Hold Bitcoin VS Bitcoin Cloud Mining
SHOULD I STAY OR SHOULD I GO??
Last year Bitcoin is showing amazing "gainz" right?! Yeah! We are all commanding Bitcoin to grow!!
Actually, the 1Y chart show us a 578% grow, from €506 in 16/08/2016 to €3430 today, 15/08/2017. (I wrote this 2 days ago sorry)
578% profit is amazing right? I guess it is… but could we get even more if we have invested in Bitcoin Cloud Mining?
LET'S GET MORE FROM OUR MINING BUSINESS!
I already heard some fellow Steemins crypto baked guys like me saying that is better hold Bitcoin than invest in mining… so… let’s see!
Let’s go down to the calcs!
SHOULD YOU HOLD YOUR BITCOINS OR INVEST IN MINING?
YOU WILL BE SURPRISED WITH THIS NUMBERS!
These are the real numbers, based in what I’m getting from my cloud mining contracts (unfortunately I didn’t followed none of the strategies).
LiFe is made out of trade-offs. You have to choose your path and risk. Now… I understand that this choices are are… regarding this investments sometimes you have to choose between the “I want it all” and the “I want it now”. Well, I want both! How can we get it all?
I created 4 different scenarios to compare:
- Hold the €1000 worth Bitcoin;
- Invest the €1000 in Mining and withdraw the monthly revenue;
- Invest the €1000 in Mining and reinvest the revenue that you have from you initial investment (the rest withdraw)
- Invest the €1000 in Mining and reinvest everything in a monthly basis
Scenario a) Hold the €1000 worth Bitcoin:
One year ago you invested €1000 in Bitcoins. You bought €1000 worth Bitcoins. That was 1,97628 BTC (now the same €1000 only give you 0,2915 BTC heheheh shiet!).
The Bitcoins have grown and after one year (today) those same 1,97628 BTC are worth €6778! Fuak! I had to make the calc again because I wasn’t believing!!!
Now you have this €6778 in your pocket and you can do whatever you wish with them. EASY PEASY
Scenario b) Invest the €1000 in Mining and withdraw the monthly revenue:
Now let’s see what happened if instead of holding Bitcoin, you would have invested in SHA-256 mining contracts and withdraw every month profit.
One year ago, €1000 would give you 10,5 TH/s mining capacity on Hashflare. Now… the calcs are going to get pretty complicated because we have to consider the Bitcoin price variation over the last year, as well as the mining difficulty over the last year.
Here you should look at the Liquid Profit (in BTC) and “€” Profit. As you can see, without reinvestment, every month you will receive less and less mined BTC for the same 10,5TH/s because of the increasing difficulty. HOWEVER, the Bitcoin price is also increasing and it offsets the difficulty. The result is that you will receive more or less (and sometimes growing) monthly revenue. Here, the liquid profit is the profit after Cloud Mining fees charged (+/-33%).
Over the last year, the same 10,5TH/s gave less and less mined BTC. This is the result of the increasing difficulty. However, as I already wrote, in the article "Bitcoin Mining Difficulty is a Myth!!!", STOP BEING AFRAID OF THE INCREASING DIFFICULTY!!! THE DIFFICULTY AND PRICE CHANGE ARE CORRELATED! Totally!!!
Now let's see how much money you get in your pocket!
This is the monthly revenue considering that you convert it every month to EUR and you don’t hold BTC a total of 2 167,48 €. Monthly you may get from €130 to €215, depending essentially on the Bitcoin price and difficulty.
As you noticed, every month you get less and less BTC but the €uros you get are stable or even grow a little.
Scenario c) Invest the €1000 in Mining and reinvest the revenue that you have from you initial investment (the rest withdraw)
Now, imagine that you invest those same €1000 to buy 10,5TH/s and that every month, you reinvest the revenue from the 10,5 TH/s, making your hash power grow every month. You will withdraw only the revenue from the reinvested mining capacity. DEAL?!
As you can see here, for the first 6 months you will receive less but after that you will receive more than scenario b). However, after those 6 months you will receive more. In this scenario, you almost triple your mining capacity, passing it from the initial 10,5TH/s to 33,3TH/s.
This partial compound interest allows your to grow your investment and at the same time withdraw money for yourself.
In this graph you can see that the mining outcome in BTC gets lower most of the months because of the mining difficulty increasing. However, it is a better scenario than scenario b), once for example in the 12th month of the scenario b) you get 0,06 BTC and the scenario c)b gives you 0,18 BTC. In this scenario you have some reinvestment to fight the increasing mining difficulty.
Also, as you can see at the revenue chart, both Compound Profit (green) and the Withdrawal value (red) grow every month. The Bitcoin price growth in this case is always bigger than the decreasing BTC mining outcome.
Scenario d) Invest the €1000 in Mining and reinvest everything in a monthly basis
Ok, in this scenario, you never withdraw your profit and always reinvest it in a monthly basis in more mining power.
In this scenario you never withdraw so you never benefit or spend the money during this first year. However, in the end of the year you will have a HUGE mining capacity and you can just sit over this mining capacity.
As you can see at the chart, you go from 10,5TH/s at the start of the first month to almost 60TH/s in the 12th month. WOW
Also, you will maintain a nice monthly mined Bitcoin because you compensate the increasing difficulty with the compound profit investments that you make every month.
Here, you will maintain the Bitcoin mining level always between 0,31 and 0,38 Bitcoin per month. However, you will always reinvest everything!
In this scenario, all this beautiful green go back to the mining cloud because you reinvest 100%
HOWEVER... BE PATIENTE BECAUSE...
In the 12th month you have a pretty nice revenue that you can use to… whatever you wish, including to finally pay to yourself!
Yes, if after the 12 month you decide to start withdrawing, you will have a very nice revenue stream!
Now, let's take a look and ripe off some conclusions!
Results of this first year:
In all of the scenarios you have a nice revenue! However there are some differences:
Scenario a) revenue comes only from the variation of the Bitcoin Price
Scenario b) revenue comes only from mined BTC
Scenario c) give us a mix of reinvestment and withdrawals
Scenario d) you reinvest everything, giving you something bigger in the end of the year
And let's also take a look at some more interesting numbers:
So... It looks like this: the scenario a) is the one that gives you immediate money. The scenario b) and c) are a kind of more conservative, but the c) looks for me one of the best strategy.
The Scenario c) allows you to put money in your pocket while you make you business grow too!
The scenario d) is... to use if you don't need money at all for now.
Other really interesting thing is... the future revenue!!!
If you resist and during that one year you don't spend money and reinvest everything, in the second year you will receive 16 570€!!! Oh yes baby!!! Now you spend it! You deserve!
The scenario c) will give you 8 794 € in the second year, the scenario b) 3 010 € and the scenario a) ZERO!
Related articles:
Compound Interest is What May Get You Rich
My Investment Strategy - I Don’t Care, I Love It
STOP Investment Diversification!
Bitcoin Mining Difficulty is a Myth!!!
If you wold like to start Cloud Mining please tell me. I would love to give you my referral code for Hashflare.
I hope you enjoyed crypto bro! If yes, Upvote, resteem and comment!