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If you’re interested in dedicating computing resources to mining cryptocurrency for yourself, this article explains how the basics of how to begin mining Ethereum, and the different mining software options.
Ethereum mining has evolved considerably over the last few years. There’s a drive towards greater and easier participation, and away from the realms of the tech-savvy early adopters. Complicated command-line mining tools have become easier to use, and streamlined. GUI mining software has sprung up that makes it really simple to get going and start earning Ether (or ETH), the currency of Ethereum.
Mining Ethereum works in a similar way to mining Bitcoin, and was designed for a similar reason. The mining process underpins the decentralization of the cryptocurrency by incentivizing computers to validate transactions on the network. Computers compete to be the one to validate transactions and are tasked with solving a complex computational equation in a process called proof-of-work. With Ethereum, whoever solves the equation first is rewarded with 2 ETH (recently reduced from 3 ETH) as well as all the transaction fees known as “gas.”
As ETH increased in price in 2016 and 2017, so too did the Ethereum Hash Rate - a number that reflects how much processing power is collectively being used to solve the proof of work algorithm. Despite a large decline in the price of Ethereum since early 2018, the hash rate has still stayed high. This is partly thanks to increased participation, and partly because of the development of powerful dedicated Ethereum mining hardware in form of Application Specific Integrated Circuit (ASIC) systems from the likes of Bitmain, such as the Antminer E3.
Due to their massive potential hashing power, and the large corporations that build and run them, ASICs are considered a threat to the decentralization of the network. This has sparked debate among the Ethereum community regarding whether its proof of work algorithm should be changed to resist such technology - it’s a big potential change to the estimated $655 million annual market for Ethereum’s mining rewards.
For most of us, mining cryptocurrency will be an activity undertaken using GPUs – either the one built into your computer, or on a gaming card such as those from NVIDIA or AMD. Anyone can try it – but to be profitable, you need an up-to-date GPU, or a dedicated GPU mining rig.
But why should you make the effort to mine ETH?
You can easily buy Ether on cryptocurrency exchanges, but mining is different. Here are three reasons to give it a go:It’s an easy way to get ETH – hobby mining is a low risk, low cost (at least to start with) way of obtaining cryptocurrency and getting involved in the crypto movement You’re a believer – by mining you contribute to the stability of the network and become an active part of the community It can subsidize the cost of a high-end GPU - Although the profits aren’t huge these days, it will help pay back that expensive gaming graphics card
How to get going and start mining Ethereum today
These days, mining Ethereum is really accessible – a far cry from the command line interfaces of the past (although the old applications still exist if you want to go deeper). Here’s our three-step guide to getting going:Set up your mining hardware
Mining Ethereum, at its heart, requires a computer that contains the same elements as any computer you are already familiar with – a CPU, RAM, storage, Power Supply Unit (PSU), cooling fans. However, to be profitable, you will need a secondary processing location - a GPU or ASIC circuit. Most people getting started begin with a gaming graphics card such as the NVIDIA GeForce GTX 1080, although new models come out all the time.
To maximize your profits, ensure you have the latest software drivers for your hardware, and get an efficient PSU to power it. An efficient PSU will not only reduce costs, it will also allow you to overclock your graphics card to get more performance from it. Also ensure you have efficient cooling in place, especially if you’re overclocking your GPU.
The aim is to get the most performance for the least power - less power in + more processing = more profit. It’s that simple.
Progressing from a single graphics card in your desktop PC, you might consider a mining rig – these are machines specially designed for one purpose only – to mine cryptocurrencies.Set up your Ethereum wallet
Before you start mining on your mining hardware, you should set up a crypto wallet. Some mining software includes a built-in wallet, but the most secure way to hold your cryptocurrencies is in your own wallet (it’s best to do your own research to understand why).
The simplest way is to get an Ethereum wallet is to use MyEtherWallet (MEW) [https://www.myetherwallet.com/], which is free and offers security and convenience. MyEtherWallet can be accessed via Browser using the company’s own metamask-powered browser extension.Set up your software
Here’s where you need to make a decision, do you want to use a dedicated command-line miner which is more complicated to set up but is more customizable, or do you want to try a GUI miner which is easy to get going but not quite as versatile?
Go manual on the Command Line
The three main options for manual mining are:Claymore’s Dual Ethereum Miner [https://bitcointalk.org/index.php?topic=1433925.0] Phoenix Miner [https://bitcointalk.org/index.php?topic=2647654.0] EthMiner [https://github.com/ethereum-mining/ethminer]
All of them require setting up and editing of configuration files - which demands some knowledge of Command Line Interface.
Claymore has long been top of the list of Ethereum miners - respected for its profitability and the control it offers over the hardware tweaking and multi-coin mining capabilities.
PhoenixMiner is heralded by many as a more efficient system that also offers additional stability over Claymore.
EthMiner - a derivative of the extra techy Geth [https://github.com/ethereum/go-ethereum/wiki/geth] is a low resource code that can be used to mine any Ethash-based crypto, meaning it can also be dedicated to Ethereum Classic and metaverse for example, by anyone looking to configure it. It will demand more in-depth work to get up-and-running, however.
All have dedicated communities, and various step-by-step guides to installation are easily found. Which option you go for will depend on your confidence level, and your willingness to get into the nuts and bolts of computing.
One additional complication - to use these miners you’ll also need to join a mining pool. This is because mining Ethereum on your own - certainly with a single small rig - is a pretty much thankless task. The nature of Proof of Work and the current crypto ecosystem means that your chances of gaining any rewards are very low indeed – it’s a lottery whether you’ll ever be the one to get the block rewards.
But similar to lottery pools, you can join forces in a mining pool such as Ethpool.org, or similar, and dedicate your resources (and rewards) to a collective. This will give you a regular income depending on the amount of hash power you contribute, but you’ll need to set up your miner to participate in your chosen pool.
Another option is to pick a platform that rolls mining and pooling into one package, for example Nanpool.org also offers its own Nanominer to anyone that wants to use it - though it can also be configured to work with Claymore and other software.
Keep it simple with a GUI miner
For those looking for a really easy time, look no further than Cudo Miner [https://www.cudominer.com/]. A user-friendly piece of software that offers a more familiar graphical interface for those looking to dedicate their GPU and CPU resources to mining.
Its simple set up will allow you to join its pool, and it mines a number of cryptocurrencies including Ethereum. A key feature of Cudo Miner is that it offers an auto-switching algorithm, allowing users to hand over mining choices to the software to ensure it mines the most profitable cryptocurrency. A neat feature is that you can still receive payment in Ethereum so this means it’s a more profitable way to gain Ethereum through mining.
Cudo Miner comes in simple to install packages for Windows, MacOS and Linux – no knowledge of the command line is required to get going. So in terms of learning curve, it is by far the shallowest option we have come across thus far – it’s click-and-go, you don’t even need a wallet to begin with.
GUI mining is a great way to test the water, and see if you want to go deeper.
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