The Indian government has issued a pressing warning about crypto mining. The Reserve Bank of India (RBI) has warned citizens that crypto-mining carries risks to devices, could reduce battery life and cause devices to malfunction. But is it really so bad?
In this article, we will discuss the pros and cons of crypto mining in India and determine whether this activity can be profitable for someone who is living in India. We will also discuss crypto tax in India, and some key factors that make India a challenging environment for cryptocurrency miners.
Effect Of Crypto Mining On Your Device:
Crypto mining can have an adverse effect on the hardware of your computer or laptop, which may lead to malfunctions. The hardware gets damaged after a certain time. With one hardware you can only mine a limited amount of crypto, after that you will have to change your hardware if you want to continue mining.
What Is Crypto Mining?
All cryptocurrencies that are being mined today, including the most popular ones, Bitcoin and Litecoin, use blockchain technology. But what is blockchain technology in simple words? Blockchain is a decentralised database that can be compared to a real ledger, which keeps account of all transactions. New blocks containing new transactions are added to the database when miners solve cryptographic algorithms to win rewards in the form of tokens issued by a cryptocurrency project. The process by which new transaction blocks are added to the blockchain is known as mining.
How Does Crypto Mining Work?
This is a very simplified explanation of how mining works but essentially it means that your CPU (central processing unit) will work hard processing complex mathematical equations until it finds an answer to them. This torrent of unnecessary calculations can all be avoided if you use a GPU, which stands for graphics processing unit. The result is that your computer will not be overtaxed by unnecessary mathematical calculations and it will save you your device’s battery.
Problem With Crypto Mining In India
The problem with crypto mining in India is that the infrastructure for cryptocurrency mining is not as developed as in other countries where Bitcoin trading has already caught on. Cryptocurrency miners in India face a number of challenges such as getting devices to function properly and dealing with unstable power supply and internet connectivity. Consider you have successfully mined the crypto currencies, Yet one of the biggest problems is taxation. You will have to learn about how crypto mining is taxed in India and will have to file your taxes at time if you do not want any trouble in future. Yet if you are willing to mine cryptos then, filing the crypto tax can be a very difficult thing to do on your own. For managing the crypto taxes you can use any service provider like Binocs which will do the job for you. Binocs will automatically detect your overall mining and fill the tax on time, doing the accurate calculation. Binocs is the safest platform on which you can rely on. It is one of the best service providers for managing the crypto tax.