How To Mine Bitcoin In Australia: The Ultimate Guide to Bitcoin Mining for Australians
This ultimate guide will cover topics such as how to mine bitcoin in Australia, how much it will cost you and whether it’s a profitable method of acquiring bitcoin.
Bitcoin has come a long way since its launch in 2009. It started trading at around $0.0008 to $0.08 per coin, but it’s now the gold standard for all cryptocurrencies. Currently, 1 bitcoin is trading at $39,262.60, which is pretty high if you compare the prices of other digital coins. There are even some that haven’t hit the $1 mark yet!
The good news is that you don’t have to invest in full coins. You can simply buy BTC in smaller quantities at a fraction of its real value. While you can buy Bitcoin from exchange sites like Swyftx, there are many people who prefer mining bitcoin.
What Is Bitcoin Mining?
If the phrase bitcoin mining has you thinking of people with shovels covered in mud as they try to dig up gold coins, you couldn’t be more wrong. If you automatically thought of tech geniuses sitting in front of multiple computer screens, scouring the dark web for hidden codes, you could be on to something.
Here’s a quick rundown of bitcoin mining; when Satoshi Nakamoto launched bitcoin, he limited its supply to 21 million bitcoin in the entire world. Once all these coins are mined, no new BTC will enter circulation. Currently. Around 18.5 million BTC have been mined, leaving less than 3 million bitcoin to be mined.
The reason why it’s referred to as mining is that much like precious metals, bitcoin has to be extracted from a place, but instead of actual mining pits, computers are used in the extraction. Simply put, bitcoin mining is basically the process of extracting BTC from the web.
Miners have to solve complex mathematical equations using high-powered computers because they’re too hard to be solved by hand. This also means that your everyday PC just won’t cut it.
A Quick Overview of Bitcoin Mining in Australia
Since bitcoin is not a fiat currency, it’s not bound by the same regulations that govern fiat currencies. Instead of being issued and distributed by a regulatory body, the only way its supply can be controlled is through mining. This is like the backbone of its entire functionality and existence.
There are 2 critical roles that bitcoin mining in Australia performs;
1. Creating new bitcoin
2. Verifying new transactions on the bitcoin network.
All cryptocurrency transactions are stored on a decentralized ledger, and before a bitcoin transaction is executed, it has to be verified, after which it’s recorded. This process ensures that the bitcoin is sent to the intended recipient and reduces fraud cases. Once a transaction is listed on the ledger, it cannot be altered, which means that fraudsters can’t spend or send the same bitcoin twice. Think of bitcoin miners as auditors that protect bitcoin users and the network by ensuring all transactions are verified.
Bitcoin mining is very computer-intensive, so miners are often given BTC rewards every time they verify a transaction. This reward is bitcoin that has never been spent before, and the miner can either sell it for cash on exchange platforms or hold on to it.
How Does Bitcoin Mining Work?
You already know that bitcoin miners have to solve complex mathematical equations to earn BTC rewards. All verified transactions are then grouped together on a blockchain which means that the BTC blockchain has all transactions that have occurred since the coin was launched.
In order to verify transactions, the miners require a one-way encryption tool known as a cryptographic hash. The decryption process is pretty difficult because the miners have to go through all possible data combinations until they find one that matches the hash. Just in case it’s not clear just how complex it is, there are trillions of possible combinations! Once they find the right data input, they use it as a block identifier for that particular transaction which ultimately prevents it from being interfered with.
The mining process also has difficulty levels that change every two weeks or 2,016 blocks. This level is determined by how much hash power the miners need to mine a block and is designed to maintain the time it takes to verify a transaction to about 10 minutes. It’s also dependent on the number of miners in the network and their computing power.
How to Mine Bitcoin in Australia
There was a time when you could mine bitcoin using a high-speed graphics card on your home PC, but currently, that’s no longer an option. Technology has advanced, and there is sophisticated mining hardware specifically designed to extract BTC coins.
There are 2 main ways you can mine bitcoin in Australia;
I. Cloud Mining
To make a profitable venture out of bitcoin mining, you have to acquire mining hardware, but it’s very expensive. This is why some miners prefer to use a bitcoin cloud mining service such as Hashflare and Genesis Mining. These services basically allow you to rent the sophisticated hardware and then let someone else do the actual mining for you.
