As is the case with any type of cryptocurrency, when you are ready to start mining “Ethereum” there are a few basic items that you must be aware of before you can appreciate the specific steps that are involved.

— Know the Difference Between Ethereum and Ether —

Since cryptocurrencies are relatively new, it is not uncommon, even for those that are already experienced with the subject, to confuse some of the terminologies that are involved. This is especially true when it comes to the world of Ethereum.

First, Ethereum is not a cryptocurrency. The best way to look at Ethereum is as the overarching network that includes the Ethereum blockchain. Since this blockchain, unlike that of Bitcoin, is designed to accommodate purposes and functions that go beyond the monetary — the “economic fuel” behind it has a name different from its blockchain. It is called “ether.”

Ether is what provides the motivation to conduct transactions on the Ethereum network. It is also the currency used to transact business on the network. Whether you are using the Ethereum network to register a smart contract, or if you are using the Ethereum Virtual Machine to serve as the underlying infrastructure for an online app, or if you are acting in the role of the miner by validating transactions — all of those activities are settled in ether.

When used as a cryptocurrency ether is denominated as Ether (ETH). Each Ether is a tradable unit of cryptocurrency. It can appreciate or depreciate over time based on market flows and demand. Hence, when you are considering mining Ethereum you are really intending to mine Ether.

— What Makes Ether Mining Unique From Other Cryptocurrency Mining —

Although the overall concept involved in mining cryptocurrency is shared by nearly every type of altcoin that is in existence, each usually has its unique permutations. Ether is no exception.

Two of the most beneficial differences involved in mining Ether as opposed to Bitcoin include:

• Much faster block times are involved with Ether.
• Ether can still be mined on a desktop computer.

A new Bitcoin block occurs approximately every 10 minutes. On the Ethereum network, new blocks occur roughly every 15 seconds. That is what is meant by a faster block time. The more frequently new blocks emerge — the more opportunities for miners.

The way that the hashing algorithm for Ethereum was designed, application-specific integrated circuit boards (ASICs) — those boards that are designed to perform one specific function, such as those found in Bitcoin mining rigs — do not have an advantage when used for Ether mining. As a matter of fact, ASIC boards and Ether mining really don’t mix. Ether mining is best suited for what is known as GPU-based mining.

A GPU is a graphics processing unit. They are commonly found in video cards. This is what makes mining for Ether still possible on a desktop computer.

— Choose the Style of Mining That’s Best for You —

Once you have a clear picture of the subtleties that differentiate Ether from other cryptocurrencies you are better able to plan and structure your mining operation. One of the first things that you need to look at is the style of Ether mining that you want to execute. There are three — solo mining, joining a mining pool, and cloud mining.

— Solo Mining —

Solo mining is the purest way to mine for Ether. This is the style of mining in which you are entirely on your own. That means that you must operate and maintain your own mining equipment.

Solo mining has the benefit that all your Ether rewards are kept by you — no sharing. However, in order to sustain an operation that is worth your while, you will need to dedicate multiple GPUs to mining.

To determine how many GPUs you will need and their specs it is wise to use an Ether mining calculator. Our calculator can be found here – ETHEREUM MINING CALCULATOR – and it allows you to calculate your anticipated profit based on key parameters such as the power consumption of your mining GPUs, cost per KW/h from your power source, and the hash rate of your GPUs. Our calculator automatically imports other key data, such as Ether’s current trading price and the latest average block time on the Ethereum Network, to determine how much money your operation could profit.

Conducting this type of analysis provides you the opportunity to crunch the numbers for different scenarios and to compare different GPUs before you actually purchase them.

— Mining Pools —

Joining a mining pool does not free you from having to purchase and maintain your own mining gear, but it can make the road to profitability faster. This is especially true if your startup capital limits you to just a few GPUs.

When you join a mining pool, you are pooling your GPU resources with others. This will allow you to participate in more successfully hashed blocks. While the Ether earned for hashing these blocks is shared with all who are in the pool, by being part of more successfully hashed blocks you will likely earn more than if you were going at it alone with only a handful of GPUs. For some miners, mining pools can be a great way to start in Ether mining — a stepping stone to serious solo mining.

— Cloud Mining —

Cloud mining is the most disconnected way to mine for Ether. It does not require you to operate mining equipment. You can select a plan from a cloud mining company and essentially “rent” GPU processing power. Cloud mining clients normally charge a setup fee for a predetermined amount of hash speed and also assess weekly or monthly maintenance fees. While technologically speaking cloud mining is the easiest way to start mining for Ether, mining purists argue that it can stunt your learning curve and that it does not maximize your profit potential. For a list of the top cloud mining companies available, check out our recent post on the topic.

