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Mining: where to start?

The cryptocurrency mining market in 2023 has undergone significant changes compared to previous years.

This is primarily due to the drop in cryptocurrency prices that began at the end of 2021. The decline in the value of bitcoin and other popular cryptocurrencies has led to a reduction in the number of miners and a decrease in the overall computing power of the network.

The second reason for the changes in the mining market is the stricter regulation of cryptocurrencies in some countries.

For example, cryptocurrency mining was banned entirely in China, which used to be one of the largest mining centres in the world. This led to a redistribution of mining capacity to other countries, including the United States, Kazakhstan and Russia.

The third reason for changes in the mining market is the development of new technologies that allow cryptocurrencies to be mined more efficiently. For example, new types of miners consume less electricity and have higher processing power.

Overall, the mining market in 2023 is characterized by the following trends:

  • Decreasing profitability of mining;
  • Decrease in the number of miners;
  • Redistribution of mining capacity;
  • Development of new technologies.

The outlook for the mining market next year is moderately positive. On the one hand, the growth of cryptocurrency prices may lead to increased mining profitability and development in the number of miners. On the other hand, stricter regulation of cryptocurrencies may lead to a further reduction in the number of miners and a decrease in the network's total computing power.

We can assume that the mining market 2024 will be more stable than in 2023. However, the profitability of mining will remain lower than in the past, when profits were in the hundreds of per cent.

Here are some specific factors that could affect the mining market in 2024:

  • Cryptocurrency prices: if the prices of cryptocurrencies increase, it will increase the profitability of mining.
  • Regulation of cryptocurrencies: if the regulation of cryptocurrencies tightens, it may further reduce the number of miners and decrease the overall computing power of the network.
  • Development of new technologies: if new technologies are developed that enable cryptocurrencies to be mined more efficiently, this could lead to a reduction in the cost of mining and an increase in profitability.

The final outlook for the mining market in 2024 will depend on the interaction of these factors.

In any case, cryptocurrency mining remains relevant and promising despite various market fluctuations and regulatory changes.

Technical aspects

The efficiency of the entire mining farm depends on the correctly selected equipment. The choice of equipment depends on the specific cryptocurrency and the miner's budget. The technical side of mining and the type of equipment significantly affect its profitability and efficiency.

Miners can build specialized systems called farms. These include multiple graphics cards or ASICs combined together to increase performance.

The key elements of any mining farm are the graphics cards, processor, power supply, cooling system and other components. Each of these elements has its own characteristics and power requirements that must be considered when planning.

Mining on video cards and ASICs has its pros and cons. Video cards are more versatile and allow you to mine different cryptocurrencies, but their efficiency is usually lower than that of specialized ASIC devices.

ASIC miners are specialized devices designed exclusively for cryptocurrency with a specific encryption.

Specialized equipment provides high performance and efficiency but is restricted to use only for certain types of cryptocurrencies. In addition, reselling such equipment is much more difficult.

In any case, before buying hardware, pay attention to the hash rate (processing power) and the degree of energy efficiency, and be sure to calculate the profitability and payback of each machine. Choosing an equipment supplier is an extremely important step in creating a mining farm.

Several reliable brands on the market have established themselves as efficient and durable equipment manufacturers. These include NVIDIA, AMD in the video card segment and Bitmain, MicroBT in the ASIC-miner segment. But the list is not exhausted with these companies.

Carefully study the equipment's characteristics, performance, energy efficiency and cost. It is also recommended to compare the terms of warranty and post-warranty service from different manufacturers and suppliers.

Is it profitable to mine in 2023?

A miner's earnings depend not only on the power of the farm and the cryptocurrency exchange rate but also on the cost of electricity and equipment.

The cost of electricity is one of the most critical factors affecting the profitability of mining. Even within a country, the tariffs differ from region to region by many times.

Obviously, in cities with cheap electricity, the cost of mining will be lower, allowing you to recoup your initial investment faster.

Additional factors

There are several critical factors besides equipment specifications and electricity costs for efficient mining.

