How to mine Ethereum- Ethereum Mining
Since the launch of Bitcoin, mining has been a sweet way to earn some extra Bitcoins, as rewards were high and the difficulty was still low, because of the low amount of miners.
Currently, the situation is a bit different… Right now, it’s almost impossible to make any profit mining Bitcoin without specialized hardware and even then there are tons of risks and the possible rewards stay low.
That’s why many people are switching from mining Bitcoin to mining other cryptocurrencies. Ethereum is one of such cryptocurrencies. It’s a great alternative to Bitcoin and mining it can surely be profitable. The problem is that most people don’t know how to mine Ethereum and the vast majority of them doesn’t want to find out, simply because they think it would take too much effort or that it would be too difficult. That’s why this article will focus on providing a simple guide on how to mine Ethereum.
Cloud Mining: An easy, but dangerous way
Cloud mining is probably the easiest way to mine Ethereum. The idea is amazing: You invest in a cloud mining company, the company buys miners, pays for the electricity and runs them in a large facility, so they can make more ROI (Return On Investment) than you can by mining at home.
There are tons of Cloud Mining websites out there, offering you Ethereum Mining contracts for a certain price, often packed together with some maintenance costs. However, most of these Cloud Mining companies are scams. They will take your money, pay some of their investors to build trust and then run away with the rest of the money.
Some Cloud Mining companies are less shady. One of these is Genesis-mining.com, which has been dominating the Cloud Mining sector for years now. The big disadvantage of investing in Cloud Mining companies like Genesis Mining, however, is that they don’t offer a lot of ROI (Return On Investment), unless the price of the cryptocurrency rises, which is what you want when you invest in a Cloud Mining contract.
Ethereum mining is supported on multiple websites, although the problem is that the legitimate companies don’t pay a lot of ROI and the companies that do give you a lot of profit, are scams.
That’s why I suggest not to invest in Cloud Mining and to follow our guide below on how to mine Ethereum yourself.
Mining Ethereum yourself: A great opportunity
Mining Ethereum yourself is a bit harder than simply making an account on a cloud mining website and paying the company some money, but it’s also much more rewarding and isn’t as risky.
Below, I will be talking about each part of the mining, from choosing the right hardware to joining the most profitable mining pool.
Choosing the right hardware
Choosing the right hardware is hard. You have to find a low-cost miner that doesn’t consume much electricity but still provides some nice profits. The best way to mine Ethereum is through specialized GPUs. There are multiple places you can look for GPUs that fit your needs, such as on eBay, Bitcointalk & trusted webshops. Beware of fake reviews on these webshops though, so always google “[webshop name] scam”.
If you’ve found a miner that’s not too far out of your budget, you could try putting the information of the miner in a mining profitability calculator, like https://www.cryptocompare.com/mining/calculator/eth. What this calculator doesn’t show, is the noise the miner makes and the space it takes. Obviously, you must do your research
Remember that drops in Ethereum’s price or the rising mining difficulty might make reality a bit worse than what the calculator shows… Rises in Ethereum’s price, however, could make you some extra money. Also, take into account the quality of the miners. If the miner has been used for years already, its hash rate is probably a lot lower than when it was new and it will most likely stop functioning properly quickly.
If you’re not sure whether it would be wise to buy a miner or not, you could try asking people in the Mining Support section of Bitcointalk or on the other site. It’s definitely not an easy choice and mistakes are made very often.
Cooling, Power supply, etc.
As mining Ethereum consumes electricity and produces heat, you must get a power supply and a cooling system too. The amount of cooling your mining rig requires, depends on where you live though, as living on Antarctica obviously doesn’t require a very expensive cooling system, whilst living in a desert would require a well-functioning cooling system.
Power supplies and motherboards are also necessary for an Ethereum mining rig. What Power supply and motherboard you should get really depends on the miners you have in your rig. It’s recommended to do your research on both the miner and the cooling system, power supply, motherboards and any additional parts like the computer cases, before purchasing any of these.
To mine Ethereum, you also need the right software. One of the best places to get your Ethereum mining software is https://github.com/nanopool/Claymore-Dual-Miner/releases. Although there is other mining software available, claymore’s is the best I know of. Install the newest version, configure it as you like and go here to see all commands and features: https://bitcointalk.org/index.php?topic=1433925.0. That is also the place to request help if needed.
Joining a mining pool
Joining the right mining pool is a very important part as well. As solo mining has become nearly impossible nowadays, due to the total hash power being very high, which makes your chances to find a block very low and thus it might take years to earn your first dollar worth of Ethereum.
Therefore, it’s recommended to join a mining pool. Mining pools are groups of people mining in one “pool”, combining their mining power to achieve a higher total mining power, which makes your chances to find a block higher and thus you will find blocks more often and your income will be higher.
As most pools take a fee, it’s also important to take the fees into consideration. Some mining pools offer very low fees, but if their total hash power is still very low, it won’t be worth it. Therefore, you must look for a combination of high total hash power and low fees. This will grant you the best possible income.
Managing the risks & rewards
The final part of the game is managing your risks & rewards. It’s very important to be the only one who has access to the Ethereum address you’re sending your mining rewards to, you must make sure not to lose your keys and you should never rely completely on mining. If you completely rely on mining, a simple drop-in Ethereum’s price, a rise in its difficulty, a break-down of your miners or some other disaster could ruin your life permanently.