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Speaking of Bitcoin mining, I believe everyone is familiar with it, but some investors have heard of it and don’t know much about its specific content. If we want to have a thorough understanding of Bitcoin mining, we must start with understanding Bitcoin. We must know that in essence, Bitcoin is a mutually verified public accounting system, and the essence of Bitcoin mining is to compete for accounting. Right, so this Bitcoin mining is actually a process of collecting, checking, confirming and packaging information. After such a process, you can obtain Bitcoins. So is Bitcoin mining risky? Many investors want to know whether Bitcoin mining is risky? Let the editor of the currency circle tell you about it below.

## Are there risks in Bitcoin mining?

Bitcoin mining has risks, which can be divided into the following aspects:

Engineering Risk: Bitcoin Mining Infrastructure

The first thing that the Bitcoin mining project must solve is to build a nest for the birds: it needs to establish three connections and one leveling, build a factory, buy machines, distribute water, electricity, ventilation, and engineers. For example, controlling procurement costs is not only the cost of purchasing mining machines, but also shelves, cables, transformers, routers, power supplies, wire troughs, various profiles, etc. If you pull up a detailed list, there should be at least 100 rows in it, and you have to prepare dozens of screws. Missing or buying more of any part will increase your cost, or even delay the launch of your mining machine.

Operational risk: Only those with good internal strength are martial arts masters

Once the mine is built, your banknote printing factory will be built, but you can't just sit back and collect money. You have to refine the operation and run it well before you can just lie down and collect money. This is like a martial arts master practicing internal skills.

For example, to reduce operating costs, the biggest cost of operating a mining plant is electricity, and we should find ways to find sustainable low-price electricity; to reduce the depreciation of mining machines, as the mining machines will be scrapped, and mining is generally measured by whether the mining income can cover the operating costs. Should the machine be scrapped? The scrapping of mining machines currently mainly depends on the growth of the computing power of the entire network, but whether the computing power rises or not is beyond your control, so you can only focus on protecting your mining machines and purchase power from the source. Mining machines with lower consumption and better quality should also be equipped with better quality power cables and auxiliary equipment.

Off-court factors: One careless move and you lose everything.

There are two main off-site factors: First, Bitcoin’s own system affects income. This is easy to understand. Simply put, it mainly includes: risks caused by falling currency prices and risks caused by rising Bitcoin computing power. The former will cause your assets to shrink. Facing the situation of exiting the market with a clear loss; the latter reduces the output of your mining machine, resulting in inability to make ends meet.

The other is policy risk, which is easy to understand. A ban may wipe out your efforts. When operating or choosing a mine, you must operate it legally, otherwise the increased potential risks may cause you to spit out all the extra income you have gained, including principal and interest.

## Is Bitcoin mining risky?

Bitcoin is a virtual currency calculated through a specific computer program. It has the characteristics of decentralization, limited total amount, and anonymity. It is a combination of open source software engineering model, cryptography principles and workload proof mechanism. It is an open source program where participants have the opportunity to obtain a certain amount of Bitcoin as a reward after successfully executing a specific algorithm. The method of obtaining Bitcoin through this method is called "mining". The risks of Bitcoin mining are still relatively high.

From the perspective of behavioral nature, Bitcoin is a specific virtual commodity and does not have the same legal status as currency. Bitcoin “mining” is essentially a risk investment activity that pursues virtual commodity returns, and investors need to bear the relevant investments themselves. risk.

From the perspective of behavioral effectiveness, "mining" activities consume huge amounts of electricity and energy. The 685 "mining machines" involved in the case consume an average of more than 57,500 degrees of electricity per day. Moreover, the production and transaction links can easily threaten financial security, and the risk of speculation is prominent. It is inconsistent with the Civil Code. The "green principle" is contrary to the spirit of energy conservation, emission reduction and environmental protection. It falls within the scope of obsolete industries where investment is prohibited by administrative regulations such as the State Council's "Interim Provisions on Promoting Industrial Structural Adjustment" and other administrative regulations. Therefore, "mining" related activities violate public order and good customs and should be invalid.

From the perspective of responsibility burden, the policy risks, technical risks arising from Bitcoin "mining" activities, and the resulting investment loss risks should be borne by investors themselves. Because investment entities ignore regulatory regulations and allow risks to occur, they are responsible for The invalidity of the contract is due to fault, so all parties shall be responsible for the consequences of related losses.

The above content is the specific elaboration of the editor of the currency circle on the two questions of whether Bitcoin mining is risky and whether Bitcoin mining is risky. Now that we have understood where the risks are from the above, it will be much better to avoid them in a targeted manner when mining. But for many miners who just buy machines and entrust mining, the most important step is to choose a professional and compliant mine. A good mine can save all the trouble, and we only need to make profits. . Finally, I would like to remind everyone that there are profits and losses in all investments. Investments are risky, so everyone needs to be cautious when entering the market.