Bitcoin Mining Business Plan Template
Written by Dave Lavinsky
Bitcoin Mining Business Plan
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their bitcoin mining companies.
If you’re unfamiliar with creating a bitcoin mining business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a bitcoin mining business plan step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your bitcoin mining business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a bitcoin mining business or grow your existing bitcoin mining company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bitcoin mining business to improve your chances of success. Your bitcoin mining business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Bitcoin Mining Businesses
With regard to funding, the main sources of funding for a bitcoin mining business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan (hand it to them in person or email to them as a PDF file) and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for bitcoin mining companies.
How to Write a Business Plan for a Bitcoin Mining Business
If you want to start a bitcoin mining business or expand your current one, you need a business plan. The guide and sample below details the necessary information for how to write each essential component of your bitcoin mining business plan.
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of bitcoin mining business you are running and the status. For example, are you a startup, do you have a bitcoin mining business that you would like to grow, or are you operating a chain of bitcoin mining businesses?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overv iew of the bitcoin mining industry.
- Discuss the type of bitcoin mining business you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategy. Identify the key members of your team.
- Offer an overview of your financial plan.
Company Overview
In your company overview, you will detail the type of bitcoin mining business you are operating.
By definition, bitcoin mining is the way in which bitcoin transactions are verified and new bitcoin is minted. There is currently no central or overarching manner in which bitcoin transactions are processed; therefore, bitcoin mining companies assume that responsibility and more to fulfill the role of oversight in transactions. Your bitcoin mining company may include one or all of the following elements of blockchain mining:
- Bitcoin mining validation : Bitcoin mining validation is essential to the process of legitimizing transactions. A company that focuses on verifications or validations is one that uses an application-specific circuit, such as ASIC. The circuit mines a specific cryptocurrency, based on the circuit chosen by the mining company.
- Bitcoin mining validation and minting : Several mining companies offer validation and minting of new bitcoins. After ensuring transactions are valid, the miner follows a process of mining with the goal of adding blocks to the bitcoin blockchain.
- Mining Pools: A mining pool contains a group of crypto miners who share resources and rewards. Each miner assumes part of the validation process, which enables the group to succeed more often in mining new blocks versus single miners who require more time and effort to mine new blocks. Mining pools run specific hardware and require each miner to have the mining app circuit, GPU, CPU or Cloud-based platform that conforms to the pool.
In addition to explaining the type of bitcoin mining business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of transactions made, the number of blocks added to the chain, reaching X number of clients served, etc.
- Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry or market analysis, you need to provide an overview of the bitcoin mining industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the bitcoin mining industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your bitcoin mining business plan:
- How big is the bitcoin mining industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your bitcoin mining business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your bitcoin mining business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, brokers, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of bitcoin mining business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers. Ideally you can speak with a sample of your target customers before writing your plan to better understand their needs.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are othe r bitcoin mining businesses.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes bitcoin mining farms, Ethereum cryptocurrency buyers, and other cryptocurrency alternatives. You need to mention direct competition, as well.
For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
- What types of customers do they serve?
- What type of bitcoin mining businesses are they?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide percentage options for your best customers?
- Will you offer services that your competition doesn’t?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bitcoin mining business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type o f bitcoin mining company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide a guarantee of validation? Will you offer premium service for your most valuable company clients?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the services you offer and their prices.
Place : Place refers to the site of your bitcoin mining company. Document where your company is situated and mention how the site will impact your success. For example, is your bitcoin mining business located in a home office, a business district, or a warehouse? Discuss how your site might offer additional value for your customers.
Promotions : The final part of your bitcoin mining marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Reach out to websites
- Speak as a cryptocurrency expert at seminars and corporate events
- Blog for clients and potential clients
- Engage in email marketing
- Advertise on social media platforms
- Improve the SEO (search engine optimization) on your website for targeted keywords
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your bitcoin mining business, including overseeing the platforms and circuitry you utilize, paying bills, servicing requests for transactions and/or mining, and digitally invoicing clients.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth validation, or when you hope to reach $X in revenue. It could also be when you expect to expand your bitcoin mining business to form a mining pool.
Management Team
To demonstrate your bitcoin mining business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing bitcoin mining businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a bitcoin mining business or successfully running a mining brokerage.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.
Income Statement
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you validate 25 or more transactions per day, or form an alliance with a corporation that trades in high amounts of cryptocurrency ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your bitcoin mining business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bitcoin mining business:
- Cost of computer equipment, software, hardware and utilities
- Payroll or salaries paid to staff
- Business insurance
- Other start-up expenses (if you’re a new business) like legal expenses, permits, equipment and furnishings
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include a contract you’ve created with a corporate buyer or an additional cryptocurrency you’re adding to your mining business.
Writing a business plan for your bitcoin mining business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the bitcoin mining industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful bitcoin mining business.
Bitcoin Mining Business Plan FAQs
What is the easiest way to complete my bitcoin mining business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily write your bitcoin mining business plan.
How Do You Start a Bitcoin Mining Business?
Starting a bitcoin mining business is easy with these 14 steps:
- Choose the Name for Your Bitcoin Mining Business
- Create Your Bitcoin Mining Business Plan
- Choose the Legal Structure for Your Bitcoin Mining Business
- Secure Startup Funding for Your Bitcoin Mining Business (If Needed)
- Secure a Location for Your Business
- Register Your Bitcoin Mining Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Bitcoin Mining Business
- Buy or Lease the Right Bitcoin Mining Business Equipment
- Develop Your Bitcoin Mining Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Bitcoin Mining Business
- Open for Business
Where Can I Download a Free Business Plan Template PDF?
Click here to download the pdf version of our basic business plan template.
Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.
We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.
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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success. Click here to see how a Growthink business plan writer can create your business plan for you.
How to Start a Bitcoin Mining Business
Mining Bitcoin and other cryptocurrencies is the Wild West of technology and finance. The field is still evolving and largely unregulated, and the work comes with risk. As with any frontier, however, there’s significant profit potential for those who succeed.
Although cryptocurrency mining involves the latest in computational and financial advancements, starting a mining business requires no technical knowledge. The work is basically a numbers game, and anyone who’s willing to invest in the resources needed to win the game might profit.
Ready to form your LLC? Check out the Top LLC Formation Services .
Learn how to start your own Bitcoin Mining Business and whether it is the right fit for you.
Start a bitcoin mining business by following these 10 steps:
- Plan your Bitcoin Mining Business
- Form your Bitcoin Mining Business into a Legal Entity
- Register your Bitcoin Mining Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Bitcoin Mining Business
- Get the Necessary Permits & Licenses for your Bitcoin Mining Business
- Get Bitcoin Mining Business Insurance
- Define your Bitcoin Mining Business Brand
- Create your Bitcoin Mining Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your bitcoin mining business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas .
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
How much can you charge customers?
What will you name your business.
Luckily we have done a lot of this research for you.
What are the costs involved in opening a bitcoin mining business?
When it first started, Bitcoin could be profitably mined with a home computer. Since 2013, however, mining has become too competitive for computers to provide any real profit. Even the fastest computers aren’t quick enough to find the correct hash first.
Today, Bitcoin mining businesses use application-specific integrated circuits (ASICs) that are specifically made for mining Bitcoin or another cryptocurrency. An ASIC setup that can solve Bitcoin calculations on its own costs about $12,000 .
Most people get into the industry for much less by pooling their resources, though. New ASIC miners are available for anywhere from $489 to $3,000 . With one of these, business owners can join a mining pool where members literally pool their resources together. When the pool has a correct hash first, the proceeds are split amongst members.
For even less, business owners can mine through the cloud. In these agreements, business owners lease mining resources from a cloud-based provider and the leased resources are pooled with those leased by other business owners. Bitcoin.com and Genesis Mining both have plans starting under $200.
What are the ongoing expenses for a bitcoin mining business?
The ASICs needed for mining Bitcoin and other cryptocurrencies use a lot of power. One estimate places the amount of power needed to mine Bitcoin at 215 kilowatts per transaction computed. MarketWatch charts how much that costs in each state.
