Ethereum cryptocurrency is an open software platform based on the blockchain technology. Although it is similar to Bitcoin, the main difference is that Ethereum enables developers to build and set up disseminated apps.
Ethereum has the second largest market capitalization after Bitcoin and has improved dramatically over the last year with an increase over 230% in the digital coins market.
One method of obtaining cryptocurrencies is to mine them. This is a process of solving sophisticated math and analytical problems. Ethereum miners put in a lot of time to solve these math enigmas. They provide the solution to the issuers, who verify it and compensate the miners with a block of Ether.
Naturally, an increase in mining means that it is becoming harder to solve the complicated problems, and consequently there are fewer benefits to gain. Due to its current popularity, mining Ethereum today is becoming increasingly difficult.
How to get involved with Ethereum mining?
First you need a computer, or graphics card, that can compute an algorithm that it attempts to solve to generate some Ether. For Ethereum, the ‘block’ that your video cards are attempting to find generates on average every 15 seconds.
Ethereum Miner Setup
The standard setup usually consists of:
Item Minimum Recommended
6x Video Cards 3GB Radeon RX 570 4GB
6x Risers With all capacitors built in
Motherboard 6 PCI slots minimum for risers Asus Z170-A / Biostar TB250
Memory 4GB Crucial DDR4-2133
Power Supply 80% of maximum capacity 1200W Corsair HX1200 / 1200W Gold or Platinum PSU
With this setup, you will be able to mine on average around 0.5 Eth per month. This will change depending on the Ethereum Mining Difficulty. It is important to consider the difficulty involved when deciding whether mining is worth your time, or if you should consider switching to another algorithm or coin.
Ethereum Mining Pool Setup
A Ethereum mining pool combines the assortment quota of all the miners, and increases the chances that everyone will find a block dramatically. This will at least allow you to get a steady payout from the pool, even if you yourself never find a block.
There are several options when it comes to Ethereum mining pools which vary depending their overall rate, fees, and payout structure.
NiceHash mining pool
NiceHash miner is by far the easiest way to get involved in a mining pool as it will automatically choose the best algorithm to hash which pays out in bitcoin. To use NiceHash, simply visit the site and download the AMD or nVidia installer depending on what video card you have.
Once installed, run the program allow it to run a quick scan to detect your hardware and install software. Once this is complete, enter your bitcoin address in the top. This is important otherwise you will not get paid.
Payouts on Nicehash are minimum 0.1BTC four times per day. It’s also important to note that it is approximately 20% less overall hashrate, but the switching feature may allow you to be more profitable than if you were to simply mine Ethereum.
Nanopool/Ethermine mining pool
Nanopool is by far the largest Ethereum mining pool with more than 100,000 active miners. Pool fees are 1% and they also payout alternative blocks. This means that if your miners were close to solving the algorithm that would have paid out the block, you’ll receive a bonus.
Another great choice for a mining pool would be Ethermine. They have around 75,000 active miners and have a 1% fee.
Ethereum uses the Proof of work system that has been the branch supporting blockchain technologies like bitcoin and Ethereum itself. PoW refers to the solving of complicated equations. This system is slightly controversial due to the environmental damage and electric cost it generates. However, using the Dagger Hashimoto algorithm, Ethereum created a way that permits simple home computers to mine freely with little consumption needed.
Also, Ethereum plans with its next update, named Serenity, to take out the concept of mining absolutely and change it with a new mechanism called Proof of Stake which will be developed by a consent algorithm.
The Ethereum network is a long string of connections maintained by computers, their impact is irrefutable. A lot of people believe mining will soon stop with the advent of the consensus algorithm, therefore advise those who are looking to learn how to mine to consider alternatives.