IN THIS CHAPTER

Preparing for market downturns

Crafting plans to withstand market dips

Understanding relative cryptocurrency market volatility

Calculating burn rate and runway

Understanding when it makes sense to stop mining

Pondering buying the dip

Because the cryptocurrency space is so immature, incredible volatility in the exchange rate of Bitcoin and other cryptocurrencies has occurred, along with rapid appreciations in asset prices and huge crashes.

There are two basic arguments for why this volatility happens. The skeptic will say that cryptocurrencies have no inherent value, any more than tulips have an inherent value that justified the Tulipmania of early 17th century Holland, during which tulip bulbs reached astronomical prices. (Tulip bulbs were selling for as much as 1,000 pounds of cheese, or 12 fattened sheep.) No, wait, the skeptic would argue that tulip bulbs had more inherent value than cryptocurrencies, because you can grow flowers from them. That’s why the market is volatile, the skeptic says; it’s because it’s a market built on sand.

The believer, though, will shrug this off — and point out that gold has very little inherent value, either, yet has been used as a store of value for thousands of years. The believer will argue that this volatility is a normal process for new assets during which early price discovery occurs. The world has only been working with this asset for a decade or so. In fact, most of the world has not heard of it, and even among educated people in advanced nations, they have only been aware of cryptocurrency for a couple of years, and mostly don’t understand it. Thus, it’s no surprise that prices will bounce around as the world comes to grips with this new asset class.

Either way, cryptocurrency markets are volatile. Over the last decade, the overall trend, at least for the major cryptocurrencies, has been up, with intermittent dramatic drops. So you need to assume this volatility will continue for some time. In this chapter, we discuss various things to consider and how to best prepare for market movements and downturns.

Have a Plan, Hedge Your Mine

Always have a plan for market downturns. While things are going well, consider what you would do in the event of a mild downturn, a painful downturn, or a seriously catastrophic downturn.

You have a few options:

• Put your head down and keep pushing forward. In other words, just keep moving and hope the market recovers (if you have the funds to do so).
• Sell your hashing. Use a hash marketplace to sell your mining power to another party. That is, let someone else take the risk. (If you can find a viable market, of course. You’ll need to run the numbers, as with any mining operation.)
• Switch to another, currently more lucrative, cryptocurrency.
• Hedge your operational expenditures.
• Stop mining for a while and watch the market.
• Cut your losses and leave the market entirely. Sell off your equipment to recover some of your capital costs, but understand that in a market downturn, your equipment will be worth less (and now it’s used, and perhaps older generation gear).

If you have plenty of excess capital stored to cover operating expenses during a downturn, moving forward may be a valid strategy, depending on how much you’re losing. Another would be to plan on shutting down your equipment during such periods, a subject we discuss at more length in the “Stop Mining” section, later in this chapter.

How Long Can You Last?

When mining cryptocurrencies, you’ll need plenty of liquid capital, such as local fiat currency reserved to cover mining expenses during market downturns and dips (if you decide to continue mining that cryptocurrency, that is). Small businesses are often advised to keep anywhere from three to six months of equivalent operating expenditures on hand in case of unforeseen market changes, and that — or more — may also apply to cryptocurrency mining.

In the cryptocurrency space, exchange rate downturns can last a long time. If the market does take a dip to below previous exchange rates for an extended period of time, to the degree that you’re no longer making money, you want to be prepared with plenty of operating reserves to cover expenses over the duration of the downturn. If you’re actually losing money, you may want to stop mining or perhaps switch to another cryptocurrency (if you can buy the cryptocurrency for less than you are spending on operating costs, what’s the point of mining?). But many cryptocurrency miners are in it for the cryptocurrency; their goal is to build up their cryptocurrency reserves. They may sell some of it to cover their costs, but overall they regard owning cryptocurrency as a valuable investment for the future.

So what if your operation is break even, if you are making enough money, in local fiat currency, to pay your costs but nothing more? You can continue mining, but you’re not making fiat currency, and you’re not accumulating cryptocurrency. That’s a situation in which you may want to have reserves to allow you to cover your operating costs while you continue accumulating cryptocurrency.