Who is the target market?
A Bitcoin mining business serves the Bitcoin cryptocurrency and therefore, the software used must comply with Bitcoin’s standards. Other cryptocurrency miners must comply with the standards of the cryptocurrency being mined.
How does a bitcoin mining business make money?
Mining Bitcoin is akin to participating in competitive auditing. Businesses verify Bitcoin transactions by guessing 64-digit hexadecimal numbers, which are referred to as “hashes.” The first business to guess a hash that’s equal to or less than the target hash is awarded Bitcoin and a transaction fee.
Bitcoin is set up so that the number of BItcoin rewarded halves over time . This occurs roughly every four years, and no more Bitcoin will be awarded once there’s a total of 21 million Bitcoin. As the reward for Bitcoin decreases, the amount earned from transaction fees is expected to increase.
(Other cryptocurrencies operate differently.)
The compensation that Bitcoin mining businesses receive is determined by the cryptocurrency. At the time of writing, having a correct hash first netted the winning business 12.5 Bitcoins. The current exchange rate was just below $8,000 for 1 Bitcoin, so having a hash would net almost $100,000. Transaction fees in comparison are relatively small.
How much profit can a bitcoin mining business make?
A Bitcoin mining business’ profitability is directly tied to the value of Bitcoin and cost of electricity. When Bitcoin was trading above $20,000 per Bitcoin, this business was highly profitable. As the value of Bitcoin has diminished, so has profitability.
How can you make your business more profitable?
Bitcoin is just one cryptocurrency that business owners can mine. Additional cryptocurrencies include Ethereum, Zcash, Ripple, Monero and others. Which of these is most profitable to mine depends on many factors, including the value, difficulty to mine and projected forecast for each cryptucurrency.
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Bitcoin Mining Business Name Generator
If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name , we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability .
It's very important to secure your domain name before someone else does.
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Powered by godaddy.com, step 2: form a legal entity.
The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your bitcoin mining business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Have a Professional Service Form your LLC for You
Two such reliable services:
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended : Read our best net 30 vendors , guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a bitcoin business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources .
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance .
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
Recommended: Learn what business insurance for your Bitcoin Mining Business will cost.
Business Insurance for Bitcoin Mining Business
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.
Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a bitcoin mining business
Marketing efforts for a Bitcoin mining business should be targeted towards investors. Additional investors can help fund the acquisition of more equipment, which might help a business qualify for reduced electric rates. To attract investors, business owners should have a clear presentation that details what cryptocurrencies are and how profitable the business model is.
How to keep customers coming back
A Bitcoin mining business doesn’t need to worry about attracting customers because the business serves the cryptocurrency and not people directly. Any business that complies with the standards can participate in the cryptocurrency.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business .
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides , the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .
Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Bitcoin Mining Business in your State
- Connecticut
- District of Columbia
- Massachusetts
- Mississippi
- New Hampshire
- North Carolina
- North Dakota
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
The first people to mine Bitcoin were mostly technology geeks who were intrigued by the cryptocurrency’s innovation. Today, geeks continue to experiment with cryptocurrencies, but they aren’t the only people mining Bitcoin and other cryptocurrencies.
Anyone who wants a primary or side business that provides passive income may be interested in running a cryptocurrency mining business. The work involved can be arranged around other obligations, and the budget required can be adjusted as needed.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
Entrepreneurship Quiz
What happens during a typical day at a bitcoin mining business?
Running a Bitcoin mining business is mostly hands-off work. As long as operations are running smoothly, business owners need to do little more than check their business’ Bitcoin holdings and the current exchange rate to see if they want to sell.
The most common computer malfunction is overheating, and business owners do need to respond quickly when this happens. Computers that overheat shut down, and they won’t provide any profit until they’re cooled down and restarted.
What are some skills and experiences that will help you build a successful bitcoin mining business?
Mining Bitcoin and other cryptocurrencies requires no specialized knowledge. Nevertheless, business owners should familiarize themselves with the process so they understand what they’re doing. Books, such as, Bitcoin Mining Step by Step , are popular resources on the subject.
Business owners may also want to invest in a USB Bitcoin miner . These usually aren’t profitable, but they’re helpful when learning the fundamentals of Bitcoin mining.
It’s also important to be familiar with the risks that accompany Bitcoin and other cryptocurrencies. Understanding market volatility is essential when deciding whether to sell mined Bitcoin. Being familiar with the illegal scams and hacks that occur helps business owners avoid becoming victims. John Oliver detailed some of the biggest risks, including scams.
What is the growth potential for a bitcoin mining business?
Bitcoin mining operations run the gamut from individuals doing this as a hobby to large corporations that have vast resources. An example of a small-scale setup is Geoffrey Welborn’s inexpensive, yet profitable, dorm room operation . A business in Sweden has a much larger operation, maintaining 45,000 computers in a former helicopter hangar.
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Take the Next Step
Find a business mentor.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a bitcoin mining business?
To secure low electric rates, business owners should try to start with as large an operation as they can afford. If a business requires enough electricity to qualify for a reduced commercial rate, the most significant ongoing expense can be greatly reduced. (See Ongoing Expenses.)
How and when to build a team
A Bitcoin mining business can be run with no or minimal staff. If business owners have other obligations, they might want to hire someone who can respond when overheating computers.
Get more ideas with our Business Ideas Generator .
Check out our How to Start a Business page.
Sign up at the Business Center to access useful tools for your business.
Useful Links
Further reading.
- Bitcoin Mining Basics
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Have a question leave a comment.
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How to Write a Bitcoin Mining Business Plan [Sample Template]
Are you about starting a bitcoin mining company? If YES, here is a complete sample bitcoin mining business plan template & feasibility report you can use for FREE . Okay, so we have considered all the requirements for starting a bitcoin mining company. We also took it further by analyzing and drafting a sample bitcoin mining marketing plan template backed up by actionable guerrilla marketing ideas for bitcoin mining companies. So let’s proceed to the business planning section .
Why Start a Bitcoin Mining Business?
It is no longer news that the advent of the internet has paved the way for unlimited business opportunities that one can easily start and run from the comfort of his or her home. If you love working from home, then you may want to consider starting an internet based business. One of the businesses that one can easily start with a computer and internet connectivity is bitcoin mining.
You just might want to ask;
What is Bitcoin?’
Simply put, bitcoin is a digital currency that operates independent of any country’s central bank. In order to get an updated value of the worth of a bitcoin, you can make use of Google’s currency converter; it is a reliable platform to know the value of bitcoin per time. The current value of a bitcoin is 150 British Pounds and a block of bitcoin which is 25 coins is worth 3, 750 British Pounds.
If you are interested in mining bitcoin, then you have two options to follow. You can choose to mine a block of bitcoins from a computer or you can choose to pool. If you want quick returns on your investment, then joining a pool is your best option because mining may take you a month or more before you get any return on your investment. Please note that if you join a pool, you will only get smaller payments, but you can be rest assured that you will get them on regular basis.
It is important to state that starting a bitcoin mining business can be rewarding but you would have to compete with other well – established bitcoin miners on the World. The fact that you will be competing with people from all over the globe is enough reason for you to be result oriented and at the same be creative with your bitcoin mining business.
If you are interested in starting a bitcoin mining company, then you should be ready to conduct thorough feasibility studies and market survey before committing your money and other resources to it. Below is a sample bitcoin mining company business plant template that can help you successfully write your own business plan with little or no stress.
A Sample Bitcoin Mining Business Plan Template
1. industry overview.
Bitcoin mining in its simplest term is the practice of adding transaction records to Bitcoin’s public ledger of previous transactions or block chain. This ledger of previous transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. As a matter of fact, Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is indeed an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and highly secured.
In addition, bitcoin mining as the name implies is similar to the mining of other commodities: it requires deliberate and calculated effort and it slowly makes new currency available at a rate that look like the rate at which commodities like gold and copper et al are mined from the ground. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid transaction fees as well as a “subsidy” for newly created coins.
