With Chinese companies withdrawing from bitcoin farms and banning bitcoin mining in the country, other companies in Canada and the United States have set up large mining farms and leased their miners to users. Or sell. One of these companies is Compass mining, which can be an excellent investment position. In the following, we will thoroughly review the performance and work with this platform.
Bitcoin mining methods
Bitcoin is the world’s largest and most popular digital currency, with a market cap of $ 800 billion. Many investors in the world have moved to digital currency technology and have invested heavily in this sector. There is no doubt that 12 years after the launch of cryptocurrency networks, this type of asset is prevalent globally. In general, any cryptocurrency offered has a supply limit, just as any tangible asset, such as gold, has an extraction limit.
Since the introduction of Bitcoin in 2009, the total amount of coins mines has been around 21 million. Each user can extract bitcoins with a series of prerequisites and software and receive a reward for mining them. You may ask how bitcoin mines. Suppose you have a powerful computer and bitcoin mining software. Each transaction registered has a specific address with a hash code string in the Bitcoin blockchain. For the transactions to take place, everyone who is going to extract the bitcoins is also responsible for the transaction. To do this, it must look for a hash code string with a series of mathematical operations equal to the transaction hash address. If this hash address finds, a block discovers, and the user is rewarded with 6.25 bitcoins in return.
In the same way, bitcoin mining will be done until the bitcoin inventory is exhausted. But can bitcoin mining be done on a simple computer as well? Yes, you can do that, but the difficulty of extracting bitcoins and the number of rewards paid for discovering each block halves almost every four years. So now, with a simple computer to find a complete block of bitcoins, you need nearly ten years of continuous mathematical calculations in the processor. To make things easier, ASIC Miner devices have been set up to solve mathematical equations several hundred times more than a PC.
Some companies have built and commissioned several hundred ASIC Miner machines to make huge mining farms that consume very high energy. In general, a mining farm consumes three times as much power as a typical factory. People initially established the largest bitcoin farms in China, but due to strict policies to reduce energy consumption, bitcoin mining has been outlawed since 2021. In this case, in Canada and the United States, where the cost was lower and mining permits were issued, some large companies such as Compass Mining grew and made huge profits.
In general, Compas mining is one of the platforms that leases its miner devices to users at different costs or sells them to users with long-term contracts, provided the performance of ASIC devices is guaranteed.
What is compass mining?
Compass mining platform is one of the centers that provide users with hosting and mining hardware to extract bitcoins without having a miner device.
The company has several servers to offer. For example, in the United States, you can rent mining equipment for a fixed start-up and energy costs. This service is also available for users in Canada.
Of course, except in Canada and the United States, it gives you the option to buy or rent mining services in other countries. Each is on a specific list, and its maintenance and rental costs are also displayed.
Most of these services have energy costs of 0.06 to 0.07 kWh, including the cost of internal rack facilities, electricity costs, and maintenance costs of devices.
If you buy an ASIC miner and run it at home, the energy cost you pay for it is more than three times what you would pay for a Compass Mining website. The low cost of electricity and maintenance of devices is due to the place where this tool is located, and energy and maintenance tariffs are adjusted so that each user can extract bitcoins remotely for a lower fee. Give.
You can also buy ASIC miner devices from this platform. Sometimes the stock of machines is high and occasionally low. This issue is related to supply and demand in the field of cryptocurrency. The fee you have to pay for each ASIC miner is directly related to the price of bitcoin. The more expensive bitcoins become, the higher the cost of the devices, and conversely, the lower the price of bitcoins, the lower the price of ASIC devices.
At the beginning of 2021, due to the explosive growth of the price of Bitcoin and other digital currencies, the inventory of ASIC devices decreased, and the demand increased very much. Gradually, as the cost of bitcoin fell and ASIC devices regenerated, supply outstripped demand, and device prices fell.
Due to the difficulties encountered in China in extracting bitcoins, most ASIC manufacturers decided to export these devices in order to supply other markets in this way. Companies like Compass have also increased the volume of their devices for 2022 and added more than a few thousand new miners to their miner lineup.
If you want to start bitcoin mining, it is best to use the compass mining tool. Because you do not need to set up the suitable space and the right software for a miner, and you only have to pay for mining or device rentals. You can then choose a mining pool and let the miners you buy or rent work for you on a daily basis in terms of power and cost. This platform is not a cloud mining service, and you actually remotely rent or buy an ASIC device remotely, and the device starts mining.
The steps to purchase and set up an ASIC device on the Compass mining platform are very simple. This is done in just a few minutes, and the device connects to an optional mining pool. You can then withdraw the earned profit whenever you want with a bitcoin wallet address.
