In this article, Trading Education will provide detailed information that will guide you in your quest towards earning passive income from mining Shiba Inu Coin.
Shiba Inu mining is the process of earning Shiba Inu Coins (SHIB) in exchange for running the verification process to validate transactions on the Shiba Inu protocol. These transactions play an important role in providing security for the Shiba Inu protocol, which in turn compensates the miners by giving them several SHIBA tokens. This is not a sure way to making a huge sum of money. The mining of Shiba Inu can only become a profitable venture if the price of SHIB exceeds the cost of mining.
Because of the recent changes in technology coupled with the creation of professional mining centers that come with huge computing power, as well as the constant fluctuations in the price of Shiba Inu Coin (SHIB), many individual and group miners continue to ask the question, is Shiba Inu mining still profitable?
As a newbie in cryptocurrency mining, you should know that several factors determine whether Shiba Inu is a profitable venture. These include the availability and price of a computer system, the electricity to power the computer system (cost of electricity), as well the difficulty in providing the services. The difficulty comes in when the measurement of the hashes per second of the Shiba Inu validation transaction is assessed.
The hash rate is a measure of the computational power per second used when mining. To put it simply, the hash rates measure the rate of solving the problem. When more miners enter the process of validation, the difficulty level changes.
This is because the Shiba Inu protocol is designed to produce a certain number of Shiba Inu Coins (SHIB) as a reward every 8 minutes. To ensure that the level of validation remains static, the difficulty increases as more miners enter the market. The last factor for determining the probability is the price of Shiba Inu coins compared to a standard hard currency.
- Shiba Inu can be mined using computing rigs which include expensive hardware. Shiba Inu Coins (SHIB) can also be mined through a mining pool that has a minimum Video Random Access Memory (VRAM) of 6 gigabytes (GB).
- Miners are rewarded with Shiba Inu Coins (SHIB) for verifying blocks of transactions to the Shiba Inu protocol on the Ethereum Network.
- As more miners compete for SHIB rewards, the process becomes more difficult.
- To determine whether Shiba Inu mining is profitable for you, consider how the price of Shiba Inu Coin will impact potential rewards, the difficulty associated with mining, the costs of equipment, and electricity.
The Components Of Shiba Inu Mining
You should know that before the advent of mining cryptocurrencies, particularly, Bitcoin through software in 2013, digital token mining was generally carried out on personal computers. The introduction of application-specific integrated circuits (ASICs) had certain components such as chips that offered up to 100 billion times the capability of older personal machines, rendering the use of personal computers to mine primarily proof-of-work (POW) blockchain backed-cryptocurrencies such as Bitcoin, Ethereum, and ERC 20 tokens ineffective and obsolete.
Although individual mining of Shiba Inu is still theoretically possible with older hardware, there are question marks about its profitability. This is because of the way the whole mining process is set up. Firstly, Miners have to compete to solve hash problems as quickly as possible. As a result, miners with old inefficient systems are disadvantaged when it comes to solving problems first and being rewarded with Shiba Inu Coins (SHIB). This is the primary reason experts point out that machines with a high hash power are highly efficient and can process a lot of data in a single second.
From the above statement, you can confirm that when miners use the old machines with obsolete components, the difficulty in mining Shiba Inu was roughly in line with the price of SHIB. Buying new machines and other equipment to upgrade older computers with low RAM capacity came with issues centered on cost as well as difficulties in running the new equipment.
Mining With Available Equipment
You can mine Shiba Inu via Unmineable. Through this website, you don’t need personal computers with high-energy components. You can mine Shiba using Ethash, Etchash, and Kawpow with your Graphic Card(s). If you opt for Random X, the Central Processing Unit (CPU) that comes with your computer can be used to mine SHIBs.
Probability Before And After ASIC
As the older patrons of parent crypto Bitcoin normally point out, mining cryptocurrencies were easy because personal computers were used.
Unsurprisingly, older patrons were able to make huge profits since the space was a novelty and many people didn’t believe that the traditional financial system the world has gotten accustomed to in the last century could be shaken by blockchain technology.
