Following the ever-growing craze of Bitcoins, tech nerds are turning their gaming consoles into mining rigs. Take for example Singapore based Mr Deter Ng who along with his group of friends have recently joined the Bitcoin mining circle armed with powerful graphics processing unit. They are using their computers to perform complex mathematical algorithms to mine more and more cryptocurrencies. There are ample of options in the cryptocurrency world but as Bitcoin sits at the first position in top cryptocurrency list, everyone is trying to mine Bitcoin or purchase the same.
Bitcoin price reached record-breaking figures in November by crossing over the $7500 barrier on 8th of this month which surely is a great thing when compared to its $1000 price at the beginning of this fiscal. The growing popularity of Bitcoin has also helped accentuate the growth of corresponding cryptocurrencies such as Litecoin and Ethereum. This propelled Mr Nag and his friends to enter into the lucrative business of Bitcoin mining.
“Then we posted photos online, on Facebook, and people started asking how much is this and they wanted buy it off. So I sold it to people who queried on Facebook, and after a while, we started selling many on Facebook, so we decided to incorporate this company,” the 29-year-old said.
Mr Ng was delighted with the current hike in sales of rigs. His company is presently selling 100 rigs a month in comparison to the usual figure of 15 rigs monthly. “Customers come in and order 50 rigs on their own. Compared to last time, probably one person only buys one or two. Now we get customers who buy 10, 20 or even 50,” he added.
His company situated in Geylang Lorong 23 can house up to 45 rigs with its sprawling office space spread across 1100 square feet. Individual rigs can fetch anything in between S$5,000 to over S$6,500 in accordance with the processing power.
Also Read: Bitcoin More Valubale Than Fiat Currencies Like Singapore Dollar
Singapore based exchange Coinhako recently told Channel NewsAsia that users trading over its platform has completely doubled since the year’s beginning. Quoine, another exchange platform, also reported double digit growth statistics since the beginning of this fiscal. Mr Ian Chan, had purchased a rig three months back, and feels that certain factors need to be taken into account while crypto mining:
“calculating the percentage of return is one thing but what if this machine every day gives me issue, where I need to debug or whatever. Then to me, am I buying something that I need to work on every day? From that angle, if I start with buying 20 units, then my problem multiplied 20 times. So I start with one, try it out and if it is good, then I slowly increase my investment in that,” he added.
Mr Chan’s rig is presently mining a Zcash cryptocurrency . His earnings are redirected into a virtual wallet which can be encashed by him or stored with expectations of value hike in days to come. Mr Chan has reported a monthly earning of $300 from his rig mines and it would take him two years to reach the break-even point given the additional electricity cost of running the rig round the clock in his house. Ryu, his thirteen year old son is also the proud owner of a mining rig.
With the soaring price of Bitcoin, some are comparing it to with a bubble just waiting to burst. Mr McMahon, the founder of Cleer, a digital commodities platform built on blockchain architecture feels that, “if you look at it statistically, it’s actually probably still really cheap in terms of an asset class.”
Stanley Yong, a crypto research challenged McMahon’s philosophy by saying that, “the price going up is probably a bubble, given that it has reached more than US$7,000 per bitcoin. And the question for us is not whether it is a bubble. But how long this bubble will be there. And whether that speculation will result in a correction that will be painful and destructive versus a correction that is healthy.”
The Monetary Authority of Singapore stated that it will not be a part of crypto regulation to Bloomberg last month. However, MAS was quick to add that it shall monitor its surrounding activities and decide on imposing regulations as per the inherent risk involved. Market watchers hold the view that there were various fuelling factors behind Bitcoin’s recent price hike and it surely is not entirely speculative. Economic fundamentals led people to believe that the blockchain architecture houses the potential of disrupting normal economy run by liquid cash. Mr McMahon pointed out that, “Blockchain itself is a revolutionary technology. It’s really a systemic shift.”
Also Read: Cryptocurrency Regulations Not Required Says Monetary Authority of Singapore (MAS)
Blockchain actually refers to a chain of blocks each one of which contain a data set. Such blocks are stored by using the distributed ledger mechanism. There exists no authority over the Bitcoin working unlike other centralised operations. Rather every user can easily access the data stored in the network but cannot impart any changes to the same. Mr McMahon added that, “the ledger architecture that sits on the backbone of blockchain has an incredibly innate ability to create irrefutable, immutable retention of data in perpetuity.”
However, Mr Yong has also issued a word of caution regarding the malicious side of cryptocurrency world. He emphasized upon the point saying that, “not all of them are equal. Not all of them are based on new economic models. Even when a promoter of such cryptocurrencies is to point to something innovative, there is no sure win in many of these cases even when there is no intent to commit fraud, even when the people behind the cryptocurrency are sincere in their intentions, there is always a high chance of failure.” Investors are expected to do their homework before jumping onto the investment bandwagon termed as Bitcoin.
Also Read: Central Bank of Singapore Head Warns About Bitcoin Being a Much-Hyped Bubble
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