Bitcoin is a type of digital currency that is created and held electronically; it is a cryptocurrency and a digital payment system that is invented by an unknown programmer, or perhaps a group of programmers. No one controls it. Unlike Dollars, Euros, Pounds and other currencies bitcoins are not printed, they are produced by people using software that solves mathematical problems.
If you want to start mining bitcoin, you would need an online wallet where your bitcoins will be stored. There are several wallet options available online for bitcoin mining. The rule of thumb to follow before choosing an online wallet for your bitcoin mining is to choose a wallet that will allow you save bitcoins, buy bitcoins, use bitcoins and also accept bitcoins as a means of payment. The most preferred wallet option that has all these features is coinbase.com. You can check out their website to see how it works.
The Bitcoin (cryptocurrency and a digital payment system) industry is indeed a large internet based industry that is active in a lot of countries.
Despite the fact that bitcoin mining is still a Green business, the business will continue to blossom because more and more users will embrace the use of bitcoin in the nearest future. So, if you have an entrepreneurial mentality and you wish to join a massive technological revolution, you can start your own bitcoin mining business.
The truth is that you can build a bitcoin mining business even if you are not too ICT savvy and have limited capital to invest in software development and infrastructure as long as you have internet access and you know how to use the internet.
Some of the factors that encourage entrepreneurs to start their own bitcoin mining business is that the business is profitable. You can actually start your own bitcoin mining business from the comfort of your house. All you need to do is to create an office somewhere in your house. You don’t necessarily need to see the people you are doing business with since you can mine bitcoin from any part of the world.
Lastly, starting a bitcoin mining business requires professionalism, advanced mathematics skills and good grasp of how cryptocurrencies work.
2. Executive Summary
BTC Silicon Valley Pool®, LLP is a registered and licensed cryptocurrency and digital payment system company that specializes in bitcoin mining services. The business will be based in Silicon Valley – California where we were able to secure a well – positioned and standard office facility. We are aware that running a standard bitcoin mining company can be demanding which is why we are well trained, certified and equipped to perform excellently in the business.
BTC Silicon Valley Pool®, LLP is a client – focused and result driven cryptocurrency and a digital payment system company that provides broad – based services at an affordable fee to our clients. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they hire our services to mine bitcoin for them.
At BTC Silicon Valley Pool®, LLP, our client’s best interest would always come first, and everything we do is guided by our values and professional ethics. We will ensure that we hire professionals who are well experienced in the mining of bitcoin and other cryptocurrencies.
BTC Silicon Valley Pool®, LLP will at all time demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Our plan is to position the business to become the leading brand in bitcoin mining in the whole of Silicon Valley, California, and also to be amongst the top 10 bitcoin mining companies in the united states of America within the first 5 years of operation. This might look too tall a dream but we are optimistic that this will surely be realized because we have done our research and feasibility studies and we are enthusiastic and confident that Silicon Valley is the right place to launch our bitcoin mining business.
BTC Silicon Valley Pool®, LLP is founded by Benjamin Julius and Ortiz Sunderland who have been business partners for many years. The organization will be managed by both of them since they have dequate working experience to manage such business.
Benjamin Julius has over 5 years’ experience working at various capacities within the cryptocurrency and digital payment system industry in the United States of America. Benjamin Julius graduated from both University of California – Berkley with a Degree in Information Technology, and University of Harvard (MBA). He is also a Certified Bitcoin Professional (CBP). Ortiz Sunderland has Blockcerts Certification, Cryptocurrency certification, Ethereum certification, and Blockchain professional certification.
3. Our Products and Services
BTC Silicon Valley Pool®, LLP is going to offer varieties of services within the scope of the cryptocurrency and digital payment system industry in the United States of America. Our intention of starting our bitcoin mining company is to work with bitcoin exchange and trading companies, people and organizations that make online transactions in our immediate community and state and people on the cyber space who make use of bitcoins from all over the world.
We are prepared to make profits from the industry and we will do all that is permitted by the law in the United States to achieve our business goals, aim and ambition. Our business offerings are listed below;
- Bitcoin cloud mining
- Bitcoin cloud hashing
- Providing other related bitcoin and cryptocurrency and a digital payment system consulting and advisory services
4. Our Mission and Vision Statement
- Our vision is to build a bitcoin mining company that will become the number one choice for individuals, smaller businesses and corporate clients in the whole of California and in the cyberspace.
- Our mission is to contribute our part in adding transaction records to Bitcoin’s public ledger of previous transactions or block chain. We will position the business to become one of the leading brands in the bitcoin mining line of business in the whole of Silicon Valley and also to be amongst the top 10 cryptocurrency and digital payment system companies in the United States of America within the first 5 years of operations.
Our Business Structure
Ordinarily we should have settled for two or three staff members, but as part of our plan to build a standard cryptocurrency and digital payment system company in Silicon Valley, we have perfected plans to get it right from the beginning which is why we are going the extra mile to ensure that we have competent, honest and hardworking employees to occupy all the available positions in our firm.
The picture of the kind of bitcoin mining business we intend building and the business goals we want to achieve is what has informed the amount we are ready to pay for the best hands available in and around Silicon Valley as long as they are willing and ready to work with us to achieve our business goals and objectives.
Below is the business structure that we will build BTC Silicon Valley Pool®, LLP on;
- Chief Executive Officer
- Bitcoin Miners and Hashers
- Programmers and Software Developers
Admin and HR Manager
- Digital Marketers (Marketing and Sales Executive)
Customer Care Executive/Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Office:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Bitcoin Miners/Hashers
- Responsible for mining and hashing bitcoin in the company’s pool
- Ensures fairness while keeping the Bitcoin network stable, safe and highly secured
- Responsible for managing the company’s online wallet
- Handles any other cryptocurrency and digital payment system consulting and advisory related services
Software Developer/Programmer
- Responsible for designing, installing, testing and maintenance of software systems for the organization
- Reviews current systems
- Presents ideas for system improvements, including cost proposals
- Works closely with analysts, designers and staff
- Producing detailed specifications and writing the programme codes
- Tests the product in controlled, real situations before going live
- Maintains the systems once they are up and running
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Designs job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
- Oversees the smooth running of the daily office activities.
Marketing and Sales Executive
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of relevant projects.
- Writes winning proposal documents, negotiate fees and rates in line with company policy
- Responsible for handling business research, marker surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- creates reports from the information concerning the financial transactions as recorded
- Prepares the income statement and balance sheet using the trial balance and ledgers
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis
- Performs cash management, general ledger accounting, and financial reporting for one or more properties
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
- Provides technical assistance and support for incoming queries and issues related to cryptocurrency and digital payment system
- Ensures that all contacts with clients (e-mail, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
- Receives parcels/documents for the company
- Distributes mails in the organization
- Handles any other duties as assigned by the line manager
6. SWOT Analysis
BTC Silicon Valley Pool®, LLP employed the services of a core professional in the area of business consulting and structuring to assist the firm in building a well – structured bitcoin mining company that can favorably compete in the highly competitive cryptocurrency and digital payment system industry.
Part of what the business consultant did was to work with the management of our organization in conducting a SWOT analysis for BTC Silicon Valley Pool®, LLP. Here is a summary from the result of the SWOT analysis that was conducted on behalf of BTC Silicon Valley Pool®, LLP;
Our core strength lies in the power of our team; our workforce. We have a team that can go all the way to give our clients value for their money; a team that are trained and equipped to pay attention to details and to deliver excellent services as it relates to bitcoin mining and hashing. Asides from the synergy that exists in our carefully selected workforce, we have a very strong online presence are and we are well positioned and we know we will attract loads of clients from the first day we open our doors for business.
As a new bitcoin mining company, it might take some time for our organization to break into the market and gain acceptance especially from corporate clients in the fast-growing cryptocurrency and digital payment system industry; that is perhaps our major weakness. So also, we may not have the required cash to give our business the kind of publicity we would have loved to.
