How to Mine Ethereum: A Beginner’s Guide to Ethereum Mining

Mining ether transforms the act of network security into a sophisticated but generally quite lucrative business, so the prime motive for mining is profit.

The best miner for ethereum is paid a set amount of money for each block mined and receives a portion of any transaction fees the users pay.

Ethereum mining fees typically contributed only a small part of total revenue, but the decentralized finance growth in 2020 helped change that scenario for Ethereum.

There are additional reasons why someone might want to mine Ethereum. For instance, a philanthropic community member may decide to mine at a loss to contribute to network security because every other hash counts. Besides, one can use ethereum mining to obtain Ether without investing directly in the asset.

Cryptocurrency mining and investments are gradually becoming more popular, and with time more and more people might get driven towards it given the remunerative benefits it seems to offer.

From amongst the best cryptocurrencies, the ethereum mining process intrigues people the most.

There are several queries they possess pertaining to ETH mining, such as: How to mine ethereum? What is the best miner for ethereum? What are the steps to becoming an ethereum miner? And others of a similar kind.

In this article, we’ve tried to cover all of these as closely and simply as possible, explaining in detail how can you mine ethereum using a PC and other essential tips.

But before we jump on to the process of Ethereum mining, let’s answer a key question: what is ethereum mining?

Ethereum mining is the process of solving complex mathematical equations, similar to cryptocurrency mining. An Ethereum miner is essentially the foundation of the ETH cryptocurrency network because they devote their time and computing power to solving those math problems, thereby providing a “proof-of-work” for the ethereum blockchain network that verifies ETH transactions. Ethereum, like Bitcoin (BTC), currently uses a proof-of-work (PoW) consensus mechanism but will soon switch to a proof-of-stake (PoS) mechanism.

In addition, Ethereum miners are in charge of creating new Ether tokens through the Ethereum mining process, as they receive ETH rewards for successful completion of a Proof-of-work task.

PoW is based on the fundamental properties of the hash function, an “encrypted” piece of data derived systematically from some arbitrary input. Hashes are different from traditional encryption because they have a uni-directional process.

The process PoW for ethereum mining begins with selecting a set of desired hashes based on the “difficulty” parameter. Then, an ethereum miner must try to find all possible solutions to the mathematical problem, including the previous block’s hash, to generate a hash that meets the difficulty level.

Mining ethereum becomes an energy-intensive task because of this. Therefore, the energy requirement of ETH mining can be altered by increasing or decreasing the difficulty level of mathematical problems.

An ethereum miner has a “hash rate” that specifies the number of combinations they try in one second. The greater the number of ethereum miners participating in the ETH mining process, the more difficult it is for outside entities to replicate the network. And this is how ethereum miners protect the ETH blockchain network by doing real brain work.

How To Mine ETH: A Step-by-Step Guide

Ethereum mining is a unique way of approaching cryptocurrencies and earning some revenue. We may call it so because while it is profitable to become an ethereum miner, the cost of electricity and internet connectivity consumed by the ETH mining process sometimes exceeds the income generated.

How do you mine ethereum, and the skills you possess to solve complex mathematical problems have a say in how much profit you could make from mining ethereum.

Therefore, before a person thinks to initiate mining ether, they must consider the other costs associated with ethereum mining. A rational analysis of how beneficial ethereum mining could be for you instead of simply buying ETH would significantly help you make the right decision.

Now that we’ve taken into consideration this essential viewpoint let’s look at how to mine ethereum using a PC.

Ethereum Mining Using PCs or Personal Computers

Following are the steps to mine ethereum using a personal computer:

STEP 1 – INSTALL GPUs AND SET UP THE COMPUTER

There are many Graphical Processing Units available that an ethereum miner can choose from to install on their computers for mining ethereum. The best ethereum mining software includes AMD GPU Driver, Nvidia GPU Driver, or xFast Miner for GPU ethereum mining by the MinerGate software company.

When you’re done downloading the necessary software and GPU Driver of your choice, install them and reboot the computer. You can ensure that your PC successfully recognizes the GPU or Software installed when you don’t see a warning sign on the GPU icon in the Device Manager window.

After installing the GPUs and setting up the computer such that it supports the ethereum mining process, you may move forward to the next step.

STEP 2 – GET AN ETHEREUM WALLET

For storing the rewards received from ETH mining, you would require an ethereum wallet. There are two ways to approach this step.

If you’re tech-savvy and don’t mind investing time in downloading a wallet, you may go for the official ETH wallet called Ethereum Mist. It has a friendly and easy-to-navigate user interface.

On the other hand, if you’re a beginner, you may simply access online ethereum wallets such as MetaMask, Atomic Wallet, Exodus, or MyEtherWallet. Some of these are a combination of mobile and desktop wallets, while MyEtherWallet is a user-friendly web wallet for mining ethereum.

Create a new wallet on any one of the applications as you may like. Besides that, after creating a new web Ethereum wallet, you’ll be required to download the “Keystore File” and save the provided private key.

