To Invest In Mining Contracts Or Purchase CryptoCurrency?
The question is - to invest in mining contracts or purchase cryptocurrency direct? I have been researching, reading crypto currency news for sometime now and I am still confused with which is the better option in terms of Return On Investment, Profitability, Risks. There has been some articles that are claiming that cloud mining contracts are not far from Ponzi Schemes but there also positive articles like Genesis Mining and Dragon Mine who received positive rating from the users.
I would like the advice from the Steemit community since I have some funds, $5000 to be precise to invest on crypto currency. I had a look at Bitcoin, Ether, Ripple, Nem, Stellar Lumens. Your inputs and contributions will be welcomed and highly appreciated - looking forward to hear from you.
There is a 3rd possibility: invest the $5k in a mining rig. The problem with investing in cloud miners like Genesis Mining is that the contract often limits their term. For example, if mining Ethereum, the contract is limited to 2 years. Your equipment can be used for much longer and it has the benefit of being used to mine coins which Genesis may not provide an option for. If you don't feel like mining, but prefer to have the coins mined for you, find a friend that is tech savy and consider partnering. His expertise; your power; both split the investment in the machines and the resulting coins.
One other aspect that can't be ignored. Over time, the difficulty in mining (either via a cloud miner or your own equipment) will surely increase. Make sure you factor that in to your return on investment calculation. Ideally, the increasing difficulty will be reflected in a concomitant increase in the price of the coin.
Good luck with whichever option you choose!
Thank you @cpalawyer for your advice, highly appreciated. I considered investing in the mining equipment however I looked at difficulty in mining, housing mining equipment, operational cost like cost of electricity. I will consider your contribution in choosing my option/s, thank you very much once more