When you searched “how to rent hash power”, you just wanted to mine some crypto because you don’t have a mining rig of your own right?
Did you think about making a profit? Most people think of this. However, why would someone rent out their hash power, if they could mine the altcoin themselves?
That’s the thing that comes to mind right? Well there can be a few different reasons why. The main reason people use these services to let others rent their hash power is they only want to receive bitcoin.
They never take into account the altcoin price could go high in value. I will get into the other reasons why later in the article. First, let’s get into how to rent hash power.
How To Rent Hash Power
You have 2 options to rent hash power; Mining Rig Rentals & Nice Hash. Both are really good options to use. Before you signed up for them and start buying up hashing power. You have to decide which algorithm you’re going to mine, what coin on the algorithm you’re going to mine, and which mining pool you’re going to point the hash power to.
Step 1: Pick a coin to mine.
Step 2: Know which algorithm the coin is on.
Step 3: Pick a mining pool to mine the coin.
Step 4: Pay for the hash power and point it to the mining pool.
Is Renting Hash Power Profitable?
There are 3 options to try to make a profit from renting hash power. Below I will explain how and why someone would do each of these options.
Rent Hash Power To Solo Mine
Solo mining was the only way to mine bitcoin back in the day. Then people set up mining pools because you could earn more bitcoin that way. Ever since then mining pools have been the normal way to do things. However, not all coins have a huge hash rate on their network. This leaves an opening for those of you who like to gamble.
The idea behind solo mining is to receive the block rewards from mining without sharing with anyone. So if someone has the budget to rent a lot of hash power, solo mine with the hash power to receive all the block rewards, and to make a profit hoping they receive more rewards than they paid for the hash power.
Some mining pools save you time by offering a solo mining option at their mining pool. So if you don’t have the knowledge of how to solo mine on your own. A mining pool that has a solo mining option is the way to go. If you don’t know any, I recommend 2miners since they been in the business for years.
Trying to solo mine for a profit by renting hash power is a huge gamble. However, I would rate this as a high risk, high reward type of option. If you go into this with an “all or nothing” mindset, you can’t be disappointed with the results. Because you knew, you was going to get nothing or hit the jackpot.
Rent Hash Power To Mine A New Coin
Renting hash power to mine new coins is a long term gamble. You’re not trying to make a quick profit like solo mining but its still a gamble. You don’t know if the coin will go up in value or die over the coming months. The best times to mine new coins is before they are listed on any exchanges.
Most new coins make an announcement on crypto forums like bitcointalk. Some of the coins have a limited timeframe for proof of work before going full proof of stake. This means you have a limited time to mine them before you can only stake the coin. Easiest way to become a whale in a coin like this is rent the hash power for that timeframe.
I would rate this as a high risk, high reward. Sure if it works out, you will feel like you big brain this move. If it fails, well, would you feel like a gambler or a failed investor? Either way, its still like solo mining, in the regards of how you should view it. All or nothing mindset.
Rent Hash Power For Profit
This option I don’t know how to name it. Mainly because you’re renting hash power to mine normally at a mining pool. Its not solo mining, its not mining a new coin, and it mainly works with popular coins. So let me break it down to you because this method takes some research before you understand where the profit is.
First, you will need to use a crypto mining calculator like whattomine. You want to check the current rewards for the coin, what’s the value of the rewards in bitcoin and are the rewards going up or down in the last 12 hours. Let’s use ETH, for example, using the data from whattomine.com at the time of writing.
100 MHs on the dagger-hashimoto (or ethash) algorithm, mining Ethereum will get you 0.009204 ETH per day (or 0.000316 BTC) after 1% mining pool fee. Now we have to find out how much bitcoin you would earn per MH daily. This is important to know when renting hash power because going over this rate would mean you’re renting at a loss.
In order to make the math on this look clean, we will have to count in satoshis. 0.000316 BTC is 31,600 satoshis. So the math problem would look like this 31,600/100 = 316 sats per MH per day. Now if we head over to MiningRigRentals, go to the dagger-hashimoto section. You know you can’t go over 316 sats per MH when buying hash power.
However, there is another factor in renting for profit. If the network fees for ETH are going up and the mining rewards are going up because of this. It might be ok to go over the set price a little and lock in those mining rigs for the next few days. The miner is super happy someone rented their rig because they’re getting paid in BTC. You’re happy because you know, you’re going to make a profit from renting the rigs, given the rewards are going to be higher in the timeframe you’ve rented them.
I would say this method is low risk, low reward given the profit margin is small and the math is easy to follow. There is still a slim risk doing this because the mining rewards could go down during your mining.