Hey there crypto enthusiast! With the soaring popularity of Ethereum and news of its eventual shift from proof-of-work to proof-of-stake consensus, you might be wondering if it‘s even worth starting to mine ETH in 2023.
Well let me tell you, while Ethereum mining‘s days may be numbered, there are still good returns to be made by pool mining even as a hobbyist.
And who knows, you might just offset the cost of that high-end GPU you‘ve always wanted to buy! 😉
In this comprehensive guide, I‘ll walk you through everything you need to efficiently mine Ethereum in a pool:
A Brief History of Ethereum
Let‘s first understand what Ethereum is and why mining is integral to its functioning.
Ethereum is a decentralized, open-source blockchain platform launched in 2015. It operates on a consensus mechanism called proof-of-work (PoW) where ‘miners‘ solve complex computational problems to validate transactions on the network and get rewarded with ether (Ethereum‘s currency) for their efforts.
Without miners continuously verifying transactions, the Ethereum blockchain would essentially become inert and useless.
However in September 2022, Ethereum initiated a major technical upgrade known as "The Merge" which transitioned its consensus protocol completely from PoW to proof-of-stake (PoS).
So instead of miners, the network is now secured by ‘validators‘ who stake ETH coins to verify transactions based on how many coins they hold. This is meant to make Ethereum more scalable, secure and sustainable.
But The Merge does NOT mean the end of Ethereum mining.
The existing Ethereum PoW chain still survives as a smaller fork called the Ethereum Classic blockchain (ETC). Miners have shifted to mining the ETC chain which uses the same mining algorithm – Ethash.
And while ETC prices and mining rewards are lower compared to ETH pre-merge, it‘s still profitable depending on the miner‘s operating costs.
So let‘s get right into…
Step-by-Step Guide to Start Mining ETC
When it comes to mining, you essentially have two options – mine independently ("solo") or join a pool.
Unless you have a large mining farm with multiple dedicated rigs, solo mining is just not practical anymore for small, hobbyist miners.
The chances of you actually being able to mine a block and get the current 6 ETC reward solo is extremely low.
This guide focuses on the more accessible option of pool mining where you team up with other miners around the world combining your hashrate.
The pool aggregates all your collective efforts meaning you have a constant stream of smaller but more frequent mining rewards rather than relying solely on your solo luck!
Here are the 6 main steps:
Step 1: Get an Ethereum (ETH) Wallet
To receive your hard-earned mining rewards, you obviously need an Ethereum wallet that supports the ETC token standard.
While you can choose hardware, browser or exchange wallets, I recommend going with a software hot wallet like Exodus or Atomic for their simplicity, security and reliability:
Set up your wallet, make sure to safely backup your seed phrase, and note down your ETC receiving address.
Step 2: Select an ETC Mining Pool
There are a number of ETC pools available with varying fees, min payouts, features and community sizes. Generally 1-2% pool fee is considered reasonable.
Some popular, reputable ones are:
I recommend 2Miners. Here are some of the standout features:
- Low 1% fee
- Minimum payout of 0.05 ETC
- Pays out every 2 hours
- Beginner friendly dashboard
- Additional mining options besides ETC
Once you‘ve created your account and wallet address on the pool‘s dashboard, you can now download and configure the mining software.
Step 3: Install Mining Software
There are a couple of popularEthash mining software options like GMiner, T-Rex, TeamRedMiner etc. that support GPUs.
I suggest going with the native software recommended by your pool for maximum compatibility.
For 2Miners, they recommend using GMiner which has the following benefits:
- Compatible with both AMD and Nvidia GPUs
- Low dev fee of 1%
- Runs on Windows and Linux
- Easy to setup and manage through batch file
Download the latest GMiner v2.88 from their releases page based on your operating system.
Step 4: Configure the Software
Unzip the downloaded file and open the start.bat (Windows) or start.sh (Linux) file in a text editor.
This is the batch script that will launch GMiner. Here you need to specify details like your wallet address, worker name (rig identifier) etc.
Replace the sample ETH wallet address with your own ETC receive address:
-wallet YOUR_WALLET_ADDRESS
And worker name (-worker parameter) with your preferred rig name:
-worker Rig1
Save start.bat/start.sh after the edits. This is all the basic config needed to start!
Pro Tip: For advanced management of multiple rigs, you can optionally edit config.json file.
Step 5: Start Mining!
You‘re all set to begin mining!
Simply double click the start batch script to launch GMiner app and start hashing away.
