Health, Wealth, and Happiness

February 1, 2023

“The idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly fifty years in this business, I don’t know anybody who has done it successfully and consistently.”

- Jack Bogle

In today's issue: When Ethereum switched to proof of stake, a lot of people wondered whether crypto mining could still be profitable.

For those who want to participate in mining at home, we've updated our list of Best Cryptos to Mine for 2023.

We've based our ratings on historical payouts, price appreciation, and overall profitability.

Mining can be a great way to learn how blockchain works while generating income on the side, and bitcoin is not the only game in town. Read on.

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Must Read

Today's most important story for crypto investors.

How Much Does it Cost to Run a DAO? (Coin Metrics)

Although we are frequently critical of DAOs in this newsletter, one positive benefit of decentralized autonomous organizations (DAOs) is giving transparency into how money is being spent. They show token holders the budget behind the token.

As shown in this diagram, DAOs typically have "centralized teams" (i.e., managers and developers actually doing the work), as well as "decentralized teams" of token holders (i.e., investors).

By analogy, in a public company, you have employees on the left side and shareholders on the right.

In this latest report from Coin Metrics, the operational costs of three DAOs (Maker, Lido, and SushiSwap) are unpacked.

Lido is especially interesting given our BUY ALERT and the subsequent price rise of this important project:

Total revenue: $32 million
Annual expenses: $24.5 million
Annual salaries: $11 million

This would put Lido on a Forbes list of Best Small Companies (if it were a company, not a DAO). You've never heard of most of these companies, but they're similar in size and scope to Lido (and great acquisition targets).

Investor takeaway: The transparency offered by DAOs is a welcome step forward for the industry. If you're an investor, don't you have a right to know where the money's going?

Crypto Mining: What's Most Profitable in 2023

by Preetam Kautik

When bitcoin first appeared on the scene, bitcoin mining used the CPU (central processing unit) in any basic computer. That lasted several years until miners learned to use the more powerful GPU (graphics processing unit).

While it's still possible to mine altcoins with a GPU (or even a CPU) these days, bitcoin and most others have gone beyond accessibility for home miners. In 2023, most mining uses powerful ASIC (application-specific integrated circuit) rigs that have been created specifically for cryptocurrency mining.

Whether you’re using a CPU, GPU, or ASIC machine, what are the most profitable coins for crypto mining in 2023? Read on to find out.

Crypto Mining Profitability Changes Rapidly

One excellent resource for staying updated on profitable altcoins to mine is Coinwarz, which maintains an updated database of altcoins and the profitability of mining them.

Revenues and profits are based on optimal mining rigs for each coin and average electricity costs in the U.S. Your mining revenues and profits may vary.

Monero (XMR)

Block Reward: 0.65 XMR

Block Time: 2.00 minutes

Revenue (per day): $0.62

Monero goes back and forth between profitability and small losses. You'll want to keep an eye on it to determine if it's profitable to mine at any given time.

Many early blockchain adopters like Monero because of its privacy and anonymity. It has become popular among GPU miners because the Monero development team is committed to keeping Monero ASIC-resistant.

They're so committed to this path, they changed their consensus algorithm in 2018 in response to the release of an ASIC rig capable of mining Monero. You can be confident Monero will remain accessible for home miners using a simple GPU.

Peercoin (PPC)

Block Reward: 38.82 PPC

Block Time: 10 minutes

Revenue (per day): $11.62

Launched in August 2012, Peercoin utilizes both proof-of-stake and proof-of-work systems. While Peercoin may not be a household name, it was the first altcoin to use the PoS system for processing transactions. This mining method requires little energy, making Peercoin the first “green” cryptocurrency.

Peercoin was one of the top cryptocurrencies in its early years. While it’s less popular now, the coin has a dedicated and passionate development team behind it. Due to its hybrid PoS/PoW model, it’s still one of the most energy-efficient coins to mine.

Horizen (ZEN)

Block Reward: 3.75 ZEN

Block Time: 2.50 minutes

Revenue (per day): $1.34

Horizen, known as ZenCash until August 2018, is another privacy-centric altcoin.

Horizen promotes both privacy and anonymous transactions. Like Zcash, the Horizen team embraced ASIC miners because it made the network more stable and secure. Even so, it remains a profitable coin for GPU crypto miners.

Vertcoin (VTC)

Block Reward: 12.50 VTC

Block Time: 2.50 minutes

Revenue (per day): $0.45

Vertcoin considers itself “the people’s coin.” It was developed with specific properties to ensure it remains ASIC-resistant. Its developers might be the most strongly ASIC-resistant team. Therefore, it’s likely to remain a good altcoin to mine using your GPU.

Vertcoin has a unique miner created specifically to mine VTC. It’s also probably one of the easiest miners to use. Once you download and install the miner, all you need to do is join a mining pool and you’re ready to go.