  • Climate conditions

Hot climates can significantly increase equipment cooling costs. Therefore, mining farms are often located in countries with temperate or cold temperatures.

  • Legal environment

Laws regarding cryptocurrencies and mining vary from country to country. Some countries prohibit cryptocurrency mining or impose high taxes, making the business unprofitable. Crime rates, the stability of the political situation, and other security factors can also affect profitability, increasing or decreasing the risk of equipment or data loss.

  • Access to components and spare parts

Mining equipment is a complex technical system that requires maintenance and repair occasionally. Optimal locations are those where the necessary components and qualified technicians are readily available.

  • Infrastructure

Access to fast internet, reliable power supply, and the ability to travel quickly to the farm location are all essential factors.

Investments and initial capital

The average equipment cost for a video card-based mining farm can range from $3,000 to $6,000. For a farm based on ASIC devices, the starting capital can be higher and can be around $10,000.

This calculation includes the cost of the device, cooling system, power supplies and possibly specialized racks.

Minimum startup capital calculation:

  • 6 graphics cards at $400 each = $2400
  • Cooling system = $300
  • Power supply = $200
  • Other expenses (cables, racks, etc.) = $100

Total: $3000

What about registration?

Before you start, you need to strategise thoroughly. The first step is the legal registration of your business.

Different countries have different requirements for cryptocurrency businesses. Tax accounting and regulations may differ.

Consult with lawyers to determine your tax obligations and registration requirements. This will help you avoid legal issues in the future.

In addition, you need to consider taxes, which vary significantly from country to country.


Cryptocurrency mining is not only a potentially lucrative endeavour but also an activity involving risks. Here are some specific ways to minimize them:

  1. Equipment insurance. One option is to insure your mining farms. In the event of technical failures or other unforeseen circumstances, insurance will help offset some of the losses.
  2. Backup power supplies. It is necessary to have backup generators or batteries to ensure that the farm continues to operate in the event of a power outage.
  3. Diversification of cryptocurrencies. You should not rely on only one cryptocurrency. A variety of cryptocurrencies in your portfolio will help mitigate the risks of significant currency fluctuations.
  4. Careful choice of location. Locating equipment in countries with low energy costs and stable legislation can significantly reduce risks.
  5. Cooling and maintaining optimal conditions. An efficient cooling system and regular equipment maintenance reduce the risk of overheating and equipment failure.
  6. Automation and monitoring. Use specialized software to automate mining processes and monitor the condition of the equipment.
  7. Legal preparation. Consultations with lawyers and accountants will help adequately register the business and optimize taxes, reducing financial risks.
  8. Contingency fund. Establishment of a fund to be used in critical situations, such as sharp market declines or unexpected technical problems.
  9. Security system. Protection against hacking using modern encryption methods and two-factor authentication.

Using these methods, you can significantly reduce the risks associated with cryptocurrency mining and make your business more sustainable and reliable.


We have also collected frequent mistakes made by beginners:

  1. Insufficient analysis of cryptocurrency. Beginners often choose a cryptocurrency for mining at random or on the advice of "experts" from the Internet without analyzing it themselves.
  2. Ignoring energy efficiency. Underestimating the cost of electricity can make mining unprofitable.
  3. Incorrect choice of equipment. Buying outdated or inefficient miners leads to longer ROI.
  4. Underestimation of risks. Many beginners do not consider possible risks such as changes in the complexity of mining, price fluctuations and cryptocurrency storage risks.
  5. Lack of additional cooling. Overheating of the equipment can lead to its failure.

What should be avoided when mining:

  1. Fraudulent schemes. Avoid "cloud mining" and other schemes that promise quick profits without investment.
  2. Payback is too fast. If an offer seems too good to be true, it probably is.
  3. Inefficient allocation of resources. You shouldn't put all your resources into one type of mining or one cryptocurrency.


Mining bitcoin and top altcoins is still promising in the long run. It is important to remember that if you decide to go into mining, be sure to do your own research, study the blockchain projects you are interested in and only then invest in mining if you believe that the situation is favourable.

© – , updated 09/18/2023
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