- Best Mining Rig Build Guide
- Choosing Your Equipment
- A Father/Daughter Beginner’s Guide to Cryptocurrency Mining
- Different Mining Strategies
- Which Strategy to Use?
- Guide to cryptocurrency mining
- My Strategy
- Bitcoin and cryptocurrency mining explained
- Cryptocurrency Mining Guide: Speculative Mining & Other Strategies
- Mining New Coins (Speculative Mining)
- Brief Cryptocurrency Mining Overview
- A Beginner's Guide to Cryptocoin Mining
- How to Choose Good Coins
- Hackernoon Newsletter curates great stories by real tech professionals
- Utility Tokens
- A beginner’s guide to cryptocurrency mining
- Common cryptocurrency scams and safety
- The Absolute Beginner’s Guide to Cryptocurrency Investing
If you have been following my articles the past few months, you have seen we have covered a lot of different coins, using a lot of different mining algorithms. One thing that I feel a lot of mining youtube channels or mining publications do not cover is, how do you know what coin to mine?
Best Mining Rig Build Guide
It is actually more complicated than that, because you need to have a mining strategy before you buy your equipment and begin mining different coins.
In this guide I will be explaining how to setup your strategy before you buy your equipment, and what the different mining strategies are once you start mining.
Note we will not be covering ASIC mining in this article, just GPU mining.
Choosing Your Equipment
Before you decide what card and from what brand you want to buy, you need to do some research and develop a long term plan.
Right now their is mainly two different path you can start your mining journey on.
You can buy Nvidia GPU’s which are geared for more of the Equihash mining algorithm coins, and works well with Linux, and Windows, Or do you want to mine more of the Cryptonight coins, that work better with AMD GPU’s and are mainly using Windows.
That is the first question you need to ask yourself.
Now if you want to mine Ethereum or the Ethash coins, they work roughly the same with NVIDA and AMD so you can usually mine them with which either path.
Etheruem also has plans to switch to POS soon, so we will not focus on them for this article.
So to figure this out you need to do some light research on a few of the coins from each algorithm.
You can use whattomine to do this by search for only Equihash coins
or only Cryptonight coins. For Cryptonight coins I use cryptunit because they list just about all of them, and many more than whattomine list.
They list about 23 coins right now.
This is not a complete list but it will get you the main coins in those categories.
A Father/Daughter Beginner’s Guide to Cryptocurrency Mining
If you want more coins you will need to research at forums as well as mining pools, and exchanges. For Equihash look at https://pool.miningspeed.com/ and https://www.leafpool.com/ as well as the forums on bitcointalk and reddit.
You should base the decision not only on profitability, but also what coins you think in the future will have the most value.
We will cover this in more detail in the next section.
Different Mining Strategies
So after you decided what general mining algorithm you would like to mine and you get your equipment, we now have to have another strategy in place.
Note you can change your strategy at any time, and I usually jump between different ones month to month.
In general here are the mining strategies
- Mine the most profitable coin
- Mine the coin you believe will be the best investment (speculative mining)
- Mine the most profitable coin, sell it and buy other coins (mineable or not) that you believe to be the best investment (a form of speculative mining) (this is my favorite strategy and what I am currently using right now)
- Mine the coins that just start out with a low hashrate, to get a lot of them, and hope they get listed on an exchange.
Also when selling
- Do I sell it and keep the bitcoin?
- Do I sell it and buy altcoins?
Personally I have used all four of these at some point while mining.
I have also had times where the most profitable coin to mine, was the coin I thought was the best investment.
Which Strategy to Use?
Well there really is not a good answer to this. Since I have tried all of them, I would have to say in my opinion the best way to mine is a mix of them. Here is what I do
I usually mine the most profitable coin for my machine.
I do this because I do not get why you would mine a different coin. A lot of times the most profitable coin is not what you believe is the best investment, so you can mine it and then weekly sell it on the exchanges to purchase the coin you think is the best investment.
Guide to cryptocurrency mining
Now you also need to take into account the fees from exchanges. A lot of times you also will have to sell on one exchange and then send the money to another exchange, buy your coin and then withdraw.
This means you will be paying a withdraw fee two times, so make sure you add that in when figuring out your path of how to mine X coin and convert it into Y coin.
If Y coin is mineable, sometimes it may be better just to straight mine it.
Another thing to keep in mind is that a lot of times, the most profitable coins are coins with low market caps. This means that you will need to sell them on the exchanges every few days, otherwise they could lose a lot of their percentage value quickly.
Currently my setup is to mine the most profitable coin for my machines, sell to the exchanges weekly, and then buy coins that I believe are good investments.
Even though I used profits from BTC to buy my mining equipment, I am not mining and trying to get the BTC back.
Bitcoin and cryptocurrency mining explained
The reason for this is because I calculated it would take a long time (over 1 year) to do this. Also I believe there are better altcoins that will do better than bitcoin.
