Digital Currencies have gained popularity among millennials over the past decade. Bitcoin is the most sought-after and valuable digital currency since its inception in 2008. Bitcoin is an independent digital currency which can be obtained through Bitcoin Mining.
Thankfully, Australia, the home of kangaroos, isn’t lagging in this crucial digital currency revolution. But before delving into the finer details of mining Bitcoin in Australia, here are a few critical facts you should know.
The Birth of Bitcoin
Bitcoin creators envisioned a transparent and centerless currency system that eliminates the third-party intermediaries. They wanted to create a decentralised system where people could transact as peers instead of transacting as “subjects” of intermediaries.
Before bitcoin, people were used to banking intermediaries who delayed transactions and charged hefty fees. For example, if you initiate a digital payment, an electronic payment system, a credit card would charge you a fee to affect your transaction.
Usually, the price is chargeable as a percentage of a transaction’s monetary value. However, adopting Bitcoin as a legal tender for exchange eliminates transaction costs. These costs include back-office expenses, security measure costs to secure the sensitive data, and prevention from frauds.
The vision behind Satoshi’s decentralised system was to counteract the negatives of the current system. Traditionally, the money deposited in the banks gets dumped into the opportunities that bring financial gains to banking.
The banking cartels keep only a minute percentage of the funds kept as a reserve to meet future contingencies and exploit the rest of the deposits to their advantage. According to Satoshi, Bitcoin would end banking cartels’ monopoly and create a level playing pitch. All these disruptive accomplishments would have been made impossible without an enthusiastic miner behind the scene.
Understanding Bitcoin Mining
It’s beneficial to define Bitcoin mining before examining mining Bitcoin in Australia. Mining is the process of confirming a transaction over the peer-to-peer transaction network, like the Blockchain System. Under this system, a record has to be kept for every peer-to-peer transaction globally in a public ledger.
A confirmation process completes all records in the book under a miner’s facilitation. The confirmation process involves the solving of a Hash code a cryptographic protocol creates. This protocol also backs the crypto-currency. The miner solves the hash code and confirms the transaction in the crypto network, and reaps Bitcoin as a reward for the service.
The Bitcoin earned by mining has the value equivalent to the current market value of the Bitcoin.
Bitcoin Mining in Australia
Crypto mining is legal in Australia, like many other countries worldwide. If you’re an enthusiastic miner seeking to try your hand in mining Bitcoin in Australia, you can make it happen in either of the two ways: Local and cloud mining.
In the local mining method, the miner uses the GPU in the personal computer to solve a hash code. GPU stands for “Graphics Processing Unit.” The GPU has the necessary algorithms to solve a hash code that backs a crypto-currency.
With the technological advancements, standalone devices like ASIC chips are also in use to facilitate Bitcoin Mining. ASIC stands for “Application-Specific Integrated Circuit.”, dedicated hardware that undertakes crypto mining.
ASIC chips provide a higher hash solving efficiency suitable for extensive mining than a personal computer.
Due to the widespread competitive aspect of Bitcoin Mining, the miner would face difficulties in gaining rewards out of personal Bitcoin Mining.
In a typical scenario, a Bitcoin miner in Australia tends to contribute their mined Bitcoin towards a common Bitcoin Mining Pool, which provides the miners to avail themselves of the opportunity to get rewarded more often than they could have with personal mining.
If you’re a Bitcoin Miner in Australia, you must choose a reputed and well-established Bitcoin Mining Pool to get rewarded often. Meanwhile, also make sure to be informed of the fee and payout structure of the mining pool you choose.
Cloud Mining is the most-sought option for aspiring miners in Australia. Cloud Mining takes place with a hosted structure that allows a miner to purchase or lease for hardware located in a mining farm.
Leased Hash Power is another type of Cloud Mining that facilitates a user to borrow hash computing power from a mining farm. The miner can take their share from the overall profits by assisting in the maintenance and costs of running the mining farm.
Bitcoin mining is still profitable in 2021. However, its profitability is a bit lower compared to what it was in formerly. The reason is that Bitcoin has faced stiff competition from other digital currencies. This competition has increased the challenges Bitcoin miners face. However, Bitcoin mining has an advantage due to its favourable output ratio.