Lots of people have jumped in and used their computer resources or purchased hardware so that they can mine Ethereum (ETH). If you’re thinking of starting an Ethereum mining operation read this article to learn all you need to know about mining ETH and about the different options you have for ETH mining software.
Mining for cryptocurrencies has changed a lot over the years, and that’s the case for Ethereum too. It used to be techies who mined cryptocurrency - in part because they had the skill to easily do so - but also because technically minded people have an interest in difficult to use software, like cryptocurrency mining apps. However, cryptocurrency mining software is now much easier to use so it is very possible for the average person to mine cryptocurrency.
Even the most complex CLI (command line interface) software for mining has now become much easier to use, while there are also plenty of GUI (graphical user interface) options that makes mining ETH a matter of pointing and clicking.
Bitcoin (BTC) and Ethereum works in similar ways and as a result mining ETH and BTC is quite similar too. The goal is to make sure the currency is decentralised. As a result cryptocurrency networks require a large network of computers to process transactions.
Mining is the process by which computers validate the transactions of cryptocurrency users on the cryptocurrency blockchain. It is done using a complex cryptography algorithm and the process is called proof of work.
Anyone can contribute computing power to enable the validation of transactions and you get a reward for doing so. You get a couple of ETH coins for the block you validate and there is another reward too – something called “gas” which is similar to a transaction fee.
However over time it becomes more difficult to solve these blocks. This difficulty is measured by the “hash rate”. Though, as the “hash rate” for ETH has gone up, the price of ETH has also gone up over the years. However, a big drop in the value of Ethereum in 2018 did not see an equal decline in “hash rate” – instead, the hash rate for Ethereum remained high.
Why did the ETH hash rate stay high? In part because more and more people tried solving for transaction blocks and in part because the mining hardware used by people (or indeed large groups of people) became more powerful and able to solve blocks much more quickly. For example, application-specific integrated circuits entered the mining scene. These ASICs made for much more powerful mining machines.
In fact, ASICs are so powerful and relatively hard to buy that many people think the mining power that’s increasingly concentrated in the hands of a small group of ASIC owners has meant that ETH is becoming less decentralised than it used to be. There has been some questions around what can be done to prevent concentration of power over the network in the hands of a few groups of powerful miners – but the necessary changes to the ETH proof of work mechanism has not yet been made.
You can still mine ETH without the use of specialist ASICs, but you will need a powerful GPU. In other words, a solid gaming card from Nvidia or AMD. You also need an up to date computer to run the mining software.
It’s clearly no longer all that easy to mine ETH and you have other cryptocurrencies you can investigate too. Besides, you could always buy ETH from an exchange, right? However mining Ethereum has its benefits. For starters, you won’t take much of a risk if you only mine a little bit of ETH as a hobby – you just use your existing GPU. It’s an easy way to join the cryptocurrency craze and make some money.
However, mining ETH has a deeper meaning – by mining you indicate that you support the values behind ETH as your mining activity helps ETH stay stable and ensures that it remains decentralised. Besides, the profits you make from a little bit of hobby ETH mining could easily pay for more serious mining equipment – and the opportunity to mine significant amounts of ETH.
Like we said, you no longer require a computer engineering degree to start mining ETH. It’s really simple nowadays. You need to take care of three important aspects.
The hardware you pick to mine ETH is really what determines how much ETH you will mine, and how much profit you will make. You start off with a basic computer which is really just like any other PC you would use. You need a CPU, ample memory, cooling and a power supply (PSU) that has enough power to drive your GPUs.
You will need a GPU (or indeed an ASIC board) if you want to mine any significant amount of ETH. Consider something like an Nvidia GTX 1070ti or above, high-end GPUs from AMD will also work. Always update your GPU firmware and drivers and try and buy a PSU that is efficient: an efficient PSU can reduce your mining electricity bill and could help you get a bit more speed out of your GPU.
All-in-all you want the most powerful hardware you can afford to achieve high hash rates, but at the same time achieve these high hash rates using the minimum amount of electricity. Eventually you could conclude that a PC + GPU will only take you so far, and that you should really buy a separate, dedicated mining rig.
There are plenty of ways to set up a crypto wallet, you might even find that your mining software includes a wallet. If you want to keep your newly minted ETH as safe as possible you should really use your own wallet. MEW or MyEtherWallet is a good choice and it’s free to use, all you need is a standard web browser.
If you’re a beginner you might want to choose a GUI mining software package that makes it easy to mine ETH. Note however that GUI mining software is generally not as versatile as the CLI equivalent, but for many people typing commands into a CLI can be too difficult when starting.
Choosing between CLI and GUI should really be based on what you think your technical abilities are. If you are comfortable with Linux-style command line inputs you’ll be just fine with a CLI tool and you’ll enjoy the advanced functionality these tools bring. On the other hand if you’re just starting with mining try the GUI tool we recommend.
In terms of CLI tools we recommend either Claymore’s Dual Ethereum Miner or EthMiner. You could also try PhoenixMiner. However all three these tools will require you to create your own config files so you need to be comfortable doing that.
CLI tools can be difficult to use but you can always consult the broad communities supporting these tools – but try and pick your tool of choice according to the level of confidence you have in working with CLI alongside your desire to muck around with technical software.
Cudo Miner is possibly the most popular GUI tool for mining ETH. It’s easy to use because you don’t need to know command line commands or the ability to write configuration files, it’s all point and click.
It lets you mine a range of cryptocurrency including ETH and it can even switch mining efforts dynamically so that you are always mining the most profitable cryptocurrency. Interestingly, with Cudo Miner, you always receive your payment in ETH even if you set Cudo to automatically pick which cryptocurrency it mines.
Installing Cudo Miner is easy, it works on anything from Windows to Linux through to OS X. In fact, there is very little you need to get going with Cudo Miner as you can start mining with Cudo even before you have a wallet address. All-in-all Cudo Miner can help you find your feet in the world of ETH mining.
Mining ETH on your own can be extremely difficult – it will take a single GPU what seems like forever to mine a single block. Proof of work nowadays require a lot of computing power and the best way to mine is to join a mining pool where users join in the effort to solve blocks – resulting in quicker rewards.
So, instead of waiting for a random process to eventually reward you it’s better to link up with other miners in a mining pool to boost your chances. In fact, if you contribute enough computing power to personally push a high hash rate you could look forward to regular payouts from ETH mining.
You need to configure your mining software to work with a mining pool but you do get some software solutions which can mine ETH while also linking up with a pool. One of these is Nanpool.org but you can also link a CLI tool like Claymore with Nanpool.org.
There used to be a time when mining a cryptocurrency like ETH was a very technical affair. But over the years ETH mining and mining cryptocurrency in the broad has become so much more accessible. It’s hardly any trouble to set up a mining rig, software and your wallet address. Why not try it with your existing GPU to see how it goes?