How Do You Mine Ethereum?

How Do You Mine Ethereum?

When mining on the Ethereum blockchain, you are rewarded in Ether, but you may need to do some calculations to find out it if will be profitable for you.

Ethereum mining can still be done profitably, as of the time of this writing, by individuals on their home computers, as long as they have decent hardware. This is no longer the case for Bitcoin, Litecoin, and a few other coins, due to the development of ASIC (application-specific integrated circuits) mining rigs used by the nascent mining industry, which have rendered home computers obsolete and have begun to present a significant centralization threat on the decentralized blockchain.

Ethereum’s mining process is designed to be resistant to ASIC miners, and so far this has proven to be true. Ethereum thwarts ASIC developers by requiring that mining nodes build their own DAG, for Directed Acyclic Graph, which is a memory-intensive process that uses specific, changing data from the distributed cache of the network to form a new 1GB matrix through which hash functions are filtered to solve blocks. Ethereum developers realize that ASIC miners can and probably will be developed for Ethereum, but their intent is to make it nearly impossible for them to gain any significant advantage over home PCs. Miners must have a good GPU (graphics card) in order to keep up with other miners since GPUs have a much higher “hashrate” than CPUs (the central processor of computers).

Ethereum gives client software the option to exist on the network with a few tiers of client size requiring varying degrees of computing power and memory holding different lengths of the blockchain ledger. For mining, a computer must have the full blockchain history as a “full node” on the network, and mining software. It is also a good idea to join a mining pool, which is a network of various computers all working “together” and splitting the rewards of mining.

Currently, every successfully solved block carries a reward of 3 Ether, plus a cut of transaction fees from the transactions contained in the block. Miners will only successfully solve blocks on a randomized basis, so joining a pool increases the likelihood of steady returns for your efforts. Many miners only do so as a way to defray the cost of buying good GPUs for their PCs and let the mining process run while they’re asleep or away from their computer. To mine, a computer must download the software to be a full node on the Ethereum network as opposed to a light node. Also of interest, some custom software is out there that can supposedly allow a person to mine for Ethereum and other altcoins simultaneously without losing any significant speed off of the hashrate. Several websites have calculators which can help you determine if your GPU’s hashrate and the amount that you will pay for electricity would allow you to mine Ethereum profitably.