The reality of mining and trading cryptocurrencies in 2020

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Contents

Is it worth mining Cryptocurrencies in 2020?

What to mine and how to mine? Mining cryptocurrency is dead, they say.

There are many ways to mine crypto, but which cryptocurrencies are the most profitable? Should you buy a mining rig yourself or do cloud mining? How to calculate the profits? We will discuss all that and compare the three main ways to see which one is the most profitable.

So what is cryptocurrency mining?
Mining is the process of validating other user’s transactions (e.g. bitcoin transactions) with a computer and then adding them to the blockchain. As a reward, miners receive cryptocurrency.

3 Main Ways to Mine Cryptocurrency ⚡

  • GPU mining (mining on video cards)
  • ASIC mining
  • Cloud mining

1. GPU Mining

GPU Mining is using video graphics cards to mine cryptocurrencies. Here’s a guide to help you choose the best graphics cards for mining. Some of the most popular GPUs are NVIDIA GTX1060, GTX1070 and GTX1080Ti as well as RADEON models RX470/RX480 RX570/RX580. Should be noted that RADEON GPUs consumes more electricity but are generally cheaper than NVIDIA GPUs. In terms of performance, NVIDIA GPUs are generally better. However, any GPU performance highly depends on the price of electricity. Thus, all aspects should be taken into account.

Most crucial factors of the mining process

  • cost of electricity
  • cryptocurrency prices
  • level of mining difficulty
  • GPU performance (hash rate per watt)

Crypto investor’s essential: break-even point of the investment

Another significant issue that smart investors would consider is the cost of mining equipment (mining hardware). The cheaper you manage to buy the mining rig, the faster your investment will be paid off. Don’t forget that the price must not be your only factor when making a final decision on mining hardware. Having a warranty in case the GPU or any other part will fail is essential. Otherwise, there will be a need for extra investment.

How to start mining Ethereum?

Ethereum is one of the most popular altcoins for mining, we will briefly describe how the process looks.

First, you need to get a mining rig, see list of all components required to build your first one below. Second, you must configure BIOS correctly, install OS and required software. Third, specify details of the mining pool and your personal cryptocurrency wallet (the one you will get proceeds to).

Note, currently Ethereum is running proof of work system which makes it possible to mine, but it was announced that the proof of stake system to be introduced in the future. Plan still officially remains, so Ethereum miners should be aware that it will impossible to mine once the new protocol is updated.

That’s it, you are good to go. Further, we cover some specific aspects you should be aware of while getting your mining rig ready.

What hardware do you need to build your own mining rig on video cards?

In order to build your first mining rig, you will need a case/chassis (it can be bought online or you can make it yourself) and mining hardware, which includes:

  • Motherboard (number of active PCI slots must not be less than the number of GPU you plan to employ)
  • Storage: SSD disk (16gb is enough for LINUX)
  • RAM (4GB)
  • PSU (power supply depends on the mining rig, see next section for details)
  • Processor (any that is suitable for chosen motherboard)
  • Risers (PCIe Riser is used to provide additional space for GPUs. It is often the basic component of the multi-GPU mining rig, as the PCIe riser actually provides the additional space to place multiple GPUs in the GPU mining rig.)
  • Video cards (cards with higher computing power will ensure higher hash rate and thus higher rewards)
  • Wattmeter (to monitor actual power consumption on the power socket)

As you can see it is generally the same list as if you were building a PC.

How to calculate the required Power Supply for mining with video card?

It is important to calculate how much power you need to supply your GPUs. So here is an example of how you can calculate it.

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EXAMPLE RIG: 6 Video cards NVIDIA GTX1070

  • general system will require 150w
  • GPUs: 120w x 6 = 720w
  • Risers 60w x 6 = 360w
  • Total: 150w + 720w + 360w = 1230w

Thus, you need either 1 power supply with at least 1200w or 2 power supplies connected together, where each is at least 600w.

Having that in mind, you can check what are the best pricing options you can get, as the cheaper, you can get the mining rig, the faster you can get it paid off reaching the break-even point on your investment.

Which OS and mining software to choose for mining with GPU?

Most popular options of OS for miner are:

  • Windows 10
  • HIVE OS (Linux modification for mining)
  • ETH OS (Linux modification for mining)

We will not go deep examining the advantages and disadvantages of each OS, instead, we will only share our experience. Having Windows for mining sounds attractive, but in reality, this is probably the most unstable and complicated option if we dive into details. However, it is probably the least scary option if you want to try mining with your existing PC to see how it generally works and get a concrete understanding.

HiveOS is a relatively new option which is free to connect first 3 mining rigs and is quite straightforward to set up and to run. After you run the mining rig with pre-installed HiveOS Linux build the process will ask you to connect the mining rig you’ve created in your online cabinet. Then, all configuration and management happen online.

Once you set up the OS you will need to install a mining software, choosing the most popular is a safe and stable option:

Choosing more exotic altcoins for mining may require less popular mining software.

Best Cryptocurrency to Mine with GPU in 2020?

Most profitable altcoins for your GPUs can change any day, any time as it involves a number of factors, but most importantly it will depend on the price of the altcoin. You can check https://whattomine.com to see most profitable altcoin for your mining rig.

Still, apart from using available mining profitability calculators, we suggest thinking long term. Ethereum is altcoin No1 of cryptocurrency industry with a strong team behind and relatively long record. We’ve seen the price of Ethereum reaching 1300 USD in January 2020. Mining Ethereum may not be the most profitable option today, but if you hold your mining rewards and sell later at highs, what would be with your mining rig’s profitability? Yes, it will be higher.

