Ethereum Mining – What is it and how is it done? Complete guide 2020

Mining is the term we use in the world of cryptocurrencies to describe the process by which tokens are obtained from a blockchain network. In the case of Ethereum mining, this is one of the most profitable ways to get ETH.

It sounds easy to say, but the reality is that all this hides an infinitely large and complicated world that mixes accounting, programming and finance.

In this tutorial we are going to see how to mine Ethereum, what software and hardware are needed, and we will talk about Mining Pools, the best configuration and everything necessary to start mining.

How to Mine Ethereum? (The Hardware)

The blockchain system uses a hashing algorithm, which has the ability to convert a data block into another group of fixed-length characters.

These operations must be carried out by powerful computers that can do it in the shortest possible time.

In the case of Ethereum, the algorithm used is the ethash that is in charge of breaking down the block and condensing it into a number of letters and numbers of a fixed length, all deciphering the metadata of the last data block.

To do this they use a factor called nonce, which is nothing more than a binary number that determines a single hash value.

Determining the nonce resulting from each operation is like searching for a grain of rice in the desert. So the only possible alternative is data cycling.

What the miner does is throw a certain amount of possible values until he finds the correct one. The computer that manages to decipher which is the correct value is the one who gets the proof of work and as a reward, you will be awarded an amount of ETH.

How to assemble a mining RIG for Ethereum

A mining RIG for Ethereum (ETH) is not cheap. It is necessary to make a considerable investment to build a good team with a high hashrate that generates a good amount of ether per day.

These computers are nothing more than graphics cards connected to a motherboard that allows the data blocks to be broken down as quickly as possible.

Equipment needed to mine Ether (ETH)

Cycling data is not a complicated task, the problem with Ethereum mining is that the amount of possible correct values is too wide, making it necessary to process a large amount of data to determine it.

So we will need a much more powerful computer than we usually have on our desk.

For this, the ideal is to assemble a dedicated team especially for the extraction of cryptocurrencies from a chain of data blocks.

These types of equipment are known as RIG and we will show you how they are composed.

Processor

It may sound contradictory as we have indicated that a powerful team is necessary, but in the case of a RIG, the workload is focused on other components.

That is why when choosing a processor it is not necessary to break your head. With a processor capable of allowing us to run Windows 10 or Linux is enough.

GPU cards

A graphics card or graphics processing unit is a component manufactured to improve the visual quality of a computer.

In the mining process, all the weight of the processing falls on them, so that the more and more powerful the GPUs of our RIG, the greater its hashrate is.

Currently there are different types of GPUs. For Ether mining we must look at the consumption-processing power-price ratio when choosing.

Hashrate

The hashrate is the potential of the processing unit, it determines how many hashes a unit can process per second.

When choosing a GPU to mine Ethereum, we must make sure that this value is high, between 20 and 30 MH/s.

Currently the most powerful units on the market are NVIDIA with Pascal architecture or AMD with Polaris.

Memory type

There are different GPU types, for our miner we will need a GDDR5 VRAM memory card to mine Ethereum without problems.

Amount of memory

Finally we must look at the amount of memory in the graphics unit. Currently the minimum necessary is 4GB of VRAM. However, since the DAG file size is progressive, it is best to have a drive with 8GB of VRAM.

Based on these characteristics, the GPUs available on the market would be:

NVDIA GTX 1070 Ti, AMD Radeon RX 480 or higher. These GPUs provide us with a Hashrate of 35MH/s and 30MH/s respectively with an acceptable power consumption.

Multi-slot motherboard

The motherboard is the one that will be in charge of connecting the entire system. In this case, the ideal is to have one with enough slots to connect as many GPUs as we want or are necessary.

A board with six PCI Express slots would allow us to insert six GPUs like the ones mentioned above that would allow us to put together a team with at least 180MH/s.

Because mining has become so popular, there are manufacturers that develop special boards for the job, so they have multiple PCI Express slots.

Power supply

While Ethereum mining does not consume as much power as bitcoin mining, you need a powerful power source.

The power of it will basically depend on the number of GPUs in the computer and their power consumption.

