Mining Bitcoin is hard work, and expensive to get going. It takes dedication and knowledge, and although it is rewarding, and profitable, depending on the price of Bitcoin, it’s not for everyone.
Even if mining Bitcoin isn’t profitable there’s a way you can profit from mining without even mining. Sounds mad? Let me explain.
Bitcoin was created in 2009 by Satoshi Nakamoto. Not many if anyone alive really knows who Satoshi is, although some people claim to be him (or her).
Bitcoin was originally created after the 2008 crash and all the distrust in banks and the financial institutions, who had taken us all for a ride and shafted each and every one of us.
During the crash, it seemed like everything was going belly up until the government stepped in and gave out large bailouts. It’s happening all over agin with the coronavirus as an excuse, but the truth is that because governments bail out failing businesses, they’re simply kicking the can down the road and making it worse every time.
This crash has just got going, and it’s going to be much worse than 2008. But this is the very reason why Bitcoin was created. Don't get me wrong, if there's a rush for the hills, all assets will crash, but in the long term, I believe Bitcoin will rise from the ashes of this economic hell.
It is the very first non-sovereign digital currency, meaning that no countries, no entities, no third party controls it. You can send it to whatever you want without any authorization, without any question, without any KYC information. And everything is immutable and transparent.
It's stored on an open digital ledger called blockchain, that anybody can view but nobody can edit. So once you have a transaction on the blockchain, it cannot be wiped off. It’s immutable.
And that ‘s the main difference between Bitcoin and every other ledger or database that's out there in the world.
Related Reading: Which Mining Pool Should You Join
Why Does Bitcoin Need Miners to Mine?
Remember, I mentioned Bitcoin being an immutable and transparent distributed ledger. It's also super secure. In fact it’s the most secure network ever created.
The reason being there are literally thousands miners distributed around the world, contributing hashpower to the network, which is validating transactions and ultimately securing the network.
Every 10 minutes, a new block is created on the Bitcoin blockchain, with all the new transactions of the ledger. Once there, the miner who adds it to the blockchain is rewarded with the Bitcoin block reward, which is 12.5 at the moment, but will be cut by 50% after the Bitcoin Halving in just over a month.
Homemade Mining Rigs
Now, with Bitcoin, it’s best to use ASICs mining gear, but some people do make their own CPU and GPU mining rigs.
A mining rig is basically a barebones PC, with barebones CPU memory, motherboard, but you will likely have up to 8 GPUs if you maximize your motherboard as much as possible. Don’t forget you’ll have enough power supplies to handle your rig. These are all put together and stationed on mining racks to help keep them ventilated.
It’s all very well when the Bitcoin price is high. Every man and his dog wants to mine Bitcoin then, but what do they do when it’s not profitable to mine Bitcoin? They switch off their GPUs and stop mining.
A good way for you to make money is when this happens. When the price of Bitcoin is low, many miners switch off their rigs and want to sell. They get scared and run for the hills. Especially, as it’s been up and down for the last couple of years.
And with the Bitcoin halvening almost upon us, miner capitulation is expected so it’s going to be a great time to do this.
At these times, and I expect very much so after the halvening, if you look on marketplaces, such as Craigslist or, you’ll find plenty of GPU and mining equipment going cheap. And I mean plenty! All you do is buy it, and resell it.
Better still, if you can wait a short while for some profits, wait until mining is profitable again, and every man and his dog wants to mine Bitcoin again, and sell it all at a premium.
Miners will be selling in bulk too, as they really want to get rid of their stuff. It’s amazing how many sell up every time there’s a capitulation in price. It might seem harsh, but somebody has to do it and they want to sell anyway.
If you’re not sure how much is a good price, go to eBay or Amazon and see how much used GPU rigs are going for, and calculate your profits to see if it works. I have done this over and over since I have been into crypto, and it works every time.
The best way to maximize your profits is to sell it all separately, and if you do, you’ll probably make about 30% more.
Bitcoin mining is profitable at times, but when it’s not, it can be very profitable for people looking to arbitrage buying and selling opportunities.
I have been in the space for six years now, and have done this several times. The same thing happens over and over, and with the halvening, it is going to happen again. You just need to be ready, and best of all be patient, and you’ll be rewarded nicely.