribute computing power, you are paid by receiving Ethereum. Now, wij can dissect from here.
Te my article 13 Real Petite Business Ideas, I talk about whether or not each idea can make you rich. How do wij know?
The response for all Three is YES. Crypto mining can make you rich and it has made many people rich.
But consider, if you get paid te Eth:
- Do you convert that Eth every month into dollars and take profit? If so, at current (today’s) prices, a single equipment (which cost mij about $2K) is tracking to make mij about $1000 vanaf month. Awesome.
- Do you leave the earnings spil Eth and let them grow? Each of today’s $300 Eth might be worth $Two,000 by the end of the year. Don’t forget…value could go down too.
- Do you take a blended strategy? Some profit and some holding.
Mining pools are groups of people who mine together to receive payouts more quickly and consistently. I use nanopool.org.
You can look at current output and see the top earner is making somewhere on the order of $719,000 vanaf month at current price, output, and difficulty.
What are the risks of mining Ethereum?
Alright, everything sounds excellent so far. Here are just a few of the risks:
- Eth price could druppel. If you have enormous holdings, your value goes down. If you’re using mining spil monthly income, your income drops too.
- Mining difficulty increases overheen time. Spil cryptos mature and more people participate te the network, the more the “difficulty” goes up. That means it takes more computing to earn the same. This has bot a pretty predictable incline and is accounted for te good profitability calculators.
- Ethereum mining will zekering at the “Proof of Stake.” Eventually, mining Eth will no longer be an option. No one indeed knows when this will occur.
Is this all indeed that bad? There are risks, but I obviously don’t think they’re that bad.
- Very first, a single equipment will set you back about $2K. Compared to buying real estate, that’s nothing. Now if you go nuts and buy 1,000 rigs…you may disagree with this. Spend what you’re okay losing.
- 2nd, I can mine other currencies if one becomes unprofitable.
- Third, thesis are superb pc parts–not specialized machines. I can use or resell this equipment. Te fact, Ethereum mining is done on GPUs, which are just gaming graphics cards. Whereas Bitcoin, Litecoin, and others require specialized equipment, Ethereum utilizes every-day pc parts that can be repurposed and resold.
- And last, mining is a fantastic hedge. If price drops, I’ll buy. If price goes up, I mine. It permits mij to build my portfolio effectively.
This side hustle, just like with others, is about finding work for your equipment that is out of balance. Eventually more people will mine Eth, the price will druppel, or something else will switch and it will become less profitable. But for now, it’s something most people won’t do and there’s a big request for it. So get what you can while it’s good.
What’s an Ethereum miner made of and look like?
Depending on what you mine, your equipment will be made of different components. Ethereum (and many other cryptos) is mined with GPUs (standard gaming graphics cards). Bijzonder from that, you have a fat power supply, a motherboard capable of hosting spil many GPUs spil possible, some RAM, a CPU, and either Linux or Windows running it.
Here’s a peak at my equipment spil it wasgoed coming together. Te my basement, I have a very large storage slagroom that stays nice and cool. It’s the volmaakt spot.
This equipment is much fatter than it looks ter the photos, so I added an everyday 72-lbs metal gorilla head for effortless size comparison.
And here’s a good-looking GPU equipment used for mining Zcash from /u/TheBigGame117.
How does crypto mining compare to real estate investing?
I love real estate investing. It’s my go-to strategy for contant flow and wealth, but it’s not always effortless getting deals. Since I like it so much, I generally choose to benchmark other side hustles and investments against it.
- A single mining equipment costs mij about $Two,000. That’s cheaper than a house…by a long slok.
- I earn (presently) about $1,000 vanaf month vanaf equipment ter specie flow. That’s better than most single-family rentals.
- My main expense with the equipment is electro-stimulation. Things are more complicated with a rental property.
- With a rental, tenants give mij monthly profit, pay down my mortgage, and I get to see my house appreciate. If I keep some of my earnings spil Eth, I can expect some of the appreciation too.
- I can be leveraged ter real estate. I can waterput some down and take the surplus with a loan (then let the tenant pay your loan off for you). I suppose you could do this with mining too.
All of that is excellent, but real estate is much more established and stable than crypto. Crypto has the potential to be utterly rewarding, but it also has the potential to waste a lotsbestemming of my time and money. It is risky simply because there are so many unknowns and it is relatively youthful.
For mij, the right portfolio includes both real estate and crypto.
What are the Ethereum mining pitfalls?
Information is switching rapid! So see your sources. If you look at articles from a duo of months back, you’ll very likely find people stating that Ethereum mining won’t be profitable.
You’ll also find recommendations for hardware that is no longer available. This can be very frustrating. Many of the guides and equipment lists will lead you to dead completes.
The only way to overeenkomst with this is to dive into active communities and witness the conversations until you feel comfy. A duo of keys for mij were:
Bad advice is everywhere! Here are some issues I see…
- Advice from last year (when price and difficulty wasgoed lower) doesn’t apply today.
- People are ter different situations and countries than you.
- Comments may be from very youthful people or people who aren’t indeed mining.
- Some people are overheen zealous.
- Some people don’t want competition.
So how do you overcome thesis obstacles? Take te spil much information spil possible until you can discern the good from the bad. And like any business, rely on your network very first and foremost. I have Trio trusted people ter my network who are actively mining. Their advice and practice is gold. They help mij cut through the clutter.
Is Ethereum mining right for you?
If you have the slightest bit of technical inclination and can work your way through online guides for setting up Ethereum Mining, you owe it to yourself to dive ter and see if this something you can pull off.
Here is what you’ll need:
- The capability to dig through online information and talk rooms to figure out how to make laptop hardware do things it wasn’t designed to
- About $Two,000
- A basic degree of convenience using either Windows or Linux directive line
- The preparedness to learn how to waterput a laptop together
- The patients to troubleshoot, troubleshoot, and troubleshoot!
Spil I said, you’re asking gaming components to do something they weren’t designed to do. You will run into problems and challenges. But if you love that sort of challenge and like getting your mitts dirty, this is for you.
How do you get embarked mining Ethereum or other crypto?
Here are some excellent places that I found exceptionally helpful:
Personally, I dove ter and read up on mining. I immersed myself for Two weeks straight. Dive deep, then determine to pull the trigger or not.
But if you just want to buy some crypto like you do stocks or foreign currency, the easiest way to get embarked is to go to coinbase.com or gemini.com. I both buy and mine.
And of course, if you have any questions, kasstuk mij up ter the comments below!