Note that it will be beneficial for an ethereum miner to save the essential information such as password, private key, and your ethereum wallet address in a notepad or other text file, which you can encrypt and protect alongside your Keystore File. After that, copy it to a USB or cloud drive and remove the documents, storing only the encrypted file digitally.

Further following the steps on the respective software would reveal the wallet address you can share to receive and store the rewards from ethereum mining. The most important thing to remember is that you must never share your Private Key; the rest is all good.

STEP 3 – DOWNLOAD A SUITABLE MINER

An ethereum mining software is a specific application that is particularly used to mine ETH using your system’s computing power. The ethereum mining software is very useful as it provides a detailed analytic report on the mining activity and total earnings of an ethereum miner.

You may download any of the following ethereum mining software: ETHminer, CGminer, BitMinter, Claymore, and WinETH from amongst several other software available in the market.

Once you’re done with downloading and installing any of these applications for mining ether, extract the respective folder and place it on your PC’s home screen for easy access.

STEP 4 – MODIFY COMPUTER SETTINGS

Apart from the technical computer setup you do with respect to the graphical processing units and computer driver for ETH mining, you might also require to alter some general settings of your PC, such as the default sleep or turn-off settings.

These settings might differ depending on your computer’s OS or operating system. However, the essential fact is that an ethereum miner must check these little settings to avoid any hindrance in mining ethereum.

STEP 5 – JOIN AN ETHEREUM MINING POOL

One may proceed to mine ethereum with solo ETH mining. However, it is unlikely that solo mining would fetch an ethereum miner any ETH unless they have a warehouse full of powerful GPUs.

Therefore, joining an ethereum mining pool would be a better option. You may choose any available mining pool options, such as Ethermine, Nanopool, Dwarfpool, and F2Pool. Most of these have a separate section that explains how to mine ETH with specific ethereum mining software.

Some points to consider while joining an ethereum mining pool are: to connect to the closest server, depending on your location; saving the Batch File with the bat extension; and creating a shortcut of the new bat file to send to the desktop for quick access.

STEP 6 – START MINING

When done with all the steps as mentioned above, you may begin with the actual ethereum mining process.

Double click the saved BAT file to launch the miner for ethereum. The ethereum miner will start, after which you can run certain commands to the ethereum mining variables, initialize your PC’s GPUs and build the DAG or Directed Acyclic Graph file on each of them to start hashing.

ETH Mining Details: How ETH Transactions Are Mined?

Ethereum mining can be done by using three kinds of devices, namely: Graphical Processing Unit (GPU), Application Specific Integrated Circuit (ASIC) machines, or Field Programmable Gate Array (FPGA) machines.

Essentially, ETH was specifically designed to be mined using consumer GPUs. Later on, in 2018, ASICs were created and released for the ethereum mining algorithm, Ethash. In comparison to GPUs, these machines are hardwired to perform a single task, allowing them to engineer greater efficiency in mining ethereum than the general computational hardware.

And lastly, FPGAs are another option for ETH mining. It lies between ASICs and GPUs, allowing better configuration and efficiency than GPUs with specific types of computations.

Ethereum mining can be done using any of these devices. However, one must note that not all of them might be practical or sensible to use. All these ethereum mining devices have pros and cons, which an ethereum miner should consider before investing in a machine.

A beginner ethereum miner who wants to try and see how ETH mining will suit them and if they can continue with it should go for GPUs as the machine allows mining other cryptos. In addition, the performance and flexibility of the device are good compared to its price.

Other FAQs – Ethereum Mining

Following are some of the most frequently asked questions regarding mining ethereum. Take a look at them to know more about ETH mining.

Q.1 What Is The Best Ethereum Mining Software?

From amongst several software options available for mining ether, experts suggest PhoneixMiner as the best ethereum mining software. It is simple to use and has a wealth of functionalities, making it an excellent choice for novice and experienced miners. In addition, the software has been specifically designed for ethereum mining, allowing an ethereum miner to get the most out of their hardware.

Q.2 Can Anybody Mine Ethereum?

Ethereum mining can be pursued technically by anyone. All that an ethereum miner needs is an internet connection and computer hardware to mine ethereum profitably.

Mining Ether – The Bottom Line

Ethereum mining is the process of generating new ETH tokens and welcomes anyone who wants to be an ethereum miner to be a part of the ethereum mining community. A strong ETH mining community ensures better security for the entire system and blockchain network since each transaction gets verified by a greater number of nodes.

Mining ether is an energy-intensive process and requires a rational consideration before one begins to mine ethereum. After all, one wouldn’t want to invest more than the expected rate of return from mining ether. Certain little things to consider significantly impact how much an ethereum miner earns, such as the cost of electricity, internet connectivity, hardware availability, and more.

With adequate hardware and software resources, anyone can become an ethereum miner and begin their journey of mining ethereum. Of course, it can either be an investment or a gamble, depending on why you wish to try ethereum mining. However, undoubtedly, ethereum mining would contribute to developing one’s understanding of how cryptocurrency works deeper than any other process.