I have now been in the crypto industry for 11 years and one part of Bitcoin that has always fascinated me is mining. Bitcoin mining is the backbone of the network where machines solve complicated calculations. Bitcoin mining is the process of searching for new bitcoin and verifying transactions on the Bitcoin network. Compare it to gold searching and mining. At the bottom of the article you will find more technical explanations about the principle of mining and proof of work, but I don't want to tire everyone with that technical story.
During my crypto years, mining has come my way several times as an option to invest in. However, it never became concrete because of hefty drawbacks such as:
- Expensive power
- Huge noise pollution
- Bizarre heat from the machines
- High investment and costs such as transportation
- Maintenance and equipment continuous monitoring
Then I investigated the phenomenon of cloud mining, but that is hot air in 70% of cases and the other 30% of cases too expensive, not profitable and such companies are not resilient to a bear market. This is because they finance a lot (themselves or from VCs) to buy mining machines and rent out hashrate (computing power). They buy machines at the risk of Bitcoin rate decline and no longer earn enough during a bear market to break even.
Once that option was crossed off, there was less and less left in terms of mining options, but really I would like to do something with crypto guide as well. Recently, through an acquaintance, I met someone who provides the solution for what I am looking for. Namely, Mitchell Weijerman. He offers with Epic mining the ability to purchase mining equipment that you buy in bulk with several customers for a favorable rate. These Bitcoin miners are sent to a farm in Ethiopia and within 6-8 weeks they are mining (mining) for you at a current rate of 5.2 cents including hosting, security and maintenance. I recently visited Ethiopia myself to admire the whole thing and this was an impressive trip.
You get a monthly bill with this 0.052 Euro (0.055 USD) per KWH based on what your mining equipment will consume. You link a wallet to your miners and every time you have mined 0.01 BTC it is sent to your wallet. That way you save up Bitcoin cheaply for when the price "explodes" which traditionally happens 7 months after the halving. This is a hugely interesting revenue model. If you believe in rise. Mitchell came up with the great quote. " Buy low, mine high". This refers to buying the machines low and keeping costs as low as possible and maximizing profits during a bull market. In addition, the machines increase in value when Bitcoin goes up. So this offers prospects for a second-hand trade in machines.
Table of contents
- 1 Blackrock and bitcoin mining: a sustainable combination?
- 2 How are such "low" power rates possible?
- 3 Why mine Bitcoin rather than buy Bitcoin?
- 4 What is the Bitcoin price based on?
- 5 What traditionally happens after a Bitcoin halving?
- 6 Mining earnings
- 7 Buying used Bitcoin machines:
- 8 Interview with Mitchell Weijerman:
- 9 Comprehensive explanation of the technical side of Bitcoin mining:
Blackrock and bitcoin mining: a sustainable combination?
Blackrock, the world's largest asset manager, recently announced that it will be adding Bitcoin mining to its portfolio. Why did Blackrock make this decision and what are the benefits of this strategy? Blackrock sees bitcoin mining as a good investment for several reasons. First, Blackrock believes in the future of bitcoin as an alternative to traditional currencies and as a hedge against inflation. By investing in bitcoin mining, Blackrock can increase its exposure to the crypto market and benefit from the rising demand for bitcoin. Meanwhile, they also have the spot ETF approval for bitcoin in which only makes the whole thing more bullish.
Second, Blackrock sees bitcoin mining as an opportunity to become more sustainable. Blackrock is committed to reducing its carbon footprint and supporting the transition to a low-carbon economy. Bitcoin mining can contribute to this by using renewable energy sources, such as solar, wind or hydropower. Blackrock can thus lower its electricity costs while helping to reduce carbon emissions.
Blackrock has thus discovered that bitcoin mining is a good investment, both financially and environmentally. Bitcoin mining allows Blackrock to take advantage of the growing crypto market and achieve its sustainability goals. When the world's largest institutional party becomes the largest shareholder in 4 of the 5 largest mining companies, it does seem like a very good investment right now.
How are such "low" power rates possible?
By mining Bitcoin in favorable areas in countries like Siberia and Ethiopia at various Hydro Dams for cheap and green energy and in addition they are situated in a mining facility where there are over 80,000 devices or 5% of the total global mining. This makes for extremely low and competitive power rates due to joint purchasing of all facilities with all miners collectively.
Benefits of mining Bitcoin through Epic Mining:
- No noise and or heat.
- Cheap energy rates.
- Purchasing only Bitcoin miners.
- No maintenance.
- No headache.
Everything is taken care of for you. All you have to do is watch your assets increase and pay the power bill each month.
Want to know if mining could be interesting for you Want to know more about the price of a miner? Questions about the mining farm? The technical side?
Why mining Bitcoin instead of buying Bitcoin?
With Bitcoin mining, you create Bitcoin below production value production. The higher the price of Bitcoin becomes, the more profit you can realize because your production costs are below market value. If you believe Bitcoin can shoot to 75k, 100k, 150k or even 200k in the coming bull market or a cycle after that. Then Bitcoin mining becomes exponentially more interesting than Bitcoin buying. As the price of Bitcoin goes up, the cost of buying becomes higher and higher. With mining, you can keep producing them below the market price. That is the revenue model that is used with mining. Then you don't even include the increase in the value of your machines when the price goes up. You can flip those for double if demand gets really high again.