Overclocking a Mining GPU optimally

Your overclocking strategy may change if you have cheap electricity or willing to get as much crypto as fast as you can (in that case you may want to consider simply buying Bitcoin or Ethereum on the market). General idea to keep in mind, the higher you set the overclocking the more power your mining rig will consume. Thus, make sure that the extra hash rate will still make sense because your electricity costs will increase.

Search for optimal settings online carefully, as it may allow you to both increase hash rate and reduce power consumption.

How to Choose a Cryptocurrency Mining Pool?

Your main concern with regards to mining pool should be its size and capacity to operate stably. We recommend to start with:

Is it too late to start mining Ethereum?

It may be late for some people and still fine for others. Other things being equal, the cost of electricity should be your first concern. If you are lucky to be living in a country with cheap electricity (less than 0.1 USD kWh), then it may be a good idea to consider mining as an investment.

Cryptocurrency Mining in 2020: Is It Profitable and Should You Start?

Let’s take an example, imagine you’ve built a mining rig with NVIDIA GTX 1070 video cards. Now let’s take a look at a fair result of the miner:

Price of mining rig hardware: 3000 EUR
Target altcoin for mining: Ethereum
Altcoin price on the market: 280 Euro per 1 ETH
Hash Rate: 180MH/s
Reward per 24h: 0.0144 ETH
Reward, 30 days: 0.432 ETH
Electricity expenses (kWh): 518
Cost of electricity: 77 EUR (at a cost of 0.15 EUR per kWh)
Revenue per month: 121 (current price of Ethereum is 280 EUR)
Profit per month: 44 EUR

Calculated at Ethereum mining calculator WhatToMine

If the price of Ethereum is unchanged then it will take 68 months to reach a break-even point on your investment. However, if you accumulate all proceeds and in case Ethereum costs 600 EUR in 6 months, then your electricity expenses would be 462 EUR, while rewards would be equal to 1555 EUR, which leaves you with 1093 EUR of profit for a period of 6 months.

In case the price of Ethereum will reach 1000 EUR in 6 month and you sell your accumulated Ethereum, then your profits would be 2130 euro, which makes it a lot more attractive, right?

You can see that any scenario highly depends on your price expectations and strategy you follow while mining.

Mining is obviously a risky thing, but in some cases, it can be highly profitable.

Pros

  • GPU can be sold easier than ASIC
  • Easy to switch Cryptocurrency (having a huge choice of altcoins to mine)
  • Reprogrammable

Cons

  • High Power Consumption for typical households
  • Easily Affected by Disruptions (not too stable)
  • Needs a PC
  • Requires hardware knowledge if you are going to maintain it yourself
  • Require less Mining Power than ASICs

2. ASIC Mining

ASIC mining is using Application-Specific chips to mine. That alone tells you, that you will not be able to switch between the high number of cryptocurrencies when using this mining method. Each ASIC is capable of mining only on a specific algorithm. For example, Bitcoin is based on SHA256 algorithm and apart from mining Bitcoin, it is also possible to do mining of other coins, for example, Bitcoin Cash.

Largest ASIC producers:

ASIC profitability example

To see if ASIC mining can still be profitable let’s look at the latest miner – Bitmain’s Antiminer S17, a powerful bitcoin mining hardware.
Price of miner: 2410 euro for pre-order in 6 months (at the moment of review)
Cryptocurrency: Bitcoin
Hash rate: 53TH/s
Bitcoin reward per 24h: 0.00172 BTC
Bitcoin reward, 30 days: 0.0516 BTC
Electricity expenses (kWh): 1512
Cost of electricity: 227 EUR (at a cost of 0.15 EUR per kWh)
Revenue per month: 557 EUR (current price of bitcoin is 10800 EUR)
Profit per month: 330 EUR

In this example, we get a break-event period at 7.3 months in case the Bitcoin price stays the same. This is the latest mining ASIC which is quite difficult to get right now, currently, you have to wait for 4-6 month depending on reseller.

To conclude, mining most popular cryptocurrency Bitcoin looks pretty attractive, especially if the Bitcoin price will grow even further.

Pros

  • ASIC mining is easier to start than GPU mining
  • Highest power consumption
  • Latest ASIC can become outdated faster than the latest GPUs
  • No PC needed
  • Less chance of disruptions compared to GPU mining
  • Plug and play

Cons

  • List of cryptocurrencies to switch to is short
  • Needs proper Cooling. Generally, ASICs produce a lot more heat than GPUs.
  • Can be hard to sell, if it’s not the latest model of ASIC
  • Profitability highly depend on Bitcoin price
  • Difficulty can be increased at any time if large players come (unlike GPU mining, ASIC mining can easily be scaled and controlled, thus it happened to be highly attractive for large investors, which eventually shows a significant impact on the bitcoin network mining difficulty)

3. Cloud Mining

Cloud mining is when you rent hashing power from a mining company and they do it all for you. You don’t have to worry about electricity or finding a place for the equipment. It is very easy and cheap to start. But we do it for profits, so which is more profitable?

Main profit factors:

  • Cost of electricity (the cheaper the electricity the more profit you get)
  • Mining rewards (the more mining reward is the more profit you get)
  • Price of cryptocurrency (higher price makes more profit)
  • Cloud mining fee (for cloud mining only, higher fee means lower profit)
  • Mining difficulty (higher is the mining difficulty, the lower will be the mining reward, hence lower profit)

If you do some research, the public opinions about cloud mining are not too great. The cloud mining Giants:

These are the biggest players in the cloud mining game, which can offer you the best deals. The thing about mining is that the profits are not stable, so it’s hard to tell how much exactly will you earn. The value of a cryptocurrency being mined is constantly changing. It also depends on how much mining power are you renting.

