Bitcoin and other cryptocurrencies are generating a lot of hype over the past few years, and for a good reason. The most popular digital asset, Bitcoin, hit a record all-time high price of over $63,000 in April of this year.
Considering the popular cryptocurrency price was trading at less than $10,000 for most of 2020, investors are now looking for ways to get involved and start making a profit. Rather than investing in it and paying a commission, traders are now bitcoin mining in an effort to earn digital coins.
Keep reading this guide to learn more about mining bitcoin and the benefits of using this method over simply investing in it.
1. Full Control Over the Coins
One of the most significant benefits of mining bitcoins is the ability to remain the sole holder of the digital assets, meaning you have complete control over them.
When you have money or other assets stored at a bank or other financial institution, they are subject to that financial institution’s rules and regulations. When individuals mine for bitcoin, they are eligible for what is called the bitcoin block reward. The bitcoin mining algorithm was initially designed to provide a block reward of 50 bitcoin to miners.
As bitcoin mining rigs become more advanced, making it easier to mine for the cryptocurrency, the algorithm becomes more challenging to solve. To control the supply of bitcoins in circulation, an event called the “bitcoin having” takes place approimently every four years. When the bitcoin having takes place, the mining reward is cut in half and currently sitting at 6.25 BTC.
2. Can Be Used as a Stream of Income
If you have the proper computing hardware, you can use bitcoin mining to produce a stream of income. The block reward is one way miners can earn money, but they can also receive the transaction fees associated with the block.
Miners can use these methods of generating a profit to produce a stream of income that has the potential to increase in value if bitcoin experiences an increase in value.
3. Less Costs
A significant benefit of mining bitcoin is that there are no transaction costs to obtain the digital assets. However, there are some costs that you should be aware of.
First, you will need a bitcoin mining rig capable of generating enough computing power. And second, the energy costs can also tack on additional expenses when mining.
This is why many people are using bitcoin mining colocation to subsidize some of the costs and be closer to the energy source. If you are interested, read more here. Going with the right colocation provider can help you reduce expenses associated with mining bitcoin.
Get Started Mining Bitcoin Today
Bitcoin mining can be a rewarding thing for those that have the computing hardware and mining rigs available. The equipment can be costly to buy and install, which has led many to start renting units instead. With the demand for bitcoin seemingly not slowing down, more and more people are looking to get involved with the digital asset.
If you are thinking about mining bitcoin, check out our blog for helpful cryptocurrency tips to get you started!