Forklog source emphasizes some significant points concerning investments in cryptomining and some widely-spread risks related to this process. This sphere attracts attention of traditional and venture investors. Synthetic assets and synthetic financial instruments which have emerged recently provide better opportunities for mining investments.
Currently, investments in mining are accessible not only in the form of purchase and operation of the specialized equipment but also through contracting to obtain cloud mining services, machine tokens and hashrate forward contracts.
Mining equipment efficiency is to be estimated according to the profitability of mining. It depends upon the days necessary to achieve the break-even point. The sample chart below outlines the most important factors of this approach.
Cloud mining is relatively new way of investing. This means that an investor buys some cloud capacities pro ratio his or her stake. It is quite a promising way of developing the industry. However, it still lacks regulative norms, so that, it is quite a risky type of investments. The likelihood of fraud and scam are quite high there. The same is true for machine tokens each of which represent a part of a mining device.
It is recommended for potential investors to diversify their portfolios. For example, it might be reasonable to purchase long contract for cloud mining along with long position for hashrate future contract plus short future BTC contract. Such approach can help an investor to minimize market risks.
The table summarizing pluses and minuses of each approach is provided below: