Mining Cryptocurrency: Best Practices for Top Results

From the moment Bitcoin came into our collective consciousness more than a decade ago, tech enthusiasts and digital rebels have been eager to get their hands on this digital currency.

As Bitcoin made its way into the mainstream via a mysterious founder named Satoshi Nakamoto, trusted financial institutions and governments began to see the value of crypto as a legitimate store of value, hopping on the bandwagon with millions of retail investors.

Now, Bitcoin mining is a legitimate business practice and crypto-currency, and while the competition is heating up, we’re still in the early stages of the journey. The Bitcoin blockchain is the most mined blockchain on the planet. Even just one block reward from a Bitcoin blockchain has a high value. Here are some Bitcoin mining best practices you can apply to earn crypto, stay ahead of competitors, and hopefully turn some profits.

Cloud Mining Best Practices

Our first mining method requires no technical know-how and no heavy lifting on your part, including knowledge of complex computer devices. We’re talking about cloud mining in which you outsource your computing and maintenance needs to a third-party company while you sit back and watch the Bitcoins flow. Competent third parties will handle everything, from setting up a server network to GPU mining to purchasing graphics cards. You also won't have to concern yourself with highly technical details, like figuring out the best mining algorithms or hash function for speed.

Of course, it’s not quite so simple, especially if you aim to make some real profits. Here are the top cloud mining best practices to keep in mind.

Carefully Choose a Provider

With hundreds of cloud mining companies to choose from, you need to be extra careful to avoid the less-than-ethical operations.

Do your best to research cloud mining providers before you put a single dollar down. Read reviews, talk to others in the industry, and steer clear of companies that don’t seem to have a track record or legitimate presence beyond their own website.

Transparency is Key

When cloud mining, you want maximum visibility into the operations that mine and produce cryptocurrency – transparency is a top priority.

Some cloud mining companies only provide weekly or monthly reports about their costs and earnings, while others give you access to a 24/7 dashboard that tells you exactly what’s happening around the clock.

Every bit of information is vital when mining crypto, from power usage and costs to hash rates and overall production.

You will likely spend a bit more in monthly fees to get this extra degree of transparency, but given the context of the industry, that is money well spent.

Eyes on the Prize

Whether you’re mining Bitcoin or any other type of cryptocurrency, your focus should ultimately be on the bottom line profits and the long-term viability of your strategy.

Cloud mining has the potential to earn you some real money, but only if you apply these stringent best practices and stick to a well-structured game plan over a long period.

The truth is that most crypto miners dabble in various cloud mining ventures and never piece together any real gains as a result. Our point is that you shouldn’t treat this as a hobby if your goal is to make money.

Treat it as a business and put in the time and effort required, just as you would with any other venture.

Individual and Enterprise Mining Best Practices

To keep the control and profits in your own hands, it’s best to mine cryptocurrency with full ownership and understanding of your infrastructure.

This demands substantial upfront investment in capital like a mining rig and time required to overcome learning curves, but the rewards are much greater, and the initial efforts will more than likely pay off. 

Here are some best practices to follow when setting up a mining operation on an individual or enterprise level.

Hardware and Software

Hardware will be your highest cost by far, barring real estate or rental costs for large-scale mining operations.

Graphics Processing Units are not cheap, especially given global PC chip shortages. Application Specific Integrated Circuits (ASICs) are another option, though these can cost even more depending on their size and capabilities.

Ensure you have all the necessary components to create an ecosystem of mining units, complete with smart power supplies, cooling mechanisms, and storage structures.

In terms of software, you’ve got a wide range of free options available on the web, and we suggest installing multiple programs that you can switch between to maximize profits. And it probably goes without saying, but yes: An internet connection is required to mine cryptocurrency.

Storage and Pools

Whether you’re mining with a 10-pound gaming computer or a massive data center in the mountains, you’ll want reliable, physical storage to collect and secure your cryptocurrency for the long term.

Pocket-sized wallets are available for around $100, while enterprise solutions can cost far more and require expert setup.

Also, be aware of your options for joining mining pools, which can boost your chances of earning Bitcoin and streamline many of the technical requirements that miners confront along the way.

If your operation is large enough – like if you have a mining farm – pools are not necessary for success, and you may even want to consider starting your own pool for an extra edge.

The Future of Mining Best Practices

Now that Bitcoin mining has hit a stride and competition is ramping up, we need to look to the future and consider what comes next for the industry.

Long-Term Business Models

As we mentioned, success in crypto mining requires a serious investment of time, energy, technical education, and ongoing strategy – that’s a fact.

Many hobbyist miners simply wish to dabble and test out their computers for mining purposes, but that won’t pave the way to profits by any means.

It’s time to think long-term and develop a big-picture strategy with infrastructure, investment, and coordination with other legit crypto pioneers to see real results. 

Power Supplies and Renewable Energy

One of the clear advantages in the crypto mining space is renewable energy sources, including solar, wind, and hydropower.

Not only are these eco-friendly and sustainable resources, but they also ensure greater profits due to lower energy costs over the long term.

A handful of companies have already signed the Crypto Climate Accord to aim for carbon-neutral crypto mining by a determined date – that’s a great start.

Agile Mining and Altcoins

We discussed the importance of monitoring your results and transparency in cloud mining, but this applies to any mining venture you pursue.

Even the slightest drop in hardware efficiency or a software issue can cost you lots of time and money if you cannot quickly identify and fix these problems.

On top of smart maintenance, you’ll need to be highly adaptable in the future of crypto mining as new altcoins gain momentum in the shadow of Bitcoin. Be ready to quickly pivot and mine other cryptos if you anticipate bull runs and capitalize on every opportunity.

Some other popular cryptos that are becoming just as ubiquitous to crypto as Bitcoin include: 

• Ethereum
• Litecoin
• Monero

Similar to sailing or surfing, you’ve got to watch the wind and the waves to see where the profits are going to be because new coins are created every day.

The most profitable mining operations will be those that balance powerful resources with the ability to sharply change direction and scoop up profit opportunities without a hitch.

Start Mining Bitcoin the Right Way

If you just want to dip your toes into Bitcoin mining as a hobby or at-home tech experiment, you can do so cheaply and without much effort. Individual miners are becoming a dime a dozen.

However, don’t expect to make much money in the process since mining is increasingly competitive every day.

On the other hand, you can still enjoy significant profits if you dedicate yourself to mining best practices on a larger scale, using renewable energy Bitcoin mining methods, and gaining other competitive advantages.

Keep these tips in mind moving forward, and you’ll be mining Bitcoin quickly and efficiently.

Sources:

Mining, Crypto, and Industry Best Practices | Proche
How to Get Established as a Cryptocurrency Miner | Investopedia
What is Cryptocurrency Mining? | Benzinga