Cryptocurrency mining refers to the process where nodes in a blockchain network validate transaction details and record them on the ledger. This adds a new block to the blockchain, as well as new coins. The newly minted coins are the incentive for nodes to continue maintaining the ledger.
Mining requires a mining rig hooked to a computer where it performs the transaction validating activities. However, not all cryptocurrencies in existence today can be mined. In this article, we bring you the list of best cryptocurrencies to mine in 2022.
Our Top Picks Of The Best Cryptocurrencies to Mine
In this section, we discuss popular cryptocurrencies that you can mine.
Bitcoin (BTC) was first released in 2009 by Satoshi Nakamoto. Many more cryptocurrencies came after that–amounting to 8,389 at the time of writing–but Bitcoin remains dominant, where it occupies 67.1% of total cryptocurrency value. A single block of the Bitcoin blockchain is about 1 megabyte (MB) in size, and it is created via Proof of Work (PoW).
PoW entails solving complex mathematical problems, a task that gets harder after every new block. So far, 18.6 million BTC coins have been mined, and the limit is 21 million.
Ethereum mining requires great processing power. You need powerful graphics processing units (GPUs) to solve difficult computations and get rewarded. The Ethereum blockchain network offers more functionality than BTC. For example, users can run applications on the network–called decentralized apps (dApps) without the possibility of fraud, censorship or downtime.
The use cases of the Ethereum network have catalysed the growth in value of its native coin, Ether (ETH). ETH has remained the second most valuable cryptocurrency after Bitcoin for almost the entirety of its existence.
Litecoin is a hard fork of Bitcoin, meaning it uses the same source code and algorithm as BTC. The cryptocurrency uses the Scrypt protocol, which makes it easy to mine using GPUs. The reward for validating transactions on the Litecoin network is earned in Litecoin (LTC) – 12.5 LTC per block. LTC is the network’s native coin.
LTC's supply is capped at 84 million, and there are about 66.5 million coins in circulation today. This justifies LTC as a great choice of cryptocurrency to mine.
Dogecoin is a Litecoin fork. The cryptocurrency holds 12th place on CoinMarketCap after becoming a sensation among crypto enthusiasts since its inception. Dogecoin uses the same PoW algorithm and Scrypt hash function as Litecoin, making it easy to mine using a GPU.
Billy Markus founded the coin, and he designed Dogecoin to be an 'internet cryptocurrency' for two primary functions; to store value and facilitate transactions. Dogecoin has one of the most generous block rewards for miners, whereby a single block earns you 10,000 DOGEs.
Monero has two unique qualities. Firstly, the cryptocurrency network makes the best of blockchain technology to enforce fungibility and anonymity. Users can make untraceable transactions, and you cannot link one transaction with another. Secondly, Monero uses the CryptoNote cryptographic hash function specifically built to make it impossible to mine using application-specific integrated circuits (ASICs). Miners earn 2.15 Monero (XMR) as a block reward.
Dash launched in early 2014 as an open-source version of the Bitcoin blockchain. The running of this Bitcoin fork is the responsibility of a decentralised autonomous organization (DAO). Because it is a fork of the Bitcoin protocol, Dash uses the PoW algorithm but implements the X11 hashing function. DASH miners are called Masternodes, and they usually earn 1.55 DASH as block rewards for their efforts. Masternodes are also shareholders and have voting rights.
Zcash is different from all the other coins we have covered so far. Although it was forked from Bitcoin in 2016, Zcash does not implement the PoW algorithm. Instead, it implements a unique zero-knowledge proof algorithm called zk-SNARKs to achieve consensus. This algorithm shields transactions to offer anonymity to users.
A new Zcash block is created every 75 seconds, and miners receive 2.5 in block reward.
8. Ethereum Classic
Ethereum Classic was launched in mid-2016 after an Ethereum hard fork. Like Ethereum, Ethereum Classic provides a smart contracts network and hosts and supports dApps. ETC is the native coin that facilitates transactions over the Ethereum Classic blockchain.
Mining ETC is resource-intensive, bearing in mind that the network uses the PoW algorithm for consensus building. The block reward is 3.2 ETC currently. Because of the difficulty of mining ETC, ASICs might be ideal mining equipment.
Ravencoin says its primary focus is to facilitate the transfer of assets between peers. The cryptocurrency launched in early January 2018, and its codebase is Bitcoin fork. The project is open-source and, so far, has use cases in facilitating instant payments across the globe.
A single block takes one minute to generate and has a block reward of 5000 RVN. The current total supply is 8 billion RVN against a supply cap of 21 billion RVN.
10. Bitcoin Gold
Bitcoin Gold is another Bitcoin fork aimed explicitly at making mining easy. The idea of Bitcoin Gold was born out of the need to reduce the electricity costs of cryptocurrency mining.
Bitcoin Gold’s most outstanding feature is its reliance on the Equihash algorithm, which was changed from SHA256 used by Bitcoin but retained the PoW consensus algorithm. This change effectively made it imprudent to mine BTG using ASICs. So, anyone with an everyday computer can leverage GPUs such as NVIDIA or AMD graphics cards to mine 12.5 BTG per block.
