Is crypto mining really that easy, and is it right for you? There are a few vital things you must know before you decide to cryptocurrency mine. Such as:
1. Understanding the total investment costs
2. The functions of the hardware and the software associated with mining cryptocurrencies.
The profitability of mining cryptocurrency depends on the market conditions, your living environment, and the efficiency of the hardware and software involved. Cryptocurrency mining is a process that uses computer hardware and software to create cryptocurrency coins or tokens.
Mining is the process of verifying and adding transaction data to a blockchain by solving complex mathematical problems. Miners who verify and add blocks of data to the blockchain are rewarded with coins or tokens of the cryptocurrency they are mining. For example, miners who add a block of data to the Bitcoin blockchain are rewarded with 6.25 Bitcoin. BTC 6.25 is worth approximately $187,500 at the time of this writing. That’s 187,000 reasons why this opportunity should be explored.
Is it really worth investing in cryptocurrency mining?
Like physical mining, your chances of success increase when you mine in the right location. For crypto mining, this means finding an area where electricity is cheap or free.
Understanding what the energy costs are, is one of the most critical factors in the investment evaluation process. A moderately equipped cryptocurrency miner(computer), that is technologically competitive costs about US$5,000. These units can compute approximately 95 TH/s (trillion hashes per second) and require about 3,250 watts of electricity to function at peak performance. All you would be miners need to bear in mind that your fellow miners might have invested in equipment that costs ten times as much as yours and computes faster as well, giving them an edge in computing power.
If this equipment will operate for 24 hours a day, you will need to calculate the energy costs per hour, per day, and per month to determine the total costs. Electricity is usually billed in Kilowatts per hour(kWh) or Kilowatt hours. 1000 watts X 1 hour = 1 Kilowatt hour.
What is the price of 1 kilowatt-hour of electricity where you intend to run (operate) your cryptocurrency miner? If you operate your miner in Manhattan, New York the average cost of 1 kilowatt hour of electricity is about $0.2158 cents as of May 2022. The price for 1 kilowatt hour of electricity in Bhutan is about $0.036 cents per 1 kilowatt hour. Plugging these values into our formula we can calculate how much it costs to run this equipment for 1 hour.
3,250 watts = 3.25 kilowatts x 1 hour = 3.25 kilowatts/hour (kw/hr).
3.25 X 0.2158 = $0.70135 cents
So It costs $0.70135 cents to run a $5,000 competitive crypto miner for 1 hour in New York City. $16.8324 to run this miner for a day. $504.972 to run this miner 24 hours a day for a complete month. Please understand, I extended the amount of decimal places because that’s what utility companies do when they calculate your bill.
This same piece of equipment operating in Bhutan would cost (3.25 X $0.036 =) $0.117 to run for one hour, $2.808 for one day, and $84.24 for a 30-day month. $505 a month vs. $84 a month is a substantial difference. This evaluation is at the core of the crypto mining investment.
Chart courtesy of Yahoo
On average a cryptocurrency miner can generate somewhere around $12 or more daily, although that does not mean that you will be that fortunate if you take on this investment. There are a number of factors that can lower this possibility such as weather, equipment failures, and fierce competition just to name a few. If you choose to mine Bitcoin, I’ll repeat, the reward is 6.25 coins for solving the mathematical riddle. Bitcoin traded as high as $60,000 dollars in November of 2021. Many analysts have forecast the possibility of an even higher price for Bitcoin by the end of this year. This trend and forecast could make the potential for revenue well worth the investment in the equipment, if you can utilize electricity at an optimum rate of less than $12 a day.
One thing to take note of is, a $5,000 investment in cryptocurrency mining equipment plus the cost of electricity to run it, may potentially give you a better return than the 1%, mainstream banks give on $5,000 deposited in a traditional savings account in one year. Especially if you can mine for cryptos in the right area where electricity is cheap.
Since the ability to solve the mathematical riddle is completely random, anyone with the mining software and a computer has a chance to be successful at mining a Bitcoin, somewhat like buying a lottery ticket. Even if the odds are 1 in 50 million you have the potential to be that 1. Be advised there are a great many maybes, and fierce competition that come with this quest, it might be cheaper to just buy the crypto coin of your desire.
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India is Investigating Ten Cryptocurrency Exchanges For Money Laundering.
The Enforcement Directorate of India is now pursuing an investigation against ten cryptocurrency exchanges that are suspected of being involved in the laundering of over 1 billion rupees, which is the equivalent of over $125 million in digital currency.