- Opportunities:
The opportunities in the cryptocurrency and digital payment system industry is massive considering the number of bitcoin exchange and trading companies that make online transactions all over the world. As a standard and well – positioned bitcoin mining company, we are ready to take advantage of any opportunity that comes our way.
Some of the threats that we are likely going to face as a bitcoin mining company operating in the United States are hosting issues, installation or upkeep troubles, heat, unfavorable government policies , and global economic downturn which usually affects purchasing/spending power. There is hardly anything we can do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
You will agree that there is hardly any serious player in the cyberspace who is not transacting with cryptocurrency or hosting digital payment system on their platform. This goes to show that sooner than later, cryptocurrency and digital payment system will become the most used payment system in the globe.
8. Our Target Market
The demographic of those that require the services of bitcoin miners is not restricted to bitcoin exchange and trading companies, but it cuts across people on the cyber space who make use of bitcoins from all over the world. This is so because bitcoin is a cryptocurrency and a digital payment system that is used basically on the internet hence the ability to work for people and organization all across the globe.
BTC Silicon Valley Pool®, LLP will initially serve small to medium sized business, from new ventures to well established businesses and individual clients, but that does not in any way stop us from growing to be able to compete with the leading bitcoin mining companies in the United States.
As a standard and licensed bitcoin mining company, BTC Silicon Valley Pool®, LLP offers a wide range of cryptocurrency and digital payment system services hence we are well trained and equipped to service a wide range of clientele base.
Our Competitive Advantage
The level of competition in the cryptocurrency and a digital payment system industry does not in any way depend on the location of the business since most people that mine bitcoin can operate from any part of the world and still effectively compete in the industry.
We are quite aware that to be highly competitive in the cryptocurrency and digital payment system industry means that we should be able to deliver consistent quality and result oriented services, our clients should be able to get steady supply of bitcoins whenever they need them and we should be able to meet the expectations of clients as it relates to handling cryptocurrencies.
BTC Silicon Valley Pool®, LLP might be a new entrant into the cryptocurrency and digital payment system industry in the United States of America, but the management staff and owners of the business are considered gurus. They are core professionals who are licensed and highly qualified bitcoin miners and hashers in the United States. These are part of what will count as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
BTC Silicon Valley Pool®, LLP is established with the aim of maximizing profits in the cryptocurrency and digital payment system industry and we are going to go all the way to ensure that we do all it takes to attract clients on a regular basis and to get referrals from our clients.
BTC Silicon Valley Pool®, LLP will generate income by offering the following services and products
- Sale of bitcoins
- Providing cryptocurrency and digital payment system consulting and advisory related services
10. Sales Forecast
One thing is certain, there would always be bitcoin exchange and trading companies, people and organizations that make online transactions that would need the services of professional bitcoin miners and hashers.
We are well positioned to take on the available market in Silicon Valley – California and in the cyberspace and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six months of operation and grow the business and our clientele base beyond Silicon Valley to other cities in the United States of America and in the cyberspace.
We have been able to critically examine the digital mining market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast.
- First Fiscal Year: $150,000
- Second Fiscal Year-: $350,000
- Third Fiscal Year-: $750,000
N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and internet shutdown within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
We are mindful of the fact that there is fast – growing competition amongst bitcoin mining companies and other players in the cryptocurrency and digital payment system industry in the United States of America and around the globe; hence we have been able to hire some of the best business developers cum digital marketers to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization. We will also ensure that our excellent job deliveries speak for us in the market place; we want to build a standard bitcoin mining company that will leverage on word of mouth advertisement from satisfied clients.
Our goal is to grow our bitcoin mining company to become one of the top 10 cryptocurrency and digital payment system companies in the United States of America which is why we have mapped out strategy that will help us take advantage of the available market to grow and become a major force to reckon with not only in the United States, but also all across the cyberspace.
BTC Silicon Valley Pool®, LLP is set to make use of the following marketing and sales strategies to attract clients;
- Introduce our business by sending introductory letters alongside our brochure to all the bitcoin exchange and trading companies cum bitcoin traders, programmers, investors, and internet – business oriented people and organization within and outside the United States
- Promptness in bidding for bitcoin mining and hashing contracts from bitcoin exchange and trading companies, programmers, investors, and organizations within and outside the United States
- Advertise our business in relevant programming magazines, radio and TV stations
- List our business on local directories/yellow pages
- Attend international bitcoin mining and cryptocurrency related seminars, and business fairs et al
- Create different packages for different category of clients in order to work with their budgets
- Leverage on the internet to promote our business
- Join related associations around with the aim of networking and marketing our services; we are likely going to get referrals from such networks
11. Publicity and Advertising Strategy
We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the cryptocurrency and digital payment system industry by storm which is why we have made provisions for effective publicity and advertisement of our bitcoin mining company.
Below are the platforms we intend to leverage on to promote and advertise BTC Silicon Valley Pool®, LLP;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Leverage on the internet and social media platforms like Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
- Install our billboards on strategic locations all around Silicon Valley
- Engage in roadshow from time to time
- Distribute our fliers and handbills in target areas
- Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our company’s logo
12. Our Pricing Strategy
At BTC Silicon Valley Pool®, LLP we will keep our fees a little bit below the average market rate by keeping our overhead low. In addition, we will also offer special discounted rates to startups, nonprofits, cooperatives, and small social enterprises who want to transact with cryptocurrency.
We are aware that there are some clients that would need regular access to digital payment system consultancy and advisory services and assistance, we will offer flat rate for such services that will be tailored to take care of such clients’ needs.
- Payment Options
The payment policy adopted by BTC Silicon Valley Pool®, LLP is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that BTC Silicon Valley Pool®, LLP will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via mobile money
- Payment via Point of Sales Machines (POS Machines)
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for services rendered or cryptocurrency purchased.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting / leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.
Starting a bitcoin mining company can be cost effective because on the average, you are not expected to acquire expensive machines and equipment. Basically, what you should be concerned about is the amount needed to secure a standard office facility in a good and busy business district, the amount needed to furniture and to equip the office, the amount needed to pay bills, promote the business and obtain the appropriate business license and certifications.
Basically, these are the areas we are looking to spending our startup capital on;
- The total fee for incorporating the Business in the United States of America – $750
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
- The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
- The amount needed to acquire a suitable office facility in a business district for 6 months (Re – Construction of the facility inclusive) – $40,000
- Marketing promotion expenses for the grand opening of BTC Silicon Valley Pool®, LLP in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
- The total cost for hiring Business Consultant – $2,500
- The cost for equipping the office (computers, bitcoin mining software apps and hardware such as Application-specific integrated circuit (ASIC) machines and other cryptocurrency and other form of digital payment system related software apps and wallet, internet server, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $15,000
- The cost of launching our official Website – $600
- Budget for paying at least two employees for 3 months and utility bills – $15,000
- Additional expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Miscellaneous – $1,000
Going by the report from the research and feasibility studies, we will need about One Hundred and Fifty Thousand US Dollars ( $150,000 ) to set up a small scale but standard bitcoin mining company in the United States of America.
Generating Funds/Startup Capital for BTC Silicon Valley Pool®, LLP
BTC Silicon Valley Pool®, LLP is a business that will be owned and managed by Benjamin Julius and his business partner Ortiz Sunderland. But may likely welcome partners later which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.
- From personal savings
- From family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $50,000 (Personal savings $40,000 and soft loan from family members $10,000) and we are at the final stages of obtaining a loan facility of $100,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting BTC Silicon Valley Pool®, LLP is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to offer our bitcoins and other cryptocurrencies a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
BTC Silicon Valley Pool®, LLP will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner of our business strategy.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more as determined by the board of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry, and they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of all forms of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Leasing a standard and well positioned office facility in the heart of Silicon Valley – California: Completed
- Generating part of the startup capital: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Design and Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the needed software applications, internet server, furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with vendors and key players in the industry: In Progress
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Table of Contents
Bitcoin is a type of Crypto-currency and has managed to gain immense popularity in present time. In present financial market, this currency has managed to emerge as one of the most searched financial currency.
