Jan 31, 2019 01:30 UTC
Jan 31, 2019 at 01:30 UTC
CPU, GPU or Cloud Mining? Which is Most Profitable in 2019?
Cryptocurrency mining works for those digital assets which use Proof of Work and Proof of Stake consortium. The main aim of mining apart from the Block Reward is to maintain the decentralization aspect of Blockchain Technology.
In the beginning, when Bitcoin was invented by Satoshi Nakamoto, the developers behind the Bitcoin Blockchain network thought that mining would be a simple task which could be done using a simple CPU found in home PCs.
However, over the years the mining scene got crowded and the difficulty in mining increased, people started using specialized mining rigs to generate more Hash power. Among plenty of options available, the new entrants are confused whether to go for CPU mining, GPU mining, or Cloud mining.
This article would discuss all three in detail and then try to answer the main question: CPU, GPU or Cloud mining, which is more profitable in 2019?
You May Also Read: Is Bitcoin Mining Legal or Illegal?
What is Mining and Does Using a Specified rig Make any Difference?
Mining is the process of transaction verification of the Blocks in a decentralized Blockchain network. As you must be aware by now, blockchain technology is solely dependent on the peers of the network and makes use of cryptography for making the transactions on the network tamper-proof.
In absence of any centralized institutions for verification, the task falls on the shoulder of peers. Now in order to solve the 264-bit cryptic signature, your computer needs to run various mathematical permutations and combinations in the form of computer codes, the speed at which your PC can solve the equation is determined by the hash power it can generate.
In the beginning when the concept was new and only a few people were on the network, the mining process was easy and a normal home-based CPU was enough to mine the Block. However, as time progressed, the mining scene got overpopulated and people realized that with specialized rigs, they can generate more hash power to mine the blocks faster.
Now the mining process has turned into a legit business, and brands like Nvidia and AMD manufacture specialized, graphics cards as well as CPUs for the mining process.
There is another new kid on the town, known as cloud mining but there are many “ifs & buts” surrounding it, more on that later. Now let us look at all three mining processes separately and try to decide which is more profitable in 2019.
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CPU mining is the process by which you use the CPU-centred rig to mine a block of a cryptocurrency of your choice and earn block rewards in return. Bitcoin developers made sure that the digital asset can only be mined using a CPU, but as of today, it’s almost impossible to mine Bitcoin using a CPU mining rig.
CPUs are comparatively slow when it comes to multi-tasking, and mining process requires your computer to run multiple codes simultaneously. However, you can still mine some of the new altcoins like Zcash, Nexus, Hold Coin, Reicoin etc.
Advantages of CPU Mining:
- No specialized hardware required.
- Good for beginners, who are observing and learning more about the mining process.
- Good learning experience.
Disadvantages of CPU Mining:
- Heating issues
- High-electricity consumption
- Wear and tear of the CPU
Mining Profitability: In order to maintain the constant Block size, the difficulty of mining is adjusted accordingly. Bitcoin has a constant Block time of 10 minutes, The mining profitability gets reduced after a certain number of blocks, in the case of Bitcoin, it gets halved every 4 years.
So, using a CPU rig, the chances of any profitability for top coins like Bitcoin is negative.
You May Also Read: ASIC Mining
GPU-based mining came into the picture, once the CPU mining scene got overcrowded and people realized that any CPU-based rig has certain limitations in terms of hash power generation. So, the next big thing in the mining scene came in the form of GPU mining rigs.
GPU mining rigs are basically rigs with at least 4-8 video cards, people realized that Graphical Processing Units are more flexible when it comes to the generation of Hash power. As it is evident from the gaming industry which makes use of GPU rigs for high frame rates and video rendering.
Brands like Nvidia which were focused towards the gaming platform found a new market and quite demanding one, where the GPU rig became a rage for miners. AMD based GPU rigs are on par with Nvidia and known to provide a good value for money.
GPU based rigs can be used to mine Ethereum, Bitcoin Gold, Electoneum and many others.
Advantages Of GPU Mining
- Efficient and flexible working capacity
- Standard hardware
- High resale value
- Easily upgradable
Disadvantages of GPU Mining
- High electricity cost
- Cannot mine a few coins
- Not as powerful as ASIC rigs
- Overall efficiency less than ASIC based rigs
Mining Profitability: With an efficient setup, people can manage to earn a few coins for Ethereum and Bitcoin Gold from the top lot, while many others new altcoins using Proof of Work can also see some profitability.
This is a fairly new concept, as most of the mining scene has been hijacked by the Mining farms which create a setup of hundreds of mining rigs put together with unlimited energy supply, making it impossible for individual miners to compete against them.
What cloud mining does is, it creates multi-setup data centres at remote locations which are ready to loan out hash power to individuals in return of a fee. However, many cloud mining companies have turned out to be a scam as most of them do not provide any verified evidence of their claims on the data centres they possess.
However, there are still a few of them which are genuine and have been in the business for long, but most of them are overbooked for coming years.
Advantages of Cloud Mining:
- No initial cost of setup
- No need to buy specific hardware
- Cost efficient
Disadvantages of Cloud Mining:
- Not a proven way of mining
- Many fake companies with false information on hash power
- Most of the legit companies are overbooked.
Mining Profitability: Mining profitability depends on the scheme or package of the coin you have opted for. You can make a good profit if you select the right coin.
2018 was not just a forgettable year for investors, but quite a terrible one for miners too, especially those who were into top coins like Bitcoin. The low prices made it impossible for the individual miners to continue with the process. Nvidia the leaders in manufacturing GPU rigs have already projected a very low profit for the next quarter.
The mining scene has been hijacked by big companies who have the resources to build their data centers or mining farms in countries like China, Russia, and Switzerland where electricity is available in plenty and at dirt cheap prices.
However, you can still earn some profit by mining new coins where mining difficulty is comparatively lower and among the given three option, GPU mining is the best, even though the initial cost of setup is comparatively higher.
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