Home Bitcoin News Bitcoin Mining The Cost of Bitcoins' Mining Today. What Determines The Mining of BTC?

The Cost of Bitcoins' Mining Today. What Determines The Mining of BTC?

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Well, let’s talk about mining, again? We will talk about what affects its prime cost, we will consider the list of countries where it is the most profitable (and vice versa, absolutely illiquid) to engage in the extraction of digital coins, and also talk a little about the near future of such activities.

Content:
(please, click the topic to scroll down to it)

  1. What is the process of mining digital coins?
  2. What factors influence the price of mining?
  3. Countries where it is the most profitable to engage in the production of cryptocurrency
  4. Forecasts for liquidity of mining for the next couple of years
  5. Conclusion

1. What is the process of mining digital coins?

First of all, let’s take a very brief look at what mining is in general and how it happens? Digital coins are built on the basis of blockchain technology, which implies absolute equality and decentralization. In the Bitcoin network or network of any other coin, there are miners who are responsible for the correctness of its work, and in exchange, the network provides them with a reward in the form of coins. In simple terms, the person who is engaged in mining must provide the network with computing equipment; the more powerful it is, the more coins will be obtained.

2. What factors influence the price of mining?

Like in any other business, in the mining of bitcoin, and of any other coin, there is such a thing as prime cost. The final production price is influenced by several factors:

  • the cost of electricity;
  • the cost of equipment (it can vary significantly depending on the country where to buy, it is the cheapest in China);
  • the cost of repairs.

One should not treat mining as a passive source of income. In order to get the maximum profit from such an enterprise, you must constantly devote time to it. For example, eventually, the complexity of networks of popular coins will inevitably increase. For this reason, it is necessary to upgrade your equipment constantly and most importantly in time. It is also necessary to take into account the fact that video cards or ASIC-miners will work flat out 24/7. For this reason, they will need constant care and timely replacement of components.

3. Countries where it is most profitable to engage in the production of cryptocurrency

It’s not a secret that miners consume just a huge amount of electricity. According to Digiconomist, about 31 terawatt hours are spent annually on bitcoins, which is 0.14% of the total energy consumption of mankind. The prime cost of this amount of electricity costs about one and a half billion dollars.

As you know, electricity in different countries of the world has a completely different cost. It follows that the main item of expenses for mining can vary significantly depending on geography.

In the first quarter of 2018, a study of how the cost of BTC mining differs depending on government tariffs was conducted. The data that was received shocked a little by its magnitude of the difference. So, the most unfavorable country for installing a mining farm is South Korea, on its territory to get one BTC costs as much as $26,170.

In the US, this indicator varies from state to state, but the average cost of producing one bitcoin is $4,758.

In the framework of this study, a total of 115 countries were considered and among them, there are five leaders in which mining of Bitcoin is the cheapest:

  1. Venezuela is the undisputed leader with its indicator of 531 dollars;
  2. Trinidad – $1,190;
  3. Uzbekistan – $1,788;
  4. Ukraine – $1,852;
  5. Myanmar – $1,983.

4. Forecasts for liquidity of mining for the next couple of years

Although for the last 7 months we have seen a significant decline in investors’ interest in digital coins, mining is still a fairly promising activity. The largest miners in the world still invest hundreds of millions of dollars in building new enterprises. Based on this, we can conclude that the rate of BTC/USD will still reach new horizons.

5. Conclusion

The extraction of digital coins is a multi-billion industry, which in 2017 showed a profit of 7.2 billion dollars. The price of electricity significantly affects the prime cost of mining and it can differ dozens of times in some countries.

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The Google Play Store has made some updates to the Developer Policy Center in the Prohibited Content category. Now you can no longer place apps for mining cryptocurrency on devices in the Google Play Store.

The improvements include banned apps such as MinerGate, Crypto Miner, NeoNeonMiner, etc.. This spring, Google also banned the placement of extension for mining in the Chrome Web Store.

We would like to remind you that last month App Store also banned apps for mining tokens on mobile devices. But, as in the Google Play Store, cloud mining is still available for users.

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The cryptocurrency industry is still at a very early stage of its development, so there are no single international rules yet. The governments of individual countries independently try to regulate digital assets. The tax on the cryptocurrency varies in different countries. Within the framework of this article, we will try to touch on how this situation is in the countries with the leading economy in the world.

USA

It is quite an expected fact that the legislative base in this country is better developed than anywhere on the planet. Since the distant 2014, Bitcoin is considered a property in the United States. On the first day of 2018, the revenue service changed the rules somehow: henceforth no total capital increase is imposed on the tax, but literally every operation is.

If giving specific figures, the payment of taxes on the cryptocurrency in the US is as follows:

  • income tax is from 10% to 37%, such a plug depends directly on the specific income that was received as a result of the growth of the asset;
  • the possession of a cryptocurrency for over 12 months is additionally taxed at 24%, based on a long-term tax.

It is noteworthy that in some states taxes can be paid through the coins themselves.

