As I have mentioned many other times before, there have been many different cryptocurrencies that have spun off the initial Bitcoin/Litecoin idea. A single coin from pretty much all of these “minor” currencies is’t worth anywhere near the price of a Bitcoin. For example, 700 Dogecoin is the equivalent of one USD (at the time of this writing). You can view a list of most of these currencies here (and here, and here). If you look at these sites, you will notice that they each go about listing the profitability of the coin compared to Bitcoin. What does this mean? Well, even though the price of most of these coins is no where near a decent amount of money, there are much less people mining than compared to say, Litecoin. This means that you can get large quantities very quickly, and that you would be making more money that you would be if you were mining a more stable currency.
That’s Great and All, But How Can I Benefit From It?
Great question! The most obvious answer would be to check the list periodically, pick whatever is the highest, and then find a pool that mines that particular coin, cashing out as quickly and possible before the price drops. But unfortunately, the price of these coins are very volatile, and you might be essentially losing money until you check back in and switch coins. This not only defeats the purpose, it is also very tedious finding and switching to a new pool and then selling quickly enough.
A bit more logical option would be to use cryptoswitcher. It works by taking the data from one of the said lists above, and then automatically switching to the most profitable coin. It is the ideal setup once everything is running, but setting up is a major hassle. Not only do you have to optimize cgminer settings for each type of coin, you have to find a pool that actually mines at least one of the twenty-plus coins that it supports.
As far as I can see, the most logical option is to use a auto-switching pool. The only thing you have to do for your rig is point it towards the pool sever, and all of the switching is taken care of. Work mining the most profitable coin is automatically sent to the miner. The only real disadvantage is that the pool fee tends to run a bit higher, at ~1.5%.
Sounds Great! How do I Get Started?
The first thing that you need to do is decide what pool to join. Personally I use multipool. There are other options as well, such as the premium one run by coinwarz, I only have experience with multipool.
Setting up is fairly straightforward. After you point your miner towards the pool server, you have to setup payout addresses. Multipool automatically pays out whatever balance of whatever coin you have in order for you to sell at the most profitable price. There isn’t really a site that converts all of these altcoins into USD, but sites like Cryptsy and Vircurex allow you to trade them all for BTC, which can be sold into a bunch of physical currencies. I personally use and recommend Cryptsy. After registering an account at once of these sites, you have to generate payment addresses to receive all of these altcoins. The work itself is easy, but there are a lot to do, but you can probably get them all entered into the multipool site in about ten minutes.
After you have done this, turn on autosell, and start mining! After a certain amount of time, your multi-pool will payout to either Cryptsy or Vircurey which automatically converts them into Bitcoin. You can then withdraw this and sell it at your preferred trading site.
If you choose to follow this guide, congratulations! From my testings, I have gotten 1.5-2x the profit than what I would have gotten from purely Litecoin mining.