Tucked away in Rohtak in Haryana is an emerging gold mine in the modern era. Instead of diggers and shovels, there are hundreds of computers, or “mining rigs,” working simultaneously to mine Ethereum, the world’s second largest cryptocurrency.
Welcome to New Edge Soft Sol Pvt Ltd, founded by Pardeep Narwal who decided to try his luck in cryptocurrency mining from his home in October 2020 after struggling to sustain his business of providing online infrastructure to colleges during the first Covid lockdown.
The 34-year-old gave The Indian Express a rare peek into the elusive world of crypto-mining, opening the doors to his 24-hour operation inside a three-story building run by three engineers in eight-hour shifts, with a high of 300. Graphics Processing Units (GPU) – Average monthly electricity bill of Rs 3 lakh.
The image often promoted of miners stealing electricity from the grid or massive fossil fuel stations, is far from the whole truth. Narwal said that public opinion about cryptocurrency mining is understandably based on this picture, because it is incomplete as it is.
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In India, regulatory uncertainty along with security concerns has made mining a highly underground business. “Many crypto miners operating on a large scale in India have either imported digital miners illegally or steal electricity to power their rigs, which is why they want to be out of the public eye,” Narwal said.
Crypto mining is a decentralized process for validating transactions on a blockchain network. For checking every transaction, miners get a bonus where the profits come from.
Narwal gives an interesting analogy to understanding cryptocurrency mining. “For example, suppose Ram sends Bitcoin worth Rs 100 to Shyam. If Shyam denies receiving it, miners come to the rescue of Ram by validating the transaction on the distributed blockchain database. Every transaction must be validated by the miners. encrypted, and thus miners can also be described as validators.”
To become a miner, you need a computer, preferably a high-end one capable of checking transactions all day long. A new block is added to the blockchain every 15 seconds on average, adding up to thousands of transactions every hour.
According to Narwal, in terms of units, his energy-intensive process consumes 35,000 units per month. “We’ve made arrangements with our local electricity distributors to make sure there is no power cut… Procuring a backup power source requires additional infrastructure cost, which won’t work,” he said.
Narwal’s GPUs consist of hardware like the AMD RX580 and NVIDIA’s RTX3060, the RTX3060 Ti, the RTX3070, the RTX3070 Ti, the RTX3080, and the RTX A4000 — all of which are used to mine Ethereum for the simple reason that “it’s profitable.”
GPUs are basically graphics cards, originally designed for gaming but also better suited for cryptocurrency mining. “All the GPUs I have were bought from India. While most of the miners buy from China, I only buy these in the country,” Narwal said, adding that the GPU costs him between Rs 60,000 and Rs 120,000.
The Rohtak device consists of multiple 4G connections: a broadband connection, a fiber-optic one, and two other devices running on a LAN, so even if one of them fails, the others will work. “The speed of the connection is not as important as the response time. We made sure that the multiple connections were working simultaneously so that the plant was running continuously without any downtime,” Narwal said.
According to Nerwal, the real challenge is more than just setting up the station, and ensuring it’s up and running every day. “Updates to the GPU and Ethereum miner software, and monitoring each GPU, is the challenge,” he said.
“Compatibility is a major issue, all the GPUs need to run concurrently,” said Jyotirmay Ray, 27, one of the engineers at the excavator. “We also need to constantly check for dust, so that the devices are working properly.”
Interestingly, the plant does not have an air conditioner. It has rooftop air coolers with an advanced exhaust system to remove excess heat. “We can’t afford to put in the air-conditioners, it could cost us more than our initial investment, so we use air coolers instead, but they are effective,” Nerwal said.
Another platform engineer, Deepak Gangra, 26, said it was important to maintain cooling. “Cooling systems and piping must be constantly monitored, and it is important to keep the temperature below 26 degrees Celsius so that the devices do not overheat,” he said.
Like any other crypto project, Narwal platform also warns of scams. “The other day, I woke up only to find that my earnings had been transferred to a different crypto wallet. I had to turn on two-factor authentication right away. Some days, hackers try to hack my clipboard, so that when I paste my wallet address, the malware subtly changes it to His own wallet… Since it happens in the clipboard, most people won’t even notice the change between copies and he said.
When asked about his earnings, Narwal said that it depends on the price of the crypto-asset, in this case Ethereum. Last month, with 300 GPUs, which means 13 gigahers of computational power, the entrepreneur was able to mine up to seven Ethereum coins, or roughly Rs 11 lakh – the current mining reward is 2 Ethereum per verified block plus fees.
On the larger issue of cryptocurrencies and regulations, Narwal believes that crypto is as legitimate as any other company in the IT field. “We pay GST for all our appliances and we pay the electric bill as well. After that, we are subject to a 30 percent tax, which we are fully complying with.”
Nor is he concerned about the possibility of the government imposing a blanket ban on cryptocurrencies. “As a general rule of thumb, you can expect the GPU to lose a maximum of 30 percent of its value, and my initial investment has already been paid off,” he said. Encryption is unstoppable.
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