ViaBTC | Tips on How to Solve Common Challenges with Crypto Mining
The “Burger In, Bitcoin Out” Vol.2 carried out by ViaBTC on Twitter on July 15th was a great success. Users actively participated in the event by posting burger pics and sharing their answers to “What’s your biggest challenge when mining?”. Hundreds of comments were received, and here we’ve selected some of them to answer. Each selected asker is rewarded $37.5 in USDT.
1. @tapasi1404: The biggest challenge for me is to pay the electricity bills during the bear market or market crash when the network difficulty is high and I used to get very less profit. But, why get tensed when ViaBTC is there for you.
Facing bearish market conditions, veteran miners are under great pressure. As the disposable income of most individual miners is limited, they tend to sell the cryptos mined from time to time to acquire more liquid funds required for the maintenance of their mining operations. However, in the current bear market, the crypto prices plummeted, and the mining difficulty remained high. This depreciated miners’ crypto holding.
However, users familiar with ViaBTC Pool should have noticed that ViaBTC launched [Hedging Service & Crypto Loans] back in 2020. With the [Hedging Service], insightful investors could avoid the mining losses arising from price slumps and lock in profits in advance.
Click the link below to find out more about the function:
"Hedging Service" Launched: Guarantee Your Earnings In Advance
To help you hedge the coin price risks, ensure earnings ahead of time and gain long-term stable yields, we launched the…
Thank you for choosing ViaBTC Pool. In this volatile market, we will always go forward together with our users despite the rough road ahead.
2. @AshuYuor: After this crash, mining has been very much challenging and it needs enough capital. ViaBTC is delivering what’s best for us, hence reducing my rewards due to higher costs of operating.
We are aware of your concerns. Bitcoin mining has never been a get-rich-quick scheme, and most miners venture into Bitcoin for long-term growth. Considering the current difficulty and prices, the payback period of all mainstream mining machines stays above two years. The market prospects seem bleak and the profit margins are small. Moreover, many miners had to shut down their mining machines to avoid losses. Despite all that, in a bear market, the fact that more people are quitting means that you get to mine more coins. In addition, although the profit margins of mining are small for the time being due to the low BTC price, the long-term profits look promising as the output of this deflationary asset goes down in the future.
3. @aganakata_: The challenge for me is the changing algorithm.
The constantly changing mining difficulties/prices are indeed a major concern. According to the BTC protocol, the system adjusts the current mining difficulty every 2,016 blocks. During this process, if the BTC hashrate goes up, then the system will increase the difficulty of BTC mining to keep the block time at around 10 minutes, and vice versa.
Therefore, in most cases, the BTC price is positively correlated with the mining difficulty. As the price goes up, so does the difficulty; conversely, when the price drops, it will become easier to mine Bitcoin. Over the past two months, the BTC difficulty has been trending downward, which reflects the negative sentiment of most miners.
4. @ahueit5022: I think controlling emotions is the main issue. It is difficult to say what is the correct way to sell coins after mining, as the market is always volatile.
Yes, the crypto market is indeed volatile. To earn profits in such a market, emotional management is vital. In addition, miners should focus on the long-term prospect of mining. Looking back at the history of cryptocurrency, not all early users could profit from cryptocurrency and earn huge returns. Moreover, as most early users are speculators, they would sell/buy cryptos whenever the market seems to swing. As such, it’s hard for them to profit. If you’re not a professional trader, then we recommend holding onto your crypto for the long term. A decade ago, nobody would believe that a single Bitcoin could be worth more than $10,000.
5. @haloq90: My biggest problem is that it is very difficult to determine when to sell coins to bring the highest profit.
It is a common concern. Everyone wants to sell at the peak and buy at the bottom, but no one could always achieve that. Therefore, we should consider what’s the ideal price at which we’d be willing to buy/sell cryptos. This is a feasible approach that requires market expertise and rich trading experience.
6. @Dnx_x97: The biggest challenge for me is to be able to set up and have enough equipment for my mining farm. I have seen some videos on YouTube and I want to start with something small and gradually strengthen my mining.
Investing more in mining during a bear market could be a good call. In today’s bear market, big mining companies and small individual miners have both been hit by multiple factors such as price slumps. For instance, some mining giants have filed for bankruptcy and dumped their mining machines. Meanwhile, the machines of most individual miners are also approaching the shutdown price (click Tool on the top column of ViaBTC’s official website to find out about the statistics). Data from Luxor Mining shows that the hashrate of Antminer S19 and S19 Pro had been sold for up to $119 per terahash but has now dropped to $20–23 per terahash. We can tell that the price of mining machines has hit rock bottom over the past year. If you are a Bitcoin believer with a sufficient budget, then investing more in mining at the moment could be a smart decision.
7. @ibenkrakhmat: The biggest crypto challenge is now increasingly difficult to mine because the level of mining difficulty has skyrocketed. Some celebrate it because it proves the superiority of the crypto asset. However, small-scale miners should be worried.
Compared with the figure recorded a few years ago, the BTC difficulty has been rising, which indicates that more and more people have recognized its value. This is good news because when Satoshi Nakamoto first proposed the concept of Bitcoin in the BTC whitepaper, he envisioned Bitcoin as a peer-to-peer electronic cash system. From this perspective, it’s great that Bitcoin is now known and used by more individuals and businesses.
Moreover, although the mining difficulty has indeed been rising, such a macro-level factor shouldn’t worry miners because the BTC price is positively correlated with the mining difficulty. As the difficulty increases, miners’ BTC holdings will also become more valuable. More new miners will start mining BTC as long as there are profits, but what does that matter? Maintaining one’s margin is all you have to worry about, which is true even for small-scale miners.
8. @dapopeters1: My biggest challenge with mining is the high operational cost! Spending a lot to fund mining operations squeezes the Return on Investments.
Most early miners have recovered the mining costs. So, we could tell that you might be a new BTC miner who has been mining for only a year or two. In today’s bear market where prices plummet yet costs such as the electricity bill and maintenance expenses remain expensive, the payback period of miners has kept extending. The relevant figures show that many miners are suffering from a deficit. Facing such losses, many have decided to surrender and sell their BTC holding. If you think that the market will not rebound any time soon, then you could shut down your machines and wait for your chance; if you are a firm BTC believer, then you could keep mining and hoard more bitcoins, which might bring you unexpected returns in the near future.
Thank you all for participating, and congrats to the winners. For those who miss the opportunity, don’t worry. Stay tuned and look forward to the next “Burger Day”!