This crypto currency is not regulated by any country or governing body. It operated independently of the financial authority of any country and banking institution. When selling or purchasing Bitcoins, you don’t have to worry about any taxes imposed by any financial institutions around the world.
Present Bitcoin Value
- Being a digital currency, you have to search the Google for calculating the current value of Bitcoins. Google is the best platform that can offer you with current Bitcoin value.
- When searching the current digital market, you may find that one Bitcoin holds its value equal to around 150 British Pounds. So if you are interested in purchasing a stack of 25 coins then you may have to invest around 3,750 British Pounds or equivalent in any other currency.
Method to Mine Bitcoins
When focusing on mining Bitcoins, most professionals follow two very unique methods that are full proof:-
- To successfully mine Bitcoins first option that everyone would select is to try and look around for them over the internet (as this is only a type of digital currency that does not exist in real world).
- You also have an option to fish it out of the pool.
Which method would offer you with instant returns?
As both methods are time tested, still customers who are looking around for instant returns would in general prefer going with the Pool. When you plan to mine for Bitcoins, the process is time consuming as it may take a few months before you can actually expect best returns.
Disadvantages of joining the pool
- When you plan to join the pool, you can expect instant returns on your purchase, but you have to keep in mind that the payment you get in returns will be very small.
- Pool will never offer you with big returns on your investment, so it may not be very much profitable, but the payment for Bitcoins will still be more regular and consistent.
Advantages of Mining Bitcoins
- The process of Bitcoin mining is one of the ways most investor looking around for profits, prefer. It offers with a very strict competition.
- One of the reasons for strict competition is that the crypto-currency is still short in value but higher in demand.
- You can always expect much bigger returns on your investment, but it may be time consuming.
Bitcoin Mining
Bitcoin mining refers to the process in which new transactions are added to the already existing ledger system. In simple terms, if you purchase Bitcoin, your transaction details and information is simply added to the Bitcoin chain (Block Chain). This Block chain offers the Bitcoin with its security as a single Block chain carries a very big sequence of code that is practically difficult to crack.
- This Block chain offers each transaction with security as it is attached to the same network and is visible to public.
- Each miner who is attached to the Chain has to confirm each transaction for it to take place.
- So for Bitcoins mining is one of the most important tasks that ensures that your Bitcoin is fair and secured.
- When mining for Bitcoin you may have to be very much calculative with the rates. This mechanism is made use of for introducing and adding new Bitcoins to the existing system.
- So if you manage to create new coin then you are also offered with subsidy and transaction fee as compensation.
- The currency is kept safe within the electronic medium and is used as one of the modes of making payments within the electronic medium.
- Bitcoins are created by professional people who make use of mathematical software to create and solve mathematical problems.
Bitcoin Mining requirements
- As you have to keep your money safe in a bank you need an account so with Bitcoins you have to keep them safe in a Bitcoin wallet online.
- As the currency is available in the online world, so it is obvious that to store it you have to make use of electronic wallet.
- Bitcoin wallets are managed in the digital world that are used to you’re your Bitcoins safely.
- If you are mining Bitcoins then you can make use of different Bitcoin wallets.
- These wallets are useful for users to help them purchase, save, buy and sell Bitcoins.
Process for Bitcoin Mining
In simple terms, we have provided you with simple steps that you need to follow for Bitcoin mining.
- To get started with Bitcoins you have to get familiar with method to perform calculations. After you are familiar with doing calculations you have to plan the number of Bitcoin miners you need to involve.
- You have to decide the type of miners you are going to make use of. You have to get started with calculating the overall cost of operation
- After you have selected the miners, you may have to move on to the next stage of setting your infrastructure according to your business plan.
Profitability predictions
Once all cost related to investing in Bitcoins have been done by you then it is right time for you to work out the overall profit you will generate with Bitcoins. You can also make use of Bitcoin profit calculator online.
- One main benefit of mining Bitcoins is that you can perform all possible calculations using Bitcoin calculator even on your mobile gadgets or desk top.
Generate profit
This is your last move for Bitcoin mining. You should try and invest money to make more transactions online. You can use your Bitcoins for completing any transaction. The more you use it the more value is added to it.
How profitable is Bitcoin Mining?
You have to keep in mind that profitability in business depends on one main factor – your investment. So like any other business Bitcoins will also offer you with profit, but the percentage depends on how much you are going to invest in this business.
Apart from this there may be a number of other factors as well that may affect your profit margin. You have the convenience of calculating profits using Bitcoin profit calculator.
The online calculators work on numerous parameters including time you spent online, electricity cost and other relevant factors before providing you with profit calculations.
Bitcoin Cloud Mining
This is an entire new concept to mine Bitcoins making it more profitable. To make use of this method you may not have to use any physical rigs. You can perform this by renting power for computing. There are a number of companies that perform and outsource computing for Bitcoins.
Disadvantages of could mining
- There are chances that mining Bitcoins may not prove profitable in the long term as you have to bear the cost of renting equipments and pay the rentals on monthly basis.
- It is much ideal to make investment in purchasing one time so you may get to save more money spent on rentals of these equipments.
- You just have to search online for best Bitcoin mining tool that can help you generate best profit in the long run.
Bitcoin mining Terminology
In order to effectively mine Bitcoins you have to get familiar with Bitcoin terms. Some common terms used for Bitcoin mining are stated below.
Hash rate – This is a term that is used by people to solve mathematical calculations for calculating value of Bitcoins. Higher network of people refers to high hash rate.
Bitcoins Block – Bitcoins are created once you have performed certain number of calculations. A specific number is generated for every 50 Bitcoins created. Over a period of four years this number is reduced to half by 210,000 blocks.
Difficulty –This refers to the difficulty level that increases with total number of Bitcoins generated with each calculation. So with more number of users joining the chain, harder it becomes to mine Bitcoins.
Electricity rate – When mining Bitcoins, you have to consume electricity to run the equipments. The rate of electricity you have to pay will decide your profit margin.
Power consumption – Each miner involved in the chain will use different amount of electricity. The rate may vary from one place to another. This factor is important for calculating your profit margins.
Pool fee –To stay connected to the pool and perform transactions you may have to pay some fee. Pool refers to the platform that keeps all miners connected to the single chain. The profit is evenly divided amongst the members of the pool.
Time frame – It is important that a time frame has to be set in order to generate and mine Bitcoins. You need more time frame to earn more Bitcoins.
Profitability –This depends on the total number of miners who are going to get connected to the chain. It is not easy to predict the total number that will be a part of the chain within desired time frame.
Conversion rate – This is the rate that you will have to pay or earn after each transaction. This factor will also decide your profitability.
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Business Plan for Commercial Scale Mining Operation
I've been talking with my father in law for a few years about bitcoin and I think he's finally ready to make an investment. He's got access to cheap power and is interested in making a substantial investment with full knowledge that it's quite speculative. I'd like to know if anyone would be willing to share a comprehensive or summary business plan for a large scale operation. Any resources would be appriciated. If there are any consultants willing to provide their expertise in this area please send me a PM with your experience, expertise and rate.
I'd be interested in reading this as well, if anyone will be kind enough to share.
IMHO there are only two ways to make money with bitcoin mining: running a pool or manufacturing ASIC hardware.
Mining hardware is overly expensive and has a very short lifespan. It doesn't matter how much money you have to start with, you'll constantly be chasing newer more efficient hardware. And it will never ROI. If you had started a few years ago, it would be a different story.
A better business plan is to buy low and sell high.
How big of a factor is the cost of power in determining the expected roi? Because in this case we have access to power at a substantial discount below market rates.
I work for one. Electricity is the #1 concern. You need to be somewhere cheap, have a dedicated power pole and a good plan for power distribution.
What do you pay for power? If you don't mine my asking.
I was just thinking if it would be worth it more to create custom mining setups and sell those. Ones with free on coolant systems and proprietary OS with command consoles. Or just build them and create your own. Or to invest in the backend of the market. Like a SETI style multiuser input system.
