What is Ethereum mining and how do you mine Ethereum? Learn them all and the best tips in this Complete Guide To Mining Ethereum.
It all started for some reason, you are now suddenly interested in the Ethereum mining field. Then you start looking and. Congratulations!! Now you are at the right place.
By following this guide, you will learn everything you need to know about Ethereum mining. I assume you already know that Ethereum is a rising cryptocurrency from the previous tutorial ( What is Ethereum).
Let’s start by analyzing the reasons why we must understand how to mine in the first step of joining the Indonesian Ethereum community.
Now, where does all this mining take place, and where does the Ethereum faucet come from? Well, your computer will solve a math problem to make sure no one else makes a fake transaction on the Ethereum network. If your computer solves the problem, you will be rewarded. And that is what mining Ethereum is. Everyone has the opportunity to solve this problem and claim the reward.
Explanation of how to mine Ethereum
Ethereum is a network that has its own blockchain system. All transactions made using Ethereum must be approved by ethminers or Ethereum mining experts. The transaction must be verified and entered into the Ethereum blockchain. This verification process is referred to as proof of work or proof of work.
It is your job as a miner to make sure no one cheats. To ensure that all Ethereum transactions are valid, ethminers must solve complex mathematical problems. When solving the equation, he would communicate this to all the miners “Hey, I solved it!
I’ve found the number we’ve been looking for” using a sophisticated computer language. All other miners check if the number is correct and if 51% of them agree that the number is correct then a new block will be added to the blockchain.
The new block holds all transactions which are now verified and the miner who finds it will be rewarded! Then the miners started working on solving new math problems to verify transactions from other blocks.
Three ways to mine Ethereum
Okay, now that you understand the basics of Ethereum crypto mining, then how to start mining Ethereum? There are three ways that you can mine free or paid Ethereum with low fees.
- Pool mining
- Independent mining
- Using Cloud mining services
Pool Mining
Mining free and paid Ethereum in a pool is the easiest and fastest way to get started. You will work with other people. Everyone who mines Ethereum with a single pool agrees that if one of them finds the secret number, they will share it with everyone.
How often do you find blocks and distribute the prizes according to the size of the pool? However, not all pools are the same. These are things you should consider before you join a pool.
- Pool Size
- Minimum Income
- Pool Fee
Why is crypto mining pool size so important? Well, the short answer is that as the number of ethminers increases, the chances of getting prizes increase. But also, the more people join the pool, the more prizes earned will be distributed to more people.
You should try several different pools before finding the one that works best for your computer. Joining a large crypto mining pool is usually a safer option. You might get fewer rewards per 1 block, but at least you won’t go days or even weeks without getting any rewards at all.
You should also pay attention to minimal income. The minimum income is the minimum amount of Ether you have to dig before it is sent to your wallet. If the minimum income is 1 ETH, you need to stay in the same pool for a long time before getting your first crypto mining results.
Pools with high minimum earnings will not be in your favor. You should look for a pool with a small minimum income. Of course, you want to get paid as often as possible, without having to commit to one Ethereum mining pool for a long time. The best method for mining Ethereum is to have the flexibility to switch between different Ethereum mining pools.
Every Ethereum mining pool has some sort of membership fee. You have to pay a small fee in order to continue using the pool. This fee will be paid automatically, so you don’t have to worry about it. The payouts are usually % based and calculated in the cryptocurrency you mine.
The amount you have to pay usually varies from 1% to 3%. You should look for pools with a fee of around 1% because these pools are usually more reliable than pools with a fee of 0%.
Running a pool is a full-time job and computing and data centering is not cheap. 0% fees are usually backed by donations, so they tend not to be as stable as pools with membership fees. If the pool fee is higher than 3% you should look for another pool instead.
Independent Mining
Trying to mine Ethereum yourself does sound like a great idea. You will not share gifts with anyone. You just turn on your computer and let the money flow in, right? Wrong. When you are mining yourself, you will compete with other people and will only get a prize if you solve the math puzzle first.
Since you are competing with a large network of ethminers and companies that have more resources, your chances of success will be very small.
Mining independently will only be profitable if you have a lot of resources at your disposal, meaning here are 100+ graphics cards. But having this much computing power has its drawbacks. You should pay attention to the following:
- Heating problem. If your equipment gets very hot, it can be damaged. Once your equipment breaks, it’s usually really not worth it to fix it. You’re better off spending your money replacing your Ethereum mining rig and fixing the cause of the heating problem.
- Ventilation. To keep all the equipment working, you need to have lots of fans that move the air very quickly. As I’ve said before, heat is a very critical issue.
- Noise. All the fans that are spinning to cool your equipment will make a lot of noise and of course will be very loud and fast. Usually, you will need something like a garage/warehouse or a location far from residential areas to do everything.
- Electricity cost. Having a lot of equipment that uses electricity will also make your electricity costs swell. For example, with only ten graphics cards you will spend around 3-4 dollars (40-60 thousand rupiah) on electricity each day. Imagine if you use 100 graphics cards to be more competitive. The cost of electricity to power all those cards will jump to 30-40 dollars per day (400-600 thousand rupiah) for just one day.