In fact, such downturns can end up being very profitable in the long term. The cost of the cryptocurrency goes down as miners drop out. As the value of the cryptocurrency drops, miners leave the network, overall network hash rate goes down, and your proportion of the hash rate goes up, meaning you mine more of the underlying cryptocurrency for the same operating cost. So you’ll earn more cryptocurrency at a lower cost. You may not be making money right now, but when the market comes back, you’ll be glad you continued mining!

The length of time you can withstand a market downturn will be determined by the amount of capital you have saved. You’ve presumably paid for your equipment up front, but you’ll have daily expenses (predominantly electricity). Perhaps you’re paying for the equipment monthly, too — you paid on a credit card or got a loan. Those are monthly expenses, but not directly associated with the cost of mining; you owe that money whether you mine or not.

So these calculations can get complicated very quickly because of the many variables at play. In effect, you are comparing four financial scenarios: continuing to mine, stop mining temporarily, stop mining altogether (and sell off your equipment), or switch to another cryptocurrency.

It’s not all about costs. If you continue to mine, you’ll still have some income; it just won’t be as much as it was before the drop. What you’re trying to do is calculate your burn rate (that is, how much of your reserves you spend each month), and your runway (how many months it will take to burn through your reserves). Your burn rate can be calculated like this:

Your Reserves / [Total Monthly Expenses – Mining Revenue] = runway time

Say that you have $5,000 in reserve. Your expenses are $1,000 a month, but at present, even with the market drop, you’re still making $300 a month in mining rewards. Thus,

$5,000 / [$1,000 - $300] = $5,000 / $700 = 7.14 months

We can make this more complicated … and will. First, although you’ll be able to estimate expenses pretty closely (you’ll likely be using the same amount of electricity each month, for example), you don’t know what your mining income over this time will actually be. It will fluctuate; it could go lower, it could go up a little … it’s a guess.

Next, if you have recurring capital expenses (you’re paying off a loan you took out to buy equipment), that bill is due every month whether you mine or not. Or maybe you purchased your equipment outright, but you’ve been calculating profitability by amortizing the cost over several years. Well, that equipment has already been paid for; it is, from a cash-flow standpoint, a sunk cost. It would not be appropriate to include these costs in a calculation of burn rate or runway. These are cash-flow calculations; how much money is going out, and how much is coming in, each month, are the only things that count.

Beyond all the calculations, though, there’s a big question. Why, if you’re losing money, would you continue mining? That’s a question we deal with in the upcoming “Switch to Another Cryptocurrency” and “Stop Mining!” sections.

These projections are just that, projections. They may not be right, and most likely won’t be. However, making these estimations is better than not having a plan or idea at all. Market volatility can cause monthly revenue to fluctuate and drastically alter your calculation’s assumptions and conclusions. This is something you should watch closely.

Learn from Market History

But will the market come back? As financial advisors say, “Past performance is no guarantee of future results.” And, in fact, this is the case for many alternative cryptocurrencies, for which the market has dropped and never come back!

But we’re in a new financial world, and if you believe that cryptocurrency is here to stay, then you have to believe that some cryptocurrencies will continue to increase in value over the long term. Sure, the world probably doesn’t need the 2,000-plus cryptocurrencies that exist today, but some cryptocurrencies will increase in value in the short term, even if they eventually die off, and others will be around for the long haul.

So it’s interesting to have a picture of the market and what has happened to cryptocurrencies thus far in their decade-long life, if only to gain some peace-of-mind when the market drops.

Bitcoin, the most popular, most talked about, most valuable cryptocurrency, has a history of slow increases in value, followed by periods of exuberance in which the value increases rapidly, followed by a sudden drop, followed by months of slow decline … and then the value starts going up again and the cycle repeats. But overall, the value keeps rising. Take a look at Figure 14-1, a chart from CoinMarketCap.com, showing the price of Bitcoin from April 2013 until the end of 2016. Then look at the data from April 2013 until the present day in Figure 14-2. The period up until 2016 barely registers as a blip on the chart now, but in any case, we can see the same basic pattern. We had a big drop at the end of 2017, a long, slow decline during 2018, followed by an upswing until April 2021, another drop until July, followed by another peak in November, yet another drop … and now we seem to be in another upward trend. Go to CoinMarketCap.com and play with this chart. It’s interesting to zoom in on the early days to see the same pattern at the very low prices that Bitcoin had back in those days.

Another interesting way to look at the data is by considering the All Time Highs, and how long the market has gone between All Time Highs; that is, the length of time between market historic highs, and from the current time to the last All Time High (ATH).

