Tips people won’t tell you about Ethereum Mining
Getting started with Ethereum mining may seem like a daunting task, but it’s actually pretty straightforward. Despite the price of Ethereum being low at the moment, it’s still possible to make a profit while mining Ethereum. In this post, we will be going over a few Ethereum mining tips to help you make a decision. However, it may be important to note that in time, Ethereum plans on changing their mining algorithm from proof-of-work to proof-of-stake. Once the proof-of-stake system is live, Ethereum mining with hardware could become obsolete. Instead, the process will be done by staking an amount of Ethereum coins.
Ethereum Mining Tips
With the price of Ethereum floating around R2,800($200), many people wonder if it’s still possible to turn a profit with Ethereum mining. The truth is, Ethereum’s valuation varies. It’s mainly dependant on 3 factors; Electricity costs, mining difficulty, and hash rate. With an efficient mining rig and free or cheap electricity costs, profitability increases. The higher the difficulty level for Ethereum, the less profitable it becomes. With a higher hash rate, Ethereum rewards are higher per day in tandem. Be that as it may, the mining rigs with the highest hash rates also cost a pretty penny. Ethereum mining isn’t a get rich quick scheme. If anything it’s quite the opposite. There are no special Ethereum mining tips that will get you rich in half the time it takes to mine a block. Cryptocurrency mining takes a lot of time and effort, especially for solo miners.
However, if you are using a PC to mine Ethereum, you may be in luck. A dev team called OhGodACompany released an “Ethlargement pill” that aids in getting better hash rates when mining Ethereum with the GTX 1080 / 1080ti graphics cards. Miners using these GPUs have reported increases in Ethash hash rates from around 33MH/s to 50-50 MH/s. The Ethlargementpill is a tool that increases the hash rate for Ethereum mining on GPUs with GDDR5x memory.
ETHLargement – The Hashrate Hardener. ED (Ethereum Dysfunction) affects 1 in 10 NVIDIA GPUs in North America. But don’t worry – OhGodACompany is here to help.
Order your EthLargement prescription today: Linux: 100mg and Windows: 50mg
This ‘pill’ not only improves hash rates for Ethereum mining but also all Ethash based cryptocurrencies. Currently, this tool is only compatible with GDDR5X memory. The only cards that support this is the latest GTX 1060 remodel, the GTX 1080 series, and the Titan XP. This tool is compatible with both Windows OS and Linux.
— Nvest Weekly (@NvestWeekly) November 7, 2018
Is Ethereum Mining worth it?
If you’re looking for Ethereum mining tips, chances are one of your main causes for concern is if Ethereum mining is worth the commitment. With the price of Ethereum floating around R2,800($200), mining ETH can prove to be difficult if you’re trying to make a profit. That said, it’s definitely possible to mine Ethereum and make a profit, but you’re going to need to spend a lot of money. Solo mining popular cryptocurrencies is a difficult task. The only way to stay competitive is to have a mining farm of your own. Most seasoned miners will start off with a single GPU rig, and use their profits to invest in branching that rig out and making it a multi GPU rig.
While the Ethlargement pill may give you a small boost in hashrate if your hardware is compatible, there are other altcoins on the market that can be more profitable to mine than Ethereum. Plus, Ethereum is planning on switching to a Proof-of-Stake consensus algorithm similar to Cardano as opposed to Proof-of-Work.
Be that as it may, a significant number of the ETH currently being traded on cryptocurrency exchanges has been generated by miners. But people will only mine Ethereum so long as it stays profitable. Once the cost of mining exceeds the income you can get from mining ETH, chances are we will see an influx of miners migrate to altcoins. While it’s entirely possible that ETH miners leaving the scene could scare off investors causing a crash in price; It’s likely that most weak hands were shaken out after the price drop from $600-$200.
Proof of Stake
Recently, Vitalik Buterin, the founder of Ethereum, stated that the cryptocurrency’s switch to Proof-of-Stake is “no longer far away”. This was a strong week for Ethereum as U.S Bank JP Morgan Chase stated they have created an enterprise version of the Ethereum blockchain. As it stands, Ethereum currently uses the Proof-of-Work algorithm. This is an intensive task that can only be done efficiently with a powerful computer system (Or an ASIC miner) and LOTS of energy. Switching to the new Proof-of-Stake consensus would mean that the more tokens a node has, the higher the chance of that node winning the race to validate the next block.
Currently, Ethereum can handle ~15 transactions per second. With a switch to proof-of-stake, this could be increased by a significant amount. Once Ethereum finally decides to upgrade to Serenity and PoS, a difficulty bomb will be implemented in order to prevent a system fork. This ‘difficulty bomb’ refers to a steep increase in the difficulty level of puzzles in the mining algorithm. An increase in difficulty will result in a substantial lag between the production of blocks on the blockchain, and the payouts for miners. This will be done in an attempt to deter miners from continuing to mine with PoW even after the blockchain moves to PoS.
Difference between PoW and PoS
- Proof of Work (PoW): Miners contribute electricity and processing power in order to solve a cryptographic puzzle
- Proof of Stake (PoS): Validators contribute their existing stake (Ether tokens) into an “account”. They then place bets if a block is valid or not. If valid, the miner gets a reward. If invalid, funds are lost.
The current situation looks pretty grim for miners. No Ethereum mining tips will change the market environment. Many miners have already stopped mining Ethereum and have turned to altcoins instead. Others have sold all their mining equipment and decided to just purchase their coins from cryptocurrency exchanges instead. After the block rewards for Ethereum reduced again in October, the number of active miners took a dip. This sparked the ever-present question in the community; Is cryptocurrency mining dying? Eventually, when the enthusiasm of miners gets too low, the overall Ethereum production will decrease. This could result in a significant rebound in its valuation. Be that as it may, no one knows exactly when this could happen. However, if you want to make an informed estimation, watch mining hardware costs, you may find some valuable clues.
If mining isn’t your cup of tea right now, you’re always able to trade your crypto assets such as Ethereum, Bitcoin, and many more on cryptocurrency exchanges like iCE3X in order to find arbitrage opportunities. Or, you could just HODL your crypto-coins. If anything, one of the best Ethereum mining tips we could give, is to either mine like your life depends on it, or wait until proof of stake comes out, and trade your crypto in the meantime.