We are aware that not everyone understands how Bitcoins work yet, and it’s reasonable why some might be skeptical about it. However, we believe that as more people learn about it–since it’s much younger compared to traditional currencies, the more they will understand its value and see it as a superior form of currency.

But how do Bitcoins or other digital currencies actually derive their value?

Well, this is a complex interaction between technological, economic, and social factors. However, understanding the workings of fiat currency markets isn’t common knowledge, and most don’t know why dollars or euros are valuable, for example. 

What we need to keep in mind is that cryptocurrencies display the same characteristics as the fiat currency system, except they are improved upon in the case of Bitcoin. These attributes, which we’ll analyze below, are what make any type of new currency valuable. 

What Makes Bitcoin Valuable

The perceived value of Bitcoin, similar to any asset, is determined by a collective consensus influenced by the forces of supply and demand. 

However, there is a segment of people who are skeptical about attributing value to digital assets. This skepticism stems from a hesitance to acknowledge that digital items can possess intrinsic value, leading them to view Bitcoin as valueless. 

In contrast, those with a deeper understanding of the Bitcoin system as an engineering marvel on the order of importance of the printing press, and similar to something like the internet itself, will recognize and affirm its value.

So Bitcoin, specifically, is uniquely valuable as a result of its design, 15-year history of near-perfect uptime, and broad acceptance as the largest and most widely used digital currency. 

Unlike all other stores of value humans have used in our 5000-year economic history since adopting gold as the first widely used money, Bitcoin was designed to fit perfectly the qualities of the ideal money. 

This accomplishment was not possible until today’s world, which is based on interconnected computer and software systems. 

The path Bitcoin has taken over its lifespan is as important as the initial design. The sequence of events viewed holistically leads us to believe it is the most valuable asset ever created and the first true money that the world has ever seen. 

Let us analyze this further by exploring the following 7 core characteristics.

Durability

Bitcoin’s resilience is unparalleled. It exists as long as the blockchain is maintained on even a single computer. Bitcoin’s digital information nature ensures its longevity, as it can persist indefinitely on any computer running the protocol with a full record, of which there are millions of copies of the entire financial ledger active at any given time.

Portability

Bitcoin redefines financial mobility. Transactions can occur anywhere with internet access, or even short-band radio, offering near-instantaneous transfers with final settlement typically within an hour. 

The unique aspect of Bitcoin is the ability for users to carry their assets by simply memorizing their private keys. This empowers individuals to take their wealth with them in a permissionless way, facilitating seamless global transactions without the need for intermediaries like banks or money transmitters.

Divisibility 

The flexibility of Bitcoin is evident in its divisibility. Each bitcoin is composed of 100 million smaller units called satoshis. 

As of late 2023, 1 U.S. dollar equates to approximately 2500 satoshis. This granularity makes transactions with Bitcoin efficient. Even if the value of Bitcoin goes up, it can be further subdivided via a soft fork without altering the core protocol or changing the supply.

Fungibility

Every Bitcoin holds equal value, ensuring no single coin is more valuable than another. This uniformity, backed by the impossibility of counterfeiting–due to Bitcoin’s software verification, sets it apart from traditional assets. 

The process of mining Bitcoin in accordance with protocol rules naturally incentivizes network participants to maintain this integrity.

Scarcity

Bitcoin is the first object in the known universe with verifiable scarcity. The total supply is capped at 21 million Bitcoins, a limit embedded in the protocol’s code and upheld by network consensus. 

The declining supply of coins yet to be mined bolsters demand as Bitcoin gains broader acceptance. This scarcity principle makes people want Bitcoin more, and it is a cornerstone of its value proposition. Additionally, this scarcity is immune to unilateral changes without network-wide agreement.

Uniformity

Bitcoin’s uniformity is secured through software verification, eliminating the possibility of counterfeiting. Unlike physical currencies, Bitcoins have no physical form, and any attempt to counterfeit them would be more costly than mining them legitimately. This inherent network design encourages positive behavior among all participants, reinforcing Bitcoin’s reliability and trustworthiness.

Acceptability

The adoption of digital currencies is on the rise, with the number of global cryptocurrency owners worldwide increasing by 34% during 2023. According to the same report, this rise applies to Bitcoin as well, with a growth of 33%, meaning there were 296 million owners worldwide by the end of 2023 (51% of global crypto owners). 

As knowledge and accessibility of Bitcoin increase, so does its acceptance, both by individuals in countries with unstable financial systems and businesses globally.

“Bitcoin has gained acceptance as a store of value, and over time, it’s being recognized as a unit of account. So, even if grandpa doesn’t “get it,” Bitcoin is indeed considered a form of money.” 

Final Thoughts

Throughout its existence spanning more than 15 years, Bitcoin has consistently demonstrated its decentralized nature and resilience to censorship. The principles governing Bitcoin have remained robust and effective over time. 

We shouldn’t forget that Bitcoin is unreplicable. While the underlying code of Bitcoin is openly accessible for anyone to view and utilize, just like HTTP, TCP/IP, and other open protocol standards, the characteristics of its network extend beyond mere code. Even if anybody can copy the code, nobody can copy its history or the network of builders and entrepreneurs that have flocked to put their energy toward Bitcoin only. 

Additionally, Bitcoin’s value is something that has been consistent throughout its existence, even though the USD-denominated price can be volatile and change often. This value reveals itself in layers and stages through time, and the world is slowly, but more and more every day, recognizing what that value is and why it is so important today. 