I like that idea.
Basically, any mining setup, even with cheap power and bulk purchases of the most efficient mining hardware, be it ASICs or GPUs, is going to be hard-pushed to find a margin. However, if you use it as a sort of test-bed or incubator for developing a mining rig product you can sell at a profit, you stand a better chance of making a return. I suspect your chance of return becomes even better if you also set up a pool and take a percentage of other people's work.
Management types call this "vertically integrated", or some such thing. It means that you use your knowledge, contacts and infrastructure to cross-subsidise products up and down the chain.
What do you mean by a "substantial investment"?
Part of this exercise is to determine how much of an investment is necessary to make the enterprise a worth while endeavor. I'd expect the first round to be between 150-250k.
Here's my 2p's worth if it helps.
Mining is generally not a very good idea for a commerical operation, it's entire purpose is to be trending towards a 0 return... it's the whole point of mining difficulty going up and down and why it's a p2p system not a centralized server setup. I.e. it should eventually only provide a marginal return on money spent doing it to make it worthwhile. At some point it becomes too crowded that everyone makes a loss until people turn off their equipment or get more efficient hw somehow. This means you can calculate the upper cap on the business and over time this deminishes.
As a business venture it's a dreadful business plan as you can't scale and ultimately end up with specialised hw that can't even be sold off.
That said, if you have reverse engineered SHA256 it does make a good business model assuming you keep it secret and until it becomes public knowledge it has been solved.
There is vastly more money to be made in creating a product on top of Bitcoin protocol that just mining...
Where are you located and how much do you plan to invest - not bitcoin mining but scrypt mining right? at this point i think that its quicker but tougher to mine scrypt coins although you would see a return much more quickly. use the return from those to fund your asics hardware if you must own bitcoin hardware - but now in this game, bitcoin hardware is very risky becasue as others mentioned you're looking at investing a large sum of money for hardware that will not be available for the next 90 days at the very least. You're only looking 6 weeks out if you at least buy a bunch of gpus at once instead of 12 weeks maybe on sha256 hardware
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How to build a cryptomining rig: Bitcoin mining 101
Cryptocurrency has been -- and continues to be -- a wild ride.
I'm old enough to remember being given a couple of bitcoins when they were worth next to nothing. Needless to say, I don't have them anymore. Now, with bitcoin and other cryptocurrency prices skyrocketing again, there's renewed interest in cryptomining, which is a way to accumulate cryptocurrency without having to pay for it.
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Let's take a look at what makes a good cryptomining rig, and what hardware it takes if you want to be serious about mining.
What is cryptomining?
In the most basic terms, you are using a computer (or computers) to solve cryptographic equations and record that data to a blockchain. Taking this a bit deeper, miners verify the hashes of unconfirmed blocks and receive a reward for every hash that is verified. The process is computationally intensive, requiring state-of-the-art hardware if you are planning on making much headway with mining. Mining, as it was back in the days of the gold rush, is not for the faint of heart.
And as with all high-end systems, it's less a case of how much do you want to spend, and more a case of how fast do you want to spend. So, what hardware do you need to mine cryptocurrency?
What is a cryptomining rig?
OK, the "rig" is essentially a customized PC. It has all the common elements of a PC: CPU, motherboard, RAM, and storage. Where things deviate from the norm is when it comes to the graphics cards. It's the GPU that's doing that hard work when it comes to mining cryptocurrency, and not the CPU. You're going to need quite a powerful GPU for mining, and likely you are going to be buying more than one. A lot more.
In fact, you can think of a mining rig as a relatively cheap PC with one or more high-performance GPUs attached. You need to connect multiple graphics cards to a single system, which means you also need a motherboard to handle that. You'll also be looking at more than one power supply unit (PSU) if you're planning to push things to the extremes.
There are also some other mining-specific items you'll need to make the mining rig ready for mining.
Mining rig considerations
Here are a few considerations to bear in mind when building a mining rig:
- It's not going to be cheap!
- You need to factor power consumption in your mining equation because that can eat into your earnings.
- You're not building a regular PC, and getting everything to work can become a game of trial and error and a lot of fiddling with drivers. Be patient!
Why are graphics cards prices so astronomical?
Prices are being driven high by two factors:
- Supply chain issues causing backlogs
- In order to prevent high demand from miners causing even more issues, most cards now feature LHR (Lite Hash Rate) to limit mining speeds, making them less desirable for cryptomining. The card listed below is not limited, so the price making it perfect for mining.
Motherboard
Asus b250 mining expert.
OK, let's start with the motherboard. The Asus B250 Mining Expert is a beast of a motherboard, capable of having 19 graphics cards connected to it. That's a lot. The board isn't new -- it was released in 2017 -- and it is finicky when it comes to setting up (it needs a specific layout of AMD and Nvidia graphics cards ),
Asus has published recommend GPU layouts for 19-, 13-, and 11-card for this board, and while other layouts might work, I recommend staying with what the manufacturer suggests, as veering away from this is a recipe for a serious -- not to mention expensive -- headaches.
Yes, prices are soaring for this motherboard, but that's part and parcel of bitcoin mining. If you want something priced a little more reasonably, then you could take a look at the Monland B250C BTC Mining Motherboard . A lot less powerful, but a fraction of the price.
Note: Asus recommends running Windows 10 with this motherboard.
Intel Core i5-6500
There's no real point in overspending on a CPU for a mining rig since it's the GPU's that are doing the hard work. This quad-core Core i5 is perfect for this setup and works great with the motherboard chosen above.
G.SKILL Aegis 16GB (2 x 8GB)
You're not going to overspend on RAM either. The motherboard supports DDR4 2400, and this 2x8GB kit from G.SKILL fits the bill.
SanDisk SSD Plus 1TB
I'd install a couple of these 1TB SSDs. At under $100 each, they're perfect for this kind of application. You could go with HDDs, but I prefer going with SSDs nowadays.
Also: Best external hard drives
Segotep 850W Full-Modular PSU
Depending on how many graphics cards you have installed, you may need multiple PSUs. It's tempting to find the cheapest possible, but since they are going to be pushed hard, I recommend paying a little more.
These Segotep PSUs are middle-of-the-road good value, yet they offer reliable performance. The modular nature also means that you're not turning the mining rig into a spaghetti of wires.
PCI-e Riser
Febsmart 16x to 1x powered riser 6-pack.
Even if you've built a PC in the past, I bet you've not had to fit in PCI-E risers. This is where a bitcoin mining rig differs from a regular PC in that you can't have all the graphics cards directly attached to the motherboard, so these risers allow you to connect them indirectly.
You're going to need one of these for every card you connect (other than the card that goes into the x16 PCI-e slot). This six-pack of powered risers are great and provide stable power to your graphics cards.
I do not recommend using non-powered risers. I've had nothing but problems with stability using them in the past in cryptomining rigs, so don't make the same mistake I made!
Nvidia graphics card
Msi ventus 3x geforce rtx 3090.
This is a great card and everything you're looking for in a mining rig. Loads of potential for overclocking, stable, and great cooling. Another nice side benefit is that it's quite an efficient card, which means lower power consumption and reduced mining costs.
And, unlike a lot of graphics cards nowadays, this does not feature LHR (Lite Hash Rate) to limit mining speeds.
