The effort required to mine one cryptocurrency unit rises with every new coin added into circulation. This can make mining older currencies like Bitcoin or Ethereum unprofitable without dedicated server farms. So which cryptocurrency should a hobbyist mine? Are there any altcoins that are profitable to mine with a home computer? Let’s find out.
What Is Cryptocurrency Mining?
The way cryptocurrencies work is a bit weird. Cryptocurrencies are entirely digital instead of being tied to a real-world physical asset or guaranteed by a central bank. This poses an issue: how do you keep people from endlessly copying it? That is where the blockchain comes in. Each “block” is a record of ownership and transactions, secured using cryptographic encryption. Obviously, someone needs to expend their computing power performing the necessary mathematical operations every time a transaction takes place on the network, which is precisely what mining entails. Cryptocurrency mining is the process of performing the Proof-of-Work (PoW) for a cryptocurrency’s blockchain, verifying transactions taking place on it. Miners are rewarded for their efforts by newly minted coins, adding more currency into circulation.
How Do You Mine Cryptocurrency?
If making money was as easy as just firing up an app on your computer, everyone would be doing it. While straightforward, the process isn’t as easy to get into or as rewarding as many think. Here are the steps to start mining cryptocurrency yourself.
Get a Powerful Crypto Mining Machine
The first thing you need to mine cryptocurrency is a powerful machine to handle the advanced algorithms. Theoretically, any computer will do, but if it can solve them fast enough, the process will not be profitable. Ideally, you want an ASIC (Application Specific Integrated Circuit) machine. These boards are specialized for solving crypto hashing problems and offer the best performance. The problem: they are expensive. Only large companies running crypto mining farms can afford them, making this approach useless to a hobbyist miner. The second best thing is a GPU (Graphics Processing Unit). High-end discrete graphics cards from Nvidia can do a decent job crunching numbers, giving you a fighting chance in mining some cryptocurrencies. This is partly why the prices of video cards have gone up in recent years, as enthusiasts build mining rigs using GPUs.
Choose the Right Coin
All cryptocurrencies, by their very definition, are minable. That being said, not every coin will be profitable to mine with home equipment. What you need are coins with modern algorithms that discourage ASIC usage and are suited for GPUs. Such cryptocurrencies are viable to mine without an extraordinary investment and give you a decent return.
Setup the Mining Software
Once you have a machine to mine with and a coin selected, you need good mining software. Most of these applications are free and open-source, meaning that you don’t need to spend anything here. These applications mostly differ in their user interfaces and hardware compatibility, so feel free to try them out before settling on the one you like.
Grab a Crypto Wallet
Mining gives you coins, but you also need a crypto wallet to hold them. Technically, you don’t need a wallet, only an address, but managing your funds is easier with a cryptocurrency wallet app. Like any digital wallet, you can send and receive crypto or make payments using the app.
Join a Mining Pool
Suppose you are trying to brute-force a number lock with a four-digit passcode. You will eventually find the correct answer by entering all numbers between 0 and 9999. As you might expect, this is a long and tedious process. Cryptocurrency mining works a bit like this. Crypto miners race to find the correct hash in a given range, with coins being rewarded to the one who finds it. The thing is, the chances of a home computer stumbling upon the correct hash by itself are pretty low. So crypto miners form pools. The workload is evenly split between the members, allowing the solution to be found far more quickly and reliably. The rewards are equally spread among the members, giving everyone a consistent income quickly. If you are looking to mine crypto seriously, you should first join a large online pool.
Start Mining
And that’s it. You can now run the mining software and start making money. Make sure to calculate your profitability, taking into account power costs and the value of the coins mined. Shift to a better cryptocurrency if you find your profits dipping and stay ahead of the curve.
The Best Cryptocurrencies to Mine
What you are looking for in a cryptocurrency to mine is a good rate of return, an algorithm that is ASIC resistant, and sufficient stability to make it safe to invest your time and effort into. These are the best coins that match these criteria.
1. RavenCoin (RVN)
A fork of Bitcoin with a more decentralized mining algorithm, RavenCoin is one of the best choices for new crypto miners. The block time is only one minute, and the rewards are much higher than you would get by mining Bitcoin. Although it is relatively new (launched in 2018), it has already climbed the charts to become one of the most profitable altcoins to mine.
2. Zcash (ZEC)
Zcash is one of the leading ASIC-resistant cryptocurrencies. Its mining algorithm has been tweaked to discourage commercial mining, allowing individuals to use their GPUs to mine the coin. This, along with its privacy-focused features, makes Zcash a great cryptocurrency to mine.
3. Dogecoin (DOGE)
What started as a meme coin has gone on to become a highly popular cryptocurrency with a pretty good ROI. Moreover, since it uses the Scrypt protocol, it is ASIC resistant and can be successfully mined with a GPU. We would recommend new crypto miners try mining DOGE to maximize their profits.
4. Grin (GRIN)
There are plenty of privacy-focused altcoins out there, but most are not built to last. For a cryptocurrency to remain relevant years in the future, it must be able to scale effectively. GRiN aims to do just that. It guarantees transaction privacy and a lightweight protocol that can keep scaling through incredible growth. Better yet, the Cuckoo cycle ensures that the mining is ASIC resistant.
5. MonaCoin (MONA)
Another meme coin that has made it big, MonaCoin is a popular cryptocurrency of Japan. While not as widespread as Bitcoin or Ethereum, MonaCoin is nevertheless a stable coin with great potential. It is one of the easier coins to mine, making it a favorite of hobbyists looking to earn some crypto with their GPUs.
6. Vertcoin (VTC)
There is probably no better coin to mine using a GPU than Vertcoin. Not only is the cryptocurrency ASIC resistant, but it has two mining Networks specially tailored for GPU mining. Nvidia and AMD graphic cards are well supported, creating the easiest crypto mining route for enthusiasts.
Which Cryptocurrency Should You Start Mining?
The question of which cryptocurrency you should choose to mine depends entirely on your rig and its capabilities. For example, some coins are easier to mine with a GPU, while others require an ASIC to be profitable. You should go with a cryptocurrency whose mining algorithm is a good match for your hardware besides having an excellent ROI (Return on investment).
