WHAT IS CRYPTO MINING
Crypto mining is the process by which new coins of a certain cryptocurrency are created and verified. There isn’t just one Bitcoin in the entire world. There are way too many to even count. Each of these coins is created by a process called mining. Mining involves using technical hardware, software, and solving some complex math problems. These problems include the hashing problem, the byzantine generals’ problem, and the double-spending problem. A minor gets a certain amount of Bitcoin that was pre-decided with each coin they successfully mine. If you’ve got the means to do so, this can be a great way to earn some side income.
HOW TO PROFIT FROM MINING BITCOIN
Most investors are quite confused about whether or not they should start mining cryptos like Bitcoin. The main confusion is because the equipment to do so isn’t cheap. The equipment is an investment of its own when mining Bitcoin. However, if you take care of a few other factors, you may still be able to make decent profits when mining Bitcoin.
Some of them are as follows:
ELECTRICITY
Since mining Bitcoin is done through electrical hardware like computers and laptops, it tends to use a lot of electricity. This is because these devices need to be plugged in and running 24 hours a day, 7 days a week. Now depending on where you live this may be feasible and it may not be as well. The US is a pretty expensive place to mine. Electricity is expensive and profit margins get cut quite significantly. However, countries like the UAE don’t charge their residents for electricity consumption so mining is a great side hustle over there in the sunny state.
MINING POOLS
These days if you’re looking to mine cryptos, you have to do so through a mining pool. This applies to both beginners and professionals in the field. But you should know that joining a mining pool is not free. You’re actually charged a certain percentage of the value of Bitcoin that day as pool fees. So, depending on which pool you join, you may be charged more or less. You need to try to find pools that are authentic and affordable so you don’t end up breaking the bank while trying to earn a couple of bucks on the side.
Best Bitcoin Mining Pools 2021 in Review
MINING TAXES
You should know that mining cryptos are tax-deductible in most countries around the world. The rates vary country by country but this is something to keep in mind when trying to calculate the profitability of mining cryptos like Bitcoin. If you’re living in or able to move to countries like Portugal, you get to experience the luxuries of investing and mining crypto which is exempt from taxes. The entire reason this has been done is to attract people to come and live in their country to increase their GDP. So if you’re mining any crypto, just double-check and calculate taxes in order to know your profit margins.