BuyBitcoinWorldwide.com used to provide an easily interpreted chart showing the various times since ATH over Bitcoin’s history, though it has recently replaced it with a color-coded chart that seems to us to be difficult to understand. Perhaps they’ll bring back the old chart sometime (see https://stats.buybitcoinworldwide.com/days-since-high). You can also find a table of times since ATH for various cryptocurrencies at www.coingecko.com/en/coins/ath (or search the web for “time since all time high” to find various different representations of this concept).

At the time of writing, it has been more than 150 days since the ATH of $67,567 on November 7, 2021. The previous time since ATH had been 189 days, from April 12, 2021, until October 18, 2021, when the cost of Bitcoin broke through the previous price of $63,503.

When we wrote the previous edition of this book, we had experienced 600 days since the previous ATH (of $19,497 on December 15, 2017), and it wouldn’t be until November 29, 2020, that the price broke through again, a total of 1,063 days. But even that almost three-year period was by no means the record. Back in February 2017, the price of Bitcoin recovered to the high value previously set 1,170 days earlier. (Over the next ten months, it would increase in value from around $1,000 to almost $20,000 … and then drop again.)

Just because it’s been a while since the last time the price of a cryptocurrency was at an all-time high doesn’t mean a miner can’t make money mining that cryptocurrency, of course. In fact, although it’s been 600 days since the last ATH, it’s also been around 160 days of a general upward trend in the price of Bitcoin. Profitability of mining is not related to what the price used to be; it’s related to the current mining conditions — the network hash rate, your proportion of the hash rate, the price of electricity, and so on (see Chapter 11).

But perhaps what these concepts do is to put the current value of cryptocurrencies into context for you. We’re seeing a market that bounces up and down (see the section “Consider Market Volatility,” later in this chapter), but it’s on an upward trend, at least for some of the major cryptocurrencies. Some miners are so sure of this that they even run the calculations in Chapter 11 based on the previous All Time High, under the assumption that currency will reach that level — and more — again.

We don’t recommend you do this, or at least if you do, you also run the numbers based on current value. (Otherwise, you won’t know if it’s cheaper to simply buy the cryptocurrency rather than mine it.)

Don’t Panic! (Keep Calm and Carry On?)

Market volatility is a natural occurrence in the Bitcoin and cryptocurrency space, so it’s important not to fear these occasions. Understand them, prepare for them, expect them, but if you’re going to panic, then mining may not be for you.

It is easier to not panic if you have an underlying understanding and belief in the cryptocurrency you’re mining. If instead you are motivated only by immediate, short-term profit (as measured in your local fiat currency), these market downturns can lead to significant fear and distress. If you believe cryptocurrency is a fad, your mining experience will be very stressful; you’ll constantly be waiting for the final crash. If you believe cryptocurrency is a revolutionary technology that’s here to stay, you’ll have a very different perspective. You have to accept that downturns happen and are part of the cryptocurrency landscape. You might then “Keep Calm and Carry On,” as the British World War II saying goes … or, to use the cryptocurrency equivalent, “Hodl on!”

Many miners and cryptocurrency enthusiasts have learned to avoid panic and to actually embrace these market downturns as an opportunity to acquire more of the underlying asset that they mine. Remember, as the price of an asset drops, miners leave the network, the network hash rate goes down, your proportion of the hash rate goes up, and you may end up mining more of the asset at a lower price (in terms of mining expenses).

This is an example of individuals acting on asymmetrical information that the market may not be correctly pricing during the act of price discovery. Price discovery is defined by Wikipedia as the process of determining an asset’s value through natural interactions in the marketplace of buyers and sellers. (See https://en.wikipedia.org/wiki/Price_discovery.) Information asymmetry may occur when some actors in a market do not have the full picture or make actions based on fear or misinformation.

As actor (and Seinfeld executive producer) Larry David once said, “I tend to stay with the panic, I embrace the panic.”

Don’t get discouraged, and keep in mind that eventually your hard work may pay off. Keep in mind what Winston Churchill has widely been reported to have said, “If you’re going through hell, keep going.” (Okay, so he never actually said it, but any quote can be given 50 percent more gravitas by claiming it came from the lips of Winston Churchill.)

