How to Mine Ethereum and Earn Better than Bitcoin

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How to Mine Ethereum and Earn Better than Bitcoin

Bitcoin is the #1 cryptocurrency that is mined all over the world owing to its profitability, resilence and market dominance.

But, with the price of Bitcoin more than 15x the price of Ethereum, could Ethereum mining be much more profitable than Bitcoin?

A report from Messari says 99-per-cent of all blockchain fees are paid to Bitcoin miners and Ethereum miners.

Let’s examine the long term mining implications of Ethereum mining and how a miner could benefit in terms of earnings.

The graph below shows the movement in fees paid to top cryptocurrencies with BTC and ETH leading.

But first, let go through the mining essentials of Ethereum and how to earn mining it.

As lucrative and passive cryptocurrency mining may seem, this way of earning comes with some challenges which include upfront costs if you’re going for the hardware equipment.

But, cloud mining is often a safer and less risker way of getting your feet wet.

However, to earn good money from Ethereum mining, understanding the pathway is important for success. The focus of this post is the mining of Ethereum with hardware computers.

Firstly, I’m going to explain what mining is;

Secondly, I will explain how to mine Ethereum, in technical details;

Then, Challenges you may face in Ethereum mining; and

I will also address the other frequently asked questions.

What Is Ethereum Mining?

Ethereum mining is a network powered by various mining hardware validating all transactions and securing them into the blockchain for a reward usually a token in the same cryptocurrency.

When you attempt to carry out a transaction (send or receive payments) from your Ethereum app, behind the scene, a powerful computer owned by a miner validates your transaction and adds it to the blockchain.

When a computer carries out an Ethereum transaction, the miner earns a fraction of the Ethereum token after presenting a Proof of Work.

The miner’s job is to solve this complex mathematical puzzle to earn a token.

There are typically so many mining computers competing to execute these transactions, but only one computer will validate. So mining is a competition among hardware miners or a mining pool.

To determine which computer will carry out a specific transaction, all computers are given a particular guessing task to carry out. Whichever computer gets it first, earns the right to validate and earn a reward.

So in direct terms, Ethereum mining is a sequential collection of the following — winning a guessing task to process an available transaction, processing the transaction, and getting rewarded with an amount of Ethereum, for processing the transaction.

IQ- cloud mining contracts

Is Ethereum Mining Still Profitable?

Of course, mining Ethereum is still profitable. Just ensure that you:

  1. Study and understand the market behavior of Ethereum using charts. This will enable you to forecast your earning rewards. When the prices of ETH go up, it means more rewards and vice versa.

See Ethereum Market Price today.

Price of Ethereum

2. Hash rate is everything, the higher the hashing rate, the more profitable your mining becomes. Get a hardware with higher hash rate or power.

How to Mine Ethereum?

How to Mine Ethereum and Earn Better than Bitcoin

Now, to the subject (Ethereum Mining Essentials), mining Ethereum comes in 3 steps. The following are the steps:

Setup a Mining Hardware or Rent a Cloud Mining Plan

The setup of a mining computer or hardware will require these 4 steps:

Step 1: Buy a Suitable Mining Computer

If you don’t know a lot about computer hardware, this is the simplest option for you.

There’s however a problem with this option:

1. It is expensive, relative to the other options.

2. It offers limited freedom in choosing hardware components.

When you’re ready to buy the computer, buy hardware that satisfies the following:

1. 4 or more powerful GPUs;

2. 4 GB of RAM or something better; and

3. 400 GB of SSD storage or something better.

As regards the other specs:

  1. The mining of Ethereum doesn’t require powerful CPUs, so an average Intel Celeron CPU or something more powerful should be okay.
  • Other specs (e.g. display, camera, etc) also do not matter much, just go with things okay enough.

Avoid the Chromebook or a MacBook. There are so many cons in trying to use them for Ethereum mining.

There are also special types of computers called ASIC miners (Application-specific Integrated Circuit miners). These type of computers:

  1. Typically mine faster than general-purpose computers of the same price.
  • They can be used for only one type of mining, nothing else.

— If you buy an Ethereum ASIC miner, if you later decided to change to Bitcoin mining, the miner may be useless; so you’ll have to buy a new computer or a new ASIC miner for almost every other types of mining.

— ASIC miners are not also suitable for general-purpose computing. For instance, if you later choose to stop mining, that computer will not be suitable for general-purpose computing like browsing, watching a movie, playing video games, etc.

Build a Mining Computer Hardware

If you know a lot about computer hardware and can get mining components at a good price, this is the best option for you.

This option allows you to get computers that are highly suitable and customized for Ethereum mining.

When building your mining computer, make sure it meets up with the following requirements:

1. 4 or more powerful GPUs;

2. 4 GB of RAM or something better;

3. 400 GB of SSD storage or something better; and

4. low power consumption (this is optional but recommended).

How to Mine Ethereum and Earn Better than Bitcoin

Below are compatible GPUs or graphic cards for an Ethereum hardware mining setup.

See more on Amazon

Rent a Cloud Mining Plan

If you want to avoid the complex computer hardware technicality and the upfront cost of buying a mining rig or building one, then cloud mining is another viable option.

Check this post to explore 10 legit cloud mining sites to start mining Bitcoin or Ethereum.

Some companies rent out mining computers remotely. You can rent a computer from them.

The drawback with this option is that the long-term cost of using it will be significantly greater than the first 2 options of buying or building one.

