How to mine Ethereum? It is worth it? See step by step

pamella97 (21)in #cryptocurrency • 2 years ago

The cryptocurrency mining around the world has drawn the attention of many people, being an investor or not. And Ethereum has been standing out more and more in this scenario.

That's why we decided to explain how Ethereum mining works, how it's possible to mine, how to generate profits from mining, and much more!

In this article you will also understand:

What is Ethereum?
What is cryptocurrency mining?
Ethereum Mining: How Does It Work?
Is it possible to mine Ethereum at home?
What equipment to use to mine Ethereum?
Ethereum mine ration: what are the software?
Is it worth mining Ethereum?
What is Ethereum?

Ethereum is a platform based on blockchain technology , which allows the extraction of contracts and more decentralized applications. The Ethereum is extracted using algorithms 'test' work ( proof of work ) that process input data blocks to the blockchain.

These algorithms are completed using resources provided by hardware owned and operated by miners. The hardware, time and power used by computers to do this work are offset with Ether, the currency used by the Ethereum blockchain.

The profit earned from mining Ethereum, however, can vary depending on a number of factors, including the difficulty of mining and the current value of the coin.

Ethereum breaks $3,000: how to start investing in crypto?

And so what is Ether?

While Ethereum is the name of the blockchain network, Ether – or better known as ETH – is a cryptocurrency used to carry out transactions within the platform. In other words, the ETH is fundamental for the functioning of the entire network.

'London Fork': Understand the New Ethereum Update

What is cryptocurrency mining?

The cryptocurrency miners, which can be either people or companies, are the ones who invest their computational power (technology) to solve a series of complex equations, whose ultimate goal is to record the transactions that take place on the network.

That is, what a miner does is to ensure that all transactions are valid. In practice, this is done by checking the availability of the balance sent by the sender and validating the recipient's address.

This is what prevents fraudulent transactions from occurring. As already mentioned, the activity demands a certain computational power — technology resources that are detailed below — in addition to the energy expenditure.

It is important to note that mining does not mean looking for existing cryptocurrencies , that is, it is not about looking for coins. It's actually a reward system. The miner invests its technology and electrical energy to keep the network active and the protocol remunerates it with the creation of new ETHs.

Check out the 5 promising cryptocurrencies for 2021

Ethereum mining: how does it work?

The Ethereum network allows miners to add new blocks after an average of 15 seconds. As a reward, they receive 2 ETH plus “gas” (cost required to perform a transaction on the network”). In addition, miners can also receive a bonus for updating the ledger and securing the encrypted network.

After successfully solving a mathematical problem, a miner conveys this new development to other network participants. If 51% or more of the participants agree that the answer is correct, the new block is added to the blocking chain. The miners then start solving a new problem, and the process continues.

Due to decentralization, the Ethereum network gives participants a lot of power to control the production of new coins.

However, more than half of miners must validate all Ethereum transactions. This means that millions of participants are needed to make crucial decisions.

Ethereum cryptocurrencies side by side
Learn all about how it works and how to mine Ethereum
In other words, miners are key parts for the existence and maintenance of cryptocurrencies, as they provide their time and computational capacity to solve mathematical problems, which is the “work test”.

The miners are also responsible for creating new Ether tokens, as they receive their Ether rewards for success in the proof of work.

Is it possible to mine Ethereum at home?

The answer is that mining itself is not a difficult process. That's because the miner connects his computer to some mining software and lets him use the power to solve complex algorithms. However, there is a small barrier to getting started.

As mentioned, you would need a powerful GPU or CPU . Although the first is much more recommended. If possible, you should purchase an ASIC – basically a mining-focused GPU.

But they are quite expensive and not recommended for beginners, for example. So, when choosing a GPU, confirm that it has good processing power and video RAM. Remember that the more RAM you have, the faster your mining will be.

In other words, consider your budget before deciding to mine Ethereum. This can make the difference between a profitable mining experience or one you're just investing money in.

What equipment to use to mine Ethereum?

To be able to mine Ethereum efficiently it is necessary to choose and install a hardware to configure the computer. For this there are two options: through CPUs or GPUs.

