Mining Bitcoin at home or on your own computer is actually not as hard as you might think but is it actually worth it to mine Bitcoin and how much money can you earn mining Bitcoin? Is it allowed to do Mining Bitcoin in Germany and How much money can you earn?
More and more are interested in knowing what cryptocurrencies are how they work and how they can profit from them and I have been getting many requests to cover Bitcoin mining or more generally Cryptocurrency mining.
So there are basically two ways to get cryptocurrency
- First is to exchange it with your Fiat money. You can go to crypto exchanges like Binance , open an account and exchange your Euros for Bitcoin, Ethereum or any of the other crypto currencies. I have made a very descriptive video on that topic.
- Second option is to actually mine the cryptocurrency yourself. Now this process is very complex but simply put Cryptocurrency mining is performed by computers that solve complex computational math problems; these problems are so complex that they cannot be solved by hand and are complicated enough that very complex computers take a lot of time to solve them. But as a reward to solving those complex computational problems the miners are awarded with cryptocurrency. Its not like people are sitting on a computer solving problem but instead the computer equipment is being used to do the complex computations.
So to do crypto mining you need a very good computer which you can let run indefinitely to mine cryptocurrencies for you. Again two thing come up, first is the computer hardware and Second is the electricity costs.
The better the hardware the higher the amount of crypto you can earn from it. But with the better hardware would in turn mean more electricity being used to run that hardware.
Hardware for Crypto Mining
Many cryptocurrencies require mining specific hardware for example you cannot profitably mine bitcoin with your desktop computer even if it is very powerful. So for that you would need a mining rig. Which are purely for mining and nothing else But some other crypto currencies can be mined by desktop computer that have really good graphics cards, for example Ethereum can be mined of a gaming pc.
Electric Costs for Mining Crypto
Electric costs In order for you to mine cryptocurrency you need to keep you mining rid running. The longer you keep it running the longer it can keep mining and earn you money. But running the rig needs electricity and this adds to the cost of mining which reduces your profit and Germany is not known for its low electricity costs.
I have a video on cryptocurrency taxes have a look here if you want to know more about taxes concerning cryptocurrencies. You can download my ebook in case you want to know about other investing opportunities in Germany.
*None of this is meant to be considered as investment, legal or tax advice . As I am not a financial expert nor a tax consultant please do your own reasearch and come to your own conclusions I am only sharing my experience with stock investing. The video and articles are accurate as of the posting date but may not be accurate in the future.