From Bitcoin to Shiba Inu and more–here’s our round-up of the top cryptocurrency tokens to mine this year.
The internet abounds with tales of cryptocurrency turning people into millionaires. With over 8,000 cryptocurrency tokens in circulation, it is natural to want to figure out a way to get in on the action. Today, there are three ways to get cryptocurrency: invest, earn or mine.
Miners are a vital part of cryptocurrency ecosystems, as they create new coins and validate transactions. They use their computer hardware’s processing power to solve complex mathematical problems and verify and record transactions on a blockchain. In exchange for their efforts, they receive cryptocurrency tokens. Miners hope that their chosen cryptocurrency will rise in value and become more profitable. The problem is that many coins mined can be unprofitable. There are several factors, like affordability, high energy consumption and income volatility, that make crypto mining an uphill battle. Given that, we curated a list of the five most profitable cryptocurrencies to mine in 2022. The round-up is based on the market capitalization of the token, the rewards per block mined and the profitability of mining the token.
Currently valued at US$36,215, Bitcoin (BTC)—founded by Satoshi Nakamoto in 2009—is the world’s largest cryptocurrency by market capitalization. To mine Bitcoins, miners must solve complex mathematical puzzles to validate transactions. Miners profit when the price of Bitcoins exceeds the amount it took to mine them. Though profitable, Bitcoin mining has grown to become very difficult and energy-intensive. The problem with this is that as mining becomes more challenging, profiting from it does, too. Miners will need to spend more on computational power, thus reducing their net profit (the profit they are left with after investing in computational power).
Ethereum (ETH) is possibly the most profitable to mine in 2022. Recently, on January 20, 2022, a miner earned US$540,000 (or 170 ETH) as a reward after mining a whole block by themselves. Founded by a Russian-Canadian programmer in 2013, Ethereum is currently valued at US$2,399.48. It is the second-most popular crypto token after Bitcoin. Mining Ethereum is simpler than mining Bitcoin. However, it is also energy-intensive and demands high computational power. The Ethereum site sums up the mining process best: “Anyone can mine on the Ethereum network using their computer. However, not everyone can mine ether (ETH) profitably.”
Currently valued at US$144.2 per Monero (XMR), the cryptocurrency token was launched in 2014 with a specialized focus on privacy and anonymity. Its powerful financial performance makes it a favorable choice among miners. What makes XMR so profitable is that it doesn’t require heavy-duty technology, such as application-specific integrated circuits (ASICs); Bitcoin does. You can get started with a simple central processing unit (CPU) or graphics processing unit (GPU). This way, you save money on equipment, thus increasing your net profit.
Currently valued at US$107.85, Litecoin (LTC) was founded in 2011 as one of the first altcoins (an alternative to Bitcoin). It features a faster block generation rate than Bitcoin, and it can be mined with personal computers instead of costly hardware. Still, for the best results, it helps to have specialized hardware. Miners are rewarded with 12.5 LTC (about US$1,344) per block—a lucrative factor in attracting miners. However, bear in mind, to truly stay ahead of the competition and succeed at Litecoin mining, you need to give extra attention to your operating systems and software.
Founded, quite recently, in 2018, the digital token Ravencoin (RVN) currently holds a value of US$0.06283. While its price may seem low compared to other cryptocurrencies, Ravencoin’s other features add to its profitability. For one, it can be mined using your average computer, thanks to a special algorithm. Secondly, the cost of energy is much lower than the revenue you earn from mining Ravencoin. Thanks to that, you save the tokens you would otherwise spend on energy-intensive hardware. Lastly, miners receive 5,000 RVN (about US$333) in return for each block they mine.
Mining can be a profitable venture—for those who can afford to spend the time, money and energy on it. However, lately, mining has come under fire for its high energy consumption. In May, Tesla CEO Elon Musk noted, “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.” Many others are echoing the call for miners to use cleaner energy to mine crypto. Will mining become more environmentally friendly or become obsolete? We will find out as cryptocurrency grows.
P.S. The profitability of mining a cryptocurrency relies on various factors, such as its popularity, usability, price volatility and the number of miners affecting competition for profits.
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