The CPUs , Central Processing Unit , are nothing more than the common processor of your computer. The computational power of a CPU is significantly less than a GPU, making mining for these devices unprofitable, and not worthwhile.

The GPU, Graphics Processing Unit , demands the purchase of a video card with a higher price. This is mining hardware that, even the simplest model, is far more powerful than a CPU.

Before investing in the video card, it is important to consider some factors such as the hash rate, which is the speed at which the mathematical problem will be solved, and the costs involved in the purchase, in addition to the electricity costs as well.

Ethereum mining: what are the most used software?

Once you've decided which hardware you're going to use, you'll also need to install software to be able to mine Ethereum. In addition, it may be necessary to install drivers for the video card, but only if it is not installed on the card itself.

Once that's done you need to configure your node, download the entire Ethereum blockchain, which currently runs around 20GB, and then connect it to the network.

Once configured, your node will be connected to all other nodes and will officially be part of the network, allowing you to start mining and customize it. You can implement smart contracts, submit transactions, options to create decentralized applications, etc.

The main software for mining Ethereum are: MinerGate , Geth and Ethermine . Below we will talk a little more about each of them.

Minergate

Miner Gate is the most recommended alternative for anyone who thinks of mining as a pastime or hobby and intends to do it on their own CPU. Therefore, experts do not recommend MinerGate if you are going to be mining more professionally, using specific equipment such as a GPU.

There are, however, two ways to use this software. The first one is downloading itself; the second, however, is doing cloud mining.

The software is free to download and the graphical user interface is also simple and easy to use. Once installed you can start mining immediately.

One of the advantages that MinerGate offers is being able to automatically identify the best version of the program according to the computer's capacity.

Geth

Geth is the original software that was developed by the Ethereum team itself. It is one of the best options for those who want to mine on their own, as well as being simple and easy to use. By being part of the Ethereum blockchain you will be able to create distributed and decentralized solutions.

Once installed, you can test geth help to view all commands, for example.

eternal

Ethermine is an equally interesting software as it has the ability to add 66 blocks per hour. Furthermore, you can choose which of the four servers you want to operate: Asian, European, North American and South American. It supports video cards from two manufacturers, Nvidia and AMD, and two operating systems, Windows and Linux.

In ethermine you can also set a minimum limit for withdrawing coins yourself. For example, if you decide you want to receive payments less frequently, you can set a limit of 10 ETH.

Another benefit of this software is anonymous mining. In other words, you don't need to register in the pool, nor do reports, instant transfer of assets, etc.

14 books on Bitcoin, Blockchain and Cryptocurrencies

What are the most used pools to mine Ethereum?

First of all, mining pools are groups of miners that pool their computational power to extract blocks . In this sense, all the gain is divided among the other miners according to the cooperation exercised.

This is a widely used alternative for those who want to start mining Ethereum, as the chance of finding a valuable block is much greater together than alone.

Therefore, the most suitable tools for those who want to mine together are: the aforementioned Ethermine , SparkPool , NanoPool and F2Pool . Both have their differentiators, so if you're interested, it's important to understand which one suits you.

Finally, it is worth mentioning that the reward value in ETH happens in a meritocratic way. This means that the amount received in cryptocurrencies will depend exclusively on your equipment and the time required for the task.

That is, whoever contributes more to the extraction of a block, receives more for it.

Is it worth mining Ethereum?

In fact, Ethereum mining can be a flashy activity, as the currency has been showing great performance and appreciation over time. Furthermore, it is the second largest cryptocurrency on the market. Therefore, mining this coin offers a striking proposition.

If we compare the profitability of ETH with years ago, we can see that before it was much more advantageous, since they had fewer interested miners, and the mathematical problems were more complex.

Furthermore, it is also necessary to take into account the number of active miners in the network, making the process difficult and more expensive. However, Ether continues to follow growth trends and build a promising scenario. So, whatever your decision, our tip is: study first the mining market and also about cryptocurrencies.

How to mine Ethereum? It is worth it? See step by step

crypto currency eng.jpg