Subscribe

Sign up to get the best of the Exodus blog delivered directly to your email. You can opt-out at anytime.

Subscribeplaceholder
The Best Coin to Mine in 2020 (Recently Updated)Share on Linkedin

The Best Coin to Mine in 2020 (Recently Updated)

In this article

Introduction

With the larger cryptocurrency market coming out of a deep 2018 bear market, people are again looking to profit from this exciting and innovative space. What better way than mining, which can not only be lucrative but helps secure crypto networks by validating transactions?


Best Coin to Mine for Profit: Zcoin (XZC)

Zcoin is a privacy coin that was originally conceived as a privacy extension for Bitcoin back in 2013. However, while some members of the Bitcoin community did support the Zerocoin Protocol (as it was known then), support for Zerocoin wasn’t unanimous. This led to the creation of Zcoin.

One of Zcoin’s most appealing features, aside from its privacy, is its MTP mining algorithm that allows for anyone to have a reasonable chance of mining some XZC. Unlike other cryptocurrencies, which have seen the rise of specialized mining devices known as ASICs dominate the mining landscape, Zcoin is rather egalitarian since it is ASIC-resistant and can be mined with GPUs and even CPUs.

Honorable Mentions:

Grin (GRIN) - another privacy coin

Ethereum Classic (ETC) - the original version of Ethereum (which we’ll discuss next)

Although most crypto assets exploded in value in 2017, Zcoin did especially well, going from $0.47 on January 1st, 2017 to $129.98 on December 27th, 2017, a ~277x increase. Image credit: Coinmarketcap

Best Coin to Mine for the Long Term (That’s Still Profitable Today)

While Zcoin is the best coin to mine for profit today (though it might have potential in the long term if you consider its performance in 2017), the best coin to mine with a focus on the long term is Ethereum (ETH).

Ethereum started a movement by popularizing the idea of Blockchain 2.0, or using smart contracts to facilitate uses of blockchain technology that aren’t just payments.

Since its launch in 2015, Ethereum has delivered on that promise and then some, and will probably only continue to grow moving forward. Thanks to Ethereum, movements like DeFi (decentralized surface) have surfaced that recreate old financial products and services using decentralized technology. This allows for trustless, transparent, and censorship-resistant versions of things like loans, marketplaces, and asset issuance without the need for middlemen.

best coin to mine long term is ETH - defi growth almost 1 billion usd in 2.5 years
The value locked in DeFi smart contracts has absolutely exploded, going from $4 to nearly $1 billion in just 2.5 years. Image credit: DeFi Pulse

While Ethereum does have competitors that are also trying to become the “blockchain platform” for blockchain-based applications, Ethereum has the first mover advantage, biggest developer community, and overall biggest ecosystem. This makes it the best coin to mine for the long term as its price and staying power in the long run seem more likely to strengthen than those of other cryptos.

Honorable Mention: Bitcoin (BTC) - the original cryptocurrency. Issue is that it requires more upfront investment costs in expensive ASIC mining equipment.

Now that you know the best coin to mine for profit today (XZC) as well as the best coin to mine for some profit today and a lot of potential in the long term (ETH), here are some other cryptos to consider mining for different categories like CPU mining.


Best Coin to Mine with GPU

When it comes to the best coin to mine with GPU, the cryptos mentioned earlier are good contenders. For more of a short-term profit focus, Zcoin, Grin, and Ethereum Classic are better. If you want to focus on long-term price appreciation (while still remaining profitable), Ethereum is the way to go.


Best Coin to Mine with Nvidia

With Nvidia being 1 of 2 (the other being AMD) major GPU manufacturers, it’s natural to wonder what the best coin to mine with Nvidia is. However, Nvidia is pretty versatile across the board, and the cryptos mentioned thus far would be fine to mine with an Nvidia graphics card. Again, the question is whether you need mining to pay the bills now or if you’re looking to mine for longer term gains.

For the former, look at assets like Zcoin. For the latter, look at cryptos like Ethereum, which will probably be integral to the decentralized economy.


Best Coin to Mine with CPU: Monero (XMR)

CPU mining is largely unprofitable but recently, Monero, the premier privacy coin switched its mining algorithm to be more CPU-friendly. This could be a good opportunity to acquire some XMR if you have a decent CPU lying around or want to buy one.

When using Monero, be sure to use a Monero wallet that lets you set a custom node URL. Otherwise, if you’re connecting to a remote Monero node to send and receive Monero transactions, you risk leaking your IP address to the node, negating any privacy benefits.

Don’t Mine at a Loss (Generally)

Something some people do is continue to mine crypto that isn’t making them any money. Reasons for this vary, such as wanting to help the decentralization and security of the network by providing your individual mining efforts and hashrate to the network.

However, for those that think they’ll just “make profit later”, perhaps from the eventual appreciation of the mined asset, this is a bad idea.

Assuming you have electricity costs, the money you spend on keeping your mining going (at a loss) could easily be used to just buy the mined asset. This way, you actually acquire more of the crypto in the long run.

For example, imagine that you mine $100 worth of crypto in a month, but it costs you $110 in electricity. If you had just stopped mining, you would have saved $110, which could have been used to buy $110 of the crypto. If you had kept mining at a loss, you wouldn’t have any of the crypto, since you would be negative by $10.

The exception to this would be if you used heat from your mining to heat your house. Since you would’ve paid for the energy to heat your house anyway, mining, which generates heat, saves on extra home heating costs, while earning you a bit of crypto, too.


Conclusion

While things are always changing in the world of mining, this is the most up to date information on the best coin to mine in crypto.

Generally, aside from profitability estimates, what you need to look for is the following:

  • Mining difficulty and hashrate - mining is definitely harder now than it was in the early days. There’s a lot of competition so if you can find a more niche crypto where you can make money mining, more power to you. Once a promising mining crypto gets discovered, the difficulty of mining usually shoots up due to increased competition for mining rewards.
  • The price of the cryptocurrency - is it growing long-term or do you expect it to? This could make mining it more profitable.
  • Time between new blocks - how long does it take for new blocks (groups of transactions) to be created? The more frequent the better since that means more chances for you to mine new blocks (and earn newly minted crypto for your efforts).
  • Liquidity - unless you’re planning to HODL all your mining rewards, you’re going to need to sell some to pay for costs like electricity. To do this, you want to make sure that the coin has a place where you can easily sell the coin instead of being stuck with useless numbers on a screen.

Too much of a headache? Fortunately, mining isn’t the only way to make income from crypto anymore. Things like staking and loans have also gained significantly in popularity.

Information provided is for informational purposes only and should not be considered financial advice. Investing in crypto assets is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Past performance is not indicative of future results.

Share this articleShare on Linkedin
Sign up to get the best of the Exodus blog delivered directly to your email.
Subscribe