For example, a computer with six NVIDIA GTX 1070 boards would require a power supply of at least 1200W.

Additional components

To complete our Ethereum mining equipment we only have to complete some basic components of any other computer.

We will need some PCI Express extenders called Riser that will allow us to place the GPUs on the board since, due to their width and size, it is not possible in most cases to place them directly on the board next to each other.

We will also need a monitor to be able to use and view the operating system and mining software. Also a standard hard drive of about 120GB of storage and DDR3 or DDR4 RAM with a minimum of 4GB.

Nor can we forget the computer tower, which in this case would be an open type so that all the components fit into it and it is easier to maintain and replace them, another option would be to mount it on an open structure.

The most expensive component of all equipment is GPUs. Cryptocurrency mining has created a strong demand for these and today they are a little scarce.

If we manage to achieve them without problems, assembling a RIG mining equipment of three or four GPUs would require an investment of approximately € 1,500 / € 2,500.

How to mine Ethereum (The software)

Once we have armed our RIG we must choose the software; the operating system for the miner and the mining software.

As for mining software, we will only stop to analyze the options that are available for mining Ethereum and not so in their programming or configuration (we will see later).

Mining software is nothing more than a program that has the ability to execute a hash algorithm to break down a blockchain and determine its nonce, thus creating a new block corresponding to a new transaction.

They are advanced programs with a high level of programming based on blockchain technology.

Before installing any mining software we will also need the GETH program that will allow our team to communicate with the Ethereum network.

Mining software Which one to choose?

ETHminer

ETHminer is an official client for ethereum mining that allows us to perform a custom installation.

Its latest version allows us an improved configuration for teams with multiple GPUs that improves the performance of our miner.

As far as minimum system requirements are concerned, it is not a very demanding program.

We can mine with a team of a GPU with RX460, 4GB of RAM, a dual-core processor and 1GB of space on the hard drive.

MinerGate

MinerGate is possibly the quintessential beginner mining software because its interface is very easy to use in any operating system.

Just by registering on their website, downloading the program, specifying the address of the wallet and running it, we will begin to receive rewards.

Furthermore, MinerGate not only allows us to mine Ethereum, but also bitcoin and other cryptocurrencies.

We can use it to mine ETH with CPU or GPU and we only have to pay a commission of 1% of the acquired rewards.

Without forgetting that through its Changelly system we can trade between the currencies that we mine.

As far as the minimum requirements of this mining software are concerned, we note that you don’t need a particularly powerful piece of equipment to get it working.

We can mine Ethereum with a GPU with CUDA 7.5, a computing capacity greater than 2.0 and an AMD card With OpenCL with version 1.1 or higher.

Claymore

Claymore is a legendary user of the Bitcointalk.org forum who decided to create his own mining software.

Claymore mining software is widely used today, since we can not only use it to mine ether, but also other cryptocurrencies in dual mining.

As with MinerGate, we can perform mining with CPU or GPU equipment with the same minimum requirements.

They are very similar software that even keep the same commission of 1% of the rewards.

It also has an AMD mode that increases the hashrate speed to 20% on RX460 or RX560 cards.

Not to mention its improved support for teams with up to 10 GPUs. It is currently available for Linux and Windows.

Operating systems

Currently the most famous operating systems are Windows, Linux and MacOS.

Linux

Linux is the favorite of many developers with advanced programming knowledge, as it is open source software that we can modify at will.

However, for a beginner, using Linux can be a problem for configuration and also for obtaining documentary information on how to configure mining software in this operating system.

MacOS

MacOS is a system that has gained enormous popularity in less than a decade. However, as with Linux, there is little documentary information to guide us in case we are new to mining.

Windows

Windows is undoubtedly the most used operating system for ethereum and others cryptocurrency mining for two reasons; It is the one that most users know how to use perfectly and many mining software updates are released first in this system.

In addition, there is a lot of information that can guide us without problems if we are beginners.

How to Mine Ethereum? (The Mining Pool)

After talking about RIG and mining software and before we teach you how to configure everything to start ether mining, we must talk about an extremely important factor such as the mining pool.

If we really want to take advantage of crypto mining, the best way is to join a mining group.

