Is there any relation of Bitcoin to the rise of the mining industry in India?

Some believe that this rise may be due to India’s high demand for Bitcoins. The price of bitcoin has multiplied by five times since September 2017. With the new cryptocurrency regulations, it seems almost impossible to buy or sell bitcoins in cash on Indian exchanges with the new cryptocurrency regulations. 

Therefore, the transfer of physical cash to foreign exchanges is not happening. The mining equipment manufacturers expect a rise in demand for their products due to this phenomenon. It’s still uncertain how miners in India mine many Bitcoins, but it seems that an increase in bitcoin price has led to an increase in mining activities in India.

If there is a relation of Bitcoin to the rise of the mining industry in India, it’s going to be a shady one. A new report from Economic Times says that cryptocurrency mining operations have been mushrooming across multiple industrial hubs of Pune, Bengaluru, and Chennai as they offer cheaper electricity rates besides low operational costs.

The primary reason for cryptocurrency mining is the abundant availability of cheap electricity in these industrial hubs. Electricity accounts for up to 60%-70% of overall cost, and with the average price of electricity as low as Rs 2 per unit, one can save up to Rs 30,000-35,000 per month on power costs alone.

Cryptocurrency mining refers to a decentralized, computationally-intensive process where people from across the world connect to validate transactions by computing various algorithms. The mining ensures that all transactions are unique and prevents anyone from controlling what’s being added to the blockchain ledger. In exchange for this service, miners add new blocks of digital currency.

 As a result, many illegal Bitcoin mine operators have been caught, and this legal framework might also end future endeavors. However, for now, at least, there seems to be no stopping for those who want to do cryptocurrency mining. If you are interested in bitcoin trading, visit the Bitcoin trading app.

This year, ET reported how Bitcoin mines were mushrooming across industrial hubs in Pune, Hyderabad, and Chennai in March. There are around 50 registered firms that mine cryptocurrencies in India, including big names like GainBitcoin, LabCoin mining, and HashgenX. 

Unfortunately, the presence of these companies has also led to the rise of many ‘fake’ Bitcoin mining firms who deceive people into signing up for excessive returns, promising them to mine bitcoins.

There is no shortage of appetite for cryptocurrencies in India, with the total market capitalization of all such currencies (including Ethereum and Ripple) soaring from around $20 billion to over $100 billion currently. 

The huge demand for cryptocurrencies has led to a significant rise in prices, with bitcoin touching over $4,000 levels currently. It’s a different matter altogether that whether it will lead to a bubble burst in the future, which nobody can predict.

Even though people are still trying hard to understand blockchain technology and invest in bitcoins, it seems a great way to make money. With the profitability of Bitcoin mines going up, it’s no wonder people will flock towards this business in weeks or months from now.

What do you think is India’s future in the bitcoin industry?

Some issues need to be addressed immediately. The first and foremost is cryptocurrency regulation. With new regulations, it seems almost impossible to buy or sell bitcoins in cash on Indian exchanges. In addition to this, there’s a lack of awareness among people about cryptocurrencies. 

The goal is to educate people about Bitcoin, Ethereum, and other cryptocurrencies. In addition, these exchanges should be more open for Indian users so that new cryptocurrency investors can easily buy/sell their bitcoins on these platforms.

Currently, the bitcoin industry lacks regulation and proper control mechanisms to reduce the number of Ponzi schemes. As a result, many companies are running Ponzi schemes to make fast cash by trapping new investors in their business and then disappearing with their money (e.g., Bitconnect). Sometimes these companies support people who never invested in cryptocurrencies but use fake accounts, and they trick people into investing their money in these bitcoin companies. 

More taxes will result in more spending on infrastructural projects like roads, modern railway systems, better amenities within cities, etc. all this will lead to reduced poverty and increase the quality of life (of ordinary men).

 

Original Source: https://thedailyblog.co.nz/2022/02/14/is-there-any-relation-of-bitcoin-to-the-rise-of-the-mining-industry-in-india/