Posted by on Ιαν 28, 2016 in Bitcoin | 0 comments


Bitcoin mining is looking a bit more attractive again.

When the virtual currency’s popularity was surging just a few years ago, almost anyone could set up a computer in their basement to mine bitcoins, a process needed to record transactions and ensure the propagation of the digital money, which exists as software. Miners who put their machines to work solving complex computational problems (and paying for the hardware and a higher electric bill) were rewarded with new bitcoins for their efforts. Some became paper millionaires as bitcoin’s price jumped to a peak of $1,137 in 2013 from $13 in less than two years.

Then, bitcoin’s price plummeted to a low of $183 last year, leaving only major miners with significant resources in the game. Many found it more profitable to join mining pools, or groups of miners that share computing power to harvest new bitcoins faster and more efficiently.

Now, there are signs that broader mining efforts are making a comeback, thanks to bitcoin’s price doubling since September. While that isn’t the only factor that determines whether mining is profitable, it’s an important one.

“When the price goes up, there’s more confidence in mining, and [mining equipment makers] go and design the next-generation chips,” said Bobby Lee, chief executive officer of BTCC, a bitcoin exchange based in Shanghai. “For people who already bought equipment, their ROI will increase.” BTCC also operates the world’s second-largest bitcoin-mining pool.

Genesis Mining, which has more than 130,000 people buying computing power on its mining hardware to participate the mining process, is seeing higher returns. An investment of $419 yielded a return of about $2.42 a day in November, up from $1.14 in September. At higher bitcoin prices, a speculator would be able to recoup his or her money in about six months, instead of more than a year.

“In a price-rising scenario, you can see demand that’s tripling,” says CEO Marco Streng. “And sometimes even higher.”

It’s a risky endeavor. Bitcoin prices are notoriously volatile. Also, this year bitcoin’s software is scheduled to reduce by a half the number of coins that get rewarded for mining activities (part of a built-in supply regulating systems). At the same time, more powerful, and therefore expensive, equipment will be needed to keep up with the processing power required to mine bitcoins.

For now though, the mining party is going strong. BTCC has seen the amount of computing power hooked onto its pool double in the past six months.

“Everyone in our pool is making money, because people who aren’t making money would not have their machines turned on,” BTCC’s Lee said.

Taken from here!

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