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What Is Ethereum Mining?
In recent years, blockchain has been known to more and more people, and cryptocurrency has also become a breakthrough in investment. But the recent turbulent crypto market may not be suitable for novice investors, therefore mining has become a good choice. Ethereum mining is one of the most popular. But not everyone knows what is Ethereum mining and how to mine for Ethereum.
Similar to other blockchain technologies, Ethereum applies an incentive-driven security model. Any network node that claims to be a miner can try to create and validate a block, and each miner must provide a mathematically mechanized “proof” when presenting a block to the blockchain. This “proof” is like a guarantee–if it exists, this block is valid.
Most miners around the world create and validate blocks at the same time. In order to submit a block to the chain, a miner has to provide this “proof” faster than other miners. This process is called “proof of work”. The miner who validates a new block will be rewarded.
But what is the reward? Ethereum uses its native token Ether to award miners. Every time a miner validates a new block, new Ether will be mined and awarded to the miner.
What Is the Cost of Ethereum Mining?
As mentioned earlier, Ethereum is a very popular crypto network. To receive the reward, miners need to compete with thousands of other miners to be the first to validate new blocks. Anyone who wants to become a miner, must first consider the cost of mining and weigh the possibility of successful validation of new blocks. Here are some key factors that should take into account:
- Equipment cost
It requires computing resources to solve complex mathematical problems in mining. Therefore, miners need to purchase specialized equipment, which to a large extent decides the mining output. The better the equipment, the higher the output.
- Electricity consumption
Since mining equipment runs around the clock and consumes a lot of electricity, the cost of electricity for mining is very high. Although the electricity bill is cheap in some areas, the cost is still charged, sometimes even could not make ends meet.
The noise of mining equipment is at least 70 decibels. The closer the distance, the greater the noise. For mining in small places such as homes or offices, the noise is particularly noticeable, and it is harmful to the body while disturbing others.
- Operation and maintenance
Various problems may occur during the use of the equipment. Dust, temperature, etc. will affect its operation and life cycle. If it breakdowns, miners not only need to bear the cost of repair but also the time cost during the repair.
How to Mine Ethereum?
Once you have taken all the costs into account and carefully analyzed all the above factors, you can proceed to prepare to be an Ethereum miner. Then, how do you mine Ethereum? Generally, there are three common types of Ethereum mining.
Newbies may concern that how to mine Ethereum on PC or how to mine Ethereum at home as they could not afford specialized equipment. It is actually not difficult. The only thing that needs to do is to connect the personal computer to some mining software, and its powerful computing power to solve complex algorithms during the mining process.
- Get your GPU ready (NVIDIA or AMD, graphic memory no less than 5G). When choosing a GPU, make sure it has good processing power.
- Create a wallet address to receive ETH.
- Download the latest mining software from the official sites. The most commonly used mining software are ETHminer, Claymore, EasyMiner, Phoenixminer, and so on.
- Start mining and check out the daily revenue.
Note: The graphics card might get damaged and even greatly shortens the GPU lifetime if running above 80°C or even 90°C for a long time. Guarantee GPU heat dissipation and let it can “breathe”.
Due to the increasing hashrate in the entire network and the escalating difficulty of mining, solo miners were unable to guarantee a daily income. Accordingly, the concept of mining pools was introduced.
A mining pool is a cooperation that aims to solve the problem of expected revenue by uniting the mining power of miners. In return, it will charge a certain reward. The mining pool submits blocks from the central account with proof of work and reallocates the rewards in proportion to the mining power contributed by participants. Tops mining pools include Ethermine, Sparkpool, F2Pool, etc.
- Pick a graphics card. Whether it is a desktop or a notebook, a discrete graphics card with memory greater than 4G is required for Ethereum mining. Miners can check the computing power, mining revenue, and electricity bills of different graphics cards on the f2pool website.
- Decide on a mining pool and register an account, activate the Ethereum receiving address.
- Download and install the software. It will connect your mining hardware to a pool.
- Start mining and constantly check out the mining revenue. Miners usually can withdraw the revenue from the pool.
Cloud mining providers invest in providing specialized crypto mining equipment in places where electricity is comparatively cheap and the climate is cold (to lower demand for cooling systems). Then rent out part of the hashrate to clients or miners through so-called mining contracts.
In this case, miners only need to pay a third-party fee to complete all mining work. Neither need to purchase or maintain special mining machines/equipment, nor run blockchain nodes.
- Find and create an Ethereum wallet.
- Choose a cloud mining company. Find the company that suit your need by comparing all aspects, including but not limited to the service fees, mining contracts, mining equipment, etc.
- Determine a mining contract.
- Select a mining pool.
- Start mining and constantly check out the mining revenue. Miners usually can withdraw the revenue to another wallet.
Ethereum Mining Speed: How Long Does It Take to Mine 1 Ethereum?
As an Ethereum miner or enthusiast, you may be wondering how long does it take to mine a Ethereum? Is it profitable to mine Ethereum now and how long will it take to get the cost back?
According to the mining hardware input, miners could mine about 0.02059967 Ethereum a day with a mining power of 750 MH/s, a block reward of 2 Ether, and an Ethereum Network Difficulty of 6,291,363,864,316,231. Excluding the mining cost and fees, the final Ethereum daily mining revenue is $37.4 Ether (Ether/USD).
As for June 27, 2021, it takes about 48.5 days to mine 1 ETH at the recent Ethereum Network Difficulty, together with the block reward and the mining hashrate (mining power). An Ethereum mining power of 750.00 MH/s consumes 1,350 watts of electricity ($0.10 per kWh) and gets a reward of 2 ETH.
It should be pointed out that how long to mine 1 Ethereum is eventually depending on the Ethereum network and the mining equipment. The better the equipment, the more ETH mined. And this calculation does not consider the increase or decrease in network difficulty as well as in the block reward.
Conclusion: Is Mining Ethereum Profitable?
With a rough understanding of this article, it may help answer questions about “How do I mine Ethereum” or “how to Ethereum mine“. But you may still be unsure whether mining ETH is profitable.
In terms of market capitalization, Ethereum (ETH) is currently the second-ranked cryptocurrency in the world, second only to Bitcoin (BTC). Hence more and more people would like to join the mining flow. As the token price continues to rise, Ethereum mining will become a profitable investment for real-time and short-term investors.
However, as mentioned above, individual or solo mining requirements have become higher, and are vulnerable to a number of factors. The income may not be as stable as a mining pool.
Another option to earn profits from Ethereum is to buy or trade ETH from crypto wallets or exchanges with a less transaction fee and no equipment cost or maintenance expense.
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