Cryptocurrencies have taken the world by storm. Everyone, from the average Joe to public figures, has been talking about it. More and more people are investing in cryptocurrencies every day, whether it be Bitcoin or one of the many other altcoins available today. As a result of its surge in popularity, cryptocurrency mining also rose to unprecedented levels.
But mining cryptocurrency isn’t as easy as you might think; it is very costly and requires high-end hardware to do so. It can take several months for an individual who starts mining only to break even with the cost of electricity, let alone make any profits. So, the question arises: is mining profitable?
What is Crypto Mining?
I think that it is important to understand what cryptocurrency mining actually is and what kind of hardware is required for it before we can answer this question. Cryptocurrency mining requires an extremely high level of computer processing power (dedicated hardware – GPUs or ASICs) to solve complex computational problems to approve cryptocurrency transactions.
Bitcoin is the most popular and valuable cryptocurrency today. It takes immense computational processing power to process bitcoin transactions and mine new bitcoins (referred to as Bitcoin mining). Hence, it requires high-end hardware like ASICs or GPUs.
Altcoins Versus Bitcoin Mining Requirements
However, altcoins that are newer than Bitcoin have much lower mining requirements at present, so they can be mined using CPUs and GPUs.Mining has become an extremely difficult task because of the high level of competition, and it is almost impossible to mine Bitcoin profitably now using a CPU or GPU.
As a result, mining farms have been created where hundreds of ASICs are used simultaneously to solve computational problems and generate new bitcoins. It is simply not possible for an individual to compete with these mining farms; hence, mining bitcoins is almost entirely unprofitable now.