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!).
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.
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…
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 Hashing24.com 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.