- >Can I Get Rich Mining Cryptocurrency?
Can I Get Rich Mining Cryptocurrency?
Of the first questions cryptocurrency newcomers ask is whether or not they will get rich from mining. On the surface, mining seems really straightforward, turn my computer on, run a program, and make money. It can be that simple, but that’s not the type of miner that will give you a reliable income. By now, you’ve likely heard stories of college students running bitcoin miners in their dorms and they’re now crypto millionaires. These kinds of stories are likely a thing of the past, a once in a lifetime opportunity so to speak. However, cryptocurrency is here to stay, and so is mining. It is definitely possible for anyone to make crypto pocket change. Beyond that, how can you get rich mining cryptocurrency?
Keegan Francis | Oct 13, 2020
What is Mining?
For the purposes of this article, we will use the following definition of mining.
“Any generic participation in a blockchain based network that produces cryptocurrency rewards“
For an extended explanation on what mining is, check out the CryptoVantage mining guide.
The Many Ways to Mine Cryptocurrency
Since the inception of bitcoin, participating in blockchain networks has become quite a bit more complex. Cryptocurrency projects devise ways for users to participate in the network in a variety of ways. The network itself rewards users for their participation in the form of cryptocurrency. The best case scenario is if the cryptocurrency earned is actually worth some amount of money.
Since there are so many cryptocurrency networks in existence, many of the cryptocurrencies are simply not worth the energy it takes to mine them. In general, mining cryptocurrency involves downloading and running a program on your computer. The program will then solve problems, and in essence, validate transactions on the network. In a sense, your computer is acting like a clearing house.
HoneyMiner is a mining program for windows and MacOS that pools mining resources between everyone running HoneyMiner. Your computer’s CPU is used to mine smaller cryptocurrency networks. Then whatever cryptocurrency is earned is turned into bitcoin, and given to you for your efforts. This strategy of mining is very difficult to employ if you implement it manually. HoneyMiner is great because it massively simplifies the process.
Blockchain has long been heralded as a technology that will enable many innovations. One of those things is the Internet of Things (IoT). Helium is a company that has set their sights on building a blockchain network that is capable of supporting the internet of things. The company wants you to buy their “Helium Hub”. Simply plug it in, hook it up to your account, and you’ll be earning their core token (Helium).
Another plug and play device is called Incognito. The device costs $400 on the website. By running their “Incognito Node” you will be supporting anonymous transactions on the network. You will earn their core token PVC, as well as a portion of the transaction fees routed through the Incognito network. So for example, if users are transacting with bitcoin or ether, you will receive a portion of the fees paid on those transactions.
Why Can’t I Mine Bitcoin Anymore?
You can definitely still mine bitcoin, the question is whether or not it will still be profitable for you to do so. Bitcoin actually has very interesting economics with respect to its mining. It used to be the case that bitcoin would reward miners with 50 bitcoin per block. In today’s terms that is about half a million dollars per block.
A block is published about every 10 minutes. Every 210,000 (4 years) bitcoin reduces the block reward by half. May 2020 was the last time that bitcoin halved its reward. The current bitcoin block reward sits at 6.25 bitcoin, or about $60k (at the time of writing).
Even though this is a pretty good paycheque if you do happen to mine a block, that’s not the reason why it wouldn’t be profitable for you to do. There are so many other people, companies, and warehouses of computers that mine bitcoin. You will need an industrial miner if you ever want to stand a chance at getting a bitcoin block reward. The industry leader in bitcoin mining hardware is bitmain.
They sell a variety of specialized mining computers called ASIC’s or Application Specific Integrated Circuits. These kinds of computers are good at one thing and one thing only, mining bitcoin. It used to be the case that you could mine bitcoin on your college dorm laptop. The industry has long since left that reality behind.
Other Ways to Participate
Just buying cryptocurrency is a fairly involved process if you don’t know what you’re doing. The other way to acquire cryptocurrency is by earning it. You can earn cryptocurrency by running a miner, or in a variety of other ways. For example, some cryptocurrency based social media sites allow you to earn cryptocurrency for writing popular content.
This social media site is built on top of the bitcoin lightning network. This means that users of the site can upvote your content by giving you bitcoin. ZapRead is really cool because of the sheer proliferation of bitcoin as money. By making it cost money to upvote content, it helps fix the junk news, and spam issues that many free social media platforms are facing.
Steemit works similarly, except it has its own cryptocurrency. This is a downside to the platform, as it requires users to have a more in depth understanding of cryptocurrency in general. Many people already understand bitcoin, which is why a social media platform integrated with bitcoin has a higher likelihood of succeeding.
The point here is that there are many ways to acquire cryptocurrency. Mining is certainly analogous to general participation. The industry benefits from the abstraction of what participation is. You don’t have to be a computer wizard, or own a warehouse full of computers to get rich off of crypto. It may be too late to get rich off of mining cryptocurrency. However, using a variety of other platforms that you participate on, you can get rich off of crypto from creating great content.