Cryptocurrency has come a long way since Bitcoin was first mined in 2009. Since then blockchain technology has evolved into a global market worth over $280 billion as of February, 2020. Bitcoin is dominated by mining farms using ASICs, but over the years hundreds of alternative coins have been developed that allow anyone owning a computer to participate in.
Bitcoin’s foundation lies in decentralization. It was once a token anyone with a GPU could mine, but then ASICs came along and paved the way to massive mining operations like Bitmain- the world’s largest Bitcoin mining company.
Bitcoin mining has huge startup costs, but it doesn’t mean one has to be rich in order to get started mining cryptocurrency. Many companies are developing tokens that put decentralization back into the equation by allowing anyone with GPUs to mint new coins in a fair market.
Many algorithms have been developed since Bitcoin’s SHA-256 hash function. Some have attempted asic resistance and failed while other’s have succeeded- for now. Here’s a list of the most popular cryptos and the best hardware to mine them with:
- Bitcoin: SHA-256 — ASICs
- Litecoin: scrypt — ASICs
- Ethereum: Ethash — GPU
- Monero: RandomX — GPU
- Ravencoin: X16 — GPU
When bitcoin went mainstream everybody scrambled for SHA-256 ASICs. That’s when GPU mining died and asic mining farms sprung up. Although Bitcoin is the real OG; many things could be improved upon- especially the speed of transactions. Coders flexed their fingers and investors stretched their pockets. The race for crypto supremacy was on as alternative coins flooded the market.
Litecoin and the scrypt algorithm
Litecoin introduced the scrypt algorithm which was supposed to be asic resistant up until 2014. Before then Litecoin hovered around $2–4 dollars a token- today one token is worth over $70. I kicked myself in the butt for not jumping on the miner bandwagon too.
Dash..ing to develop ASIC resistance
Dash was the first coin to implement the X11 algorithm which launched in 2014 but it wasn’t long until asics caught up in 2016. The X11 algorithm was actually created in part by a competition held by the US National Institute of Standards and Technology to develop SHA-3. X11 has ‘11’ in the name because it uses 11 different algorithms that won first round picks in this competition.
Gonna need more GPUs
Ethereum (the second most popular crypto) currently has no asics and uses the SHA-3 algorithm. There’s speculation and rumors that asics are being developed for Ethash but currently nothing is on the market. As of now ether is best mined with GPUs, and lots of them.
Ravencoin and the X16 algorithm
X16 is the newest algorithm and currently has no asics. Ravencoin is the first token to implement X16 which launched in early 2018. Right now it’s about $0.04 a coin.
In short: ASICs are best for mining Bitcoin, Litecoin, Dash, and coins that are based off these algorithms. GPUs are best for mining Ethereum, Monero, Ravencoin, and coins based off those algorithms.
Note: Over time all of these coins will produce less thanks to halvings which cut the reward for mining blocks in half. Bitcoin’s next halving will be in May 2020.