Now-a-days, there’s a full hype of cryptocurrency mining everywhere. Everyone is talking about it, all around the globe, and if you’re stuck in all this. Then don’t worry, we are here with our new blog post in detail on cryptocurrency.
So, let’s get into it.
What is crypto-currency?
Well, most of the people in India don’t know much about crypto-currencies like Bitcoin and Ethereum. Searching on the internet about cryptocurrency would likely dig up a formal definition from Wikipedia
a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
Some people do claim that digital currencies like bitcoins are similar to gold as their values increase with time. Backed up by blockchain technology virtual currencies are very secure as well. Bitcoins being the most famous virtual currency so I’ll be focusing more into it. Other currencies like ripple, litecoin, and ethereum are popular as well.
How does cryptocurrency mining work?
Basically, Bitcoin mining works on Proof Of Work consensus mechanism. Now the next question comes what is this proof of work?
All miners lend their computation power to the Bitcoin network and verify transactions. Those verified transactions are clubbed into a block. A Bitcoin is awarded for every block mined. For the purpose of earning via mining, you need to understand this that the probability of your mining a block is proportional to your contribution to the whole network hash rate.
Proof Of Work Mechanism
Bitcoin is a Proof of Work cryptocurrency mining that now cannot be mined with computational power from a CPU or GPU. This means it better to use an ASIC to mine Bitcoins than using your average computer
- On an average a block is mined in 10 minutes, i.e. 144 blocks are mined in a day
- Total network hash rate is approx 7,522,498,553 GH/s
- Mining reward is approximately or less than 12.5 BTC/block currently
Using the formula
n = (Network Hashrate) / (144 * Avg Block Reward):
where n is Computational Hashrate required to mine 1 BTC in a day
n = 4000TH/s to mine 1 BTC per day
Approx 14TH/s is required to mine 1 BTC in a year.
The total reward will decrease as the network hash rate and difficulty will increase.
Now let’s say you are mining 1 BTC in a year with 14TH/s and you purchased 1 Antminer S9 for this. You will have to spend almost $3000 for the hardware plus import duties and other accessories.
Total approx cost of hardware: ₹ 2.27 Lacs
Electricity cost: 1.3KW with the cost of electricity for the miner equal to ₹ 8 per unit. Yearly electricity cost would be around Rs.90000
In addition to this, you will have to spend on cooling equipment and its electricity cost. Plus other wear and tear. This makes the cost of cryptocurrency mining 1 Bitcoin to be around ₹ 3.5–4 Lacs.
If you believe that Bitcoin will rise more than ₹ 5 Lac in a year than it is profitable to mine Bitcoin else it will be better to buy 1 directly.
Reference: Blockchain.com Stats
How do you mine it ?
After reading about virtual currency,you might be wondering how do you get it ? Well, let’s see
what are the possible ways for cryptocurrency mining.
- Mining Hardware: With increasing difficulty of mining bitcoins,everyday laptops and GPUs are of no use in terms of mining power. Something called ASIC (Application-Specific Integrated Circuit) came into the market. If you seriously want to mine bitcoins by yourself you would like to buy atleast one miner. Depending on it’s hashing rate and other variables you can predict the output you’ll be getting per month. But if it’s out of your control to manage it along-with your electricity bill then probably you’ll want to move to our next option.Otherwise , you can check on Bitcoinmining.com to buy a miner.
- Cloud Mining: Gaining a hottest rate of popularity is cloud mining. Cloud mining is the process of bitcoin mining utilizing a remote data-center with shared processing power. With cloud mining you can actually mine virtual currency without managing the hardware. Services like Hashflare are much popular these days.
- Surveys & Captcha Solving: Online surveys or captcha solving sites do offer bitcoins or
other currencies in exchange. Having tried few, one of them is Eobot. Rewarding you by every survey or captcha you solve,these sites do pay you. However, output is not that much to satisfy your needs. These sites follow something called a faucet from where you’re rewarded.
Internet is filled with many sites claiming to offer you bitcoins or other currencies in exchange, but only few of them are genuine. Best thing is to stick to the genuine portals and stay away from
Thanks for reading this post. Hope you got some knowledge about Block chain and Cryptocurrency mining.
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