On the other hand, if you’re going through hell, maybe you should get out! (See, perhaps Churchill was smart not to say this.)

Buy the Dip

Many people in the Bitcoin and cryptocurrency sphere are ardent supporters of their blockchain of choice and strongly believe in the long-term prospects of the cryptocurrency in particular and cryptocurrency technology in general. As such, they may view market downturns and dips as a chance to be able to acquire more of the coin that they hold and believe in, at steep discounts.

Buying the Dip is another example of individuals acting on asymmetrical information that the market may not be correctly pricing the cryptocurrency during the act of price discovery (or at least, a belief that the market information is not correct and the asset is underpriced). There’s also the idea of dollar cost averaging, which we discuss in Chapter 13. Market downturns and dips offer an opportunity to lower your average dollar cost of the cryptocurrency you are mining. Why? Because although your expenses will be stable, you will mine more of the cryptocurrency. As miners leave the market, network hash rate goes down, your proportion of the network hash rate goes up, and statistically you win a larger share of the total block rewards.

Look for the Advantages

There’s a silver lining in every cryptocurrency mining cloud (perhaps). While the mining outlook may appear bleak, there are still advantages that occur during extreme market-price downturns.

First, a significant market drop results in a lower network hash rate, as other miners shut down unprofitable equipment or leave the network entirely.

This lower hash rate leads to less competition, and thus more rewards for the miners that remain, as measured in the underlying cryptocurrency asset. You may even find that even though the dollar value of a coin is less, because you are mining more you are staying even or perhaps ahead.

There are also often significant discounts on slightly used hardware that hit the secondhand markets, as the miners leaving the network sell off their equipment. You may find that market downturns are great times to upgrade your mining equipment to newer, more efficient, and more profitable gear, helping you to maintain profitability during the dip and come roaring back when the market recovers. Buyer beware though, as some of this equipment can be heavily used, near its end of life, and not currently profitable given the various market variables.

Always do your research prior to buying second-hand equipment and use the profitability calculators we cover in Chapter 11 to ensure that the equipment you purchase is in fact a good buy. Ideally, buy on terms that allow you to return the equipment if it does not function correctly. (Many markets, such as Amazon and Newegg, provide such a guarantee; personal sales, of course, generally won’t.)

Anticipate the Market Recovery

Market recovery in the Bitcoin and cryptocurrency space isn’t ever a guarantee and nothing is certain. (Hey, maybe the skeptics are right, and it is a fad! On the other hand, that’s what the skeptics said about the Internet.)

However, over the course of Bitcoin’s roughly 13-year existence (as of this writing), the market has recovered from plunges an astounding nine times.

It’s a good idea to plan for both market crashes and market recoveries. Many miners can continue mining during these downturns, in anticipation of the recovery, if they planned properly for the dip. So plan accordingly, stockpile resources to help cover mining costs, and reduce expenditures to ensure that your mining operation is as lean and economically efficient as possible.

During the downturn, keep an eye on useful cryptocurrency metrics and statistics for on-chain activity, such as network hash rate, block difficulty, and daily transactions, as well as market data, such as trading volume and exchange rate.

These metrics indicate market sentiment and may signal a pending market recovery. For example, during the dramatic market downturn for the Bitcoin network in 2018, the average daily hash rate bottomed out at just above 31 EH/s in December 2018 (see Chapter 5), the block difficulty dropped to 5,106,422,924,659 (see Chapter 6), and right around that same time the exchange rate started recovering from the relative bottom of $3,200 per BTC.

In other words, many market indicators may signal market recovery is coming, before the price actually begins rising. Although many of these indices are intertwined, and there is a large debate in the community as to whether hash rate lags, or leads, price, it is without question that there is some kind of correlation and it is still useful to study and understand these metrics to get an idea of what may be coming soon.

Learn From Your First Dip

There is no better source of knowledge and insight than experience. That’s true of all life experiences, including cryptocurrency market corrections. Learn from your first mining dip, which may occur quicker than you think!

Watch the markets closely. (We know you will.) It can be a painful and stressful experience, and there’s nothing better than pain and stress to make human beings pay attention!

Take note of the many variables in the space and how they shift during a market dip, variables such as exchange rate, network hash rate, equipment costs (hardware, such as ASICs, may drop in price), social engagement, and so on.

