Mining Bitcoin and Ethereum
A 498-word article that could be used as a blog post
Mining Bitcoin and Ethereum
Mining is the process by which blocks are confirmed on the bitcoin and Ethereum blockchains. One of the rewards of mining is the creation of new bitcoin or Ethereum – the other reward of mining is the transaction fee which is included in every transaction on the blockchain. Mining bitcoin and Ethereum are effective ways of getting the cryptocurrency – this article explains the difference between mining bitcoin and mining Ethereum.
Bitcoin mining uses an algorithm that’s based on proof-of-work: a bitcoin miner attempts to solve a mathematically difficult problem and submits proof of the attempt to gain a reward. Bitcoin mining has a difficulty associated with it – the difficulty adjusts the difficulty of the mathematical problem so that miners can only solve the problem after a certain amount of time. The difficulty increases about every two weeks to prevent all miners from generating too many bitcoins. As the difficulty increased so did the hardware requirements for mining bitcoin. You now must use a specialized computer called an ASIC to mine bitcoin. Mining can be profitable if your cost of electricity is relatively low. There are bitcoin mining profitability calculators available online to help you figure out if your mining setup will make a profit for you.
Like bitcoin mining, ether mining validates transactions on the Ethereum blockchain and generates tokens. Ethereum mining changed in 2016 from the bitcoin-like proof of work algorithm to the Ethereum Casper Proof of Stake algorithm. You generate Ethereum by running special mining software on a powerful computer that has powerful graphics cards in it. The special mining software takes advantage of the computer’s graphics cards’ computational power and uses them to mine Ethereum. Unlike bitcoin, you don’t need a specialized computer, making Ethereum mining accessible to home and hobbyist users because you can use regular PC hardware and graphics cards.
To start mining, you need a powerful computer that has powerful graphics cards. Currently, the suggested and popular graphics cards are the AMD Radeon RX 470 and AMD Radeon RX 480 Graphics Card. The computer configuration could be a minimum of an Intel i5 processor with 8Gb RAM and a hard drive that’s a reasonable size. Pay attention to the computer’s power supply since it will have to power between two and five graphics cards.
You can also use a cloud mining service for Ethereum mining. The way cloud miners charge varies but you basically pay for the use of their hardware and electricity and the service generates a return for you based on the underlying miners’ work. The more popular cloud mining services are Genesis Mining and HashFlare. Many Ethereum experts say cloud mining is not necessary since many can afford their own hardware. However, many opt to use a cloud mining service because they don’t want a computer having noisy fans running at home 24/7.
Mining cryptocurrencies can be profitable. Bitcoin mining requires specialized hardware whereas Ethereum mining can use regular PC hardware.