If you decide to do this, make sure you keep track of how much your selling on the exchanges, this way you know in BTC value did you ever pay off your mining computers.
I like buying altcoins that I believe in this way as well, because it forces you to buy them slowly every week and average out your buys, instead of buying a large BTC amount of them at once.
Bitcoin Mining – Is it Worth it?
Now, every once in a while it makes sense to hold your mining money.
Cryptocurrency Mining Guide: Speculative Mining & Other Strategies
For example if the coin your mining is having a fork, it may be a good idea to hold the coin to get the free forked coin. However it may not be, if you think the price of your coin will diminish by more than the price of the free forked coin you will receive.
Their are also times when you may want to hold onto you BTC mining rewards and not trade them for alt coins.
For example if you have been buying an altcoin for a while, and you feel the price is too high, and you do not want to buy other altcoins, then it may be worth it to hold onto the BTC until you feel the price is not to expensive.
Another thing is most of the times in a bear market it is a better strategy to hold your bitcoin, because the alt coin price tends to be cheaper in a bear market.
Mining New Coins (Speculative Mining)
By mining the most profitable coin and selling it for BTC or another altcoin, you will still take a long time to usually pay off your rigs.
Because of this it is a good idea to take a set amount of time maybe a few days per month, and try to mine coins that have just come out and have a low hashrate. By doing this you will get a bigger amount of coins compared to if you mine that coin when it has a higher hashrate.
Brief Cryptocurrency Mining Overview
Usually these are coins that have are not listed on an exchange yet, so you have no idea what the price will be, or if it will even get on an exchange. These are usually not forks of coins, since most people already know about them before they come it. These would be like Ravencoin a few months ago when only a few people knew about it, or any coin that is not well known and has a low hashrate, and has recently been released.
How to Mine Ravencoin
The next step is to know how to find new mineable coins.
One of the best, but most time consuming is the Bitcointalk announcements thread this is where you can find out about coins the day they come out.
You also want to use mining pools and small exchanges as well to look for new coins they list.
A Beginner's Guide to Cryptocoin Mining
Reddit’s GPU mining section also has some information.
How to Choose Good Coins
Well there’s a lot of information in the answer to this question. The basics would be that first you will want to start out on the coins website.
You want to look for their whitepaper, and read it, or at least skim through it. Next you want to look at the team members, and see if they are qualified or experts in their field.
You also want to note if there’s an imbalance.
Hackernoon Newsletter curates great stories by real tech professionals
I have seen teams where their is marketing, advisors, leaders, but very few developers on the team.
You will also want to make sure they have some type of working product, or plan on having one soon. You also need to ask yourself, is this a type of product that needs to be on the blockchain, or could it be a website or app. If it does not need to be on the blockchain you may want to look at other coins.
The next big question would be is this a utility token?
A utility token is basically a tokenized money coin, that can only be used inside of a particular system. For example this would be a coin where people buy it just to use a dapp, and outside of that dapp it has no value.
A beginner’s guide to cryptocurrency mining
Basically the question comes to mind, “why can’t they just use bitcoin” in the dapp. This means that the token does great when their is a constant flow of buyers and sellers, but there is no long term reason (except price speculation) to hold onto the token. I personally like cryptocurrencies that provide a reason to hold like POS, underlining platforms that other coins can build on top of, or something that you may use that has value.
Sometimes you can find coins that have all three of these and that is always exciting when you find a coin like that.
Proof of Stake Coins
If the coin you pick is a token (NEP-5 or ERC20 etc) you may want to check if they have plans on becoming a coin anytime soon. If you look at https://coinmarketcap.com/ you can see that most of the top cryptocurrencies are coins or tokens that plan on being a coin.
Also make sure you research the competition of your coin.
Common cryptocurrency scams and safety
Do they have any competition, and if so how do they compare?
Also notable investors and working with real world companies is also a plus as well.
We also want to look at the coins metrics because this can tell us if It is a good time to buy a good coin.
You will want to use https://coinmarketcap.com/ for this
You usually want to see that the circulating supply is at least half of what the total supply is.
The more that is already circulating, the better. For example if only 10% of the coin’s total supply is in circulation, then that means there’s a lot more “inflation” of the supply that will happen at some point, and that usually will affect the price in a negative way. I like to generally see over 50% but anywhere from 30% is usually okay depending on the type of coin, and all of the other factors.
I will not list any coins here that fall into these categories, since this is not an investment advice article, and it is better if you do your own research and find coins that you personally like.
The Absolute Beginner’s Guide to Cryptocurrency Investing
You can find coins right now though that fall into most of these categories, and they are in the top 100, so make sure you do research on them.
I hope you enjoyed a quick strategy guide on what to do after you start mining, and how to pick coins that you may want to slowly buy with your mining money!
I am a developer who programs websites, games, software and is knowledgeable about cyber security.
I have been a cryptocurrency investor, since 2013, and have been interested in cryptocurrency mining, trading and writing since 2016. Contact [email protected]