What do we mean by social engagement? Pay attention to the amount of activity on social networks related to the cryptocurrency. If activity seems to be gradually dropping, maybe interest in the cryptocurrency is waning, for example. Several tools attempt to measure social engagement. For example, see www.theblockcrypto.com/data/alternative-crypto-metrics/social and https://lunarcrush.com/markets.

Watch what’s going on with your cryptocurrency at all times. After a while. you’ll get a feel for how things work. Take the lessons learned from this experience and use them to plan for your mine in anticipation of the next market correction. It’s a bit like jumping out of an airplane; it gets a lot less stressful after you’ve done it a few times.

Consider Market Volatility

A volatile market is one in which the price of the item being tracked bounces around a lot. That’s pretty imprecise, though, so, we can get more specific. Volatility can be measured; there are degrees of volatility. Volatility is defined as the amount of variation of a market exchange rate over a certain period of time, as measured by the standard deviation of logarithmic returns. Standard deviation is a measurement of the degree of variation of a set of data values (in this case, of course, the data values are the daily prices of the cryptocurrency).

Volatility may be stated as a percentage of the average market exchange rate over a particular period, though it may also be seen as a dimensionless unit; the higher the number, the higher the level of volatility. Volatility in cryptocurrency markets is a measure of the steep increases and declines in market exchange price. (Volatility measures the amount of change, not the direction.) The higher the volatility value, the more the price of the cryptocurrency is varying from the average over that period … the more the value is bouncing up and down.

So volatility has to have a time range; we might measure BTC-to-USD volatility over 30 days, for example, or over 60 days, or longer. In other words, volatility on any particular day is shown in comparison to the average price over that 30- or 60-day period.

Getting a feel for volatility is tough, as it is a difficult metric to grasp. In rough, layman terms, the more the value of the currency bounces around during the period being measured, the higher the percentage of volatility.

You can’t tell from a volatility chart what the price was at a particular point in time; the volatility percentage doesn’t directly indicate the price at that point. For example, when the price of Bitcoin fell 50 percent during the market downturn in December 2018 (from about $6,000 to around $3,000), volatility spiked to around 40 percent.

Over the past decade, Bitcoin volatility has trended down as the market valuation has increased (the more value and liquidity in the market, the harder it is to move the price significantly with large market orders).

The following resources can help you get a feel for the volatility of Bitcoin and various other cryptocurrencies:

• Bitcoin Volatility Index (www.buybitcoinworldwide.com/volatility-index): The Bitcoin Volatility Index is not just for Bitcoin. This volatility index provides percentage-based Bitcoin and Litecoin over 30, 60, 120, 252 days, measured against the U.S. dollar (see Figure 14-3). You also get Bitcoin and Litecoin price charts.
• Satochi.co Bitcoin Volatility Index (www.satochi.co): The Satochi.co Bitcoin volatility index tracks daily, 30-, and 60-day volatility estimates against the USD. It also has volatility comparisons for gold, Ethereum, and many other currencies.
• Woobull Bitcoin Volatility (http://charts.woobull.com/bitcoin-volatility): Woobull Bitcoin Volatility is a useful chart tracking 60-day Bitcoin volatility over the past decade, compared to dollars and euros. You can even add USD/EUR volatility, Bitcoin price, and a 200-day average Bitcoin price over the same period of time.
• Woobull Bitcoin Volatility Comparisons (http://charts.woobull.com/bitcoin-volatility-vs-other-assets/): This Bitcoin volatility chart allows you to compare 60-day Bitcoin volatility estimates against oil, U.S. stocks, gold, U.S. real estate, and other noteworthy assets.

So, why do we care about market volatility? What does it tell us, and how can we use it? Many miners like to keep an eye on the volatility of the cryptocurrency they are mining, and compare to earlier levels, to give them an idea of what may be coming. Volatility can help put current price fluctuations in historical context. To some degree, this may be a “peace-of-mind” thing, in which looking back in time and seeing high volatility says to the miner, “Don’t worry, we’ve been through this before!” If you see high volatility, that means something is going on in the market, and you may want to keep an eye on things, especially if the level of volatility is much greater than the market has seen before.

Of course, volatility needs to be seen in the context of the cryptocurrency’s price movements. So a cryptocurrency can be volatile while on an overall upward trend, or an overall downward trend … or simply bouncing around a level price.

