Investing in mining

Introduction

The purpose of investing is quite simple, it’s to make your money work for you. The most popular one known as a Term Deposit is provided by all banks across the world. Advantage of term deposits is the very low risk of your investment, however the disadvantage is the interest rate and in result your profit. In New Zealand the average interest rate is 3% and in other parts of the world it’s more or less the same or even negative like in Switzerland.

Investing has one simple law, more profit means accepting more risk. Investing in stocks and investment funds can give you up to 10-15% per year, but then the risk is also much higher. Especially people who invested about 10 years ago lost a lot of money since the financial crisis in 2008. This included also investments in the usually reliable property market.

Crypto-mining investments compared to cryptocurrency investments

Investing in crypto mining is a bit different from investing in crypto currencies. The crypto currency investor invests by buying crypto currencies and speculating about the market to sell them at a higher price later. This is a high risk investment, especially in this highly volatile crypto market. Mining investors are firstly investing in hardware or in a cloud mining plan, which they use to mine, and secondly in crypto currencies. However, they don’t necessarily sell the mined crypto currencies at the highest price. Mining investors don’t want to hodl all mined crypto currencies as they need to recover the investment in hardware or in their cloud mining plan. The hardware or their cloud mining plan functions namely as a security, which they can sell. Crypto currency investors can also diversify the risk by investing in different currencies, but they still lack this security. In conclusion, the profit-to-risk ratio of crypto mining is higher than investing in crypto currencies only.

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Switching between coins

Mining investments are not for the average faint-hearted Joe. “Normal” investors don’t have time, space or skills to mine crypto currencies themselves. They may have tried some cloud mining providers, but got stuck with a contract mining once-oh-so-profitable- coins and now not anymore. That’s why Mining4us exists. The only cloud mining provider, where the miner is in full control of what and when he mines. He can switch between coins daily and maximize his profits by pointing his miners to mine the most profitable coin.

Mining when the market is down

Many hesitate to invest in mining when the market is down. After all, different crypto calculators show that it is not so profitable anymore. This is partly true. The interesting and distinguishing aspect of mining investment is that it is independent of the state of the market. You can still make huge profits in a bear market. When the crypto market is down, cryptocurrencies are worth less and less people are inclined to buy or mine cryptocurrencies. This leaves more coins in the network for you to mine. Since the number of coins you can mine with the same plan (hashpower) has increased your total mining reward (number of coins x value) remains the same or could even be more than in a bull market. As you see, crypto investors enjoy their lives seeing their investments doubling or tripling as long as the market is up, but mining investors enjoy their lives anyway, irrespective of the market trend.

Rules of investing in mining

Your profit as a mining investor will depend on which cryptocurrencies you mine, when you sell them and on your mining strategy. There are a few rules which you can follow to maximize your profits with Mining4us.

Rule 1. Mine always the most profitable coin.

This sounds obvious, but the majority of cloud miners are still mining “old” coins, such as Bitcoin, Litecoin, Ethereum, etc. This is sometimes because they only know those famous coins from the media. After all, we have heard of “Bitcoin millionaires” but not of “Sumokoin millionaires”. Others are simply stuck in a mining contract that can only mine one of these “old” coins. These coins are not always the most profitable coins to mine. Mining altcoins, such as Sumokoin and Electroneum, was at certain moments four times more profitable than for example Bitcoin.

Rule 2. Secure your mining profit.

Convert (exchange) your obtained coins by mining to the other more reliable (stable) coins as often as possible when the conversion rate is favourable. While mining altcoins can be more profitable they are on the long run not the most stable to hodl. Reduce risk by sufficient coin diversification: convert to two or three other stable coins.

Rule 3. Bigger hashing power is better.

In most situations you are mining by using mining pools with a predefined payout threshold. This is the number of coins that you should reach in order to be able to transfer the mined coins to your wallet. In order to apply rule 2 you need to get your coins as often as possible, ideally daily. This is only possible if your mining profit exceeds the threshold. With more hashing power the threshold becomes insignificant.

Rule 4. Be greedy, but not too greedy.

Sell your mined coins when the market price is just sufficient, and not more. This ensures you meet your expected profit and recovers your cloud mining plan investment.

Rule 5. Switch between coins.

As discussed above, keep an eye on the crypto currency prices and on the network hashrates. When one or rather both are favourable, switch your miners to mine the most rewarding coin. You can also use online mining profitability calculators.

Rule 6. Resell your plan.

Mining may just not be your thing. As Mining4us plans are open, you can cancel your plan or, even better, resell your plan to someone else. By reselling you can recover part of your setup fee, exactly as you would own the mining hardware.

DISCLAIMER: Everything expressed here is our opinion and not official investment advice - please do your own research before risking your money.