Everyone Wants to Be a Bitcoin Miner Right Now – Here’s How to Join In Without Breaking the Bank

Bitcoin mining appears to be having a moment. As the price of the flagship crypto asset scaled to new highs in March, flying on the back of ETF approval news, miner revenues also reached previously unseen levels, with the network distributing close to $70 million each day during the peak.

Furthermore, even thought BTC prices haven’t yet managed to claim the same highs as in March, interest in mining hasn’t waned. In mid-June, Web3 chief at telecoms giant T-Mobile, told attendees at the BTC Prague event that his firm is intending to enter Bitcoin mining, revealing it has been operating a node for some time.

Elsewhere, the Paraguayan government told reporters that it intends to take advantage of energy demand to fuel BTC mining, putting electricity sales to legitimate mining firms at the heart of its energy strategy.

However, it may find competition from the United States if Donald Trump gets re-elected this November, since the former president has vowed to embrace Bitcoin mining as part of his broader strategy to appeal to the crypto sector’s deep pockets for his campaign funding. In a post to his Truth Social followers, Trump said he wanted to all remaining Bitcoin to be made in the USA.

It’s late in the game, and competition among miners is rife, but there’s still plenty of faith in the future value to be captured from Bitcoin mining. However, entering mining as a small-scale operator is almost completely economically unviable these days. The up-front investment in even the simplest mining rig starts at around $20,000. However, that will only buy the smallest-scale mining operations, which must then compete with multi-million-dollar mining farms wielding far more hashpower for the chance to mine a block.

Even if an entrepreneur can fund the initial investment, there’s still a huge amount of risk. For example, many miners choose to mine across multiple networks to spread the risk, but networks can change their algorithms or block production protocols overnight. One of the most dramatic examples was when Ethereum switched from proof of work to proof of stake, resulting in a huge amount of mining hashpower simply going offline.

Outsourcing the Operation

There are other ways to get into Bitcoin mining that don’t involve quite as much investment or effort as setting up a mining rig from scratch. One example is renting pooled hashpower, which is possible via a decentralized hashpower marketplace like NiceHash. It brings together people who want to sell spare mining capacity, whether that comes from specialized equipment like ASICs or general hardware such as GPUs, and those who want to buy hashpower for crypto mining.

For a buyer, there are plenty of advantages to this route over setting up a mining rig. There are no up-front costs or overheads, and it’s easy to stop mining without losing profit at any point. Buyers can rent only as much hashpower as they want or need in the moment. It also offers advantages to sellers since selling hashpower on the open market can offer a steadier income than competing against mining farms for hashpower.

NiceHash offers several different ways to get started, including the “Easymining” option, which effectively allows users to simulate the process of Bitcoin block mining by purchasing a mining slot for a chance to win the full block reward, currently set at 3.125 BTC.

Stocking Up

Another potential option worth exploring is Bitcoin mining stocks, which have recently been outperforming the broader markets. In June, US-listed Bitcoin mining companies hit a record high, even outperforming BTC upon the news of mining firm Core Scientific’s deal with AI firm CoreWeave, an AI firm.

Investing in Bitcoin mining stocks doesn’t offer the same exposure to BTC as mining itself, but it can be an adequate proxy for investing in mining or a way to supplement a portfolio of mining activities and investments.

One option is to purchase stocks in mining companies directly, but the influx of BTC-related investment products also offers options for broader exposure. For example, Valkyrie’s WGMI Bitcoin Miners ETF fund invests in Bitcoin mining companies, like Marathon Digital and Riot Platforms, but also has shares in chipmaker NVIDIA.

Bitcoin mining itself may be becoming more inaccessible due to high competition. However, the ongoing keen interest from investors is helping to ensure that routes to participate in mining value creation remain open to all.

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