Anyone planning to get into cryptocurrency mining should get acquainted with the mining apparatus required and the benefits of mining pools depending upon the exact coin they decide to mine. To be successful in this endeavour, it’s very important to understand one’s objectives and limitations first.
On this page, we will acquaint you with the best cryptocurrency to mine in 2021 and also tell you about the different platforms you can use to mine them. You’d also be informed about the profitability aspect of mining cryptocurrencies and the pros & cons of taking this route to crypto acquisition.
Our List of the Top Cryptocurrencies to Mine
Here is a list of 10 cryptocurrencies which definitely deserve a look from anyone interested in crypto mining.
If you have the capital and are willing to put the effort, Bitcoin (BTC) continues to be the number one choice amongst cryptocurrency miners across the world. Its price was hovering around the $ 35,000/BTC mark at the time of writing this piece. In fact, not too long ago, in Jan 2021, the price of BTC reached an all-time high of $ 42,000. However, please also know that the current BTC mining reward is 6.25 BTC per block, which will reduce to 3.125 BTC after four years. Bitcoin mining is also considerably more difficult and resource-consuming cryptocurrency to mine, than newer cryptos in the market.
Having gained widespread recognition for being on the forefront of innovation in the crypto industry, courtesy its ‘smart contracts’ and ‘dApps’, Ethereum or Ether is an extremely popular cryptocurrency one can mine at present. The cryptocurrency has a market cap of around $ 171 billion at the time of writing this article. The current mining reward stands at 2 ETH per block. It uses the Ethash hashing function and can be mined with CPU and GPU devices. Please note, though this cryptocurrency has converted to Ethereum 2.0 (ETH 2.0), after changing its consensus algorithm from Proof-of-Work (PoW) to Proof of Stake (PoS), miners still have at least couple of more years to continue with PoW on Ethereum. The present ETH won’t be switched to the latest PoS blockchain any time prior to phase 1.5 of ETH 2.0.
The year 2016 saw the launch of multiple great cryptocurrencies, including Zcash (ZEC). Considering that the ZCash development company is excessively focused on privacy, it’s emerging as an excellent cryptocurrency to mine. However, you can’t mine ZEC easily despite its ASIC-resistant design. Nevertheless, its value not being fragile makes it an ideal mining opportunity for people willing to take a long-term approach. The current mining reward is 2.5 ZEC/block, and 21 million coins is the maximum possible supply, all of it expected to be mined by 2032. ZCash mining requires a higher RAM owing to its Equihash algorithm.
Grin (GRIN) came into being in the year 2019 and as against other cryptocurrencies, it doesn’t have any maximum supply associated with it. Considering that it employs Cuckoo style mining for being ASIC-resistant, it enables easy mining with CPU and GPU devices for the regular cryptocurrency users, without the need for huge investment. The hashing function used is MimbleWimble and the current mining reward stands at 60 GRIN per block.
This is another popular ASIC-resistant cryptocurrency which values the importance of equity when it comes to crypto mining. With a market capitalisation in the vicinity of $ 3 billion, Monero (XMR) continues to be amongst the most profitable cryptocurrencies you can look to mine. The current mining reward is 2.15 XMR per block and the total number of blocks expected to be supplied are 2,272,762. It employs the CryptoNightR hashing function and you can mine it with CPU and GPU devices.
Launched only a few years ago in 2018, Ravencoin (RVN) emerged from a Bitcoin hard fork. This cryptocurrency has gained widespread popularity owing to its special features, for instance, its mobile crypto wallet (along with seed phrases), messaging and RVN voting. Additionally, it gets traded fairly actively on all major cryptocurrency exchanges, making it extremely liquid in nature. It’s an attractive cryptocurrency for the miners because of its KawPow protocol and X16R hashing function. The block mining reward for Ravencoin stands at 5,000 RVN per block as of now.
Litecoin (LTC), which is counted amongst the best Bitcoin hard forks, has a wide appeal as well as solid functionalities. It is counted as one of the top 10 profitable cryptocurrencies in several lists, and for good reason too. LTC makes use of Scrypt protocol and is amongst the leading profitable coins to be mined with GPU. As evident, the hashing function used is Scrypt and up until August 2023, all Litecoin miners will be rewarded with 12.5 LTC for every mined block. As of Jan 2021, a total of 66.8 million LTCs had been mined out of a maximum 84 million.
Dash (DASH) is a hard fork of Litecoin and came into being in January 2014. It has a market cap of around $ 1.07 billion and is well-known for enabling secure and swift transactions across the world through PrivateSend and InstantSend. The hashing algorithm used is X11, a creation of Evan Duffield, the Dash founder. There are a total of 9.96 million DASH in circulation right now and the current reward for mining each block stands at 2.88 DASH.
