Like many other cryptocurrencies, Ethereum transactions are also carried out by a group of miners on the network. It is a complicated process which demands the time, money and energy of a miner. Each block generates a fixed number of 5 ETH tokens.
Ethereum mining is quite similar to Bitcoin mining. Ethereum miners make use of powerful PCs to solve the mining algorithms which are complex and difficult to crack. This method is called ‘Proof-of-Work’ since it requires miners to participate in a puzzle-solving task, following which they win ETH as mining rewards.
Mining takes much more time than verifying the transactions, the latter being instantaneous. Therefore, miners locate a block in about 15 seconds. The Ethereum network automatically adjusts the mining difficulty level within a range of 12 to 15 seconds as and when required.
Ethereum’s "ETHASH" system demands more memory, which implies that Ethereum miners will find it difficult to mine using an ASIC device and they are encouraged to make use of other computing systems. As per the latest news, Ethereum is planning to shift from Proof-of-Work to Proof-of-Stake, but till the time this happens, one can very well continue to mine Ethereum.
Since Ethereum mining consumes high electricity, miners have to constantly struggle in order to achieve the efficiency level so as to earn decent profits after recovering the initial investments on electricity as well as the mining rig. If you are mining Ethereum at home, you will require graphics cards along with 3 GB RAM memory.
A GPU is more preferable than a CPU, since graphics cards can be set up much faster than a CPU. Evidently, GPUs have higher hash rates, and renders it possible to solve the mining algorithms faster. When it comes to GPU mining, AMD cards as far more efficient than Nvidia cards.
You may also choose to participate in an Ethereum mining pool which allows you to share your resources and earn steady payouts based on your contributions.
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