Bitcoin Cash (BTC)

Block Reward: 6.25 BCH

Block Time: 10 minutes

Revenue (per day): $8.42

Not to be confused with bitcoin, miners and developers created Bitcoin Cash in response to concerns about the future of bitcoin and its ability to scale effectively. Bitcoin Cash has its own blockchain and specifications. It also has an increased block size of 32 MB (vs. 1 MB for bitcoin) to speed up the verification process.

This means Bitcoin Cash can process transactions more quickly than the bitcoin network, resulting in shorter wait times and lower processing fees on transactions. Apart from block size, however, Bitcoin Cash comes with the same mining limitations as bitcoin. It’s deflationary like BTC, meaning only 21 million coins will ever exist. It also uses the same SHA-256 hashing algorithm, with the reward halved roughly every four years.

While it used to be more profitable to mine bitcoin, the profitability of Bitcoin Cash is catching up. Thanks to its fast transactions and increased block size, it’s easier to mine and create transfers for lower fees.

Ethereum Classic (ETC)

Block Reward: 3.20 ETC

Block Time: 15.00 seconds

Revenue (per day): $1.03

Many miners are taking refuge in Ethereum Classic since the arrival of the Merge, the software upgrade that led Ethereum from a mining-based, proof-of-work blockchain to a more energy efficient and scalable proof-of-stake system.

In 2017, Ethereum Classic adopted the bitcoin way, with a fixed supply cap and ETC issuance rate. While there's now too much supply and not enough demand, mining Ethereum Classic can still be profitable for at-home miners using GPU or ASIC mining machines. However, it can’t be mined with regular CPUs.

Dogecoin (DOGE)

Block Reward: 10,000 DOGE

Block Time: 1 minute

Revenue (per day): $8.32

What started as a joke turned into an impressive market capitalization and a powerful lesson for crypto investors and miners. Two software engineers created Dogecoin to poke fun at the wild speculation involved with cryptocurrencies.

The parody token went live in 2013 and reached mainstream popularity when Elon Musk, the CEO of Tesla, publicly endorsed it in 2019. Dogecoin has a market capitalization of $21.98 billion, and over 131 million DOGE are in circulation.

Mining Dogecoin became increasingly popular partly because Musk continues to endorse it. It reached its highest revenue figures this past year, and mining is likely to remain profitable for the foreseeable future.

Vergecoin (XVG)

Block Reward: 100.00 XVG

Block Time: 30 sec

Revenue per day: $5.41

Verge is an open-source, community-driven asset that promotes complete anonymity in transactions. It's run by volunteer miners across the globe.

Verge, launched in 2014, was an offshoot of Dogecoin. It was introduced to provide anonymous private transactions similar to other privacy coins like Monero, Pivx, and Zcash.

Verge hides users' IP addresses and locations, making transactions untraceable. It uses multiple distributed networks like the Onion Router (TOR) and Invisible Internet Project (I2P) that bounce communications over a network of relays and tunnels. This makes it impossible to trace users' identities and locations. The I2P encrypts user data.

Verge now supports multi-algorithm mining. One can choose either the GPU or the ASIC protocol to mine.

The Verge ledger is public. Transactions can be verified, but the token network ensures any participant's identity remains hidden. While Verge's use by some adult sites gave it notoriety, it's still going strong. Verge plans to introduce a sidechain through the Rootstock project to process smart contracts.

The market capitalization of Verge at the time of this writing is around $44.63 million. Verge tokens are worth $0.0026 each.

Litecoin (LTC)

Block reward: 12.50 LTC

Block time: 2.5 minutes

Revenue per day: $7.67

Litecoin is a pioneer in altcoins. It was introduced in 2011 by Charlie Lee, an ex-Google employee, to enable faster and cheaper blockchain-based transactions. Litecoin lit up the crypto world and saw massive adoption. It reached a market capitalization of $1 billion in 2013.

Mining Litecoin is easier as it's done on a common GPU. Litecoin runs on the Scrypt proof-of-work algorithm, which is different from the ASIC setup used by bitcoin. Aside from being easier to mine, the entry barrier is relatively low.

Litecoin was derived from bitcoin's original source code. Lee called it the "lite version of bitcoin." Litecoin's supply cap is 84 million tokens.

Bitcoin (BTC)

Block reward: 6.52 BTC

Block time: 10 minutes

Revenue per day: $8.23

Bitcoin has become the most recognized cryptocurrency. Since its inception in 2009, the asset has lived through turbulent times while reaching phenomenal heights and a top valuation of $65,000.

While it's difficult to make much money without joining a mining pool, you can earn meager profits mining by yourself, even with the costs of electricity factored in.

Bitcoin's supply cap is 21 million. Mining rewards are halved after every 210,000 blocks. In 2009, the first reward was 50 new bitcoins. Today, the reward is down to 6.25 bitcoins. The next halving is slated for 2024.

In other words, mining will get more difficult over time. If you want to be involved, it's better to start sooner rather than later.

ICYMI