While it’s clear that Bitcoin is leading the cryptocurrency arms today, it is also also true to say that Ethereum is set to be the top crypto any time soon. You see, Ethereum is truly an awe-inspiring technology we definitely can’f afford to overlook.
Today, we are going to explore the basics you should know if you are looking to try your hand in Ethereum mining. Read on.
Ethereum Mining Explained
From phones to washing machines and currency, we all can attest that technology has changed everything. Speaking of currency, technology has updated the traditional money to give the world new money- cryptocurrency. Cryptocurrency is one form of digital currency that we don’t want to overlook. It uses a cryptography mechanism to secure and verify transactions. Cryptocurrency mining is the process of adding and verifying transactions in blockchain (a digital public ledger).
If we are to list the most common forms of mining, then ethereum mining and bitcoin mining should top the list, right? Well, for both forms of cryptocurrency mining, miners strive to solve complex mathematical problems using a high-power computer and they are rewarded for their efforts. Today, we are going to explore Ethereum mining.
How to Get Started With Ethereum Mining
Getting started with Ethereum is in fact easier than you think. All you need to kickstart your mining efforts is a Graphics Processing Unit (GPU) and you are ready to start mining Ether. Unlike coin mining in a bitcoin network, mining Ether requires a GPU only.
Start Ethereum Mining
Install GPUs on your computer and get a MyEtherWallet, Mist or any other Ethereum wallet. Next, join a mining pool and start mining Ethers! As simple as that.
At its core, mining Ethers is just similar to mining coins from a bitcoin network. An Ethereum network is a decentralized digital ledger that is usually updated and verified by miners participating in the network. When miners mine a block, they update a new block – that is the only way to update and verify a block.
Ether is some sort of “fuel” used to run an Ethereum network. In simpler terms, it is the currency required in the Ethereum platform. Besides, it is used for settling computational costs and transaction fees. Ethereum developers and different users can exchange Ether. For example, Ethereum developers can use smart contracts to get, store, and send Ether to fellow developers. It is true to say that Ether is the incentive required by developers to build better Ethereum platforms and applications.
The best part with Ethereum wallets is that they are very secure because users are required to authenticate transactions using private keys before sending ether to other users.
How to Obtain Ether
There are several ways to obtain Ether:
- By receiving it from other users on the platform.
- By exchanging it for other coins on transactions that support coin-ETH exchange.
- Through mining if you are part of a mining pool, or better yet, if you have a cloud mining contract.
That said, let’s us look at the actual process of Ethereum mining.
As we discussed earlier, Ethereum mining is the process of mining Ether. It uses a verification mechanism known as Proof-of-Work. Performing mining is indeed simple and easy, atleast if you have a little scritping and command prompt knowledge.
Ethereum mining needs a lot of computational power and electicity. Plus, you need the right system to make the mining possible. For example, you need a 2 GM RAM GPU because it is 200X faster than your computer’s central processing unit (CPU). You can choose NVIDIA or AMD graphics card.
Below is the process of Ethereum mining:
Step 1: Download Geth. This is a software that connects a computer to an Ethereum network. Unzip the file and store it in drive “C”.
Step 2: From your comman prompt, locate the Geth set up file and type in ” C:/>geth account”. This will create a new account for the Geth set up application. Once created, hit the “Enter” button and key in your preferred password. Cheers! Your account has been created.
Step 3: In the command line, type in “geth-rpc” to download the whole Ethereum blockchain. Don’t be shocked if the process takes much of your time.
Step 4: You are ready to start mining if you have Ethminer or such mining software. On a new command line, type in “cd prog” and hit the “tab” key twice to see “C:/>cd “program files””. Press the “Enter” key.
Now, type in “cd-cpp” and press the “Tab” to enter the folder with Ethminer software.
Step 5: Next, start mining Ether. Type in ” Ethminer – G” and hit “Enter” to initiate the mining process. Use this approach if you are using a GPU. Otherwise, or if you are using a CPU to mine, just type in “ETHMINER” and press “Enter”.
Ethereum Mining: Is it Profitable?
Of course, you can do your thing solo, but there is a major reason why no one is willing to mine solo- because it is no longer practical and it will be difficult to realize the intended results.
The entire Ethereum network works because of the existing network of miners. Basically, miners create new blocks through solving complex computational puzzles and as a result, they get rewarded 12.5 BTC.
When miners create a block successfully, they are allowed the power to create transactions in the block.
One disadvantage of mining poolsis the centralization. That is a topic for another day.
Interesting Facts About Ethereum
Here are a few facts you should know about Ethereum:
- Ethereum is built using a custom computer language known as “Solidity”. It is a programming language created by programmers of the Ethereum network.
- Ether is an inflationary digital currency. Unlike other cryptocurrencies, Ether does not have maximum number of coins.
- Originally, Ethereum mining relied on a Proof-of-Work mechanism but developers are working to switch over to a Proof-of-Stake mechanism in the near future.
Will Ethereum Scale?
Just like other blockchains, Ethereum supports as many users as possible. The major problem is that, we can’t truly tell the limits of the Ethereum platform. Its coded limit on computation per every block causes the blockchain to support only 15 transactions/second which is far less than the 45k transactions processed by Visa.
The limitation blockchain systems including Ethereum has and remains the subject of discussion by scholars and developers.
Why is scaling extremely difficult? Well, both ethereum and bitcoin leverage a combination of incentives and tricks to ensure that the systems record who has what, without central authorities.
Plus, scalability and decentralization are presently at odds. However, Ethereum developers are looking to solve this inconvenience.
What this means is that it is not really easy to tell how long it can take to scale. You see, it is a tricky question because currently, there is a lot of experimentation going on at the scaling front.
To sum up everything, Ethereum developers have high hopes for the future of the platform, so it’s a worthy venture.