Mining is a concept that was introduced by the first cryptocurrency to market, Bitcoin. At the time, miners who succeeded in validating blocks on the network received rewards of 50 BTC. Of course, at the time, the coin wasn’t worth as much as it is today. Nowadays, thanks to Bitcoin halving, which occurs every 210,000 blocks, the reward is now down to 6.25 BTC. Analysts expect that by 2024, the next halving will occur and reduce this reward to 3.125 BTC.
Mining explained
Mining is the process through which tokens running on the proof of work consensus mechanism mint new coins from the total supply. In this process, miners utilize computers with advanced hardware, which then guess the solution to an equation on the blockchain. The rate at which these computers guess new solutions is called the hash rate. The first computer to solve the equation gets to validate a block of transactions on the network, and in return, its wallet address is rewarded in crypto. Therefore, the higher the hash rate a miner commands, the better their chances are of validating a new block.
In the beginning, the equations on most blockchains were not as complex, and they could be solved using simple CPUs. After a while, they grew in complexity and now required graphics processing units (GPUs). As the equations became more complex, miners needed to pull their GPUs together to utilize their combined hash rates. Nowadays, application-specific integrated circuits (ASICs) are specially designed for mining specific digital assets. These are the most advanced mining hardware units in the market at the moment.
Tokens to mine for maximum returns in 2022
1. RavenCoin
RavenCoin (RVN) is a token named after a blackbird in George R. R. Martin’s Game of Thrones stories. The coin is trading at $0.065 at the time of writing, launched in 2018, with a market capitalization of $678 million. Other than being useful as a means of payment, it features messaging, a mobile wallet protected by a seed phrase, as well as voting rights on its platform. The developers of this coin had the goal to build a blockchain that facilitates the easy transfer of assets between users.
To successfully mine this coin, you would require the X16R hashing function. The reward for successfully validating blocks is currently at 2,500 RVN. The coin has a fixed supply of 21 billion tokens, which means its value can be expected to rise in the long run as its demand grows.
2. Monero (XMR)
This is a crypto token that’s easy and profitable to mine. New blocks are validated on its network every two minutes, and miners require the RandomX hash function. In return, successful validators are rewarded around 0.6 XMR. At the time of writing, the coin was trading at $173, with a market capitalization of $3.12 billion. What’s more, this coin is ASIC resistant, which means that miners don’t need to run overly complicated rigs to validate transactions on the network.
3. Litecoin (LTC)
This is a token that bears a close similarity to Bitcoin. It utilizes the SCRYPT protocol, which means miners do not require ASICS to mine it – GPUs are sufficient. What’s more, it offers 12.5 LTC for every block mined. LTC is trading at $123.5 at press time, with a market cap of $8.6 billion.
4. Ethereum Classic (ETC)
This is a coin that aims to maintain the original Ethereum network that was based on proof of work. It is retailing at $31 at press time, with a market cap of $4.12 billion. The reward for successfully mining a block of this token is at 3.2 ETC, and new blocks are validated every 13 seconds. What’s more, this coin can easily be mined using GPUs.
5. Zcash (ZEC)
This is a token that utilizes the Equihash algorithm, which allows GPU mining and is ASIC resistant. Established in 2016, it is currently the 60th largest cryptocurrency by market cap. Successful miners of this token are awarded 2.5 ZEC for their efforts in keeping the network secure. At the time of writing, it is trading at $120.
6. Grin (GRIN)
Brought into fruition in 2019, this is an inflationary cryptocurrency because it has no maximum supply. Be that as it may, it is a favorite among miners because of its hefty reward of 60 Grin per block and its Cuckoo cycle style of mining, which makes it ASIC resistant. It is also a very privacy-oriented network, as it does not allow any residual transaction data to remain on its network. Due to this, it tends to take up less storage space than most other blockchains. At the time of writing, Grin was trading at $0.16 with a $15 million market cap.
7. Metaverse (ETP)
This is a coin that was launched in China as the token behind an open-source blockchain by the same name. The Metaverse chain contains digital identities, various digital assets, and properties, as well as oracles for meeting its users’ needs. It works on the blockchain-as-a-service model and utilizes the proof of work consensus mechanism. At the time of writing, it is trading at $0.15, with a market cap of $11.7 million. The reward for successfully verifying a transaction block on Metaverse is 1.3509 ETP, and new blocks are mined every 30 seconds.
Conclusion
Mining refers to the process of utilizing a computer with advanced hardware capabilities to try to guess the solution of an equation on a blockchain. If a miner successfully solves the equation first, they get to validate a block of transactions on the network. In return, they are paid in the native coin of that chain at a specified rate. This way, they get to earn new cryptocurrencies without necessarily buying more.