Being on a budget, I have looked at a few different method of cryptocurrency mining over the past few years. The upfront cost of building or purchasing a hardware miner was not really an option. Plus, I don’t want to have to maintain, switch algorithms or mine a single currency. I would rather take the labor out of the equation and allow my investment to do the work for me. With that as my base, I first took up methods to mine on my home computer, laptop, and raspberry pi. After 3 months of mining, I learned small scale mining like this would only produce low budget alt-coins (commonly referred to as S#it coins). I think I made about $1 in coins after that time. I used Minergate as the app to mine with. I think I still have the Bytecoin, which ended up being the most profitable coin to mine. Although I really do believe these were a massive premined coin and possibly a scam. A quick look at the time and energy invested, I decided this would never break even.

Next I looked toward cloud mining as an option. I reviewed Hashflare and Genesis Mining as viable options for mining contracts. I ended up going with Genesis Mining since they had Ethereum (ETH) and Monero (XMR) contracts available at the best rate for the time. I spent 0.03 BTC initially (which was about $140 at the time) on 8/23/2017 between both contracts. On 11/11/2017, I purchased a lifetime BTC contract for $390.67. See screenshot below.

As of 11/19/2018, which over half way through my initial contracts, I made $19 from the Monero contract and $3 from the Ethereum contract. At this rate and if hash power in the networks don’t increase, I will lose 2/3s of my initial investment. I am glad that I went small to test out the profitability. The BTC contract ends up being an even bigger loser. I have made $11 on that contract to date, which has plateaued due to the network fees and maintenance fees. Genesis Mining has informed me that the maintenance fees are so large that the contract is no longer profitable unless I choose to upgrade to their radiant technology. All this can be done for the low price of $303.75. That would take my investment to a grand total of $694.42. I think I’ll pass. This seems like it is a desperate attempt to milk more money out of me to maintain a non-profitable mining contract. Right now I stand to lose 97% of my investment. I will consider that loss an investment in my education of bad decisions. I’ve opted to cut my losses and consider this an epic fail.

Now I have not given up completely on mining, but I am leaning toward buying the hardware is probably one of the most viable options for mining.

However, I came across something that might be a game changer when considering small scale mining or mining on a budget. Let’s just use rounded numbers and say you got $500 initial investment you would like to put into mining. Imagine if you took that $500 to Coinbase and bought even amounts of BTC, LTC and ETH. After fees and poor timing, we will assume the $500 only bought $150 worth of each of those three coins for a total of $450. Now you transfer those coins out of Coinbase to another wallet that is secured by BitGo. BitGo is an institutional grade custodian that is SEC certified and regulated (see my previous article discussing security here). Now consider getting 3.75% interest on the BTC, 4% on the LTC, and 3.5% on the ETH. As long as my coins remain under Bitgo’s custody, I will continue to receive interest. There is no contract, no maintenance, no hardware to buy, no electricity cost and no hidden fees. After 2 years you would have $161.25 worth of BTC, $162 worth of LTC, and $160.50 worth of ETH (All assuming the coins don’t go up or down in price). This would gross $483.75. Although it is a loss of 3.25%, I left out one interesting fact. The interest is not paid in USD; it is paid in the same crypto. Instead of looking at this in USD, I would have been able to buy 4.54545454 LTC at the current rate with my initial $150 portion. That would have grown to 4.916363636 LTC over the 2 years, 5.1130181 after 3 years, 5.3175389 after 4, 5.5302404 after 5 and so on. BTC/ETH would both be accruing similar interest and have similar results. The goal is to get more crypto, not necessarily get more USD. Best of all, my initial investment is not tied up. I can withdraw it at any time I chose! Try that with a mining contract.

Dear Genesis Mining, I would like my money back please. I have other things I would like to invest in. Thanks!

I doubt Genesis Mining would even get back to me. Now I would be purchasing BTC, LTC, ETH anyways. I would just be holding them in my ledger and not getting any interest on them. Why not throw some of it into an interest accruing account?

Ok, so what is this place I found? It is Celsius Network. Their homepage can be found here:

I have a previous article about Celsius Network and how they plan on disrupting the banking industry that can be found here.

They are a blockchain based banking system that allows you to deposit crypto assets and earn interest. They also have built in “CelPay” to their application, which is a payment system rivaling PayPal. Celsius Network even does collateral backed loans at interest rates far better than most personal loans on the market. How about ADA, XLM, NEO, OMG, XRP, BCH? Do you have any of them lying around in a wallet? Yes, they pay interest on those as well. I had my OMG sitting in a wallet for over a year, not doing anything. Finally, I get rewarded for holding onto them!

Although this is not technically mining, it is exactly what I was looking for. The risk is highly mitigated compared to cloud mining contracts, there is no maintenance, there are no fees, there is no cost of electricity, no setup, etc. This is a passive way to earn more cryptos on the cryptos I would already be purchasing. I can withdraw my cryptos at any time, and I can even get a loan without having to sell my cryptos when it comes to tax season!

Let me know what you think? Any better alternatives when it comes to mining on a budget?

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    1. Phillip Post author

      You’re correct not mining, but you are earning more cryptos at a faster rate than contract mining.
      Earning cryptos is limited, but you will earn CEL token later. CEL token allows better rates and discounts to loan paybacks.

  1. Fred Blauer

    Very good article. I went thru a similar exercise, and came to similar conclusions. I have invested about half of my coin on the celsius platform. But I have recently discovered something which I also found very interesting. The more I learn about it, the more I like it. I plan to write an article about it on trybe to go into more detail. Its a Proof of stake pool, and investment platform called Cobo. I have been testing it out with some very good results. There is a certain amount of custodial risk involved, but same with celsius. Anyways, more details to come shortly.