Crypto Mining
Running specialised computers that process transactions on the Bitcoin and Ethereum Classic networks, and are paid in newly issued coins for doing so.
- Networks
- Bitcoin (SHA-256), Ethereum Classic (Etchash)
- Hardware
- [PLACEHOLDER: rig models and hash rate per unit]
- Facility
- [PLACEHOLDER: location, power source and cooling]
- Power tariff
- [PLACEHOLDER: ₹/kWh — this drives the entire economics]
- Typical payback period
- [PLACEHOLDER: only state this if you can evidence it]
Hosted mining capacity in Bitcoin (SHA-256) and Ethereum Classic (Etchash). Returns depend on three things you do not control — the coin price, the network difficulty and your electricity rate — and one you do, which is the efficiency of the hardware.
What mining actually pays you
A miner competes to validate the next block of transactions. The winner receives newly issued coins plus the fees attached to the transactions in that block. Your share of the network's total computing power determines your share of the rewards over time. Payouts arrive continuously in small amounts through a mining pool rather than in occasional large blocks.
Difficulty rises, and it is the reason returns decay
As more machines join a network, the difficulty adjusts upward so blocks keep arriving at a steady rate. The same machine therefore earns steadily fewer coins each month even if the coin price never moves. Any mining projection that holds difficulty constant is not a projection — it is a marketing document. Bitcoin additionally halves its block reward roughly every four years, which cuts mining revenue per unit of work in half overnight.
Electricity is the whole business
Mining converts electricity into coins at a fixed conversion rate set by your hardware. The tariff you pay per kilowatt-hour determines whether that conversion is profitable and at what coin price it stops being profitable. A rig is worth running only while its revenue exceeds its power cost; below that break-even it should be switched off, and hardware bought at a higher coin price may never return its purchase cost.
What can go wrong
These are the specific ways this desk loses money. They are listed here rather than in a footnote because you should read them before deciding, not after.
- Mining hardware is a depreciating industrial asset with a limited productive life and a thin resale market. It can become permanently uneconomic to run before it has paid for itself.
- Network difficulty has risen over the long term and is expected to continue rising, reducing the coin output of any fixed amount of hardware every month.
- Bitcoin's block reward halves approximately every four years, which halves mining revenue per unit of work at a stroke.
- Profitability is a function of coin price, difficulty and electricity tariff. All three can move against you at the same time, and have done so before.
- Power interruptions, cooling failures, hardware faults, facility downtime and regulatory change at the facility's location all directly reduce output.
- Any payback or ROI figure is a scenario under stated assumptions, not a forecast and not a promise.