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What Is The Purpose of Cryptocurrency Mining?
Cryptocurrency mining is probably the most critical part of blockchain technology. To understand how this works, let us first see how a blockchain network works. A blockchain network consists of a distributed ledger whose maintenance falls on a group of connected nodes or individual actors. The management of the network is decentralised, meaning all nodes transact on a peer-to-peer basis without going through a central point.
Mining, therefore, is the process where the nodes validate transactions over the network and record the details on the ledger. Every new record on the ledger creates a new block, and many of the blocks join together to form a chain, hence blockchain. But how do the miners validate transactions? This process involves using their computing power to solve difficult cryptographic equations.
Speaking of computing power, some miners are clever enough to band together and mine as a group. This mining pool enjoys immense amounts of computing power that can handle even more complex mathematical problems. As such, the output of mining pools is greater than individual miners.
Then there is mining with a GPU or an ASIC. GPU mining refers to using computers equipped with GPUs to mine crypto. Usually, a computer has a central processing unit (CPU) that acts as its brain. The GPU (graphics processing unit), on the other hand, is similar to the computer’s muscle. It handles the most difficult tasks such as computations and so on. GPU mining is more profitable because of lower electricity costs.
On the other hand, ASIC (application-specific integrated circuit) mining entails using dedicated ASICs to perform complex mathematical tasks. An ASIC is a specialised computer whose only task is to mine cryptocurrency. This makes the ASICs more powerful than GPUs, but their energy consumption is immense. Also, ASICs are specific to the task, say if you got an ASIC software to mine Bitcoin, it would only mine Bitcoin. You will have to get another ASIC to handle other mining tasks.
Is It Worth Mining Cryptocurrency?
Mining cryptocurrency is resource-intensive, whether you depend on GPUs or ASICs. Also, note that the hash rate (computing power) required to validate a new set of transactions increases with time. Therefore, you should consider the economics of the whole activity before thinking about diving in. Let us paint a picture for you.
The average cost of a GPU is roughly $450, depending on the graphics card brand. A good computer that can perform in-depth work costs an estimated $1,000. Also, you need electricity and an internet connection, which taken together could cost you $150 per month. So, the initial investment you need to make is roughly $2,000, assuming you are starting from zero.
A mining rig comprising ASICs is another story. Miners spend upwards of $10,000 to set up a single mining rig. Never mind that electricity costs could amount to about $1,000, depending on your location.
The good thing is that cryptocurrencies including Bitcoin have been surging in price lately. Also, currently, adding one block to the Bitcoin blockchain earns you 6.25 BTC. If you do the math, the potential income from cryptocurrency mining justifies the cost of investment.
How to Find the Best Cryptocurrency to Mine
How Long Does It Take to Mine
Cryptocurrency mining varies depending on the hardware you use and the type of coin you mine. For example, Bitcoin miners need an average of 10 mins to validate and record one block to the network, and for every second, the mining hardware consumes 120 gigawatts (GW) of power. In comparison, the same process takes Ravencoin miners one minute.
Compare Costs of Mining Hardware/Mining Pool
The most resource-intensive cryptocurrency to mine will require more expensive mining hardware. For example, you cannot possibly think of mining Bitcoin with a PC, no matter how powerful the GPU is. But for ‘lighter’ cryptocurrencies, you can possibly produce substantial coins with less costly mining hardware. Joining a mining pool can also be an option.
Start Mining Cryptocurrency
Before you can start mining, make sure you have factored in the electricity costs and internet connectivity. Also, mining could be a delicate affair if you are doing it at home. You should find a secure location where your rigs/computer can stay unperturbed.
Cryptocurrency mining is what keeps the cryptoverse running. Miners maintain blockchain networks by attending sections of the public ledger. As an incentive, the miners earn cryptocurrency that they sell to other enthusiasts.
Cryptocurrency mining is resource-intensive. The difficulty of the problems increases as more blocks are added to the network. Never mind the cost of mining rigs and other attendant issues. Nevertheless, crypto mining is increasingly becoming popular and can be used to accumulate crypto tokens.
Frequently Asked Questions
The best cryptocurrency to mine is the one that is less resource-intensive yet yields high returns in the market.
Theoretically yes. But BTC mining requires powerful hardware and it has become too competitive.
You should first get access to mining hardware. Next, get the mining software of your preferred cryptocurrency and install it on your hardware. You should also get a wallet to store your coins when they start trickling in.
A mining pool refers to a group of people who team up their computational power to run a single powerful mining rig. This increases the probability of solving mathematical problems faster than anyone else, which earns cryptocurrency for the pool.
Yes, the powerful computational power that a mining pool wields is worth many times than a standalone miner. However, mining pools have grown unpopular in cryptoverse with accusations of going against the primary ethos of blockchain.
If you consider the prices of digital currencies today, then cryptocurrency mining is more profitable today than ever before. However, the resources needed to install and run a mining rig are also higher than ever before.
Cryptocurrency mining is legal in many jurisdictions but check your local laws before mining.
It takes 600 seconds–which is around 10 minutes–to discover one Bitcoin block. Each block yields 6.25 BTC, which is the reward miners get to recoup the resources expended in the mining process.