Note, with the most stable mining companies the entry investment barrier is significantly higher. Most of the companies who targeted retail and offered to start with investments of 500 USD are gone now.

Profit Formula of mining

Calculate how much of a specific currency will you mine and follow the value of it. WhatToMine is a great tool to calculate mining profits. It may look complicated at first, here’s a guide telling you how to use it. Once you know your mining power, find out your electricity costs and how much power your mining hardware power consumes. Then, subtract the bills from the mining yields and what’s left is your profit.

Where do I get proceeds from mining?

It may be very obvious for those who have already tried mining or is deep into crypto but if you are new, it might not be that clear – “how, where and when do I get my rewards for mining”.

First, as you set up your mining rig, you will define to which address you will receive the mining reward. Second, as you will successfully do mining your balance on the mining pool will be increasing. Once you reach the minimum level, the pay-out will be made to your account. Thus, depending on the results of your mining rig you will be receiving accumulated rewards every time threshold is reached.

With cloud mining, it works in a similar way but terms can differ from company to company.

Do I need to pay taxes on mining?

Depending on a place you live you may need to pay tax on rewards you get from mining. In most countries, you would need to pay tax on income. However, in most countries, cryptocurrencies are still not legalized, thus unless you sell your mining rewards and receive fiat money (USD, EUR, GBP, etc.) to your bank account, you may be exempt of taxes (this is a not a financial advice, please confirm with your State Tax Office for details).

Read more on mining taxation in the US, UK, Japan and Russia in this guide.

What should I do with the mining rewards? Hold, Trade or convert to fiat?

Simple but important aspect: as soon as you sell your cryptocurrency you fix your gains or losses. In case you decided to follow a holding strategy, you always have to keep in mind that you would be holding your crypto assets up to the point at which you would like to spend them. Therefore, your potential gains or losses would depend on the point of entry and exit of your investment. In case you believe in short term growth, you should probably exit once you believe crypto has reached its peak and re-enter in your investment positions at better/lower price.

Apart from the typical question of whether you should hold or sell, there are alternatives. First, you can learn to trade and try to make more crypto. What’s great about the cryptocurrency market is that you have tonnes of cryptocurrency pairs, so you can trade ETH against other cryptocurrencies with the aim of the increasing amount of Ethereum. This is especially positive thing as cryptocurrency trading against fiat on both bullish and bearish market sentiments is a very risky thing.

Second, you can go for social trading, which essentially employs the idea of copy-trading behind it. On a typical social trading platform, there are two groups of users, crypto traders on the one side and beginner traders (also know as copy-traders or investors) on the other. Traders simply trade through the platform (like Wunderbit Trading) and try to show as best statistics as they can, while Investors are screening through the Traders’ list and try to select the best performer.

Once the best match to the risk and reward appetite is found, Investor can then start to follow and copy trade the Trader. Copy-trading (also known as mirror trading or shadow trading) allow Investor to automatically execute the same trades as the Trader.

There are differences across platforms, almost each has its own interpretation of social trading and technical functionality. It’s yet great to have such a variety of options, thus allowing to invest your crypto and make it work.

Note, some platforms allow to make the whole simulation but every trade is made against a broker. In such cases, it’s always a bet, where you can make more of fiat money or less. Still, there are platforms that are built on top of exchanges (e.g. Binance and Kraken), which means that behind each trade there will be your crypto.

Wunderbit Trading is a typical crypto social trading example of a platform that is built on top of the largest crypto exchange – Binance, where Investors don’t send their holding to anyone, they simply connect API to allow Wunderbit’s Trading platform to copy trade of the Trader that was selected by the Investor.

Conclusion

To summarise, mining can still be a great way to profit from cryptocurrencies. Mining is not dead.

Today is 5th July 2020, cost of Ethereum (one of the most popular coins to be mined on GPU) is 290 USD. In countries, where the cost of electricity is higher or equal to 0.24 USD mining, mining profit is zero, if the cost is lower, you are in profit. Few examples.

Countries with the cheapest electricity include Ukraine, where 1 kWh costs only 4.1 cents USD meaning that running a six-card mining rig of NVIDIA GTX1070 would profit you a 3.46 USD daily (per month 103.8 USD), thus if the mining rig was bought for 2000 USD (price of pre-owned mining rig), then it would take you 19 month to break-even your investment.

Another great way to profit from cryptocurrencies is to start trading. Although trading crypto is not easy, some say that crypto trading is the best strategy you can follow right now, since mining difficulty has increased significantly and the cryptocurrency value is not that high.

Thank You for Reading!

We hope this article was helpful. Subscribe to our Blog to get the latest cryptocurrency news and tips on how to profit from them. Read our comprehensive guide on whether you should buy bitcoin and how to do it at Wunderbit’s bitcoin exchange.

Top 10 Most Profitable Crypto Coins To Mine in 2020

Is cryptocurrency mining profitable now? Both yes and no. It depends on what and how you mine plus your electricity bills may vary depending on where your rigs or farms are located. Bitcoin (BTC) is not the most profitable mining coin anymore: mining difficulty is so high it requires the whole farms jam-packed with juggernauts servers to get a block. Luckily, there’s a bunch of great altcoins making profitable mining possible.

Although mining is not as dirt-cheap and profitable option as it used to be a few years ago, it’s still a legitimate way of earning crypto and enjoying almost passive income.

