Wait! What! Have people started mining Ethereum now as opposed to Bitcoin, which is the most mined in large volume for the past decade? Yes, the reason being the blockchain algorithm works this way, the more you mine, the more complex it becomes and it’s even harder to mine. How Ironic! Yes definitely, but that is the motive behind blockchain technology.
Before we jump into mining Ethereum, let’s refurbish the history of Ethereum. It was founded by Vitalik Buterin in 2013 and went live in 2015. As you might already know, Ethereum is a decentralized protocol featuring smart contract functionalities. The coin of Ethereum is called Ether (ETH) which is an altcoin that stands next to Bitcoin in the global market with a value of $1781 as I write this blog. The supply of ETH coins in the market is 114.63M, with a market cap of $201.4B. Etherscan would tell you how much Ether is in the market and who owns the most, their address and the quantity.
What is Mining?
Mining is a process in which a system adds blocks of transactions to the global ledger and verifies the transaction legitimately. The most fantastic thing is that not a single transaction that has been verified can be undone which makes it the most powerful decentralized system of this era. Miners who do this are rewarded with Bitcoins or any altcoins they mine that encourages them to do more. Ideally, it is adding some blocks of the transaction to a ledger, is it that difficult? What’s all the hype about mining?. Yep, it is, a miner has to solve a complex puzzle to verify the transaction and add blocks, that requires high computation speed, which cracks the code in less time and less electricity. It is costly, scrupulous and people own mining farms across the globe only for its rewards.
What to Mine?
Preceding mining and stuff, let’s discuss on few metrics that will make you take an informed decision before actual mining. Don’t you think, it is only your right to know, given certain inputs/investment criteria, what is your forecast for the next year or month or days. How much will you be able to mine given certain variables in a span of time? The Key performance indicators while the mining is happening.
It has become extremely complex to mine Bitcoins post-2017, though the ones who wanted to, still mine, but the rate at which new miners join fell drastically as it became costlier and more challenging. Why not move on to the next top Ethereum’s Ether coins which is not doing so bad, in fact doing much better. For monitoring and configuring your mining process, Whattomine gives it all. Considering the Mega hashes per second and watts consumption, given your power bill’s cost, what will be your revenue in 24 hours, in a fortnight, in a month, in a year and so on and so forth. Though the mining process is quite easy without much of a manual effort or time from you, there are quite a few pre-requisites in terms of hardware and software that needs to run while you are sleeping, eating, jogging. They are to be discussed below:
- Hardware with high power (High power means high investment and high returns)
- Miner Applications on your laptop/mobile/home PC
- Wallet (I’ll tell you why a wallet is required when you can store your coins in the miner app below)
During the initial days of Bitcoin, CPU (Central Processing Unit) was used to mine the Bitcoins that are part of your home PC, but as and when it got tougher and competitive, we needed a higher-powered gear called the GPU (Graphics Processing Unit) that could be plugged into your pc to improvise the computing power. Later on, we discovered FPGA (Field Programmable Gate Array) that figuratively has an algorithm coded into it which was heating more quickly, as 1FPGA means roughly 100 GPUs. Despite being faster, scalable it had a wide range of possibilities than GPUs, yet it was not very down to earth meaning it can only be used by programmers and used high power consumption, which led to the discovery of ASIC(Application Specific Integrated Circuits). These overcame the negative possibilities of FPGA using less power and more computation speed that optimized the world of the mining as of date. Nonetheless, it has its own cons, in not having to change the algorithm as the market improvises but a new one needs to be built. It does only what it’s been designed for and nothing more or less. In the market, there are many ASICs available on eBay, Amazon etc., with variations in power consumption. However, the most common ones are MSI burner and Corsair GPUs as ASICs are relatively costlier for a single pc to mine. Rather people invest in much lower cost GPUs with the high computational speed that is measured in Hashrate per second. The hardware needs to be plugged into the pc that will act as a miner and a user interface is provided with it. These GPUs again have a plethora of variations according to the need of the miner such as NVIDIA, AMD and much more. The most basic metrics all GPUs allows us to control are the following:
- Core Voltage
- Power Limit
- Temperature Limit
- Core clock
- Memory clock
- Fan speed
- Number of profiles
Miner Applications – NiceHash, CGminer, LOLminer, Cudo miner.
