Crypto Mining In 2022 — Is It A Good Idea?
This blog post will cover:
- What is mining, and how does it work?
- Crypto mining via PC, laptop, and mobile. Which one is better?
- Desktop PC
- Mining in 2022 - is it still relevant?
Cryptocurrency mining was at its peak in the months leading up to the last crypto bull run of 2021. Graphics processing unit (GPU) manufacturers were making money hand over fist, posting remarkable financial results as crypto, GPUs, and their respective company share prices were skyrocketing.
However, despite what was then a strong demand for GPUs, the concurrent “gold rush” in crypto mining abruptly came to an end, as Bitcoin and crypto prices decreased significantly. Inflation soared, and the time and bother setting up and running mining rigs were no longer worth the trouble with the slowed down profitability.
That said, is mining crypto in 2022 still a thing? Let’s find out.
What is mining, and how does it work?
In the case of Bitcoin and other cryptocurrencies that follow the Proof-of-Work (PoW) consensus mechanism, miners must provide confirmation that they spent computational power before the network comes to a consensus and adds a new block of transactions. The network rewards miners for providing the Proof-of-Work by asking them to deliver the hashes serving as proof that computational resources were spent.
Miners that solve the equation to find the correct hash before a new block of transactions is added to the network are rewarded with freshly-minted BTC and transaction fees paid by Bitcoin users. The process restarts until another miner finds the next correct hash so that the new block can be added.
Crypto mining via PC, laptop, and mobile. Which one is better?
Technically, anybody can mine BTC and other crypto. However, as the network has grown immensely and mining algorithms have increased in complexity, most Bitcoin mining today is done by large-scale commercial mining companies with specialized mining rigs running in data centers near energy sources.
But between a desktop PC, laptop, and mobile device, which one is the best?
Essentially, mining on a rig is the same as mining on a desktop. Mining rigs and desktops share the same hardware: graphics card, motherboard, hard drive, processor, and operating system. The main difference is that mining rigs contain up to 8 or more graphics cards compared to a desktop, which only has one. Mining rigs also have additional fans and are typically left open to help cool them down better.
In 2022, it’s still possible to build a desktop capable of mining crypto, but you’ll need specialized hardware such as a graphics processing unit (GPU) fast enough to be worth buying for crypto mining purposes. Otherwise, the overall costs of setting up a crypto mining desktop might not be worth the costs to keep it running – meaning the profits might not be commensurate with the cost.
Likewise, it is technically possible to mine cryptocurrency on a laptop – however, since laptops don’t use the same powerful GPU (which does most of the mining work) as a desktop, you’ll need to make sure that the laptop’s components don’t overheat.
In addition, laptops are assembled compactly. If your laptop’s GPU overheats, so will its other parts. Over time, they will likely reduce your laptop’s lifespan for very little in cryptocurrency rewards. Ultimately, regular consumer laptops lack sufficient power to make crypto mining worth it. Laptop CPUs and their integrated GPUs – even for high-end laptops – are less capable than their desktop counterparts.
Is it possible to mine cryptocurrencies on an Apple or Android mobile device? Since smartphones are, in fact, computers, they can – but with even less power than a laptop does. Any computer can be instructed to compute cryptocurrency hashes, including smartphones, to mine crypto. But it doesn’t mean all computers can or should be used for mining.
Smartphones are even less ideal to use than laptops for cryptocurrency mining. They pack less power than a consumer-grade laptop. Using a smartphone for crypto mining is like nailing Jell-O to a tree – theoretically possible but mostly futile and difficult in practice.
Mining in 2022 - is it still relevant?
Mining used to be a profitable endeavor, especially during the early days of Bitcoin. However, the crypto mining industry has drastically changed since the entry of large institutional interests and the increasing difficulty of mining crypto altogether.
Also worth considering is the shift of cryptocurrencies moving to a Proof-of-Stake (PoS) model, which randomly assigns miners or validators block transactions depending on the number of tokens a user stakes. The greater the number of tokens staked, the greater the mining power they are granted. Proof-of-Stake is less computationally intensive than PoW, meaning it doesn’t require as significant energy input as the latter. Ethereum is an example of a cryptocurrency that has switched from PoW to PoS model.
According to expert estimates, most of the video cards’ capacity aimed to mine various coins belongs to the Ethereum network. After the transition of the Ethereum network to PoS mining, ETH was eliminated. Some people were mining ETH to the last, and when this opportunity disappeared, they put their hardware on sale. But the remaining huge amount of power shifted to finding the most profitable coins. Coins such as Kaspa, ETC, Ethereum POW, RavenCoin, Flux have become a popular way to spend the vacant capacity.
But unfortunately the released power turned out to be redundant. The complexity of mining on PoW projects increased more than fourfold, and the earnings did not cover even the cost of electricity. In several projects, mining profitability amounts to just 1 cent, sometimes even ending up in the red. The subsequent slight decrease in mining complexity happens due to the desperation of some miners, the sale of equipment and the transition to ASIC mining. However, most miners continue to look for coins for profitable mining and also accumulate coins hoping for their serious growth, even having a negative profit to date.
If you’re an individual miner, you should weigh the costs of electricity, cryptocurrency prices, and the prospect of spending on specialized hardware before committing to mining. At this point, many enthusiasts choose to mine altcoins with low mining difficulty and an appreciating price – which they can mine with less expensive equipment than mining BTC.
However, as is par for the course with crypto, the best cryptocurrency to mine right now might not be the best choice tomorrow. Mining altcoins is like buying a lottery ticket – the chances of making a profit are slim, but the payoff could be worth it for a few lucky punters.
Ultimately, mining costs have skyrocketed, pricing out small and medium-sized investors. Cheaper mining alternatives like pool and cloud mining are better options for smaller investors who wish to get into crypto mining without spending too much on mining rigs.
Prospective miners looking to make some side cash with mining will likely be disappointed – the days of profitable crypto mining as an individual are probably gone. However, there are still many ways to get a profit with crypto. All you need to do is think for yourself and never make financial decisions based on someone else’s advice.
SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.