Individuals profitably mining Bitcoin now appear to be a thing of the past. The emergence of ASICs (computers developed specifically for mining Bitcoin) and large mining firms has effectively put an end to the notion of becoming wealthy through Bitcoin mining.
Surprisingly, the recent increase in the price of Ethereum has made ETH mining a viable choice for everyone with a decent graphics card. It won’t survive (ETH will convert to proof of stake in the future), and it necessitates a significant investment in video cards, but here’s how people are mining ETH in 2021.
Why is Ethereum so popular?
First, some background: the Ethereum protocol’s market capitalisation surpassed $100 billion in January 2018. It dropped to 11.2 billion dollars in January 2019. Over the following two years, the procedure slowly but surely regained its lost ground. It was able to reclaim a market value of more than 80 billion dollars in December 2020. But what transpired in the months after that was incredible.
By January 2021, the market capitalization of Ethereum has surpassed $150 billion for the first time in the cryptocurrency’s history.
According to the most recent data, Ethereum’s total market capitalization has surpassed $200 billion US dollars. Every day, the network handles over a million transactions. The overall value of its DeFi apps, as well as the value of the greater Ethereum digital economy, has nearly hit $40 billion.
What is Ethereum Mining, and how does it work?
Ethereum mining, at its most basic level, is the process of maintaining the Ethereum ledger by solving complicated mathematical puzzles. It is the process of adding valid blocks to a chain of blocks. To find the nonce for a block, the miners go through a lot of trial and error. Only blocks with a corresponding valid nonce can be added to the chain.
The miner continually inserts a dataset that can only be obtained by downloading and executing the whole chain with a mathematical function while building a block. As a consequence, mixHash is generated with a nonce that is less than the intended nonce. It becomes considerably easier for other miners and clients to validate it after it has been created. Even just one transaction changed, the hash would become totally different, signaling fraud.
Ethereum miners are compensated for their efforts. An Ethereum block is added to the network every 15 seconds. Miners are paid 2 ETH in addition to all transaction and code processing fees. In blockchain language, these costs are referred to as gas.
The Ethash method used by Ethereum for mining is compatible with ASICs, or application-specific integrated circuits, which are specialized hashing gear. Ethash, on the other hand, is designed in such a manner that it can be used for GPU mining, which is the technique of choice for casual miners.
The final step involves selecting and installing Ethereum mining software. Make sure you’re using the most recent version of the program available from their website. Windows may provide a warning while downloading the mining program. You can, however, disregard the warning and continue with your installation. After you’ve downloaded the mining program (like simplemining.net), save the folder to your desktop so you may access it at any time.