One of the biggest upsides of cloud mining is that it has a significantly smaller initial capital. You, however, don’t control the hardware, which increases your levels of risks. There have also been a couple of cloud mining scams, so ensure you choose a reliable provider.
Step by Step Guide of Acquiring Bitcoin Through Cloud Mining
1. Choose a reputable cloud mining provider.
Go through various alternatives and compare their fees, associated costs, safety protocols, and how reliable they are.
Some of the top cloud mining options for Australians include Genesis Mining, Bitcoin.com Cloud Mining, HashFlare, Hashing24, and NGSCrypto.
2. Select the suitable mining package.
Review the mining contract to identify how long it will last. You should also take a closer look at the mining hardware that they’re offering and compare it to that of their competitors.
Currently, the best mining hardware is the Antminer S19 Pro that has a hash power of 110.0 TH/s. other options include WhatsMiner M30S++ and AvalonMiner 1246.
3. Compare different mining pools.
After selecting a plan, look at some of Australia’s best mining pools and compare them. They include Slush Pool, ViaBTC, and AntPool.
You should also go through their user reviews and look at their track record to identify the one that suits you best.
4. Start mining bitcoin!
Don’t forget to transfer your BTC coins into a safe wallet that you fully control.
II. Personal Mining
For this type of bitcoin mining, you’ll require specialized ASIC hardware, and it doesn’t come cheap. Before you engage in personal mining, make sure you’re ready to make a significant investment, your network connection is fast, and that you have access to cheap electricity.
Start by buying an ASIC miner (hardware) whose price varies depending on whether it’s new or used and the model you choose. On average, you can get it from anywhere between $500 to around $5000. You then have to pair this hardware with the right mining software, and you can start mining bitcoin at home.
Personal mining is very capital intensive which is why it’s advisable to join a bitcoin mining pool. This allows you to join forces with other miners and get BTC rewards based on how much you contribute to the pool. You will have to pay a fee, but it’s often affordable. Just ensure that you go for a pool that’s reputable and established to protect your investment.
Step by Step Guide of Acquiring Bitcoin Through Personal Mining
1. Get a mining profitability calculator.
This will help you identify whether the amount of bitcoin you make will be worth the investment you put into it.
The top bitcoin ming calculators in Australia include Buy Bitcoin Worldwide Mining Calculator and Crypto Compare Mining Calculator.
2. Select the right mining hardware.
Look at different ASIC mining devices and compare their costs and features to identify the one that fits your budget. They generally range between a couple of hundred dollars to about $10,000 and can be bought on online platforms such as Amazon.
Don’t forget that you may also have to buy a power supply unit for the hardware separately.
3. Join a bitcoin mining pool.
This will increase your chances of making the venture profitable as you’ll be combining resources with other miners.
4. Download a mining software.
Compare the features of various mining software including that of CGMiner, MultiMiner, BFGMiner, and Awesome Miner.
Keep in mind that some of them offer a Graphics user interface for ease of use while others are command-line programs. If you, however, join a mining pool with its own mining software, you won’t have to buy one.
Get a secure wallet for your BTC rewards, and don’t forget to stay updated with current bitcoin prices and mining difficulty adjustments. This will help you keep your mining set up profitable
How Much Does It Cost to Mine Bitcoin in Australia?
Before you start mining for bitcoin, it’s important to note that it’s a complex and costly process.
There are 2 main costs associated with bitcoin mining in Australia; electricity costs and equipment costs. The cost of electricity in Australia ranges between 23c/kWh and 40c/kWh, while the mining hardware can cost anywhere between a few hundred AUDs to a couple of thousands.
You need to ensure that all associated costs are less than the amount of bitcoin you actually mine. With the right approach and setup, however, either through cloud mining or joining a bitcoin mining pool, you can still make a tidy profit.
Factors to Consider When Choosing the Right Bitcoin Mining Hardware in Australia
Before buying Bitcoin mining hardware, you should consider;
1. Energy Consumption
The relationship between power consumption and hash rate is critical to your profitability. To calculate the energy consumption, you should divide the hash count by the total power watts used.
For instance, if your hash rate is 9000MH/sec and you use 64 power watts, the energy consumption will be 281.250 MH/sec on every watt. The good news is that you don’t have to do the calculations manually because there are online calculators that give you an estimation of your power bill.