Miners are now smarter & way more experienced in crypto trading. They prefer mining the most promising cryptocurrencies only as there’re done wasting precious hashpower, time and investments on new coins with a low trading volume. Nevertheless, there are always a sufficient number of enthusiasts to support a new crypto project by mining or minting blocks and confirming transactions hoping for a future take-off to the Moon.

Want to join the crypto mining industry and got a GPU or CPU-based miners ready? Find out what are the most profitable GPU and CPU mining coins in 2020.

Estimate Profitability First

Before we start enlisting most profitable coins, let’s find out what defines crypto mining profitability:

  1. Price of Cryptocurrency. The law is simple: the more expensive a coin is, the more profitable mining should be. However, it’s true only for short-term investments. If you’re patient enough, you can mine a promising coin and wait till the price grows.
  2. Block reward & Halvings. What makes cryptocurrency mining 2020 less profitable than before is halving of rewards. For example, the next BTC halving will take place in 2020 making it even less attractive. Or recent Litcoin (LTC) halving which cut the profits from 25 to 12.5 LTC. Make your own research to calculate whether your investment in mining equipment will be compensated by the amount of coins mined.
  3. Time of block generation. The more blocks are generated by the network, the higher the chance of getting rewarded for a found block.
  4. Mining difficulty and hash rate. Both GPU and CPU mining 2020 is quite challenging due to a high number of miners involved. However, it’s still possible to find a niche coin where you can make a decent profit without suffering from competition. Find out most profitable algorithms & coins to mine on WhatToMine.com
  5. Equipment efficiency. It depends on your budget and current difficulty of a coin, so choose accordingly. Theoretically, the power of mining equipment should be continuously increased, but in reality, it’s too expensive to invest in GPUs all the time.
  6. The cost of electricity cost. This is the most important when calculating the profitability of cryptocurrency mining. Below you can find a list of countries with the cheapest electricity bills.

Electricity costs by country in 2020.

If you focus on profitable Bitcoin mining, you may be interested in the infographics below.

The following table shows how ETH mining profitability fell during a couple of years:

Does it mean mining is no longer relevant? No! You just need a smarter approach.

How to choose the best coin to mine in 2020?

Even if you use the best GPU for mining 2020 and plan to mine thousands of coins, think how and where you will use them. There are a few aspects that matter:

  • The possibility of withdrawing to fiat. Find the exchange platforms allowing you to convert the newly mined coins to fiat or buy some popular tokens like ETH or BTC. Don’t forget about exchange fees, as well.
  • Which exchanges support the coin? When it comes to unpopular or low-quality coins, some of them can only be withdrawn to the internal wallet of crypto exchanges. Exchanges with a low level of popularity and are forced to work with shitcoins (even if mining seems profitable) and rely on large commissions as the only way to survive. In this case, the miner will be forced to give a serious share of the earned only for withdrawal.
  • Make sure it’s legal. Some countries have pretty strict regulations concerning cryptocurrency mining. If it’s totally banned in your country – better avoid the risk. In some countries, authorities pay particular attention to the cryptocurrencies with a high level of anonymity because they serve as a perfect money-laundering tool and allow for illegal trading. Make sure you won’t have any legal issues after mining a new coin
  • Now when you’ve decided which cryptocurrency to mine, evaluate the long-term use of the purchased equipment. The problem is that the complexity of mining is growing very quickly and mining equipment is always doomed to lose its value.

Nvidia GTX 1070 – one of the most popular GPUs for mining in 2020

Top-10 best altcoins to mine in 2020

In this list, we have gathered cryptocurrencies that are widely available for mining: you don’t have to build the entire mining farm to start earning. Moreover, each coin has tons of potential, so cryptocurrency profitability shouldn’t be a big concern.

1. Grin (GRIN) – Best for GPU mining

Green is a relatively new cryptocurrency based on the MimbleWimble consensus algorithm, which ensures the privacy of transactions within the network.

Grin has unlimited coins, which is certainly attractive for miners. The complexity of mining changes dynamically in accordance with the hash of the network. The coin uses the so-called Cuckoo Cycle concept. We are talking about two PoW algorithms: CuckARood-29 and CuckAToo-31. The first is suitable for mining on GPU processors and is protected from ASIC miners, the second is geared specifically for them. At the same time, work with ASIC is planned for the future, so while CuckAToo is compatible with video cards.

The coin is traded on various crypto exchanges, including the famous Poloniex, HitBTC, Bittrex, OKEx and KUCoin.

Algorithm: Proof-of-Work
Hashing Function: MimbleWimble
ROI since launch: -95.43%
Curr. Price: $ 0.45 USD
Mining Reward: 60 GRIN per block
https://grin-tech.org/

2. ZCash (ZEC)

ZCash (ZeroCash) was released in October 2020. This coin, since it can be mined by anyone. Its algorithm allows using mining graphics cards. ZCash is completely anonymous in transactions. It is impossible to track them. Many people really like this feature.

The commission for ZCash transactions is negligible, so it’s absolutely convenient for trading and selling.

In 2020, ZCash was massively introduced to popular exchange platforms. Yet, the coin is greatly underestimated and, most likely, will reveal its potential only in 2020.

Algorithm: Proof-of-Work
Hashing Function: Equihash
ROI since launch: -99.29%
Curr. Price: $30.43 USD
Block Mining Reward: 10 ZEC
https://z.cash/

3. RavenCoin (RVN)

This Bitcoin hardfork appeared in 2020, and already boasts high liquidity. Today, it’s #55 world cryptocurrency with the market cap over $78 mln. In 2020, developers added a set of new great features (messaging, voting with RVN, better compatibility, mobile wallet with seed phrase).