Russia

In the first quarter of 2018, a rather “raw” bill was submitted to the State Duma, which had not even been considered by the deputies. So, at the moment the taxation of digital assets has not yet been formed in Russia. Another “white spot” of this draft law is the lack of tracking of miners. For this reason, it is not entirely clear how the state will monitor the fulfillment of tax obligations.

Germany

In Germany, the issue of taxation of digital coins was first raised in 2013. Then digital coins in this country were recognized as one of the varieties of financial assets. The profit is subject to an income tax of 25%, but it is paid only if this profit was received within 12 months from the date of purchase of the coins. That is, if you sell assets in more than a year, then this operation will be treated solely as a private transaction.

Japan

From the second quarter of 2017 Bitcoin and other digital coins in the country of the Rising Sun have been regarded as a full legal tender. For this reason, the state does not oblige its citizens to pay taxes for any operations with them.

Singapore

The government drew attention to the issue of taxation of the cryptocurrency from the preliminary filing of one of the market players. The fact is that in 2014 representatives of the company Coin Republic independently sent a request to the tax agency so that the latter settled this issue. If a taxpayer has an investment cryptocurrency portfolio as a secondary income, then, in this case, he is not subject to an additional tax. But if the investment is the main or the only way to earn money, then corporate income tax is applied to profits. A little lifehack: if a company that is registered on the territory of Singapore conducts cryptocurrency transactions through exchanges of other countries, then such transactions are not taxed.

India

In 2017, there were battles in this country about the recognition of cryptocurrency in general. The issue of a complete ban on digital coins was on the agenda. But the bullish trend of last year and the ability of the state to raise additional funds to the treasury played a role. There is no specific legislative base yet, this issue is still under consideration.

Israel

Digital coins have received the status of physical goods in Israel. Any activity (mining or trading on the stock exchange) is considered a business, the profit of which is taxed. If you buy anything for the cryptocurrency, then it is considered as barter. Sales of cryptocurrency are taxed to increase the total capital.

South Korea

This field is a rather complicated situation in this state. The conduct of the ICO is prohibited, and the legislative base on tax issues is only at the stage of discussion.

Australia

In this country, the tax agency collects taxes both on income in digital currency and for each transaction with it. One of the not so pleasant features of Australia was the presence of double taxation in the exchange for fiat and back, but relatively recently it was removed.

Canada

In Canada, digital coins are considered a product. Any acquisitions that have been made through cryptocurrency are barter. The tax is levied only on capital gains.

EU

In general, in the euro-zone, cryptocurrencies are regarded as full-fledged currencies. And there are small branches already within the limits of the separate states of participants.

Conclusion

The governments of the countries listed above quite differently classify such an asset as cryptocurrencies. Each country has its own legislative base, which taxpayers must consider with.

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The decision on approving or disapproving the rule change of 5 bitcoin-related exchange-traded funds was postponed by the Securities and Exchange Commission (SEC) till September 21.

This fact was stated in the latest edition of the Federal Register. Five Bitcoin ETFs include Direxion Daily Bitcoin Bear 1X Shares, Direxion Daily Bitcoin 1.25X Bull Shares, Direxion Daily Bitcoin 1.5X Bull Shares, Direxion Daily Bitcoin 2X Bull Shares, and Direxion Daily Bitcoin 2X Bear Shares. The application was filed by fund provider Direxion.

According to the Bitcoinist, Direxion Asset Management LLC planned to list those Bitcoin ETFs on Intercontinental Exchange Inc’s NYSE Arca, so that in January the Arca Inc. sought approval to list and trade their Bitcoin ETFs.

You would think that the whole crypto world is waiting for the SEC to approve these funds, however, some people still are against of it. CNBC reported that chief investment strategist at Atlantis Asset Management, Michael Cohn, said that any approval would be “insane”. Moreover, he doubts that “governments want to go there yet”.

It`s important to notice that there wasn`t any mention about VanEck and SolidX, who continue to make a case for their approval. On July 20, VanEck sent a letter to the SEC, expressing the belief that the industry is ready to accept and support the ETF. The letter states that VanEck has qualified answers to the questions of the cryptocurrency valuation, its liquidity, etc. Furthermore, they believe that the proposed ETF will meet the SEC’s task of protecting investors.

It is important to notice that previously SEC rejected all applications for the launch of Bitcoin ETFs. Also, we would like to remind you that Coinbase exchange admitted that it was wrong stating that it got an approval from the SEC.

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In the cryptocurrency industry, unfortunately, quite often there are thefts and deceptions of ordinary investors. For example, last year the NiceHash site, which was engaged in selling and renting its own mining capacities, was hacked and about 60 million dollars were lost from its accounts. It is meaningless to deny, there are many scammers on the market, but it is not entirely correct to say that digital coins are unreliable. Often people, because of their own misunderstanding of how the blockchain and coins, in particular, are arranged, help themselves to steal.

To retain your digital assets, you do not need to be a specialist in cryptography or an advanced financier, just follow the simple rules of security and backup. In this article, we will talk about the popular methods of stealing bitcoins and find out how to protect ourselves from each of them.

