What Is Crypto Mining and Is It Still Worth in 2024?

The essence of the “production” of Bitcoin and other proof-of-work cryptocurrencies is mining – a process that secures the network and encourages cooperation. In exchange for solving complex equations, crypto miners are rewarded with cryptocurrencies. This symbiosis has been working for years, but recently, it has become increasingly difficult to profit from crypto mining. Why is this so, and is cryptocurrency mining still worthwhile in 2024? Let’s take a peek into the world of cryptocurrency mining.

Key Highlights for (New) Crypto Miners

• Mining allows you to earn cryptocurrency without buying it.
• Miners receive cryptocurrency as a reward for completing blocks of verified transactions added to the blockchain.
• You need a graphics processing unit (GPU) or an application-specific integrated circuit (ASIC) to set up a mining rig.

As with conventional mining, in crypto mining, it is the miner’s job to discover the resources. And while the reward for extracting gold from the ground is a sum of money, things are a bit more complicated when it comes to cryptocurrency mining. There, the miner is rewarded for solving a difficult puzzle. Cryptocurrency mining is, therefore, the process by which blocks of transactions are added and verified to a public blockchain. It is also the process by which new crypto-coins are created – a mechanism that protects the integrity of the blockchain and encourages cooperation in the network.

While this process has so far achieved good results in terms of reliability, it has also received criticism for the energy required to operate the network. Bitcoin alone uses more electricity than in some countries. Many cryptocurrencies (such as Ethereum) therefore introduce a proof-of-work system that consumes significantly less energy, although the king of cryptocurrencies, Bitcoin, remains with the old system.

In the good old days, bitcoin users could join mining from their personal computers. Profitable mining today requires the use of highly specialized mining facilities. Since solo mining is challenging, many miners join a mining pool to increase their chances of winning a block reward distributed proportionally among the members.

How Crypto Mining Works?

Because this responsibility is shared by many users worldwide, Bitcoin is a decentralized cryptocurrency. It does not rely on any central authority, such as a government or bank, for its reliability. Mining is the process by which users reach a consensus on the accuracy of those shared records. About every 10 minutes, the network generates enough transactions to create a new block, which is essentially a collection of transactions encoded to be tamper-proof. A user who successfully enters a new block into the records receives a mining reward. When you think a little, you see that mining and games of chance, such as roulette and poker, have many similarities.

Miners’ computers run crypto formulas trillions of times per second, hoping to be the first to produce a value that falls within a narrow mathematical range. Successful completion of this task unlocks the ability to submit a block. If other computers on the network find it consistent with their records, the miner receives a reward.

Why Do We Need Miners

Mining is a process of auditing and verifying transactions, thus preventing double-spending. Double spending occurs when someone tries to spend the same coin twice. With physical currency, you can’t buy a drink in a pub with a $10 bill and then use the same bill to pop into a grocery store and buy some groceries. As the culture of safety and security is big in the crypto world, it is clear that miners are actually the guardians of law and order.

How Much Do Cryptocurrency Miners Earn?

Let’s look at the example of Bitcoin. Each new block gives the miner a block reward consisting of newly generated bitcoins (block grants) and transaction fees. Since a block reward consists almost entirely of a block subsidy, we consider it a block reward in principle.

So, Is It Worth Mining Crypto?

The idea of mining and receiving cryptocurrency in return sounds appealing. Although the days of mining BTC using a computer processor are over, having a physical device to participate in mining is not always necessary. With BTC, the block subsidy started at 50 BTC in 2009 and was halved every 210,000 blocks. As a result of these halvings, the mining reward decreased to 25 BTC in 2012, then to 12.5 BTC in 2016, and finally to 6.25 BTC in 2020. The next halving is expected in 2024. As of May 2021, the block reward gives miners about 300,000 USD per block. If you want to know more about Bitcoin halving, you can read our article here.

What Do You Need for Crypto Mining?

You can mine cryptocurrencies using CPU, GPU, FPGA, or ASIC devices. Some altcoins can still be mined with GPU cards. FPGAs may also be an option, depending on the mining algorithm, weight, and power costs. But when it comes to Bitcoin, ASIC devices are the most efficient. Let’s take a look at the different methods of cryptocurrency mining.

1. CPU

It is one of the most effective long-term cryptocurrency mining options. Processors act as versatile chips that are responsible for distributing commands between different parts of the computer. Cryptocurrency mining with a home processor is possible for coins such as Monero, Zcash, and Byte. But it will be a slow process, and the electricity costs may be more than the value of the coins. Evergreen Miner v2 offers a plug-and-play mining option that brings in about 50 EUR per month on average. Prices range from 300 EUR for the very basic Starter Kit to 2,800 EUR for the Starter Kit Pro, which provides quiet mining equipment, doesn’t generate much heat, and doesn’t consume much to run.

2. GPU

3. ASIC

ASICs are application-specific integrated circuits – meaning these computers are designed for a single purpose. ASIC mining rigs are fully dedicated to cryptocurrency mining. ASICs are less flexible and more expensive than FPGAs. Still, due to their speed, known as hash rates and power consumption levels, they are the most efficient option for Bitcoin mining.

What About Electricity Bills?

If you don’t have a cheap source of electricity, your mining costs may exceed your reward. ASICs vary in price and performance, so you should do your homework before starting. For example, we can mention that AntMiner S9 ASIC is often used, which in January 2022 was sold at around 700 EUR.

