Week 1: results and predictions

First week’s results are in. Please note that these estimates:

  • Are based on current market prices. If cryptocurrency prices increase, profits increase. If prices drop, profits drop.
  • Don’t take into account the gradual difficulty increase in mining.

 

June 5th – June 11th

ETHEREUM

Average Ethereum yield per day: 0.0305217

Two-year Ethereum yield estimate: 22.280841

Total contract lifetime income estimate (USD): $7761.57

Profit margin (2-year contract): $6467.64

 

BITCOIN

Average Bitcoin yield per day: 0.0007745825

Yearly Bitcoin yield estimate (lifetime contract): 0.2827226125

Total yearly income estimate (USD): $843.55

Profit margin (1st year / consecutive years): $505.02 / $843.55

Please note that in the profit margin calculation for Bitcoin, I’ve assigned the initial contract fee for the first year. Since it’s a lifetime contract, there are no investment fees for consecutive years.

 

MONERO

Average Monero yield per day: 0.026489192

Two-year Monero yield estimate: 19.33711016

Total contract lifetime income estimate (USD): $995.348

Profit margin (2-year contract): $672.148

Update 19.6: adjusted Monero profit margins due to an error in original formula.

 

Comparing my numbers with the results from CryptoCompare’s calculator, the yields are around 1-2% lower. I was expecting a lower yield, so this was a positive surprise.

The most important takeaways? From a yield perspective, the Ethereum investment will be paid off fastest (at around 4 – 4.5 months), and with the PoS update coming sometime in 2017 – 2018, you will want to hold as much Ethereum as possible at that point. More information about Proof of Stake here.  I will increase investment in all three fields to keep it diverse and help manage risk, but focus is on Ethereum.

USEFUL LINKS

Genesis Mining

Market Caps

Getting paid by Genesis Mining – basic guidelines

I wrote earlier about how to set up your Genesis Mining platform.  While Freewallet (or another external cryptocurrency wallet) is a good option, it is easier and potentially safer to use a marketplace wallet directly (only one point of failure). This way, you’ll only have to do one transfer, and the funds will be immediately available to exchange for USD/EUR/your currency of choice.

There are several options to choose from based on your location. I use these marketplaces:

  • Kraken (my main platform for selling / trading)
  • BitStamp (recommended for European users)
  • Bittrex (recommended if you want to trade mainly with cryptocurrencies / altcoin)

If you plan to start mining with GM, I recommend opening an account to Kraken / Bitstamp / Bittrex already, as their verification process can take a long time, especially with Kraken. That said, it’s worth the wait, and my recommendation of the three options listed here.

After your marketplace account is set up successfully, open a wallet for every currency you’re mining (Ether, Monero, BTC) and copy the wallet address to Genesis Mining’s settings so they can pay you directly. I also recommend activating two-factor authentication for increased security.

UPDATE 21.6.2017: I’ve moved to using the Exodus wallet – click here for more information.

 

Analyzing the Genesis bitcoin mining contract (theoretical)

The Bitcoin mining lifetime contract is available at Genesis Mining again. I’ve decided to do a conservative investment and assess the results before expanding.

For the time being, here are some calculations on the profitability. Please note that before consistent data is available, this is purely theoretical, so invest at your own risk. This calculation also assumes that BTC value will stay on its current level, which is highly unlikely.

A 2.5TH/s investment will result in approximately 0.338 BTC mined per year, with a first year cost of $604.5 and every consecutive year at $255.5. With the current Bitcoin value, this translates to:

FIRST YEAR: $944.66 total mined value, $340.16 yearly profit

SECOND AND THIRD YEAR: $944.66 total mined value, $689.16 yearly profit

 

Since the Bitcoin block (and rewards) drop to half in mid-2020, I’m considering this investment to be viable only until then, even though the contracts have no ending date. All in all, it seems a viable option and a decent addition to the portfolio, especially with the current BTC price trend.

USEFUL LINKS

Genesis Mining

Official Bitcoin website

 

Monero mining – worth it or not?

