Mining Bitcoin Cash as an Alternative
Mining Bitcoin is still profitable if you’re able to invest enough in the proper equipment and if you’re not paying a fortune for electricity. Yet for anyone trying to get in on the action now, it may be slightly harder and more expensive.
But what if you still want to mine crypto and you’re not that interested in alt coins? If you’re a Bitcoin loyalist, you could also try to give Bitcoin Cash (BCH) a go. The entry costs may be somewhat similar but the competition is not as fierce among miners of the hard fork.
What Do You Need to Mine BCH?
A dedicated ASIC miner is your best bet. BCH can be mined with the same equipment as Bitcoin, due to it having the same hashing algorithm. So all you really need is enough money to invest in an ASIC miner and low electricity costs in your area, in order to turn a profit.
Is Mining BCH Different Than Mining Bitcoin?
Yes and no. Both cryptocurrencies use similar algorithms and make use of the same ASIC miners. The rewards per block are the same for both, 12.5 tokens. Yet there are clear differences in profitability and market value.
Bitcoin is at least seven to eight times more valuable than BCH. So in theory, BTC rewards for miners are higher. However, this isn’t actually the case. The BCH network has some key differences, including a larger block size, 8MB as opposed to Bitcoin blocks that are just 1MB.
Why is this important? Because, while bigger blocks do require additional computing power and more investment to be profitable, they also handle more transactions. So, BCH miners may not earn as much as BTC miners from straight up block rewards, but they share in many more transaction fees.
It’s the transaction fees that make up the difference, as well as a less competitive field. Many early-stage miners still stuck with Bitcoin instead of switching to the hard fork.
Mining Options
Although solo mining is always an option, turning a profit with solo mining isn’t very easy, or cheap. Most BCH miners follow in the steps of BTC miners and join mining pools where they split profits with others. However, the huge pooled computing power ensures consistent profits. And the more computing power you contribute, the bigger your share of the profits.
Well-established mining pools have adopted BCH too so you should have no problems mining the hard fork on BTC, AntPool, BitClup, F2Pool, and other very popular mining pools.
Cloud mining is another alternative, albeit a riskier one since it doesn’t give users control over the hardware used. Add to that additional rent fees and fees imposed on profits, and the profits aren’t all that exciting.
Cloud mining is also plagued by a long history of scams and the fact that it’s difficult to assess the validity of the contracts. Not to mention the fact that it often takes more than one or two years to get any return on your investment. Time in which the price of BCH could drop beyond the point where you would make a profit.
How to Choose a Good Mining Pool
Always consider the size of the pool first and foremost. Large pools have more miners so the rewards are split between more people. The second thing to consider would be the payment structure. How much the computing power you contribute will factor into your share of the profits.
Also look at statistics for mined blocks. Some smaller pools sometimes find more blocks than large pools. Having a huge mining collective doesn’t always guarantee more computing power. Hence why some mining pools pay better than others, or are more successful.
It’s also worth noting that not all payment structures and mining pool fees are favourable for all users. That’s why it’s best to check various BCH mining profitability calculators and put your existing rig and local electricity costs to the test.
Don’t forget that having a secure cryptocurrency wallet is also important so you can receive your rewards as soon as the pool gives them out.
Can You Profit from Mining BCH?
You can profit from mining any cryptocurrency that follows the proof-of-work reward system. It’s only a matter of having powerful equipment and choosing a mining pool that’s better suited to give you a nice profit based on your expenses.
BCH is a stable hard fork crypto coin that’s considerably more valuable than many others, even though it’s much cheaper than Bitcoin. Your profits could be even higher than those of a traditional BTC miner given the recalibrations done to the BCH network that favour miners, and the extra transactions handled per block.
Cover image by Taylor Vick on Unsplash
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