What are mining pools?

The mining pools are mining groups in which thousands of users unite the mining power of their RIGs to break down a block as soon as possible.

Such a combination is extremely useful due to the high competition that exists in ether mining.

As you may know, mining is a competition in which the reward is taken by the miner who first manages to break down the previous block and register the new transaction.

This means that if you are mining a block and another node decrypts it first, you are left with no reward despite the time invested.

There are users and organizations in the world that invest hundreds of thousands of dollars in the construction of enormous mining farms with unimaginable hashrate power. Competing with them alone is unfeasible and practically impossible.

That is why mining pools were born, so that users with less economic potential join forces and can compete with those huge mining farms that we mentioned at the beginning.

The only downside is that the rewards for mining are much less than solo.

However, it is better to be in a group and get small rewards rather than mining alone and waiting for loot that may never come.

How are the profits shared in a mining pool?

As we told you, the profits from group mining are not as large but are much more recurring.

Once we decide to mine in a group, we must be clear about the methods of profit distribution. Basically there are two classic types; PPLNS and PPS.

PPS

Also known as Pay Per Share, every action taken has a value in the Ethereum mining network, that value is what will be attributed to us every time we mine.

If we are used to mining intermittently, this is the best form of payment for us.

PPLNS

This stands for Pay Per Last N Shares. This payment method depends on the fate of the group.

If in a given period of time the group manages to break down “N” number of blocks, the rewards for the network will be greater.

Obviously, if you do not manage to break down many the gains will be less, but for a person who keeps his RIG connected always, this method will bring him greater profits than the previous one.

Other factors that we must take into account are; Mining commissions, taking care not to exceed 2% as we will be giving away the work, and the minimum amount of reimbursement.

What are the best pools to mine?

There are hundreds of ether mining groups around the world. However, what have the best user reviews are:

Ethermine

Link: https://ethermine.org/

Ethermine is one of the best today. It works with a PPLNS payment system and its commissions are extremely low (1%). In addition, it has an extremely high hash power that allows it to process more than 30 blocks per hour, being one of the most powerful in the Ethereum network today.

Ethermine has more than 200,000 active workers, allowing it to be so powerful. Also, your payments are processed instantly and only the amount of 1ETH is required to request them.

EthPool

Link: https://ethpool.org/

Ethpool is a group with a solitary predictive system in which the majority of the profits are attributed to the miner who contributed the greatest mining power. In addition, it offers us a completely anonymous system in which our personal information will be protected. It has approximately 12,000 workers and breaks down around 5 blocks per hour.

Together with Ethermine they take up 25% of the power of the entire Ethereum network, positioning themselves as the most powerful mining pools today. In the case of Ethpool, the commissions are 1% and we can withdraw from 1ETH.

F2Pool

Link: https://www.f2pool.com/

This is a Chinese pool with a hash power that covers 24% of the network, being also one of the most powerful. It works with a PPS payment method and these are carried out daily without problems once the withdrawal minimum (1ETH) has been exceeded. The commissions are still very low and despite being an Asian website, it has an English interface.

F2Pool is one of the least used in Europe and Latin America, but in Asia it is a benchmark when it comes to Ether mining.

Nanopool

Link: https://eth.nanopool.org/

Let’s talk about Nanopool, a mining pool with more than 70,000 active miners who credit 15% of the Ethereum network hashrate today.

Like Ethermine, it distributes its payments with a PPLNS system and these are made several times a day whenever the minimum withdrawal is exceeded.

This pool has servers in Europe, Asia and America, being one of the most used internationally. It should be noted that Nanopool also allows us to extract Ethereum Classic.

Mining Pool Hub

Link: https://ethereum.miningpoolhub.com/

MiningPoolHub is a less powerful pool but still very profitable. It has 7.6% of the hashrate of the Ethereum network today and its rewards are distributed differently from the previous ones.

Instead of a PPS or PPLNS system, they use a system where earnings are calculated based on a transaction fee, a block search fee, and an incomplete block fee.

Dwarfpool

Link: https://dwarfpool.com/eth

Finally we have Dwarfpool, a pool with a power of 13% of the current network. It has servers in more than one continent and its commissions are 1% just like its main competitors.