Of course, you may be wondering if Compass mining has any disadvantages or harms? In the following, we will examine the risks of using such a platform in general.
Calculate the amount of profit earned
Some other platforms offer similar options at different costs, but you should note that you do not do cloud mining in Compass but buy or rent a device separately and make a profit. You get the same device or devices. To understand how much profit you can make from ASIC devices on this platform, consider the following example:
Suppose you buy an Antminer S19j Pro for $ 7,500, and you have to pay an average of $ 150 a month for maintenance and energy. Of course, these prices are more fixed and do not change. The profit earned at any moment from the extraction of bitcoins with this device changes.
At the moment, because the price of Bitcoin is trending well, the total monthly profit is $ 805. If the price of bitcoin goes up or down, the gain will change in the same way.
USD-Denominated Example
You bought a $ 7,500 device to make $ 9669 a year. Of course, if the price of bitcoin remains at the exact figure. If you reduce the cost of electricity and maintenance, you get $ 9,000 a year. This means that the charge of your device will be refunded after one year.
Each ASIC device can operate for 3 to 4 years without interruption. The better the maintenance and temperature adjustment of the device, the more time it can be used. So you can earn up to four times the price of the device, assuming the price of Bitcoin fixes.
You can use an ASIC device for a year and then sell the device, or you can use it for three years and sell it without making a profit.
Imagine you have a device for three years, and it pays you $ 9,000 in the first year. In the second year, its profitability will reach $ 6,750, and in the third year, it will get $ 4,500. In this profit, you have received a total profit of $ 20,250. After three years, your ASIC device is no longer helpful, and you can no longer sell it.
In general, this method is excellent if the price of bitcoin is stable and does not go down. You can make a profit of 170% in three years. In addition, you can buy another device with the gain of the first year and double your profit.
Hybrid-Denominated Example
Suppose you keep any profits you make from renting a device in your bitcoin wallet. So you first have to pay $ 7,500 to rent or buy the device and $ 150 a month to maintain it. That means you have to pay $ 12,900 over three years. You save 0.0008 bitcoins per day in the first year, 0.0006 bitcoins per day in the second year, and 0.0004 bitcoins per day in your wallet in the third year.
Finally, 0.65 bitcoins store in your digital wallet after three years. If we consider the price of Bitcoin at $ 40,000, you have turned your $ 12,900 into $ 26,000! So after three years, considering the fixed price of $ 40,000 bitcoin, you can make more than three times the profit.
However, what happens if the price of Bitcoin reaches more than $ 100,000 after these three years? You make about six times as much profit, which is a considerable achievement overall.
Risks and losses
One of the biggest dangers of this method is the sudden drop in the price of bitcoin. If you are one of those people who think that the cost of Bitcoin will reach the lowest possible level in the next five years, you should not invest in buying and working with Compass mining devices at all.
The second risk that may arise in the long run to use such a platform is that the difficulty of extracting bitcoins increases, and the amount of bitcoins obtained in one day decreases with the same miner. More than 1 million ASIC miners on the network are currently mining bitcoins, so the competition is one in one million. The more of these devices, the more competition there is. Of course, new models are released every year with more power, so the device you bought three years ago will probably not be very efficient this year.
Another risk that arises when renting or purchasing ASIC Miner devices at Compass is that the company may go bankrupt or, for some other reason, will not support your device. Your device may be damaged or out of warranty. Of course, these possibilities are minor, but they can happen. If you buy more devices, this risk will increase, and your capital may be lost for no particular reason. However, the maintenance and support routines are outstanding, and their policy always gives the customer the right.
Another problem with this method is that it costs a lot to get started. What if you do not have the money to start a business? Of course, compared to buying and investing in Bitcoin itself, this method does not require much technical knowledge. You need to have a Bitcoin wallet address and know which mining pool can use. Otherwise, you have nothing else to do.
Conclusion
The further we go, the more people use ASIC miner devices and increase the competition for bitcoins. But on the other hand, the price of bitcoin is increasing every year. In 2021, explosive growth alone pushed the price of Bitcoin closer to $ 60,000, but the resistance level was not strong enough to keep the fee. However, many analysts predict that the cost of this digital currency will be close to $ 100,000 for the next five years. So it is better to think about buying or renting a device in Compass mining from now on.
You do not need specialized knowledge in Compass mining. You have to choose the best device with the lowest maintenance cost and maximum profitability and let it extract bitcoins for you. Even its maintenance and management is the responsibility of the people who work in this company, and you only have to pay for it. However, try to look at your budget first and then enter such a game. In any case, in my opinion, this method is very convenient, so I suggest you start soon.
