Bitcoin mining: How to make money on the cryptocurrency?

Author : Nina Hlushchenko

20:47, 30 November 2017
Bitcoin mining: How to make money on the cryptocurrency?

Author : Nina Hlushchenko

Even those most distant from the technology are showing interest in mining, and it seems that ads for mining farms can be found even in the most remote regions

20:47, 30 November 2017

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In September 2017, National Bank of Ukraine (NBU) did not recognize crypto currency as a currency or payment instrument. In October, deputies registered two bills to regulate cryptocurency, but none have yet been adopted. This is rather a good news for miners, since our legislation is at least loyal to the cryptocurency (judging by the bills). "Today, mining as such remains unresolved on a legal level, but this fact makes the mining legally legitimate, as Ukraine has a constitutional presumption of legitimacy of a civilian activity not prohibited by law," said Serhiy Papernyk, Head of Banking and Finance, Head of FinTech Evris.

In our country, the lack of a law sometimes does not exempt entrepreneurs from liability, and in recent months, the media published numerous publication on criminal cases on the miners.

Thus, from a legal point of view, renting virtual facilities for renting is safer compared to one's own farm, and mining as such is not a forbidden in Ukraine. At the same time, when extracting funds and receiving income from them, you will have to pay a tax on it.

Related: Bitcoin’s price crashes by 30 percent over week

One of the trends of our time is clouds and cloud services. Clouds are gaining in popularity, because they allow you to receive both the necessary power and the necessary services for a small amount of money, while paying for exactly as much as you consume without worrying about maintaining the infrastructure. Therefore, it is not surprising that the trend came to the cryptocurrencies.

When you google “Cloud Mining,” at first, you will find a number of advisory articles with lists of trusted services in the first place. It is about resources that have already been in the market for some time, which allowed their customers to make some money and bring them out. But there is no certainty that this is not a pyramid (like cryptovolumines in general, as well as separate services in particular). Therefore, it is important here to adhere to the main recommendation for investments in high risk assets.

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In the case of cloud-based mining, you can start with a few dollars. It is much cheaper than your own farm. In addition, you can exchange different currencies simultaneously in the cloud. Bitcoin, being the most popular and most expensive cryptocurrency, is not the only interesting asset. For example, in the first half of 2017, bitcoin grew by 157%, while Litecoin - by 795%, and Ethereum - by 3 510%. Although altoquines are cheaper, they are also very interesting. has been communicating with one of the users of the Finnish mining cloud service for the HashFlare (it is on the top of several recommendation lists). Our interlocutor invested in cryptic currencies three and a half months ago. At the moment, he has extracted about a third of the sum. If the rate is less, the payback period will increase, and vice versa.

Related: Ukraine plans to implement bitcoin use under the oversight of National Bank

The service allows to reinvest funds or extract money at any time. When buying a tariff plan, you can choose equipment according to the characteristics. The principle of the linear dependence of the amount of money invested on the equipment power is in force. The service receives money from users and spends on the equipment and maintenance of the needs of the farm, and in addition, it receives commission for withdrawal of funds. The user does not need to think about the maintenance of the equipment and how to update it.

Pros: A small entry threshold (from a few dollars), does not require specific knowledge (quite a common understanding of the main terms is enough).

Cons: You do not control where the "cloud" is located, and you cannot be sure that the resource is sufficiently reliable and its owners will not disappear one day with your money or that the data center will not fail.

In September, it became known that the famous Torrent Tracker Pirate Bay used the user computers for mining Monero cryptocurrency.

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And since then a whole series of such unpleasant discoveries has followed: it turned out that the sites use scripts that are imperceptible to users of cryptocurrencies on their computers. The brightest Ukrainian case is the sites "1 + 1 media" (as well as a number of large media projects), which in this situation were the victim of unscrupulous partners - the start-up Newzmate, whose platform the group used.

Ukraine plan to recognize illegal mining without the knowledge of the owner of resources. But experts suggest that in the near future such a way of earning will become popular on the Internet. For example, WordPress even has a special plugin for Monero mining, which site owners can install at their own will. Secondly, there are plug-ins that can run without notifying the user. In the end, the site can be simply hacked to install a script for mining. If you are worried that your computer will be used for these purposes, then read these signs and recommendations, and install a plug-in-blocker. For Chrome it can be No Coin, AntiMiner, minerBlock. Some antiviruses (in particular, Kaspersky Total Security) can define scripts for mining on the site.

Pros: does not require investment, if you have your own online resource.

Cons: first, it is illegal, and secondly, it, at least, will frighten off visitors to the site, which will find that the site uses their resources for their own purposes. At the same time, earnings on such a scheme are small - they need a site with a large audience, which spends a lot of time on it (for example, this resource gives an example that a site with an audience of 1,000 people a day earns about $ 10 per month).

Related: Alternative Money: Why more and more countries recognize cryptocurrency?

This method is the most difficult and expensive. First, it is necessary to immediately invest large amounts of money  in equipment. Secondly, to regulate relations with the state, so that later there would be no problems on its part. "First of all, determine the location of the mining farm. If it is located in a leased building, it is necessary to enter into valid lease agreements and, if necessary, with all necessary documents, to connect to the energy network. If the farm assumes home accommodation, it is important not to violate the rules for using electric energy and do not exceed the permissible voltage and load on the network, and secondly, it is necessary to verify the legitimacy of the user's acquisition of computational and the availability of documents on them. Often law enforcers find violations in customs clearance when crossing equipment across the border of Ukraine, and can also refer to the fact that the equipment is a means of secretly receiving information. It is important not to allow these suspicions to come true," Papernyk explains the algorithm of actions.

With the choice of equipment you can go in two ways: to buy a ready farm for mining or to create it by yourself. The second requires much more technical knowledge, but if you have one, it will be cheaper. In this case, resources will come to help with a payback calculator (for example, here), comparative reviews of video cards for mining, as well as specialized sections in online stores (for example, on "Rozetka").


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On OLX, purchase of a complete farm will cost from several tens of thousands of hryvnia for 4-6 video cards to several hundred thousand, but on average it is 2,8-3,7 thousand USD.

Pros: you control the process as much as possible, and the risks that someone will run away with your money are minimal. The main risks are still related both to the cryptocurrency itself and to relations with the Ukrainian state.

Cons: requires technical knowledge to create a farm; if the security forces are coming, it will be difficult to prove that you bought equipment and electricity absolutely legally, and also do not violate the norms of power network operation: for example, maintenance and replacement of equipment will have to be dealt with on your own (or pay specialist services out of your pocket).

Related: Ukrainian start up to conduct research for Oxford University

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