What’s more, the equipment was already owned by the miners. In addition to this, settings could be changed to run more efficiently. All these could happen and see miners earn more money because there was nothing like mining pools.
Aside from these, there weren’t huge sums of money being invested in building mining centers. As a result, the competition wasn’t strong enough since individual miners competed with themselves. Because of a lack of interest by millions of people in blockchain technology and digital tokens taking over the world, there was a level playing ground for miners. Even with the variations in the cost of electricity across different geographical areas, nothing could deter miners because of the huge profit margins they enjoyed.
After application-specific integrated circuits (ASICs) came into play, everything changed. Individual miners all of a sudden realized that they were competing with mining companies that possessed powerful mining rigs. Profits from mining began to fade away piece by piece because of expenses like high energy costs for running the new equipment, purchasing new computing equipment, as well as the difficulty involved in continuous mining.
The Difficulty Of Mining Shiba Inu Coin
As earlier on discussed, the difficulty rate associated with mining Shiba Inu is variable and changes periodically to maintain a stable production of verified blocks for the blockchain (and in turn, Shiba Inu Coins introduced into circulation). The higher the difficulty rate, the less likely an individual miner can successfully solve the hash problem and earn Shiba Inu Coins (SHIB).
Thanks to the popularity of meme-inspired coins led by Dogecoin (DOGE), millions of people have become involved in the mining of Shiba Inu Coins (SHIB). This has led to the difficulty level in mining SHIBs, which skyrocketed to new highs in the process.
When Shiba Inu was launched in August 2020, the difficulty level was infinitesimal. Now, there are millions of difficulties associated with Shiba Inu mining. This provides an idea of just how many times more difficult it is to mine for Shiba Inu Coins now than it was 12 months ago.
Whatever happens, the Shiba Inu ecosystem has capped SHIBs at 1,000,000,000,000,000 (1 quadrillion). With the 500,000,000,000, 000 (500 trillion) SHIBs that were sent to Vitalik Buterin burned, there has been a dent in the number of SHIB coins that are now available for mining. This has been a key stipulation of the entire Shiba Inu ecosystem since it joined the crypto rankings in August 2020. The 1 quadrillion limit is to help control the supply of Shiba Inu coins on the market. Currently, there are 549,063.28B SHIB circulating in the market.
As a way of controlling the introduction of new Shiba Inu Coins into circulation, the reward continues to decrease due to the increasing number of miners in the Shiba Inu ecosystem.
Initially, individual miners received millions of SHIBA tokens as rewards. As a result of the creation of software to meet the growing needs and preferences of miners as per the components of their personal computers, numerous mining pools have been created.
Currently, if you decide to use the Unmineable software to mine SHIB, you will get great rewards. Specifically, if you mine Shiba Inu Coin using the Binance Smart Chain (BSC), you will get a minimum payout of 500,000 SHIBs. If you choose the Ethereum Network, you will get a minimum payout of 2,000,000 SHIBs.
If you are a prospective miner, you should know that the reward size continues to decrease with the increasing number of individuals involved in mining pools. This means that the difficulty level is only going to increase leading to high energy consumption and low SHIB rewards.
Profitability In Today’s Environment
Mining Shiba Inu Coins can still be profitable for some individuals. Thanks to the introduction of software that can easily be found online, you can join mining pools and be charged in the range of 1% to 5% of mining rewards.
To stay competitive, you can still upgrade your computer with the latest graphics which can cost a few 100 dollars. This is what lots of individuals have done and continue to see huge passive income periodically.
A great example can be attributed to hardware that allows you to alter settings so that you can lower energy requirements which reduces the overall cost of operating the computer.
As a prospective miner, it would be in your interest to perform a cost-benefit analysis to help you understand the break-even price needed to be reached before deciding on making the fixed-cost purchases of the personal computer.
The variables needed to help you make this calculation are the cost of power, efficiency, time, and Shiba Inu value.