While some financial professionals may focus on price targets and trading levels, spending time staring at screens all day, intelligent Bitcoin investors set themselves apart by exploring its true long-term value, opening their minds to the end game, and the far-reaching consequences of Bitcoin’s inherent properties.

If you understand the core principle of supply and demand behind what gives Bitcoin value, appreciate this value, and know what you own, you are poised to make better financial decisions. This also applies when the emotions of large price swings take away from other investors’ reasoning faculties, both to the upside and down. 

Although there are some opportunistic times in life to sell, especially when a life-changing amount of money can improve your quality of life, we believe the ideal holding period for Bitcoin is FOREVER. Selling too much too early will be the sour regret of many would-be wealthy investors who allowed short-term thinking to make them sell a long-term asset too early in the adoption curve.

Are you ready to embrace this lasting investment and explore what this exciting journey holds? OX Block Mines is here to support you as you navigate the fascinating world of Bitcoin and Bitcoin mining.

Let’s discuss more!

The post Why Is Bitcoin Valuable? appeared first on OX Block Mines.

But how can you access and transfer these intangible digital assets securely?

There are two different options available: custodial and non-custodial (self-custody) wallets. Their main difference comes from who controls the cryptocurrency. So, in a non-custodial wallet, the user has complete control and not a third party, as we see in a custodial service. 

Wondering which option is best for Bitcoin? Let us share some information. 

Bitcoin is useful and valuable because of its robust security characteristics and ability to transfer value from peer to peer in a sovereign way. Unfortunately, the greatest losses to consumers have occurred when they give up these security characteristics in favor of the convenience offered by large exchanges, in which you buy crypto and they custody it for you. 

The largest public losses, like those incurred by the FTX collapse, Celsius, BlockFi, MT.Gox and many others were so disastrous because they lost or absconded with customer funds through mismanagement, negligence, or outright malice.

In the Bitcoin space, these losses (including the examples shared above) are entirely preventable because Bitcoin is so easy to self-custody. Unlike gold, stocks, or real estate, you can easily own, store, move, and transfer your assets without the need for a third-party custodian or asset manager. 

So in this article, we’ll explore the ways you can choose to self custody your Bitcoin.

How Do Bitcoin Wallets Work 

When creating a Bitcoin wallet, you receive two essential keys: a public key and a private key. 

The public key is utilized for encrypting data and forming your wallet address, while the private key enables you to decrypt this data or access your Bitcoin holdings. Protecting and securely storing your private key is crucial.

The blockchain is the record-keeper for your Bitcoin. It reliably records, stores, validates, and secures your Bitcoin ownership through encryption. To this day, no cryptocurrency has been compromised via blockchain data alteration, owing to the robust encryption techniques employed by proof of work blockchains. 

It would actually require several hundred years, or even thousands of years (given the current state of technology), to successfully breach a blockchain through brute-force hacking.

So, to store these private keys and secure your funds, there are a variety of methods available for you to choose from. Let’s review the most common ones.

Types of Bitcoin Wallets

Software Wallets/Phone Apps

Apps like the Coinbase Wallet or Muun Wallet are great software-based solutions to store your Bitcoin. While they are not perfect as far as security, they have reliable backup methods that allow you some redundancy in case you misplace your seed phrase–the 12 words that generate your wallet when you first set it up. 

These wallets are great for smaller amounts that need to be accessed and moved with some frequency. For large amounts, it is recommended to use a hardware wallet or some version of multi-signature custody (explore more below).

Paper Wallets

Because a “wallet” is really just an address generated by a private key, which can be generated by 12 random words from a list, access to your money is really just a matter of accessing information. 

In other words, you can own Bitcoin without ever interacting with an electronic device, and in fact, your security is greatly improved by doing so, and devices connected to the internet pose the greatest security risks.

By simply writing 12 words on a piece of paper or stamping them on stainless steel as a more durable option, you can take custody of Bitcoin and receive it to your address without ever setting it up via an online interface. This can be a very secure option as long as you properly store your seed phrase.

Hardware Wallets/Signing Devices

Hardware wallets store your private key on a physical device and allow you to access your money for spending through a physical interface that is needed to validate any transaction you initiate. 

Hardware wallets are (usually) essentially software wallets that do not have a built-in private key stored. So, while the experience of interacting with your hardware wallet interface is very similar to a software wallet, the actual validation of the transaction depends on a physical device to authenticate. 

This provides an added layer of security and keeps your private key from being on a physical device with internet access. These devices often have multiple secure elements. This means that the private key is safer and cannot be read from the device at a distance, similar to how credit card information can be lifted from your wallet.

Hardware wallets, especially combined together in a multi-signature format, are the gold standard for keeping your assets safe. Companies like Ledger, Trezor, and CoinKite are well-known in the space and have their own individual setup processes and security features.

Multi-Signature Software Wallets

We discussed private keys being the ultimate access to your funds, and if your key is lost or stolen, unfortunately, you are out of luck UNLESS you have your assets in a multi-signature setup. 

Software wallet providers like Sparrow Wallet are built to accommodate multi-signature setups. 

In a multi-signature custody configuration, you essentially split your private key into multiple pieces, with a 2 of 3 signature being the most common. 

The scenarios for collaborative multi-signature custody are endless, and there is no limit to how many keys you can have or what set of rules you apply.

Suffice it to say that if you lose one key but have access to the other 2, your funds are safe. If someone gains access to one of your keys but cannot get a second, your funds are safe.

