Crypto Mining Australia: How to Mine Bitcoin Down Under
Bitcoin (BTC) mining is a rather expensive (varies from country-to-country) yet a rewarding procedure. Each time a bitcoin transaction is made, a record of the same is made on a block along with other recent BTC transactions. Bitcoin miners compete against each other to validate and verify the block once it is full. Crypto mining Australia is no different.
This reward is halved every 210,000 blocks (roughly once every 4 years). The process of crypto mining consumes a huge quantity of electricity every year – Bitcoin mining consumes more electricity on an annual basis than Argentina!
As a hub of traditional mining, crypto mining is picking up pace Down Under.
Here is all you need to know about crypto mining in the country.
Is crypto mining legal in Australia?
Yes, crypto mining is legal in the country.
Cryptocurrencies like Bitcoin are treated as property in the country and are taxable as Capital Gains Tax (CGT). Under the CGT discount provisions, capital gains may be discounted if the crypto token you own is held for a period of 12 months or more.
Refer to this link to learn all you need to know about the legal status of cryptocurrencies as an Australian citizen.
Is crypto mining profitable in Australia?
Yes, cryptocurrency mining is profitable in the country. To put it into perspective, to profit from mining, the electricity cost to mine BTC and the total hardware cost must be lesser than the reward you eventually reap.
The global annual BTC mining revenue is almost $10 billion at the time of writing, with miners earning an average gross profit of 80%.
If you want to mine BTC or altcoins like Ethereum (ETH), Litecoin (LTC), and Monero (XMR) at home (by yourself) in Australia, the United States, the United Kingdom, or Japan, you are likely to incur a heavy loss given the high electricity prices in these countries.
Countries like Venezuela, Russia, and China charge lower electricity prices and are better suited for crypto mining.
Renewable energy accounts for over 20% of Australia’s generated electricity and is the cheapest source of energy for mining. Cheap green electricity could see huge profits reaped in the country.
That said, Cosmos Capital, a Sydney-based BTC mining company is in talks with energy providers in South Australia, Victoria, and New South Wales to harness their excess power capacity and build a bitcoin mine in rural Australia.
If you want to make a substantial profit, you will have to find a consistent source of renewable energy. We will discuss how you can make a profit from cryptocurrency mining in another section of this guide.
What electricity costs ensue?
Using the crypto mining tools calculator, we calculated the electricity cost to run a Whatsminer M20S in Australia at home, at a cost of $0.33/kWh (average non-renewable home electricity cost in the country).
As you can see from the image below, you will incur a daily loss of $2.52, a monthly loss of $75.61, and an annual loss of $919.92.
The need for a renewable source of energy is apparent. Installing a solar panel system is a good option. While the initial outlay will set you back a few thousand Australian dollars (AUD), a solar panel system offers great value for money over its lifetime.
Over the lifetime of a 10 kWh solar-powered system (let’s say 25 years), the cost per kWh you will have to pay will be between 0.044 – 0.053 AUD. Of course, you will need a more powerful solar system to mine a large amount of BTC.
What are the different types of mining rigs?
There are two options for BTC mining Down Under – personal mining and cloud mining.
Here is how they work:
CPU mining and GPU mining are things of the past. Nowadays miners purchase an application-specific integrated circuit (ASIC) miner coupled with the right Bitcoin mining software.
The mining hardware can cost between $500 to $5,000 (USD), depending on whether it is has been used before or is new.
If you want to profit from mining cryptocurrency, avoid going solo as you are unlikely to gain profitability, given the high cost of electricity in the country among other constraints – join a reputable BTC mining pool instead.
A mining pool will allow you to combine your computing power and earn BTC rewards accordingly.
Instead of competing with each other, your collaboration will allow you to compete with professional (private) mining organizations. You are likely to earn more consistently as well.
Cloud mining is a popular BTC mining option as well. As the name suggests, you do not physically own hardware meant to mine Bitcoins. To make a profit from the same, you will need access to the best-in-class hardware meant for cloud mining.
This does not come cheap and you are better off joining a Bitcoin cloud mining service like Hashflare and Genesis Mining.
Such services allow you to rent the hardware (present anywhere in the world) meant to mine BTC while other people do the mining operation for you. The initial outlay for cloud mining is much cheaper than that of personal mining.
Choose a service provider wisely as there have been many recorded cases of BTC cloud mining scams.
Given that non-renewable energy is quite expensive in the country and the various steps (and initial investment) needed to secure a reliable source of renewable energy are troublesome, cloud mining is your best bet as an Australian miner.
Here is all you need to know about the best mining pools and cloud mining services in the country.
Where can I get a mining rig in Australia?
If you want to purchase a used personal mining rig Down Under, look no further than eBay. Be extremely careful when you are buying a used rig. Buy a rig from a verified seller and check whether it is working properly.
You can purchase mining rigs at Amazon, Miningstore.com.au and official websites that ship to Australia. Crypto Pit is a fantastic option for GPU mining rigs.
The biggest drawback of mining in the country is the cost of (non-renewable) electricity.
While renewable energy is a fantastic option, it is difficult for you to operate a solo mining operation using renewable energy, given the initial investment needed for the same and the huge amount of energy that will be needed to mine at home on your own.
You should either join a respectable BTC mining pool or a sought-after BTC cloud mining service to enjoy sustained profits at relatively lower costs.
Store your mined BTC in a hardware wallet (Ledger or Trezor-based) for maximum security. The cryptocurrency’s price is on the rise, so hold on for dear life (HODL)!