The Best Proof-of-Work Crypto to Mine in 2022 Other than BTC and ETH
While the possibilities of profits have reduced for BTC and ETH mining, you can still try mining these 6 cryptocurrencies.
Bitcoin mining at its peak was an arms race that fuelled demand for graphics processing units (GPUs). Microchip developers, and GPU makers, reported terrific financial results as demand for mining devices increased. The company shares traded at their best levels in a decade, making companies highly valued. People even today are fancied by cryptocurrency mining and often look for the best crypto to mine.
Mining is the most common way to profit from cryptocurrencies. It is an essential component of the blockchain industry and is necessary for the smooth operation of the crypto ecosystem. Many crypto fans want to get involved in mining, even when it poses some serious challenges to miners and pays significantly less than it used to.
However, this does not preclude cryptocurrency mining from being profitable or highly convenient. What is cryptocurrency mining? Is mining still profitable? Is it legal, and how to get started? This article will help you understand all these concepts and provide insights into the best cryptos to mine in 2022.
Understanding Cryptocurrency Mining
The practice of validating transactions on a blockchain ledger is known as mining. People who contribute to mining are known as miners. These miners usually employ devices with massive computing power. Any person or organisation with sufficient hardware and software resources can mine crypto assets. However, the ubiquity of mining and rising costs make it an increasing challenge for newcomers.
Most people associate cryptocurrency mining with a method of creating new coins. In contrast, crypto mining involves validating bitcoin transactions on a blockchain network and adding them to a distributed ledger. Most importantly, crypto mining prevents digital assets from being spent twice on a decentralised network.
What Happens During Crypto Mining
The digital ledger needs to be updated during a cryptocurrency exchange by debiting one account and crediting the other, just like a physical currency. This exchange of assets places an additional obligation on miners to prevent double network spending.
Meanwhile, new currencies are created to compensate miners for their contributions to network security. Since distributed ledgers have no centralised authority, the mining process is essential for transaction validation. Therefore, miners are encouraged to protect the network by engaging in transaction validation, increasing their chances of acquiring newly mined coins.
All crypto coins are mined through a consensus protocol. The premiere most crypto coins are based on the Proof of Work(PoW) consensus. Crypto assets such as Bitcoin and Ethereum are powered by Proof of work consensus.
What is Proof-Of-Work?
Proof Of Work is the initial consensus algorithm powering the blockchain ecosystem. The algorithm validates the transaction and adds a new block to the chain. In this algorithm, miners compete to complete the network transaction.
As a transaction gets validated, the participating miners are rewarded, and a new block is added to the ecosystem. Many trials and errors are required before creating a valid block. The main operating principle of proof-of-work is a mathematical puzzle that miners must solve. Let us understand how the Proof of work protocol works in bitcoin.
Proof-of-Work Protocol in Bitcoin
Here's how Bitcoin uses Proof of work to protect its blockchain. When a bitcoin transaction takes place, it undergoes a security check before being collected into a block to be mined. The block hash is then created using Bitcoin's proof-of-work method. Hashing is the process of converting data input of any length into a fixed-length string using a defined method.
Bitcoin uses the SHA-256 algorithm, which generates 64-character hashes every time a transaction is processed. Miners compete over who can produce a target hash more minuscule than the block first. The winner will be tasked with uploading the latest block of transactions to the Bitcoin network.
Bitcoin incentives also include freshly minted coins and transaction fees. Bitcoin has a fixed maximum supply of 21 million coins, although miners are still getting paid for their efforts beyond that. Every 10 minutes, Bitcoin'sBitcoin's proof-of-work algorithm attempts to add a new block.
This addition is achieved by changing the difficulty of bitcoin mining depending on the rate at which miners add blocks. If mining is done too fast, hash calculations become more complex.
Advantages of Using Proof of Work Consensus Mechanism
Now that the Proof of work consensus is understood let us see some of the advantages of using the Proof of Work consensus mechanism.
- Proof of Work consensus is impartial and an amorphous concept. You don't have to start with any crypto asset, as block rewards allow you to go from zero to a positive balance.