The rewards work with a PPS system and the best thing is that they have a distributed infrastructure that allows to process payments every hour without problems.

2Miners

Link: https://2miners.com/eth-mining-pool/

2Miners is the youngest pool on the list. It has a good design and many incredible features, such as its RIG equipment monitoring bot.

The minimum payment amount is 0.02 ETH and the pool commission is 1%.

2Miners pays all possible commissions, including the transaction fee for payments to miners. The group has 2 different payment schemes: PPLNS and SOLO.

How to mine Ethereum? (The configuration)

Now that we have our mining RIG in place and have chosen software and pool to mine, it’s time to configure our miner to start mining Ethereum.

Despite the fact that many people believe that this phase is exclusively for programmers, you will be surprised how easy it can be to complete it.

You will learn how to configure everything to start mining with MinerGate and Claymore, the most used programs for Ethereum mining today.

Although in the future many more may emerge.

Claymore installation and configuration

Before downloading and installing the program, we have to increase the virtual memory of our computer.

For this we must access the path “Computer Properties / Advanced System Settings / Performance / Advanced / Virtual Memory” and select a value greater than 16GB.

We also have to change the power options and set the computer to never go into hibernation or sleep mode and disable automatic updates to avoid interruptions during mining.

Once this is done, we follow the steps detailed below.

• Step 1: First we must download the miner which can be found in the thread created in BitcoinTalk by its developer.

Then we proceed to open the rar file. or zip. as the case may be and we extract the main folder on the desktop of the computer or on the hard disk.

• Step 2: In the miner’s folder is a file called config.txt containing the miner’s default settings.

We proceed to make some changes so that it can mine according to our demands.

• Step 3: The file tells us that we must eliminate the “#” of each value so that it can be applied.

Parameters are identified by having a hyphen and a value and all that is placed after that is the attribute.

• Step 4: We proceed to change the default attributes of each parameter:

“-Epool” It will be where we will place the address of the mining group to which we will join

“-Ewallet” Refers to the address where the rewards will be sent, so we must replace the one found there with one of ours

“-Epws” Refers to the miner’s password within the group which we must establish to secure our work

“-Mode” Refers to the mining mode that can be dual, put “0”, or just ether, put “1”

“-Ems” is the Ethereum mining stratum mode

“-Tt” We set the maximum temperature of each GPU to avoid breakdowns, the soft

“-Asm” activates the core synchronizer to combine the power of each GPU

• Step 5: Once these values have been modified, we proceed to save the changes and we can start mining ethereum without problems.

Mine ether with MinerGate

MinerGate is the mining software for beginners because it requires virtually no configuration.

We just have to download and install the program like any other desktop application.

So downloading the program and running the installer will suffice. Once the program is installed we can enjoy the following functions:

• Wallet: The wallet is the MinerGate wallet in which all the rewards we obtain will be stored.

In this section we will see an interface that reflects the available balance and a field in which we must indicate an Ethereum address to withdraw said earnings.

The only condition to withdraw is that the amount is no less than 0.02ETH.

• Smart Miner: This is the smart mining of MinerGate. This software allows us to mine other cryptocurrencies in addition to Ethereum.

What smart mining does is start mining the most profitable cryptocurrency based on its market value.

• Miner: This is the standard MinerGate miner. In it we can start mining any of the available cryptocurrencies although in this case what interests us is mining ether.

So we are going to choose Ethereum and click start to start exploiting the network.

In the case of this cryptocurrency, a Pay Per Last N Shares rewards system is used that gives a slightly higher reward to the miner who discovers the latest solutions. N is a reference to a random number.

• Others Pools: This is a tab that allows us to enter other groups of miners. In this case, CryptoNotes coins are used, among which are not Ethereum, Bitcoin or Litecoin.
• Benchmark: this tab allows us to calculate the mining power that our computer has.
• Archievements: in this section we can see our brands and achievements. Mining is taken in this case as a game and every time we have a good round we get an achievement which is saved in this section.

If you are interested in this project and want to stay up to date with everything that happens, visit our Ethereum News section