Choosing the best cryptocurrency for mining: essential factors to consider

Which are the best cryptos for mining with ASICs in 2024, and how much can miners expect to earn?

The global crypto mining market, which reached nearly $2.93 billion in 2023, is projected to grow at a compound annual growth rate (CAGR) of 12.2% and reach $8.26 billion by 2032.

A 2023 report by the Energy Information Administration (EIA) highlighted that crypto miners used as much electricity as the entire country of Australia, accounting for about 1 percent of global electricity demand.

In the U.S. alone, crypto mining operations were responsible for up to 2.3 percent of the nation’s total electricity demand.

Meanwhile, the market for crypto mining has seen considerable shifts, with the U.S. becoming a major hub for Bitcoin (BTC) mining, hosting nearly 38 percent of all Bitcoin mining activities in Oct. 2023.

Adding to the challenges faced by crypto miners is a new proposal from President Biden’s Fiscal Year 2024 budget, which includes a 30 percent excise tax on electricity used for mining cryptocurrencies.

This move aims to raise about $3.5 billion over the next decade. The tax would be phased in over three years, starting at 10 percent in the first year and escalating to 30 percent thereafter​​.

With these considerations in mind, let’s delve into the specifics of what makes for ideal mining conditions and the best cryptocurrency for mining in 2024.

Things to consider before you start mining crypto

Venturing into crypto mining requires a strategic approach, given the competitive landscape of the industry.

Firstly, the choice of cryptocurrency is paramount. With thousands of cryptocurrencies available, selecting a profitable cryptocurrency to mine is crucial.

Factors such as the coin’s market stability, demand, and the complexity of mining algorithms should guide this decision.

Energy consumption and cost cannot be overstated. Mining is notoriously energy-intensive, and with electricity prices fluctuating globally, calculating operational costs becomes essential.

Meanwhile, regulatory compliance and tax obligations in your jurisdiction are crucial. With countries adopting varied stances on cryptocurrency mining—from outright bans to welcoming it with open arms—understanding and adhering to your local laws and tax regulations is vital to avoid legal pitfalls.

Lastly, hardware selection is another critical consideration. The mining landscape has evolved a lot over the years. The choice of hardware impacts not only the efficiency of your mining operations but also their longevity and scalability.

Types of mining hardware

Initially, mining started with central processing units (CPUs), the basic form of computing power in any computer. While accessible, CPU mining is significantly less efficient compared to newer technologies, making it largely obsolete for competitive mining operations.

The next leap came with graphics processing units (GPUs), which are more powerful than CPUs and capable of solving complex algorithms faster.

GPU mining became popular for its improved efficiency and ability to mine more profitably, though it also requires more energy and generates more heat.

Field-programmable gate arrays (FPGAs) introduced even greater efficiency by allowing miners to configure these chips for mining, offering better performance than GPUs without as much power consumption.

FPGAs strike a balance between customizable hardware and the efficiency needed for effective mining, but they can be complex to program and are often more expensive.

Application-specific integrated circuits (ASICs) represent the pinnacle of mining technology, designed specifically for mining cryptocurrencies.

ASIC miners are the standard for professional mining operations in 2024, particularly for mining Bitcoin, due to their superior processing power and energy efficiency.

They offer unparalleled efficiency and speed but come with a higher price tag and rapidly become obsolete due to the constant evolution of mining technology.

Best coins to mine in 2024: ASICs-based

Bitcoin (BTC): most popular crypto to mine

As the most popular choice among miners, Bitcoin mining demands significant computational power.

To effectively mine Bitcoin, one requires advanced ASIC equipment, for example, an Antminer S21 Hyd. This is one of the most powerful mining hardware available, designed to tackle Bitcoin’s complex mathematical puzzles.

Mining profitability, however, is not guaranteed and hinges on several factors. Using the Antminer S21 Hyd as an example, miners can expect to generate around $26.93 in daily revenue.

Yet, this comes with an average electricity cost of $21.74, assuming an electricity rate of $0.169 per kWh in the U.S. Electricity costs can vary widely depending on your location, significantly impacting your bottom line.

As a result, the net daily profit averages about $5.19, according to data from Minerstat. From an annual perspective, employing a single Antminer S21 Hyd miner could net approximately $1894 in profits.

Bitcoin mining profitability | Source: Minerstat

Yet, this figure is an estimate that assumes consistent operational conditions—a scenario that rarely holds true given the volatility of electricity prices and Bitcoin’s market value.

You should thus approach Bitcoin mining with a balance of optimism and pragmatism, thoroughly analyzing your potential investment in hardware and the ongoing costs of electricity. This careful consideration can make the difference between a profitable venture and a costly endeavor.

Kaspa (KAS): one of the most profitable cryptocurrencies to mine

Mining Kaspa (KAS), a cryptocurrency that has been trending on Minerstat, can be particularly useful for those looking to maximize profitability through ASIC miners.

For instance, with the Antminer KS3, one of the leading ASICs for mining Kaspa, miners can expect to generate a daily revenue of approximately $99.14.

KAS mining profitability | Source: Minerstat

After accounting for an average electricity cost of $12.39—based on a generalized rate—the daily profit stands at an impressive $86.05, as reported by Minerstat.

Similarly, the IceRiver KAS KS3 offers a daily profit of $82.45, while its counterpart, the IceRiver KAS KS3M, yields $57.95 in profit.

Additionally, the annual profit forecast for employing an Antminer KS3, which theoretically could reach up to $31,408, is subject to significant fluctuations.

Hence, you must navigate these variables carefully. You should prepare for potential market shifts, regulatory changes, and the ever-present risk of increased mining difficulty, all of which could impact the long-term viability of Kaspa’s mining operations.

Dash (DASH): privacy-focused crypto to mine

Mining Dash (DASH), a cryptocurrency known for its emphasis on privacy and fast transactions, also relies on ASIC miners due to their efficiency and processing power.

When operating an Antminer D9 for Dash mining, the daily revenue potential stands at approximately $20.11. However, this income is offset by electricity costs, which average $11.03 daily, leading to a net profit of around $9.08 per day, according to Minerstat data.

In comparison, a less powerful ASIC like the Antminer D7 yields a significantly lower daily profit of $2.38.

The profitability of mining Dash with an Antminer D9 or any mining hardware is subject to numerous variables. Annual profits, which could potentially reach $3314 with an Antminer D9, are influenced by fluctuating electricity prices, changes in Dash’s market value, and adjustments in mining difficulty.

Key considerations before selecting the top crypto to mine

Remember that the profitability of mining any cryptocurrency is heavily influenced by electricity, hardware, and maintenance costs (if any), which vary widely across the globe.

While the calculations provided are based on average electricity rates in the U.S., countries like Ireland, with higher electricity costs (approximately $0.52 per kWh), or Iran, where electricity may be subsidized for low-income citizens, will see different profit margins.

Additionally, the volatile nature of cryptocurrency prices, mining difficulty, and market demand can all significantly impact your potential earnings.

Changes in these factors can either enhance or diminish the profitability of your mining operation overnight. Therefore, it’s crucial for miners to monitor these variables and continuously adjust their mining strategies accordingly.