To Mine Or Not To Mine

Updated: Mar 7, 2021

In order to participate in the cryptocurrency eco-system you must own a

cryptocurrency such as Bitcoin or any of the other alternative coins

(or ALT Coins) listed in

There are basically four ways you can acquire cryptocurrencies:

1. Buy crypto on an Exchange

2. Accept crypto as payment for goods and services

3. Accept free cryptos from someone

4. Mining new cryptos

You will learn in the preceding paragraphs that Mining is by far the

cheapest way to own cryptos!

Those new to cryptocurrency will most likely use an Exchange to buy their

first crypto coin. As of February 2021, there are 308 Exchanges for you to

buy and sell cryptos. The biggest and most popular is Binance where you

can trade over 330 cryptocurrencies. The widely known site, Coin Market

Cap has put together a comprehensive list of Exchanges.

You can find them on this link .

You can compare them and make a decision which to sign-up with based on the

ranking of this website or you can evaluate the individual Exchanges based

on its trade Volume, Average Liquidity, Number of Markets, Number of

Coins, and the supported Fiat currency.

The fast-growing trend of cryptocurrencies have sparked the idea of using

cryptos to pay for goods and services. For this to occur the supplier of the

goods and/or services must be willing to accept this form of payment and

have the phone or computer software app to facilitate the transfer and

storage of the cryptocurrency.

The technology of the blockchain or digital ledger has made the

cryptocurrency virtual transactions possible anywhere, any time, and any

place where there is a smart phone and internet connection! People living

remotely and great distances from banks, or those who don’t have a bank

account will naturally gravitate to the use of cryptocurrencies as a form of

payment with a click of a button on their phones.

The blockchain and cryptocurrencies has made it possible for the unbanked to participate in the financial world! It is very possible in the very near future that this digital

form of payment will be widely adopted and fiat currency could be a thing of

the past.

You don’t have to buy to own cryptocurrency. Instead, you can mine them.

But of course you need to know that some cryptos can’t be mined like

Ripple (XRP). On the other hand there are many mineable digital assets

out there including Bitcoin, Ethereum, Litecoin, Zcoin, Zcash, and many more.

Why mine cryptos instead of buyer them? There are very good reasons

why mining could be a better option for you. Let’s say you have $5,000

dollars to buy any one of the cryptocurrency listed on coinmarketcap.

Although it is unlikely to happen, let us assume that all the Exchanges and

the entire cryptocurrency ecosystem came crumbling down. Obviously this

event this will leave you with a worthless asset that you purchased online.

On the other hand, if you invested the $5,000 on mining rig hardware and

this unlikely event took place, you can recover all or a major portion of the

investment by simply selling the hardware. In particular, you can easily sell

the highly sought after Graphics Cards that many gamers use to build their

computers. Plus you still get to keep the worthless crypto coins which

someday may come back to life when the world is finally ready to accept them.

The other advantage of mining is that you can own cryptocurrency at a

major discount. After recouping the cost of mining rig hardware, the only

cost going forward is electricity. Let us look at an example.

A typical 12 GPU (grapics cards) mining rig using RX580 8GB Memory GPU cards will

consume about 1750 watts per hour. We will use 11.5 cents per kilowatt

for electricity which is the cost in Las Vegas. This mining rig operating

continuously for 30 days, 24 hours per day will consume about 1,260

kilowatt-hour or $145 dollars per month. With this type rig mining Ethereum

(ETH), you can mine or produce about .75 ETH per month. At the time of

writing February 2021, the price of one ETH got as high as $2,000. Using