As the second-largest cryptocurrency in the world, Ethereum has gained the attention of many traders and crypto miners. Did you know that there is more than one way to mine Ethereum?

3 ways of mining Ethereum that you should know.

Apart from trading, more people are also interested in crypto mining, one of the most popular cryptos to mine is Ethereum, known to be the "next Bitcoin" because it is the second-largest crypto in the world by market cap. Even more, Ethereum has its own blockchain with more advanced features.

However, before you start, it's worth mentioning that there are certain things that you should consider regarding crypto mining. One of them is that crypto mining needs a high-tech computer, which takes much power. In this case, PC component shortages are becoming more common in many places, making it harder to prepare the hardware needed for mining.

Generally, there are three ways to mine Ethereum, including:

  1. With NiceHash: Provides an easier way to mine and has lowered the barrier to entry.
  2. Pool Mining: Work or mine with a group in a single pool.
  3. Solo Mining: Do it alone and you don't have to share the rewards.

Regardless of the difficulties, crypto mining is still popular these days. Many people still want to know about mining, how it works, and how much they can earn from it. We will answer these questions in a minute, but remember that we're focusing on Ethereum minings. By the end of it, you can judge whether crypto mining is worth trying and which method is the best.

 

1. Mining with NiceHash

Ethereum mining can be done in many ways and platforms. One of the easiest options is with NiceHash, a well-known crypto platform for mining and trading that was launched in 2014.

The platform provides an easier way to mine and has lowered the barrier to entry. You can lease your PC's hashing power to other users, who gets to pick what crypto to mine, and you'll get rewarded in Bitcoin. However, a small fee of the potential profit goes to NiceHash.

Generally, the first thing that you must do is register with the service (make sure to own a Bitcoin wallet beforehand), download the NiceHash mining software, configure it to mine to your BTC address, and you're good to go. Your BTC will be accumulated on the platform and you can transfer it out whenever you desire.

There are several "levels" that you can pick:

  • The easiest one is called the QuickMiner, which is a web interface to a basic mining solution. You have to download the software, and on the webpage, you can immediately start and stop mining without putting in your BTC address.
  • The next option is NiceHashMiner, the standard version most people use. It's slightly more complex than QuickMiner, but it offers more features that can improve the overall profitability.
  • The last one is called NiceHash OS, a custom Linus installation recommended for larger-scale mining farms. As the OS is already tuned specifically for mining, hash rates can be higher.

The major downside is that NiceHash only gives rewards in the form of Bitcoin. That means, if you're planning to mine Ethereum, you should trade it with the Bitcoin you get. This is not entirely bad though because Bitcoin is the largest crypto.

If you're aiming for ETH, you would have to do some extra steps. Let's say we cut the rewards with the fee from NiceHash, the final net result might be lower than mining Ethereum yourself. Nevertheless, it's still worth considering with all the ease of use that NiceHash has to offer.

 

2. Pool Mining

Pool mining is probably the easiest and the fastest way to get started. To put it simply, you work or mine with a group of people in a single pool and then share the rewards with everyone. However, not all pools are equally profitable. That is why you must choose the right mining pool and consider some factors such as pool size, method of payment, and fee.

In terms of pool size, the simplest way to choose is to join with large pools because as the number of miners in that pool increases, the chances of getting the rewards also get higher. If one of them finds a secret number, they'll have to share it with everyone.

However, keep in mind that as more people join in, the rewards are also shared between more people. But even so, joining a big pool is still a safer choice because while you might be getting fewer rewards per 1 block, it's still better than going for a day or a week without getting rewards at all.

Moreover, the pool fee is also important to think about. When joining a pool, you must pay a small fee, usually 0-3% or more. The payments are calculated in the crypto that you're mining. The fees are needed to keep the pool up and running.

Keep in mind that managing a mining pool is not cheap. It costs money to run the servers and infrastructure in it. Free pools usually earn money from donations, making them less reliable. Therefore, it's best to pick the one with low fees. If the fee is higher than 3%, you might want to consider picking another pool.

Also, pay attention to the payment method and payout requirements used in the pool. Most pools would allow you to claim your rewards daily, but there's a minimum quota and it's usually pretty high. Sometimes, there are payout schemes designed to discourage pool hopping, so check the rules in each pool before joining.

Once you pick a pool, you'll need to set up an account, choose which mining software to use, and configure your launch settings. These steps can vary depending on which pool you use, so check the detailed tutorial in each pool.

 

3. Going Solo

Mining alone may sound like a great idea because then you don't have to share the rewards. But the reality is actually quite far from that. Compared to the previous two methods, mining alone is probably the hardest one.

If you mine alone, you are competing with other people and it's actually harder to get the rewards because they are only given to the first person who solves the math puzzle.

Since you are competing with a large community of people and companies worldwide, you would have to be very lucky. Not only that but you are also required to have a lot of resources at your disposal; enough to compete with the rest of the other miners.

Statistically, your chances of solving math quizzes for one block are equal to your percentage of the network's total hash rate. If we talk about Ethereum, the current hash rate is about 400TH/s or 400 million MH/s.

Even if you do have a farm of the best quality computers of let's say, 100 RTX 3080 GPUs, that would only make up a 0.0025% chance. In other words, with such farm you will potentially solve one block every 6.15 days. Imagine if you only use one computer. It would take about 615 days to solve a block at current rates.

However, mining solo is not all bad because you can get the rewards for yourself plus fees, with no percentage going to the pool or anyone else. So if you have the materials needed and still want to try solo mining, here's what you need to do:

  • First, you should set up an Ethereum wallet and download the Ethereum blockchain, it usually takes about 200GB in size, even after pruning a lot of extra data that you won't need.
  • Once your wallet is synced up, you can point your own mining rigs at your local node and that's it; you're good to go.

On a side note, you can also search for mining pools operating on a "solo" approach. It means that the pool still works together to find a block solution, but only the participant with the highest contributions to date gets the reward.

This option is definitely easier than mining alone, but you should also be aware that without a decent amount of hashing power, it will take some time to reach the point where you become the one that gets the rewards. In the meantime, you still have to pay a small pool fee, usually 1%.

 

Conclusion

In this post, we have pointed out three ways to mine Ethereum. Hopefully, it can give you some insights about which option is the most suitable for you. Being an Ethereum miner means you are helping the blockchain to stay decentralized by making sure that all transactions are secure. In return, you'll receive rewards for every transaction that you successfully validate.

However, becoming a miner is not as easy as it looks. You must consider various aspects such as balancing the cost and materials, calculating the potential profits, etc. Figuring out the perfect balance of those aspects is not easy, so you need to be very careful with your steps.