RavenCoin can be easily exchanged in many different platforms. In its essence, it’s a P2P blockchain that serves for efficient and fast transfer of assets from one person to another. It focuses on asset transfer on the basis of Ethereum and Bitcoin. Why RavenCoin is recommended for miners? It uses X16R algorithm and proof-of-work protocol.

Algorithm: Proof-of-Work
Hashing Function: X16R
ROI since launch: 39%
Curr. Price: $0.0138 USD
Block Mining Reward: 5,000 RVN
https://ravencoin.org/

4. Monero (XMR)

Existing on the market since 2020, Monero has proved to be reliable and viable. Since 2020, XMR entered an uptrend and continues growing. Unlike ZCash, it has 10 times higher fees, but users still value Monero for an exceptional level of anonymity provided.

Monero keeps altering its algorithm to prevent the possibility of ASIC-mining, so you are free to use GPU and CPU to mine it. Monero leverages CryptoNightV8 proof of work algorithm and generates 3.38 XMRs as block reward every two minutes, so it’s quite profitable for mining.

Algorithm: Proof-of-Work
Hashing Function: CryptoNightR
ROI since launch: 1,490.68%
Curr. Price: $39.29 USD
Block Mining Reward: 2.47 XMR
https://getmonero.org/home

5. Ethereum Classic (ETC)

A hardfork of Ethereum, Ethereum Classic can be mined with a couple of GPUs. It has a bit higher block reward (4 ETC), and despite the fact that ETC might have higher inflation and scarcity, it’s still a very profitable cryptocurrency. Purchase a couple of NVidia or AMD cards, and enjoy passive income.

Algorithm: Proof-of-Work
Hashing Function: Ethash
ROI since launch: 525.52%
Curr. Price: $4.71 USD
Block Mining Reward: 3.2 ETC
https://ethereumclassic.github.io/

6. Litecoin (LTC)

If you can allow buying more or less expensive GPU, try mining Litecoin – all in all, this is one of the most successful Bitcoin hard forks. Why Litecoin?

  • It can be easily exchanged on a variety of platforms.
  • It’s less volatile than many other altcoins.
  • It’s one of the best GPU mining coins – you don’t have to buy ASIC because it uses SCRYPT protocol.
  • High speed and moderate transaction fees.

The top-10 world cryptocurrency with a $2.3 bln market cap, Litecoin will never be a wrong decision.

Algorithm: Proof-of-Work
Hashing Function: Scrypt
ROI since launch: 743.42%
Curr. Price: $36.27 USD
Block Mining Reward: 12.5 LTC
https://litecoin.org/

7. Bitcoin Gold (BTG)

Another great mining cryptocurrency 2020, Bitcoin Gold was created specifically for GPU mining. It’s based on the consensus between Equihash algorithm and POW protocol. It’s ranked as 39th world cryptocurrency with its $125 mln market cap.

By the way, an interesting chart from bitinfocharts.com reflects the leadership
of Bitcoin Gold in revenue in USD for 1 KHash / s.

One of the main reasons to try Bitcoin Gold is stability. Although it didn’t grow during 2020, it’s appeared to be less volatile than other altcoins. The coin has avoided being affected by the bearish trend this year – it’s a good sign.

Algorithm: Proof-of-Work
Hashing Function: Zhash
ROI since launch: -98.52%
Curr. Price: $7.11 USD
Block Mining Reward: 12.5 BTG
https://bitcoingold.org/

8. DASH (DASH)

Dash describes itself as digital cash in the world of cryptocurrencies. It enables swift and secure transactions around the globe via InstanSend and PrivateSend.

The best DASH ASIC miner is considered to be Antminer D3 produced by Bitmain. Is it profitable to mine DASH in 2020? It quite is. However, don’t forget that the mining profitability depends on the hashrate of your mining device, network difficulty and electricity costs in your region.

Algorithm: Proof-of-Work
Hashing Function: X11
ROI since launch: >9000%
Curr. Price: $65.74 USD
Block Mining Reward: 3.11 DASH
https://www.dash.org/

9. Dogecoin (DOGE)

The creation of Billy Markus, Dogecoin cryptocurrency was made just for fun, but it suddenly became popular and now is #33 world cryptocurrency with $219 mln market cap! Like Litecoin, it uses Scrypt protocol, so you don’t have to use very expensive machines to add DOGE to your portfolio.

However, it doesn’t mean you should use your laptop for mining. Dogecoin is highly popular, so is its mining difficulty. Use a CPU/GPU to enjoy steady performance and income.

Algorithm: Proof-of-Work
Hashing Function: Scrypt
ROI since launch: 216.51%
Curr. Price: $0.001769 USD
Block Mining Reward: 10,000 DOGE
http://dogecoin.com/

10. Ethereum (ETH)

In 2020, Ethereum has managed to get its second place back, and the price of the coin is expected to grow after reduction of reward from 3 to 2 ETH. As a result, a decrease in supply, if there is demand, usually flows into an increase in value.

JoeTechnologist creator Joe Rachinski claims ETH will cost $ 1,200 by the end of 2020. As we can see in 2020, this prediction didn’t work. Still, Nigel Green believes ETH will someday cost $ 2,500. This will be facilitated by increased demand for digital currencies, the popularity of smart contracts and the decentralization of cloud computing.

