Imagine being a factory dedicated to manufacturing pencils, and all of a sudden, the world decided to use ballpoint pens. This is the situation a lot of miners are in, to some extent, with Ethereum mining officially ending as The Merge has completed.
Ethereum mining requires either sophisticated GPUs or a special ASIC computer. With millions invested into the mining of ETH and the whole protocol changing the way rewards are given, the question is what are Ethereum miners going to do with their graphic card miners now?
This guide aims to help solo Ethereum GPU miners find a new home for their rigs. People who are new to GPU mining can also take advantage of this guide to dive into the venture.
Table of Contents
Proof of Work vs Proof of Stake
The reason we wrote this article is that Ethereum, one of the most profitable cryptocurrencies for GPU mining, has transitioned from proof-of-work (PoW) to proof-of-stake (PoS). You’ve probably heard about “The Merge” and how changes have been made to Ethereum. One of the biggest alterations made is in its rewards system.
Let’s take a closer look at the change.
- Proof of Work: This system rewards those that mine cryptocurrency using their physical hardware.
- Proof of Stake: This system rewards those that hold a large stake in the cryptocurrency and function as validators.
Basically, Ethereum will no longer provide rewards to miners, and instead, shift its monetary allocation to those who stake their ETH, the protocol’s native asset. This shift aims to make Ethereum not only environmentally friendly but also faster and more affordable (the last two will roll out over time).
Obviously, this is bad for miners.
How Do Miners Make Money?
Miners play the volume game and rely on massive factories of hardware. They are also responsible for funding pools in order to rent hash power. Unlike smaller miners, mining pools are able to bring their costs down due to economies of scale
It’s also important to note that Ethereum isn’t the only cryptocurrency you can mine. There are many other PoW blockchains like Bitcoin and others. One key to profitable mining is to look for cheaper alternatives for power.
Let’s explore the top coins that are mineable with a GPU.
Top Most Profitable Coins to Mine
It’s important to note that this list is subject to change depending on the mining rig you use, the cost of your electricity, the change of price for each cryptocurrency, and the change in difficulty.
1. Neoxa (NEOX)
Neoxa is a unique proof-of-work (PoW) and proof-of-gaming (PoG) cryptocurrency that rewards miners and players alike. The cryptocurrency can be mined via GPU mining or playing popular games like Rust.
As for its consensus, it is 85% proof-of-work (can be mined by GPU miners) and 10% proof-of-game (rewards to gamers). The remaining 5% is allocated to developers and marketing over a four-year period.
Neoxa Mining Requirements
In order to solo GPU mine $NEOX, it is recommended that you use an Nvidia RTX 3080Ti GPU if the price of your electricity is at $0.054/kWh. If the price of your electricity is lower than $0.048/kWh, you can use an Nvidia RTX 3090 to mine $NEOX. Miners can also opt to join a pool for added uptime in order to maximize rewards.
Note that as more miners start to look for ETH alternatives like Neoxa , there is a possibility that network difficulty will increase due to having more miners. In cases like these, it will require more time and power or lower electricity costs to become profitable.
2. Ravencoin (RVN)
Ravencoin took inspiration from Bitcoin as an open-source platform with the goal of enabling P2P transactions. The coin wanted to provide a solution for many of Bitcoin’s shortcomings like capping the supply of $RVN at 21 billion coins (BTC has 21 million), mining rate, and reward allocations.
Ravencoin was designed to help incentivize the regular miner and discourage the use of ASICs to allow for a more decentralized system. Additionally, Ravencoin also randomizes the hashing order to keep the rewards system fair.
Ravencoin Mining Requirements
In order to solo GPU mine $RVN, it is recommended that you use an Nvidia RTX 3080Ti GPU if the price of your electricity is at $0.053/kWh. If the price of your electricity is lower than $0.047/kWh, you can use an Nvidia RTX 3090 to mine $RVN.
Ravencoin was designed to help incentivize solo GPU miners, which is why joining a mining pool will not make a huge difference.
3. Ubiq (UBQ)
While Ravencoin takes after Bitcoin, UBIQ takes after Ethereum. Just like its now-PoS counterpart, Ubiq is a decentralized blockchain designed to enable smart contracts and dApps.
The good thing about $UBQ is that it also has backward compatibility with the Ethereum Virtual Machine (EVM) system to help make the creation of dApps much easier. For a cryptocurrency that was founded in 2014, it remains fairly consistent in its performance as of press time compared to when it first launched.