You‘ll see output like this showing your overall hashrate, shares submitted, ETC balance etc:
—————— GMiner 2.88 ——————
ETH: 32.234 Mh/s, Shares: 44/0/0, Time: 0:02
ETC: 217.8 Mh/s, Shares: 120/0/0, Time: 0:05
Balance: 0.00 ETC
Pool: etc.2miners.com:2020Based on your GPU model (e.g. RTX 3090 ≈ 120 MH/s), you can determine if you‘re reaching optimal hashrates.
Now just monitor your rig from time to time as it continously mines ETC and contributes hashrate to the 2Miners pool!
Step 6: Track Profits & Costs
As the rewards start trickling into your wallet, you can estimate mining profit taking into account your hardware energy costs too:
Using such a mining calculator, tweak parameters like:
- Your hashrate
- Hardware power usage
- Electricity costs etc.
…to forecast your potential returns and ROI period.
Many pools like 2Miners also have mobile apps to conveniently track your portfolio, rigs, payouts and profits/losses while on the go:
So that‘s it! Just repeat step 5 and 6 to maximize your ETC earnings over time!
Other Considerations for Profitable Ethereum Mining
Beyond the basic setup, optimizing your Ethereum mining operations takes a little more planning and effort:
Choosing Mining Hardware
For best results, you would want to invest in the latest, high-end GPU models like:
- NVIDIA RTX 3090 (Hashrate ≈ 120 MH/s)
- AMD Radeon RX 6900 XT (Hashrate ≈ 62 MH/s)
As Ethash is designed to be ASIC-resistant, GPU rigs are still the preferred ETC miners.
Consider the GPU‘s efficiency (hashrate/watt), availability and of course your budget!
Building a Dedicated Mining Rig
To scale up, a cost-effective option is to construct an open-air rig frame housing 6-8 graphics cards together with supporting components like:
- Processor
- RAM
- SSD
- Reliable PSU
- PCIe risers
- Fans/cooling system
This allows you to multiply your hashing power and maximize mining output!
Tracking Network Difficulty
As more miners contribute hashrate to the network, the mining difficulty increases dynamically to ensure block times remain constant.
This directly impacts your mining rewards so it‘s critical to keep an eye on the difficulty, and tweak your operations if needed to stay profitable.
For e.g. during periods of high difficulty, reduce your pool commission % or switch to another pool with better returns for your hashrate.
Potential Issues to Watch Out For
While mining itself is a straightforward endeavor, there are couple of things that can trip you up:
- Dealing with excessive heat if your GPUs are not adequately cooled
- Troubleshooting crashes or hardware failures
- Fine-tuning BIOS settings for peak mining performance
- Handling higher-than-expected stale share rates
- Fending off malware, botnets and potential hack attempts
So be prepared to regularly monitor remote access, keep devices patched, safely store credentials and have recovery options in place.
The Future of Ethereum Mining
Given Ethereum‘s transition to PoS through The Merge, the long-term outlook for mining is debatable.
Here are the key possibilities:
-
As more miners shift to the ETC chain, the heightened competition can drive down individual rewards due to increased network difficulty. Mining profitability may decrease as a result unless ETC coin value rises.
-
There are alternative Ethash coins like Ubiq, Expanse and Ellaism that can be mined but they are comparatively lower in value than ETC currently.
-
However ETC has an ardent community committed to preserving proof-of-work mining. If coin adoption continues to grow, it can still prove lucrative for loyal miners.
-
There is also the speculative possibility that proof-of-work mining returns to Ethereum mainnet in future if the community is unsatisfied with PoS security guarantees.
So in summary – while we are possibly past the golden age for ETH mining rewards, Ethereum Classic and few other Ethash coins still present viable mining options today.
Beyond Mining: Alternatives to Earn from Ethereum
If straight-up mining itself sounds complex or risky, fret not. There are other easier ways to leverage your ETH coins to generate attractive yields:
Staking ETH
If you invested in some ETH earlier or hold crypto on exchanges like Binance, you can stake it as a validator on the Beacon Chain (new PoS blockchain) to earn steady 8-10% APY rewards.
Lending & Savings Products
Platforms like Nexo, Celsius Network and Crypto.com offer up to 14% interest rate if you deposit supported coins like ETH, MATIC, stablecoins etc. into their savings account or agree to lend them out.
So there you have it! Still interested in mining the Ethereum blockchain? Now you know exactly what it takes!
I hope you found this guide helpful. Feel free to leave any feedback or queries below!
Happy mining! 😊
