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. So just how can the risks are reduced by you and costs, and take advantage of the cryptocurrency opportunity before it’s gone?
How exactly to cut your cryptomining expenses
The potential risks of cryptocurrency mining
While the value of cryptocurrencies has just increased over time, so have the challenges associated with mining them.
That’s because all cryptocurrencies count on blockchain: a distributed, peer-to-peer ledger technology that guarantees cryptocurrency transactions are validated and secure. Miners add new blocks to the string by using mining software to spot Secure Hash Algorithms – and in return, they’re provided some cryptocurrency units.
Because miners are effortlessly competing become initial to resolve a particular Secure Hash Algorithm, budding miners operate into a few challenges:
Numerous cryptocurrencies have a limit to exactly how many units can be in circulation at any time
The mining scene for popular cryptocurrencies can be very competitive, making it tough to get started
Less popular currencies may be easier to mine, but there’s no guarantee they’ll stay valuable over time
Beyond these risks and challenges, there is another key concern in how to get the energy, space and compute resources needed to power cryptocurrency mining software.
The compute costs of mining
Successfully mining cryptocurrency requires a selection of important assets that will potentially come at a cost that is high.
All miners need some type or 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 begun using pre-programmed application-specific integrated circuits.
Whatever hardware you decide on, you’ll need to carefully give consideration to just how it balances cost and flexibility, and how this stacks up against prospective profits.
The hardware useful 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 expense that can cut deep into prospective earnings.
For example, the bitcoin system presently uses approximately 16TWh of electricity per year, accounting for 0.08% of the world’s energy consumption. To put this in perspective, this is the same as powering 1.4 million average households – or the entirety of Tunisia. The energy price of a transaction that is single power five households for each day.
Because Secure Hash Algorithms must be submitted to your cryptocurrency network, it’s important for your mining operation to have a network connection that is stable.
Making certain you have a low-latency network connection can also give you the best chance that is possible solve a block and mine the cryptocurrency before anyone else can.
Significant players into the mining community have been goals of distributed denial of service (DDoS) assaults into the past. So, if you’re thinking about mining seriously, you’ll want to ensure you have a secure network with protective measures in position to keep downtime to a minimum.
Similarly, physical security should also be a key concern if you want on mining seriously. Without a secure site for keeping your mining hardware safe, you run the risk of theft.
uk server colocation can help you maximise your gains
A few of these mining needs mount up to a significant investment. While the expenses is substantial, the opportunity for earning cash is higher than ever – plus it’s the opportunity that numerous will want to capitalise on prior to the mining market becomes much more saturated.
So how can you cut the costs, reduce steadily the dangers of mining, making the the majority of the cryptocurrency opportunity?
uk server colocation can help reduce the risks and costs connected with cryptocurrency mining – and maximise the total amount of revenue you can 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 centres are made to handle massive energy requirements in the absolute most efficient way possible
Get a stable, low-latency network for less – data centers offer enterprise-class internet with somewhat higher uptimes
Secure your valuable mining assets – data centres provides a numerous security measures, ranging from CCTV and guards, to comprehensive DDoS protection
For more information about more about cryptocurrency, and exactly how uk server colocation can transform mining profitability and risk, take a good look at our cryptocurrency mining white paper.