Why am I talking about Bitcoin here? Because everyone is? Not exactly. For one, you can now exchange bitcoin into dollars and that can buy some nice photo gear.
If only there was a way to get bitcoin without spending thousands of dollars building a rig that sounds like an airport runway in your basement and destroys your electric bill. Turns out there is.
But before I get into that lets review some cryptocurrency basics…
What is bitcoin?
Bitcoin is the first decentralized digital currency without a central bank. Transactions take place between individuals without an intermediary. These are verified by network nodes (computers) so that no transaction is lost.
What is a blockchain?
A blockchain is a ledger/database that records all the bitcoin transactions.
What is a block?
A few times an hour, a new group of accepted transactions is made. This block is added to the chain, hence blockchain. It is then published to all the nodes.
What is mining?
Mining is performed by special mining hardware units (pretty expensive) or by fast video graphic cards (GPUs) connected to power supplies and motherboards. New transactions are collected into a block and verified by miners many times over into a block. Miners get paid/rewarded when their machine solves a block.
What is a hashrate?
It is the speed at which an operation in the bitcoin code is made. Higher hashrate increases your opportunity of finding the next block.
What can you do with bitcoin once you have them?
These days there are more and more things you can do with bitcoin. You can trade them for other cryptocurrencies, convert to regular money, play the market, invest into stocks, exchange for gold and even buy cars at dealerships. In the future you will have many more options.
Having covered the basics, lets get into growing your bitcoin amount. While this was easy many years ago with a homemade rig or even a simple computer, it has become very difficult now due to competition. Not difficult as in you will mine less bitcoin. More like your chances are slim of mining because your home computer or rig would be competing not with the guy down the street but with a 10,000 unit factory in a country where electricity is 10x cheaper and the climate provides natural cooling year round. You may even be competing with mining farms powered by solar energy. Chances are you will actually lose money.
So what is an individual to do? Give up because he/she missed the boat 5 years ago when the price was low? Not necessarily. Enter cloud mining, where you rent existing mining hardware that is already set up and running somewhere in the world, most likely where conditions are optimized for mining and the mining farm is so large it makes a nice profit. You do this by purchasing a mining contract which covers everything including the equipment, the location, and all the maintenance which will be required for the duration of your contract, such as GPUs burning out (they do run 24/7 at max rates after all).
Are these contracts expensive like most investments? Actually no, you can pick how much you want to spend, whether its $50 or $500,000. Either way you can make money. You will make even more if bitcoin price goes up in the future. Not a fan of bitcoin? You can mine other currencies such as ethereum or litecoin, although bitcoin seems to be the most profitable.