Bitcoins, or mining in apartment: everything you need to know
While bitcoins are experiencing another peak of their growth, we explain what you need for cryptocurrency mining
In February 2021, the value of one bitcoin rose to 50 thousand dollars. In just six months, the price has increased by 350%. Anyone who's ever followed the cryptocurrency rate is probably kicking themselves now because back in October, the owner of one unit of cryptocurrency could boast of 11 thousand dollars; now this amount has increased 5 times.
There are different ways to get coins: buy them, play on the stock exchange, pay with bitcoins for products, or… Mine them yourself, as does Oleksandr, who built a mining farm of Asics (special computers) in a country house near Kyiv last fall. 4 Asics installed at Sasha's consume 9.5 kW per month. It's as much as needed to provide a country house with all appliances; the costs pay off, the difference quickly covers the money spent on hardware, and due to the heat generated by computers, you can heat the house. Rubryka contacted the miner and asked to share his experience: how is it to generate bitcoins in your own home?
What is ASIC and how many bitcoins does it generate?
It's not some centralized structure that can "issue" (extract through mathematical solutions) coins, but any person who has the necessary hardware and software. Mining means creating new blocks in the blockchain; simply put, mining is the creation of a new line of code in a database. This task is performed by a special computer, ASIC. If a regular PC or phone can be multitasking, ASIC does only one mathematical operation required for transactions to happen in the bitcoin network. For the work performed, users receive a reward as a commission in bitcoins.
Don't think that ASIC opens the door to Eldorado: the coins won't rain down on you. Modern equipment installed in the home grid can give up to one bitcoin per year.
Cryptocurrency mining is carried out on "farms" comprising numerous ASICs. However, their number depends on the inclination of the farmer and his financial capabilities. ASICs of different power can cope with different amounts of work; it directly affects the price of the device and the amount of electricity it consumes. The more productive such a computer is, the more expensive its content is, and the higher the "hash rate" — the number of extracted bitcoins — is. Prices for computers also vary depending on the value of bitcoin. "I bought my Asic for 1.5 thousand dollars," says Oleksandr, "but now, after the jump, the price has risen to 6 thousand."
Where to get ASIC?
Sasha told us that ASICs are produced very little, mostly in China, where they are imported to Ukraine. Although modern devices are expensive, about 10 thousand dollars, the last delivery, which was made six months ago, was sold out for pre-sale before the devices crossed the border. The next delivery is planned only for early summer 2021.
Due to the high demand for new devices and their high cost, the ASIC market in Ukraine is mostly secondary. The fact is that mining investors often build farms in China. Mountainous terrain and cheap real estate create all the conditions for this: Miners buy land, many of them extract electricity from small hydro generators, installed on rivers. They often change the equipment to more modern and sell the "obsolete", which, according to Sasha, is almost not inferior to the new. Europe, America, Russia, and Ukraine are buying them up. There is no problem buying ASIC in Ukraine. There are a lot of offers, and devices are sold on Rozetka, OLX, and other major ad sites.
The most popular model of ASIC today in Ukraine is Antminer C17 Pro. The new model of Antminer C17 Pro will cost the buyer about 150 thousand hryvnias, and the second-hand is about 50; The "secondary" one will pay off in about 9 months, bringing about 5.6 thousand hryvnias a month.
Filip Modnov, CEO of the LAZM technology company, which manufactures computer equipment, gave examples of the profitability of cryptocurrency mining in various ASICs:
- The new Antminer T19 device, worth about 100 thousand hryvnias; the net profit will be 8 thousand hryvnias per month. In this case, the payback period will be 12.4 months.
- The Whatminer M 21S device, worth 45 thousand hryvnias, will bring 4.7 thousand hryvnias per month and will pay off in 9-10 months if the market situation doesn't change.
- Used model Antminer T17 can be purchased for 40 thousand hryvnias. The monthly net profit will be about 5.5 thousand hryvnias, and the payback period will be about 7 months.