If, unfortunately, you lose one key or pass away suddenly (leaving heirs and a treasure trove of Bitcoin), but your two trusted backups are intact, your funds are safe and can be transferred to your heirs according to your individual wishes. 

Multi-signature custody creates redundancy security as, by nature, it requires several types of permission. So it forces upon you as a saver the good behavior of HODLING your coins for longer due to the challenge of moving them around on a whim.

Collaborative Custody Solutions

The field of Bitcoin custody solutions is huge and ever-expanding. Companies like Unchained Capital, Fedimint, and The Bitcoin Adviser all offer various types of collaborative custody for individuals and institutions to achieve a wide variety of aims. 

The possibilities and permutations of structures are infinite, and one size does not fit all. If you find yourself handling a small fortune of Bitcoin, and you want to be sure it is protected, it is highly advisable to start considering collaborative custody setups. This will allow you to minimize the risk of loss and can help you feel secure about your ownership of the most valuable asset in the world.

That’s all for today!

We shared with you an in-depth exploration of crypto and bitcoin wallets and how you can use them in each circumstance. 

Last Words

Ultimately, taking self-custody is NOT DIFFICULT; it is just not widely understood or taught. Finding the best option can sometimes be challenging, especially when you’re just starting out, but with the right resources and advice, you can choose the right method. 

At OX Block Mines, we are on a mission to make sure you never lose your coins to a scammer or mismanager and that you have the confidence and competence to take ownership of your future. We want you to sleep easy, knowing that something like FTX can never happen to you as long as you take self-custody!

If you have more questions or need any advice, you can always reach out, and our team of experts will be here to cover all your Bitcoin needs.

The post How To Safely Store Bitcoins: Exploring Your Options appeared first on OX Block Mines.

Well, this is achieved through sophisticated, specially designed devices called crypto mining rigs. While these specialized computers can be found and purchased online, building your own mining rig can become an interesting and educational experience. 

Familiarizing yourself with the crypto-mining hardware can help you better understand the technical aspects of the mining process while learning more about how the blockchain technology works. Building your mining rig can also give you room for customization, adaptivity to changes, and flexibility for an upgrade whenever it is important. 

If you find all these exciting, then this article will help you start. Read on to understand the fundamentals of mining rigs, their components and constructing instructions, and our tips on maintaining and enhancing their efficiency for optimal profitability.

What is a Crypto Mining Rig

A crypto mining rig is a specialized computer system or hardware setup designed to mine cryptocurrencies like Bitcoin. Mining cryptocurrencies involves the use of mining rigs to verify and add transactions to a proof-of-work blockchain. 

Specifically, during the mining process, miners collect and verify transactions (grouped in a block) and compete to solve verifiable mathematical problems. Once a miner successfully solves the problem (through hashing) and its solution is accepted by the network (through a consensus mechanism, hindering double-spending and other blockchain attacks), the block is added to the blockchain, and the miner receives a reward. 

So, to be able to mine successfully, you’ll need to invest in high-quality hardware and set it up properly. As for the composition of such systems, you can think of your mining rig as a customized personal computer, and building it requires assembling essential parts together, including a motherboard, CPU, RAM, and more. 

However, keep in mind that the essential components to process data, mine cryptocurrencies, and generate rewards are GPUs (Graphical Processing Units) or ASICs (Application-Specific Integrated Circuits). 

At OX Block Mines, we typically offer hosting for ASICS, which are more commonly used in Bitcoin Mining specifically, as GPUs are no longer competitive. However, we are able to advise clients on some generalities of other forms of cryptocurrency mining.

Now, let’s review the essential parts individually and ensure you have everything you need to start building your rig. 

Crypto Mining Rig Components

GPU (Graphics Processing Unit)

Selecting a powerful GPU is a crucial step, and typically, multiple GPUs are recommended for building an efficient cryptocurrency mining rig. 

Having multiple GPUs can make your mining rig more powerful and more profitable because it increases the hash rate–how we measure the ring’s computing power, which plays a crucial role in how profitable it can be. 

Motherboard

When choosing a motherboard, don’t forget that it is the primary piece of your miner, and all the other components will be plugged into it. So, choose a motherboard with multiple PCIe slots to ensure compatibility and stability. 

CPU (Central Processing Unit)

CPU might not be the primary component in your mining rig since the GPUs will handle most of the workload, but it still remains an important element. The model you’ll choose depends on what you want to mine and what you’ll do with your ring, but don’t forget to consider compatibility and power efficiency when selecting your CPU. 

RAM

You need to ensure that you have a good RAM capacity, but again, the RAM requirements can vary. So, before making a decision, consider the overall needs of your mining system and the cryptocurrency you want to mine. 

PSU (Power Supply Unit)

Find a high-quality power supply unit (PSU) with sufficient wattage to support your miner’s power requirements. Don’t forget to review the product specifications to check that it has the necessary connectors and to ensure compatibility.

Mining Frame

Choose a suitable frame that has enough space for good airflow and secures all parts tightly. Of course, you can even customize it and build it on your own, but you can also start by choosing a frame from a reputable brand like Veddha, Kingwin, or Hydra that can hold multiple GPUs. 

Now that you’ve successfully selected the required components, you have to start assembling your mining rig. Here’s a quick guide with all the main steps. 

How to Build and Maintain a Crypto Mining Rig

Build the Rig Frame 

Whether you choose to purchase or build your frame, here’s where you need to start assembling the core of your mining rig, ensuring that screws, cables, and all other components are secured.

