Today, crypto mining is much more popular than ever before. It is like everyone wants to make money from this exciting and innovative space. However, making a profit from mining cryptocurrencies is not guaranteed unless you know what you are doing.
One of the best ways of beating the competition and staying one step ahead is by understanding the best coins to mine. In this post, we outline some of the best cryptocurrencies to mine in 2020.
How to Determine the Profitability of a Coin
Profitability should be your number one priority while choosing a cryptocurrency to mine. After all, you are in this game to make money, nothing less. Here are some of the factors that determine crypto mining profitability:
Price of cryptocurrency
The price-performance of a coin is among the key indicators of whether it is worth the mining costs. In simple terms, the more expensive a cryptocurrency is, the more profitable mining should be.
For instance, a lot of people are willing to purchase expensive ASIC miners to join bitcoin mining because the price of one BTC is quite high. However, such coins are also difficult to mine and you might be forced to find a good alternative. If you are patient enough, you can still choose to mine a promising coin and wait for its price to grow.
The cost of electricity
Currently, Venezuela has the cheapest electricity rates while South Korea has the most expensive electricity rate. Bitcoin miners in Venezuela spend an average of $531 on electricity to mine one bitcoin while those in South Korea require a massive $26,170. In the US, you will spend an average of $4,758 in electricity costs to mine one bitcoin.
How much power does your system consume in watts and what is its hashrate? To mine profitably you need to assemble a mining rig with a decent hashrate and power consumption rate. For instance, a mining rig with a 10% higher hashrate than another but consumes 50% more power is both wasteful and less profitable.
Mining difficulty and hashrate
Cryptocurrency mining is highly competitive due to the high number of miners involved. In fact, to ensure a smooth and reliable network, mining difficulty is adjusted based on how many blocks have been mined.
An increase in the mining difficulty increases the electricity cost, which in turn, affects profitability. For instance, anytime bitcoin’s network difficulty increases, the hashrate also increases and consequently increases the number of resources you need to verify a transaction on the network and earn a block reward.
Also, the number of miners on the network affects mining difficulty. If there are so many people on the network, the mining difficulty increases because your mining rig is expected to compute more guesses per second to stand a chance of earning the block reward.
Factors to Consider When Choosing the Best Coin to Mine
Even if you assemble the most powerful mining rig and venture into mining several coins, you need to figure out how you will use the mined coins. Here are some of the critical factors to consider when deciding which coin to mine:
Is the coin legal?
Some countries such as Columbia, Bolivia, and Ecuador don’t allow cryptocurrency mining. Therefore, if mining is banned in your country, the best thing to do is avoid the risk. In some countries, mining is allowed, but authorities pay close attention to cryptocurrencies with a high anonymity level because they believe such coins can aid money-laundering and illegal trade. Make sure you understand laws governing cryptocurrency mining in your country before you venture into mining.
Possibility of mass adoption
If a coin gains mass adoption, its value can easily shoot through the roof. This is because demand will outweigh supply. The best way to determine the possibility of a coin gaining mass adoption is to look at its use cases. Is it solving real-world problems? If the cryptocurrency has a use case that affects our everyday lives, then it is in a good position to possibly play a critical role in the future.
Which exchanges support the crypto?
Make sure you check out if the coin is listed on reputable exchanges. Typically, if a coin is listed on some of the reputable exchanges, the trade volume will be relatively high, making it easy to convert the coin into Bitcoin or fiat currency. If the coin is not listed on reputable exchanges, then it could be difficult to convert it into fiat currency.
Who is behind the project?
You should also consider the development team behind the team before you start mining it. Who is behind the project? How is the project being implemented? How is it being marketed? Is everything outlined in the project’s whitepaper? Keep in mind that a coin could have the best use case in the world but without a team of reliable and trustworthy developers and marketers behind it, then it is a dead project.
Top 10 Best Coins To Mine
Bitcoin is a decentralized peer to peer digital cryptocurrency and was one of the first blockchains ever invented. With this coin being the first-ever of its kind, it is also one of the most prized coins of all. Bitcoin uses a proof of work hash function called SHA 256 to verify user transactions on the network.
Right now, the reward for mining a block of Bitcoin successfully is worth 6.25 BTC, which recently halved from 12.5 BTC sometime in May of 2020. With Bitcoin being the most valuable cryptocurrencies to mine, it is also one the hardest coins to mine as its network has significantly grown in size.