- Proof-of-Work is an established consensus mechanism that has made bitcoin and Ethereum stable and scalable for many years.
What Are The Different Ways To Mine Crypto?
Crypto mining can be categorised into three sections depending upon the hardware used.
ASIC Mining
ASIC (Application-Specific Integrated Circuit) offers the most environmentally friendly crypto-mining service. ASICs are made explicitly to mine or solve complex arithmetic calculations.
The majority of ASIC miners are built to mine cryptocurrencies in particular. ASICs are typically very affordable to users and cost around $350 to $550. ASIC miners have a more effective hash rate and are 100,000x more efficient than the industry-best CPUs and GPUs used to mine crypto.
GPU Mining
The GPU is a graphics enhancing and processing device that we use to watch movies and play games on our devices. Users can also use it to mine cryptocurrencies. GPU mining is less efficient (although hash rates at times are higher) and more expensive than ASIC mining.
However, it offers miners flexibility by allowing users to mine several coins using a single device. Even if most people have a GPU, the computer it's installed on is unlikely to be powerful enough to be a viable mining rig.
In order to get the maximum out of a GPU mining rig, not only do you need to spend a lot of money on a GPU, but you also need equally powerful hardware that can handle the intense workload. In addition, the maintenance costs of the GPU miners are incredibly high due to the high power consumption.
What Are The Best Cryptocurrencies To Mine in 2022?
To this point, we have understood what mining is, how it works, and what are the different mining hardware devices that users can use for mining. Let us address the best crypto to mine in 2022.
Ethereum Classic (ETC)
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Among the best cryptos to mine in 2022, Ethereum Classic is the most viable option. Ethereum needed to perform a hard split to restore and recover post the DAO hack in 2016. Ethereum Classic (ETC) is a significantly updated and improved version of the original Ethereum network.
Ethereum Classic boasts a market cap of more than $6 billion. It has a sizable following; thus, earning the mining rewards requires significant computing power.
Features:
Ethereum Classic has the potential to be a profitable coin to mine because:
- It can be mined through a CPU or a GPU and ASIC miner.
- Even when conventional mining is becoming expensive, complex, and less rewarding, you can expect to earn approximately $6 per day.
- Ethereum Classic is poised to stay and scale for a long duration. Miners can expect a stable income from mining this coin.
Tokens: ETC
Consensus Protocol: PoW- Proof of work
Algorithm: Etchash
New block generation time: 9-15 seconds
Litecoin
Litecoin is a peerless cryptocurrency distributed over the MIT/X11 protocol. The code used in Litecoin was derived from the Bitcoin system. Additionally, the creators increased the transaction and reduced the gas fee. Litecoin is one of the better-known names for cryptocurrencies.
It'sIt's a globally accepted payment method so mining it for profit is a good option. LTC uses the SCRYPT protocol, which eliminates the need for ASIC mining machines.
Features:
The features that make Litecoin amongst the best cryptocurrencies to mine in 2022 are:
- Litecoin works on the Proof-of-Work consensus protocol based on the Scrypt algorithm.
- It utilizes significantly less energy and power to carry out transaction processing.
- Litecoin can be mined through a GPU miner and is thus a viable option for users to explore.
Tokens: LTC.
Consensus Protocol: PoW- Proof of work.
Algorithm: Scrypt.
New block generation time: 1-3 minutes.
ZCash
In terms of anonymity and confidentiality, ZCash is still amongst the best cryptocurrencies to mine in 2022. It is also ASIC-resistant crypto meaning you can utilize CPU and GPU for mining. The founder of ZCash emphasised the value of anonymity and subsequently helped it gain a strong foothold among crypto enthusiasts and the crypto industry.
Mining ZCash is comparatively more complex due to its ASIC resistance but is worth the rewards. The price of the coins is not abrupt but stable and predictable, making it a solid investment for the long term.
Features:
The salient features of the ZCash coin are:
- The zk-SNARK zero-logs protocol used by ZCash improves the security and privacy of the ecosystem.
