I know many of my blogs followers are going to wonder why I wrote an article about cryptocurrency, Bitcoin, and Ethereum deviating from the primary premise of my blog. So let me explain. Many artists suffer from boom and bust when it comes to income from their works or art and photographs. Particularly those who rely on print income as their main revenue source. This article is being written for anyone including artists and photographers who have major fluctuations in their income and need a way to subsidize their income between sales, those who want their money to work for them instead of working hard for their money, and those who are looking for a passive income stream. If that is you, you may want to look at mining Bitcoin and/or Ethereum to fill that want or need. This is not a get rich quick scheme but it can make you some pretty serious money.
Before we begin talking about mining for fun and profit let’s start at the beginning at least for a minute. Each term will have links attached to them to not belabor the point and provide important information. Some, who will read this entry already know what Cryptocurrency is, what a cryptocurrency wallet is and what cryptocurrency mining is, and Fiat money if you do not I would strongly suggest you review these articles to familiarize yourself with the terms before proceeding.
There are 3 ways to obtain cryptocurrency. Those three ways are:
- Purchase them from an exchange or broker
- accept cryptocurrency as payment for goods and services
- or data mine cryptocurrency
We are going to focus on data mining for this article because the concepts or purchasing cryptocurrency from an exchange or broker will be somewhat familiar to most individuals. It works similar to buying stocks. Buying from an exchange or broker you exchange fiat money for cryptocurrency (similar to exchanging fiat currency for stock shares). The same is true with accepting cryptocurrency for payment of good and services instead of fiat money. Cryptocurrency has a fiat dollar value that fluctuates a 1-2% percent up and down per day based on supply and demand.
Mining of Cryptocurrency
Mining of cryptocurrency is different. To create cryptocurrency a set of mathematical calculations have to be assigned to each block. To create those blocks someone has to unlock and prove those mathematical codes. Thats where the miners come in. A miner is a person who assists in unlocking a block of code, using software designed to do complicated mathematical calculations and unlock the block, therefore creating the cryptocurrency. The individual or group credited for unlocking a hash or portion of the block is also credited and paid out a percentage of the blocks value, based on how much they contributed to unlocking the block. In bitcoin mining how fast your miner hardware and software work is measured in giga-hashes that is one billion hash calculations per second. In Ethereum mining hashing is measured in M/h, or 1 million hash calculations per second. The more hashes you can calculate per second the more profitable your mining will be. Hash rate is determined by mining software and capabilities of the hardware running the program.
There are 3 ways to mine
- Buy a Bitcoin or Ethereum miner, install the software, and run it from your home. While this may provide you with some Satoshi (fraction of a bitcoin that has a recordable fiat money value), for Ethereum its Wei (fraction of a Eth that has a recordable fiat money value). It will be a slow process. You are on your own and everything you find is yours however the downside is also you are on your own and finding and verifying Wei and Satoshi can be very slow and mining rigs range in price from $500.00 – $3,000.00+.
- Buy a Bitcoin or Ethereum miner, install the software, run it from your home, and join a pool. This is called “drip mining”. Drip mining is a lot more profitable than “going it alone”. In drip mining as the pool solves and records the hashes you receive a portion of the reward based on how much your system (rig) contributes to the pool solving the blocks. You are rewarded in Satoshi (fraction of a whole bitcoin that has Fiat Money value) or Wie (a fraction of an Eth that has monetary value) for your contribution to solving the block. Currently a Bitcoin is worth around $7,000.00 and an Eth around $300.00. There are 12.5 bitcoins in a block and 5 eth per block. The typical reward for those contributing only 100 G/h second in a bitcoin pool from their own equipment is about $3.35 USD per month, please note most bitcoin home rigs now run in excess of 14 G/h per second. The typical reward for those contributing only 1 M/h second in a Ethereum pool from their own equipment is about $1.50 USD per month. Ethereum miners start about 25 M/h a second.
- The final way is to lease mining power from a service by the the 100 G/h with bitcoin or 1.0 M/h with Ethereum. This is the way I mine Bitcoins and Ethereum. The cloud mining service I use is Sun Mining . The convenient thing about cloud mining is you do not have the expense of the equipment to buy before you start mining and they use the “drip mining” or “pool approach” to solving blocks which assists their clients to receive bitcoins and ethereum based on their rate of contribution. Cloud mining is very inexpensive. Most of the services that I have looked at charge between $18.00 – $30.00 per 100 G/h for bitcoin and $14.00 – $30.00 per 1.0 M/h for Ethereum. The typical contract length for bitcoin is 3 years and 2 years for Ethereum. In other words once you pay the rate above $18-$30 or $14-$30 respectively, you keep your portion of what the pool finds for the next 2-3 years without being required to pay additional registration fees.