Moving on to the mining apps, there is again n number of them in the market. However most of them are scams, so please do your research before installing any miner app on your pc and update your anti-virus. The most commonly used, easy-to-use, go with the wind app is the NiceHash app that can be installed on any operating system from mobiles to PCs. It supports mining of the top altcoins as its variedly used. Again, you can configure various GPUs in the miner while you get payouts in the form of altcoins. It allows you to choose from an assorted set of algorithms for increasing your result speed, with low power. You would have total control over your mining process and see some bucks without doing anything except for the setup part.
CGminer on the other hand is a widely used mining app amongst miners. Like NiceHash, CGminer is also used by small businesses. What makes CGminer stand out is the ability to meet the requirements of the miners, easy to set up, easy on admin functionalities, Quality of support and easy to do business with. Whereas NiceHash is very easy to use and is the go-to for beginners.
LOLminer has its own way of doing things. Although it allows more than one algorithm to be run by the miner at a time unlike other miner apps, it does not have a user interface instead it needs to be run in command-prompt by executing the .bat file. As of date, it is compatible with all types of operating systems Windows, Linux. Needless to say, all miner apps connect you to a mining pool and give you your share of the mining, this percentage may differ from pool to pool. Why can I not do it solo? Of course, you can, but to mine one single block will take ages, alternatively imagine contributions you make while making a pie with 5 other people, Pie is made faster and you get your share in a short span. Many malicious sites pose as miners beware of them as you have to let the legitimate miner over your firewall.
As we move on to the last in the list Cudo miner, which is the latest of all is again compatible with all operating systems and allows multi-algorithm hashes. Not so widely used because the withdrawal fees are slightly in the higher-margin and not so user-friendly when it comes to mix and match of coins. Ultimately the creators of the app boast on monetizing the hardware you own through cryptocurrencies. It too supports CPUs, GPUs and ASICs.
Remember I said you need to hold a wallet, though all miner apps allow you to hold the cryptocurrencies in them. Well, all miners’ apps are malware according to the Operating systems, you need to give admin access to have it installed on your PC or mobile. This rationally means it’s best not to hold crypto in miner apps, alternatively in a wallet or exchange which is way more secure. There are various types of wallets in use, mainly:
- Hardware wallet
- Web/Software wallet
- Mobile Wallet
- Desktop wallet
All of these advances with some pros and cons, but which do you think has the most security. Obviously, it’s the Hardware wallet, the downside being you cannot access it any time you want to, you need to plug in your hardware into a very safe PC or laptop or Mobile to access it. The common ones are Software wallets as mobiles are more prone to malware and we connect to common wifi that is utterly unsafe. If you can have your antivirus upgraded in the phone and safely use it only for its purpose, we can consider using Mobile wallets. Desktop wallets are similar to hardware wallets, the only difference being in size and no internet connection will make the desktop wallet perform as a hardware wallet. In the end, keep your cryptocurrency, away from the Internet when you are holding.
Come on! let’s dive into some of the commonly used ones. Commencing with Coinomi, which is the most prevalent one in the market next to CoinBase. All these wallets allow you to hold your crypto safely and securely in exchange for holding fees. They do have both mobile and Laptop versions to tend to the needs of their customers. Most of the wallets are multi-coin support but there are specific to altcoins as well. Like Ethereum wallet holds only ETH coins and Bitcoin wallet holds only Bitcoin.
Last, but not least I have delineated all the possible choices to do mining of ETH coins with a complete depiction of the process, types of equipment and software required. As such these are purely my opinion and not in any way a piece of financial advice, please do your research before investing money in any new venture.