What Is the Most Profitable Crypto to Mine?
Despite a bearish market, cryptocurrencies can still be profitable investment vehicles. But with thousands of cryptocurrencies in circulation, deciding which are convenient to hold can be challenging. Before you go ahead with your plans to invest in crypto, you should choose a way to get some digital coins in the first place. Currently, there are three ways to do it:
- Buying cryptocurrency. For beginners, this way is the most straightforward. A crypto exchange like LetsExchange.io allows you to purchase and swap cryptocurrencies without hassle.
- Earning cryptocurrency. More and more workers are getting their salaries in cryptocurrency. Paying wages in crypto is more common for remote international work, but you can ask your employer if this possibility exists for you. Also, if you own a business, you can accept crypto as payment for goods and/or services.
- Mining cryptocurrency. This process consists of validating transactions on a cryptocurrency network. Mining also generates new digital coins. For their service, miners get rewards in crypto. Mining requires a more advanced understanding of blockchain technology and is therefore unsuitable for beginners. Moreover, miners must invest in powerful hardware to make their activity profitable.
Miners are vital for cryptocurrency ecosystems, particularly those utilizing the proof-of-work (PoW) consensus mechanism. To validate transactions, miners must solve complex mathematical problems. Miners compete with each other to solve the said problems since only the first to solve a problem gets a crypto reward. A miner should invest in a fast hardware miner to increase the reward probability.
So, besides the cost of mining hardware, there are other factors to determine whether mining can be profitable. Electricity consumption is one of the most critical factors to take into account. Also, income volatility plays a role. So, to help you decide if mining is for you, we have compiled a list of the most profitable cryptocurrencies to mine in 2022. The price data provided for each cryptocurrency correspond to July 3, 2022. These values can vary unexpectedly, making a coin more or less profitable to mine in the future.
Bitcoin
Bitcoin (BTC) was launched in 2009 and is the most valuable cryptocurrency by market capitalization. Currently, it trades at a little over $19K. Mining Bitcoin can be profitable if you use specialized miners equipped with application-specific integrated circuit (ASIC) technology. However, mining Bitcoin has grown to become highly energy-demanding because of the difficulty of solving the related mining problems. Since this difficulty increases over time, mining Bitcoin will be less profitable in the future.
Currently, the mining reward for this cryptocurrency is 6.25 BTC per block of transaction data verified. Because of the significant price drop of this cryptocurrency in the last months, mining with old ASIC hardware might not be profitable anymore.
Ethereum
Ethereum (ETH) was launched in 2015 and is the second most valuable cryptocurrency by market capitalization. It trades at a little over $1K and is likely the most profitable crypto to mine in 2022. Mining Ethereum is simpler, so you can pursue this activity with a graphics processing unit (GPU). A GPU is not as expensive as an ASIC miner, meaning you can save money on mining hardware.
However, mining Ethereum is also energy-intensive. So, your electricity bill will significantly soar if you mine this cryptocurrency at home. Using ASIC miners can yield more significant profits, but you need to invest more money in your mining rig. Currently, the mining reward per block on the Ethereum network is 2 ETH plus all the priority fees contained in the block.
Litecoin
Litecoin (LTC) was launched in 2011 and is the 19th most valuable cryptocurrency by market capitalization, according to CoinMarketCap. It trades at around $50 and can be profitably mined with a personal computer. Since your initial investment in a mining rig is usually lower, your profit can be more significant. However, using specialized ASIC hardware and/or joining a Litecoin mining pool can yield the best results. Currently, the mining reward for this cryptocurrency is 12.5 LTC per block, making Litecoin a lucrative coin to mine.
Monero
Monero (XMR) was launched in 2014 and is the 28th most valuable cryptocurrency by market capitalization. It trades at around $116 and is among miners' preferred coins. The primary reason for this popularity is that you can mine Monero with a simple central processing unit (CPU). Since your laptop or desktop computer already has a CPU, you can start mining Monero with minimal upfront costs. For better results, you can consider getting a GPU. You cannot mine Monero using ASIC hardware. Currently, the block reward on the Monero network is 0.6 XMR.
Ravencoin
Ravencoin (RVN) was launched in 2018 and is the 111th most valuable cryptocurrency by market capitalization. It trades at around $0.02 and can be mined using an average computer. You can use a CPU, but a GPU can yield better results. You can also consider joining a Ravencoin mining pool. Mining Ravencoin consumes significantly less electricity than other cryptocurrencies. Hence, the profitability of mining this coin is high. Miners get 5,000 RVN for each block they mine.
Is Cryptocurrency Mining Dangerous?
Crypto mining is not a dangerous activity. However, some activists consider it harmful to the environment because of the enormous amounts of electricity that mining consumes. Because of this high energy consumption, ensure a professional electrician sets up the installation to connect your mining rig to the electrical grid. Also, beware of the many scams existing in Web3. Scammers and hackers are continuously trying to steal crypto funds from miners and investors. Hence, you should proceed with caution when mining cryptocurrencies.
How to Make Money from Cryptocurrency Mining
To mine a cryptocurrency profitably, you should calculate all your upfront costs and estimate the potential gains you can make within a day or a month. If your mining rig's operation cost in that time is lower than the possible gains, you will have a profit. Some online mining calculators help you determine whether a particular coin is profitable to mine with your hardware.
Conclusion
Mining can be a profitable venture if you do it right. It means you must be ready to spend time, money, and effort on this activity. Before investing in a mining rig, research the profitability of the cryptocurrency of your interest. Learn what type of hardware you need for the best results and estimate the energy consumption you will have at home. Finally, find out what mining rewards you potentially can get and determine whether mining would be profitable for you.
Disclaimer
Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.
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