Try Quests to earn cryptoFlash Bounty: Miners
How to Mine Ethereum
Ethereum is arguably the second most popular cryptocurrency after Bitcoin. With the second largest market capitalization in the whole cryptocurrency market, it was the first cryptocurrency to feature “smart contracts”. Smart contracts are individual, decentralised and self-executing agreements which are coded into the blockchain.
Developed by Vitalik Buterin in, Ethereum went live with its beta version in 2015. It features the Ethereum virtual machine, or EVM, capable of running smart contracts as a representation of financial agreements such as swaps, options contracts and coupon paying bonds. One can use Ethereum to fulfil employment contracts, as a trusted escrow and to execute wagers and bets.
Cryptocurrency experts and analysts are of the opinion that Ethereum mining is more profitable than Bitcoin mining. According to the latest statistics, Ethereum miners are earning an average of $77 million in daily revenue, compared to $67 million that Bitcoin miners have earned. Thus many experts in the field believe that it is generally more profitable to mine Ethereum instead of Bitcoin.
Before we begin discussing what Ethereum mining is, we must first understand mining as a process means. Mining refers to computationally intensive work that requires a lot of computer processing power and time. In the mining process, the miner is an investor that provides energy, computer space, and time for sorting through blocks. They submit their solutions to the issuers when the mining process hits the right hash. Miners get rewards which are portions of the transactions for taking part in the mining process. Miners in cryptocurrencies are responsible for increasing the circulation of a particular cryptocurrency in the market. Every cryptocurrency has an upper limit of the number of coins that can be mined. So when rewards are reduced, the inflow of new cryptocurrencies also reduces.
What is Ethereum Proof of Work?
Like Bitcoin, Ethereum also uses a consensus protocol to operate, known as Proof-of-work(PoW). The Ethereum network uses this protocol for its nodes to agree on the state of information recorded on the blockchain. It is the mechanism that allows the Ethereum network nodes to come to a consensus on data.
The protocol aims to deter or curb blockchain network attacks or abuse. They do this by forcing all participants to solve moderately hard calculations or computations to verify blockchain transactions for a reward. PoW is also responsible for releasing new currency into the system. In the PoW system, no one can erase or create fake transactions.
PoW miners have to use their computational resources to solve hashes to verify transactions. It is done to prevent double-spending. Proof of Work also helps you to ensure that the network functions without relying on any third party or middleman.
Some of the Proof-of-Work functions miners execute include puzzles, integer factorization, merkle tree-based puzzles, hash sequences, and functions. The completion of these activities helps in producing blocks, after which the network rewards the miners.
Best Way to Mine Ethereum
We’ve reached an important point in this review – learning how to best acquire Ethereum. Now, mining Ethereum is done through a mining rig with GPUs or with an ASIC (Application-Specific Integrated Circuit) miner from Bitmain. Ethereum can be mined with every recently released GPU, but if you want to make profit, you’ll need to setup a GPU mining rig or get your hands on some ASIC miners. Both ways are almost equally profitable.
No matter which one you pick, we would recommend joining a mining pool, where you cooperate with other miners to find blocks faster and receive proportional reward for the work you have done. Mining in pool can also guarantee you will receive stable income, all for the price of a small fee (0% – 3%).
Lastly, if you aren’t a tech savvy, then cloud mining might be the best choice for you. We are going to explain it later in our Ethereum cloud mining section.
According to graphs above we can see that miners with transactions between 1-5 for mining each block are most common miners with 2,322 miners which are 21.4% of all miners, next group is miners with 10-50 transactions for mining each block with 2,155 miners which are 19.8% of all miners, and next group is miners with 1 transaction for mining each block with 2,082 miners which are 19.2% of all miners, and next group is miners with 5-10 transaction for mining each block with 1,579 miners which are 14.5% of all miners, and next group is miners with 100-500 transaction for mining each block with 1,299 miners which are 12% of all miners, and next group is miners with 50-100 transaction for mining each block with 1,298 miners which are 11.9% of all miners and last group is miners with more than 500 transaction for mining each block with 130 miners which are 1.2% of all miners.