Crypto mining is the blood and flesh of any Proof of Work (we’ll come to that) blockchain. Without a strong miners network, the blockchain is as vulnerable as anything written on a piece of paper. Ethereum, the second-largest blockchain, is not just a cryptocurrency but has many other blockchain-related applications like DeFi, Metaverse, Non-Fungible Tokens, DAOs, etc. Some also perceive Ethereum as superior to the Bitcoin blockchain, which is limited to financial transactions. And with Bitcoin mining’s difficulty reaching unprecedented heights, it’s natural to search for a strong alternative. Ergo, you’re here searching how to mine Ethereum. 😀 Before going to the crux, let’s brush up on the basics.
What is Crypto Mining?
This means all miners competing to validate a block worth of transactions, which then becomes the newest addition on the long chain of blocks–blockchain. This is accomplished by finding the crypto hash. It’s an incredibly resource-intensive process for a lengthy chain like Ethereum. After finding the required hash for the block, the first miner transmits this information to the network. Subsequently, the network verifies its legitimacy, finally adding to its own copies of the blockchain. This process repeats for every block, which comes about every 15-18 seconds for the Ethereum network. This complexity is what makes Ethereum a robust, immutable technology. Because to compromise such a huge network, the efforts needed will easily outweigh the potential benefits. Consequently, crypto mining is the backbone of any proof of work blockchain and is profitable if done wisely.
What is Proof-of-Work?
This phenomenon in which a miner solves for a crypto hash and then submits the ‘work’ to the entire network as the ‘proof’ is called Proof-of-Work (PoW), which is nothing but a consensus mechanism for the blockchain to work. However, there are other mechanisms, like Proof-of-Stake, on which Ethereum is planning to shift. Still, PoW is the only one standing the test of time, as it started with Bitcoin in 2009 and has been foolproof for over a decade. The only drawback is the energy consumption. As all the miners rush to compile a block, only one succeeds, resulting in a huge wastage for all the others every time a block is created.
Types of Mining
There are different mining methods based on your hardware and a few other important parameters.
Solo Mining
As evident by the name, solo mining is when you DIY everything. It demands a great deal of technical know-how and investments. Put simply, mining is competing in a race every time you search for the crypto hash. So what’s the fate of a person riding a bullock cart in an F1 formula race–a lot of hard work with no gains. It could be the same if you try to mine Ethereum with a setup substantially inferior to the mega pools with hundreds of computers joining forces. However, this is also the most you can earn from mining, with no profits going elsewhere if you’re ready to invest a fortune upfront.
Pool Mining
In contrast, pool mining carries lesser risk and fewer rewards. In addition, joining pools is generally easy, with detailed guides to help you through it. The primary advantage of pool mining is the freedom it gives to start mining with nominal costs. Besides, they take care of the intricate software setup, and you pay only a small commission in exchange for it. If this piques your interest, try mining with F2pool, Ethermine, or Binance Pool.
Solo Mining Pools
This is the middle ground between the complications of solo mining and the fewer rewards of pool mining. These pools permit you to join the pool alone while taking care of the software aspects related to mining. Still, you need potent hardware for joining solo pools like K1Pool, 2Miners, etc.
Cloud Mining
This is the easiest to begin with but the riskiest of the lot. Cloud mining facilitates a mining contract for a set period. These companies reportedly mine with their own hardware and share the profits with the clients (you). The user pays for the complete contract period in advance and becomes entirely dependent on the mining company. As many users have mentioned getting scammed, inform yourself before investing in any cloud mining contract.
GPU mining
This is when one uses graphic cards to mine. It’s an economical way to begin mining. However, one should also expect little profits. This is more suitable for joining pools as the overall small hash rate won’t find luck in winning blocks by oneself. However, some miners also combine multiple GPUs in a mining rig to elevate their chances of securing a block. Please note that these products provide only the frame without all the essential parts you may need to start mining. Conclusively, verify what’s on the offer before making a purchase.
ASIC mining
Application-Specific Integrated Circuit (ASIC) are dedicated beasts purpose-built for mining. ASIC miners have premium price tags, create high operating noise, and generate comparatively greater profits. They have a higher chance of success at solo mining, but the best use case is still joining a good pool. But they carry greater risk as they are explicitly designed to work with a single mining algorithm. So they can’t be used with other coins. For instance, when Ethereum shifts to Proof-of-Stake, all the ASIC Ethereum miners will lose their value, especially if the miner isn’t interested in mining other less significant crypto coins using the same algorithm. Conclusively, investing in ASIC for Ethereum mining at this point in time is not advisable. So this concludes the major types of mining. Further sections entail the general procedure for Ethereum pool mining with GPUs since that’s what most miners do.
How to Pool Mine Ethereum?
Mining Ethereum is a few steps process. Once set up, you will hardly need to do anything except monitor the rewards and track expenses. Before starting, it’s vital to assess the approximate profitability as per your current hardware. The easiest way to do this is to use any crypto mining profit calculator like CryptoCompare, CryptoRival, etc. However, these calculators only give rough estimations, and the actual results may vary.
#1. Create a Crypto Wallet
Register with any Ethereum compatible crypto wallet. There are many options in the market based on their features. However, try to look for a self-custodial crypto wallet, as they are more secure. For those who don’t know, self-custodial wallets mean you hold your private keys. This translates to greater control and security if you can keep your keys and seed phrase safe.
#2. Register at a Pool
You have a variety of pools to join. But joining a new pool with a sluggish hash rate can be a waste of time and resources. So even if the reputed names charge greater commissions, they are worth joining because they give you a better shot at steady profits. The best way to judge any pool is its recent performance. And the most reliable place to witness that is Etherscan. This might take some time, but you can check which pool is actively winning blocks. Still, if you don’t want to go through all that labor, try miningpoolstats to know the history of the last 1000 blocks. Based on this, the top three Ethereum mining pools are Ethermine, F2Pool, and Poolin.me.
#3. Download Software & Start Mining
Like pools, one has plenty of options for mining software. The recommended way is to proceed as per your pool mining guide. Make sure to edit the start.bat or start.cmd file that comes bundled with the mining software. The objective is to replace the ‘username’ with your registered pool name and enter your pool’s mining address as given in the respective guide. After editing and saving the file, all you have to do is double-click the same file to start mining.
Conclusion
So this concludes the Ethereum pool mining guide. It will help to ensure compatibility with other mining algorithms if you’re purchasing new hardware, as Ethereum mining is going to stop sometime in 2022. But mining is not the only way to earn crypto. You can start with crypto staking on these crypto staking platforms. However, there are also ways to earn free crypto by doing as little as surfing the internet.
