People around the world are hoping to profit from the emergence of Bitcoin and cryptocurrency as globally-traded commodities. However, they will quickly realize that, without considerable industry and trading knowledge, merely buying and selling these currencies is a difficult way to make money. Instead, many are turning to the source of the cryptocurrency: mining.
While the typical everyday investor cannot afford the time and capital cost to build their own mining farm, contract cloud mining services, mining farm ICOs, and mining as a service have allowed people to enter the mining market at any price. This article will explain each of these alternatives and why (spoiler alert) mining as a service is the best choice in almost every scenario.
Let’s begin with cloud mining. Cloud mining is essentially a service where users can pay for a mining subscription – typically on a two-year contract. This entitles them to the mining profits of a GPU or ASIC miner located in a mining farm for the specified period of time. The convenience and flexibility of cloud mining makes it an attractive option, but it is not without its flaws.
Despite the fact that you own the mining from the cloud mining service’s equipment, your profitability is limited to the contract term. Yet mining hardware can last from five to ten years, meaning that you will miss out on up to eight years of the equipment’s useful life! While a cloud mining contract may, in some cases, provide a higher rate of return within the first couple of years, your mining profitability grinds to a halt when the contract expires.
Furthermore, cloud mining often involves trusting an offshore company with your money. These companies typically have very little transparency and it is impossible to verify whether the service is legitimate. One horror story for cloud mining investors occurred in July 2018, when Hashflare, a popular cloud mining service based out of Estonia, suddenly announced that they were shutting down their Bitcoin mining service and cancelling all contracts, without offering refunds for the remaining portion of their clients’ contracts. Following major uproar at the announcement, Hashflare resumed the contracts, but the damage was done – the mining community realized that cloud mining isn’t as worry-free as it seems.
Another method of entering the crypto mining market is buying into a mining farm ICO, or initial coin offering. Some mining farms will introduce a blockchain-based currency that is backed by the mining profits. The coin can become valuable if the mining farm is successful, so it catches the attention of speculative investors. However, mining farm-backed coins can be highly volatile and, like cloud mining, the companies behind them often do not offer much transparency.
In some cases, mining farm ICOs can turn out to be colossal failures despite significant investment. Swiss company Envion AG attracted more than $100 million in their 2018 ICO, thanks to strategic partnerships and a successful marketing campaign, but turned out to be a financial disaster. Envion’s issues were evident as early as March, when their Instagram showed a brand new shipment of Dash miners, which had been unprofitable since November 2017. Many investors have accepted that they have lost much, if not all, of their money invested in Envion and the company is now being investigated by the Swiss Financial Market Supervisory Authority (FINMA).
The third method by which investors are entering the crypto mining market is owning their own rigs through mining as a service. With RekDeck’s model, customers purchase their own crypto mining equipment (GPU or ASIC miners) and pay a monthly fee for hosting and operation of their machines. Those who want fully passive income can also subscribe to management and trading services.
Mining as a service is advantageous for a number of reasons. First, the longevity of mining profit (typically from five to ten years when the equipment is well-maintained) provides a higher long-term return on investment and lower risk. With RekDeck, the service is also highly transparent, as customers can take an in-person or virtual tour whenever they want to and can remove their equipment from the mining farm at any time if it is not meeting their needs.
With RekDeck s mining as a service, you will have access to reliable, transparent, profitable crypto mining on equipment that you own yourself. While cloud mining services can be convenient and mining farm ICOs can offer good speculative value, mining with RekDeck gives you a stable source of crypto income and lets you maintain control.