Algorithm: Proof-of-Work
Hashing Function: Ethash
ROI since launch: 4,352.08%
Curr. Price: $126.07 USD
Block Mining Reward: 2 ETH
https://www.ethereum.org/

Bitcoin (BTC) – The King

Bitcoin remains the king of cryptocurrencies with a current dominance index of 64.5% according to CoinMarketCap. A recent survey from a well-known crypto-community influencer @hodlonaut, more than 60% of cryptocurrency holders assign more than 75% of their portfolio to Bitcoin (BTC). It is a brand and has its own unique currency symbol – .

How much of your crypto portfolio is in BTC?

Moreover, the “2020 BTC block reward halving” is coming soon and will reduce the reward for the mined block from 12.5 to 6.25 bitcoins. A decrease in production, as a basic rule, means an increase in the value of the asset, especially with that constantly growing demand. There is still enough time to start mining some bitcoins.

It is important to understand that despite all the positive aspects, Bitcoin mining remains an extremely competitive market and the situation will only worsen in this sense. Be prepared to invest enough in mining equipment, technical support, and to pay some huge electricity bills.

Also, Bitcoin mining is dominated by ASIC mining machnines for several years already. Do not even try to get involved in mining it on a CPU or GPU.

Algorithm: Proof-of-Work
Hashing Function: SHA-256
ROI since launch: 8.215.50%
Curr. Price: $ 5,996.36 USD
Block Mining Reward: 12.5 BTC
https://bitcoin.org/

By the way, if you have a pretty moderate amount of mining power, you can increase your crypto mining profitability by joining a mining pool (mine together with others and share profit). Here are platforms allowing for it:

Coin Mining pools
Monero MineXMR, MinerGate, Nanopool, Dwarfpool
Ethereum ETHfans, Dwarfpool, F2pool, ETHpool, MinerGate
Ethereum Classic Ethermine, Nanopool, Miningpoolhub, 2miners
Ravencoin Pickaxe.Pro, Virtopia Mining Pool, XiTech, Zergpool
Litecoin Multipool, Prohashing, Litecoinpool, NiceHash, viaBTC
Dogecoin Aikapool, Litecoinpool, Multipool, Prohashing
Bitcoin SlushPool, BTC.com, F2Pool, Antpool, Poolin

Bottom Line

Is crypto mining worth it? Absolutely yes, if you calculate all investments and earnings beforehand and make up a thorough plan. Your budget should correspond with what you’re going to mine. The more popular and expensive a cryptocurrency is, the more powerful equipment is required.

Here you can calculate the average CPU or GPU mining profitability: https://whattomine.com

Good luck!

About Changelly

Changelly is a secure instant crypto exchange that has 150+ cryptocurrencies available to be swapped and bought at market-best rates. Operating since 2020, the platform and its mobile application attract over a million visitors monthly, who all enjoy quick and simple exchanges, low transparent fees, and 24/7 live support.

Mining Cryptocurrencies in 2020

Mining cryptocurrencies is one of the best ways to make money out of the cryptocurrency wave but the reality for mining cryptocurrency has changed rapidly over the past few years. Whereas in the past you could make huge sums of money by mining cryptocurrency things have without a doubt changed – it’s not that easy to mine profitably any more.

However you can still make money by mining cryptocurrency – you just need to keep a close eye on your best mining options. Read on to see how cryptocurrency mining can still pay off – even in 2020.

Your cryptocurrency mining options in 2020

Mining cryptocurrency profitably depends on the way you mine and also your choice of cryptocurrency. For example, you can buy your own mining rig or choose to mine in the cloud using third party computing resources. There are essentially three ways to mine cryptocurrency and each have pros and cons.

As a reminder, mining is basically the way a cryptocurrency network confirms and validates the transactions made by people on the cryptocurrency network – mining checks out the transaction and adds it to the blockchain. The reward for this mining process, which requires a lot of computing power, is paid in the form of cryptocurrency.

To mine you basically have three choices. First, you could choose cloud mining using cloud computing platforms – basically renting computer power in the hope to earn more from mining than the cost of the cloud computing resources. Another option is to use GPUs – the same computer kit used for playing computer games. And the last option is specialist kit containing ASICs.

Cloud Mining

Why mine using your own equipment when you can rent computing power in the cloud? That’s the thinking behind cryptocurrency cloud mining where you rent hashing capabilities from another company. You don’t need to store any equipment, it’s easy and cheap to get going too.

Looking around for cryptocurrency cloud mining companies you might find that people are somewhat critical of the companies providing these services. One of the most serious and reputable cloud mining companies you may choose is IQMining

IQMining was founded at 2020 by the group of blockchain experts. This company provides smart cloud mining solutions focused on affordable cryptocurrencies mining. The special feature of IQMining is frequent mining payouts within the shortest periods of time.

IQMining and several others cloud mining industry leaders offer the best possible deals. Yet, just as with any other mining strategy the difficulty lies in that the mining profits you earn will not be stable all the time because the value of cryptocurrency varies so much.

However, is it profitable? Yes, and you will need to do your own math to figure that out but the factors you should keep in mind are:

  • Your mining rewards, including the price of the cryptocurrency
  • The costs of cloud mining
  • Changes in mining difficulty
  • The price you pay for electricity, if any

GPU mining

GPUs or graphics processing units are usually installed in a PC to process gaming graphics, or to do 3D rendering. GPUs however are also good at mining cryptocurrencies. Think of Nvidia GPUs like the GTX 1080Ti or GPUs from AMD such as the RADEON RX 580.

It’s worth noting that each GPU has its advantages, for example Nvidia GPUs use less electricity but they are more expensive to buy than AMD GPUs. Likewise Nvidia GPUs generally perform better so you can mine faster. So performance, price and electricity consumption should all be taken into account. Furthermore, you need to add the current price of the cryptocurrency as well as the current mining difficulty for that cryptocurrency.

