Can I achieve Compound Growth When I Invest in Bitcoin Mining and Cloud Mining?
Can I get compound growth when I invest in Bitcoin?
Einstein - "Compound interest is the eighth wonder of the world; the one who understands it wins it and the one who does not pay it."
We are hearing a lot of discussions about the way forward for Bitcoin, could it gain popularity? Will the value increase? To what extent could it be a possible investment?
I have heard many discussions about whether or not to trade, mine and exploit the cloud, but I have never heard of professional investment or at least the application of professional investment theory to Bitcoin. Now suppose we use the point of view that there is a good future for Bitcoin, its popularity will increase, its value will be maintained and, if necessary, its value will increase because we fundamentally understand that it has a better value for fiat money.
If this sounds like my point of view, I decided that I should approach this as a professional investor; I can afford to invest as an example 1,000 GBP (about 1,600 USD), but I plan to think about how to invest this in Bitcoin in the safest and most efficient way.
The most important rule for anyone who considers themselves a professional investor is to use the compound growth rule, if you plan to treat your account or portfolio like a checking account, you probably won't see your potential.
A quick example:
Andrew would like to see a compound growth on his shares that represents an average of 1% growth each month; (1% seems pretty lame, but we would like our example to become conservative and demonstrate the strength of this) he deposits 10,000 GBP and every year he reinvests his interest. His account would look like this;
The first year 11,200, the second year more than 12,500 and so on until the tenth year which is more than 31,000.
Whereas if Mark decides to take 1,200 towards the end of December to treat himself for Christmas, we don't even need to do the math, he will stay at 10,000 and if he continues to pull on the bad years or decides to take more he may even lose money, while Andrew more than triples his own.
Now, later in this article, I'm going to show how, using very conservative numbers, to make massive improvements to this and find out why Einstein called compound growth the eighth wonder of the world.
Back to mining; If you calculate the profitability of using your own hardware, this can be done online, using Google and searching for the Bitcoin mining profitability calculator, you will find many websites, just make sure that you enter the correct difficulty and exchange rate, everything will be fine, but one thing that most Bitcoin profitability calculators do not keep in mind is the skyrocketing mining difficulty.
Now let's imagine that we have opted for the cheapest mode of mining, due to living in England, the operating and maintenance costs of Cloudmining warehouses will be less than half the cost of an average electricity bill, and we are also saving space.as well.
For 1000 GBP, we can buy 3 Cloud Mining contracts of 1000 GHz and there are 100 left that we will use to buy 5 Cloud mining contracts of 50 GHz, which can leave us 3250 GHz or 3.25 Th.
I have taken the most recent and relevant data for the mining difficulty in the last 3 months, because you will discover that the difficulty increases about twice a month to be more exact, that is every 11.7 days. Therefore, I will work on the basis that the difficulty increases by 4.80% every 12 days, there is no point in worrying about 0.3 days every 12 days when we are operating with averages anyway, and what we are doing is only increasing our existing accuracy, so I do not wish to be criticized for this.
To determine our earning potential, I will calculate our earnings after deducting the costs and add the difficulty to the next session. And then adding the new hash power purchased with the winnings. I am focusing on the increasing average difficulty of 4.98% as well as the decreasing average cost of 10% for the hash power.
Now, the simple truth is that it is not going to serve as well as that, the hash power will not decrease by 10% every twelfth day, but it will have to go in such a direction to remain viable for buyers. More than a year ago, we saw it with CEX, the hash power was not economically viable for people, so it had to be brought down to a reasonable level.
It has been found that even according to conservative estimates, you EASILY have a beak even within 6 months and can potentially double your income during the year.
Granted, the difficulty rate is increasing at a high rate, but so is the hash power and it's getting cheaper at a faster rate. So, whatever your approach, if you apply the principle of reinvesting your earnings or at least a good part of your earnings for a period as soon as the hash price drops (the cost per Ghs has never increased), you will make a small fortune.
What I am showing is that when you treat mining as you would any proper business and not as a gimmick, you will definitely reap the rewards. You have to adopt the attitude that 6 months, a year or maybe three years is not a lot of time (especially if you earn money while you sleep) and I think you should definitely spend an hour or two on Excel and online to make sure that you take a proper approach.
If you think that Bitcoin is still in its infancy and that it is fundamentally undervalued, it is certainly possible to earn a good income with bitcoin mining and that it is not at all too far from getting into what many would like you to think.