Need Advice: Mining vs Directly Investing

[Afr0Man]

I know this probably got asked a million times by now, but I seriously can't get my head around this and need advice from some experienced in the field.

Ok so basically I've been investing in Crypto for the better part of a year now, I have a diversified portfolio long term hodling multiple coins. I have made profits off of this and still am. A couple of close friends and I were thinking of taking it a step further and build our own mining rigs. Between us the initial cost would be somewhat minimized and in time we could scale the rig and keep adding to it, increasing profits..

We were planning on renting out a place and build our hardware there, checking on it once a week or so and using remote desktop, sensors etc to keep an eye on it from home. We decided to rent out so that one it's fair on everyone and two to avoid noise and excessive heat in our homes (we do have a tough summer here).

We have punched in the numbers, considered our monthly costs, and can confirm that it is profitable for us, dividing the profits as necessary. My dilemma is this: I invest a small amount of my income each month into Crypto. What advantages would I have in buying and using mining hardware instead of just outright investing. I've done my research and I KNOW that mining is way safer, you can mine different coins etc, but that doesn't seem to do it for me. Is there anyway that mining could be more profitable than just outright investing the money which I would have otherwise spent on the hardware? We were thinking of using NiceHash as our mining software by the way.

All in all I know that mining is fun, it's like a business, and we would be giving back to the community. However is it worth it, at least in the scenario I described above? The best way I'm seeing at the moment is to re-invest the money made from the mining (after costs) so that as such you would be both mining and investing that which you are making.

Advice on this? What would you suggest I do?
Thanks.

[p337miner]

In the way that you described it above - I don't think it would be worth it. Think about the time you would be investing into continually researching what is most profitable - that on top of building and maintaining the setup that is a lot of time you would need to invest. I would recommend starting off small first before you rent out a place.

I think if you start mining you learn more about PoW and appreciate it more. Giving back to the community is a different thing. I think it will be problematic sharing the profits between your friends because if one of your friends finds something they want to mine and you disagree what would you do then?

Also you can't check hardware once or twice a week - you'd have to check it at least once every two days to ensure that it is working. I've had this conversation with a friend recently, I advised him to just invest it because a 3x flip is much easier than the time and effort you'll put into mining. Good hardware and good rigs are hard to find for cheap.  Just my opinion - maybe since there are more of you the labour would be less intense and you'll have better communication and info sharing!

[Vann]

Mining is more predictable than directly buying coins. You have a direct influence on the outcome and your ongoing costs are essentially the same for any coin. By obtaining units for less than what they are worth, you also have an upper hand when it's time to sell.

[leonix007]

Keep in mind some considerations, Mining is not always profitable just like today, I remember those days or months mining with almost a loss paying out electricity bills. much more worst when your are renting out where an added cost is in it. compare it to directly investing unto crypto. take some risk assessments and resolutions when it strikes. Plan A and B. more importantly, Just do what are you good at and happy doing it.

[MinLum]

How big of a mining setup are you thinking of making that it needs its own place?  ROI for a "basic" 6-GPU setup is anywhere from 4-6 months, maybe even more!  Now you want to add rent, utilities (coz I assume you'd pay for water and gas for the rented place aside from electricity even if you'll be using minimal gas/water), council tax (if you pay such), etc. to your overhead?  You may not be making enough per month to cover overhead at that point!

Remember, everything you buy for a mining rig is working to pay itself back.  Nothing in your rented place is working to pay itself back.  The only way I could think of this working is if you literally fill the place with mining setups.... which I don't think is your plan seeing as you're just starting out in mining.

[BennyT]

In mining, you own the asset and it generated a continuous revenue stream. You are building out the very network you hope to profit from.

In buying coins, the upside is far greater because you have no overhead but you have no asset. Similar to owning stock, you own nothing.

Two different streams.

[bitcoinisbest]

In mining, you own the asset and it generated a continuous revenue stream. You are building out the very network you hope to profit from.

In buying coins, the upside is far greater because you have no overhead but you have no asset. Similar to owning stock, you own nothing.

Two different streams.

This is true but the efforts in mining would be much larger and also their are various factors that would decide the cost of mining. Also if the country is not yet accepted btc then it is much more risky to start mining as tomorrow if govt decides to ban it then the selling of equipment would be a huge concern as nobody would be interested to buy mostly but for coins you can easily sell out and close the account.

[nixofme]

Have you considered difficulty levels across all applicable coins lately and the fact that ASIC is now available for several alt coin algorithms? Profits are decreasing and in order to maintain, you need to keep adding cards / rigs.

This is not a unique situation.

[MonkeyBrain]

Personally I've tried mining (small scale) and it too much time and energy.  It doesn't really pay off unless you enjoy it as a hobby and money comes second. Renting a place just to mine seems like a very large scale operation.  If your math works, its great but there's always more to it than the math. I've since just bought my coins.

[Bitsaurus]

If you a certain that a certain coin/token will be worth much more in the future, it's always best to buy it. If you are uncertain whether that coin/token will succeed, then it is best to mine it as the hardware's value works as a hedge against lost coin value.

[CrazyJoker]

I think the most important thing in your choice is what more interesting for you. If you are interested in investment and have enough great experience in it, it is matter for you. Mining is different field of activity. It is more safe and calm. Is it for you? If your answer is No, couple of month and you will throw it down.

[Afr0Man]

Thanks for your replies and the sound advice.

We were thinking of dividing the profits into segments, part of which goes to paying the costs, while another part goes back into coin investing. This way, eventually the percentage of fiat income invested in crypto each month is replaced by the miners themselves, in doing so enabling us to keep our money in our pockets, while still adding money to our portfolio.

What do you guys think?

[Afr0Man]

Also adding to my last reply.

We're still looking into renting, aiming at very cheap very small areas. If it comes as too costly we will have to get back to our drawing-boards.

We don't plan to start big at all, thinking of a rig with around 6 GTX1070s (Ti maybe?).

As such the profits per month, if our math checks out, is only just above a hundred dollars each (at the current Bitcoin price) once the costs have been paid. We plan to (if proven to be worth it) slowly scale on this setup, getting in more income.

Edits : Clarification