Cryptocurrency mining led to increased demand for graphics processing units (GPUs). In fact, Advanced Micro Devices, a GPU manufacturer, posted impressive financial results as demand for the company’s stock skyrocketed and shares traded at their highest level in a decade.
Mining cryptocurrencies, can still be profitable. So, what is crypto mining? , How can you get started? What Cryptocurrency to Mine Right now? Is Crypto Mining Worth It?
This article takes a closer look at these questions.
What Is Cryptocurrency Mining?
Crypto mining is not simply a way of creating new coins. Crypto mining, also involves validating cryptocurrency transactions on a blockchain network and adding them to a distributed ledger. Most importantly, crypto mining prevents the double-spending of digital currency on a distributed network. Like currencies, when one member spends cryptocurrency, the digital ledger must be updatedby debiting one account and crediting the other. The challenge of a digital currency is that digital platforms are easily manipulated. New coins are generated to reward miners for their work in securing the network. Since distributed ledgers lack a centralized authority, the mining process is crucial for validating transactions. Miners are, incentivized to secure the network by participating in the transaction validation process (Proof-of-Work).
How to Start Mining Cryptocurrencies?
Mining cryptocurrencies requires computers with special software designed to solve complicated, cryptographic mathematic equations. Over the years, however, CPU chips have become impractical for mining most cryptocurrencies due to the increasing difficulty levels. Today, mining cryptocurrencies requires a specialized GPU or an application-specific integrated circuit (ASIC) miner. The GPUs in the mining rig must be connected to a reliable internet connection at all times. Crypto miner are require to be a member of an online crypto mining pool as well.
What Cryptocurrency to Mine Right now?
So here we have our top Cryptocurrency picks:
The cryptocurrency has a market cap of around $ 171 billion at the time of writing this article. The current Ethereum mining reward stands at 2 ETH per block. It uses the Ethash hashing function and can be mined with CPU and GPU devices. Please note, though this cryptocurrency has converted to Ethereum 2.0 (ETH 2.0), after changing its consensus algorithm from Proof-of-Work (PoW) to Proof of Stake (PoS), miners still have at least couple of more years to continue with PoW on Ethereum.
The year 2016 saw the launch of multiple great cryptocurrencies, including Zcash (ZEC). ZCash company is excessive focus on privacy, it’s emerge as an excellent cryptocurrency to mine. However, you can’t mine ZEC easily despite its ASIC-resistant design. Nevertheless, its value not being fragile makes it an ideal mining opportunity for people willing to take a long-term approach. The current mining reward is 2.5 ZEC/block, and 21 million coins is the maximum possible supply, all of it expect to be mine by 2032. However,ZCash mining requires a higher RAM owing to its Equihash algorithm.
Grin (GRIN) came into being in the year 2019 and as against other cryptocurrencies, it doesn’t have any maximum supply associated with it. Considering that it employs Cuckoo style mining for being ASIC-resistant, it enables easy mining with CPU and GPU devices for the regular cryptocurrency users, without the need for huge investment. The hashing function used is MimbleWimble and the current mining reward stands at 60 GRIN per block.
With a market capitalisation in the vicinity of $ 3 billion, Monero (XMR) continues to be amongst the most profitable cryptocurrencies you can look to mine. Monero earns miners a reward of 2.15 XMR per block and the total number of blocks expect to be supplie are 2,272,762. It employs the CryptoNightR hashing function and you can mine it with CPU and GPU devices.
Litecoin (LTC), it count amongst the best Bitcoin hard forks. LTC mining makes use of Scrypt protocol and is amongst the leading profitable coins to mine with GPU. The hashing use Scrypt and up until August 2023, all Litecoin miners have a reward with 12.5 LTC for every mine block.
Dash (DASH) is a hard fork of Litecoin and came into being in January 2014. It has a market cap of around $ 1.07 billion and is well-known for enabling secure and swift transactions across the world through PrivateSend and InstantSend. The hashing algorithm used is X11, a creation of Evan Duffield, the Dash founder. There are a total of 9.96 million DASH in circulation right now and the current reward for mining Dash stands at 2.88 DASH per block.
It was released in December 2013 as another one of the Litecoin forks. DOGE is used for tipping Reddit and Twitter content creators and you can mine Dogecoin using CPU or GPU devices. It uses Scrypt protocol and has no capping on the total supply. The block reward currently stands at 10,000 Dogecoins per block.
This cryptocurrency has gained widespread popularity owing to its special features, for instance, its mobile crypto wallet (along with seed phrases), messaging and RVN voting. The trade fairly actively on all major cryptocurrency exchanges, making extremely liquid in nature. Mining Ravencoin is attractive for miners because of its KawPow protocol and X16R hashing function. The block mining reward for Ravencoin stands at 5,000 RVN per block as of now.
Is Crypto Mining Worth It?
There are various other considerations like current market price, block rewards, hash rates, possible halving etc. However, you also need to acknowledge the competition between Proof of Stake (PoS) and Proof of Work (PoW) cryptocurrencies.It is possible mine PoW coins by becoming a part of some mining pool, running an independent set-up (with CPUs, GPUs and/or ASIC devices) or by renting a third-party’s computing power. You should choose to have your own set-up, you’d need to factor-in electricity costs and the cost of updating the hardware & software from time-to-time.New and inexperienced miners could consider smaller cryptos which deliver more cost-benefit but the mining apparatus setup costs can go upto around $1000 upfront on consumer level hardware. The electricity costs will vary depending on where a user resides.
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