Millions of people around the world have followed closely the astonishing rise of cryptocurrencies. Lines of code have become wealth almost overnight. A currency approach that was only a theory a decade ago has made numerous early investors rich. It has become a place to store wealth, facilitate transactions, and make businesses more secure. Also, unlike practically any other form of investment, it can be produced by individuals in their own homes. As a result, more and more people are interested in using their computers to mine cryptocurrencies. Ethereum is one of the more popular choices for miners. In order to mine Ethereum, individuals need to study and make sure that they are familiar with the companies and structures associated with mining Ethereum in order to become successful.
What is Ethereum?
In order to make sense of mining Ethereum, it is helpful to know what Ethereum is. Ethereum is one of the fastest-growing and most successful cryptocurrencies on the market today. A cryptocurrency is a type of currency that is based off of a blockchain. Blockchains are strings of computer code that provide the bits of code that give cryptocurrencies a considerable degree of security and anonymity. The amount of a cryptocurrency like Ethereum is established in advance by its creator and grows over time.
More Ethereum is produced when computers engage in the process of mining. Computers mine Ethereum by processing massive numbers until they reveal the next part of the blockchain that verifies a transaction. Once the transaction is verified, the computer or computers that helped to verify it are rewarded with more Ethereum. This process continues at a gradual pace over time and can be aided by more and more computers engaging in the process.
There are numerous cryptocurrencies on the market today. But it is not surprising that so many people specifically want to produce Ethereum. Ethereum has numerous uses that place it above other cryptocurrencies that have existed for longer or may have better name recognition. One of the major benefits to mining Ethereum over other forms of cryptocurrency is its multiple uses. Some forms of cryptocurrency are only valuable for their use as anonymous currency that is not controlled by a major country or central bank.
These currencies are popular but have a ceiling on their growth. Demand is restricted to people who are interested in the currency for these uses. A restricted demand means that the price can only increase to a certain level. Ethereum, on the other hand, is useful because the blockchain behind it has been picked up by major banks and corporations. For instance, JP Morgan Chase, one of the country’s largest banks, has to perform thousands of transactions around the world every day.
These transactions need to be secure in the present age of rampant company hacks. JP Morgan Chase has therefore decided to consider using the blockchain behind Ethereum in order to protect those transactions. This utility helps to increase the demand behind Ethereum and increased demand plus steady supply means an increased price. In addition to companies who are interested, a large number of individuals want to use Ethereum for the same reasons that people want to use every other form of cryptocurrency. As a result, mined Ethereum could start to make a considerable amount of money if used as an investment. The incentives to mine the currency on a home computer are clear.
Choosing a Computer to Mine Ethereum On
The first step to mining Ethereum is to choose a proper mining machine. Desktop computers are clearly the best option for the vast majority of individuals who want to mine Ethereum. They are much stronger than cell phones or laptop computers in many instances. Only using a store-bought computer will produce some Ethereum of course. However, for those who are serious about mining Ethereum, they have to work outside of the traditional computer structure. Computers are built to perform a number of different tasks. On the other hand, mining cryptocurrency is just one particular type of task that a computer can do.
The best way to use a desktop computer for Ethereum mining is to purchase the most sophisticated computer one can for a particular budget and then to add onto that computer in order to optimize it for Ethereum mining. Adding on graphics cards should be a good first step in the process. Graphics cards can perform the complicated procedures necessary for Ethereum mining better than most other aspects of the computer. A series of graphics cards connected together can make many times more Ethereum over time than the traditional processor of an average computer.
Next, the prospective miner should start removing parts of the computer that are inessential for the purposes of mining. They should modify the computer and its fan mechanism. A broken or insufficient fan can ruin the entire mining process. Fans should be strengthened and increased for any computer that may be doing the work of mining. Mining is a calculations-heavy process that often creates a considerable amount of excess heat. Cooling fans run constantly when a computer is mining and they may lead to the computer breaking down if they do not work properly. Completely overhauling the cooling system on a mining computer may be necessary for proper optimization.
The final step of optimization is to consider steps that reduce energy consumption. Ethereum mining is basically the process of using computing to turn electricity into currency. Any step that a miner can take to reduce the amount of electricity they are using will therefore increase the amount of money they will bring in. These steps may include a smart power system, setting up a computer near an AC vent to reduce the need for fan cooling, or even the usage of solar panels. Some solar panels are small enough to charge a cell phone or charge a battery. Hooking up a computer to a solar panel placed in a particularly sunny area can lead to the production of cryptocurrency practically for free. Reducing electricity costs through these steps can be critical in saving and making as much money as possible over the long-term.
