CNN International previously met the companies who have chosen South Africa as their hub for cryptocurrency mining to understand why the country favors the cryptocurrency industry.
Host Eleni Giokos from CNN met cryptocurrency miner Taqi Abughazaleh to find out what is involved in the cryptocurrency mining process. Abughazaleh apparently mines cryptocurrencies in his back yard. All he needs is electricity, a cooling system and the hardware, known as Miners. The process in energy intensive and requires many miners to verify transactions. This was the major reason why he moved his operation from West Bank to Johannesburg. The electricity is more affordable in South Africa than in other destinations.
Although the cryptocurrency price for even the top 3 coins, Bitcoin, Ripple an Ethereum stands volatile, in March the value of Bitcoin varied from 8,000 dollars to 10,000 dollars, it can be cited as a value of high profit.
Abughazaleh outlines how much money he makes each month by mining,
“We are producing about 2 bitcoin every month and around 12 ethereum per month. [The amount of money we make] depends on the price, so let’s say if the price went up [and we made] 40 000 dollars per month, we have to take off 5,000 dollars for electricity, so the rest would be 35 000 dollars profit every single month.”
In the wake of certain profits attached to cryptocurrency mining in South Africa, now many new companies are emerging due to the increased demand for exposure to cryptocurrencies, such as Affinity Mining. Greg van der Spuy, the company’s Director, told that his company is unaffected by the fluctuation in the cryptocurrency prices and has firm confidence in the crypto market. “There were days when we were seeing 30 to 40 percent fluctuations [in cryptocurrency value] but the market corrects.”
The cryptocurrency mined by people like Abughazaleh and Affinity Mining are then traded on platforms such as Luno. Marcus Swanepoel, Luno’s CEO and Co-Founder, says,
“We make it easy for people to buy, sell, store and use digital currencies. Some use it to buy things, but what we are seeing more of at the moment is people using it as an investment and store of value.”
The instability may make the crypto market’s future unpredictable but cryptocurrencies could play a significant part in African banks in the future.
Farzam Ehsani, Blockchain Lead at Rand Merchant Bank, explains:
“In Africa, there are many types of currencies and they’re not the most stable; the Nigeria Naira was more volatile than bitcoin last year… In the future, cryptocurrencies could play an alternative to some of the regimes that aren’t doing well.”
Thus, with the convenience and availability of the cryptocurrency mining resources, South Africa is surely becoming the hub for Cryptocurrency mining.
Also Read: New York to impose tax on Bitcoin Mining
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