What began as a joke for some light-hearted fun, Dogecoin (DOGE) rapidly grew in popularity to become one of the most successful and widely-adopted cryptocurrencies in no time! It was initially released in December 2013 as another one of the Litecoin forks. DOGE is primarily used for tipping Reddit and Twitter content creators and can be mined using CPU or GPU devices. It uses Scrypt protocol and has no capping on the total supply. The block reward currently stands at 10,000 Dogecoins per block.
10. Bitcoin Gold
Another one of Bitcoin hard forks, Bitcoin Gold (BTG) was launched in 2017. How it differed from Bitcoin was that it used Equihash instead of the PoW algorithm. The idea was to democratise Bitcoin mining and disallow the usage of specialised mining equipment. This cryptocurrency was designed specifically to be mined with GPU devices, and can be considered an excellent option for anyone seeking a profitable cryptocurrency to mine this year. The reward per block is 6.25 coins and there are around 18.6 million BTG in existence today.
What Is Cryptocurrency Mining?
Simply put, cryptocurrency mining is the process that involves solving complex mathematical equations, so as to validate the various cryptocurrency transactions. For each new cryptocurrency that is mined, the people involved in making it possible are rewarded a fraction of that currency. As against the popular belief, mining of a cryptocurrency doesn’t imply the creation of a new coin, however, it means the release of one from the overall supply.
Majority of the crypto products in the market today have a limited number of coins which will be released over the years, increasing their value, as they become rarer. The biggest reason why crypto mining exists is to resolve the biggest issue associated with such currencies which is double-spending.
Crypto mining can be done using three distinct types of computer components–CPU (Central Processing Unit), GPU (Graphics Processing Unit or Graphics Cards) or ASIC (Application-Specific Integrated Circuit)–depending upon the extent of investment you’re willing to make. Furthermore, you can take three broad approaches–‘Solo’ mining, which is mining at an individual level; ‘Pool’ mining, wherein multiple miners join a pool to increase the computational power of a server; and ‘Cloud’ mining which does away with the need of investing into mining equipment and rather opt for rented computing power. Nowadays, it’s also possible to mine cryptocurrencies using one’s mobile phone, by lending its computing power to a pertinent-app.
Is Cryptocurrency Mining Profitable?
The hardware, power requirements and costs involved in mining popular proof-of-work cryptocurrencies like Bitcoin don’t make it profitable anymore, unless of course, you’re a corporate entity willing to invest millions of dollars. However, the lesser-known Proof of Work cryptos still have plenty of mining potential and can take you places if you get in at the right time! Please remember, there are various other considerations like current market price, block rewards, hash rates, possible halving etc. which must also be factored in before going ahead with such an endeavour.
It also behoves us to acknowledge the competition between Proof of Stake (PoS) and Proof of Work (PoW) cryptocurrencies. Now, when it’s possible to generate revenues from validating transactions by simply staking coins, not everyone would want to mine them anymore. Having said that, it can’t be denied that mining, though is more complicated, it delivers bigger rewards. It all comes down to the resources you’re willing to invest.
As mentioned earlier, you can mine PoW coins by becoming a part of some mining pool, running an independent set-up (with CPUs, GPUs and/or ASIC devices) or by renting a third-party’s computing power. Please note, should you choose to have your own set-up, you’d need to factor-in electricity costs and the cost of updating the hardware & software from time-to-time. The electricity cost may vary from country to country, and is cheapest in China, where a large majority of crypto mining happens today. New and inexperienced miners could consider smaller cryptos which deliver more cost-benefit but the mining apparatus setup costs can go upto around $1000 upfront on consumer level hardware. The electricity costs will vary depending on where a user resides. However, the biggest upside of the entire activity is gaining a coin whose value could see some appreciation with time.
Pros & Cons of Crypto Mining
Cryptocurrency mining could help a user gain access to coins provided you do thorough calculations of earnings and investments beforehand, and approach it in a planned manner. The advantages offered by crypto mining far outweigh its cons, and as long as one’s budget corresponds with what s/he plans to mine, there is potential value to be made in any such venture.
Frequently Asked Questions
The cryptocurrency market is reportedly expected to witness a ten-fold growth by the year 2025.
There’s no middleman involved, the transactions are quicker and with no third-party fees.
The legality of crypto mining will depend entirely on the geographic location from where you mine. Always check the local laws before planning to make any investment.
Far from it! However, as it requires considerable investment, not everyone is able to pursue it successfully.
Yes, absolutely! Though this activity can take multiple forms, anyone willing and capable can throw their hat into this domain.
There won’t be any more coins of that currency available for release. However, mining will not stop and miners will probably be rewarded in some alternate way.
Crypto miners are rewarded with a full or partial coin for their share of effort in mining a new block.
Cloud mining is a rental mining service offered by large companies with industrial setups. They enjoy immense economies of scale and are often used by hobbyists to tap into their huge mining power.