Before you start mining ethers, you need to check how much you are making. Ethereum calculators are free on the internet and can display your potential earnings in seconds. Most of them follow a formula that you can use yourself.
First, let’s discuss what Ethereum is and how it works. Then we go through the specifics of ETH mining, from the methods to the equipment you will need. Later, you’ll see why you might want to forget about mining Ethereum this year.
Mining is a win-win way of supporting a particular cryptocurrency. They help keep the network running smoothly while you earn more from that crypto. However, you should plan carefully before trying this expensive activity.
What is ethereum
Bitcoin is the mainstream favorite, so they tend to forget about other coins on the crypto list. However, despite BTC’s 6-year lead, Ethereum has far more real-world applications.
The big BTC is the first cryptocurrency. It was introduced as open source, free software in 2009. In response, a lot of people started creating new cryptos.
Some had a few tweaks, like for example Bitcoin Cash (BCH). Others were made to go beyond the capabilities of Bitcoin. Ethereum is one of those successful coins.
Vitalik Buterin published Ethereum (ETH) in 2015. The Ethereum network was a blockchain, just like Bitcoin. However, it had features that BTC didn’t:
- Smart contracts – These are online agreements that are only executed when certain conditions are met. This did not require a third party to function.
- Decentralized applications (dapps) – These are computer programs that run on the blockchain. These had better features than most of the regular apps.
- Non-fungible tokens (NFTs) Allow people to have a copy of their assigned digital media. Despite free copies online, your version of NFT is different. Your property is registered on a blockchain.
What is Ethereum Mining?
We mentioned that the ETH network is a blockchain. It is made up of a number of computers around the world. However, they do not have a central authority like a bank or a government.
They also belong to normal people like you and me! These computers confirm Ethereum transactions. Everyone is protected by encryption.
A certain code is required to break this encryption. As soon as an exchange takes place, computers on the blockchain will find out the code. You have to do thousands of calculations!
The first to receive the winning solution deserves a Proof-of-Work (PoW). Then a new block is added to the blockchain. In return, the computer receives a block reward in ETH coins or ethers.
This whole process is known as mining. It benefits both sides. They help the crypto network run. Then you will earn more from that crypto in return. It’s a win-win situation!
How much can i earn?
Before you start mining Ethereum, the best thing to do is to check how much you are making. Crypto mining is expensive. You need a powerful computer with the right software that runs 24/7!
In particular, you need to pay attention to three factors. These are your hash rate, energy usage, and the purchase price for your equipment.
Let’s start with the hash rate. Simply put, it’s your “mining speed”. A higher hash rate means better chances of making money from ETH mining. Crypto miners often use GPUs.
These are located in graphics cards. Thank God, hashrates.com shows the estimated hash rates for each graphics card model. Note that graphics cards are quite expensive.
Therefore, you should also consider the purchase price. Devices degrade over time. At some point they break. Balance your budget with your desired hash rate and graphics card prices.
Finally, determine your energy consumption. If you’re not careful, you may be paying too much for your next utility bill! The more expensive devices often require less electricity.
After you’ve got all of this information, use a free Ethereum calculator to work out your potential earnings. Examples include Etherscan and CryptoCompare.
Mining software can also function as an Ethereum calculator. It can run benchmarks on your mining rig. Which one should you use however?
The online Ethereum calculators are handy, but they’re not accurate. They don’t take many factors into account. This includes different types of mining software and computers.
On the other hand, the mining software will give you more accurate results. It is saved on your computer so that it can do an in-depth analysis. However, this takes up to 30 minutes.
Why Ethereum mining is not a good idea right now
You have three options for mining Ethereum. You can do it alone or with other people. Or, you can pay someone else to do this for you. Read below for more details:
- Solo mining – As the name suggests, you can mine cryptos yourself. This means that you will receive all of the income. This is not profitable these days as you are competing against too many.
- Pool mining – This is crypto mining with a group of other people. They work together to earn more crypto than solo miners. However, the income is shared among the members. More people mean fewer block rewards for you.
- Cloud mining – Companies can mine cryptos on your behalf. You pay them for it for a set period of time. However, if your crypto fails, you can earn a digital coin of lesser value.
Unfortunately, all of them are not a good idea right now. There are a number of reasons for this. Read each one below:
- Ethereum 2.0 – Ethereum will switch from Proof-of-Work to Proof-of-Stake. Instead of mining, people will just put some ETH aside to make more. Mining is a thing of the past. The Beacon chain upgrade comes on December 1st, 2021.
- It is expensive – You need a lot of money to start mining at ETH. You may not be doing enough Ethereum break even before the staking upgrade.
- Other cryptos – You can get better profits with other cryptos. You might want to spend your mining money on these coins. Then HODL them effortlessly until their value skyrockets!
Please do your own research to find out if Ethereum mining is right for you. Cryptos run on blockchains, and most of them allow mining. You might want to choose this instead of ETH.
Start by reading more about cryptos. Look at those that have long-term use. The other Cryptocurrency items on Inquirer USA are a great starting point.
Also check out real-time crypto market data such as exchange rates. You should know all about your investments. Never invest in things you don’t understand.
Learn more about Ethereum mining
How do I start mining Ethereum?
You need a powerful computer and the right mining software. Search the internet for recommended specs and equipment. Use one of the numerous Ethereum calculators on the internet to see if it’s worth it or not.
Is it hard to mine Ethereum?
It is difficult to mine Ethereum these days. You have to face too many miners. In addition, some companies have even more powerful computers that mine cryptos.
Will Ethereum 2.0 Kill Mining?
Once the staking upgrade starts, mining will be a thing of the past. It is scheduled for December 1, 2021. That is why it is best not to dismantle ETH now.
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