According to The Economics Times, the cryptocurrency exchanges, which have not yet been named, were used by several companies that have been accused of money laundering to make purchases of more than 100 million rupees worth of cryptocurrency, which were then transferred to other international wallets, the majority of which were linked to mainland China.
The exchanges had a poor control on the activities of their users.
In addition, the sources mentioned that the exchanges acquired KYC data of questionable provenance, as the accounts that were followed belonged to individuals who lived in faraway places “with no relation to the transactions.”
However, the exchanges asserted that they were in conformity with KYC laws, despite the fact that they did not provide any suspicious transaction reports (STRs) that could have led to the discovery of information regarding alleged instances of money laundering.
Therefore, the failure to comply with the measures required by regulators made it more difficult to trace the account, which, upon learning of the investigation, reportedly proceeded to withdraw their funds and log off, according to sources close to the investigation. This made it more difficult to track down the account.
“As soon as these companies discovered that they were being investigated, they shut down their operations and utilized the crypto way to transfer the money overseas. The unregulated nature of the cryptocurrency business combined with the opaque nature of the ecosystem for cryptocurrencies offered the necessary cover for these companies to park their funds offshore.
The cryptocurrency exchanges Binance and WazirX are currently under investigation in India.
Following a series of Twitter spats between the CEOs of both firms about ownership and regulatory non-compliance by WazirX, the ED has decided to focus its attention on Binance and WazirX, as was recently published on CryptoPotato.com.
After the argument between the two companies, the ED blocked WazirX’s bank accounts, which together held more than $8 million, on the grounds that the exchange had “actively” assisted in the laundering of illicit funds for more than 15 different fintech companies.
In reaction, Binance stated that it expects WazirX to “take full responsibility for its operations and users’ funds,” while emphasizing that the global cryptocurrency exchanges has nothing to do with WazirX’s operations. Binance also emphasized that it has nothing to do with WazirX’s operations.
Although the ED is investigating several cryptocurrency exchanges for money laundering, an industry executive who spoke to the Economic Times stated that the exchanges are the second point of failure in these crimes. This executive stated that the money comes in and out of these crimes primarily from traditional banks, which did very little or nothing to trace the funds, which is why “it wasn’t caught at the banking level.” Despite the fact that the ED is investigating several cryptocurrency exchanges for money laundering, the executive stated that the exchanges are the second point of failure.
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Ethereum Completes Its Final Test Before a Major Crypto Event.
Ethereum, the second-largest cryptocurrency by market value, had a final dress rehearsal before a years-awaited upgrade.
Ethereum has been mined using a proof-of-work approach since its introduction in 2010. It needs difficult math formulae and a lot of energy.
Ethereum is transitioning to proof of stake for network security. The new method uses users’ existing ether cache to verify transactions and generate tokens, rather than energy-intensive mining. It consumes less electricity and should speed transactions.
Wednesday 9:45 p.m. ET was the final test.
Ansgar Dietrichs, an Ethereum Foundation researcher, said the most meaningful statistic for success is time to finalization. “Another good exam,” he said.
Galaxy Digital’s research associate noted that after the test merging, participation reduced and there may have been a client issue, but generally, it functioned.
Christine Kim tweeted, “A successful Merge = chain finalizes.” We may see similar troubles with the mainnet upgrade, but “the Merge worked.”
Thursday’s developer meeting will address the upgrade’s timing. The merger was expected to begin in mid-September.
For years, Ethereum’s transformation has been delayed. Core developers say the merge has been gradual to allow for study, development, and implementation.
Ether, the Ethereum blockchain asset, has gained about 80% in the last month, including 10% in the last 24 hours, to $1,875. It’s down half this year.
One of Ethereum’s testnets, Goerli (named for a Berlin train station), mirrored the mainnet’s September process.
Testnets let developers try new things and make modifications before main blockchain updates. Wednesday’s exercise revealed that proof-of-stake reduces the energy needed to verify a block of transactions and that the merger process works.
Josef Je, a former Ethereum Foundation developer who now manages PWN, stated Goerli has a bottom-up testnet.
Je said it’s the most popular testnet, and proof of stake on Goerli will be almost equivalent to mainnet.
Goerli is “the closest to mainnet, which can be beneficial for testing smart contract interactions,” according to the Ethereum Foundation’s blog.
Tim Beiko, Ethereum’s protocol coordinator, claimed they knew “within minutes” if a test was successful. In the hours and days ahead, they’ll still seek for setup flaws to fix.
“We want the network to finalize and have a high participation percentage among validators,” added Beiko.
Participation rate is the easiest indicator to track, Beiko noted. Developers must discover out why if numbers drop.