- 24GB 384-Bit GDDR6X
- Boost Clock 1725 MHz
- 1 x HDMI 2.1 3 x DisplayPort 1.4a
- 10496 CUDA Cores
- PCI Express 4.0
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CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
This cryptocurrency mining business plan template can be very helpful for writing your cryptocurrency mining business plan, it can be used for government and non – government business grant applications, for bank loan applications, for business proposal writing, to write business concept notes, for business grant competitions, other competitions among others. The cryptocurrency mining business plan in Nigeria is a highly lucrative business idea, with a very high yield potential; given the right planning strategy. Also, seeking for technical support and expertise will go a long way to help. To kick start your business, you will need the help of a professional business consultant in Nigeria like Dayo Adetiloye to help you with the effective implementation of the business plan
BUSINESS DESCRIPTION OF THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
Business: CRYTOCURRENCY MINING
Industry : CRYPTOCURRENCY
Patilad Cryptocurrency Inc is a Limited liability Company which is based in Ikeja Lagos. It is a Cryptocurrency company that enables a new generation of assets and contracts creating decentralized capital markets. Patilad’s technology can create fast, scalable and customisable new products across complex and challenging financial infrastructures and asset classes. Patilad is transforming the financial system for the digital age and creating transparent and frictionless global markets
Patilad has a highly experienced team from the banking and Capital markets sector, along with top block chain developers and machine learning experts. Patilad will become the preferred partner to banks interested in implementing smart contracts and making markets for traditionally illiquid asset classes.
The Benefits of our Products and Services are;
– Availability of high quality cryptocurrency mining services and other related online payment system services
– Employment opportunities for so many people
– Unique periodic training program for our team
– Fair and best possible prices
OUR PRODUCTS AND SERVICES
We have developed our model with combined expertise in cryptocurrency, crypto mining and algorithms. Based on our current mining operation, we have upgraded the hardware/software specification to maximize profitability. We are offering a robust and lucrative investment opportunity. We are poised at the cutting edge of mining technologies and cryptocurrency investments. We are true advocates of digital currency
KEYS TO SUCCESS
The keys to the success of the cryptocurrency mining business plan in Nigeria are as follows:
– High quality cryptocurrency mining services
– Building trust with our clients
– Ensuring that we understand the needs of/ and can meet the needs of our clients
– Having a good location
– Modern solution and technology
– Maintaining a highly motivated and dedicated team of professionals
– Professional and experienced staff
OBJECTIVES OF THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
The following are the objectives of the cryptocurrency mining business plan in Nigeria;
– To create products whose primary goal is to exceed customer’s expectations
– To establish our brand throughout the country
– To create a partnership between our skill set and potential investors to drive forward our aspirations for the next generation of tender
– To achieve a net profit in year one, increasing in year two, by containing costs and meeting sales targets
– To achieve a net profit of $2,000,000 in four years
GOALS FOR THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
The goals for the cryptocurrency mining business plan in Nigeria are as follows;
– To provide employment opportunities for over five hundred people
– To become one of the top ten leading cryptocurrency mining companies in the world
VISION FOR THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
Our vision for the cryptocurrency mining business plan in Nigeria is ; to enable a new generation of assets and contracts creating decentralized capital markets.
MISSION FOR THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
The mission of the cryptocurrency mining business plan in Nigeria is; to build Internet of assets on the principles of bank as a service (baas) powered by internet of things and artificial intelligence(AI) technologies.
MANAGEMENT TEAM OF THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
The management team of the cryptocurrency mining business plan in Nigeria is made up of the following people;
George Tammy: He is the founder and owner of PATILAD Crytocurrency Inc. He has had over seven years of experience in the cryptocurrency mining industry and has gained sufficient exposures to the rudiments of the business. He is an alumnus of the University of California, Berkeley, California.
Dayo Adetiloye: (B.AGRIC,MBA, and PMP). He has over fifteen years of experience in business management, financial management and overall business growth and development. He is an alumnus of Enterprise Development Centre (EDC), of the Lagos Business School (LBS), Pan African University (PAU). He is our business development strategist and also a strategic partner of the company.
Read Also: Advertising Business Plan in Nigeria
We brought to the business;
– Educational skill and practical experience in the cryptocurrency mining industry
– The capacity to consistently deliver outstanding service
– Quality assured standards and a good understanding of the market trend
– Our staff brings operational, promotional, marketing, Educational and technical skills to the business
MANAGEMENT EXPERIENCE GAINED FOR THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
With over seven years experience in the cryptocurrency mining industry and through having numerous exposures to both the practical and technical aspects of service, I have been able to master the technical requirements, financial management, staff recruitments and organizational skills among other necessary factors to give us a good commendation from our clients. My managerial skills has also helped me to put up a strong workforce for the past two years and to organise the teamwork in most aspects of the company. I am the CEO of the company and I will be overseeing the day to day activities of the company.
MATERIALS AND EQUIPMENTS REQUIRED FOR THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
The following materials and equipments are needed for the cryptocurrency mining business plan in Nigeria;
Office space , office equipments, clerical tools and materials, licence, permits, company vehicle, software amongst others.
COMPETITOR ANALYSIS FOR THE CRYPTOCURRENCY MINING BUSINESS PLAN IN NIGERIA
We receive a lot of patronage due to these reasons;
– Availability of high quality cryptocurrency mining investments
– Our quality assured standards
– Prompt service delivery
– Our customer – centric company culture
– Excellent customer care services and packages
– Fair and lowest possible prices
Our three main competitive advantages are;
- Quality assured standards
- Our customer – centric company culture
- Excellent customer care services and packages
To buy the remaining part of this business plan, including the detailed financial analysis, call any of our business plan consultants on 08105636015, 08076359735, and 08113205312. You can send a WhatsApp message or email us at [email protected] or [email protected] .
We help institutions and organizations write concepts, implement Business plans, and train on business Plan writing in Nigeria.
We can help you write a detailed, bankable and comprehensive business plan for your business idea.
Call any of our business plan consultants on 08105636015, 08076359735 and 08113205312
Or send a WhatsApp message or email us either at [email protected] or [email protected] .
Read also ten-10-reasons-and-more-why-i-choose-bitclub-advantage-online-investment-opportunity-in-nigeria/
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Is Now the Time to Start a Bitcoin Mining Business?
January 25, 2023
Read Time 10+ MIN
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Simulations of a Bitcoin mining business suggest that starting a mining business is a better option than simply buying Bitcoin at current prices.
In 2022, Bitcoin miners faced the triple entente of electricity price hikes, substantial hash rate growth and Bitcoin price declines. As a consequence, mining Bitcoin is currently unprofitable for many firms, resulting in a rolling tide of bankruptcies. Industry stalwarts such as Core Scientific and Compute North have declared bankruptcy, while others such as Bitfarms, Argo and Iris Energy have warned of default. Luxor’s HI Crypto Mining Stock Index, based upon publicly traded Bitcoin miner stocks, is down 72% year-on-year. Even more dramatically, the price of mining computers themselves has declined more than 86% from the same period last year. This compares to a 58% decline for BTC. Were Baron Rothschild alive today, he might be on CNBC beaming about the crimson color of opportunity presented by the pain of Bitcoin miners. Given the immense fear, uncertainty and doubt across the industry, we assessed whether it was time to don a hard hat and enter the Bitcoin mining business.
Rolling Week on Week Yearly Returns, BTC vs Mining Rigs
Source: Luxor Technologies, VanEck Research, January 2023. Past performance is no guarantee of future results. The joule is the unit of energy in the International System of Units. 1 joule is equal to the energy that is required to raise the temperature of 0.239 g of water from 0 °C to 1 °C.
To analyze the opportunities presented, we compare the projected returns of simply buying BTC on the market versus investing in BTC mining computers to run a mining business. It is important to recall that miner businesses operate similar to farmers in the sense that both derive revenue by harvesting a commodity to sell at market. Of course, miners markedly differ as they run computers to solve a complex cryptography problem to receive a portion of Bitcoin’s inflationary block rewards. In the Bitcoin mining business, the more computing power one has relative to the network’s computing power, called “hash rate,” the greater share of Bitcoin block rewards they receive.
We built a conceptual business model for a mining operation hosted in a third-party facility based upon quoted all-in hosting rates and the current market prices of Bitcoin mining rigs. In our business plan, we buy the rigs using brokers and ship them to a company who will run, maintain and optimize the machines on our behalf. In turn, this hosting party passes through the costs of personnel, electricity purchase agreements, and infrastructure in its hosting fee. For our purposes, we are assuming an all-in hosting cost of $0.075 per kw/h of electricity usage. The maximum life of our business is three years.
