Ethereum ETH - became a real sensation in the world of cryptocurrency because it offered to solve a huge number of tasks within its own network built on blockchain technology, and not just specific one, as Bitcoin did. The concept of a cryptocurrency ecosystem was created by a team of enthusiasts, led by Vitaliy Buterin, and has become customary in a very short time. As part of this material, we will review the concept of mining of Ethereum, which concerns many users.
Mining of Ethereum
Many owners of mining capacities switched to Ethereum immediately after the presentation of its main advantages. The reason for this was several noteworthy features of the process:
Before studying the material concerning the mining of Ethereum, you need to know a few facts:
On the Internet, there are hundreds of pictures with endless corridors between the racks, on which an incredible amount of mining equipment is displayed. Yes, industrial mining constitutes a significant part of cryptocurrency networks, but the real decentralization lies in the placement of a small private mini and medium-sized farms for mining. There are three mining options for Ethereum:
Mining farms are an open case of the PC or a special frame for the farm on which the hardware is placed. The only difference is the number of video cards connected to the system. It varies depending on the capabilities of the motherboard and the finances of the owner from 1 to 12 per farm.
The cost of equipment for starting work with one video card starts from $200 The cost of one card for mining starts from $300. The return on investment is calculated in such a way that the profit is formed after 8 - 12 months of work. It means that all invested funds have already been worked out, at least in the equivalent of Ethereum. Such terms are dictated by the warranty period of video cards.
Due to the fact that the work is carried out on the peak possibilities of the card 24/7, and often under software overclocking, the probability that the card will get out of order is very high. Warranty replacement is a very profitable way to keep your wallet safe. The first benefit is that a burnt warranty card is exchangeable, which means you don’t have to buy a new one, at least right away. However, the lack of high-end video cards on the market significantly lengthens the warranty exchange procedure, so it is recommended to keep 1-2 cards for hot swapping. The second benefit is the possibility of selling cards with a residual guarantee to gamers at the price of new or close to that.
In addition to video cards, other equipment is needed, undeservedly overlooked by many reviews and tutorials:
This question is put into a separate part of the article for a reason. It is the video cards that are the key and most expensive elements of the process. Performance of a video card is measured in the number of computational operations (hashes) per second. For Ethereum, the amount is measured in millions of megahash operations (Mh/s). In order to calculate the profitability of working with one or several video cards, it is necessary to use special production calculators, which take into account many variables in the calculations.
Predictions are carried out do not only consider nominal performance but also the cost of electricity, the commission of the pool and other variables. The result offered by the calculator covers several time periods at once, which makes it possible to calculate the payoff period of the equipment and the profit that will be received after.
It is necessary to note that the calculations are done for the exact moment for a number of reasons:
While working the video cards get very hot and need to be put on the maximum distance. Risers are used for this. Overheating of cards leads to their disconnection or burnout.
The second negative point of the mining farms is noise. Video card coolers operate at maximum speed and when using at least three cards the noise from them is very noticeable. If there are 6 or more of them, staying in the same room for more than a couple of hours becomes impossible.
Options for solving the problem is the removal of the farm to the basement or to a separate room and ensuring an adequate level of cooling. For larger capacities, you need a separate place with low dust levels, and at a distance from residential premises or buildings. Some miners transfer their Ethereum and other cryptocurrency mining farms to water cooling. This minimizes the noise level and stabilizes the working temperature, however, makes it much more expensive.
There is a wide number of companies offering computing power for rent. Not all of them are reliable and the choice of a specific proposal is another topic completely. The general principle of their work lies in the fact that the company acquires computing equipment for their money, places in their own premises and maintains it independently. Clients are offered to buy a contract, according to which, all coins mined with purchased capacity will be sent to their wallet during the entire contract period. The benefit of the company is that they take a small commission for the service, and they also own all the purchased equipment.
Mining Ethereum on your own is a bad decision unless you plan to mine on an industrial scale. Participants of the mining process combine power into a common network - a pool, and this is dictated by the feature of the block generation process. The reward for finding a new unit is received by the participants of the pool that first found one. All other participants in the process do not receive anything. Also, large capacities provide the fastest generation of new blocks, therefore, rewards are paid more often. Independent work with a small capacity will be unreasonably long and, possibly, lacking any meaning, since more powerful pools will find blocks earlier.
Here’s the top list of most efficient pools:
Each miner chooses a specific pool based on their own considerations, information obtained from the network or on the recommendation of their more proficient colleagues.