Install the Core Components

Fit the CPU into the motherboard socket, and then install the RAM correctly in its slot. Then, attach the motherboard and the power supply unit (PSU) to the frame.

Power Supply Connection

Again, ensure your PSU has enough connectors for your GPUs, and connect them to the motherboard to power all components. 

Set Up GPUs with PCIe Risers 

Connect each GPU to the motherboard using PCIe risers. This helps with placement and airflow and ensures good connectivity for better mining efficiency.

Configure Your Mining Rig

Adjust the BIOS settings for optimal mining, set up your operating system, and install the right mining software for your cryptocurrency. Set your computer to never sleep and adjust virtual memory settings.

Choose a Cryptocurrency and Mining Pool

Pick a profitable cryptocurrency using tools like WhatToMine. Join a mining pool by setting up an account, configuring your mining software, and linking your wallet.

Regular Maintenance

Clean your rig regularly to prevent overheating and maintain performance. Use dust management tools, temperature control, and monitoring software.

Evaluate Profitability

Use calculators and tools to assess your rig’s profitability, considering equipment cost, electricity use, and mining difficulty.

There you have it! 

The basics for setting up your own crypto mining rig and building it yourself from scratch. 

Closing Thoughts

We hope you’ve gained some valuable information from our piece about building your own crypto-mining rig. It might have already inspired you to figure out how you can be a miner, too, and generate passive income through the hard work of your computer employees. 

If the idea of setting up your own mining rig though sounds complicated or not ideal for you, you can always find a more suitable solution for your needs. 

If you’re looking for a more hassle-free experience, we would recommend choosing an ASIC miner. They are a pre-built and scalable way to get into mining without the individual configuration needed for GPU racks. 

Especially for Bitcoin Mining, ASIC miners are the way to go, as nothing else competes with their efficiency. Additionally, ASIC miners are standard models with highly active used markets, so they are also easier to resell when you are ready to upgrade. 

At OX Block Mines, we can help you find and set up your equipment in the most optimal setting and environment possible. So, if you need any advice or help with your crypto mining equipment, we are here to give you the best selection of miners, as well as a top-notch facility in which to operate your mining rigs!

The post What Do You Need to Build a Crypto Mining Rig appeared first on OX Block Mines.

These facilities are designed to provide a reliable and secure environment for mining computers (miners). The facilities are equipped to channel large amounts of power to ensure a smooth operation and effectively protect these computers inside from external elements while dealing with their primary waste products–heat and noise.

They can be based in old industrial warehouses, shipping containers, purpose-built facilities, and even co-locate on oil wells and landfills to mitigate vented methane from the atmosphere.

But what do they all have in common?

Key Components of a Cryptocurrency Mining Facility

A cryptocurrency mining facility consists of a few major components, each one of them playing a crucial role in the process. Let’s take a walkthrough and learn more about them. 

Power Supply

These facilities have access to a high voltage transmission line, major substation, or similar large carrier and transformer of power distribution capacity nearby to ensure efficient power transmission.

Also, they are equipped with special transformers that output data-center-specific voltages for the optimal running of the computers. This is a different voltage than the one that exists in standard commercial or industrial buildings and is meant to optimize the performance of cryptocurrency mining rigs.

Power Distribution Networks

These networks can be large electrical switching equipment as well as a main distribution panel in a warehouse, a network of retrofitted modular shipping container-type data centers, or a custom solution. 

Power must be brought effectively from the distribution system into each individual mining computer in a safe and effective way that minimizes the heat profile and power losses through connections and transformations. 

Each miner is typically protected on an individual circuit by a single breaker for additional safety!

Racking and Shelving 

These structures are designed to keep miners organized. They are purpose-built to fit as many miners as possible into the space allocated for them while effectively expelling heat. 

Their materials should be non-combustible and sturdy, as a standard mining computer is about 35 pounds. So, a rack of hundreds must be well supported and laid out for the best overall thermal performance.

The Miners Themselves

Last but not least, the cryptocurrency mining machine itself is what makes a cryptocurrency mining data center exactly that. These specialized machines work to solve complex mathematical puzzles, a process fundamental to verifying transactions and securing the integrity of the blockchain.

A cryptocurrency mining data center is a wonderful thing to behold. Especially when you realize, standing in front of hundreds or thousands of whirring fans, that every watt of electricity running through that site is securing a monetary network for the whole world.

This data center creates the security and decentralization that makes Bitcoin such a compelling investment vehicle and store of value. 

Cryptocurrency Data Centers Vs. Traditional Data Centers

A crypto mining data center is usually quite different from a traditional data center built and operated by large tech companies like Google or Facebook. The purpose is more specialized and optimized for different parameters, like energy cost, climate, energy reliability, and heat transfer profile, to name a few.  

Miners also require different environments than a standard data center and do not have the same needs as we discussed so far.

Traditional data centers depend on 100% uptime and high bandwidth network connections. At the same time, crypto miners typically need very little data transfer capacity and instead rely more on a low cost of energy, even if it incurs minor interruptions to their uptime.

Crypto mining data centers can be built far more economically than a traditional data center, which may have an average cost of over $9 Million USD per megawatt.

In contrast, most cryptocurrency data centers are less than 1 Million USD per megawatt, and we have built data centers for much lower than even the publicly listed company average due to our expertise in real estate development and data center architecture. 

There are many things that traditional data centers spend money on that make no sense for cryptocurrency miners. Still, most developers of data centers that would offer to build a facility for you have no idea about these design differences because this industry is not their primary focus, and they only consult opportunistically.

