Minig ethereum
You can start staking your ETH today. Read more on The Merge , proof-of-stake , and staking. This page is for historical interest only. Prerequisites To better understand this page, we recommend you first read up on transactions , blocks and proof-of-work. What is Ethereum mining? Mining is the process of creating a block of transactions to be added to the Ethereum blockchain in Ethereum's now-deprecated proof-of-work architecture.
The word mining originates in the context of the gold analogy for cryptocurrencies. Gold or precious metals are scarce, so are digital tokens, and the only way to increase the total volume in a proof-of-work system is through mining. In proof-of-work Ethereum, the only mode of issuance was via mining. Unlike gold or precious metals however, Ethereum mining was also the way to secure the network by creating, verifying, publishing and propagating blocks in the blockchain.
Ethereum miners - computers running software - used their time and computation power to process transactions and produce blocks prior to the transition to proof-of-stake. Why do miners exist? In decentralized systems like Ethereum, we need to ensure that everyone agrees on the order of transactions. Miners helped this happen by solving computationally difficult puzzles to produce blocks, securing the network from attacks.
More on proof-of-work Anyone was previously able to mine on the Ethereum network using their computer. However, not everyone could mine ether ETH profitably. In most cases, miners had to purchase dedicated computer hardware, and have access to inexpensive energy sources. The average computer was unlikely to earn enough block rewards to cover the associated costs of mining. Many of the first miners were developers or crypto enthusiasts who believed in the project and wanted to support its cause.
Nowadays, with ether prices being in the four digits, mining ether is a profitable business, even though fiercely competitive. But as Ethereum is switching to PoS in , new investments in mining equipment are unlikely to still prove profitable. Nevertheless, mining is certainly an interesting option for individuals with access to unused GPU processing power that want to make some extra money. But with PoS just around the corner and ether staking already available, staking is certainly the simpler, less hardware-intensive, more future-oriented way to earn ether.
For miners, this fundamental shift makes them obsolete, as mining in the form of solving cryptographic puzzles is no longer required for PoS. Read More: Learn About Ethereum 2. Investors can either stake ether by running their own Ethereum validator as described here , which requires a minimum of 32 ether. Or they can stake any amount of ether with a staking service. Many crypto exchanges like Coinbase or Binance already offer ether staking. Also, staking is offered by decentralized services such as Lido or Rocket Pool.
Miners wanting to keep using their hardware after the switch can direct their computing power to other blockchains that are still working on a PoW consensus mechanism. The easiest option is Ethereum Classic ETC , which runs on almost the same hashing algorithm as Ethereum, so it supports the same hardware.
How to mine Ethereum Step 1: Choose your mining approach When mining ether, there are three different approaches miners can follow. Pool Mining Mining Ethereum in a pool is the simplest and quickest way to get started. In pool mining, you join forces with other individuals. All the miners joining a pool agree that if one of them solves the cryptographic puzzles, rewards will be split among them according to the hashpower provided.
The size of the pool, measured in hashpower, determines how many blocks the group finds on average. However, not all pools are created equal. When choosing a pool, three key characteristics should be considered: pool size, minimum payout, and pool fee.
The pool fee specifies the share the pool administrator gets for running the pool. Minimum payout defines the smallest amount one can withdraw from the pool. For instance, if the minimum payout is 1 ether, it can take weeks or months until you reach the required amount in reward payments and can cash out.
To have a realistic chance to solve one of the cryptographic puzzles in a reasonable amount of time though, a miner needs dozens of GPUs. Therefore, solo mining is mostly for professional miners, who run their own mining farms. Cloud Mining In cloud mining, you pay someone else to mine for you. In return, you get the mining rewards. But be aware: cloud mining requires trust in the counterparty, especially when done over an online service.
There is no guarantee that the money paid upfront is used to run mining equipment or that there even exists such equipment. Therefore, it is recommended to do cloud mining through long-established, trustworthy cloud-mining platforms such as HashFlare. There are many wallets available on the market. Two popular wallets are MetaMask and Trust Wallet. Step 3: Prepare your hardware and software Mining requires lots of computing power.
0 comments