Before you start mining Ethers, you need to check how much you’ll earn. Ethereum calculators are free on the internet, and they can show your potential earnings within seconds. Most of them follow a formula that you may use yourself.
First, we’ll discuss what Ethereum is and how it works. Then, we’ll go through the ins and outs of ETH mining, from the methods to the equipment you 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 specific cryptocurrency. You help its network function smoothly while earning more of that crypto. However, you should plan carefully before trying this expensive activity.
What is Ethereum?
Bitcoin is the mainstream’s favorite, so they tend to forget other coins on the crypto list. Yet, Ethereum has far more real-world applications despite BTC’s 6-year headstart.
The big BTC is the first cryptocurrency. It launched in 2009 as open-source, free software. In response, many people started creating new cryptos from it.
Some had a few tweaks, such as Bitcoin Cash (BCH). Others were made to go beyond Bitcoin’s capabilities. Ethereum is one of these coins that succeeded.
Vitalik Buterin released Ethereum (ETH) in 2015. The Ethereum network was a blockchain, just like bitcoin. Yet, it had features that BTC didn’t have:
- Smart contracts – These are online agreements that only execute after certain conditions are met. This didn’t need a third party to work.
- Decentralized applications (dapps) – They’re computer programs that run on the blockchain. These had better features than most of the regular apps.
- Non-fungible tokens (NFTs) allow people to own a copy of digital media designated to them. Despite free copies online, your NFT version is different. Your ownership is registered on a blockchain.
What is Ethereum mining?
We mentioned that the ETH network is a blockchain. It’s made up of a bunch of computers around the world. Yet, they don’t have a central authority like a bank or government.
What’s more, they’re owned by regular people like you and me! Those computers confirm Ethereum transactions. Each one is protected by encryption.
A specific code is needed to crack this encryption. Once an exchange happens, computers in the blockchain will figure out the code. They will have to perform thousands of calculations!
The first one to get the winning solution earns proof-of-work (PoW). Then, a new block gets added to the blockchain. In return, the computer gets a block reward in ETH coins or Ethers.
This entire process is called mining. It benefits both sides. You help the crypto network operate. Then, you earn more of that crypto in exchange. It’s a win-win!
How much can I earn?
Before you mine Ethereum, it’s best to check how much you’ll earn. Crypto mining is expensive. You need a powerful computer with the right software running round the clock!
Specifically, you’ll need to watch for three factors. These are your hash rate, energy consumption, 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 earning from ETH mining. Crypto miners often use GPUs.
These are inside graphics cards. Thankfully, hashrates.com shows the estimated hash rates for each graphics card model. Note that graphics cards are quite pricey.
That’s why you should consider the purchase price too. Devices degrade over time. Eventually, they’ll break. Balance your budget with your desired hash rate and the graphics card prices.
Lastly, find out your energy consumption. If you’re not careful, you might pay too much for your next power bill! The pricier pieces of equipment often need less power.
Mining software may also work as an Ethereum calculator. It can run benchmarks on your mining rig. Which one should you use, though?
The online Ethereum calculators are handy, but they’re not exact. They don’t take numerous factors into account. These include various kinds of mining software and computers.
On the other hand, the mining software will give you more accurate results. It will be on your computer so that it can provide an in-depth analysis. This takes up to 30 minutes to complete, though.
Why Ethereum mining isn’t a good idea right now
You have three ways of mining Ethereum. You may do it alone or with other people. Or you may pay someone else to do it for you. Read below for more details:
- Solo mining – As the name suggests, you get to mine cryptos by yourself. This means you get all the earnings. This is not profitable nowadays since you’re competing against too many.
- Pool mining – This is crypto mining with a group of other people. You work together to earn more cryptos than solo miners. However, earnings are split among members. More people means fewer block rewards for you.
- Cloud mining – Companies can mine cryptos on your behalf. You pay them to do this for a set period. If your crypto fails, though, you may earn a digital coin with less value.
Unfortunately, all of them aren’t a good idea right now. There are a bunch of reasons for this. Read each one below:
- Ethereum 2.0 – Ethereum will shift from proof-of-work to proof-of-stake. Instead of mining, people will just set aside some ETH to earn more. This will make mining a thing of the past. The Beacon Chain upgrade will come on December 1, 2021.
- It’s expensive – You’ll need a lot of money to start mining ETH. You might not make enough Ethereum break even before the staking upgrade.
- Other cryptos – You may get better profits from other cryptos. You might want to spend your mining funds on those coins. Then, HODL them effortlessly until their value skyrockets!
Please research by yourself to find out if Ethereum mining is right for you. Cryptos run on blockchains, and most of them allow mining. You may want to pick those instead of ETH.
Start by reading more about cryptos. See the ones that have long-term uses. The other cryptocurrency articles on Inquirer USA are a great place to start.
Also, check real-time crypto market data such as exchange rates. You should know all you can 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. Check 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’s difficult to mine Ethereum nowadays. You’ll have to compete against too many miners. Also, some companies have even more powerful computers that mine cryptos.
Will Ethereum 2.0 kill mining?
Once its staking upgrade launches, mining will be a thing of the past. It’s scheduled for December 1, 2021. That’s why it’s best not to mine ETH right now.
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