Mining With OX Block Mines 

We genuinely hope that one day you’ll visit one of our data centers, as we have in-person get-togethers for our clients several times per year so we can learn from each other.  

There’s so much misunderstanding about what actually goes on in a crypto mining facility, and we enjoy educating our clients on the construction and operational differences between ours and other data centers in the world. 

Understanding the nature of these data centers allows you to make a more informed decision when evaluating who to use for your crypto-mining hosting. 

You may even decide that building one yourself is a goal of yours. In that case, don’t forget to check out our large mine development consulting packages, where we are happy to assist you at any stage of your data center development!

The post What Is a Cryptocurrency Mining Facility? Let’s Take a Tour appeared first on OX Block Mines.

So, plugging in a computer and printing money is definitely an interesting tagline, but this is just the tip of the iceberg. At its core, mining involves verifying transactions and adding them to a proof-of-work blockchain. This dynamic process of solving cryptographic problems using high-powered, specialized computing hardware can trigger the generation of cryptocurrencies. 

History has shown that mining has gone through periods of being an absolutely brutal business, as well as years of euphoric margins and seemingly endless lucrative passive income streams. And just like any worthwhile business, there is nuance to how to most effectively survive and thrive as a cryptocurrency miner. 

Because of its nature and evolution, crypto mining still remains an industry as volatile and misunderstood as Bitcoin or “Crypto” itself–the cryptocurrencies that it produces. Lately, there has been an increasing interest in the future of mining, and after different speculations and debates, many are left wondering if this is the end of an era. 

So, is crypto mining actually dead? In short, no.

But let’s explore why. 

Claims and Misconceptions

Factors such as costs, profitability, energy consumption concerns, and ongoing technological changes generate different claims and misconceptions, leading to the perception that crypto mining faces many challenges or is a dead industry. 

Below, we’ll discuss some prevalent misconceptions and provide facts and our insight to clarify any misunderstandings. 

1. Crypto Mining is a completely dead industry

This is simply untrue, and to justify ourselves, we’ll just share a few numbers with you. 

Every day, at today’s prices (end of 2023), the Bitcoin network alone generates revenues of $33.3 million per day for miners. PER DAY. 

So if a programmatic potential paycheck of $33 million per day is a dead industry, then happy “Dia de Los Muertos”!

2. Profitability is Unattainable

That perception that crypto mining is no longer profitable is a common myth. Of course, if you want to be profitable, that is a much more intricate question, and the answer is “it depends.”

Many people proclaim crypto mining to be dead because their individual strategy is dead. However, that does not mean that nobody is making money; it just means that THEY are not. 

Maybe this also means that they don’t know anybody else who is successful, or they are not familiar with more lucrative options, or perhaps don’t know how to take advantage of the lucrative options that could be available to them. 

Any of these only underscores the importance of working with the right people with the right strategy. For the intelligent investor, picking the right operator is usually the difference between healthy profits or fruitless hassle. 

3. You Have To Own Your Own Personal Large-Scale Data Center To Succeed

Many have proclaimed crypto mining “dead,” as there is no opportunity left unless you own your own personal large-scale data center. These claims are also misleading and not entirely true, and let us explain why.

While there are competitive advantages to achieving scale, many of those benefits can be acquired through a reputable hosting and development company. Such companies charge a fee for the service of aggregating thousands of miners together and providing management services in order to secure an attractive rate for their clients. 

Through colocation with other miners, you achieve the power of the group without the need for organizational resources required to build and operate a data center on your own. 

OX Block Mines is proudly a company that operates on this model, offering our clients the kinds of power rates and managed services that are not available when mining at home or setting up on a smaller scale.

4. You Can’t Thrive In Crypto Mining Long-Term

To be successful over the long term in crypto mining and not fall into the trap of calling it “dead” requires work, and yes, it can be challenging. 

However, despite the complexities, history has proven that many individuals and operations were able to adapt to the industry’s demands and succeed.

So, while other smarter and more attentive players are raking in profits, happy that you are no longer competing with them, are you willing to reverse that? 

Successful and long-term mining can be achieved if you understand and optimize some essential aspects. Continue reading to discover the most important ones.

How to Improve Crypto Mining Efficiency

Machine Efficiency

Even with free power, running older miners with low efficiency or a short lifespan barely makes sense. The maintenance requirements and low overall production of Bitcoin from these machines mean that running them past their relevant life cycle is a losing game in most cases. 

Many proclaimers of the “deadness” of crypto mining are themselves running unprofitable miners and unwilling to look at the market reality of their aging equipment.

Energy Rates

Miners depend on electricity as their main input cost. If you are mining on residential power rates or in most standard commercial settings, mining is primarily unprofitable, especially outside of bull markets. 

In a bull market, the rising price can paper over many operational mistakes. However, when the tide goes out, and the cyclical markets do what they always do–which is cycle, the businesses without strong fundamentals will always eventually be revealed for their mistakes.

Environment and Maintenance

One of the most overlooked aspects of crypto mining is the environment in which these computers live and thrive in.   

At our Columbia Gorge data center, for example, we regularly clean and maintain machines, as well as operate in a perfect climate for crypto mining.  

Because we minimize dust, heat, and mismanagement, machines typically last much longer than advertised or commonly touted. 

By locating your machine in a balanced climate, you typically add years to the useful life of your machine. This offers you a competitive advantage over the miners who regularly expose their equipment to high heat and other subtle but damaging environmental factors. 

