Mining Bitcoin and cryptocurrency can be very profitable if you have a powerful enough ASIC, GPU or CPU. Although it is merely impossible to mine Bitcoin with a CPU or GPU, there are tons of other coins that can be mined profitably. The amount of hash power your machine can produce can determine to a great extent if mining is going to be profitable.
Theoretically, you can mine profitably, if the earnings from mining cover all the expenses of mining. If you have a powerful GPU, CPU or ASIC, it is not enough to mine just any cryptocurrency. You must utilize the power of your machine and mine the most profitable coin. In this article, we will show you how to find the most profitable coin to mine.
Most Profitable Coin to Mine
There are 2 main ways of mining the most profitable coin. You can either mine the most profitable coin and profit in the short term or HODL coins and profit in the long term. First, we look at how to mine the most profitable coin in the short term.
Most Profitable Coin to Mine in the Short Term
Profiting on the short term means you are going to convert all mined coins to fiat. It is important to understand that there is no one specific coin that is profitable to mine at all times. You should mine the coin that is most profitable at the given moment. Before determining the most profitable coin, you must know a few things.
Hash Rate:
The most important thing you must know is the amount of hash power your machine can produce. Hash power of your machine varies with different hashing algorithms. Different cryptocurrencies use different hashing algorithms for mining. For example, Ethereum uses Ethash algorithm. A powerful graphics card like Radeon R9 295 X2 can hash Ethash algorithm at 46 MH/s. This does not mean, hash rate will be the same for different hashing algorithms.
To find the hash rate of your machine for a certain algorithm, first, you need to know the hashing algorithm of the cryptocurrency you want to mine, then search the hash rate of your machine for that algorithm. Heres a list of cryptocurrencies with their algorithm.
If you have mined any cryptocurrency with your machine before, you know the average hash rate your machine is capable of hashing it. If you haven’t mined before and want to find the hash rate of your machine, you can simply use Google. Heres a list of graphics cards with their hash rate for SHA-256 algorithm. For Ethash algorithm, check here. For other algorithms, you can look it up on Google.
Power Cost:
Mining consumes a lot of electricity. To find the electricity cost of mining, you first need to know the power consumption of the mining setup. This includes the total power consumption of graphics cards, fans, motherboard, and CPU.
If you are mining with an ASIC, you can easily check the power consumption on the manufacturer’s website. If you are mining with a laptop (not recommended), you can check the power adapter.
If everything fails, you can purchase a small power consumption meter to measure the power consumption of the mining setup. You can check out those devices here.
The power consumption is measured in watts. A kilowatt is 1000 watts. Electricity is charged usually by the kilowatt-hour (kWh). This means you need to know the hourly power consumption of your mining setup. But don’t worry, this is easy to do. Almost any equipment displays the power consumption in watt-hours. For example, if your graphics card manufacturer says it consumes 200W, it means 200 watts per each hour.
To find the electricity cost per kilowatt-hour (kWh), you can look at your electricity or simply search on Google. If the total power consumption of your mining setup is in watts, you need to convert to kilowatts. Remember, 1000 watts = 1 kilowatt.
The electricity cost per kilowatt-hour (kWh) is 12 cents where I live.
Pool Fees:
This is the fee of the pool you are mining in. Heres a list of cryptocurrency pools. Some of the pools have 0 fees. Find the best pool for your cryptocurrency.
How to Find the Most Profitable Coin to Mine
Now that you know all the information needed to find the most profitable coin, it is time to find it. For this, you must use a mining calculator. You can use CryptoCompare or WhatToMine calculators.
Enter the hash power of your mining machine, the power consumption, Cost per KWh, and pool fees. Hit calculate. Repeat this for all the coins listed in CryptoCompare or WhatToMine. The cryptocurrency with the highest profit is the most profitable coin to mine.
Repeating this calculation for all coins is tedious work. If you have the graphics card listed on WhatToMine, you can calculate the profitability for all coins at once. This saves a lot of time. Simply enter how many graphics cards you have in the field next to the type of graphics card and press the button till it turns green. For example, if I have 3 1080Ti cards, this is how you do it:
When you click calculate, you will see the most profitable coin to least profitable to mine.
Important note: If you have a mining rig, you can hash almost any algorithm. But, if you have an ASIC, you can only hash one algorithm. That is one advantage of having a custom built mining rig.
Most Profitable Coin to Mine in the Long Run
Some miners mine cryptocurrency for the pure potential of the coin. Their hope is that this coin will appreciate in the future and bring them profit. Yes, this can be a good strategy only if they can predict the future price of the coin. Miners of this type sometimes mine cryptocurrency even at a loss. This can certainly work out if you compare the historical price of Bitcoin, Ethereum, Zcash, and other cryptocurrencies with the price it is today.
Everyone has a set of cryptocurrency they like to HODL but this way, profit is never guaranteed. You are solely betting on the price of the coin. Here are my top picks of cryptocurrency you might want to HODL if you like this strategy:
Bitcoin – First-mover advantage.
Ethereum – The sheer scale of the network and the projects being built on the Ethereum network.
Monero – Most popular privacy-focused cryptocurrency. There will always be use case scenarios for a privacy-focused coin.
Mine or Buy Cryptocurrency?
One interesting consideration is mining vs. buying cryptocurrency. If you don’t have expensive ASICs or mining rigs, you can always buy some cryptocurrency. As to which is more profitable, it is dependant on a variety of factors. Check out our article where I compare mining with buying cryptocurrency. Another interesting consideration is cloud mining as a way of earning a profit. Check out how much can you earn from cloud mining here.
Conclusion
There are 2 ways of mining cryptocurrency for profit. You can either mine and sell the most profitable coin in the short term or HODL a coin you mined for the long term. The hash power of your machine can determine to a great extent if your venture is going to be successful. To find the most profitable coin to mine, you must use a mining calculator.