Bitcoin, the crypto who started it all, is still at the forefront of the market. Starting in 2009 at the price of few pennies a piece, by 2017 it’s grown into a multi million dollar market with the coin priced at over $8,000 at the time of writing.
But is Bitcoin still the most profitable coin to mine?
Along the way, hundreds of cryptocurrencies similar to Bitcoin appeared.
Ethereum, ZCash, Monero, Ripple, Litecoin – these are the most popular ones. Their market share might not be as large as Bitcoin’s, but they offer interesting and useful features, such as increased privacy, anonymity, ease of transaction or even the ability to create your own cryptocurrencies on the main blockchain, as is the case of Ethereum.
What attracted newcomers to the cryptocurrency world is the possibility of profiting on them. Mainly through the process we know as mining, which is using processing power of a hardware unit to solve mathematical equations and help the network create new coins.
You can mine solo or through a pool, combining the hashrate of all machines in the local network. As of today, Bitcoin is unprofitable to mine alone, unless you own costly, specialized hardware using ASIC – application specific integrated circuits. Thus, it is an endeavor for large companies owning cryptocurrency farms in places such as Inner Mongolia, where costs of electricity are one of the lowest in the world.
So if not Bitcoin, then what would we recommend for the average mortal without a million dollar budget to blow on hardware?
A useful tool for our mining endeavors is a cryptocurrency profitability calculator. Services such as Cryptocompare https://www.cryptocompare.com/mining/calculator/ are a necessity to prepare a mining operation. Remember to check many sources and do your research. Mining is not too different from investing, and you should take the same precautions.
Best Altcoins to Mine
Let’s take a look at the altcoins, starting with Ethereum. It’s one of the best coins to mine. The RX 480, a popular AMD GPU, nets us 25 megahashes per second. This would give us around $40 of profit per month if we don’t count in the electricity costs. The card consumes 150 watts of power. At the average US price of electricity – 10 cents per kilowatt hour, we get $30 of pure profit a month. Sounds good?
Now for Monero. The same card generates about 580 hashes per second for the network. With equal electricity stats, that’s $33 of profit. Granted, the coin experienced a recent surge in price, and usually Ethereum was the more profitable to mine of the two. It shows that long-term, it might be preferable to re-evaluate the market situation and see if mining another coin might be more profitable at any given time.
Having a diverse portfolio would be smart in case one of the coins soars.
Looking at ZCash, it seems to score the worst of the three. Only $21 of profit. Quite unimpressive. The coin itself though, is Edward Snowden’s favourite, and might interest you if you are keen on privacy and security. Currently, there’s not much profit in ZCash, but it might be worth to keep some as a store of value.
So now, you only have two options – Ethereum and Monero. Let’s consider these with a greater hashrate. Now, getting ten RX 480’s is where the difference shows. We have made our hashrate ten times higher, and now, with adequate power consumption increase (1500 watts), our profit now amounts to $337 for Monero, and only $307 for Ethereum. Differences get more dramatic as we get greater hashrates. One hundred GPU’s would give us a difference of over $300 between the two coins. This is shifting into professional mining farm territory, but still in reach of a dedicated person. You can imagine how much a farm can gain from Monero at greater GPU counts.
Concluding, Monero would be the best coin to mine in the current state of the market. What about long term? We cannot predict something like this with 100% certainty, especially in the cryptocurrency world, which has shown high volatility. But taking a look at the potential held in the technologies, in my opinion, the answer is clear.
Ethereum. Its network has a planned upgrade coming up. Casper – the addition of a PoS (Proof-of-Stake) algorithm to its usual PoW (Proof-of-Work). Every 100 blocks, there will be a single block validated with the PoS algorithm. The change is huge. Mining will play less of a role, and by simply owning the currency, you can stake it in order to get more, as with Peercoin, which also uses both algorithms. In Peercoin, the process is called “minting”. This means that accumulating Ethereum will be highly profitable.
In addition, Ethereum is at the forefront of technological advances in the cryptocurrency world. The aforementioned feature of creating your own cryptocurrencies linked to the main chain could spell enormous changes as to how our businesses operate.
Services such as Uber could be made cheaper and quicker, thanks to the Ethereum blockchain. It is very likely that the price of this coin will continue to rise, as it could revolutionize many industries. Therefore, it’s a good idea to mine Ethereum and hold onto the coins if you’re looking for an investment.
However, it’s best to not stay fixated on a single coin and stay vigilant. Watch the market carefully and plan out your cryptocurrency mining strategy with consideration of upcoming changes (like hard forks in the networks) and the latest technology developments. Remember to subscribe for more articles and updates on mining.