Despite recent price volatility, mining Ethereum is still a profitable activity, capable of bringing an impressive passive income. However, getting started may seem difficult, especially for users who are not well-versed in cryptocurrencies.
Luckily, the process is mostly straight-forward! In this article, we will outline the basics to Ethereum mining, and give several tips that will help you along the way.
Note: It has been confirmed that in the future, Ethereum will switch its protocol from proof-of-stake to Casper Fork. Alongside a list of improvements for the network, this means that Ether will no longer be mineable.
The Mining Rig
Mining is impossible without a mining rig, which is a computer that has been built using mining-friendly parts. As such, here is a list of necessary parts for your rig:
Graphics Processing Units, which is the essential part of your setup, as mining Ethereum is done solely via the GPUs. For a solid output, consider purchasing 6 GPUs of at least 3GB-4GB each.
- A solid motherboard, with at least 6 PCI slots. You might want more, in case you ever wish to upgrade your system.
- Central Processing Unit (CPU), almost anything goes, look for something of medium power/quality.
- Random Access Memory (RAM), 4GB-8GB card, make sure to note whether it is DDR3 or DDR4, for compatibility with your motherboard.
- Hard Drive, or Solid State Drive (SSD), any as long as it provides a minimum of 70GB for your operating system.
- Power Source, at least 1,200W in power, rated gold, or platinum for energy efficiency.
- Risers & Case, to help stack everything together. Those with built-in capacitors are often recommended.
- Cooling Fans
When it comes down to building, and choosing the right hardware, you can find numerous suggestions with a quick Google search. Make sure to compare GPUs to ensure that you’re getting the best value for your investment.
With this system, you can expect to earn around half Ether on a monthly basis. Do keep in mind that earnings can be influenced by the current mining difficulty. You can use this service to determine a rough estimate of your profits.
Setup of your mining operation
- Get a wallet!
- Install a miner on your machine, such as Ethminer.
- Join a mining pool.
Unless you have invested several grand in building your system, chances are that your mining rig won’t earn a single penny unless you join a mining pool. Because of the mining difficulty, finding and cracking an ether block on your own seldom happens. Using a pool, however, once a block is found, the group of miners reaps the rewards, divided according to their hashrate. This guarantees a steadier income, as you won’t be mining alone.
Mining Pool Recommendations
Things often get a bit cloudy, when choosing the right mining pool. As there are several options on the market, the first tip would be to check them out, read reviews and see which is best for you.
Nanopool and Ethermine are two of the most popular pools available on the market. For instance, Nanopool is the world’s largest, with over 130,000 active miners, 1% service fees, and payouts for both full and uncle blocks. Ethermine is mostly similar, with the only difference being a lower number of active miners.
We’ve recommended these two pools, thanks to their Claymore Dual Miner functionality. What this means, is that while your graphics card is busy mining for Ethereum, your processor remains idle. With the functionality enabled, your processor will continue mining for another coin, thus giving you access to a secondary stream of income.
Setting up the pool should be easy! Both websites offer a quick start option, which you need to click on, and then follow the instructions. They will guide you through downloading and installing the miners, setting up the configuration files, mining rig, and payment details. Once the installation is over, simply press on the start.bat file, which will start up the miner.
Future Tips & Other Costs
As the cryptocurrency mining market is fairly dynamic, and dependant on factors such as price volatility, sustainability, mining difficulty and a range of other costs, miners should constantly keep an eye on the network and the hardware. This will ensure that things are running smoothly at all times.
In terms of possible costs, these include electricity, part replacements, mining pool fees, exchange fees, and possibly tax. With this in mind, there is no sure-fire way to determine the universal profitability of a mining operation, as it depends on factors applicable only to you.
If, and when Ethereum switches its consensus protocol, your mining rig will still be suitable to be used for mining other coins. And if you ever wish to quit mining altogether, do keep in mind the fact that your rig is comprised of high retail value parts that can easily be sold.