Whatever computer you choose to rent should meet up with the following specs:

1. 4 or more powerful GPUs;

2. 4 GB of RAM or something better; and

3. 400 GB of SSD storage or something better.

See more on Amazon

Step 2: Install a Desired Operating System

Once you have a computer, if it doesn’t have a suitable OS (Linux or Windows) installed on it, install an OS on it.

Ordinarily, I will recommend using a high-quality Linux OS (e.g Alpine, Cent OS, Debian Ubuntu, etc).

You may choose Windows 10, if you have a good reason to. If you choose Windows, just make sure you use at least 8 GB of RAM (not 4GB).

Step 3: Connect Hardware to the Internet

Once you have a computer, with an OS installed on it, the next thing is to connect it to the internet.

When trying to connect to the internet, choose a good internet service provider (ISP). A good ISP is an ISP that satisfies the following requirements:

1. Offer high data-transfer speed;

2. Offer low latency internet access; and

3. Offer stable internet access.

Step 4: Install a Mining Software

Once you have a computer, an OS installed on it, and internet access, install Ethereum mining software.

Download an Ethereum Mining software:

These are notable software for mining Ethereum:

1. Dual Ethereum miner (from Claymore);

2. ETHminer;

3. Miner Gate;

4. Hash Flare;

5. Nice Hash;

6. BitMinter; and

7. CGMiner.

Get a Good Crypto Wallet

The tokens you earn will have to be sent somewhere, so you need to get a wallet.

There are two main types of wallets, Cloud/soft or Hot wallets, the hardware or Cold wallets. Of all types, the hardware wallet is the most secure, although costs more than other types.

See this post for the 5 Best Ethereum Wallets for Safe-trading and Storage. There are free wallets to use and paid ones.

Start Mining

At this point, you have all that’s needed to mine Ethereum; the next thing is to test your mining computer to see if all works well. Do not hesitate to seek help from your local computer hardware store or simply follow this video tutorial to see the basics of setting up an Ethereum mining rig.

How to Build a GPU Mining Rig

Joining a Mining Pool

Ethereum has grown from a system powered by hundreds of computers into a system powered by hundreds of thousands of computers.

This rise in the number of participating computers means there are a lot of computers competing for the limited minable Ethereum tokens.

To ensure mining is profitable as soon as possible, owners of mining computers come together; they make their miners work collectively as a team; by doing that, the team wins more frequently; whatever earnings they make are then shared among themselves.

If you’ll like to succeed at mining, it is highly recommended to join a mining pool.

There are lots of mining pools out there. There are legit ones and the ones we are not so sure about. Read more about mining pools to find out which will be best for you.

Ethereum Mining Challenges

1. Finding a Legit Mining Pool

If you’re going the cloud mining route, finding a good Ethereum mining pool is one of the challenges you’ll face.

You will need to do due diligence before signing up with a good mining pool. The reasons for this are:

  1. There a lot of mining pools out there.
  • Most of the existing pools are not legit.
  • Some are legit but fraudulent,
  • Among the legit pools, only a small fraction will suit your needs.

2. Cooling Your Miner

Computer hardware used to mine Ethereum typically generates a lot of heat. If not addressed, the computers can overheat and get damaged or cause a fire.

To prevent your miners from overheating, you’ll have to figure out how to suppress the heat with an air conditioning system.

Mining pool companies site their mining farms in very cold regions like Russia, Siberia, and other arctic regions where cooling comes naturally and the cost of powering massive airconditioning is greatly reduced.

3. Cost of Electricity in Mining

Globally, miners are always blamed for high energy consumption.

In the U.S, States like Arkansas, Washington, Louisiana, Idaho have low power rates.

Computers used to mine Ethereum are typically power-consuming; a person will typically have multiple of them and power has to be put into consideration as that will determine your net income after power charges are deducted.

You also have to think about the following:

— How to power a miner that saves electricity; and

— How to ensure a constant supply of power.

You can check electricity rates in your area.

Can Ethereum be Mined on an Android Phone?

It is possible to mine Ethereum on Android phones. Just find a good mining app.

Ethereum is minable on Android phones, but I won’t recommend it for the following reasons:

A. Google frowns at it

While Ethereum can be mined on Androids, one of the reasons I won’t recommend it is because Google is not in support of it.

Google is the main player behind the Android platform; the company has kicked all mining apps out of PlayStore.

To use a mining app, you’ll have to get them from other sources; once you start getting apps from other sources aside PlayStore, you risk infecting your phone with very dangerous malware.

B. Android Phones are not suitable enough

Another reason why I won’t recommend mining on an Android phone is that Android phones are typically not suitable enough in terms of OS and other functionalities.

Elaborating —

— You’re unlikely to mine any Ethereum or a significant amount (even if you’re part of a pool).

— Your phone could get damaged in the process, as most phones cannot withstand the stress.

Trading vs Mining Ethereum, Which Is More Profitable?

Trading and mining both have their advantages.

In terms of profit, trading Ethereum is the more profitable option.

Mining is the better option when it comes to earning consistently and passively. Minimal effort is required from you daily.

Can I Mine with a Raspberry Pi?

Raspberry Pis are very small computers. They are cheap and as powerful as Android phones. They are mostly used for IoT projects.

Raspberry Pis can be used to mine Ethereum theoretically, but practically, they’re not recommended for anyone serious about mining.

These computers are too weak to compete with the mining beasts typically used by other miners.

If other important considerations were missed out, kindly share in the comment section.

Happy mining!

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