Despite expected fluctuations, the value of popular cryptocurrencies has steadily increased over time. While many see the potential profits in the likes of Ethereum, Ripple, and other up and coming cryptocurrencies, many more see mining them as a risky, and venture that is potentially unprofitable. How can you reduce the risks and costs, and use the cryptocurrency opportunity before it’s gone?
How exactly to cut your crypto mining costs
The risks of cryptocurrency mining
While the value of cryptocurrencies has only increased over time, so have the challenges associated with mining them.
That’s because all cryptocurrencies rely on blockchain: a distributed, peer-to-peer ledger technology that ensures cryptocurrency deals are validated and protected. Miners add new blocks to the string by using mining software to spot Secure Hash Algorithms – and in return, they truly are provided some cryptocurrency units.
Because miners are effectively competing to be the initial to solve a particular Secure Hash Algorithm, budding miners run into a few challenges:
Numerous cryptocurrencies have a limit to exactly how units that are many be in circulation at any time
The mining scene for popular cryptocurrencies can be extremely competitive, making it tough to get started
Less popular currencies may be simpler to mine, but there’s no guarantee they will remain valuable over time
Beyond these risks and challenges, there is another concern that is key how to get the energy, space and compute resources needed to power cryptocurrency mining software.
The compute expenses of mining
Successfully mining cryptocurrency requires a variety of important assets that may potentially come at a cost that is high.
All miners need some kind of hardware to power their mining applications. Some use a conventional CPU, others use a customised graphics processor or field-gate programmable array, and more recently some miners have started using pre-programmed application-specific integrated circuits.
Whatever hardware you choose, you’ll need to carefully give consideration to just how it balances cost and freedom, and how this stacks up against prospective profits.
The hardware employed for mining has a tiny physical footprint, but GPUs and ASICs consume vast amounts of power. And when you factor in the power that is additional of keeping the hardware cool, it’s a significant cost that can cut deep into potential earnings.
For instance, the bitcoin system currently uses approximately 16TWh of electricity per year, accounting for 0.08% of this energy consumption that is world’s. To put this in perspective, this is the same as powering 1.4 million average households – or the entirety of Tunisia. The energy cost of a single transaction could power five households for a day.
Because Secure Hash Algorithms should be submitted towards the cryptocurrency community, it’s important for your mining operation to have a stable network connection.
Making certain you have a low-latency network connection can also supply you with the best possible chance to solve a block and mine the cryptocurrency before anyone else can.
Significant players within the mining community have been objectives of distributed denial of service (DDoS) assaults in the past. So, if you’re thinking about mining seriously, you’ll desire to ensure you have actually a secure network with preventative measures set up to keep downtime to a minimum.
Likewise, physical security must also be a key concern if you want on mining seriously. Without a secure site for maintaining your mining equipment safe, you run the risk of theft.
uk server colocation can help you maximise your gains
Many of these mining needs add up to a significant investment. While the expense is substantial, the opportunity for generating revenue is more than ever – plus it’s an opportunity that numerous will want to capitalise on before the mining market becomes more saturated.
So how can you cut the costs, lessen the dangers of mining, while making the the majority of the cryptocurrency possibility?
uk server colocation can help reduce the risks and costs connected with cryptocurrency mining – and maximise the total amount of profit you may make from it.
By moving your mining equipment into a provided information centre managed by a party that is third can:
Significantly reduce power costs – data centers are designed to handle massive energy requirements in probably the most efficient way possible
Get a stable, low-latency network for less – data centers provide enterprise-class internet with somewhat greater uptimes
Secure your valuable mining assets – information centres provides a myriad of security measures, ranging from CCTV and guards, to comprehensive DDoS protection
For more information about more about cryptocurrency, and how uk server colocation can transform mining profitability and risk, take a good look at our cryptocurrency mining white paper.