Nestled in the Rohtak of Haryana is an emerging modern gold mine. Instead of diggers and shovels, there are hundreds of computers, or “mining rigs,” working in sync 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 with crypto mining from home in October 2020 after struggling to keep his online infrastructure provision business afloat to colleges during the first Covid lockdown.
The 34-year-old gave The Indian Express a rare glimpse into the elusive world of cryptocurrency mining, opening the doors to his 24-hour operation inside a three-story building occupied by three engineers in eight-hour shifts, with 300 high-end graphics processing units (GPUs) – and an average monthly electricity bill of Rs 3 lakh.
“The often touted image of miners is stealing electricity from the grid or from huge fossil fuel power plants, which is far from the truth. Public opinion around crypto mining naturally builds on this picture, however incomplete,” Narwal said.
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In India, regulatory uncertainty coupled with security concerns has made mining a highly secretive activity. “Several crypto miners that operate at large scale in India have been illegally importing crypto mining hardware or stealing electricity to run their rigs, that’s why they want to be out of public view,” said said Narwal.
Crypto mining is a decentralized process of validating transactions on a blockchain network. To verify each transaction, miners are given a reward where the profits come from.
Narwal gives an interesting analogy to understand crypto mining. “For example, let’s say Ram sends Rs 100 worth of Bitcoin to Shyam. If Shyam denies receiving it, miners come to Ram’s rescue by validating the transaction on the blockchain’s distributed database. Every transaction needs to be verified by crypto miners, so miners can also be referred to as validators,” he said.
To become a miner, you need a computer, preferably a high-end device capable of verifying transactions throughout the day. A new block is added to the blockchain every 15 seconds on average, which represents thousands of transactions per hour.
According to Narwal, in terms of units, his energy-intensive operation consumes 35,000 units per month. “We have made arrangements with our local electricity distributors to ensure there is no power outage… Purchasing an emergency power supply requires additional infrastructure costs, which which will do us no good,” he said.
Narwal’s platform GPUs consist of devices such as AMD RX580 and NVIDIA RTX3060, RTX3060 Ti, RTX3070, RTX3070 Ti, RTX3080, and RTX A4000 – all of which primarily mine Ethereum for the simple reason that “it’s profitable” .
GPUs are basically graphics cards, originally designed for gaming, but are also best suited for cryptocurrency mining. “All the GPUs I own were bought from India. While most miners buy from China, I only buy these devices from within the country,” Narwal said, adding that a GPU costs him between Rs 60,000 and Rs 120,000.
The Rohtak platform consists of several 4G connections: a broadband connection, a private fiber optic connection and two other devices that work on LAN, so even if one is down, the others will work. “The speed of the connection doesn’t matter as much as the latency. We made sure that multiple connections work in sync so that the factory runs continuously without any downtime,” Narwal said.
More than setting up the plant, making sure it runs every day is the real challenge, according to Narwal. “Regular GPU and Ethereum miner software updates, and monitoring each GPU, is the challenge,” he said.
“Compatibility is a big issue, all GPUs need to work in sync,” said Jyotirmay Ray, 27, one of the platform’s engineers. “We also have to constantly check for dust, so that the devices work properly.”
Interestingly, the factory does not have an air conditioner. It has roof-placed air coolers with a high-end exhaust system to vent excess heat. “We can’t afford to install air conditioners, it might cost us more than our initial investment, so we use air coolers instead, but they are just as effective,” Narwal said.
Another rig engineer, Deepak Jangra, 26, said maintaining cooling was important. “Cooling and piping systems must be constantly monitored, it is important to keep the temperature below 26 degrees Celsius so that the devices do not overheat,” he said.
Like all other crypto projects, the Narwal platform is also wary of scams. “The other day I woke up to find that my winnings had been transferred to another crypto wallet. I had to immediately activate two-factor authentication. Some days hackers try to hack into my clipboard, so that when I paste my wallet address, the malware subtly replaces it with its own private wallet…since this happens in the clipboard, most people wouldn’t even notice the change between copy and paste” , did he declare.
Asked about his earnings, Narwal said it depends on the price of crypto assets, in this case Ethereum. Last month, with 300 GPU devices, which means 13 Gigahash in computing power, the entrepreneur was able to mine up to seven Ethereum coins, or around Rs 11 lakh – the current mining reward is 2 Ethereum per verified block more expenses.
On the broader issue of cryptocurrency and regulations, Narwal believes crypto is as legit as any other IT business. “We pay the GST on all our appliances and also pay the electricity bill. After that, we are subject to a 30% tax, which we fully respect,” he said.
Nor is he worried about the possibility of the government imposing a blanket ban on crypto. “Generally, you can expect a GPU to lose a maximum of 30% of its value, and my initial investment has already been paid back,” he said. “Crypto is unstoppable.”