How long does it take to break even?

You don’t want to invest in expensive GPUs if you cannot make back your money – and relatively quickly, an important point given that the parameters for crypto mining can change fast. So, the less money you pay for your GPU mining kit the quicker you can get your money back by mining.

It’s about more than price though – you also need to keep an eye on things like warranties because your GPUs can break down. Again, a complete picture of all costs and potential risks involved is necessary before you invest in GPU mining.

How do you start with GPU mining?

Mining Ethereum is a good place to start and is arguably one of the best places to start mining coins other than Bitcoin, which has become very difficult to mine. But how do you start? It’s a simple process really – first, you need the hardware to mine – your mining rig. We list the components you will need below.

You also need the right operating system, mining software and a correctly configured BIOS. Finally you need to know what your personal wallet address is and also know the details of the mining pool you chose to join.

The start mining you need some type of chassis which contains essential components. First, you need a motherboard with sufficient suitable PCI slots alongside an SSD drive (16GB is just fine if you’re running Linux) plus at least 4GB of RAM as well as your choice of PSU and CPU. You may need PCI risers to plug your GPUs in, alongside the actual GPUs. We also recommend a meter that can monitor your power consumption.

Power supply mathematics

Note that GPUs can use a lot of power. So the PSU or power supply unit you buy for your rig needs to have sufficient capacity. A typical calculation would include a 150W allowance for the general system, 720W for six powerful GPUs and 360W for six risers so a total of over 1,200W in power supply capacity. You can choose to buy either one power supply of 1200W or indeed buy two 600W power supplies. It’s worth seeing which configuration offers the best value because, as we said, the less you spend on your mining rig the quicker you will reach breakeven.

Best OS & software for GPU mining

There are really three OS options when it comes to mining using GPUs: Windows or either HIVE OS or ETH OS, both Linux operating systems which were designed for cryptocurrency mining. It is easy to have a very long discussion about the relative merits of each OS, but we will note that Windows is the least difficult option to get started with. With Windows you can easily get a basic understanding of how mining works, and it’s great to just try out mining.

On the flipside Windows is relatively unstable for crypto mining and can entail various complications. As an alternative you could consider HiveOS which you can use free of charge to connect your first three mining rigs. It’s quite easy to set up HiveOS and you do your configuration and management all online. You also need to pick mining software on top of your mining OS, some of the best options include Ethminer, PhoenixMiner, CGMiner and of course Claymor. However, if you want to mine some of the rarer coins you may need to choose mining software that is less popular and which has less support.

Which cryptos are good for GPU mining?

The profitability of mining cryptos can change really quickly because of the number of factors involved. It, of course, depends to a large degree on the current price of the coin you are thinking about mining. A good place to check the value of cryptos and how it relates to mining is www.whattomine.com. Nonetheless, thinking long term about mining can be worthwhile in order to get past short fluctuations. Ethereum is commonly respected as the most important alternative to Bitcoin (i.e., an altcoin) and while Ethereum might not be the most profitable to mine on a specific day, mining and holding Ethereum can really pay off – if you sell Ethereum at a later high you could see a real boost to the profitability of your mining rig.

Picking the overclock on your GPU

The speed at which your GPUs run will affect how quickly they can process mining transactions, in turn meaning you can earn coins faster. If you have access to cheap electricity for example overclocking can help you mine more profitable. But higher clocking uses more power and there may be a point where the higher hash rates will be erased by the cost of your electricity.

The mining pool: another important choice

Often you cannot mine a crypto on your own – you need to join a group of people who all work together to profitably mine coins. This is called a mining pool. By collectively mining you can often generate mining profits much faster. However choosing a mining pool can be tricky – it involved a number of factors, of which trust is an important one. You also need to consider the size of the mining pool and find out whether the mining pool is stable enough to ensure consistent mining over time. There are two pools we can recommend if you are starting with mining – one is Nanopool, the other is DwarfPool.

Can you mine Ethereum with GPUs in 2020?

Frankly, some people might find doing profitable mining of Ethereum very difficult and for them it is essentially too late. Others could find that mining is profitable. In 2020 the cost of electricity is really what determines your crypto mining options – and countries with cheap electricity, think less than 10c US per kilowatt-hour, have an advantage. In calculating the profitability, you need to keep in mind the following factors:

  • What your mining rig cost you and the hash rate it delivers
  • The coin you’ve decided to mine, and its current price
  • The reward rate per hour, and per 30 days, and the total revenue in 30 days
  • The cost of your electricity per kWh and as a result per month
  • A calculation subtracting your rig and electricity cost from the rewards earned

You will then get to a break-even point in your investment. As of July 2020 a 3000 euro Nvidia rig will take about 5.5 years to reach breakeven – and this breakeven point can quickly change. Furthermore, if Ethereum reached higher prices in the near and medium term your breakeven point can rapidly change. So the overall scenario depends on such a range of factors that it is almost impossible to give a definitive opinion on the profitability of Ethereum mining at any given point in 2020 – except for saying that there is a chance that you can mine profitably.

Pros and Cons of GPU mining

We’ll discuss ASIC mining in the next section, but let’s summarise how GPU mining compares to ASIC mining first. GPUs are a good choice because they are easier to sell than ASICs – after all, you can use a GPU for PC gaming if you want to. It’s also easy to switch between altcoins with GPUs, and you can reprogram your GPU for a variety of purposes. However, most households will find that GPUs consume a lot of power when mining coins. Overall, GPUs are not that stable and, of course, you need a PC to run your GPUs. You will also need a little bit of PC hardware knowledge if you want to set up your own rigs. Finally, GPUs simply don’t have the same amount of mining power compared to an ASIC.

