It is no news that Nigerians are one of the most resourceful people you would ever meet. This is why it is not surprising to see many of them exploring digital opportunities to make a better life for themselves. One industry where Nigerians are trooping in in their numbers is crypto.
If you are one of such people and you are wondering if crypto mining is something to explore, I’ve got you. In this article, I walk with you through the realities of crypto mining in Nigeria to help you make an informed decision. So, sit back and let’s unpack this conversation together.
KEY TAKEAWAYS:
- Crypto mining is the process of validating transactions on a blockchain network in return for crypto rewards.
- Crypto mining is a challenge in Nigeria because of challenges like electricity, expensive equipment, internet connectivity, and uncertain regulations.
- Instead of traditional mining, you can explore alternatives like cloud mining, staking, and crypto-backed services.
- Crypto mining in Nigeria is a high-risk, high-reward hustle that requires serious thought, planning, and grit.
What Exactly Is Crypto Mining?
In simple terms, crypto mining is the process of validating transactions on a blockchain network in return for crypto rewards, usually in the form of coins like Bitcoin or Ethereum. It is how new coins enter circulation and how the network stays secure and decentralized.
There are two main ways to mine:
- Proof-of-work (PoW): This is what Bitcoin uses, and it requires high computing power.
- Proof-of-stake (PoS): Newer networks like Ethereum use this. It’s less about power and more about staking your coins to secure the network.
We will be focusing on PoW since that’s where the biggest mining opportunities exist.
The Realities of Crypto Mining in Nigeria
The idea of mining crypto sounds really exciting because it can bring in a lot of money. However, in Nigeria, this thought is not as rosy or straightforward as you might expect because of the following factors:
- Electricity
Power supply is one of the biggest enemies of crypto mining in Nigeria. Most mining rigs need to run 24/7 to be profitable, and that’s not possible in many parts of the country where light can disappear for days. Even if you are in an area with relatively stable electricity, you’ll still need to deal with power surges and outages.
- Cost of Mining Equipment
Crypto mining requires specialized hardware, especially if you’re aiming to mine Bitcoin or other PoW coins. Machines like the Antminer S19, Whatsminer M30S, or even high-end GPU rigs don’t come cheap. For instance, a brand new Antminer S19 Pro can cost as high as ₦5 million.
This is just the beginning of your expenses because you will need cooling fans, a backup power supply, possibly a voltage stabilizer, and definitely shipping and customs clearance.
Then there’s maintenance because these machines run hot, wear out, and sometimes need part replacements. So even after you invest millions upfront, you’ll still have running costs to deal with.
Read Also – Who Are Miners? How Does Mining Work?
- Internet Connectivity
Mining doesn’t need blazing-fast internet, but it does need consistent internet. A rig losing connection to the blockchain for even a few minutes amounts to lost revenue. If you can keep your mining rig online 99% of the time, then you are good. But if your internet is always cutting in and out, it’s going to hurt your returns badly.
- Regulatory Environment
As of now, the Central Bank of Nigeria (CBN) has not banned mining. However, they’ve also not made it easy for anyone to work with crypto openly. Many banks have been restricted from facilitating crypto transactions, which means getting your mining rewards into your bank account could be difficult.
Alternatives to Traditional Mining
Traditional crypto mining in Nigeria isn’t for the faint of heart because the barrier to entry is high. Thankfully, mining is not the only way to earn crypto. Here are other alternatives you can try to make a good income from crypto.
- Cloud Mining
Cloud mining is more like renting someone else’s mining setup. Instead of running your own equipment, you pay a company to use their mining infrastructure, and they give you a share of the earnings. It is important to vet your cloud mining provider because the cloud mining space is full of scammers.
- Staking
Staking is a way to earn money from cryptocurrencies that use the proof-of-stake (PoS) model. Here, you lock up your crypto in a network to help validate transactions, and you get rewarded for doing so. Compared to the heavy lifting involved in traditional mining, staking is far more beginner-friendly and sustainable, especially in a country like Nigeria.
- Crypto-Backed Services
If you already have some crypto, you can use it to earn more through platforms that offer crypto lending and yield farming. In crypto lending, you give out your Bitcoin, Ethereum, or stablecoins to other users (or platforms) and earn interest. On the other hand, yield farming allows you to provide liquidity to decentralized exchanges and earn fees or tokens in return.
Conclusion
Crypto mining in Nigeria is a high-risk, high-reward hustle that requires serious thought, planning, and grit. You’ll deal with power issues, costs, internet challenges, and a regulatory environment that is still taking shape. Nonetheless, the rewards can be worth it if you can rise above these challenges. Whatever you do, make sure you understand yourself, your environment, and the kind of risk you’re ready for.
References
- prestmit.io – How to Make Money With Bitcoin Mining in Nigeria
- investopedia.com – Is Bitcoin Mining Profitable?
- stears.co – What will it take to mine bitcoin in Nigeria?