2. Hash Rate
This is the estimated number of calculations that your ASIC hardware can do every second. It’s important that you consider the hash rate because a high rate will result in more calculations per second which will ultimately increase the number of BTC rewards that you earn. The bitcoin has rate ranges between 336 MH/s and 14,000,000 MH/s.
What Is the Best Software for Bitcoin Mining in Australia?
Before you select a mining software, make sure you check whether your hardware has any specific software requirements. Some of the software you should consider include;
● EasyMiner: It’s only compatible with macOS and Linux. It also supports performance graphs as well as various protocols for pool and personal mining.
● Bitcoin Miner: It runs on both Windows and macOS and has a very interactive user interface. Some of its features include power saving mode, pool support, fast share submission, and profit reports.
● CGMiner: Is compatible with macOS, Linux, & Windows and also comes with a fan speed control, CPU, and Multi GPU support. GG miner also has a block self-detection feature.
● RPC Miner: It has API integrations and is compatible with macOS systems.
● BFGMiner: It’s almost similar to CGMiner but is specifically designed for ASICs. It’s compatible with Windows, Linux, and macOS
Hardware Used for Bitcoin Mining in Australia
There are 3 main categories of hardware used for bitcoin mining;
1. CPU: Central Processing Unit
The main function of a CPU is to execute functions that enable programs like word processor or web browsers to run. When bitcoin was launched, there were very few people in the bitcoin network, so the power required to mine the coin was very low. This made it possible to calculate hashes per second.
CPU mining doesn’t require any specialized hardware, but it causes a lot of strain on your CPU. in the past, you could easily run mining software in the background as you carry on other tasks.
Currently, it’s almost impossible to mine bitcoin on your CPU. There’s a high hash rate on the network, and it just wouldn’t be profitable.
2. GPU: Graphics Processing Unit
A GPU sometimes referred to as a video card or a graphics card, is designed to handle repetitive tasks that often train a CPU’s processing power. It’s mainly used by graphic designers and gamers to render intensive videos and 3D graphics as it is technically a chip devoted to these processes.
The main benefit of using a GPU to mine is that it’s readily available and highly efficient. You can also repurpose a GPU to be specifically used for bitcoin mining. Its major downside is that it consumes a lot of energy.
The top bitcoin mining GPUs in 2021 include MSI Gaming GeForce RTX 2070, Nvidia GeForce RTX 2080 Ti, ASUS ROG Strix AMD Radeon RX 5700XT, and MSI Gaming GeForce GTX 1080 Ti.
Due to high demand and the lack of supply, their prices range between $1000-$3000 on online platforms such as eBay and Amazon.
3. Application Specific Integrated Circuit: (ASIC)
An ASIC is a type of specialized chip that’s only dedicated to one specific process. For example, in bitcoin mining, the ASIC is specifically designed to run the hash algorithm.
One of the reasons why bitcoin miners prefer ASIC mining to CPU and GPU mining is that they have a low power consumption and a high hash rate. They are also more efficient.
The major downside to ASIC chips is that they are highly expensive and have a relatively short lifespan.
ASIC miners cost anywhere between $2000 to about $10,000 dispensing on factors such as the hash power. The top Bitcoin miners ASIC machines in Australia include WhatsMiner M30S++, WhatsMiner M30S+, Antminer S19 Pro, and AvalonMiner 1246.
Why Are Bitcoin Blocks Only Mined Every 10 Minutes?
This block time was set by Satoshi Nakamoto because if it was too fast, people would mine bitcoin too quickly, thereby impacting the inflation rate. On the other hand, if the mining rate was too slow, there would be delays in the approval of bitcoin transactions.
Is Bitcoin Mining Profitable In Australia?
Now that you know how to mine Bitcoin in Australia, you must be wondering whether it’s really profitable.
Bitcoin mining can be profitable, but you need to be ready to make a capital-intensive investment.
You simply can’t take it up as a hobby because you’ll also be competing with large firms and pools that are in it for the money.
If you now feel like Bitcoin mining is not the right thing for you to do but you still want a slice of the Bitcoin pie, this article about how to buy Bitcoin in Australia might just be the right thing for you.