Mining with ASICs

ASICs are application specific chips: unlike GPUs, you cannot use an ASIC for any reason other than to mine crypto. Also, each ASIC is designed for a specific type of blockchain so you typically cannot rely on the ability to switch coins when you’ve brought an ASIC rig. For example, an ASIC for Bitcoin mining can mine Bitcoin and other coins based on the SHA256 algorithm, but will preclude you from mining the variety of coins you can mine with a GPU.

How profitable is ASIC mining?

Some of the better ASIC producers include BitFury as well as InnoSilicon. But how profitable is ASIC mining? Again, you have to work on a set range of variables when you consider mining profitability – and the pricing of cryptos move so quickly than an example is almost impossible. You need to consider:

  • The coin you’re planning to mine
  • The hash rate of your ASIC mining rig
  • Coins earned per day, and hence per month
  • The cost of electricity
  • The difference between the revenue earned and the cost of your electricity

However, you will likely find that the breakeven point for ASIC mining can be a lot shorter – in the manner of months, when compared to GPU mining which can take years before you recoup your costs. That said, the latest mining rigs can have a very long waiting time before you can get your hands on the mining equipment – up to six months.

Clearly ASIC mining can generate profits

So mining say, Bitcoin, with an ASIC mining rig can be profitable. But what are the pros and cons of ASIC mining? Well, ASIC mining is generally easier to set up compared to GPU mining, but note that ASIC mining uses more electricity – on the flipside, you can make more money using ASIC mining, which can compensate for the electricity cost. Furthermore, you don’t need a PC for ASIC mining as ASIC rigs are plug and play, and also generally more stable compared to a GPU mining rig. However note that ASICs can quickly become outdated and you could be stuck when you want to mine a different coin. You also need real cooling for ASICs and chances are that you will struggle to sell your ASIC mining rig. One other thing to note about ASIC mining: if a big player in crypto mining suddenly comes online you could find that your ASIC rig no longer copes with the increased difficulty in mining. In turn you won’t be able to mine enough coins to cover your electricity costs.

How to calculate your mining profits

There are plenty of tools to help you make this calculation, one of them is WhatToMine. This website can look a bit complicated at first so it’s worth reading the included guide so that you can understand how to use it. This guide will help you figure out your mining power, but you’ll need to assess your own electricity costs alongside the amount of power consumed by your mining rig of choice. Next, simply perform a subtraction to find out what the profits are.

Assessing profits and paying taxes

Experienced miners and cryptocurrency experts will obviously know how to extract mining profits but if you’re new to the mining scene you might wonder – how do I get the proceeds from my mining efforts? It is pretty simple really. When you set up your mining rig you specify which account is set to receive mining rewards – you supply your wallet address in other words. As you keep mining your balance in the mining pool will keep going up and when you reached a set level you will be able to request a pay-out from the mining pool. So, depending on the power of your mining rig you should be getting fairly regular pay-outs. Cloud mining might work slightly differently but in essence cloud mining pay-outs also follow regular intervals, paying you as you earn.

Don’t forget about taxes

Every country treats taxation of cryptocurrencies differently. To be fair, you might only need to pay tax once you change your cryptocurrency into fiat money – but do your own research depending on where you live because it may be that you will have to pay tax on mining profits even if you keep your coins. The legislation on cryptocurrencies is rapidly changing and though it is only outlawed in a couple of countries a few countries have slightly more advanced laws covering the use of cryptocurrency – and indeed the taxation of crypto profits.

What to do with mining profits?

Once you’ve made a bit of mining profit you might wonder whether you should simply sell the coins straight away, or hold it in case the value of the cryptocurrency goes up. If you decide holding is the best option it’s worth remembering that you’re keeping your coins until you need to spend it – so whether you lose or gain from holding coins will depend on exactly when you sell your coins to spend them. Other people might decide that they want to sell when they observe a peak in the price of the cryptocurrency they hold. In which case you could decide to re-invest when you think the value has fallen again. You have other alternatives however – you could decide to trade your coins actively. Trading crypto can be really interesting because there are so many coin pairs to choose from. For example, you could trade ETH against a number of other coins in the hope that you get more ETH. In contrast, trading your crypto assets against fiat money like dollars and euros can involve a lot more risk, whether you are trading in a crypto bull or bear market – due to the volatility of crypto.

Consider social trading platforms

Social trading could be a good alternative for some people. Social trading basically involves the idea of copying the trading efforts of others. These social trading platforms have two groups of users – on the one side you have active experienced traders, the second group being the newbie traders who follow active traders who proved to be successful. These beginner traders decide on their appetite for risk and their demand for reward and according to this select a matching trader that fits their goals. The beginner investor then copies the trades of this successful trader and sets the trading software to automatically copy the trades of the pro trader. You get many different social trading platforms and every platform has different technical functionality alongside a different take on how social trading works. It gives you a lot of options so that you can easily invest in crypto in a way that works with your goals.

Summing up cryptocurrency mining in 2020

So when it comes to mining in 2020 – the devil is really in the details. In other words, it depends exactly how you choose to mine and what you choose to mine. Importantly, it also depends on the cost of electricity where you lived. In fact, to a large extent mining profit comes down to the cost of electricity in your country: in the Ukraine you could more easily make money mining for example simply because the cost of electricity is around $0.041 per kWh. But the profitability of crypto mining could be very different in your country. So, cloud mining here can be the universal solution, especially when you have plans to scale!

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