All About Ethereum Mining – How It works And Top Cloud & Mining Pool Websites
What is Mining – Ethereum Cryptocurrency
Mining is one innovation that makes decentralized record-keeping possible. The word mining originates in the consent of the gold analogy for crypto currencies. Gold or precious metals are scarce, so are digital tokens, and the only way to increase the total volume is through mining it.
Mining is also the way to secure the network by creating, verifying, publishing and propagating blocks in the blockchain. Mining is a computationally intensive work that requires a lot of processing power and time. It is the act of participating in a given peer distributed cryptocurrency network in consensus. The miner is subsequently rewarded for providing solutions to challenging math problems. It is done by putting the computer’s hardware to use with mining applications. Ethereum Mining is the process of mining Ether. Ether is an incentive used to motivate developers to create top notch applications.
Ethereum Mining – How it works
All the information on cryptocurrency transactions must be embedded in data blocks. Each block is linked internally to several other blocks. This creates the blockchain. These blocks must be analyzed as fast as possible to ensure a smooth running of transactions on the platform. However, the issuers of such currencies do not have the processing capabilities to handle this alone. It is where miners come in.
A miner is an investor that devotes time, computer space and energy to sorting through blocks. When the mining process hits the right harsh, they will submit their solutions to the issuer. After verification, the issuer of the currency offers rewards which are portions of the work of miners. The result of digital mining is called proof of work system. This has been the arm supporting blockchain technologies like bitcoin and ethereum. Proof of work (PoW) refers to the solving of complex equations, which is a basic requirement for a miner to clear for their block to be added to the blockchain. PoW uses the algorithm called Ethash (modified version of Dagger-Hashimoto). Ethash PoW is memory hard, making it basically ASIC resistant. Ethash uses a DAG (Directed Acyclic graph) for the proof of work algorithm, this is generated for each epoch, i.e. every 30,000 blocks (100 hours). The DAG takes a long time to generate.
In a simple language we can say that the virtual money transactions take place in a legal and safe manner. A process of verification that with the spread of bitcoin always requires more computing power is called mining and verification of the transactions done by the miners who provide the computing power of their computer to run this verification. In return, they receive free bitcoin, until bitcoin reaches 21 million units, as its total number is limited.
For example, if a user buys an item and pays in bitcoin, algorithms check whether the bitcoins spent are taken from his wallet, avoiding the phenomenon called double spending.
Bitcoin Mining Vs Ethereum Mining – Which One Is Best
- Bitcoin Mining takes about 10 minutes average time to mine a block, but in Ethereum Mining, approximately every 12–15 seconds, a miner finds a block.
- Bitcoin has emerged as a relatively stable digital currency, while Ethereum aims to encompass more, with ether just a component of its smart contract applications.
- Two-thirds of all available bitcoin have already been mined, while only about half of its coins will have been mined by its fifth year of existence.
If miners start to solve the puzzles more quickly or slowly than this, the algorithm automatically readjusts the difficulty of the problem so that miners spring back to roughly the 12-second solution time. In Ethereum Mining, the difficulty is adjusted dynamically so that the network produces one block in every 12 seconds on an average. Thanks to the synchronization of the system, it is not possible to rewrite history or maintain a fork except the individual attempting to do so have over half of the mining power in the network. Ethereum Mining requires script writing and some knowledge of the command prompt.
Types of Ethereum Mining
Physical or Traditional Mining:
Any personal computer can be used to mine Ethereum, provided the 64 bit Operating System with atleast 30 GB Hard Disk space (Solid State Drive SSD 120 GB works best for this purpose), a motherboard, min. 4 GB of RAM, Power Supply (PSU) of atleast 1000 Watt, 6 Graphic Cards (GPUs like Radeon RX 470/480) and same number of GPU Riser Cards. GPUs are 200 times faster than CPUs when it comes to mining Ether. AMD cards are more efficient than Nvidia cards as well. Prefer Desktop over Laptop for mining process, it will help you a lot because laptop can be damaged by the heat produced during the mining process.
