The Covid-19 has changed that way we look at the technology and the way world works. The pandemic has accelerated a digital revolution that has among other things shone the light on Cryptocurrencies in India such as Bitcoin & Ethereum. The price of Bitcoin has risen at an exponential rate in the last year, bringing renewed attention to the concept of Bitcoin mining.
What is Bitcoin?
Let’s say someone you conduct business with sends you Rs 100 via bank transfer. When do you feel confident that the transaction is complete? It’s when the bank gives you a notification or you check your statement/passbook to see if you’ve received the funds. Your bank functions as a settlement agent in this case, and once the amount is confirmed, it is credited to your account, you can withdraw the funds by going to your bank. Bitcoin, unlike traditional monetary systems, does not have a central clearing or settlement agent. Instead, through a process known as Bitcoin mining, consumers take on the function of the bank in confirming transactions. Miners are paid with the bitcoins they mined as a form of compensation for effectively acting as an auditor.
Bitcoin mining is a complicated and time-consuming operation. However, there is some good news: Bitcoin miners do not require any technical knowledge and may simply instal Bitcoin mining software.
However, there is some bad news: the hardware required to mine cryptocurrencies is costly to install and run, and it consumes a lot of electricity.
Furthermore, the difficulty of solving the problems required to settle transactions grows with time, implying that the same piece of hardware will be able to earn less in the future.
The requirement of Hardware and Software in India
Mining is a hardware-intensive operation that necessitates the use of costly computing devices known as “mining rigs.” Here’s a list of the software and hardware you’ll need to get started mining. A GPU or an ASIC can be used as part of the mining hardware (application-specific integrated circuit). ASICs and GPUs, in comparison to CPUs on standard computers, are faster at solving complicated calculations required to settle transactions.
The faster the unit solves problems, the more powerful it is. A quality ASIC unit, such as the Antminer S9, can set you back around Rs. 1.5 lakh. To mine, you’ll also need mining software and a digital wallet to hold the reward you’ll receive. There is a lot of free mining software available on the internet.
Is Bitcoin Mining Profitable in India?
The question of whether Bitcoin mining is profitable is a complicated one. Cryptocurrency mining is generally profitable only for those who can invest in strong hardware, as a matter of thumb.
The success of this venture will be determined by four key factors:
Hash Rate: The number of difficult calculations that mining hardware can perform is referred to as the hash rate. The above-mentioned ASIC, for example, has a hash rate of 13.5 TH/s.
Electricity cost: A mining rig uses a lot of electricity because it contains a lot of extra components besides the primary computer engine, such cooling mechanisms and other things. A typical ASIC will use roughly 1500 watts of electricity per hour, or 1.5 hW. In India, power costs around Rs 7 per kW on average.
Mining pool fees: A mining pool is a group of miners who pool their hardware resources in order to enhance the amount of calculations they can perform. Pooled hardware will always be more powerful than a single device because of the synergy it creates. The benefits will be shared among all of the pool’s miners. However, this may reduce your profit.
Price of the cryptocurrency: When it comes to mining, this is the most significant factor. Cryptocurrency prices are quite volatile. And the cost has risen and fallen considerably in the last year.
Bitcoin Mining Calculator:
You may enter essential factors like as hashing power, power usage, electricity cost, and pool fee into several online calculators. The Mining Calculator will calculate the number of Bitcoins you may expect to earn based on your inputs. It will also tell you whether this money, in addition to your initial investment, will be sufficient to meet your electricity costs. For example, according to Nicehash.com, with the AntMiner S9, you can expect to make Rs 8,607 in Bitcoins per month while spending Rs 5,867 on electricity. In this situation, your total profit will be Rs 2,739 rupees. It could take several years to break even on your initial investment at this rate.
These figures are estimates based on the current Bitcoin price and the type of hardware you use; more powerful rigs increase your chances of making money.
Note: Bitcoin mining may appear to be a lucrative endeavor, but it is not suitable for everyone. Before you jump in, make sure you’ve done your homework.