Let’s take a look at Bitcoin mining with the aforementioned AntMiner 9. The NiceHash platform calculated that based on prices from January 2023 (the price of electricity for households in Europe according to official data = about 0.21 EUR/kWH ), in one month, AntMiner S9 could bring about 34.5 EUR in BTC but consumed 207.4 EUR of electricity, which means a total loss of 172.9 EUR. However, this does not necessarily mean that Bitcoin mining is not profitable. These calculations may change if the price of electricity decreases or if the value of bitcoin increases. If you believe that the value of Bitcoin will increase over time, you can consider your monthly losses as a long-term investment.

4. FPGA

FPGAs can be programmed and reprogrammed for different functions and applications. They are flexible and more affordable than ASICs but less efficient in cryptocurrency mining.

5. 5G

VoskCoin also mentions Bobcat mining rigs like the Bobber 500 as a way to mine Helium (HNT) using 5G mobile network and LoRaWAN wireless coverage, but not as a very interesting or profitable option – it’s a straightforward option. HNT mining is done by simply installing the device on your home or office window. “Hotspots” enable miles of wireless network coverage for millions of devices in your area using Helium LongFi technology, and you get rewarded for it in HNT. This option is not profitable initially, but if you believe in HNT, it can pay off in the long run.

Mining Pools

Mining pools allow multiple miners to pool their efforts to mine bitcoins. Over time, Bitcoin mining has become more and more difficult and requires more and more resources. Therefore, pooling resources makes it easier and cheaper to become a Bitcoin miner. In these gatherings, many network participants pool their computing power together. The block rewards are then distributed among the pool members in proportion to the computing power they have contributed. Usually, a mining pool also assigns a coordinator to ensure that miners do not waste hash power and to pay out rewards to participants.

Cloud Mining

You can also join a cloud mining “farm,” leaving the hardware and software to the farm owners, thus avoiding technical feats. In general, cloud mining usually consists of paying someone else to mine on your behalf. Then, the farm owner is expected to share the profit with you. However, this option is very risky, as there is no guarantee that your investment will return. Many cloud mining services have been proven scams, so be careful.

Which Cryptocurrencies Can I Mine from Home?

Mining Bitcoins on your home computer is no longer feasible, but you can still mine other cryptocurrencies at home – if you’re willing to put in the effort.

1. Dogecoin (DOGE)

Although Dogecoin (DOGE) is a memecoin with no actual use in the real world, it has become a popular altcoin with a large fan base, including Elon Musk. DOGE is designed to add new coins to the ration each year, while Bitcoin’s supply is limited to 21 million coins. This is an added incentive for anyone mining it.

How to mine Dogecoin (DOGE)?

First, get a wallet to store your earnings. You can download the main Dogecoin wallet or search the site for other suitable online wallets. CPU mining works best with CPU software, as mentioned above. Mining this way is possible, but it is slow. Graphics cards can be used to increase mining speed. AMD and Nvidia cards are your best choices. If you choose to mine with GPU, use cgminer or cudaminer software.

Although individual mining is feasible, it is recommended to join a mining pool as you can take advantage of higher processing power and speed to generate higher mining returns. After mining, Dogecoin can be traded on crypto exchanges such as Binance and Bitstamp.

2. Ethereum Classic (ETC)

The main goal of the Ethereum Classic project was to ensure the survival of the original Ethereum blockchain and offer an alternative to people who disagreed with the new proof-of-stake method – which made mining standard Ethereum no longer possible. This was good news for Ethereum Classic, as the funds that were officially used to mine ETH can easily be used to mine ETC.

How do you mine Ethereum Classic (ETC)?

Ethereum Classic mining is almost identical to Ethereum mining and supports the same hardware and software. If you were Ethereum, you could start mining ETC with your existing hardware by switching to a mining pool that supports Ethereum Classic. On the software side, the Ethereum Classic network’s Proof of Work mining algorithm is ETCHash. There are two main types of hardware you can use to mine Ethereum Classic profitably:

GPU: In general, the best graphics cards for mining Ethereum Classic are the most energy-efficient cards with at least 4GB of memory. You can find the tab by typing “Best GPUs for mining Ethereum Classic in 2024” into Google.

ASIC: There are various ASIC miners available for Ethereum Classic that you can find by typing “ETHash ASIC Miners 2024” into Google.

3. Monero (XMR)

Monero (XMR) is a popular anonymous digital currency. This altcoin network is specifically designed to resist the development of Monero-specific ASICs, making it very suitable for mining with a home computer.

How to mine Monero (XMR)?

To get started, you first need to download a wallet in which to store your coins. It is recommended to use the official Monero GUI client.

After that, the next step is to download mining software that supports Monero, such as MultiMiner. MultiMiner is one of the easiest to use, but other mining options are available online. After mining, exchanges that trade Monero include Binance and Bitstamp.

Conclusion

So, is it worth mining in 2024? As we have seen throughout the article, there are many mining options. Sure, PC Bitcoin mining is over, but you can still join a mining pool. But if you don’t like Bitcoin mining, you can mine other cryptocurrencies like Helium, Ethereum Classic, Monero, Dogecoin… Mining cryptocurrencies from home can be a great way to earn money. You will need relatively simple equipment that is easy to obtain, and the job is simple.

Choose your cryptocurrency and equipment carefully and pay attention to energy consumption and costs associated with mining. To increase your chances of profitability, it is also important to stay informed about changes in the market. And to track the difficulty levels of the cryptocurrencies you mine. Then, adjust your mining strategy as needed to make sure you’re always mining the most profitable cryptocurrencies. Well, with all that covered, let the crypto fun begin!

Share Our Content on Social Networks:

FAQ