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Top 10 Ways Bitcoin Miners Save Money

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Mining has evolved in many ways over the years, and miners have not stagnated during the process. Today's miners are keen to squeeze the most out of their rewards, especially for those affected by events like the halving of block rewards.  With a desire to improve ROIs having never been higher, leading to many innovative ways that crypto and Bitcoin miners save money.

What is Halving?

As you delve deeper into the Bitcoin Ecosystem, you will undoubtedly begin to hear more about an event called the halving. This term refers to a decrease in mining rewards by 50%. This decrease occurs roughly every four years and was built into the design of Bitcoin by Satoshi Nakamoto.

The original Bitcoin mining reward was 50 BTC. Of course, at that time, Bitcoin had very little value, and you could successfully mine the network on a regular PC. Since then, the mining rewards have consistently halved every four years until the current reward of 6.25 Bitcoin.

Today, hundreds of mining farms dedicate massive computational power to securing Bitcoin’s network. The value of the world's first cryptocurrency isn't a secret anymore and considerable funding and effort has been put forth to dominate the sector. As such, leveraging every possible way to save money and remain competitive is vital. Here are the top 10 ways crypto miners save money.

1. High-Efficiency Mining Rigs

Mining used to be open to anyone; it still is. However, there is no denying that it is much more difficult to successfully mine Bitcoin without using specialized hardware versus a decade ago. The evolution of mining equipment is an interesting tale demonstrating the many changes of pace the market has endured.

The first miners simply needed a PC, allowing almost anyone to participate in validating the blockchain. However, as soon as miners realized that GPUs were better at solving the SHA-256 equation, they became the industry standard. As the network grew, this eventually added demand for these devices, resulting in widespread shortages for GPU manufacturers.

It wasn’t long before dedicated Bitcoin mining rig manufacturers entered the market and introduced ASIC (Application Specific Integrated Circuit) devices to the market. These early high-powered devices were built from the start to accomplish only one task: solve the SHA-256 equation. As such, they are thousands of times more powerful than GPU options.

Recently, mining rigs have begun to pivot towards creating the highest hash while remaining sustainable. Mining rig manufacturers are aware of the massive pushback that networks like Bitcoin have gotten from conservationists and those worried about its power consumption. In response, a new generation of sustainable mining rigs is now available.

2. Renewable Energy

Since the dawn of Bitcoin mining, miners have sought to leverage renewable energy to power their operations. There are endless stories online of massive solar or geothermal-powered mining farms. These installations leverage renewable energy to power their demands without draining the community.

There are many different ways to power Bitcoin mining rigs with renewable energy. Solar options are the first and most popular form of renewable energy for power rigs. Solar panels are readily available and easy to install, so they make sense. Geothermal and hydraulic options are also popular.

Notably, El Salvador is in the middle of building a massive mining facility that uses volcanic energy. This setup will enable the country to further its aspirations of becoming a major Bitcoin hub in the region. It also demonstrates the nation's commitment to the decentralized economy.

In the future, there will be even more renewable mining options as mining rig manufacturers have begun integrating options to streamline the process. In the future, almost all major mining farms will be powered by winds, sun, and even wave power.

3. Miners Save Outsourcing to Data Centers

Another easy way for miners to save and avoid having to make a massive investment is via cloud mining. Many reputable platforms operate major mining facilities. These facilities allow users to rent hash power and receive their Bitcoin rewards directly in their wallets.

Data centers are ideal for people who live in climates where it wouldn't make sense to mine for Bitcoin. For example, if you live in a very hot and humid area, it is going to be more expensive to keep your rigs cool, which will significantly reduce your profits. It’s a better option to leave the heavy lifting to a mining facility that was designed to offer its services to the public.

4. Use Mining Pools to Offset Costs

Mining pools are another great way to alter the rewards scenario. In a single mining scenario, every miner competes for a chance to solve the equation and receive a reward. Notably, this layout means that there’s little chance that you will receive the rewards when competing against massive data centers.

One way to offset the wait is to join a mining pool. Mining pools are large communities that combine efforts to gain more hash power in the network. These pools work to improve ROIs because they pay out rewards, split over the pool based on your contributions.

Receiving consistent rewards can help you build up reserves versus waiting for a windfall that may never arrive. These factors have made mining pools one of the premier ways crypto miners participate in the market. Additionally, they can open the door to other coins that use the same mining algorithms.

The main thing to consider when finding the right mining pool is its history. Some pools dominate the market and have formed a reputation for their quality. The best pools have been in operation for years and have thousands of members who can attest to their quality and payouts.