Bitcoin Mining these days requires the use of Application-Specific Integrated Circuit (ASIC)miners, which are prebuilt supercomputers primarily made in China. Bitcoin Mining may not be suitable for most at-home miners as ASIC miners do consume a decent amount of electricity and emit a lot of heat. Nonetheless, Bitcoin still remains one of the most profitable coins to mine today if done correctly.
- Hash Function: SHA 256
- Mining Hardware: ASIC
- Block Reward: 6.25 BTC
Ethereum is an open-sourced blockchain that is designed for executing smart contracts and running decentralized applications(Dapps). Ethereum uses the Ethash proof-of-work hash function that is derived from the Dagger Hashimoto algorithms.
This hashing function by design was intended to ward off ASIC mining, which is considered by many to be centralized. However, in 2018 ASIC miners were finally developed to mine this algorithm, yet it remains to be one of the best coins to mine via GPU as well.
Currently, the block reward for miners is set at 2 Eth per block. Next to Bitcoin, Ethereum is the second-largest mining network out of all the cryptocurrencies out there. However, Ethreum has plans to at some point to switch its consensus protocol to proof-of-stake (PoS), yet no exact date for this implementation has been set. All in all, this is one the best coins to mine with a GPU.
- Hash Function: Ethash
- Mining Hardware: ASIC/GPU
- Block Reward: 2 ETH
Ravencoin is a blockchain specifically dedicated to the creation and peer-to-peer transfer of both real-life and digital assets. Ravencoin aims to be a pioneer blockchain built from the ground with asset management and compliance in mind.
Since it was forked from Bitcoin’s codebase, the blockchain uses Bitcoin’s UTXO model but operates on its own.
Ravencoin underwent a hard fork in April 2020 switching from X16R2 algorithm to KawPow algorithm that is designed to drop ASIC and FPGA devices from mining, leaving only GPU miners on the network. Currently, the block reward is 5,000 RVN for each block mined.
- Hash Function: KawPow
- Mining Hardware: GPU
- Block Reward: 5,000 RVN
4. Ethereum Classic
Ethereum Classic is an open-source and highly decentralized blockchain designed to execute smart contracts. The blockchain is based on the principle of “Code is Law,” which makes smart contracts self-executing and autonomous digital applications that can run on their own as programmed. The network uses Ethash proof-of-work hashing function designed to prevent ASIC mining, but the blockchain is not entirely ASIC-resistant. In fact, the first ASIC miner for Ethash was introduced on the market in 2018.
Ethereum Classic emerged as a split version of the Ethereum blockchain after the infamous DAO attack in 2016. The incident led to the existence of two versions of Ethereum Blockchain simultaneously. The new version of the blockchain was named Ethereum, while the older one was renamed to Ethereum Classic.
According to the Ethereum Classic monetary policy, the ETC network automatically reduces the block reward every 5,000,000 blocks. The latest block reduction took place in March 2020; hence the block reward was cut from 4 ETC to 3.10 ETC. Nonetheless, Ethereum Classic remains one of the most profitable coins to mine on GPU.
Ethereum Classic mining
- Hash Function: Ethash
- Mining Hardware: GPU
- Block Reward: 3.10 ETC
ZClassic is a result of a hard fork on ZCash. The cryptocurrency was developed to ensure miners received their full reward as opposed to the ZCash model that forced them to give up 20% of their reward as a fee. Rhett Creighton, the developer of ZClassic, argued that the 20% fee system could have had severe ramifications on the future of ZCash.
ZClassic continues to employ a proof-of-work consensus mechanism running on the equihashzero algorithm that is ASIC-resistant. Just like ZCash, miners are required to use either NVIDIA or AMD chips to mine the coin.
The maximum coin supply stands at 21,000,000 ZCL, with the current circulating supply being 8,867, 000 ZCL. The block reward stands at 12.5 ZCL.
- Hash Function: Equihashzero
- Mining Hardware: GPU
- Block Reward: 12.5 ZCL
Monero is an open-source cryptocurrency that focuses on privacy, fungibility, and decentralization. The blockchain uses an obfuscated public ledger, meaning that anybody can easily send or broadcast transactions, but an outsider cannot tell the source, amount, or destination of assets. Unlike Bitcoin, which is pseudonymous, Monero is much more anonymous.
This crypto asset is based on the proof-of-work hashing algorithm referred to as RandomX. However, Monero keeps altering its algorithm to prevent the possibility of ASIC mining. So far, it is among the best cryptocurrencies to mine with CPU in 2020.
