Important Factors to Consider For Your Bitcoin Mining Home Base
Bitcoin mining can be a profitable venture for those who are looking to earn additional income through cryptocurrencies. However, mining, especially for Bitcoin, requires you to consider multiple factors that can impact whether or not a Bitcoin mining venture will be profitable. This includes the computers you use, huge processing power requirements, equipment, and electricity or power costs. This is why location plays of prime importance when you want to open a profitable Bitcoin mining venture.
In this article, we look at the different factors to consider when choosing where to set up your Bitcoin mining operation.
Factors to consider for Bitcoin mining locations
A Bitcoin mining farm is a warehouse where you can set up your Bitcoin mining operations. You can own the farm and be the sole miner, you can hire others or get more mining partners to join the mining farm and share the profits.
1. Electricity cost
Electricity cost is the greatest expense that a miner will incur for a mining operation. A typical mining machine draws thousands of watts to run powerful mining rigs, and this consumes huge energy and electricity.
Miners need to run their machines continuously and generate high mining speeds. If the computational speed is low and there are disruptions in electricity, it slows down Bitcoin yielding and subsequent profits. This is why miners use high-performance GPUs (graphics processing units) to mine Bitcoins. Miners also use ASICs (application-specific integrated circuits). GPUs and ASICs improve the computer’s processing power and increase Bitcoin yields. To run these, miners need an uninterrupted internet connection, which can add up.
To improve productivity and computational power, miners often join mining pools. Running single mining machines may be costly for one person. So, they pool their machines and yield Bitcoins collectively.
When you are running a mining farm and operating hundreds of mining machines, it is obvious that there will be a huge electricity cost. It’s worth putting in the time to find out if there are lower costs of electricity in your area, and consider how that would affect your mining farm’s bottom line.
Availability of renewable energy
Renewable energy like solar power can often augment other sources of power for your farm, which could lower costs over time in addition to reducing your environmental impact. Consider researching solar panels or if wind/hydropower is available in your location, and how they might compliment your mining operation as an additional source of power.
2. Mining-friendly climates
Countries where resources are abundant and electricity cost is low are best for mining Bitcoins. Running ASICs or GPU computers require steady internet connections. So, before you set up your mining space, it’s essential to confirm that you will have a consistent and affordable internet connection.
Mining machines operate 24/7, which increases the risk of a machine overheating. If you set up a mining machine in warm climates, then you will have to invest more in air coolers to continuously cool down these machines. Cold weather keeps the temperature down and naturally cools the mining tech.
It may also be worthwhile to consider other overhead expenses like the real estate prices or housing rents in the area. A country’s regulatory factors such as the government’s stance in crypto trading or mining should also be considered. For instance, Iran recently put a ban on crypto mining, while on other hand, Canada encourages crypto mining and trading.
Different countries may be best depending on your circumstances. Countries like Estonia, Norway, Switzerland, Finland, and Kuwait have high internet speed which is an ideal solution for crypto miners. Iceland is rich in renewable resources, has a cool climate, and derives most of its electricity from geothermal power.
Another crucial consideration is the hash rate, which measures the strength of a blockchain network. The greater the hash rate, the faster the mining operation, though it can also increase the cost per hash rate. New York, Georgia, and Texas have mining pools and collective hashing power where hundreds of miners all over the world join in and share the expenses.
3. Hire local talents
Bitcoin mining depends on complicated algorithms and computations. You need to hire people with industry experience in Bitcoin mining and the knowledge to solve technical problems that may arise during the mining process.
That said, local hiring practices are often more cost-effective, so long as you dedicate adequate resources to training staff. Hiring locals also generates employment, contributes to the local economy, and also helps to build a friendly network within the community.
The mining business scenario has changed over the years. When people first started mining Bitcoins, there were only a few individual players and it was easy to earn profits. Now, there has been significant change in the crypto mining industry. Big players have entered the market and the algorithms have become quite complicated. Mining pools are dominant, and it is very difficult for single miners to thrive in this industry. Often miners incur huge losses during the mining process and they have to sell their equipment to cover up for the loss. But like any other business, research is key. If you are interested in Bitcoin mining, review the above factors before plunging into the business.
Originally published at https://www.cryptohopper.com.