Results were updated today – I’ve added the holdings value to better keep track of asset development. Slight investment increase, with a total of just over $2k and a bump to projected yearly profit, which stands at around $3.7k now.

I’ve also invested in mining Monero. While the contract’s average break-even point is not as good as with Ether (10 months vs. 4.5 months), there are two reasons to justify this:

  • More spread -> “not having all of your eggs in the same basket”
  • Price increase. Monero’s coin price is still low, and while nothing is guaranteed, its 2nd tier coin position seems fairly stable

If you are (or will be) mining with Genesis, it might be worth it to spread your hashpower investment between Monero and Ether – with emphasis on the latter. For those interested in buying directly instead of mining, check out this article by CoinDesk.

Along with mining, I will include some hold-and-sell activity in the project to add variation. More on this later.

USEFUL LINKS

Genesis Mining

Official Monero website

 

Beginner’s guide to mining Ethereum with Genesis Mining

Follow this step-by-step guide to get started with Ethereum mining.

  • OPEN AN ACCOUNT

Head to Genesis Mining and open an account.  The process is straightforward – email, password, the usual.

  • SET UP THE MINERS

At the moment of writing (June 2017), I recommend starting with Ethereum. Genesis Mining’s Bitcoin mining option is sold out at the moment, and the profit calculations for Monero are not nearly as good as Ethereum.

Click on “Start Mining Now” and use the slider to select how much hashpower (MH/s) you want to buy. To estimate the ROI, use the calculator here. Add the MH/s amount you’re planning to buy and check the profit / year column for an estimate.

mining-ethereum-slider.png

Please note that the ROI estimate from the calculator is only accurate if the price of Ethereum stays the same. If the price doubles, your profits double. If the price drops, your profits drop. There is risk, just like with any other investment.

Always use an affiliate code when buying hashpower – even if you already have some, and are buying more. You can use the code Sr5fmI to get 3% off any hashpower purchase.

You can pay with credit cards, Bitcoin or some altcoins, if you’re holding any. I paid with credit card and it went through smoothly.

  • SET UP A WALLET

A cryptocurrency wallet is basically the cryptocurrency equivalent of a bank account. In the case of an Ether wallet, you can deposit (receive), store and send Ethereum, including sending it to marketplaces to sell later.

UPDATE 15.6.2017: After experimenting with different types of wallets, I recommend Exodus, which is a great desktop wallet with a neat interface and good safety features. You can download Exodus here (available for Windows, MAC and Linux). The installation is easy and straightforward.

After you have Exodus installed, click on Wallet -> Ethereum -> Receive, and copy your Ethereum wallet address (hashcode, long string of numbers and letters). Head to Genesis Mining (My Account -> Settings -> Wallets) and paste the address to the Ether field (lower left corner).

Genesis Mining will pay you daily. However, if you use a credit card to buy the hashpower, you’ll have to wait 30 days for your first payment. I assume they’ve had some issues with credit cards in the past, as in, card charge back.

That’s it – your miners are running and your payment details set. If you have any problems or if the guide is missing something, please let me know in the comments.

USEFUL LINKS

Genesis Mining

CryptoCompare Mining Calculator

Official Ethereum website

 

Early days

A little bit about myself: I’m a 33-year old Finnish startup entrepreneur / nomad / former IT manager. I turned my life around five years ago when I quit my job and joined the then-booming digital nomad movement, and spent several years living abroad in Southeast Europe, Asia, North America and Australia. I’ve settled to the APAC region for now.

I only got into cryptocurrency investing fairly recently, while living in Chiang Mai. Since then, I’ve invested mainly in Bitcoin and Ether, and am a huge fan of passive income, which fits well into this scenario.

This blog’s purpose is two-fold. Mainly, it will be a vessel for my ravings and observations of the cryptocurrency investing field, from a beginner’s viewpoint. I will also be tracking the results of my investments transparently. Unless anything drastic happens, the results will be updated weekly.

Main methods for this experiment will be Genesis Mining and direct investment (buying and holding the currency).