Content:
(please, click the topic to scroll down to it)

  1. Fake Wallets
  2. Extortion programs
  3. Phishing
  4. Conclusion

1. Fake Wallets

The theft of bitcoins by this method has recently lost its former popularity, but this does not mean that it should be forgotten, warned means armed. So, fake wallets are fake sites or even entire applications for iOS and Android, whose interface resembles the most popular services (logos, fonts, design, etc.). There have been cases when the application with viruses was moderated even in the Google Play Market.

The scheme here is extremely simple: a person downloads an application or visits a site and, without suspecting anything, passes their login and password into the hands of scammers. The rest is paperwork, they try to clean the trustful user as soon as possible.

In order to protect yourself from such an unpleasant scenario, you should carefully check the services to which you enter your personal data. If the application is in popular app stores (App Store, Play Market) this does not mean that they are genuine. Always look at the address bar of the sites you are visiting. If some service causes even the slightest suspicion, don’t log in it under any circumstances. It is better to spend extra 15 minutes to verify the authenticity of the wallet.

2. Extortion programs

This is the most popular way to steal bitcoins, which has been quite successfully used by hackers recently. Technically, this is not quite theft, since the victim decides whether to pay or not. It’s more like extortion and blackmail. The technique is simple: the victim’s computer is exposed to a virus that blocks her personal files. Malicious software tells the user that hisher files will be deleted after a certain amount of time if heshe does not transfer an unlimited number of bitcoins to the specified wallet.

As a rule, such programs are hunting large companies or state structures that cannot be categorically out of the working process for a long time. Such viruses are designed in such a way that independent treatment is almost impossible; it plays on the nerves of the victims and encourages them to pay the ransom.

But you should not relax, because no one is protected from such an attack and the computers of individuals were also infected. To protect yourself from extortionists, you need to follow a few simple rules:

  • do not go through questionable links;
  • do not open or under any circumstances download files from untrusted sources;
  • acquire a license for a good antivirus program;
  • backup important files to external media on a regular basis.

All this will make you practically inaccessible for hackers, and even if infected, you will not lose your important files.

3. Phishing

This method is somewhat similar to the first one, but it is more thoughtful and is based on social engineering. There are a few variations of how the scammers crank, but usually, their main tool is e-mail. They send people letters which are very similar to official inquiries from popular services with the request to confirm their data. To avoid falling into the bait of scammers, carefully filter incoming messages, look at the sender’s contacts and do not go over questionable links.

4. Conclusion

Scammers do not slumber and constantly come up with new ways of manipulating and deceiving ordinary users. There are also advanced hackers who are able to steal the bitcoins on the exchange. It is impossible to defend against such force majeure; the only thing that can be done is not to store more than 10% of its assets on exchanges.

Best Cryptocurrency Exchanges in 2018

And you can easily protect yourself from all the methods of stealing digital coins mentioned above, if:

  • you carefully refer to the resources you are migrating to;
  • use antivirus software;
  • take care of backing up important files to external media.

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Digital Asset will provide tools and services to developers of the blockchain solutions that operate on the Google Cloud platform. For its part, Google will also have access to the development of Digital Asset Modeling Language.

According to the head of Digital Asset Blythe Masters, cooperation with the Google Cloud platform will make developers`life much easier:

“We’re partnering with Google Cloud to provide developers with a full stack solution so they can unleash the potential for web-paced innovation in blockchain. This will reduce the technical barriers to DLT application development by delivering our advanced distributed ledger platform and modelling language to Google Cloud.”

Developers will be able to purchase a new service via Google Cloud application store. In addition, the platform will participate in a private beta testing program for the developers of Digital Asset. 

Also, recently, Google has added Bitcoin, Bitcoin Cash, Ethereum and Litecoin to its currency converter. The system automatically displays the converter for “Bitcoin”, “Litecoin” and “Bitcoin Cash” search requests. The service shows the exchange rate in the local currency by default.

The giant company may be thinking about conquering a new, cryptocurrency top seriously. We would like to remind you that Google is engaged in the development of blockchain technology for its cloud business and is ready to make a proposal for cooperation to the founder of the Ethereum, Vitalik Buterin, in the near future.

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According to the online platform Coin360, Bitcоin (BTC) has added 3.56% over the last 24 hours. The price at the time of writing is $7982 per coin.

kurs price

Cryptocurrencies are in both green and red zone:

Bitcoin Cash grew by 2.52% over the past day and costs $839;

Ripple became cheaper by 0.41% and its price is $0.45;

EOS dropped by 1.77% and $8.04 at cost;

Litecoin added 2.70% and its price is $87;

Cardano decreased by 3.39% and costs $0.16;

Dash grew by 2.36% – its cost is $250 per coin;

Ethereum has added 0.79% over the past 24 hours. Its cost is $468 per coin.

The total market capitalization is $293 billion. Bitcoin accounts for 46.8% of the total volume. In monetary terms, this is $137 billion.

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