The current reward for verifying one transaction block on the network is 1.69 XMR, but it is programmed to go lower with each block mined until it hits 0.6XMR/block mined when new coins get added to the network at a flat rate of 0.3XMR/minute.
- Hash Function: RandomX
- Mining Hardware: CPU
- Block Reward: 1.69 XMR
Grin is a cryptocurrency implementation of the MimbleWimble blockchain protocol designed to provide enhanced privacy, scalability, and fungibility. The network is designed to scale with the number of users other than the number of transactions. Its mining complexity is designed to change dynamically in accordance with the hash power of the network
The crypto uses the Cuckoo cycle concept, which is a type of proof-of-work algorithm that helps to maintain the security of the network and validation of operations. The Cuckoo cycle is one of the most promising ASIC-resistant frameworks, which means Grin can only be mined on a GPU or CPU.
The cryptocurrency can also be mined using three other algorithms, namely, Cuckarood-29, Cuckatoo-31, and Cuckaroom-29. The Cuckaroom-29 algorithm was introduced on January 16, 2020, after the network underwent a second hard fork. The next hard fork is scheduled to take place on July 16, 2020.
- Hash Function: Cuckarood-29, Cuckatoo-31, and Cuckaroom-29
- Mining Hardware: GPU/CPU
- Block Reward: 60 Grin
Beam is another MimbleWimble protocol-based cryptocurrency that is focused on privacy. This crypto makes all transactions on its network private by default. In fact, Beam users have complete control over their personal transaction information and can control what information about them is shared and with whom it is shared.
Blocks on the network are mined using proof-of-work consensus mechanism paired with Equihash and BeamHash II algorithms. Beam developers describe it as a “stable and GPU-friendly solution” aimed at ensuring secure and more equitable coin distribution.
Beam aimed at decentralizing its network right from the start by discouraging ASIC mining. While the platform doesn’t forbid ASCI mining entirely, it is almost impossible to mine Beam coins profitably using ASIC miners. GPU mining delivers better hashrate and ensures increased decentralization of the network. Currently, the block reward for verifying one block of Beam is 40 BEAM.
- Hash Function: Beam Hash II/ Equihash
- Mining Hardware: GPU
- Block Reward: 40 BEAM
Zelcore is a platform that focuses on digital asset management. You can think of it as a multi-asset wallet which is highly encrypted and features a secure user platform that supports Bitcoin, Ethereum, EOS, and ERC20 tokens. The platform supports Windows, Linux, macOS, and even mobile devices.
The platform was launched to give individuals a complete ownership and control over their digital assets. The Zel ID, which is the accounting system for Zelcore, encompasses a user’s login credentials and a private key generation feature.
The recently launched partnership between Zelcore and CoinSwitch provides users with a seamless swap function that allows them to bank their assets in a way that works best for them. Zel is the cryptocurrency that powers the entire Zel ecosystem. It is GPU mineable and the current block reward is 112.5 ZEL for every block mined.
- Has function: ZelHash
- Mining Hardware: GPU
- Block Reward: 112.5 ZEL
Zcoin is a highly decentralized cryptocurrency that focuses on privacy and anonymity aspects of digital transactions. This is the first coin that fully implements the Zerocoin protocol. The protocol allows you to send coins with no transaction history and was initially intended to be an extension of Bitcoin, but there is one notable difference.
Bitcoin records every transaction on a public ledger for anyone to see. The wallet addresses are only pseudonymous with the potential of people linking your real identity to a specific wallet address. However, with Zcoin, you can preserve the privacy of your spending since there is no transaction history recorded anywhere.
Zcoin uses the Merkle Tree Protocol (MTP) algorithm for proof-of-work . The MTP is a special memory-hard algorithm that helps to prevent ASIC mining, which could lead to the rise of centralized mining farms.
The ultimate goal of this transition is to help keep CPU mining as feasible as possible. For the first four years, miners get 86% of mined coins while founders receive the other 14%. After four years, block rewards will go entirely to miners and Znodes. Currently, the block reward is 14XZC, but the figure is expected to halve in September 2020.
- Hash Function: MTP
- Mining Hardware: GPU
- Block Reward: 14 XZC
Cryptocurrency mining still makes a lot of sense in 2020. However, to mine profitably, you need to do your homework before choosing a coin to mine. Calculate all expenses involved and possible risks before you come up with a mining plan. Even as you go into mining, don’t expect easy money. The process can sometimes be long and might take you some time before you figure out the best strategy.