What is the Bitcoin price based on?
Factors increasing demand for Bitcoin:
- The failure of the traditional financial system.
- More and better education is available.
- Network effects.
- Bitcoin is the best asset of the decade/ever in terms of returns.
- Countries are buying up Bitcoin.
- Companies add Bitcoin to balance sheet.
- Large mutual funds are buying up Bitcoin like BlackRock.
Factors making Bitcoin scarcer:
- Bitcoin's new stock is halved every four years (halvings).
- Holders do not sell, but buy at (hodlers)
- Large mining companies have better access to financing and, as a result, they no longer sell BTC to finance their operations.
With demand increasing and supply becoming scarcer, this can only mean one thing. The price is going to rise!
What traditionally happens after a Bitcoin halving?
- After the market crashed in 2010, Bitcoin's price shot up 11.645%.
- After the market crashed in 2014, Bitcoin's price rose 7,382%.
- After the market crashed in 2017, Bitcoin's price rose 1.991%.
Mining earnings
Of course, we all want to know what it can then yield in the end. This can easily range from 10 to 25k per machine over the term. Book a free consultation and find out, in a short conversation, exactly how it works!
Buying used Bitcoin machines:
With each Bitcoin miner, the owner receives a unique certificate that he can sell to someone else. That person then becomes the owner of the machine and must identify himself to Epic Mining to change the address of the wallet being mined to and the natural person to whom the electricity bill is sent. This is different from ordering new miners, as those are new machines shipped to Ethiopia from the factory.
When you order a new Bitcoin miner, the buying and shipping process can take about 8 weeks. Some people just want to start mining the very next day and then second-hand machines are a good choice. For example, the machine in our webshop has only been in use since Nov. 13. The new price of Bitcoin miners is skyrocketing fast. So a used machine with a lifespan of 4-5 years is a hugely interesting deal! Especially since you transfer the contracts within 24 hours and the machine will earn Bitcoin for you tomorrow!
Interview with Mitchell Weijerman:
Comprehensive explanation of the technical side of Bitcoin mining:
Bitcoin mining is the process of creating new bitcoins and verifying transactions on the Bitcoin network. It is a crucial part of the cryptocurrency's infrastructure.
Bitcoin operates on a decentralized network, meaning there is no central authority controlling the currency. Instead, transactions are verified by a network of computers (nodes) scattered around the world. Miners are participants in this network who use specialized hardware and software to solve complex mathematical problems and validate transactions.
Here is a simplified explanation of the mining process:
- Verification of transactions: When someone initiates a Bitcoin transaction, it is broadcast to the network. Miners collect these transactions in blocks.
- Hashing: Miners compete to solve a mathematical puzzle, known as a cryptographic hashing function, by repeatedly guessing a specific value (nonce) until the desired outcome is obtained. The hashing process converts the block of transactions into a unique string called a hash. The computing power of miners plays a role in increasing their chances of finding the correct nonce and solving the puzzle.
- Proof of work: The successful miner who solves the puzzle first broadcasts the newly mined block to the network. Other miners then verify the validity of the block and transactions.
- Block Addition: Once the block is verified, it is added to the existing blockchain, creating a permanent and immutable record of transactions. Miners receive a reward for their work in the form of newly minted bitcoins and transaction fees for transactions in the block.
It is worth noting that the mining process becomes increasingly challenging over time. This is due to the design of the Bitcoin network, which adjusts the difficulty of the mathematical puzzle to ensure that new blocks are added about every 10 minutes, regardless of the overall computing power of the network.
Bitcoin mining requires considerable computing power and electricity. Therefore, specialized hardware called ASICs (Application-Specific Integrated Circuits) is often used to efficiently mine bitcoins. In addition, mining farms with numerous ASICs are often set up in locations with cheap electricity to maximize profitability.
Overall, bitcoin mining plays a vital role in securing the Bitcoin network, verifying transactions and putting new bitcoins into circulation.
Bitcoin mining is divided among several companies that manage mining pools, which are groups of miners who share their computing power and divide the rewards.
- Foundry USA: based in America, with 30% of the network's hash rate. Foundry USA is a subsidiary of Foundry Digital, a company that provides mining equipment financing and consulting services to institutional investors and corporations.
- Antpool: based in China, with 23% of the network's hash rate. Antpool is owned by Bitmain, one of the largest manufacturers of Bitcoin mining hardware and chips.
- F2Pool is also based in China, with 18% of the network's hash rate. F2Pool is one of the oldest Bitcoin mining pools, founded in 2013.
- Poolin: another Chinese pool, with 12% of the network's hash rate. Poolin was founded in 2017 by former Bitmain employees.
- Slush Pool: based in the Czech Republic, with 7% of the network's hash rate. Slush Pool is the first Bitcoin mining pool, launched in 2010.
These five pools account for about 90% of the total Bitcoin mining power, meaning they have a significant impact on the security and decentralization of the network.
Explanation Cloud mining:
Cloud mining is a service where individuals rent computing power from companies to mine cryptocurrencies on their behalf. They do not have to own or manage the hardware themselves. The cloud mining provider handles the mining operations and distributes rewards to participants based on their rented computing power. It is a way for people to mine cryptocurrencies without needing expensive equipment or technical expertise.