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In recent years, the price of Bitcoin has been soaring. Many investors have relied on Bitcoin to achieve financial freedom and move towards success. In fact, this is what we often say, standing on the cusp of the storm, even pigs can fly. stand up. As the first implementation project of the blockchain, digital currency is currently the biggest hot topic. As ordinary investors, if we want to participate in this wealth feast, there are only two methods: currency speculation and mining. The risk is still relatively high, so many investors choose to enter the currency circle through mining. So is there any risk in earning Bitcoin by mining? Let the editor of the currency circle take you through the risks of Bitcoin mining.

## Is there any risk in earning Bitcoin by mining?

There are risks in earning Bitcoin through mining. Bitcoin has repeatedly broken new highs in recent times. After reaching US$16,000, it is only two daily limits away from the all-time high. Therefore, the topic of obtaining "Bitcoin of life" has become popular again. There are two main ways to obtain Bitcoin: secondary market purchase and mining. Compared with secondary market investment, mining is always the lowest-cost method.

As a result, many people who have entered the market have increased their investment, and those who have not yet entered the market are asking how to "dig Bitcoin". So the question is: Is Bitcoin mining profitable? "Isn't this nonsense? The most profitable thing in the Bitcoin industry is mining." But blind confidence is often slapped in the face. The reason why we invest in a project can never be: others have made money. We need to clearly see the risks involved in this project.

## Breakdown of Bitcoin Mining Risks

·Engineering risks: 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.

Then control the construction cost. You need to build a mining factory building. This factory building must be dustproof, rainproof, and ventilated to prevent high temperatures. You need to place the mining machines neatly, arrange the cables in an orderly manner, and connect them properly. Wires, control wires, network cables, you also need to consider maintenance, etc.

In addition, we must pay attention to controlling environmental risks and consider environmental factors. Mining machines are not zero-emission equipment and will produce a lot of noise and heat. To control technical risks, you need project management talents, electricians, construction engineers, and talents who understand computer room construction. Although this knowledge is not complicated, only experienced people can help you reduce costs and control risks.

·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.

To avoid unexpected risks, mining plants must pay special attention to fire prevention. There have been cases where large mines were burned down, resulting in an instant drop in the computing power of the entire network. In addition, a lightning rod must be installed, and of course common natural disasters such as flood prevention must be considered. The mine also needs to prevent theft, maintain public relations, and prevent others from causing trouble.

To avoid the theft of computing power, generally speaking, the operation of mining farms is now professional and engineers need to be hired for maintenance. The computing power of mining machines fluctuates. A mining machine with a rated computing power of 14T may actually produce 12T. This is normal. Risks of cooperation with mining pools. Most miners have to connect their mining machines to mining pools to mine. This requires miners to master more knowledge to avoid being bullied by mining pools.

·Off-court factors: One careless move can lead to a loss of 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 will reduce the output of your mining machine,
Resulting in making 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.

The above is a comprehensive analysis by the editor of the currency circle on the issue of whether there are risks in earning Bitcoin through mining. In fact, as long as we know where the risks are, we can avoid them in a targeted manner. For many miners who just buy machines and entrust mining, the most important and critical thing is to choose a professional and compliant mine. The editor of the currency circle still wants to remind everyone, but there are profits and losses in investment. You must treat it with a normal mind. Investment is risky, and you still need to be cautious when entering the industry.