If you send your machines blindly to a host, you may never know why your machine didn’t last as long as it should have. We can tell you with near certainty that it almost always relates to the operating environment and standard of care those miners receive. 

Also, don’t ship your miners many times throughout their life. Find them a good home, and let them “retire” there if possible. The idea of moving machines between facilities on a regular basis to travel for better energy costs for the short term is fraught with risk.

Here are some quick numbers:

In profit terms, the last bull market saw crypto miners making 95% profit margins on electricity (meaning that for every dollar spent on energy, they yielded $20 in crypto). This is bound to happen again to some degree, as cryptocurrency prices can rise much faster than physical infrastructure can be built in the real world, especially in inflationary environments with poor supply chains.

Even in the bear market, competent operators maintained 30-50% margins. While less lucrative than multiplying your money by 20, a 50% margin is more than enough for most businesses to survive and take advantage of the next upward price cycle.

Final Thoughts

Crypto mining and bitcoin mining, specifically, are not dead; they are simply evolving. We would say it has never been more alive, and it continues to grow.

We believe that these industries have a lot of runway and, in fact, are going to play a much bigger role in the energy transition and other major global technological revolutions than is currently appreciated. 

Much like the internet in 1990, crypto mining is poorly understood and widely distributed but not commonly used. 

The early adopters and students of this segment of technology are setting themselves up for a prosperous future. One where they understand the world on a deeper level because of their exposure to this technology and the computing power that supports it.

Are you ready to find what lies ahead? Join our community to discover the future of mining together! 

The post Is Crypto Mining Dead? appeared first on OX Block Mines.

1. A Hedge Against Inflation

While the allure of traditional currencies, especially the dollar, remains strong, they aren’t without their issues. Chief among them? Inflation. Over time, as the purchasing power of these currencies diminishes, assets held in them lose value. Saylor’s perspective hinges on Bitcoin’s finite supply offering a robust counter to this monetary dilemma. It’s a modern solution to a longstanding problem.

2. The Digital Gold Thesis

Throughout history, we’ve leaned on gold as a dependable store of value. But in an age where digital interactions dominate, Saylor presents Bitcoin as the new gold — a digital asset that retains value without the physical constraints.

3. Superior to Gold

However, Saylor doesn’t merely view Bitcoin as an analogue to gold; he sees it as an improvement. Its decentralized framework, combined with a hard-capped supply, makes Bitcoin an attractive and potentially more stable store of value in his eyes.

4. The Long Game

While the financial world is often accused of chasing quick returns, Saylor is playing chess, not checkers. His vision is long-term, viewing Bitcoin as an enduring store of value, poised to grow and mature over decades, not just years.

5. The Network Effect

Ever noticed how platforms like Facebook or Instagram become more valuable as more people use them? This principle, known as the network effect, applies to Bitcoin too. Saylor posits that as more institutions and individuals adopt Bitcoin, its inherent value and utility will only amplify.

6. Leading the Financial Revolution

This isn’t just about hopping onto a trend. By investing so heavily in Bitcoin, Saylor is positioning MicroStrategy as a pioneer in what many believe is a seismic shift in the financial world.

7. Educating the Masses

Saylor isn’t just a proponent; he’s an educator. Through seminars, webcasts, and interviews, he’s taking on the mantle of helping the corporate world, and the general public, grasp Bitcoin’s transformative potential.

8. Conviction in Action

It’s easy to endorse an asset during its highs, but Saylor’s commitment shines brightest when the going gets tough. Through market highs and lows, MicroStrategy’s consistent investment in Bitcoin underscores their unwavering belief in its overarching promise.

To sum it up, to Michael Saylor and MicroStrategy, Bitcoin isn’t merely a digital asset. It’s a groundbreaking shift, a testament to the future of finance, and a beacon of what modern financial strategy can look like. As we navigate these uncharted waters, Saylor’s insights serve as both a map and a compass, offering a unique perspective on where the tides of finance might take us next.

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This is where the beauty of Bitcoin self-custody comes into play, a feature that allows for comprehensive ownership, freedom, and security that is unparalleled in the world of finance. 

The technology that Bitcoin operates on ingeniously leverages the benefits of decentralization, cryptography, and mathematical odds to offer a level of security that cannot be matched by another other security network, and fosters independence among its users.

Let’s start with the concept of Bitcoin self-custody. What makes it unique? Why does it matter? 

At its core, self-custody is the act of being your own bank. 

Instead of entrusting your assets to a financial institution that retains full control, you become the master of your wealth, thus preserving your financial sovereignty. This approach stands at the center of the Bitcoin philosophy, rooted in the libertarian principles of financial autonomy and personal responsibility.

The intricacy and elegance of Bitcoin’s architecture allow for this level of control. Key to this framework is the notion of the private key – a complex string of characters that authorizes transactions on the Bitcoin network. This key can be stored in multiple ways, each offering varying degrees of convenience and security.

Consider this: you own a hardware wallet, a physical device that provides a secure and user-friendly interface for managing your Bitcoin transactions. This is how many people choose to store their keys in a way that allows them to spend their coins conveniently without the security tradeoffs of software wallets that are continuously connected to the internet. 

However, in this case, concerns arise over the potential of a compromised software update, maybe an unconsented feature upgrade (looking at you, Ledger). 

Here’s where Bitcoin’s brilliance shines through. Even if the hardware device is compromised, your assets aren’t trapped.

