Cryptocurrency mining is one of the easiest yet exciting activities you can do in your spare time to earn real money. It's a great option for those who are passionate about blockchain technology and looking to play an active part in the industry and also those who are looking for a low-risk way of earning money through cryptocurrencies.
It's a relatively safe way of getting cryptocurrencies. The only trade-off is that you will require the right equipment and invest in energy consumption. If you ever wondered if cryptocurrency mining in Malaysia can be profitable, this article is for you.
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What is cryptocurrency mining?
Mining is a central component of cryptocurrency. It is what makes financial transactions possible on the blockchain. Unlike conventional banking systems, all money transfers and transactions are made through the middlemen - the bank. All the records and ledgers are centralised within the banking system, which approves or disapproves transactions made between two parties. It's a system based on trust in the banking system.
Cryptocurrencies, on the other hand, operate in a trustless and decentralized manner. And that is where blockchain technology comes in. Every transaction made from one party to the other is coded in highly secure cryptography, then when a transfer is made, it will be recorded on all the blocks of data - which then forms a chain that verifies the veracity of the data recorded.
Since there is no centralised system to control this function and process such enormous amounts of data in real-time, it will depend on individual nodes. The nodes are operated by miners, where a specialised software is used to decode the cryptographic algorithms and runs on a computer.
The miner receives a "reward" or a "bounty" for his participation in the cryptocurrency computer network through his contribution of data processing capacity, necessary for the payment network to operate safely.
How does mining work?
Ever wondered how are cryptocurrencies created? It's made possible through mining. Miners use special software to solve complex mathematical problems that help to verify transactions made and stored on the blockchain. This is to ensure that double-spending does not occur - a central issue in accounting.
The miners that participate will then receive cryptocurrencies in exchange for the computing power that they lent. If a miner is mining Bitcoin, then the miner will receive Bitcoin. If it's in another cryptocurrency, then the miner will receive that particular cryptocurrency as a reward.
Is it worth to mine Bitcoins in Malaysia?
At first glance, it might seem that cryptocurrency mining in Malaysia can turn a profit due to the cheaper electricity costs here compared to many other Western countries. But if you get down to it and actually calculate the ROI of mining - let's say Bitcoin - in Malaysia, there's a good chance that it will be difficult to turn a profit.\
There are two main factors:
Larger mining pools in China and Eastern Europe dominate the mining market. Electricity there is cheaper than in Malaysia.
The initial capital investment to get the right mining equipment will cost thousands of ringgit.
If you're running a small running rig at home, you'll need to pay the sky-high utility bills because mining needs to run 24/7, or else your ROI will take forever to materialise. But if you're planning to set up a large mining facility, you'll need to run it like a business with overheads that includes rental and equipment maintenance. Both of which will eat into your potential profits.
Crypto mining calculation in Malaysia
To start mining, you need a lot of computing power to mine Bitcoin. You can use a normal PC, but since the processing power is slower, it will take forever to recoup back your investment and utility bills.
On the other hand, you'll either need a powerful PC with advanced graphics cards or specialized machines that are built specifically for mining. Let's say you opt for a good computer with the latest graphics cards, here are your initial start-up costs:
One unit of PC = RM4,000-5,000
GPU = you can use the one that comes with the PC (but dedicated ones will cost you at least RM900-1,000)
All in it will likely set you back at least RM4,900. That's a month's salary for a lot of people! The Catch-22 is that the more expensive your machine, the better it will perform. The better it performs, the more you can mine.
At the same time, since more advanced PCs costs more, it may take you a bit longer to recoup your capital and start realising actual profits.
Other mining costs
One thing's for sure, Malaysia's electricity tariffs are among the lowest in the world. But whether or not it's low enough to be profitable for cryptocurrency mining in Malaysia, you'll need to calculate for yourself (since there are many variables, such as type of equipment and number of mining machines you're planning to use).
To help calculate your mining costs better, here is a breakdown of the electricity tariff in Malaysia:
First 200 kWh = RM21.80 sen/kWh
201 to 300 kWh = RM33.40 sen/kWh
301 to 600 kWh = RM51.60 sen /kWh
601 to 900 kWh = RM54.60 sen/kWh
901 kWh and above = RM57.10 sen/kWh
What you will need for cryptocurrency mining in Malaysia
Taking the example of Bitcoin, you will need about 48,800 kW hrs to generate 1 Bitcoin. Do note that this is a very rough calculation since this also depends on the price of Bitcoin at the present time.
It's quite common for serious miners to dedicate up to 5 GPUs to mine, which may come up to around RM10,000. Other than Bitcoin, these 5 GPUs can also be used to mine Ethereum, where you should be able to get about 10 Ethers by 12 months time.
Once you have a precise quote for the equipment cost, the number of machines you're planning to run, and approximate costs of utility bills to run the machines 24/7, you can then compare it with current (and probably projected) prices of the cryptocurrency you're planning to mine to see if it'll be worth it.
If it's your first time, it might be a good idea to start small and scale your way if it starts working out for you.
