The topic of investment in recent years has become one of the most discussed in society. This is because in the 21st century the number of profitable ways to invest money has multiplied. Some people prefer classic investment methods and put their savings in the bank at a fixed percentage, while others use alternative routes to increase their capital. One of the most developing and modern areas for investment is mining.
To appreciate the attractiveness of mining as a way to invest, you need to understand this concept in detail. Mining can be called a process that allows you to create a cryptocurrency using special computer equipment. But how useful is it to make money in this way? Let's try to figure it out.
Mining in Russia
Today, in Russia, in general, there are more than favorable conditions for investing in mining. According to studies, the return on investment in a new area for most citizens of our country is slightly less than 68%. For comparison, in the US this figure is almost 2 times lower - 38%. This difference is possible largely due to the existing surplus of electricity in Russia and the presence of a large number of renewable sources.
If we compare investments in mining with investments in real estate, then the latter can pay off for decades. While in mining, even when buying professional hardware, the payback can be no more than one year. After that, you will be able to receive a net profit. At the same time, many novice investors make a common mistake and confuse investments in mining and investments in cryptocurrency. In the case of cryptocurrency, your profit lies in the difference in rates, which, due to constant fluctuations and instability, can be negative. Mining, in turn, allows you to diversify your investment portfolio and makes you a little less dependent on exchange rate fluctuations. In the long run, investing in mining can give you multiple growth.
What are the investments in mining?
To understand the full range of ways to invest in mining, you need to consider the following types of investments:
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Buying and setting up hardware on your own. In this case, the investor needs to do everything himself: analyze the market and, based on the data obtained, choose the most profitable cryptocurrency, then calculate the payback of the hardware, assemble it, connect it, and also monitor its technical condition on a regular basis. To succeed in each of these processes, the new miner needs to understand perfectly;
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Mining on a turnkey basis. This type of investment involves the purchase of a ready-made assembly of hardware. In this case, all the preparatory work described above falls on the accompanying company. You can also individually coordinate the placement of your hardware in a pre-prepared data center and agree on its remote maintenance. But all this implies additional costs that will increase the payback period of your enterprise;
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cloud mining. It involves renting a certain part of the capacity of an already finished farm. On the one hand, with such inputs, the entry threshold decreases - instead of the conditional 500 thousand rubles spent on new hardware, you can pay 10 thousand and rent it from specialized companies. On the other hand, in cloud mining there is a very high risk of stumbling upon scammers and losing not only money, but also precious time.
But even if you have chosen the right and most suitable type of investment in mining for yourself, you must consider the most important risk factors. They are present in any kind of activity, and mining is no exception in this matter.
Control risks
The first factor, which does not depend on you and cannot be influenced by you, is the decline in quotes. If the price of the coin goes down, then your profitability also drops, since the miner now receives less digital currency for creating one block. Another important risk factor is the change of algorithms. Each miner has its own algorithm that allows you to mine a certain range of cryptocurrencies. And if, for example, you previously freely mined Ethereum, then in the event of a change in the algorithm of this coin, your mining hardware will no longer be able to bring you this cryptocurrency.
Do not forget that all the hardware used in mining is high-tech. This means that when it fails, you are most likely to expect not only a temporary loss of profitability, but also expensive repairs. Whatever one may say, mining is an energy-consuming and actually round-the-clock process, so even professional equipment is sometimes not able to withstand such high loads for a long period of time. The only way to minimize the risk of damage to your hardware is to maintain proper humidity levels, adequate cooling, and no dust.
Like any other type of investment, mining has both pros and cons. Do not forget that the cryptocurrency market is volatile, and therefore it is almost impossible to calculate the exact return on investments. However, with a sufficient level of expertise in this matter, the chances of success are very high. If you want to learn even more about the world of cryptocurrency - subscribe to our telegram.