Ubiq Mining Requirements
In order to solo GPU mine $UBQ, it is recommended that you use an Nvidia RTX 3090 GPU if the price of your electricity is at $0.046/kWh. If the price of your electricity is lower than $0.046/kWh, you can use an Nvidia RTX A5000 to mine $UBQ.
As an alternative to Ethereum, mining $UBQ used to be extremely easy. In fact, it was even doable with low-powered GPUs once. As the blockchain’s difficulty progressed, however, its requirements have also increased with it.
4. Beam (BEAM)
Beam, similar to Monero and Zcash, is designed to prioritize privacy and anonymity within the blockchain. The coin aims to solve the blockchain bloat (continuous overload of information being added) problem with the Mimblewimble protocol, making it confidential, scalable, and allowing optional audits.
Beam is designed to put the decision of confidentiality in the hands of the sender and receiver and prevent information leakage to third parties. The blockchain is also designed to support time-locked swaps, atomic swaps, and escrow features.
Beam Mining Requirements
In order to solo GPU mine $BEAM, it is recommended that you use an Nvidia RTX 3090 GPU if the price of your electricity is at $0.037/kWh. If the price of your electricity is lower than $0.036/kWh, you can use an Nvidia RTX 3080Ti to mine $BEAM.
Due to the demand for privacy, BEAM has a harsh requirement when it comes to low electricity costs in order to be profitable. The cryptocurrency requires lower electricity costs at longer timelines in order to mine 1 $BEAM.
5. Zano (ZANO)
Zano is another blockchain designed for privacy and anonymity with an initial focus on e-commerce. The cryptocurrency relies on stealth addresses and numerous privacy-oriented approaches to help hide transactions from outsiders.
Zano has a hybrid PoW and PoS consensus mechanism geared towards preventing 51% attacks and double-spending. With that, its PoW side gives rewards accordingly to miners. Although it can be mined via solo GPU mining, joining a pool may be more profitable.
Zano Mining Requirements
In order to solo GPU mine $ZANO, it is recommended that you use an Nvidia RTX 3090 GPU if the price of your electricity is at $0.037/kWh. If the price of your electricity is lower than $0.036/kWh, you can use an Nvidia RTX 3080Ti to mine $ZANO.
Compared to other mineable cryptocurrencies, although $ZANO takes longer to mine, it can still be profitable despite electricity costs being relatively high. The bulk of the expense when mining Zano is its time horizon so for interested solo GPU miners, make sure to calculate how long it will take for you to be profitable.
How Much Can You Make From GPU Mining?
Just like running a business, the profitability of mining cryptocurrency also depends on your capital expenses (one-time costs) and recurring costs. The higher your costs and the smaller your margins, the less profit you’ll make.
In order to mine cryptocurrencies like Bitcoin, the largest cryptocurrency currently being mined, there are two options; a GPU mining rig or an Application-Specific Integrated Circuit (ASIC) miner.
For reference, ASIC is a specialized computer that mines Bitcoin, Litecoin, Ethereum Classic, and others more efficiently compared to GPU mining. Like all computers, both the ASIC and GPU mining rig requires electricity and maintenance costs, which need to be factored in when measuring profitability.
It is important to note that although calculations were given above, they are still subject to change depending on both the capital and recurring expenses GPU mining entails.
Possible GPU Mining Expenses:
- One-time costs:
- Cost of the GPUs (the more powerful, the more expensive)
- Cost of cooling setup
- Cost of computer frame
- Recurring costs:
- Cost of electricity
- Cost of maintenance
- Cost of rent space
- Cost of repairs
- Cost of cooling
These are just among the few costs associated with GPU mining and this does not include any other operational expenses (tax, registration, labor, etc.) should you decide to go commercial.
How Does Crypto Mining Make Money?
Before we answer the question of profitability, it is important to understand the concept behind mining. Miners use their GPUs for hash power needed to solve complicated problems to get rewards. The higher the hashrate, the more likely the unit will solve a problem and get the accompanying reward.
The problem with this is that if the mining difficulty increases (which happens when there are more miners participating in a network) profitability also decreases. In fact, the odds of being able to mine a block and getting a reward as a solo miner would drop. The solution: mining pools?
Mining pools allow you to lend your mining power to someone else. They basically rely on a network of mining rigs to solve the question and gain rewards. Depending on which method a miner chooses, they can either earn rewards once they solve a problem or lend their mining rig and receive a stable amount.
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