How to Mine Ethereum: Recommendations and Tips for Newbies

By November 25, 2021Ethereum
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Ether is holding one of the top positions in terms of price, growth, and impact. That’s why so many people are interested in mining it. However, due to the latest changes in the policy of the network, as of today, this activity does not look so profitable. Let us explain these updates and give you a piece of expert advice.

First, let us explain to you why the network decided to adjust the rules. The point is that they plan to switch from their Proof-of-Work algorithm to the Proof-of-Stake scheme, which will make the crypto 99% more environmentally friendly.

Before the latest update of the policy, which took place in August 2021, miners got the reward, which included two components ― a basic payment for mining a block plus fees paid by users who executed transfers within this block. As a result, miners were provided with substantial profits along with an opportunity to mine priority blocks, which were more actively used for performing transactions and brought higher profits.

As of now, miners keep on receiving the basic mining rewards, but they are deprived of transaction commissions. To be objective, the administration of the network proposed users send certain tips to miners on a voluntary basis. However, this practice does not enjoy much demand.

Speaking about the technical process of mining, there are no differences yet. Here is a short guide on how to mine Ethereum:

  • Choose a location. The key criterion is the price of electricity, as this is the key expense in mining.
  • Buy hardware. Some miners use computers complemented with numerous video cards, others ― invest in ASIC miners.
  • If you plan to mine on a computer, buy the software. Among the most popular choices are ETHminer, WinETH, and CGMiner.
  • Create a wallet for storing the coins. We recommend MyEtherWallet.
  • Join a pool. For example, Ethpool.org, Ethereumpool, Nanopool.

But the question is how much one can earn from mining Ether today? Taking into account the reward for a block equalling 2 ETH, electricity consumption of 400 Watt at a price of $0.1, one can count on $6.96 daily. That constitutes $2,540 per year. Certainly, as there are still some transactions of the old type left, some miners can earn from fees ― 0.079 ETH per transaction. But, in the near future, this opportunity will disappear.

No doubt, an additional profit won’t hurt in any situation. But, one must keep in mind that there is a new update upcoming ― Difficulty Bomb. It is scheduled for December 1, 2021. It implies increasing the difficulty of puzzles for mining the crypto. Thus, miners will have to choose between buying new equipment, which will be more powerful, or stop mining.

In sum, if you are only thinking about trying your hand at mining this crypto and buying the corresponding equipment, we recommend you choose to invest in the crypto itself instead. That can bring you about 20% annually.

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