We are all aware of what cryptocurrency mining means! It is the process by which high computational powers and tools are combined to verify the crypto data! This creates and adds more crypto coins into the blockchain network. There are crypto miners available to solve the complex mathematical equation to add the coins to the blockchains while in exchange they receive rewards in terms of transaction fees and coins.
However, the process is not as easy as it seems! You need to remember that all these are highly technical jobs and unless you are mining profitable coins, the effort goes to waste. Let’s find out more about coins that should be mined.
With so many varieties of cryptocurrency coins available in the market, Bitcoins are the most popular ones in the market! You will also be intrigued to find out that it is highly profitable too. In other words, it has a market capitalization of $1 trillion as of October 2023. Yup, that is true! With more and more users investing in Bitcoins, this number is only increasing day by day.
There are several developers as well as investors who can envision the massive growth of Bitcoins in the upcoming years. This is a decentralized and censorship-resistant digital currency that can be jiggly reliable when you are investing largely in the cryptocurrency network.
Several factors can influence the growth and profitable margin of different cryptocurrencies, so let’s find out more about that!
1. Block Reward
This is the measure of several coins designed and the number of coins that are distributed to the miners to create the blockchain. The higher the block reward, the higher the profit earned by the miners.
2. Block time
This is the average time one needs to look for a new block arranged on the blockchain. A shorter block time is the confirmation of higher rewards for the miners again. This means the transactions are verified faster.
Locating a new block on the blockchain can be a hard thing to do! According to the network hash rate, the level of difficulty in locating these blocks varies and is adjusted from time to time. When the difficulty level is so high, locating blocks becomes harder based on the protocol system.
4. Price of each coin
This is the market value of every coin in the realm of cryptocurrency! It is implied that if the price of the coin is higher, your rewards will also be paid at higher rates.
5. Hash rate
Now you need to understand the concept of hash rate. This is recorded as the computational power which is used to mine a particular network. If the hash rate is higher that means the security and the rate of confirmation will also be higher. However, this will make the mathematical expression more complex and the energy consumption will also increase.
6. Hardware cost
To mine the coins in cryptocurrency, you need high-tech and costly hardware tools. It depends on the miners to decide how much they wish to invest in their hardware equipment.
7. Power consumption
Here is another vital factor that one needs to bring into consideration as well. Mining hardware can use up a massive amount of energy. This accounts for higher costs and environmental impact.
Well, with that now we can move on to catching a quick glimpse of what are the cryptocurrencies that yield higher profits for the miners. So let’s find out.
As we already stated, Bitcoins are the highest and most profitable cryptocurrency with a market valuation of $1 trillion in 2023. So now you know why it tops the list. The rewards and fees for the miners are also high when it comes to cryptocurrencies like Bitcoins.
The coins are based on a protocol called the proof-of-work (PoW) consensus mechanism. This makes the mathematical equations and algorithms harder to solve for the miners. But once they do it, the rewards are high and impressive. Based on the principle of the SHA-256 algorithm, Bitcoins are solved by ASICs.
Distinguishing feature of Bitcoins-
There are a few features of Bitcoins that make them superior to the rest. Since it is not controlled by a central authority, these cryptocurrencies are built on the concept of decentralization. In other words, anyone is allowed to join and participate in the operation with simple identity verification and proof. The security of Bitcoins is also tight which also makes them immune to the attacks of hackers and cyber theft. Another striking feature is its scalability and adoption to the environment.
Now it is the second-largest cryptocurrency in the digital world. This has a capitalization and market valuation of $400 billion as of October 2023. Since it offers decent rewards, Ethereum is stated as one of the fairly popular cryptocurrencies in the market. Its functionality is mainly based on the proof-of-work (PoW) consensus mechanism. The Ethash algorithm is solved by GPUs where the mathematical equations are solved to add new blocks on the block chains.
Several qualities of Ethereum make it quite a favorable option for both investors as well as miners. For example, its smart contract feature is simply commendable! This offers a platform for the creation as well as the establishment of smart contracts. Various applications are permitted due to the presence of these self-enforcing agreements.
You will be surprised to find out that Ethereum has an actively growing community around the globe with users, investors, and miners. Plus, the technical features of Ethereum are constantly evolving, making it quite an innovative digital coin to invest in.
This is one of the most secure platforms for dealing and transacting in terms of cryptocurrency. With over $10 billion as of October 2023 capitalization, this is also quite a decent choice for miners to invest in. Complex mathematical problems need to be solved here to add blocks to the continuous chain. Based on the RandomX algorithm, complex problems are solved with the aid of CPUs.
Here are some features of Monero that you should know about. For example, monero makes use of stealth addresses to avoid revealing the identity of the sender as well as the receiver of the transaction. Another striking attribute of Monero is the Ring signature. The amount and origin of transactions are maintained confidential through this system. Bulletproofing is a mechanism used to reduce the size and cost of a transaction.
Here is another privacy-oriented cryptocurrency that is often preferred by investors and miners for its fair share of benefits. This is recorded as a market capitalization of over $5 billion as of October 2023. The rewards and the fees for the miners are pretty convincing and profitable and hence Zcash is often opted for, especially by the miners. The proof-of-work (PoW) consensus mechanism is put to use to solve complex mathematical expressions and verify the coins. The Equihash algorithm used by Zcash is easily solved by GPUs.
Apart from that, there are several characteristics of Zcash that one can take into account. Zcash carries the concept of zero-knowledge proof! Every information related to the transaction is secure and hidden from the eyes of the public. Both the shielded and transparent kinds of transactions are offered by the system. You may choose which one works best for you. Selective disclosure is another major benefit of engaging with Zcash. Here you are permitted to view keys or payment disclosures without having to compromise the security of the data.
This is one of the oldest existing cryptocurrencies in the market. Also, being one of the most established in the market, it carries a capitalization of over $20 billion as of October 2023. Since it offers consistent rewards and fees to the miners, this is a popular cryptocurrency mining option. Utilizing the Scrypt algorithm, they are mined by ASICs. There are a couple of factors that make it special! Did you know that Litecoins are more speedy in adding blocks when compared to Bitcoins? The average block time of 2.5 minutes while for Bitcoins, it is 10 minutes. The block size is also larger, 4 megabytes compared to Bitcoins which are 1 megabyte.
6. Raven Coin
This is a relatively new kind of cryptocurrency in the market. The market capitalization of over $2 billion as of October 2023. With a steady flow of rewards and pay, this is a suitable option for the miners. Working on the X16R algorithm, they are solved by the GPUs. Digital assets can be created with the aid of Raven Coin which includes tokens, shares, bonds, coupons, certificates, and so on. These assets can also be transferred from one point to another without any restrictions working in the middle.
Here is another comparatively new version of cryptocurrency that you will come across. It has a market capitalization of $1 billion in 2023. Built on the Cuckoo Cycle algorithm, they are solved by GPUs. A protocol called the Mimblewimble is followed by the Grin. The privacy and security policies are very tight along with a high scalability rate.
The emission schedule is linear and constant. Distribution of new coins over a constant rate is often initiated. Having a simplistic approach in terms of design, this is an ideal option for the miners.
So, now you can decide, accordingly, Which cryptocurrency is most profitable for you.