You Don't Really Need Hardware Rigs to Start Mining Bitcoin

After Chinese financial regulators put an end to Bitcoin mining in their country, the barriers to entry for this potentially lucrative activity became lower. The hash rate underwent a major downward adjustment before it returned to normal levels a few weeks later; by the time this happened, quite a few miners had crossed the border from China into Kazakhstan, but many others decided to retire their mining rigs.

While the cost of power and hardware to mine cryptocurrency is high, many people are now turning to data centers located in countries that have much lower electricity rates, such as China and Iceland, to capitalize on the cryptocurrency boom. However, data centers do pose a number of health and environmental risks, including large-scale waste output and the use of chemicals that are harmful to humans.

With all the above in mind, prospective Bitcoin investors now have a few options to put some capital towards mining operations without having to hunt down expensive GPUs from online marketplaces such as eBay.

Cloud mining provides a valuable additional option for those who do want to invest in mining but cannot at the time, and for those who have the equipment but want to make sure they are going to be mining where there is a high demand for Bitcoin and other cryptocurrencies. For miners that do not have the specialized mining hardware required to get into mining Bitcoin, cloud mining provides the capability to mine alongside others.

It’s unclear how much these mining operations pay to the miners who rent their hardware and how much these companies have to lose with fluctuating Bitcoin values. However, the concept of cloud mining could be a viable alternative for those interested in earning Bitcoin tokens.

There's also the option known as staking, which consists of participating in liquidity pools for lending and trading operations. This option is available through peer-to-peer networks that serve as financial platforms. You can invest in projects that involve mining, lending, or providing liquid funds to decentralized finance layers that augment the operations of the Ethereum blockchain network. As can be imagined, staking a mining operation involves substantial investment risk.