In this article we are going to write about whether it is worth taking miners on credit.
The concept of credit and loan money in itself does not carry anything wrong. Many corporations and start-ups started with just borrowed money. What matters is not what resources you use to achieve your goal (your own, investors’ or banks’), but how you handle those funds.
But let’s not forget that mining is a pretty risky business, just like any other cryptocurrency manipulation. The market itself is very volatile at the moment and there have been both a lot of gains and a lot of losses over the years, which is hard to imagine!
So, first I will tell you about the risks you might face in credit mining.
The biggest risk that is present in mining on asics is the fork of the cryptocurrency you are going to mine. So be sure to research the coins being mined and the attitude of their creators towards asics before you buy the device.
Currency exchange rate changes during the loan period are one of the most common reasons why you might have trouble paying off your loan.
The fact is that exchange rates are constantly floating and in months when the entire cryptocurrency market is going through a bad period, you will have to choose: withdraw your income at the current exchange rate and possibly deposit your own money, or hold until better times and pay off your monthly payments in full with fiat.
- expotential increase in complexity. This is possible if asics on new algorithm are released. It’s hard to calculate how much the complexity will increase and income will decrease. Another thing is if you buy asics where the network complexity is already high and new, more powerful machines are either not possible at all or will not affect income much.
- Various kinds of equipment failures, which can leave you without income for half a month. Luckily there are service centres in Russia now, or you can send spare parts to China for repair. But still, it can affect the financial situation as a whole.
And so, we’ve considered the most compelling reasons why you shouldn’t take out an ashik on credit. But still, I would like to highlight the cases when you can afford to do credit mining. After all, making a passive income from mining cryptocurrency with minimal investment sounds pretty attractive.
You have access to what is known as a blatant outlet. This is the privilege of a few and I by no means welcome mining under the circumstances. Still, if you have your own wind farm or an entire vegetable garden occupied by solar panels, which keeps your electricity costs as low as possible, then why not go into mining?
If you have a steady income, and even a complete lack of profit from the ashik will not lead you to bankruptcy or even upset you, then go ahead! Everyone sets their own limits, but I would rely on a figure of 10%. If the cost of the loan does not exceed 10% of your total income, you are good to go.
And the last case, refers not to loans at the expense of banks, but to investment money. If you have access to such and the investor himself is familiar with the topic of cryptocurrencies, knows about the risks involved, then that too can be a help to start mining without your own funds.
Now, let’s make a rough calculation on buying asics on credit. Let’s take the most stable option – Antminer S9 14.5TH.
The cost of this device 39200r, brings us today 218r/d, electricity costs 93r/d. Total net profit 124r/d or 3732r/month.
If you take the miner on loan for 2 years, the monthly payments at a rate of 13% credit will be 1845r. Total remains 1886r/month. But we don’t take increasing of complexity during this period and possible BTC rate jumps. That’s why it’s quite hard to predict net profit.
Anyway, mining is risky and you have to be ready for any turn of events. And if you have a chance to start mining with borrowed funds, and total lack of profit will not make your life harder, then go for it! But if the loan payments will burden your life and in the worst-case scenario you won’t forgive yourself this venture, then you shouldn’t start mining on credit, but rather increase your financial flow with less risky ideas.
I hope this article will lead you to the right thoughts and help you make the right choice. Subscribe to our channel, follow us on social networks where we constantly monitor the profitability of miners and review the latest models.