Top Cloud Mining Sites

 

— Ether Mining Hardware —

Assuming that you chose to be a solo miner or to be part of a mining pool, one of the first concrete decisions that you have to make is selecting and purchasing you’re mining equipment.

Technically, if you already have a robust desktop computer with a modern and powerful GPU, you could use that machine to start mining for Ether. However, you would be best advised to have multiple dedicated GPUs in order to make your mining operation meaningful.

When it comes to choosing the best GPU for Ether mining you want to obtain the best price for the best performance to power consumption possible. This is when those Ether mining calculators mentioned above can really save you time in comparing different GPUs.

Technology changes fast, however, as of early 2018, GPUs on AMD video cards tend to perform better than those on NVidia cards when it comes to Ether mining. Also, at current block times and levels of hashing difficulty, it can be taken as a given that you will need a video card that has at minimum 3 Gigabytes of dedicated RAM. Mind you, we are not referring to the RAM that is part of the computer — we are referring to the RAM that comes integrated to the video card.

Keep in mind that if are planning to use solely one GPU, your chances for profitability will be practically zero. Six GPUs is frequently seen as the minimum number to properly get started. It is for this reason that there are specialized motherboards that are available that can accommodate 6 different video cards. There are even some that can accommodate twice as many.

Once you have made your selection of GPUs, make certain that their drivers are updated. The method for doing this will vary based on your device and specific card. You can use a desktop that is running Windows or Linux to mine for Ether. Unfortunately, Ether mining on an Apple machine is not possible.

— Get an Ether wallet —

Your ether rewards need a place to land. You may already have an Ether wallet if you have already dabbled with the Ethereum network. If not, you can open one on MyEtherWallet. The process is straightforward. However, do not be coy or nonchalant about it. After you’ve completed the process you will have to download an encrypted key set. You should make multiple secure copies of this. For added security store them in encrypted folders in different locations — such as your computer, flash drives. etc. If you choose to upload them to a cloud service like DropBox, we would definitely urge you to make certain that they are in an encrypted folder before you upload them. You also have the option of printing a paper version of the keys. You should keep that in a place that is physically secure. If you forget your password or lose the keys, there is no way to recover your Ether wallet. That would mean that you would not be able to access the Ether that you have on Ethereum.

— Mining Software —

Once you have your hardware setup and obtained an Ether wallet, you need to install the appropriate mining software. This is what allows your GPUs to connect to the Ethereum Network and blockchain.

The Claymore Ethereum Miner is the best choice for this. Downloading the latest version requires you to visit a thread started by its developers on a forum called Bitcointalk.org. The link for this thread is https://bitcointalk.org/index.php?topic=1433925.0

From there you will be able to access the latest version of Claymore for Windows and Linux.

Be advised, while the download itself consists of a zip file, the process of installing and configuring Claymore to mine for Ether is not what a non-tech person would call user-friendly.

Fortunately, the same thread provides you with the latest detailed instructions from the developers on how to install and configure Claymore. If you are not technically savvy, we would suggest you read through those detailed instructions and the entries on the thread multiple times.

— More on Mining Pools —

If you decided to go the mining pool route by joining services such as EtherMine or Nanopool, you will have to edit the .bat file in your mining software to configure it for pool mining. Most pools follow the Ethermine example of posting clear instructions on how to do this. For the most part, it involves copying and pasting lines of code from their website to the Claymore .bat file.

— Do Not Be Intimidated —

It is easy to see how the installation and configuration of the mining software involved in mining Ether can seem like a daunting and intimidating task. While it cannot be described as being a simple process, it also should not be an obstacle for you to enter the world of Ether mining.

As we stated previously, the thread posted by the Claymore developers is very detailed. Also, it is frequently updated as the Claymore software itself is updated. There are graphical user interfaces available for Claymore, but these are in the very early stages of development and require just as much work, or more, to install. Thus, defeating their purpose.

While it may seem overwhelming at first, even the most inexperienced computer novice can grasp and complete the process in a single day. Also, if you need additional motivation to get into Ether mining, keep in mind that Ether will most likely be one of the first major cryptocurrencies to move from a proof-of-work model to a proof-of-stake model.

The latter refers to the way that Ether will be “mined” in the future. It is estimated that by 2021, the established way for mining Ether will change.

In other words, validating transactions on the Ethereum blockchain will not require hashing. At that stage, those who hold Ether on the blockchain will, in essence, be engaged in a passive form of “mining.” It would mean that the more Ether you have, the greater role you would have in the process of validating transactions. It would be an “energy-free” process — no GPUs, no equipment.

When you look at it that way, no matter how cumbersome it might seem to set up your Ether mining operation today, its long-term prospects make it worthwhile on multiple levels. Mining and extending your Ether reserves today may easily yield you passive and continuous income in the future.