When Bitcoin was launched in 2009, mining was easier. But things changed in the year 2017 when Bitcoin reached its peak value. The sudden boom in the popularity and value of Bitcoin resulted in increasing the mining difficulty. And as a result, today mining Bitcoin isn’t what it used to be. In 2019, if you’re looking to mine Bitcoin, you can’t expect to make a profit by using a common computer or low power mining devices. The simple mining rig set up in your house is no longer efficient to make a profit in the current market climate.
Cryptocurrency mining is a process of verifying the transactions in the blockchain network by using high power computers. The miners who verify and secure the network by doing that proof of work are rewarded with Bitcoin. This is how new coins are produced and the Bitcoin network is secured.
In the early days, crypto enthusiasts used to run CPU or GPU processors in their house or garage to earn a decent profit. But over the years, cryptocurrency mining has evolved at a rapid pace. In the present hyper-competitive mining environment, miners need specialized ASIC mining hardware that performs faster than the traditional home-based setups. When it comes to profitably mine high cap currencies like Bitcoin, it’s best to choose colocation. This is one of the best crypto mining methods that can maximize your cryptocurrency mining revenues. Read further to know what colocation is and how it can help you boost your ROI on your mining investment.
Colocation is a method of crypto mining where you outsource the infrastructure and management for your mining equipment. Due to the increasing power/processing demands and congestion, colocation mining was emerged to deal with rising mining complexities. Colocation data centers allow miners to take advantage of a managed offsite infrastructure solution for crypto mining. You can send your mining hardware to the data center or purchase the latest ASIC miner from the colocation service provider. These data centers are the state-of-art, large-scale shared facility that can house and cool ASIC mining equipment. As an owner of the mining equipment, you simply pay for power rates and hosting facilitates. The equipment will remain yours and you can monitor it the way you want. You will be charged for kWh and the contract terms are usually annual or biannual.
The mining rigs at home are not only less efficient but also generate a lot of noise and heat. These issues can be avoided by renting space in a data center. The colocation service provider will maintain and operate your mining equipment on your behalf. The data centers have access to redundant power and network feeds, as well as cooling equipment. They have expert IT staff to keep your miner running at all times, 24x7x365. The colocation facilities also have security guards, CCTV cameras, man traps and biometric scanners to ensure top-notch security of your device and data.
When you colocate your mining hardware, you keep all the mining rewards. The data center will not keep any portion of your mining reward. The hosting service companies charge a fee according to rack space or power or a combination of both.