You can bypass the device and use your seed phrase, a list of 12 or 24 words that represent your private key, to access your Bitcoin from a trusted software wallet. 

The hardware device and seed phrase are redundant custodians of your private key, reinforcing the fail-safe nature of Bitcoin’s security design. When properly custodied, Bitcoin is a perfectly secure bearer asset. You don’t need a bank or an exchange to hold it, spend it, or move it.

But the elegance of Bitcoin’s security features extends even further. For long-term holdings, you may opt to go entirely hardware-free. A seed phrase alone can generate a Bitcoin address to which you can send your funds. 

The wallet associated with this address is completely offline, having never interacted with an electronic device, hence reducing the attack surface to a bare minimum. This wallet, shrouded in anonymity, is secured by mathematical odds that border on impossibility.

Add to this the concept of a multisig (multiple signatures) setup where your private key is split into separate parts, each stored independently. In this setup, to authorize a transaction, you would need a majority of the parts of the key, creating an additional layer of security. This means that even in the event of a highly improbable hack, your funds remain secure unless multiple parts of the key are compromised simultaneously. It also means you have to LOSE multiple keys in order to lose access to your Bitcoin, making a multi signature setup the best tradeoff mix of any form of long term self custody.

In essence, Bitcoin self-custody represents a radical departure from traditional banking models, offering unparalleled security, privacy, and control over one’s wealth. 

While it demands a higher degree of personal responsibility, it also shields you from the systemic risks inherent in centralized financial institutions. I myself narrowly avoided hundreds of thousands of dollars worth in lost Bitcoin from custodians like Celsius, one of many “trusted third parties” to take all of their customer’s money.

Whether it’s managing short-term transactions or safeguarding long-term holdings, Bitcoin’s robust security features provide the tools needed to retain complete control over your assets. By opting for self-custody, you’re not just participating in a novel financial system; you’re reclaiming power over your wealth, affirming your financial autonomy, and embracing a future where the individual, not the institution, holds the keys.

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Navigating the complex, thrilling world of Bitcoin, cryptocurrency, and mining has been an adventure. Along the way, I’ve learned some invaluable lessons, often the hard way. Here’s a guide for new investors, crafted from my experiences.

Lesson 1: Control Your Own Private Keys

The very cornerstone of Bitcoin lies in the ability to hold your own private keys. This ability places you in direct control of your wealth without the need for an intermediary. The gravity of this responsibility cannot be overstated. I remember the anxiety when I first held my own keys – a mixture of fear and freedom. Remember, when you surrender this control to a third party, you expose yourself to counterparty risk, which I learned when Celsius collapsed, narrowly avoiding a personal disaster. Many others were not so fortunate, and the same can be said of blowups like FTX and others.

Lesson 2: Understand the Yield

I was enticed by many projects offering yield in the early days. The allure of earning consistently from your investment, especially during volatile periods, is strong. However, if the yield’s source isn’t clear and understandable, you’re likely the providing the yield. A similar risk applies when earning yield on Bitcoin – it often means surrendering your private keys and opening the door to counterparty risk. In my opinion, the best way to get Bitcoin yield is through mining. With mining, your yield is tied to a predictable, verifiable process, not an unending supply inflation of some obscure alt-coin. While mining is definitely not for everyone, it certainly satisfies the desire to earn consistent income from your crypto investments without the worst risks.

Lesson 3: Exercise Caution When Buying Used Mining Equipment

My early mining days were fraught with costly mistakes, one of which was buying used mining equipment. The prospect of cheaply and profitably expanding my mining operations seemed too good to pass up. However, within a year, most of my miners were out of commission, worth only a fraction of what I paid for them. The lesson? Investing in new, high-quality equipment is a wiser choice for consistent, long-term returns. Also, a good equipment seller will take care of you and all new machines come with a warranty. In the case of used equipment there is generally no warranty and no responsibility from the seller or your sales agent for the quality of machine you receive. 

Lesson 4: Be Wary of Cloud Hashrate Services

Cloud hashrate services looked like the perfect solution to my mining ambitions – buying computing power and watching the returns roll in without the fuss of equipment or hosting. However, I soon realized the risk of scams in this sector. I’ve seen countless investors fooled into believing they’re mining while they’re merely receiving fragments of their initial investment. Nowadays, I engage with such services only when I thoroughly understand their inner workings and the teams operating them.

Lesson 5: Playing the Long Game

In my early days in crypto, the allure of overnight riches led me to obscure altcoins, hoping to hit the jackpot. But after getting scammed, rug pulled, and pump and dumped more times than I’d like to admit, I adopted a different approach. Now, I focus on the long-term with Bitcoin and specifically Bitcoin mining. I appreciate the steady, compounding accumulation. History has repeatedly shown Bitcoin’s value, outperforming almost all other investments over the long run. The more I commit myself to understanding that truth and aligning with it, the more prosperous of a future I build. Similar to learning about the internet in the early days “just because it was interesting”, I think taking a similar fascination with Bitcoin will pay its own unique reward within our lifetime.

Lesson 6: Understand What Diversification Really Means

The common wisdom of diversification isn’t always the best strategy. In my early investment years, I spread myself too thinly across many mediocre assets, mistaking this for diversification. It took some painful losses to realize that true diversification means investing heavily in proven, dominant markets and sticking with them as long as their fundamentals remain sound. Successful investors rode out market fluctuations with unwavering conviction in their chosen investments, because they took the time to understand them. 

Diversify only if you understand the potential of the other assets.

