We have to deal with the rather tricky question of whether it is more profitable to mine cryptocurrencies yourself or to rent equipment and space on a crypto-mining hosting service somewhere? The question is quite interesting, whichever way you look at it. Firstly, it will help newcomers to the world of cryptocurrency to understand the work process. And secondly, it will help the already advanced miners to save, or even earn more money.
The past 2021 has made it clear to us that the cryptocurrency world is only moving forward and gaining a lot of momentum, not to mention the mining of that very cryptocurrency. There are a growing number of people on YouTube, specialist forums, and social media talking about how they are mining and how much money it makes. Let's assess how relevant mining is in 2022. Is it profitable to get into it from scratch now?
Let's get right down to business and sort out all the advantages and disadvantages using our own powers. It is worth mentioning the opinion of people who say that home mining is dead and makes no sense. This is not entirely true. Home mining is not dead, but its share of the total network capacity is negligible. Conventionally, one 50MW data center is roughly equal to 3,000-10,000 possible home farms. And cumulatively, the capacity of data centers can be compared to a million home farms. Today, the bulk of mining devices are video cards or ASICs (equipment designed exclusively for mining cryptocurrencies). Each option has special pros and cons:
For the current year 2022, we also see another problem for home mining, especially with video cards. Today, their cost is two and in some cases three times higher than it was a few years ago. It means that we will have to invest several times more. And for home mining, we would need at least 5-10 powerful modern video cards, which are overpriced. To mine with video cards, you need to invest from $5,000 to $50,000 on average. Simply put, graphics cards are still the province of the small entrepreneur to set up small farms in their home or backroom.
Some novice miners decide to purchase ASICs to begin their journey, which is a big mistake. This type of specialized mining equipment has several hundred times more computing power than video cards. That is why their cost is much higher than you expect. They are noisier and use more power. And they quickly become obsolete, lasting only a year or two. Also, because of their low specialization, they are not suitable for the aftermarket. Today, ASICs are being bought for profit by institutional miners who are willing to finance the creation of farms on an industrial scale. They buy bulk quantities of devices worth hundreds of thousands to millions of dollars.
Simply put, video cards are still the domain of the small entrepreneur for setting up small farms in their home or utility room. Graphics processors consume considerably less power, have better heat dissipation, and emit less noise.
Electricity and cooling the equipment is also a very important part of a home-based mining farm. These farm types, by consuming electricity at prohibitive and excessive levels, pose a threat. Not only to the building they are in but also to the surrounding buildings and structures. The danger is that by connecting to household networks not designed for such enormous amounts of consumption, mining farms put a serious strain on them. This can lead not only to technological disruptions but also to short circuits and fires.
On top of all that, you will also need a really good uninterrupted power supply that can handle the mining farm. As for cooling, if you do not live in some cool climate or do not have a suitable location, you will feel the problem right away.
So, it is clear that if you are not going to seriously engage in mining in the long term and do not want to invest huge sums in it to recoup later, then mining at home becomes a good option. However, there is also a limit here. If you have the means for a huge space, and the purchase of gigantic computing facilities, it could work. If you can also hire the staff to oversee it, then, of course, it will be profitable. But it would be hard to call it home mining
Now let's talk about using the mining hosting service. Here we have it a little easier and clearer, as the process is quite primitive from a buyer's point of view. We can say right away that if you are serious about mining bitcoin, then renting equipment and hosting is the best option.
In this case, we have undeniable advantages, which not only make our task easier but also give us a very strong sense of reliability.
First and foremost these are:
Thus, essentially, from scratch and without any hassles, you get equipment, electricity for which you do not need to worry about. You need not worry about it short-circuiting and burning down your house. Plus, you get a lot of additional services.
As we can observe, everything is simplified as much as possible. You do not lose any profits, you just invest in your business. But with a much larger scope and capabilities.
And so now after we have considered both options for mining cryptocurrency, it immediately becomes clear that right renting equipment and using crypto-mining hostings is very much pushing out home mining. It is not a surprise, the world of cryptocurrency is moving forward. However, there are now more advanced and profitable options, which you should definitely take advantage of.