Ethereum mining process will not start along with the start of a PC or farm. To initialize the process, you need a special program called a miner. There are a lot of programs for this purpose both universal and specialized. Miners designed for a specific currency, as well as for a specific type of video card have better performance. If you are mining Ethereum on AMD cards it is recommended to use the Claymore’s Dual Miner.
For Nvidia cards, EthMiner is considered to be the best, increasing hashrate a bit for the most popular models of video cards used in mining. Users offer their own customizations and build for all popular PC and farm configurations, and also recommend driver versions for each model.
Installing the driver and miner software takes a few minutes. To configure, you must edit the startup and debug files. The start-up files indicate the pool address, the payment wallet address and the password for the voker if necessary. Debug files are edited to achieve the optimal ratio of performance and heating of video cards.
The coins which were successfully mined have to be sent somewhere since there are no internal accounts where cryptocurrencies can be stored for a long time. Cryptocurrency wallets come in several types:
Regardless of which wallet is selected, it is necessary to register and generate the address to which the coins will be sent.
Installing GETH, Synchronizing the blockchain.
Step 1: The first thing you need to do is follow the link "Download Geth". Geth is a program that communicates with the Ethereum network and interacts with your computer, its hardware, and the rest of the network of computers. So if the block was mined by other computers through your Geth program, then it will take this information and upload it on your GPU and CPU for further mining.
Step 2: You need to unzip the file Geth and move it to a local drive. All you need is to move your file that you downloaded to your hard drive, where this file will be easy to find.
Step 3: Now you need to run the program you just downloaded. To do this, you need to go to the command line. Type "CMD" in the search field and select command Promt from the options provided.
Step 4: Now your terminal is open and you can see how incomprehensible it looks to most people. Usually, by default, CMD shows the path C:\Users\Username but instead of Username - the name of your PC user. You need to change the path by writing the CD/”directory where your Geth file is located”.
Step 5: You need to ask the Geth program to create a new account. If you have completed step 2 correctly, just type “geth account new” and press Enter. It should look something like this: “C:\>geth account new”
Step 6: After pressing the Enter button in Step 5, you will be prompted to enter a password. Make sure to enter the password carefully as you will not see the symbols you are entering. This password closes your account and is also your private key. If you lose this password, then you will not have access to the contents from Ether, where your personal wallet is stored. Once you have entered your account with a password and have confirmed your entry into the program, then the next time you start, you will be logged in automatically.
Step 7. You need to tell the Geth program to interact with the rest of the Ethereum network. You can do this by typing "geth - rpc" - it looks like this "C:\>geth - rpc" (in the latest version you enter: geth -rpc -fast -cache = 1024) Press Enter and the Ethereum will start downloading. At this moment you are being synchronized with the rest of the Ethereum network. It may take some time, depending on the speed of your Internet connection and the current block size, anywhere from 20 minutes to several hours. Keep cmd open, you will need it to work in the background. Also, make sure that you start mining only after your blockchain is synchronized.
After that, start the program. If everything is done correctly, the miner will show the number of cards involved, the hashrate with which each of them works, as well as the progress of finding new blocks.
It was already mentioned that the pool does not hold funds in its accounts for a long time. Payments are made in two ways:
Despite the fact that the number of places that accept payments in cryptocurrencies is increasing, there are still lots of things that cannot be bought for Ethereum. There are several options to make the conversion:
The most profitable exchange rate is displayed by multiple monitoring services, for example, Coinmarketcap.
It is the most popular question among all that concern mining in general. Anyone who plans to invest money in the mining of Ethereum, and does not use his home PC or specialized rigs for mining on his own. There is no possibility to specify the exact numbers and approximate profitability. The key parameters in calculating it are farm hashrate and ETH value on the stock exchange. The average for a single video card is considered to be $3-5 a day. If the profit is less than $3, the investment may not pay off at all. Numbers higher than $5 indicate that the market is in a growth phase that cannot last forever. In addition, profitability is constantly decreasing due to the increasing complexity of mining and a decrease in remuneration for each unit. To stay at a stable level, it is necessary to increase the computing capacity of the rigs and farms that you are using or renting.
That being said, you now possess enough information to decide if mining is something you want to engage in. It’s rather hard to make a decision to invest in mining or begin mining on your own, so it is absolutely necessary to consider all of the pros and cons of this risky business. Nevertheless, it might pay off many times depending on the situation as it should be clear by now that industrial mining is a good way to earn some good money especially if you’re ready to invest a lot.
The principle is rather simple, the more and earlier you invest the more you will be able to get out of it, but this is still valid only for those people who are not going to engage in mining on their own as it might only result in undesirable expenses that won’t pay off at all. Despite the fact that everyone can start mining, only the attitude towards the process, as a business, will let you receive an adequate profit.