Cryptocurrencies are becoming more popular than ever before, and people are looking for other ways to earn crypto and generate money. Commonly, people earn cryptocurrencies, like Ethereum, by mining them. Miners supply computational power that solves complex mathematical problems in exchange for cryptocurrencies. These can then be sold in the crypto markets for fiat currencies like USD and GBP. We bring to you a step-by-step guide on Ethereum mining on PC.
What is ETH mining?
Before understanding Ethereum mining, let's discuss the basic idea of a blockchain. In simple terms, a blockchain contains millions of blocks of information that are chained to each other. Therefore, one can think of it as an online ledger of transactions between numerous parties encrypted with cryptography to ensure no party can change past records.
Each block on the chain uses hashing for encryption, including solutions for different mathematical problems. Nodes represent computers or processing units over the blockchain network competing to guess the correct hash sequence.
Miners who manage to guess the correct hash functions are rewarded with Ether, the native token of Ethereum. Mining is a great way to earn money and secure the Ethereum network. However, with a powerful mining machine, you can solve more complex solutions in short timeframes.
Why mine ETH?
Ethereum is the second most popular cryptocurrency after Bitcoin; apart from putting money in the miner’s pockets and supporting the Ethereum ecosystem, ETH mining plays an active role in releasing new cryptocurrencies into circulation.
ETH is tied to numerous decentralized applications that are gaining traction in 2022. If you are looking for an alternate financing option to buy NFTs or play crypto games like Cryptokitties, you can mine ETH and use it for different purposes.
Profitability of an ETH Rig
While ETH mining earns money, it can cost money, so you should not make any wrong decisions and end up with a negative ROI. Therefore, you should use a profitability calculator that takes the following input variables to calculate the profitability:
- Block reward
- ETH/USD rate
- Pool fees (if there are any)
- Hardware costs (USD)
- Power costs (USD/kWh)
Before starting, it’s vital to assess the approximate profitability as per your current hardware. The easiest way to do this is to use any crypto mining profit calculator like CryptoCompare, CryptoRival, etc.
One way to calculate the profitability before getting started is with Minestat. All you have to do is add your current hardware to the calculator, define your pool, add the exchange rate, and insert your power costs to determine your profitability.
Use the following mining calculator to get a quick idea of potential earnings.
Requirements to set up
Setting up an ETH mining rig is easy, but you must make a list first. A rig requires specific things to become functional. If you miss one of the following items, your rig will not work properly.
- A desktop to run the miner
- Windows 10 to operate the system
- Peripherals to configure the miner
- Graphical Processing Units that will solve mathematical problems
- Wallets that store Eth after mining
- A mining pool that your rig can use to mine ETH
Step-by-step guide for Ethereum mining on PC
The simplest and quickest method to get started with Ethereum is Pool mining, where you join hands with other miners to successfully mine blocks simultaneously. All miners who are a part of the pool agree on splitting the rewards according to their respective hashpower whenever a problem is solved.
Pools use hashpower to determine the size and number of blocks that the group finds as an average. You will waste time and resources if you start mining on a pool with a slow hash rate. Try using Etherscan to find good pools with better rewards that make mining worth it.
Keep in mind; that some pools define a minimum payout rate before miners are allowed to collect their Ether rewards. Here are the steps you need to follow to mine ETH from your PC:
- Checking your GPU and drivers: You need a GPU with at least 3 GB and the latest drivers to start mining while ensuring smooth performance. AMD GPUs are much better for mining than Nvidia, but you can install either of the two or both in your rig. Be sure to compare GPUs before you purchase them, and check the manufacturer’s website for more software updates.
- Creating an Ethereum wallet: You need to create an Ethereum wallet that will store your earnings while your rig mines ETH. The most reliable wallet is Metamask, which is perfect for beginners. It attaches to your browser, making it easier to use than most software wallets.
- Installing Ethereum mining software: You need Ethereum mining software like lolMiner to get started. Be sure to download the miner from the official GitHub repository, as some sites infect the files with viruses, keyloggers, and spyware. You can install lolMiner by:
- Heading over to GitHub to select the latest version for your operating system from the assets tab.
- Extract the zip file with WinRAR or 7zip.
- Joining a mining pool to get server credentials: After installing the mining software, you will open the official site to get server credentials like server name, port, username, and password.
- Configuring .BAT files: lolMiner contains a file called “mine_eth.bat” that allows miners to connect to the pool with the server credentials obtained in the last step. More detailed configurations are covered in this tutorial.
- Running the miner: Once you’ve added all the necessary information in the .bat file, you will double-click on the eth.bat application to start mining. Your GPU will continue to complete jobs and add ETH to your wallet.
Alternate mining platforms
If you don’t want to mine with a group and want to keep the entire reward for yourself, you can use these two alternate mining platforms.
Mining by yourself is an attractive option as you no longer have to pay pool fees or share the reward with anyone, as you are the only one actively mining in the pool. However, solo mining takes time, as the mathematical problems are complex. A miner also needs dozens of GPUs to do solo mining, so you must invest money and build a mining farm.
Since mining farms are expensive to build and maintain, aspiring miners can pay someone else to mine ETH on their behalf through cloud mining. You simply rent someone else’s farm to use their computing power to mine rewards. However, cloud computing requires trust between the two parties, especially if the arrangement occurs through an online service. There is no guarantee regarding the farm's existence, so you should try to visit it before finalizing an agreement or paying the upfront amount. HashFlare is one of the most trustworthy cloud-mining platforms with a long-established history of running mining equipment.
You can easily set up a mining rig at home using the right equipment and start mining. Beginners can start with pool mining and shift to solo or cloud mining after learning how to mine. Moreover, you should constantly monitor the changes on your Ethereum pool to ensure you have the correct credentials. Without them, your miner will struggle with block-validating procedures that negatively impact your mining profitability.