- Transactions in the ZCash system are highly anonymous and private.
- ZCash uses the Equihash algorithm for mining, which uses a CPU. The coin is therefore resistant to mining on most ASICs.
Tokens: ZEC.
Consensus Protocol: PoW- Proof of work.
Algorithm: Equihash.
New block generation time: 2.5 to 3 minutes.
Monero
Monero, one of the best privacy-focused coins, improves transaction anonymity. Unlike Bitcoin, which contains transaction data such as the amount sent and the sending and receiving address, Monero does not store any transaction log; as a result, it is secure and private.
With proper equipment and software, Monero is one of the most profitable cryptocurrencies to mine in 2022, with a more than $3 billion market cap. It has an infinite supply and uses the RandomX hash function. As a result, it offers an incredible block time of less than 2 minutes.
Features:
- Users don't need to invest much in mining as they can mine Monero with CPUs.
- As a result, mining Monero is highly affordable and significantly less power-consuming.
- One Monero is mined every 24 seconds. Miners are rewarded with 4.99 XMR for their participation in block processing.
- It is possible to mine Monero solo, but with GPUs intact, joining mining pools can result in additional reward generation.
Tokens: XMR.
Consensus Protocol: PoW- Proof of work.
Algorithm: RandomX.
New block generation time: 2.03 to 2.15 minutes.
Dogecoin
Who hasn't heard about the famous Dogecoin? Dogecoin started as a meme coin and is now amongst the most vibrant cryptocurrencies. The cryptocurrency, whose logo is a dog, was created by Billy Markus and Jackson Palmer in 2013. Merely nine years later, it has outperformed most alt-cryptocurrencies.
It has already disrupted the crypto industry and has got backing from Elon Musk for Tesla products. It uses the Scrypt algorithm, which, like Litecoin, prevents users from adding Doge to their portfolio by buying expensive mining hardware. Meanwhile, users can use a GPU/CPU to ensure efficient mining performance.
Tokens: DOGE.
Consensus Protocol: PoW- Proof of work.
Algorithm: Scrypt.
New block generation time: 1 minute.
Bitcoin Gold
Bitcoin Gold is a Bitcoin extension that uses Equihash or Zhash proof-of-work encoding algorithms. BTG aims to prevent the ASIC device owners from monopolising the mining operation. It also strives to restore the ideals of decentralisation and anonymity.
Solo miners can mine Bitcoin Gold with their CPUs and GPUs using the Equihash BTG algorithm. Beginners interested in crypto mining with GPUs should consider BTG. Features like convenience to mine and highly decentralised make Bitcoin Gold one of the best cryptos to mine in 2022.
Tokens: BTG
Consensus Protocol: PoW- Proof of work.
Algorithm: Equihash 144.5.
New block generation time: 8 to 10 minutes.
In 2022, the best crypto coins to mine are those with low-cost mining options. Mining should be both affordable and convenient. If you want to mine cryptocurrency without spending a lot of money, Monero and Dogecoin are excellent options. Monero, for example, can be mined on standard computer hardware with CPUs.
However, if you want to mine the most profitable cryptocurrencies, Bitcoin and Ethereum should always be your first choices.
To Wrap It Up
Proof of Work(PoW) and Proof of Stake(PoS) are distinct cryptocurrency consensus mechanisms with significant differences. Blockchain transactions are validated using both techniques and added to a blockchain. The Proof of Work mechanism validates transactions and adds new blocks to the ecosystem. As a result, it leads to the creation of new coins distributed among the participating miners.
Proof of Stake contradictorily makes it easier for more people to act as validators on blockchain networks. In the Proof of Stake mechanism, there is no need to buy expensive processing equipment or waste enormous amounts of electricity. You only need coins to stake, and you can contribute to the validation of transactions.
Proof of Work is the most common consensus method for validating blockchain transactions. Proof-of-work miners contribute to the blockchain consensus, ensuring that only legitimate transactions are recorded in the blockchain.
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