The endeavor’s expenses consist of mining rig acquisition costs, variable costs of hosting the rigs, and asset disposal costs from exiting from the business. The business revenues are based upon projected sales proceeds of the mined Bitcoin and the estimated gain on sale from liquidating the bitcoin miners upon close of the operation. To maximize tax benefits, we double line depreciate over a useful machine life of five years. The greatest factors affecting profitability of our theoretical mining operation are:
- Purchase price of the mining rigs
- Efficiency of the mining rigs
- Hosting cost ( electricity cost)
- Price of Bitcoin
- Growth of the hash rate
- Mining rig resale price
The base of our model begins by applying live broker quotes for seven different miner rigs of various efficiencies as well as hosting rates from five separate miner data centers. To estimate the price of Bitcoin, price of mining rigs and growth of hashing rate, we use historical data to project future variation. We feed this variation into Monte Carlo simulations to create thousands of hypothetical outcomes to assess profitability of our business across many scenarios. In each situation, we compare the return profile of the mining entity to the returns of Bitcoin. To simplify our model, our business has three potential exit timings as well as two strategies for selling the mined Bitcoins:
- Sell the mined coins at the end of the year alongside mining rigs.
- Hold the mined coins until end of year 2 and sell them alongside the mining rigs.
- Sell the mined coins continuously throughout operation and the mining rigs at the end of the second year.
- Hold the mined coins until end of year 3 and sell them alongside the mining rigs.
- Sell the mined coins continuously throughout operation and the mining rigs at the end of the third year.
These different strategies are compared in our model against the benchmark of just holding Bitcoin. Basically, our business is run through thousands of hypothetical scenarios where we adjust all the previously mentioned key factors affecting profitability against the various types of mining strategies. Because we do not know what the outcomes will be, these permutations provide an understanding of the profitability of our business over many, many outcomes.
The below table reflects the results of different mining strategies when compared against mining rig beta and hash rate growth. The variable inputs in this table is the yearly average price of Bitcoin in 2023, 2024 and 2025. The prices used to generate the below table are $18k for 2023, $33k for 2024 and $45k for 2025. Eight bitcoin mining strategies were compared - which included holding mined bitcoin for a period of time before selling (1-3 years), selling mined bitcoin as soon as they are mined, or buying and holding bitcoin (1-3 years).
Source: VanEck Research, January 2023. Please see important disclosures below regarding hypothetical performance. Hypothetical performance is designed with benefit of hindsight. These simulated results have no financial risk, and they do not represent actual trading, and as such, may not account for various market factors that would have impacted the results. Beta of rig price is a measure of the price volatility of a mining rig compared to Bitcoin’s price. Hash rate is a measure of the computational power on a blockchain network. The chart represents different hypothetical scenarios comparing mining rig beta to hash rate growth.
The orange dotted box denotes the historical ranges of rig beta and hash rate growth. The shading of the box denotes in each scenario whether mining or holding Bitcoin produces higher returns, with green indicating mining and red holding. Likewise, the text denotes the best strategy to pursue within the broader strategies. The takeaway is that based upon past values of hash rate growth and rig beta, and Bitcoin price as noted, a better risk versus reward is to buy machines and mine BTC. Additionally, the best mining strategy, if the past is any predictor, would be to hold the coins until the end of the business in three years.
Other price outcomes, both the absolute values and the trajectories of those values, will change our sensitivity table outcome. For example, if the Bitcoin price exploded 200% the first year and then cratered to decline 50% in each of the next two years, the best mining strategy would obviously be to sell all the coins as well as the rig after the first year of operation. Clearly, we do not have Congresswoman Pelosi’s crystal ball to see future price outcomes, so we employ simulations to inform us which strategy is most profitable, the most number of times, and on average how profitable it is.
The below table reflects the results of a single, hypothetical scenario out of 5,000 using a Monte Carlo simulation. The variable inputs for the simulation included the average price of Bitcoin in future years, the hash rate growth, and the beta of the mining rigs to Bitcoin. From there, the simulation calculates the return of eight different strategies for the miners, which included holding mined bitcoin for a period of time before selling (1-3 years), selling mined bitcoin as soon as they are mined, or buying and holding bitcoin (1-3 years).
Source: VanEck Research, January 2023. Please see important disclosures below regarding hypothetical performance. Hypothetical performance is designed with benefit of hindsight. These simulated results have no financial risk, and they do not represent actual trading, and as such, may not account for various market factors that would have impacted the results. The table represents the result of a single Monte Carlo simulation (out of 5,000) showing the result of different strategies that bitcoin miners can employ (hold for pre-determined time/sell continuously/hold).
The key takeaway from our analysis is that from an expected value standpoint, it is more profitable to run a mining business than it is to buy and hold Bitcoin if our main inputs behave as they have historically. Additionally, of all the mining strategies, the highest expected return (mean return) comes from the strategy where a miner holds its coins to sell them when the business is rolled up at the end of three years. Likewise, it is also clear that the downside risk of running a mining business is greater than buying and holding Bitcoin as an investor can easily loser more of his initial investment supporting an unprofitable mining entity. We attribute these findings to two factors. First, the Bitcoin mining rigs trade at prices that are favorable relative to their potential value for appreciation in bullish Bitcoin scenarios. Second, the historical price trajectory of Bitcoin is skewed positive with high kurtosis (fat tails) and it appears this potential is not reflected in the current price of mining rigs. Therefore, the risk-seeking, adventurous investor may want to consider the mining business. Give us a call if you have a site with cheap power!
DISCLAIMER : The above is not intended as financial advice nor as a recommendation to buy or sell any securities, Bitcoin mining equipment, or to take any other action. These are solely the results of a simulation and are for illustrative purposes only. This simulation projects distributions of BTC based upon the distribution of historical returns as well as the distribution of Bitcoin miner beta and hash rate growth. These historical data points were used as the basis for functions that would output projections based upon the distribution of these historical data points. This is not intended as a projection of what the returns of BTC look will like. Neither we, nor anyone else including Satoshi Nakamoto himself, know what the price of Bitcoin, the hashing rate, the price of miners or the beta of miner to Bitcoin will be in the future. This is simply a mock-up based upon historical inputs. Please conduct your own research.
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DISCLOSURES
Definitions
Bitcoin (BTC) is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Beta of rig price is a measure of the price volatility of a mining rig compared to Bitcoin’s price.
Hash rate is a measure of the computational power on a blockchain network.
The joule is the unit of energy in the International System of Units. It is equal to the amount of work done when a force of 1 newton displaces a mass through a distance of 1 metre in the direction of the force applied.
Please note that VanEck may offer investments products that invest in the asset class(es) or industries included in this communication.
This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the cryptocurrencies mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results. Information provided by third-party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as of the date of this communication and are subject to change without notice. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its employees.
Past performance is not an indication, or guarantee, of future results. Hypothetical or model performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading, and accordingly, may have undercompensated or overcompensated for the impact, if any, of certain market factors such as market disruptions and lack of liquidity. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading (for example, the ability to adhere to a particular trading program in spite of trading losses). Hypothetical or model performance is designed with benefit of hindsight.
Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.
Investing in cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future.
Investors should conduct extensive research into the legitimacy of each individual cryptocurrency, including its platform, before investing. The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical, or difficult to understand or evaluate. The cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the cryptocurrency’s blockchain or other underlying technology. Some cryptocurrency transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.
Investors must have the financial ability, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire investment in cryptocurrency.
- An investment in cryptocurrency is not suitable or desirable for all investors.
- Cryptocurrency has limited operating history or performance.
- Fees and expenses associated with a cryptocurrency investment may be substantial.
There may be risks posed by the lack of regulation for cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should conduct extensive research before investing in cryptocurrencies.
Information provided by Van Eck is not intended to be, nor should it be construed as financial, tax or legal advice. It is not a recommendation to buy or sell an interest in cryptocurrencies.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.
© Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.
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A business plan provides a snapshot of your bitcoin mining business as it stands today, and lays out your growth plan for the next five years. It explains your
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