Cost of Power: You should ask the question, what is my electricity rate? Keep in mind that electricity cost is not universal. Someone who lives in the United States will have rates that differ from miners in Europe. Miners in Europe and the United States will have mining rates that will differ from miners in Asia and Africa due to differences in exchange rates. You can find how much you are consuming per hour by checking the kilowatt per hour on your electricity bill.
Efficiency: Another vital question to ask is how much power does your system consume? This can be measured in watts.
Time: What is the anticipated length of time you will spend mining? This can be calculated based on the mining group you fall into (individual or pool). This will play an invaluable role in helping you determine profits.
Shiba Inu Value: What is the value of a Shiba Inu Coin (SHIB) in United States Dollar (USD) or another official currency such as the United Kingdom Pound (GBP), or Euro (EUR)?
The advent of blockchain technology and cryptocurrency has created diverse areas in the space. One of the areas is how to calculate the level of profitability. You can find one of such calculators via CryptoCompare.
Aside from this, you can calculate potential profits by factoring into account the number of SHIB tokens you can make daily.
Multiply the coins by 7 to determine the number of SHIB you can make weekly.
Multiply the weekly total by 4 to determine the total number of SHIBs you can make monthly. Multiply the coins by 10% more and 10% less of the current price of Shiba Inu Coins.
This will help you get an approximate sum of money you could attain from your SHIBA mining. You can then compare the amount to the sum of money you pay monthly for electricity.
To give you a mathematical concept of what you can expect to get from mining from SHIB, let us take a look at the example below.
If you mine Shiba Inu via Unmineable, you can get 2,000,000 coins using the Ethereum Network daily. As a result of the increasing number of people joining, let us break the reward in half to 1,000,000 SHIBs a day.
This means that in 7 days, you’d get 7,000,000 SHIBs which will total 28,000,000 SHIBs for the month. At $0.00002, your total income from the mining will be $560. Therefore, if you pay an electricity bill of $50, $100, or $150 monthly, your profit will be $510, $460, and $410 accordingly.
As earlier pointed out, one of the ways to profit from mining is to join mega-mining pools which can be found online. This way, you can work together with others, share risks as well as rewards.
By going this way, there is an increment in speed and a reduction in the difficulty of mining. This puts profitability within reach.
Although the rewards continue to decrease between its shared among 10s or 100s of participants, the combined computing power means that you have a greater chance of actually completing a hashing problem first and receiving the first place reward.
Read Also: Is Shiba Inu A Buy?
So, Is Shiba Inu Mining Still Profitable?
To answer the question of whether Shiba Inu mining is still profitable, you have to use a web-based probability calculator to run a cost-benefit analysis.
Additionally, you can employ the simple mathematical method pointed out under the Profitability in Today’s Environment section.
If you decide to stick with the web-based probability calculator, you can plug in different numbers and find your break-even point. This is the point after which your mining of Shiba Inu Coins is profitable.
Firstly, decide if you have the right capital for hardware if you need to boost the capacity of your computer.
After that, you can determine the potential price of Shiba Inu Coins in the future as well as the difficulty level in mining the coins.
This is because a decline in the difficulty levels of the mining as well as price is a great indication of fewer miners being present which leads to relatively easier ways of earning Shiba Inu Coins (SHIBs).
On the other hand, when there is a rise in the level of difficulty in mining SHIBA as well as the price of SHIB, more miners compete for a relatively lower number of Shiba Inu Coins.
Finding the right platform as an individual miner or joining a mining pool for many has been profitable and it could be the same for you.
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Can You Still Mine on Ethereum after Proof-of-Stake?
Once Ethereum reaches full functionality, the proof-of-work (POW) algorithm that gave birth to the old system of mining will cease to exist. Instead, cryptocurrency miners will be able to mine or validate block transactions based on the number of coins a miner holds.
In the case of SHIB, if the Shiba Inu Community decides to update its ecosystem to take advantage of Ethereum 2.0 features, there wouldn’t be free SHIBs anymore. Instead, a miner will get more SHIBs as rewards depending on the amount of SHIBs staked.
Once this happens, stakeholders of the cryptocurrency space will get to know if mining will completely go away or if new and improved methods will be used to reward miners.