Before investing in crypto mining, consider equipment, energy costs, and finding the right currency, mining pool, and market to invest in.

Media / Blog

5 Factors Investors Must Consider before Investing in Crypto Mining


PPO or High Deductible Healthcare Plan: Which is Better?

October 13, 2021

Cryptocurrency is steadily gaining global acceptance. El Salvador was one of the first countries to classify Bitcoin as a legal currency, and the overall legality of cryptocurrency around the world is growing as well.

Along with cryptocurrency, crypto mining has also come into the limelight. It has become a lucrative sector to invest in since more cryptocurrencies are being launched every year. Despite its popularity, the cryptocurrency market is still highly volatile. A safer bet would be to invest in infrastructure that supports cryptocurrency, such as crypto mining.

Investors need to be cautious and have good forecasting abilities to step into the world of crypto.

What Is Crypto Mining?

Basically, crypto mining is the process of creating cryptocurrency. High-power computers are used to solve cryptographic equations and verify data on the public ledger referred to as the blockchain. Cryptocurrency is rewarded for solving these complex equations. Apart from a powerful computer, you will need a miner to verify and organize transactions on a blockchain.

Currently, the most popular miners are kd box goldshell, Antminer S19, WhatsMiner M30S+, and the AvalonMiner 1246

Crypto mining generates cryptocurrency at a slow and steady rate, so if you want to invest in it, you need to be prepared for long-term involvement. As an investor, there are several other industry variables you must know before investing in crypto mining.

Things Investors Should Know About

Mining is just one significant part of the crypto industry, but since it largely depends on the hardware and availability of blockchains, you need to consider the following things.

1. Equipment Used for Mining

In the earlier days, CPUs were used for mining all types of cryptocurrencies. However, CPUs were not fast or efficient. It took a long time to generate profit but required a high up-front cost.

Currently, GPU and ASIC are used as much more efficient alternatives to mining. Miners have to think wisely before investing money in their equipment. Both CPU and ASIC are efficient, but they have some differences.


People switched to GPU mining because it was faster and more convenient. It could solve multiple complex algorithms simultaneously. However, people soon switched to ASIC, or Application Specific Integrated Circuits, because they were faster. ASIC units can optimize both the software and hardware to mine faster.

The main advantage of using GPU for mining is availability. GPUs are readily available and can be used for other applications such as gaming, video editing, and other heavy processing activities. However, a GPU will not function on its own; you will need a CPU, RAM, and SSD to make it work. You will need a lot of space to set up a GPU rig as well. It is also time-consuming.

Compared to that, ASIC units are much smaller, yet more efficient. They are programmed to mine particular cryptocurrencies, such as Bitcoin or Ethereum. You won't get additional benefits like gaming or video editing on an ASIC rig, but it is great at what it's supposed to do, which is mining cryptocurrency.

As an investor, you will get better results from ASIC equipment, but you also have to consider the price and availability of ASIC rigs. The tech market is always volatile, so prices will fluctuate often.

2. Cost of Energy

Miners have to run their equipment almost 24/7. They have separate cooling systems to keep all their machines running in good condition for a long time. The power cost of running this equipment can be staggeringly high.

Paying off all that electricity bill can leave a big dent in your investment, especially if you are mining in a location where power rates are high.

Location is very important for mining. Low power costs can give you high-profit margins. You cannot expect to generate the same amount of cryptocurrencies every day or month, but you will have to use the same amount of energy, so choosing a location with a low energy cost would be ideal

A better solution would be to switch to renewable energies. It costs less but provides the same power. Mining in China is incredibly popular and profitable because most of the miners there use renewable energy. If you can find a mining company that uses renewable energy, invest in it.

3. The Market Rate of the Currency

Most ASIC rigs are programmed to mine one particular currency. The same goes for GPU units. The best cryptos to mine with GPU would be Etherium, Monero, Ravencoin, and Bitcoin Gold.

ASIC units are preferred for Bitcoin, Litecoin, Zcash, Etherium, Grin, etc. Before investing carefully, choose the currency you want to mine. This will help you choose suitable equipment and give you a better idea of operational costs and your profit margin.

You also have to forecast the dollar rate for that particular crypto. The market is highly volatile. Not every trending coin can keep its value. Some currencies are overhyped on social media without any factual basis. The value of crypto depends on its especially, supply rate, transaction cost, divisibility, value, and perceived transaction privacy. You will have to do your research on each currency before betting on your investments.

4. Global Market Condition

Almost 60% of the global crypto mining is done in China. Thanks to favorable conditions, legality, support, and renewable energy sources, China shows no signs of stopping. Around 10% of global mining is done in the U.S. This is soon to increase because of the popularity of cryptocurrency and some regulatory changes.

The U.S. market is investing heavily to create harsh rates and increase the manufacture of miners. To make the right investment, you need to be updated on global markets and foreign companies looking for investments.

5. The Mining Pool

Miners usually form groups and combine their computational power to increase the probability of solving algorithms and generating cryptocurrency. The groups are called mining pools. A mining pool can make or break your bank. Successful pools offer profit at a shorter time and provide sustainable returns.

To choose the right pool, consider which currency they are mining, their reputation, pool track record, payment system, infrastructure compatibility, transparency, and payout frequency.

Final Thoughts

The cryptocurrency industry is only going to grow. While betting on the currency itself has high risks, investing in crypto mining is more sustainable. Treat it just like any other investment opportunity. Do plenty of background research, gain market insight, talk to previous users and professionals, and make an informative decision.


Understanding the Difference between Repairs and Improvements

About the author

Stepheny Johnson

Stepheny Johnson is an incredible content writer and business blogger. Being a creative individual, she also shows interest in the business world and aims to make boring business articles interesting. Apart from writing, she is also a successful businesswoman that helps her to create useful yet enticing business blogs.

Sign Up

Sign up for our exclusive Sunday Paper with a weekly market commentary, insightful personal finance blogs, and life changing education guides.

Email sign up

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. Kestra IS and Kestra AS makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is Kestra IS and Kestra AS liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.