- Room. Having a place to store over 100 Ethereum mining rigs is not something that most people have access to.
Cloud Mining
When you use cloud mining, you are hiring someone else who knows how to mine Ethereum. The way these mining works is that you rent someone else’s Ethereum mining time and for a fee, they give you all the rewards they can get. Cloud crypto mining does sound a little stupid.
- Why would someone use their equipment to mine for others when they could mine for themselves?
- Why should you pay someone else to mine Ethereum when you can invest money in equipment development and mine yourself (for those who know how to mine Ethereum)
- Why don’t you use the money to buy the cryptocurrency you want instead of paying someone else to do it?
And all of these are valid questions. But that’s not to say it’s better or worse than doing it all yourself. Let’s analyze all the advantages and disadvantages of mining Ethereum via cloud mining.
Pro:
- You are not responsible for damaged equipment. Once you pay for mining Ethereum, you’ve already bought a number of jobs that you just have to accept. All repair costs are not your responsibility. But be careful, certain companies will make you pay for electricity and repairs. Read the contract carefully and avoid this!
- You don’t need to keep a number of annoying noisy equipment in your home or warehouse.
Cons:
- You pay the money up front if the price of Ethereum drops, you won’t be able to get your money back, and if you can only receive the mining results that you paid earlier.
- You cannot customize the software and hardware that cloud mining service providers use.
- Cloud mining is a safe way for mining service providers to ensure profits go to themselves from the equipment they have purchased. Cryptocurrency price fluctuations have no effect on them as they are prepaid. So, when you buy a cloud mining service, you will have no problem building a special rig and making your own Etherium faucet. In an ideal situation, cloud mining is more detrimental than independent mining. Instead of using cloud mining services, you are better off buying Ethereum directly.
How to mine Ethereum with a pool system
So your computer will be used for mining Ethereum. Let’s discuss the tools your computer will need for a more efficient way of mining Ethereum. This is everything you need to mine free and paid Ethereum via mining pools:
- An Ethereum wallet to store all the currencies you find;
- GPU drivers;
- Mining application (Claymore miner);
- Mining pool address if you are going to mine Ethereum without a pool;
- Graphics card (GPU) with at least 3 GB of RAM;
- Compatible operating system (Windows 7 or 10 64bit).
Create a digital wallet
Before starting Ethereum mining, you need to create a digital wallet. You have a real-world wallet for your cash.
So are cryptocurrencies. You will create a digital wallet where you can store the Ether you have dug up
Installing your graphics card driver
When your digital wallet is ready to use, it’s time to update the software on your computer. The mining process will be more profitable if your hardware runs all the latest updates. So update your drivers now.
Installing Ethereum mining software
First, visit https://bitcointalk.org/index.php?topic=1433925.0bitcoin-talk
Download the latest version of Claymore dual miner. By clicking on one of the marked links. As of today, the latest version is 11.0. This tutorial uses the second link from Megaupload.
Click the latest version for windows. Then click the “download as zip” button. Wait until the download is complete. Save the file on your desktop for easy access. download-as-zip
Extract the Claymore v11.0 file to a folder on your Desktop for easy access.
Open the folder where you just extracted the files, it should look like this.
Right-click on start.
Edit the Start.txt file and paste the following lines:
setx GPU_FORCE_64BIT_PTR 0
setx GPU_MAX_HEAP_SIZE 100
setx GPU_USE_SYNC_OBJECTS 1
setx GPU_MAX_ALLOC_PERCENT 100
setx GPU_SINGLE_ALLOC_PERCENT 100
EthDcrMiner64.exe -epool -ewal -epsw x
Choose your pool from one of the following best recommendations:
- 2Miners, Minimum Revenue 1.0%, Pool Fee(ETH) 0.01, Pool Address eth.2miners.com:2020
- Nanopool, Minimum Revenue 1.0%, Pool Fee(ETH) 0.05, Pool Address eth-eu1.nanopool.org:9999
- Dwarfpool, Minimum Revenue 1.0%, Pool Fee(ETH) 0.05, Pool Address eth-eu.dwarfpool.com:8008
- Ethermine, Minimum Revenue 1.0%, Pool Fee(ETH) 0.05, Pool Address eu1.ethermine.org:4444
Note: these pool addresses are for the European region. If you live in the US or Asia you may be able to get better results by using an address closer to your own region. Visit the pool site and find pool support in your region.
Replace < Mining_Pool_Address> type your pool address.
Replace type your wallet address:
Once you’re done it should look like this:
Save Start.txt with your new value by clicking file -> save as
Then, Rename the file to start.bat
Double click Start.bat to start mining
If you followed the steps above you should see this screen
Finished! Your computer can now be used to mine Ethereum. Leave this screen open. For this example, I used 2miners pool and MyEtherWallet. But you can use other wallets and other mining pools.
How to check how much has already been mined?
Each pool has a different interface but the principle remains the same. If you need to visit your pool website and type in your public wallet address. Let’s use the 2miners pool as an example.
You type your public wallet address in the search bar and you will be able to see all the information about your Ethereum mining venture. In the case of pool 2miners, when your balance reaches 0.01 ETH it will immediately send it to the wallet address that you typed in the start.bat file earlier.