One thing you will want to check is you go with a company outside of Sun Mining is their maintenance fee or electricity fee charges (Sun Mining does not have any) these fees can quickly eat into your profits from mining, and they vary widely by company. That said anyone can start mining and mine with a cloud mining company for 2-3 years for $30.00 or less. It has been my experience that the return on investment is 12-20% per month, with 18.2% in bitcoin and 12% in Ethereum being the average.
In fiat or real money (USD based) that means that if you invested $18.00 in cloud mining bitcoins you would receive about $3.30 a month in Bitcoin. If you invested $14.00 in cloud mining of Ethereum you would receive about $1.70 a month in Ethereum. Definitely not a bad rate of return on a small investment under 20 bucks. You can invest more, as you budget allows. Likewise if you invested $1,000.00 in bitcoin cloud mining you would earn $183.33 per month and if you invested $1,000.00 in Ethereum cloud mining you would earn $121.42 per month. These figures are based on current mining costs and current payout rates.
So what do you need to get started?
- The first thing you will need is a wallet or an e-wallet. There are many, with varying fees for transactions, and varying modes for storing your Bitcoins and Ethereum and many offer services for other types of crypto-currency. You can utilize a wallet software solution for you own PC. The transaction prices for PC wallet vary. These types of wallets are very secure but, if something was to happen to your PC you could lose all your crypto-currency so if you choose this solution you will want to make sure it has “cold storage” for your data. Cold Storage is a backup of your account, that purchases cannot be made from, to backup your cryptocurrency keys.
There are also many e-wallets out with varying transaction fee schedules. Most are free to open and charge fees as you use or transfer your fiat money or cryptocurrency. The solution I use is CoinBase and Cryptonator , depending on the transaction, but I most often use coinbase and would recommend it to anyone who does not use cryptocurrency to buy goods and services. They offer competitive to low fees and I have not had any issues with any of my transactions to or from of my e-wallet or exchanging one cryptocurrency for another within my e-wallet. A few of those transactions were rather large.
Some cloud mining companies only accept payment in bitcoin and others will accept fiat funding, paypal, credit cards and cryptocurrency. If you choose a cloud mining company that only accepts payment in Bitcoin, you will need to purchase the bitcoins and then transfer them to your wallet/e-wallet to begin mining. This is also where you will receive disbursements of bitcoins and Ethereum so creating and verifying your wallet is a vitally important first step in beginning to mine.
- The second thing you will need is a broker or the ability to buy and sell Bitcoins and Ethereum in the market. After all, what good does it do you if you cannot buy, sell, or trade cryptocurrencies after you mine them. I use Coinbase they have a great reputation and low fees and as stated above, an e-wallet on-site.
- Finally, you will need a way to mine bitcoins and ethereum. As I stated before there are 3 ways to do this but I am going to focus more on cloud mining because that’s what I have found to be the most productive. Do not get me wrong I know people who do pretty good buying, maintaining, and upgrading equipment but it is easiest for me to just rent cloud mining hash rates and then have the mined coins sent out to my e-wallet once I accumulate enough that fees do not eat up my profits. I use the service provided by Sun mining. Currently, I transfer mined crypto-currency at the following minimum rates (at 0.01 bitcoin and 0.1 ethereum) and/or once per day.
It is not only possible but probable to make money, and even some pretty serious money mining cryptocurrency. Cryptocurrency mining is definitely not a get rich quick scheme. Based on the level of initial investment and tolerance for risk you can realize profits from mining that range from $1.70 a month for an investment of less than $20.00 all the way to $2,265.00 a month with a $9,000.00 investment and many investment amounts and returns in-between.
The fine print:
Please be aware that, as with any investment tool or plan, there is the potential to lose money due to many factors that are out of the physical control of the author. Those conditions include, but are not limited to, fluctuation in the fiat market price of cryptocurrency, delivery and performance of a third party vendor, and external conditions out of the authors direct control. The information provided in this writing was accurate, to the best of the authors knowledge, at the time the article was written. The author is not an employee or stakeholder in any of the aforementioned companies but the author does assert that he has done business with the aforementioned companies and has used affiliate links within the article. Please do your own due diligence before investing in this or any investment tool, plan, or item.