5. Heating Businesses and Homes

Another cool way in which miners are getting the most out of their setups is by heating their homes and businesses. Mining rigs put off a lot of heat and until recently, this was a major issue. Thankfully, some miners have embraced this issue rather than run from it. As such, there are more mining rigs used for heating than ever.

There are a variety of ways in which miners use their rigs to make their homes and businesses more comfortable. You can find examples of miners using their rigs to heat rooms and even water heaters in a simple search. Some instances show water-cooled mining rigs where the heated water can then be used for many options.

This approach is a great way to save for businesses located in regions with low electricity costs and temperatures. Nations like Greenland have access to lots of renewable energy, making it ideal for mining. The heat from these massive mining farms is then used to heat other facility areas which would normally cost much more to keep comfortable.

Imagine heating your pool or massive warehouse while at the same time securing the Bitcoin mainnet. This reality is closer than many people think. When you look at the massive amount of heat created by high-powered mining rigs, this strategy makes perfect sense and can save a miner big time.

6. Miners Save Using Tax Incentives

There is a growing number of locations around the world that seek to draw crypto businesses. As such, it's worth your time researching if there are any tax incentives or benefits for miners in your region. You may be pleasantly surprised to learn that you get a discount on electricity or other benefits.

More nations have begun to open crypto districts. These regions are set up to support blockchain innovation and cultivate future startups. As such, they are tech-friendly and offer cool benefits to attract the best talent and profitable businesses.

A great example of a crypto-friendly community is El Slavador’s Bitcoin Beach. This community was designed from day one to help promote Bitcoin and other cryptocurrencies. The maneuver went along with a ruling that made Bitcoin legal tender. All of these moves catapulted El Salvador into the limelight as a pioneering crypto market.

The best way to find any tax incentives in your area is to speak with a tax specialist. These strategies can help you to get all the advantages allowed. They can also help you structure your business in a manner that enables you to take additional tax incentives to build your blockchain business.

7. Greenhouse Conditioning

The use of mining heat to produce food is another fascinating development. Recently, many miners have moved to use their heat to help cultivate food. These innovative individuals use their rigs' heat to accomplish tasks like controlling the heat in their greenhouses or the water of their plant food.

The concept of combining food production and crypto mining is one right out of the sci-fi books. When you consider the major benefit that this approach brings to the market and the fact that it tackles two of society's biggest issues, food, and financial insecurity, the entire idea is a win-win.

8. Miners Save Using Smart Mining Devices

Another way in which miners can keep the network safe without spending all of their funds is by leveraging dual-purpose devices. Items like smart TVs, appliances, and even vehicles can be set up to mine cryptocurrencies. Imagine your fridge letting you know you need more milk and then sending the funds to the grocery store and ordering it.

While this reality is a little off, it's not that far. Already, many smart devices are capable of handling mining applications. The pioneering EV firm Avvenire recently unveiled a fleet of new EVs that are blockchain-enabled. These devices range from an e-bike that pays you crypto rewards for your journeys to a 2-seat roadster that is capable of doing 0-60 in 1.8 seconds.

Avvenire isn't alone on its quest to transform your electronics into ming rigs. Other firms already offer mining rig space heaters and other blockchain devices that pay their way.

9. Mine Coins that require PC only

Another easy way to reduce your mining costs is to stick with cryptocurrencies that don’t enable the use of GPU or ASIC mining rigs. Many coins use various methods to prevent miners from using high-powered rigs. For example, Monero was designed to be resistant to ASIC mining rigs.

Developers continue to expand on ways to prevent mining centralization. One popular method is to have the network's consensus mechanism alternate. This maneuver means ASIC miners can only participate in the consensus portion that fits their chipset.

Another popular option that offers mining resistance is Zcash. The network introduces the  Equihash algorithm, better suited for GPU and PC mining than ASIC rigs. Notably, many privacy coins support PC and GPU mining.

10. Use a Hash Marketplace

The innovative minds at Titan Mining recently unveiled a Lightning Network-powered mining protocol that improves processes considerably. For one, it enables instant payouts rather than waiting for pool payouts, which can take days. This system leverages the Lightning Network's payment channels to reduce costs.

The Titan Lightning Protocol introduces a new concept – tokenized hash power. The market enables miners to sell their hash power as tokens to others. The process is completed on a chain and provides full transparency. This approach is just one of many methods driving profits in the mining sector.

The Network Wins when Miners Save Money

Many people are unaware of the crucial role that miners play in the market. They are the backbone of decentralized networks like Bitcoin. As such, more effort needs to be put into making their positions profitable and rewarding. These top 10 money-saving tips go a long way to help reduce overhead and improve rewards.

You can learn more about exciting blockchain projects here.

David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com