Ethereum: The Insider Guide to Blockchain Technology, Cryptocurrency and Mining Ethereum by Richard Ozer

Author:Richard Ozer
Language: eng
Format: azw3
Published: 2017-07-14T07:00:00+00:00

Obviously, you can just go and buy your ETH from an exchange if you want large amounts and you want it quickly. Cloud and mining pools will provide lower rewards but you are guaranteed them quicker than if you were mining on your own.

Mining Profitability

Profitability in ETH mining is dependent on two major factors – electricity and hardware. The returns can vary very wildly; we know that the value of ETH can easily decrease and so can your revenue, relative to your hardware and power costs. Cryptocurrency is, by nature, volatile and this volatility can spill over into all different types of mining. However, provided you have the correct type of hardware and the right energy source, you could well be on your way to reaping a fairly good income.

Because it doesn’t use ASIC hardware, it is argued that Ethereum is more accessible to beginners and hobbyists than Bitcoin is. However, as time moves on, it is clear that Ethereum is heading in the same direction as Bitcoin, especially in terms of market saturation.

The Ethereum Mining Algorithm

Ethereum mining algorithm is no longer the proof of work that was used in Bitcoin. Instead, Ethereum uses the Casper proof of stake algorithm that uses far less in the way of computational power and provides the same outcome as the more expensive proof of work. This is meant to imply that Casper is a much better alternative. It is cutting edge and puts speed or availability above reliability or consistency and this results in much faster validations that have similar properties to the proof of work algorithm. Where the proof of work uses the hardware to provide value in terms of computation, the proof of stake system uses a miner-less approach that gets rid of the heavy energy requirements for the network. Instead of getting rewards for the mining, the Ethereum miners are given rewards that are in proportion to the size of the transaction being validated.

Is it Worth it?

There are plenty of ways to mine Ethereum from the cloud options to a full-on hardware option. It really is own to you to choose what suits you and your needs best. There is no way of predicting whether what you choose is going to lead to a high-profit level but, provided you put in the time to research the options available to you, and into the hardware and the energy costs, you will be well on the way to knowing exactly where you stand.

In the next chapter, we are going to move on to Smart contracts and you are going to have a go at creating your first one.

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