Ethereum is (just like Bitcoin) considered a public blockchain. It is a decentralized blockchain that is updated and confirmed by miners of the Ethereum network, a distributed database. The only method to add new blocks to the Ethereum blockchain or network is through the process known as mining. Here the term “mining” does not refer to the actual mining, which is a process of collecting valuable metals from the ground, which necessitates the miners’ use of energy and labor. Here the word “mining” is used as an analogy because the Ethereum blockchain miners also use energy and labor to mine new blocks. Miners are critical to the operation of the Ethereum network, as they ensure that transactions between members are confirmed and recorded in the blockchain’s public log of transactions. Miners also make it possible to generate new currencies without requiring a third-party central authority to do so. A great deal of discussion exists over how lucrative Ethereum mining is, but the first thing to grasp is how to mine Ethereum.
How does Ethereum mining works?
Mining is a method of creating blocks and confirming transactions, safeguarding the network, and getting rewards by the current generation of Ethereum’s Proof of Work consensus.
For Ethereum mining to succeed, graphics processing units (GPUs) must contend for newly created ether from the blockchain. The Ethash mining process that Ethereum employs makes use of a Directed Acyclic Graph (DAG) file, which is a data/storage block that is uploaded into the video card’s memory and mined. As a result, when the Directed Acyclic Graph file reaches a particular size, you may need to upgrade the memory on your graphics card.
Ethereum was purposely constructed in such a way that it can only be mined efficiently using GPUs or graphics processing units. It is in stark contrast to Bitcoin, almost exclusively mined using specialized gear, referred to as ASICs (Application Specific Integrated Circuits). The goal of incorporating such a limitation into Ethereum’s codebase was to prevent the centralization or monopoly of hash power observed on the Bitcoin network in recent months. By optimizing GPU mining, Ethereum developers hoped to guarantee that mining would remain viable for individuals who own their computers and mining rigs, even in the face of rapid expansion and an increasing difficulty rate in the long run. When it comes to the allocation among miners, these procedures, as a result, aid in maintaining the network’s decentralization to the greatest extent possible.
The process of Ethereum mining:
The process of mining Ethereum is divided into two parts. The first part is that you need to understand how you want to mine Ethereum blocks because three options are available.
· Pool mining:
Pool Mining of Ethereum is the most straightforward and time-efficient way. You will be collaborating with other people in this manner. All of the members in a pool have agreed that if one of the miners successfully solves the cryptographic riddles, the rewards will be divided among them in proportion to the amount of hash power they have given. A group’s hash power (the amount of computing power it possesses) decides how many blocks it finds and how much money it earns as a result.
· Cloud mining:
Cloud mining is the process of compensating someone else for mining Ethereum for you in exchange for a fee. Instead of owning and operating your own mining gear, you rent computing power from someone else and trust them to do the difficut work for you, saving you time and money. You receive the mining benefits in exchange for paying the rent. However, keep in mind that cloud mining necessitates trust in the counterpart, which is especially important when done through an online service. There is no certainty that the amount paid in advance will be utilized to operate mining equipment or that such equipment will even exist. As a result, it is suggested that cloud mining be carried out through well-established and reliable cloud mining platforms.
· Solo mining
Solo Mining appears to be an appealing option, as there are no pool fees to pay, and benefits do not have to be divided with other miners. However, to have a real chance of solving the cryptographic riddles in an acceptable length of time, a miner will require dozens of graphics processing units (GPUs). As a result, solo mining is primarily reserved for professional miners that operate mining farms.
Steps to mine Ethereum:
Once you choose the pool with which you want to mine your Ethereum, then come the following steps.
1. Build a rig:
A mining rig is a collection of graphic cards that have been specifically designed for cryptocurrency mining. Each mining rig comprises several components, the most important of which are a power supply, computer memory, a motherboard, an operating system to run on your motherboard, and a GPU, which stands for the graphic processing unit.
2. Install Software
After you’ve purchased your mining hardware, you’ll need to install the software that comes with it. It is either included with the graphics card or available for download from the manufacturer’s website to install.
It is followed by the downloading of the Ethereum blockchain and connecting your node to the Ethereum network. Following the installation, your nodes will be linked to all other nodes as well as the Ethereum blockchain itself. The ability to start mining, construct decentralized applications, and this feature set provides transfer transactions.
3. Create Ethereum Wallet
If you don’t already have one, you’ll need to establish an Ethereum wallet to use it.
4. Install Ethminer
Once your node has been successfully connected to the blockchain, you will need to install ethereum mining software known as Ethminer on your computer. As a mediator between your gear and the mining pool, this service is provided. Ethminer is a mining worker (Ethash GPU) that allows you to mine any crypto coin that depends on an Ethash Proof of Work.
5. Choose a mining pool:
You must have made your mind that you want to be part of which mining pool. At this step, you have to select that particular pool.
6. Get paid:
You will be paid in ETH as well as the transaction fees once you have effectively mined a block or blocks. In most cases, the reward is transferred very immediately to the Ethereum wallet associated with the mining pool. You can also get free Ethereum coins or tokens with Airdrop Crypto.
To participate in Airdrop, you just have to review the selection process for the cryptocurrency you have chosen and mobilize the required resources to ensure that they match those criteria.
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Michigan Journal USA journalist was involved in the writing and production of this article.