Cryptocurrency mining is a process through which businesses/persons with high-powered computers and servers compete against each other in order to solve extremely complicated mathematical equations – result of the encryption which is designed to protect transactions on a blockchain network. Top cryptocurrencies use mining process; however, others use different methods.
There are other factors that you
keep in mind, since there are inflated costs included in the crypto mining, as well.
- Thousands of servers, processingunits, and hard drives are used for solving complex equations, making it a highly intense electricity practice.
- This doesn’t only increase the electric bill, but also creates a lot of heat, so a cooling system might be required for it as well.
- Likewise, hardware becomes outdated real-quick, so miners are also required to upgrade their equipment on daily basis to remain competitive.
All virtual currencies are not mineable. Mineable cryptocurrencies are:
- Bitcoin Cash
However, other cryptocurrencies like Ripple, E
OS, Cardano, Stellar, IOTA, and NEO, use a different technique of transaction validation, which is known as “proof of stake.”
Cryptocurrency mining isn’t viable for everyone, though it has been lucrative. There are many ways through which investors can gain exposure to crypto mining.
AMD and NVIDIA
The most protuberant names of the bunch are:
- Advanced Micro Devices (AMD)
They are quite popular for their PC-based microprocessors and graphics card, respectively. However, no company has been impending related to how much of their sales are linked to cryptocurrency mining, but at the same time, each company has evidently profited from the sale of graphics processing units (GPU).
In reality, the demand for GPUs is quite strong and the price of graphics cards, including the new and the old ones is also increasing. This truly makes a little bit of a conundrum for both AMD and NVIDIA, as AMD is more commonly known. The main customers of both companies are potential gaming enthusiasts as well as enterprise customers.
If cryptocurrency mining demand keeps on plucking the supply from the market, the high price for graphics cards could come as an upheaval amid AMD and NVIDIA’s customers. On the other hand, if these companies make a product just for cryptocurrency mining, they will probably cut down the prices by cumulative supply and cram the sales.
Although both companies surely have so much going on outside the cryptocurrency mining industry, but still there’s a possibility that their share prices could consider the ebbs and tides of virtual currency token prices – consequently, making it something unforgettable.
TSMC (Taiwan Semiconductor Manufacturing Company)
Taiwan Semiconductor Manufacturing Company is among growing cryptocurrency mining stocks and isn’t really keen on revealing its sales percentage. TSMC reported strong first-quarter functioning results last week, including a 6% upsurge in its sales from the prior-year period. The co-CEO and president of TSMC, C. Wei, explicitly said that these consequences were largely driven by robust demand for high-performance computing like “cryptocurrency mining.”
HIVE Blockchain Technologies
Well, if you want cryptocurrency mining exposure deprived of running your particular own mining operation, there is over-the-counter exchange-listed HIVE Blockchain Technologies. This widely traded cryptocurrency mining firm is trying to ramp up its operations in Iceland and Sweden at this time – envisions making almost $150 million in revenue every year from its operations.
Iceland and Sweden provide commercial kilowatt-per-hour electricity prices; below the European average. In addition to that, these are comparatively temperate nations, which could help in keeping mining equipment imperturbable.
Even with being a cryptocurrency mining start-up, HIVE Blockchain has already turned a revenue in its latest reported quarter. Certainly, the $149,724 in revenue was insignificant and resulted in $0.00 in returns per-share. It seems like HIVE could make over 10 times – each quarter when completely ramped up.
HIVE Blockchain isn’t specifically selling all of the tokens that it is mining. It does hang on to few of these coins, hoping they will appreciate in value. Consequently, HIVE directly allows an investor to access crypto mining margins, along with the movement in a trickle of some reputable digital currencies. However, some risks are also included.
- As long as the business is totally devoted to cryptocurrency mining and lacks sales diversity, investors must know that if virtual currency prices drop significantly, their investment in HIVE could also drop.
- Also, if you want to raise capital, it won’t be astonishing if HIVE Blockchain dilutes current investors through “bought-deal offerings.”
These are some risks that stock investors must have to endure; especially if they want to directly access a publicly-traded crypto mining stock.