- Your cryptocurrency mining options in 2020
- A Beginner's Guide to Cryptocoin Mining
- Cloud Mining
- Most Profitable And Easy Coins To Mine 2020 – Top Altcoin Mining Picks
- GPU mining
- Mining Cryptocurrencies in 2020
- How long does it take to break even?
- How do you start with GPU mining?
- MobileMiner: Cryptocurrency mining on iPhone! [9to5Mac]
- Mining 101: An Introduction To Cryptocurrency Mining
- Power supply mathematics
- Best OS & software for GPU mining
- Cloud Mining
- Mining cryptocurrency can be a lucrative endeavor with enough computing power
- Which cryptos are good for GPU mining?
- Picking the overclock on your GPU
- The mining pool: another important choice
- Can you mine Ethereum with GPUs in 2020?
- Best Cryptocurrency to mine (2020) : Easy and Cheap using CPU and GPU.
- Pros and Cons of GPU mining
- Mining with ASICs
- How profitable is ASIC mining?
- Clearly ASIC mining can generate profits
- How to calculate your mining profits
- Can you pause mining cryptocurrency
- Assessing profits and paying taxes
- Don’t forget about taxes
- What to do with mining profits?
- How can you mine cryptocurrencies?
- Consider social trading platforms
- Summing up cryptocurrency mining 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.
A Beginner's Guide to Cryptocoin Mining
And the last option is specialist kit containing ASICs.
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 2016 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.
Most Profitable And Easy Coins To Mine 2020 – Top Altcoin Mining Picks
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
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.
Mining Cryptocurrencies in 2020
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?
MobileMiner: Cryptocurrency mining on iPhone! [9to5Mac]
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.
Mining 101: An Introduction To Cryptocurrency Mining
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.
Mining cryptocurrency can be a lucrative endeavor with enough computing power
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.
Best Cryptocurrency to mine (2020) : Easy and Cheap using CPU and GPU.
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.
Can you pause mining cryptocurrency
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.
How can you mine cryptocurrencies?
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!