Switch to Another Cryptocurrency

If your mining equipment becomes unprofitable during market downturns, one option for cryptocurrency miners is to search for profitability on an alternative cryptocurrency that uses the same algorithm as your ASICs. If you are mining with a GPU mining rig, you have a wider variety of blockchains as possible options to switch to because they are more flexible and not hash-algorithm specific.

Refer to Chapter 8 for a list of popular cryptocurrencies by hash algorithm if you are looking for alternatives to work with your equipment, or for a more exhaustive list of coins by algorithm use an online resource like https://cryptorival.com/algorithms. You may find that your equipment, while unprofitable on your cryptocurrency of choice is still viable on other blockchains.

This is something that comes under the “plan ahead” category, too. It’s a good idea to know what your options are, so you can move quickly, if necessary. As with any entry into a new cryptocurrency network, though, you’ll want to run the numbers carefully to make sure it makes sense.

Stop Mining!

If the market drops, crashes even, you may not want to continue mining if the only way you can do so is to spend all of your cryptocurrency rewards from mining to keep going.

If you’re spending more to keep mining than the mining rewards you earn bring in, you’re losing money. That shortfall has to be made up somehow, either by selling some of the cryptocurrency you’re holding or by investing more fiat currency.

If you cannot sustain your mining expenses with cash reserves or the rewards from your mining equipment, it simply doesn’t make sense to continue mining under extreme market circumstances. If you can purchase the cryptocurrency you are mining at a discount via the market, compared to the cost of acquisition from your mining deployment, there is significant incentive to shut down. There comes a point when you should stop mining!

There are really three financial scenarios in cryptocurrency mining:

• Your expenses are less than your mining rewards. You are profitable; you’re spending less than the income you are making, and can decide whether to sell the cryptocurrency to pay expenses (withdrawing your profit), or hold the cryptocurrency in the hopes that it will increase in value. (In effect, you’ve just converted it to an investment by holding it; remember, though, you owe taxes on that profit; see Chapter 13.)
• Your expenses are more or less equal to your mining rewards. You’re in balance. You haven’t made any money — if you sell the cryptocurrency you can cover your costs, but not more. But if you hold the cryptocurrency in the hopes that the price goes up, you are, in effect, investing in the cryptocurrency. (And no taxes are due now, because you haven’t made money, but maybe will be in the future if the cryptocurrency goes up in value and you sell it.) You are spending money on electricity and other monthly costs, and in exchange getting an equal amount of cryptocurrency.
• Your expenses exceed your mining rewards. You’re losing money. (You may have a tax write-off, reducing your tax bill, if you have other business income to write it off against.) In fact, you’re better off taking the money you spend each month and buying the cryptocurrency on the open markets.

Consider that last scenario. Say that it costs you $1,000 in monthly expenses (not including equipment amortization) to mine 100 DummyCoins.

Now assume you can go to an exchange — Kraken, or Poloniex, or Coinbase, or whatever — and sell those 100 DummyCoins at an exchange rate of 8:1; $8 for 1 DummyCoin. You’ve just made $800, $200 less than your expenses. Or, another way to look at it is that you spent $1,000 to buy 100 DummyCoins; you paid $10 a coin, $2 more than the market rate. The coin’s market value has to increase in value 25 percent (from $8 to $10) before you ever break even on what is now an investment.

Okay, now say you turned off mining for a month; you would have saved $1,000. If you really believe in the cryptocurrency you’ve been mining, that it will increase in value, you could take that $1,000 to an exchange and buy 125 DummyCoin; or you could buy 100 DummyCoin for $800, and keep the other $200 in the bank.

Scenario 1 makes sense; if you’re turning a profit, that’s good business (assuming the profit is better than alternative uses of your time and money). Scenario 2 makes sense, too, if you believe in the value of the cryptocurrency and its growth opportunity and view it as an investment. (And you don’t mind the time and hassle of running your mining business.)

But Scenario 3? There is no point in continuing to mine if it’s cheaper to spend the same amount of money at an exchange to get more of the cryptocurrency or get the same amount of the cryptocurrency for less money! (Except for reasons such as ideology and fresh coins.)

If your goal in mining is to make money short term, mining at a loss doesn’t make sense. If your goal is to acquire more cryptocurrency, it still doesn’t make sense. It is illogical to continue mining for coins if you can purchase them for less than it costs to mine.