2017’s exceptional performance of cryptocurrency is seeing a wave of newcomers looking to get their hands on their first coins. For those not looking to spend fiat, there is another way to receive Bitcoin, Litecoin, Ethereum, or any other cryptocurrency: and it’s to mine it.
Mining uses what you already have (laptop, desktop) and in exchange for running mining software, you will receive tokens for running the software. Miners are essential for many networks in ensuring security and validity of transactions, so they play a major role.
Unfortunately, it’s also a competition. Whoever has the most processing power takes the lions share of the coins, and only a certain amount is distributed at certain intervals. In Bitcoins case, only 12.5 Bitcoins are released every 10 minutes or 1,800 Bitcoins per day. This has led to the utilization of ASICS, in order to remain competitive.
With many of the major cryptocurrencies being mined with ASICs, short for Application Specific Integrated Circuits, machines that are designed to exclusively mine a certain algorithm for the maximum amount of performance with the minimum amount of energy, many GPU miners or even home computers are moving to alternative algorithms or coins in order to keep an income. Below are a few ways you can use your existing hardware and still turn a profit despite today’s competition.
If profit is your only concern, websites like WhatToMine and NiceHash will be your best friend. What To Mine is a profitability calculator, and can show you calculated profits based on your electricity costs and what hardware you have available. The vast majority of cryptocurrencies are mined with a graphics card, with only a select few being mined with CPU’s.
NiceHash takes the automation one step forward, by becoming a downloadable software for the user. Once installed, it takes one click to start mining, and Nicehash’s software will automatically mine the most profitable software, with payments being automatically converted into Bitcoin. Users can start withdrawing Bitcoin starting at 0.001 Bitcoin, allowing for regular withdrawals into their own wallet.
Another way to go about mining is to find a cryptocurrency you believe is undervalued and has potential, and reap the rewards at a later date. If you begin mining a cryptocurrency early enough where a single GPU can still reap tens or hundreds of coins, this could potentially be worth a lot more later down the road. This is, of course, a higher risk/reward ratio, as if you’re wrong, you’d have just spent time mining a coin that is worth nothing.
Since ASICs dominate the main algorithms, such as Scrypt and SHA -256, this typically makes directly mining Ethereum, Bitcoin, or Litecoin not the most profitable option. Mining other coins with other algorithms that are still only CPU or GPU mineable and then exchanging those earnings into the above cryptocurrencies would yield a larger return compared to mining those directly and competing with powerful ASICS.
Read More about Bitcoin, Litecoin and Ethereum Cloud Mining in our Introduction to Cloud Mining series:
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