With the current cryptocurrency wave traversing the world, cryptocurrency mining is one of the best options for surfing this wave and making a profit. However, cryptocurrency mining has evolved over the past several years in that it is much more challenging to make a high level of profit now. This is mainly attributed to the fierce competition that exists within the mining world. The good news is you can still make money through cryptocurrency mining. You need to understand your best mining options now.
Keep reading to learn more about the best cryptocurrency mining options in 2020.
The Best Mining Options of 2020
Being profitable at cryptocurrency mining highly depends on the method in which you mine and your cryptocurrency choice. There are three cryptocurrency mining options:
Cloud mining involves renting computational power from the cloud. This means you do not need to purchase and store any special and expensive equipment, so it is an easy and inexpensive option. However, when searching for cloud mining companies, you will see many message boards and reviews of individuals who are critical of those providing the services. It is worth noting that due to the competition, you will always not be financially stable since the value of cryptocurrency drastically varies. That does not mean cloud mining is not profitable, so you must do the calculations. Consider the following points when making this decision:
- Regular changes in mining difficulty
- The costs of cloud mining
- The mining rewards
- The price of electricity
Graphics processing units or GPUs are utilized to process gaming graphics and three-dimensional renderings. Surprisingly, GPU’s are excellent at cryptocurrency mining. There are two leading GPU companies: Nvidia and AMD. Each GPU has various trade-offs, such as utilizing electricity but paying a higher cost for the unit. In general, Nvidia GPUs provide better performance allowing you to mine faster. When deciding which hardware to purchase, consider performance versus electricity consumption and price. You must also include the price of cryptocurrency (at that moment) and the associated mining difficulty.
Getting Started with GPU Mining
The first step is to determine which coin to mine, remembering not to select an overhyped coin that will become saturated by the end of the week. Once a cryptocurrency has been chosen, you must purchase the hardware components to create a mining rig and the software to run the components. The software will comprise the correct operating system, correctly configured BIOS, and mining software. The final requirement is a personal wallet address, and to understand the details of the mining pool you will join.
The required hardware components that will be built into your chassis include a motherboard with decent PCI slots, a 16GB SSD drive (this is enough when running Linux) with at least 3GB of RAM, a CPU, a power supply unit (PSU), and a GPU with risers. It is also beneficial to purchase a power consumption meter since this will be important in electricity tracking and determining your profitability.
Power Supply Calculation
Generally, GPUs consume a large amount of power, so your PSU must have sufficient capacity. An average calculation includes a 150-watt tolerance for the system, 720-watts for six GPUs, and 360-watts for six risers totalling 1200-watts. Alternatively, you can purchase two 600-watt power supplies. When performing the calculation, see which option presents the best value since the less you spend on your mining hardware, the quicker you can reach the breakeven point and then start making a profit.
Best Operating System
When determining the best operating system for mining, there are three options: Windows, HIVE OS, and ETH OS, with the last two being Linux-based systems and designed for cryptocurrency mining. While there are pros and cons to all systems, Windows is the easiest to get a basic understanding of the process and give mining a try.
The downsides to utilizing Windows are its stability for cryptocurrency mining and potential complications due to the high load. On the other hand, HIVEOS is free to use on your first three mining rigs and is simple to set up, configure, and manage. In addition to your mining operating system, you must select mining software, with some being better than others.
GPU mining is an excellent option because the hardware is more accessible to sell than ASICs since it can also be used for PC gaming. Even you can reprogram your GPU for other functions, and it is easier to switch between altcoins. On the flip side, GPUs consume a tremendous amount of electricity when mining. They are not incredibly stable and require a PC to operate. Furthermore, you need some PC hardware knowledge to create your mining rigs, and GPU’s do not have the same amount of mining power as ASIC.
ASIC stands for application-specific chips, which are hardware dedicated to cryptocurrency mining. Every ASIC is designed with a specific blockchain type, so you cannot switch coins when you have purchased an ASIC machine. What this means is you can mine Bitcoin and coins associated with the SHA256 algorithm, but you cannot mine as many coins as a GPU.
ASIC Mining Pros and Cons
Utilizing an ASIC mining rig is undoubtedly profitable and easier to set up than a GPU rig. Like the GPU option, ASIC consumes a considerable amount of electricity, but you can make more money with ASIC mining, which compensates for the power cost. Also, you do not need a PC for this type of mining since ASIC machines are plug and play plus, they are more stable than GPU equipment. One significant concern is that ASIC hardware can become quickly outdated and are stuck if you wish to mine a different coin. Given the speed at which the hardware evolves, it won’t be easy to sell the equipment when you want to upgrade. Furthermore, ASIC hardware needs a tremendous amount of cooling.
ASIC Mining Profitability
While ASIC mining can be profitable, it is essential to consider the following variables when determining profitability:
- The cost of electricity
- The difference between revenue earned and electricity cost
- The hash rate of your ASIC rig
- The number of coins earned per day and month
- The type of cryptocurrency to mine
The good news is the breakeven point of ASIC mining is considerably shorter, only a matter of months, that GPU mining, which can take years. Often, the newest ASIC mining equipment is on backorder for up to six months, so keep that in mind when determining which cryptocurrency mining type is best for 2020.
The Mining Pool
In addition to selecting how you mine, it is crucial to choose a mining pool. It is challenging to mine cryptocurrency on your own, so you need to join a group that works together to mine the coins. Known as a mining pool, this collective group typically can generate profits quicker due to the combined resources. While there are multiple factors involved in selecting a mining pool, trust is the most important. Other considerations include the size of the pool and whether the group is stable enough to mine over time consistently.
There are still three options for cryptocurrency mining in 2020: cloud, GPU, and ASIC. Therefore, your profitability depends on which option you choose, the type of cryptocurrency you want to mine, and the mining pool you join. Also, the cost of electricity can cut into your profits. If you live in a country with high electricity costs, then maybe the cloud is your best option. On the other hand, if electricity costs are low, then you could choose GPU or ASIC. This proves that profitability differs from one place to another, and there is no one-size-fits-all approach. Do the research and follow the considerations before committing to one type, and you will be earning coins in no time!