Finding a pool
After building their machine, an individual has to find a pool that will allow them to join their mining group. Individual computer Ethereum mining is simply not feasible at this current time. As a cryptocurrency grows, the numbers that have to be processed in order to earn another unit of currency increase to astronomical levels. Like many other cryptocurrencies, Ethereum has grown so large that individual computers do not have the processing power necessary to mine significant quantities of the currency. No single home computer is large enough to process parts of the blockchain at the amounts that are currently required.
As a result, Ethereum miners have begun to pool together their computing power in groups that mine as much Ethereum as they can and then split the resulting cryptocurrency. This approach is not officially set up by Ethereum itself and is not regulated by any group. As a result, it can be inherently risky. Individuals can leave themselves vulnerable to the practice of cryptojacking, where hackers or scam artists use their computing power to mine cryptocurrency that is never sent to the miner.
Just as they did with computers and graphic cards, prospective miners should shop around to make sure that they can find a mining platform. There are a number of ways for users to pick the mining platform that suits them best. Finding a proper dashboard can help a prospective miner narrow down their search. Dashboards are the user interface that helps tell how much Ethereum a computer is mining and how much money they will eventually make through the mining process. Not all dashboards are created equally. Some are cluttered with information that the beginning Ethereum miner does not need. Others unnecessarily hide the amount of cryptocurrency that a particular computer is earning.
The mining platform should not only work outside of the view of the miner. Every reputable mining platform will show an individual all of the metrics they need to make sure that their computing power is creating the required amount of Ethereum. In addition, anybody interested in mining Ethereum needs to work with a well-established, well-reviewed group that is accessible and responsive. They need a group that will answer questions that they have and troubleshoot any possible problems. An Ethereum mining group that does not respond in such an adequate way can cause
Another factor to consider is frequency of payment. Different Ethereum mining services pay out at different times. They may hold onto the funds of an individual and only distribute Ethereum every month or so. A similar tactic would be to only pay out Ethereum to an individual’s wallet once that individual reached a certain threshold of mined Ethereum. Such a payment system would definitely create red flags. It would, in essence, involve a short-term loan at no interest to the group in charge of the pool. Many pools and mining groups will instead pay more regularly and transfer to the individual’s wallet whenever necessary.
Picking a wallet
Then, individuals will want to set up their wallet. The wallet is the place on their computer where their mined Ethereum will go. It is supposed to be a secured location where Ethereum is transferred after the mining process and held. The product of crowd mining is a set amount of Ethereum that a group receives and then doles out to its individual miners. There is no other way for a miner to hold onto Ethereum than with a wallet. It is the base where individuals can later turn their cryptocurrencies into traditional currency.
Using a trustworthy wallet service is essential to eventual success mining Ethereum. Like any other online bank, individuals are literally trusting a wallet company with money. But cryptocurrency wallets do not face the same amount of regulations that online banks have that make the vast majority of them trustworthy deposits for wealth. There are practically no wallet rules or regulations and many wallets are set up outside of the jurisdiction of the United States government. The amorphous nature of cryptocurrency means that unscrupulous wallet companies can easily steal all of the Ethereum that an individual is trusting to their service. Therefore, miners should tread carefully. They should only work with established wallet companies that provide access to funds and a considerable amount of liquidity. Many wallets are able to hold multiple forms of cryptocurrency as well.
Once an Ethereum wallet is securely established, it can then be used to allow miners to hold onto their investment. Ethereum and similar cryptocurrencies continue to grow in value as the months go by. They have grown substantially in recent years as more and more companies find different uses for the cryptocurrency. People should not just hook up their computer and leave it to mine without any attention or changes, however.
Individuals who enjoy the experience of mining Ethereum can take steps in order to increase the viability of their investment. They can spend time on forums where successful miners and investors discuss the best tips to mining Ethereum. This interest could lead them to move to new platforms or find new wallets. They can also invest in additional computer attachments that will help the mining process run more smoothly. All of these steps can help an individual miner make the most out of their foray into Ethereum mining.
Ethereum mining is a unique way to make money and build up an investment. Anyone interested in beginning to mine Ethereum should start slow. They should not abandon their jobs or their other investments because they hope to immediately get rich off of the cryptocurrency. Instead, they need to be careful with the mining pool that they join and the wallet that they use. If they are careful and do their research, prospective miners can start using their computer to mine one of the most profitable, exciting cryptocurrencies on the market today.