Ethereum known the world over for being the Cryptocurrency which gave rise to Initial Coin Offerings is currently the second-best cryptocurrency in terms of Market Capitalization. This open source, public, decentralized and blockchain based Cryptocurrency is becoming popular day by day.
It was proposed by Vitalik Buterin, a Cryptocurrency researcher and programmer in 2013. It was totally funded by an online crowdsale which shows the enthusiasm people had for the competitor of Bitcoin. It went live on 30 July 2015 with 11.9 million coined being premined at the crowdsale. That is 13% of the total circulating supply was created at the inception.
The running of smart contracts and applications being run on a custom built blockchain has made it very viable for startups all over the world. This removes the use of middlemen for certain barriers to jump over such as creating markets, registers of promises, and even moving funds.
Is Mining Ethereum Profitable?
Ethereum is a proof of work coin, which means that the miners need to confirm network transactions. This is similar to Bitcoin. Hence the three important factors that you need to consider are:
- Difficulty of Mining – A solution to the mathematical algorithm means a successful mine of Ethereum. Therefore it all depends on the algorithm. Therefore what needs to be calculated is the difficulty as this is directly proportionate to the energy consumed by the GPU of the mining rig. As miners are increasing it is starting to become difficult, but look at the bright side it has a higher value thanks to the difficulty.
- Hash Rate – This is the speed of solving the algorithm in order to validate the transaction. The higher the hash rate means more electricity consumed, but a faster mining time. Therefore you need to calculate the estimates well in advance as Hash Rate is not everything in a particular miner.
- Cost of Electricity – Calculate the power cost per day (100 W is maximum load while this can go to 1000 W when less efficient) and compare it to the return in value and investments.
I would recommend you to use Ethereum Profitability Calculator to get a better idea of the prospective profits.
This will help you decide if your profits are far more than the costs adhered and if the time is efficiently used to make good profits.
Below is a screenshot of Etherescan’s Ethereum Profitability Calculator.
You will notice the three fields which are Network HashRate (GH/s), Average Block Time (secs) and Price of 1 Ether (USD) being in current value according to real-time data.
The first column which indicates Hash Rate (MH/s), Power Consumption (in Watts) and Cost per KW/h ($) will have to be filled by you.
Once you click ‘Calculate’ you will notice the below results (As per input details in above screenshot)
You will notice these results showing the Power cost in $ and the Profit earned. The best part is it divides it into Hours, Days, Weeks and Months so that you can plan and calculate your Return on Investments and how fast you can expand Ethereum mining operations.
Mining Ethereum at home
Ethereum can be mined at home, considering your computer at home is powerful enough with the right GUI. The best client to use, and most suggested in MinerGate client.
MingerGate lets you share your resources in exchange for rewards of generating Ether using these resources. Keep in mind the profits earned depends on the mining difficulty, the price of Ether and the strength of your hardware.
You can quickly get started with mining Ethereum by following these steps:
1. Download Minergate from their official website.
2. Click on Download and Start Mining which is on the right side of the website (See Picture Below)
3. Once Setup launches, read thoroughly and agree to the license agreement. In the Install Options select ‘Add MinerGate to the system PATH for current user’ and ‘Create Minergate Desktop Icon.’ Once selecting the two click on ‘Install.’
4. Once downloaded, open the application. When launched Create Account and Register yourself before logging in with the same details.
See below picture, it is a screenshot of how the login will look like. The MinerGate Mining Pool will then automatically try to use your resources the best way possible to mine cryptocurrency.
5. Check if your machine is powerful enough to mine cryptocurrency using Benchmark in the top bar. Click on ‘Start Benchmark’ similar to the screenshot below. Once it tests, an overall score is given.
A machine with multiple graphics cards is ideal to mine Ether efficiently than a plain CPU.
Click on ‘Miner’ and choose the cryptocurrency ‘Ether.’ Click on start mining similar to the screenshot below, and the best part is the compliment by MinerGate. We are not going to tell you, try it for yourself and let us know what you think of the boost in motivation!
A notification of loading a Dagger Hashimoto file (DAG) will flash, which shows that the proof of work algorithm is being represented well. It is 1 GB in size and very important, so don’t worry about the large size. Ethereum data block needs to be mined using the DAG.
Want to know how much is being mined? When you click on the ‘Miner’ Tab you can view your currency balance. Your current hashrate is displayed in the CPU Mining and GPU Mining sections. The dropdown menu helps you choose the number of hardware to be dedicated to mining. Shares section shows how the work is divided to gain a fair reward.
Don’t worry about the unconfirmed balance, it will in no time be confirmed by the MinerGate’s servers to be added to the wallet.
Mining Ethereum in a Cryptocurrency Pool
You can start mining Ethereum by downloading Claymore’s Dual Miner or by registering on an Ethereum mining pool. It is called a dual miner as you can mine Ethereum as your primary coin and a second coin as the secondary. Before you do this, ensure your AMD or Nvidia Graphic Cards are of the highest upgrade and an Ethereum wallet to deposit the mined Ether.
You can download Claymore’s Dual Miner here. Once you download the file, just ensure you unzip it.
After downloading, start Claymore using a batch or bat file. This will enable variables to be sent so that the program can use. One example of a file which is configured to mine only Ethereum from Nanopool and deposit into an Ethereum wallet is:
setx GPU_FORCE_64BIT_PTR 0
setx GPU_MAX_HEAP_SIZE 100
setx GPU_USE_SYNC_OBJECTS 1
setx GPU_MAX_ALLOC_PERCENT 100
setx GPU_SINGLE_ALLOC_PERCENT 100
EthDcrMiner64.exe -epool eth-us-west1.nanopool.org:9999 -ewal 1LULtiq4Xntk
The minus indicates variables which include:
-epool (Add the URL of the Ethereum mining server)
-ewal (Add Ethereum Wallet)
-mode (1 is for single mining, 2 is for dual mining)
Choose Nanapool as the mining pool, and keep the following in hand when choosing the server closest to you for physical effectiveness.
|Europe (Server 1)||eth-eu1.nanopool.org|
|Europe (server 2)||eth-eu2.nanopool.org|
|United States (East)||eth-us-east1.nanopool.org|
|United States (West)||eth-us-west1.nanopool.org|
Moreover, There are various ways to change the variables:
1. Opening the folder containing Claymore’s Dual miner
2. Duplicating the file named Start.bat
3. This duplicated file should then be renamed to whatever you like
4. Open this renamed file in a text editor and in this case enter the right variables as mentioned above
5. Once the right variables are entered save the file.
Once you click the renamed file, mining will take place safely with the window appearing showing the progress.
You can check your progress by visiting Nanopool. Just click on Ethereum on the home page similar to the screenshot below.
On the top right-hand corner paste your wallet address.
Click ‘Search’ and you will find the statistics to your mining rig.
When I first did it, there was a page that flashed ‘Account not found’ which changed after the rig found a few shares. So don’t fret if this happens.
Ethereum’s founder Vitalik Buterin is very innovative and given his team of experts, Ethereum is bound to rise higher and higher. With the smart contracts and ICO’s in place, it has already paved its way to a niche of its own.
However, in the latest news, Vitalik Buterin has proposed capping Ethereum, switching to a proof of stake protocol and ASIC miners being introduced by Bitmain. That’s a lot of news for Ethereum, and so understand the mining guide above and make the right moves when the time is right and the confirmations are followed.
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