Usually, when an individual discovers Bitcoin, they end up going down the rabbit hole and considering whether it would be better for someone to mine or buy the cryptocurrency directly.
Now, some usually give up on mining due to the rigor and cost of running the ASIC miners, coupled with regulatory uncertainty and the lack of any technical expertise. Hypothetically, if people could overcome the challenges, they would be able to enjoy all the advantages that mining provides- full autonomy over their operations, as well as the diversification of their crypto investment through physical hardware rather than purchasing the cryptocurrency directly. But, there is always a risk one runs, coupled with it being labor intensive.
Purchasing Bitcoin Is Far More Profitable Than Mining Bitcoin
An analysis by Hashrate Index, a Bitcoin mining data firm has suggested that purchasing Bitcoin which could be preferable to mining the cryptocurrency under most of the circumstances. One of the mining analysts in the company, Jaran Mellerud, recently calculated the projected earnings of the miners in the next half a decade under several bearish and bullish scenarios.
The analyst also found out that the miners will be incurring a loss even in the most optimistic price projections of the company. Mining, for those wondering, is also a dynamic business where the hardware usually remains outdated within five years- simply due to the introduction of far more efficient machines.
Bitcoin miners are only profitable if they are capable of recouping 100% of their entire capital that is spent in purchasing the machines, which excludes the operational costs. Any additional cryptocurrency token that the hardware brings with itself to its owner will just be an additional gain.