The first thing a miner does is to pick the right machine. This involves several issues: when to buy mining machine, what price to buy mining machine, what type of mining machine to buy.
The time to buy a mining machine
Bitcoin has an obvious bull-bear cycle. Mining machines, like buying coins, are very particular about the timing of entering the market. When buying mining machines at the top of a bull market, the prices of mining machines tend to be artificially high, the S9, for example, sold for more than $4,700 at the end of 2017. This is a time when a bear market in a slump is unlikely to pay off. But if you buy a mining machine when a bear market turns into a bull market, you can buy a cheap mining machine, or even fall below the cost price. When the bull market price rises later, the profit of the mining machine increases substantially, and the payback time quickly shortens, mining prices will also rise, killing two birds with one stone.
The price of the mining machine
When buying a miner, there are two ways to evaluate whether the price of the miner is reasonable, one is to calculate the days of static return, the other is to evaluate the cost of the miner. The static payback days are clear and easy to calculate (you can also find that all machines in KMining.io come with a ROI calculator, easy to calculate :)), but when the price of the coin soars, the payback days are greatly shortened, which often gives people the illusion that they can make a lot of money. Once the price of the coin plummets, the payback period will increase sharply, so tread carefully. When the price of mining machines fell, or even below the cost price, when the network hashrate is difficult to grow, it is a better time to buy.
What type of miner to buy
Miner has a particularly important indicator, is the rate of electricity charges for mining income, once the rate of electricity charges reached 100% , mining machine will be unprofitable, and get shut down. When the price of the coin plummeted, some mining opportunities with a higher share of electricity charges would be the first to shut down, leading to a decrease in the hashrate of the whole network. Mining machines with a lower share of electricity charges would be able to dig up more coins, partly cushioned the danger of a sharp fall in the coin’s price. If miners had the lowest electricity rates in the world, they could stay on top forever, they could never stop running, they could always make money. Therefore, we should buy the low electricity cost mining machine.
However, miners with low electricity costs are also more expensive and typically have longer static payback days. In addition, when the price of the currency is high, the return on investment is not as high as the rate of return on the purchase of mining machines with low electricity charges. For example, if A mining machine and B mining machine static return days are the same, A mining machine electricity costs 90% , B mining machine electricity costs 50% . If the price of the currency doubles and the network’s computing power remains the same, the earnings of A mining machine will go up 100% / 10% = 10 times, B will only go up 100% / 50% = 2 times, obviously A will make more money.
What kind of mining machine to buy, also depends on the investors’ own investment strategy and market conditions, comprehensive consideration of risk and income.
