How Profitable is it to Use GPUs in Mining Ethereum?

Much has been stated about Ethereum and the blockchain technology that governs it. However, only a few know that Ethereum mining can be a lucrative investment for those who are ready to adopt it. The mining process is an important part of the decentralized network that generates Ether and can help you earn a few extra dollars every day using a GPU if you are ready to invest some of your precious time.

Ethereum Mining

Miners solve complex mathematical problems and are remunerated with Ether for their consistent effort, dedication, time and the contribution of computational power using their PCs. It’s essentially like how you would play computer games and once you have won a level, the following level will get unlocked. Likewise, here you need to solve mathematical riddles and the new levels are essentially the new blocks generated in the blockchain.

It involves smooth functioning, authentication, and generation of blocks, other than a rise in the circulation of ETH. Miners get rewarded in Ether and this is a unique strategy to draw more people to the blockchain and thus expand the network’s width.

How To Mine Ethereum?

Ethereum mining rigs demand clear specifications with respect to the software or hardware being used. If you wish to mine ETH, you will require a PC with pre-installed GPU or graphics card. GPUs generate higher hashrates and solve the computational problems faster- almost 200 times faster than a CPU. Thus, it is advisable to use a GPU for Ether mining. You can also build mining rigs comprising of 6 or 7 GPUs. Their combined power produces higher hashrates and leads to faster performance.

Hardware is a very important factor when it comes to mining Ether and at the same time, demands high electrical units. Hence, when it comes to selecting productive Ethereum mining hardware, one must take into account all the factors including cost, power consumption and hashrate (the speed at which the mining problems are solved).

You need to connect your hardware (essentially your computer) to the Ethereum network. This may be done via software applications which are a two-way link between them.

Ether Mining Using Geth

If you are aware of the command line in your operating system, you will be able to download the Geth application.

1. Download the Geth Application and install it.

2. Transfer the application to the C-drive (Hard drive).

3. Run the program and go to the computer location where you have copied Geth.

4. Open your user account on Geth by entering ‘command >>geth account new’.

5. Provide password. This password is your ‘private key’ to preserve your Ether.

6. Input ‘>>geth –rpc’ to get the Geth application to access the Ethereum network. This is a lengthy process and depending on the speed of your internet, it may take some time.

Ether Mining Using EthMiner

Mining software is used to the produce hashing protocol run by a GPU. Among the many programs available in the market, EthMiner is a popular one.

1. Download and install EthMiner on your computer.

2. Open a new tab of command prompt. Then go to Database Files folder.

3. Input ‘>>cd cpp’, press the tab and continue to press the ‘Enter’ key till ‘C:\Program Files\cpp-ethereum’ is opened.

4. To begin mining, input ‘>>ethminer –G’ and click on ‘Enter’. The process will take up to 10 minutes and will then create one DAG file.

5. If the memory of the GPU is exhausted, use the CPU memory. Input ‘>>ethminer’ once again to create another DAG file.

6. You can determine the hashing power of your GPU as well by entering ‘>>ethminer -G –M’.

Ether Mining Profitability

This is based on different factors such as electrical cost, hash rate, and mining difficulty.

While miners become a part of the Ethereum network, mining difficulty gradually rises, and thus you end up with less profit when compared to the total energy used to work on one puzzle. According to statistics, the block level difficulty for Ethereum rose from 171 TH/s to 1714 TH/s in a span of 6 months last year.

The time factor should also be taken into account. As the cryptocurrency evolves and becomes widely acknowledged, it turns less profitable in the long run. Thus, bearing in mind these factors, one may go ahead and calculate the mining profitability of Ether. There are many online programs and calculators which allow you to do so.

However, there is no direct correlation between the above-mentioned factors and your actual mining profitability (the amount you may mine with your computer within a stipulated time period).If you mine with your standard computer, then the total Ether mined won’t be lucrative enough as it consumes high electricity.

If you are using a standard GPU that generates an average hashrate of 50-57 MH/s, then it may take up to 6 months to mine 1 ETH.

For effective mining, a separate GPU device needs to be installed to generate higher hashrates. Some of the best hardware available in the market are NVIDIA GEFORCE and AMD. AMD Radeon R9 295X2 generates a hashing power of 57.6 MH/s. However, it consumes exponential power. AMD Radeon RX 580 and Radeon RX 480 are cost-effective with a hashrate of 25-27 MH/s. If you create a mining rig using such 6-7 hardware, you can productively mine ETH.

A number of miners across the world are utilizing efficient mining rigs which are powered by cheap electricity. Today, the time taken to mine 1 ETH has increased owing to the simple fact that more people have now joined the network.

Ether Mining Via Cloud

As mining demands high computational power, cloud mining platforms are far more beneficial when it comes to earning Ether and making considerable profits. You neither have to purchase a hardware, nor do you have to spend an excess amount on electricity. All you have to do is purchase a mining contract which is generally of 2 years. This is like renting a specific hashrate for mining and you will probably have to pay a regular maintenance fee which is almost negligible when you take into consideration the profits that you will be making.

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