If you want to mine Ethereum, you are in the right place. In this guide, you will learn everything you need to start mining Ethereum. We assume that you already know what Ethereum is and how it works, thanks to our previous guides on the subject. To get started mining, let’s consider why Ethereum mining is important.
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The process of mining Ethereum is done by a computer that solves complex mathematical problems to make sure that transactions on the Ethereum network are correct. If your computer solves the problem, you will be rewarded with ether. This process is called mining, and anyone can help solve problems and earn rewards. It should be noted, however, that digging up Ethereum is not a simple process.
How does the Ethereum network work?
The Ethereum network operates on its own blockchain, which is secured by miners. Every transaction conducted on Ethereum must be verified and approved by miners through a process called “Proof of Work.” To ensure the security and integrity of the network, miners must solve complex mathematical equations, and when they find a solution, they inform the rest of the miners. The rest of the miners then verify and accept the solution, and if more than half agree that it is correct, a new block containing the transactions is added to the blockchain, and the miner who solved the equation is rewarded.
What are the methods of digging Ethereum?
Below are the three most popular ways to mine Ethereum:
- Pool digging – you can dig in a group, i.e. use a so-called pool digger.
- You can mine it independently.
- You can use cloud services to mine crypto.
Each activity has its advantages and disadvantages. We write about these below:
Ethereum Pool
Mining Ethereum in a group is the easiest and fastest way to start your mining adventure. In this method, you collaborate with other people who pool their resources to increase the chances of digging up a block and sharing the reward with everyone. The frequency of discovering blocks and sharing rewards depends on the size of the group you join. However, not all groups are the same. You should consider three things before joining:
- group size,
- the minimum payout,
- the group fee.
Why does group size matter? As the number of users in a group grows and their computing power increases, so do the chances of earning rewards. However, when more people join a group, the rewards will be shared by each of them, which means smaller rewards. It’s worth trying different pools to find one that best suits your computer.
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Minimum payment
You should also pay attention to minimum payouts.
The minimum payment is the minimum amount of cryptocurrency you have to mine before it is sent to your wallet. If the minimum payout is 1 ETH, you will have to work in the same pool for a long time before you receive your money. Pools with huge minimum payouts are not beneficial for you when you are at the beginning of mining. It’s better to look for pools with lower minimum payouts.
If you want to earn as much as possible without spending too much time on one pool, the flexibility to switch between different cryptocurrency mining pools is key!
Fee for using a pool
Each group of people that mines cryptocurrencies charges a fee for using their pool. To continue using the pool, you have to pay a small amount, which is automatically debited from your account. These fees are set as a percentage of the cryptocurrency you are mining and usually range from 1% to 3%. It’s best to look for sites with fees of around 1%.
Digging Ethereum on your own
When it comes to mining Ethereum cryptocurrency solo, it may seem like a good idea because you don’t have to share the rewards with others. However, in reality, it is difficult and requires a lot of luck, as you have to compete with a huge network of people and companies that have far more resources than you do.
In solo mining, you are only rewarded for solving math problems first. Therefore, in order to succeed in solo mining, you need to have very high computing power – such as more than 100 graphics cards. However, having such a large computing power can lead to many problems, such as problems with cooling, ventilation, noise, electricity bills and space to store equipment.
Therefore, solo mining can only be viable for those who have a lot of resources and are willing to invest in solving the above problems.
Cloud mining
Cloud cryptocurrency mining involves renting computing power from other people who have special mining equipment. In return, you receive rewards for the cryptocurrencies you mine. You don’t have to invest in equipment or worry about maintenance issues such as costs related to electricity bills, cooling, ventilation or noise. On the other hand, you also don’t have full control over the mining and profits you receive, since everything depends on the performance and efficiency of the equipment you rent from other people. You also have to pay for their rent, which can be costly in the long run.
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