Bitcoin is the first digital asset that introduced the mechanics of “mining”. Satoshi Nakamoto, the creator of Bitcoin, mined the very first blocks merely to see if the system works and now it is said that he or she owns about one million bitcoins.
Some of the bitcoin believers who stayed true to it right from the beginning, got notoriously rich mining it. It’s April 2021, and bitcoin trades for around $60,000 per BTC.
That said, solo miners don’t even look in the direction of bitcoin anymore. After the series of halvings, the mining reward reduces from 50 BTC to 6.25; and the difficulty has spiked proportionally to the total computing power of the network.
What crypto to mine then? How to mine crypto? What is the best way to mine crypto? Here we go with a general guide to help you make up your mind.
What crypto to mine: the top 5 right away
- Ether. The most profitable coin to mine so far. Just join a mining pool and watch ETH drop into your account daily. Depending on the electricity costs, how many hours you mine a day, and a chip you use, it takes about half a year to cover the expenses on a decent mining GPU. Ethereum Classic remains a viable alternative to Ether, especially in the face of the infamous EIP-1559.
- RavenCoin positions itself as better than Bitcoin in every regard: better decentralization, better block rewards, higher maximum supply, and lower block time.
- Grin is a ‘very young and experimental’ crypto based on ASIC-resistant MimbleWimble algorithm.
- Monero is probably the most protected coin in terms of anonymity. Backed up by a numerous community of privacy advocates, it yields considerable mining rewards.
- Zcash appeals to the community because of its decent mining profits, focus on privacy, and ASIC-resistant mining algorithm.
It’s notable that all of the abovementioned coins use proof-of-work (PoW) consensus. There are hot debates going on considering the inefficiency of PoW but their mining profitability seems out of doubt.
PoW guarantees that an asset will keep some of its value regardless of market perturbations, because the crypto is backed up by the cost of electricity and the ever-increasing effort to add a single block to the blockchain.
If a network means to be truly decentralized, hundreds of thousands (if not more) of its servers must be scattered across the globe and run 24/7, ensuring the stability of the network. Bitcoin, for example, can be mined in space, so it won’t be easy to shut it down.
How to mine crypto that is PoW-based? Join a mining pool, resort to cloud mining services (it requires you to stake money instead of running a node), or set up your own node with wallet software.
Proof-of-stake consensus, PoS, on the other hand, basically requires nothing else but a stake of given coins as a prerequisite for mining: the more, the better. It is easy to find a coin that multiplies in the owner’s wallet. They are certainly not scarce, so the price won’t go too high.
The server equipment requirements for running a verification node are much lower for PoS coins than for PoW ones. It’s possible to run it on an old PC. But not every computer is fit for the task: the reason for this is mining software (or a wallet app). For example, it may be built for Linux and Windows, but not for Mac.
You may want to draw attention to your node first. Build a blockchain app or a game, gain influence, and accept tokens from the app’s users.
Naturally, you don’t want the value to leak out from your node. So you may award stakeholders with your own unique token—if an ecosystem allows that—and offer them the services, which can be purchased with that token. WAVES is an example of such an ecosystem.
How to mine crypto the easiest way?
Network users who don’t want to or cannot run a node but still want to put their stake to use, may choose to delegate their stake to an active node. It allows the said node to process more transactions and consequently earn more crypto. The person who delegated their stake usually receives some benefits: a share of the node earning, unique node tokens, or other kinds of support. Stake your coins and forget about them while they bring some passive income.
What is the best way to mine crypto
The benefits and drawbacks of each of the consensus protocols should be the basis of your rational decision to prefer one of them over another. What is your budget? What is your earnings goal? How much time are you willing to spend on studying the technologies and the market?
- PoW-based crypto is more resilient to market fluctuations. Mining it is more profitable.
- With PoS virtual currencies, the entry point is as low as you set it yourself. But you hardly can expect these currencies to go to the moon.
So when it comes to deciding, what is the best way to mine crypto, it is always up to you. Perhaps trading game items in Splinterlands would suit you better, and you won’t need to mine at all.
How to mine cryptocurrency summary
Your mining journey is only about to begin, and there are a lot more opportunities to get rich than we’ve described. For example, Proof-of-Burn consensus might be “the next big thing”, but it takes curiosity to discover it first, and financial experience to assess its viability.
Let’s suppose you are excited by the idea, how to mine cryptocurrency on mobile. Some coins are mineable on mobile devices indeed. There’s also software that ports desktop mining software to Android, effectively allowing to mine bitcoin or altcoins on a smartphone. However, it puts a heavy strain on the device in question, possibly leading to its damage or malfunction.
See, it takes your own deep research when it comes to deciding how to mine cryptocurrency or what crypto to mine, especially in times of wild financial changes, like ours.