Should You Try Mining Ethereum? Guide for Noobs and Beginners
For many, the idea of mining bitcoin faded out long ago. While mining for Bitcoin profits is still possible, the cost of electricity and equipment these days is significant. The days of mining on an ordinary computer were gone before most even heard of Bitcoin — and even consumer-grade video cards were obsoleted by 2013. But don’t despair! There are plenty of other digital currencies you can still mine with off-the-shelf gear. The big one is: Ethereum.
Also read: Can I Make Money Mining Bitcoins?
Audio version of this article recorded by King Passive
Note: this starters’ guide is aimed more at beginners. If you already have a fair idea of what hardware you’ll need and how to build it, check out our more advanced mining guide by Bitsonline’s resident Ethereum expert Utkarsh Anand.
Bitcoin: No Longer for Beginners
Let’s get the Bitcoin thing out of the way first: To mine BTC these days, you’d have to make an investment of $1,600 USD or more in specialized ASIC chip-based equipment — which will likely be superseded in about six months to a year, leaving you mining pocket change. Your annual profits, after the cost of electricity (at an average of .13 cents per/KWH for electric and a Bitcoin value of $6,000 per coin), would be around $3,745.
That’s not a bad return, especially if the price of Bitcoin continues to rise.
However, many who want to mine cryptocurrency don’t have $1,600 or more to invest in equipment. When Bitcoin first started, all you needed was a PC and the belief that what you were mining for would one day become valuable. And sure enough, those two investments have seriously paid off for some. However, as Bitcoin’s value increases, so does the difficulty to mine it.
Why Mine Ether?
Ether is the cryptocurrency that “fuels” the Ethereum network. Note, the Ethereum blockchain is slightly different than the Bitcoin one. The Bitcoin blockchain exists solely to conduct financial transactions.
However, the Ethereum blockchain is designed to handle a lot more, including:
- Conducting financial transactions,
- Creating ironclad records of copyrights and intellectual property ownership,
- Executing smart contracts (business contracts that execute when financial transactions occur),
- Generating new tokens and cryptocurrencies that businesses can use as rewards or that can gain financial value over time (many “ICOs” use Ethereum ERC-20 tokens).
The Ethereum blockchain is a software-based platform that businesses can use to create decentralized tools and business structures. Because of this, many businesses in the music, financial, real estate and software development industries wishing to enter the cryptocurrency realm are using Ethereum to build their projects on.
Ether is now the second most valuable cryptocurrency (by total market cap, not per unit) at least as of November 2017. Businesses from almost every sector are looking at Ethereum as a business building block, not just a form of financial currency.
Sound Like a Good Investment Yet?
Not only does Ethereum show remarkable promise as a financial investment, it’s still easy to get into Ethereum mining. You can still mine ether on a gaming PC or, if you’re feeling more adventurous, build a “GPU rig” of half a dozen or more gaming-style graphics cards.
This is the way people used to mine bitcoin, back in the day. In fact, they filled entire rooms with them:
If you’re going to go that far, make sure you also have plenty of fans, plenty of available electricity… and probably a fire extinguisher handy, just in case. You probably don’t want to run this rig in a hot climate, or in summer either. Just a warning.
Building a Mining Rig or Gaming PC
A gaming PC is the minimum you’ll need for an Ethereum mining rig. We Do Tech recommends using a graphics card with 4GB or more of video RAM, running software called Claymore’s Miner — available from Nanopool.com.
With a gaming PC, you can over-clock your system power and increase your hashrate and daily earnings by a few cents to a dollar.
In addition, the Nanopool DAG file is increasing constantly. If your video card is less than 4GB video RAM you will lose significant megahashes per second. If your video card is less than 4GB, then he recommends mining for a different currency, like Zcash. Luckily, Zcash is also increasing in value this year.
TechCashhouse looked at pre-assembled rigs for sale on eBay that (let’s be honest) cost more than they’re worth. But if you’re not bold enough to build your own, you’ll pay a premium for someone to make it easier for you. Life’s like that.
He shared that you can buy the parts and re-make the rig yourself for much less. However, he also showed that buying a pre-assembled, (maybe over-priced) rig can still turn a profit.
Both TechCashHouse and We Do Tech calculated the average earnings for Ethereum mining with a few tweaks like .10 to .13 cents USD/KWH for electricity, hashrates between 17 and 22 per MH/s, and various power wattages, etc.
It looks like mining ether with a gaming PC or rig can earn you about $3 to $4 USD per day*.
Mining Ethereum with a PC?
The Daily Decrypt also shared a tutorial on mining Ethereum using only your PC. This step-by-step guide recommends using the Geth and Ethminer programs to do it.
Amanda doesn’t discuss the financial projections for mining Ethereum with just your PC. Anyway, it’s likely the information would be out of date by the time you read this.
However, you can visit the CryptoCompare.com mining calculator and calculate the current amount you’ll likely earn per day, per week or per month based on the cost of your electricity and the other factors exclusive to your PC and equipment.
*exact prices may fluctuate as wildly as cryptocurrencies themselves, so please consider these a rough guide only. Use a mining calculator site (as mentioned above) to get a better picture.
Do you think it’s a good time to start mining ether? Do you ever wonder how many Bitcoins you’d have if you’d started mining the first time you heard of Bitcoin? Chime in below.
Images courtesy of Pixabay, We Do Tech, TechCashHouse