Bitcoin, cryptocurrency, and mining offer immense opportunities but require a deep understanding and careful strategy.

My journey through Bitcoin, cryptocurrency, and mining has been nothing short of an adventure, filled with triumphs and failures. Through it all, these lessons have steered me in the right direction, helping me make better choices and mitigate risk. My hope is that they will do the same for you. Remember, continuous learning, understanding your risk tolerance, and making informed decisions are the best strategies for a long and prosperous investment career and life.

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As I write this in the wake of a lengthy bear market (which counterintuitively, might be the optimal time to commence mining), most machines consume about $200 worth of electricity each month at standard hosting rates, and yield an income of $250-$300 per month. 

The net profit per machine per month, therefore, is approximately $50-$100. 

This may seem insignificant. Depending on the cost of your mining equipment, you might break even in a few years based on mined coins alone, assuming current conditions persist.

But here’s the thing: conditions always change.

As miners, we bet on the fact that circumstances will fluctuate, and historically, they always have. Take the peak of a bull market as an example. During such periods, a miner currently yielding $300 per month could generate $1000 or more. Just a few months of such revenues can reimburse your initial investment a few times over, shortening your breakeven time from years to a few months.

Moreover, in past bull runs, Bitcoin miners have outperformed Bitcoin in terms of price. 

That $2500 machine you purchase today might sell for $10,000 within 12-24 months. They have historically, and nothing looks different to me this time.

This allows you to ‘double-dip’: you mine coins for regular income, then sell your equipment at a hefty profit at an opportune moment. 

Many miners have made millions by strategically timing these cycles, earning continuous monthly revenue from their fleet while multiplying their investment tenfold or more. It’s a more complex process than merely buying Bitcoin, but it might just be worth it.

My advice is to consider your entry point into the Bitcoin mining market carefully. A poorly timed entry could spell disaster, while a well-timed one, or consistent investment over time, could provide a smoother journey.

In my opinion, the present moment is ideal for building your mining fleet in anticipation of the 2024-25 Bitcoin bull market. We may witness its onset much sooner, given the approaching halving date.

Of course, these are short-term profit figures. However, from a long-term perspective, Bitcoin mining allows you to purchase Bitcoin at the cost of your energy rather than at market price. 

This chance to create an asset at a discount to its market price is worth considering, especially if you share my belief that Bitcoin is the best store of value asset ever created and that it’s only a matter of time before the world realizes this.

Once global demand for Bitcoin from significant capital pools rises, acquiring Bitcoin on an exchange could become exorbitantly expensive or even impossible. 

In that scenario, mining might be your only avenue to own Bitcoin.

Though this idea might seem far-fetched, the high profitability of mining during bull markets can be attributed to the constant issuance of a predictably produced asset whose price appreciates much faster than the input costs or the ability to quickly build power infrastructure. 

The early miners of each cycle are rewarded with the momentum of a huge wave for their courage and conviction during times when mining profitability appears least attractive.

Mastering the mining game involves a certain degree of foresight and audacity, coupled with steadfast belief in the face of market apathy. If you witness daily Bitcoin deposits in your wallet, it certainly becomes easier. You know your Bitcoin is untouchable, while everything else debases to zero. 

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Bitcoin mining, the method by which new bitcoins are brought into circulation, offers a unique solution to acquiring Bitcoin. By solving complex computational problems, miners can validate transactions, securing them within the blockchain. The reward? Freshly minted Bitcoin. This process is permissionless, meaning anyone, anywhere, with the right resources can mine Bitcoin. This captures the essence of Bitcoin’s decentralized ethos.

Opting for Bitcoin mining hosting services provides an appealing proposition, especially for individuals and businesses that wish to mine Bitcoin but lack the necessary resources or technical know-how. These services handle the technical aspects of Bitcoin mining, enabling you to mine Bitcoin directly to your wallet. This service not only streamlines the mining process but also offers a solution to the potential difficulty in buying bitcoin on an exchange when it really takes off.

As the era of 21st-century innovation unfolds, 90% of which still lies ahead, we can expect cryptocurrencies, led by Bitcoin, to take centre stage. With Bitcoin mining hosting services, you secure a front-row seat in this digital revolution. By supporting the transactional security of the Bitcoin network, you ensure your stake in this digital frontier.

Moreover, Bitcoin mining hosting services offer an enhanced level of financial independence. By facilitating Bitcoin mining directly to your wallet, these services allow you to bypass potential constraints or regulations imposed by financial institutions or government bodies, providing an unparalleled level of financial sovereignty.

The mathematical underpinning of Bitcoin ensures that as the remaining Bitcoin becomes more scarce, its value should, in theory, continue to rise. Therefore, the Bitcoin you mine today could significantly appreciate in the future, offering potentially exponential returns on your mining infrastructure investment, facilitated by Bitcoin mining hosting services.

While Bitcoin mining involves some initial investment and a degree of technical knowledge, Bitcoin mining hosting services bridge this gap. They provide a simplified and efficient mining experience, making it a compelling proposition. As the world slowly but surely embraces Bitcoin, the demand for Bitcoin and consequently for Bitcoin mining hosting services is expected to surge.

So, are you ready to embrace this financial revolution? Are you prepared to mine Bitcoin and secure your financial future? Bitcoin mining hosting services may be the answer. In the age of Bitcoin, the key to financial independence might not be in buying Bitcoin but mining it. Choose Bitcoin mining hosting services, and secure a piece of the digital gold rush.

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