Asic in the house is an alternative to heating
During operation, the devices heat up so much that they can replace the radiator, and not just one. Therefore, large farms are usually specially equipped with coolers and cooling systems, so that computers don't overheat. Most systems are cooled by air, using fans:
"But the air has a low heat capacity and low molarity," says Sasha. "Compared to water, for example. It slowly cools the ASIC, and the heat is simply carried outside and lost. But if you want to optimize, you can try to use that energy."
It is exactly what Sasha did in his house; now all 200 square meters of space are heated by Asics, which consume a total of 9.5 kW per month. The heat released by the Asics is dissipated through a universal heat carrier, a special liquid into which you can immerse the electronics. It doesn't conduct electricity but takes away the heat, which is then sent to heat the water circulating in the batteries and underfloor heating.
How to withdraw cryptocurrency?
There are plenty of services that allow you to withdraw cryptocurrency in the network; some of them offer to withdraw hryvnia immediately to Privat 24, some offer payment systems like PayPal, Qiwi, or others. In both cases, you'll have to pay a commission for the conversion; it's usually from 1 to 10% of the amount.
There are four ways to do this: through exchanges (KUNA, Biance, EXMO, Yobit, CEX), through payment systems (Payeer, PerfectMoney, Advcash, PayPal), through cryptomats (ATM analog), or through online exchangers (Buybank, BTCBank). The difference between the exchange and payment systems is that in the first case, the rate can be "played" to choose the most profitable. However, in this case, there's a risk of fraud, so payment systems or crypto-ATMs are a safer way.
As for cryptomats, it's reliable, but, unfortunately, too difficult way. Yes, bitcoins can be instantly cashed. But there's one problem; there are only about 10,000 cryptomats worldwide, and 4 in Ukraine, in Kyiv and Lviv.
- Verkhnii Val, 10
- Borshchahivska, 154 (Marmelad shopping mall)
- Kulparkivska, 226
- Soborna Square, 14
Is it worth it?
Bitcoin is an uncontrolled cryptocurrency. No one can influence its rise and fall. There's a theory that the price depends on the cost of electricity, but it was later refuted. In fact, many factors influence the value of cryptocurrency.
For example, the last leap to $50,000 was probably due to Biden's victory in the US presidential election, whose team is loyal to the legalization of cryptocurrency. For example, the Miami authorities are already considering the integration of bitcoin as a means of payment. The concept allows civil servants to receive all or part of the salary in the first cryptocurrency, and residents to pay taxes and fees through the asset. The BBC reports that the auction was also affected by the news that the car manufacturer Tesla has invested $1.5 billion in bitcoins and is going to accept cryptocurrency as payment.
Whether these events really affected the value of bitcoin, no one can say for sure, but experts and investors expect that the use of cryptocurrency in the traditional financial system will increase. It's indicated by the decisions of individual companies:
- Square and PayPal payment services, used by a total of about 300 million people, have added the ability to purchase cryptocurrency to their applications.
- Morgan Stanley Bank is considering investing in bitcoin.
- Mastercard Executive Vice President Raj Damodaran has announced the ability to make payments through the system in some cryptocurrencies. According to him, this feature will be available in 2021.
- The BBC reports that Uber, Twitter, and Amazon are also considering investing in bitcoins and paying salaries to employees in cryptocurrency.
Some countries, on the other hand, are actively fighting the use of cryptocurrency. For example, this February, the Central Bank of Nigeria banned any cryptocurrency transactions. The Senate is currently considering potential threats from cryptocurrency. In some other countries, any circulation of cryptocurrency is prohibited. This applies to Algeria, Bolivia, Vietnam, Indonesia, Kyrgyzstan, Lebanon, Morocco, Namibia, Nepal, Pakistan, and Ecuador.
Legal status of cryptocurrencies in Ukraine
Bitcoins aren't banned in Ukraine, but their circulation is still not officially legalized, although the relevant draft law №3637 has already passed the first parliamentary reading. The document defines cryptocurrency as a set of data in electronic form that has value and exists in the system of handling virtual assets and regulates transactions with it in Ukraine. The regulator is the Ministry of Digital Transformation, and in some cases, the National Bank and the National Commission on Securities and Stock Market.
Lawmakers hope the draft law will regulate legal relations related to cryptocurrency, guarantee the protection of property rights and introduce cryptocurrency in tax jurisdiction.