Once you get you hardware ready, you need to join a mining pool. Here you can do mining solo or in a group. Besides Ethereum mining pool and Ethereum mining hardware, you will need high-quality Ethereum mining software and a reliable Ethereum wallet.
If you want another company to mine for you, than you would need cloud mining. Cloud mining allows users, instead of using their own machines, to buy mining power of the hardware placed in remote data centres.
Top Ethereum Cloud Mining Websites in the World – 2018
1. HashFlare: Mining Service On Modern & High-Efficiency Equipments
HashFlare launched at Estonia in 2015 by Ivan Turygin and Sergei Potapenko. It offers SHA-256 mining contracts and more profitable SHA-256 coins can be mined while automatic payouts are still in BTC. Customers must purchase at least 10 GH/s.
2. Genesis Mining: Largest Cloud Mining Company
Genesis Mining is the largest cloud mining company in the world and founded by Marco Streng in 2013. It is believed that Genesis Mining providers are the world’s leading and most transparent hosted provider. It was found in the year 2013 and this is predicted to be the oldest Bitcoin companies around. They are trying their best to run in the path of technology by investing heavily. They provide you with the best ideas to invest your money in the safest and smartest way.
3. Eobot: Cloud Mining Made Easy – Miners Love it
Eobot has been founded in 2013 in Los Angeles, California. It is a cloud mining solution that lets users mine bitcoin and other digital currencies including Ethereum, Litecoin, Dogecoin, Ripple, and more without owning any of their own hardware. They just pay the company to rent server power. It is said that Eobot is the valuable and the inexpensive way to get Bitcoin and Ether.
4. Miningrigrentals: Faster, Smarter, More Powerful Way To Rent Or Lease Mining Rigs
MiningRigRentals.com focuses on providing a top level mining rig rental service. The focus is to unite renters and rig owners for the purpose of exchanging Crypto-currency for mining time. It is a one-stop solution for renting and leasing mining rigs. Ever since it has entered the market, it has been praised for its ease of renting, efficiency, and the range of algorithms available.
Top Ethereum Mining Pools around the World – 2018
1 . Ethpool/Ethermine:
Despite of two separate websites, they are part of the same and the largest Ethereum mining pool. It allow for the 25% of the network hash power. Ethpool is a predictable solo mining pool. 100% of the block reward will be credited to the miner who did contribute the most work to the pool. Ethpool is currently charge 1% as a fee and its servers are located in Europe, Asia and North America. Ethermine payouts are instant and you will receive your Ether as soon as you reach your configured payment threshold. Ethermine offers a PPLNS mining stystem to accommodate users who prefer pool to solo mining. It has a 1 % fee and shares the transaction fees from the block.
F2pool is the second largest Ethereum mining pool. It also known as Discus Fish is a Chinese mining pool that allows users to mine ETH, ETC, BTC, LTC, Siacoin (SC), Zcash, XMR and Dash. This pool charges a 3% pay-per-share fees.
Dwarfpool is the third largest Ethereum mining pool. It accounts for about 13% of the network’s hash rate and charges 2% fees. The payouts are releasing 4-6 times a day for balances higher than 1 ETH. It also allows users to mine Monero (XMR), ZCash (ZEC), GroestlCoin (GRS) and Expanse (EXP).
EthereumPool.co is stable and transparent and fair Ethereum mining pool. This pool will charge you 1% fees and network fee on withdraw. Here, miners can get their payouts temporary payment once a day for balances higher than 0.1 ETH. They also payout uncle (orphan) block rewards.
Disclaimer: Please note that, this article is only for the information purpose only and not a trading and investment advice. Do your own research and take expert’s advice before trading and investing. Find out if trading is legal in your jurisdiction. Trading in cryptocurrency carries a high level of risk, and may not be suitable for all investors. Therefore trade and invest at your own risk. We will not be responsible for the any risk involved in it.