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Mining Cryptocurrency in South Africa

Is mining cryptocurrency in South Africa a minefield for you? Well, that is because it is, it is also the reason why so much money is being made in this “fledgeling” industry (mining cryptocurrency in South Africa is a fairly small industry compared to the rest of the world).

Who is mining cryptocurrency in South Africa?

Cryptocurrency miners fall into 2 main groups. Professional miners and hobbyists. South Africa currently has very few professional miners (compared to Asia and Balkan countries). The reason for this is not expertise, skills or hardware. The element to consider is electricity. At its core, cryptocurrency mining requires electricity and a lot of it. Bitcoin mining, for example, uses more electricity globally than many small countries. Digiconomist estimate Bitcoin mining to consume around 73TWh of electricity for 2018. This figure is roughly the same as what Venezuela, Chile or Austria use in a year.

This leaves the majority of mining activity in South Africa to hobby / small operators. As a result, currencies such as bitcoin, end up being an “import”.

Why can mining cryptocurrency in South Africa be very expensive?

Due to the lack of reliable and cheap electricity supply in South Africa, mining cryptocurrency in South Africa can be very risky, but there are, however, buildings and land which has flexible-plan billing. This is a little-known offering by Eskom and according to sources in the industry, almost impossible to simply “apply” for, because of the need for better management.

On top of the electricity consideration, you need to be very astute in importing and exporting goods. The reason is that the equipment to mine specific coins are already expensive. This is before import duties and levies are applied. Many of these machines never make a return on investment. Whilst there are some local suppliers, these are far and few between. You are also likely to pay almost double for your mining rig if you buy local. Most miners that make money from mining altcoins, do so because they are technically able and have the skills to build and configure their own machines. This is not scalable though, as these types of miners usually build mining rigs with second hand GPU’s (they work perfectly, but there are only so many second-hand graphics card available).

You can also earn cryptocurrency by speculating. This is the practice of buying and selling coins on different exchanges

Is mining cryptocurrency the most profitable way to get more crypto?

One of the most asked and answered questions in the cryptocurrency industry. Is mining cryptocurrency profitable and which cryptocurrency to mine. The answer yes, no and maybe. You can buy cryptocurrency, you can mine cryptocurrency or you can earn cryptocurrency.

Buying Cryptocurrency

To buy cryptocurrency with Rand, you can use a trusted crypto exchange such as iCE3X.com or any reputable bitcoin exchange, anywhere in the world. You know how much it will cost you and you also know exactly how much bitcoin you will get.

Mining Cryptocurrency

You can mine cryptocurrency with your own hardware yourself, or you can pay someone to set up and manage the hardware for you, whilst you still control the operation. Those are the only two realistic options. Any other method or scheme will 99% guarantee, to separate you from your investment.

Stay away from any cloud mining or “compounding packages”, because these are peddled by unscrupulous marketers. You will be better off to rather take your money and buy a second-hand car from a dodgy car salesman. This way, when you realize your mistake, you will at least have some scrap metal to sell.

Earning Cryptocurrency

You can earn cryptocurrency such as bitcoin, litecoin, ethereum and so forth by selling goods or services. A great way is to simply share your knowledge via blogs and social media and use affiliate marketing links to earn extra income. You can learn more about cryptocurrency affiliate marketing here. {be careful of pyramid marketing schemes and Ponzi schemes that are disguised as genuine affiliate programs)

You can also earn cryptocurrency by speculating. This is the practice of buying and selling coins on different exchanges and taking advantage of arbitrage opportunities which present themselves. This is fairly easy to learn how to do but requires patience, dedication and a reasonable balance of crypto and FIAT money on multiple exchanges.

Where can mining cryptocurrency take place and where do you get the mining equipment?

You can mine cryptocurrency anywhere in the world, as long as you have access to the internet, have the equipment and a reliable electricity supply. Not much different from gold mining. You would, however, think twice before getting involved in gold mining, wouldn’t you? Mining cryptocurrency is no different and would require the same operational considerations. It is much easier to buy gold outright, or buy gold stocks, or even to invest in shares. This way you own a small part of the company that actually create the wealth.

Large scaline cryptocurrency mining farms also carry risks..

How is mining cryptocurrency regulated and taxed in South Africa

Mining cryptocurrency, transaction verification, creating ledger space, Proof of Work (PoW). You can call the process of creating coins whatever you like. The government will review it, and they will attempt to tax or regulate it. In the case of cryptocurrency such as bitcoin, the authorities can only tax or regulate the interaction with FIAT money. Governments do not own, issue or create these tokens and have no legal right or influence as to how people use it. Private money is not illegal, on the contrary, it has just never been scalable. In their, statements SARS has issued guidelines, but there is still no concrete crypto specific laws or regulations.

The conclusion is that mining cryptocurrency in South Africa is restricted to the technically able amongst us. There are many people who simply throw their money away when they invest in non-ethical mining practices.

Keep your money safe and do your own research. #DYOR

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Disclaimer Notice:

This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.

 

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