I thought I’d provide a regular update on how my cryptocurrency investments are going on a roughly weekly basis. Hopefully, it will provide readers looking at this type of investment with some information to make their own decisions on.

Mining At Home

I’m not currently mining at home. My mining rig (a PC with a Sapphire R9 280x video card running BAMT 1.6) has been turned off for a few months now. Electricity where I live costs almost three times what it does in the USA, so that killed any remaining profits in the rig.

I may turn it back on later in the Winter, to use as a low wattage heater for the room while mining something at the same time.

My Altcoin mining rig – due to be converted to a gaming PC

GAW Miners

I have some investment in GAW Miners Hashlets as I’ve described in previous posts.

Zen Hashlet Solo Mining ContractGAW are going through what I hope are just some teething problems at the moment while they try to figure out the direction the company will take into the future.

Project Prime, a major project to bring cryptocurrency to the masses was meant to go live on October 23rd, but the deadline has slipped due to how the company wants to move forward. No new deadline has been provided as yet.

GAW rent out their hashing power to other companies (and perhaps high-powered individuals). However, the contracts they have with these entities appear to have lapsed and they’re in the middle or renegotiating new contracts. You would think that any such contracts should be renegotiated and finalized before existing contracts expired.

The upshot of all these machinations is that GAW’s ZenPool (highest paying pool) payouts have more than halved in the last 2 weeks. They are still profitable and GAW promises that the payout rates will increase once new contracts are nailed down.

4 weeks ago, hashlets were paying between $0.18 and $0.19 each (after fees). Three days ago, payouts reached their nadir and were about $0.055 per hashlet. Payouts have increased slightly over the last couple of days, but I don’t know if that’s a blip or a trend.

My previous look at GAW Miners painted a rosy picture of them as an investment opportunity but with the recent changes, missed deadlines on promised features and bugs in the system, I can’t currently recommend them as an investment opportunity. I do expect things to change for the better in the coming weeks, so I’ll keep you updated.

LTC Gear

One of the best outcomes of me investing with GAW Miners was learning about LTC Gear. Instead of buying virtual miners (as you do with GAW), here you buy shares in a mining farm.

Litecoin Gear LogoWhat sets LTC Gear apart from other cloud mining operations is that the owner designs and builds his own mining equipment (including designing his own chips), so he’s not piggybacking on or using equipment from other manufacturers (as the other cloud mining companies do).

Since joining LTC Gear, I’ve received a regular payout every Friday, paid directly in Bitcoin (BTC) [you can also get paid in Litecoin (LTC) or FeatherCoin (FTC) if you want].

I expected payouts to go down a fraction each week but they’ve stayed pretty level over the 4 payouts I’ve received to date.

Right now, this is my favorite place to invest. Payouts are the best of all the mining companies I’ve looked at. You can read my full review here or check out the LTCGear FAQ here.

While you can open mining contracts at the cloud mining companies for $20 or less (and you can pay in dollars), with LTC Gear, the minimum buy-in price is $920.55 (if you use the anniversary1yr coupon code with any of the LTC Gear links on this blog. If you pay directly in Bitcoin, you save an additional 8% so pay the current Bitcoin equivalent of $846.90.

If you don’t already own Bitcoins, you’ll need to buy some first. LTCGear also take payment in other types of cryptocurrency, but you don’t get the 8% discount here.

I expect to make back what I paid for my shares in another 4 weeks. After that, all additional payouts will be pure profit.

Bitcoin MiningHow payouts will fare after 6 months is anyone’s guess as Litecoin difficulty is expected to rise sharply in December when the new round of Scrypt ASIC miners are released. That will drive payouts down. This won’t affect just LTC Gear, but also any mining company that mines Litecoin.

My plan is to reinvest 1 payout every 6 weeks to counteract the payout reduction that will occur due to rising network difficulty. Depending on how things go, I may need to increase that to 1 payout reinvestment every 3-4 weeks.

LTC Gear also do a share multiplication every 6 weeks to counter reductions in payouts due to the rising difficulty. These multiplications are, on average, about 1.3x (so if you had 1,000 shares before a multiplication, you’d have 1,300 after).

Note: If you do order LTC Gear shares through one of my links (don’t forget to use the anniversary1yr coupon code at checkout), I’ll send you half the referral shares I get (so you’d get about 90 shares though it varies from week to week due to the BTC/USD exchange rate). So it would be win-win for both of us. Just email me your LTCGear account name and order number.

Final Thoughts

Other mining companies do exist though I haven’t invested with any just yet. I’m waiting till I get my initial investment inLTC Gear back before I look at committing additional funds to cryptocurrency investments.

Cloud MiningThere’s no denying that these types of investment are risky in a number of ways. Companies come and go and if you have funds with them when they die, you’re out of pocket. The price of Bitcoin is volatile and will affect what amount of dollars or euro you can extract if you are cashing out of Bitcoin rather than holding in the expectation that it’s value will radically increase.

The world of cryptocurrencies is a fast changing one and you have to keep on top of your investments to make sure they’re giving the best returns and that you’re invested with reasonably stable companies.

But it is fun and the returns are way better than you’ll get from putting your money in a bank.

And, as I keep saying, never invest more than you are prepared to comfortably lose, should things go pear shaped.

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Filed under: Altcoin Mining Contracts