In the decentralized, digital world of Decentraland, users can own pieces of digital property, customize them as they see fit, and show their homes off to their friends. It's now one of the most popular blockchain-based video games. To make a quick buck, a lot of people want to mine Decentraland’s native cryptocurrency, Mana.
Unfortunately, mining Mana isn’t possible right now. Unlike proof-of-work (PoW) cryptos (such as Bitcoin), Mana is built off the proof-of-stake (PoS) consensus algorithm, which means traditional mining isn’t possible. However, there are other ways to make money from Decentraland, Mana, and the platform's other tokens.
What is Mana crypto?
Mana is Decentraland's in-game currency. In the game’s ecosystem, players use Mana to pay for various goods and services, such as customizing their character or home. Mana is built off the Ethereum blockchain, otherwise known as an ERC-20 token. That means traders will need Ethereum and an ERC-20-compatible digital wallet (as most are) to buy Mana.
Demand for Mana is correlated with Decentraland's popularity. As more people play the game, demand for Mana tokens will rise, boosting their price. Thanks to social media and YouTube stars getting in on the crypto trend, we've seen Decentraland's popularity skyrocket, along with Mana prices. Prices are sitting at $0.71 per token, significantly lower than the $1.60 all-time high seen in Apr. 2021. The world's 72nd largest altcoin, Mana currently has a market cap of $1.1 billion.
Why you can’t mine Mana
Mining Mana isn’t possible because there’s no need for “miners” to validate transactions. Bitcoin and Ethereum mining works because the PoW consensus algorithm requires users to lend their computational power to validate transactions. In contrast, the PoS algorithm means just a few trusted users are responsible for validating transactions. Typically, this requires “staking” a collateral of tokens to “buy in” to a validator position. In return, these validators earn a percentage of all transaction fees. Since Mana is a PoS token, there’s no need for miners on the Decentraland ecosystem.
Is mining crypto still worth it?
Mining cryptocurrencies isn’t what it used to be. In 2021, your best bet is to go with an ASIC, a type of computer system designed to mine cryptocurrencies. However, even with high crypto prices, you won’t break even until a few months of dedicated mining after you factor in electricity expenses.
Although this crypto bull market has sent prices skyrocketing, over the long run, mining cryptocurrencies have become harder for individual miners. Back in 2014, a person could mine bitcoin on their computer and earn a decent side income. Today, mining requires exponentially more computational power, which is why most mining activity is performed through mining pools involving thousands of computers.
For the regular person, mining cryptocurrencies isn’t as profitable as it used to be. Publicly listed cryptocurrency mining companies, like Riot Blockchain (RIOT), still struggle to make a profit with Bitcoin trading above $40,000. And even if you can make a profit mining crypto, you’ll have to remember that mining produces a lot of heat, which could make your living space uncomfortable and quite noisy.