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Mining cryptocurrency is not cheap, it costs a lot of energy. So much that some people don’t even think it’s worth it. But if you have the means and can mine bitcoin or another cryptocurrency successfully, there are ways to cut down on energy costs and mine the currency as cheaply as possible. You can make a lot of money mining bitcoin, but you want to make sure that it is worth the time and energy costs. For example, a household can spend £5,000 a year mining cryptocurrency in electricity costs alone.
The Cost of Mining Cryptocurrency
It’s far from free to mine cryptocurrency. You need a lot of power and computers that can run on end. According to a recent report, mining will take up 0.2 percent of the world’s energy consumption this year. It may not sound like a lot, but for such a niche activity it is astounding. Bitcoin explosion has been under scrutiny from a lot of people, including environmentalists, for this reason. There have been concerns raised over the amount of electricity needed to mine bitcoin and there have been some pretty startling estimates.
For example, in November 2017 bitcoin exploded and reached nearly $20,000 after starting the year at $1,000. During this time, Digiconomist estimated the power usage consumed to run cryptocurrency was higher than the Republic of Ireland. That’s a lot of power. Digital currency has gained popularity since then even, and the strain on energy has also increased. The use of electricity for cryptocurrency is on pace to be more than the power needs of Hungary and New Zealand. This consumption is estimated to almost double in the last three months of the year and more than quadruple in under a year. Environmentalists are worried about its impact.
Not surprisingly, the price of bitcoin needs to increase to incentivize miners to use energy at $1.1 million a coin. The price isn’t close to that currently but as it increases, the amount of people mining it will increase and the use of power will multiply. Some are concerned that this is an environmental disaster waiting to happen. Bitcoin, it should be noted, isn’t the only cryptocurrency being mined.
It isn’t just the environmental concerns. It is also possible that if you are mining cryptocurrency in your home you may even be paying more for your energy bills than what you get back in cryptocurrency. The Energy Shop has crunched the numbers to figure out how much it costs individuals to mine cryptocurrency in your home. In addition to all the equipment you need to mine cryptocurrency, the energy it costs to power all the equipment is not a small amount.
Saving Money to Mine Cryptocurrency
Since mining cryptocurrency is so expensive, you need cheap power to mine it. The rigs must be powered with large quantities of electricity. One option is to power your rig and equipment with solar power. Mining operations with the tools and resources to be able to set up solar-powered rigs in the desert and are finding out that it is a good investment. Once you have paid for the solar system, the cost of mining goes way down. It can be nearly free. Doing away with the hefty electrical bill that typically weighs down mining operations leaves room for profit.
According to the site MoneyPug, which is known for being a place to energy switch, another way to cut down costs is to change our provider. Finding cheap reliable energy will make a big difference. Finally, using a product like Node, which makes mining cryptocurrency cheaper than power a toaster.
Mining cryptocurrency is expensive, there is no way around it. But if you can get the equipment and power cheap enough, you can make a lot of money mining bitcoin and others. Balancing computing power, energy costs, the value of the crypto, and more can help you find out if it is worth it to put it in the time and work. As cryptocurrency spreads, some will get cheaper and others will become more expensive. Bitcoin is limited, and therefore will continue to get more and more expensive. There is an urgency to it, but if you get on track early you will be able to make money and find out ways to save.
Ryan Beitler is a journalist, writer, and blogger. He has written for Paste Magazine, The Slovenia Times, OC Weekly, New Noise Magazine, Deadline Magazine, and more.