Bitcoin Mining: 4 months later – The Good, The Bad and The Ugly

Time to share some more thoughts on my cloud mining experiences.  Here’s some more of the good, the bad and the ugly (Great movie by the way – I Love Clint Eastwood Movies!).

The Good, The Bad and The UglyThe Good: 

Free Money! – Almost.  I started cloud mining as an experiment to see what I could do with a minimal investment and try to prove the viability of mining.  So far it is still holding a promise of generating a decent revenue stream.  I am currently making about $60 per month which is much accelerated from my original predictions of around $40 per month at this point in time, thanks to the fact that the price of bitcoin has tripled since I started.  In a sense, I got lucky.

The Bad: 

There are risks, especially now.  It will be interesting to see what happens in a few days (August 1st, 2017) when the possible fork of the blockchain into UAHF (User Activated Hard Fork) and/or UASF (User Activated Soft Fork) activates.  This is a truly double edged sword, one that has divided the Bitcoin community and is causing a lot of speculation, anxiety and arguments.

What happens with UAHF? –  A hard fork will cause a requirement for new software and new blockchain.  It seems to me that it will also cause a logistical nightmare for miners.

What happens with UASF?  – A soft fork will activate Segregated Witness (SEGWIT) which will use the existing blockchain and software, yet promises faster transactions. My opinion is that UASF will be the clear winner here.  I say this since it is simply making a change to the existing technology, leaving the software and blockchain intact.

Other risks – I could lose my entire investment, including my re-invested money if Bitcoin devalues or if the cloud mining companies I use go belly up.  Since I kept my initial investment low, I find this to be an acceptable risk.  I’m not in this to develop a retirement plan, I just wanted to see IF it could work.  I could get lucky…

The Ugly: 

I have yet to withdraw any money from this venture.  Not that I was expecting to.  My original plan, which I am sticking to, is to re-invest all of my earnings until I generate around $1000 per month, then I will continue investing around $500 per month while making regular withdraws into my fiat currency.  All of this depends on the future value of Bitcoin.

There are times when you are ready to re-invest and you simply will not be able to purchase hash power, simply because there are no contracts available.  I’m not sure if this was a one time problem, but I got a pretty good scare when Genesis Mining suddenly stopped selling contracts for BitCoin Hash Power, I thought that my plan had come to an abrupt end.  Not wanting this to happen, I started picking up hash power at which actually taught me to have multiple mining services so I can stick to my plan regardless of who has available contracts.

Going beyond the Good, the Bad and the Ugly

This has been a great learning experience!  I have found that I know less about Bitcoin and Alt Currencies than when I started.  I’ve done ton’s of research and am still just grazing the surface of this technology.  I hope to learn much more as I gain more and more experience.

Some lessons I’ve learned:

  • Mining is not for everyone, it takes work and persistence.
  • Mining is risky, but then so is investing. Never invest more than you can afford to lose.
  • Don’t use just on mining company.  This way you can develop multiple revenue streams, always be able to purchase contracts if one company runs out of contracts and it offers a little bit of protection if one of them should fold.
  • Develop a plan and stick to it.  See my previous article, Bitcoin Mining: What I’ve learned in my first 30 days, for my plan, which you can follow or use to develop your own.
  • Use CoinDesk or some other bitcoin related news site to stay up on the changes.  They come fast, it will help you keep up.
  • Have fun and learn, learn, learn.