Have you ever wondered what cryptocurrency is and the meaning of crypto mining? Ever thought of owning cryptocurrency and starting your cryptocurrency mining in India? We live in such times where physical money has taken a back seat in the currency field, and cryptocurrency has gained a lot of traction globally, and cryptocurrency mining is the talk of the hour. This article will tell you how to do crypto mining in India and what developments have taken place in the field of crypto mining in India.
You need to keep in mind that cryptocurrency is not physically existing like cash. Still, they do hold a significant value in the economic sector and have some sort of lawfulness to India’s cryptocurrency market.
In the past few years, we have seen a sudden wave and uprising in the cryptocurrency market by introducing various types of cryptocurrencies such as Bitcoin, Dogecoin, Ethereum, Binance Coin, etc.
What is Cryptocurrency mining?
Let us assume that you are a businessman and you are doing business with a client. Your client makes a payment of ₹1,000 to you through bank transfer. When do you think the transaction is complete? When your bank notifies you that ₹1,000 has been credited to your account or when you see ₹1,000 in the bank statement. In this scenario, your bank plays the role of a middleman who ensures that you receive your payment and that you can withdraw the amount once credited to your account.
Like we have banks out there acting as middlemen, you won’t find the same sort of arrangement when it comes to cryptocurrency mining. Here, the bank’s portrayal is done by any user who wants to do crypto mining as they will be the ones verifying the transactions. For verifying any sort of transaction, the users are given a reward for working in the way of an auditor through these deals.
Cryptocurrency mining is a tedious task, but you can easily do the mining task with due diligence and mining software.
In other words, cryptocurrency mining is a process where you maintain the transaction records in a ledger that is made for crypto purposes only. These ledgers are also called blockchain, which has records of all the past crypto-related transactions.
Need of systems for crypto mining
The computers made for crypto mining can solve mathematical equations. The user who can keep the transaction intact and put it in the crypto ledger/blockchain and prevent fraudulent transactions will get some sort of cryptocurrency as a reward.
The work of the users who are into such mining out there is to ensure that all transactions recorded in the crypto ledger are genuine to avoid fraudulent transactions. Bitcoin node is a computer that runs a Bitcoin implementation and stores the entire transaction in the crypto ledger/blockchain. These Nodes verify each transaction before adding them to the crypto ledger/blockchain.
People who are able to maintain these complex transactional records and prevent any fraudulent transactions are rewarded for the same in the way of cryptocurrency.
There is one issue that many people intrested in crypto mining will face: the expensive hardware that needs to be purchased to do this task.
Plus, maintaining these complex transactional records in the crypto ledger/blockchain will get difficult with time once the record keeps on increasing. With the time, the hardware a user has will make them earn much less compared to the initial days they set their foot in the crypto mining.
How can you start crypto mining in India?
Starting crypto mining in India is a tad bit difficult but not impossible. In India, crypto mining is still a grey area that doesn’t entirely fall under the ambit of government rules and regulations, but that doesn’t make this work illegal in India. There are a lot of risks in investing in cryptocurrency mining in India, but if everything works in your favour, it is a sure-shot way to earn a significant number of assets.
Requirement for Crypto mining
If you want to start crypto mining, the following are the requirements on how to start cryptocurrency mining in India-
- Effective hardware – By effective, we mean that you need power-packed hardware. One that is able to run every task you throw at it. But sometimes, your high-end system may also feel out of breath as crypto mining requires a lot of data processing. Your system’s core may feel that they have taken a hit at their very core(pun intended) to process such data. Ensure that you get the best custom-built systems out there in the market for processing complex data. To keep your system cool, you will need to invest in a cooling system. Cooling fans and liquid cooling to keep your systems’ performance intact. Be ready for a hefty electricity bill as these systems will take a lot of power to operate.
- Mining Software – A reliable mining software is also needed, trustworthy for harbouring the entire mining process.
- Cryptocurrency wallet – The crypto earned from rendering your services needs to be credited somewhere, so you need a cryptocurrency wallet.
- Mining Team– Mining is undoubtedly a tedious task due to complex data processing. Mining teams let miners fuse their help and decrypt the equations jointly.
Cryptocurrency mining in India: Legal aspect
India’s Finance Minister Nirmala Sitharaman explained that taxing cryptocurrencies does not guarantee a legal position. But they also don’t fall under the ambit of illegal activity. She furthermore declared that taxing ‘virtual digital transactions’ is the Government’s sovereign righteousness. Indian Government is still contemplating over the fact whether to ban these ‘virtual digital transactions’ or not.
Indian Government announced taxing crypto at a hefty 30 per cent to give crypto market legal recognition in India.
It doesn’t end here; the Indian Government also stated that non-fungible tokens(NFTs) would face tax deduction at 1 per cent after a specific limit.
India has tried to give the crypto bill chance twice in Parliament. Still, the bill is stuck in the Cabinet, not letting the crypto market have a legal tender in the country.
The ban on cryptocurrencies by the RBI in 2018 and Supreme Court’s overturning RBI’s order two years later. It’s not shocking that the Government handling cryptocurrency legal framework with due diligence before introducing it to public.
Law Graduate with knack for keeping up with latest technology news.