Transactions are another matter. Ethereum blocks transactions. Beiko said blocks with transactions indicate the test went properly.
Last, make sure more than two-thirds of validators are online and agree on the chain history. Normal network circumstances take 15 minutes, says Beiko.
If those three things seem excellent, there’s more to check, but things are moving nicely, said Beiko.
The Ethereum community has been testing proof-of-stake on a chain called beacon since December 2020. Beacon solved critical issues.
Beiko said the original idea needed validators to hold 1,500 ether, worth $2.7 million. The new proof-of-stake proposal requires only 32 ether, or $57,600.
“It’s not trivial, but it’s more accessible,” Beiko added.
Other events have shaped Wednesday’s test. Ethereum’s longest-running testnet, Ropsten, united its proof-of-work and proof-of-stake chains in June. It was the first big dry run for the mainnet’s planned process next month.
Beiko said testing the merge ensured that Ethereum’s software was reliable and that everything built on top of the network was ready for the changeover.
Blockchain Bridges In Trouble
Another day, another hack, and another bridge on the blockchain is destroyed.
It was the eighth heist of 2022 to target Blockchain “bridges,” which are lines of code that assist transmit cryptocurrency money between different applications. The theft occurred last week when thieves stole an estimated $190 million from American crypto business Nomad.
According to statistics from London-based blockchain analysis company Elliptic, hackers have already stolen cryptocurrency worth over $1.2 billion from bridges this year, more than double the amount they did last year.
Ronghui Hu, an associate professor of computer science at Columbia University in New York and co-founder of the cybersecurity company CertiK, stated, “This is a conflict where the cybersecurity firm or the project can’t be the winner.”
“We have so many initiatives to safeguard. When they examine a project and discover no bugs, they (hackers) can just go on to the next one until they identify a weak spot.”
Currently, the majority of digital tokens operate on their own distinct blockchain, which functions as a kind of online ledger for cryptocurrency transactions. When initiatives using these coins get isolated, their chances of being widely used are decreased.
Blockchain bridges seek to topple these barriers. In “Web3,” the much-hyped vision of a digital future where cryptocurrency is integrated into online life and commerce, backers claim they will play a crucial role.
The Nomad hack ranked as the eighth-largest cryptocurrency theft ever. A $615 million theft from Ronin, which was utilized in a well-known online game, and a $320 million theft from Wormhole, which was used in so-called decentralized banking applications, are two other bridge thefts that have occurred this year.
According to Steve Bassi, co-founder and CEO of malware detector PolySwarm, “Blockchain bridges are the most fertile ground for new vulnerabilities.”
Support has been given to Nomad and other businesses who produce blockchain bridge software.
Nomad, situated in San Francisco, claimed to have received $22.4 million from investors just five days before being hacked, including prominent exchange Coinbase Global (COIN.O). Pranay Mohan, co-founder and CEO of Nomad, referred to its security methodology as the “gold standard.”
To monitor the stolen funds, it has stated that it is collaborating with law enforcement organizations and a blockchain analysis company. It announced a reward of up to 10% for the return of money stolen from the bridge late last week. It announced on Saturday that it had so far recovered more than $32 million of the funds stolen.
The restoration of bridging user cash is our first priority, and community is what matters most in cryptocurrencies, according to Mohan. “Any party that reimburses 90% or more of monies that were misused would be regarded as a “white hat.” White hats won’t be charged by us, “He claimed, making reference to purportedly moral hackers.
According to recent discussions with several blockchain and cyber security experts, bridges’ intricacy makes them potentially vulnerable points for projects and apps.
According to Ganesh Swami, CEO of blockchain data company Covalent in Vancouver, which had some cryptocurrency stored on Nomad’s bridge when it was hacked, “one reason why hackers have targeted these cross-chain bridges in recent times is because of the immense technical sophistication involved in creating these kinds of services.”
Some bridges, for instance, alter crypto coins to make them interoperable with various blockchains while keeping the original coins in reserve. Others rely on smart contracts, intricate agreements that automatically complete transactions.
All of these could have bugs or other weaknesses in the programming that could open the door to hackers.
So how should the issue be handled?
According to some experts, audits of smart contracts and “bug bounty” programs that reward open-sourced assessments of smart contract code could assist prevent cybercrimes.
Others argue that deconcentrating control over the bridges among fewer organizations would increase their resilience and code openness.
Because they frequently use a centralized infrastructure that typically locks up assets, cross-chain bridges are a tempting target for hackers, according to Victor Young, founder and chief architect of U.S. blockchain company Analog.
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